Tough trick: Estimating need for renewables
February 7, 2012
State law requires that a steadily growing percentage of the power sold by Nevada utilities – 15 percent today, 25 percent in 2025 – must come from renewable sources.
Simple enough, right?
Not in a time of big economic change in the state, when once-rapid growth in electric demand has slowed to distinctly modest levels.
Utility executives and regulators know the law says that 18 percent of the electricity sold in the state in 2013 and 2014 will need to come from renewable sources. But the question anymore is this: 18 percent of what?
And the question is all the trickier because some sources of renewable energy – notably, some solar technologies – cost more than traditional coal- or gas-fired plants to produce electricity.
NV Energy needs to contract with some of those higher-cost producers to meet the requirements of the state’s Renewable Portfolio Standard, but it doesn’t want to burden customers with the costs of high-priced electricity.
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So the question – 18 percent of what? – has implications for developers of geothermal, solar, wind and biomass plants across Nevada.
Stacey Crowley, director of the Nevada State Office in Energy, told a Reno audience a few weeks ago that Nevada officials hope to export power from renewables plants in Nevada to markets elsewhere in the West. That would support continued development of the renewable-power industry in the state even if demand in Nevada remains flat.
Guessing the demand for electricity in the state long has been one of the challenges facing utility executives as well as staff of the Public Utilities Commission of Nevada.
“It’s always been difficult,” says Bobby Hollis, renewable energy executive for NV Energy.
When the recession began to unfold and big electric users ranging from manufacturers to casinos went dark, NV Energy expected that the graph of electric sales might look like a hockey stick – a few years of flat growth followed by a sharp recovery.
Now, the projections they’ve developed with the PUC call for modest growth over the next two or three years – and no hockey-stick upturn for a good while.
While the requirements of the Renewable Portfolio Standard also will grow to 18 percent next year from 15 percent today, new projects coming on line will keep NV Energy on pace.
Among the largest of the new projects are the 152-megawatt Spring Valley Wind project under development by Pattern Energy near Ely and a 100-megawatt solar plant under development near Tonopah by SolarReserve of Santa Monica.
If the Nevada economy recovers more quickly than expected, NV Energy could be scrambling to buy power from renewable sources elsewhere while it waits for new plants to come on line in Nevada. “You can’t just call up on the phone and say you need something in a few weeks or a few months,” says Hollis.
Some solar plants now can add capacity in small increments fairly quickly, he says. On the other hand, development of new facilities or transmission lines on federal lands in Nevada can be slowed by lengthy environmental studies.
Weather is a wild card in all of the estimates. An exceptionally hot summer in Las Vegas may mean that NV Energy is required to draw large amounts of power from traditional generation facilities across the West.
That pushes down the percentage represented by renewable sources. A cool summer, meanwhile, might mean that renewables account for a larger percentage of the utility’s total sales.
The state allows the utility to average those peaks and valleys over time. Consumer behavior also will play a role in the amount of power that NV Energy needs to buy from geothermal, solar or other renewable sources. State law allows utilities to count savings through conservation toward the requirement for use of renewables.
Hollis notes that conservation is by far the least expensive way for NV Energy to meet part of the renewables goal. When a consumer buys a energy-efficient refrigerator, the decision moves the utility one small step farther away from the day that it will need to invest millions in construction of a new power plant.