Austin, Texas increases solar goals by 700 MW, solar to be new default source of power

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On August 28th, the Austin City Council passed a resolution strengthening its greenhouse gas reduction and solar deployment goals, which it says will make it the leading city in the nation in terms of addressing Climate Change.

The resolution sets a goal for city utility Austin Energy replace the power output from a 36 year-old natural gas-fired power plant by 2017 with 600 MW of new utility-scale solar plants.

It increases the utility’s “local solar” goal to 200 MW by 2020, which includes 100 MW of behind-the-meter solar, as well as allowing third-party solar companies to participate in the residential incentive program. These increases follow on recommendations from a task force convened earlier in the year, which call for solar to be “the new default generation resource through 2024”.

The resolution also makes changes to the Residential Solar Tariff, which is a “value of solar tariff” (VOST), a form of standard offer program. These including allowing credits to roll over from year to year, removing a 20 kW cap, setting an annual floor for the tariff rate, and allowing leased system hosts to receive credits.

Perhaps most importantly, any future Residential Solar Tariff methodology changes must be approved by the city council, which may address concerns that some in the solar industry have made concerning the ability of utilities to rapidly cut VOST rates.

Finally, the resolution calls for a comprehensive strategy for the deployment and use of 200 MW of fast-response energy storage technologies.

These sweeping changes are set within the context of even more ambitious greenhouse gas reduction targets. The resolution calls for a reduction of CO2 emissions from all “city-controlled” energy sources to zero by 2030. These goals follow on a series of increasingly ambitious greenhouse gas reduction targets, starting with the city’s Climate Protection Plan passed in 2007.

However, economics may be another motivation for the increasing importance given to solar. Austin Energy recently signed a power purchase agreement with a 150 MW PV project at around USD 0.05 per kilowatt-hour, a price competitive with natural gas generation even at current low prices.

Additionally, the neighboring city of San Antonio, Texas has contracted with OCI Solar Power to provide 400 MW of utility-scale PV. The CEO of the city’s municipal utility CPS has been candid about the benefits of solar in helping to reduce the very high costs of electricity imports during heat waves.