It seems to me…
“Solar power, wind power, the way forward is to collaborate with nature – it’s the only way we are going to get to the other end of the 21st century.” ~ Bjork.
Crescent Dunes in Tonopah, Nevada, represents a new generation of commercial solar generated electrical power. 360,000 mirrors concentrate the sun’s energy to heat a steel silo containing 70 million pounds of molten salt to 1050F degrees[i]. The heated salt is placed in a storage tank where the heat is used to generate electrical power 24 hours a day.
While Crescent Dunes is the latest effort to generate energy commercially in the U.S., the development with possibly the greatest potential impart is the increasing number of private homes installing rooftop photovoltaic (PV) solar panels – a new installation occurs in the U.S. on average about every three to four minutes. More PV panels were installed in the last 18 months than in the previous 30 years.
In the last five years, energy capacity from wind has tripled and solar has increased sixteen fold providing 90 percent of all new capacity installed in the first quarter of 2014. These, however, since they are starting from such a low initial installed base still only account for about 6 percent of all U.S. electrical production.
The switch to renewables is accelerating and no longer is dependent on subsidies though there still are some dinosaurs such as Congressman Paul Ryan who referred to them as an “ill-fated venture” in his 2014 budget proposal. As more renewables are deployed, costs decline as new technologies and production achieve an economy of scale. In many parts of the country, wind has become the least expensive source of electrical power. The cost of solar energy production is declining faster than for wind; the price of PV solar panels has declined 80 percent in the last four years. If fossil fuel subsidies were eliminated and a carbon tax imposed to cover carbon combustion’s impact on health and the environment creating a level playing field, nonrenewable power generation would no longer be competitive. Elimination of those subsidies is not likely as lobbyists for utility companies are some of the most powerful and entrenched special interest groups in Washington.
Even large financial corporations including Bank of America and Goldman Sachs are now investing in solar installation. Rooftop installations are starting to threaten large corporate producers as home and business owners produce increasing amounts of electrical power. Some investment rating companies have downgraded bonds from the entire electrical sector.
Regulated power utilities who make their money by selling electrical energy consider the rapidly increasing number of rooftop solar installations as competition and rather than adapt to this change have chosen to fight by limiting customer ability to sell power back to the grid. This is not to deny there also are very serious legitimate concerns. No one, much less the power utilities, was able to foresee the rapidity with which PV installations would increase. Much of the U.S. power grid is archaic and in need of updating – the grid was never designed to convey power in two directions and too much PV on a circuit can result in overvoltage and reliability issues.
10 percent of electrical customers in Oahu, Hawaii, have now installed rooftop PV panels and overvoltage in some locations has become a very real problem. The local utility company felt it did not have any choice other than to limit additional installations and charge a grid upgrade fee for each installation approved.
Another aspect of the problem is the policy known as net energy metering where customers are paid by the utility for the excess power their systems generate. Only limited technology currently exists to store excess power and there is a potential, especially on small grids such as in Hawaii, for more power to be generated than is required. Electrical utilities do not feel they should be required to compensate customers for unused power. This should not be a problem for large grids such as in the continental U.S. within the foreseeable future until storage technology is available.
Perhaps the greatest fear of electrical utilities is the so-called utility death spiral where while current customers convert to solar power, the companies still are required to maintain their installed distribution system. The declining customer base will force companies to increase rates for non-solar customers forcing remaining customers to convert to solar reducing the customer base even further.
Most customers will continue to partly rely upon the distribution grid for the foreseeable future: solar energy is not available at night or during inclement weather and battery storage is expensive. If energy storage becomes cost effective, this dependency could quickly change.
There are numerous changes that while supporting electrical utility company profitability would encourage increased private PV installation including:
- Utilities should be required to unbundle their services into separate product categories for electrical production, storage, and delivery to generate competition in these different areas and, hopefully, increase efficiency and reduce costs.
- Granting of public utility monopolies should be prohibited enabling users to contract with the lowest price provider in each area of service.
- Utilities are entitled to be reasonably compensated for provided services but consumers need greater flexibility and options in their selection of providers.
- Utilities also should be required to compensate end consumers for power fed back into the grid (net energy metering) at a substantial percent of a consumer’s base cost up to the amount of that customer’s normal monthly charge if that energy is provided to another customer.
- A so-called partial destination-based carbon tax should be imposed on the limited number of products associated with consumption or use of fuels with “significant” carbon emission content to compensate for health and environmental degradation.
- All new construction, including homes, should be required to provide a minimum of 5 percent of their normal structural energy requirements from renewable sources.
This list is not complete nor will it satisfy most people. As always, while it is relatively easy to create such lists of what we personally might prefer, attaining agreement on implementation details and specifics is what always is difficult.
That’s what I think, what about you?
[i] Grunwald, Michael. The Green Revolution, Time, 16 June 2014, pp40-45.