Solar Power Plant Reliability – Why Should We Care?
Solar power plants have taken their place alongside coal, natural gas, nuclear, and wind as legitimate and valuable generation resources. Solar comprised 29.4% of new electric generating capacity in the U.S. in 2015, exceeding the total for natural gas for the first time.1 The acceptance of solar by utilities has happened seemingly overnight, moving from an annual utility-scale installed capacity of 1.8 GW in 2012 to 4.2 GW in 2015. Solar is following wind power by a few years in its meteoric path to volume, and has the opportunity to avoid the difficult early stage lessons that wind and nuclear industries had to experience the hard way. The methods and roadmap to reduce long term power plant risk is clear: test new technologies before deploying in volume, establish consistent industry standards for structural design, and utilize well established technical predictive tools to evaluate and account for long term maintenance costs. Failed companies and impaired project assets which act as a brake on industry growth can be easily prevented.
$388.57 billion was invested in utility-scale solar from 2011-2015 to finance, construct, and grid connect power plants around the world.2 Owners will soon start focusing on optimizing those assets for both operational and economic performance. The product architecture and technology choices that were made up-front will determine the long-term equity owner’s returns, debt holder’s coverage ratios, and utilities’ PPA contractual fulfillment. There are many important stakeholders, so getting the up-front decisions right matters.
1. GTM Research, U.S. Solar Market Insight, 2015 Year in Review
2. BNEF, Clean Energy Investment, By the numbers – End of year 2015