Why Won’t Ashland Embrace Solar Energy?

10×20 Project Report                                                                June 15, 2019

A Focus on Renewable Energy, CEAP, Resiliency, and Higher Value Solar.                             

Background

The 10×20 steering committee summarizes here the progress made in the project over the last few months.  We offer in brief the main elements as we see them, and invite input and support in behalf of your interests in the development of local renewable energy due to its role in climate action.   The ordinance calls for the replacement by the City of Ashland of 10% of its electric energy use by new, local renewable means, by 2020.   This amounts to ~17 million kwh per year, or 17 gwh/yr.

Consideration was given to a number of methods to achieve this goal, and it is well-determined that we can probably only accomplish this via a large solar farm utility operated by the City.  We also discuss why several often-suggested alternatives are in fact not considered attractive.

Sample Field Array

  

One factor suggesting the solar farm solution is the availability of an existing site already owned by the City.  Significant  work has been done in 2016 – 2018 by Ashland to determine the suitability its 846 acre Imperatrice property as a possible site for the required 60 acres.  The standard financing of such a project is through a power purchase agreement with a 3rd party investor, where the full cost to the City is met through its sale of the PPA electricity to residential and business customers via the standard City rate structure.

Reiterating the Fundamental Purpose of 10×20

The spirit behind the 10×20 ordinance is primarily the pursuit of community climate action, very much in line with the City’s CEAP goals.  This is to be achieved by producing approx. 17 gwh/year of very clean electricity, freeing that much BPA electricity (our wholesale supplier) for use wherever its own clean energy can be purchased by other customers.  The net result is that 17 gwh/year of clean energy is pumped into the NW, ultimately displacing that much non-renewable energy.  We note that GHGs are a nonlocal toxicity; reducing it anywhere is identical to reducing it anywhere else; it is always and only a global action.

A secondary purpose of 10×20 is the production of energy for use in local resiliency.  This is made possible by the project steering committee’s call for:

  • battery storage for both solar peak-shifting and moderate-to-low level storage use in times of outside power loss, and
  • an upgrade of the City’s Reeder Gulch hydro plant for seasonally balancing renewable  energy sourcing with the solar farm, and for its 24/7 energy supply sourcing during outside power loss. 

It is the addition of a Reeder upgrade that enables 10×20 to support a 10Mw solar farm instead of a 12-13 Mw solar array.   This is especially significant because it enables the solar farm power to be handled directly by two existing substations without upgrades, per the City’s OS Engineering study report.

When we identify resiliency as a sub-purpose of 10×20, the emphasis is directed at the micro-grid function, and the local sourcing for it which the renewable energy offers.  Having the dual capacity offered by the solar farm and the hydro upgrade (along with the battery storage) gives Ashland an excellent energy supply for the micro-grid.  The micro-grid, with these supplies, is a complete but small utility unto itself capable of operating a large fraction of Ashland’s emergency electrical requirement — without external power.

 The Financial Picture in June 2019

The current understanding of the costs involved in completing the project as described herein and elsewhere can be enumerated.

1.         The solar farm cost per kwh to customers may be slightly higher than current BPA wholesale prices, but lower than Ashland’s current retail to customers.  The impact is small since the solar component is still only ~8.5% of the mix.  It can be shown that the increments in the monthly electric costs are less than the already planned City increases for next year.  Over time (6-8 years or less), the BPA wholesale rates to Ashland will exceed the solar PPA rates.  After 15-20 years the PPA rates will drop to zero, when the City then owns the solar and after which we can expect decent output for another 20+ years.

2.         We do not know the costs of the Reeder hydro upgrade, but we expect likely assistance from grants.   Reeder has been in operation over 100 years and will continue indefinitely.

3.         Battery storage recommended here [to be refined by engineering] is in the vicinity of 2 Mwh capacity and 2 Mw power since its primary use is minor solar peak-shifting.  Battery storage has become cost effective nearly as fast as solar pricing has dropped.  (See the Lazard Levelized Cost of Energy report1).  Cost:  approx. $350K.

4.         Micro-grid development.  10×20 does not include this work, but aims to enable it.

5.         The 7 years of a possible BPA Take/Pay liability has been a main concern by the City and others.  We have approached this directly, and City officials then met with Bonneville Power to clarify the consequences of Ashland generating 10% of its power with new resources, ahead of its contract renewal in 2028.   Results:  To the extent that the City energy usage drops beneath its RHWM2 (due, say, to 10×20), BPA can levy charges for the difference between its wholesale rate to Ashland and the current NW spot market prices.  We [10×20 steering committee] have analyzed this in depth by examining average spot market prices over a five-year period.  We do not observe, in a worse case scenario, discouraging results.  Two other factors are in play with this:  contract accommodations in 2028, and (hopefully) increased natural use of electricity by Ashland for heating and electric vehicles charging — as proposed by our CEAP commitment.  Increased use of electricity directly reduces the RHWM gap caused by the 10×20 production — which directly reduces the  amount of power and cost associated with Take/Pay.   We will bring some highly useful spreadsheets with these results to our next 10×20 meeting.

Understanding Utility Solar vs. Rooftop and Community Solar

The most persistent question among alert citizens that arises as interest increases in climate action via renewable energy use is “why not just double down on rooftop solar?”.  Another version of this question is “why not one or another exotic plan using community solar?”.  There are very solid reasons why not that we can point out here.  Again, it is easiest to enumerate them:

1.         Utility solar is less than half the cost of all other solar pv applications3.

2.         There are limits to the ability of a utility (Ashland Electric) to support net-metering with payback for into-the-grid power generated by rooftop solar.

Each kwh of private solar reduces City revenue while not reducing the Electric Dept.’s grid maintenance obligations.  Expanded net-metering will eventually saturate, with obvious fiduciary results.   The grid is financed through income from power the City sells to users.

The impact of net-metered City revenue losses tend to force rate increases for all residents and businesses simply because fewer people supporting the utility grid means its expenses are spread across fewer customers.  In other words, roof-toppers, to an extent, are in fact partially supported by residents/businesses who do not or who cannot have rooftop solar.  Community solar, which is a misnomer, has exactly the same effect. 

In comparison, the City owned/operated solar farm is in effect an electric co-op enabling every single person, even visitors to Ashland, to automatically participate in our expanding solar world.   Everyone in the community contributes to the climate action.  [If necessary, there could be an opt-out mechanism.]  Instead of costing the City revenue, this utility gives the City revenue.

(We emphasize that while there are community disadvantages to ‘rooftop’ solar,  almost every 10×20 advocate has rooftop solar or fully supports it.  There is nothing in the 10×20 project development that discourages anyone from pursuing rooftop solar.  It is climate positive but simply not the most cost effective deployment.)  

3.         The City hosts approx. 2.2 Mw of net-metered roof-top solar, which is ‘very good climate action’.  This has cost Ashland approx. $925,000 in incentives plus its losses in revenue described above.   The large presence of existing roof-top solar in Ashland could in principle also supply a future micro-grid.  However, the distributed nature of rooftop would make this more challenging at this time.

4.         There are not enough additional, suitable, rooftops and available, likely spaces for community solar to furnish the energy that a 10 Mw City solar utility will generate.

5.         If the 1 Mw solar grant project the City electric dept. is (apparently) currently pursuing is successful, it will serve as a fine component of 10×20, reducing the solar farm level to 9 Mw.  It will also have battery storage, with an eye toward a City micro-grid.  (Please note that the 10×20 solar farm is in no way in competition with this endeavor.   Both initiatives should be fully regarded as helping to fulfill our 10×20 ordinance.)

Obstacles to 10×20 and the Project Off-Ramps

The City has undertaken several necessary steps that 10×20 has required, to this point.  These include:

  • ordinance adoption, 
  • a professional power engineering analysis, 
  • several opposition citizen group testimonies,
  • an environmental analysis,
  • many meetings with the 10×20 steering committee members,
  • many hours of staff analysis,
  • preliminary RFP documents for the solar farm,
  • the Portland meeting with Bonneville administrators,
  • and probably many hours of private discussions.  

It cannot be said that Ashland has not considered this project.  But while several hurdles have been passed, several more remain: 

  • Concern for some disruption of the Imperatrice property, which is generally seen as pristine by some conservationists. 
  • No doubt neighbors and others are concerned about the physical presence of 60 acres of panels. 
  • The potential short and long term rate affects are not exactly known and will not be until an RFP is issued and proposals are evaluated. 
  • We do not know whether the land use county/state variances can be obtained. 
  • We do not yet know whether suitable geotechnical [foundation soils] and acceptable
[aesthetic]

positioning on Imperatrice can be made. 

  • Finally, many of us think and appreciate that the public will be called upon again to certify or reject the project, after the challenges described here are met.

Each of these present Ashland with an off-ramp by which the solar farm part of the 10×20 project can be derailed. This is the way it should be; we can delight in the realization that democracy is alive and well in our community.   We can determine very much our energy directions.

There are many interesting, correlated projects to follow 10×20.  For example, we can envision an energy storage co-op organization, again probably City-operated,  whereby a large number of eV users network with a system that can on the average depend on a certain minimum amount of total EV battery function furnishing its total charge to the City grid — serving an important load-leveling function as well as another positive micro-grid element.

Dr. Tom Marvin, Professor Emeritus in Physics, Ashland

1,3 www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2018/

2 RHWM  is the industry ‘rate high water mark’, and is one billing benchmark among several for understanding not just how much energy a utility uses, but also it’s change, in 2-3 year increments.  It is compared and adjusted against a contracted CHWM, the ‘contract high water mark’.  Take/Pay can be initiated when a utility uses less energy than its RHWM specifies.  This can happen under a 10×20 installed resource  — until which time the City can obtain a new contract (2028).  The RHWM a fluid parameter, but so is Ashland’s energy use.  If CEAP becomes successful, our energy use can mitigate some of these effects.

//inserted by Sharon