What should renewables pay for grid service?

by Planning Engineer

There is a lot of public debate around the rates utilities charge solar customers, but very little of it shows an awareness of the embedded technical and philosophical issues.

This posting will seek to provide a general context to help sort out issues in that ongoing debate. It will focus on transmission for simplicity’s sake, but the concepts can be extended to generation as well.

Part of the problem is that people associate rates with costs. Rates are crude ways to collect costs that work out on average. Early innovators can often take advantage of rate structures to get more than they pay for. But as usage patterns change and as more consumers “game” the system – rates need to be refined and adjusted. For example, for many years many systems did well charging residential customers just a flat energy rate. Based on the average use of their customers over the year they were able to collect their fixed cost and variable costs. However, for example, some areas saw increasing numbers of summer cottages that used only limited amounts of energy. Charging for their limited usage did not accrue enough to cover the fixed cost for providing the meter, the line and their usage. Some utilities corrected by adding a fixed monthly charge. People get irate when they have to pay something they did not before. They rarely realize that perhaps before they were getting below cost service and that as rate structures are exploited they need to change.

Traditionally the costs of transmission service were collected from consumers through their electric energy usage charges. For homes with behind the meter solar the price of the transmission cost can’t effectively be distributed for them across regular usage hours. While transmission costs are driven by peak demand periods, it would be extremely cumbersome and costly to individually monitor and bill residences for their contribution to transmission costs. Rate methods are devised to get approximate appropriate charges from individual customers, but these rate methods need to keep up with changes in how customers use (and “game”) the system.

Customers with their own generation are receiving a different service from the utility than traditional customers and traditional cost structures will not work for them. They are benefiting from back up service that will not be paid for by their use under existing rates in most cases. Extra costs are incurred to provide backup service to residential solar customers from the grid. Utilities can’t collect transmission expenses from them that are spread out across hourly energy costs. To recoup the costs associated with backup, utilities either can have a general charge for backup, charge backup customers’ extremely high costs when it is needed or subsidize them by charging rates designed for higher usage customers. The subsidized approach was acceptable when roof top solar made up a small portion of the customer base. The inequity could be ignored because supporting fledgling renewables did not cost other customers much and was seen as desirable or not worth the trouble to fix. This approach will cause problems with higher penetrations of intermittent renewables.

A digression

To get away from the emotion generated by consideration of renewables here is a short discussion of potential philosophies around cost sharing.

Imagine you are having a contractor do some work in your backyard for a cost of $8,000. You learn that your neighbor is planning a similar smaller project that will cost him $4,000. You talk to your contractor and he can combine both jobs and do it for $10,000. There are multiple ways that the $2,000 savings could be apportioned.

Business Model: You go to your neighbor with an offer that competes with his. Perhaps because you are overseeing all the work, he would prefer to have you do it for $4,000 or perhaps you have to lower the price some to be competitive. But basically you seek to use your capabilities to meet your neighbor’s need and offer him some small benefit, so you can maximally offset your costs.

Subsidy Model: Perhaps you decide to treat your neighbor. If you decide to pay more than $8,000 for the combined project you are subsidizing your neighbor. He could see anywhere from a $2,000 to $4,000 benefit from the combined project from this approach. There likely needs to be some other motivating factor to make you accept this arrangement.

Incremental Cost Model: You pay the $8,000 for your share and charge the neighbor the $2,000 increment. The neighbor gets his project at half of what his cost would be otherwise, as the entire $2,000 saving goes to benefit him.  You’ve done your neighbor a favor, but received no benefit.

Shared Savings Model: You and your neighbor each reduce your cost by $1,000 or perhaps you each reduce your cost by 20%. This provides benefits to both parties and encourages cooperation from both sides.

None of the above models are generically right or wrong, but may be more or less applicable in various situations.

Hypothetical renewable example

Imagine a system with a level of solar roof penetration such that the transmission system would cost $10 billion for combined service to traditional and solar rooftop customers. If the system only served traditional customers it would cost $8 billion. A system to serve just the solar rooftop customers would cost $4 billion. Let’s look at the models introduced above in the context of this example.

Business Model: the utility would seek to get as close as possible to $4 billion from the solar customers to provide benefits to their traditional customers. I don’t believe anything approximating such an arrangement has or would occur in the electric utility industry. Such a model would cripple the potential for most self-generating customers who require grid back up as they do not have other feasible alternatives.

Subsidy Model: The traditional full service customers could be responsible for most of the costs. This is the model which dominates the utility industry today. At small penetration levels the costs are not large for the traditional customers, but as costs increase they can get very burdensome increasing the risk of a death spiral. A death spiral would occur if rising costs to traditional customers cause defections to solar customers and the reduced customer base has to continue subsidizing the growing base of solar customers.

Incremental Cost Model: Here the traditional customers are held neutral and the solar customer reaps all the benefits of the combined system. This is a controversial model today because it makes it very difficult to justify solar programs in many areas.

Shared Savings Model: For those familiar with cost accounting, charging renewable customers their fully allocated costs would be one way of doing this. I don’t know anywhere that this approach is currently being seriously and successfully advocated in cost of service studies for renewables, though it is generally common for other classes of service. (I welcome reader input and enlightenment here.) It would greatly reduce the risk of a death spiral but it would also greatly delay the implementation of renewable resources until such time as they were more cost competitive.

Discussion

History, inertia and the desire to support renewables have resulted in significant support for the idea that traditional customers should subsidize renewable customers. Perhaps this is coupled with the idea that traditional customers should be punished while renewable customers should be rewarded. Many of the battles around charges to solar customers are just over what the appropriate degree of the subsidy should be. Moving away from the subsidy model engenders great conflict. I have not read all the details, but I believe the Salt River Project’s controversial pricing plan is just trying to recoup the incremental costs of serving rooftop solar. (Perhaps they are asking for some help with shared/common costs. Any help readers?) In the press Salt River Project has been accused of “penalizing” solar customers, being anti-competitive, sabotaging their customer’s right to choose and far worse.

We need to move the public debate so that it is not just about the level of subsidy utilities should provide to solar. The subsidy model nearly guarantees that if the system transitions to high levels of local renewables there will be a major death spiral collapse as the traditional customer base erodes and the subsidized population increases. While some envision utilities as highly profitable entities with deep pockets that can well afford massive subsidies, in fact, the subsidies come from the ratepayers. Whether utilities pay for their system through money collected from their traditional customers or backup customers, their profits are in the hands of their public service commissions. Unlike the utilities, which will make money if they work with their regulators, ratepayers will be materially impacted by the cost sharing model selected. Indirect taxes placed upon electric utility ratepayers are terribly regressive and in the area of rooftop solar they result in significant wealth transfers from the less affluent to the more affluent.

Renewable subsidies disproportionately impact the poor, impacting their quality of life. To avoid these effects traditional customers should pay no more than incremental costs. If as a society we want to offer subsidies to rooftop solar we should consider funding it through a less regressive and punishing approach. That source will likely be less convenient to target but far more appropriate.

Aside from the appeals to fairness for ratepayers, the other models have further benefits. They send appropriate price signals to encourage more rational choices. They could help provide better flexibility for a transition to a renewable future that avoids price collapses and is open and potentially better able to serve newer and better “clean” energy alternatives.

JC note:  As with all guest posts, please keep your comments relevant and civil.

170 responses to “What should renewables pay for grid service?

  1. Pingback: What should renewables pay for grid service? | Enjeux énergies et environnement

  2. “They are benefiting from back up service that will not be paid for by their use under existing rates…”

    This is exactly the problem with the German Energiewende. The public has not yet realized that THEY will have to pay for back up service. At the moment they think that the (evil) Big Utility Companies will (must?) provide that service for free.

    They won’t.

    http://www.elp.com/articles/2015/03/owners-to-shut-down-german-gas-fired-power-plants.html

    Somebody will have to tell this to the Germans one of these days….

  3. “While some envision utilities as highly profitable entities with deep pockets that can well afford massive subsidies, in fact, the subsidies come from the ratepayers. Whether utilities pay for their system through money collected from their traditional customers or backup customers, their profits are in the hands of their public service commissions. Unlike the utilities, which will make money if they work with their regulators, ratepayers will be materially impacted by the cost sharing model selected. Indirect taxes placed upon electric utility ratepayers are terribly regressive and in the area of rooftop solar they result in significant wealth transfers from the less affluent to the more affluent.”

    This needs to be repeated often and loudly! Customer utility rates and any utility corporate profits (if any – most utilities are actually non-profit) in the USA are controlled by public utilities commissions. Placing a financial charge on a utility is simply placing it on their rate payers. The question discussed here is which customers bear the larger burden.

  4. Yet again, an excellent post from PE. One other form of subsidy for solar that needs to be addressed is net metering where the homeowner is essentially paid full retail rates for energy provided from the home to the grid. This subsidy is possibly the most costly due to grid management issues and the fact that a “supplier” is being paid the same amount that the utility receives, so there is no profit margin at all, and this arrangement most likely results in a net loss when factoring in fixed costs and grid management costs.

    • “One other form of subsidy for solar that needs to be addressed is net metering where the homeowner is essentially paid full retail rates for energy provided from the home to the grid.”

      In some cases, energy supplied TO the grid from solar earns the consumer more than the price of the same power FROM the grid – this can be true even where the consumer uses their own power, meaning they have “negative” bills!
      IIRC, consumers in Germany at one stage had such an advantage in pricing terms from this arrangement that it was profitable to light solar panels from grid energy and “sell” the resultant “product” back to the grid. Madness^2!

  5. While transmission costs are driven by peak demand periods, it would be extremely cumbersome and costly to individually monitor and bill residences for their contribution to transmission costs.

    In this area, in southeast Houston, we now have “smart” meters for Electricity and Water, not sure what they did for gas. They are monitored daily and hourly. It is now less cumbersome and costly to individually monitor. It is already being done.

    • “Smart” meters can and do provide a lot of information to utilities and can track peak usage. They are costly but they certainly can be used to bill customers based on a transmission “rate”. I’m trying to emphasize that there is a difference between costs and rates. Rates are good enough on average, but they can fail when the system is exploited by changes in usage. When we understand the components of the system and have some predictability about how they will work it is easier. Intermittent generation coupled with equipment outages makes that harder.

      A transmission system must be robust enough to handle outages across a variety of conditions. In a transmission system we build for many things that hopefully never happen. Many improvements are like backup insurance – you can’t just charge the people who use it. So we have transmission costs for improvement’s for conditions that might not happen and the risks are magnified by solar intermittencies. Looking at the system as a whole some parts are stronger and some weaker. Some customers are more likely to aggregate to drive new improvements than others. Meters aren’t going to tell us what was spent to provide protection for specific customers. Best case we can get a general idea what is happening on the system on average for a time and put it in a rate. Figuring out how individual residences are impacting that balance and what they are costing would be cumbersome and costly.

    • Good article. I touched on commissions a little here: https://judithcurry.com/2014/10/22/myths-and-realities-of-renewable-energy/

      To add to the article I’d say that utilities kind of build when the can and slow down when they have to. When fuel is high maybe they cut back on maintenance. When prices drop resume needed maintenance. Not always the most rational approach, but expedient at times. I think utilities generally try to do the right thing, but they do need to be watched by regulators. But also they can be enticed to do the wrong thing when the regulators have bad goals.

      I thought the final quote was telling. “From now on, utilities must prove that their spending will make an electric system cleaner, more efficient, or stronger”. More economic or affordable is not in there. More efficient does not mean less costly.

    • rogercaiazza

      One comment on the article is that the author did not realize that there are differences between the traditional electric utility and New York’s de-regulated system. New York State de-regulated the electric utility industry before 2000. Therefore the following example in the article is not as simple as portrayed:
      “Families in New York are paying 40% more for electricity than they were a decade ago. Meanwhile, the cost of the main fuel used to generate electricity in the state—natural gas—has plunged 39%.
      Why haven’t consumers felt the benefit of falling natural-gas prices, especially since fuel accounts for at least a quarter of a typical electric bill?
      One big reason: utilities’ heavy capital spending. New York power companies poured $17 billion into new equipment—from power plants to pollution-control devices—in the past decade, a spending surge that customers have paid for.”

      In particular, the example power plants and pollution control devices are not a direct rate payer cost in New York. The de-regulated power producers make investments in power plants and pollution control devices and hope that they can recover their costs in the wholesale market. If we assume that those costs are reflected in the whole sale and those rose 40% the statement would be correct. I could not find recent numbers to make a definitive conclusion. This report (http://www.nyiso.com/public/webdocs/media_room/publications_presentations/Power_Trends/Power_Trends/power_trends_2012_final.pdf) only goes to 2011 and shows that the wholesale price bounces all over the place. EIA has good retail numbers (http://www.eia.gov/electricity/data.cfm#sales) but I could not find wholesale numbers.

      I could not disprove the statement but I doubt it. I have worked with the power companies in New York and my impression is that while there have been investments in pollution control equipment there has not been a return on those investments to cover the costs. Frankly, it will be real interesting to see what happens when new generation is needed for reliability beyond what can be provided by New York’s commitment to distributed generation (New York’s Reforming the Energy Vision) is required. It seems to me that the business model for an independent power producer in the NY deregulated market is not consistent with REV so I would be surprised to see new power plant investments.

  6. This is a growing issue. I just read a NYT article on electricity generation Hawaii and the issues emerging as solar penetrates more and more of the market. It is astonishing the lack of understanding of the free rider problem created by intermittent power grid users. The ultimate salt in the wound is the Net Energy Metering where free riders are paid to ride free!!
    As for this post, the example fails. In truer parasitical fashion, it is more like my project increases the cost of my neighbors project as in the Net Energy Metering scenario.
    A parallel problem emerges with bike riders who get the use of the roads and enforcement of highway laws but, unless they own a car, pay little to cover their usage costs.

    • The highway analogy is interesting, but in this case I think the bike riders are not the big problem. The big issue is: What is the fair charge for trucks?

      There is also an equivalent in the German energy debate: i.e. How much should heavy industry have to pay for power? German heavy industry is currently exempted from some of the Renewable Energy levies. This is also a sticky political problem.

      This is issue separates urban yuppy Greens from their erstwhile coalition partners, the Social Democrats. The union-supported SDP understands that their blue collar jobs depend on affordable energy.

      So what is fair?

      • Danny Thomas

        Ken W,
        “What is the fair charge for trucks?” and “How much should heavy industry have to pay for power?”. I’m not really sure it matters as if those costs increase they’ll just be passed down to the ultimate consumer. One caveat might be that if paid via a profit margin, there indeed might be a mark up.

        The thing that interests me in this type of discussion is if subsidized we pay, if deferred (IE road maintenance) we pay, if passed thru as cost of product/service, we pay.

      • Danny, you’re using common sense and logic – that won’t do here!

        “We Pay”

        You and I know that because Planning Engineer explained it to us, but try telling it to people who have been told – and like to believe – that wind and sun are somehow “FREE”?

        They don’t understand why their electric bills go up. Then they become angry and look for someone to blame. The first culprits are the evil, capitalistic power companies because they must collect the money. Then they blame industry for not paying their fair share. Then they blame lobbyists and pro industry politicians for sabotaging green policy. Then they blame people that don’t want windmills or new power lines in their backyard. Everybody is to blame but the people who voted for the policy. Finally they call for nationalizing electricity production and distribution entirely. This is where the discussion in Germany is going…

        Of course, we still pay no matter what.

    • ” It is astonishing the lack of understanding of the free rider problem created by intermittent power grid users.”

      True. For most people it is too complicated to understand and they are exposed to too much fud marketing from the renewable lobby, the MSM, and the political friends of both.

      Bikes have minimal impact on roads, more so on traffic, and most bikers own cars/trucks.

    • Motor vehicles are subsidized and pay into the government as well. A few examples are found here: http://en.wikipedia.org/wiki/Effects_of_the_car_on_societies
      Bicycles pay little or nothing to the government but are probably subsidized less. A paved trail on an old rail line costs a lot of money. That may be a recreational subsidy. It may allow more people to commute by bicycle, lessening congestion. It might be said to be a subsidy for roller bladers, walkers and joggers. It may bring pedestrian traffic through small down towns. They can allow teenagers to have some transportation options and the same for low income people. Bicyclists can seem to at times face an entrenched and powerful auto centered world. How does any of this relate to PE’s article? Bicycles can provide economical transportation and have done so in many places. Is a $40,000 vehicle really economically effective? What are its infrastructure needs? I suppose the greater the population density of an area, the less effective automobiles are. Yet we keep paying for an infrastructure that doesn’t do a very job of transportation and we keep driving our cars. We attempt to solve a dense areas problems with old ideas and probably some of every bodies money. There is competition for road space, that is bicyclists can be most comfortable and efficient about 4 feet to right of traffic on a smooth surface and sometimes that 4 feet is 18 inches, sandy and bumpy. Reducing that 18 inches is 0 may seem like a victory for motor vehicle, but the former bicyclists then gets in their cars and add to congestion and road wear. They join their subsidized brethren, the automobile consensus. It’s a case of limited resources and commons property being fought over. Where is the place that you might find yourself a little bit or more angry? I’ve heard this happens. Driving your car. About enforcement of highway laws. Yes, bicyclists get away with a lot. I do not condone that. It’s one of the reasons bicyclists are taken less seriously.

      • Ragnaar: I am a lifelong cyclist. Where feasible and if funded appropriately dedicated cycling lanes should be built. However, many cyclists especially in cities and on narrow back roads operate in a way that defies commonsense and reasonableness.
        I did not mean to confuse the main issue: Those relying on the grid for back up power are paying too little for this service before we even consider Net Energy Metering. Adding in the latter just makes the under-payment worse.

      • I am a life long cyclist. I still believe those who only own a bicycle are “free riders”. However, I did not mean this example to distract from the main point. Those who stay connected to the grid and use it as a back up source for electricity simply do not pay their share. Those who use Net Energy Metering pay even less.

      • bernie:
        I too do not wish to derail the topic, but I find some similarities with the two situations. Given a large enough amount of bicyclists, let’s say ½ who rarely drive their motor vehicles and hopefully not all on the same day, what effect would that have on the road system? I suppose it would depend on the politicians and transportation engineers. We already see the beginning of that question being addressed. Perhaps that issue offers ideas about what to do with small renewable energy production. Roads are common property and utilities in some ways are too. Through utilities, green production targets for the state of Minnesota might even be met in future years. How would the roads be paid for with only ½ of their former motor vehicle traffic? I suppose the gas taxes would rise. In the interests of fairness maybe they shouldn’t rise and some other source should be used. Our workhorse, fast response delivery choice is the motor vehicle. But that choice largely sits idle unless you’re driving most of your day. As it sits idle we have these sometimes overlooked costs: http://bca.transportationeconomics.org/benefits/parking-costs
        The large parking lots in front of the Walmarts result from transportation choices. The cost of that parking lot in this case goes into the price of the what Walmart sells, even for the bicyclists. Walmart adapts to what the consumers want and builds these large parking lots. Then they allocate those costs associated with a segment of them to all of them I am assuming. These parking lots are idle a fair amount of the time. With a capacity for the holiday shopping part of the year, they might be said to be overbuilt. If ½ of the people were bicyclists, the amount of the overbuild might be 40% less in area. Our very clear and determined transportation choices may seem to not be so efficient.

  7. Good article. But I can’t help thinking that these schemes are like peeing into a well to save water. And then charging by the piddle.

  8. What seems obvious is that electric cars’ official EPA MPGe — based the energy in a gallon of gas as measured in, e.g., kW — has zero to do with reality. Based on the actual production electricity to run a diesel generator and figuring in the transmission losses resulting from getting the electricity to Tesla owners garages would put the fuel economy of a Tesla at about 34 MPG.

    Sure, sure, a Tesla is fast but do we want government to subsidize the manufacturer of the fastest ever 0-60 automobile for wealthy Californians and crazy Norwegians? Sure too, we can charge-up Tesla’s using hydroelectric power that is kept artificially low for homeowners’ use, that is not further burdened with excise taxes to pay the costs to build and maintain the roads and HOV lanes for electric cars.

    But, just imagine for a moment the insurmountable regulatory obstacles to be faced and the enormous amounts of diesel fuel that would be required to build the Hoover Dam today, to charge-up our Teslas batteries. The current low cost of electricity is a legacy of our ancestors who obviously were a lot smarter that we are today (they were not afraid to liberate the CO2 required to make the cement that was used to build the Hoover Dam); and besides, 40% of the nation’s electrical grid is actually generated using coal – the evil demon of the Left.

    Or, we could charge up our Tesla batteries with the energy from heavily subsidized solar or wind power. But, it is surprising how many solar panels or your roof or the number of windmills in your backyard that would need to fully charge a Tesla on a daily basis.

    • If you are wealthy you can buy a subsidized Tesla ( don’t forget the $80,000,000 in free carbon credits Tesla gets) and drive solo in the commuter lane while giving all the poor people stuck in traffic the finger.

      • On the road to self-sufficiency, generating up to 3.4kWh/day with a pole-mounted wind turbine for home use in an area that enjoys a 12 mph wind speed seems possible. Less wind speed will of course result in less power generation but maybe still as much as 8 solar panels generating about 2.8kWh/day. With a combined wind and solar system, generating 5kWh/day seems possible. A home system like that would fully charge a Tesla P85’s battery in just 17 days, enough to go about 265 miles.

      • “A home system like that would fully charge a Tesla P85’s battery in just 17 days, enough to go about 265 miles.”

        Perfect for the unemployed blue-collar worker!

    • You omit one factor: the bulk of Teslas get charged overnight, when utilities are producing vast amounts of excess power. Overnight rates are kept low to attract such usage and provide load. The Tesla SuperCharger network provides daytime charging at no user cost, and Tesla pays the going rate to utilities for it. They have plans to provide large battery banks at each to do “load levelling” and to transfer load from day to night, further helping stabalize the grid. But they also are emplacing large solar arrays at or associated with each station, so are implicated in the “free backup” issues, or will be as this develops.

      • Please provide evidence that ‘the bulk of tesla’s’ are charged overnight.

        The few electric cars that I have personal knowledge of are charged via the ‘maintenance outlets’ in company parking lots during the day.

        Obviously…companies want to appear ‘green’…so they allow their workers to charge via company electric outlets during peak hours…which just exacerbates the ‘peak power’ problem.

        Personally…I think charging electric vehicles at night is roughly the same as the mythical housewife doing laundry at 2AM because electricity was cheaper then.

        We tried time of day metering in the late 1970’s and early 1980’s and found that it didn’t modify behavior…the whole point of grid power is that we don’t have to schedule our activities based on when the wind blows or when the sun shines..A ‘few’ green people are willing to modify their behavior but anywhere near as many as advocates postulate.

  9. I think it would be best to have a base infrastructure hookup monthly cost to all consumers as the base charge, while having metered usage rates on top of that. It still is cheaper for a person to provide a measure of their own electricity, while not subsidizing infrastructure cost. If they do not want the hookup fee, then don’t hookup. If they do after initial building or construction want the hookup say 2 years later, then a prorated infrastructure hookup fee would need be charged.

    • From the article:

      “Federal officials complain in the 348-page report that the energy infrastructure system does not fit into current needs regarding … climate change…”

      Just what does climate change require from the grid?

    • Beta Blocker

      From the QER Summary for Policy Makers:

      ” ….. The focus of U.S. energy policy discussions has shifted from worries about rising oil imports and high gasoline prices to debates about how much and what kinds of U.S. energy should be exported, concerns about the safety of transporting large quantities of domestic crude oil by rail, and the overriding question of what changes in patterns of U.S. energy supply and demand will be needed — and how they can be achieved — for the United States to do its part in meeting the global climate change challenge. ….. “

      The QER is pushing Crony Capitalism on a massive scale. It will not be successful in reducing America’s GHG emissions anywhere nearly fast enough to meet President Obama’s announced goal of a 28% reduction by 2025.

      What the QER does instead is to recommend an array of programs which will, in their combined impact, greatly favor one fossil fuel, natural gas, over another fossil fuel, coal.

      If President Obama is truly serious about reducing America’s GHG emissions fast enough to meet his announced target of a 28% reduction by 2025, he has no other practical option but to put a stiff price on carbon and to directly constrain the supply and availability of all carbon fuels.

      He can take the needed actions unilaterally using authorities he already has in his hands as Chief Executive. Not another word of new legislation is needed from Congress to do what President Obama says he wants done in reducing America’s GHG emissions.

      If the President isn’t using the EPA to its greatest possible effectiveness in legally constraining the supply and availability of all carbon fuels, and to force a substantial increase in their price, then he isn’t truly serious about transforming America’s energy landscape or about taking effective action on climate change.

      • Beta Blocker wrote:

        “If President Obama is truly serious about reducing America’s GHG emissions fast enough to meet his announced target of a 28% reduction by 2025, he has no other practical option but to put a stiff price on carbon and to directly constrain the supply and availability of all carbon fuels.”

        Let me provide another possibility. How about a 1960s-NASA-like project to design a few scale-variations of thorium reactors within the next 5 years. Let the Federal taxpayers handle the development, liability and waste issues and give the working designs to the regulated utilities for the benefit of their customers, plus appropriate profit as determined by their respective PSCs. Spend the second 5 years replacing non-nuclear base capacity with the new reactors. Legislatively restrict “green” obstructionist lawsuits.

        Cheap carbon-free energy and a path toward reserving coal, gas, and oil for fertilizer, plastics and transportation.

        I suspect there are MANY other possible options available, to either exercise in parallel or after thorium reactors are online. If your head is not stuck in green sand.

      • ” to put a stiff price on carbon”
        This is an act of quasi-religious belief. How will “putting a stiff price on carbon” reduce emissions? To reduce emissions you need an energy source free of emissions. Such source isn’t available now. Solar and wind are not capable of supplying the energy needs, no matter how stiff the carbon tax is.
        So, the claim that a “stiff” carbon tax will reduce emissions is based on faith not fact. It is nonsense. Putting a tax you end up having a tax, and emissions too…

      • Beta Blocker

        sciguy54: April 21, 2015 at 8:44 pm

        Let me provide another possibility. How about a 1960s-NASA-like project to design a few scale-variations of thorium reactors within the next 5 years. Let the Federal taxpayers handle the development, liability and waste issues and give the working designs to the regulated utilities for the benefit of their customers, plus appropriate profit as determined by their respective PSCs. Spend the second 5 years replacing non-nuclear base capacity with the new reactors. Legislatively restrict “green” obstructionist lawsuits. …. Cheap carbon-free energy and a path toward reserving coal, gas, and oil for fertilizer, plastics and transportation. …. I suspect there are MANY other possible options available, to either exercise in parallel or after thorium reactors are online. If your head is not stuck in green sand.

        My own professional background spans thirty-five years in nuclear construction and operations in the areas of radiological protection controls and nuclear quality assurance oversight. Most of my occupational radiation exposure has come from beta-gamma sources, as opposed to alpha sources, hence my internet handle is ‘Beta Blocker.’

        For those who argue for the adoption of thorium reactors as a panacea for America’s power generation needs, you can argue the merits of the thorium fuel cycle as much as you like, it will not be adopted here in the United States. The nuclear industry here in the US sees no cost advantages to the thorium fuel cycle; and as far as the anti-nuclear activists are concerned, the thorium cycle remains a nuclear fuel cycle and it is therefore evil by definition.

        In any case, the nuclear construction industry here in the United States does not currently have the capabilities, as measured in terms of numbers of nuclear-qualified personnel and numbers of nuclear-qualified equipment suppliers, that are needed to support a rapid expansion of nuclear power in this country. Even if the United States commits to a public policy of a rapid expansion of nuclear power, some years will pass before this situation is reversed and an acceleration in America’s nuclear construction could occur — a decade or more, in my estimation.

        As for obstructionist lawsuits brought by anti-nuclear activists against power reactor construction projects, the only practical way to avoid these lawsuits is for the nuclear construction industry to be highly proactive in following the stipulations of their Combined License (COL) for the project. If an ongoing nuclear construction project follows its COL to the letter, the anti-nuclear activists don’t have any basis for filing a lawsuit. It is strictly a management decision on the part of the senior managers of the construction organization whether or not to follow the COL to the letter, and to risk the possibility of lawsuits by anti-nuclear activists if they don’t follow the COL stipulations they’ve committed themselves to follow in their license application.

        There is a widespread opinion among those who work in nuclear construction that the four new reactors now being built in the Carolina’s are the last large nuclear power plants that will be built in this country. The upfront capital costs for big nuclear plants like those being built at Vogtle and at Summer are just too high for most utilities to be thinking about in today’s economic climate. At current market prices for power, nuclear cannot compete with natural gas and with subsidized wind & solar in deregulated power markets. Adoption of Small Modular Reactors (SMRs) might change the long-term outlook, but these SMR’s are a decade or more away at the very earliest, and it is not certain that SMRs could change the basic economics of nuclear to the extent which is needed if nuclear is to play a larger role.

        As things stand today, the future of electric power in America lies in gas-fired generation combined with some limited amount of subsidized wind & solar. Nuclear power construction cannot move forward beyond the few plants now in the pipeline unless the Federal Government intervenes in the energy marketplace to make natural gas substantially less competitive than it is today.

      • Beta Blocker

        jacobress April 22, 2015 at 6:52 am

        ” to put a stiff price on carbon” …. This is an act of quasi-religious belief. How will “putting a stiff price on carbon” reduce emissions? To reduce emissions you need an energy source free of emissions. Such source isn’t available now. Solar and wind are not capable of supplying the energy needs, no matter how stiff the carbon tax is.

        So, the claim that a “stiff” carbon tax will reduce emissions is based on faith not fact. It is nonsense. Putting a tax you end up having a tax, and emissions too…

        PA: April 21, 2015 at 5:19 pm

        The roadmap for Smartgrid is just under $ 1/2 trillion dollars over 20 years. The vast majority of the spending appears to be grid adaptation costs to support renewables.

        Here in America, moving away from fossil fuels towards wind, solar, and nuclear is strictly a public policy decision, one which cannot occur without the direct intervention of the Federal Government in the energy marketplace.

        It is impossible to transform America’s energy production and consumption landscape to the extent which is needed in order to achieve President Obama’s goal of a 28% reduction in GHG emissions by 2025 unless substantial near-term energy conservation measures are imposed upon all energy consuming sectors of the American economy.

        Imposing these near-term energy conservation measures also reduces the future investment needed for an ongoing transition into wind, solar, and nuclear; and will therefore lay the groundwork necessary for achieving an 80% reduction in America’s GHG emissions by 2050.

        Raising the price of all carbon energy resources for all energy producers and consumers is recognized by most economists as being the most fair and equitable means of distributing the economic burdens of these energy conservation measures. It is also the most economically efficient approach for encouraging energy producers and consumers to move away from fossil fuels towards alternative energy resources such as wind, solar, and nuclear.

        Since Congress will not act to put a price on carbon, the only way it can be done is for the Executive Branch to use the full authority now vested in the Environmental Protection Agency to directly constrain the supply and availability of all carbon fuels and to raise their price, thus encouraging substantial near-term energy conservation measures so as to achieve the 2025 emission reduction goal.

        If President Obama and the Progressive Left are not using the EPA to its maximum possible effectiveness in reducing America’s GHG emissions — something which they can do legally and constitutionally without requiring another word of new legislation from Congress — then he and they can be rightly accused of playing politics with the issue of climate change.

      • Beta,

        And how do you envision Obama “putting a stiff price on carbon” or “directly constrain(ing) the supply and availability of all carbon fuels” ?

        Ordering a carbon tax?

        Issuing and Executive Order stating that refineries may only produce at volumes mandates by the Dept of Energy? Or Gas companies may only supply a mandated volume of NG to homes and businesses? Or drivers can only fuel up once a month?

        I believe a system where that can be done is referred to as a dictatorship.

    • The roadmap for Smartgrid is just under $ 1/2 trillion dollars over 20 years.

      The vast majority of the spending appears to be grid adaptation costs to support renewables.

      • Beta Blocker

        PA, see my responses to sciguy54 and jacobress above.

        It is not possible — even after spending a trillion dollars or more on creating the necessary technological foundation — to achieve a renewable energy future for America unless substantial energy conservation measures are imposed on all energy producers and consumers.

        The most simple, effective, economically efficient way to do that is for the Federal Government to intervene directly in the energy marketplace to raise the price of all carbon fuels and to constrain their supply and availability. The politics of imposing this kind of approach on the American public are heavy duty, to say the least.

      • Beta Blocker,

        Carbon pricing cannot succeed; these two posts explain why:
        http://catallaxyfiles.com/2014/10/26/cross-post-peter-lang-why-carbon-pricing-will-not-succeed-part-i/
        http://catallaxyfiles.com/2014/10/27/cross-post-peter-lang-why-the-world-will-not-agree-to-pricing-carbon-ii/

        Command and Control policies to force economically irrational energy efficiency does not work – it has only a temporary effect.

        The only measure that can work to reduce emission from fossil fuels is to substitute low emissions technologies for fossil fuels technologies. And the way to achieve that is by deregulation of markets not more regulation: see my 10 comments starting here: https://judithcurry.com/2015/04/19/week-in-review-politics-and-policy-edition-2/#comment-695211

      • Beta Blocker

        Peter Lang: April 22, 2015 at 4:31 pm

        ” …. Command and Control policies to force economically irrational energy efficiency does not work – it has only a temporary effect. …… The only measure that can work to reduce emission from fossil fuels is to substitute low emissions technologies for fossil fuels technologies. And the way to achieve that is by deregulation of markets not more regulation: see my 10 comments starting here: ”

        Peter, your analysis looks at the long-term world market for energy, as opposed to what I am doing in looking at a smaller component of that market, the United States; and at what will be happening here in the US over a somewhat shorter time frame.

        Recognizing that the world will go its own way in dealing with issues concerning energy and the environment — both in the short term and in the long term, and largely independent of the path we choose to take here in the United States — the focus of my personal interest concerns what kinds of public policies we will be adopting here in the US to meet President Obama’s stated commitment of a 28% reduction in America’s GHG emissions by 2025 and an 80% reduction by 2050.

        2025 is only ten years away, and 2050 is thirty-five years away — not that long considering that ten years ago in 2005 we in the nuclear construction industry were becoming aware that a Nuclear Renaissance was emerging in the energy marketplace (since throttled by low prices for natural gas) — and that thirty-five years ago in 1980 we were coping with the high interest rates which, along with the severe quality assurance issues we were experiencing at that time, were killing our nuclear construction projects.

        There is much room for improvement in America’s overall energy efficiency. But the question must be asked, can efficiency improvements alone cover the Obama climate action plan’s 40% shortfall in meeting his 2025 emission reduction goal of 28% relative to a 2005 baseline?

        The answer is ‘No way, not a chance.’ Neither the shorter-term 2025 goal nor the longer-term 2050 goal can be met without inflicting some degree of economic pain and sacrifice on America’s energy consuming public in the form of government-enforced energy conservation measures with real teeth. Here in the US, putting a price on carbon and restricting its supply and availability is the fairest and most economically efficient way to go about it.

        At any rate, a serious public debate concerning the science and the economics of climate change will not reach critical mass here in the United States unless and until America’s energy consuming public is asked to make serious economic and lifestyle sacrifices in pursuit of major GHG emission reductions.

        The Obama Administration has said next to nothing about what kinds of sacrifices will be necessary to achieve a 28% reduction by 2025, which is yet another indication that climate change is merely a political talking point for the Administration to use against its critics, it is not an issue which matters to them strictly on its own merits.

  10. This is an admirably dispassionate and even handed analysis of the situation, but the problem is that the solar/wind proponents have no incentive whatsoever to play along.
    The first problem is that there is a time lag between growing systemic financial unsustainability of solar/wind subsidies and when ratepayers actually start suffering. This time lag means unscrupulous operators will push forward knowing full well that sunk costs are money already in their pockets, and that once installed – solar/wind facilities are hardly going to be dismantled much less clawed back on cost.
    The second problem is that the demographic being regressively taxed are the poorer and less informed portions of the populace. Once again, the unscrupulous will simply market to those who will benefit knowing full well that the hoi polloi won’t act until the pain becomes too great – at which point it is too late anyway.
    The third problem is a public relations one: all the solar/wind people have to do is talk about how “bills will be reduced” and “earth will be saved” – while your eminently sensible approach is far more difficult to communicate and even more difficult to get people to act on.

    • Yes, bills will be reduced for wealthy people, but will increase for the working poor that don’t qualify for susidies and the lower middle class. It is true that the lower middle class is disappearing so maybe the energy bill will be free for everyone, but JustinWonderland.

      • Small correction: most of the subsidies are open to all, but poor people can’t afford to prepay their electricity or gasoline cost by purchasing solar PV or electric vehicles.

  11. This article from Bishop Hill ‘Solar Heat’ is interesting

    http://bishophill.squarespace.com/

    Apparently a fire was caused by Solar panels atop a town hall roof in the UK. However, what was interesting was the reaction by the fire fighters as whilst AC power can be turned off by them to fight the fire, the DC power from the solar panels can’t be..

    There is obviously a cost AND a safety issue there, but who is responsible for ensuring a remote switching mechanism can be employed I don’t know. The Grid? The Energy Co? The Householder?

    tonyb

  12. The title is a little misleading as it uses the very general term renewable and really is discussing small solar installations. A renewable project such as landfill-gas-to-electricity gets to pay for the interconnect study, any infrastructure upgrade, running the lines to the transmission or distribution grid, meters and disconnects. The project also gets to pay fees to the utility for the privilege of being on the grid. The utility doesn’t have much choice in whether they take the energy, but can make it as easy or difficult as they want. The degree of difficulty seems to be a matter of geographic location.

    If I put solar panels on my house, I need to meet certain requirements but none of those seems to be paying much for the privilege of having “free” electricity.

    • That would be true if you don’t feed-in excess electricity nor connect to the grid at all. In the former case, the fed-in power requires additional handling by the utility company. In the latter case, the utility company has to be prepared for handle larger ramps up of demand in days where solar PV isn’t producing as expected as well as pay for the infrastructure to transmit to the atypical usage profiles of solar PV users.
      As Planning Engineer notes above – it isn’t that the present pricing system is completely exact either, but the widespread adoption of solar PV is breaking the system that already exists.

  13. David L. Hagen

    Planning Engineer
    Excellent discussion.
    Sustaining the Grid during Polar Vortex w/o Coal?
    The issue with renewables is both backup and transmission under worst case conditions. e.g., in the middle of winter during a polar vortex when most coal fired backup has been destroyed to satisfy the goddess Gaia (aka EPA.) Then a dead calm day will give little local wind, or overcast will give little local solar PV. That will likely crash the grid at current trajectories – possibly causing 100s thousands to millions of deaths from hypothermia! We will have lawyers slathering over trillion dollar law suits! What do we need to do to ensure against such easily identified worst case scenarios, let alone the “black swans” etc.?

    • johnvonderlin

      David,
      While I’d certainly concede a “black swan” event could create trillion dollar lawsuits given lawyers’ propensity for hyperbolic inflation of claimed damages, your “–possibly causing 100s thousands to millions of deaths” borders on the silliness of a Cli-fi catastrophe B movie. Can you point me to any event of this category that produced even .01% of the deaths you asserted were possible and explain why we wouldn’t be able to bring resources to bear to prevent it from reaching the unprecedented level of deaths from hypothermia you posited as possible?
      I’d note that most of the deaths from hypothermia during recent polar vortexes were homeless, often alcoholic people that the presence of power had nothing to do with their demise. Most deaths in these outbreaks were car crashes, heart attacks while snow shoveling and carbon monoxide poisoning from alternate heating sources.
      Wild-eyed alarmism diminishes the credibility of one’s POV, no matter which side you are on.

      • David L. Hagen

        johnvonderlin. See major response below. If grid fails, the gas furnaces, hot water, stoves and ovens fail for lack electricity. Natural gas and fuel pipelines and gasoline stations similarly fail for lack of electricity. How many still have access to wood?
        The August 2003 heat wave in Europe was estimated to cause 70,000 additional deaths.
        Robine, Jean-Marie; Cheung, Siu Lan K.; Le Roy, Sophie; Van Oyen, Herman; Griffiths, Clare; Michel, Jean-Pierre; Herrmann, François Richard (2008). “Death toll exceeded 70,000 in Europe during the summer of 2003”. Comptes Rendus Biologies 331 (2): 171–178. doi:10.1016/j.crvi.2007.12.001. ISSN 1631-0691. PMID 18241810.
        Excess cold causes more deaths than excess heat.

    • David L. Hagen

      Catastrophic Central Planning
      johnvonderlin Several examples come to mind of the disastrous consequences of central planning. My guestimates were only ~1% to 10% of relative deaths of the famines in China and No. Korea caused by central planning.
      Mao Tse Tung’s “Great Leap Forward”/Famine mandated a five year program to transform China from a predominantly agrarian (farming) society to a modern, industrial society like the USSR. Boasting progress, China exported food. The directive to make steel to replace imports led to back-yard “steel furnaces” producing worthless metal / converting anything metal. With farmers forced into steel making, not enough were left to harvest crops. Per capita food production dropped 50%. Some 30 million to 40 million people starved to death – about 5.5% of the population. A similar number were not born. 60 million dead/unborn and a 10% drop in population due to a central directive demanding unrealisticly fast transformation to an idealized goal. Great Leap, Great Famine Cormac Ó Gráda, University College Dublin WP13/04 March 2013 etc.

      North Korea’s Great Famine
      The USSR provided No. Korea with agricultural equipment and subsidized fuel. With rapid industrialization, energy use and farm equipment in North Korea reached about 50% of Japan’s. However, it relied on imports for transport fuel. No. Korea’s poor quality led to inadequate exports and it defaulted on loans, losing credit. USSR’s collapsed in 1991, ending fuel subsidies. By 1995-96, No. Korea’s energy regime collapsed. No. Korea lost most diesel fuel and tractor parts. The military fuel priority cut fuel to farmers by up to 90%, cutting tractor usage by 70-80%. Diesel shortages cut coal shipments to fertilizer factories. Fertilizer production collapsed from 600-800,000 tons to 100,000 tons/year. Without fuel, tractors, or oxen, farmers were reduced to subsistence agriculture. Food production dropped 77%. About 1-2.5 million people died (about 10% of the population) in 1991-1996 from centralized planning.
      Meredith Woo-Cumings, The Political Ecology of Famine: The North Korean Catastrophe and Its Lessons, ADB Institute Research Paper 31.

      Grid failure
      North American blackouts are being seriously examined. See. ’American Blackout’: Four Major Real-Life Threats to the Electric Grid etc.

      EPA’s forced power transformation
      Today’s EPA/radical “green” policies are showing similar symptoms of centralized planning. This is causing rapid closure of coal-fired power plants without ensuring replacement power. That will likely lead to grid failure during coldest winter/polar vortex periods due to insufficient capacity and destruction of backup plants.

  14. In Ohio, the Public Utilities Commission has already broken transmission from generation expenses, transmission is based on consumption (as is generation).
    If you build a solar plant in the middle of nowhere, you should also include running the cables to the grid.
    But I don’t want either my rates to go up due to alternate sources, if you can add alternates to the grid and make money, good for you, if you can’t well then you should do something else.

  15. It is amazing to me how many PVC owners or wanna-be owners can not get their arms around the problem created when they demand that utilities pay 2-3 times the cost for their cast-off power (retail vs cost to generate), plus the cost of storage or disposal during oversupply conditions, plus the cost of transmission and re-distribution, plus the cost of backup.

    In return for these unpaid shifted costs, the PVC owner gains the flexibility to buy a system with perhaps 1/2 the required solar capacity required for 99.9% reliability, with little or no storage capacity. They demand the right to sell retail-priced power while at work and using little or no power at home, then expect rate-payers to sell power back at the same price during peak hours, contributing to a system load which defines the minimum network and generation capacity.

    In many states they also demand that all taxpayers subsidise their PVC installation to boot. Including fellow citizens who are not wealthy enough to take advantage of the PVC subsidies.

    All the while many PVC owners truly believe that their subsidised installation is making a better future for society. Their is no denial like green denial.

  16. And another thing….

    It will be interesting to see the number of deaths due to falls as millions of homeowners start dealing with maintenance and repair issues with rooftop PVC installations. Perhaps a comparison with the same number of deaths per MW as compared to coal, natural gas, and nuclear power.

  17. All projects governments envisage based on monetary policies that keep the cost of money at zero can be expected to be unproductive endeavors because every project becomes a profitable when the money for it is free. Irving Fisher (celebrated economist) gave the example that you could theoretically pay back with fuel savings over time the ‘cost’ to flatten every railroad track in the US, so long as there is no interest on the loan.

  18. In Maryland the transmission/facility costs are billed as a separate item from the cost of power. That solves part of the problem.

    The reality is that renewables are like squirrels in overhead transformers, rats in underground cable vaults, and power line losses. They are a nuisance that the power company has to deal with.

    The power company would not subsidize squirrels in overhead transformers, rats in underground cable vaults, and power line losses, so they shouldn’t subsidize renewables either since it is unfair to the other rate payers.

  19. Seems to me the existing grid points towards a reasonable solution. Currently, a generator can supply power into the grid on a day-ahead or real time basis, with the price governed by the transmission system operator. In some cases, the generator can end up paying money for power dumped into the grid.

    Today’s smart meter allow this same principal to be easily applied to renewable energy suppliers (e.g. Solar panels on a roof). Alas, the “green energy” lads will not like this common sense market-based approach as they will not be able to profit at the expense of the hapless middle class.

  20. Good article. Solutions may be difficult for residential PV, for reasons including but not limited to smart metering. Conceptually, incremental backup cost charges to grid connected solar (ivanpah in California) and grid connected wind farms should be fairly easy from a commercial and accounting perspective. Measure their capacity factors and charge for incremental spinning reserve or gas peaker in two parts, standby and actual generation. In some places, peak load rates are already higher showing feasibility.
    That this not yet done is probably political. Renewable producers and their political advocates don’t want the cost of this hidden subsidy exposed. It will likely take a major disruption to force the issue onto the table. That appears to be coming in Germany (EON splitting off its now unprofitable conventional generation which will expose the hidden costs), the UK (grid stability, EON shutting Killingholme CCGT because unprofitable fivennthe subsidy structure), or California (explained in essay California Dreaming).

  21. Excellent post by planningengineer, as usual.

    I like the cost sharing scenarios. Though not too difficult for the average CE denizen, a simpler model is needed for the general public. If the public truly understood the costs to them of intermittent power from renewables the subsidies would be ended.

  22. Steven Mosher

    my buddy writes on this topic

    https://www.greentechmedia.com/articles/read/on-the-uncertain-edge-of-the-renewable-powered-grid

    hmm maybe I can get him to do a guest post

    • How much Renewable Energy can a Utility support? It depends on the integrated grid. While it is absolutely appropriate to talk about problems, its disingenuous not to put these problems in “context” or how engineering “work-arounds” are being developed and implemented.

      As I understand it, the “Duck Curve” potential long term problem in California was actually brought up by the System Operator. And here is the key that nobody talks about (certainly not the WSJ): It was brought up as the justification argument “WHY California needed to build new natural gas combined cycle units to track load.

      I posted this before at CE (I’ll look for the link) that the overwhelming number of U.S. electricity capacity additions in 2014 were flexible natural gas combined cycle units — mostly in California

      The “off the cuff” example I’ve given: Maybe in Mississippi, the proper amount of current Renewables will be less than 1%. Maybe in New England (which has a fleet of shiny new combined cycle NG Units that can track load and also that has access to Canadian Hydro power for back-up), Renewables could be greater than 10%.

      • Steven – I agree that it depends on the grid and that system and will vary by area and time as far as appropriateness of renewable penetration. There is some good work going around on what it takes to serve higher penetrations of renewables and shows you can raise the percentage numbers a bit with technology. But it has to be put in context a lot of times and sometimes it turns out the qualifiers make it impractical. Such that bringing it up is more misleading than helpful.

        Here’s a rough example. One thing conventional generators do is have the ability to provide a “surge” in power to respond to a fault. I might say intermittent renewables can’t do that. (That would be technically inaccurate but basically true.) Wind and solar can provide a surge, but at a cost. It’s been noted in studies around west coast penetration levels. What they have to do is generate below their capacity at all times until the surge is needed and in those brief instants they provide full power. It’s hard to cost justify installations in most cases so if you don’t take their full output so that you can get the “surge” well you’ve made the economics prohibitive in many cases. Maybe solar and wind farms will generate below the amount that the current wind and sun enable them to, so they can act more like synchronous machines – but don’t count on it being soon.

        I won’t ever disagree that problems can’t be surmounted and high levels of renewables might be able to dominate. I’d just caution watch the hype and unmentioned costs associated with the seemingly easy fixes..

  23. Planning Engineer — Obviously I think you are a “good faith guy” and a well qualified planning engineer.

    Where I continue to balk at much of our discussion here at CE is the “framing of Renewables. Much of the discussion is focused on the “traditional G-T-D electric utility”. This might not be the “Model” of the future.

    The blog topic you’ve posted is a complicated issue — and not just about individuals’ installing solar on their roof-tops.

    I sure hope I come across as respectful — but I just don’t think you can discuss this issue without looking at and bringing in what’s going on with Texas De-regulation as part of the discussion (say of including metrics of short or longer interruptions of Texas versus Germany).

    For example in Texas we can replace the word “Solar” with the word “Efficiency”. There are customers in Texas who have seen their electricity bills increase by becoming highly energy efficient. With their usage falling below a certain thresh-hold, they have been hit with much higher “demand fees”.

    Is this right? Should a person who chooses to be more “energy efficient” (less use) be penalized to maintain and operate a grid for folks who are not as energy efficient through higher demand charges?

    This is a complicated issue — not just framed as a solar issue.

    • Stephen – I think you are a good faith guy as well. Texas might need to be in this discussion but so might a lot else. I have to cut it somewhere and there things are left out. I think efficiency as well. I mean to oversimplify, but I don’t mean to suggest that oversimplification will be sufficient in the final analysis.
      Back in the Integrated Resources Planning (IRP) and Demand Side Management (DSM) days we really let folks who would over-extrapolate have a field day. They spoke of negawatts, the value of not generating . The foresaw saving so much money that utilities could pay people not to generate and benefit everyone. A lot of programs helped the participants but raised costs for the non-participants (like solar) plus they ended up depending a lot on Global Benefits in the end. A lot of the renewable crowd cut their teeth in DSM and IRP. Efficiency can be a good thing, but its usually hard to pay if you keep your numbers and cross subsidies in check.
      I would say the efficiency equation changes and depends a lot on assumptions. You can argue people who use less save money and sometimes it is true. Sometimes spreading costs out over more hours save money. Resource mix and price of gas will change that. But the key ingredient in saying less use means lower costs is that your new resources are costing more than your old ones did. Not true in the 60s and 70s. Was true in the 90s. If we started putting in natural gas and didn’t have all the inflated costs associated with todays favored programs, probably efficiency does not lower costs most places.

      • Steve Postrel – I am a huge admirer of Joskow, he was the voice of sanity who spoke intelligently during the IRP. I credit him for shaping much of my thinking. He gave academic credibility and helped articulate the case for some of us struggling against the demand side management hysteria. When I read him, my first thoughts were “maybe I’m not crazy”. I don’t belive he’s writing on issues today, but wish he was. I remembered he was from MIT and I was trying to google him but was thinking “Jastrow” when Stephen mentioned MIT experts below.

    • One other point. All kinds of customers and technology cost power companies different amounts of money and a lot of it is ignored because its too complicated and hard to identify, monitor and charge. We can’t get too exact with solar and I don’t mean to imply they are the only problem technology. For example ground source heat pumps. Some utilities love them because they can sell more electricity in the winter. But some hate them because they switch to inefficient resistive strip heat on the coldest days producing a spike (needle) in the winter peak that can be problematic for a number of reasons. Some used to love them and subsidize them and now they have been bitten and hate them. What helps a little with ground source heat pumps is the customer at least pays a bit when his meter is spinning with the high demand and has an incentive to slow down (even thought the energy at that point costs the utility way above the average price they are paying). Air conditioners perform a little different under fault conditions than typical resistive loads and in some areas this requires costly special equipment. But we don’t charge AC versus not (though in those areas – most everyone has AC). The point is we address things when we have to and we can, but a lot of small stuff is ignored. If you want to overhaul the system however – you need to pay attention to those costs.

      • Planning Engineer — It would be interesting for Dr. Curry to put together a Pay-Per-View event between you and some engineers from say, NREL, EPRI, MIT on this. I’d pay $25 to watch.

        One thing that we can agree on though is that decisions should be made by engineers and not politicians in Congress.

      • If we ever get a “smart” grid (the one where someone else can turn off your AC) and I hope we don’t, then the greenies might get a shock. It would also allow the power company to charge the real costs to each end point.

      • Stephen – I will take that as a compliment that you have me one on three, but I think we should get some notables for both sides. Seriously though – I don’t think the NREL or EPRI guys and I have fundamental differences. I’m just trying to tell you what they should at least add in small print.

      • One other point. EPRI has done a lot of good things and are an excellent resource in some areas. But go back and they have supported, pushed and been overly optimistic (and sunk a lot of money) into many things that were way too premature and have been abandoned or not worked out yet.

      • Stephen – agreed that engineers are a better choice for making decisions, but we also don’t need engineers whose thought process starts from an assumption that CAGW is a real problem that needs to be solved. No problem with developing new technologies with or without fossil fuels, but not OK with starting from a standpoint that expressly excludes any solution that uses fossil fuels as an option.

      • Barnes — As I have repeatedly stated here at CE, I just hate a Federal Renewable Energy Standard. I’m OK with State REPs as long as they are TARGETS, not locked in concrete mandates. I see nothing wrong in nudging Electric Utilities (at a State level) a little to think outside the box.

        I worked for one the largest Electric Utilities in the U.S. and have built and used numerous planning models. I’ve never seen a planning model that assumes CAGW in the code to drive decisions. I’ve just never seen it.

    • Ready-to-serve are fair and commonplace and can lead to higher per unit costs for low usage customers. We have that situation here in some water districts in California. Water tanks, wells, pipelines, service, maintenance, finance, billing, receiving, employee benefits, and management are expensive. Everybody has to share the cost. The actual cost of the water, or the abundance of the resource, is only part of the total cost.

      The solution is to disconnect from the grid and manage your own downtime. Easy.

    • There is an obvious truth that cheap power is good and means a higher standard of living.

      There is a green concept that power is a scarce resource and we need to conserve it.

      This is a lie. Power is not a scarce resource and in general the more we make the cheaper it is.

      The green viewpoint is power generation should be made expensive so that conservation makes sense. This green viewpoint is just plain outright indefensible, and is incredibly destructive to the economy.

      • PA — I think if you knew what the cost per kWh was for peaking power (using fossil fuels), you would be shocked.

        Personally, I think that greater use of “Time of Use Rates would give a better market signal in consumer behavior.

      • I sometimes let my disgust/contempt/loathing for environmentalists get the better of me.

        Let me look at the numbers. There are the green happy stories about how wind cuts peaking cost. I haven’t looked at it in while.

        I would expect the out-of-pocket cost of the resource is 2X but market pricing is going to be much higher. LCOE of baseband NG is around $64/MW-h vs $128 for conventional combustion turbine.

        I don’t really have a objection to time based pricing. They have rolled out the upgraded meters in most places so resisting it is spitting in the wind.

      • Stephen – what cost per kWh do you refer to as potentially causing shock? The cost of natural gas peaking provided by a combustion turbine or what the market price is sometimes for systems with majority fossil fuel generation or something else? I’m thinking natural gas CTs provide peaking power pretty economically. I would also think the factors causing market fluctuations in system kWh costs are not going to be improved by lowering a reliance on fossil fuels.

  24. Thanks planning engineer.
    Assume a 25% solar penetration in CA based on greenhouse restrictions so most rooftops and parking lot covers generate solar electicity. Lots of windmills generate intermittant power. Current electrical rates are 3 or 4 tiers based on usage. So public hearings to develop rate structures and backup plus distribution costs will sort this out. Utilities will make a profit and we can move the meters to measure a big renewable center on the left coast.
    \Scott

  25. When it comes to looking at network charges I’m reminded of the advice often given, if the last station, house, train etc in the network isn’t making a profit drop it off.

    It all goes to show that networks are supplying multiple goods and services, and if they are being provided by a regulated monopoly the regulator needs to look at each separately and on disaggregation some may not be monopolies and not need regulating (eg electricity generation and retailing). In this industry people are buying active and reactive power, capacity, maintenance services, and different levels of quality and reliability of all of the above.

    Once disaggregated many of the issues people have raised in this thread become academic. If you are buying a capacity to receive X amount of power of course you should pay for that, whether you use it or not. If you embed generation but still need that capacity or still require reactive support you need to continue to pay for those services and factor that into the cost of your embedded generation. If you don’t want it go off grid.

    And there are lots of good reasons why governments who think renewables are to be encouraged should do that directly and transparently rather than use hidden taxes on other participants in the industry.

    • The problem is that there are “economies of scope” among these different services, so that disaggregation can become inefficient, too. Different studies have concluded different things about whether it’s a good idea to separate transmission and generation, but almost everybody has found that it’s a bad idea to disaggregate combinations of the other services, e.g.

      http://link.springer.com/article/10.1007%2Fs11149-011-9166-z#page-1

      • Only just picked this up. The publication suggests the economies of scope lost in separating out the monopoly elements (distribution and transmission) are low, and it doesn’t consider the benefits of competition and greater innovation on the non-monopoly services.

  26. Everybody connected to the grid should pay the same fixed costs for available capacity, since they are the same for “regular” or “backup” power based on the size of the wires or phases available.

    People feeding in to the grid need to pay more fixed costs for feed in metering.

    People off grid don’t need to pay for a grid connection.

    Usage costs are same as before.

  27. Several weeks ago, Dr. Curry posted a story (from Motley Fool?) on supposedly skyrocketing electricity prices and that Renewable Energy was the cause. Most Denizens here at CE grabbed their pitch-forks to storm the gate.

    I went back over the period that the article cited. I saw that EIA and U.S. Dept. of Commerce data showed that electricity prices followed the cost of living/general inflation index (e.g., the GNP price deflator).

    Today, the Wall Street Journal has their own “conspiracy theory” on how Electric Utilities are out to gouge consumers: http://www.wsj.com/articles/utilities-profit-recipe-spend-more-1429567463

    Geez — give me a break.

    I just wish everyone would be required to step into a Regional Load Dispatch Center to see software at work that NASA would envy — and that System Planners try and replicate.

    No — There is no mass conspiracy going on.

  28. Possible solution for PV/Wind Power/Hydro Powered do-it-yourselfers.

    (Note – I did not read all the comments, so someone else may have posted something similar.)

    Just don’t allow self-generated electricity to be pushed back into the commercial grid (as we know it today). It seems to me that attempting to do such a thing is just not feasible at this point in time and is liable to cause strife and no solutions. And muddy the water on the real issues.

    Instead, do the following:
    1. The self-generating power person(s) can connect to the grid. But it is, as is generally the case now, only a one way connection. They have to pay for electricity they use at the same prices as everyone else.
    There is an argument to be made that they should possibly pay a surcharge based on a sliding scale of usage of the grid’s electricity. As an example, if a person wanted to be a 100% off the grid, they would have to create/manage their own battery storage solution. By allowing them to connect to the grid and purchase small amounts of electricity (during the night, etc.), they are not spending money for batteries. They should be willing to pay extra for this benefit. This benefit is quite an easy thing to measure (in dollars). The problem is one of communication (both accidental and on purpose).
    2. Self-generating power persons should be able to setup/manage a neighborhood power system. When scaling to such a size, the use of batteries may be cost favorable (especially when that technology matures a little more). They should be able to “sell” electricity to others at rates competitive with the power company. This may help drive innovation (possibly from the power companies themselves). Obviously, there will need to be new codes created (sigh, I hate codes, but kinda one of those necessary evils. They just seem to always overdo it.).
    3. Etc. (sorry, ran out of time).

    The above gets rid of all the headaches (well, most of them) for the major power companies and puts everything more on an equal setting. There would have to be some regulatory group in place to ensure that the power companies did not set the surcharge so high as to being mostly an anti-competitive measure. Although, once a person is really “off the grid”, such things would not matter. But there would (forever, most likely) be those (probably a majority) who want to have the grid as a nice “backup.”

    As someone who has lived “off the grid” among others where “off the grid” was moderately normal (Alaska), I can assure you that unless there is some sort of large monetary benefit (or, as the case was normal in Alaska, there is no other option), it’s just a VERY large pain in the butt to maintain an off the grid system. What normally happens is you hook onto the grid as soon as possible and maintain your “off the grid” stuff just for emergencies when the grid goes down (or, a fire or wind storm temporarily disconnects you from the grid : )

    GeoffW

    • If you are on grid down this way and the power goes down you can’t generate locally for safety reasons.

      My feeling is that people are worrying a lot about issues that technology is rapidly going to deal with. Smart transformers will move from focusing just on improving asset life and begin to add functionality that allows better load management including reactive power.

      Short-term storage devices will smooth out the peaks and help with VARS and the distribution system beyond the last transformer will start to be able to be managed as a local a/c grid rather than needing private DC micro grids. Local intelligence will be able to heuristically model local load characteristics and respond (managing the odd key bits of load) even without the intrusive monitoring implied by smart-plugs/appliances all joining in on the internet of things.

    • “There would have to be some regulatory group in place to ensure that the power companies did not set the surcharge so high as to being mostly an anti-competitive measure.”

      Apparently you do not know that in the USA all utility rates are controlled by public utilities commissions. Those commissions determine what latitude utilities are allowed to adjust their rates and fees without resubmitting their rate cases. In California, at least, this is an adversarial process. Also, in California, this is complicated for new technology adoption because commissions are political agencies with little technological knowledge of the details of the internal operation of that state’s electrical distribution system.

      This is evidenced by the recent media flap about the CPUC asking PG&E for help improving natural gas system maintenance rules. Until the 1990’s, PG&E’s San Ramon Research Center was the agency researching and writing guidelines on electric and gas distribution. When the CPUC required PG&E to shut down its research functions (supposedly because it was unfair for PG&E rate payers to pay for industry wide research activities) most of the USA utility safety rules remained frozen. So… who else were the CPUC people supposed to talk to about updating safety rules but PG&E and other gas utilities about current system problems and potential solutions? The news commentators seemed to think that was criminal collusion.

  29. Is there a reason beyond the semantic and tricky to lump hydro with solar and wind? Norway, BC, Paraguay, Hubei etc long ago adopted hydro for the same reason my part of the world adopted coal power. Maybe coal and hydro, along with nukes, should be lumped together as “doables”.

    Of course there are practical differences between doables: coal can’t run low in a drought and hydro can’t be mined out by 2300 AD.

  30. Excellent post, as usual Planning Engineer. Thank you. I invariably learn a lot from your posts.

    Here are a few references that I found particularly helpful:

    1. Energy Supply Association of Australia “Who pays for solar energy?http://www.esaa.com.au/policy/who_pays_for_solar_energy_1_1_1_1_1_2_1_1_1

    2. Graham Palmer, 2013, “Household Solar Photovoltaics: Supplier of Marginal Abatement, or Primary Source of Low-Emission Power?

    3. OECD/NEA “System effects in low-carbon electricity systemshttp://www.oecd-nea.org/ndd/reports/2012/system-effects-exec-sum.pdf

    4. Martin Nicholson and Barry Brook, 2013, “Counting the hidden costs of energy” “http://www.energyinachangingclimate.info/Counting%20the%20hidden%20costs%20of%20energy.pdf”

    #4 is a 3 page summary of #3. The table shows the average grid system cost for six OECD countries in $/MWh of delivered electricity for 10% and 30% penetration level. At 30%, penetration, nuclear costs $2.1/MWh and solar PV $55.6/MWh. Projecting linearly to 50% penetration the costs would be: Nuclear = $1.8/MWh and solar PV = $74.8/MWh.

    • In 2012, I did a very rough estimate of the additional costs of a system of about mostly nuclear versus mostly renewables to reduce emissions intensity of electricity by around 90% (similar to France’s emissions intensity of electricity). The estimate was $37/MWh for mostly renewables versus $4/MWh for mostly nuclear.
      http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.363.7838&rep=rep1&type=pdf

      Note this is not a sophisticated analysis. It is a ‘ball park analysis’. However, more recent studies have shown I was not too far off.

      I’d welcome Planning Engineer’s and other’s comments on that analysis.

      • Peter,
        very nice articles. What in the worlld to do. USA resistence to nuclear is essentially insurmounatable if irrational. Japan Fukushima killed it for a long time. Even though 25,000 people died in the tidal wave and 3 were injured at the nuclear plant it spooked the USA, Germany and Japan. We have to depend on China and India to build the plants to show the economics. I think France will also continue on the nuclear plant. The affuluent USA is hopeless until electricicty rates spike so high due to renewables and cutbacks in coal plants plus inevitable increases in natural gas prices.

        /we just cant’ buidl in this country. Sad but realistic. Maybe the Japanese will come to their senses rather than import coal but the Germans and US are stubborn and unrealistic.
        Scott

      • scotts4sf,

        Thank you. I share your frustration. However, I feel our focus should be on providing dispassionate, balanced, factual material to the large mass of people in the middle who simply want information and they will then make up their mind. I feel USA is the one country that can lead the world out of this, so that is where I feel our focus must be. I explained my reasons for that on WIR Politics and Policy in comments starting here: https://judithcurry.com/2015/04/19/week-in-review-politics-and-policy-edition-2/#comment-695211

      • Agreed, Peter your papers bring much clarity to the issues here.

        Very topical to this discussion:
        “Transmission is a significant component of the costs of Scenarios 1 to 4, but not of Scenario 5 [nuclear].”

        Nuclear is the the only “drop in” option which could simply replace old base load generation, often in situ, and using most of the existing transmission network. Potentially simple, fast and direct. But totally hamstrung by a generation of a certain faction on the left, and unlikely to change until those folks fade from the scene and a subsequent generation feels enough pain.

        Meanwhile, there are nearly 150 million households in the US. Having helped in a small way to establish a support organization for one of the largest private networks built in the early 1990s, and then doing similar work in the cable transition to digital service, I have significant concerns for the stability and security of a network with at least 150 million points of access, and the potential for many more.

        We used to say (to ourselves) “it’s only cable!” when facing an outage, but power is serious business and the system is truly critical to individual and national security. I am not privy to the details of the proposed transmission and distribution networks, but if the microcode contained in any component of any device on the grid can be compromised, then rest assured that someone will be burning some midnight oil trying to scheme a way to do so.

      • sciguy54,

        Thank you. I agree with all your points, However, I think we need to have a much more active and involved approach than this:

        But totally hamstrung by a generation of a certain faction on the left, and unlikely to change until those folks fade from the scene and a subsequent generation feels enough pain.

        Their effectiveness at raising the cost of nuclear power, delaying progress has progressively increased over the past 50 years.

      • The basic problem is not facts.

        The problem is that, as the gamechangersalon scandal showed, the MSM is basically a advocacy group for radical environmentalism.

        The only way to get realistic policies implemented (like more nuclear) is grass roots activism.

        The environmental groups practice churnalism where they regularly release regurgitated, or untrue stories to keep their viewpoint in the news and simply suck the air from the room. Real unbiased stories are buried in the chaff. The environmental groups fight any honest balanced presentation of the facts tooth and nail.

      • PA,,

        I agree with you, as I do with nearly all you say. I am doing grass roots activism as best I am able, as are you, and many other informed souls.

        What I’ve noticed is lack of response from Stephen Segrest and AK on this comment. They seem to really dislike having to face up to the costs of the policies and ‘solutions’ they advocate. So they ignore comments that reveal the stark difference between the costs of nuclear and renewables if those costs make proper comparisons on a properly comparable basis to provide a significant proportion of electricity supply.

      • Peter, i can’t give your paper the review it deserves now, but I gave it a look. It’s clear, persuasive and appears well documented. Ballpark analysis is a great way to screen if assumptions and modeling do not work to favor leading alternative, or penalize the lesser alternatives. Such analyses are more credible when you have the expectation that more detailed analysis would widen the gap.

        First pass you look crediblle but the cost deltas between the alternatives are staggering. (Which is your point and motivation). I wish I had the luxury of being able to dig down and see if I thought you were fastidious in being fair (or more than fair)to the losing alternatives. being unable to do that, I’d get secondary confidence knowing critics (or supporters) had not raised any substantive criticisms.

        I would feel better grounded if there was a “business as usual” case. That would be an anchor for changes plus it tells people how much emission reductions are costing us.

      • Planning Engineer,

        Thanks you for your comments. The Australian Energy Market Operator (AEMO) did an analysis of the cost of 100% renewable energy for the National Electricity Market. The report is here: http://www.environment.gov.au/climate-change/publications/aemo-modelling-outcomes. There are many subordinate studies and reports.

        The study was political. The Greens demanded it as part of their agreement to support Labor in an alliance government from 2010 to 2013. The terms of reference, various supervisory committees and inputs from various parties ensured the government got the result is was seeking. However, AEMO has caveats buried in the report such as: the cost would be higher than stated. I have not been able for find the details of the estimate of the additional costs for transmission. The report seems to be presented in a way that does not allow that to be separated out.

      • Planning Engineer,

        If you had time and wanted to, you could dig drill down into the analysis of the four renewables scenarios: http://bravenewclimate.com/2012/02/09/100-renewable-electricity-for-australia-the-cost/ . You can download the simple spreadsheet people check it and run sensitivity analyses: http://bravenewclimate.files.wordpress.com/2012/02/renewable-electric-nem-the-cost-v0-05.xls. The nuclear scenario uses the same spreadsheet and adds the nuclear scenario to the four RE scenarios; the inputs and intermediate outputs are shown in the Appendices of the paper linked above.

        Unfortunately, some of the links to sources are broken.

      • Peter- I’m not challenging or doubtful of your study at all. I don’t have time for a deep review so those comments are about as nice as anything I could say about a study with a quick review.

        As you note sometimes political (or agenda driven) studies contain their own disqualifiers internaly. They can often be picked up on a simple review. It amazes me how these internal can be overlooked as the findings are touted . There is US study that finds that a certain level of renewables can be reasonably well served under non-emergency conditions. The definitions and findings show that the study did not consider the response of the system to any faults. They call emergency any conditon with a fault and they don’t ask whether any fault might blackout the system or not. The system is always run and operated only within ranges where it can survive the next most credible fault within strict parameters. So it’s a lot of effort and time talking about integrating renewables at costs and efforts that seem like they might be reasonable but ithe system is beefed up only to to a level that is virtually meaningless. But it will get play and make people optimistic that we are close to resolving the issues.

      • Planning Engineer,

        Thank you. I didn’t mean to push you to do more than you wanted to. I was really think of the other audience and perhaps some lurkers who might be interested – and trying to stir-up more discussion of your post.

  31. I’m out here in CA, and get my energy from PG&E. In my area, the top rate for energy is 39c/kwh, or 13 times what the wholesale cost is. Why is this? Government meddling. I’ve paid exorbitant bills for a very long time to subsidize the poor (lifeline rates), other people’s refrigerators, insulation, etc., all at the behest of government. And no, you can’t write off these hidden taxes on your Federal forms. No free market system would pay you to use less of their product.

    The Solar business is one more example of that. I hope PG&E gets tied up in this for a long time, and it has consequences on other people’s PG&E bills (yes, I plunked down $25K to install solar, knowing it was evil and selfish to do so).

    In any event, that’s my view of the problem, and I personally hope to get significant return, help cause others to suffer, so the real problem, government meddling, is solved.

    • That is the point Ed.
      The orchestrated plan to shut Diablo Canyon, and raise rates to subsidized solar and wind will make CA rates very high. An affluent state can “afford” it and the less afluent will just have to go along with the schemes. lifeline rates vs solar backup and connection costs will require a total revamp of the four tier rate structure in the future.
      Richard

  32. I know several limousine liberals who have installed solar systems on the roofs of their multi-million dollar houses here in NM in order to take advantage of various subsidies and pricing schemes. Definitely doesn’t help the poor or the middle class.

    This article in the Weekly Standard today: http://www.weeklystandard.com/articles/might-well-go-green-yourself_921766.html

    • Curious George

      They are as bad as one Anthony Watts. There might be a difference, however; Anthony never lobbied for green subsidies.

  33. Danny Thomas

    PE,
    Wished to take a moment and thank you for this (and all your other) contributions. On a site known as “Climate……………etc.” It is often the etcetera which brings balance and perspective to the conversation. Here, your presentation of cost sharing approaches has brought me (yet again) to factor in an area I’d not even thought of. Your work is appreciated.

  34. Consider a “Property Insurance” model. One pays periodically for a guarantee that the insurer will compensate you for damages and liabilities (up to an agreed amount). The insurer invests the premiums in assets. If you under-insure or do not insure, you take the hit.
    Short-term outages (seconds) would not apply.
    Regular customers would not be surcharged.
    Backup customers would pay a fee for standby power up to a limit in KWH.
    For the “free-rider” needing power from the grid, then the utility would bill for arrears before they restore power.

  35. Related article:

    http://www.motherjones.com/environment/2015/04/new-front-solar-wars-who-owns-panels-your-roof

    ,

    “It’s all about control,” [Nick Culver, the lead US solar analyst for Bloomberg New Energy Finance] said. Utilities “can justify it [to their shareholders] by saying we’re going to profit from this, rather than waiting for other solar companies to take all of the market.”

    But independent solar companies and some regulators are concerned that letting big utilities into the rooftop solar market will unfairly squeeze out competition, hurt innovation, and ultimately stick customers with higher costs. The result, they argue, will be that fewer households end up choosing solar power.

    “The utilities are using their vast economic resources to encourage people to go with them,” said Gabe Elsner, executive director of the Energy & Policy Institute, a clean energy think tank in Washington, DC. “What we’re seeing is a monopoly trying to retain its monopoly.”

    • That is a related but different issue. You can have utility based and non-utility based entities providing home solar, but I would be pretty sure for utility back up service, that the utilities would not be allowed to discriminate against solar users based on who is providing the service. Utility backed or not you would still have the issue of which group of ratepayers (solar versus conventional) pays for what share of costs. might this make utilities more eager to subsidize solar backup because it works differently in their business model? I don’t know.

      • Curious George

        It would be nice to know how much is the cost of generation, transmission, and a back up/storage. Without those numbers, this is only a religious (but still interesting) discussion.

      • Those different costs vary from utility to utility, based upon geography, land costs, resource mix and fuel costs to name a few factors. Typically generation make up the bulk of costs, then distribution costs and lastly transmission. I’d swag the numbers as generation anywhere from 50 to 80%, distribution 20 to 45% and transmission 5 to 20%. Each of those different services provide backup for rooftop solar. Distribution could cost more for rooftop solar because you need the capability to feed in and take excess, for generation it would largely be fixed cost of the component likely coincident with peak usage and for transmission it’s all fixed so that would be likely/potential load coincident with peaks,

      • In Australia’s National Electricity Market (NEM), transmissions and distribution accounts for 53% of retail consumers electricity bills, generation 23% and retailing 24%.

      • Not sure what is meant by retailing in Austraila and NZ. What I think of as retailing would be part of distribution. What a huge percentage difference for generation between US and Australia. My link says generation was 68% for US in 2009. Maybe differing accountingi is responsible for a bit.

      • Planning Engineer,

        The figures I gave above are for the National Electricity Market, which is the eastern side of Australia. The breakdown for all of Australia’s electricity is just 19% attributiable to generation:

        Source: 2014 RET Review, Section 3.1.2, Figure 10 here https://retreview.dpmc.gov.au/312-impacts-electricity-prices

        The NEM is the largest grid in the world by area but the electricity sold is less than 200 TWh p.a. So, there is a high transmissions and distribution cost to low population density areas. Losses are about 3% in transmission and 7% in distribution average across the NEM.

      • Wind and solar contribute around 3% of electricity. They are increasing the cost of wholesale electricity (i.e. generation), transmissions and distribution by an unstated amount in the figure above. Environmental programs and the RET are increasing the cost of electricity by 16% (for 3% of electricity). That’s the sort of figure the RE advocates should be taking on board and think about! They should be considering what is the cost projection at 20% penetration. And what is the benefit?

        [Some of my comments are for the benefit of other readers]

      • Thanks Peter. Miles between meters is a common here for understanding differing distribution costs, but The big transmission difference still caught me off guard. Having a less dense area often goes hand in hand with lower quality service for cost savings so that I haven’t seen T costs that high. Hats off to those down under bucking that. It makes sense that more dense areas (Europe) will spend less on transmission then areas with lower density. Cole that with the clean energy push causing stronger more costly grids so that wind power can travel great distances, power can flow between areas with intermittents to capture diversity…. This should all else raise the % of transmission costs, but the generation can be so expensive maybe the % will shrink.

      • Interesting application for solar and wind in a coastal area with lots of sun /wind and land vs central coal or nuc plants far away that must dispach the power to low density populations along long transmission lines with power loss and high capital costs. that is why remote areas often use solar in place of new construction transmission. As solar panels come down in price and roof tops or back country; land is cheap it may changea the dynamic. All the economics is specfic to the circumstances.
        scott

      • Good point Scott. New technology at first should be expected in niche areas. Areas where the challenges, hurdles and costs are somewhat different allowing the benefits of the new technology some leverage, as the technology is improved, expanded and the costs come down it is ready for wider applications. When legislators just mandate new technology you get some bad applications.

      • scots4sf,

        Interesting application for solar and wind in a coastal area with lots of sun /wind and land vs central coal or nuc plants far away that must dispatch the power to low density populations along long transmission lines with power loss and high capital costs. That is why remote areas often use solar in place of new construction transmission. As solar panels come down in price and roof tops or back country; land is cheap it may change the dynamic. All the economics is specific to the circumstances.

        All true, but I think misleading. Only 2% of Australia’s population lives in fringe-of-grid and off-grid areas (see map page ii here: http://www.arena.gov.au/files/2014/12/ARENA_RAR-report-20141201.pdf . This 2% of population has 8% of Australia’s generating capacity and uses 6% of Australia’s electricity. Most of Australia’s electricity generation is close to the load centres so transmission for most of the population is not the long distances your comment suggests. For the 2% of population who live and work in the fringe-of-grid and off-grid areas, solar is becoming more attractive, but still diesel is cheaper (even with the subsidies for solar and the high remote area prices for diesel).

        Only 2 per cent of Australia’s population live in off-grid areas, however over 6 per cent of the country’s total electricity is consumed in off-grid areas. Around 74 per cent of that electricity is generated from natural gas and the remainder is mostly from diesel fuel; making it Australia’s most expensive electricity due to the underlying high gas and diesel prices in the remote areas. However, due to lower levels of coal generation, the off-grid market has the lowest average emission intensity of all of Australia’s electricity markets despite only 1 per cent of electricity is generated from renewable sources. An estimated 15,575 GWh of electricity was produced in 2012 by off-grid generation in Australia; supplied from a total installed off-grid generation capacity of approximately 5GW.

        http://www.arena.gov.au/files/2014/12/ARENA_RAR-report-20141201.pdf

        From a global perspective what is relevant is that most electricity will be supplied from grids and central power stations. So, to cut global GHG emissions we need to stay focused on fuel switching for central power stations and not get distracted into putting most of our time and effort into discussing the options that can address less than 5% of the problem. We need to apply the Pareto Principle and focus on where we can fix >80% of the problem (i.e. the (CO2-e emissions intensity of electricity).

    • From Joshua’s link:
      “It makes sense that the company would be worried about solar’s epic takeoff. In many ways, the solar boom poses an unprecedented threat to big electric utilities, which have done business for a century with essentially zero competition.”
      The writer is a bit optimistic about solar. Some might say it was foisted onto monopolies that couldn’t do much about it as they had to keep regulators happy. Rather than an epic takeoff, we have an albatross placed around their neck. That this utility hasn’t had competition is because it’s a child of government. Protected and directed by government. Competition would be a solar/wind/battery package that costs $10000, last for 20 years, is allowed on a ½ acre lot, require less than $100/year in maintenance and repair costs and provides 100% of my power needs 99% of the time. Perhaps the writer thinks that competition’s origin and health is highly dependent on government. The writer is correct for the wrong reason in that solar will drive up costs for some of the users and this will make few happy, possibly only the small solar owners. This might actually increase the number of small solar owners because by doing so, one can stop subsidizing them and begin getting their own subsidies. We can see that the situation might tip over at something like 50% small solar owners and 50% regular customers. Call it a small solar bubble/utility collapse/federal bail out. I think it can happen if you keep the subsidy spigot open. This is I think is the unprecedented threat mentioned by the writer. I have to think most utilities do see a threat from renewables. They would see very little threat if the renewables had to stand on their own, but I think the case is, government is pushing forcefully renewables upon them. Am I alarmist? Will the utilities and their consumers only be financially hurt a little bit or at some acceptable level? The writer also sets the tone of a number of small businesses being denied something. I think the case is they might be denied direct or indirect subsidies and that doesn’t match my definition of competition. I do empathize with the utility here. Framing the issue that small solar is part of the network and should be treated that way when it comes to costs. A different treatment is also not competition. The utility wants solar at a certain time of day. Some small solar is selling it at the wrong time, not what the utility wants most. That is not competition. Resiliency. We will see if the utilities have that?

      • Ragnaar –

        ==> ” That this utility hasn’t had competition is because it’s a child of government. Protected and directed by government…They would see very little threat if the renewables had to stand on their own, but I think the case is, government is pushing forcefully renewables upon them. ”

        Seems like a little simplistic (overly-unilateral) for describing the relationship , IMO. Utilities and related businesses give a whole lot of campaign contributions to politicians and judges.

      • It was simplistic. Utilities also get benefits from their relationships with regulators and lawmakers. I suppose they are somewhere between a mostly capitalistic company and an entity that works closely with government. It was one sided. As you know I think one side has the better answers most of the time, the libertarian side. I think the writer way trying to say, the problem is that monopolies didn’t have enough competition but does quite understand competition the way I see it, which admittedly might be agreed upon by only a tiny minority. We could say he was questioning the child of government to ask it become less productive. I guess one industry goes after another one using government as a means all the time. It was an interesting article, having me think of all the ways this could play out.

      • Without subsidies I don’t foresee solar as a good thing in most places for a long time. (But I May be wrong) . I don’t really have a position as to whether utilities should do it versus others so much. I jus think it should come closer to paying its own way before it is widely implemented.

        Sure I’m in a position to be biased, but you have to question how much competition could do for traditional electrical service. There are examples of huge screwup failed projects, but usually most systems perform pretty well. Knowing the laws of physics,fuel costs, construction costs and such you could calculate theoretical best case values for the major components of electric costs. The remaining costs are small. This should show that the potential percentage reductions are very low compared to many other sectors.

        There was a brief time when it looked like entities like Enron would provide benefits to the industry through competive approaches.. Power marketers used some unorthodox approaches, got creative and offered great deals that unfortunately did not hold up. You can’t legitamately and sustainably beat the system by a large margin.

        While I am not a unmitigated fan of all public service commissions, they do a good job preventing a lot of unwarranted costs (when ideology does not get in their way) and they usually punish screw ups.

  36. I fully agree with PE that there should be no subsidies for solar rooftops.

    However if a solar rooftop provides electricity to neighboring houses all on the same transformer, why should those neighbors pay the cost of their electricity to the electric company when it is the neighbor who has invested in very expensive solar panels that is supplying the electricity?

    These arguments that solar rooftops penalize the poor are exactly the arguments used a century ago to justify communism. They are no more valid today than they were then.

  37. Here are a few references that explain the hidden systems costs that should be attributed to solar PV generation, not to other consumers who do not have PV:

    1. Energy Supply Association of Australia “Who pays for solar energy?” http://www.esaa.com.au/policy/who_pays_for_solar_energy_1_1_1_1_1_2_1_1_1

    2. Graham Palmer, 2013, “Household Solar Photovoltaics: Supplier of Marginal Abatement, or Primary Source of Low-Emission Power?”

    3. OECD/NEA “System effects in low-carbon electricity systems” http://www.oecd-nea.org/ndd/reports/2012/system-effects-exec-sum.pdf

    4. Martin Nicholson and Barry Brook, 2013, “Counting the hidden costs of energy” “http://www.energyinachangingclimate.info/Counting%20the%20hidden%20costs%20of%20energy.pdf”

    #4 is a 3 page summary of #3. The table shows the average grid system cost for six OECD countries in $/MWh of delivered electricity for 10% and 30% penetration level. At 30%, penetration, nuclear costs $2.1/MWh and solar PV $55.6/MWh. Projecting linearly to 50% penetration the costs would be: Nuclear = $1.8/MWh and solar PV = $74.8/MWh.

    • Hidden costs of energy supply should be made visible and appropriately apportioned to consumers. For example, the owners of solar panels should pay their fair share of the costs of the electricity grid and the hidden cross subsidies provided by the reliable generators and network.

      Furthermore, the cost of electricity distribution networks for suburbs should be fairly apportioned to all properties. Therefore, the ‘supply charge’ should be split between the charge that applies to electricity consumers (applied on the electricity and gas bill) and the cost of the infrastructure charge that applies to all who live in the suburb whether they are connected to the grid or not. The cost of the electricity infrastructure should be included in the rates.

      • Hidden costs of energy supply should be made visible

        Fully agree. But if I power my neighbor’s air conditioner with my solar panel, what exactly is this “hidden cost”? How is that any different from my turning off my solar panels and my neighbor turning off his air conditioner at the same time? With no change in the demand on our shared transformer, how exactly how does that make the poor even poorer?

        You seem to making the same appeal to the poor as Marx and Lenin did over a century ago.

      • Read the references I provided and be willing to learn.

      • Read the references I provided and be willing to learn.

        Karl Marx could have said the same thing about his many books if he’d had the opportunity to blog. But the ability to learn is no substitute for the ability to reason. While those who learned from Marx’s writings absorbed the “wisdom” of his theories without questioning them, those who instead reasoned about them saw the fallacies.

        ESAA’s argument that solar PV benefits the rich at the expense of the poor is a tug at the same heartstrings Marx pulled on so effectively. ESAA has adapted Marx’s argument against capitalism to solar PV.

        It is therefore perhaps not surprising that none (to my knowledge) of the following important voices in Australia’s energy sector have seen fit to sign on as a member of ESAA.

        Australian Energy Regulator,

        Energy Networks Association

        Energy Retailers Association of Australia

        Lumo Energy

        Major Energy Users Inc.

        Red Energy

        Simply Energy.

        What is the Australian government’s COAG Energy Council view of ESAA’s literature?

        All that aside, as to ESAA’s claim that the grid may need expensive upgrading in order to support houses pumping electricity back into the grid, I’m not challenging that. Instead I’m making the obvious transformer-by-transformer point that when a transformer supports several houses only one of which has solar PV, the solar contribution merely decreases the load imposed by that transformer on the grid, it does not actually pump any electricity back into the grid itself. Any residential solar PV in that situation is therefore not impacting the poor any more than they would if all those on that transformer merely cut back on their usage on sunny days.

        Which thanks to the extra load of air conditioners on sunny days is exactly the circumstance under which the electric company itself asks users to cut back.

        If ESAA has ever analyzed the case of one solar PV on a transformer, please give the page number. If not then their reasoning is incomplete and it would be a waste of time reading all those references only to find out at the end that they don’t address the point.

      • Karl Marx could have said the same thing about his many books if he’d had the opportunity to blog. But the ability to learn is no substitute for the ability to reason. While those who learned from Marx’s writings absorbed the “wisdom” of his theories without questioning them, those who instead reasoned about them saw the fallacies.
        ESAA’s argument that solar PV benefits the rich at the expense of the poor is a tug at the same heartstrings Marx pulled on so effectively. ESAA has adapted Marx’s argument against capitalism to solar PV.
        It is therefore perhaps not surprising that none (to my knowledge) of the following important voices in Australia’s energy sector have seen fit to sign on as a member of ESAA.

        What a ridiculous comment. Clearly you don’t understand who ESAA represents -0 hint not the government organisations responsible for policy and for regulating the industry – ESAA loke BCA, ACCI, MCA, AGA, APPEA, APGA etc are represent their members to government.

        As I said in my previous comment: your comments are so ridiculous and irrelevant you are clearly motivated by irrational ideological beliefs and are trolling – as usual.

      • Clearly you don’t understand who ESAA represents -0 hint not the government organisations responsible for policy and for regulating the industry – ESAA loke BCA, ACCI, MCA, AGA, APPEA, APGA etc are represent their members to government.

        ESAA must be thrilled to have their raison d’etre and membership explained so clearly. Expect a thank-you note from them in due course.

    • From the OECD paper linked above and Nicholson and Brooks, summary of it, and linear projection to 50% penetration, the systems costs of solar are about 40 times higher than for nuclear. Solar is far more expensive that nuclear on all substantial cost items. So, what rational justification is there to advocate for solar?

      • the systems costs of solar are about 40 times higher than for nuclear

        Since my solar panels have no impact on the transformer I share with my neighbors other than to reduce the load on it, the only sense I can make of this factor of 40 is that if I’d bought a nuclear power station instead of solar panels I’d have paid only $1000 for it instead of $40,000.

        These calculations of the supposed impact of solar panels seem to be based on the assumption that every house is equipped with solar panels.
        Since we’re decades away from that happening, you’re talking about something decades into the future.

      • Since my solar panels have no impact on the transformer I share with my neighbors other than to reduce the load on it

        Irrelevant.

        You are not the only solar planet owner.

        Your commented are so silly, that since you were once a professor, you should be capable of recognising that one it is the sum total at time of peak output that counts. All PVs in an area power up and down together and suddenly.

        The fact you pretend not to understand that and ask ridiculous questions and make ridiculous comments demonstrates you are simply trolling and/or any rational analysis is not possible for ideological extremists. I suspect that applies just as much to your advocacy for CAGW beliefs as it does for solar power – all far Left extremism.

      • As above, read the references I provided and be willing to learn.

      • All PVs in an area power up and down together and suddenly.

        This interesting claim (the only substantive one you made) is worth exploring. Did you come up with it yourself or is it in an ESAA publication? If the latter it would be very helpful to know the page number.

        Bearing in mind that my point was for the status quo in California and not for some imagined future decades hence, we can evaluate this claim in light of the following.

        1. California has some 14 million housing units, of which 230,000 or 1.6% have solar PV. So even if every PV went on suddenly together and each PV was producing 100% of its house’s load, that could not impact the load by more than 1.6%. Any utility that could not withstand such a fluctuation would be a very poorly designed one.

        But that’s only the most extreme case, as the following considerations show.

        2. On a clear day (the norm in California these days) PV turns on gradually as dawn sweeps westward across the state. It is gradual mainly because there is little sunlight at dawn, though the sweeping effect also helps a little.

        3. On an overcast day there is little fluctuation.

        4. On a day with say 50% clouds, each PV transitions sharply at cloud edges. However for any given area the ramp-up or ramp-down will not be instantaneous but will take time equal to that needed for the leading or trailing edge of the cloud to pass over that area. With the 1.6% density of PV, any area large enough to have a significant impact will require considerable time for the cloud to pass, raising the question of what you (or ESAA) mean by “suddenly” for an area.

        since you were once a professor

        As a point of clarification I’m still a professor, more precisely a professor emeritus recalled to active duty, with my own office at Stanford, the same voting privileges on all matters at faculty meetings as any other senior faculty member, etc, etc. Had this not been the case I would not have elected emeritus status.

      • any rational analysis is not possible

        This is clearly the case. Equally clear is that you don’t consider yourself at fault in the slightest.

      • Since PL clearly enjoys being blunt, perhaps it is only appropriate to respond in kind.

        Mr Lang is one small cog in a giant wheel that in a number of parts of the world has had great success in opposing solar PV. The scale of this opposition is mind-boggling, and well described at

        http://www.latimes.com/nation/la-na-no-solar-20140810-story.html#page=1

        Those states in the US that are having great success in preventing solar PV such as Florida (which has even more sunlight than California) and other south-eastern states have succeeded in limiting their residential solar PV to about 0.1% of the level in California, thanks to energetic lobbying by affected utilities.

        From Peter Lang’s perspective, Florida’s residential solar PV installation rate is to die for. His nightmare is that Australia might end up like California instead of Florida.

        There is no rational reason why Florida should have so little PV compared to California other than vested interests and politics. That does not stop opponents of solar PV from creatively dreaming up reasons against it regardless of whether they hold any water. So far all such arguments I’ve seen are clearly ridiculous. If they were not, Californians with a thousand times as many residential PV installations as Florida would have noticed by now.

      • There is no rational reason why Florida should have so little PV compared to California other than vested interests and politics.

        There could be a rational reason. Perhaps it is the case that there no rational reason why California has so much PV in the first place, other than than green-ideology vested interests and political correctness.

      • There may be some rational reasons if you expect that decisions around home solar would at least be driven somewhat by the self interest of the homeowners who are paying for the panels. Ther cost of power in California is much higher than in Florida. The climate makes the average usage in Florida higher. When I moved from California to the southeast I found my electric rate roughly cut in half but my electric bill doubled. Homeowners driven by economics will be greatly impacted. Plus even if you are willing to spend somewhat more for altruistic reasons but money is somewhat a factor, this makes solar a bigger hurdle.

        Further Florida is wetter,many parts salt infused and has much greater corrosion problems. You have to expect they would not last as long in Miami as LA. Tie in economies of scale impacting contractor costs for installation costs and it may be surprising to some how much solar Florida has.

        Is it rational to expect that subsidies should increase proportionately more in Florida to get past these hurdles?

      • Perhaps it is the case that there no rational reason why California has so much PV in the first place, other than than green-ideology vested interests and political correctness.

        In my case the reason was an annual electricity bill on the order of $10K a year, thanks to air conditioners, pool pump, many computers, etc. For an initial outlay of $50K in 2008 my electric bill dropped to below $1K. I’m therefore now ahead financially.

        When I pointed this out a while ago, Peter Lang’s main objection was that my financial benefit came at the expense of the poor.

        This was Marx’s objection to capitalism. Those who identify proponents of renewable power with communists might reasonably expect that Marx’s objection should carry weight with them. Since the objection seems not to be having much impact in California it would appear that the state is not a hotbed of communism. :)

      • > Since the objection seems not to be having much impact in California it would appear that the state is not a hotbed of communism. :)

        Solar’s coming out big in Cali, Vaughan:

        For a long time, solar power has seemed like a thing of the future. A few environmentalists with a lot of money could afford it, but it wasn’t really available for everyone.

        That’s changed. Suddenly, solar power isn’t this weird fringe technology anymore. People get it not to save the planet, but because it’s a good deal.

        Today on the show: how solar power got so cheap, so fast.

        http://www.npr.org/blogs/money/2015/04/10/398811199/episode-616-how-solar-got-cheap

        We might need both communism and capitalism for a beneficial bootstrapping.

      • Peter Lang – “… Rational justification … to advocate for solar?”

        Here it is, in his own words, written without any shame. No wonder the poor and middle class are fed up with Stanford elites gourging at the public trough, pontificating about CAGW, and all the while advocating that we reduce consumption while they pig out.

        From VP:

        “In my case the reason was an annual electricity bill on the order of $10K a year, thanks to air conditioners, pool pump, many computers, etc. For an initial outlay of $50K in 2008 my electric bill dropped to below $1K. I’m therefore now ahead financially.

        When I pointed this out a while ago, Peter Lang’s main objection was that my financial benefit came at the expense of the poor.

        This was Marx’s objection to capitalism. Those who identify proponents of renewable power with communists might reasonably expect that Marx’s objection should carry weight with them. Since the objection seems not to be having much impact in California it would appear that the state is not a hotbed of communism. :)”

        Is that a smile or a smirk?

        Pool? AC? 10K/ month utility bill? Really?

        I live in the mountains just down the road from Palo Alto and it is just as hot here and I have no AC and my utility bill – all electric, no gas, no woodstove – is about $130 month year round for 4 people.

        If VP wants enviro-bragging rights he needs to lose the pool – replace it with a native plant garden – and plant native deciduous trees around his house for air conditioning. I recommend drought tolerant native oaks but there are other choices. For those who don’t know, Palo Alto, the home of Stanford University, has perhaps the mildest and most pleasant climate in the entire USA.

        As for the computers, there is the cloud. Rooms full of hot PCs is so 1990s.

      • Mr. Pratt – I’m curious if you are paying your part for grid maintenance, backup/standby power supplied by the power company, added burden on the power company to load balance due to the unpredictable nature of your solar power system? Do you think you are? Do you think you should?

      • Correction … Meant to write “10k/yr”

      • If VP wants enviro-bragging rights

        But I don’t. As I said, my switch to solar was for financial reasons. My interest in climate is in understanding it. I leave mitigation to others. If you find me driving a hydrogen fuel cell car when hydrogen stations appear in our neighborhood it will be because they don’t emit nitrous oxide or such carcinogens as benzene, formaldehyde, acetaldehyde, and butadiene (a matter of toxicity in my neighborhood, not of worldwide warming), while not taking as long to refuel as battery EV’s, with better range than any available BEV, and because they’re cool technology. But if my carbon footprint happens to go down, that’s gravy.

        replace [the pool] with a native plant garden

        Sounds like you’re more of an environmentalist than I am. That said, the part of our back garden (on the south side) that is not pool is already native plants. We had a lawn in the 1980s but took it out in the 1990s.

        and plant native deciduous trees around his house for air conditioning.

        For those without solar this is excellent advice. The benefit of deciduous trees on the sunny side of the house is that the leaves shade it in summer while their absence in winter allows the sun to warm the house.

        However it should be obvious that this natural air conditioning approach is incompatible with solar panels, which need sunlight to operate. But the solar panels do shelter the roof from the sun similarly to what the trees would have done.

        I recommend drought tolerant native oaks but there are other choices.

        We have three deciduous oaks and seven evergreen oaks (all quercus agrifolia). Not on the south side, obviously. Plus uncountably many oak seedlings, all very temporary.

        For those who don’t know, Palo Alto, the home of Stanford University, has perhaps the mildest and most pleasant climate in the entire USA.

        That’s more true in the mountains where you live than in the valley where we live, which tends to focus heat on us from the hills on three sides. Also Palo Alto is hotter than either San Francisco, or Berkeley where we used to live, or Pacific Grove where I’m typing this.

        As for the computers, there is the cloud. Rooms full of hot PCs is so 1990s.

        Excellent point, applicable equally to all electric appliances, which have improved in efficiency even in the short period since 2008 when we decided the time had gone to install solar panels. We upgraded the pool pumps to much more efficient models a couple of years ago, and next week will be replacing our 1988 air conditioner upstairs with a much more efficient model. Computers too have gotten smaller and more efficient, to the point where energy is not the main reason to move to the cloud, at least for those of us for whom MATLAB in 16 GB of RAM on an i7 meets our needs.

        So nowadays our immediate neighbors on the same transformer buy more of our solar panel output than they did seven years ago, at the going rate.

      • I’m curious if you are paying your part for grid maintenance, backup/standby power supplied by the power company, added burden on the power company to load balance due to the unpredictable nature of your solar power system? Do you think you are? Do you think you should?

        Spoken like a true socialist. We capitalists are happy to let market forces do their thing.

      • @PE: When I moved from California to the southeast I found my electric rate roughly cut in half

        That could well account for less motivation in Florida to install solar, independently of whether your bill increased (since if it did then you’d need proportionally more solar).

        Further Florida is wetter,many parts salt infused and has much greater corrosion problems. You have to expect they would not last as long in Miami as LA.

        I can see that for the Everglades, which has extensive brackish water. What proportion of Florida is like that?

      • Electricity is inexpensive in Georgia also

      • Vaughn

        “… my switch to solar was for financial reasons…”

        Ok, that is honest, so I retract the belligerent parts of my post, which I should do in any case. My apologies. I experienced posting regret. :)

        It is also partly true that Palo Alto has a different exposure than many parts of the Santa Cruz Mountains. Palo Alto does get the cooling breezes from the SF Bay. I worked for appx. 5 years in Palo Alto and Menlo Park. I believe that parts of Palo Alto were likely oak woodlands and oak savannas which tend to be hot and dry. Where I live, in a mixed evergreen forest, the mode max temp in the shade in the summer is 84 F, with temps in the 90s common. I planted native big leaf maples around my house, which are winter deciduous, and they are my air conditioners.

        Regarding PV, the tax credits, deductions, and other subsidies are not capitalism, and neither is net metering. Someone has to pay for that, and it should be the solar customer, not the rest of the customer base. The mix of government and business, in this case the politically appointed PUC and PG&E, is prone to corruption and political patronage.

      • Solar PV cost 2 to 5 times the cost of conventional power. Someone is paying the difference. There are massive hidden subsidies. Therefore, it is damaging the economy and that results in people in that country being worse off on average over the long term than they otherwise would.

        Look at Figure 6 here to compare costs of scenarios to reduce the CO2 emissions intensity of Australia’s’ electricity to that France’s.
        http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.363.7838&rep=rep1&type=pdf

        There are many authoritative studies from other countries giving the same message – i.e. solar power is hugely expensive. Therefore, someone is paying. Furthermore, it does nothing to reduce global GHG emissions (hint: ’emissions leakage’, look it up)

      • Vaughn Pratt. All else equal if gas costs a lot more you will sell more hybrids/electric/fuel efficient vehicles than you would someplace with cheaper gas, same deal with electric prices and solar installations. If you want to nationalize electric prices then it may make more sense to compare Florida and California. The extra consumption just makes it harder to adopt a bad idea for altruistic region.

        What part of Florida besides the Everglades might be more corrosive? If you have not been to both, Florida had much higher humidity than California. Record high humidity days in LA would be a dream come true low humidity day for much of Florida. There is tremendously more rain and molds and fungus across Florida as well (I’d take a bet any day the Florida had more pressure washers per capita, more frequent need for repaintings. It’s harder to keep stuff from rotting?). I’m no expert on how or why but The salt corrosion close to coastal Florida is worse the California from my experience. Utility corrosion in Coastal Florida a is a bigger deal than in California. (Impacted by more salt transportation through humid breezes? Maybe storms?). My experience from friends in car clubs is that older vehicles in California are more likely to age better because of lower corrosion as opposd to the southeast US. In any case most southerners think that.

        Do you think California does a better job when it comes to hurricanes and Florida when it comes to earthquake preparedness based on their repawctive damage from each. I hope not. They are differnt places. They have differnt needs and drivers for many things and will not me arch each other often for rational reasons, nt because one is backwards.

  38. The only frontier for low-density power generation that I’ve seen that has any promise is to try to improve wind power by reaching to higher, stronger, steadier winds using kites. I’m skeptical that the operational issues and inherent reliability problems can be overcome, but at least there is an in-principle source of energy there that would be less intermittent while also reducing the amount of materials per generator substantially. One outfit working on this stuff is here. I wish them luck.
    http://link.springer.com/article/10.1007%2Fs11149-011-9166-z#page-1

  39. This one has a fun promotional video:
    http://www.enerkite.de/en/

  40. Similar to how landlines work(ed). Inroduce a monthly fixed cost, and lower the usage cost, such that the new combination of costs leaves the conventional users’ bills unchanged. This will mean the renewables users are being properly charged. Which is both inherently fair, and avoids a death spiral.

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