Construction has begun on Colorado’s largest solar farm which energy experts say is a symbol of renewable energy’s growing competitive edge over natural gas and a glimpse into the future of the U.S. energy market.
The 156-megawatt Comanche solar farm, which is being built and will be operated by SunEdison Inc., will provide power to Excel Energy Inc.’s Public Service of Colorado utility under a 25-year agreement. The contract was awarded by the utility after an open solicitation call to all power source providers, including gas.
SunEdison’s chief strategy officer Julie Blunden said the contract demonstrated that renewable energy is able to increasingly compete on price with fossil fuels. She said public utilities that were interested in planning for power demand in the future are now looking more seriously at wind turbines and solar energy, which will become cheaper over the coming decades because they have no associated fuel costs.
“We actually can offer solar and wind that’s cheaper than gas. It’s such an important inflection point. We can sell power without any fuel-price risk,” she said.
According to North Carolina’s Database of State Incentives for Renewables and Efficiency, buying power from the Comanche solar farm would assist Public Service of Colorado meet State policies requiring investor-owned utilities to obtain 30 percent of their power needs from renewable energy sources by 2020.
Submissions for the power supply called by Public Service of Colorado showed that although gas may be cheaper than renewable energy today, projections showed its price would rise fairly dramatically and that as a long term investment, it was not as competitive as solar power.
Solar photovoltaic power supplied over a 20 year period was priced at between $5.90 – $5.96 per million British thermal units, compared to natural gas estimates exceeding $6 by just 2020. According to Intercontinental Exchange Inc data, natural gas delivered today in the Denver area was $2.55 per million British thermal units.