Tuesday, April 21, 2009

Roadmap for Pricing Greenhouse Gasses in California

At yesterday's SolarTech meeting I heard a presentation by Sue Kateley of CalSEIA about possible expansion of Feed-in Tariffs (FIT) in California.

One proposal currently on the table calls for explicitly pricing the greenhouse gas emissions of fossil fuel generation plants and providing a bonus payment, or "adder" to forms of generation that produce few or no GHG. The slide Sue showed had these proposed prices per metric ton of CO2 equivalent:

2012...$10.18/ton
2015...$23.76/ton
2020...$42.46/ton

As I understand the math, solar would be compared to modern combined cycle natural gas powerplants, which I believe generate roughly 1 ton of CO2 per 2000 kWh. If that conversion is correct, then the "solar adder" would be:

2012...$0.005/kWh (half a cent)
2015...$0.012
2020..$0.021

The proposals also call for a time of delivery adder which values energy generated during times of peak demand more highly than energy delivered during off-peak hours and day.

These proposed prices are not high enough to create a utility scale solar gold rush right now, but if the credit squeeze comes to an end in 2009, I do think there is the possibility of a rapid reacceleration of "big solar" funded by insurance companies and pension funds who want long term investments that are not tied to the up and down cycles of the stock market.

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