Solar Power International Is a Learning Experience
Terrific day at the Solar Power International (SPI) show yesterday. I had the opportunity to take in a 30-minute presentation by an extremely senior analyst at Bloomberg, though it really wasn’t particularly good news for distributed solar.
The over-supply midday means very low wholesale prices, which is a tricky problem to solve. One possible solution is time-of-use metering, causing power consumers to shift their use from early evening (the peak) into the middle of the day, though it’s currently unknown how much demand elasticity this new pricing model will produce.
Another potential solution is the widespread adoption of electric transportation–IF these EVs are charged during the day.
And here’s a possible approach: building solar farms west of the load they serve, since eastern locations get dark earlier, thus moving into the peak while there is still sun in the west.
Being out here at SPI is a truly enriching experience. Wish you were here.
From the original post:
“One possible solution is time-of-use metering, causing power consumers to shift their use from early evening (the peak) into the middle of the day, though it’s currently unknown how much demand elasticity this new pricing model will produce.”
Actually, there is noting new about that. For more than half a century that I know of, in some parts of the country electric water heaters have had one element that operates only during off-peak hours. In 1957, I had a summer job at a hardboard manufacturing company. Twice a year they changed plant operating hours as peak demand for electricity changed; they did so to take advantage of lower off-peak rates.
What does seem strange is that changing rates according to peak usage is not more common.
@ Craig and @ Frank
Nice post Craig, the forecasts for soalr dg mostly show a dip due to the over generation and lowering of wholesale prices etc. The Cal prescription is Time of Use rates for all residential customers in 2019.
But as you and Frank said people will have to shift some consumption back to the middle of day while solar is working to reduce peak load after 6 pm.
Most SW utilities and into Cal also now peak from 3 30 to 7 30 pm at nite or longer. This has changed since my utility days when the peak was 2 pm to 430 pm or so. Load dropped big time after 5 pm Little refrigeration also.
But now we have all the shopping centers , stores open till 10 pm , Restaurants and other 18 hr a day business that we did not have. Residential users are loaded up w Electronic devices computers, tables , multiple TV lots of other gadgets. So we peak later and longer.
Makes the solar DG case more difficult to completely off set the utility peak demand.
One approach that is being studied it to install half of the solar panels South for energy production year round. And the other half WEST facing for peak summer production running out to 7 or 730 at nite. These systems would have reduced annual kwhr production but they would produce more valuable kwhr during the Peak times. May be a solution to the battles.
Utilties can assign a higher capacity Value to WEST facing solar as some systems reduce KW load on Feeders during the peak hours by 62 % versus South facing which can earn a Capacity Value of mid 25 % or so. South facing tends to peak out by 3 pm depends, and while producing till 6 pm in summer its capacity factor is lower than at Noon to 3 pm.
Market Impact Utilities realize this so they are looking at Utility scale solar with single trackers so they can cover the 7 am to 730 pm summer load curve and that really is effective. Solar prices for utility scale over 50 megawatts is in the $ 1.75 watt range. Projected to be at $ 1.10 to $ 1.20 per watt by 2019 or sooner. Utilities and /or developers can use the 30 % ITC till 2019 so lots of the big projects will come on line and the net metering battles will slow dg. In any case solar like wind is becoming one of the least cost options going forward.
In Texas ERCOT predicts 5,000 megs of dirty coal will close in next 5 years or so replaced by 17,000 to 25,000 megawatts of Utility Scale Solar. The rest of the coal fleet in Texas will close by 2030 or sooner. Coal death Spiral woes creating Big Opportunity for Solar. As solar is the least cost option of all options. Texas market is getting ready to ROAR and SOAR !
Solar Marching along with Wind and there are no nuclear Genies to be Found !!! Deep in the Heart of Texas !!
Frank Time of use rates have been around for years the utilities were reluctant to use them due to higher metering costs and the high cost of Automated meter reading until the digital age came. Now they are embracing it and how this impacts solar dg is still very uncertain.
In the Plains states the Coops are selling 80 gallon Elec water heaters with controls and super insulated. They use no energy during most of day and they are charged up at night by the utility with EXcess Wind Power so the wind is not wasted during low load times. So the utility industry in some places is getting creative and learning how to embrace Renewable Power creating much higher value for the excess wind power at night. So some good progress for all. The customers get a cheap Off Peak Wind rate! there are around 80,000 of these time of use water heaters in the Plains states.
Contrary to our contrarian friends from Down Under WIND is standing Tall and Delivering across the US and Europe and other places. LOTS MORE IN THE PIPELINE .
Craig,
I hope you’re having a great time at the Solar Power International (SPI) show. If nothing else these conventions initiate a lot of interesting conversations and can be very thought provoking.
I wouldn’t worry to much about analysts from Bloomberg. Bloomberg analysts (senior or otherwise ) don’t have a great record, although the latest article from Bloomberg highlights information that has been obvious for some years now.
The article, [www.bloomberg.com/news/articles/2016-09-13/the-u-s-rooftop-solar-boom-is-grinding-to-a-halt] adds Bloomberg’s voice to a growing chorus that both Solar and Wind rely heavily on Government subsidies, incentives and complicated mandates, to justify their existence on a global scale.
Both technologies should regain some credibility and relevance due to the arrival of GM’s new Bolt. With a 230 mile range, and $24,000 (after subsidies and incentives) this small EV should rejuvenate interest in EV technology, (Maybe even persuade you to consider buying an EV:), and make home solar more attractive and Wind/solar subsidies more politically acceptable.
In the long term, large scale Wind/Solar must compete with emerging technologies,some of whom are direct competitors such as new advanced micro-nuclear generation, and technologies that remove the urgency for “any zero carbon generation, no matter how inefficient”, such as the promising results from research into removal/recovery and conversion of atmospheric CO2 etc, on a global scale.
The technology to remove/recover and convert atmospheric CO2, always seemed a fantastically unrealistic gargantuan task ! However, the results of going research is proving that the technology may be far less far fetched or complex than first believed. The time-frame to deploy such technology is also potentially far closer, and less costly than imagined.
Just as the knowledge that human technology can negatively affect composition and chemistry of the Earth’s atmosphere is not new, neither is idea human technology could positively influence composition and chemistry of the Earth’s atmosphere has also been mooted.
Neither of these emerging technologies will prove very economically or socially disruptive. (bad news for those hoping for an exiting apocalyptic revolution).
Investment models for both technologies are in progress by institutions with the resources, expertise and analytical experience to implement the result of such analysis.
Wind and Solar are currently at the height of their popularity. Both technologies have eager and ardent supporters, along with massive corporate investment to be protected.
Unfortunately, investment and the image of success depend upon taxpayer/consumer support. Taxpayer/consumer support will quickly dissipate when the obvious inefficiencies begin to be assessed .
In recent times a slowly, but increasing number of highly reputable critics of large scale Wind and Solar are emerging. These critics are not just energy commenters, such as [http://www.edn.com/electronics-blogs/power-points/4442678/The-gap-between-renewable-energy-promises-and-reality], but also independent and government auditors, financial analysts.
The recent announcement by two of the world’s largest financial institutions to take legal action against the Spanish government for reneging in guarantees to ensure the profitability of the institutions investment in Solar/Wind, is a very disturbing development.
Both Wind and Solar technologies have a role to play in future energy generation, but it will be a more reduced and marginal role that it’s enthusiastic supporters advocate.
@ Marco
You Paint with a Broad brush – Yes there may be some situations where some of the momentum may slow for solar and wind . But this is going to be the result of high level resource economics. Right now Utility scale solar s value is rising to the Grid and it can displace higher marginal cost power – nuke, coal, gas. in certain situations and it is. Same for Wind in conjunction with new gas .
They depress wholesale prices and this only goes so far down before it disrupts the economics of running competing fuels plants. Thus the recent closings of some nukes and coal plants.
But at a high level of deployment the price of power falls so low it becomes un economical to add any more solar to the grid. solar will be working against it self. as they say. anymore capacity of any type and load growth is fairly flat in US , Load factors in decline too. National average is 50 % which is a sign of sick business model. No need for big baseload plants. ERA is over !
The other factor and it has nothing to do with technology. the utility co can only accept a certain amount of capacity. They all have Resource Planning schedules and once they get the capacity level they need with the proper reserve margin then they don’t need to add any to the rate base. They will not earn a return on it as the regulator will not allow it.
So there will be a Lull; when its only a guess. Depends on Clean Power Plan in US if it holds then the boom holds out longer to replace coal plants as I stated in my previous Post. Planned coal closings has Texas raising its forecast for solar pv utility scale from around 10,000 megawatts to now they are looking at 17,000 to 25,000 megawatts of solar by 2025 to 2030 and it is not subsidized any more than your favorite Nuclear Jenie has been for 60 plus years. so Don’t Paint with such a Broad Brush it can carry lots of Paint – but it runs and leaves big gaps in your analysis that you present. You need some stats to back up your forecast you present just a Broad Brush!
The percentage switch to RE in china is impressive and the growth of nuclear there is very small in comparison on GW basis. Coal has gone from Flat to negative reducing now , check back in 10 years and the sky will be cleaner.
Craig and I both allude to a slow down in solar dg. The reasons are many but then politicians may find a way to juice the market its up in the air ???
Carry On Mate
Silent,
Selecting only favorable information from a small number of locations to form a distorted scenario, is the same argument used by those who quote Costa Rica as an example of how every nation can operate on 100% ‘renewable’ energy.
Only 44% of Costa Rica is connected to the grid. Costa Rica has no industrial or manufacturing demand and 96% of all that ‘renewable’ power is generated by hydro with another 3% geothermal.
All Costa Rica’s hospitals, Government offices, emergency services etc are equipped with diesel generators during frequent power shortages. In addition Costa Rica is a tiny nation with a per capita income of less than $10,000.
Costa Rica has less than 1% Wind and Solar.
The relevance to the rest of the world is non-existent.
The Peoples Republic of China is not a doyen of ‘renewable energy’, on the contrary, the PRC is heavily committed to coal fired generation and building advanced Nuclear generating capacity. The PRC has reduced it’s investment in wind and solar, although some wind projects are being built in the western PRC.
You’ve got the wrong China! The ROC, (Taiwan) has proportionally a larger commitment to Wind and Solar.
Like most supporters of any particular technology, your analysis lacks objectivity. You see only what you want to see.
The problem for large scale Wind and Solar is very simple, without government mandates, regulatory requirements, incentives, and other subsidies it can’t economically compete outside certain locations.
Industrial nations require “power on demand” not ” power when available”. Developing nations also require “power on demand”.
Electric Power transmission infrastructure is both very inefficient and costly, which is why the first major manufacturing took place beside coal fields or near coal transport depots.
The micro-nuclear generators of tomorrow will be located in the centre of demand with very little transmission infrastructure and minimal losses. Judging advanced Nuclear by 70 year old technology standards would be like judging intercontinental Air travel by the standards of a DC3!
Often this is the case with technology. It doesn’t need to be “bad”, just lacking a competitive edge.
Large scale Wind and Solar have captured the public and government imagination, in the same way as bio-fuel once did. Eventually, it becomes obvious that the dream can’t survive reality.
Some years ago I recommended and took a strategic position myself in lithium investments. That’s a resource stock of my lifetime.
If I were asked about a long term resource investment, I would recommend Thorium, and Thorium technology. There is still a great deal of merit in advanced molten salt technology using uranium, but my preference is Thorium.
Like many of my colleagues, I have made a lot of money for myself and clients in Wind and Solar shares. It’s been a bumpy old ride, but it’s not so hard to navigate if you follow the money trail provided by governments.
Silent, I’m not an advocate for any particular technology. my analytical training has taught me to be objective and dispassionate. Like Craig, every day I’m approached by deeply sincere and really passionate people with new products, technologies, idea’s they are sure deserve to be commercialized.
Like Craig, I’m forced to reject 98%. Not because the intent isn’t worthwhile, but because I can see all the negatives as well as the positives.
Like ethanol, large-scale Wind and Solar will prove to be marginal technologies, except in certain locations.
Marcopolo,
Investing in thorium nuclear power may be a good investment but it probably depends on which company you choose. As far as investing in thorium metal, I have my doubts. It is really a glut on the market because huge amounts of it have been discarded during mining for rare earth metals. It has been estimated to be about four times as abundant as uranium.
Hi Frank,
IMHO the trick in resource investing is identifying small companies developing new technologies to be used by main resource corporations. Such supply chain corporate entities often enjoy spectacular growth, rather than the giant mining and generation corporations.
The abundance of Thorium is one of it’s many attractions as a resource.
Marcopolo,
That’s similar to the approach my late mother used, or similar to it. For example, when Univac employees left and founded Control Data, she saw it as a good investment and it paid off well. A former next door neighbor figured that Home Depot, before it was anywhere near its present size, was promising so he bought a lot of it and was enabled to retire early. Of course there are risks.
@ Marco
Thanks for sharing your perspective on things interesting .
If I had the time I could cut and paste from a study done by a Researcher from Australia on China and their Energy program. It sheds insight into China mainland so your deflection in your last post is noted as usual.
take care count your Thorium right now only India is lined up maybe it grows there is lots of it!
The next decade will be a boon for wind and solar as both are doing utility-scale PPAs for 2 – 3.5 cents per kWh. China did 20GW of solar in the first half of 2016! You can expect utilities to address the intermittancy issues with time-of-day pricing, energy storage, and geographical distribution of solar farms.
It will probably be another decade before the U.S. installs any next-generation nuclear.
Perhaps if utilities charged $5.00 per kilowatt hour at peak hours, people would suddenly find it worthwhile to spend tens of thousands of dollars on batteries so they could effectively disconnect themselves from the grid during peak hours.