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DOE OSTI2016

Designing Wind and Solar Power Purchase Agreements to Support Grid Integration

Power purchase agreements (PPAs) represent one of many institutional tools that power systems can use to improve grid services from variable renewable energy (VRE) generators. This fact sheet introduces the concept of PPAs for VRE generators and provides a brief summary of key PPA components that can facilitate VRE generators to enhance grid stability and serve as a source of power system flexibility.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2017

2016 Wind Technologies Market Report

The U.S. Department of Energy (DOE)’s Wind Technologies Market Report provides an annual overview of trends in the U.S. wind power market. You can find the report, a presentation, and a data file on the Files tab, below. Additionally, several data visualizations are available in the Data Visualizations tab. Highlights of this year’s report include: -Wind power additions continued at a rapid clip in 2016: $13 billion was invested in new wind power plants in 2016. In 2016, wind energy contributed 5.6% of the nation’s electricity supply, more than 10% of total electricity generation in fourteen states, and 29% to 37% in three of those states—Iowa, South Dakota, and Kansas. -Bigger turbines are enhancing wind project performance: Increased blade lengths, in particular, have dramatically increased wind project capacity factors, one measure of project performance. For example, the average 2016 capacity factor among projects built in 2014 and 2015 was 42.6%, compared to an average of 32.1% among projects built from 2004 to 2011 and 25.4% among projects built from 1998 to 2001. -Low wind turbine pricing continues to push down installed project costs: Wind turbine prices have fallen from their highs in 2008, to $800–$1,100/kW. Overall, the average installed cost of wind projects in 2016 was $1,590/kW, down $780/kW from the peak in 2009 and 2010. -Wind energy prices remain low: After topping out at nearly 7¢/kWh for power purchase agreements (PPAs) executed in 2009, the national average price of wind PPAs has dropped to around 2¢/kWh—though this nationwide average is dominated by projects that hail from the lowest-priced Interior region of the country (such as Texas, Iowa, Oklahoma). These prices, which are possible in part due to federal tax support, compare favorably to the projected future fuel costs of gas-fired generation. -The supply chain continued to adjust to swings in domestic demand for wind equipment: Wind sector employment reached a new high of more than 101,000 full-time workers at the end of 2016. For wind projects recently installed in the U.S., domestically manufactured content is highest for nacelle assembly (>90%), towers (65-80%), and blades and hubs (50-70%), but is much lower (<20%) for most components internal to the turbine. -Continued strong growth in wind capacity is anticipated in the near term: With federal tax incentives still available, though declining, various forecasts for the domestic market show expected wind power capacity additions averaging more than 9,000 MW/year from 2017 to 2020.

17 WIND ENERGY↗

DOE OSTI2018

2017 Wind Technologies Market Report

The U.S. Department of Energy (DOE)’s Wind Technologies Market Report provides an annual overview of trends in the U.S. wind power market. Highlights of this year’s report include: -Wind power capacity additions continued at a rapid pace in 2017: $11 billion was invested in new wind power plants in 2017. In 2017, wind energy contributed 6.3% of the nation’s electricity supply, more than 10% of total electricity generation in fourteen states, and more than 30% in four of those states—Iowa, Kansas, Oklahoma, and South Dakota. -Bigger turbines are enhancing wind project performance: Increased blade lengths have dramatically increased wind project capacity factors, one measure of project performance, and taller towers appear to be on the horizon. The average 2017 capacity factor among projects built from 2014 through 2016 was 42%, compared to an average of 31.5% among projects built from 2004 to 2011 and 23.5% among projects built from 1998 to 2001. -Low wind turbine pricing continues to push down installed project costs: Wind turbine prices have fallen from their highs in 2008 to $750–$950/kW. Overall, the average installed cost of wind projects in 2017 was $1,610/kW, down $795/kW from the peak in 2009 and 2010. -Wind energy prices remain low: After topping out at 7¢/kWh for power purchase agreements (PPAs) executed in 2009, the national average price of wind PPAs has dropped to around 2¢/kWh—though this nationwide average is dominated by projects that hail from the lowest-priced Interior region of the country (such as Oklahoma, Nebraska, Kansas). These prices, which are possible in part due to federal tax support, compare favorably to the projected future fuel costs of gas-fired generation. -The domestic supply chain for wind equipment is diverse: Wind sector employment reached a new high of more than 105,000 full-time workers at the end of 2017. For wind projects recently installed in the U.S., domestically manufactured content is highest for nacelle assembly (>90%), towers (70-90%), and blades and hubs (50-70%), but is much lower (<20%) for most components internal to the turbine. -Continued strong growth in wind capacity is anticipated in the near term: With federal tax incentives still available, various forecasts for the domestic market show expected wind power capacity additions of 8,000 to 11,000 MW/year from 2018 to 2020, with market contraction anticipated beginning in 2021 as those tax incentives are phased out.

17 WIND ENERGY↗

DOE OSTI2019

2018 Wind Technologies Market Report

The U.S. Department of Energy (DOE)’s Wind Technologies Market Report provides an annual overview of trends in the U.S. wind power market. Highlights of this year’s report include: ~Wind power capacity additions continued at a robust pace in 2018: $11 billion was invested in new wind power plants in 2018. In 2018, wind energy contributed 6.5% of the nation’s electricity supply, more than 10% of total electricity generation in fourteen states, and more than 30% in three of those states—Kansas, Iowa, and Oklahoma. 232 gigawatts of wind are seeking transmission interconnection, 2% of which represents proposed wind plants paired with storage. ~Bigger turbines are enhancing wind project performance: Increased blade lengths have dramatically increased wind project capacity factors, one measure of project performance, and taller towers are on the horizon. The average 2018 capacity factor among projects built from 2014 through 2017 was 42%, compared to an average of 31% among projects built from 2004 to 2011 and 24% among projects built from 1998 to 2001. Low wind turbine pricing continues to push down installed project costs: Wind turbine prices have fallen to $700–$900/kW. The average installed cost of wind projects in 2018 was $1,470/kW, down 40 percent since the peak in 2009 and 2010. ~Wind energy prices are at historical lows: After topping out at 7¢/kWh for power purchase agreements (PPAs) executed in 2009, the national average price of wind PPAs has dropped to below 2¢/kWh—though this nationwide average is dominated by projects that hail from the lowest-priced Interior region of the country. These prices, which are possible in part due to federal tax support, compare favorably to the projected future fuel costs of gas-fired generation. Solar PPA prices have declined precipitously, pressuring wind’s competitive position. ~The grid-system value of wind has declined over the last decade, but rebounded over the last two years. The value of wind in wholesale power markets is impacted by the location of wind plants, their hourly output profiles, and how those characteristics correlate with real-time electricity prices and capacity markets. The market value of wind in 2018 was the lowest in the Southwest Power Pool and Texas (average of $17/MWh and $18/MWh, respectively) whereas the highest-value market was New England (at $41/MWh). Wind energy prices are generally competitive with these value estimates. ~The domestic supply chain for wind equipment is diverse: For wind projects recently installed in the U.S., domestically manufactured content is highest for nacelle assembly (>90%), towers (75-90%), and blades and hubs (50-70%), but is much lower (<20%) for most components internal to the nacelle. Wind sector employment reached a new high of more than 114,000 full-time workers at the end of 2018. ~Continued strong growth in wind capacity is anticipated in the near term: With federal tax incentives still available, various forecasts for the domestic market show expected wind power capacity additions of 9,000-12,000 MW in 2019 and 11,000-15,000 in 2020, with market contraction anticipated beginning in 2021 as those tax incentives are phased out.

17 WIND ENERGY↗

DOE OSTI2021

Land-Based Wind Market Report: 2021 Edition

The U.S. Department of Energy's 2021 edition of its land-based wind market report provides an overview of key trends in the U.S. wind power market, with a focus on 2020. You can find a report, data file and presentation on the Files tab, below. Additionally, several data visualizations are available on the Visualizations tab. Highlights of this year’s update include: -Wind comprises a growing share of electricity supply: U.S. wind power capacity grew at a record pace in 2020, with 25 billion dollars invested in 16.8 GW of capacity. Wind energy output rose to account for more than 8% of the entire nation’s electricity supply, and is more than 20% in 10 states. At least 209 GW of wind are seeking transmission interconnection; 61 GW of this capacity are offshore wind and 13 GW are hybrid plants that pair wind with storage or PV. -Wind project performance has increased over time: The average capacity factor among recently built projects was over 40%, considerably higher than projects built earlier. The highest capacity factors are seen in the interior ‘wind belt’ of the country. -Turbines continue to get larger: Improved plant performance has been driven by larger turbines mounted on taller towers and featuring longer blades. In 2010, no turbines employed blades that were 115 meters in diameter or larger, but in 2020, 91% of newly installed turbines featured such rotors. Proposed projects indicate that total turbine height will continue to rise. -Low wind turbine pricing has pushed down installed project costs over the last decade: Wind turbine prices are averaging 775–850 dollars/kW. The average installed cost of wind projects in 2020 was 1,460 dollars/kW, down more than 40% since the peak in 2010, though stable for the last three years. The lowest costs were found in Texas and the (non-ISO) West. -Wind energy prices remain low, around 20 dollars/MWh in the interior of the country: After topping out at 70 dollars/MWh for power purchase agreements (PPAs) executed in 2009, the national average price of wind PPAs has dropped. In the interior ‘wind belt’ of the country, recent pricing is around 20 dollars/MWh. In the West and East, prices tend to average 30 dollars/MWh or more. These prices, which are possible in part due to federal tax support, fall below the projected future fuel costs of gas-fired generation. -Wind PPA prices are often attractive compared to wind’s grid-system market value: The value of wind in wholesale power markets is affected by the location of wind plants, their hourly output profiles, and how those characteristics correlate with real-time electricity prices and capacity markets. The market value of wind declined in 2020, following natural gas prices lower and averaging under 15 dolalrs/MWh in ERCOT, MISO, NYISO and SPP; higher values were seen in CAISO, ISO-NE and PJM. -The average levelized cost of wind energy is down to 33 dollars/MWh: Levelized costs, which exclude the impacts of federal tax incentives, vary across time and geography, but the national average stood at 33 dollars/MWh in 2020—down substantially historically, though consistent with the previous two years. Levelized costs were lowest in ERCOT, SPP, and the (non-ISO) West. -The health and climate benefits of wind in 2020 were larger than its grid-system value, and the combination of all three far exceeds the current levelized cost of wind: Wind generation reduces power-sector emissions of carbon dioxide, nitrogen oxides, and sulfur dioxide. These reductions, in turn, provide public health and climate benefits that vary regionally, but together are economically valued at an average of 76 dollars/MWh-wind nationwide in 2020. -The domestic supply chain for wind equipment is diverse: For wind projects recently installed in the U.S., domestically manufactured content is highest for nacelle assembly (>85%), towers (60-75%), and blades and hubs (30-50%), but is much lower for most components internal to the nacelle.

17 WIND ENERGY↗

DOE OSTI2022

Land-Based Wind Market Report: 2022 Edition

The U.S. Department of Energy's 2022 edition of its Land-Based Wind Market Report provides an overview of key trends in the U.S. wind power market, with a focus on 2021. You can find a report, data file and presentation on the Files tab, below. Additionally, several data visualizations are available on the Visualizations tab. Despite ongoing supply chain challenges, wind energy in 2021 continued to see strong growth, technology improvements, and low prices in the U.S. Key highlights include: Wind comprises a growing share of electricity supply: U.S. wind power capacity grew at a strong pace in 2021, with the 13.4 GW of new additions representing a $\$20$ billion investment and 32% of all newly added U.S. generation capacity. Wind energy output rose to account for more than 9% of the entire nation’s electricity supply. At least 247 GW of wind are seeking transmission interconnection; 77 GW of this capacity are offshore wind and 19 GW are hybrid plants that pair wind with storage or solar PV. Wind project performance has increased over the decades: The average capacity factor among recently built projects was nearly 40%, considerably higher than projects built earlier. The highest capacity factors are seen in the interior ‘wind belt’ of the country. Turbines continue to get larger: Improved plant performance has been driven by larger turbines mounted on taller towers and featuring longer blades. In 2011, no turbines employed blades that were 115 meters in diameter or larger, but in 2021, 89% of newly installed turbines featured such rotors. Proposed projects indicate that total turbine height will continue to rise. Low wind turbine pricing has pushed down installed project costs over the last decade: Wind turbine prices averaged $\$800$–$\$950$/kW in 2021, a 5% to 10% increase from the year prior but substantially lower than in 2010. The average installed cost of wind projects in 2021 was $\$1,500$/kW, down more than 40% since the peak in 2010, though relatively stable in recent years. The lowest costs were found in Texas and the (non-ISO) West. Wind energy prices are on the rise, but generally remain low, around $\$20$/MWh in the interior of the country with higher prices in the West and East. After topping out above $\$75$/MWh for power purchase agreements (PPAs) executed in 2009, the national average price of wind PPAs has dropped—though supply-chain pressures have resulted in increased prices in recent years. In the interior ‘wind belt’ of the country, recent pricing is around $\$20$/MWh. In the West and East, prices tend to average above $\$30$/MWh. These prices, which are possible in part due to federal tax support, fall below the projected future fuel costs of gas-fired generation. Wind PPA prices are often attractive compared to wind’s grid-system market value: The value of wind in wholesale power markets is affected by the location of wind plants, their hourly output profiles, and how those characteristics correlate with real-time electricity prices and capacity markets. The market value of wind increased in 2021, averaging $\$16$/MWh in MISO, $\$19$/MWh in SPP, $\$23$/MWh in NYISO, $\$31$/MWh in ERCOT, $\$33$/MWh in PJM, $\$44$/MWh in ISO-NE, and $\$48$/MWh in CAISO. The average levelized cost of wind energy was $\$32$/MWh for plants built in 2021: Levelized costs, which exclude the impacts of federal tax incentives, vary across time and geography. The national average stood at $\$32$/MWh in 2021—down substantially historically, though relatively stable in recent years. Levelized costs were lowest in ERCOT, SPP, and the (non-ISO) West. The health and climate benefits of wind in 2021 were larger than its grid-system value, and the combination of all three far exceeds the current levelized cost of wind: Wind generation reduces power-sector emissions of carbon dioxide, nitrogen oxides, and sulfur dioxide. These reductions, in turn, provide public health and climate benefits that vary regionally, but together are economically valued at an average of over $\$90$/MWh-wind for plants built in 2021.

17 WIND ENERGY↗

DOE OSTI2010

Quick Guide: Power Purchase Agreements (Fact Sheet)

Introduction to Federal power purchase agreements (PPAs), including available FEMP services and technical assistance as well as questions to ask when evaluating PPAs for a Federal renewable energy project.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

DOE OSTI2010

Quick Guide: Power Purchase Agreements

Alternative Fuel↗

DOE OSTI2015

Is $50/MWh solar for real? Falling project prices and rising capacity factors drive utility-scale PV toward economic competitiveness

Recently announced low-priced power purchase agreements (PPAs) for US utility-scale photovoltaic (PV) projects suggest $50/MWh solar might be viable under certain conditions. To explore this possibility, this paper draws on an increasing wealth of empirical data to analyze trends in three of the most important PPA price drivers: upfront installed project prices, operations, and maintenance (O&M) costs, and capacity factors. Average installed prices among a sample of utility-scale PV projects declined by more than one third (from 5.8/W AC to 3.7/WAC) from the 2007–2009 period through 2013, even as costlier systems with crystalline-silicon modules, sun tracking, and higher inverter loading ratios (ILRs) have constituted an increasing proportion of total utility-scale PV capacity (all values shown here are in 2013 dollars). Actual and projected O&M costs from a very small sample of projects appear to range from $20–$40/kW AC -year. Furthermore, the average net capacity factor is 30% for projects installed in 2012, up from 24% for projects installed in 2010, owing to better solar resources, higher ILRs, and greater use of tracking among the more recent projects. Based on these trends, a pro-forma financial model suggests that $50/MWh utility-scale PV is achievable using a combination of aggressive-but-achievable technical and financial input parameters (including receipt of the 30% federal investment tax credit). Although the US utility-scale PV market is still young, the rapid progress in the key metrics documented in this paper has made PV a viable competitor against other utility-scale renewable generators, and even conventional peaking generators, in certain regions of the country.

14 SOLAR ENERGY↗

DOE OSTI2014

Walking the interactome for candidate prioritization in exome sequencing studies of Mendelian diseases

Here, whole-exome sequencing (WES) has opened up previously unheard of possibilities for identifying novel disease genes in Mendelian disorders, only about half of which have been elucidated to date. However, interpretation of WES data remains challenging. As a result, we analyze protein–protein association (PPA) networks to identify candidate genes in the vicinity of genes previously implicated in a disease. The analysis, using a random-walk with restart (RWR) method, is adapted to the setting of WES by developing a composite variant-gene relevance score based on the rarity, location and predicted pathogenicity of variants and the RWR evaluation of genes harboring the variants. Benchmarking using known disease variants from 88 disease-gene families reveals that the correct gene is ranked among the top 10 candidates in ≥50% of cases, a figure which we confirmed using a prospective study of disease genes identified in 2012 and PPA data produced before that date. In conclusion, we implement our method in a freely available Web server, ExomeWalker, that displays a ranked list of candidates together with information on PPAs, frequency and predicted pathogenicity of the variants to allow quick and effective searches for candidates that are likely to reward closer investigation.

60 APPLIED LIFE SCIENCES↗

DOE OSTI2014

To Own or Lease Solar: Understanding Commercial Retailers' Decisions to Use Alternative Financing Models

This report examines the tradeoffs among financing methods for businesses installing onsite photovoltaics (PV). We present case studies of PV financing strategies used by two large commercial retailers that have deployed substantial U.S. PV capacity: IKEA, which owns its PV, and Staples, which purchases power generated from onsite PV systems through power purchase agreements (PPAs). We also analyze the financial considerations that influence any company's choice of PV financing strategy. Our goal in this report is to clarify the financial and institutional costs and benefits of financing strategies and to inform other companies that are considering launching or expanding similar PV programs.

14 SOLAR ENERGY↗

DOE OSTI2013

Revisiting the Long-Term Hedge Value of Wind Power in an Era of Low Natural Gas Prices

Expanding production of the United States’ vast shale gas reserves in recent years has put the country on a path towards greater energy independence, enhanced economic prosperity, and (potentially) reduced emissions of greenhouse gases and other pollutants. The corresponding expansion of gas-fired generation in the power sector – driven primarily by lower natural gas prices – has also made it easier and cheaper to integrate large amounts of variable renewable generation, such as wind power, into the grid. At the same time, however, low natural gas prices have suppressed wholesale power prices across the nation, making it harder for wind and other renewable power technologies to compete on cost alone – even despite their recent cost and performance improvements. A near-term softening in policy-driven demand from state-level renewable energy mandates, coupled with a possible phase-out of a key federal tax incentive over time, may exacerbate wind’s challenge in the coming years. As wind power finds it more difficult to compete with gas-fired generation on the basis of near-term cost, it will increasingly need to rely on other attributes, such as its “portfolio” or “hedge” value, as justification for inclusion in the power mix. This article investigates the degree to which wind power can still serve as a cost-effective hedge against rising natural gas prices, given the significant reduction in gas prices in recent years, coupled with expectations that prices will remain low for many years to come. It does so by drawing upon a rich sample of long-term power purchase agreements (“PPAs”) between existing wind generators and electric utilities in the U.S., and comparing the contracted prices at which utilities will be buying wind power from these existing projects for decades to come to a variety of long-term projections of the fuel costs of gas-fired generation modeled by the Energy Information Administration (“EIA”).

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2016

North Antelope Highlands Wind Project

This is the final report on the Wind Energy Development of 190 Mw on the Rosebud Indian Reservation in collaboration with Citizens Energy Corporation. The report discusses all pre-development activities since July of 2010 when award was granted. A systems impact study along with wind data accumulated over the past 5 years is contained in this report. We have responded to several RFPs concerning the sale of energy to certain offtakers, but we have failed to win a Power Purchase Agreement due to existing wind farms that won and the interconnection costs were already included in a previous PPAs, which we don't have that luxury. We continue this effort and hopefully in the near future we will win an RFP.

17 WIND ENERGY↗

DOE OSTI2016

Status and Trends in the U.S. Voluntary Green Power Market (2015 Data)

The voluntary green power market refers to the sale and procurement of renewable energy for voluntary purposes by residential and commercial customers. This report reviews seven green power procurement mechanisms: utility green pricing programs, utility green tariffs, voluntary unbundled renewable energy certificates, competitive supplier green power, community choice aggregations, voluntary power purchase agreements (PPAs), and community solar. This report details the status of trends of those seven green power procurement mechanisms in 2015. Three trends -- significant growth of the voluntary PPA project pipeline, innovative green power mechanisms developed by utilities, and geographic expansion of green power mechanisms -- suggest that the green power market is likely to continue to grow in coming years.

2015↗

DOE OSTI2017

2016 End of the year South Carolina PV soft cost and workforce development

A solar industry survey was given to professional installers who serve the South Carolina market in order to determine trends in costing, work force needs, and business demographics at the end of 2016. It was found that 70% of the respondents serve the residential sector, while only 7% of the total exclusively serves the residential market. The average size of residential installations remain near 9 kW-DC, while the average size of commercial and utility scale installations continue to grow to 378 kW-DC and 14.8 MW-DC, respectively. The total cost of these residential systems has hovered around $3.50/W-DC since the end of 2015, while commercial installations have dropped to $2.45/W-DC and utility scale installations have dropped to $1.49/W-DC. It is expected that the cost of utility scale installations will continue to drop as there are publically reported utility scale installations with contracted PPAs for less than 4¢/kWh. 52-60% of the cost is associated with hardware only depending upon sector.

14 SOLAR ENERGY↗

DOE OSTI2017

Charting the Emergence of Corporate Procurement of Utility-Scale PV

Through July 2017, corporate customers contracted for more than 2,300 MW of utility-scale solar. This paper examines the benefits, challenges, and outlooks for large-scale off-site solar purchasing through four pathways: PPAs, retail choice, utility partnerships (green tariffs and bilateral contracts with utilities), and by becoming a licensed wholesale seller of electricity. Each pathway differs based on where in the United States it is available, the value provided to a corporate off-taker, and the ease of implementation. The paper concludes with a discussion of future pathway comparison, noting that to deploy more corporate off-site solar, new procurement pathways are needed.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2017

Utility-Scale Solar 2016: An Empirical Analysis of Project Cost, Performance, and Pricing Trends in the United States

The utility-scale solar sector has led the overall U.S. solar market in terms of installed capacity since 2012. In 2016, the utility-scale sector installed more than 2.5 times as much new capacity as did the residential and commercial sectors combined, and is expected to maintain its dominant position for at least another five years. This report—the fifth edition in an ongoing annual series—provides data-driven analysis of the utility-scale solar project fleet in the United States. We analyze not just installed project prices, but also operating costs, capacity factors, and power purchase agreement ("PPA") prices from a large sample of utility-scale PV and CSP projects throughout the United States. Highlights from this year's edition include the following: Installation Trends: The use of solar tracking devices dominated 2016 installations, at nearly 80% of all new capacity. In a reflection of the ongoing geographic expansion of the market beyond California and the Southwest, the median long-term average insolation level at newly built project sites declined again in 2016. While new fixed-tilt projects are now seen predominantly in less-sunny regions, tracking projects are increasingly pushing into these same regions. The median inverter loading ratio has stabilized in 2016 at 1.3 for both tracking and fixed-tilt projects. Installed Prices: Median installed PV project prices within a sizable sample have fallen by two-thirds since the 2007-2009 period, to $2.2/WAC (or $1.7/WDC) for projects completed in 2016. The lowest 20th percentile of projects within our 2016 sample were priced at or below $2.0/WAC, with the lowest-priced projects around $1.5/WAC. Overall price dispersion across the entire sample and across geographic regions decreased significantly in 2016. Operation and Maintenance (“O&M”) Costs: What limited empirical O&M cost data are publicly available suggest that PV O&M costs were in the neighborhood of $18/kWAC-year, or $8/MWh, in 2016. These numbers include only those costs incurred to directly operate and maintain the generating plant. Capacity Factors: The cumulative net AC capacity factors of individual PV projects range widely, from 15.4% to 35.5%, with a sample median of 26.3%. This project-level variation is based on a number of factors, including the strength of the solar resource at the project site, whether the array is mounted at a fixed-tilt or on a tracking mechanism, the inverter loading ratio, degradation, and curtailment. Changes in at least the first three of these factors drove mean capacity factors higher from 2010- to 2013-vintage projects, where they’ve remained fairly steady among both 2014- and 2015-vintage projects as an ongoing increase in the prevalence of tracking has been offset by a build-out of lower resource sites. Meanwhile, several of the newer CSP projects in the United States are struggling to match long-term performance expectations. PPA Prices: Driven by lower installed project prices and improving capacity factors, levelized PPA prices for utility-scale PV have fallen dramatically over time. Most recent PPAs in our sample are priced at or below $50/MWh levelized, with a few priced as aggressively as ~$30/MWh. Though impressive in pace and scale, these falling PPA prices have been offset to some degree by declining wholesale market value within high penetration markets like California, where in 2016 a MWh of solar generation was worth just 83% of a MWh of flat, round-the-clock generation. At the end of 2016, there were at least 121.4 GW of utility-scale solar power capacity within the interconnection queues across the nation. The growth within these queues is widely distributed across all regions of the country: California and the Southeast each account for 23% of the 83.3 GW of solar that first entered the queues in 2016, followed by the Northeast (17%), the Southwest (16%), the Central region (12%), Texas (6%) and the Northwest (3%). The widening geographic distribution of solar projects is a clear sign that the utility-scale market is maturing and expanding outside of its traditional high-insolation comfort zones.

14 SOLAR ENERGY↗

DOE OSTI2019

The Vineyard Wind Power Purchase Agreement: Insights for Estimating Costs of U.S. Offshore Wind Projects

This report analyzes the power purchase agreements (PPAs) between Massachusetts electric distribution utilities (EDC) and Vineyard Wind LLC filed on July 31, 2018, and derives insights for estimating cost of U.S. offshore wind systems and broader cost modeling activities. The documented price for delivery of offshore wind generation and renewable energy certificates under the Vineyard Wind/electric distribution utilities PPA is 74 $/megawatt-hour (MWh) (2022$) for facility 1 (400 MW) and 65 $/MWh (2023$) for facility 2 (400 MW). However, this PPA price does not comprise the complete set of expected revenue sources and tax benefits available to the Vineyard Wind LLC project. A comprehensive accounting of expected revenue sources inclusive of those that are exogenous to the reported PPA is conducted in this study to estimate the project's levelized revenue of energy (LROE). This allows for a more equivalent comparison of the PPA pricing with bottom-up modeled (unsubsidized) levelized cost of energy (LCOE) estimates. LROE from the Vineyard LLC/EDC PPA is estimated to be 98$/MWh (2018$). This LROE estimate for the first commercial-scale offshore wind project in the United States appears to be within the range of LROE estimated for offshore wind projects recently tendered in Northern Europe with a start of commercial operation by the early 2020s. This suggests that a cost and risk premium for the initial set of U.S. offshore wind projects may be less pronounced than anticipated by many industry observers and analysts.

17 WIND ENERGY↗