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So when such a deal is signed in the US, what does it mean when it says 150 MW? Is this installed capacity, average supply, or guaranteed supply?
And who deals with power fluctuations (partly cloudy, etc.) and I assume the need to buy power on the spot market? Is it the local utility or SunEdison?
I'd be grateful for a clarification. These fixed solar contracts and the issue of fluctuations have been bothering me for some time.
Great questions! Perhaps Bob Wallace can help. In the meantime, although not exactly what you asked, I found this:
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And this, which suggest SunEdison manages the power balancing:
For utilities who prefer to own their solar installations, SunEdison can design, build, and provide operations and maintenance services to meet their requirements. For utilities who prefer to put their capital to work in other ways, a Power Purchase Agreement is often the best solution.
With a SunEdison PPA, you agree to purchase the power generated at a fixed cost, and that’s it. SunEdison or its subsidiary TerraForm Power will often retain ownership of the system once it’s up and running. You enjoy the benefits of a diverse energy portfolio, and we do the rest. And because we own the system, we’re as invested as you are in its performance.
http://sunedison.com/utilities
Thanks. So I went out and read about SunEdison and their business model, and from what I can gather the utility agrees to purchase all the power generated at a fixed cost, regardless of its distribution and fluctuations.
IF I understood correctly, when the sun is shining, you get 100 MW and have to pay for them, and when the sun is hidden you get nothing and pay for nothing. In my view this model is not scalable beyond a certain point. Today all electricity is priced alike using an average rate, but with high penetration of solar the utility might have an overabundance of power that it has to pay for even if it doesn't use it. One the other hand, during widespread cloudiness it will have to buy the missing power from other sources just at the time when power is scarce. Eventually this should translate into variable wholesale pricing and could cause losses for the utility (average prices during overabundance and high prices during scarcity = above-average rates in total).
Bob - I'll be happy to hear your thoughts on that.