237 comments on Concerning coal, some numbers and a thought
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I suspect that a single person living alone in an apartment without A/C is not paying much more than $100/yr in infrastructure costs either. Is that a subsidy? What is a reasonable amount to pay? PG&E isn't supplying much more than infastructure these days, they buy all of their power.
Well, that makes it even easier to figure out.
If PG&E buys its power they are paying industry prices for it, adding some costs to maintain their infrastructure plus profit and reselling it to you at retail price. Their problem is that they are buying from you retail prices - foregoing any fixed costs and profits they would have otherwise taken. Here is a small calculation:
Spot electricity prices are usualy in the 50-70$/Mwth, if we take the higher end this is 7c/kwth, and the difference to 16c is 9c.
9c times 12000 kwth (annual consumption) is $1080. So you end up tricking the utility by $980. Of course the utility managers are not stupid and it is certain that they pass these costs to the other consumers.
Actually, no. The utilities are finding that they can get more out of existing infrastructure and do not need to spend so much on upgrades, so net metering is saving them money. The problem they face is they lose some customer base. So far it looks like net income stays neutral, especially since they get power at a lower price than wholesale at peak, but going to a much higher fraction of net generation provided by solar could pose a problem as the spinning reserve kept for peak becomes less needed and so less expensive. But, if they won't net meter, folks will start getting off the grid and then their infrastructure won't even get supported with the connection fee.
Don't worry though. Uilities are very very good at making the stranded cost argument, so they'll make money one way or another.
Chris
The utilities are finding that they can get more out of existing infrastructure and do not need to spend so much on upgrades, so net metering is saving them money
Frankly I think you are making this up. If a house has 2.5kW solar panels and its peak power it uses is 10kw, the line to this house, the transformers that serve it etc.etc. must be calculated for... 10kW. There will be times of the day that PV does not produce anything and the infrastructure is calculated based on the maximum load, not the average one. It's a common sense.
There might be some benefits in reduced average load and wear, but with 0.2% of electricity produced I would suspect these to be hardly noticable if any. Power equipment hardly gets damaged by normal use, it is sudden surges/drops of power that usually cause problems.
You are not thinking like a utility. Consider a development large enough to require a substation. If the development were built with solar, much of the energy use will be produced within the development and so it can be larger with the same size substation. Put another way, you need fewer substations for the same number of customers. A growing town that grows with solar does not need a new transmission line as soon as one that grows without solar. The last half mile does not change much, but everything getting there does.
Chris
Again you are not making sense - like I said there are times of the day solar will produce nothing over the whole area served, and the whole country actually. The transmission infrastructure and the number of substations and transmission lines would have to cover for that time period - as though solar does not exist.
The effect you described may have some credibility in the scenario when solar reduces the midday load peak in summer. Well, guess what - there is a secondary peak between 6 and 7pm (when people go back from work) and at that time solar panels will be producing virtually zero. And what about winter, when solar is producing almost nothing while more and more people go to resistive heating and heat pumps?
Anyway if there are some savings I expect them to be minuscule compared to the revenues foregone by utilities. You need to link some industry report to prove your point, otherwise your assertions are largely theoretical.
Now you are beginning to think like a utility a little. Take the delta between the main peak and the secondary and there is your savings.
You have forgotten that non-time-of-use rate net metering customers are providing power to the utilities when the wholesale power price is above the retail price.
Chris
It was your point that solar makes some savings and I agreed there might be some small savings. It's up to you to show how large are they and do they cover the subsidy to PV customers. If we are talking a $1 of savings per $100 costs for PV panels we are obviously not doing anything meaningful.
For these $100 every house could be equipped with CFC bulbs and more efficient A/Cs - potentially saving hundreds of MWs of peak load. One very cheap but not present everywhere appliance - a scheduler for the A/C would likely save more than all the PV combined at a small fraction of the price.
"It's up to you to show how large are they and do they cover the subsidy to PV customers."
It's always helpful for boths sides of a debate to offer data, sources & calculations, rather than for either (or both) to just ask for the other side to bear the burden of the proof.
"For these $100 every house could be equipped with CFC bulbs and more efficient A/Cs - potentially saving hundreds of MWs of peak load. One very cheap but not present everywhere appliance - a scheduler for the A/C would likely save more than all the PV combined at a small fraction of the price."
I think we all agree that efficiency and demand management are the cheapest alternatives and should be given a very high priority, but at any level of demand we'll still need some generation, and non-carbon emitting forms should be developed ASAP.
It's worth mentioning that demand management will also help reduce that seconday peak you mentioned earlier, when people arrive home.
It was mdsolar's point that PV is bringing some savings in utility costs, my point was that any savings would be insignificant compared to PV costs, and asked him what he has to prove his point.
If we both can not find any numbers I guess the question will remain open.
In fact, no, you objected that utilities get nothing out of net metering but they do. If you shift ground now and say that what they get should cover the state subsidy you are mischaracterizing the discussion. The utilities don't own the PV, they only get to take advantage of the generation. One wants to look at the benefit to the owner and the state rather than the utility to examine the benefits of the subsidy.
Chris
By your logic each time I switch off my A/C I should get a subsidy for not loading the grid.
Your point was ridiculous from the very begining and I'm expecting you to provide your sources proving it.
"By your logic each time I switch off my A/C I should get a subsidy for not loading the grid."
And a lot of utilities do that, with peak demand management, and they consider it quite cost effective. Of course, that's for selected maximum peaks, but the principle is there.
DOE, for example says the same thing. You can probably find a few things here.
I have to say that you a quite rude as you hold untenable positions. Words like ridiculous do not describe what I have been saying and certainly do not do so in a polite manner. If you look at net metering from the utilities' point of view it is beneficial up to a certain capacity, probably about 25% depending on demand growth. Higher if they need RECs and can get them at a low cost from the net meterers. Industrial and commercial customers are more likely to sell their RECs at market price. We are certainly considering plans to give connected utilities discounts. Perhaps the best benefit of net metering is the sense of working together to make things better. When there is an outage, and someone goes outside to flip the switch to disconnect from the grid, they'll be thinking of the linesmen they are protecting by keeping power out of the mains. That kind of thing makes a difference even if you can't count it in money. To paraphrase MLK, net metering is going to really happen in the TVA first.
BTW, if you have tiered rates, you do get a subsidy by turning off your AC.
Chris
PG&E has a cap of 0.1% for net metering. Obviously they don't share your view that up to 25% it will not hurt them. Both articles talk about theoretical benefits to utilities, but none are calculating them. I think it is self-evident that the grid operators can not benefit from net metering. They still have to maintain the transmission lines and substations to the houses despite them being with a lower load. But at least their losses could be offset partially by what you said.
IMO the fair thing to in this case would be to charge PV customers higher fixed fees for using the grid as a backup while keeping their electricity (up to the produced by PV) for free.
And please don't consider me rude - you are the one who made the claim and you were supposed to back it up. Otherwise it was just a hollow argument.
Better note the age of the study. California's cap is 2.5% now. This one I think you can look up yourself. It will be raised again.
Chris
"PG&E has a cap of 0.1% for net metering. Obviously they don't share your view that up to 25% it will not hurt them. "
It is in PG&E's interest to maximize production, consumption & revenue. This isn't in the community's best interest.
Sure there's a subsidy here, but as we've agreed in the past, it's perfectly reasonable to consider this a countervailing subsidy to those enjoyed by fossil fuels. Is this perfect? No. Would a carbon tax, and an end to all other subsidies be a perfect world? Sure, but this isn't too bad, and it's better than no net-metering.
And to answer your question - yes, it is a subsidy, paid by non-solar consumer. No operators in their right minds would made such contracts with their customers if they were not forced to by the state legislation. In effect the state is forcing non PV-customers to subsidize PV customers.
It would have been realtively OK if the PV share was kept small, but it is obviously set to rise. Prepare for price hikes.
"yes, it is a subsidy, paid by non-solar consumer."
Sure, you can think of it that way. OTOH, coal is heavily subsidized by the right to emit (CO2, pollutants) without cost. This can be thought of levelling the playing field.
Fair enough. But what has to happen in this case is either price the carbon or force CPPs to eliminate the polution.
This should truly level the playing field and then the competition should determine which one is the best.
My guess is that the winner would still be nuclear as it is almost on par with coal. But if solar brings down costs a some more it maybe the ultimate winner. Personally I'd be happy see nukes providing baseload and PV and NG providing for the peaks... but unfortunately with PV we are not there yet.
"what has to happen in this case is either price the carbon or force CPPs to eliminate the polution. "
That would be best. We seem to be doomed to spread around additional subsidies forever, rather than reduce them. Easier politically, it seems.
"My guess is that the winner would still be nuclear "
If nuclear can move fast enough. Wind & solar are likely to move much faster, and cut off nuclear's window of opportunity. Wind was 20% of new generation last year, is doubling every 2 years, and could easily provide all new generation in 5 years. Solar is about 8 years behind, and growing just as fast.