City of Las Vegas enters deal for 100% renewables

Portland, Maine (Platts)--25 Nov 2015 435 pm EST/2135 GMT

While companies have been increasingly buying renewable energy for several years, Las Vegas is joining an emerging trend of US cities switching to green energy.

Las Vegas now plans to buy all its electricity from renewables, thanks to an arrangement with NV Energy announced Tuesday.

The city currently supplies about 40% of its load through city-owned solar and biogas, as well as conservation, Tom Perrigo, the city's chief sustainability officer, said Wednesday.

The deal with NV Energy would cover the city's remaining load of about 4.3 million MWh/year, Perrigo said. The arrangement would cost about $228,000 extra, but the city expects to more than offset the cost with increased conservation and renewable energy additions.

Las Vegas entered into the three-year agreement after exploring other options, including third-party suppliers, Perrigo said. The city expects to replace the contract with a 20-year power purchase agreement, he said, noting that although the 30% federal investment tax credit is set to fall to 10% in 2017, Las Vegas expects solar prices to be about on par with current prices in 2020.

If approved, the deal would begin in January 2017.

The switch to full renewables would lower the city's carbon dioxide emissions to 40% below 1990 levels, exceeding a city goal, Perrigo said.

The city also sees going to 100% renewables as a way of attracting top companies and workers who value sustainability efforts, he added.

The power is slated to come from SunPower's planned Boulder Solar project, with the power set to be sold to NV Energy for $46/MWh under a 20-year, fixed price contract. SunPower plans to build the project in a solar energy zone created by Boulder City, Nevada. The project is expected to produce about 298,000 MWh/year.

The contract must be approved by the Nevada Public Utilities Commission and the Las Vegas City Council. The city council could vote on the deal in December and the PUC is expected to make a decision by March.

The deal would be similar to one the PUC approved in October between NV Energy and Switch, which has data centers in southern Nevada. Under the arrangement, NV Energy will supply Switch from First Solar's 100-MW Playa 2 project, once it is built. NV Energy plans to buy the plant's output through a 20-year PPA that calls for paying First Solar $38.70/MWh, with a 3% annual increase.

'VOLUNTARY' GREEN POWER SALES GROW

The voluntary green power market grew 10% last year to 74 million MWh, according to a report released in October by the National Renewable Energy Laboratory. The voluntary market, which is separate from mandated renewable purchases, accounted for 26% of all non-hydroelectric renewable generation last year, the report said.

The voluntary market includes utility green pricing programs, competitive suppliers, community solar, community choice aggregation and PPAs.

There were more than 550 voluntary PPAs totaling about 6,400 MW as of July, according to the report, which noted that the PPAs are becoming cost competitive with other options.

Last year, information and technology companies accounted for about half of the new PPA capacity, while the government and education sector accounted for about a quarter of the new capacity last year.

With a population of about 600,000, Las Vegas would be the largest city in the US getting all its power from renewable resources. Currently, at least four other US cities are 100% green: Aspen, Colorado; Burlington, Vermont; Greensburg, Kansas; and Scituate, Massachusetts.

Other cities have plans to follow the trend.

Georgetown, Texas, aims to get all of its power from renewable sources by 2017 while in California, San Francisco has a 2020 target and San Diego has its sights set on being 100% renewable by 2035.

--Ethan Howland, newsdesk@platts.com
--Edited by Lisa Miller, lisa.miller@platts.com

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