Community Renewable Energy

Energy Value

In assessing the value of a new renewable resource to a utility, the first question that should be answered is whether the utility will need or want to acquire new resources. If a utilities load is outgrowing its ability to serve its customers with existing resources, or if new resources could displace a higher cost or lower value resource, the utility will most likely be interested in acquiring new resources.  If not, the renewable developer almost certainly will not be able to compete  on an economic basis with the utilities current energy costs, because most utilities’ average costs are much lower than the cost of building and operating a new energy facility of any kind. On the other hand, if a utility will need to acquire new resources, it will assess the cost of potential renewable resources and compare their cost to new energy generating facilities, such as a gas fired combustion turbine, or to available market purchased power. All else being equal, a community renewable resource developer may with to site its project in or near the service territory of a utility that is growing rapidly.

A utility-scale wind turbine may have a one or two-megawatt rated capacity, which means that it can produce that amount of power at its rated wind speed.  Another commonly used term is capacity factor, which is the ratio of actual energy produced by a generating facility to the amount of energy a facility would produce if it was constantly running at its maximum capacity.  Capacity factors are used primarily to calculate the amount of energy that will be produced by a power plant.  The higher the capacity factor, the more valuable the resource from an energy perspective.  Refer to technology specific sections of this website for each type of renewable resource for a discussion on ascertaining the capacity factor of a given resource.