In the wake of recent state and federal policies and incentives, investment in solar energy has become increasingly competitive. Accordingly, our energy team desires to provide our readers with the most up-to-date solar market insights. The authors, contributors and editors of Lex Helius have done just that.

Lex Helius analyzes critical issues that solar power project developers confront during the development process, including real property acquisition, regulatory and permitting requirements, interconnection issues, power purchase agreements, financing, and construction contracting.  The guide also discusses federal and state incentives available to solar projects, financing structures, market conditions, and sale and transfer of renewable energy credits.

The new edition of Lex Helius will be available at the Stoel Rives booth (#3043) at the Solar Power International 2011 conference in Dallas, October 17-20, 2011.

The guide can also be downloaded, along with the entire Stoel Rives “Law of” library at www.stoel.com/lawofseries.

The record attendance at the meeting and reports of successful pilot projects were strong indicators that the EES industry has matured over the past years. The general sense at the meeting was that the EES industry is poised to emerge from the product development stage and move into the commercialization and deployment stage. In order to successfully make that leap, the EES industry must first overcome several hurdles.

Prospective EES customers, including utility representatives, contended that, except for pumped hydro, EES applications are not yet cost competitive and that EES systems must achieve significant price reductions before they can be competitive. Various utility representatives encouraged the EES industry to continue to bring down costs with the goal of becoming cost competitive with gas peaker plants. 

Project developers and technology companies acknowledged this reality, but stressed that when comparing EES applications to gas peakers, it is imperative that the market recognize the broad range of combined value streams and utility benefits that EES applications offer. These benefits include:

• Ancillary services and frequency regulation
• Reactive power, voltage, and power quality
• Renewable integration and smoothing
• Multiple hour peak shifting
• Demand response
• Islanding
• Deferred T/D upgrades
• Minimizing spinning reserves

In addition to these benefits, various speakers emphasized the siting and permitting advantages EES enjoys over gas plants. From a land use perspective, EES applications are relatively low impact. Many EES projects can obtain required permits based on a negative declaration and thereby avoid the lengthy siting proceedings that can drag on for years for some thermal generation projects. These siting and permitting advantages that EES applications enjoy translate into reduced costs and quicker development timelines and give EES a distinct advantage over gas peakers. 

The future of EES will in part hinge on the development of supportive federal and state regulations. Accordingly, ongoing proceedings at the Federal Energy Regulatory Commission and the California Public Utilities Commission are critical to the future of EES.

Further, EES system providers will face challenges in structuring transactions to finance and build EES projects. Consultants and legal advisors, including Stoel Rives attorneys, are currently wrestling with various options to solve these challenges.

The EES industry will meet again in San Diego for Infocast’s Storage Week  on July 11-14, and several Stoel Rives attorneys will be presenting and attending.

The Scoping Memo splits the proceeding into two phases: Phase 1 – Policies and Guidelines and Phase 2 – Cost Benefit Analysis and Allocation. The Scoping Memo provides that Phase 1 will consider the following topics:

1. How are energy storage technologies currently being used? To what extent are these current uses indicative of how energy storage should be utilized on a going forward basis? As the Commission is developing a generalized view towards energy storage, what lessons learned should the Commission consider, both in terms of successes and failures?
2. What policies are needed to encourage effective energy storage that will: reduce greenhouse gas emissions; reduce peak demand; defer and/or substitute for an investment in generation, transmission or distributions; and improve reliable grid operations?
3. How can energy storage technologies be best integrated into the utilities’ existing portfolios?
4. How could energy storage technologies be integrated with the Commission’s loading order, such as energy efficiency, demand response, renewable procurement, distributed generation and other items in the Commission’s loading order? What about other overarching policies like smart grid?
5. Are there current state or federal policies that impede the ability of energy storage technologies from being utilized more widely or serve as barriers to the development of energy storage systems? What, if anything, can be done to remove these impediments and barriers?
6. Is it possible to develop a single unifying policy for energy storage when storage has a wide variety of uses?
7. Regardless of the technology used, are there certain energy storage applications/attributes that should be encouraged? To what extent do the costs and benefits associated with these different applications/attributes differ?
8. How should ownership model of energy storage be considered? Do the current value streams favor one type of ownership model over another?

The Scoping Memo contemplates that Phase 1 will involve a series of workshops, the first of which is set for June 28, 2011 at the CPUC Golden Gate Room, 505 Van Ness Ave., San Francisco, CA.

The Scoping Memo notes that the outcome of Phase 1 will influence the scope of Phase 2. Accordingly, the Scoping Memo declines to set the scope of Phase 2, but states that Phase 2 shall consider at least the following topics:

1. How should energy storage applications/attributes be valued?
2. What are the costs for the various types of energy storage applications?
3. What should be taken into consideration to determine whether energy storage technologies are cost effective? Should they be compared against the other types of resources currently being procured by the utilities? How should the benefits associated with energy storage technologies be taken into consideration when determining cost-effectiveness?
4. How should the costs and benefits associated with energy storage technologies be allocated among retail end-use customers?

The CPUC will issue a future scoping memo to definitively set the scope of Phase 2.

Storage Week kicks off on July 11 with four in-depth market and technical tutorials to provide you with all the background details necessary to maximize your experience at the two-day main event. Network with every key group playing a role in rewriting the rules of power markets, from policy strategists, state regulators, and grid operators, to utility planners and IPPs, vendors and more. This event lines up block-buster case studies, key project developers, investors, engineering firms and consultants covering bulk storage development, as well as distributed storage business models.

Click here for a detailed agenda, registration information, and our exclusive 15% off discount code!

Stoel Rives also believes in this mission, and is proud to be an active member in the Twin Cities, Portland, San Diego, and San Francisco Bay Area chapters.  During the month of September we are sponsoring three unique WoWE events.

Our San Diego office will sponsor the local chapter’s September 15 social gathering at Orfila Vineyards and Winery, and the following day our Minneapolis office will host a WoWE Speed Networking Social.  The SF Bay Area Chapter’s September 23 program is being hosted in our downtown Sacramento office and will feature speaker Debi Le Vine with California ISO, who will discuss “Renewable Status and Integration Impacts to the CAISO.”

For more information about WoWE please visit:  http://www.womenofwindenergy.org.

Twin Cities Chapter: http://www.meetup.com/Women-of-Wind-Energy-Twin-Cities/

Portland Chapter: (linkedIn) http://www.linkedin.com/groups?home=&gid=2339246

SF Bay Area Chapter: (linkedIn) http://www.linkedin.com/in/wowesfbayareachapter

San Diego Chapter (lindedIn) http://www.linkedin.com/groupInvitation?groupID=2306706&sharedKey=35FB4D359402

On day one, Jim Woolsey, Venture Partner and Senior Advisor for VantagePoint Venture Partners and Former Director of the CIA, delivered a keynote address that focused on the theme of the role of energy storage in achieving energy independence and security. Panel discussions included the following topics:

1. Bringing Energy Storage to the Power Grid
2. State Regulatory Policy
3. Revising Regional Market Designs to Facilitate Storage: System Operators Views
4. Utility Perspectives on Implementing Energy Storage
5. Views of Storage Suppliers: What Policy and Market Change are Needed to Stimulate a Robust Storage Market?

On day two, Dr. Imre Gyuk, U.S. DOE Program Manager for Energy Storage Research, reported on ARRA stimulus funding initiatives and described research funding opportunities. With respect to the challenges facing DOE as it attempts to deploy massive amounts of funding, Gyuk stated, “It’s like trying to drink out of a fire hose.”

Many storage system developers reported that they are having problems “creating value” and monetizing their systems. These developers consistently called for a national storage portfolio standard similar to the RPS for renewable energy. This vibe created a lack of confidence in the attendees that were contemplating entering the market.

There was not much discussion of co-location of storage and renewable projects, but the wind and solar developers in attendance seemed open to the concept of co-location of storage if the price is right.

There was definitely a sense that the market is still in somewhat early stages.  However, a few days later, on July 16, 2009, the Federal Energy Regulatory Commission issued a policy statement that identified energy storage as one of four grid functionalities that FERC views as key to the development of future standards that will apply to smart grid technologies.  Hopefully, FERC's support of the energy storage industry will stimulate further development and deployment of energy storage systems.

According to its Report, Huron based its analysis on a macro evaluation of the solar industry, expected program costs, and identification of key value drivers. Huron created a computer model based on a series of twelve inputs, including, amongst other things, hardware costs, installation costs, monitoring and maintenance costs, capacity factor, and cost of capital. Interestingly, the Huron Report projects that the cost per DC watt installed for solar generation will decline to $2.20-$2.40 in 2012. Additionally, the Huron Report predicts that thin film technologies will create more competition in the solar market and that “the realization of lower thin film manufacturing costs and scalability will put pricing pressure on traditional crystalline silicon PV technology manufacturers.” Huron ran 10,000 simulations through its model to compute the expected cost per kilowatt. The Huron Report concluded that the expected cost of implementing 400 MW of LADWP owned solar generation is $0.119 per kWh generated, which equates to an incremental rate increase of approximately one percent over LADWP’s existing financial plan.

The Los Angeles Times (1/29/09 editorial ) has criticized the process by which Measure B was placed on the ballot, pointing out that the City Council was not provided with the estimated cost of the project before it approved placing Measure B on the March 3, 2009 ballot. It remains to be seen whether the Huron Report allays these concerns.