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I N · T H I S · I S S U E
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FLANIGAN'S ECO-LOGIC
The California Feed-In Tariff
Well to be honest, it hit me hard.
The head of the Energy Division at the California Public Utilities
Commission was taking a shot at me. At issue is how to fund
solar systems and how to make solar investments a good deal.
Sean Gallagher took exception with my assertion that California
is applying the brakes with limits on net metering. He claimed
that there has to be balance in the level of subsidy. And
didn't I know that California has a feed-in tariff? No, frankly,
I did not. In EcoMotion Network News Volume 11#10 I challenged
the State to follow the German feed-in tariff model that is
working so well.
Gallagher asserts that net energy metering has not one but
two benefits. In addition to paying small producers retail
rates for on-site generation, participants enjoy the benefits
of being connected to the grid. "…With solar net
metering, they get credit against the transmission and distribution
components of their bill when they produce energy, not just
the energy commodity component of the bill. Of course, the
customer still receives transmission and distribution service
from the utility in the hours when the premise is a net consumer
of energy. So solar net metering down to zero is a pretty
good deal for customers. It is really a second subsidy, in
addition to the rebate program."
While Gallagher is a strong solar advocate,
particularly mandating solar in new developments in appropriate
climate zones, he noted, "…other ratepayers, not
the utility, effectively pay for net metering. So if you increase
the net metering subsidy by allowing the bill to go negative,
other ratepayers must pay for it." This is the crux of
the policy issue: What level of incentives will move the solar
market, and what level of rate increase will our society accept
to support sustainable energy resources? In Germany, consumer
willingness to pay for renewables was analyzed, and consumers
there are willing to pay. The feed-in tariff model allows
any solar producer to maximize production without limits.
Sean Gallagher then reported on his division's work developing
a feed-in tariff in California: "Happily, perhaps, there
is also a feed-in tariff solution. The Commission's implementation
of AB 1969 from 2006 expanded on the requirements of the bill
to allow any customer to install a small renewable facility
(up to 1.5 MW) and sell ALL the energy to the local utility,
at the MPR rate. Of course, a customer can't get both net
metering and the feed in tariff approach, but now customers
can choose based on which approach is a better fit for them."
I thanked Sean and dug in to CPUC Draft Resolution E-4137.
The California Feed-In Tariff - formally presented in a CPUC
Draft Resolution E-4137 on "tariffs for the purchase
of eligible renewable energy generation" - will come
before the CPUC Commissioners for approval at their upcoming
December 20th meeting. The tariff's genesis was AB 1969 which
passed in September 2006. It was designed to accommodate water
and wastewater facilities that sought to feed power back into
the grid. The CPUC was charged with developing a suitable
tariff, and ultimately a resolution called for 250 MW of renewables
from water and wastewater facilities statewide. SCE and PG&E
expanded the offering to 228 MW for other, "non-water
and wastewater facilities."
Further, the feed-in tariff is based on MPR, the so-called
"market price referent" and pays renewable energy
providers with 10, 15, and 20-year contracts for fixed "feed-in"
prices of 9.2 - 11.954 cents per kWh, plus a "time of
delivery" (TOD) factor, basically a relatively small
sum. (The MPR is the "predicted annual average cost for
a base-load proxy plant.") While the tariff may be a
good start, it's far from the German model that pays over
fifty cents a kilowatt-hour! It certainly appears far from
playing a major role in progressing renewable energy and solar
power in California; at its current rates it will not become
a common means for the average citizen or business or government
facility to go solar.
Molly Sturkel at the CPUC writes that, "We're not sure
what the interest level will be... but plan to watch it closely.
For [power users] that have average retail electric rates
below the MPR (like some that actively manage their load to
get close to whole power rates) -- this is a good tariff opportunity."
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| "Hey Ted - I like your newsletter,
but I'd expect better from you on the solar net metering issue."
Sean Gallagher, Chief, Energy Division California Public Utilities Commission
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| The
Big Energy Equation: Part Three Renewable Energy |
Editor's Note: This concludes a three-part
series on "the big energy equation." We began with
global energy use (in V1#7), then shifted to national energy
use (V11#9), and now conclude with a snapshot of renewable
energy resources both globally and domestically.
Renewable energy once was the basis for all modern civilization;
using the sun, wind, and water to do work. Today, while "primitive"
forms of renewable energy consumption continue such as gathering
fuel wood for cooking, (and are not included in the data presented
herein), renewable energy has been largely supplanted with the
use of fossil and nuclear sources of energy. In 2005, renewable
energy forms provided only 8% of global energy consumption,
with hydro and biomass sources providing 34 quads of our 400
quad global, annual energy diet.
In the United States, the share is about the same: Renewables,
primarily hydro and biomass, provide about 7% of national
energy consumption. Remarkably, geothermal, solar, and wind
energy resources combined provide less than a quad to our
100-quad per year national energy diet, with hydro and biomass
providing about 3% each.
In terms of electricity, renewables provided
9% of the national production in 2005. Of this, conventional
hydro provided 269.6 TWh, more than two-thirds the nation's
renewable generation base.
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| The Naked Truth:
Coal is King |
Editor's Note: This glimpse into the World
Energy Outlook 2007 findings on coal is horrifying: If the
International Energy Agency is right, and the naked truth
is that coal is on an unstoppable roll, then its carbon dioxide
and climate implications - short of a sequestration miracle
-- are light years beyond demoralizing, potentially fatal
to society as we know it. The findings of the International
Energy Agency's annual report smack the face of climate protection.
The International Energy Agency (IEA) reports
in World Energy Outlook 2007 that the world's dependence on
fossil fuels is set "to rocket at a time of global alarm
about climate change." The most profound finding: CO2
emissions will surge 56% over the 2005 level to 42 billion
tons per year.
IEA predicts that coal will make a comeback,
the Middle East and Russia will grow in influence as oil suppliers,
and emerging giants China and India will account for most
of the growth. The projections "are even worse"
than the projections in WEO 2006, giving little hope for technological
breakthroughs and finding instead that "coal will be
king" in emerging countries, China and India in particular.
Coal will realize the biggest increase in
consumption, growing by 73% between 2005 and 2030. China and
India already account for 45% of world coal use, and will
drive over four-fifths of the increase in coal use through
2030. Because of the role of coal-fired generation in this
increase, IEA advocates carbon capture and sequestration (CCS),
and notes that if its member countries implement CO2 reduction
strategies that they are considering, the tonnage may be as
little as 34 billion tons per year. (Current anthropocentric
emissions are approximately 25 billion per year.)
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| Perspective:
Deaths per Megawatt |
This past August's Crandall Canyon Mine collapse
in Huntington, Utah was a horrid story. Six men trapped, followed
by three more, all presumably dying a terrible death. Shortly
thereafter, another Chinese coal mining accident. This time
161 perished, the biggest accident since a 262-death Chinese
mining accident two years ago. Last year, 4,746 Chinese miners
died in coal mines, about 13 a day. (And that's a big improvement;
the peak year was 2002 with some 7,000 fatalities.) With China's
insatiable thirst for coal climbing each day, miners will
be deployed to more and more dangerous mines. And the death
toll will rise.
Chinese miners toil for a few hundred dollars
a month; fearful of reporting dangerous conditions and mine
accidents that leave them without jobs at all. Surveyed miners
in the Hunan province fear poverty more than mine accidents.
Mining is inherently high risk, but China's fatal accident
rate is about two deaths per million tons of coal mined, fifty
times higher than America's rates and nine times higher than
India's rate. Chinese officials note that more deaths occur
in small mines that go unreported, "which routinely cover
up accidents."
Perhaps we ought to look at power supplies
in terms of "deaths per megawatt," internalizing
deaths that have heretofore been an externality of power production.
Some tried and true environmentalists are calling on "clean
coal" and other trade-off technologies in the battle
for climate protection. Coal may be a least-cost fuel, but
at what climate and now mortal cost?
Such a discussion quickly leads to benign
sources of power. Few canaries or miners or caribou or seagulls
die "mining" energy waste and becoming more energy
efficient. It's the ultimate low-mortality energy source.
Efficiency in America is only held back by imprecise - and
narrowly defined -- measures of cost effectiveness. Efficiency
is restricted, while conventional power sources continue to
be subsidized. If the true costs of coal, and nuclear, and
gas were internalized, efficiency would no doubt rise to the
top of society's energy choices.
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| The
Green New England Patriots |
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The New England Patriots, known for winning Super Bowls, is also
among the greenest of teams. When Gillette Stadium opened
in 2002, it was awarded the Environmental Award for Corporate
Leadership for the stadium's design. The EPA also gave the
Kraft Group - owners of the Patriots - the Environmental Merit
Award. Now Jonathan Kraft has announced that pre-season, regular,
and post-season home games throughout the season will be powered
by wind power purchased from Constellation NewEnergy.
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| Kennebunkport
Wind |
Southwest Windpower reports that former President George H. W. Bush and his wife Barbara have installed a wind turbine at their
summer home at Walker's Point in Kennebunkport, Maine. The
Bushes reportedly opted for the system for financial and environmental
reasons. The Skystream 3.7 at the Bush's home will generate
power beginning at 8 miles per hour, with projected average
monthly production of 400 kWh. The wind turbine, mounted atop
a 33 foot tower, is grid connected and will feed excess power
into Central Maine Power's system throughout the winter earning
the Bushes credit for power that they can then use in the
summer. In Maine, Governor Baldacci's wind power task force
is encouraging wind turbines at schools to increase their
visibility.
At the other end of the spectrum, wind turbines
are getting larger and larger, into the megawatts. GE is rolling
out a 5 MW wind turbine. Naturally the blades of these massive
wind turbines are enormous, requiring very special shipping.
The LM Glasfiber plant in Grand Forks, Michigan has doubled
its capacity this year, producing over 2,000 wind turbine
blades, each of which are 120 - 145 feet long and weigh up
to 1,500 pounds. Furthermore, their shipping costs can be
as high as $15,000 - 20,000 each. Trucking the blades requires
special extra-long trailers with rear steering to navigate
turns. Many states also require pilot cars in front and back
with flashing lights to escort the giant trailers.
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