Utah Utility Cuts Deal For 20 Years Of Solar Power Because It’s The Cheapest Option http://b4in.org/b4ni
Boston-based renewable energy company First Wind just finalized agreements to provide a Utah utility with 320 megawatts of solar capacity for the next two decades. And the circumstances of the contracts are yet another example of how falling solar prices are reshaping the market.
The agreement in this case is what’s called a power purchase agreement (PPA), in which an energy provider (First Wind in this case) agrees to sell energy to a buyer (such as Utah utility Rocky Mountain) at a fixed payment rate for an agreed-upon amount of time.
In other words, a PPA only makes market sense when an energy provider is confident they will be able to reliably generate the energy at a low cost for an extended period of time. In this case, the PPAs are a 20-year deal between First Wind and Rocky Mountain, for energy produced by four solar projects First Wind will build of 80 megawatts each.
That’s a grand total of 320 megawatts of capacity, which should be able to produce over 800,000 megawatt-hours of energy annually — enough to power about 90,000 Utah homes. Construction is planned to begin in 2015, and end the next year.
“These additional long-term contracts with Rocky Mountain Power will enable us to move forward quickly with what will be the largest solar development in Utah, and our largest solar project to date,” said First Wind CEO Paul Gaynor.
The latest projects are also on top of a 306 megawatt solar plant First Wind already runs in Utah, as well as seven smaller PPAs — totaling 20 megawatts — the company agreed to build in the state earlier this month.
“When combined with our nearby Milford Wind project and Seven Sisters projects, we will have a capacity to generate nearly 650MW of clean electricity while serving as a source of major economic activity for southern Utah through good construction jobs and significant local tax revenues,” Gaynor continued.