Showing posts with label Energy incentives. Show all posts
Showing posts with label Energy incentives. Show all posts

30 December 2012

Energy Subsidies


Anti-wind and anti-solar folks (yes, there are a few out there — mostly tied to the fossil fuel industry) love to bring up renewable energy subsidies. However, there are so many reasons why they really shouldn’t be eager to do so. For example, fossil fuel and nuclear subsidies dwarf renewable energy subsidies.



Subsidies in first 15 years of subsidies for various energy sources.

Additionally, many indirect subsidies never even get counted in most subsidy analyses — such as the tremendous extent to which we subsidize oil through our military and the tremendous health externalities not included in the price of fossil fuels (neither of which are included in the price of fossil fuels).

But there’s another point which gets even less attention. Here’s a reader comment that I thought was worth a repost:

Yes, we have supported oil, wind and solar with subsidies. Look how that’s played out.

Wind, 30 years ago, produced electricity at $0.38/kWh. Now it’s producing at $0.04/kWh to $0.06/kWh and on its way down to $0.03/kWh in the near future. (Already, we’ve seen a 9.5x drop.)

Solar panels, 30-40 years ago, cost as much as $100/watt. Solar panels are now being manufactured for prices approaching $0.50/watt.  (That’s almost a 200x price drop.)

Oil, in 1946, was $18.89 a barrel (2012/current dollars) and in 2012 it’s running about $100 a barrel. (More than a 5x increase.)

Support for oil might have kept prices from rising further, but it has not made oil cheaper.

Support for wind and solar have made them much cheaper. Our investments are returning massive dividends.

Wind has gone down to 1/6th its early price, solar to 1/100th, and oil has risen by more than 5x. Exactly how has that oil subsidy worked out for us?

Image Credits: Climate Progress

Reposted from Solar Insider's News

08 May 2012

THIS IS IMPORTANT READ IT!

Reposted from Planet Thoughts The future of nuclear power now hangs on a single decision by President Obama---and us. His Office of Management and Budget could cave to the unsustainable demands of reactor builders who cannot handle the standard terms of a loan agreement. Or he could defend basic financial procedures and stand up for the future of the American economy. You can help make this decision, which will come soon. It's about a proposed $8.33 billion nuke power loan guarantee package for two reactors being built at Georgia's Vogtle. Obama anointed it last year for the Southern Company, parent to Georgia Power. Two other reactors sporadically operate there. Southern just ravaged the new construction side of the site, stripping virtually all vegetation. It's also stripped Georgia ratepayers of ever-more millions of dollars, soon to become billions. This project is in the Peach State for its law forcing the public to pay for reactor construction in advance. When the project fails, or the reactors melt, the public still must pay. A taste of what's coming has emerged in shocking defects in poured concrete at the site which will cost millions to correct and months of delay on a project whose construction has barely begun ( http://nukefree.org/nc-warn-vogtle-already-hit-major-design-flaw-delay ) . Nonetheless, Southern runs virtually no financial risk. It actually has an interest in never finishing. Florida is now in turmoil, trying to rid itself of a similar Construction Work in Progress law ( http://nukefree.org/florida-legislators-sue-stop-nuke-bailouts-advance ). Worldwide estimated reactor costs have jumped from $3-5 billion each a few short years ago to $10 billion or more, and rising. Uranium prices are set to soar as the supply of Russian weapons-based fuel is about done. And renewables have long since outstripped atomic energy as being cheaper, faster to build, cleaner, safer, more reliable and open to community ownership. There are virtually no private investors willing to back new reactor construction. There are no private insurers willing to take the risk on operating reactors. There is no place to store the radioactive wastes they generate. Operating reactors in Vermont ( http://nukefree.org/vermonters-tell-vermont-yankee-get-out ), New York, California ( http://nukefree.org/nrc-chair-jazcko-says-san-onofre-be-shut-indefinitely ) and elsewhere now face ferocious public uprisings to get them shut. They are being joined by Governors, US Senators and entire legislatures. Peter Shumlin, Governor of Vermont, has appeared at a major public rally to shut Yankee. The legislature long ago voted (26-4) the same way. Shumlin was joined by US Senator Bernie Sanders, who has issued a stunning denunciation of the loan guarantees ( http://nukefree.org/sen-bernie-sanders-ryan-alexander-stop-nuclear-subsidies ) . US Senator Ron Wyden of Orgeon has published a serious warning about the on-going dangers of Fukushima, which he recently visited ( http://nukefree.org/sen-wyden-warns-situation-fukushima-worse-believed ). Once the public kills one of these elderly reactors, a tsunami of shutdowns among the 104 currently licensed in the US will follow. Germany and much of the rest of Europe have abandoned the technology ( http://nukefree.org/europes-war-over-nuclear-financing ). Bulgaria has just scrapped plans for two proposed generators. Major banking institutions have warned potential investors in Britain's planned reactors that if they proceed, they will lose their financial standing. Mexico has also said it won't build new nukes. In Asia, only one of Japan's 54 licensed reactors now operates, and it may soon shut. Huge demonstrations and hunger strikes are raging against a proposed project at Koodankulam, India. The Philippines says it won't build any reactors at all ( http://nukefree.org/philippines-says-no-new-nukes ). China, the last bastion of any apparent large-scale interest in multiple nukes, seems to be wavering, in part because of the rise of a No Nukes movement there. Here, two reactors barely beginning construction in South Carolina are also in deep trouble. Their builders need massive rate hikes in North Carolina to proceed, and the opposition there is fierce ( http://nukefree.org/ncwarn-north-carolina-can-kill-south-carolina-nuke-project ). But the lynchpin is Vogtle. The construction loan guarantee program got $18.5 billion from George W. Bush in 2005. With the industry in deepening chaos, it took until last year for a president to designate less than half that money. For the first time in years, there is no Executive or Congressional request to put more money into the fund. The French National Utility EDF did step forward to get funding for Maryland's proposed Calvert Cliffs project. But haggling over terms contributed to its demise. Now Southern faces the same abyss. It refuses what the mortgage community would consider a normal 20% downpayment on its taxpayer-funded loan. Southern wants to put virtually none of its own money into the project, leaving the radioactive gamble totally to the public. But the Office of Management and Budget is apparently demanding something more reasonable ( http://nukefree.org/vogtle-loan-guarantee-not-yet-done-deal ). Because the OMB is a White House agency, Obama holds the key. It's our job to make him turn it in a green direction. A short while ago, this package was considered a done deal. But the GOP uproar over the failed $535 million loan to the solar company Solyndra changed to context. Initiated by Bush, Republicans have made Solyndra the poster child for bad federal loans. Vogtle involves some 15 times Solyndra's liability. And it's all Obama's. At least three petitions are circulating against the package.( http://nukefree.org/please-do-sign-petition-stop-new-nuke-loan-guarantees ). There are many ways to finally shut down what has been the most expensive technological failure in human history. Fukushima and the killing power of radiation, the unsolved problem of radioactive waste, the campaigns against failing reactors such as Vermont Yankee, Indian Point, San Onofre and Davis-Besse---all are key. This weekend, a conference convened by the Sierra Club in Washington, DC ( http://action.sierraclub.org/site/DocServer/no_Nukes_Flyer2.pdf?docID=9701 ), will weigh the various strategies. But killing this loan guarantee package could finally kill the prospect of new reactors in the US. The astonishing rise of Solartopian green technologies has far outstripped atomic energy in the marketplace. Every delay deeply diminishes the possibility of building more of these profoundly uneconomic anachronisms. In the long run, Vogtle, Summer and any other new nukes that seem to slip through in the short term will almost certainly be stopped by what has become one of the most powerful non-violent social movements in human history. But right now, it's up to Obama---and us. Does he really want an atomic Solyndra on his hands? Will we really let this happen? Let's relieve the President of this radioactive burden. Let's kill these reactors before they kill us, and take the most significant leap of all toward a green-powered Earth.

16 March 2012

Rooftop revolution: How to get solar onto 100 million U.S. homes


It’s about the spread of “solar grid parity” over the next 10 years, where grid parity is defined as “when the cost of solar electricity — without subsidies — is equal to or lower than the residential retail electricity rate.” People often talk about grid parity as if it’s some magic moment, but in fact it will happen in different places at different times, depending on local conditions and electricity prices. And it’s a moving target: It depends on how fast the cost of solar falls and how fast electricity rates rise.

Farrell says that the “installed cost of solar has fallen 10% per year since 2006 and grid electricity prices have averaged a 2% annual increase in the last decade.” In his projections, he uses 7 percent annual decline for solar costs and 2 percent for electricity increases, which seems conservative but reasonable. Obviously either of those rates could change, but almost everything I’ve read and heard predicts rising electricity rates; the rate of solar cost decline is somewhat harder to predict. As a technophile, my money is on the cost of solar falling faster than expected.

Anyway, given those assumptions, here’s a map that shows how and when solar grid parity will spread.

By 2021, some 100 million people in the top 40 U.S. metropolitan areas will be at grid parity for residential rooftop solar. The number is larger if you take into account people living outside those areas. It expands again if you assume widespread time-of-use pricing. And of course it expands a whole lot more if you include non-residential (commercial and industrial) rooftops. Like so:



Two big things to note about this:

1. Obviously this doesn’t mean 100 million people will have solar on their roofs in 2021. That’s just the cost-effective potential. To exploit that potential will require smart changes in policy. Farrell mentions several state laws and regulations — lower permitting fees, net metering, the like — but I want to emphasize his recommendations on subsidies.

Right now, there’s a federal solar tax credit of 30 percent that is set to expire in 2016. Tax credits are pretty crappy policy. They exclude the public sector and raise transaction costs to the point that tax credits are twice as expensive as cash grants. Keeping the solar tax credit perpetually in place would mostly enrich big solar developers … but dropping it abruptly would hurt the solar market.

The best option is to phase out the tax credit over time in favor of a less expensive policy responsible for 75 percent of the world’s solar PV and 45 percent of its wind power: feed-in tariffs. Feed-in tariffs — which apparently we’re now supposed to call CLEAN contracts (for Clean Local Energy Accessible Now) — pay people for creating clean energy and feeding it into the grid. If done right, CLEAN contracts could replace America’s entire tangled web of tax rebates, incentives, state mandates, and utility programs with something far simpler, more transparent, and more predictable. CLEAN money could phase out over time as costs drop, as is now happening in Germany.

We could exploit the full potential of solar, but that would require [gasp] planning, and planning is socialist, so oh well.

2. If 100 million people had residential rooftop solar, they’d still only be producing roughly 2 percent of the electricity consumed in the U.S. But electricity generation isn’t the only story here. That’s almost a third of the U.S. population!

That means a whole lot of voters — voters in Florida, Texas, Colorado, Arizona, Nevada — with direct experience being energy producers as well as consumers. They will come to understand the value of local, distributed energy in a tangible way and serve as a political force for its expansion. That’s what has happened in Germany. Smart energy policy doesn’t just create energy; it creates a constituency.

It can also be argued that locally owned solar has greater economic benefits (more jobs, spread more widely, and more money circulating in local economies) and greater benefits to the grid (avoided transmission, peak shaving) than absentee-owned power plants.

Energy policy is not just about numbers. It’s not even just about energy. It cannot be separated from economic development or social change. Energy democracy — local ownership, local benefits, local autonomy — ought to be an explicit goal of policy. In part that means planning ahead to take full advantage of solar’s extraordinary potential.

David Roberts is a staff writer for Grist.

21 January 2012

Subsidy 101

25 July 2011

Energy Use in the US

Description: cid:image002.png@01CC3CB7.616C7000

· Note that nuclear power has been fairly level for many years, as has coal power with large fluctuations.

· Note that renewable power has climbed steadily since 2001.

· Note that natural-gas power has climbed rapidly since 2005 due to the fact that the lack of environmental controls has made it easy to extract from shale. My web page on shale gas shows that the extraction is so fast that it will peak in about a decade and then decline rapidly.

· Of course, crude-oil power has declined steadily since 1985, mainly because extraction of crude oil peaked for the U.S. about a decade before then.

SOURCE (CLICK HERE)


04 October 2010

The United States Should Adopt a National Energy Efficiency Resource Standard


By Daniel J. Weiss, Kalen Pruss

Efficiency is frequently described as the “low-hanging fruit” for cutting greenhouse gas emissions and reducing fossil fuel consumption. Energy efficiency improvements can meet a substantial portion of new U.S. energy demand and are relatively easy, cheap, and within the scope of current technology. A number of states have already adopted an “energy efficiency resource standard,” or EERS requiring utilities to reduce electricity demand, and these standards are already creating electricity savings. New legislation proposed in Congress by Rep. Edward Markey (D-MA) would build on these successes by enacting a federal EERS that would reduce national energy demand, save businesses and households money, and reduce global warming pollution.

For the rest of the article click here.

For my Facebook followers if the link does not work go to my blog:

www.zeroenergyconstruction.blogspot.com

21 May 2010

Rooftop Rentals Soar With Generous Canadian Feed-In Tariff


Since September, when the Ontario Power Authority began its generous payment for rooftop solar power, Toronto's commercial roof acreage has become the site of a new renewable energy gold rush by solar developers now able to earn a steady income farming solar power to local utilities for 20 years.

Just as farmers in Texas or Iowa can now earn royalties from wind developers to allow them to place wind turbines on their farm, now commercial building owners in Toronto can earn income from their roofs.

Solar developers are willing to rent a part of a building that previously had no value, that is now prime solar real estate. How much is this new income for the building owner? It could be as much as $12,000 a year.

Ontario Power Authority will now pay between 53 cents and 71 cents per kilowatt-hour for solar electricity. The utility guarantees a speedy, expedited connection to the grid so solar developers can be assured of a quick start to their earnings. And they are not the only beneficiary. The building owner and the solar developer both stand to gain.

Under the arrangement the utility pays the Feed-in Tariff amount monthly for 20 years. Once built, the solar farms can be expected to generate a steady income for 20 years to the solar developer.

Once they sign the lease, the solar companies design, build, and perform the maintenance on the system at no cost to the building owner. Both the solar developer and the building owner can earn money on the deal. Either a percent of the monthly payments from the utility can go directly to the building owner, or the solar developer can simply pay rent, averaging about 30 cents per square foot.

For example, a 250-kilowatt system that would take up 40,000 square feet on the roof would mean the building owner would earn about $1,000 a month in rent. At the end of the 20 year contract with the utility, the solar developer transfers the system to the building owner who then can benefit from the electricity for what could potentially be at least another 20 years, at slightly less efficiency.

Alternatively, compensation might be a guarantee to supply solar-sourced electricity over two decades for less than what a building owner currently pays, as CarbonFree Technology of Toronto has done. Of course the building has to undergo inspection to ensure that it can take the weight of such large solar arrays, because it may not have been engineered to handle that kind of load. (at least to put onto buildings) solar arrays.

Since September 1st, when the offer was announced, business has taken off. GTE, Ozz Solar, Helios Energy, Rumble Energy and SunOne Energy Canada are among a growing list of solar rooftop space aggregators knocking on doors

03 November 2009

Perfect Example of Long Term Thinking

The German solar thermal firms, Solar Millennium & MAN Ferrostaal have created Solar Trust of America with contracts to build 2 plants in California and 5 more plants in the US.

Once again we have succeeded in handing the lead in a new energy technology to foreign entrepreneurs with more foresight and long term horizons than we seem to be able to muster in the US. With the Solar One and Solar Two projects in the Mojave Desert, in the 1980's and 1990's, we were among the leaders in alternative, sustainable energy development. This technology was pioneering and forward thinking. It was sponsored by the DOE and could have been the basis for the US taking a leading role in the large scale global market of sustainable energy production. Instead of that what happened?

Well, it is the typical US story.

First - the DOE spent money and time to sponsor cutting edge energy technology. (This part of the story is still on going, as the DOE continues to sponsor such research.) The politicians had a photo op upon opening of these projects.

Then - in the US the political will to support such industry was not there. In the time of $1 gas and republican rule, any hint of sustainable energy support was withdrawn. But there was a group that had the political will and was interested in supporting this technology, this group was lead by Germany. Thanks to their parliamentary system of government, the German Green Party was able to gain the minimum vote percentage to become part of a ruling coalition and because of their determined advocacy of sustainability, the German Government adopted a forward looking approach to sustainable energy.

Now - fifteen years later, the technology that the US taxpayer supported through the DOE in the late 1970's and 1980's and the US political leadership promptly dropped (remember the solar system on the White House) is needed in the US and who is installing those systems? Many are being installed by European Companies that have had the governmental support through subsidy and regulation to get them over the "hump" and now they are poised to grap a large percentage of the global market. One German company is expected to own 20% of the US market!

What can we learn from this. We need to learn that long term thinking and political will to support it is what is needed in the US if we do not want to be left behind in the 21st century economy.

29 October 2009

Denmark vs. Virginia

In 1973 there was surprise and revulsion in the western world as the Arab world, upset at the US resupply of Israel after the surprise of the Yom Kippur attack, retaliated with a knife in the soft belly of the western world and embargoed oil supplies. For those old enough to remember, it was as rude an awakening to our collective 28-year comfort enjoyed since our victory in 1945. The western world’s reaction to the events of 1973 – 1974, while rhetorically very similar, were in fact were quite different in terms of real world action.

Almost to a country, the western world decried the moves as unacceptable and almost to a country vowed to reduce their dependence on foreign energy supplies. It is here that the story becomes very interesting both for the student of history and as an insight into the probable near term consequences of actions we will take.

In examining the reaction of a western country let’s first look at Denmark. They made the decision to commit themselves to a future that was not dependant on foreign energy supplies. They made commitments not only on the oil side, but also on conservation, heat and electrical generation. In the 1980’s they also made the decision not to allow any nuclear power plants on their soil.

In examining the reaction of the US, and specifically Virginia, we made a lot of verbal noise about energy independence and freedom from foreign energy sources. We made some first steps in the years from 1974 – 1979, but with the election of Ronald Reagan and the return of cheap oil, all focus was diverted and the goals were forgotten.

Why did this happen and what were the results? Well, the American public has never had a taste for putting off gratification today for the betterment of tomorrow, and the Danes were focused on two generations down the line. An examination of the results thus far is very telling. Here is a brief comparison between Denmark and Virginia.

The GDP per capita for Denmark is $37,300.00
The GDP per capita for Virginia is $46,521.00
Per capita Virginia is 25% richer than Denmark.

The population of Denmark is approximately 5.5 million.
The population of Virginia is approximately 7.7 million.
Virginia has 40% more people than Denmark.

Denmark (proper) is approximately 17,000 sq miles
Virginia is approximately 43,000 sq miles
Virginia is 153% larger than Denmark

Total energy usage per capita in Demark is 46,722 kWH/year
Total energy usage per capita in Virginia is 99,442 kWH/year
The average Virginian uses 113% more total energy than the average Dane.

Electrical energy usage per capita in Denmark is 6,506 kWH/year
Electrical energy usage per capita in Virginia is 13,662 kWH/year
The average Virginian uses 110% more electrical energy than the average Dane.

Cost of electrical energy in Denmark is $0.322 / kWH
Cost of electrical energy in Virginia is $0.104 / k WH
The average Dane spends $2,094 on electricity annually and the average Virginian spends $1,420 on electricity annually.
The average Dane spends $674 (47%) more on electricity annually than the average Virginian.

Percent sustainable energy (including hydro) in Denmark is 17.0%
Percent sustainable energy (including hydro) in Virginia is 2.6%
Denmark produces 554% more sustainable energy than Virginia.

So what do all these numbers tell us. Before I answer that I would like to tell the reader why I chose Denmark. Denmark has the highest cost of energy of any country in the European Union. Denmark also is consistently listed as one of the freest markets in the European Union and also had the least dependency on foreign energy supplies. I wanted to compare Virginia to a real world success story.

So, back to the numbers.

First, we see that Virginia is richer (per capita GDP), larger (population) and has more natural resources (gross land area) than Demark.

Second, there is a simple truth which shines thorough the second set of figures. There is a correlation between energy cost and energy usage. In study after study it has been shown that the higher the energy cost, the lower the usage. We see this in the US in states like Vermont, which has some of the highest energy costs in the nation, but per capita has the lowest energy usage.

Third, we see that this energy independence is costing the average Dane $1.85 per day more than the average Virginian.

So for less than a Starbucks Coffee per day, we could conceivable create a sustainable and foreign intervention free energy supply. Wow, sounds like a deal to me!

So what is standing in our way Virginia? Oh, I can answer that, political will and vision. Here are three items that happened to me at the Conference on Virginia Energy Symposium (COVES) in Mid October 2009:

(excerpts from by blog)

There were 400 or so folk who showed up, most of the regular characters you find at such things: solar, wind and biomass folks, utility reps, college facility people, politicians or there reps, etc..

As I circulated among the seminars and talked to the people at the conference, I got a very clear understanding of how far we are from grasping the scope of the change that needs to be made. At this symposium, I found just what I expected, many of the people on the front lines of energy policy change and renewable generation had a clear understanding of just how much has to happen in a small amount of time.

Unfortunately, the political folks had an inkling of understanding but a lack of will and vision. I will site three examples and you judge for yourself:

At a symposium where an Assistant Secretary of DOE gave a presentation, he discussed the much needed work to be done on existing buildings in the area of energy retrofits. He described energy retrofit as “not low hanging fruit, but fruit rotting on the ground”. There is a huge potential for energy reduction that is easily achievable and compared to other energy reduction strategies, relatively inexpensive. After the presentation during the question and answer portion I asked if we could get Fannie Mae and Freddie Mac to make it mandatory that any home purchased using their funds (which is the majority of all homes sold in the US) have an energy audit done. We could get folks used to having audits done and use this to quantify the homes energy footprint in an eye towards making energy upgrades mandatory with the sale of homes. This is a program that is not pie in the sky; rather it is currently being done in the UK. The answer was depressing a generic, "we are looking into many ways of encouraging energy audits". To me this was the failure to recognize two facts, first is that the US taxpayer now owns Fannie and Freddie (for all intents and purposes) and secondly it would take no political maneuvering, as Fannie and Freddie can impose that type of requirement at will.

The second was what happened at the final symposium, the summation of the conference. They had four speakers, one from biomass, solar and wind and one from the governor’s office. After the presentations during the questions and answer period I asked this question: I said that it seemed to me that all the presenters were ignoring the elephant in the room. Every alternative energy presenter lamented the fact that it is hard to compete with the cheap energy we have in Virginia, and that with little political and financial support from Richmond, the alternative energy community was facing a tough road. The elephant is Virginia's cheap energy. I asked the governors rep. this ~ since we all generally agree that we need sustainable, non-polluting sources of energy in Virginia and that we have cheap energy here in the olde dominion, why not use that as a positive and raise the cost of energy to create the revenue to pursue a faster switch to a sustainable future. The response was once again what I expected, the gov's rep started in saying that Virginia could not act "in a vacuum" and that making a change while the rest of the US and the world did not would hurt Virginia. I responded that we cannot abdicate our responsibility for energy independence and that is exactly what he was doing by making that argument. He said, "I did not say that" to which I said, "you most certainly did". With that the moderator took another question.

The third thing happened in a presentation by Dominion Power’s Vice President in charge of sustainable energy. She gave a presentation about the “smart meter” installations that Dominion was doing and bemoaned the fact that the customers did not seem interested in the monitoring abilities of the smart meter interface. She said that the customers were not monitoring their energy usage to lower their consumption. My hand shot up in an instant and I asked, why not have a usage carrot and stick. For example, if you use the base amount of energy you pay the base rate, but for every kWH you use over that amount the rate increases, and alternatively for every kWH you use under the base amount the rate decreases, I told her that I bet folks would pay attention to their usage then! She brushed my comment aside as unrealistic, but I muttered that I guess the meters aren’t as smart as they want to make out. I also asked her if we could institute a voluntary check box like the neighbors to neighbors fund to support customer generated energy (wind, solar, biomass). I let her know that right now North Carolina is doing this and it has almost tripled the amount of money going to the customer for electrical generation, without costing the utility a cent. Once again she said that she thought it would not work in Virginia.

So you see, this is the situation and the problem. Left in the hands of the politicians, who are guided by those with a lot of money and access and a vested interest in business as usual we are not going to see change.

So what I am asking is to think about the kind of Virginia you want for your grandchildren and act as if your actions today will have a direct effect on their lives, because they do.

10 September 2009

Net Metering Update

Here is the elusive 1:1 net metering language I discussed earlier:

20VAC5-315-50. Metering, billing, payment and tariff considerations.

Net metered energy shall be measured in accordance with standard metering practices by metering equipment capable of measuring (but not necessarily displaying) power flow in both directions. Each contract or tariff governing the relationship between a net metering customer, electric distribution company or energy service provider shall be identical, with respect to the rate structure, all retail rate components, and monthly charges, to the contract or tariff under which the same customer would be served if such customer was not a net metering customer with the exception that time of use metering is not permitted. Said contract or tariff shall be applicable to both the electric energy supplied to, and consumed from, the grid by that customer.


Click here for more info: Net Metering

After writing this I got this response from Carol Huffman, the AEP local netmetering coordinator which makes this much clearer:

Hi Adam-

Yes, that little summary is a little bit misleading. The entire law allows for the following:

First, the Net Metering program is intended for customers wanting to offset their own energy requirements so the generators need to be sized according to their loads.

Net metering periods run 12 months and begin on the first meter reading date following interconnection. A customer can carry forward, to the next 12 month period, excess generated energy to the extent that they purchased that number of kwhs from the utility during that same period. This is what I think the summary is referring to when it says "allows customers to receive the full retail value for their excess electricity at times when their system is producing more electricity than the building is consuming" because they are in essence offsetting future usage at retail rates. At the end of each 12 month period, you should come out even at the most (that's why you can only carry over to the extent you purchased that many kwhs during the year).

The Virginia Administrative Code 20VAC5-315-50 puts it like this:

"If electricity generated by the net metering customer and fed back to the electric grid exceeds the electricity supplied to the net metering customer from the grid during any billing period, the net metering customer shall be required to pay only the nonusage sensitive charges for the billing period. Such billing period credits shall be accumulated, carried forward and applied at the first opportunity to any billing periods having positive net consumptions. However, any accumulated billing period credits remaining unused at the end of a net metering period shall be carried forward into the next net metering period only to the extent that such accumulated billing period credits carried forward do not exceed the net metering customer's billed consumption for the current net metering period, adjusted to exclude accumulated billing period credits carried forward and applied from previous net metering periods."

This clause in the law, in my mind, ensures that customers are not sizing generation larger than their own energy requirements.

New as of last fall, customers now also have the option to enter into a contract with their utility to have those kwhs purchased at the PJM day ahead annual simple average LMP rate for the AEP zone and for the most recent calendar year ending on or before the end of each Net Metering Period. For calendar year 2009, that rate is .053 per kwh. The law does stipulate that they have to request to contract for payment PRIOR to the beginning of the net metering period. And remember too..the intend is still that the customer is producing to offset their own energy requirements.

The Virginia Administrative Code explains it as follows:

"...upon the written request of the customer, the electric distribution company shall enter into a power purchase agreement for excess generation for one or more net metering periods. ...For net metering periods beginning on or after January 1, 2009, the written request shall be submitted prior to the beginning of the net metering period....and obligate the investor-owned electric distribution company to purchase the excess generation at a price equal to the PJM zonal day ahead annual simple average LMP for the PJM load zone in which the electric distribution company's Virginia retail service territory resides, as published by the PJM Market Monitoring Unit, for the most recent calendar year ending on or before the end of each net metering period.

Hope this helps!

PS...I really enjoy your blog!

Carol R. Huffman, C.E.M.
Customer Services
Appalachian Power Company

14 August 2009

A Fairly Sane Radical Solution to Reduce Energy


One idea put forward to reduce carbon is the US cap & trade bill (HR2454). This is one way to help reduce carbon, and we really need to start the process. I am personally dubious of the chances of getting meaningful greenhouse gas reductions out of the Senate after seeing how the house pandered to special interests like King Coal, but we will see.

Unfortunately, it does not really represent a solution that makes the individual consumer aware of our responsibility for climate change. A quick analysis of the proposed cap and trade bill looks like the average American will have to pay somewhere between 5 and 10 dollars a month more because of the legislation, but once again that legislation is pending and probably will be watered down, so the personal "pain" will probably hardly be felt by the average American.

I contend that it is this generation's responsibility to start atoning for the shortsighted use of fossil fuels that we have benefited from. Why, may you ask, is this relevant. As an American, it is important that we recognize that while we are but 4% of the world's population we consume over 20% of the world's energy. That is a 5 to 1 ratio. Imagine if you had to cut your energy consumption to your world percentage "fair share". That represents an 80% reduction in current energy usage! Are you ready to do that? I really believe, as American over consumers, we need to think on those terms.

We need to think about energy and sustainability as one thing. One idea I have would facilitate both the conservation of current energy as well as the creation of new sustainable sources of energy. It is simply this, we allot each American an amount of monthly or yearly electrical energy to use. When you use less you pay less, when you use more you pay more. Here is a quick outline of the basic plan:

Average American usage:
Average American household size -2007 US Census Bureau = 2.6 Persons Average American Household Electricity Usage - Department of Energy = 10,656 KWh Average American Electricity Usage = 4098.461538 KWh / Person
Average monthly usage is approx. 415 KWh / person.

So a family of four would be allotted 1660 KWh/month, based on 2007 information. Now let's say we decide we want to lower our energy usage by 5% in year 1. That would give that family of four a monthly energy budget of 1577 KWh. Great! So here is how it may work.

The first phase:
We would simply read meters. We already do that on a monthly basis. If your base electric rate is 12 cents per KWh then if you use 1577KWh you pay 12 cents per KWh or $189.24. If you use less energy than the monthly allotment your per KWh rate would start to reduce by the percent you are under the allotment. When you exceed the monthly allotment, you pay a higher rate. So here are some quick examples of how it may work:

INPUT VALUES INPUT VALUES
KWh / person 415 KWh / person 415
Cost / KWh $0.12 Cost / KWh $0.12
Year 1 Target Year 2 Target
Reduction 5% Reduction 7%

CURRENT AVERAGE USAGE CURRENT AVERGAE USAGE
Household Monthly Monthly Household Monthly Monthly
Size KWH Energy Size KWH Energy
Allotment Cost Allotment Cost
1 415 $49.80 1 415 $49.80
2 830 $99.60 2 830 $99.60
3 1245 $149.40 3 1245 $149.40
4 1660 $199.20 4 1660 $199.20
5 2075 $249.00 5 2075 $249.00
6 2490 $298.80 6 2490 $298.80

AVERAGE USAGE w/ 5% REDUCTION AVERAGE USAGE W/ 7% REDUCTION
Household Monthly Monthly Household Monthly Monthly
Size KWH Energy Size KWH Energy
Allotment Cost Allotment Cost
1 394.25 $47.31 1 385.95 $49.80
2 788.5 $94.62 2 830 $99.60
3 1182.75 $141.93 3 1245 $149.40
4 1577 $189.24 4 1660 $199.20
5 1971.25 $236.55 5 1929.75 $231.57
6 2365.5 $283.86 6 2315.7 $277.88

COST OF USAGE @10% OVER COST OF USAGE @10% OVER
ALLOTMENT ALLOTMENT
Household Monthly Monthly Household Monthly Monthly
Size KWH Energy Size KWH Energy
Allotment Cost Allotment Cost
1 433.675 $57.25 1 424.545 $56.04
2 867.35 $114.49 2 849.09 $112.08
3 1301.025 $171.74 3 1273.635 $168.12
4 1734.7 $228.98 4 1698.18 $224.16
5 2168.375 $286.23 5 2122.725 $280.20
6 2602.05 $343.47 6 2547.27 $336.24

COST OF USAGE @20% OVER COST OF USAGE @20% OVER
ALLOTMENT ALLOTMENT
Household Monthly Monthly Household Monthly Monthly
Size KWH Energy Size KWH Energy
Allotment Cost Allotment Cost
1 473.1 $68.13 1 463.14 $66.69
2 946.2 $136.25 2 926.28 $133.38
3 1419.3 $204.38 3 1389.42 $200.08
4 1892.4 $272.51 4 1852.56 $266.77
5 2365.5 $340.63 5 2315.7 $333.46
6 2838.6 $408.76 6 2778.84 $400.15

COST OF USAGE @10% UNDER COST OF USAGE @10% UNDER
ALLOTMENT ALLOTMENT
Household Monthly Monthly Household Monthly Monthly
Size KWH Energy Size KWH Energy
Allotment Cost Allotment Cost
1 354.825 $38.32 1 347.355 $37.51
2 709.65 $76.64 2 694.71 $75.03
3 1064.475 $114.96 3 1042.065 $112.54
4 1419.3 $153.28 4 1389.42 $150.06
5 1774.125 $191.61 5 1735.775 $187.57
6 2128.95 $229.93 6 2084.13 $225.09

COST OF USAGE @20% UNDER COST OF USAGE @20% UNDER
ALLOTMENT ALLOTMENT
Household Monthly Monthly Household Monthly Monthly
Size KWH Energy Size KWH Energy
Allotment Cost Allotment Cost
1 315.4 $30.28 1 308.76 $29.64
2 630.8 $60.56 2 617.52 $59.28
3 946.2 $90.84 3 926.28 $88.92
4 1261.6 $121.11 4 1235.04 $118.56
5 1577 $151.39 5 1543.8 $148.20
6 1892.4 $181.67 6 1852.56 $177.85









(Now i am no accounting wiz or economic model person or MBA, the figures I am quoting here are for illustration only, to get the point across. Other folk with more wisdom then me can figure out the real numbers by crunching something)
As you can see from the numbers there would be quite an incentive for folks to become aware of their electrical usage.

Now let's get into the fun part.

There would be both debits and credits on the utility balance sheets depending on the amount of energy used. If your rate reduces below the average as you use less power then the utility will want to make that difference up. This could (and probably would) be made up by the offset of the folks who use more energy. But, let's say that, we are in a perfect world and everyone uses less then the target rate. Well, we would then have to adjust the base rate, right? No, wait, there is another way. Suppose sustainably generated energy had no cap and no adjustment! Then the utlity could build sustainable plants rather then polluting plants to power the grid. They could sell and folks could use as much of this power as was available with no penalties! What an incentive for the utlities to create more sustainable energy plants. They can sell as much as they can produce at the market rate, the great American profit motive shines through! There is another consideration here, if your energy is generated by coal you are having a greater impact on the climate then if your energy is generated by natural gas or solar power. Here is where Cap and Trade re-enters the picture. There should be real costs for greenhouse gas creation for the utilities to push them towards sustainable power production. That, however, is a post for another day.

Right now, remember to think about what your global energy share is and try to relate it to your personal habits.

Cheers!

ps. I know the formatting is messed up, can anyone tell me how to insert a table into this blog?