Bad Utility Pricing Creates Solar Problems


bad utility pricing creates solar problems

In Australia, bad utility pricing creates solar problems for generators, utilities, solar installers, and customers.

I have indicated before that what is happening in Australia is a harbinger to what the U.S. will see with regard to solar energy and utilities’ reaction.  Australia has very high variable electricity prices, over 30¢/kWh, because they include fixed costs in the variable price. Solar produces power more cheaply than buying from the utility. The high variable prices have caused a deluge of solar installations, with over 1 million households and 2.5 million people having installed solar at an aggregate cost of over $8B AUS.

Now the utilities and state price regulators want to change the price structure of electricity, which will make many of these solar investments uneconomic and forestall additional solar installations. Existing solar customers as well as solar installers are forming lobbying alliances to fight these changes. They may very well be successful because they have grown so large.

I think the cost-effectiveness of solar is inevitable and I welcome it as a keystone to fighting global warming. But making it cost-effective as a result of bad pricing decisions by government and utilities is just sad. It’s too late for Australia, but not for the U.S. if we start to act now. Unfortunately, the utilities are only worried about the next quarter and the regulators are (mostly) living in the monopoly world past. Odds on we will repeat Australia’s (and Germany’s) mistakes even though we have had the benefit of their experience.

In the US, utilities are now seeking to protect their business models by pushing hard against net metering and seeking to influence the pace and manner of deployment of other technologies and new energy market concept that don’t fit the decades old model.

In Australia, much the same has been happening. RenewEconomy reported on the concerns of utilities in this article last month. Feed-in-tariffs have been wound back, as they were supposed to have been as technology costs fell, but now the pendulum is swinging the other way, and utilities – with the apparent complicity of state-based pricing regulators – are now trying to extract as much revenue from solar customers as they can.

It is a dangerous game. Leading electricity executives and market analysts suggest the rollout of rooftop solar is inevitable and “unstoppable” – unless, of course, by regulation and changing tariffs.

Little wonder then, that solar consumers and rooftop solar providers are starting to organise themselves to protect the interests of individual consumers, and the industry as a whole.

In Australia, a new solar campaign initative known as “Solar Citizens” is being launched this week to ensure the interests of solar owners are protected from changes to laws and policies by power companies and governments.

Solar Citizens sees its mandate as helping existing and would-be solar owners to advocate for their rights as energy investors and aims to push for panels on every Australian rooftop.

Solar Citizens Manager Dr Geoff Evans says 2.5 million Australians now live under a solar roof (one million homes have rooftop solar PV systems), and have invested about $8 billion. Some forecasts expect those numbers to triple by 2020.

via Rooftop solar owners vs utilities – the battle begins : Renew Economy.


Will PG&E Be the First Utility To Fall To Solar Energy?


Falling solar energy costs and non-competitive pricing threatens PG&E’s future.

“We’re an energy company. We install solar systems for free, and we sell the electricity at a lower rate than you can buy it from the utility. So given the option of paying more for dirty power or paying less for clean power, what would you take?” – Lyndon Rive, CEO, SolarCity

Make no mistake about it, solar competes with utilities for sales at the point of use. The customer decides, do I buy from the utility or from a solar company? SolarCity is clear about the competition.

Pacific Gas and Electric (PG&E) serves most of northern California, except for the sparsely populated Oregon border, the northern part of the Nevada border, small areas served by municipal utilities and the large municipal utility around Sacramento. It is the seventh largest investor-owned electric utility by market value, and number one in terms of number of retail customers.

PG&E’s marginal prices cannot compete with solar. Large residential customers pay 31¢-35¢/kWh, the same prices that cause the solar revolutions in Hawaii and Australia. Even worse, according to PG&E, “By 2022, PG&E’s top residential rate could reach 54 cents.” Residential customers represent about 40% of PG&E’s retail electric revenue.

Read more at Will PG&E Be the First Utility To Fall To Solar Energy? | The Energy Collective.


Localized Dutch energy cooperatives create explosive solar energy growth


Local energy cooperatives boosting PV deployment.

Holland will never be known as the sun capital of Europe. Amsterdam’s daily average solar radiation is only about 3 kWh/m2, about the same as Berlin. For comparison, sunny Boston’s daily average is 4.6 (50% more) and Miami’s is 5.3.

While Holland does not yet have the prevalence of solar that Germany has, its people tread the same development path the Germans trod: cooperatives. In Germany, individuals or groups of individuals that formed their own energy cooperatives installed most of the solar. Energy cooperatives power the Dutch solar growth for likely the same reasons:

  • “On the one hand people want to contribute to a sustainable green energy.
  • “On the other hand, they want to be independent of large organizations such as banks and energy companies.
  • “All this has the hallmark of a booming grassroots movement.”

I would love to have answers to some of the questions that come to mind:

  • Why do the Dutch and Germans get together and cooperate to create their new energy future?
  • Why do rural electric cooperatives in Colorado on municipal utilities in Nebraska shun wind and solar?
  • Why did the federal government choose tax credits and accelerated depreciation to promote renewables, when it rewards inputs, not outcomes, and requires some level of wealth to take advantage of it?
  • Most importantly, what would it take to make it easy to create energy cooperatives in the U.S.?

I would love to hear your answers!

SolarPlaza: Dutch solar energy growth explodes through local initiatives

Last year in the Netherlands 145 megawatts (MW) of new solar panels were installed, and 3.5 times more solar power was generated than in 2011. Most PV panels are purchased through the joint initiatives of the general public.

“In the Netherlands there are currently more than 300 local energy cooperatives. This is an indication of its popularity. Netherlands is truly a country where growth takes place at grassroots level. I call that the power of the people,” says René Moerman. He is the director of business development at Solar Insurance & Finance, and Chairman of CALorie in Northern Holland. This local public initiative recently opened its first solar power plant with 112 panels, and plan to put another two to four solar powered plants into operation before the end of the year.

“We have been in existence since 2010 and are actually an established club. We have already realized several projects, while new cooperatives will come come to fruition next year. Therefore I expect that solar energy in the Netherlands will more than double in the coming years, purely through the power of growing from grassroots level, “said Moerman.

Cooperatives show people that PV is cost effective and cheaper than electricity from the power company

This opinion on future development is shared by Dr. Frans Stokman, professor of sociology at the University of Groningen and president of Grunneger Power, the local energy cooperative.

“Despite the limitations of net metering and the difficulties of investing in solar energy at other locations besides your own roof, we envisage tremendous potential for growth. This is evidenced by cooperatives such as Grunneger Power that show people that it is cost effective and cheaper than electricity from the power company,” says the professor.

Grunneger Power constructs a roof fitted with solar panels in Groningen every two days.

“Worldwide, you see the number of solar panels growing at an amazing rate. Every year it exceeds the previous year. In the Netherlands, people on the same street collaborate and help each other to purchase solar panels. That is the social impact that we have always envisaged and that is now becoming a reality,” says Stokman.

In the Netherlands, a kilowatt-hour of solar power now costs about 16 cents. Power from an outlet costs on average of 21 cents.

via KW17 | SolarPlaza: Dutch solar energy growth explodes through local initiatives - SolarServer.


Denmark bans new installations of fossil-fired heating


Although Denmark announced its ban on installations of new fossil fuel heating systems last year, it was not widely available in English until now. The Danes’ renewable goals (100% renewable by 2050) far exceed those of Germany (80% renewable by 2050). Apparently, the oil crisis in the 1970′s caused Denmark to begin aggressive build-out of district heating systems and of a natural gas network to use the newly abundant supply from the North Sea.

Now the North Sea gas is expected to run out in a decade, requiring the Danes to rely on Russian supplies. In response, they are accelerating district heating and sourcing the heat from renewable supplies. They have banned oil and natural gas heating systems in new buildings and in 2016 installation of oil-fired heating systems will be banned in existing buildings if gas or district heating is available.

Denmark shows a level of commitment to addressing climate change and energy security far beyond most countries.

via Denmark partly bans fossil-fired heaters – 100% renewable – Renewables International.


Will EVs Save the Electric Companies?


The major utilities in Australia think they might. As I have discussed, U.S. utilities need to start now (Disruption On All Sides – What Is A Utility To Do?) to save their businesses, protecting what they can while building the base for a new  business. The longer they wait, the closer they will be drastic economic losses and fewer options to save themselves.

Utilities in Germany and the rest of Europe are already there, having lost two-thirds of their market value since 2008 (Reuters: Renewables turn utilities into dinosaurs of the energy world). The utilities in Australia are now there as well, complicated by the fact that many of them are actually state enterprises.

The European utilities were first; their executives can be forgiven for not seeing the future. The Australian executives much less so. The U.S. utility executives will have no excuse.

EVs of some sort must be part of the answer to offset the loss of electricity sales. Utilities must understand they now have a competitor with an exact substitute at the point of use, so their price and customer relations matter. They have  customers, not ratepayers.

Giles Parkinson sums up the situation nicely:

The more utilities appear to declare war on their customers, and seek to make solar unattractive by increases in fixed charges, and raising tariffs, and regulatory barriers, the more battery storage and distributed energy seems appealing. The more utilities feel they are competing against their customers, the quicker they will become estranged.

The only reasonable option seems to be to encourage people to consume more. Mandating them to turn on more air conditioning, or re-install wasteful appliances, obviously won’t work. Time to think of something new.

That option could be electric vehicles.

via Electricity suppliers look to EVs to save their business models : Renew Economy.


Want To Bet Against Elon Musk? Solar City / Tesla Energy Storage


SolarCity Sees Energy Storage ‘Viable’ Within 10 Years, CEO Says

Elon Musk is CEO SpaceX, CEO Tesla Motors, Chairman Solar City. SpaceX made history as the world’s first privately held company to send a cargo payload to the International Space Station. Tesla builds electric vehicles and its Model S is Motor Trend 2013 Car of the Year. Solar City is one of the largest solar manufacturers and installers in the U.S., and provides the solar panels and installation for Tesla’s free charging stations.

Now Tesla is providing SolarCity with batteries for their energy storage product. SolarCity already has 395 energy storage “pilots” under contract. SolarCity CEO Lyndon Rive says storage will be viable in 10 years and that “We will solve the storage issue.”

Given the technological and business success of SpaceX, Tesla, and SolarCity, do you want to bet against their storage success?

SolarCity Sees Energy Storage ‘Viable’ Within 10 Years, CEO Says – Businessweek

“It’ll be a viable product in the next ten years,” SolarCity CEO Lyndon Rive said today in an interview in San Francisco. “We don’t know yet how big the next phase is going to be, but this is a long term investment, full stop,” he said. “We will solve the storage issue.”

The San Mateo, California-based company is installing 8 kilowatt-hour battery packs provided by Tesla Motors Inc. (TSLA) and combining them with energy management systems that allow for remote monitoring. Storage will be crucial to balance the U.S. electric grid as solar expands from 1 percent of total generation capacity today, according to Rive.

via SolarCity Sees Energy Storage ‘Viable’ Within 10 Years, CEO Says – Businessweek.


Do You Think Utilities Should Be Able To Own Rooftop Solar?


If utilities own the solar on customers’ roofs, it will increase penetration, save the distribution grid, and set the stage for a new business model. In Idaho, natural gas exploration representative David Hawk said that’s not the utility’s business.

Idaho Power is struggling to do the right thing by its shareholders and its customers. It wants to keep prices as low as possible and to make profits. It still sees those as tied to kWh sales.

Last week Idaho Power’s Integrated Resource Plan Advisory Council met. Rocky Barker of the Idaho Statesman covered the meeting in some detail. Based on the coverage, it appears that Idaho Power is hampered by a belief that solar prices will not continue to drop and so has not included solar in its integrated plan.

Not surprisingly, many on the Council and in attendance disputed this position. Rocky Barker reports the following exchange:

Idaho had hundreds of people eager to build solar systems as the price of panels dropped – until Idaho Power filed a proposal with state regulators that removed the financial incentives.

“Idaho Power brought a case to kill it,” said Peter Richardson, an energy attorney.

That brought a terse response from David Hawk, who represents natural gas exploration companies.

“I don’t think building solar units on individual houses is the role of a utility,” he said.

Hawk was apparently against allowing third-party financing of solar installations as is done in California, because “electric prices are higher in California than they are in Idaho, making such programs more useful and profitable.”

There should be no doubt that the price of solar will drop precipitously; the Department of Energy is investing millions to ensure it does (DOE Sunshot Initiative). More importantly, a big chunk of the investment targets driving down residential rooftop solar costs. Distribution utility focus on making distributed generation and storage work ensures a future for them, and a big part of that could be owning solar and storage at customers’ sites.

If we do not give utilities a chance to own the solar and storage, we will doom them to eventual bankruptcy. Before that occurs, of course, we will pay too much for a poorly functioning grid because they will not have the funds to invest, which brings hardship on customers as well as investors. Let’s give the utilities a path to save themselves instead.


SunPower 21.5% Efficient Panels Could Reduce Other Costs by 30%


SunPower has announced a new series of solar panels with 21.5% efficiency, about 44% more than the 15% efficient panels typically installed. While this does not mean choosing SunPower will get you cheaper electricity per kWh (it is a free marketplace after all), it does have some interesting knock on effects.

If your panels produce 44% more kWh than current standard installations, to get the same amount of kWh you need 30% fewer panels. For installers, this means costs associated with panel installation like labor and racking should also be 30% lower. This is a significant cost reduction and points out how increased panel efficiency will drive down installation costs.

via SunPower Launches X-Series Family of Solar Panels with World-Record Efficiencies of 21.5 Percent.


A New Entrant In The Hydrogen Storage Race


There is another entry in the cheap hydrogen storage race. Two scientists at the University of Calgary believe they have discovered a way to use inexpensive, safe catalysts to produce hydrogen from water through electrolysis. They believe their catalysts will be 1,000 times cheaper than what is used today. They have started a new company, FireWater Fuel Corp., to commercialize the technology.

The key to their approach is using unstructured materials (unorganized and randomly distributed as opposed to organized crystalline structures). The unstructured materials allow more gaps and thus increase the catalytic action. The two scientists have discovered a fairly efficient way to create the unstructured materials that they believe can be done on an industrial scale. (More details below.)

I hope they are right. Their goal is “… to have a commercial product in the current large-scale electrolyzer market in 2014, and a prototype electrolyzer – using their new catalysts – ready by 2015 for testing in a home.” The idea is that people could use excess solar electricity to make hydrogen during the day, and then use a fuel cell to create electricity from the hydrogen when the solar panels are not producing electricity.

They may want to leverage the experience of a similarly targeted company, Sun Catalytix. In 2009 Sun Catalytix had similar, admirable, lofty goals to use its catalysts to create a hydrogen storage energy source. (See Sun Catalytix Receives Seed Financing from Polaris Venture Partners.) A recent article talked about time to market:

The vision of using a low-cost, solar-powered electrolyzer brought heaps of publicity to the company and Nocera, who advocated using the technology in developing countries. At the time, many venture capitalist companies were willing to invest in companies formed to commercialize lab research. But as the experience at Sun Catalytix shows, development times in material science are typically many years and require a substantial amount of capital to bring to market.

Decelle joined the company in June of 2011 and by the fall, it was clear the company had to pursue a shorter-term commercial market. “That (artificial leaf) technology tends to rely on hydrogen infrastructure. But when you think about that in venture capital time scales, it’s a tough pitch,” he says.

I cannot help but see eerie parallels between the two groups of scientists. Simon Trudel, one of the University of Calgary scientists, said “Our vision is to have these in your home so you can be completely off grid eventually.” (Globe and Mail video.) Sun Catalytix founder Daniel Nocera said much the same thing in 2009. I wish Sun Catalytix and Firewater Fuel much success.

What have the two University of Calgary researchers discovered?

Curtis Berlinguette and Simon Trudel, both assistant professors in the chemistry department in the Faculty of Science at the University of Calgary, have discovered a ground-breaking way to make new affordable and highly efficient catalysts (called electrocatalysts) for converting electricity into chemical energy. A catalyst is a substance that increases the rate of a chemical reaction.

What makes the electrocatalysts created by the University of Calgary researchers different than conventionally made, commercial catalytic materials?

Chemists have traditionally been attracted to creating catalysts out of ‘pure’ crystalline-structured materials. They’ve tended to ignore unstructured material as the “crud at the bottom of the flask.”

“There really have been few significant advances in catalyst design over the last three decades,” Berlinguette says.

He and Trudel developed a novel process that uses cheap, abundant and non-toxic metals (e.g. iron, cobalt, nickel) combined in a highly disordered, or amorphous, structure.

Think of crystalline structures as being like tiles laid in an ordered pattern on a floor, while amorphous structures are like tiles thrown on a floor. Such an amorphous material has no symmetry and is full of ‘defects.’

These ‘defects’ in amorphous mixed metal oxide materials actually make them more chemically reactive – and therefore more efficient catalysts – than crystalline materials.

Laboratory tests by the University of Calgary researchers show their catalysts perform as well as or better than catalysts now on the market – but theirs are 1,000 times cheaper.

“We’re essentially showing, even with our ‘first generation’ of catalysts, that we’re equal to or better than anything that’s sold commercially right now after 30 years of development,” Trudel says.

via New, inexpensive, efficient catalysts offer viable way to store and reuse renewable energy | News & Events | University of Calgary.


Virginia Power: Feed-In Tariff For Very Small Amount Of Solar


Virginia Power, owned by Dominion Resources, has received approval from the Virginia regulatory commission to have a feed-in tariff (FiT) for up to 3 MW of solar power from residential and commercial installations. This would be a buy-all, sell all arrangement as was the case with Germany’s FiT. That is where the similarity ends, however.

Virginia Power has low electric rates, and the variable portion of their prices are too low to make installation of solar panels economic today. Their FiT of 15¢/kWh, while significantly higher than their variable price on a percentage basis, may still be too low to make the economics of solar work at current solar costs. And, the cap of 3 MW will ensure very little solar gets installed in any case.

There is nothing wrong with utilities having low prices, as long as the cost of their pollution is included in the variable portion of their rates. If solar does not work at current prices, that is OK too. Let’s just make sure we recognize this for what it is, which is really not much.

Dominion Virginia Power’s demonstration Solar Purchase Program will allow qualifying solar customer-generators to sell all their sun-generated electricity to the utility company for five years and at the same time purchase all of their electricity from the company at their current rate.

“We will buy all of their generation and pay them 15 cents a kilowatt-hour,” Corsello said, “and the customers will buy all their energy from Dominion at an average price of about 10.5 cents per kilowatt-hour.”

via Dominion Virginia Power to buy electricity from small solar power generators – Richmond Times Dispatch – Richmond VA.


Low Income Subsidizes Solar In Queensland, Govt. Struggles With Solution

Solar-powered households could be forced on to time-of-use tariffs, which would limit the bonus residents receive from selling power to the grid. Source: The Courier-Mail

Solar-powered households could be forced on to time-of-use tariffs, which would limit the bonus residents receive from selling power to the grid. Source: The Courier-Mail

Government agencies begin to struggle with the disruption caused by solar photovoltaics, mis-priced feed-in tariffs, and mis-priced residential electric rates.

Update 3/26/13: To get more of an idea of how the government is tying itself up in knots, see Qld solar PV households face dramatic tariff changes. This is what happens when there is a dramatic shift in costs and technology and the market cannot react, in this case because of poor government pricing policies.

If you have an item that is easily mass produced, people can purchase a lot of it in a short time if the price is attractive. Solar panels are mass produced and mass installed.

Queensland paid too much for the feed-in tariff for too long; $0.44 AU/kWh, far above the average price of $0.23/kWh. They included fixed costs of distribution in their variable prices for retail electricity. They now have a political firestorm on their hands between the solar power haves who are getting a fat subsidy, and the solar power have nots who are paying for the subsidy. And they are positing that the subsidizers are those least able to afford it (relatively low income) while the subsidizees are those who need it least (relatively high income).

The government authorities search for a way out that makes both happy; likely they will make neither happy with associated political consequences. Once you get into this mess with government as the price setter, it is extremely hard to get out. In the U.S. we have a small window to correct our price structures for the retail consumption of electricity and the recompense for excess solar electricity (typically net metering). If we fail to act within this short window, we will be in Queensland’s predicament.

Queensland Competition Authority recommends time-of-use tariffs be mandatory for solar-powered households

SOLAR-powered households could be forced on to time-of-use tariffs to ensure they pay their share of network charges.

A report ordered by the Newman Government has recommended the highly-controversial move after finding the current solar schemes were hurting lower income households.

The report found that by 2015/16, the cost passed on to all electricity users from paying for home-produced solar power would drive up the average annual power bill by $276, or about 17 per cent.

“When those doing the paying are likely those least able to afford it and those enjoying the benefits are those likely to be most able to afford to meet their true costs, then something is truly wrong,” the Queensland Competition Authority report said.

Industry insiders are convinced thousands of solar households maximize the benefit of the 44-cent feed-in tariff they receive by selling all the power they produce during the day and using only grid-produced power at night.

This way they received 44 cents per kWh for the solar power they produce while paying the retail rate of about 23 cents per kWh for what they use.

The QCA report found one way to reduce the impost being passed on to other consumers would be to switch solar households to the time-of-use tariff, which is currently voluntary.

Time-of-use tariffs offer off-peak price discounts but make power more expensive at night when there is increased demand.

“In this regard, it would go some way to reducing the problem of PV customers avoiding a portion of the true cost of their network access due to their net consumption profile, which leads to higher average variable network charges,” the QCA said.

via Queensland Competition Authority recommends time-of-use tariffs be mandatory for solar-powered households | The Courier-Mail.


A Peek At A Startup’s Smart Lighting Technology Inside HP

Enlighted's smart lighting

Enlighted’s smart lighting

This is one reason retail electricity sales are shrinking: improvements in lighting technology. (Residential and commercial lighting consumes 17% of the total electricity of both of these sectors and about 12% of total U.S. electricity consumption. Enlighted’s sophisticated system is wireless, and because it monitors occupancy in 10′x10′ increments, can be used for emergency building evacuation information.

Inside a laboratory at Hewlett-Packard‘s Palo Alto campus, the lighting system that keeps the researchers productive doesn’t look extraordinary. It’s designed that way. But beyond the glow emanating from the overhead light fixtures, a wireless communication system, sensors and monitoring software are hard at work to customize the brightness and the timing for when the lights should shine and when they should go dim or turn dark.

via A Peek At A Startup’s Smart Lighting Technology Inside HP – Forbes.


Recent Warming Is ‘Amazing And Atypical’


Temperature change over past 11,300 years (in blue, via Science, 2013) plus projected warming this century on humanity’s current emissions path (in red, via recent literature).

New Science Study Confirms ‘Hockey Stick’: The Rate Of Warming Since 1900 Is 50 Times Greater Than The Rate Of Cooling In Previous 5000 Years

Temperature change over past 11,300 years (in blue, via Science, 2013) plus projected warming this century on humanity’s current emissions path (in red, via recent literature).

If you believe the science and look at the picture, there is really not much else to say. The author of the article, Joe Romm, concludes:

[W]e have decided to change the setting on the thermostat from “Very Stable, Don’t Adjust” to “Hell and High Water.” It is the single most self-destructive act humanity has ever undertaken, but there is still time to aggressively slash emissions and aim for a setting of “Dangerous, But Probably Not Fatal.”

While I have been unhopeful and resigned about climate change in the past, I recently have renewed hope. Renewables increasing cost-effectiveness, non-fossil businesses responses to risk from climate change, coalescing of belief in climate change across the political spectrum, and real world results implying scientists may have underestimated the rapidity of change all make me think we have reason to hope. It could result in a combination of acceptance we have to do something, business drive to do something, and available alternatives to somewhat mitigate lifestyle changes.

A stable climate enabled the development of modern civilization, global agriculture, and a world that could sustain a vast population. Now, the most comprehensive “Reconstruction of Regional and Global Temperature for the Past 11,300 Years” ever done reveals just how stable the climate has been — and just how destabilizing manmade carbon pollution has been and will continue to be unless we dramatically reverse emissions trends.

Researchers at Oregon State University (OSU) and Harvard University published their findings today in the journal Science. Their funder, the National Science Foundation, explains in a news release:

With data from 73 ice and sediment core monitoring sites around the world, scientists have reconstructed Earth’s temperature history back to the end of the last Ice Age.

The analysis reveals that the planet today is warmer than it’s been during 70 to 80 percent of the last 11,300 years.

… during the last 5,000 years, the Earth on average cooled about 1.3 degrees Fahrenheit–until the last 100 years, when it warmed about 1.3 degrees F.

In short, thanks primarily to carbon pollution, the temperature is changing 50 times faster than it did during the time modern civilization and agriculture developed, a time when humans figured out where the climate conditions — and rivers and sea levels — were most suited for living and farming. We are headed for 7 to 11°F warming this century on our current emissions path — increasing the rate of change 5-fold yet again.

via Bombshell: Recent Warming Is ‘Amazing And Atypical’ And Poised To Destroy Stable Climate That Enabled Civilization | ThinkProgress.


Tensions rise in CA utility versus solar debate


Utilities accused of trying to obstruct growth of solar. Image: SDG&E.

I think things are going to uglier before they get nicer. Utilities have to get their prices in line with their costs if the grid is going to be there when people with solar need it. Idaho Power applied for something similar to what the California utilities did and, like the California utilities, kind of bungled it. See Solar energy companies upset over Idaho Power proposal.

Tension between California’s solar installers and the state’s investor owned utilities boiled over today at the Cleantech Forum in San Francisco.

Bryan Miller, vice president of public policy and power markets at residential solar company Sunrun, said that utilities are the biggest obstacle to rapid growth rates of solar.

via Tensions rise in utility versus solar debate – PV-Tech.


Europe: EON Closing 3-Year-Old Natural Gas Power Plant


EON SE’s Irsching-5 in Bavaria, Germany.

Almost new fossil plants shutting down. 30% of fossil capacity uneconomic because of wind and solar. This is Europe, and the uneconomic fossil plants are new, efficient natural gas plants. Natural gas is expensive, so the plants are uneconomic. Coal plants, even dirty lignite (brown) coal plants, are economic because coal prices have fallen as have CO2 emission credits (i.e., it’s cheap to pollute).

In the U. S. we will be facing something similar. In our case, natural gas is cheap and increased pollution restrictions make operating and retrofitting coal plants more expensive. We will also shut down a lot of excess fossil capacity, but it will be coal.

If we replace the old depreciated plants with new, electricity prices will increase. This will make renewable and distributed generation more cost-effective and will help start us down the path Germany has already trod. See Nuclear Industry Withers in U.S. as Wind Pummels Prices.

Three years ago, Germany’s largest utility spent 400 million euros ($523 million) building a natural gas-fired power station. Later this month, the company may close the plant because it’s losing so much money.

EON SE’s Irsching-5 in Bavaria last year operated less than 25 percent of the time as slumping power prices made burning natural gas unprofitable by record margins. As Europe’s weak economy holds back electricity demand, cheaper coal, requirements to buy renewable energy and the collapsing cost of carbon permits are undercutting gas-fired plants.

The pattern is repeated throughout Europe as utilities including France’s GDF Suez SA and Centrica Plc mothball gas plants. The impact is both environmental and commercial. Switching to coal increases emissions, while it lowers profit for gas plants, which generate almost a quarter of European power, and shrinks the market for suppliers led by OAO Gazprom. (GAZP)

“Gas-fired plants are stopped three days out of four,” Gerard Mestrallet, chief executive officer of GDF Suez, France’s former gas monopoly, said at a briefing on Feb. 28. “The thermal industry is in crisis. There is overcapacity.”

The difference between the cost of fuel and the price paid for the power generated reached a record low today. The so- called spark spread for the month ahead fell to as low as minus 18.35 euros a megawatt-hour ($23.87). Gas plants are also unprofitable in France, the Netherlands, Spain and the Czech Republic, according to data compiled by Bloomberg. In the U.K., they’re barely breaking even.

At the same time, spark spreads for coal plants are profitable in every European market tracked by Bloomberg as prices for the fuel drop.

via Europe Gas Carnage Shown by EON Closing 3-Year-Old Plant – Bloomberg.