Author: Robert Walton@TeamWetDog Published: April 22, 2019 Utility Dive
- North Carolina’s Competitive Procurement of Renewable Energy (CPRE) program, developed as part of the state’s 2017 comprehensive renewable energy law, has resulted in 14 solar projects being selected in the Carolinas via an independently judged Tranche 1 bidding process.
- Duke Energy announced the procurement last week, saying it will “produce or purchase” a total of 602 MW under the CPRE process. The law allows Duke to bid alongside other developers, and the utility says it was awarded six projects totaling about 270 MW. Duke did not name developers of the other eight projects in its announcement.
- A report by Accion Group, the independent procurement administrator, said proposals for Duke Energy Carolinas (DEC) averaged $36.93/MWh, while projects in the Duke Energy Progress territory averaged $31.24/MWh.
The solar bids in North and South Carolina do not break any low-cost records, but they do demonstrate the continuing decline in the cost of renewable energy and the benefits to customers.
Accion Group estimates customers will see savings of around $375 million over the 20-year contract period versus the price at which many solar contracts had been set prior to the CPRE program.
There is “robust” interest in the CPRE program, and “given the response, we are expecting the next phase of the program to also bring cost savings to customers,” Accion President Harry Judd said in a statement.
There were a total of 78 projects submitted in the Tranche 1 process, and the 14 most competitive were selected through a process approved by the North Carolina Utilities Commission. North Carolina will host 10 of the solar projects, with four in South Carolina. Two of the projects will include battery storage.
Duke was awarded almost 45% of the total capacity, and said it already has 40 solar projects in the state North Carolina.
The results are “a strong reflection of how competitive we are in the open market at building renewable energy projects,” said Rob Caldwell, senior vice president and president of Duke Energy Renewables and Business Development. The company operates more than 20 wind facilities and 60 solar facilities in the United States.
“As solar energy expands in the Carolinas, the competitive bidding process will lead to better prices and more geographic diversity of projects,” Caldwell said
Despite strong interest from developers, the Accion report notes that the procurement fell short of the CPRE Tranche 1 goals in the Duke Energy Carolinas territory, procuring 515 MW of a 600 MW target. However, for Duke Energy Progress, the goal was 80 MW and Accion recommended entering into power purchase agreements with two projects for a total of 87 MW.
The procurements combined for 602 MW across the two Duke territories.
Accion also estimated that the cost of transmission system upgrades for all of the selected proposals will be approximately $5 million. Most projects are targeted to be online around the end of 2020, according to Duke, though the utility cautioned the dates may vary “depending upon local approvals and any construction delays.”
Accion’s report on the procurement also includes possible improvements to the process. The Tranche 1 procurement “succeeded in further clarifying the need to address ways to permit ‘shovel ready’ renewable projects to move to development without delay,” the report concluded.
Several market participants declined to advance their projects despite being ranked competitively during the process, Accion said. That suggests that “a number of projects holding positions on the transmission queue are not ready to be developed.”