Alabama Power received about 200 renewable energy project ideas through a request for proposals (RFP) process that recently closed to bidders.
The company is reviewing the numerous proposals to determine whether any of the proposed projects would be beneficial for Alabama Power customers. The review process is expected to last well into next year.
“We are encouraged to see so many proposals come in through the renewable RFP process,” said Liz Philpot, marketing resources manager in Alabama Power’s Renewable Resources group.
Under the proposal, individual projects had to be at least 5 megawatts AC but no greater than 80 megawatts AC. The projects had to be located in Alabama, but could either be owned by Alabama Power or owned by third parties with the power sold to Alabama Power through power purchase agreements (PPAs). The company received proposals for both types of projects, but the majority are PPAs, Philpot said.
She said the bulk of the proposed projects involve solar energy, but hydro and biomass projects also were submitted. Bidders had until Nov. 16 to send in proposals.
Philpot said the company expects to narrow the large number of proposals to a “short list” by April 2017. After that, the company will undertake a more detailed analysis of the short-listed projects to see which may be viable. The Alabama Public Service Commission will ultimately have to approve any project. Under the terms of the RFP, the target date for projects to be operational is March 31, 2019.
Philpot emphasized that the company could decide not to move forward on any project submitted through the RFP. Projects brought to the PSC for approval through the RFP process must be shown to provide positive, economic benefits for all the company’s customers. “That’s a high bar these projects must meet,” Philpot said, adding that Alabama Power’s total retail price is already below the national average.
Under the provisions of the RFP, Alabama Power receives all the renewable energy attributes, also known as Renewable Energy Credits (RECs) from the proposed projects. The company retains the rights to sell the RECs to third parties, either separately from the energy or bundled together.
Alabama Power has been expanding its use of renewable energy in recent years. The company was actually founded on renewable hydro energy. Alabama Power’s first hydroelectric facility on the Coosa River began operating in 1914, and hydro remains an important part of the company’s generation mix.
The company also purchases energy from Alabama-produced biomass and has solar projects nearing completion at two Army facilities in the state. Alabama Power is also a leader among Southeast utilities in purchased-power from wind farms in the Midwest. Alabama Power has the flexibility to use this power and the associated RECs to serve its customers or to sell the RECs, either bundled with energy or separately, to its customers or third parties.
The company also recently signed an agreement for a third party to develop a large solar facility in Chambers County in east Alabama. Under a long-term contract with Alabama Power, Walmart will subscribe to a majority of the Chambers County facility’s RECs, which will be retired on Walmart’s behalf to help the retailer meet its renewable energy goals. Alabama Power is marketing the remaining RECS to other customers who have an interest in renewable energy.
In addition to the utility-scale renewable projects, Alabama Power customers can buy RECs from the company for $1.25 per month – an affordable way to encourage expansion of renewables in the state. Customers can purchase as many RECs as they like – enough to match their energy use or more.
For more information about the company’s renewable energy efforts, please visit www.alabamapower.com. Click on “Industry” and then “Renewables.”