Setting annual PPA price for each year of PPA

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vonreis
Setting annual PPA price for each year of PPA

I'm trying to run a simulation where I set the PPA price for each year of a 20 year PPA. As far as I can tell, SAM is only capable of modeling a starting PPA price with a constant annual escalation rate. The price schedule I'm trying to model doesn't escalate at a fixed rate each year. The annual escalation ranges from 23% to -2%. (I want to see Minimum DSCR for my price schedule.) I cannot find a way to set the PPA price for individual years with SAM. I looked through the SamUL variables and did not find the functionality I'm looking for. I could approximate my price schedule with a constantly escalating PPA price with an equivalent NPV, but the Minimum DSCR output would be useless.

Does anyone know if SAM can do what I'm trying to do?

Paul Gilman

Hello,

Your observation is correct. SAM can model the following PPA price scenarios:

1. A fixed PPA price that does not vary over time.

2. A PPA price that escalates at a fixed annual rate over the project life.

3. A PPA price with a set of time-of-delivery (TOD) factors that adjust the price. You can specify a set of 24 daily TOD factors for each month to model a PPA price that varies hourly and monthly.

SAM cannot model a PPA price that varies by year, or with a varying escalation rate as you describe.

However, if you are using either the Utility IPP or Single Owner financial model, and are running SAM in Windows and have Microsoft Excel installed on your computer, you can work around the issue as follows:

1. Model your project in SAM with a fixed PPA price.

2. After running simulations, on the Results page Cash Flows table, click Send to Excel with Equations. SAM exports a fully functional version of the financial model for your case to an Excel workbook.

3. In Excel, you can edit the values in the Energy Price row in the Base Case Cash Flow worksheet to represent your annual PPA price schedule. (Remember to save the workbook to recalculate the values in Excel.)

4. In the Inputs and Outputs workbook, you should see the Minimum DSCR for your PPA prices. You can also see the DSCR by year on the cash flow table itself.

How common do you think this kind of PPA schedule is? We would be interested to hear from anyone else who would find it useful for us to add this capability to SAM.

Best regards,
Paul.

vonreis

Paul,

Thank you for the workaround. It sounds like it will do what I need, and I look forward to trying it.

In response to your question, this kind of PPA schedule is very common in the Northwest (Oregon, Washington, Idaho, Utah) for PURPA qualifying facilities (QFs). It is probably common in other regions in the U.S. Under PURPA, state public utility commissions can publish PPA prices for investor-owned utilities at the utility's "avoided cost"; QFs (including solar) can obtain long-term PPAs with these fixed "avoided cost" PPA prices. These administratively set prices often vary significantly from year to year based on the utility's projected costs in that year. For instance, the published PPA price may contain a significant increase in year four because the utility plans to build a gas-fired generator that year. For an example of these rates, see Portland General Electric's Schedule 201 (http://www.portlandgeneral.com/renewables_efficiency/generate_power/busi...).

Feel free to contact me if you have questions about these PURPA rates.

Thanks,
Charles

Paul Gilman

Hi Charles,

Thank you for those details. I will suggest to my colleagues on the SAM development team that we allow the PPA price escalation rate to be specified using an "annual schedule." It is possible for several other input variables, so should not be difficult to implement.

Best regards,
Paul.

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