Environment & Energy
Related: About this forumSolar panels could destroy U.S. utilities, according to U.S. utilities
Notice whose doing the squealing here.
Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model, which has remained virtually unchanged for a century, to the ground.
That is not wild-eyed hippie talk. It is the assessment of the utilities themselves.
Back in January, the Edison Electric Institute the (typically stodgy and backward-looking) trade group of U.S. investor-owned utilities released a report [PDF] that, as far as I can tell, went almost entirely without notice in the press. Thats a shame. It is one of the most prescient and brutally frank things Ive ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.
(snip)
So, just a bit of background. You probably know that electricity is provided by utilities. Some utilities both generate electricity at power plants and provide it to customers over power lines. They are regulated monopolies, which means they have sole responsibility for providing power in their service areas. Some utilities have gone through deregulation; in that case, power generation is split off into its own business, while the utilitys job is to purchase power on competitive markets and provide it to customers over the grid it manages.
Much more: http://grist.org/climate-energy/solar-panels-could-destroy-u-s-utilities-according-to-u-s-utilities/
DetlefK
(16,423 posts)To me, a foreigner, the US seems to boast its individualism and independence and freedom at every turn. (You even have free-spech-zones...)
And what says more "rugged individualism" than harvesting your own damn electricity?
Why are the self-proclaimed defenders of freedom okay with being dependent on oil and the electric grid, when they could be more independent by harvesting their own electricity and using less and less (or maybe no) oil?
hunter
(38,311 posts)Those widespread applications depend on cheap hydro, coal, or nuclear power. That's really all there is to it.
truebluegreen
(9,033 posts)Progressive dog
(6,900 posts)The utilities are paid for carrying electricity over their lines. Period. The whole point of deregulation was to allow corporations to compete to sell electricity.
kristopher
(29,798 posts)I don'e see anything that is untrue in the case of NY.
Progressive dog
(6,900 posts)electricity and resell it to the customer. This is not true. Customers sign up with an electricity provider.
oldhippie
(3,249 posts)nt
kristopher
(29,798 posts)... this: http://www.newyorkpowertochoose.com/
is different than what the OP is describing, right?
Note the first sentence: "This directory contains contact information on energy services companies (ESCOs) that have met the Commission's and utility requirements to provide energy supply, electricity or natural gas, and other services to residential customers in New York."
The process these providers go through integrates them into the market so that the utility can, as the OP put it, purchase power on the competitive market. You see your own decision as guiding the purchase and that appears different than what the OP describes, but in fact the utility know generally what amount each provider is going to need to deliver and contracts for that on the appropriate market (for example long term, month ahead, week ahead, day ahead, hourly). Adjustments are made as required.
It's complex, true, but both your perception of being the one doing the buying and the OP are both true.
Search terms might include 'unbundling electric markets' or 'consumer choice unbundled market'
Progressive dog
(6,900 posts)I live in NY,and yes I do get to choose my power supplier. I cannot help it if contradicts the OP, which is wrong. I even get to change my supplier if I don't like him. I have had at least three new suppliers contact me with introductory pricing this year. My suppliers power is carried over the NYSEG lines. Those lines will still be necessary, unless you assume that each of us will have miraculously cheap power storage capacity and enough air space to generate our own power.
So the grid is not going away soon, or maybe not at all. You did notice the word "imagine" in the article, or not.
oldhippie
(3,249 posts).... and it works the same in Texas. My "utility" provider, Oncor, does not contract with my electric provider, Reliant Energy, for energy, wholesale or otherwise. I do. Oncor buys no power for me at all, at any rate. They receive a payment for transporting the energy from wherever Reliant Energy produces it to my house. Reliant Energy collects the payment from me in my monthly bill and forwards it to Oncor. I pay nothing directly to the "utility." I've used three different electric providers since deregulation.
kristopher
(29,798 posts)The grid is required to be balanced on a large scale, and that requires a certain economic construct exist that makes coordination between power providers and utilities necessary. That means buying electricity with bulk contracts on the established markets. Your "choice" from a set menu of choices just tells them how much to buy from who and who to allocate your contribution to. For example, when you Go Green with wind you might elect 100% wind energy. That doesn't mean the electrons flowing into your house come from X wind farm, it means the utility buys as much energy as you and others contract for and send it into the grid.
Or do you think they run a special dedicated line just for you every time you decide to change who your money goes to?
Progressive dog
(6,900 posts)The utility company keeps no money for generating electricity in NY or Texas. That means that the original article, which claims they do is wrong!!!! Which means that you have now admitted that you were wrong.
kristopher
(29,798 posts)I notice you can't reply to what I actually have written. I'm very familiar with what unbundling is, and it isn't limited to NY or TX. It also doesn't affect the mechanics of the system the way you think it does.
We're done.
oldhippie
(3,249 posts)But you do. Kris, you have no credibility. You obviously don't know how Texas works. I am a degreed Electrical Engineer. I am also a paid, independent photovoltaic consultant. I work with individuals, companies and municipalities in integrating their renewable energy plans with the "utilities" as you call them.
If the system works as you describe, then I would get my bill from Oncor, my "utility", rather than my energy generation provider, Reliant Energy. Oncor, the "utility" is paid $0.0378 per kWHr to deliver my energy to me over their wires. They are paid by my energy provider, not by me. So the "utility is not "buying" any energy for me, either wholesale or retail. They are more like picking it up and delivering it to me. For a fee.
Just out of curiosity, I know you have billed yourself as a "policy analyst" in the past. Would you mind telling me (and others here) just what is your academic background and practical experience in the field? How many systems have you engineered and installed?
kristopher
(29,798 posts)Progressive dog
(6,900 posts)who acts as collection agent doesn't change that. I used to pay my utility bills at my bank and they didn't provide the electricity or phone.
You are wrong, I actually pay an electric bill in NY and get to select my provider. The utility (NYSEG) is required to collect for them.
kristopher
(29,798 posts)And then say I'm wrong?
Do you have any idea of how many "providers" go into actually sending current into your home?
You have baseload power.
You have power ramping up and down to accommodate the way the demand varies by time of day.
You have power standing by in case a large generating unit has an emergency shut down.
You have power sources that only run in periods of peak demand - perhaps just a handful of hours each year.
You have regulation power that helps balance the grid on a moment to moment basis.
Which company did you contract with for each of those power requirements that you have?
Progressive dog
(6,900 posts)The point is that the original article is highly exaggerated.
The grid ownership is still divided, with portions of the grid being controlled by different companies. The grid is not balanced in the sense that you seem to think it is. We do not have a smart grid. Power output from many generators has the inherent ability to increase or decrease power substantially in response to load. I assume this is what you mean by regulation power. Let's do a little thought experiment here. If line voltage drops 5% due to load and power is proportional to the square of the voltage, then load can increase 10% and the compensation does not have to be moment to moment.
As far as peak demand is concerned, if an electric supplier agrees to add me as a customer, they are supposed to supply my electricity during periods of peak demand and they do. I wouldn't expect a heating contractor to sell me a system that would not keep the house warm during colder winter days. I do not expect an electricity supplier to not have the capacity to supply electricity during peak periods.
As I have explained again and again to you, I pay 2 companies, one to supply electricity and one to deliver it. There is no magic 3rd company or stuff that needs to be done by a third company.There is no magic stuff that falls outside the responsibility of either.
kristopher
(29,798 posts)... but apparently not enough.
Progressive dog
(6,900 posts)especially when the whole article is premised on it. That's amazing logic.
kristopher
(29,798 posts)We're done, Clueso.
Progressive dog
(6,900 posts)This from the same guy who posted on this thread an article about costs of integrating renewables into the grid. There would be no reason to integrate them into something that the OP claims won't exist.
Now that is funny.
cprise
(8,445 posts)**added: http://grist.org/climate-energy/how-can-we-boost-distributed-solar-and-save-utilities-at-the-same-time/
http://grist.org/climate-energy/utilities-for-dummies-how-they-work-and-why-that-needs-to-change/
Utilities' business model is outdated and needs to change along with the changes that consumers are making-- even if they just restructure their rates. Distributed generation *must* be supported from here on out, because big money is coming online to develop the storage market ASAP... Rate-paying generators will switch to personal/neighborhood storage (go off-grid) as soon as they can if the utilities try to suppress their on-grid generation.
The power of the American consumer has long since faded into the background compared to the time when, say, Carter had those WH solar panels installed. Now we are turning back into consumer-producers with an inherent ability to "strike" or boycott the system, and the effects will not be limited to a car maker or purveyor of lardy sweets. Abuse from the utilities will be met with decreasing demand and subscribership system-wide.
Progressive dog
(6,900 posts)Solar power will not be truly competitive until all costs are counted. Subsidies for clean energy might be more efficient if they were provided directly.
The storage, regulation,and failure backup for solar and/or wind self generation is far from being cost competitive with grid connection. It would not be abuse from utilities to require that solar generators pay the costs of grid connection.
This is a subsidy. It is a subsidy paid by other electric consumers.
The argument that the utilities will have less demand and fewer subscribers because they don't continue to subsidize small producers on the grid makes no sense for a self proclaimed green organization. Less demand for electricity should be encouraged, along with renewable energy.
cprise
(8,445 posts)That depends entirely on the details. It could well be abusive, and it could remove the financial incentive to switch to renewables (an overriding public good that shouldn't have to match fossil fuels down to the last cent/kWh).
According to one study from California that I linked to, it isn't really a subsidy. The utility actually gets a slight break on their costs, mainly because there is more electricity generated close to the highest-demand areas during peak demand.
The thing to realize here is that if the IOUs get panicky/bossy and restructure the rates to discourage distributed solar, it will (somewhat sooner rather than later) lead to a consumer rebellion of the worst kind, where the consumers insist on becoming producers in direct competition with the large corporations. It could be more jarring than what happened to mainframe computing and telephone services.
The grid has to get smart, clean and more distributed or it will quickly become a shadow of its current self.
Progressive dog
(6,900 posts)with utilities. Solar only generates power during daylight hours. During low light days and night, more than 50% of all hours, the grid is used exactly the same by solar producer/consumers as by any consumer of similar consumption. The grid capital and maintenance costs must obviously be nearly the same for both customers.
As to the question of off grid private storage of electricity, the costs are and will remain much higher than grid costs. Optimistic predictions put battery costs alone at $200/KW-hour in 2020. Assuming an average usage of 1 KW and at least 48 hours of usage stored, we have a cost of $9600, not including installation or cost of associated electronics. Now grid costs (delivery/reliability costs) right now are $.032 /KW-hour in my bill. That is $.768 cost per day at an average usage of1KW or less than $300/year. You do the math. It doesn't make economic sense .
The question then becomes, why should one customer subsidize another. Isn't this solar grid subsidy a tax, and a regressive tax at that?
cprise
(8,445 posts)It wasn't until those computer users developed communication-centric uses for them that the transmission cost per megabyte really started to change. And that new market wouldn't have mattered unless the PC had already reached a critical mass.
We have only just started to see distributed solar reach significant penetration in a handful of regions. Until now, a demand for storage (and a potential to 'mine' excess supply) did not exist beyond a microscopic level. Now its reaching macroscopic proportions and states have just added monetary incentives for storage.
FYI, the "optimistic projections" for solar PV taken from 10 or even 5 years ago, from the most respected sources, have proven outright pessimistic. They are about prevailing sensibility and not science: There is no reason to believe them on storage, either, if for no other reason than its fun to watch the market for EVs grow.
--
David Roberts is right-- The IOUs want more consumption, not less. If a far-reaching campaign promised to reduce electricity use by half in the next 20 years, it would mean the same thing to the utilities' bottom lines; They would have to be against it for the same reasons they complain about distributed solar.
Progressive dog
(6,900 posts)fyi The optimistic solar PV predictions from 10 or 5 years ago have proven wildly optimistic. Chinese pricing on PV cells has been lower than cost, according to the American manufacturers who have been driven into bankruptcy.
The batteries that would allow cheap storage do not exist and not because power companies are holding back the development of them. Huge expenditures have and are being made pursuing a more efficient battery chemistry and trying to improve existing batteries. They are used lots of other places.
You cannot possibly believe this statement " demand for storage (and a potential to 'mine' excess supply) did not exist beyond a microscopic level. Now its reaching macroscopic proportions and states have just added monetary incentives for storage. " You do know that utilities used pumped storage, air pressure storage, multiple types of battery storage etc. They have a need for storage too. Then we have the EV manufacturers, then the portable electronic device manufacturers. Or then again, maybe you don't care because it doesn't fit your story.
cprise
(8,445 posts)...by pointing out the below-cost tactics of some manufacturers. I don't condone the practice, but this was also a phenomenon in the early PC industry.
Its hard to imagine such a thing with fossil or nuclear energy.
The bottom line on solar is that it only needs to be cheap enough, not cheaper than coal or gas. The latter come with staggering hidden costs.
BTW, the EV manufacturers not only contribute to the economy-of-scale for batteries, but also a growing pool of storage that can potentially be tapped by the consumer in his/her own home.
Progressive dog
(6,900 posts)Fossil was the first big trust that was busted for these trust type tactics of selling below cost. Apparently you never heard of Standard Oil.
So you don't have to imagine it, it already happened.
As to EV, it's going to be tough to store energy for the home in your EV, if your EV isn't home. I may be confused, but I think if an EV is being used as a vehicle, it isn't at home. I just can't get my mind around a two places at once scenario.
As far as "The latter come with staggering hidden costs", that is not the point that I addressed.
This is what I said "You cannot possibly believe this statement " demand for storage (and a potential to 'mine' excess supply) did not exist beyond a microscopic level. Now its reaching macroscopic proportions and states have just added monetary incentives for storage. " and you have said nothing that contradicts it.
Claiming that I supported your position is obviously untrue, unless you have changed your position.
oldhippie
(3,249 posts).... NOT the "utility."
kristopher
(29,798 posts)Reliant doesn't own any generating assets at all.
Oncor is the operator of the electric system that you're on and they buy the electricity you use from those who generate it - just as I described above.
oldhippie
(3,249 posts)ERCOT is the "operator" of the electric system in Texas. Oncor buys no electricity for me. Period. We are done on this subject. We'll let the group decide who has credibility.
http://www.ercot.com/about/
kristopher
(29,798 posts)On Oncor's website they describe themselves as operators of their T&D system so I assumed they were part of the missing 15%. If that isn't true it does not make your claim of uniqueness for TX true.
We've established that YOU are not buying the power directly from the entities that generate it as you claimed. The only difference between Texas and what is described in the OP is that Tx has created a more opaque system by creating a niche for billing companies that own no assets. You have absolutely no idea who actually generates the power you purchase nor how many hands payment goes through before the bill comes into your residence.
It can't be any other way.
Progressive dog
(6,900 posts)My utility, NYSEG, owns no generating capacity, they were forced to sell their plants. The point is NOT how many hands touch the payment or even whether some hands keep part of it, the point is that the payments for the use of the "grid" are separate from the payments for electricity itself.
Therefore savings to the electricity producers do not flow to the grid operators in NY or Texas and probably other states.
This means that the supposed savings to utilities from solar generation does not apply in NY and Texas.
It doesn't matter that I agree that NY has a system that allows another layer of profits to the middlemen who sell the electricity. But that is a totally different subject and has nothing to do with the fact that utilities in NY and Texas do not benefit from the supposed savings to the electric producers.
kristopher
(29,798 posts)The OP wrote that there are two basic models in use
- vertically integrated utilities (regulated monopolies);
- and utilities that have been unbundled (which you seem to (inaccurately) believe applies only to NY and TX).
You wrote in post (7), "The article claims that the utilities purchase electricity and resell it to the customer. This is not true. Customers sign up with an electricity provider."
and in (3) The power purchase claim in the article is not true in NY The utilities are paid for carrying electricity over their lines. Period. The whole point of deregulation was to allow corporations to compete to sell electricity.
Now you say, "It doesn't matter that I agree that NY has a system that allows another layer of profits to the middlemen who sell the electricity."
Here is what the OP wrote that you are reacting to:
"Some utilities have gone through deregulation; in that case, power generation is split off into its own business, while the utilitys job is to purchase power on competitive markets and provide it to customers over the grid it manages."
The OP is simplifying the concept of "unbundling" and the description is perfectly adequate for its intended purpose - to show that there are two different types of economic entities that are not affected equally by the influx of distributed solar.
You don't seem to understand (or care) that electricity is traded on both a wholesale market and a retail market and that the electricity couldn't get to you without the wholesale market that you denied and then disregarded.
What I wrote in post 6 is accurate, and I'll remind you of this line:
"It's complex, true, but both your perception of being the one doing the buying and the OP are both true."
Progressive dog
(6,900 posts)to customers over the grid it manages." in NY or Texas. You continue to make the same wrong arguments that you made in the beginning. If this statement, which you quoted, is not true, then the entire article falls apart. Power purchases are made by the consumer and you continue to pretend that transportation cannot be separated from product transported.
The entire premise of the article is to show how providing grid transport to solar customers costs the utilities nothing and so the subsidy is not a subsidy. This would only be true if the supposed savings from GENERATING benefit the grid operator. In at least NY and Texas, they do not.
It is not complex, it is simple.. If you make me subsidize Tom and claim it costs me nothing because it saves Harry, Mary, and Moe money, that's obviously not true. Nothing complex about it. It is only complex when you fail to account for where the money ends up.
kristopher
(29,798 posts)At some point it becomes useless to continue the discussion.
You obviously neither possess nor desire to possess the knowledge needed to have a fruitful discussion on the topic. You are unable to separate in your mind the various elements that are part of providing electricity to you, and are making your determination on the narrow view you have as a consumer.
Your not correct. And we are done (really and truly).
Progressive dog
(6,900 posts)oldhippie
(3,249 posts)... from our expert "policy analyst." When he finds himself in error, he will slightly shift the subject of the sub-thread, say that you said something you didn't, and generally make stuff up to deflect the discussion off on some slightly different path. This whole sub-thread started on the statement where the article claims that the utilities purchase electricity and resell it to the customer. You correctly pointed out that the statement is not true in all cases. I confirm that it is also not true in Texas. After some point it makes no sense to continue the discussion.
kristopher
(29,798 posts)The OP, "while the (unbundled - k) utilitys job is to purchase power on competitive markets and provide it to customers over the grid it manages"
You, "the article claims that the utilities purchase electricity and resell it to the customer"
How did "provide it" become "resell it"?
You've been off target from start to finish. You claim to understanding based on an EE degree is like an auto mechanic claiming to have special insight into the design and function of the nation's auto, air and rail transportation systems.
oldhippie
(3,249 posts)The OP, "while the (unbundled - k) utilitys job is to purchase power on competitive markets and provide it to customers over the grid it manages"
It's the "purchase" part we are talking about, not the "provide it" part.
And an excellent example of what I just alluded to about changing the subject. Thanks.
kristopher
(29,798 posts)You still think a company that owns only computers and postal scales is generating your electricity.
Why did you change "provide" to "resell"?
oldhippie
(3,249 posts)We were talking about PURCHASING. I never used the term "generating" in any post. And you can stop telling me how the fucking Texas grid works.
You know, kris, you are so exasperating that I have had you on ignore several times. But I periodically purge my ignore list, and you do occasionally make a valid point. But you are too much of an energy sink. Back you go on the list. Bye.
kristopher
(29,798 posts)You used your case as an example.
The reason I'm exasperating is that it is very difficult to BS me. I know my topic.
Progressive dog
(6,900 posts)I looked up how various states did or did not regulate electricity after I saw your first post. It is about time for me to give up on the argument. I just hate to give him the satisfaction.
kristopher
(29,798 posts)Don't believe it.
For 50 cents per megawatt-hour, you get strong wind penetrationand the grid holds up just fine.
HERMAN K. TRABISH: MARCH 18, 2013
The latest numbers on the wind industry show wind energy generating an increasingly significant portion of U.S. electricity.
Wind became, for the first time, the biggest source of new generating capacity in 2012, at 42 percent. That pushed the renewables total share of new U.S. generating capacity last year up to over 55 percent, according to American Wind Energy Association (AWEA) industry statistics.
In two states, wind provided almost a quarter of all electricity (Iowa, 24.5 percent, and South Dakota, 23.9 percent, by in-state-generated megawatt-hours). For nine states, wind provided more than 10 percent of the in-state-generated megawatt-hours and, in fourteen states, more than 5 percent.
Because the windiest states are among the less populated, the national number is at 3.5 percent. But that figure is big and growing rapidly in populous places like California, Texas, Minnesota, Colorado and Illinois.
The U.S. wind energy industry leveraged a $25 billion private investment to build a record-breaking 13,124 megawatts in 2012, bringing the nations installed capacity to over 60 gigawatts...
http://www.greentechmedia.com/articles/read/Grid-Integration-of-Wind-and-Solar-is-Cheap?utm_source=Newsletter&utm_medium=headline&utm_campaign=GTMDaily
The upshot is that it is substantial real world data showing a cost of less than $0.50 per MWh.
madokie
(51,076 posts)If I'm remembering correctly it is 14%
cprise
(8,445 posts) Avoided energy costs
Avoided capacity costs for generation
Reduced costs for ancillary services
Lower line losses on the transmission and distribution system (T&D)
Reduced investments in T&D facilities
Lower costs for the utilitys purchase of other renewable generation
Long story short, Crossborder found that a) the costs and benefits alike were relatively small beans, and b) the benefits outweighed the costs by a small margin.
http://grist.org/climate-energy/how-can-we-boost-distributed-solar-and-save-utilities-at-the-same-time/
kristopher
(29,798 posts)E+C-Co+Be+Ext.
Based on these findings, the authors suggest a new model for valuing distributed resources. The alphabet-soup version is "E+C-Co+Be+Ext." In laymans terms, this means adding the savings from offsetting wholesale energy purchases (E) to the savings from avoided capacity investments (C), subtracting the range of costs listed above (Co), and adding the benefits (Be). The Ext part of the equation is the right of states to assess environmental, security, and job creation into the mix and value those benefits accordingly.
This is actually very straightforward. The equation boils down to valuing energy based on the savings from using distributed energy compared to using the next best option, along with considering the balance from a cost-benefit analysis perspective. There are a few real-world examples of this, but unfortunately, as the report notes, none of them are comprehensive. Examples include net energy metering, which allows consumers to be compensated for the electricity they generate, but only assesses retail energy value and not the long-term energy and capacity values or the costs and benefits. ...
http://www.democraticunderground.com/112744729
AndyA
(16,993 posts)This is their own fault. They have been increasing rates, while failing to maintain their infrastructure. Executives make huge salaries, of course.
They should have gotten on the band wagon years ago, working with customers to install solar panels and providing service. Extra power generated could be used to lower rates for other customers who don't have solar.
This would be good for the environment, and would increase the number of people using Earth-friendly solar power. I would think the utility companies could still make a decent profit doing this.
Instead, they've done nothing, and now complain because they failed to stay ahead of the trends in energy use. After this winter's utility bills, they'll get no sympathy from me.
madrchsod
(58,162 posts)they had to close the coal fired installations so now they are looking into alternate sources.