agreed to buy 550 megawatts from OptiSolar, a relatively new Hayward
firm that would install thin-film solar panels on 9.5 square miles of
ranchland in San Luis Obispo County.
It would buy an additional 250 megawatts of power from SunPower
Corp., a solar industry leader based in San Jose that would use an
additional 3.5 square miles of San Luis Obispo land.
Energy experts said the purchase could change the face of the
renewable energy industry by showing that photovoltaic power can be
affordably produced on a large, centralized scale, not just on the
rooftops of individual homes and businesses.
"This scale is 10 times larger than what was being talked about
awhile ago," said Daniel Kammen, director of the Renewable and
Appropriate Energy Laboratory at UC Berkeley.
"This makes large-scale solar an increasingly likely and large part
of the energy portfolio in California and the West," said V. John
White, director of the Center for Energy Efficiency and Renewable
Technologies in Sacramento.
PG&E and California's other utilities are under a state mandate
to generate 20 percent of their energy from renewable sources such as
solar, wind and geothermal power by 2010.
They now remain far from that goal: PG&E received just 11.4
percent of its energy from renewable sources in 2007, while Southern
California Edison and San Diego Gas and Electric got 15.7 percent and
5.2 percent of their respective power from renewables.
And solar makes up a particularly tiny share of that - less than 1 percent of PG&E's total power.
However, PG&E has signed a spate of solar contracts over the past year aimed at expanding its supply of renewable energy.
Together with the 800-megawatt deal announced Thursday, these solar
contracts would increase renewable energy to 24 percent of PG&E's
portfolio by 2013, utility officials said.
"We will continue to explore such innovative technologies as we
aggressively work to increase the amount of renewable energy we provide
our customers," said Jack Keenan, chief operating officer for PG&E.
The contracts announced Thursday are significant because they
involve photovoltaic power, a solar technology that uses silicon-based
panels to convert sunlight directly into electricity.
This is the kind of solar power found on the rooftops of homes and
businesses. But until now, it has been too expensive for utilities to
use on a large and centralized basis - costing about 40 cents per
kilowatt hour, compared with 10 cents for natural gas and 12 cents for
wind power, according to Severin Borenstein, director of the UC Energy
Institute. (A kilowatt hour is the amount of electricity needed to
operate a 100-watt light bulb for 10 hours.)
Instead, utilities seeking large-scale solar plants have generally
pursued a technology called solar thermal, where concentrated sunlight
is used to heat a liquid that generates electricity with a turbine.
Solar thermal typically costs about 18 cents per kilowatt hour.
PG&E officials said their contracts with OptiSolar and SunPower
would provide power at rates competitive with other renewables. That
would amount to a major reduction in the cost of photovoltaic power.
But officials declined to say precisely what rates they would be
paying. They said the contracts would not affect electricity rates paid
"If they can get the costs down to the range they're talking about,
that would be a real major step," said UC's Borenstein. "But we don't
know exactly what the numbers are because they're not being made
public. I'm wondering why there isn't more transparency in this."
Economies of scale
OptiSolar and SunPower said they are able to offer power at a lower
rate than traditional photovoltaic projects for a variety of reasons,
including economies of scale, technological advances and efficiencies
While hailing PG&E's photovoltaic contracts as a potentially big
step forward, some industry experts cautioned that there still are some
hurdles to cross before those 800 megawatts of power become a reality.
Both of the plants will need approval from state and local
government, where they may run into opposition from environmentalists
because of the sizable amount of land involved. PG&E will have to
develop transmission lines to move the power from San Luis Obispo to
its customers. And OptiSolar and SunPower will need to finance
construction of all those solar cells.
"A power purchase contract is one thing, but where are the bankers?"
said White. "They are going to need hundreds of millions of dollars."
PG&E has said the deals are contingent on Congress reauthorizing
several tax credits for renewable energy that are due to expire at the
end of this year. Although there is broad bipartisan support for the
credits, their renewal has been caught up in the debate over other
controversial issues like offshore oil drilling and how to pay for the
"This is contingent on the (renewable-energy tax credits) being
reinstated," Borenstein said. "If Congress screws up and lets that
lapse, this could be put on a shelf."
PG&E's solar deals
|Cleantech America||5 MW||photovoltaic||6/07||2009|
|Green Volts||2 MW||photovoltaic||6/07||2008|
|Solel||553 MW||solar thermal||7/07||2011|
|Ausra||177 MW||solar thermal||11/07||2011|
|BrightSource||up to 900 MW||solar thermal||4/08||2012|
|Martifer||106.8 MW||solar thermal/biofuel hybrid||6/08||2011|
Source: PG&E Co.
This article appeared on page D - 1 of the San Francisco Chronicle