Minneapolis-based Xcel Energy has received astonishingly low median price offers of 3.6¢ per kilowatt-hour for solar plus storage and 2.1¢ per kWh for wind plus storage across a series of incoming bids for new electricity supply, to be installed and in operation by 2023.
While the pricing comes with “lots of caveats”, it’s “incredible nonetheless,” said GTM Research Advisor Shayle Kann.
“What fabulous numbers,” tweeted Vibrant Clean Energy CEO Christopher Clack, last seen in a very public spat with Stanford University’s Mark Jacobson over the viability of Jacobson’s pathways to 100% renewable energy.
Xcel’s 2016 Electric Resource Plan calls for it to procure about 615 MW of new generation for Colorado, Greentech Media reports. After the utility holding company issued an “all-resource solicitation” late last year, it said bidders came back an “unprecedented” 430 proposals covering 238 projects, with some developers putting forward multiple pitches per project.
“For comparison, the company received 55 bids in the 2013 all-source solicitation,” Xcel noted.
But the pricing was the big surprise. “Wind came in lowest, at $18.10 per megawatt-hour,” Greentech notes. “It was followed by combined wind and solar, at $19.90; then wind with battery storage, at $21; (solar photovoltaic) alone, at $29.50; then wind, solar, and battery storage, at $30.60.”
Those numbers indicate that “Xcel’s bidders were expecting significant solar, wind, and battery cost reductions between now and when the projects are due to go online,” Greentech adds, citing GTM Research Energy Storage Director Ravi Manghani.
“There’s still five years and a few months before they become operational,” Manghani said. “The industry is looking to ride on the cost curve.” With the U.S. Investment Tax Credit for solar scheduled to fall from 30 to 10% by 2023, “the industry expects the costs will decline faster than the ITC.”
Greentech says Xcel is not expected to finalize bid selections before April.