Here’s another strong case for more solar photovoltaics: Last week’s 30-state heat wave caused record-breaking demand spikes in three regional transmission systems, according to data from the Energy Information Administration. New York’s Independent System Operator came close — only 74 megawatts away from a 2006 record.
That record demand comes at an enormous cost. As power providers ramp up all the dirty, fossil-based “spinning reserve” capacity they have available, electricity prices shoot through the roof. In PJM, a transmission organization that covers the mid-Atlantic and some surrounding states, wholesale prices jumped to nearly 35 cents a kilowatt-hour. Today, the cost of solar electricity ranges anywhere from 12 cents to 30 cents per kilowatt hour — in some cases, potentially a third of what it costs to meet peak demand with conventional resources.
The second-highest prices were in New York’s ISO, where they reached almost 30 cents a kilowatt-hour. As we wrote about earlier this month, solar PV can already compete with retail electricity rates in New York City where grid congestion has driven rates 60% higher than the national average. New York State is currently considering a bill that could realize around 5 GW of solar PV — providing competitive resources that can help the state reliably meet peak demand, explained Rosalind Jackson of Vote Solar to Climate Progress:
These sky-high electricity prices and outage alerts are a pretty clear indicator that New York’s business-as-usual energy approach is broken. Solar is primed and ready to cost-effectively address New York’s power needs, especially the peak demand that paralyzes the state’s power grid on hot summer days. The bill’s goal of 5 gigawatts of local solar development would go a long way toward repowering the state.
The beauty of solar PV is that it matches up perfectly with demand on the sunniest summer days of the year. As Richard Perez, an energy expert from the University of Albany appropriately said to Climate Progress about his solar research: “we should be using the source of the problem to create the solution.”
If this graph doesn’t prove the value of distributed solar, consider this: During the 2003 Northeast blackout that caused $8 billion in economic losses, as little as 500 MW of solar PV deployed in the Midwest and Northeast could have prevented the disaster. Perez and a group of colleagues researched the issue back in 2004, shortly after the economically-devastating incident:
Prior to the precursor events power flow from the south into Northern Ohio, Southern Michigan and Western Pennsylvania were of the order of 5000 MW, a substantial portion of this was transiting to Ontario. Had local dispersed generation been available in/near Detroit, Cleveland and Toronto, these transfers would have been reduced and inadvertent power line trips would have been inconsequential. A 10% power transfer reduction could have been achieved with a total PV resource of 0.5 GW dispersed throughout northern Ohio, Michigan, Pennsylvania, New York and Ontario.
In a report released in June, Perez and two other researchers also found that the value of distributed solar can be worth more than the actual cost of the electricity — ranging from 14 to 30 cents. That value comes from decreased investments in transmission, increased reliability during times of high demand, and environmental benefits associated with reducing “peaking” fossil fuel generation.
As tropical heat waves around the U.S. become the “new normal,” these spikes in demand are only going to get higher and more frequent. It’s time we met that demand with clean generation that provides proven economic and environmental value.