As California looks for strategies to meet its greenhouse gas reduction goals, finding ways to cost-effectively install renewable energy systems could be key. One creative approach recently proposed by the California Public Utilities Commission involves letting developers bid on contracts to install green energy projects in California. This “reverse auction market” feed-in tariff is designed to avoid scenarios like the one that developed in Spain when the booming solar market crashed due to the expiration of subsidies and the maxing out of a cap on renewable energy.
In the past, utilities have negotiated contracts for solar power plants that generate hundreds of millions of megawatts, typically located in the desert and taking years for big solar farms and transmission lines to be licensed and built. An auction in California would essentially let the market set electricity rates for photovoltaic projects that produce between one and 20 megawatts in California and can be built within 18 months.
Solar developers expect this proposal to spur a large volume of PV projects in the state. According to Adam Browning, the executive director of Vote Solar, a San Francisco advocacy group, the reverse auction proposal fills a big hole in California’s renewable energy program — photovoltaic projects that generate between one and 20 megawatts and can be built quickly and plugged into the existing transmission grid. Browning said that he think these photovoltaic systems will likely be built on otherwise unusable land, such as railroad rights-of-way or wastewater plants that have lots of roof space.
The proposal calls California’s three investor-owned utilities to hold a minimum of two auctions a year until projects generating 1,000 megawatts are installed. Solar, biomass, wind or geothermal energy projects up to 20 megawatts can be proposed. However, the utilities would not be required to accept bids for those greater than 10 megawatts.
Steven Chadima, vice president for external affairs for the Chinese solar giant Suntech America, said his firm favors the proposal. However, he hopes that the CPUC might consider a separate structure for smaller projects because he has concerns about the potential for a few large solar developers to dominate the auctions and skew the results toward big projects.
Read more: A ‘Reverse Auction Market’ Proposed
(New York Times, 8/28/09)
Stacey Meinzen has a broad range of experience in climate change policy. From her work with ICLEI doing a municipal greenhouse gas inventory to her news coverage of climate change for Flex Your Power's e-Newswire, to her research on climate change policy for Green For All, she has absorbed a range of views and interests about the best way to deal with this complex issue. Her primary interest is in local solutions that can be executed with sound policy to support them. She founded ClimateActionPlans.com to highlight key green projects and the programs and policies that allow them to happen.