By Joe Smyth | email@example.com | @joesmyth
Next week, United Power will switch on its biggest solar project yet. At 16 megawatts, the SR Platte solar array will produce enough electricity to power 2,700 homes, and help the electric cooperative save money on its electricity purchases.
But because of its contract with its electricity supplier, Tri-State Generation and Transmission, United Power is unlikely to build more solar arrays any time soon, so it's shifting its focus to energy storage.
United Power has brought several solar projects online since 2009, when it built Colorado’s first community solar array. As the price of solar energy dropped in recent years, United Power partnered with solar developer Silicon Ranch to build larger arrays, including a 13 megawatt project near Fort Lupton, Colorado and a 6.5 megawatt project near Mead, Colorado. With its latest solar project, United Power now generates enough solar electricity to power about 7,000 homes.
United Power’s website notes: “These projects reduce carbon emissions, but they also make economic sense. They produce generation that we can purchase for our members at a predictable cost, with a predictable lifespan. It is one way to build some cost stability for our cooperative members.”
The latest energy cost data from industry consultant Lazard shows that utility scale solar energy continued to drop in price over the last year, from an average of $55/megawatt hour in 2016 to $50/megawatt hour in 2017. Meanwhile, the average cost of coal power stayed flat at $102/megawatt hour. Colorado Governor John Hickenlooper highlighted that trend last week, noting that “Coal is no longer the low-cost fuel" in an interview with the Pueblo Chieftain.
United Power’s New Energy Program Coordinator, Jerry Marizza, explained that the electric cooperative would likely build more solar projects if it could. But because of its contract with its electricity supplier, Tri-State Generation and Transmission, United Power is limited to generating just 5% of its electricity locally. United Power’s new solar array brings it to the 5% limit.
This summer, United Power urged Tri-State to raise the limit to 10% so that it could continue to invest in local renewable energy projects. Other Colorado electric cooperatives such as La Plata Electric Association and San Miguel Power Association have also urged Tri-State to increase the amount of electricity they can generate locally. Last year, Kit Carson Electric Cooperative ended its contract with Tri-State in part because of frustrations with the limits on local energy development. Another electric cooperative, Delta Montrose Electric Association, is now also seeking to end its contract with Tri-State.
Despite the appeals to raise the limit on local energy development, and the risk of losing more contracts with the electric cooperatives it supplies, Tri-State rejected the proposal and said that it will keep the 5% limit on local energy generation.
Without the option for more solar energy, United Power plans to focus on energy storage as a way to help reduce costs and keep electricity rates stable for its members. The electric cooperative announced that it will partner with SoCore Energy to install a 4 megawatt Tesla Powerpack battery in early 2018.
The battery system will store electricity at night when demand is low, and then supply that electricity during peak hours as a way to reduce demand. United Power's peak demand usually falls between 4-8 pm. Marizza explained that the battery would switch on during days when it's needed, based on real-time data coming into their system.
Like United Power’s first community solar projects, members of the electric cooperative will be able to purchase a share of the battery’s output and reduce demand charges on their electricity bills.
“United Power was one of the first utilities in the country to experiment with the ‘community solar’ concept with our Sol Partners program, and now there are community solar projects all over the country. ‘Community batteries’ are the next big trend,” said Marizza.
At the Colorado Rural Electric Association’s Energy Innovations summit last week in Denver, Tesla Utility Sales Director Bob Rudd said he expects to see more community battery projects.
“We see a lot of opportunity in that marketplace in terms of the community storage akin to the community solar efforts we’ve seen in the co-op space, and we’re really excited about that, and look forward to rolling that out, and seeing those and similar types of business models really get crafted and implemented for the distribution co-op specific application,” said Rudd.
“Because we recognize, at the end of the day, it’s not our job to tell you what’s the best economic structure or operational need, or whatever might be. What we do really well is make batteries. We make batteries, we sell them, we maintain, and they work really well.”
Lazard's data also noted the declining costs of energy storage technologies, stating that the industry participants it surveyed expect costs to decrease significantly over the next five years.
“The next frontier is energy storage, where continued innovation and declining costs are expected to drive increased deployment of renewables, which in turn will create more demand for storage” said Jonathan Mir, Head of Lazard’s North American Power Group.
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