Government

FPL Sees Solar Incentive, Even Without Mandate

By: Lane Wright | Posted: February 15, 2011 3:55 AM
FPL Solar Therman Facility Construction

Workers install mirror panels at FPL Martin County Solar Thermal facility | Courtesy FPL

For years, proponents of renewable energy have lobbied for mandates to jump-start Florida's renewable market, but one investor-owned utility (IOU) sees a solar future, voluntarily.

Florida Power & Light Co., the state’s largest utility, sees solar-power generation as a way to expand its fuel mix and add stability in times of fossil-fuel price spikes.

"If there was no mandate, we would still be very supportive of this and try to build as much renewable energy as we possibly could," said Buck Martinez, senior director of development for FPL. "It's an incentive, because it allows us to diversify our portfolio and increase our security," he said.

FPL Martin County Solar Plant Construction

Workers construct FPL's Martin County Solar Thermal facility | Courtesy FPL

Martinez says about 60 percent of the energy FPL produces today comes from natural gas. By the time the company finishes projects currently in the works, that figure will go up to about 76 percent. Statewide, Florida has a similar pattern of not just natural gas dependency but reliance on imported fuels. According to the University of Central Florida, 73 percent of Florida’s electricity is produced from imported fossil fuels -- either from out of the state or out of the country. Both of the pipelines that supply natural gas to FPL come from the Gulf of Mexico, which exposes the company, and in turn its customers, to a greater risk if something goes wrong or when fuel costs spike.

Sean Stafford, an energy consultant and lobbyist, says no smart investor would want that kind of an unbalanced portfolio and the state shouldn't either.

"The state's putting all its eggs in the natural-gas basket," said Stafford. "Natural gas is cheap because the economy is in the tank, but when the economy gets better, and demand rises, prices will  rise again."

While there are a host of alternative-energy possibilities in Florida -- wind, biomass, underwater turbines -- solar is at the top of FPL's list. The company recently finished building three solar facilities that produce 110 megawatts of electricity and has plans to build at least 500 megawatts more, expanding the percentage of Florida's energy that comes from renewable sources, which currently stands at just 2 percent.

Beyond security through diversification, FPL says another incentive to develop solar is the long-term cost.

Solar facilities -- whether they use photovoltaic cells that convert sunlight into energy or solar thermal mirrors that concentrate the sun’s light and heat fluids to produce energy -- cost more to build than natural gas facilities, but over time the costs can be dramatically less. The price of natural gas, like other fossil fuels, is expected to rise as demand increases and resources diminish. Since 85 percent of the cost of energy production lies in the fuel price, Florida is currently exporting $30 billion to purchase those fossil fuels.

But with solar, there are no fuel costs. FPL estimates its customers could save $178 million in fuel costs over the 30-year life of its Martin County plant alone.  

Some say solar also eliminates the worry over a possible added expense of an unpredictable carbon tax.

Impact to Customer's Bill

Click image to view Projected impact to customer's bill. Chart provided by FPL

Mark Bubriski, an FPL spokesman, says all these factors translate to more stable energy costs over the long-term.

"It's a direct benefit to the customers," said Bubriski, "because utilities don't make money on fuel."

But just as there are real incentives for FPL to develop solar power, there is at least one potential sticking point: Somebody has to pay for the initial investment to build the facility.

Currently, FPL uses a cost recovery model to shift some of the burden of construction onto the ratepayer.

Nuclear cost recovery, used by FPL and Progress Energy Florida over the last several years, has left a bitter taste in the mouths of some who believe solar could go down the same road.

"Solar, as we found out in committee last week, is extremely expensive," said Sen. Mike Fasano, R-New Port Richey, member of the Energy and Utilities Committee. "An electric company has to find other ways to pay for it. They're a business … That's their responsibility."

While Martinez admits solar plants are more expensive than the traditional fossil-fuel facilities, he argues it's not a fair comparison with nuclear.

Building a nuclear facility can take 10-12 years, where a solar plant can be completed in about 12 months. Nuclear also has a mountain of state and federal regulations that wouldn't apply to solar projects.

Martinez says if the company can't recover the costs of solar by charging building expenses to customers, it doesn't make as much sense for them to do it.

"What we need is the ability to recover costs. If not, we wouldn't be able to recover the investment in these assets," he said. "Those capital costs are offset by the amount of fuel savings and low maintenance."

FPL contends it has found ways to lower solar construction costs since the implementation of its first three plants.


As part of Sunshine State News’ continuing series on Florida’s energy policy, next, we will explore the effects of energy production on economic development and whether the state can really be home to green-collar jobs.


Lane can be reached at lane@sunshinestatenews.com or (561) 247-1063.


Comments (3)

LDouglas
8:49AM FEB 15TH 2011
"The state's putting all its eggs in the natural-gas basket," said Stafford. "Natural gas is cheap, because the economy is in the tank as a country, but when the economy gets better, demand goes up and it'll get expensive just like oil."

If we made the market tell the truth, we would find that natural gas is not cheap as it appears. Anybody following the news on natural gas will find there's mounting evidence that the drilling process is polluting something equally, if not more important than energy- water. Not to mention the tons of polluted tailings that have to be stored.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

"Building a nuclear facility can take 10-12 years, where a solar plant can be completed in about 12 months. Nuclear also has a mountain of state and federal regulations that wouldn't apply to solar projects."

Not to mention the pollution that takes place when mining uranium for nuclear power, (again pitting energy needs against water needs) or that at the moment we're dependent on a foreign country for uranium. Or that the demand for uranium is rising as new nuclear plants are currently being constructed all over the world, which will raise prices even more. Or that nobody wants to store the toxic spent fuel in their backyard.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

"What we need is the ability to recover costs. If not, we wouldn't be able to recover the investment in these assets," he said. "Those capital costs are offset by the amount of fuel savings and low maintenance."

I understand that and would rather pay for FPL to recover their costs building solar plants over other plants. And at one time I paid an extra ten a month in order to promote alternative energy. But that said, if we're going to pay upfront to reduce our dependence on foreign countries for our energy needs, I'd rather we take it a step further and reduce our dependence on a for profit corporation to meet them. Or as much of our energy needs as possible, and use them as a supplement.
Think of the benefit to the economy if half or two thirds of what we spend on electricity stayed to circulate in our local economy instead of being sent out to sit in the bank accounts of remote investors. (Plus, it would make it a lot easier to compete in a global economy.)
EWilson
11:04AM FEB 15TH 2011
Didn't FPL take the extra money customers paid to promote alternative energy and spend it out of the state? In Texas or somewhere in the midwest. I'm not sure how we trust them to do what they say now.
LDouglasl
12:23PM FEB 15TH 2011
EWilson,
For some reason I can't remember exactly what FPL was doing with that money, but I remember feeling like I had been ripped off after hearing they had to end it. Otherwise, I don't know who you can trust these days...

Leave a Comment on This Story

The content of this field is kept private and will not be shown publicly.
To prevent automated spam submissions leave this field empty.