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Appendix B. WGA Report The Western Governors’ Association (WGA) established the Clean and Diversified Energy Initiative for the West in order to develop 30,000 MW of clean energy in the West by 2015. The WGA formed a Solar Task Force comprised of industry, utility, environmental, and State and Federal government representatives to develop a set of policies and incentives necessary to enable sufficient deployment to bring the cost of solar energy down to levels competitive with fossil fuel-generated electricity.70 Initially it was estimated that CSP would provide 1,000 MW towards that goal, but the Solar Task Force recommended that it be increased to 4,000 MW.71 For the task force’s report, data from Pacific Gas & Electric was used to compile a blended average of electricity prices that takes into account the fraction of CSP generation that falls into baseload and peak periods (called a market price referent, or MPR), as well as the sensitivity of electricity prices to natural gas price fluctuations. This data shows that the market price of conventional electricity is about 5.5 cents/kWh when the price of natural gas is $5/MMBtu and that it increases as the price of natural gas increases.72 The cost of electricity is 8 cents/kWh when natural gas reaches $9/MMBtu. The WGA task force recommended that the 30 percent Federal investment tax credit be extended to ten years and made available to utilities, and that States exempt CSP plants from property and sales taxes, extend power purchase agreements to 30 years, and make power purchase agreements larger (e.g., 500 MW) to accelerate scale-up cost reductions. The report cautions that if these incentives are not available, CSP deployment may require the establishment of a production tax credit or buy-down. However, if these incentives are in place, the task force estimated that 4,000 MW of CSP could be deployed, reducing the levelized cost of energy from CSP to under 6 cents/kWh (see Figure 9). This would place the cost of CSP within the competitive range with fossil fuel-fired power plants at current natural gas prices. In addition to the Solar Task Force, the WGA formed six other task forces: wind, clean coal, biomass, geothermal, energy efficiency, and transmission. Each task force wrote a report. The reports were submitted to the WGA in 2006. 20PDF Image | 2007 Concentrating Solar Power USA DOE
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