A lot of people have subscribed to the Energy Rant in recent weeks, so I think a little re-introduction is in order. Last week, the post was entitled Gamification; from a Non-Gamer. That was unusually peaceful and friendly because I really have no beef with that since, well, innocent until found guilty (of problems). This week, discussing Utility 2.0, I get back in the spirit of the true meaning of the Energy Rant. What dozens of readers have expressed is the Rant goes outside the comfort zone to discuss things no one else will say – like the emperor has no clothes – can we just agree on this simple fact? Utilities should especially love this blog because the emperor is usually short-sighted, one-sided policy that vilifies and demonizes these empires.
At AESP National, I attended a session on Utility 2.0. As I sat there, for most of the panel discussion I was thinking, “Could one of you guys up there on stage at least conceptually define what Utility 2.0 is?” My fuzzy memory tells me there is a Program Evaluation 2.0, and nobody knows what that is either.
This report from the Institute of Local Self-Reliance (ILSR) defines it clearly, at least from their perspective. It is a well-written, informative, and interesting report.
Ok. Utility 2.0 includes states that have decoupled return on rate base from energy sales (allowing utilities to recover their fixed costs of their assets regardless of sales), and flattened their utility markets by separating transmission and distribution (utilities) from power suppliers to achieve some level of market-based pricing.
Utility 2.0 also integrates distributed generation primarily in the form of photovoltaic (PV). The ILSR paper describes the interconnection of customer-sited PV and the grid as a “battleground” in 20 states. Now that is a little over the top. It is often called a “war” on renewable energy waged by utilities. Ah,,,, no.
Renewable proponents describe grid parity with utilities, which means PV owners can generate their own electricity almost as cheaply as the utility… when the sun is out, and after a bevy of tax breaks for billionaires like Elon Musk who leases them to the homeowner. The war ensues when the under-informed customer expects to receive retail prices when they sell to the grid. I covered this in detail in Pricing Renewable Energy – A Tomato Tale, and I don’t want to rehash all that – but I do feel obligated to straighten misguided information when I see it.
What the utilities really ought to be saying is, you, Mr. PV guy, are in a battle with other merchant power providers. Your electricity is worth no more to us or our customers than what we are paying the independent power producers at any point in time.
And speaking of any point in time, ILSR is calling Utility 3.0 an “energy system that empowers electricity customers to manage their electricity use, produce power individually or collectively (a commune), and transact with their neighbors, local businesses and their city.” This is quaint, but Beelzebub rules the details. Who wants to sit in front of their screen to play energy trader for something that costs or is worth maybe $1,000 per year? The $1,000 represents typical-home-generated PV electrical energy for purchase or sale to the grid, not the grid itself, which utilities will continue to own, and be compensated for.
This is technically made possible by smart meters with net metering capability. It would be similar to buying and selling grain on the open market with everybody growing their tiny crop in the back yard. Customers can grow and preen a quarter acre of corn on their lot, surrounding their house (neighbors beware). Come October, they might have 40 bushels worth something like $200. Don’t expect corn flakes, ethanol, or high fructose corn syrup prices for this bounty. It’s only worth what the local grain elevator or farmer will pay for it, at the market rates which fluctuate with the time of year and 4,000 uncontrollable variables. Undoubtedly, you have seen Fair Trade, this or that. When I see that, I think, “You mean, not stolen?” Market prices are fair trade.
Below are retail hourly pricing plots for a fully-regulated Midwest utility, showing modest price volatility. By contrast, the PJM regional transmission organization / independent system operator experienced a peak price of $1.80 per kWh during last year’s so-called polar vortex.
I was going to save it for later, but now may be a good time to mention this: I see a collision between convenience and the necessity of one outage day per ten years of grid design.
I’m a certified OCD efficiency nutjob, but I am not at all interested in being a micro energy broker weighing the benefits and costs of buying or selling my electrons every minute of the day. It could all be automated by load controls within the house, but having the lights go out while I’m in the shower, or the TV going black while I’m watching my DVR’d programs, or sweltering in bed (or not) are not things I want to happen or weigh on a constant basis. I get 150 emails a day, and I don’t keep up with them. I am bombarded with information and make decisions all day. The last thing I want is my refuge turning into either a constant, headache-inducing decision matrix or automated darkness and melted ice cream.
This year was a blowout for tomato production at the Ihnen household. Enough tomatoes were planted such that if a tomato plague blighted the Ihnen ranch, wiping out 90% of the crop, there would still be plenty for onsite production.
What to do? We visited the People’s Food Coop in La Crosse where we buy nearly all our produce. Cherry tomatoes are selling for $1.80 per pint, and locally grown tomatoes are going for $3.00 per pound. This is great! Clearly, our crop as shown, represents a nice down payment toward an advanced degree for our K-9s.
We loaded all these gems into the Civic and drove to the Coop ready to cash in on the $200-$300 bounty. Ready to make a deal, I was as stunned as the Coop folks were. I demanded retail prices. They scoffed that I was a naïve hillbilly. They have overhead costs, like mortgage payments, utility bills, employees to pay, store maintenance, marketing, insurance, equipment, and furnishings.
So what? That’s your problem.
Ok. I can’t take it anymore. You guessed it, and if not, you lose. The fable here is a parallel to renewable energy aficionados demanding full retail prices for net metering and selling their excess site-generated electricity to the utility.
Wisconsin is ground zero for equity (fairness) as the emergence of photovoltaic distributed generation becomes a significant source of grid power. As mentioned in this blog before, the delivery of power – transmission, distribution, and associated maintenance comprises about 50% of a typical power bill, whether the customer is a giant industrial user or a residential customer.
WE Energies and Madison Gas and Electric (MG&E) are seeking approval from the Public Service Commission of Wisconsin to increase their fixed charges to residential customers while at the same time dropping their energy charge rate per kWh. In the MG&E case, the fixed charge, also known as the meter charge, would about double to $19, per the aforementioned noted article. I’m going to take a wild guess and bet that will be revenue neutral. This is known as a “war on renewable energy” – that term captures 17 million hits on google. Apparently lowering the energy charge from 15 cents to 14 cents across the board (for normal customers too) is a war.
The solution for the utility is twofold. First, they need to do a better job of messaging, as usual. Consumers aren’t going to understand that having widespread distributed generation is going to burden non-participants more over the long term. They can understand the tomato allegory described above. How can anyone expect to receive full retail value for a commodity that is produced on the roof of the home, or the garden in front of the home with no delivery charges and infrastructure charges? In fact, it’s a bit like having the mailman pick the tomatoes and deliver them down the street for retail rates – and making someone else pay for the mailman’s extra efforts.
The second piece of the settlement includes a bone for the photovoltaic enthusiasts. To go on a net-metering rate, customers must install a smart meter. The smart meter can be used to charge equitable rates, AND it provides customers with total control over their energy bills.
The chart below shows interval data for a PG&E customer (a friend from Silicon Valley).
Here’s how this solution would work: For the energy sold to the grid, customers receive commodity prices, like a tomato farmer would receive when he delivers tomatoes to a store or a distributor. They would also pay only commodity prices for any energy drawn from the grid. The tomato farmer must pay for delivery and for the service of selling the tomatoes (grocery store). Ok.
In the renewable energy case, the customer would pay for their peak net demand. Net demand equals net draw from the grid: consumption minus production. If a customer is a net positive producer and can supply to the grid at peak times, they are rewarded. In California, as described in this article, the peak demand continues to be about 9:00 PM in the shoulder months of spring and fall. This is when solar panels aren’t doing the non-participants any good.
The bottom line is if consumers want to sell power to the grid, they need a perspective of a tomato farmer. If you do not agree and you think shipping and the grocery store’s markup to cover overhead and profit should be zero, paid by the other shoppers, I’m all ears. If consumers want to sell power to the grid, they need a perspective like that of a merchant power provider. I.e., when energy is produced or consumed is a major factor in pricing. If you can sell delicious August-tasting tomatoes in January, you will get a hefty price. If you can sell power at 9:00 PM in California on March 21, you will receive a hefty price. If the customer helps decrease demand for non-participants, they are rewarded handsomely. If they do nothing to help non-participants – not so much.
It’s that simple, fair, and equitable.
 A fable to make a point.
Because everyone reading this blog is in some way reliant on money from electric and/or gas utilities, I pay a lot of attention to the utility business and things like technological disruption and the utility death spiral. I wrote about the utility death spiral back in April. As a result of this fine article in greentechgrid, I’d like to bloviate about ballyhooed disruption.
Disruption is an updated buzzword for “game changer”. Prime example: Netflix to Blockbuster Video, Au Revoir.
Greentechgrid notes a bunch of examples, and I have taken liberty to enhance the list by tabulating them into disrupted (Blockbuster) and disruptor (Netflix). To examine what might be coming for the utility industry, consider what it has and does not have in common with the tabulated examples, and other business practices in general. The utility industry fundamentally does not have much in common with these other industries. What do I mean?
Some of these disrupted industries held on or are holding on for nostalgic reasons or because some people are luddites. For example, post offices and banks are “nostalgic” enterprises. Old(er) people like to hand deliver checks, drop off, and pick up mail. Speaking of which, they used to like to pay their utility bill in person too, accompanied by large doses of yammering with neighbors and people behind the counter. I think I’ve only been in a bank about three times in the past 25 years: Once to set up a mortgage; once to sign stuff; and again to refinance. Doing these things in person is certainly not convenient.
I haven’t visited a brick and mortar clothing store in years. Why? It’s a hassle. I don’t have time. They don’t have what I want. They don’t have my size. Answer: Amazon Prime. I’m lucky if I can find a single pair of jeans my size in a store. Amazon: about a dozen different materials in just one make/model that I like.
Electricity: electrons flowing at 60 Hz from the utility 24/7, about 99.99% of the time. That’s all it will ever be. That’s all it needs to be.
Most industries in the table provide things that are not necessary. I.e., most people can survive without movies. None of them have a requirement for 24/7 availability. Some have 24/7 convenience, but that is far from 24/7 necessity.
Nearly all disrupting forces include a strong dose of pricing advantage. This is why I included those near the end of the list; namely retail, airlines, etc. These are disruptors that don’t change the product or service; they perfect it. The big box retailers are one example. Walmart, Target, Costco are huge-volume retailers that beat their suppliers down on price, and they each wriggle a little differentiation with the others, but they are essentially direct competitors.
This isn’t so much a disruptor, but rather a way to make more money and be more efficient at the core business. I’m talking about outsourcing products and services.
As you may know, I grew up on a Midwest farm, growing corn, soybeans, alfalfa, oats, cattle, hogs, and even way back chickens, and before my time on the planet, dairy. This is how city-folk may envision hayseeds in flyover country today. It isn’t that way anymore.
First, product lines have streamlined down to only a couple crops and probably one, if any, type of livestock. If “it” isn’t needed right now, such as during planting or harvest time, and “it” isn’t used all the time, “it” is contracted out to others because they don’t want to dink around with these things. This includes trucking, barn cleaning, fertilizer application, manure hauling/application, and in some cases, planting and harvesting. To the dismay of livestock, even reproduction (sperm) is outsourced from distant donors (better, cheaper). Focus on the core business.
Many readers were in K-12 back in the late 1990s. Boy, there was one “disruption” that imploded. It was utility deregulation Enron/cowboy style. The “free market” was going to sweep the industry, except it was not, and is not a free market. It is a regulated monopoly market. Back then, utilities were investing in telecoms, overseas generation, and offshore real estate. It all collapsed with the stock market bubble prick around 2000. Interveners howled that ratepayers were paying for failed investments in Bermuda golf courses. Utilities retreated to what they do best: generate and deliver energy.
A utility model disruption would have to buck just about every common characteristic with those noted on the list above.
I took lashings from renewable energy enthusiasts back in January over this post that described the high cost of widespread renewable generation. Well, I like to let others make my point. The Wall Street Journal recently reported that in Germany, which is very aggressively moving to renewable energy, “Average electricity prices for companies have jumped 60% over the past five years because of costs passed along as part of government subsidies of renewable energy producers. Prices are now more than double those in the U.S.” Ditto from Fierce Energy. No spiking the football.
I enjoy felling, cutting, and splitting wood to heat my house. I use a resource that is free and it saves me some money, but I enjoy it – and it’s renewable!!! Frankly, I don’t want to dink around with my own power plant and neither will the vast, vast majority of end users.
Economies of scale; this is what a 2000 MW generating station is. A bazillion 3 kW solar panels swings violently the other way. Think it will be cheap to maintain and keep all that operating, while all the poles and wires must stay in place anyway? I don’t. Sorry. This bucks every business trend in the last century.
Electricity isn’t a movie. It is needed all the time.
When consumers are considering the purchase of an electric vehicle, what are they thinking? Good question.
I would be thinking, how can I fully utilize it and what are the limitations? The limitation nearly anyone would consider include the limited driving range. What can I do with the 70 mile or so cap between charges? Obvious (I think) answers include driving to work and running errands around the city. But there are a boatload of other owner and societal issues no one mentions – not this article from Green Tech Media, which is based on this report from the Edison Electric Institute (EEI).
Both documents urge electric utilities to get on the wagon and promote EVs as a way to restore flagging sales growth. The EEI report includes a short section on challenges, but as most promoters of EVs do, they barely scratch the surface on a huge pile of technical, societal, and equity (fairness) questions.
Take California, please – the bleeding edge of energy efficiency, renewable energy, and electric vehicles. I already discussed the challenges photovoltaic (PV) renewable energy will inflict on California ratepayers in Utility Death Spiral – The Duck has Your Back. You can see in that post that the planned surge in PV does nothing to curb peak use, but rather it makes it worse in that far more power from conventional sources (nearly all natural gas) will come in a very short period of time as everyone returns to their homes for evening activities.
See a little problem here?
Customers use electric cars for commuting to work. They return home, plug it in, and pile on much greater demand on the grid during that peak.
But this can be diverted with “smart” technology and/or added infrastructure by utilities. Smart technology might be waiting till after that peak has subsided – which coincidentally, is when the sun is shining – in Guam. At this point, cars are being charged with electricity generated by natural gas, with maybe 60% efficiency in a combined cycle plant. Why not just cut out the middle man – the power plant, the poles, wires, transformers and all this junk – and fillerup with natural gas and be done with it?
But Jeff, the utilities will/should install charging stations for EVs at customers’ place of work. This way, the PV panels back at my home – the distributed generation that PV enthusiasts boast – can charge my car while it sits in the ramp at work. Isn’t this a little odd? And who is going to pay for the charging station at my place of work? People are not going to pay for it because jobs come and go, and furthermore, I’ll stick with my pets for life, but I’m not going to stick with my parking spot for life.
The answer could be the utility pays for it. If it goes with the rate base, it’s a major equity issue. The poor can barely afford their energy bills, let alone PV panels, let alone a Nissan Leaf. Even if it doesn’t and is leased to users, it’s going to cost a lot. Imagine a gas station for every car!
It wouldn’t be inexpensive either. How many parking garages, lots, and ramps have electrical service with capacity in excess of that required to power high pressure sodium fixtures on 50 foot centers? The electrical pipes to the structure don’t have capacity to support meaningful charging.
The lowest common denominator EVs share with combined heat and power is lack of cost effective electrical storage and optimally timed supply and demand. The kneejerk response to driving around town in a vehicle powered by renewable energy is nirvana. The challenge is the engineering.
A potential solution is swapping batteries. While the Leaf is sitting in the garage at work, the PV panel at home is charging the second battery during the day. But on top of buying my own PV generation, charging equipment, expensive car, I need another battery? They are not cheap. They are not light. They are not even part of the EV design.
One final challenge with EVs, and this gets back to combined heat and power mentioned above – controlling the climate in a car takes an enormous amount of energy. This hardly matters in a conventional vehicle because they are rolling combined heat and power plants on wheels.
Cars are not like homes. They have no insulation. In wintertime, the waste heat generated by a conventional car isn’t just a luxury for comfort, it is entirely essential. Without ventilation to remove moisture from breathing occupants, and freshly showered wet hair in my case, the driver cannot see due to the resultant fogged/frosted windows. If you think texting while driving is risky… you get the picture.
Per my calculations, a car that gets 30 miles per gallon, at 60 miles an hour, produces roughly 200,000 Btu/hour of waste heat = three typical home furnaces. In really, really cold weather, like minus 30, that’s probably just enough to keep the cabin around 70F. At something reasonable, say 20F, it’s about twice as much heat as required. For an EV, it will suck the battery dead like nobody’s business. It’s about 30 kW for cabin heating, which is at least 2x the power needed for propulsion. Cooling presents similar challenges.
These are inescapable maxims.
I can’t say whether utilities have thought about these brick walls, er, I mean challenges, but if I were a EV proponent, I’d say, fuggedaboutit. I’ll take the bus.
The Environmental Protection Agency’s (EPA) announcement a couple weeks ago to decrease carbon emissions from power generating plants by 30% has kicked up a lot of cheering, but also mudslinging and absurd statements. As an engineer, I am an emotionless number crunching, skeptical coot constantly in search of reality and facts – trying to illuminate others who are swayed by hype, 24/7 news, and the internet. Opinions may change, and should, based on facts that do not.
Friday morning I was stretching in my hotel room and reading The Wall Street Journal on my iPad when I came across this eye popping statement from the President and CEO of the American Coalition for Clean Coal Electricity. It was a letter to the editor in response to the EPA’s carbon target. He wrote, “The EPA is hedging its bets on largely unproven energy-efficiency programs that pose enormous cost and implementation challenges. The agency’s proposal sets pie-in-the-sky expectations for these programs that, in turn, inflate calculations across the board and set the stage for wholly unrealistic and unachievable standards.”
I thought, “I need to get Marty Kushler from ACEEE on speed dial.” This truly is a flat-earth society statement. Ironically, the very next letter published by the WSJ was from Steve Nadel, Executive Director of ACEEE.
I also spent much of last week analyzing how to possibly integrate large doses of renewable energy with the grid we have – not the grid we wish we had. This was the result of “the duck” post regarding this topic, from back in April (there have been dozens of articles and blog posts by others since). I was invited to write an article for AESP’s monthly Strategies newsletter to members, and that led to the research.
I learned a lot in the process and the conclusion is: Renewable energy in the form of wind and solar photovoltaic has significant limitations with the grid we have, not the grid we wish we had – unless consumers and utilities spend a lot of money to enable load shifting and storage. The limit, as it stands today, is about 20%. When it gets into the 30% range for renewable energy supplied, like California is doing, weird and wasteful things, like curtailing PV generation during peak production times, comes into play. That’s all I’ll say here, like a movie trailer. Read the article later when it comes out, hopefully in July.
At the opposite end of Mr. Clean Coal guy up there, we have the BANANA (build absolutely nothing anywhere near anything) hempheads who believe we should all pile into megalopolises like Hong Kong and somehow live off solar panels (no sunlight for you) and soylent green.
As ACEEE recently reported, the grid we have and the utilities that use it are not going away, but certainly, changes are in the air – renewables, demand response, combined cycle natural gas plants, electric cars, and so on.
Hey, what about nuclear power? Solar and wind power are space intensive (thus the blackout over Hong Kong), coal is evil, and natural gas should be preserved for better uses as I explained last week.
Nothing comes close to the power density of nuclear power. A single kilogram, 2.2 pounds, of U-235 (an enriched isotope of uranium) will power 20,000 homes for a year. We seem to have lost sight of this. It’s an incredible and safe fuel – carbon free. Some companies, like Southern Company, see the importance of a “full portfolio” – one that includes nuclear, coal, natural gas, renewables, and energy efficiency – and believes the U.S. has the potential to “lead the world in energy.”
The paranoia over nuclear power is spectacular to say the least. I reported on this shortly after the Japanese Tsunami destroyed the Fukushima nuclear plant back in 2011. To summarize, three years later, the tsunami killed 18,500 (includes missing persons) and injured 6,148. It destroyed 127,290 buildings, partially collapsed 272,788 buildings, and damaged another 747,989 buildings.
Yet, get this, the United Nations, that radical right wing arm of The Fox News Channel (that was a joke), stated “that the scientists have found no evidence to support the idea that the nuclear meltdown in Japan in 2011 will lead to an increase in cancer rates or birth defects” and that, “None of the workers at the plant have died from acute radiation poisoning.”
I will repeat that. A complete annihilation of a nuclear power plant, not even a modern one with fully automatic protection systems, resulted in no (nil, zero, none) increase in cancer or birth defects and not a single worker died as a result.
So, I ask, where the heck is nuclear power in the mix for the carbon abatement plan?
And people talk about the development of electric cars will follow that of the cellular phone. Today’s cell phone has more computing power than all the computing power used to put a man on the moon – more computing power than a 1960s computer the size of a house. There are a thousand other barriers that will not allow the development of the electric car to be nearly as successful. But yet there is proven technology to produce nuclear power safely, and likely the technology has advanced to do it inexpensively.
I’m out of space to discuss the technology, but it would follow that of the nuclear Navy, about which I know some things. I will cover this next week, or another time in the future in case something spectacular happens in the meantime.
 European nuclear society – 1kg U235 can generate 24 million kWh
I’ve come to realize over the course of many years that the electric utility business is fascinatingly challenging. No other industry that I can think of has more bosses than an electric utility. In fact, high ranking utility people promoted from Executive Vice President to President/CEO leave a job with one boss and accept a job with dozens of bosses.
A utility must take orders from Washington. Recently, the Supremes overturned a lower court ruling that effectively said, Michigan, you don’t have to listen to New Jersey to set limits on your emissions. Now Mr. CEO, you do.
The utility pleas for a decent rate of return at the state level – readers of this blog understand that it takes a lot of capital to run a utility, but the ignorant don’t think the utility needs to offer a decent rate of return for investors who supply the capital. Customers think this is a multi-billion dollar company made of money. They think the utility spends money like the federal government. No. I haven’t seen utilities spend $375,000 to study why rattlesnakes don’t attack squirrels that wag their tails. Nor do they spend a million dollars studying how playing video games improves grandma’s and grandpa’s cognitive functions. This is true.
Consumers and interveners want heavy doses of “clean” renewable energy – and the part that cracks me up, many times the zealots that demand the renewable energy protest construction of transmission lines to transport power from areas where the wind blows to areas where people live. We have this going on right now, a few miles from my house, with the regulatory approval process for the construction of the Xcel Energy / ITC Badger-Coulee transmission line. What is their major malfunction? Aside from transporting wind-generated energy to populated areas of Wisconsin, it helps stabilize reliability.
Speaking of transmission lines, the ignorant (people) fear “high voltage”. Breaking news: high voltage allows transmission lines to carry more power. You want “low voltage”? Fine. Just take the reciprocal of the voltage reduction, and that’s how many more power lines that will be needed. For example, if the zealots want 90 kiloVolt lines rather than the proposed 345 kV Badger Coulee line, they would need about four of them rather than one, all else equal. Who wants to pay for that? And where would you like those lines to be built?
The other thing, of course, is the elite folks cruising around in their $100,000 Teslas won’t stand for amazingly reliable (relatively) offshore wind generation. They don’t want to look at these things. They make too much noise. By the way, I’ve been around wind-turbines before, and I can’t hear them – probably because the wind is blowing too hard. Who comes up with this stuff?
Recently, of course, hydraulic fracturing has greatly expanded the supply of natural gas. The natural kneejerk reaction by many stakeholders is switch to natural gas and decommission nuclear and coal plants. This looks smart until the price of natural gas, and specifically its price relative to petroleum, returns to historically normal levels. Markets will find a way to use natural gas at roughly $7 per million Btu rather than petrol products at $28 per million Btu, particularly for transportation.
On top of all this is utilities never know what regulations from the EPA will be coming down the pike. The courts, as noted above, have given the EPA a lot of rope to do whatever they want in this regard under the clean air act. Thereby, they pretty well call the shots for fuel supply. Unfortunately for Ms. CEO, the assets to be built have a 40-year or even longer lifespan. Everything is a gamble. In 15 years, the EPA may declare carbon dioxide emissions from combined cycle natural gas plants are a danger to the human race, or maybe just cockroaches and termites, which could result in a catastrophic chain reaction in the food chain ecosystem.
The king of all that trumps everything for a utility, because it’s what customers demand, is reliable power at low cost. All the hissing and moaning from the issues above run counter to reliable, low-cost power. Utilities have to placate a loud but tiny minority, but also in general, most consumers who don’t think of the consequences (i.e. cost) of supporting this wonderland of clean, low cost, always on, invisible, safe, varmint-friendly, avian-safe, zero-emission power; while taking a beating from their largest customers who just want reliable and cheap.
Come to think of it, what is the only source of clean, low cost, always on, invisible, safe, varmint-friendly, avian-safe, zero-emission power? Energy efficiency!
I don’t know much about renewable energy in the form of photovoltaic (PV) electricity generation, other than its efficiency is about 10% from solar radiation to electricity. I’ve collected a mélange of articles that each seem to have interesting, if not humorous, short stories.
First we have the Crips and Bloods of political adversaries; liberal groups like the Sierra Club recruiting Tea Partiers to promote rooftop PV installations in the arenas of politics, regulatory agencies, and with utilities. The punch line: Promoting PV is good for competition. Pause for a laugh break.
A couple regulatory issues were being considered in two southern “red” states: Arizona and Georgia. In Arizona, consideration was being given to lowering the cost at which utilities must purchase electricity from residential PV installations. In Georgia, lawmakers were considering laws to promote solar power. Yep. Sounds like the free market at work to me – you must pay us more and you must promote your competition. The entire crux of energy efficiency programs is a regulatory play to minimize cost for consumers because there is no competition, by design of the systems we have in place.
A descendent of Barry Goldwater, named Barry Goldwater Jr., has started what I’ll call a political action committee named “Tell Utilities Solar won’t be Killed” – and yes, the reader can tell when a name is dumb it is due to a lame attempt to make an acronym, TUSK, as in elephant tusk, as in an appendage of the Republican mascot.
He says Republicans should get behind this because it’s about choice, like vouchers for public schools. Uh Barry, vouchers displace in full the cost of putting a kid in a public school classroom, and generally vouchers are worth substantially less money, like $7,000 versus $12,000 per year. In the PV/Utility case, the utility still has all the fixed cost, plus Barry wants utilities to hand money to the PV proponents. It would be like telling the public school district, you still need to spend the $12,000 for the kid you don’t have and won’t get paid for, and on top of that, you should pay a couple thousand bucks for the voucher kid to promote “competition”.
In Georgia, “tea partiers” are simultaneously bashing Georgia Power (unit of Southern Company) to not pass cost overruns for a nuclear plant onto consumers and pushing for rules to promote rooftop PV. The former would be understandable if the cost overruns are outside the commission approved cost, although I claim almost complete ignorance on this topic. And they go on to say, “consumers should have a choice.” Ok. If you believe that, tea partier, then all costs of both alternatives shall be on the table and subsidies and incentives shall be off the table. But that’s not what they want. They want to eat the cake and enjoy its elegance at the same time.
If you like PV, want to promote it, subsidize it, provide tax credits, this, that, and the other, fine. Argue that case but don’t put a dress on a goat and tell me it’s Ms. America. It is similar to my love for politicians; either they are clueless, don’t understand the issues or how things work, or they are dishonest.
Certainly the interaction of PV and traditional utilities will be interesting to watch in coming years, but as the technology gains greater acceptance, reality will start to set in, and that reality is the cost of supporting the traditional grid to supply electricity to all these customers when the sun isn’t shining or when their system breaks. It will also include what could become an overwhelming cost of subsidies and incentives, which to this point probably have been down in the grass with energy efficiency programs costs.
Another issue is going to be the “soft cost” of PV. To date, it seems the focus on PV cost has been the hardware; the PV panels. These costs have come down to the point that a PV installation is hitting a floor, and the soft costs continue to creep upward. These include installation labor, permitting, and code compliance as described in this article. Much of this is gummed up in bureaucracy and political favoritism (e.g., required union labor) and is one thing for which the US certainly leads the world.
By the way, The Wall Street Journal article was published last summer. Apparently since that time, Arizona Public Service, the large Phoenix area provider, asked for a $50/month surcharge to cover interconnection costs (backup) and were granted $5/month to rooftop PV owners. As this article points out, it is likely not the end of the battle as these costs grow in the future.
Nothing lasts forever, or in some cases, even a couple years. The race to displace current products and services of any stripe is rather obvious, except there will never be a replacement for the McDonald’s hamburger, and running shoes haven’t improved in 20 years. In recent weeks, I have seen perhaps a half dozen articles regarding growing threat to electric utilities. In the most recent article I’ve seen on the subject from The Wall Street Journal, Nick Akins, Chief Executive with AEP, sums it up cleverly and succinctly: “Am I going to just sit here and take it and ultimately be a caretaker of a museum, or am I going to be part of that business?”
The Wall Street Journal article describes the threat to electric utilities as numerous forms of distributed generation, or DG. Large and small companies, and even residential end users, are installing their own power generating equipment in many forms: photovoltaic, combined heat and power, and biogas power generation. Kroger, the giant supermarket chain sends their expired food to gasification plants to generate their own power. That is pretty radical. Food is distributed to supermarkets and on the trip back to the distribution center, fuel, in the form of dated donuts and unused fried chicken, powers their refrigerated warehouse.
Other articles published in Fierce Energy, authored by guys from E Source, and in Business Week, by NRG Energy Executive David Crane, explain the situation for utilities a little further. Utilities have their fixed cost in the form of rate base, discussed in Utilities – A Formula for Contraction. Rate base is the capital on which utilities are allowed a rate of return. This fixed cost is blended in the utility bills of hundreds of thousands of customers, enormous and tiny.
Once DG begins to erode sales, regulated utilities still have all the hardware for which they need to be paid, and so the reaction is, beg the regulators to raise rates to cover their costs. Result: tilts the financials to be even more in favor of DG. Result: more DG. As Mr. Crane calls it, a death spiral.
Not So Fast
There are distinct challenges and issues that must be addressed for any type of DG. First, consider renewable energy – photovoltaic (PV) and wind power. The sun doesn’t always shine, and the wind is erratic and unreliable. I don’t believe Walmart, with 65 MW of PV installed, will shutter its doors when the sun goes down. However, PV would have major implications since it tends to produce peak power when it is needed most, and thereby flattening the load shape for utilities during a significant portion of the day. On the third hand, as the sun sets at 7:00PM on warm September evenings, people are shopping like crazy, swilling beers, cooking, and washing clothes, while the television is blaring away and kids are running around the house with all the lights on. The impacts on peak grid demand may not be that significant, but it may shift an hour or two later in the day. Thus, there is a significant need for standby power.
Another issue with renewable energy is the massive cash incentives and tax favors that shower down on owners of this stuff; not to mention they pay nothing for standby power at this point. In a recent AESP newsletter, John Hargrove from NVEnergy (also Chairman of the AESP board), indicated a photovoltaic system to take care of his electric loads cost $28,000 and after a list of incentives, the remaining cost: $12,500. Well jeez man, if you gave me a 55% discount on a Toyota Prius I might buy one of those too.
Natural gas prices are making DG, and in particular combined heat and power, much more cost effective. But even so, I recently spoke with a major engineering firm that does a lot of DG design, and here in the upper Midwest, they indicated that it would be very difficult to install a natural-gas fired CHP plant with a simple payback under five years.
What may happen is the centralized utility business will convert to more of a standby power provider. Right now, early DG adopters have it easy peezy lemon squeezy. Except for major DG applications, customers pay little or nothing for these standby power supplier charges. Once millions of rickety DG plants are up and running, standby power will become much more expensive, and I would guess customers can either live like the Amish and pay nothing for standby charges because they don’t use it (won’t happen), or charges become very expensive eroding DG cost effectiveness, particularly when the massive subsidies go away.
Speaking of lemons, the opportunity for utilities is to get in the game and provide DG for customers, as Nick Akins implies. I would say utilities can ignore the threat and stick to their business model at the risk of becoming the next Blackberry – THE dominant smartphone player at one point that refused to acknowledge the changing landscape and is now on the brink of collapse.
Don’t shoot the messenger(s).
 Standby power is essentially backup power provided by the utility when DG is not available for any reason.
 A client wanted me to work this phrase into a post, so there you are. Customer service!
This will blow your mind. How many large power plants (500 MW) does it take to cook the thanksgiving turkey across the nation – just the ones cooked with electricity? Answer is provided below. Guess. Don’t be a loser. Guess.
I’ve seen perhaps 100 ads for dust collecting contraptions that everyone including the buyers know will end up under the bed, in the closet, or basement, and finally onto the garage sale to somebody else who will decycle it. These include the things like the Ab Buster 5000 (just made it up), junk you sit on, junk you rock on, junk you push/pull, slip/slide, squeeze or shake. They get body builders that spend 5 hours a day in the gym pumping real iron, doing real body building, to demonstrate the use of this crap with a voiceover of something like, “You will notice results in 5 days with just 15 minutes a day”, which is technically true. In 5 days the sedentary person’s gut, arms, or legs will be burning of lactic acid. The reality of course is, the schmo that buys this stuff is thinking they may look like the dudes and babes on TV if they buy the dust collector. I suppose that every once in a blue moon the stuff is actually used.
I’m more in favor of Rocky Balboa type training – simple stuff, like pulling a log through waste deep snow in Siberia. I run and the only weather or conditions not fit for running are those that might kill me or give me permanent brain damage. That would be limited to excessive heat. Everything else varies from great (minus -30F or 35F wind and rain in the dark or above 85F) to perfect (everything between 0F and 85F). There’s very rarely a legitimate excuse for not running. Real influenza, 103F body temperature, and barely being able to sit up in bed qualifies. I was there four years ago. There are practically no equipment requirements. Most requirements are provided by the state: that is roads, sidewalks, and when necessary bike trails (BORING). The roads are always open.
You really only need one pair but a couple of these are for ice and snow and the rest have varying degrees of mileage so I can bleed a thousand miles per pair by rotating new, old, new, old.
Compare this to the gym. And speaking of BORING, OMG, I was in Scottsdale at the Hotel Valley Ho a couple weeks ago; a fantastic 1950s retro hotel with a beautiful pool, patio area with immaculate greenery. As I was on my way out the door at O’Darkthirty to run, I noticed a row of treadmills on the second floor indoors overlooking the outdoor pool area. They were in use at least, but I was thinking what is wrong with those people? Why would you run in place staring at CNN with an iPod ruining your eardrums next to a stinky guy, in stale, stagnant air? I’d rather run laps in a Wal-Mart parking lot – or the Hotel parking lot, Interstate 5 in Southern California, or the tarmac at JFK in the rain. In this particular case, it was just above 50F and perfect outside, plenty of sidewalks and not much traffic.
Maybe people need an excuse (gym) to “work out”. I don’t get this. Treadmills are stupid (see above). Free weights cost not much compared to a few months of gym membership. Stationary biking can be had for a decent $100 doohickey attachment and a $50 tire for the bike you already have (no one does stationary biking unless they bike for real). There is nothing more brain damaging than riding a stationary bike. If you want to live forever, ride a stationary bike because an hour seems like 8 hours, like reverse dog years. Note THIS stuff is not dust collection material. Only obsessive hard core people use this stuff – triathletes, for example use it in Wisconsin winters. Nobody on TV sells stuff that actually works and gets used. No BS here.
In “Oh Behave” and “Biscuit Discipline” I attempted to make a point that information to save energy or to be healthy alone is not enough. Energy efficiency requires somebody, preferably multiple bodies if not all bodies being involved with constant favorable behavior to sustain savings over time. Both EE and fitness require persistence and activity over time. Grapefruit diets? Not so much.
Long term health and EE have this in common. Neither include simply buying your way to success. Ready?
Switching gears just a little, last week I came across this pyramid for energy efficiency in homes, which I thought was pretty cool. (Although as I type that, I’m thinking, wait a minute, the USDA food pyramids were complete flops, unless one rationalizes it was successful with the “created or saved” sort of government metric.) It seems its creator has prioritized things very well for a residence. It has renewable energy with the highest complexity and investment and I would add poor return on investment.
This spurred me to generate one of these for commercial buildings. The pyramid base – the best stuff – the raw vegetables, fiber, and omega 3 of energy efficiency is retrocommissioning, operations, maintenance, and discipline to stay with it. At the top: seven layer chocolate cake with chocolate drizzle and whipped cream – renewable energy. By the way, it takes just over 100 large power plants to cook the TG bird I mentioned above!
Payback ranges and percent of total facility savings potential are guessed for each category of measure. They are all wrong, so let’s just get that out of the way now. Misguided applications of practically any technology can have 200 year simple paybacks. Results can be all over the place and depend on many things possibly the greatest of which is, what is there now and how it is being used prior to implementation. The years noted of course represent a range of typical simple paybacks for the technology. The percentages represent the portion of TOTAL facility energy consumption the technology can achieve. Note for renewables I have a high of 100%, representing most likely a wind turbine. This can be done as Spirit Lake Schools (Iowa) had done many years ago. They were generating wind energy long before wind turbines sprouted like chia heads in the surrounding areas.
The chart is for commercial facilities only; NOT industrial and manufacturing facilities.
*Building envelope measures can have fast paybacks if the existing condition is terrible. For example, no roof or attic insulation – and in the case of flat roofs, the roof is pealed off anyway for replacement.
Some folks are proposing a switch to using lumens as the metric for selecting light bulbs for purchase at your favorite home improvement store. This would be in lieu of incandescent wattages or equivalents thereof. Uh huh. Around 1980 the US was going to be the last country on the globe to convert to metric units. You know – base 10 everything with common sense conversions like a milliliter equals a cubic centimeter. Fuggedaboutit! Not gonna happen. Funny thing is, by mid-engineering-school career, every engineer clamors to use metric only. Six months out of school they are polluted by old timers who like incomprehensible units like mass in units of grains – and so the insanity lingers perpetually.
Have you had your fill of Occupy Wall Street, (OWS) which has spilled over into dinky, surrounding, wannabe towns including one nearby with a population of a whopping 4,000? Apparently, these in-duh-viduals are protesting rich people and the fact that the rich keep getting richer and the poor, well, are the poor. My response: that’s life. Life isn’t fair. I don’t like the word “fair”. Rather, I like “not cheating”. “Fair” is too often used by whiners. Some of these OWSers are self described anarchists and communists. Oh yeah, there you go. That’s what we need is communism. There’s a model of equal outcomes. How is that Venezuela model working?
I have not a covetous cell in my body. Steve Jobs, or at least his widow, is a multi-gazillionaire having lead his company from the brink of collapse in the 1990s to the world’s most highly valued company, ahead of Wal-Mart, Exxon Mobil, and Microsoft. Speaking of Microsoft, as Steve Jobs once said, Bill Gates has never developed any innovative products in his life, but yet he is a billionaire because he was good at steeling ideas within the law, I guess, and developing a monopoly. Good for him!
The real problem and reason the OWS whiners are misguided is crony capitalism. The DOE and administrations dish out billions of dollars to crony campaign donors who in turn send a big chunk back for reelection campaigns, before or after their ill-conceived company fails and the executives walk away with millions. Or it’s egg before the chicken. The cronies donate a bunch of money and get their investment in government back 10 fold once their guy gets into power.
Let’s see… in the underground economy, there is a name for this: money laundering. So all OWSers should be marching on and petitioning Washington, the root of their grievances. You have to understand the problem to solve it. This is clearly a bipartisan activity and nothing new. However, I would say the recent fanning of the flames, pitting citizens against one another is a bit unprecedented and shameless. Watch the hand! You guys get in a food fight while we (Washington) continue to rip you off.
While I have not a covetous cell in my body, I have billions and billions of cells of rage against crony capitalism, money laundering, cheating, dishonesty, malfeasance, and vast wastes of money and resources.
As mentioned before, Washington should, like utilities have done in recent years, get back to their core business of protecting and defending its citizens against enemies, foreign and domestic. This is the only thing they do remarkably well, although I’m sure there are gobs of waste, but how many plots have been busted and bad guys destroyed in the past decade or so?
Washington is a horrible venture capitalist because (1) they make decisions based on politics and not favorable or acceptable risk/reward, which follows with (2) they are using other peoples’ money so they obviously do not care. It seems there are failed green energy, green jobs companies and/or scandals in the paper each day. Or take my favorite, ethanol. Many are concerned about our ability to feed ourselves as the planet takes on its 7 billionth human, this month or thereabouts. Meanwhile, over 4 billion bushels of high energy corn go to make a tiny dent in our fuel needs and negligible impact on our petroleum imports. That’s roughly 30 pounds of corn for every human on the planet, or maybe 50,000 calories – enough to keep an offensive (as in the team with the ball) lineman going for a couple hours. No. Really it’s enough human fuel for 20-30 days for a mortal human being.
Similar to OWSers, there are end users of energy that whine about high energy costs and hate their utility as a result. Isn’t it ironic that nobody seems to care about energy costs, as in the total cost of running a business, except when prices rise? And end users should consider what is driving prices upward: I would guess the vast majority of price increases is due to emission regulation and construction of wind farms. These things are legislated at state and federal levels. I, unlike the prima donnas (think JFK junior, hypocrite in chief) living in population centers and telling everyone else how to live, do not mind the sight of these behemoths on the landscape.
On a side note, other hypocrites for renewable energy and lower energy cost protest construction of transmission lines from where the wind blows to where people live and wind doesn’t blow. In addition to transporting renewable energy to population centers, it adds reliability and more supply options to the grid. More options mean lower prices. The solution is simple if you ask me. See I-90 in southern Minnesota. Just run the transmission lines down the damn ugly interstate highways where there is already immanent domain and land! It’s flat. It’s open. What? Would it mess up the beauty of billboards for Wisconsin Dells, gentlemen’s clubs, and truck stops? This is a no brainer. What for the love of Pete is all the hassle about? And there aren’t even any dairy cattle near the interstate to pick up the electromagnetic waves causing birth defects like four headed two legged calves.
Whining end users share a loser trait with the OWSers – they would be far better off taking control of their own well being rather than itching and moaning about something they have little control over. And by the way, the control they do have is mainly with their corrupt finaglers in Washington. Very few are accountable. These people represent the very few competitive congressional districts, states, or the entire country, while most are not accountable. The unaccountable include political appointees like Lisa Jackson running the EPA, or Bonnie Fwank and Charlie Rangel, each of whom would have to be caught live on national TV steeling an armored car and maybe running over a few pedestrians to not get reelected. I don’t think felons can be elected from their jail cell but who knows. Felons, dead people, pets and alternate personalities can and do all vote.
For-profit end users that howl about their energy costs are very likely to have more energy cost reduction opportunity than those who don’t. This is Jeff Ihnen’s untested hypothesis. Why? Because the howlers don’t like, and in some cases, detest their energy provider and do not trust them. Detestment (a new word) does not foster cooperation, which is extremely helpful, bordering on essential to control energy consumption and cost.
I have also yet to come across a for-profit, with a strong efficiency track record at the corporate level, howl about their evil energy providers. Well known EE champions with track records that fit this profile include 3M, Pepsico, General Mills, and Simplot.
The message to end users of all shapes and sizes is first control what you can best control – yourself and your organization, and second, pay attention to what’s going on in state and federal governments – each of which are big drivers of energy supply, regulation, and generation sources – the primary drivers of energy price.
I thought this was a great headline for an opinion piece in Saturday’s Wall Street Journal, by Holman Jenkins: “Hooray, A Financial Firm Fails”, describing of John Corzine’s MF Global collapse. What’s even more impressive is that Corzine, formerly of Goldman Sachs, formerly U.S. Senator, formerly New Jersey Governor, is in the admiral’s club of crony capitalists. Failure is progress. Eat your heart out.
I had a really bad week last week – nothing significant occurred to me in the world of EE, and nothing really enraged me or even made me snicker, although I could always rant about federal spending on EE and renewable energy. Actually, if you are so inclined, Kim Strassel from The Wall Street Journal takes it to Rick Perry and Mitt Romney, if you are interested. Who would name their kid “Mitt”? What kind of a name is that? Is that short for Mitchell? Mitt for short, with two ts? Or is it short for Mitten? Why are there baseball “gloves” and a catcher’s “mitt”? Because gloves have fingers and mitts, short for mittens, have none. Wow. I think I figured something out today, although Romney is still confusing as hell in more than one way.
In the end, I did come stumble onto this article regarding SAIC’s programs for Ameren Illinois. Specifically, I was looking at the photo, thinking, this isn’t where the savings are! The vegetables are pretty and attractive, although beware of listeria and e-coli. Who’s your farmer?
But the EE-buying public doesn’t know the bok choi and asparagus are harmless passive loads for the refrigeration system. The engineering nerd wants to see the guys standing in a room full of hunks of iron on steel racks with pipes and conduits perfectly aligned in harmonious symmetry and parallelism.
BTW, engineers cannot handle any abnormalities, curves, interesting angles, or asymmetry – in a word: art. If you want to get an engineer to sing like a canary, put them on a stool in an empty room lined with Picassos, Kandinskys, and Miros. This would be harsh psychological torture. Why are so many engineers obsessed with woodworking? In another word: square. I’m easy. If I were chemically influenced enough to create, say an entertainment center, I would purposely skip the squares, rulers, pencils and all that crap. Does the end result look like crap? No. It’s art.
Come to think of it, this could be why it is difficult for new graduates to transition into energy efficiency. We don’t solve problems like, “How much work does it take to empty a 16 gallon keg of beer with a hand pump?” (Wisconsin is the only state in the union that refers to this thing as a “half barrel”) That keg question was on my final exam for my first semester thermodynamics course, and that is no joke.
We never have complete information to analyze an energy project, even when we can get everything we can think of. One has to learn what matters and what doesn’t really matter. We are not solving problems like a 1000 Btu of heat is added to a cylinder with water blah blah, this, that, and the other. How far does the piston move?
Unlike design, and possibly any other profession engineers delve into, when calculating energy use/savings, we want it to be as accurate as possible with no safety factor. Most building design, especially new construction, is performed using cookbook methods and then multiplying by 4 because this building will be warm and it will be cool – dammit! Well, this may be fine but it costs the owner, in many cases, a fortune because stuff is grossly oversized to begin with and oversize isn’t like a quad artery bypass burger from Carl’s Junior. Come to think of it, it probably is. You pay more now and you will really pay the rest of its life.
Not all oversizing is created equal. Belt and suspenders design is especially costly as entire systems are virtually redundant with EXTRA equipment. For example, you DO NOT want belt and suspenders for an earthen heat exchanger for a heat pump system. That is costly. Installing an air conditioner or boiler that is 50% larger than it should be isn’t ideal but at least in most cases it isn’t going to proportionally increase the cost, like a couple dozen extra bores for heat pump well field would.
How do people think about EE for decision making and what did the designer have in mind when he designed this behemoth? These are the things that interest me most about EE and they are encapsulated in program evaluation and retrocommissioning. In program evaluation, we are asking, what good is this program anyway? That is a big question to be answered with responses and answers to a thousand other questions. Most of our work for evaluation includes determining gross savings – actual savings. Attributes of a good evaluator include those of a good referee, judge, investigator, interrogator, psychiatrist, dog trainer, social scientist, mathematician, philosopher, priest and engineer. To the square engineer, this seems boring, stupid, and frivolous. To the artful or person who can’t stand wasted money, unrealized or fake savings, it is great stuff.
In retrocommissioning, it helps enormously to figure out the profile of the designer or firm that designed the systems. Descriptions include:
- This must have been the first of this type of system these guys designed. It is designed with backup for everything, which for a nuclear power plant is good, but not for your building.
- These guys paint by numbers. There is no thought or creativity whatsoever. E.g., they put an equipment room on a central air handling system, which will waste energy like crazy.
- I have no idea what the hell this guy was thinking. This is the most bizarre thing I have ever seen.
- These guys actually did a pretty good job.
With retrocommissioning, like evaluation, one has to work with incomplete information and sometimes it requires psychoanalyst skills as well. Being a genius and having tons of experience to recognize the fingerprints of an energy hog are both highly valued, but one also needs the social skills required to act like a schmo or a fan of whatever football, baseball, hockey team, sport, politician or car the customer wants to yap about. Don’t worry about golf. If the guy wants to talk golf, it’s the wrong guy.
Japan, with its devastated tourism industry since the tsunami and Fukushima meltdown, may offer 10,000 free flights to revive tourism. Fukushima is keeping people away? It would be an attraction to me – like seeing a volcano spouting lava.
In the OMG department this week, Bernie Sanders, self-described socialist senator from Vermont, espouses on-bill financing of energy efficiency projects consistent with a key part of my plan a couple weeks ago. This could be described as a broken clock being right twice a day but Sanders has a digital clock. A better allegory would be, even the Minnesota Vikings franchise will win the Super Bowl at some point if the league survives a long time, maybe 10,000 years would do it?
Lastly, in the home improvement department, last week I took on a chore for which I am capable – running a drill and grinding paint and rust down to bare metal. Pictured nearby is the front door to our house. It was manufactured by Pella Windows and is probably 12 years old. It was rusting as shown around the fru fra plastic frame, which is removed as shown in the picture. Upon removing the fru fra, it was obvious why this was happening. Look at the gaping cavity with no insulation. Jeez man, I think they could use some better engineering, or possibly the assembly line guy was in the restroom when this one passed his station. For extra credit, why did this happen and why did it rust where it did?
The barrier to having a decent energy policy is very similar to the barriers of solving illegal immigration. Both the left and the right have their own vested interests in not fixing the problem. I see the political spectrum as a circle, not a line from far left to far right. It is a circle because when views get so extreme, they are supported by both the far left (e.g. Dennis Kucinich) and far right (e.g. Ron Paul). Personally, I respect both of these guys and I have no doubt they are sincere in their beliefs and want the best for the country. An example on which they agree is pulling out of Afghanistan, yesterday. Very few on the right agree and few on the left, including the President, agree.
The same dynamic is at work blocking decent energy policy. The left wants to stop the use of any fuel with a “C” in the molecular makeup but they also object to all realistic alternatives, including nukes and hydro. The right opposes any sort of standards whatsoever on the demand side – mileage standards, CFLs for a couple examples. The good folks in western Minnesota and Iowa are fine with building massive wind farms but neither left nor right want a transmission line from the La Crosse area to Madison to improve reliability by having more access to generation AND getting the renewable energy to where it can be used.
The Afghanistan equivalent in EE: smart meters. The far left doesn’t want them because they cause cancer. But then again, this is coming from California where organic vegan mother’s breast milk causes cancer. Everything causes cancer in CA. On the far right are the Glen Becks who think the government is going to spy to find out when you leave for work and commandoes will swoop in and secretly log the contents of your underwear drawer for blackmail material.
Last week I attended the Association of Energy Service Professionals (AESP) conference in Dallas that featured an overarching theme of consumer behavior and smart grid. First off, what is smart grid? If I polled 1,000 people I’d get 997 different answers. It is entirely nebulous. The other three wouldn’t have any idea.
I took a pre-conference class on evaluating programs that include elements of smart grid and behavior and my definition of a smart grid is two way communication with customers via the electric meter. That is the bare bones definition I think – but there is also grid design for reliability, so like if the Christmas, er I mean holiday light burns out they don’t all go out. But I know little about the grid reliability stuff.
As I was sitting there in the class, I developed my own framework for the energy future.
WHEREAS, consumers want reliable power at negligible cost.
WHEREAS, the hard left abhors any form of reasonable energy supply.
WHEREAS, the hard right abhors any form of restraint on consumption.
NOW, THEREFORE, A SOLUTION is offered by Jeff Ihnen that delivers the framework for the genius grid that everyone must agree with.
Electricity prices can skyrocket during peak periods as shown in the chart in this article, which is actual quasi-deregulated Texas pricing. Prices rise sharply the minute supply starts eating into the required spinning reserves, but it is capped at $3 per kWh right now – thus quasi deregulated in my book. They are talking about raising that to maybe $6 per kWh.
Genius grid solutions should be developed on both demand and supply for power. On the demand side, the genius grid would include a home area network with amperage meters and relays (cutout switches) on major appliances – central air conditioning, clothes dryer, maybe refrigerators and freezers, and water heaters. Over a year’s time the genius grid logs and builds a model for energy consumption based on time of day, weather conditions and day of the week for each meter. Now the utility has something to work with because they know exactly how much power the AC unit is pulling on Tuesday afternoon at 2:00 PM just before July 4 when it’s 96 degrees outside.
The genius grid, rather than giving price signals to consumers, e.g., it is going to cost you $26,000 to keep your house at 68 degrees the rest of the day, it would instead BUY your agreement to shut down your AC. This would come on your i-Phone/Android/Blackberry. “Shut down your AC for $20 this afternoon?” Accept? Decline? Hit accept and you get $20 credited to your bank account instantly. And so on. Homes become a source for increasing power available on the grid.
BTW, I see residential end users as the best applications for genius grid. Homes have many unneeded loads that can be shed during the day and loads that can easily be shifted to eight from six o’clock. I don’t mind my house at 80F but I couldn’t stand working with full garb in the office at 80F.
On the supply side, customers can put power on the grid for some of these high peak costs from renewable and other sources. Take photo-voltaic panels installed on houses. The panels are generating peak electricity while powering a number of things in the home and maybe selling the excess back to the grid at some ridiculously low price. (But I really don’t know how the current pricing works.) Why not have the utility send a buy message to your iPhone to shut down all major appliances for the afternoon and buy the 2kW from the PV for four hours at $3 per kWh? That’s $24 in the bank account for doing practically nothing. And you could do this while you are daydreaming in a sensitivity training session.
Readers of this blog know I’ve bashed all-electric vehicles numerous times because it is a plain stupendously idiotic idea. However – hybrids and plug-in hybrids even are great ideas. You drive to work and park your plug-in hybrid in the preferred spots next to the handicapped section and plug it into the charging station installed by General Electric with the assistance of obscene federal subsidies. Now the iPhone buzzes while you are nodding off in the sensitivity session and says, “Hey Bozo. We will buy from your car’s generator for $2 per kWh for three hours.” Let’s see… say 50 hp motor can generate 25 kW for three hours, that’s a $150! – enough for five fills of gasoline, or better yet, 20 fills of natural gas. It can start remotely. It can automatically shut down so you don’t go to leave work with a dead battery and empty tank.
Making money, I believe, is sexier and more attractive to consumers (versus saving) and everyone likes to mess with their phones 200 times a day. Just watch people when their hands aren’t on a computer keyboard. They are fiddling with their phones.
Everyone has a bad story or 20 about air travel but there are some things that are really bizarre to me. Have you ever seen passengers sit in an airplane after most everyone else has deplaned? I haven’t either. Yet it is a “privilege” to board first, as in first class. If I had my druthers, I’d like to sit in a recliner sipping a martini in the skyhigh club until the last second before entering the aluminum tube. The only reason I want to get in the tube as soon as I can is so I can fit my carry-on in the overhead compartment in cattle class – and get the hell out of the airport as fast as I can when it lands. If I were in first class, there’d be all kinds of space for my carry on, so what’s the rush?
Can first class customers not swill enough booze in three hours? Are they trying to get their money’s worth of “free stuff” in exchange for the $1,000 extra they paid? I almost forgot, first class customers get to board on the left aisle in the terminal past the ticket counter. They get a special blue rug to walk on – like the red carpet at the Oscars I guess. Oooooh. (I stepped on it once myself) A fellow passenger was snickering and throwing barbs at the blue carpet and staff as we boarded.
It seems my flights are served by smaller and smaller planes. On three hour rides I always had at least a six-across Airbus A-320 or a Boeing 757. Then it was crappy little MD-80s and DC-9s, and more recently four-across jets made by companies with names I forget or cannot pronounce. On these little planes, those in cattle class get to stumble over the first class passengers who had the privilege of sitting in the plane as long as possible. I don’t know about you, but I’d rather not have 80 people running over my toes, spilling my drink and watching what I’m doing, thinking, “What does that guy do? He must be the CEO’s nephew. He doesn’t look smart enough to manage a hotdog cart.” First class passengers never look at second class passengers (at all for that matter) and wonder, “What does that serf do for a living? That may have been the guy trying to wash my windshield when I was trapped by the red light. That one looks like a day-laborer. That one looks like a cab driver and that one probably washes dishes at a diner.”← Older posts