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Koch Brothers Attack Net Metering and Solar
- Thread starter Cottonwood
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Your generation credits are completely wiped out by the Standby charge. THAT IS INSANE. What a brilliant strategy for a utility to implement - for their benefit. In CA, solar is specifically exempted from standby charges.
rolosrevenge
Dr. EVS
Net metering has nothing to do with fossil fuels, but getting non-solar customers to pay for your grid connection. The fossil fuels don't get free grid connections. Net metering needs to go because the grid needs to be supported regardless of what the fuel source is. Especially since many distribution utilities don't own any generation.
I've been wondering for a while if massive decentralization of electric power could work.
Instead of several layers of high voltage transmission lines, stepping down through substations and neighborhood transformers, what if there were small isolated systems. It seems to me that cheap solar and efficient microturbines could make this possible.
Imagine a neighborhood of a few hundred houses. They have enough aggregate solar to cover most of their use. A small central location has a natural gas microturbine and a battery bank. This neighborhood is its own isolated grid. Each house is a very short run ( less than 1/4 mile ) from the microturbine and battery bank. Losses are minimal, transformers are few or none.
The microturbine is powerful enough to provide electricity to all the homes on cloudy days. The shared battery bank allows the turbine to spin up smoothly when needed, and handle some short term needs without the turbine at all.
The size of the whole system is chosen to balance minimizing infrastructure costs ( no substations, transformers, short wires ) with making the turbine big enough for efficiency and reliability. I assume that individual homeowners wouldn't want their own turbines, and could share the cost among a few hundred neighbors.
Of course, a few hundred EVs may also provide a huge battery for the neighborhood.
Then utilities only have industrial customers. Maybe this market fragments too.
How long will we still need electric utilities and huge connected grids?
Yes you lose the ability to move lots of power from places that are overproducing to places that need it, but if the solar panels are cheaper than the high voltage lines, maybe its better to discard the extra energy and not have the grid?
Can some of you experts comment on this?
Instead of several layers of high voltage transmission lines, stepping down through substations and neighborhood transformers, what if there were small isolated systems. It seems to me that cheap solar and efficient microturbines could make this possible.
Imagine a neighborhood of a few hundred houses. They have enough aggregate solar to cover most of their use. A small central location has a natural gas microturbine and a battery bank. This neighborhood is its own isolated grid. Each house is a very short run ( less than 1/4 mile ) from the microturbine and battery bank. Losses are minimal, transformers are few or none.
The microturbine is powerful enough to provide electricity to all the homes on cloudy days. The shared battery bank allows the turbine to spin up smoothly when needed, and handle some short term needs without the turbine at all.
The size of the whole system is chosen to balance minimizing infrastructure costs ( no substations, transformers, short wires ) with making the turbine big enough for efficiency and reliability. I assume that individual homeowners wouldn't want their own turbines, and could share the cost among a few hundred neighbors.
Of course, a few hundred EVs may also provide a huge battery for the neighborhood.
Then utilities only have industrial customers. Maybe this market fragments too.
How long will we still need electric utilities and huge connected grids?
Yes you lose the ability to move lots of power from places that are overproducing to places that need it, but if the solar panels are cheaper than the high voltage lines, maybe its better to discard the extra energy and not have the grid?
Can some of you experts comment on this?
lolachampcar
Well-Known Member
I made my living providing hardware to utilities as they made their way through deregulation. The Boards either hired professional management consultants (Anderson and the likes) or brought in a talented and capable CEO for the duration of the deregulation process. They did this because, for the most part, utilities have no need of competent competitive management. Once deregulation was complete and the business was stable, things went back to business as usual. They are protected entities thus require no imagination or competent management. Obviously these are blanket statements that do not apply to 100% of the utilities in this world but they do reflect my personal experience working with a large number of utilities though out the US.
Deregulation was a man made regulatory discontinuity where PV is a natural market discontinuity. Deregulation provided warning and a date certain so that even the most incompetent Board was forced into action. PV is a slow creeping process akin to boiling a frog. No action is required just yet until it is too late.
In the case of Florida, the answer for me is obvious. I've even tried to get together with some of that old school management that was brought in for deregulation but they are long since retired and have no interest in the subject. If I were a Florida utility and were used to making capital decisions based on a 30+ horizon I would see the writing on the wall and this is what I would do-
Use my relationship with the customer to put PV on their roof.
Do so in a neighborhood by neighborhood basis to create micro-cells of production.
Arrange to buy all of Canadian Solar's (insert any company(ies) here) production along with point inverter suppliers etc in addition to extruding my own racking system to manage costs.
Use my regulatory connections to do a state wide permit process by which an electronic permit is filed with each city/county entity and that permit, if it meets certain standards, is rubber stamped approved.
Use my own installation crews to install and maintain the equipment.
Use real time reporting and big data to manage the micro-cells.
Use local sub-station type fixed storage to smooth out production/demand issues and sort out that side of the technology equation.
Use the same big data above to manage down grid node usage for each of the above mention micro-cells such that I still had a functional grid for handling delivery issues but that the nature and type of grid required evolves into a load balancing mechanism and not a primary delivery mechanism.
Add demand fast reaction filler generation capability on a more local basis.
The above would-
Remove the non-value add overhead associated with very inefficient house by house adoption of solar.
Remove the extremely inefficient house by house local storage requirement and significantly reduce the net local storage requirement by distributing that storage need over a reasonable population.
Keep the grid which provides a valuable service.
Make the utility relevant in 30 years.
It is obvious to me but then we have already addressed the quality and competence of utility management and foresight.
Deregulation was a man made regulatory discontinuity where PV is a natural market discontinuity. Deregulation provided warning and a date certain so that even the most incompetent Board was forced into action. PV is a slow creeping process akin to boiling a frog. No action is required just yet until it is too late.
In the case of Florida, the answer for me is obvious. I've even tried to get together with some of that old school management that was brought in for deregulation but they are long since retired and have no interest in the subject. If I were a Florida utility and were used to making capital decisions based on a 30+ horizon I would see the writing on the wall and this is what I would do-
Use my relationship with the customer to put PV on their roof.
Do so in a neighborhood by neighborhood basis to create micro-cells of production.
Arrange to buy all of Canadian Solar's (insert any company(ies) here) production along with point inverter suppliers etc in addition to extruding my own racking system to manage costs.
Use my regulatory connections to do a state wide permit process by which an electronic permit is filed with each city/county entity and that permit, if it meets certain standards, is rubber stamped approved.
Use my own installation crews to install and maintain the equipment.
Use real time reporting and big data to manage the micro-cells.
Use local sub-station type fixed storage to smooth out production/demand issues and sort out that side of the technology equation.
Use the same big data above to manage down grid node usage for each of the above mention micro-cells such that I still had a functional grid for handling delivery issues but that the nature and type of grid required evolves into a load balancing mechanism and not a primary delivery mechanism.
Add demand fast reaction filler generation capability on a more local basis.
The above would-
Remove the non-value add overhead associated with very inefficient house by house adoption of solar.
Remove the extremely inefficient house by house local storage requirement and significantly reduce the net local storage requirement by distributing that storage need over a reasonable population.
Keep the grid which provides a valuable service.
Make the utility relevant in 30 years.
It is obvious to me but then we have already addressed the quality and competence of utility management and foresight.
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Great post, @lolachamp.
@richkae, you've asked the $64,000 question: what is the future of the grid? Let me start by trying to answer a related but different question, why does the grid look the way it does?
First, what does the grid look like? At a high level, the transmission system was built to move large amounts of power from concentrated sources -- large power plants or systems of dams -- to load. The grid is cross-linked, so that the loss of one element (a big power plant or major transmission line) doesn't interrupt service. High-voltage lines form the backbone/skeleton of the grid, with a series of lower voltage lines stepping down to finally deliver power to each customer. The operation of the grid is run from a handful of centralized control rooms, where the generation at each facility is carefully monitored and controlled to assure reliable service and the ability to recover from a disruption.
Why does it look this way? Economies of scale (at least, historically):
Many of those factors are crumbling, though not all. In particular, distributed resources are becoming cheaper, particularly when you add in the costs of bolstering the grid. Also, telecoms and IT have improved so much that a lot of the control room operations can be built into the grid's hardware.
Microgrids are clearly The Next Big Thing, inasmuch as they have much better economics in some areas. The challenge is how to maintain continuous service on the microgrid. If you install backup fossil-fueled generators, those are still far less efficient than grid-scale generators. If you buy off the grid, then there's a difficult negotiation about the cost of that standby service.
As @lolachamp suggests, no utility has seriously stepped up to the plate on reimagining the grid and its role. This is a MUCH bigger step than deregulation in the 1990s/2000s, which merely shuffled who owned and operated assets, without fundamentally changing anything about the grid. Edison and Westinghouse would immediately recognize nearly everything about the U.S. grid, while Bell wouldn't understand today's telecoms infrastructure.
My simple take on the Koch Bros. actions is that they are being classic conservatives, in the literal sense. They make excellent money selling oil, gas, and coal under the century-old utility model. Of course they want to slow or stop any change.
@richkae, you've asked the $64,000 question: what is the future of the grid? Let me start by trying to answer a related but different question, why does the grid look the way it does?
First, what does the grid look like? At a high level, the transmission system was built to move large amounts of power from concentrated sources -- large power plants or systems of dams -- to load. The grid is cross-linked, so that the loss of one element (a big power plant or major transmission line) doesn't interrupt service. High-voltage lines form the backbone/skeleton of the grid, with a series of lower voltage lines stepping down to finally deliver power to each customer. The operation of the grid is run from a handful of centralized control rooms, where the generation at each facility is carefully monitored and controlled to assure reliable service and the ability to recover from a disruption.
Why does it look this way? Economies of scale (at least, historically):
- Large thermal power plants burn fuel more efficiently
- Large power plants produce more power / employee
- High-quality hydro resources are concentrated, often far from load.
- High-voltage lines have lower line losses and lower capital cost (per MVA)
- Regulatory hurdles make it harder to build many small generators (100 MW) rather than one big one (800 MW)
- Controlling the grid requires lots of information and expertise
Many of those factors are crumbling, though not all. In particular, distributed resources are becoming cheaper, particularly when you add in the costs of bolstering the grid. Also, telecoms and IT have improved so much that a lot of the control room operations can be built into the grid's hardware.
Microgrids are clearly The Next Big Thing, inasmuch as they have much better economics in some areas. The challenge is how to maintain continuous service on the microgrid. If you install backup fossil-fueled generators, those are still far less efficient than grid-scale generators. If you buy off the grid, then there's a difficult negotiation about the cost of that standby service.
As @lolachamp suggests, no utility has seriously stepped up to the plate on reimagining the grid and its role. This is a MUCH bigger step than deregulation in the 1990s/2000s, which merely shuffled who owned and operated assets, without fundamentally changing anything about the grid. Edison and Westinghouse would immediately recognize nearly everything about the U.S. grid, while Bell wouldn't understand today's telecoms infrastructure.
My simple take on the Koch Bros. actions is that they are being classic conservatives, in the literal sense. They make excellent money selling oil, gas, and coal under the century-old utility model. Of course they want to slow or stop any change.
@lolachampcar: Great view/description of the utilities and nice suggestions about how to encourage distributed solar while having it work well with the grid. A little reprograming and the energy storage units that Tesla is testing out in Supercharger sites like Barstow and Hawthorne could do a great job softening cloud edges at the substation level or finer.
@Robert.Boston: Very good summary of the grid and how we got here. Your comparison of the electric industry to the telephony industry are right on. The internet world is that again... Today, there are standards like IEEE 1901 - Wikipedia that will carry 100's of megabits per second of data over distances of 1.5 km on the existing power lines. Putting that communications technology on the last mile of copper with fiber on poles on up the line would give the power folks private comm links that could easily provide the bandwidth to manage the grid with lots of distributed sources, sinks, and storage of power. I completely agree with your analysis of the Koch Brothers' motivation, and will paraphrase it: The Koch Brothers are rich bullies using their money to protect and increase their assetts by spreading half-truths and lies to the public.
@richkae: Your ideas of going to microgrids are great. The problem is that the devil is in the details. Putting together a reliable, cost-effective system takes a lot of effort up front and on a continuing basis. This all can be done, but there is view graph engineering and there is real world, reliable engineering. The latter takes a lot more effort and care to make work.
Thanks to all for this interesting discussion!
@Robert.Boston: Very good summary of the grid and how we got here. Your comparison of the electric industry to the telephony industry are right on. The internet world is that again... Today, there are standards like IEEE 1901 - Wikipedia that will carry 100's of megabits per second of data over distances of 1.5 km on the existing power lines. Putting that communications technology on the last mile of copper with fiber on poles on up the line would give the power folks private comm links that could easily provide the bandwidth to manage the grid with lots of distributed sources, sinks, and storage of power. I completely agree with your analysis of the Koch Brothers' motivation, and will paraphrase it: The Koch Brothers are rich bullies using their money to protect and increase their assetts by spreading half-truths and lies to the public.
@richkae: Your ideas of going to microgrids are great. The problem is that the devil is in the details. Putting together a reliable, cost-effective system takes a lot of effort up front and on a continuing basis. This all can be done, but there is view graph engineering and there is real world, reliable engineering. The latter takes a lot more effort and care to make work.
Thanks to all for this interesting discussion!
nwdiver
Well-Known Member
The whole point to net-metering is to encourage solar to displace fossil fuels. Fossil Fuel generators may pay for their grid connection but they aren't paying to dump CO2 into our air... when they start doing that I'll agree DG owners should start supporting the grid. Quid Pro Quo
Not with our current breed of grid-tie inverter but it shouldn't be too difficult with next-gen inverters capable of reactive power management and curtailment.... and with storage + demand response of course...
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lolachampcar
Well-Known Member
nwd,
It is easy to take an us v them approach but then everyone entrenches and nothing gets done.
The brothers aside, I wish there were a way to steer this ship in a sensible direction. Net Metering is a start but surely is not sustainable as it relies on artificial pricing per KW-Hr and not realistic cost to generate plus cost to distribute (the grid element). Put differently, I'm getting my "battery storage" from FPL for free right now and that can not last.
It is easy to take an us v them approach but then everyone entrenches and nothing gets done.
The brothers aside, I wish there were a way to steer this ship in a sensible direction. Net Metering is a start but surely is not sustainable as it relies on artificial pricing per KW-Hr and not realistic cost to generate plus cost to distribute (the grid element). Put differently, I'm getting my "battery storage" from FPL for free right now and that can not last.
nwdiver
Well-Known Member
I agree net metering is not sustainable... but neither is burning coal; I propose that we use the elimination of net metering as an incentive for utilities to drop coal from their portfolios.
Are you envisioning this as a non-regulated affiliate of the utility, or are these regulated activities? If the latter, wouldn't Solar City et al. scream about the regulated utility competing unfairly?
I've mentioned this in other threads, but several energy companies are indeed changing their approach. For the past 5 years or so, my co-op has changed its approach to fixed cost vs. variable cost. It has raised the connection / meter fee (from an original $17ish/month when I started a number of years ago to a current price of ~$40/month, while lowering (or at least attenuating the increases of) the variable costs. This helps to solve the primary argument that non-solar customers subsidize solar customers' use of the grid as a battery.
The downside of this approach is that anyone who consumes less than 1,000 kWh/month sees a higher bill overall, but it does bring into line the fixed costs of a grid connection and the plant maintenance & depreciation costs. You could say that under the usage-based model, I'm subsidizing the farmers who want a meter at a lean-to, 3 miles into their field, for $5/mo.
The downside of this approach is that anyone who consumes less than 1,000 kWh/month sees a higher bill overall, but it does bring into line the fixed costs of a grid connection and the plant maintenance & depreciation costs. You could say that under the usage-based model, I'm subsidizing the farmers who want a meter at a lean-to, 3 miles into their field, for $5/mo.
lolachampcar
Well-Known Member
Robert,
I'm afraid I am an old time operations guy. I had not even considered the third rail of regulated versus non-regulated players. If I were the utility, I'd be working my end as hard and fast as I could. We are all used to utilities operating in their existing regulated environment and, in this case, that gives them a huge existing competitive advantage.
I'm not sure we should tie one of SC's hands behind their back just because there is a lack of innovative management at the utilities. By the same token, we should likely not hamstring the utilities when they try to reinvent themselves using their existing monopoly with the customer. Even if we were to try, I'm not sure governments are equipped to manage such stuff fairly.
I'm afraid I am an old time operations guy. I had not even considered the third rail of regulated versus non-regulated players. If I were the utility, I'd be working my end as hard and fast as I could. We are all used to utilities operating in their existing regulated environment and, in this case, that gives them a huge existing competitive advantage.
I'm not sure we should tie one of SC's hands behind their back just because there is a lack of innovative management at the utilities. By the same token, we should likely not hamstring the utilities when they try to reinvent themselves using their existing monopoly with the customer. Even if we were to try, I'm not sure governments are equipped to manage such stuff fairly.
For what it's worth, IEEE 1901 is still very, very finicky. I find it difficult to get even 100 feet out of it under normal conditions at a handful of Mbps. The 1901.2 variant tends to work well for SmartGrid applications, as I understand it, but it's limited in bandwidth.
A few Mbps is all you need to control a neighborhood. In fact, I bet a good, neighborhood control system could be implemented with a few kbps if the communications were very reliable. This is not for the power company to become an internet provider.
OTOH, the municipal power company in Longmont, CO is getting a lot of accolades as it rolls out its inexpensive, fiber to the curb, gigabit service to customers using the power-line easements for new fiber.
http://longmontcolorado.gov/departments/departments-e-m/longmont-power-communications/broadband-service
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I agree, just pointing out that 1901 isn't all that robust right now. If I can't get a few Mbps to work over more than 80 feet, I'm not sure of it's use. I've heard the 500 Kbps narrow-band spec works a bit better, so maybe that's the solution that works for their use (and I recognized that you weren't talking about them providing Internet service, but rather using it for SCADA).
The grid in rural areas (like mine) would still need some workarounds. My nearest substation is about 10 miles away; for some, it's more. But they've been doing load management since the 90's here, with things like Scientific-Atlanta's VHF load controls that put electric water heaters on standby during peak times. So there are ways to do it; wireless works - and since it's pretty simple for them to get power to something, seems like one of the easier problems to solve.
The grid in rural areas (like mine) would still need some workarounds. My nearest substation is about 10 miles away; for some, it's more. But they've been doing load management since the 90's here, with things like Scientific-Atlanta's VHF load controls that put electric water heaters on standby during peak times. So there are ways to do it; wireless works - and since it's pretty simple for them to get power to something, seems like one of the easier problems to solve.
I found this link on yahoo: Sessions: | CNS News
I know this is a different subject he is talking about in this article, but I find this statement by him ironic.
"We've got to ask ourselves who it is this government is representing. Are we representing the interests of Americans who are hurting today..."
I know this is a different subject he is talking about in this article, but I find this statement by him ironic.
"We've got to ask ourselves who it is this government is representing. Are we representing the interests of Americans who are hurting today..."
jgs
Active Member
Not clear what you're getting at with your (rhetorical?) question. Under any net metering scheme I've ever heard of, people with grid-tied solar are motivated to minimize their use of energy at least enough that they net out to zero for the year. In markets where the best you can do is to net zero then yes, you have no further motive to reduce usage beyond that point. In markets where you are actually paid for production, then the normal profit motive exists.
rolosrevenge
Dr. EVS
But net metering will bankrupt the grid operators long before it ruins the economies of fossil generation. If you want to subsidize solar, there are better ways to do it.
I sell my PV to the grid at about 50cents/kWh, I buy it back at about 25cents/kWh.
New installs sell their PV to the grid at 8 cents/kWh.
In my state, PV helped offset the yearly peak demand caused by summer air-conditioning. As such it pushed/reduced the requirement for an annual 15min powerplant elsewhere.
Now it mostly reduces the use of gas/coal. thats low value add. probably less than 8 cents/kWh (ie 8 cents/kWh is generous)
the powerpoles were replaced near me, thats expensive, even if I not on solar, is doubtful that the transmission entity would be receiving a fair return from my neighborhood. (ie cross subsidized by other neighborhoods)
When do rental properties get solar?
There are real fairness issues about grid connection, and simple answers miss major aspects. But the electrical grid is a major contributor to society equity and equality. Electricity itself (along with antibiotics and clean water) is one the 3 distinctives that can be associated with increased lifespan due to modernity.
As far as microgrids go, if they are not connected to the grid then its basically a minesite/minecamp power supply. - Not cheap for an ability to provide peak demand.
New installs sell their PV to the grid at 8 cents/kWh.
In my state, PV helped offset the yearly peak demand caused by summer air-conditioning. As such it pushed/reduced the requirement for an annual 15min powerplant elsewhere.
Now it mostly reduces the use of gas/coal. thats low value add. probably less than 8 cents/kWh (ie 8 cents/kWh is generous)
the powerpoles were replaced near me, thats expensive, even if I not on solar, is doubtful that the transmission entity would be receiving a fair return from my neighborhood. (ie cross subsidized by other neighborhoods)
When do rental properties get solar?
There are real fairness issues about grid connection, and simple answers miss major aspects. But the electrical grid is a major contributor to society equity and equality. Electricity itself (along with antibiotics and clean water) is one the 3 distinctives that can be associated with increased lifespan due to modernity.
As far as microgrids go, if they are not connected to the grid then its basically a minesite/minecamp power supply. - Not cheap for an ability to provide peak demand.
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