While most industry insiders have long understood that utility-scale solar is more economical than rooftop solar, Nevada lacked hard data to support the notion. To remedy the deficiency, the state's Public Utilities Commission ordered northern Nevada's electric utility, Sierra Pacific Power Company d/b/a NV Energy, to conduct a comparative analysis of the costs and benefits of various generation and generation avoidance technologies. The analysis was to be a supplement to Sierra's triennial resource plan filing.
On July 1, 2016, Sierra filed an integrated resource plan with the Nevada PUC. Sierra's Preferred Resource Plan is to partake in its sister utility's purchase of the South Point power plant. Sierra Pacific requested Commission approval to lease a 30 percent interest in South Point from Nevada Power Company. With a $75.6 million price tag, the 504-megawatt natural gas plant is a value proposition for both Nevada Power and Sierra. This sharing of generating resources has become possible with the completion of 500-kV One Nevada Line, which connected Sierra's transmission and distribution system to Nevada Power's. While Sierra's Preferred Plan will not please environmentalists, it will please ratepayers' pocketbooks. Over a 20-year horizon, the Plan costs $80 million less than Sierra's Low Carbon Alternate Plan, which is a 50/50 combination of solar PV and natural gas generation.
In addition to the ordinary components of a resource plan, Sierra, as ordered by the Commission, included economic analyses of various generation (and generation avoidance) technologies within the resource plan filing, including photovoltaic distributed generation, large-scale solar, large-scale geothermal, conventional natural gas, and energy efficiency. The Commission's order instructed Sierra to evaluate the economics of each technology by adding hypothetical 100-megawatt blocks to the system. Such 100 MW blocks of various resources were to be added to Sierra's Preferred Plan and evaluated, in part, under the Present Worth of Revenue Requirement ("PWRR") analysis.
The results of the PWRR analysis were both surprising and predictable. Deployment of close to 100 MW of energy efficiency measures proved to be the most economical choice. Energy efficiency, of course, also happens to be the most environmentally friendly technology as the cleanest MW of energy is the MW that was never produced. The second most economical choice turned out to be a natural gas plant. Operated as a flexible peaking unit, this 113-MW conventional resource would provide considerable value to the utility during peak load hours.
The analysis demonstrated that large-scale solar is the most economical renewable energy resource. According to the 20-year PWRR analysis, deployment of 100 MW of large-scale solar would save Nevada ratepayers $23 million over a comparable wind deployment and $38 million over a comparable rooftop solar deployment. The margins widen ever further under the 30-year PWRR analysis. Coupling large-scale solar and rooftop solar with energy storage yielded system-wide costs that are considerably higher than they would be with stand-alone solar generation. This data suggests that, to protect the environment and ratepayers' pocketbooks, Nevada regulators and lawmakers should prioritize investment in energy efficiency measures and utility-scale solar.
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