New PPA In Arizona Locks In Lowest Solar Prices In US As Demise Of Navajo Station Looms

June 11th, 2018 by Steve Hanley

The lifeblood of Arizona is water. Without it, the Grand Canyon State is just another desert and Phoenix is a dust bowl. Arizona gets its water from the Colorado River. That water is pumped and distributed by the Central Arizona Project, which is the largest user of electricity in the state.

On June 7, the directors of the Project signed a 20-year power purchase agreement with AZ Solar 1, a 30 megawatt (MW) solar power plant. The deal calls for the delivery of 83,500 megawatt-hours (MWh) of electricity at a the lowest price yet recorded in the US — 2.49 cents per kilowatt-hour (kWh). This would denote an AC capacity factor of 32%, and a DC capacity factor ranging of anywhere from 19-27% with DC:AC ratios of 1.7 and 1.2, respectively according to Green Tech Media.

2.49 cents per kWh is the lowest price for solar power in the US to date. PTM reports there is a deal pending in Austin, Texas at 2.1 cents per kWh, but details of that contract have not yet been made public.

Solar AZ 1 will be constructed, owned, and operated by Origis Energy USA. The contract calls for the first delivery of electricity to begin on December 31, 2020. Few details about the AZ Solar 1 project are available at this time, but Origis Energy USA has developed other solar power plants using First Solar and standard 72-cell crystalline silicon modules, along with both fixed-mount and single axis tracker configurations, according to PV Magazine.

Power for the Central Arizona Project currently comes from the Navajo Generating Station, the oldest coal-fired plant in the US and one of the largest. It is scheduled to be decommissioned in 2019, which will prevent large quantities of carbon emissions entering the atmosphere over Arizona for years to come. The cost of electricity from that plant now stands at 5 cents per kWh according to Green Tech Media — exactly double what electricity from AZ Solar 1 will cost.

Tesla is bidding on a plan by Colorado’s Xcel Energy to add grid-scale battery storage to an upcoming solar project in that state. The cost of electricity in that proposal from various preliminary bidders ranges from 2.3 to 2.7 cents per kWh. What is really interesting is that adding battery storage only increases those numbers between 0.5 and 0.8 cents per kWh — still less than the wholesale cost of electricity from the Navajo Generating Station. The age of electricity from burning fossil fuels is really coming to an end at long last.









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