SCE Songs substation Renewable DG Potential Assessment

1. SCE Songs substation Renewable DG Potential Assessment Jon Pietruszkiewicz Ryan Pletka September 24, 2013

2. Scope of Work Potential Assessment Interconnection Feasibility and Cost Assessment Comparison to Other Renewable Resource Options Implementation Issues

3. SECTION 1Scope of Work

4. Scope of Work Solar PV Potential Assessment- Assess potential for distributed PV around six key Southern California Edison (SCE) substations. Interconnection Feasibility and Cost Assessment- Assess high level scenarios to interconnect the PV capacity. Prepare rough order-of-magnitude estimates of interconnection cost. Comparison to other Renewable Resource Options- Compare costs of DG resources to other options, such as large scale solar. Implementation Assessment- Prepare high level discussion of issues and challenges of rapidly deploying large amounts of distributed PV This is a very-high level preliminary assessment to determine if the overall concept is feasible. Not a siting study or cost-benefit analysis

5. SECTION 2Potential Assessment

6. Area of Interest – AreA Served by 6 Transmission Substations In Orange and LA Counties LA County Orange County Section Heading–optional Source: Google Earth, SCE Approximately 300 square miles

7. Methodology for Potential Assessment Black & Veatch developed a new approach to automatically quantifying DG potential based on analysis of aerial imagery Three key areas of potential were analyzed: • Commercial and industrial (C&I) roofs • Residential roofs • Parking lots “Open” spaces have not been quantified in this assessment due to limited time • Special considerations and competing uses? Potential is quantified in terms of available square feet per parcel of land • Overall accuracy of the square footage estimates is perhaps around +/-25% Square footage converted to energy potential using key assumptions This comprehensive approach identifies significantly more potential for DG than previous estimates

8. Three Estimates of Potential were Developed

9. Key Assumptions To estimate Potential *Typical residential rooftop size based on CSI market data. Theoretical and technical potential estimates are the same as the CSI data already represents suitable development area.

10. Identified Large Roofs and Parking loTs Technical Potential Capacity, MWdc < 0.25 > 3

11. Example Detail Near Woodbridge Area of Irvine (About 30-40 MW Total) Technical Potential Capacity, MWdc < 0.25 > 3 Updated screenshot

12. Example Detail Near John Wayne Airport (5.2 MWdc Parking Lot) Technical Potential Capacity, MWdc < 0.25 > 3 In addition to technical potential, LCOE calculated for rooftop and parking applications for each parcel Updated screenshot

13. Estimated Total Potential Capacity Almost 8 GWac of technical potential. About 800 MWac of developable potential based on a 10% participation rate. A 5% participation rate would cut this potential in half.

14. Total Technical Potential By Category Parking lots are more than half the potential

15. Total Technical Potential By Substation 2,500 Residential Roofs C&I Roofs 2,000 Parking 1,500 Technical Potential (MWac) 1,000 500 0

16. Developable Potential By Substation – with Potential Interconnection Capacity 300 Residential Roofs C&I Roofs Parking 250 30% of Substation Load 200 Interconnection capacity estimates at the substation level based on 30 percent of substation load (from SCE ). 30 percent estimate is rough rule-of-thumb to be verified with studies. Loading not available for one substation. 150 Developable Potential (MWac) 100 50 0

17. Non-Residential Technical Potential – Pareto Chart of Parcels Sorted from Largest to Smallest Developing the largest 1,400 sites (5%) would be 2,750 MWac – if every site could be developed Developing the largest 238 sites (<1%) would be 1,000 MWac – if every site could be developed (000’s)

18. 11 Large Development Prospects: 450 MW Technical Potential, 45 MW Developable Potential Except for #11, these are not single parcels. They comprise multiple nearby parcels.

19. Cost and Performance Assumptions Capital Costs • Black & Veatch developed capital cost assumptions based on data from the CSI program and B&V engineering estimates (see appendix) • Assumed capital costs are lower than average prices observed in the CSI program, but believed to be achievable for a large program of the type which may be implemented here • Costs are based on the estimated technical potential for a site • Carports assumed to be $500/kW more expensive than equivalent size roof system • Example costs:

20. Capital Cost Estimates Based on Project Scale (See Appendix A for More Information) A typical parking lot is 2-3 times the size of the roof area on a given parcel

21. Cost and Performance Assumptions O&M Cost • Assumed to be $40/kWac-yr for all systems assuming fleet maintenance strategies implemented • Inclusive of O&M contract, lease, and insurance Performance • Black & Veatch estimated performance previously for solar projects across California • Commercial systems in Orange County, assuming 10 degree tilt and 1.2 inverter loading ratio: 23% CF (ac) • Residential assumed to be 20% CF (ac) • Common assumption used across Orange and LA counties (simplification)

22. Example Levelized Cost of Generation Excludes any significant interconnection and distribution upgrade costs

23. Supply Curve For Urban DG Levelized Cost of Generation <–––––––––––––––– C&I Roofs and Parking Lots ––––––––––––––––> Residential Technical Potential. Developable potential would be 10% of this, but which 10%? Excluded significant interconnection and distribution upgrade costs.

24. SECTION 3Interconnection Feasibility and Cost Assessment

25. Interconnection Scenarios Lower cost interconnection limit assumed to be 30% of transmission and distribution substation capacity. An ideal scenario would target lowest cost interconnections first: • First 15% of systems can be accommodated by existing distribution system with minor upgrades • Estimated cost $100/kW or less • Second 15% (up to 30%) will require upgrades similar to those identified in the recent Navigant study. • Estimated cost $300/kW or less • Individual and aggregated systems above 30% local penetration will require additional upgrades to be identified by SCE (such as dedicated feeders). • Estimated cost $500/kW or less

26. Example Distribution Scenario #1:West Irvine

27. Example Distribution Scenario #2:East Irvine

28. Section 4 Comparison to other Renewable Resource options

29. Comparison to desert-sited Solar It can be asked whether urban DG or a plant located in the desert can best meet the current needs. There are two important factors that must be considered: • What is the cost of DG vs a central station solar project? • What is the time required to implement each? A central station solar plant located in the desert may require more time than available to accomplish permitting and to resolve transmission issues. If major system upgrades or new transmission lines are required, it may take 7 to 10 years to resolve not 3 to 4 years as needed.

30. Rough Cost comparison Cost of Generation • Large-scale desert solar projects: $75-85/MWh • Urban DG: $110-140/MWh Transmission and distribution costs: • Large-scale desert solar projects: $35/MWh • Assuming $1000/kW in capital costs @33% CF • Urban DG: $5-25/MWh • Assuming $100-500/kW in capital costs @23% CF Total Costs • Large-scale desert solar projects: $110-120/MWh • Urban DG: $115-165/MWh Costs are comparable, likely within 10%-20%, and transmission will take longer for desert plant

31. Section 5 Implementation Assessment

32. Scenarios Scenario 1 - Utility-Owned Scenario 2 - Developer / Customer Owned

33. Program implementation issues/challenges Interconnection Feasibility Interconnection Cost Procurement Approach Regulatory Siting Permitting PV industry capacity Cost/benefit assessment Design of targeted incentives

34. Appendix ASolar DG Capital Cost Assumptions

35. DG Capital Cost Estimating Approach Reviewed 2013 Market Data from CSI Program Reviewed recent LBNL/NREL Analysis Compared to B&V estimates previously developed Recommended Assumptions

36. CSI Data Set Data downloaded on 9-13-2013 from CSI website Generally focused on installed systems in 2013 • Filters: • Installed Status = Installed • First Incentive Claim Request Review =>2012 • Some activity (dates) in 2013 27,000 data points for that sample alone, including good representation across 1-1000+ kW size range Minimal data clean-up performed Costs and system sizes in this section based on nameplate rating (kWdc)

37. Average System Costs ($/kW dc) Steady decline, leveling recently. Some decline could be attributable to increasing system sizes. Date is based on the latest date listed in CSI database

38. Costs by Capacity Block ($/kW dc) Significant variation by system size. Prices in 2013 relatively stable Date is based on the latest date listed in CSI database

39. Average Installed Costs ($/kW dc) for CSI Systems (2013) Pricing for 30-500 kW systems flat at around 4.7

40. Range (1 SD) of Installed Costs ($/kW dc) for CSI Systems (2013) Significant variation shows that lower costs are achievable, especially for 30-1000 kW systems.

41. Comparison to Recent LBNL Analysis

42. CSI 2013 Costs Similar to LBNL 2012 Costs California tends to have slightly higher prices than LBNL’s national average; however, time difference compensates.

43. B&V estimates that a 300 kW Rooftop System would cost $3.29/Wdc Today B&V costs near lower range of market, but not outside of experience

44. Why IS B&V Estimate On Lower End of CSI Market Data? B&V estimate of $3.29/Wdc for 300 kWdc system comports well with LBNL/NREL “bottoms-up” modeled estimate of $2.61-3.22/Wdc for 221 kWdc system B&V’s estimate represents the cost (including reasonable profit), whereas the CSI database records the price at which the system was sold B&V’s estimate is for a size that is not as competitive of a market segment as the rest of the CSI market (80 systems between 200-300 kW in 2013 vs. 24,000 systems <10 kW B&V’s estimate is current as of 3Q 2013, whereas the CSI database contains systems quoted earlier, in some cases in 2012 or earlier • B&V estimate also captures likely continued decline in system costs for next couple of years Relatively high soft costs persist in CSI market, B&V has assumed those can be brought down • Other states and countries have significantly lower costs than California • A coordinated, targeted, and competitive program in this area should achieve economies-of-scale resulting in lower costs

45. B&V Capital Cost Estimates For other Rooftop System Sizes Based on Observed Economies of Scale in CSI Data Carports assumed to cost an additional $0.50/Wdc more than equivalent size rooftop system

46. Ground-Mount Capital Cost assumptions Fixed Tilt Design Note: B&V system design philosophy different for rooftop and ground-mount systems. Ground mount designed to achieve higher performance (CF), with tradeoff of requiring more land area. Single Axis Tracking Design