301 Moved Permanently

301 Moved Permanently


Interests Challenge
Co-op Solar Procurement

Just as investor-owned utilities (IOU) continue to procure solar power, member-owned electric cooperatives are also following suit.

According to the National Rural Electric Cooperative Association (NRECA), member-owned electric cooperatives have nearly 240 MW of solar capacity online or in the planning stages across the country. Additionally, NRECA notes that utility co-ops are developing solar power in 34 states - remarkable progress for such a small sector of the electric utility industry. As of October 2014, co-ops reported an existing capacity of nearly 95 MW of owned and purchased solar capacity in 34 states, and they plan for an additional 144 MW by 2017.

However, some electric co-ops are now beginning to encounter many of the same challenges faced by their investor-owned counterparts, explains Richard P. Mignogna, solar industry consultant.

“The co-ops have many of the same concerns as IOUs,” Mignogna says. “It’s important to remember that these are, ostensibly, distribution-only utilities. So, there are concerns about maximum penetration and overloading (system) feeders and transformers.”

Unlike the IOUs, however, member co-ops are dependent on a larger entity for operations. Therefore, control becomes an issue.

In New Mexico, for example, the Kit Carson Electric Cooperative is at odds with its electric supplier, Tri-State Generation & Transmission, over limits capping renewable energy generation. Denver-based Tri-State, a wholesale electric power supplier that serves 44 electric cooperatives, restricts its member co-ops from locally generating more than 5% of its total load from renewable energy. The Kit Carson co-op maintains that the 5% cap, which predates the renewable energy standards in place in Colorado and New Mexico, is merely a tactic to ensure that the co-op continues to buy its electricity from Tri-State.

In fact, the co-op is seeking to terminate its contract with Tri-State based on a wide range of issues - including the 5% cap on renewable energy. The case is pending before the New Mexico Public Service Commission.

Nonetheless, Tri-State maintains that its policies - including the 5% cap - provide incentives for member renewable energy generation and minimize cross-subsidization of member renewable energy project costs. The electric power supplier points out that it was one of the first such entities to put programs into place to facilitate distributed and renewable energy from its member distribution cooperatives.

“These programs have been successful and support each member distribution cooperative’s goals,” says Lee Boughey, a Tri-State spokesperson, adding that Tri-State’s contract committee is “currently considering the issue - and a range of options - and could make a recommendation in 2015.”

The challenge, Mignogna says, is coming up with a workable solution that fits all stakeholders while still meeting renewable energy mandates. “There are as many different perspectives on solar power as there are co-ops,” he says. “Some are very progressive, and some want no part of it. The bottom line about renewable energy interconnection, even with co-ops, is that it is still a turf war over control and lost revenues.”

Despite the challenges, some solar developers still see the value in penetrating new markets, like co-ops.

“At the moment, solar on co-ops is a limiting opportunity,” says Tony Clifford, CEO at Rockville, Md.-based Standard Solar, which recently completed a 1.8 MW ground-mounted solar array in Las Vegas, N.M., for Taos, N.M-based Mora-San Miguel Electric Cooperative, another co-op supplied by Tri-State.

As is the case with the Kit Carson co-op, Mora-San Miguel’s wholesale electricity contract with Tri-State caps the Standard Solar project at 5% of the co-op’s total load. The co-op purchases the other 95% of its load from Tri-State.

“The growth is coming because the cost of solar is coming down, and now the co-op members are seeing the benefits,” Clifford says.

However, he adds, because the co-ops themselves are often members of larger entities, “there is some friction.”


Top 10 Solar PV Module Suppliers Reshuffled

IHS has released its global top 10 module rankings based on full-year shipment estimates.

The top 10 module suppliers of 2014 are expected to be almost the same group of companies as 2013, although several changes in rank will have occurred.

According to IHS’ analysis, Trina Solar is forecast to be the largest module supplier for 2014 in terms of global shipments. Yingli Green Energy, the previous holder of the top spot, is expected to drop one rank, having adopted a new strategy to prioritize profitability. JA Solar is expected to show the highest shipment growth rate among the top 10. SunPower has entered the top 10 with the same ranking as Kyocera.

Many of the top 10 suppliers have also increased the use of their module manufacturing output for self-developed solar projects, such as Yingli, Jinko Solar, JA Solar and especially Trina Solar. Total module shipments for internal projects reached 1.4 GW in 2014 for these four companies combined, IHS says.

China, Japan and the U.S. were clearly the biggest markets for all of the top 10 module suppliers in 2014.


NextEra To Buy
Hawaiian Electric

NextEra Energy Inc. and Hawaiian Electric Industries Inc. (HEI) have announced a definitive agreement to merge their companies. The transaction, which is valued at approximately $4.3 billion, includes NextEra’s assumption of $1.7 billion in HEI debt and excludes HEI’s banking subsidiary.

If approved, the transaction will bring the Hawaiian Electric Companies - Hawaiian Electric, Maui Electric and Hawaii Electric Light - under NextEra’s aegis.

NextEra Energy says it shares Hawaiian Electric’s goals of increasing renewable energy, modernizing its grid, reducing Hawaii’s dependence on imported oil and integrating more rooftop solar energy. Hawaiian Electric has filed plans with the Hawaii Public Utilities Commission (PUC) that could triple the amount of distributed solar in its service area, while achieving among the nation’s highest levels of renewable energy by 2030.

NextEra Energy says it supports Hawaiian Electric’s plans to accomplish these goals, although it will also inherit the challenges that must be surmounted to achieve them.

“It’s too soon to talk about specifics,” says a NextEra spokesperson. “Clearly, this is an issue that we have considered and have some expertise on.”

NextEra Energy’s principal subsidiaries include Florida Power & Light Company (FPL) and NextEra Energy Resources LLC, which together with its affiliated entities - NextEra Energy Resources - is one of North America’s largest producers of renewable energy from the wind and sun. The company has a number of utility-scale and distributed solar, wind and battery storage projects deployed and under development.

NextEra Energy and Hawaiian Electric intend to file a merger approval application with the Hawaii PUC. In addition to the Hawaii PUC’s approval, the transaction also is subject to approval by HEI shareholders and applicable federal regulatory approval.

Upon completion of the transaction, together with FPL and NextEra Energy Resources, Hawaiian Electric will become a third principal business within the NextEra Energy family of companies. Hawaiian Electric will continue to operate under its current name and continue to be headquartered in Honolulu. Hawaiian Electric’s utilities will continue to be locally managed from their existing operating locations.

The companies say they anticipate no layoffs to Hawaiian Electric’s workforce as a result of the transaction for at least two years after close, and all of its union labor agreements will be honored.


S.C. Net-Metering
Agreement Signed

South Carolina’s Office of Regulatory Staff has filed an agreement with the state’s Public Service Commission that spells out solar net-metering policies.

The agreement, which has the support of public utilities, including Duke Energy Carolinas and Duke Energy Progress, proposes a methodology to calculate the value of solar generation based on its known and quantifiable benefits and costs, and also provides direct incentives for distributed energy resources.

The agreement has the support of Southern Environmental Law Center, the Southern Alliance for Clean Energy, the Coastal Conservation League, the South Carolina Solar Business Alliance and other environmental, solar and business groups.

Under the agreement, net-metering customers as of Dec. 31, 2020, will continue to be credited at the retail rate through Dec. 31, 2025. The difference between the applicable retail rate and the value of net-metered solar generation as computed under the methodology proposed in the agreement will be treated as a distributed energy resource program net-metering incentive and collected from customers system-wide by the utilities.


Utilities Face Losses From Solar And Storage

Continued growth of distributed energy resources and energy-
efficiency measures could cause significant demand disruption and drive down utilities’ revenues by up to $48 billion a year in the U.S. and EUR 61 billion a year in Europe by 2025, according to research from New York-based market research firm Accenture.

Utility executives are notably more concerned about the impact of these technologies on future revenue streams, with 61% saying that they expect significant or moderate revenue reductions as a result of distributed generation - such as solar photovoltaic power - compared to 43% in 2013, the Accenture report says.

Nevertheless, despite popular reports of a looming utility “death spiral,” in which consumers migrate off the grid or use it only as backup, Accenture research shows it to be unlikely and uneconomic for a large number of consumers due to natural limitations on viability and cost constraints.

Accenture found that a significant majority (79%) of utility executives believe that it won’t be cost-effective for consumers to go off-grid without any subsidies until 2030 or beyond. In addition, by 2035, just 12% of customers in North America are expected to become energy self-sufficient, compared to 11% in Europe.

Solar PV is already at grid parity in many states in the U.S. Accenture’s analysis suggests that it will be at grid parity across Australia and most European Union member states this year, except less sunny ones, such as Sweden and Poland, as well as those with regulatory barriers to solar PV deployment, such as Spain. Japan is forecast to reach parity in the next few years, followed by the rest of North America - with the exception of Canada and some U.S. states with the lowest electricity prices.

Approximately 61% of utility executives expect grid faults to increase by 2020 as a result of low-voltage connected distributed renewable generation - up from 41% in 2013 - while 53% also expect an increase in grid faults from deployments of large-scale renewables, up from 33% in 2013.


Solar Bending CAISO Load Curves

As more solar and wind electric generating capacity is added in California, the California Independent System Operator (CAISO) is facing an increasingly different net load shape, reports the U.S. Energy Information Agency (EIA).

Net load - the total electric demand in the system minus wind and solar generation - represents the demand that CAISO must meet with other dispatchable sources, such as natural gas, hydropower and imported electricity from outside the system.

In the summer, PV generation tends to match load requirements, both of which increase at midday. However, electricity demand in non-summer months tends to have both an upward morning ramp and a higher peak in the early evening as people return home from work.

CAISO officials have projected this shift in net load and expect the trend to become more pronounced as more solar and wind capacity is added to meet the state’s 33%-by-2020 renewable portfolio standard. California’s changing net load patterns are expected to create a greater need for flexible, dispatchable capacity to manage operational and reliability challenges.

According to the EIA, California’s legislature, public utilities commission and CAISO have initiated a number of policies and frameworks that could mitigate challenges associated with this changing net load shape. These actions include the following:


Capital Power Acquires U.S. Unit Of Element

Canada-based Capital Power has signed a purchase and sale agreement to acquire Element Power US LLC, a subsidiary of U.K.-based developer Element Power.

Capital Power says the price tag is approximately $62 million plus $52 million in assumed project financing debt for a total of $114 million.

The acquisition provides Capital Power with a portfolio of 10 wind development sites and four solar sites in the U.S. The latter includes a 15 MW North Carolina solar project under development for Duke Energy Progress Inc.

The acquisition also includes Macho Springs, a 50 MW wind project in New Mexico that has been operating since 2011 and has a 20-year power purchase agreement with Tucson Electric Power.

Capital notes that the transfer of Macho Springs is subject to Federal Energy Regulatory Commission approval.


Norway’s REC Solar Sells To Bluestar Elkem

Norway-based photovoltaic module manufacturer REC Solar ASA has reached an agreement to sell all of its shares to Hong Kong-based Bluestar Elkem Investment Co. Ltd.

Under the terms of the deal, Bluestar Elkem will purchase 100% of the shares in a Luxembourg company to be established that will own REC Solar Holdings AS. The purchase price will reflect a premium of 22.6% and 27.1% to the one- and three-month volume-weighted average share price, respectively. The total cash value of the transaction is approximately $637.9 million.

The sale is subject to approval by an extraordinary general meeting of REC Solar, expected to be held no later than Jan. 16, 2015. The board of directors has unanimously resolved to recommend the transaction to its shareholders.

In 2010, REC Solar opened an integrated wafer, cell and module manufacturing facility in Singapore, to which it has since expanded and transferred all of its European production.

In 2013, REC divested itself of its silicon production business and moved its PV manufacturing operations entirely to Singapore while downsizing its Norwegian headquarters, essentially positioning itself for sale. The silicon business was moved to the U.S.

REC Solar says the transaction is not subject to any financing conditions but is subject to other customary conditions, including all required regulatory approvals. The sale is expected to be completed by April 2015. REC Solar’s board of directors expects thereafter to delist and liquidate the company and return all cash other than transaction costs to shareholders.

New & Noteworthy

Interests Challenge Co-op Solar Procurement




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