U.S. Utilities’ Push for Solar+Storage Holds ‘Major Implications’ for Fossil Electricity
Despite their “checkered history” on renewable energy development, U.S. utilities have begun to drive the transition to solar-plus-storage projects, in particular—with “major implications for baseload power providers,” analyst Dennis Warmsted writes for the Institute for Energy Economics and Financial Analysis.
Warmsted cites the Northern Indiana Public Service Company’s recent decision to shutter its coal-fired power plants over the next 10 years as one example of the wider trend, after the “eye-opening proposals” it received in its last solicitation for new electricity supplies. “In its preferred resource plan released this past October, NIPSCO proposed adding 1,145 megawatts (MW) of solar and solar-plus-storage by 2023, which would push its renewable generation well above 50% and its coal-fired power capacity down to 17%.”
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And NIPSCO isn’t the only one: in January, Hawaiian Electric announced seven contracts for 262 MW of new solar capacity and 1,048 MWh of battery storage, with six of the seven bids coming in below 10¢ per kilowatt-hour. Warmsted cites those two contracts and five others as evidence that the market for utility solar+storage is maturing, with greater capacity to tailor individual deals to market conditions and corporate needs. His five other examples include:
- A 65-MW peak power supply deal between Arizona Public Service and First Solar;
- A contract in Vermont that cuts peak demand and enables Green Mountain Power to reduce its transmission charges;
- A series of solar and storage investments in Nevada that will enable NV Energy to retire a 254-MW coal plant;
- El Paso Electric’s plan to buy 200 MW of solar and 100 MW of battery storage to meet rising summer electricity demand beginning in 2022-2023;
- Irving, Texas-based Vistra Energy’s plan to add storage to an 180-MW solar project to boost its economics in the state’s “cutthroat” electricity market.
“Every new project like these that comes online highlights the broad potential of solar-plus-storage and chips away at the fossil industry narrative that renewable energy isn’t reliable or cost-effective,” Warmsted writes. “Clearly, the utility industry has a different perspective, and it is not just talking the talk, it is walking it too.”