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Grid parity, New Mexico style June 10, 2013

Posted by Maury Markowitz in solar.
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I just came across a short article on a recent deal signed between El Paso Electric Power and First Solar for a 50 MW PV plant in New Mexico. The key point here is the power purchase agreement (PPA) was signed at 5.79 cents/kWh. See this document for details.

Who knows what backroom dealings went into this agreement, and it’s impossible to say whether or not this represents any sort of reasonable price point moving forward. But none of that makes a difference. What we’re looking at here is what appears to be the first example of “Grid Parity of the Third Kind”, parity on the wholesale side of the wire, as opposed to the retail side.

5.79 cents is more than we pay for some wholesale power here in Ontario, which varies from 1.9 cents/kWh as the average grid rate, but have real payouts as high as 8.53 cents/kWh at Pickering A (and 5.36 at Pickering B) down into the 2 cent range for some of its hydro assets.

It’s a funny world we live in when PV plants are signing PPAs at the same rates as nuclear stations!

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