Net- Metering is a specific utility term used to describe the way utilities may allow small home generators to feed electricity back onto their electric distribution wire grids.
The DSIRE database, (Data base of State Incentives for Renewable & Efficiency) lists each state’s renewable programs. They define net- metering like this:
“Net Metering Rules For those consumers who have their own electricity generating units, net metering allows for the flow of electricity both to and from the customer through a single, bi-directional meter. With net metering, during times when the customer's generation exceeds his or her use, electricity from the customer to the utility offsets electricity consumed at another time. In effect, the customer is using the excess generation to offset electricity that would have been purchased at the retail rate. Under most state rules, residential, commercial, and industrial customers are eligible for net metering, but some states restrict eligibility to particular customer classes.”
This is a widely accepted definition but gets confused by some utility programs that don’t really offer net-metering. Instead they offer wholesale or avoided cost metering. This often requires two meters installed at the customer’s expense. One meter records the kWh flowing into their house from the utility grid and the other meter records the flow of electricity from the home’s power generation sources like a PV array or small wind turbine. The market drives the cost of electricity just like it does other commodities and the price we all pay on our electric bill reflects market value as well as actual costs for delivery. In the case of small alternate energy generators, utilities typically pay a wholesale rate for any energy that they buy directly.
One myth that is often used to oppose net-metering is the myth that meters go forward more accurately than they go backwards. Eletromechanical meters have no physical reason to run any differently more or less accurately no matter which way the current is going. Yet, this is the reason that many utilities require two meters. Two meters doubles your minimum monthly service charge and throws an un-necessary obstacle into the net-metering road.
Utilities that offer true net-metering, allow one meter that goes both directions. With this arrangement, consumer’s gain by having any energy that they generate going back to cancel the incoming kWh hours.
Once the meter hits zero on the register the price changes. Now you are making a net contribution to the grid instead of just canceling out your utility company generated power. So, the price you make on each kWh goes down to the wholesale rate which is typically 40 to 60 percent less than the retail rate. So, if you are going to run payback numbers for your project, you need to find out the average retail rate per kWh when you calculate the financial benefits of installing your own net-metering equipment.
Safety has always been very important to electric utilities and rightfully so. You can’t make any mistakes handling 14,000 volts of electricity without serious – usually fatal consequences. So, may utilities require a long list of lock out safety requirements and a hefty insurance liability policy from homeowners interested in installing net metering equipment.
Some utilities require a physical lock out device accessible to utility personnel; all day every day so that they can isolate your system from the grid while they are working on distribution circuits effected by your system.
I heard a good talk several years ago by a knowledgeable engineer about the potential danger from net-metering facilities. He seemed to think that the likely hood of a 12 or 24 volt 1.5 to 3.0KW net-metering system back feeding enough voltage to injury a line worker was a remote possibility and said it really was not scientifically supportable. Yet many utilities still persist in adding this substantial obstacle to net- metering installations from home owners.
Today, there are several alternate energy system inverters that take care of most of the legitimate interconnection and safety issues raised by utility regulations.
The main problem with net metering relates to the way you get billed for electricity. In most locations there are two parts to your bill. One part is a kWh charge that is supposed to cover all of the costs of getting each kWh to your house from the generation facility. The other part of your bill has a fixed minimum monthly charge or availability of service fee that is supposed to cover those expenses that a distribution utility incurs whether you use any electricity or not. If you leave town and throw your main breaker to the off position, you will not use any kWh. But, your meter is still sitting there ready for action and the wires coming to your house are still in the air or under the ground waiting for something to do and the utility company still needs to send a meter reader or use software to read your meter remotely just in case you use some juice that month. These fixed costs, like property taxes, accounting expenses and administrative expenses continue whether you use electricity or not. Also these expenses are often so high that utilities bundle a portion of the fixed expense into your kWh charge. So, if you are a net-metering customer whose meter hits zero or generates a lot of your own power that displaces the utility grid power , you are cutting into their revenue, without making a meaningful contribution to cutting the costs for buying power during the night and on cloudy days.
What may change utility attitudes toward net-metering is the growing need for additional generation resources and the clamor over fossil fuel generation. Utility executives maybe looking for net-metering resources to fill in peak daytime loads when the sun is shining, thus taking some of the pressure off financing new fossil fuel resources.
Do you have a question about how your electricity gets to your house? Ask me. I'll try to find out? GOt any other questions about electric energy generation? Ask me. I'll get some answers.
Thursday, January 31, 2008
Wednesday, January 23, 2008
Alternate Electric Generation Systems need Facts
It happened again Saturday. I was in a room of about thirty people eager to hear about the Sierra Club’s Cool Cities program. These thirty people appeared to be well educated. We were all certainly well feed because the meeting was at an Irish Pub. I thought about speaking up. Maybe it was the pint of Guinness. Maybe it was the weekend. At any rate, I bit my tongue and sat on my hands to avoid climbing on my soap box and alienating the few remaining friends I have.
Well meaning speakers got on the subject of net metering, wind power and hydro-electric energy generation. They were making the kind of statements that make uneducated crowds cheer and utility executives barf.
Here are some of the comments. “We have wind resources that should be used to replace dirty coal fired power plants”. “Solar energy systems are available that can be built into your house and power your home without the need for dirty coal fired power plants”.
Man, if it were only that simple.
Yes, there are wind resources throughout the United States that could be developed to provide power into the grid. Yes, there are integrated solar photo-voltaic systems that can be built into your house to provide clean energy. Yes, there are low head and small hydro-electric opportunities across the USA that contribute power to the nationwide electric grid. These things exist today and people are actually doing them, but there is more to the story. I believe that blindly repeating these cheer leader statements creates a climate of distrust between utilities and consumers that destroys the working relationships needed to really solve our electric energy problems.
The future of all of these technologies is exiting and optimistic. Yet, there are some very valid reasons that utilities might balk at massive expenditures to bring these technologies into the system today.
Wind Power- Wind power has seen exponential growth in construction and development, but it is still a small portion of the generating resource that keeps all of our lights on. In many areas the wind blows hard enough to get your attention but not hard enough to make a financially viable resource. The obvious limitation is that we expect electricity all the time, but the wind doesn’t blow all the time even in the Dakotas. Yes, some day there may be enough wind generation equipment well connected and spread out over a big enough area that system managers can “schedule” reliable power to load centers (like your neighborhood). Today however, utilities know that you will not wait to have electricity until the wind is blowing. This means that while wind can make a growing contribution to the grid, utilities feel that they must have base load reliable power generation that they can schedule to meet your power needs. So now, they are building and paying for wind facilities and coal fired facilities at the same time. This is part of the reason that generation utilities grimace in a crowd that’s screaming for more wind power. The other limitation to wind power is that people don’t usually like to live in a good wind resource area. While Chicago may be an exception, wind resources aren’t located near major population centers. So now we are talking major transmission facility construction and the people that are usually pro- wind, seem to be Not in My Back Yard (NIMBYS) when it comes to building transmission systems. Studying your wind resource for a full 12 months is the only way to find out what the wind power potential is for your site. You can get a rough idea about wind resources national wide from the National Renewable Energy Laboratory (NREL).
Solar Power-New developments in thin film construction for solar panels promise to make collectors that will turn 50 percent of the light that hits them into power instead of the 10 to 25 percent efficiency of panels in service today. Today you can buy solar roofing materials that do double duty. These new products have been commercially available for years and protect your roof like shingles while making electricity at the same time. Thousands of homes across the nation are using solar panels called photo-voltaic systems to power their homes. So why not just go solar now? -Two reasons. First they aren’t going to power my home unless I make major (read expensive) changes to my home’s building envelope (walls, attic insulation, windows) and appliances (refrigerator, well pump, stock tank heater, etc). Second, no one wants to be in the dark when the sun goes down, so making central station solar generation, puts us in the dark just when we get home and want the power. The exception to that is business and air conditioning loads. Here again we run into a “disconnect” between wishful thinking and reality. A simple Photo voltaic system with controls and equipment will set you back $10,000 to $20,000 for a modest system capable of generating 1.5 KW (kilo-Watts) and every five to seven years you get to replace batteries at about $4- 5 K a wack. When I go through my house and add up the load demands my appliances and equipment require, I’m in trouble and I’ll bet your home and business is in the same situation. It takes a very large and very expensive system to supply the 500 kWh per month average energy demand of homes in the USA. If you are serious about going solar you have to get a copy of the Real Goods Source book. It’s a product catalogue and a how to manual rolled into one book.
Hydroelectric power- Big dams have gotten a lot of bad press lately. Never mind that customers in big dam areas have some of the lowest power bills in the nation. Big dams create a host of other environmental problems that have their own opponents. Small hydro facilities in the 500 KW range are springing up nation-wide MARK FIND OUT FACTS. These facilities have real potential to contribute to the electric grid in regions that have the resource. So why aren’t utilities knocking down the doors to license and build these facilities? Well, there are two reasons, licensing and building. Each permit to build generation equipment requires a long drawn out battle because of all of the conflicting issues. Why go through multiple battles 500 to 1000 KW at a time when you can fight one 100 or 500 Megawatt battle and build the facility closer to the load demanding the power?
Even the smallest hydroelectric system can use more water and more water fall than you think. If you think you have a small hydroelectric resource you must do the research and study of your water resource to find out the potential to make electricity. The Real goods catalogue can help, but other hydroelectric education resources are available.
So, there you have it. I know it’s confusing. I know that in one sentence I sound like a democrat and the next sounds more republican. I had one women read my stuff and get real confused about which side I was on, and that is the problem today. It seems we have to pick sides and one side is for dirty coal and the other side is for clean renewable energy. The truth is both sides want electricity 24 hours a day 7 days a week. Utilities are mandated by law to do two things. First they have to supply the amount of power you want when you want it. Second, they have to do it at the least possible expense. If that wasn’t hard enough, they have to get permits and design approval ten years before you want the power. No wonder some of those executives are cranky.
My next blog will explain why most utility executives hate net-metering.
Well meaning speakers got on the subject of net metering, wind power and hydro-electric energy generation. They were making the kind of statements that make uneducated crowds cheer and utility executives barf.
Here are some of the comments. “We have wind resources that should be used to replace dirty coal fired power plants”. “Solar energy systems are available that can be built into your house and power your home without the need for dirty coal fired power plants”.
Man, if it were only that simple.
Yes, there are wind resources throughout the United States that could be developed to provide power into the grid. Yes, there are integrated solar photo-voltaic systems that can be built into your house to provide clean energy. Yes, there are low head and small hydro-electric opportunities across the USA that contribute power to the nationwide electric grid. These things exist today and people are actually doing them, but there is more to the story. I believe that blindly repeating these cheer leader statements creates a climate of distrust between utilities and consumers that destroys the working relationships needed to really solve our electric energy problems.
The future of all of these technologies is exiting and optimistic. Yet, there are some very valid reasons that utilities might balk at massive expenditures to bring these technologies into the system today.
Wind Power- Wind power has seen exponential growth in construction and development, but it is still a small portion of the generating resource that keeps all of our lights on. In many areas the wind blows hard enough to get your attention but not hard enough to make a financially viable resource. The obvious limitation is that we expect electricity all the time, but the wind doesn’t blow all the time even in the Dakotas. Yes, some day there may be enough wind generation equipment well connected and spread out over a big enough area that system managers can “schedule” reliable power to load centers (like your neighborhood). Today however, utilities know that you will not wait to have electricity until the wind is blowing. This means that while wind can make a growing contribution to the grid, utilities feel that they must have base load reliable power generation that they can schedule to meet your power needs. So now, they are building and paying for wind facilities and coal fired facilities at the same time. This is part of the reason that generation utilities grimace in a crowd that’s screaming for more wind power. The other limitation to wind power is that people don’t usually like to live in a good wind resource area. While Chicago may be an exception, wind resources aren’t located near major population centers. So now we are talking major transmission facility construction and the people that are usually pro- wind, seem to be Not in My Back Yard (NIMBYS) when it comes to building transmission systems. Studying your wind resource for a full 12 months is the only way to find out what the wind power potential is for your site. You can get a rough idea about wind resources national wide from the National Renewable Energy Laboratory (NREL).
Solar Power-New developments in thin film construction for solar panels promise to make collectors that will turn 50 percent of the light that hits them into power instead of the 10 to 25 percent efficiency of panels in service today. Today you can buy solar roofing materials that do double duty. These new products have been commercially available for years and protect your roof like shingles while making electricity at the same time. Thousands of homes across the nation are using solar panels called photo-voltaic systems to power their homes. So why not just go solar now? -Two reasons. First they aren’t going to power my home unless I make major (read expensive) changes to my home’s building envelope (walls, attic insulation, windows) and appliances (refrigerator, well pump, stock tank heater, etc). Second, no one wants to be in the dark when the sun goes down, so making central station solar generation, puts us in the dark just when we get home and want the power. The exception to that is business and air conditioning loads. Here again we run into a “disconnect” between wishful thinking and reality. A simple Photo voltaic system with controls and equipment will set you back $10,000 to $20,000 for a modest system capable of generating 1.5 KW (kilo-Watts) and every five to seven years you get to replace batteries at about $4- 5 K a wack. When I go through my house and add up the load demands my appliances and equipment require, I’m in trouble and I’ll bet your home and business is in the same situation. It takes a very large and very expensive system to supply the 500 kWh per month average energy demand of homes in the USA. If you are serious about going solar you have to get a copy of the Real Goods Source book. It’s a product catalogue and a how to manual rolled into one book.
Hydroelectric power- Big dams have gotten a lot of bad press lately. Never mind that customers in big dam areas have some of the lowest power bills in the nation. Big dams create a host of other environmental problems that have their own opponents. Small hydro facilities in the 500 KW range are springing up nation-wide MARK FIND OUT FACTS. These facilities have real potential to contribute to the electric grid in regions that have the resource. So why aren’t utilities knocking down the doors to license and build these facilities? Well, there are two reasons, licensing and building. Each permit to build generation equipment requires a long drawn out battle because of all of the conflicting issues. Why go through multiple battles 500 to 1000 KW at a time when you can fight one 100 or 500 Megawatt battle and build the facility closer to the load demanding the power?
Even the smallest hydroelectric system can use more water and more water fall than you think. If you think you have a small hydroelectric resource you must do the research and study of your water resource to find out the potential to make electricity. The Real goods catalogue can help, but other hydroelectric education resources are available.
So, there you have it. I know it’s confusing. I know that in one sentence I sound like a democrat and the next sounds more republican. I had one women read my stuff and get real confused about which side I was on, and that is the problem today. It seems we have to pick sides and one side is for dirty coal and the other side is for clean renewable energy. The truth is both sides want electricity 24 hours a day 7 days a week. Utilities are mandated by law to do two things. First they have to supply the amount of power you want when you want it. Second, they have to do it at the least possible expense. If that wasn’t hard enough, they have to get permits and design approval ten years before you want the power. No wonder some of those executives are cranky.
My next blog will explain why most utility executives hate net-metering.
Tuesday, January 15, 2008
The Death of the Electric Utility Industry- Part Two
So, here is the scenario for the demise of central station electricity power grids. Many of the key elements are already visible. First you have climbing electric rates. Today, no one is predicting a decrease in electric rates. In fact no one is predicting stabilization of electric rates in the near future.
Next as central station power production rates climb, costs for alternative power systems keep going down. Innovations in wind turbine design, solar photo-voltaic output and other alternate electricity systems continue to drive down the costs of delivering power to your house from these choices. And, the majority of these systems are designed to work right at your house. No more buried cable or over head power lines for residential development. Bye Bye wires companies. No more distribution meters on homes for local distribution companies, adios distribution companies.
Of course this isn’t going to happen tomorrow, but the trends are there. Today the driving expense for wholesale power costs are power plants and transmission grids. These two features of the electric utility industry are also the most damaging to the environment. Witness the reduction in the number of proposed coal fired power plants as investors and consumer re-evaluate their roles in a climate change environment. Take away the residential load and what happens? Poof, now all that’s left is business and industrial loads.
Here too the trend is moving to disbursed generation facilities. Part of this movement is to improve reliability and part is a direct response to increasing rates and the lack of control that businesses feel over electric utility rate increases. The Y2K scare drove many industries to set up back up power systems that were under their control, just in case. So, many facilities have already done some of the planning to be grid free.
What can you do about all of this. Get informed. Find out how solar and wind might work at your house. Use existing tools to calculate what it would take for you to get off the grid. Even if you choose not to make the plunge, like me, you will at least understand your energy appetite and be able to have some control over your own climate change emissions. Here are some sites to get you started with your quest.
For innovations in wind energy see- http://www.getsmartenergy.com/
For help sizing your photovoltaic system see- http://www.realgoodssolar.com/
For help reducing your home energy use see- http://www.epa.gov/cleanenergy/energy-and-you/reduce.html
I like electric utilities, really I do. I’m not ready to do this stuff by myself. I want a team of lineman ready to help get the lights back on after a storm. I want an office of skilled engineers designing a safe and reliable system to keep my home running. What I don’t want is an industry wide arrogance about individual energy choices that assumes central station power generation is the only economical way to go. That may be true today, but tomorrow will be here sooner than many utility executives can imagine.
Next as central station power production rates climb, costs for alternative power systems keep going down. Innovations in wind turbine design, solar photo-voltaic output and other alternate electricity systems continue to drive down the costs of delivering power to your house from these choices. And, the majority of these systems are designed to work right at your house. No more buried cable or over head power lines for residential development. Bye Bye wires companies. No more distribution meters on homes for local distribution companies, adios distribution companies.
Of course this isn’t going to happen tomorrow, but the trends are there. Today the driving expense for wholesale power costs are power plants and transmission grids. These two features of the electric utility industry are also the most damaging to the environment. Witness the reduction in the number of proposed coal fired power plants as investors and consumer re-evaluate their roles in a climate change environment. Take away the residential load and what happens? Poof, now all that’s left is business and industrial loads.
Here too the trend is moving to disbursed generation facilities. Part of this movement is to improve reliability and part is a direct response to increasing rates and the lack of control that businesses feel over electric utility rate increases. The Y2K scare drove many industries to set up back up power systems that were under their control, just in case. So, many facilities have already done some of the planning to be grid free.
What can you do about all of this. Get informed. Find out how solar and wind might work at your house. Use existing tools to calculate what it would take for you to get off the grid. Even if you choose not to make the plunge, like me, you will at least understand your energy appetite and be able to have some control over your own climate change emissions. Here are some sites to get you started with your quest.
For innovations in wind energy see- http://www.getsmartenergy.com/
For help sizing your photovoltaic system see- http://www.realgoodssolar.com/
For help reducing your home energy use see- http://www.epa.gov/cleanenergy/energy-and-you/reduce.html
I like electric utilities, really I do. I’m not ready to do this stuff by myself. I want a team of lineman ready to help get the lights back on after a storm. I want an office of skilled engineers designing a safe and reliable system to keep my home running. What I don’t want is an industry wide arrogance about individual energy choices that assumes central station power generation is the only economical way to go. That may be true today, but tomorrow will be here sooner than many utility executives can imagine.
Monday, November 26, 2007
The Death of the Electric Utility Industry
"The reports of my death are greatly exaggerated"- Mark Twain.
Like Mark Twain, the US electric utility industry will no doubt be surprised by my predictions that their death is coming soon. This is no apocalyptic prediction and certainly no veiled monkey wrench threat; so, DHS don’t get your knickers in a knot.
What I am talking about is the age old cyclical nature of technology and the natural evolution of things from disbursed to central and back to disbursed again. I am sure entropy is at work in this, or chaos theory or at least a corollary version of my mother’s plea to, “put all your toys in one box”. But, I knew that keeping my toys spread out through the house was more efficient. I could get them quicker and if one broke I didn’t have to go all the way back to the toy box to get a new one.
Hang with me just a little longer this is really cool stuff and what you are about to learn will help you for the rest of your life.
The popular press and media hype about renewable energy versus that bad old kind of energy made from coal and hydrocarbon fuels leads many people to believe that if those greedy bastards at the electric utility company would just use wind and solar instead of coal, our electric bills would drop with green house gas emissions. Then Al Gore could retire and quit using all that jet fuel to travel around the world telling everyone about global climate change.
It must be a fossil fuel baron’s conspiracy keeping the world from clean air and cheap power right? After all the sun shines everywhere and that damned spring wind makes everyone insane part of the year and Wyoming residents crazy all year long. You just have to watch our vice president for awhile to see the proof of that, but I digress.
If you want to call yourself an American, or an Environmentalist or an Industrialist or a true blue techie, you have to know the history of electricity generation. I’m not going to launch into the details of the knock down drag out contest between the Alternating Current philosophies of Thomas Edison and the Direct Current philosophies of Nikola Tesla, but read those links and find out what the limitations where of each system because that same argument is coming back to haunt the electric utility industry.
It’s no secret that distributed distribution (e.g. home light plants and individual municipal electric generation) systems generally went the way of the dinosaur. Efficiencies for power production and air quality have long been assumed to be best with a central location for power production. Why else do you think all of those investor owned, cooperative and municipal utilities got together to power the industrial world from central power plants? Check it out yourself. If you live in or near a city that existed before the 1940’s, I’ll bet you that they had their own, light plant or power plant. When large central station transmission lines came to the neighborhood most of these municipalities dropped their power generation facilities and started buying the bulk of their electricity from a wholesale power supplier. Doing this reduced their costs and their headaches. It also made the air in your city cleaner.
Yet as construction costs, electricity demand, and environmental concerns grow, it will be these big central power suppliers that will disappear like an extinct reptile. No- wait; I like electric utilities, really. Without them we would have all been in the dark and powerless. Yet today, their desperate fight for survival is due to the fact that the big money and the big expense, is still in central station electricity generation. And, it’s the “big expense” part of the equation that spells the death knell for electric power generation as we know it.
Of course the electric utilities argue that alternate energy is not capable of powering our society. They are right and they will continue to be right for another 15 to 50 years or until society changes and that is where it gets interesting. Society is changing and the change is accelerating in a way that will make distributed power generation king again, dethroning King Coal and its entire kingdom. Remember, “The stone age did not end because we ran out of stones and the Oil (fossil fuel) Age will not end because we ran out of Oil (fossil fuels). – Don Huberts, Shell Hydrogen.
My next Blog entry will begin to explain how I think this is going to happen.
Like Mark Twain, the US electric utility industry will no doubt be surprised by my predictions that their death is coming soon. This is no apocalyptic prediction and certainly no veiled monkey wrench threat; so, DHS don’t get your knickers in a knot.
What I am talking about is the age old cyclical nature of technology and the natural evolution of things from disbursed to central and back to disbursed again. I am sure entropy is at work in this, or chaos theory or at least a corollary version of my mother’s plea to, “put all your toys in one box”. But, I knew that keeping my toys spread out through the house was more efficient. I could get them quicker and if one broke I didn’t have to go all the way back to the toy box to get a new one.
Hang with me just a little longer this is really cool stuff and what you are about to learn will help you for the rest of your life.
The popular press and media hype about renewable energy versus that bad old kind of energy made from coal and hydrocarbon fuels leads many people to believe that if those greedy bastards at the electric utility company would just use wind and solar instead of coal, our electric bills would drop with green house gas emissions. Then Al Gore could retire and quit using all that jet fuel to travel around the world telling everyone about global climate change.
It must be a fossil fuel baron’s conspiracy keeping the world from clean air and cheap power right? After all the sun shines everywhere and that damned spring wind makes everyone insane part of the year and Wyoming residents crazy all year long. You just have to watch our vice president for awhile to see the proof of that, but I digress.
If you want to call yourself an American, or an Environmentalist or an Industrialist or a true blue techie, you have to know the history of electricity generation. I’m not going to launch into the details of the knock down drag out contest between the Alternating Current philosophies of Thomas Edison and the Direct Current philosophies of Nikola Tesla, but read those links and find out what the limitations where of each system because that same argument is coming back to haunt the electric utility industry.
It’s no secret that distributed distribution (e.g. home light plants and individual municipal electric generation) systems generally went the way of the dinosaur. Efficiencies for power production and air quality have long been assumed to be best with a central location for power production. Why else do you think all of those investor owned, cooperative and municipal utilities got together to power the industrial world from central power plants? Check it out yourself. If you live in or near a city that existed before the 1940’s, I’ll bet you that they had their own, light plant or power plant. When large central station transmission lines came to the neighborhood most of these municipalities dropped their power generation facilities and started buying the bulk of their electricity from a wholesale power supplier. Doing this reduced their costs and their headaches. It also made the air in your city cleaner.
Yet as construction costs, electricity demand, and environmental concerns grow, it will be these big central power suppliers that will disappear like an extinct reptile. No- wait; I like electric utilities, really. Without them we would have all been in the dark and powerless. Yet today, their desperate fight for survival is due to the fact that the big money and the big expense, is still in central station electricity generation. And, it’s the “big expense” part of the equation that spells the death knell for electric power generation as we know it.
Of course the electric utilities argue that alternate energy is not capable of powering our society. They are right and they will continue to be right for another 15 to 50 years or until society changes and that is where it gets interesting. Society is changing and the change is accelerating in a way that will make distributed power generation king again, dethroning King Coal and its entire kingdom. Remember, “The stone age did not end because we ran out of stones and the Oil (fossil fuel) Age will not end because we ran out of Oil (fossil fuels). – Don Huberts, Shell Hydrogen.
My next Blog entry will begin to explain how I think this is going to happen.
Tuesday, October 30, 2007
Air Permit Denial Threatens to Cost Consumers
Like the old Chinese curse, " may you live in interesting times", recent events could be on track for a perfect storm for electric utility generation, with electricity consumers caught in the middle and footing the bill as usual.
The convergence of recent US Supreme Court decisions, pending State and Federal government climate change legislation and citizen discussions about global warming put consumers at risk for a deluge of electric rate increases. Add a cold winter, or higher transportation and maintenance costs and the writing is on the wall. For those consumers that believe that current electricity rates are too low and do not reflect the external costs of air pollution created during electricity generation, the recent decision to deny power plant air quality permits in Kansas is a good decision. For those consumers struggling on fixed incomes or tight budgets, the decision may mean electric rates will continue to climb. That could be bad for everyone.
The Background
Tri-State G&T proposed the joint construction of the largest coal-fired power plant in the United States, to be built at the cost of $3.6 billion. The power plant with its two 700-megawatt generators was to be built and financed by several utilities including, Tri-State Generation and Transmission Association, Sunflower Electric Association, Golden Spread Electric Cooperative, Inc, and Midwest Energy.All four companies are member owned, non-profit cooperative corporations. The first three companies are wholesale power suppliers. Sunflower, organized in 1957, serves six rural electric distribution cooperatives in 34 western Kansas counties. Tri-State, started in 1952, is owned by and serves 44 electric cooperatives across portions of Colorado, Nebraska, New Mexico and Wyoming. Golden Spread Electric Cooperative was founded in 1984 and serves 16 distribution cooperatives in Oklahoma and Texas. Midwest Energy serves customers in central and western Kansas.
The new power plants are planned as an expansion to existing power generation facilities owned by Sunflower on their 10,000-acre, 360-megawatt Holcomb Station site. This is located approximately four miles south of Holcomb, Kansas.
The original plan was for Golden Spread, Sunflower, Tri-State and other investors to jointly own the first new 700-megawatt unit. Construction of the first unit was planned to begin in 2007 and be operational in 2012. Golden Spread planed to own 400 megawatts of the unit’s output for supply to its member systems. Sunflower expected to provide up to 150 megawatts to its member systems, and Midwest Energy was in for 75 megawatts. Tri-State planned to own the second 700-megawatt unit, to supply power to its member systems. This unit was projected to be online in 2013, but recent proposals before the denial show Tri-State postponing construction and tying the construction schedule to future load growth.
The Denial
According to an October 18, 2007 Kansas Department of Health and Environment (KDHE), press release concern over carbon dioxide production was the key factor in permit denial. Bolstered by the recent US Supreme Court decision (Massachusetts v. EPA), KHDE Secretary Roderick L. Bremby, stated, "I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing".
Massachusetts v. EPA defined carbon dioxide ( CO2) as an air quality pollutant that should be regulated by the EPA. The 66 page Supreme Court Opinion refers to specific scientific studies and reports documenting the existing and predicted negative impacts from global climate change and ties these changes directly to human activity; specifically the accelerated production of green house gases. Carbon dioxide heads the list of these green house gas emissions.
The EPA defines coal fired electricity generation as the single largest source of CO2 emissions in the USA. Coal fired electricity generation exceeds CO2 emissions from the entire transportation sector.
This permit denial is the first such denial in the nation."We are disappointed with the Secretary's arbitrary and capricious action," said Earl Watkins, Sunflower's president and chief executive officer. Those disappointed with the denial point out the neither the EPA or the State of Kansas include CO2 as a regulated air pollutant. Project partners felt that they had met all environmental and regulatory requirements with their proposal.
This action also changes Sunflower's plans to invest in and advance algae technology that would use carbon dioxide from the power plants. Attempting to address carbon emissions, the project partners completed initial testing for an innovative algae reactor that would use a portion of the carbon dioxide emissions from Holcomb Station to produce biofuels, including ethanol and biodiesel. Funds that would have been earned from the power plant expansion project were expected to be used to finance Sunflower's investment in the commercial algae reactor.
The Next Step
Tri-State's general counsel Ken Reif reported to the G&T's employees, "Naturally we are all disappointed in this action and we are in the process of evaluating our options with Sunflower and our board."
Sunflower’s President and CEO Watkins said, "Politics aside, the 1.5 million cooperative customers still need reliable, low- cost power. We will endeavor to fulfill that mission in the appropriate way, but those customers will be harmed and the economy damaged by the Secretary's decision. Sunflower expects to pursue legal and legislative remedies to this denial."
Talk about Denial
Wholesale power utilities still do not get it. They continue to promote misleading statements regarding global warming or climate change and insist that decisions are being made based on emotion and "politics" rather than science. If it wasn’t for "politics", utilities and consumers would have been paying higher generation rates for decades to account for externalities - pollution etc., caused by fossil fuel electricity generation. Some argue that as soon as electricity becomes expensive enough to be worth saving, energy conservation will finally kick in and become a serious part of demand side management, instead of the token savings that it is inmost homes today.
In any case the Kansas Department of Health and Environment took one of the first steps toward new thinking and new energy solutions. In these interesting times it will be very interesting to see the impact that this permit decision has on other coal fired power plant construction plans across the nation. It will be even be more interesting to see how utilities meet the growing national demand for electricity with limited generation resources and a growing demand for climate change action.
© 2007Mark Daily
The convergence of recent US Supreme Court decisions, pending State and Federal government climate change legislation and citizen discussions about global warming put consumers at risk for a deluge of electric rate increases. Add a cold winter, or higher transportation and maintenance costs and the writing is on the wall. For those consumers that believe that current electricity rates are too low and do not reflect the external costs of air pollution created during electricity generation, the recent decision to deny power plant air quality permits in Kansas is a good decision. For those consumers struggling on fixed incomes or tight budgets, the decision may mean electric rates will continue to climb. That could be bad for everyone.
The Background
Tri-State G&T proposed the joint construction of the largest coal-fired power plant in the United States, to be built at the cost of $3.6 billion. The power plant with its two 700-megawatt generators was to be built and financed by several utilities including, Tri-State Generation and Transmission Association, Sunflower Electric Association, Golden Spread Electric Cooperative, Inc, and Midwest Energy.All four companies are member owned, non-profit cooperative corporations. The first three companies are wholesale power suppliers. Sunflower, organized in 1957, serves six rural electric distribution cooperatives in 34 western Kansas counties. Tri-State, started in 1952, is owned by and serves 44 electric cooperatives across portions of Colorado, Nebraska, New Mexico and Wyoming. Golden Spread Electric Cooperative was founded in 1984 and serves 16 distribution cooperatives in Oklahoma and Texas. Midwest Energy serves customers in central and western Kansas.
The new power plants are planned as an expansion to existing power generation facilities owned by Sunflower on their 10,000-acre, 360-megawatt Holcomb Station site. This is located approximately four miles south of Holcomb, Kansas.
The original plan was for Golden Spread, Sunflower, Tri-State and other investors to jointly own the first new 700-megawatt unit. Construction of the first unit was planned to begin in 2007 and be operational in 2012. Golden Spread planed to own 400 megawatts of the unit’s output for supply to its member systems. Sunflower expected to provide up to 150 megawatts to its member systems, and Midwest Energy was in for 75 megawatts. Tri-State planned to own the second 700-megawatt unit, to supply power to its member systems. This unit was projected to be online in 2013, but recent proposals before the denial show Tri-State postponing construction and tying the construction schedule to future load growth.
The Denial
According to an October 18, 2007 Kansas Department of Health and Environment (KDHE), press release concern over carbon dioxide production was the key factor in permit denial. Bolstered by the recent US Supreme Court decision (Massachusetts v. EPA), KHDE Secretary Roderick L. Bremby, stated, "I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing".
Massachusetts v. EPA defined carbon dioxide ( CO2) as an air quality pollutant that should be regulated by the EPA. The 66 page Supreme Court Opinion refers to specific scientific studies and reports documenting the existing and predicted negative impacts from global climate change and ties these changes directly to human activity; specifically the accelerated production of green house gases. Carbon dioxide heads the list of these green house gas emissions.
The EPA defines coal fired electricity generation as the single largest source of CO2 emissions in the USA. Coal fired electricity generation exceeds CO2 emissions from the entire transportation sector.
This permit denial is the first such denial in the nation."We are disappointed with the Secretary's arbitrary and capricious action," said Earl Watkins, Sunflower's president and chief executive officer. Those disappointed with the denial point out the neither the EPA or the State of Kansas include CO2 as a regulated air pollutant. Project partners felt that they had met all environmental and regulatory requirements with their proposal.
This action also changes Sunflower's plans to invest in and advance algae technology that would use carbon dioxide from the power plants. Attempting to address carbon emissions, the project partners completed initial testing for an innovative algae reactor that would use a portion of the carbon dioxide emissions from Holcomb Station to produce biofuels, including ethanol and biodiesel. Funds that would have been earned from the power plant expansion project were expected to be used to finance Sunflower's investment in the commercial algae reactor.
The Next Step
Tri-State's general counsel Ken Reif reported to the G&T's employees, "Naturally we are all disappointed in this action and we are in the process of evaluating our options with Sunflower and our board."
Sunflower’s President and CEO Watkins said, "Politics aside, the 1.5 million cooperative customers still need reliable, low- cost power. We will endeavor to fulfill that mission in the appropriate way, but those customers will be harmed and the economy damaged by the Secretary's decision. Sunflower expects to pursue legal and legislative remedies to this denial."
Talk about Denial
Wholesale power utilities still do not get it. They continue to promote misleading statements regarding global warming or climate change and insist that decisions are being made based on emotion and "politics" rather than science. If it wasn’t for "politics", utilities and consumers would have been paying higher generation rates for decades to account for externalities - pollution etc., caused by fossil fuel electricity generation. Some argue that as soon as electricity becomes expensive enough to be worth saving, energy conservation will finally kick in and become a serious part of demand side management, instead of the token savings that it is inmost homes today.
In any case the Kansas Department of Health and Environment took one of the first steps toward new thinking and new energy solutions. In these interesting times it will be very interesting to see the impact that this permit decision has on other coal fired power plant construction plans across the nation. It will be even be more interesting to see how utilities meet the growing national demand for electricity with limited generation resources and a growing demand for climate change action.
© 2007Mark Daily
Monday, September 3, 2007
RESIDENTIAL ENERGY TAX CREDITS HELP YOU SAVE ENERGY
If you make certain types of energy efficient improvements to your primary home in 2007, you may be able to apply for tax credits to lower your income tax requirements or increase your income tax return for 2007.
The Energy Policy Act of 2005 and its amendments encourage homeowners and renters to install energy efficient home improvements in three major categories; Residential building envelope improvements; Residential heating system improvements, and; Solar energy system additions.
If you qualify for building envelope improvements, you may be able to take a tax credit of 10% of the cost of your “nonbusiness energy property credit” improvements up to a total of $500. The materials referred to in the IRS general instructions for Form 5695 must be new and permanently installed to last at least five years. These improvements can include insulation materials, exterior windows, exterior doors and storm doors and some metal roofing materials. Labor costs for these improvements eligible for the tax credit.
Heating system improvements or “Residential energy property costs” include certain electric heat pumps, ground source or geothermal heat pumps and other space conditioning equipment. Labor costs are eligible for this tax credit which has the same tax credit eligibility of 10% up to a maximum of $500.
Solar energy tax credits are referred to as the “ Residential Energy Efficient Property Credit”. This credit is limited to 30% of your costs including labor up to a maximum credit of $2,000 for qualifying photovoltaic and solar water heating systems.
This article is not a tax consultant article. To make sure these credits apply to you, talk to your tax consultant, the Internal Revenue Service (IRS), or refer to IRS Form 5695. The Energy Star website also has more information.
Eligible improvements must be in place by December 31, 2007 and meet other requirements to qualify, so make sure you check it out before buying your improvements.
© Mark Daily, 2007
The Energy Policy Act of 2005 and its amendments encourage homeowners and renters to install energy efficient home improvements in three major categories; Residential building envelope improvements; Residential heating system improvements, and; Solar energy system additions.
If you qualify for building envelope improvements, you may be able to take a tax credit of 10% of the cost of your “nonbusiness energy property credit” improvements up to a total of $500. The materials referred to in the IRS general instructions for Form 5695 must be new and permanently installed to last at least five years. These improvements can include insulation materials, exterior windows, exterior doors and storm doors and some metal roofing materials. Labor costs for these improvements eligible for the tax credit.
Heating system improvements or “Residential energy property costs” include certain electric heat pumps, ground source or geothermal heat pumps and other space conditioning equipment. Labor costs are eligible for this tax credit which has the same tax credit eligibility of 10% up to a maximum of $500.
Solar energy tax credits are referred to as the “ Residential Energy Efficient Property Credit”. This credit is limited to 30% of your costs including labor up to a maximum credit of $2,000 for qualifying photovoltaic and solar water heating systems.
This article is not a tax consultant article. To make sure these credits apply to you, talk to your tax consultant, the Internal Revenue Service (IRS), or refer to IRS Form 5695. The Energy Star website also has more information.
Eligible improvements must be in place by December 31, 2007 and meet other requirements to qualify, so make sure you check it out before buying your improvements.
© Mark Daily, 2007
Tuesday, August 21, 2007
Wind Energy Could Be Mainstream Generation Resource Soon
With over 11,000 megawatts of wind energy on line in the USA and 2,000 of it coming on line in 2006 alone, wind stands to be a major contributor to renewable energy generation.
One of the obstacles to the adoption of wind generation as a major electric energy generation source in the Untied States has been the contention by some in the Utility industry that wind energy must be covered by duplicate dispatchable fixed output generation facilities. This argument has been used to down play the importance and usefulness of wind energy to the growing renewable energy moment. The argument goes like this.
Since the wind can stop blowing at any time, coal or other conventional generation resources must be built simultaneously with wind production facilities, just in case the wind stops blowing. While it maybe true that wind is not as reliable as conventional generation, according to a Utility Wind Integration Group ( UWIG) report entitled, “ Utility Wind Generation State of the Art”, studies confirm that wind generation can stand alone as a generation source without the requirement for fossil fuel back up. The anti wind sentiment also dampened the enthusiasm of utility planners to the acceptance of combined cycle gasification technologies and other advance clean coal and clean fossil fuel technologies because they argued that the extra expense of these unproven technologies was not justified if wind generators could kick in any time the wind was blowing hard enough to cover the demand.
While some of you may see a pattern here ( read conspiracy) I think that utilities justifiably and sincerely are concerned about the impact that wind generators might have on a stable energy grid. Restarting a coal fired plant (50% or more of the USA’s generation fuel) is no easy task. Neither is balancing load requirements with available electricity generation facilities. While some may retort that this is not rocket science, I think its pretty close. Keep in mind that terribly expensive things happen to utilities when there is not enough power available to cover the demand from millions of independent homes and businesses. Every kilowatt hour sent to your house or business comes from a system that plans ahead for your equipment to come on even when you haven’t told anyone that you have the equipment.
Utilities have developed sophisticated computer models that use weather forecasts, seasonal business cycle histories and historic residential demand data for the average home in their service area. They are prepared to turn on, ramp up and stoke up generation facilities or turn off, ramp down or slow down every generator in the USA every thirty minutes to an hour 24 hours a day 365 days per year. Just to keep us in “cold beer and toast”, as Amory Lovins says. I think it’s a bit more serious than just cold beer and toast, but a surprising amount of energy is wasted every year.
The UWIG report acknowledges that Wind Generators are a different type of generator but assure planners that wind generation can fit into the existing electricity generation system nationwide, with the proper planning, design and integration.
Electric energy dispatchers rely heavily on weather forecaster’s temperature predictions for scheduling their power delivery. The UWIG report says that weather forecasters are 80% effect at predicting wind speeds and durations. This additional weather data can go a long way towards making wind generators as reliable, predicable and dispatch able as fossil fuel generators.
Recent policy approvals for amendments to the National Energy Policy Act of 2005 lend new support for renewable energy initiatives. This could be the perfect storm that renewable energy needs to get a little help out there. The coal, nuclear and oil industries have subsidies and federal support that has been in place for decades. Now is the time to lend that same support to renewable energy by supporting Renewable Electricity Standards.
California, New Mexico, Minnesota, Oregon, and Colorado – have or are implementing Renewable Portfolio Standards of 20 percent or more. Now is the time to take it nation wide. Contact your congress person today.
What are your energy questions these days? Drop me a note and I'll try to cover your question in a future blog.
© Mark Daily 2007
One of the obstacles to the adoption of wind generation as a major electric energy generation source in the Untied States has been the contention by some in the Utility industry that wind energy must be covered by duplicate dispatchable fixed output generation facilities. This argument has been used to down play the importance and usefulness of wind energy to the growing renewable energy moment. The argument goes like this.
Since the wind can stop blowing at any time, coal or other conventional generation resources must be built simultaneously with wind production facilities, just in case the wind stops blowing. While it maybe true that wind is not as reliable as conventional generation, according to a Utility Wind Integration Group ( UWIG) report entitled, “ Utility Wind Generation State of the Art”, studies confirm that wind generation can stand alone as a generation source without the requirement for fossil fuel back up. The anti wind sentiment also dampened the enthusiasm of utility planners to the acceptance of combined cycle gasification technologies and other advance clean coal and clean fossil fuel technologies because they argued that the extra expense of these unproven technologies was not justified if wind generators could kick in any time the wind was blowing hard enough to cover the demand.
While some of you may see a pattern here ( read conspiracy) I think that utilities justifiably and sincerely are concerned about the impact that wind generators might have on a stable energy grid. Restarting a coal fired plant (50% or more of the USA’s generation fuel) is no easy task. Neither is balancing load requirements with available electricity generation facilities. While some may retort that this is not rocket science, I think its pretty close. Keep in mind that terribly expensive things happen to utilities when there is not enough power available to cover the demand from millions of independent homes and businesses. Every kilowatt hour sent to your house or business comes from a system that plans ahead for your equipment to come on even when you haven’t told anyone that you have the equipment.
Utilities have developed sophisticated computer models that use weather forecasts, seasonal business cycle histories and historic residential demand data for the average home in their service area. They are prepared to turn on, ramp up and stoke up generation facilities or turn off, ramp down or slow down every generator in the USA every thirty minutes to an hour 24 hours a day 365 days per year. Just to keep us in “cold beer and toast”, as Amory Lovins says. I think it’s a bit more serious than just cold beer and toast, but a surprising amount of energy is wasted every year.
The UWIG report acknowledges that Wind Generators are a different type of generator but assure planners that wind generation can fit into the existing electricity generation system nationwide, with the proper planning, design and integration.
Electric energy dispatchers rely heavily on weather forecaster’s temperature predictions for scheduling their power delivery. The UWIG report says that weather forecasters are 80% effect at predicting wind speeds and durations. This additional weather data can go a long way towards making wind generators as reliable, predicable and dispatch able as fossil fuel generators.
Recent policy approvals for amendments to the National Energy Policy Act of 2005 lend new support for renewable energy initiatives. This could be the perfect storm that renewable energy needs to get a little help out there. The coal, nuclear and oil industries have subsidies and federal support that has been in place for decades. Now is the time to lend that same support to renewable energy by supporting Renewable Electricity Standards.
California, New Mexico, Minnesota, Oregon, and Colorado – have or are implementing Renewable Portfolio Standards of 20 percent or more. Now is the time to take it nation wide. Contact your congress person today.
What are your energy questions these days? Drop me a note and I'll try to cover your question in a future blog.
© Mark Daily 2007
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