Conservative heavyweights have solar industry in their sights

[bencrix]

Even w/o invoking indirect subsidies ("externalities" like environmental and health impacts, security, etc.), renewables are directly subsidized to a far lesser degree than coal, oil/gas, and nuclear.

Utilities are asking legitimate questions about whether we want "cross-subsidies" for solar power (i.e. the large mass of ratepayers subsidizing the small group who invest in solar and receive some form of net metering).

They did not call for a similar debate when putting in place subsidies for nuclear power that essentially asked ratepayers to subsidize future residents / generations.

But nuclear aligns much better with their traditional regulatory model than solar does.

There need to be much broader discussions of energy policy in this Country (and this State and this City).

[spuwho]

Even w/o invoking indirect subsidies ("externalities" like environmental and health impacts, security, etc.), renewables are directly subsidized to a far lesser degree than coal, oil/gas, and nuclear.

Utilities are asking legitimate questions about whether we want "cross-subsidies" for solar power (i.e. the large mass of ratepayers subsidizing the small group who invest in solar and receive some form of net metering).

They did not call for a similar debate when putting in place subsidies for nuclear power that essentially asked ratepayers to subsidize future residents / generations.

But nuclear aligns much better with their traditional regulatory model than solar does.

There need to be much broader discussions of energy policy in this Country (and this State and this City).

Agreed on the broader discussions on energy policies, but with high involvement of special interests supporting their respective industries, any decision will be fraught with lawsuits and legal entanglements for many years.

Stephen referred to a coming change in the order of certain industries, I think this is a perfect example.

As solar inches yet closer in cents per kwh to mass generation, this issue is going to get larger. But its going to take a few years to reach it.

What if WalMart decided to build out a solar infrastructure on the roof of every store around the globe?  Once the price of solar reaches that level, then there are going to be big problems in existing policy.

[bencrix]

RMI has been producing a series of interesting articles regarding what is at stake (an example is excerpted below w/ a link). I am guessing that some of these issues are prompting some utilities to "act out" in places like those mentioned in the article that started this thread.

http://blog.rmi.org/blog_2014_04_15_the_urgent_need_for_innovative_business_models

Apr 15, 2014

The Urgent Need for Innovative Business Models: Could RMI's Economics of Grid Defection base case and more aggressive scenarios actually have been conservative?

Earlier this year RMI and partners Homer Energy and CohnReznick Think Energy released The Economics of Grid Defection, a report that predicted when and where solar-plus-battery systems might reach parity with retail electric prices. In other words, it identified the times and places that customers could defect from the grid by installing an off-grid solar-plus-battery system to get their electricity as cheaply and reliably as from their utility.

...

Consider these significant changes and market developments that have taken place since The Economics of Grid Defection released at the end of February:

For example, Bloomberg New Energy Finance, whose battery cost forecasts we cited in our base case, lowered its projections in favor of faster cost declines—by nearly $200/kWh!—from 2012 through the first quarter of 2014 alone.

Our report modeled lithium-ion batteries as a storage technology, the same type of battery found in most electric vehicles (EVs) on the road today. As more vehicle manufacturers race to release hybrid and all-electric vehicles to meet customer demand for cars that are cheaper to drive and that can meet stricter government mileage standards, battery prices are expected to drop via economies of scale to meet that demand. The Electric Vehicle Initiative's 15 member governments found that EV sales more than doubled between 2011 and 2012 and that battery costs dropped by over 200 percent from 2008 to 2012. Extrapolating forward, and realizing the incredible innovations being made by the likes of Ambri and others, a $125/kWh battery might not be so far off.

To wit, Tesla is targeting battery prices in line with our accelerated technology scenario. The EV company recently released details of a high-volume lithium-ion battery manufacturing "Gigafactory" that will produce more batteries annually by 2020 than all of the batteries produced in 2013. Tesla plans to use this plant to support its mass-market car, supply batteries for up to 500,000 vehicles per year, and drive down the battery per-kWh cost by 30 percent—matching the $125/kWh target used in our accelerated technology scenario. With partners like Toyota and Daimler already using Tesla's batteries in their vehicles, it isn't hard to imagine the macro effect this factory will have on the industry and battery prices overall.

Furthermore, no-cost financing for batteries will cause a surge in grid-ready battery storage systems for homes and businesses alike, as no-cost financing already has done for solar systems. Offerings by companies such as Green Charge Networks have already shown utility bill reductions of 15 percent or more.

Finally, the Department of Energy's SunShot Initiative aims to make solar energy fully cost-competitive with traditional energy sources by 2020, which is what the report assumed could happen in its Aggressive Technology Improvement scenario. JinkoSolar, a Chinese manufacturer, already reached the SunShot goals of sub-50 cent per Watt solar modules.

...

So if parity is coming even sooner than we thought, it is more urgent than ever for utilities and regulators to act quickly. Utilities and regulators need to evolve business models and policies so we can live in an electricity future in which grid-connected solar-plus-battery systems are optimized for individual customer and societal benefit.

[spuwho]

I like the fact that this blog refers to the spin off industries that a cheap battery supply can create.

While people think of batteries for EV's and Commercial UPS systems, a real target market for the industry is for non-commercial home use.

Either the use of solar roof shingles or LNG based fuel cells combined with these next generation batteries that are mass produced so cheaply that it will be considered a standard addition/appliance with any new home (like your AC unit).

That market is massive and has huge economies of scale available to it.  It will still be a few years, but when it reaches the sweet spot, it will be massively disruptive to the current energy regulatory environment we see today.

[simms3]

Houston/TX (and everything it stands for) v San Francisco/CA (and everything it stands for).  Lol, ages old at this point...at the end of the day it's just politics.  The two energy sides and cultures inherent in any form of energy market are not all that different.  But the means to the end, the politics, is virtually opposite.

Whatever the Koch brothers say or do is not going to change the fact that the country's largest economy, by far, is still requiring all new residential construction to be net zero energy certified by 2020, and all new commercial by 2030.  And tech and all of the other drivers of this massive CA economy are not showing any signs of slowing down any time soon.  Houston folks better keep praying to the oil gods that crude prices remain high.  They have nothing otherwise.

[Rob68]

Alternative energy education should begin in 4th grade! With enough time we can heal the damage the
industrial age and greed has caused.

[finehoe]

We've now entered an era in which affinity politics has gotten so toxic that even motherhood and apple pie are fair targets if it turns out that liberals happen to like apple pie. There are dozens of good reasons that we should be building out solar as fast as we possibly can—plummeting prices, overdependence on foreign oil, poisonous petrostate politics, clean air—but yes, global warming is one of those reasons too. And since global warming has now entered the conservative pantheon of conspiratorial hoaxes designed to allow liberals to quietly enslave the economy, it means that conservatives are instinctively opposed to anything even vaguely related to stopping it. As a result, fracking has become practically the holy grail of conservative energy policy, while solar, which improves by leaps and bounds every year, is a sign of decay and creeping socialism.

Does it help that the Koch brothers happen to be oil barons who don't want to see the oil industry lose any of the massive government support it's gotten for decades? It sure doesn't hurt, does it?

http://www.motherjones.com/kevin-drum/2014/04/right-wing-trains-its-hysterical-eye-renewable-energy

[spuwho]

We've now entered an era in which affinity politics has gotten so toxic that even motherhood and apple pie are fair targets if it turns out that liberals happen to like apple pie.

I agree on the era of affinity politics, but it has been happening both ways unfortunately.

[bencrix]

The two energy sides and cultures inherent in any form of energy market are not all that different.

I can't agree w/ this. They are fundamentally different: centralized vs. distributed; fuel extraction vs. technology development; monopolies vs. competitive marketplaces; major negetive externalities vs. very few / none; mega-finance vs. innovative business models; structural subsidies vs. intermittent incentives. These are just some of the starkest differences. It's like saying sprawl culture is the same as urban culture.

If the politics were the same (or inconsequential or "happening both ways") then we wouldn't have the situation we have today, where solar and renewables provide a fraction of our nation's energy, it is illegal for businesses to build and sell renewable energy systems in Florida, and utilities get bigger returns for selling more energy and we pay less for each kWh we waste on the margin (among other realities). The politics are highly asymmetrical.

I'm hearing a lot of the "false equivalence" narrative here that unfortunately dominates discussions of climate change too. I recognize that I'm getting pulled into setting up too many dichotomies here too. It's counterproductive.

Natural gas, for instance, is very synergistic with renewables. Nuclear power has a big role to play. Some people think coal w/ carbon capture and sequestration will play role.

I guess my point is that we don't have rational discussions regarding energy policy. Fiddling while Rome burns.

[IrvAdams]

Someone mentioned an idea/paradigm regarding competitive fuels that I had never really heard phrased this way before. He said the problem is that auto makers, electric companies, etc. don't realize what business they're in.

For instance, auto manufacturers are in the car making business and electric utilities are in the electric creation/distribution business. What the car runs on is irrelevant, as is the type of engine. Also the type and distribution of fuel for electric generation is irrelevant.

So all car makers (especially the big ones) should have been the first and fastest to develop good, competitive electric autos years and years ago. Likewise, electric utilities should have always been on the solar forefront, experimenting and setting the standard.

Instead, small, aggressive and creative independent companies have had to fill the void.

[finehoe]

I agree on the era of affinity politics, but it has been happening both ways unfortunately.

Really?  What's an example of something liberals are against merely because conservatives are for it?

[simms3]

The two energy sides and cultures inherent in any form of energy market are not all that different.

I can't agree w/ this. They are fundamentally different: centralized vs. distributed; fuel extraction vs. technology development; monopolies vs. competitive marketplaces; major negetive externalities vs. very few / none; mega-finance vs. innovative business models; structural subsidies vs. intermittent incentives. These are just some of the starkest differences. It's like saying sprawl culture is the same as urban culture.

If the politics were the same (or inconsequential or "happening both ways") then we wouldn't have the situation we have today, where solar and renewables provide a fraction of our nation's energy, it is illegal for businesses to build and sell renewable energy systems in Florida, and utilities get bigger returns for selling more energy and we pay less for each kWh we waste on the margin (among other realities). The politics are highly asymmetrical.

I'm hearing a lot of the "false equivalence" narrative here that unfortunately dominates discussions of climate change too. I recognize that I'm getting pulled into setting up too many dichotomies here too. It's counterproductive.

Natural gas, for instance, is very synergistic with renewables. Nuclear power has a big role to play. Some people think coal w/ carbon capture and sequestration will play role.

I guess my point is that we don't have rational discussions regarding energy policy. Fiddling while Rome burns.

I think you'd be surprised that TX and CA, while politically on opposite ends of the spectrum, are both "energy" states that share similar histories and "wild west" cultures that have for generations bred a higher degree of innovation and advancement of the industry as a whole (and other industries).  The oil companies aren't 100% oil.  And the solar companies aren't financed as incrementally as you think without subsidies (dear Lord, Solyndra was one of Obama's biggest scandals!).

My point was to be taken extremely high level.  You have a bunch of smart energy guys in TX who are all Repub/Libertarian.  You have a bunch of smart energy guys in CA who are all liberal/libertarian.  These guys all employ lots of smart engineers and chemists who all come out of the same schools in this country and move to one of these states.  At the end of the day, they aren't as different as we give them credit for.

Calpers shares a headquarters between San Jose and Houston.  Literally.  Google is getting into the game (they just funded a solar thermal plant here in CA) just like BP got into wind energy.

At the end of the day, the folks in CA are going to beat out the folks in Houston.  It's just going to happen.  The major breakthroughs are going to happen here.  Google slinging cash around is about as big finance as it gets (have you looked at Goog's books?  They are basically a country, LoL).  Google is the "smartest guys in the room du jour" right now, and it's likely to be another Bay Area company after them, but in the 90s it was Enron in Houston.  Same kind of deal, different political flavor.

[simms3]

An interesting EPA list just came out...

http://www.epa.gov/greenpower/toplists/top30localgov.htm

Of the Top 30 cities using renewable energy (or providing on-site using renewables), Houston ranked #1 in sheer KwH.

Ranked by KwH with % of electricity used in parentheses:

1) Houston (48%)
2) DC (100%)
3) Austin (40%)
4) Dallas (40%)
5) Montgomery County (26%)
6) Philadelphia (18%)
7) Chicago Public Schools (20%)
8 ) DFW Airport (30%)
9) Portland OR (103%)

At the end of the day, Houston has a gay mayor, has been making lots of "green" lists, and is a dynamic, growing city with a huge economy and a super diverse, educated population.  All of this mud-slinging is really just Washington politics.  I'm sure the "conservative" energy guys in Houston and the "liberal" energy guys in CA get together routinely and are buds.  Everybody no matter what they produce wants a handout and today's business leaders see what the future holds, even if yesterday's business leaders (aka today's lobbyists and occasional Congressmen) don't.  Heck, elements of both TX and CA don't even feel like they are officially part of the US...people in both states basically could give a crap what goes on in Washington.  The two states definitely move to the beat of their own drum.

Anybody who has driven across TX on 10 sees humongous wind farms on the other side of SA.  I keep bringing TX up and CA up because people tend to associate TX almost exclusively with oil and Republicanism and CA exclusively with green energy and liberalism.  But neither fits those stereotypical molds and when we hear of "the energy" companies getting subsidized and the Koch Bros bitching, we are really just witnessing a routine if not flawed system and a bunch of New York City conservatos going at it.

Let the Tea Party run itself out of steam and existence...

[spuwho]

Sounds like most new generation coming online is the good kind.

Per Next City

http://nextcity.org/daily/entry/92-percent-of-new-u.s.-power-plant-capacity-this-year-came-from-renewables

92 Percent of New U.S. Power Plant Capacity This Year Came from Renewables



Earlier this month, the Office of Energy Projects at the U.S. Federal Energy Regulatory Commission released their monthly update on new electricity generation projects, and the news is bright for renewable energy: a full 92 percent of all new capacity added in the United States so far this year came in the form of renewable energy, a larger share than over the same period last year.

In the first three months of the year, 1,150 megawatts of new generation capacity, in the form of new plants or expansions of existing ones, came online in the United States. Of this, all but 91 megawatts came from renewable generation sources. Solar took home the crown with half of the new capacity, while wind picked up the majority of the rest, with 37 percent of the added capacity. The only major non-renewable source to add capacity was natural gas, which added a measly 90 megawatts of generation capacity.

Compared to the same period last year, much less overall capacity was added — from January through March of 2013, the country added nearly 3,300 megawatts of capacity, or nearly triple the amount that came online this year. But the renewable slice of the pie grew, up from 84 percent over the first three months of last year.

The largest two renewable projects to come online in March were in New York and California. In Wyoming County, in Western New York, the 92.8-megawatt Orangeville Wind Farm was activated. The farm has 58 turbines, each 430 feet tall (which, in addition to electricity, generated a bit of controversy when approved), and was enabled by the state's Renewable Portfolio Standard, which aims for a 30 percent renewable share of the electricity market by 2015.

Meanwhile, on the other side of the country, the largest project to start producing electricity last month was phase two of the Genesis Solar Energy Project in Riverside County, outside of Los Angeles in the sprawling Inland Empire. That array of solar panels can produce up to 125 megawatts of electricity, which will be sold to Pacific Gas & Electric.

Zero coal, nuclear or oil capacity (or close to it, in the case of oil last year) was added in the first three months of either this year or last.

[simms3]

392 MW of the solar comes from the February opening of the Ivanpah Solar Thermal plant in the Mojave Desert.  $2.2B, $1.6B coming from the feds and $168M coming from Google.  Warren Buffett spent the same amount on a PV plant up the road in Bakersfield that puts out 1.5x the power, just to give an idea of which form of solar is currently more efficient.

I'd say we'll have to look at year-end, because this past quarter was definitely inflated as a result of the opening of that plant (these things don't open that frequently yet).

As you mentioned, the other plant to open this quarter was in Riverside County, also in CA.  So between Genesis an Ivanpah, solar saw a very non-consistent spike in additional capacity.