Search The Oil Drum with Google
Recently on TOD:World
TOD:Local
- Streets: Utilitarian Corridors or Livable Public Space
- Summer Streets a Success!
- Plan for Hydro-Fracture Drilling for Unconventional Natural Gas in Upstate New York
TOD:Europe
- Oilwatch Monthly - November 2008
- The 2008 IEA WEO - Production Decline Rates
- The EU Strategic Energy Review: maybe not so depressing after all
TOD:Canada
- The Round-Up: October 24, 2008
- Compressed Air Energy Storage - How viable is it?
- Oil Megaproject Update (July 2008)
TOD:ANZ
Blogroll
Energy Sites
- The Coming Global Oil Crisis
- Die Off
- Dry Dipstick
- Energy Bulletin
- From the Wilderness
- Life After the Oil Crash
- Peak Oil Crisis
- Peak Oil News and Message Boards
- Powerswitch
- Rigzone
- Matthew Simmons
- Wolf at the Door
Environment & Sustainability Sites
- The Daily Green
- EcoGeek
- Eco Street
- Green Car Congress
- Green Options
- green.alltop.com
- Gristmill
- RealClimate
- Sustainablog
- Treehugger
- WorldChanging
Blogs
- The Big Picture
- Casaubon's Book
- Cleantech Blog
- Clusterf
k Nation (Jim Kunstler) - The Cost of Energy
- David Strahan
- The Energy Blog
- Entropy Production
- European Tribune
- GraphOilology
- jeffvail.net
- Mobjectivist
- Peak Energy (Australia)
- Peak Energy (USA)
- R-Squared
- Resource Insights
Finance & Economics Blogs
- Calculated Risk
- Ecological Economics
- Econbrowser
- Environmental Economics
- Infectious Greed
- The Mess That Greenspan Made
- Mish's Global Economic Trend Analysis
Organizations
“Most people spend more time and energy going around problems than in trying to solve them.”
—Henry Ford
User login
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
Personnel
- Editors: Prof. Goose, Heading Out, Stuart Staniford, Nate Hagens
- DrumBeat Editor: Leanan
- Contributors: ace, Engineer-Poet, Gail the Actuary, jeffvail, JoulesBurn, Khebab, Robert Rapier
- TOD:Local: Glenn
- TOD:Europe: Chris Vernon, Euan Mearns, Francois Cellier, Jerome a Paris, Luís de Sousa, Rembrandt, Rune Likvern, Ugo Bardi
- TOD:Canada: benk, Libelle
- TOD:ANZ: Big Gav, Phil Hart, aeldric
- Technician: Super G
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
There are two ways to get people to buy "green" electricity: one is, like in your case, by way of a surcharge on the normal price. The other is by way of a fixed price linked to the actual cost of generation (if the utility does it itself) or its purchase price (if it buys from a third party). Until two years ago, both implied similar prices for consumers; however, after the rise in gas prices last year, the second option suddenly became cheaper than the normal price (and some utilities had to close the programme to new clients!).
Today, it would make sense to offer "green" electricity at a fixed price, linked to actual generation costs (of wind), and selling it, beyond the fact that it's green, as more stable into the future (protection against energy price increases).
The problem, as I see it, with the current program is that the vast majority of people have no economic interest in paying more for a good than is necessary. Why should they pay extra and give the rest of their fellow customers a free ride. In any event, the surcharge approach has clearly been shown to be a failure which I think back up my theory.
Under the "fixed price" approach, I assume that existing customers would face prices that go up and probably mostly down based on the future costs of wind. But once the fixed price of wind dips below that for all other sources, wouldn't most people rush in to change their payment plan. In that event, wouldn't you have to shut most people out of the program because of capacity constraints?
If wind becomes cheaper than the cost coming from the rest of the produced power, including coal, then the it would be in the utility's interest to switch to wind as much as possible without regard to any program that might be in effect. Under this scenario, all customers would benefit from lower overall prices.
Regardless, I think my particular utility needs to come up with a realistic goal for percentage of electricity generated by wind, figure out the cost to get them there, and then spread whatever additional costs are involved over all customers. I think that the vast majority of customers would not be sophisticated enough to choose wind with a fixed price, while projecting possible future benefits.
The goal, I think, should be to move to as much renewable energy as we can as fast as we can. We are running out of time.
We have the same free rider problem in NC. One can pay increments of $4/mo on top on one's normal bill for 1KW/mo of "green" energy (a basket of wind, solar, hydro, etc.) Unfortunately, this is just structured as a "contribution". The big problem, as I see it, is that if (or rather, when) there are price increases or service curtailments down the line due to FF supply shortages, those will be distributed equally to all residential customers, regardless of participation or non-participation in the NC GreenPower program.
This program would be a lot more attractive if participation could secure one a preferential claim upon power generated by renewable sources in the future. If one is making an investment, it only seems right that one should expect some return on that investment.
WNC,
I really like your idea of invest/return on power. It would be the best way to deal with a lack of leadership/foresight on the part of our gov./population
However, I would question if the returns of power might be taken away from you in an energy constrained future. Given that the purchasers would be a small minority of the population they would hardly have a strong political voice.
The same could be said for personal power generation investments but that is where I will be investing. I think it will be too easily justified to keep essential goods and services running that any grid tied power will be used there first.