The heated debate over solar power (Georgia)

[jpak]

http://blogs.ajc.com/political-insider-jim-galloway/2012/02/24/your-morning-jolt-the-heated-debate-over-solar-power/?cxntfid=blogs_political_insider_jim_galloway

Clearly, a bill to encourage the use of solar power is now the hottest item in the state Capitol.

SB 401, sponsored by state Sen. Buddy Carter, R-Pooler, originally had been shunted by Lt. Gov. Casey Cagle to the Senate Natural Resources Committee, where it was to be studied to death.

So on Thursday, an impatient Carter — opposed by Georgia Power, electrical membership corporations, and the Georgia Chamber of Commerce — brought SB 401 to the Senate committee that oversees utility legislation, where many think the measure ought to have been brought in the first place. Carter attempted to attach his bill to another piece of legislation intended to allow paranoid homeowners to opt out of wireless metering systems.

The concept offered by Carter is complicated, but my AJC colleague Kristina Torres has this explanation:

The most controversial aspect of Senate Bill 401 would allow outside companies to install, own and maintain alternative energy systems, in return for customers agreeing to a long-term contract to pay for the electricity generated by that system.

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[saras]

1. It's rather a sucky bill. Good riddance. Don't let Republicans write alternative energy bills.

from the article, a fairly reasonable approach from someone who's probably a utility nerd.

Kyle Leach, director of resource policy and planning at Georgia Power, sought to reframe the argument:

”We do not view this as a property-rights issue. We do not view this as a free-market issue. We’ve also heard this bill characterized as a financing bill.”

Leach then drew the committee’s attention to the language of the bill that permits the leasing of solar panels and other devices:

”That’s literally an agreement between a buyer and a seller of electricity. Our company enters into PPAs all the time – power purchase agreements. …Literally, it is a contract to sell electricity. That is where we have great concerns about this legislation. Because it introduces a whole new class of electricity suppliers into this state. Basically, it’s deregulation.

“…As far as we can tell, these new suppliers are not bound by the Public Service Commission. There’s no oversight. They’re not bound by an EMC board of directors or municipal city council or elected officials.”

In addition, Leach said, when the sun doesn’t shine, or the wind doesn’t blow, alternative energy users will require back-up power from Georgia Power or an EMC, which will be stuck with the costs of providing the infrastructure to deliver the energy.

There are good laws, and good ways to do this. Opening the field to predatory middlemen doesn't seem like a good idea for any reason. I entirely support self-reliant power, but if corporations are going to get involved, they need to be regulated as tightly as existing utilities (never mind that that isn't anywhere near good enough, it's at least a minimum). If someone puts their own power in, they understand that they are responsible. This system would produce a new class of consumers who will end up holding public utilities, not their private contractors, responsible for failure. That is NOT a good idea.

[kristopher]

2. The utility doesn't like it because it reduces their market influence and profits

It might seem a bit complicated but the utility has to pay up to 30X the average cost of wholesale electricity for the 'peaking power' they need to meet mid-day demand. They have it structured in most places that small producers, like home-owner solar is too small to be dealt with under the regulations that allow them to receive that sort of value for the electricity they produce. By putting together a lot of panels into one legal entity as viewed by regulatory framing, the utility has to pay the solar owners the same way they would have to pay a natural gas plant.

The utility is probably giving the individuals who own solar a 1:1 credit for what they produce; meaning that the homeowner buys the system, generates their own mid-day needs, plus extra that the utility uses. Thus for no investment the utility has peaking demand reduced, buys the homeowners peaking excess at dirt cheap prices, and profits by selling that electricity for the same rate it sells all other peaking electricity.

So, if your benchmark is "does the bill work to make solar affordable for homeowners and does it help speed the deployment of solar", then most bills of this sort are extremely effective. They should, of course, be crafted so as to protect the consumer from bad business practices also.

If your benchmark is "does this type of regulatory change protect the utility's profits" then it is indeed "sucky".

[saras]

3. You're assuming a lot better quality of business doing the aggregating than I would.

You're also drawing attention to the economic issues involved with extreme price fluctuations. Both really good points.

Are the people proposing to do the aggregating really that good? Co-ops, perhaps? Because it could be a way to screw over property owners really effectively.

And when I have considered the issue, making it work for the homeowner was more of a concern, and getting paid even a fair rate compared to what they paid. Extreme price fluctuations put a whole new spin on it. I would think the power companies would have some interest in the homeowner getting the least money for their power, and the middlemen would have an overriding interest in it, since it would be a lot larger portion of their profit margin. That's why I think co-ops or something. In this part of the country there's legal infrastructure for creating PUDs, even tiny ones. There's a bunch of places where a handful of homes created a water district. But I would think a for-profit business the worst possible structure for managing it in the interests of the homeowners.

[kristopher]

4. There is nothing wrong with a for-profit entity acting as an aggregator

If the regulations are written properly. As an example, unregulated lending is an open invitation to horrible business practices, regulated lending does a lot of social good.

Limiting it to co-ops also limits the opportunities for doing it.

[Yo_Mama]

5. This bill is bad for much of GA

The reason is that it would divert the profits to a select group with money (the investors), but stick the average poor joe with higher energy bills.

The reason it would do that is that the energy would be funneled into the system anywhere, but the infrastructure doesn't exist to handle the line voltages in large swathes of the state. A lot of GA is rural, and the line capacity isn't there. But the rural areas are the places where people would do this. This means that the utilities would not get the benefit of lower peak costs, but would be stuck with all of the line maintenance costs, which means that consumers would not get the benefit.

GA has large line installation costs - mostly we bury the lines for any new development. That's because of our terrain and our storms. This means that the utilities, which would have to deal with the line costs, would be left without the revenue to do it. It is relatively far more expensive to build a mile of power lines in GA than in many parts of the country, but over time the utilities minimize their total costs with far less maintenance (and the residents profit by highly reliable power).

This means that most of GA is very poorly suited to this type of scheme. Essentially the utilities would be stuck buying power they can't use, and the people doing this would ultimately get screwed too, because over time it wouldn't pay off but that wouldn't be obvious at first.

The ways to do this would be to form local coops that could invest in energy storage from the new facilities which could be used to offset peak power. It would be far cheaper to run some lines to a local regional area that could then dump voltage back into the local grid during high demand times. However the net investment costs to do this would have to include the cost of the storage facilities and the cost of the line updates feeding into that storage facility.

The pile of rocks heat pump scheme would work very well in most of GA.
http://www.isentropic.co.uk/

[kristopher]

6. That is a crock.

It is extremely easy to assess the case by case impact of any aggregated system and just as is the case with any other source of generation, any impact would be considered when negotiating the power purchase agreement.

[Yo_Mama]

7. But they are talking about aggregated purchases

So it is not a crock.

The reality is that they couldn't make a case-by-case assessment. You'd have a bunch of relatively rich farmers getting a lot of money, and most of the population paying more for their power.

Years ago I tried to campaign for something like this, because I wanted to put a facility in at my farm. I live in GA, you know. Rural GA. On a farm. After several years of making an ass out of myself, I realized that the utility company was right. So here let me disclose:
A. I was an ass about this, in a very innocent and public spirited way.
B. When presented with proof that I was an ass, I conceded the undeniable reality. Unfortunately I was a hard-headed ass about this, so I did not actually concede the point until I created the simulation that proved that I was just about Ass of the Year in my county. It is a title that I am not proud to hold and that I do not list on my resume, but nonetheless is seared on my psyche.
C. That made me an erstwhile ass who is still trying to find a way to make this work in my area of GA.

If you limited this geographically to areas in which the population density were higher, and in which the net power install per existing line voltage was lower, it would work far better. But that's not what this bill does. That's its fatal flaw. This bill would allow a bunch of me-ish people, with the best intentions, to aggregate our production power across the state and negotiate as a unit. The power company wouldn't even get the data to know what they were buying.

[kristopher]

8. You are now cooking a stew in that crock

They CAN make a case by case assessment precisely because they are power aggregators.

No utility ever wants to pay more for power; especially when they are currently exploiting a loophole to get a buy/sell spread far in excess of what the regulators would ever approve for large contracts. I don't care what they told you, their motive was to protect their profits, not to save the ratepayers money. All this does is to ensure that people who invest in grid tied solar for their homes or farms are paid what they power they contribute to the grid is worth. When that happens the payback time for solar plummets. If there are associated costs due to grid issues those costs can be assessed and will be addressed when the power purchase agreements are negotiated.

[Yo_Mama]

9. You are so, so wrong

This is the bill currently in the Senate:
http://www.legis.ga.gov/legislation/en-US/display/20112012/SB/401

Your statements that are wrong:

What this bill does is allow me and my farming buddies to force the local utility to buy my excess power, charging the only the direct costs of metering or connecting the energy source. The cost cannot include any insurance charge or capacity or interconnection charge that is not also charged to customers who are not generating their own power. What this means is that the utility could charge me for upgrading the capacity on the line to my house, but would have to bear the cost of upgrading the local lines (which could not carry the joint output of my neighbor and me). Regardless of whether my production routinely blows up my neighbors down the street (which my simulation showed it would every spring, when my own usage and my neighbor's usage is low), the utility MUST BUY MY POWER AND CANNOT CHARGE ME FOR THE LINE COSTS IT HAS TO RERUN FOR FOUR or FIVE MILES. That is not a direct cost.

FURTHER, the bill creates the "customer generator", who may be a customer 200 miles from me and my neighbor. That customer is allowed to contract with ME DIRECTLY through a power purchase agreement.

This is a sweetheart deal for me. The power company has to pay all the costs from the road on. I get the profits, because I can now contract with a customer in Athens (I live close to the Florida line) to buy my excess power as metered by the power insurance company.

[kristopher]

10. It isn't what you say but neither is it an authorization for aggregators.

Line 44, 45 specifies that the generator must be primarily for meeting the on-premises needs of the entity doing the generating. That prohibits the kind of excess you are talking about.

It says nothing at all about allowing aggregators to negotiate power purchase agreements on behalf of multiple homeowners who are leasing. Instead it assumes that the lease or purchase arrangement for the homeowners is independent of the utility-homeowner agreement.

The purpose of this law as written is to break down artificial barriers created by utilities to discourage distributed generation. It still leaves the purchaser in the position of having to sell their power to the utility at a sub-prime value - most likely it would be a net metering where the homeowner trades their peaking power for the utilities coal or nuclear.

For what it's worth I don't know your case but USUALLY the main problem with rural areas is that the further you get from the centralized generating source the more the power fluctuates and the more it benefits from small, distributed systems. If the line you are on is so precarious that 10-15 KW of generation is going to cause the problems you relate, then that area is in need of an upgrade that has nothing to do with you.

You do know that solar inverters are able to help stabilize the local circuits and that your contribution to grid stability would in most cases have a pretty high value? See "regulation power".

[Yo_Mama]

13. It does legally create that option, Kristopher

And it is intended to create that option. It's not as if those of us who might do this are going to pick up a phone directory and call homeowners in upper GA one by one. If the law creates an individual right, then it also creates an aggregate right. You have to understand that big hunks of GA are quite rural with low population densities, and farmers naturally think in terms of co-ops.

Our local grid is remarkably stable now - one can go years, including years with hurricanes and 60-70 mile hour winds, without a power outage, but it is rural so there isn't the line capacity to handle the type of power generation that would be set up. A bunch of us are interested in this.

Now I would think this law would work much better for the more metro counties. First, installations would tend to be smaller, and since metro counties have higher population densities most of the households are much closer to higher capacity lines, so there is the ability to move the generated excess. Nonetheless, there would be problems - go to the end of this post to see why.

An appropriate law would recognize the differences and create categories to allow this to be done where it can happen without undue cost.

Solar inverters may stabilize line voltages locally or they may destabilize them. It all depends on the circumstances.

My objection to the bill is that it diverts most of the benefits to those with significant ability to invest and spreads the real costs to those who have no money. This will wind up shorting the real required investments, jacking up the bills of those in trailer parks, and creating a destabilized grid across much of the land area of GA.

Because the bill ignores realistic limitations it is a bad bill.

I realize that you are not that technical, but everyone has known for quite some time that there is a capacity issue with maintaining line voltage in the presence of significant solar penetration (either small solar thermal or PV). Even in Germany they have already run into issues in the more rural areas, and that's remarkable because Germany doesn't really get that much sun so installing X capacity in Germany compared to Georgia generates amost an X-2 or X - 3 load in Germany in some of the areas now seeing grid problems.

Here are two papers that have nothing to do with power companies in GA. The first is non-technical. The second is quite technical:
http://www.nrel.gov/csp/pdfs/45653.pdf

http://itee.uq.edu.au/~aupec/aupec04/papers/PaperID75.pdf
Note that for the purposes of this analysis they are grouping the generating sources into feeders. They are not looking at individual fluxes.

To give you some idea of just how important the local flux issues are, please read this thread:
http://forums.energymatters.com.au/solar-wind-gear/topic942.html

For solar installations to feed power back into the lines, the solar inverter output needs to be a touch higher than the line voltage. But solar inverters have to be set to cut out (stop feeding power) when line voltages rise too high.

Thus there is a paradox in some areas already - those who have installed these systems in some areas actually get more revenue on shady days than on sunny days, because on sunny days the net output of the local installations rises quite rapidly with a high degree of correlation and pushes grid voltages to the max point. So in effect, when the PV installations should be putting out the most, they get to feed in the least.

The not so good news is that the inverter with the monoxs must be of Mediterranean extraction and likes a siesta on sunny days between 10 and 4, occasionally popping its head out to see if there is any cloud about. If there is cloud, it may stay on for a while until the sun shows itself again. When it is on between 10 and 4 it runs ok when it shows grid voltage of under 256V but drops out when it hits 258V.I note that when this inverter is running at 254-257V, the above inverter is showing 2 - 4v less.The Pv array voltage is around 250 - 280V when its running whereas the thins run at around 200V. Today it is raining and I haven't noticed any drop outs and the Grid is showing 252 - 5V. Does sunlight increase grid voltage :?: It managed 4.5Kw on Sunday and 2Kw on Saturday.

If you don't have these systems cut out then you get line faults. If you do set them to cut out, you have to vary cut out voltages because otherwise the synchronized cut outs cause hugely fluctuating line voltages locally. So then you get a situation where those with the higher cutouts routinely drop out on sunny days, causing them to get little revenue while those with the lower cutouts generate more revenue.

[saras]

11. If you folks can find so many interpretations of the law, I trust lawyers will do even better...

...and that, in my mind, makes it a bad law. If there's ways to game it, it will be gamed, and by the biggest and most powerful, in order.

When everyone agrees on what it will do, but disagrees on whether those are good things or not, it's ready to consider passing.

But that's a pretty high standard for modern-day America. If it doesn't require the mandatory gerbiling of elementary-schoolkids, it's a pretty good law for the Republicans at this point.

[kristopher]

12. There weren't that many interpretations, I simply didn't verify your innaccurate initial comment

My bad.

Once Yo Mama posted the text it was obvious what was at stake - it is still a case where the utility doesn't want the law, and it is still because the law encourages a distributed renewable grid and a distributed renewable grid is what is going to slash their market influence to only a fraction of what it now is.

They would much much rather have centralized generation like nuclear so they can maintain control of all energy production and serve as the bottleneck through which it flows.