|
Publication Number: CEC-300-2006-004
Abstract:
In implementing state renewables portfolio standards, utility purchasers and electricity regulators must confront the reality that signed renewable energy contracts will not always yield operational projects on the timeline given in the contracts themselves. Renewable energy projects may fail to achieve scheduled commercial operations for a variety of reasons, some of which are outside the control of both the purchasing utility and the renewable developer. If not addressed, this risk of contract failure could cause individual load-serving entities, or entire states, to fall short of their renewable energy targets. Based on a variety of data sources, this report summarizes potentially relevant experience with renewable energy contract failure from historical experience in California within the major investor-owned utilities' service territories; from a broad group of other North American electric utilities; and from government renewable energy contract and incentive auctions. The resulting sample is extensive, consisting of over 21,500 MW of renewable energy contracts. The report finds that contract failure rates vary considerably among utilities, across situations, and by technology. Though some of this experience is not entirely relevant to the contracting practices of today's electric utilities, the data suggest that a minimum overall contract failure rate of 20 to 30 percent should generally be expected for large solicitations conducted over multiple years. Failure rates much higher than these levels are supported by historical experience. Ongoing monitoring of contract failure is recommended. Moreover, as additional contracting experience is gained, it may be helpful to scrutinize the different approaches used by utility purchasers to mitigate contract failure, document early experience with those measures, and compare in some detail the approaches used in various jurisdictions. KeywordS: renewable energy, power purchase agreement, contract failure, renewables portfolio standard, wind power, project status
Author(s): Ryan Wiser, Ric O'Connell, Mark Bolineger, Robert Grace Commission Division: Renewables Program (300)
Office/Program: Renewable Energy General
PIER Program Area:
Date Published: January 2006
Date On Line:
01/11/2006
Acrobat PDF File Size: 53 pages,
852 kilobytes
|
|
