SRP announces new solar plant in Florence

Nov 22 - Yellowbrix

Salt River Project plans to buy power from a new solar project being constructed near Florence for a price that rivals power costs from traditional natural-gas plants.

The 21-year power purchase deal with the Sandstone Solar Power Plant will average 5.3 cents per kilowatt-hour, totaling about $65 million .

The plant will have a capacity of 45 megawatts. That is enough power to supply about 11,250 homes at once, when the sun is shining on the plant.

The price is among the most competitive in the country for a solar plant, said Tom Cooper , SRP director of resource planning and development.

Even using a fairly moderate forecast, not many years down the road we see the cost of natural gas crossing over and being more than the price that was set for this project, Cooper said. That makes some assumptions about where gas prices go. That is definitely one of the important pieces of the economic picture for us on this project.

In October, the market rate for power in the region was about 4 cents per kilowatt-hour. That rises to close to 5 cents a kilowatt-hour in summer.

On a present-value basis, we think this is more cost effective than the gas fuel itself would be, Cooper said. With a gas plant, you get capacity when you need it. This is intermittent. The plant will peak shortly after noon and our system peaks at 5 or 6 p.m. , so it does not have the same capacity value as a gas plant. But just on fuel, we see this over time becoming more attractive.

Most power-purchase deals, including those at SRP, are kept confidential between the utility and the project developer. Sometimes prices are included in public information for municipal utilities, or if a utility wants to boast about its deal.

In February 2013 , New Mexico utility El Paso Electric Co. made headlines with a similar announcement about where it would purchase solar power for about 5.8 cents per kilowatt-hour.

That deal with Tempe-based First Solar Inc. at the Macho Springs project was the lowest price for solar to be publicly revealed at the time.

I don't know if this is the cheapest one in the country, but it's got to be among the cheapest, Cooper said of Sandstone.

Utah -based sPower will build the Sandstone project on 300 acres of land and use a tracking system to keep the panels pointed at the sun as it moves across the sky.

SRP has set a goal to meet 20 percent of the municipal utility's demand with renewable sources and energy efficiency by 2020, and currently meets about 12 percent of its demand through those resources.

Other SRP solar resources include the Copper Crossing Solar Ranch in Florence and the Queen Creek Solar Farm , as well as a system at the Arizona State University Polytechnic Campus in Mesa.

The fact that solar power is becoming economically competitive with traditional energy sources means we can achieve our goal of affordable energy independence with less environmental impact, Rep. Paul Gosar said in a prepared statement. He represents the Florence area in Congress .

http://www.energycentral.com/functional/news/news_detail.cfm?did=34410545&