Amidst power shortage, energy executives discuss solar’s future

During this week’s historic winter weather, power companies across the South were waylaid with shortages to meet demand. Intertwined regional grid systems and Texas’ standalone model complicated the flow of electricity to homes and businesses in unprecedented fashion.

Arkansas experienced unexpected rolling blackouts and brownouts, which made for difficult distribution challenges for large energy firms such as the Arkansas Electric Cooperatives Corp. and Entergy Arkansas.

Two leaders from those companies and two solar company executives were part of a virtual panel discussion at the Downtown Little Rock Rotary Club (Club 99) on Tuesday (Feb. 16).

Kurt Castleberry, director of resource planning and market operations for Entergy Arkansas, said the company’s customers were encouraged to conserve electricity but that still didn’t prevent some rolling blackouts or brownouts over a two-day period.

“This has been unprecedented in terms of temperature,” Castleberry said. “Anchorage, Alaska, is tropical compared to what we’re experiencing now.”

Entergy’s power plants were operating well but had some issues receiving enough natural gas for gas-fired generators.

Like Entergy, electricity was curtailed to some of AECC’s industrial and residential customers.

Buddy Hasten, president and CEO of AECC, said the below-freezing temperatures for an extended period of time highlighted the importance of reliability through a mix of generating sources, including coal, gas and renewable energy, such as wind and solar.

“We got right to the edge of the cliff and stared into the precipice,” Hasten said.

SOLAR PLANS
After a discussion about the powerful winter storms, Hasten and Castleberry were asked about solar power, a conversation joined by two other solar company executives.

Castleberry said it’s important to Entergy and is the future of Arkansas. The company looks to bring online more solar plants “in a way that benefits all our customers,” he said.

The company committed to developing solar power about 10 years ago and has become the largest solar provider in the state, he added. It has in operation or in the works about 561 megawatts of solar generation. That would power about 90,000 homes and reduce emissions equivalent to removing 200,000 vehicles from the road. The plants are expected to save customers about $300 million over their 20-30 year lifetime. Its existing solar plants, comprising 181 megawatts, can serve about 45,000 homes.

“There are significant economies of scale associated with building 100-megawatt facilities relative to a smaller application,” he said. “Those economies of scale not only manifest themselves in how much it costs to add it or how much it costs to acquire it on a per-kilowatt-hour basis, but also they produce more electricity per kilowatt because they follow the sun, they track and that, of course, adds to the savings as well.”

The company offers its customers access to its solar energy through a tariff but has sold out, Castleberry said. Entergy is working on new tariffs in response to customer requests to meet renewable energy goals.

An important factor for the tariffs is they do not lead to disadvantages for non-participants, and the same goes for its solar energy resources, he added.

Hasten said solar is a low carbon, reasonable cost energy when factoring in federal solar subsidies and the per-kilowatt-hour cost. The electric cooperatives are supportive of renewables, but he noted reliability concerns. He often tells employees the importance of diversifying their retirement portfolio, and that’s what AECC does with its energy portfolio. Its energy mix comprises 25% coal, 25% gas, 25% renewables and 25% from the markets, including MISO and SPP, of which a portion are renewable sources.

“We set an all-time record peak this morning for the co-ops in the history of 80 years,” Hasten said. “We were at the highest load we’ve ever been at. We have 474 megawatts of wind contracts, and 4 megawatts were online. And then, when I look at solar, we had 0.65 megawatts online. That’s a reality for us we have to figure out, and I know storage is a big part of the question.”

He said the cooperatives tend to gravitate toward reliable, low-cost assets while looking to the future and following the national debate on climate change. AECC is adding the 100-megawatt Crossett Solar plant that is expected to start operating in 2022, he said. Over the last decade, he said generation sources have been replaced with renewable energy, but it has some intermittency problems and is a challenge.

“We’ve probably been painted a little bit anti-solar in co-op land, but we’re not,” Hasten said. “What we are is we’re very, very sensitive to our members, and in the cooperative family, we’re democratically controlled. We think all members are equal. Therefore, we get a little bit persnickety when it comes to the policies that we think where there are people who can use a technology and benefit from it, but that benefit gets paid by their neighbors.”

LEVELIZED COST
Josh Davenport, co-founder and CEO of solar array installer Seal Solar, told the Rotary panel that homeowners, businesses and non-tax entities, such as school districts and counties, have looked to “lock-in” energy costs and want a levelized bill. And solar arrays, based on the energy they produce over their lifetime, have a levelized cost that’s 75% lower than electricity purchased from utilities, he said.

Davenport also noted the importance of battery storage systems that can be paired with solar arrays. The North Little Rock-based company is on track to install one battery storage system per business day this year, he said. It installed 60 of the systems in 2020 and three in 2019. One day, Davenport foresees that homeowners will be able to make one transaction to purchase an electric vehicle, battery energy storage and solar array.

Matt Bell, partner with Little Rock-based Entegrity, talked about the new mixed-use development that the solar array installer and energy efficiency services company is building in Fayetteville. It will not only be the company’s Northwest Arkansas office but also the first mixed-use net-zero development and the second net-zero building the company owns, Bell said. The first was in Little Rock and was the first LEED Zero building in the United States and the second in the world, he said. The Fayetteville development also will include multi-family housing.

“It comes with a combination of very thoughtful engineering on the building designed to reduce the overall demand… and then put renewable power on the building to power it,” Bell said. “It’s a very integrated approach.”

RISING DEMAND
Bell expects electricity demand to only continue to rise with the increased use of electric vehicles and related charging infrastructure and buildings that use electric heat pumps. He said electric vehicles comprise 2.8% of vehicle sales, and they are expected to account for 28% of sales by 2030.

Bell also spoke about the importance in having a mix of electricity generating sources and said the electricity issue that Texas has faced isn’t with the wind farms, which account for 17% of the mix there, but the 26 gigawatts of natural gas capacity that’s being allocated to meet the high heating demand. Only 4 gigawatts of solar or wind were down, he added.

“It’s the resource allocation,” Bell explained. “You need these natural gas plants. You need the coal plants. You need these dispatchable systems where solar doesn’t provide it. Wind could have a bad wind day. So it does take a mix.” Other issues are the lack of smart infrastructure and a smart grid, he added. This might include smart meters and battery energy storage as batteries become more cost-effective.

Entegrity has solar energy projects with 27 school districts, the University of Arkansas, the Arkansas Department of Corrections and state agencies.

“We’ve been in this business a long time, and it used to be about saving the planet,” Bell said. “Now, it’s about saving money. Where it meets both of those objectives for our clients, even better. But most of this is about economics.”