Nuclear Industry Withers in U.S. as Wind Pummels Prices – Bloomberg


Wind-generated electricity supplied about 3.4 percent of U.S. demand in 2012 and the share is projected to jump to 4.2 percent in 2014, according to the U.S. Energy Information Administration. Photographer: Konrad Fiedler/Bloomberg

[T]he U.S. wind-energy industry went on a $25 billion growth binge in 2012, racing to qualify for a federal tax credit that was set to expire at year’s end.

The surge added a record 13,124 megawatts of wind turbines to the nation’s power grid, up 28 percent from 2011. The new wind farms increased financial pressure on traditional generators such as Dominion Resources (D) Inc. and Exelon Corp. in their operating regions. That’s because wind energy undercut power prices already driven to 10-year-lows by an abundance of natural gas.

We continue to go down the path already trod by others, in this case Germany. While in alternative energy circles Germany may be better known for solar power, they were also the driving force behind wind power development. The problems Bloomberg talks about here, negative prices in some off-peak hours, shutting down of coal and nuclear plants, is exactly what has happened, and is happening, in Germany.

I am a little befuddled when this appears as a surprise to some in the industry; the handwriting is on the wall, written not only in Germany, but Australia and Hawaii, too. People all over the world like renewable power and, generally, dislike utilities. When told the utilities are losing money, their reaction is “Good!” People won’t feel the effects for awhile, and when and if they do, the utilities will not have a reservoir of goodwill to fall back on; instead, they will be blamed for the problems.

What is next as we follow Germany down the renewables path?

The Stoxx Euro 600 Utilities index, with its January 1, 2008, level rebased to 100, now trades at 46, compared with 81 for the all-industry Stoxx Europe 600. The eurozone-only utilities index is at 35 and has lost 312 billion euros ($407 billion) in market cap. Reuters: Renewables turn utilities into dinosaurs of the energy world

Look for electric energy conglomerates to lose up to two-thirds of their value, on average, over the next 5 years. Distribution companies can thrive, but only if they take steps now to correct their prices and their relationships with customers.

via Nuclear Industry Withers in U.S. as Wind Pummels Prices – Bloomberg.


COLUMBIA, SC: Report: Gov’t incentives favor nuclear over renewable energy in SC


As SCE&G and other utilities work to complete atomic power plants, the law that made construction possible gives power companies less incentive to use solar, wind and other forms of alternative energy.

The legislation in South Carolina, Georgia, and Florida that allows utilities to recover construction costs for nuclear power as they incur them, instead of when the asset is used and useful, is (I don’t know how else to say this) economically stupid. It makes the time value of money, and the cost of risk, equal to zero. As it turns out, we have always and systematically underestimated the cost risk. And the time value of money, well, it compounds, especially when the nuclear plant is delayed. (And this is on top of the exemption from the costs of insurance associated with a nuclear problem at the plants.) With these types of guarantees, well, we could put rooftop solar on every roof.

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Japan Adds 1,178 Megawatts of Mostly Solar Energy in Nine Months


Japan added 1,178 megawatts of mostly solar clean-energy capacity in the nine months to the end of December as the country curbs its reliance on nuclear power.

The key to this is not the volume; if you pay enough, you can get lots of anything. Instead, it is the time frame. They got a gigawatt of new power in 9 months. No central station paradigm can do that.

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Stanford scientists calculate the carbon footprint of grid-scale battery technologies


Solar and wind power pose a challenge for the U.S. electrical grid, which lacks the capacity to store surplus clean electricity and deliver it on demand. Researchers are developing grid-scale storage batteries, but the fossil fuel required to build these technologies could negate some of the environmental benefits of new solar and wind farms, say Stanford scientists. Credit: Eugene Water & Electric Board/NREL.

Stanford scientists looked the energy stored on investment (ESOI) of various storage technologies. At the low end were lead-acid batteries with an ESOI of 2.0, meaning they are only able to supply twice the amount of energy that it takes to manufacture them. Of all the battery types evaluated, lithium-ion was the best, but they only had an ESOI of 10.0. The main reason for the poor ESOI figures is that all batteries have a limited number of charge/discharge cycles compared to the energy it takes to build them.

In contrast, hydro pumped storage had an ESOI of 210. Of course, there are limited geographic opportunities for hydro pumped storage. Compressed air energy storage (CAES) using caverns had the best ESOI, 240. This may bode well for companies like SustainX and LightSail Energy that seek to bring CAES on an industrial scale without the use of caverns.

via Stanford scientists calculate the carbon footprint of grid-scale battery technologies.


Germany’s onsite energy storage incentives creates technical advantage


Germany’s upcoming incentives for energy storage could have a major impact on the prevalence of storage and its cost to consumers.

The German Federal Ministry of Environment announced plans to introduce incentives for energy storage, especially storage for solar photovoltaic systems, this year.

In the same way that Germany took the lead in developing and installing solar on a large scale, Germany is going to take the lead in onsite electric storage. In Germany, solar electricity is cheaper than utility electricity and rates paid for excess power fed into the grid are less than prices for power from the grid, presenting a real opportunity for storage.

Not only will this spur the development of new types of stationary battery storage, but it will give German companies a leg up in developing the hardware and software to manage the triumvirate of solar electricity, grid electricity, and electric storage. It will have to ensure optimal use of the battery from a lifetime use perspective as well as determining when to charge the battery and take power from the grid. This will necessarily involve incorporating weather forecasts to develop forecasts of solar energy production.

Unlike the manufacture of solar panels, hardware and software to manage these combined energy systems will be a high value product.

More at Germany’s newest incentives to kickstart energy storage for solar.


Duke Explores Rooftop Solar



An installer for Stellar Solar carries a solar panel at a home in Encinitas, Calif. Rooftop panels are gaining popularity as the industry faces “anemic” growth in power demand.

“It is obviously a potential threat to us over the long term and an opportunity in the short term,” Rogers said in an interview after the meeting. “If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using us for backup,” he said.

If the CEO of Duke is positing that solar panel costs and installation costs might not come down, that would be whistling past the graveyard. But, if he is sending up a trial balloon to get his board and executives to start thinking seriously about disruption, then he might want to push harder, faster. Once solar becomes cost-effective, it will be too late to get on board the train. See SolarCity Winning Competition With Utilities For Customers.

via Duke Explores Rooftop Solar as Panels Slow Demand, CEO Says – Bloomberg.


Indian NGO Halfway To Goal Of Light For A Billion People


More than 2,000 villages have been provided with ‘charging stations’, each offering 50 or so solar LED lanterns. Photograph: Ahona Datta Gupta

[I]n five years, thanks largely to a single NGO that has not sold one lamp, 500,000 more homes have been provided with cheap, decentralised electricity via powerful solar LED lanterns using the latest batteries and panels.

Distributed Solar Generation + Brains + Good Will + Entrepreneurship

= Safe Light For Billions

Now they are doing microgrids to bring more power to villages all across India, instead of just lanterns and cell phone charging. And they are expanding to Afghanistan, Burma, Pakistan and African countries, including Kenya, Ethiopia and Sierra Leone.

Teri, India’s leading energy research institute, launched its Lighting One Billion Lives initiative in 2007. After a slow start – only four villages signed up in the first year – it has taken off. More than 2,000 villages now have “charging stations”, each offering 50 or so long-lasting, high-quality solar lanterns that double up as mobile phone chargers.

Teri does not make, distribute or sell the lamps. Instead, it acts as a combined social, developmental and technical enterprise. Its scientists and designers work closely with more than 20 manufacturers to improve the quality and reliability of the lamps, and bring down their cost, while other teams work with villages, NGOs and banks to identify people to run the charging stations. Teri helps to set up repair shops, trains people and provides technical support.

“We are trying to improve the quality of the lamps and build up the chain of local entrepreneurs. We helped seed and catalyse the market,” says Ibrahim Rehman, director of Teri’s social transformation division.

“People were paying about $1 a month for kerosene lamps, so we had to have an economic model which allowed people to pay about the same as they did before. At the start, the lanterns used to cost about $100 each but now they are down to $15-$30. The batteries used to last one year; now they last three.”

People can buy them on microcredit, but in the villages most rent them for a few pence a day. Teri itself, NGOs, businesses, Bollywood film stars and individuals partly or completely sponsor a village to have lanterns, after which a local villager runs the operation as a business, renting them out for no more than they used to pay for kerosene. Villagers drop the lamps to the charging station in the morning and the lights are charged when they return in the evening.

Read more at India’s villagers reap visible benefits from solar electricity scheme | John Vidal | Global development |


Nebraska public power groups oppose solar gardens bill



LINCOLN, Neb. (AP) — Utility officials warned lawmakers on Tuesday that a plan for so-called community solar gardens could increase energy costs in Nebraska, but environmentalists said the proposal would make it easier for residents to use solar power to provide electricity to their homes.

Apparently the public power groups are confused or really concerned about something else. I think they are afraid to give up control and to do something “new”. Note that while Nebraska has one of the best wind resources in the U.S., it has almost no wind turbines. They do continue to build new coal power plants, though. (Note that there are no investor-owned utilities in Nebraska, only public power utilities.)

Solar gardens allow individual entities to purchase one or more panels in the garden and to own the output from the panels. Some rules allow a kWh credit of production from the panel against the customers’ usage. Others cash out the value of the power produced by the panels (usually pursuant to a purchased power agreement (PPA)), with the dollar value credited against the customer’s utility bill.

The Nebraska public power utilities might be confused because they raise the issues of the current net metering law and rising rates for customers without solar in conjunction with solar gardens. The current Nebraska net metering law states that excess production at one site cannot be used to offset production at another site. Obviously solar gardens would operate differently because the whole purpose of the proposed Nebraska law is to allow people to buy panels in the garden to offset their usage.

Moreover, solar gardens ensure that every customer has a chance to participate in solar power. Customers may not have an appropriate location for solar panels on their home or office. Customers may be renters who pay the utility bill but cannot install solar. Community solar gardens address these issues.

By crediting kWh on the customer’s bill, the proposed law will reduce sales. Depending on how the utility structures its prices, it may increase per kWh prices. But since solar gardens are available to all customers, everyone has a chance to reduce the kWh consumed on their bill.

What it does do is remove decision-making control from the public power utilities. Many of the leading utilities in the country with regard to renewable power are publicly owned utilities (Austin Energy, Sacramento Municipal Utility District, and Vineland Municipal Electric). This is because they are not concerned about their shareholders’ profits, but instead are concerned about meeting their customers’ needs at the lowest total cost (not necessarily the lowest price).

The Nebraska public power utilities seem to operate more like investor-owned utilities than like true public power institutions. It might be time for them to re-examine their roots and their purpose, and shake off the old utility mindset. The people of Nebraska deserve nothing less.

via Neb. public power groups oppose solar gardens bill – Businessweek.


MIT researchers develop solar-to-fuel roadmap for crystalline silicon


Such a system would use sunlight to produce a storable fuel, such as hydrogen, instead of electricity for immediate use. This fuel could then be used on demand to generate electricity through a fuel cell or other device. This process would liberate solar energy for use when the sun isn’t shining, and open up a host of potential new applications.

The silent video of a solar leaf at work is mesmerizing. This is a step toward solving the intermittent nature of solar power.

via MIT researchers develop solar-to-fuel roadmap for crystalline silicon – MIT News Office.


Shell Scenario: Solar To Be #1 Source Of Energy (But Don’t Jump Yet)


Shell is still quite bullish on solar energy in the long term. In one of the two future energy scenarios it just released (the New Lens Scenarios), it projected that solar would become the largest source of energy by 2070.

This is a good review of the facts of Shell’s New Lens scenarios and outcomes (the full studies are available at New Lens Scenarios.) While the ultimate conclusion of the scenarios may be good, it turns out that the path Shell expects us to take to get there is not so good for climate change, waiting until very late in the century for a rapid increase in all types of renewable energy.

Perhaps more interestingly, the author brings in a study done by REN21 that compares the results of various organization’s forecasts for renewables. It turns out that though Shell’s forecast is significantly higher than ExxonMobil’s or BP’s, it is much lower than Greenpeace and the IEA. (See REN21 Global Futures Report.)  It is as though the large energy companies believe we will need to see major climate disruptions before we will act, while others believe we can muster momentum to change before it is too late. I think we will only act in time if renewables become so inexpensive that they beat fossil fuels at their own game. We are in a technology race against time.

via Shell Scenario: Solar To Be #1 Source Of Energy (But Don’t Jump Yet) – CleanTechnica.


Solar Energy: Grid Parity In India, Italy, and More to Come in 2014


Deutsche Bank just released new analyses concluding that the global solar market will become sustainable on its own terms by the end of 2014, no longer needing subsidies.

Douglas Short‘s insight:

Rooftop solar is especially robust, according to Deutsche Bank. It increased its forecast for worldwide solar installations in 2013 to 30 gigawatts, 20% more than in 2012.

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Republican Mayor Of Lancaster, CA Requires Solar Power On Every New Home


A first-of-its-kind requirement for solar power systems is going to be implemented in Lancaster, California. The requirement is that solar power systems be installed on all new single-family homes within the city. Furthermore, this announcement comes from a Republican mayor.

Although the rules require installation of only modest amounts of solar, this is the beginning of building integrated photovoltaics (BIPV). The requirements are from 1 to 1.5 kW, depending on lot size. While some builders may go the cheapest solar panel route, others may use things like Dow’s solar shingles, while others might exceed the minimum amounts.

“One day, a person would no more think about buying a house without
solar shingles than they would buy a house without plumbing. That is our
hope, at least.” John Cleereman, Senior Director of Solar Development at
Dow Chemical Company. Lancaster, CA, is bringing that hope one step closer.

via Solar Power Required On Every New Home — Pioneering Requirement From Lancaster, California – CleanTechnica.


Solar energy companies upset over Idaho Power proposal


BOISE — Alternative energy companies are at odds with Idaho Power over a proposed change in fees.Solar Power companies say Idaho Power is running them out of business, but Idaho Power says they’re looking out for the hundreds of thousands of…

Idaho Power is doing the right thing by trying to get its prices lined up with how it incurs costs. However, it is making several mistakes that will make its proposal harder for regulators and the public to accept. I know that “proffered advice stinketh,” but I will proffer some anyway.

First, Idaho Power is cloaking its proposal in the name of fairness to all customers yet ignoring the obvious benefits that accrue to the company. People will not buy this. Instead, Idaho Power should explain how its current prices do not reflect how it incurs costs and that this means people with solar are not paying the cost of serving them. Included in this should be a calculation of what things would look like if nothing changes and all residences had solar. Let others determine what “fair” is.

Second, Idaho Power is applying the increase in fixed and demand charges only to customers with net metering, predominantly solar. This, on its face, appears unfair and contradicts their fairness argument. Instead, they should apply any price structure change to all customers. Moreover, it just changes the incentives such that customers still put in solar but eschew net metering so they can still avoid high variable prices. It encourages the adoption of energy storage that is, from a societal perspective, uneconomic.

Third, Idaho Power is making a large change very fast. This looks unreasonable to government price setters (regulators), and especially antagonizes a relatively small interest group, making acceptance of the change harder. Instead, they should propose a series of revenue neutral changes every six months for all rate classes, the result of which will bring them toward where they want to be over a reasonable period, say five years.

Fourth, Idaho Power should propose to purchase excess power at their avoided cost based on the time it is delivered. There has to be good faith in the calculations which take into account avoided capacity, transmission, and distribution as well as line losses and energy. And they should seek the opportunity to invest in rooftop solar at their regulated rate of return to both show that they support solar and customer generation and that they are indifferent as to where they own generation.

Idaho Power’s proposal will not stop distributed generation, it will only twist it in uneconomic ways. Net metering does not work on a large scale (unless it is changed so much it is not really net metering) because if everyone installed enough distributed generation, there would be no net sales of kWh but  there would still be the costs of generation. It is time to begin selling and buying retail electricity at prices that reflect costs. Our window to get this right is short.

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New Electric Industry Paradigm Collides With Old In Queensland


The state-owned electric utility in Queensland crunched by new electricity economics, failure to adapt

Queensland Premier Newman and his team were quick to blame solar, carbon, Gillard – anyone but themselves –for the big rise in electricity bills announced on Friday. Perhaps it’s time for Queensland …

I have reviewed the effects of rooftop solar on traditional utility operations and pricing several times (German Rooftop Solar Juggernaut Is “Unstoppable”The economics have changed, new baseload power is likely deadThe Death of Load Response – By Solar, On The Roof, With The Battery; For the U.S. Electricity Future, Look To Australia; and Disruption On All Sides – What Is A Utility To Do?).

Utilities must recognize that the change in technology means they must get their prices aligned with how they incur costs. They must change prices relatively slowly to give customers a chance to respond, which means they must start now. They must figure out how to do business in the new cost world.

But they don’t. Until it is too late. And it is even worse if the politicians control the utility and the prices, because there is no market cost of capital discipline and an even slower response as they try to maintain relations with large donors and angry voters.

Some selected quotes:

“Energy experts say the Newman policy cocktail – a combination of state subsidies on electricity use, price freezes, tariff designs that add fixed costs and do not encourage peak demand reduction or energy efficiency, and his choice of demonising new technology rather than embracing it, will simply accelerate a spiral towards stranded assets rather than an efficient network.”

“In the residential sector, the same trend is appearing. Standing charges will triple under the QCA recommendation, lifting the share of fixed charges on total bills to nearly a quarter in some cases. It penalises those that use less energy – either because they cannot afford it, or because they have solar or are being energy efficient.” [Note: this price change must happen, but it is too rapid and the costs too large from alleged "gold-plating".]

“Rob Passey, from UNSW, says the network operators face a conundrum – they (and the state government owners) are keen to protect their financial viability, but they are doing it in a way that makes it difficult for energy efficiency and distributed generation such as solar. He suggests the better model is to turn networks into service providers, rather than bulk billers.

Otherwise, as network costs rise more people would be given an incentive to leave the grid – a concern expressed by some retailers. The warning signs are there: Even the ABC radio and the mainstream print media in Queensland have been interviewing homeowners who are looking to go off-grid. Passey’s fear is that the same rules that apply to the water supply – homeowners pay for the mains going past the house whether they use it or not – will be used for electricity.”

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The Future of Electricity Markets


Excellent article on the future of electricity markets. The authors look at the impacts of adding zero variable cost electricity to the wholesale markets. They rightly conclude that it will drive down prices and render investments in new generation uneconomic. This would happen for renewables, too, except for the special price subsidies they receive from feed-in tariffs, required renewable energy credits, and tax investment incentives.

Subsidies always distort and corrupt and lead to intense lobbying by those with a lot to lose (nuclear, coal). But the price structure is unsustainable; see German Rooftop Solar Juggernaut Is Unstoppable (

The types of disruptions they see are an indication of the true economic costs that customers wore as a result of a regulatory regime that guaranteed cost recovery. In obvious retrospect, competitive market PPAs were priced far too low given non-captive customers and changing technology. Simply put, uncertainty is more expensive than we usually believe.

While people generally do not like change and disruption, I think that is where we are headed with our electric system. It will become more unreliable as we lack generation to meet demand when adequate renewables are not available; prices will increase dramatically in these periods. (This is already happening in Australia where some 5 minute periods have prices over $13,000/MWh AUD.) But, these changes will reflect the costs of providing these services and will provide opportunities for companies to provide solutions, and the higher prices can make new technologies more cost-effective.

If the governments step in to subsidize prices, either through direct ownership or investment guarantees, the likely ultimate result will still be higher prices. The more the government manipulates the market, the less economic-driven it becomes and the more types of producers lobby for subsidies (see U.K. gas and nuclear generators). We probably would have been better off with the simplest intervention, a very high carbon tax and letting the market sort it out. Since this is almost impossible to enact, however, we have gone down the hole of special subsidies.

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