The battle between Investor Owned Utilities and Solar Energy explained

[kristopher]

Utilities vs. rooftop solar: What the fight is about
By David Roberts


...There’s a short-term problem and a long-term problem. The former is about how electricity rates are structured, specifically how utilities compensate (or don’t) customers who generate power with rooftop solar PV panels. The latter is about developing an entirely new business model for utilities, one that aligns their financial interests with the spread of distributed energy. The danger is that fighting over the former could delay solving the latter.

Today, let’s dig into the fight at hand. It’s about utility rates, specifically “net metering,” yet another nerdy green term no one understands. I will endeavor to make clear what it is and why the fight over it is so damn interesting and exciting. Exciting, I tell you! Wake up!

The utility perspective

First, note that I’m focusing here mostly on investor-owned utilities (IOUs), which serve about 70 percent of America’s customers. These are the old-school, for-profit, regulated-monopoly utilities, with a captive customer base and profits guaranteed by law. IOUs are the main (though not exclusive) force pushing back against distributed solar.

Here’s how IOUs make money:
1) they estimate how much power their customers will need;
2) they estimate the investments they’ll need to make in power plants, fuel, transmission lines, etc. in order to meet that demand;
3) they estimate what rate they need to charge customers to cover those investments and offer a reasonable “rate of return” to their investors;
4) they go to the state public utility commission (PUC) to make a “rate case” justifying the rate;
5) if the PUC signs off, the IOU charges that rate until time to make their next rate case...

Just enough more to make it all make sense at: http://grist.org/climate-energy/utilities-vs-rooftop-solar-what-the-fight-is-about/

[oldhippie]

1. On the other hand .......

Another good article in Solar Pro ...

http://solarprofessional.com/articles/design-installation/pv-generation-and-its-effect-on-utilities

This is a bit long, but a really good article from the perspective of a utility engineer. He describes some of the problems, and some solutions, to distributed generation. There are problems, and there are solutions, but they must be developed, paid for, and implemented.

[kristopher]

2. The technical problems are secondary by a wide margin to...

...the economic impact that the utilities expect.

Thanks for sharing. We can always count on you for helping us understand the entrenched energy industry's perspective.

[Yo_Mama]

4. That is a very good article indeed!

Thank you for posting the link.

[FogerRox]

5. I think it was the NAtional Academy of Science that said

we can integrate up to 20% renewables without grid work.

Distributed residential roof top solar benefits utilities now, they get a profit margin without the same scale of cost found in commercial plants. In that regard its a great deal.

[kristopher]

7. That's 50% not 20.

"Electricity from Renewable Sources
Status, Prospects, and Impediments

This report from the National Academy of Sciences and the National Academy of Engineering explores the potential for and barriers to developing wind, solar, geothermal, and biopower technologies for electric power generation. It concludes that with an accelerated deployment effort, non-hydropower renewable sources could provide 10 percent or more of the nation’s electricity by 2020 and 20 percent or more by 2035. However, for these sources to supply more than 50 percent of America’s electricity, new scientific advances and dramatic changes in how we generate, transmit, and use electricity are needed.

I strongly recommend reading this before accepting the timeline they've suggested.

Conventional Wisdom About Clean Energy Is Still Way Out of Date

“It’s not 1990 anymore.”

CHRIS NELDER: MAY 9, 2013

"We're fifteen to twenty years out of date in how we think about renewables," said Dr. Eric Martinot to an audience at the first Pathways to 100% Renewables Conference held April 16 in San Francisco. "It's not 1990 anymore."

Dr. Martinot and his team recently compiled their 2013 Renewables Global Futures report from two years of research in which they conducted interviews with 170 experts and policymakers from fifteen countries, including local city officials and stakeholders from more than twenty cities. They also reviewed more than 50 recently published scenarios by credible international organizations, energy companies, and research institutes, along with government policy targets for renewable energy, and various corporate reports and energy literature.

The report observes that "he history of energy scenarios is full of similar projections for renewable energy that proved too low by a factor of 10, or were achieved a decade earlier than expected." For example, the International Energy Agency's 2000 estimate for wind power in 2010 was 34 gigawatts, while the actual level was 200 gigawatts. The World Bank's 1996 estimate for China was 9 gigawatts of wind and 0.5 gigawatts for solar PV by 2020, but by 2011 the country had already achieved 62 gigawatts of wind and 3 gigawatts of PV.

Dr. Martinot's conclusion from this exhaustive survey? "The conservative scenarios are simply no longer credible."

There is now a yawning gap between "conservative" scenarios and more optimistic ones...

http://www.democraticunderground.com/112743773

[FogerRox]

8. I'm thinking 30% -35% by 2030

18% from wind, and 14% from solar. A conservative guess. We may find ourselves at 38%-40% by 2030.

[FBaggins]

9. Can you provide a link for that first citation?

Googling "This report from the National Academy of Sciences and the National Academy of Engineering explores the potential for and barriers " or "However, for these sources to supply more than 50 percent of America’s electricity" only finds a bunch of hits from this guy named kristopher on DU over the last couple years.

[kristopher]

10. Try googling the title of the National Academy Press book as shown in my post nt

[FBaggins]

13. So was that a no? You can't provide a link?

Is it that you don't know how? Or don't want people to actually read the report?

Instead of a summary of a summary... let's see what the report actually says.

Integration of the intermittent characteristics of wind and solar power into the electricity system is critical for large-scale deployment of renewable electricity. Advanced storage technologies will play an important role in supporting the widespread deployment of intermittent renewable electric power above approximately 20 percent of electricity generation, although electricity storage is not necessary below 20 percent.

...

According to the Department of Energy’s study postulating 20 percent wind penetration, transmission could be the greatest obstacle to reaching the 20 percent wind generation level.

...

Higher levels of penetration of intermittent renewables (above about 20 percent) would require batteries, compressed air energy storage, or other methods of storing energy such as conversion of excess generated electricity to chemical fuels. Improved meteorological forecasting could also facilitate increased integration of solar and wind power. Hence, though improvements in the grid and related technologies are necessary and valuable for other objectives, significant integration of renewable electricity will not occur without increases in transmission capacity as well as other grid management improvements.

http://www.nap.edu/nap-cgi/report.cgi?record_id=12619&type=pdfxsum

In short - FogerRox was pretty close to spot on with "it was the NAtional Academy of Science that said we can integrate up to 20% renewables without grid work" - while your claim that the number is actually 50% was dead wrong.

[kristopher]

14. I have the paper on file as pdf. You can google it as easy as I can.

You didn't seem to have any trouble, did you? Yet still you carp and act snotty.

Electricity from Renewable Resources: Status, Prospects, and Impediments

Currently, use of renewable resources for electricity generation generally incurs higher direct costs than those currently seen for fossil-based electricity generation, whose price does not now include the costs associated with carbon emissions and other unpriced externalities. Some form of market intervention or combination of incentives is thus required to enable renewable resources to contribute substantially to the national electrical energy generation mix. Sustained, consistent, long-term policies that provide for production tax credits, market incentives, streamlined permitting, and/or renewable portfolio standards are essential to support significant growth of the market for renewable electricity. With such policies and economic incentives in place, up to 20 percent of additional domestic electricity generation could come from non-hydropower renewable technologies within approximately the next 25 years.

In turn, significant technological and scientific barriers must be surmounted if renewables are to provide upward of 50 percent or more of domestic electricity generation in a reliable, controllable system that also has a low-carbon-emissions footprint. The barriers include those related to transmission as well as system inte- gration and flexibility, including storage and other enabling technologies. Specifically, large-scale and distributed electrical energy storage, and/or large capacities for rapidly controllable low-carbon-emission generation, would be required to reach such a goal. Further, a systemwide intelligent, digitally controlled grid could reduce the need for backup power and storage and further facilitate the penetration of renewable electricity into the marketplace. Significant R&D is required now if such technologies are to be available in time to facilitate deployment of renewable electricity at a level of 50 percent or higher.

Pg 12, 13

The grid upgrades and modernization are required no matter what we do. If we stay with fossil fuels or if we were to go with nuclear you'd need substantially the same major structural grid improvements.

This paper was published in 2010 and is compiled from research that is much older. With the incredibly escalating rate of renewable penetration we now KNOW WITH CERTAINTY that the storage requirements as they are discussed simply do not exist. Some storage is required, however it is far less than was believed to be the case 5 years ago.

Let me point again to this recent study of the predictive accuracy of conservative studies such as this one by the NAS.

Conventional Wisdom About Clean Energy Is Still Way Out of Date

“It’s not 1990 anymore.”

CHRIS NELDER: MAY 9, 2013

"We're fifteen to twenty years out of date in how we think about renewables," said Dr. Eric Martinot to an audience at the first Pathways to 100% Renewables Conference held April 16 in San Francisco. "It's not 1990 anymore."

Dr. Martinot and his team recently compiled their 2013 Renewables Global Futures report from two years of research in which they conducted interviews with 170 experts and policymakers from fifteen countries, including local city officials and stakeholders from more than twenty cities. They also reviewed more than 50 recently published scenarios by credible international organizations, energy companies, and research institutes, along with government policy targets for renewable energy, and various corporate reports and energy literature.

The report observes that "he history of energy scenarios is full of similar projections for renewable energy that proved too low by a factor of 10, or were achieved a decade earlier than expected." For example, the International Energy Agency's 2000 estimate for wind power in 2010 was 34 gigawatts, while the actual level was 200 gigawatts. The World Bank's 1996 estimate for China was 9 gigawatts of wind and 0.5 gigawatts for solar PV by 2020, but by 2011 the country had already achieved 62 gigawatts of wind and 3 gigawatts of PV.

Dr. Martinot's conclusion from this exhaustive survey? "The conservative scenarios are simply no longer credible."

There is now a yawning gap between "conservative" scenarios and more optimistic ones...

http://www.democraticunderground.com/112743773

[FBaggins]

15. Can you point me to where you have considered that acceptable from others?

Or shall the double standard remain that blatant?

Yet still you carp and act snotty.

You missed the irony there, didn't you?

The rest of your spin can't hide the fact that FogerRox was correct and you were flat wrong. The report says pretty much what he claimed it said (and NOT how you spun it).

With the incredibly escalating rate of renewable penetration we now KNOW WITH CERTAINTY that the storage requirements as they are discussed simply do not exist.

Nope. In fact, what we know is exactly the opposite. Germany is the perfect example. They're at just over 13% from wind/solar and they're already faced with challenges requiring substantial storage and grid enhancements (including many billions in enhancements that are specifically caused by the renewables).

But let's at least pause and savor the additional irony that you shift so transparently from using the report as evidence for your faulty claim... right into claiming that it's wrong... without pausing for breath.

[kristopher]

16. I don't accept your characterization of what the report says...

...in relation to the remark by FogerRox.

You are incorrect also in accusing me of changing my position. I gave the same warning about dubious validity the first time I posted the information from the NAS study.

The same trend is visible in your interpretation of what is happening in Germany. They have to build some transmission - that is not a unique issue associated with renewable energy. Neither is upgrading to a smart grid. You can claim it is, but like most other claims you make it has no substance when examined closely. Your claim of "challenges requiring substantial storage and grid enhancements" due to renewables is simply not true. Storage is an economic possibility, not a technical requirement for delivering power. The rapidly declining technology costs for generating assets will, unless storage can improve its cost profile, steadily undercut nearly the market for large scale storage because it is cheaper to build more redundant wind than to build storage.

Frankly Bags, you just don't know what you are talking about when it comes to understanding the systems we are discussing. All you really are capable of is being a nitpicker who spends his time trying to irritate anyone who is critical of nuclear.

Why don't you grow up?

[FBaggins]

17. I didn't make a characterization. It's a direct quote.

You're the one that took a summary out of context and tried to make it say something that it didn't.

If, for instance, a report said that people under 20 have no trouble remembering things... and people over 50 do... you can't take that to mean that people between 20-50 either do or do not have trouble. The report's abreviated summary doesn't say that "anything under 50% will work without substantial additional work"... it says that below 20% isn't a problem and above 50% is a problem. You could be forgiven for jumping to either conclusion if that summary was all that existed. In reality the rest of the report makes it clear.

The paragraph I gave you is as clear as it can be. I need to make no "characterization" at all. There isn't any ambiguity or room for debate.

Higher levels of penetration of intermittent renewables (above about 20 percent) would require batteries, compressed air energy storage, or other methods of storing energy such as conversion of excess generated electricity to chemical fuels. Improved meteorological forecasting could also facilitate increased integration of solar and wind power. Hence, though improvements in the grid and related technologies are necessary and valuable for other objectives, significant integration of renewable electricity will not occur without increases in transmission capacity as well as other grid management improvements.

The same trend is visible in your interpretation of what is happening in Germany. They have to build some transmission - that is not a unique issue associated with renewable energy.

"Some transmission" is of course something that can and does happen appart from variable sources. But we both know that they have significant transmission upgrades going on specifically because of the renewables. Are you seriously going to deny it?

[quadrature]

3. why are PV folks treated any different than other co-gens? .nt

nt

[kristopher]

6. A co-generation plant provides 2 forms of energy - electricity & heat

Since solar isn't that type of system, I'm afraid I don't understand your question.

[quadrature]

11. if a co-gen sells electricity to the grid ...

a co-gen generates heat and electricity for
itself, and sells surplus electricity to the grid.

I assume what a co-gen can do(and rates) is
controlled by the state's Public utility commission.

when a solar PV operation sells electricity
to the grid, Why are the rules any different
that the rules applied to co-gens?

[kristopher]

12. I understand.

Adding cogeneration to the question muddles the point; that is really a matter of efficiency of the plant and isn't really relevant to the relationship that exists with the utility.

The difference primarily size. Traditionally, utilities only deal with power providers that operate plants in excess of 1MW and the utilities either negotiate long term contracts with each entity or the generating facility sells on the spot market.

Obviously much of distributed generation (including some cogeneration facilities) is smaller than a megawatt. It is only lately that new rules are being developed to encourage the growth of this sector by providing renumeration for the value they bring to the grid.