Discussion for article #235170
Have any utilities had the sense to embrace rooftop solar? Every time I see one of the solar-leasing startup companies dong an installation (they front the cost, arrange the installation and permitting, take the tax credit and pass some surplus to the homeowner) I wonder why no utility seems to be doing that, either by starting its own leasing arm or directly. They have the access to capital markets, they have the craft expertise (or at least they did until they all started downsizing), they have the intimate knowledge of sites and power demands. And they’d get out from under having to buy excess electricity back at retail. They could even make sure that individual installations were set up to put minimum stress on the local grids.
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Note the dearth of wind in new installations in California. It is a truely crappy resource here: the wind stops during the heat waves when loads peak. So a portfolio that has wind needs backup…typically inefficient simple-cycle gas turbines (often “aero” units, scaled to power airplanes.
There is still substantial wind coming on line on the Great Plains, where the wind is more reliable—but reliably at the Wrong Time. Great Plains wind has its non-storm peaks at about 10 PM, as cooling air slides down the long slope from the Rockies to the Mississippi. And it tends to stop during the winter cold snaps, acoinciding with the winter load peak in that region.
Those rooftop distributed-gen PV installations still need a distribution grid to provide lights at night. Their advantage to the grid is that they provide well-shaped power near the peak, turning off the least efficient alternatives (aeros) in the fleet. They do not obviate the need for a costly distribution network.
The Sacramento Municipal Utility District is one utility that embraced rooftop solar long ago (as well as subsidizing tree planting, the silliest little nuke ever (now closed), and some wind installations that, given the relationship between the Delta Breeze that powers them an A/C loads in Sacramento, make no sense. SMUD’s PV program has been a big win, and with continuing decreases in PV costs it will continue to win.
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Some have speculated that a company like Solar City may itself become a quasi-utility, as the years progress and it reaches critical mass. Overall, there does seem to be a pattern where utilities are terrified initially of the appearance of renewables, and then capitulate somewhat to their embrace. We are in the early days, and predicting is tempting but probably unwise with so much change to come.
Gregor
Storage will be covered quite extensively in one of the upcoming pieces in this series. Big subject, and the smartest analysts admit they really don’t know how it’s going to play out. Makes for an exciting amount of uncertainty for sure. The bottom line is that storage itself will represent a new, and substantial investment, and the question is how will that cost be distributed. Thanks for reading.
Gregor
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That’s a very deceptive first chart you show - the fact that the axis doesn’t start at zero gives a quite misleading impression of the contribution of renewables.
The graph is appropriate for showing the growth of renewable energy which was the focus of the piece. The piece makes it quite clear the overall contribution from renewables is still small.
This piece talks briefly about tax credits and incentives for renewable energy. What I’ve never seen really is a comparison of the tax credits and incentives for renewable vs non renewable energy sources. Can anyone point me to a discussion on that?
Yeah, I disagree that the chart is deceptive and here’s why. I have watched the discussion for many years about zero scaling charts, and it’s simply not the case that all charts must be zero scaled to either be effective or accurate. You really can choose to not zero-scale, and rather than losing accuracy you simply gain insight. Let’s take this chart here as an example: as you can see, the point of the article is not the absolute quantity of renewable contribution but instead the marginal growth. The article is quite up front about the small percentages: everything is still below/around 5%. What the chart effectively does, in my opinion, is show you two important things: 1 the fact that the total power generation is not advancing, and 2. that new (marginal) additions are coming from combined wind and solar.
Gregor
Further Reading: a good post by the former editor of the Harvard Business Review, on why there is no mandate to zero scale all charts: http://byjustinfox.com/2014/12/14/the-rise-of-the-y-axis-zero-fundamentalists/
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I completely agree the series, so far, has been very light on the menu of tax credits and incentives that have historically benefited the sector not only here but especially in Europe. As you are likely to agree, covering that aspect deeply represents a potentially vast amount of written material. So the question I’m asking myself: how to cover it more completely without winding up in the weeds where every reader falls asleep. That said, there is more material coming on the topic, because cost is going to be a key feature when I cover Storage and the costs/benefits of the incentives will be included. Thanks for the feed back because I see readers are already asking for this material to be covered more completely.
Gregor
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Thank you for making all of this accessible to dummies like myself when it comes to this issue.
For years, the idea of doing a rooftop has been in the back of my mind but I really haven’t pushed myself to be more informed about all of this. Your series is forcing me to confront the options available to me in the Hudson Valley.
This is all fascinating to me and I appreciate the effort you’ve been putting into it.
There’s a lot of fresh material and fresh perspective in this article. I appreciate the graph discussed because it’s easier to see the changes over the last number of years. The graph probably shows the effects of energy efficiency (not counting 2008-09) which many people are emphasizing more these days. Since American oil production peaked in 1970, we sort of forget that energy efficiency has played a major role in keeping our economy going. The first car I ever drove got only 14 MPG but I’m hoping my next car will get at least 50 MPG, or equivalent.
California has a major energy storage system in its hydroelectric system but it’s not clear what’s going to happen to it with the drought, particularly if it’s long term. I see more desalination coming but that will require more energy. Lots of dynamics are at work, but the most disappointing are the people defending the privilege of old technology and domestic protectionism at the price of competition and better technology. But it appears at least some people are coming around.
Incidentally, the EIA is almost always behind in its predictions of alternative energy, but its still useful if we remember that.
The management at coal companies is terrible. Several years ago they saddled their companies with large amounts of debt to finance mergers and acquisitions instead of diversifying into alternative sources of energy. Shortly after acquiring debt, natural gas prices crashed causing a steep drop in coal prices. Also, China reduced their purchases of coal by a significant amount. During the past 5 years, Arch Coal’s stock dropped from $35/share to $1/share. Last year the CEO of Arch Coal made $4.2 million. Peabody Energy (a big supporter of Mitch McConnell) is also in very bad shape. Coal companies are using some of their remaining cash to pay lobbyists and lawyers to fight proposed EPA standards. The largest Chinese coal company invested in wind technology.
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One thing that will be crucial to cover, even if it does get down in the weeds, is the different kinds of subsidies that accrue to different modes of energy. For conventional sources of energy, there’s some favorable tax treatment, but there are also favorable terms for extraction from public land, rules that shield energy companies from the costs of pollution, and even the cost of military protection for international shipments. (I edited a piece in the mid-90s, before the second iraq war and all that, where the author estimated the incremental cost of the US persian gulf naval presence at somewhere north of $10 a barrel, for example.)
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Fusion energy may be a pipe dream but that’s about the only thing that will save the centralized generation model for utilities. Solar and wind are the real impetus for fusion research now. Have no real data just recently saw some fusion breakthroughs put two and two together.
The wind generation industry is the one group the Koch brothers have not been able to push around in Kansas. As much as the Kochs try, those Western Kansas farmers love wind power and why not. Relatively small footprints means little land goes out of production and that which does is usually less than prime. It is almost free money for the landowners.
How long have we been talking about fusion? 60-70 years. I think we will be dancing with Barsoom native girls before fusion becomes a viable energy source.
Mentioned is utility scale PV, with storage issues. I wonder how the trade offs compare to a thermal system with supplemental fuel.
I made a comment about the predictions on alternative energy from the EIA and the need to take them with a grain of salt. But I stumbled on this stronger statement about the EIA and the need to upgrade the quality of its predictions:
http://thinkprogress.org/climate/2015/04/15/3646658/eia-report-ignores-renewable-potential/
The EIA, of course, is still very useful for collecting data from previous years.
Glad to hear the Kochs are losing some battles. New York isn’t that big in wind power, but I remember reading very positive comments from farmers and other folks on the Tug HIll Plateau. They were thrilled that wind power was allowing them to stay on their land. Without it they would probably have to sell out. It’s a very tough place to live and especially to farm.
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