Solar Valuation in Utility Planning Studies

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This webinar was presented by the Clean Energy States Alliance and featured Andrew Mills of Lawrence Berkeley National Lab (LBNL) discussing new research on solar valuation that he and his colleague, Ryan Wiser, have recently published. As renewable technologies mature, recognizing and evaluating their economic value will become increasingly important for justifying their expanded use. In their report, Mills and Wiser used a unique investment and dispatch model to evaluate the changes in the long-run value of variable renewables with increasing penetration levels, based on a case study of California. They found that the value of solar is high at low penetration levels owing to the capacity and energy value of solar, even accounting for an increased need for ancillary services and imperfect forecastability. At higher penetration levels, the marginal value of additional PV and concentrating solar power (CSP) without thermal storage declines, largely due to a decrease in capacity value. The value of CSP with thermal storage remains higher for similar penetration levels owing to the ability to continue to produce energy for hours after the sun goes down. By way of comparison, in California the value of wind at low penetrations is less than the value of solar at low penetrations, but its value is less sensitive to penetration levels. In addition to discussing these findings, Mills reviewed a recent sample of utility planning studies and procurement processes to identify how current practices reflect these drivers of solar's economic value. The LBNL report found that many of the utilities have a framework to capture and evaluate solar's value, but approaches vary widely: only a few studies appear to complement the framework with detailed analysis of key factors such as capacity credits, integration costs, and tradeoffs between distributed and utility-scale photovoltaics. In particular Mills and Wiser found that studies account for the capacity value of solar, though capacity credit estimates with increasing penetration can be improved. Similarly, few planning studies currently reflect the full range of potential benefits from adding thermal storage and/or natural gas augmentation to concentrating solar power plants.

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