Moronomics

Guest Post by Willis Eschenbach

Reading my Sunday paper today, I find the following:

Customers Can Sell Back Solar Power.

The Los Angeles District of Water and Power will allow customers to sell back excess solar energy created on their own equipment.

Described as the largest urban rooftop solar program of its kind in the nation, the so-called feed-in-tariff program would pay customers 17 cents per kilowatt hour for energy produced on their own equipment. The DWP has already accepted more than a dozen applicants and will be taking dozens more as it accepts contracts for up to 100 megawatts of solar power through 2016.

My prediction is that this whole thing is going to turn into what we used to call a “righteous goat-rope” when I worked in Alaska. The problems with the proposal were spelled out before the vote by the Ratepayers Advocate, Fred Pickel. According to reports, he “told commissioners that 17 cents per kilowatt hour was above market rates and could force significant rate increases on DWP customers. Higher DWP bills could drive jobs away.”

Well yeah, duh. The Commissioners knew that, so they were careful to give Fred a fair trial before they executed him and voted for their proposal instead. This shows that it’s good for the LA DWP to have a “ratepayers advocate”, it gives the Commissioners someone to ignore, which is always fun, and that way they can say that they considered all sides of the question.

us average residential electric ratesFigure 1. Retail electricity rates, in US cents, for 2010. SOURCE 

What is wrong with the moronomic math of the Commissioners of the Los Angeles District of Water and Power? Figure 1 suggests some of the answers.

The problem is that in order to break even, the Los Angeles District of Water and Power (DWP) has to sell the power at more than it cost the DWP to buy it, transport it, buffer it with adequate backup, and deliver it to the eventual customer. As a result, their sale price will be more than seventeen cents per hour.

How much more? Well, that’s kind of difficult to calculate. But we can look at some of the issues and make some first-cut estimates.

First, getting the power from the rooftops. Certainly for some installations the DWP will have to install interconnects to their main backbones. And even for residential installations, a sunny day can put a huge load on a local distribution network. Remember, that network was never designed to handle excessive amounts of power, particularly heading upstream. In addition, DWP will have to install a variety of wireless reporting instrumentation for the control of the intelligent network, to keep it from going off the rails. I’d guess the cost to upgrade local networks and provide intelligent interconnects and controls would be on the order of a cent per kWh.

Then we have to look at the question of backup. Solar is notoriously variable. When the clouds come over, output drops massively and pretty instantaneously. That power needs to be replaced, immediately, from some other source. That means that you will have to both purchase and install peaking power that is equivalent to the amount of solar that you are adding to your system. This need for immediate response is often met these days by huge diesels, which can respond much faster than gas turbines to power variations. But whether the backup is gas or diesel, it is going to be two things—inefficient and expensive. It has to be inefficient because you have to keep it running, at minimum load and in an inefficient range for the engine/turbine, all the time. Engines are designed to run at maximum efficiency under full load conditions, and elsewhere in the range they are much less efficient. You can’t shut the backup off, and to make it worse, most of the time you’re running at maybe 10% of the nameplate capacity. No bueno.

I discuss the levelized cost of various generation systems in “The Dark Future of Solar Electricity“. I’ll use the costs of conventional combined cycle gas as an example for the backup of the solar. The capital costs for CCG are about two cents per kWh, and the running costs are given as five cents per kWh. It won’t be running all the time, though, so we’ll take running costs at two cents per kWh. That’s a combined cost of four cents per kWh for the backup.

Finally, the electricity has to be delivered to the ultimate customer. The price of operating this transmission network is usually referred to as a “wheeling cost”. I would expect the wheeling cost to be on the order of a cent or two per kWh.

So we have seventeen cents for the power purchase. We have a penny for the intelligent network upgrade to handle the power, about four cents capital plus running costs for the backup generator, and we’ll call it another penny for wheeling costs to be conservative, although if their network is old the wheeling cost may be higher.

That gives a total out-of-pocket power cost to the DWP of about twenty-three cents per kWh of power delivered to the ultimate customer … but wait, it gets worse. The DWP still needs to both cover their administration costs, and to have funds to re-invest in upgrading plant and equipment as the years go by. So they’ll need maybe 20% above the raw costs to cover overheads and investments, which puts the sale price for the power on the order of twenty-seven, twenty-eight cents per kilowatt hour … might be a bit more, might be a bit less, this is an estimate, but that’s the range.

Of course, they likely won’t ask any single customer to pay that much. Instead, they’ll quietly spread the expense over all of their customers near and far, and it will be reflected in a price increase across the board.

Unfortunately, as you can see by the colors in Figure 1, California already has the most expensive electric power with the exception of the New England states, and this will only make it worse. Power in CA is far more costly than in any of its western neighbors. This is a result of California’s colossally foolish policy of requiring a certain percentage of renewables … plus an even more idiotic policy of not counting hydroelectric power as a renewable.

But wait, it gets worse. We used to have the “20% renewable by 2020″ goal for our electricity, which is why the California power cost is already up to fourteen cents per kWh as shown in Fig. 1, and part of why people were fleeing the state even then.

But when Jerry Brown assumed the imperial governorship, he decided by fiat that the new policy should be:

20% renewable by December 31, 2013

25% renewable by December 31, 2016

33% renewable by December 31, 2020

And that, dear friends, that means that you can stick a fork in California, we’re done. By the time that the 33% renewable policy is implemented statewide, all Californians will be paying the twenty-five cent per kilowatt-hour price that the LA folks are test-marketing right now. And meanwhile, the neighboring states are ending up with the businesses that are fleeing California like cockroaches from the light, in part because electricity and fuel costs are so high that a business can no longer afford to run a factory in California.

As I have mentioned elsewhere, expensive energy is always a bad idea. It turns out that in California, it’s a lethal idea, it will both kill businesses dead and be very hard on the poor.

w.

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154 Responses to Moronomics

  1. WillR says:

    Willis:

    Cry me a river — here in Ontario, Canada, the provincial government pays about $0.45 per KWH — but only because it finally realized that $0.80 was waaayyyy tooo expensive for Solar Power. So please, can we trade rates?
    See here:
    http://www.solarpowernrg.com/index.php/rebates/45-ontario/60-ontario-solar-fit-program.html

    and Here:
    http://fit.powerauthority.on.ca/what-feed-tariff-program

    And via our very own CBC:
    http://www.cbc.ca/news/canada/toronto/story/2012/03/22/ontario-wind-solar-electricity-rates.htm
    l
    March 22, 2012
    Ontario’s Liberal government announced Thursday it would lower the premiums it pays for future wind and solar energy projects, but electricity bills will keep rising.

    The province will drop the guaranteed rate for small rooftop solar projects from 80.2 cents per kilowatt hour to 54.9 cents, while larger solar installations will get between 34.7 cents and 44.5 cents a kWh.

    The amount guaranteed for power from industrial wind turbines will drop from 13.5 cents per kilowatt hour to 11.5 cents, regardless of the size of the wind farm.

    Ontario Power Generation, the government-owned utility, is paid 5.6 cents a kWh for nuclear power and between two cents and 3.5 cents per kWh for power from its hydro-electric facilities.

    It could be a lot worse. Be glad it is not. We routinely pay nearby US states to take our wind and solar over production — that’s right we pay those high rates — then pay Americans to take the unneeded energy.

    Cheers!

  2. WillR says:

    Willis:

    For even more fun go here and track down articles by Parker Gallant:
    http://freewco.blogspot.ca/2013/01/ontario-spin-week.html

    Look for the search box on the right hand side…

    And you will dredge up a wealth of material
    http://freewco.blogspot.ca/2013/01/conservation-or-consternation.html

    Learn the whole woeful story of how Ontario forces it’s own citizens pay the FIT rate — yet will happily sell the power to the USA for the Wholesale rate — typically $0.025 per KWH.


    An article in the Ottawa Citizen on Boxing Day indicated Ontario was the only place in North America forecasting negative growth in demand for electricity for 2013-2022 and carried quotes from an Ontario Power Authority (OPA) spokesperson on the reason. Chuck Farmer, director of planning policy had this to say about Ontario’s position: “It’s really because the growth is being offset by energy efficiency in one form or another and I think that’s quite a success story.” Ontario’s ratepayers know that “energy efficiency” is another way of saying “conservation” and it is impossible to open up your hydro bill without finding coupons or energy efficient rebate offers or an offer to pick up your old fridge for free. In Ontario we hear ads on the radio, see them on TV and find them in newspapers and webpages and they all all aimed at helping us save energy.

    Ontario also has “smart meters” which were touted by our Liberal government as energy savers when introduced by then Minister of Energy, Donna Cansfield in 2005. Minister Canfield said: “By helping Ontarians make smart choices about how and when they use electricity, we’re helping them save money and making the most of our electricity supply.” Ms. Cansfield promised to couple that “with a pricing structure that reflects the cost of power production at certain times of day and year, allows consumers to make informed decisions about their electricity use. This will save money for Ontario consumers and reduce the strain on the power system at peak periods.”

    The “pricing structure” referred to by Minister Cansfield, begat time-of use (TOU) pricing reputedly to allow us all to save money. Just prior to that announcement the OPA had been created and Minister Cansfield in the November 3, 2005 press release indicated that they would appoint Ontario’s first “Chief Energy Conservation Officer.” Almost exactly one year later the appointee to that position; Peter Love, (part of the Bruce Lourie circle) delivered a speech to the Empire Club about conservation and opined on how it would all save us money. Included in his speech were the words; “When it comes to being of benefit to the economy, electricity conservation has a multiplier effect. It truly is a gift that keeps on giving.” The OPA has led our publically owned energy sector companies in spending billions of ratepayer dollars to entice us to save energy as Minister Canfield envisaged and as so persuasively stated by Peter Love.

    It’s 1984 — all over again… How much was your chocolate ration increased?

    Bahh Humbug!

  3. HaroldW says:

    It makes the 2,2 cents per kWh subsidy for wind (production tax credit) which was extended in the “fiscal cliff” legislation, seem minuscule by comparison. I bet they’ll be back, hat in hand, looking for more.

  4. RockyRoad says:

    Yes–electricity prices will necessarily skyrocket. And still they voted for him. Incredible!

  5. This kind of foolishness is typical of any system that is driven totally by ideology.

  6. john robertson says:

    If its electricity they’re after, then they would be insane.
    But if its power over people and perhaps a ploy to buy up California cheaply… hmmm?
    And these strange money juggling systems do seem to loan themselves, almost by design, to money washing. Washing out of the ratepayers pocket and being deposited in the regulators paws, for safe keeping of course.
    Still the best response to this, was Spain or Italy where the State Utility found themselves buying Solar electricity at night and or wind power from sites with no wind.
    But whats a little corruption amongst friends.

  7. Willis Eschenbach says:

    WillR says:
    January 14, 2013 at 8:22 pm

    Willis:

    Cry me a river — here in Ontario, Canada, the provincial government pays about $0.45 per KWH — but only because it finally realized that $0.80 was waaayyyy tooo expensive for Solar Power. So please, can we trade rates?
    See here:
    http://www.solarpowernrg.com/index.php/rebates/45-ontario/60-ontario-solar-fit-program.html

    Dang, dude, I stand properly rebuked. Forty to eighty cents per kilowatt-hour? That’s insane.

    w.

  8. Chris4692 says:

    If the $0.17 is paid in excess of the power use of the producer, as seems to be implied, how often would it actually be paid? With an air conditioner demand to be met before the $0.17, it would seem to me to be not much. It also seems that what ever excess was produced, it would not get far back into the system, as other nearby users would use that power, reducing their draw from the main trunk high voltage lines.

    One generator turning down to idle as standby is a false dichotomy. Rather than turning down one to idle, the utility would turn down multiple units say for example four units turned down from 75% to 50%, according to where the demand is in relation to the generators available.

  9. Tim from Australia says:

    Willis
    In NSW Australia we have a similar scheme. There is a tax payer funded subsidy to install solar panels (which has caused price gouging by suppliers/installers) and then originally a 60c feed in tariff for excess power. This has caused massive increases to the price of electricity (retail rate is tiered based on consumption and is approx 24c for first 350kWh, 25.5 for next 350 kWh, and then 34c anything above.

    The state government has now wound this back for new applicants (firstly to 45c and now I believe 35c as people who covered there roof with panels were costing the rest of society dearly – especially those who can least afford it)

    We now also have a Carbon Tax (Federal level). There is a political gimmick where supposedly 9/10 of households are compensated for the cost of power increases. However, everything that consumes energy (which is virtually everything) has gone up in price, some votes are bought by transferring tax payers money (less the overhead of administering another tax) and then foreign made goods are purchased because they are relatively less expensive (and getting more so).

    Australia has become so expensive. There is very little manufacturing (without government subsidy). If we didn’t sit on a mountain of coal and iron ore we would be a 3rd world country.

    Our Prime Minister was an active participant of a student branch of the Communist party during University (which she now denies and says she just did clerical work for them), however is a proud former member of the Fabian society.

    Wealth creation is ignored (or even demonized) with the primary government focus being blatant wealth redistribution. We are making ourselves poorer and hurting the poorest the most.

  10. Lawrie Ayres says:

    The last state Labor (Democrat) government in NSW introduced a 60 cents/kWh feed in tarriff which the incoming Coalition (Conservative) goverment scrapped. My complaint was that while I could afford to instal rooftop solar (a 10kW system) it would paid for by those who could neither afford a system nor the increased rates. In 5 years household tarriff has increased from 11 cents to the current 32 cents and here we are sitting on some of the biggest steaming coal deposits in the world. Much of our increases were caused by renewable energy targets and now the carbon tax. Network charges have also increased due to overdue upgrades and maintenance. The Feds are under fire for the imposition of the RET and Carbon tax and retalliate by saying the states are gold plating the distribution system. Trouble here is the Feds are the ones demanding the higher reliability standards. Left wingers always have a problem with maths and even more problems with money. They invariably spend more than they have, promise more than they can deliver then find some else to blame.

  11. Kum Dollison says:

    Have you taken into consideration “time of use” pricing? What are those Los Angeleans paying during “Peak” hours?

  12. john robertson says:

    @ Chris4692
    Trouble with that is normal efficiency is around 80% Nameplate rating.
    50% just gives you more units running inefficiently

  13. Manfred says:

    The comparison with retail price is not correct, as solar power without backup does not replace replace any conventional power stations, nor any transmission lines, nor management overhead.

    Worse, it increases cost at conventional plants if those are not longer used 24/7.

    In fact it replaces only fuel. Fuel costs for coal, gas or uranium are in the range of 0-2 cent/kWh.

  14. Billabong bill says:

    This is what occurs in Australia, and we have very expensive electricity.
    $400AUD/quarter is quite normal. $700-$1000AUD is not uncommon.

    The effect of paying more than market rate is those that aren’t fortunate enough to be able to install solar panels end up subsidising those who are.

    Our government launched a 3-pronged attack on consumers. 1. They offered incentives to install solar panels. 2. They regulated the tariff and forced generation companies to pay more than market price. 3. They offered incentives to electricity generation companies to upgrade infrastructure.

    If you count the generation targets then it could be a 4-pronged attack.

    After this multi-pronged attack we have some of the highest electricity prices in the world. Only recently has the government woken up to what was going on and removed the incentives and tariff regulation. Tariffs are now set by individual agreement between the consumer-generator and a generation company who will buy their energy. Tariffs for consumer-generated electricity are also now far below market price.

    But the damage has been done and I can’t see how prices will ever fall back to normal levels. This is the new era of needlessly expensive energy.

  15. Alex Heyworth says:

    Certainly could be worse. Some parts of Australia have a 45.7 cent per kWh feed-in tariff that also applies to the power generated and used directly in the home – ie to all the power produced. Madness upon madness. Source: http://www.actewagl.com.au/Product-and-services/Offers-and-prices/Prices/Residential/ACT/Feed-in-schemes/ACT-feed-in-scheme.aspx

  16. tokyoboy says:

    Our stupid gov’t introduced the FIT in July last year at a rate of 42 Yen ($ 0.50 then) per kWh, being roughly twice the market rate (20 – 25 Yen or $0.25 – 0.30). I foresee its collapse in a few years.

  17. S. Meyer says:

    Germany has done a very similar experiment already. They now have set a record for solar power (I found the number 4,000,000,000 kWh or the equivalent of 20 nuclear power stations). This is still only 4 % of the total electricity consumed in Germany. Germany got to this point by a government policy which worked like that: homeowners could get an inexpensive government loan for the purpose of installing solar panels, plus a guarantee that they could sell any excess electricity back to the grid for a very good price which was guaranteed for 20 years. The cost was to be distributed evenly between all consumers of electricity.

    As a result of this, electricity in Germany is quite expensive… About 0.30 $ per KWH. This price includes taxes, amortization of initial investments etc. Moreover electricity is traded on an exchange which makes the whole thing rather opaque.  However, they anticipate that production costs of solar versus fossil fuel derived electricity should be about equal within about 5 more years.

    http://en.wikipedia.org/wiki/Solar_power_in_Germany

  18. Claude Harvey says:

    The name “Fred Pickle” brought up memories of past utility battles when I worked with Fred. Fred “knows the territory”. There is another way to get roughly the same number at which you arrived, Willis. The average wholesale price of the current mix of generation at the trading hubs is less than 4-cents per Kwh. If the typical California user is now paying 14-cents per Kwh, 10-cents of that bill is for “fixed utility costs” including already contracted capacity sources that go on regardless of the source of the power. If the utility pays 17-cents, at the fence, for solar power to which you must add 10-cents in ongoing fixed costs, you arrive at 27-cents per Kwh. Add in a premium for additional “spinning reserve” that intermittent solar power requires (if you expect reliable results when you hit the light switch) and you’re well above your calculated 28-cents.

  19. Jean Parisot says:

    WillR,

    Thank you. For once I get to benefit from green idiocy.

  20. John Trigge (in Oz) says:

    Here in sunny South Australia we pay sliding rates for electricity from $0.30c to $0.40c per KWh. I have a 4.8KW solar system and receive $0.53.9c/KWh (44c from Oz Govt + 9.9c from the supplier) feed-in to the grid.
    After 2.5 years I have received over $6,000 in feed-in rebates with $2,700 of that being cash-in-hand, the remainder paying for the power I use.
    I am one of over 100,000 solar installations in SA whereas the government estimated around 10,000 when the plan was announced. OOPS! Big hole in the budget so new installations only get 17c/KWh, which has slowed down the installation rate but they are still going in everywhere.
    South Aust is also the state with the largest installation of wind power.
    In March 2012 it was estimated that SA would have the highest electricity rates IN THE WORLD (http://www.adelaidenow.com.au/news/south-australia/power-prices-to-be-highest-in-the-world/story-e6frea83-1226305741810) but I haven’t seen any updated figures to see if we have achieved that dubious honour.
    Of course, whenever there is a politician being asked why prices are so high, the green initiatives (solar, wind and a carbon tax) are never included; it is the eternally money-hungry suppliers who are at fault.

    Then we have the likes of our PM, Julia Gillard, attempting to have her cake and eat it too.

    What is the biggest single thing that makes politicians different from the rest of us? I reckon it’s the ability to hold two or more contrary views on the same issue and believe both to be absolute truths. Take electricity pricing. The federal government has gone through a world of pain to introduce a carbon tax to drive up electricity prices. This makes electricity less affordable, people use less of it, which in turn reduces carbon emissions and hopefully global temperatures. At the same time Julia Gillard wants state governments and electricity generators to reduce the price of electricity (“Premiers unhappy with PM’s energy reform plan”, December 3). She can see that consumers are suffering the financial pressure of rising electricity prices and wants to make it more affordable. This in turn would, of course, allow consumers to use more of it … and you can complete the rest of the chain. No normal person would be able to even come up with a position like this, let alone defend it with passion.

  21. Terry Hoffman says:

    Seems to me that power in Honolulu in 2010 was around $.33, not $.24 as you show.

  22. markx says:

    Willis, you are lucky b******* ……

    Australia: …..average household electricity prices for the year ending June 2012 of 24.8 c/kWh

    (…still …. a bit better off than the Canadians…)

    …..we examined a recent report by the Bureau of Resource and Energy Economics (BREE, 2012) that concluded that Australian household electricity prices are below the 8 OECD average. That report used average Australian household prices for the year ending June 2010 of 19.38c/kWh as calculated by the Australian Energy Markets Commission in November 2010 (see AEMC (2010)). A more recent AEMC report published in November 2011 (see AEMC (2011)) shows average household electricity prices for the year ending June 2012 of 24.8 c/kWh, an increase of around 28%. We have used the most recent data.

    http://www.euaa.com.au/wp-content/uploads/2012/04/FINAL-INTERNATIONAL-PRICE-COMPARISON-FOR-PUBLIC-RELEASE-19-MARCH-2012.pdf

    http://www.euaa.com.au/wp-content/uploads/2012/03/EUAA-Press-Release-0112-Australian-Electricity-Prices-Among-the-Highest-in-the-World-21-March-2012.pdf

  23. ntesdorf says:

    After the advent of the ‘Carbon Tax’ in Australia night time electricity costs 12c/kwh and peak afternoon time electricity costs 60c/kwh. We have a roof-top solar electricity generator and sell the excess to NSW electrical generation at 60c/kwh. The elevation of all these prices is the only tangible result of the ‘Carbon Tax’ as the weather is running along here just as it ever did. I must say that while we think the situation is ridiculous, we are grateful for the financial relief in the face of regressive taxation by the government..

  24. AndrewS says:

    In New South Wales, Australia, the government was subsidising solar power to the tune of 60c/kWh. This was paid based on electricity generated, not just on what was exported to the grid (no joke).

    People who could afford the capital outlay covered their roofs in panels and are paying them off quickly, thanks to the taxpayer. This scam soon became oversubscribed and the rate dropped to 20c/kWh late 2010.

    This sort of rorting has helped force up the electricty costs in NSW to huge levels.

    If you want to look at government subsidied green stupidity, Australia makes a great case study. A good start is the government subisdised roof instulation (Pink Batt) scam/scheme where the Federal Goverment put free ceiling insulation in “every” house in Australia as part of a “spending stimulus” during the GFC. The government wasted over $1 billion, 4 people died from dodgy operators, organised criminal gangs rorted the system due to poor administration (invoices were paid on houses that had no work done on them!), houses burnt down from poorly installed insulation, the insulation industry was decimated overnight when the pin was suddenly pulled on the scheme. It was a circus. A further $500million or so was spent rectifying the substandard work and aduiting for compliance to building codes. Taxpayers money wasted, for no tangible environmental gain. It also rewarded people for being too lazy to install ceiling installation in the first place.

    Moronomics of the highest order!

  25. William McClenney says:

    Yup. We’ve reversed evolution. Time for another ice age…….

    :-)

  26. MACK1 says:

    This been done in various Australian states for a number of years, and due to cost, the schemes are being wound down as fast as possible. They are also causing instability in the grids:
    http://www.theaustralian.com.au/national-affairs/carbon-tax/rooftop-solar-panels-overloading-electricity-grid/story-fn99tjf2-1226165360822
    “In Western Australia, Horizon Power has set limits on how much renewable energy can be installed in a system without affecting the power supply. Horizon is rejecting applications for new renewables installations in Exmouth and Carnarvon, and accepting them only from households, schools and not-for-profit organisations in Broome and Leonora.”

  27. draverobber says:

    Electricity rates in Europe

    I pay slightly above 20 U.S. cents/kWh and, well, it’s one of the lowest rates around here.

    businesses that are fleeing California like cockroaches from the light

    This allegory will soon become obsolete due to the light being switched off.

  28. anarchist hate machine says:

    Trying to explain economics, no matter how basic, to enviro-slag is like trying to housebreak a pet rock.

  29. Dr. Paul Mackey says:

    Ed Milliband introduced a feed in tariff in the UK a while back. It was reported this week in the paper that its costs have risen to 900% of what was originally forecast. And guess who foots the bill?

  30. eo says:

    Electricity is a fungible commodity. It is impossible to differentiate electricity generated from coal, nuclear, gas, hydroelectric, wind, etc. Consumers should have an option of choosing for renewable energy. In fact, they could be charged a fixed rate equal to the cost of the renewable source nominated with a bonus that they will have electricity supply even if the renewable source is not operating. I was discussing this option with a person who is very vocal proponent on renewable energy and he objected to this option as nobody will pay for electricity from renewable source including himself as it is too expensive.

  31. nickleaton says:

    UK is proposing smart meters.

    Costs over 11 bn

    Savings 7

  32. DirkH says:

    anarchist hate machine says:
    January 15, 2013 at 12:06 am
    “Trying to explain economics, no matter how basic, to enviro-slag is like trying to housebreak a pet rock.”

    Assuming that the greens WANT the economy to flourish is a WRONG assumption. They want exactly the opposite. Again and again they candidly stated that they are against economic growth. So they needed to find ways to absorb all surplus that an economy creates and reward failure enough to turn the economies of the West into failures; ideally like the USSR or North Korea.

    So we are now running enormous economic activities to do pointless things – like producing huge amounts of concrete to build foundations for wind turbines.

    And building all those small Diesels to serve as spinning reserve.

    This is all like Keynesian building of pyramids. The state wants pyramids? Well buy a pyramid maker and get rich.

  33. A. Scott says:

    Willis – I agree with you on the basic premise that selling power to the grid at an inflated cost is a significant issue. And I agree with many of the other comments such as about back up power etc.

    That said – some comments.

    First, as Kum Dollison asked, I believe I recently read that a big part of solar’s benefit is it is most available at peak times. So customers would be paying higher rates – and the price paid for selling to the grid would I suspect be much closer in price to peak prices.

    Re: backup generation – I agree its a significant cost factor and issue – something I’ve railed against re: wind generation as well. But I don’t think its quite as bad as you note. The grid is fed from many points and sources, and this solar would be just one of them. And while you certainly can have massive systems come in the cause cloud banks over a wide area its more typical the clouds go to scattered first and gradually fill in – but even then – other areas may well be in daylite.

    And while there is certainly growth in electric use my understanding is the goal is in large part to supplement existing capacity – so the main generation sources would still be available. Also, as noted, I suspect they probably don’t “idle” any generation but rather run a larger number of facilities at reduced, partial power. This way it seems they aren’t really spending much if anything for “idle” generation as multiple plants are simply running at lower.

    It would appear you may be overlooking the capital cost of the generation – the cost of the solar panels and the like. Buying from consumers means no capital costs for the generation itself – may well be other costs – but not for the panels.

    Last – keep in mind that while your base per KwH electricity rate might be say .09 cents – that is not what it actually costs you. By the time they add in the basic service fee ($7.11 for me) and all the other crap charges and fees including things like Cost of Gas surcharge and the like, the overall cost is more than double the base rate per Kwh

    In my case the base winter rate per KwH is $ 0.07. When I’m done, after taxes, surcharges, and fees, I pay nearly $ 0.13 per KwH effective rate.

    In Los Angeles according to the US Bureau of Labor Statistics the average rate is $ 0.211 per KwH – 66.1% more than the 2012 US average of $ 0.127. A PGE Rate sheet shows depending on area rates can be as high as $0.209 summer peak and $0.334 winter peak. Add base costs, fees and taxes and these can easily be in the $0.35 to $0.55 per kwh effective total range.

  34. Dale says:

    Willis,

    I’m in Melbourne Australia, and I got solar panels during a certain Green promotion. Here’s the deal I’m on:

    – 3 KW solar system, grid connected (install price was $5,000)
    – 66c / KWh feed from my solar panels
    – 17c / KWh feed from the grid
    – Perpetual

    Basically, I jumped on board during an insane Greens sponsored deal which is perpetual (in reality, until I change retail providers) and at insane pricing.

    I used to pay $500 a quarter for electricity (note at today’s prices that’d be close to $750) and under this deal I haven’t had to pay electricity for three years now.

    I believe that trumps all of you. :D

    PS: If you want, I can scan a bill and send it to you showing the rates etc.

  35. Scute says:

    Same in UK

    Feed in was £0.43. This was promised for 20 years and still is for those clever early-adopters who grabbed it. This caused installation to rocket along with prices (£12k per fix). In one road near me 6 out of 20 houses were kitted out in 2010-11. Two installers would earn £6k in two days if they bought their panels in bulk (which they did because they were swamped with work). The early adopters saw it as a no-brainer 10% interest on capital invested in a time of near zero interest rates. They weren’t just paid for what they exported to the grid but were paid £0.23 for what they used themselves. Seems crazy but that was the only way to get payback on £12K in 10-12 years. A friend of mine who showed me his installation had a smart meter that showed him what he had made through the feed in: between May 2011 (installation date) and October 2011 it stood at £720. I told him that was coming out of my pocket and it was a shame I couldn’t gouge people the same way because I had a little flat with a tiny communal roof.

    When the government panicked, realising the feed in was way to high and people were creaming it they halved the rate- but guaranteed the old rate to people like my friend because it was a signed contract. He will be making money hand over fist for 20 years- all on the backs of city dwellers who, incidentally, by virtue of the small area of their dwellings, use far less energy than those large houses with sufficient roof area for solar panels. Irony heaped on irony.

    When the feed in was halved, so miraculously did the installation cost (remember the installers made £6K which meant they paid 6K for panels. Under the new feed in their wages were wiped out but because there was now a glut of panels and fewer punters (due to the feed in drop) the price of panels plummeted so as to allow the installers a measly few hundred quid a day labour.

    Governments refuse to heed the law of unintended consequences. But why should they care when it’s not their money funding their pet schemes?

  36. BrianJay says:

    The best bit is in Spain, where the grid was buying a large amount of Solar power at night. Some people worked out how to connect a diesel/generator set up to the mains – and make a profit. I suggest the good people of LA do the same.

  37. A. Scott says:

    There appears to also be a tiered rate structure in CA as well – going from baseline to Tier 2 (of 5 total tiers) appears to double the per KwH costs.

    Willis – this link appears to”unbundle” and break down costs by line item detail.
    http://www.bls.gov/ro9/cpisanf_energy.pdf

    While some of these numbers are from PGE … a quick review would seem to show that purchasing from consumers at $0.17 per KwH, at least in LA and other highest price areas, MIGHT not be as terrible a price considering there is no capital cost for the “generation” capacity – the panels etc.

  38. A. Scott says:

    Looks like LADWP currently maintains a generating capacity of 7,200 megawatts vs. peak demand of 6,165 megawatts by the city of Los Angeles. Coming up with 100 megawatts of standby backup power wouldn’t seem to be much problem with existing excess capacity?
    .

  39. osopolitico says:

    LADWP: Los Angeles Department of Water and Power – not ‘District’

  40. anticlimactic says:

    While ‘renewables’ are being pushed by those regarded as being on the left, the gains are for the richer members of society.

    It is only really the middle class who have the space and money to install solar panels. These feed energy in to the grid when they have no use for it, but then they expect energy on demand from fossil and nuclear. In many cases their energy bills can be almost zero.

    Here in the UK large wind turbines can generate profits of 20% per year. To maximise profit you take a wind turbine capable of generating up to 900 kilowatts, and then degrade it so it can not produce more than 500 kw. The subsidy almost doubles for turbines rated at less than 500 kw. Manufacturers in Europe create special degraded turbines for the UK market. Ample proof that turbines are for generating profit, not energy! While the returns may not be as great in the rest of Europe it is certainly not a ‘not for profit’ industry.

    So with renewables supporting the middle and upper classes who pays the bill? The poor of course.

    Those people supporting renewables have to realise they are supporting the robbing of the poor to enrich the middle and upper classes.

  41. Rhys Jaggar says:

    I would say that the place for solar is in domestic homes: that way, the needs of families for externally purchased electricity goes down quite a lot. You’re not telling me that Southern California doesn’t have pretty reliable sunshine for 8-10 months of the year are you?

    The most obvious complementary resource to solar for domestic needs in SoCal would be hydro: if you assume that solar is at its most unreliable around Christmas/January time, it’s also the time when rainfall is at its highest so the hydroelectric possibilities should be most reliable for SoCal at that time. There might be a bit of a lag period whilst the rain falls a bit, so you need a third back up, feeding in from somewhere else. Hoover dam??

    The most reliable source you guys have is the ocean. Waves coming in every minute of every day on the California coastline.

    Might take a few decades to really harness it, but until the moon disappears, you’ll always have the Pacific Ocean’s tides. And unless we have the ice age to end all ice ages, it ain’t gonna freeze up any time soon in your neck of the woods……..

  42. Michael Oxenham says:

    F.I.T is called robbing the poor to pay the rich here in the UK. One big scam.

  43. Nigel S says:

    BrianJay says: January 15, 2013 at 2:08 am
    …Spain…Solar power at night.

    Bio diesel in the generators I hope!

  44. Bloke down the pub says:

    Scute says:
    January 15, 2013 at 2:06 am
    Same in UK

    Feed in was £0.43. This was promised for 20 years and still is for those clever early-adopters who grabbed it.

    People like me. Except it’s worse than you think. The contract is for 25 years and it’s index linked to the price of electricity. I’m currently getting 45.5p per Kwh for what I generate, plus 3.2p per Kwh for what I am deemed to have exported. Meanwhile the charge for electricity used is 12.45p per Kwh. I was (and still am) against this scheme for all the reasons mentioned above, but in the end I couldn’t afford not to sign up.
    Willis, If you think California’s economy is screwed, try living in the UK.

  45. michaelox says:

    Here in the UK Feed in Tariff is called robbing the poor to pay the rich. One big scam.

  46. Ben D. says:

    These posts show that this madness is ubiquitous, the PTB are using the AGW fear campaign to destroy the economic viability of the western society. This conservationist driven madness is the left’s BAU economic approach to displace the fossil fuel BAU economy…

  47. anticlimactic says:

    If you don’t believe ‘renewables’ is all about how much money you can make – here is an amusing story from ZeroHedge :

    Question ‘Why Did A Train Carrying Biofuel Cross The Border 24 Times And Never Unload?’
    Answer : It gained credits every time is passed in to the USA, over 6 million dollars at the time of the story!

    http://www.zerohedge.com/news/2013-01-02/why-did-train-carrying-biofuel-cross-border-24-times-and-never-unload

  48. Vince Causey says:

    In the UK, now that the feed in tariff has been halved (as mentioned by posters above), I started to see ads appearing claiming free solar panels installed AND you can reduce your electricity bills by the power you generate.

    What manner of scam is this? How can such a miracle happen? What I learned is that you would enter into a legal contract whereby you lease your roof for 25 years to the energy installer, who claim all the feed in tariffs. I also discovered that you would have quite a legal problem when you come to sell the house, since you no longer own your own roof.

    The scams just keep coming.

  49. eco-geek says:

    My charges for using electricity were £0.37p / kWh recently or about fifty cents. That was with a particularly unpleasant outfit called “Spark Energy” that runs extortion rackets – they are currently pursuing me for electricity both they and I know I have not used amounting to an additional 60% per annum rate or 59p per kWh. I guess that’s about 85 cents(?) /kWh.

    I will beat them and their debt collecting heavies.

  50. Alan Watt, CD (Certified Denialist), Level 7 says:

    Here in Atlanta, Georgia Power used to have a deal with business customers who maintained their own backup generators to allow Georgia Power to turn those generators on remotely and feed the output onto the grid when they needed more power. This was an extremely low capital cost way to get reserve generation capability. For example the building where I work has two 2 megawatt units outside — sufficient to run the entire building including the data center floor. The building next door has another generator; I don’t know the capacity but it’s probably around 2 megawatts. With the right interconnect, all those generators could be spun up and feeding 5-6 megawatts onto the grid in 30 seconds or less.

    But with metro Atlanta under EPA orders to improve air quality, the use of deisel generators to provide power for the grid was banned. I’m sure Los Angeles imposes a similar restriction. Now what happens when grid power capacity and stability is not adequate to run power-critical businesses like data centers, financial clearing houses, public safety facilities, etc., ? Why they will turn on their deisel generators of course, spewing exhaust pollution into the pristine LA environment.

    The only way to stop that is to force power-critical businesses to shut down or move …

    Oh wait, you’ve covered that already.

  51. Merovign says:

    The government in California appears to want to get rid of all those nasty, scary producers and consumers among the “unwashed peoples.”

    The reverse is also true.

  52. D Lawrence says:

    The attached map showing US rates has an labeling error.
    The state of NH (New Hampshire) is shown twice, with the second NH just to the right of the first. The NH to the right is the actuallty the state of ME (Maine).

  53. Joe Public says:

    LADWP:-

    Los Angeles District of Waste & Penury?

  54. TimTheToolMan says:

    Willis writes “Finally, the electricity has to be delivered to the ultimate customer. The price of operating this transmission network is usually referred to as a “wheeling cost”. I would expect the wheeling cost to be on the order of a cent or two per kWh.”

    This cost is not an additional cost and you’re adding it to bolster your short sighted argument. When people moved to the new fangled automobile technology from the perfectly good horses, who do you think paid for the roads?

  55. johanna says:

    Some sort of madness seems to have descended on our politicians around about the peak of the CAGW scare in 2007. One result, as previous posters have explained, is that lucky punters in the right circumstances were not only subsidised to put solar panels on their roofs, they were then subsidised to disrupt the electricity grid with unwanted power while not having to pay for electricity.

    The naivete of the politicians and the canniness of the sharks in the business is shown in the quotes above – deals for 15, 20, 25 years. The sellers and installers are long gone. Homeowners, taxpayers and consumers who are subsidising these rorts are left with the bills.

    A wise person once said something like – ‘protect me from enthusiasms.’ I can’t find the quote (grateful if someone could remind me.) And all because the planet was allegedy about to fry because of CO2.

    Sigh.

  56. P. Solar says:

    “Remember, that network was never designed to handle excessive amounts of power, particularly heading upstream. In addition, DWP will have to install a variety of wireless reporting instrumentation for the control of the intelligent network, to keep it from going off the rails. I’d guess the cost to upgrade local networks and provide intelligent interconnects and controls would be on the order of a cent per kWh.”

    Willis, much as I generally enjoy your writings and astounding breadth of life experience you are able to bring to bear, here you are offering something with a very one-sided logic.

    We are constantly told solar is such a piddlingly small contribution that it is insignificant , now you tell us going to produce “excessive amounts”.

    Distributed generation can only _reduce_ the overall load on a system normally centrally fed. Electricity can flow equally well both ways along a transmission line, There is not problem about it heading “upstream”. In reality this will never (at least in our lifetimes) out-produce the local consumption , so it will simple reduce the load on the distribution system not overload it.

    Your argument about the need to expensive back up production is equally dubious.

    There was the usual anti-solar ranting here when there was a recent failure of a power station in California : “where was the solar when we needed it” backed up with graphs of production. What no one notices on the graph (or closed their eyes to) was that there was a surprisingly constant supply of solar_plus_wind. The two complemented each other perfectly. No one was shouting “thank goodness for the wind power being there when we needed it”.

    Sadly this just shows that the political right are just a bigoted as the ecological left and while they are generally on the correct side of the argument with regards to global warming they are not more objective or honest.

    Declaration if interest: I am currently buying a small PV installation for reasons similar to those of our host. I will not be taking advantage of local feed in tariff nor am I getting a grant or tax credit for the purchase.

    Recent subsidies have resulted in sufficient volume and infrastructure in the solar market to bring once stupidly expensive prices down to an affordable level. That is the aim of subsidising a new technology. Both Britain and France (and I believe Germany now) are reducing subsidies and feed-in tariffs and this is as it should be, now the market is maturing.

    I await the day they stop all the back door subsidies for the nuclear industry, which after 50 or 60 years still does not seem to be able to stand on its own two feet.

    Oddly, those who decry subsidies for solar and wind usually seems to be great fans of nuclear so adopt a different set of values where that is concerned.

  57. P. Solar says:

    not the market is maturing should have read “now the market is maturing.”

    [Fixed -w.]

  58. MattS says:

    WillR,

    “We routinely pay nearby US states to take our wind and solar over production — that’s right we pay those high rates — then pay Americans to take the unneeded energy.”

    As a resident of the state of Wisconsin in the US, I would like to thank the Province of Ontario Canada for subsidizing our electric rates.

    :-)

  59. FerdinandAkin says:

    The state of California will soon come to the realization that the current price structure and the buying – selling scheme is not economical. The wizards of smart will determine that the electric power grid is a one way system, and it would be cost prohibitive to upgrade it to allow energy feed-in at the points of consumption.

    The solution will be to go ahead and buy the solar power generated by the consumers and simply dissipate the electricity as resistive heat. This way no power is actually fed back into the system eliminating the necessity of upgrading the grid.

    It will be marketed as saving the citizens of California significant sums of money while keeping the sate on a firm economic footing.

  60. Adrian O says:

    If they chose to go for plentiful, INexpensive electricity instead, like their neighbors, they could use it in desalination plants like the one being built now in San Diego to solve their water problem too…

  61. MattS says:

    P. Solar,

    “We are constantly told solar is such a piddlingly small contribution that it is insignificant , now you tell us going to produce “excessive amounts”. ”

    The way the power grid is designed and operates it doesn’t take much to be excessive.

    Solar and wind can both vary output on very short timescales, but the power grid has to have power out balanced with power in to within a few watts on a sub-second basis or something somewhere explodes.

    You have no idea how much effort goes into managing this with just conventional generation to prevent the something somewhere exploding. There are safety systems in place that will automatically shut down large sections of the power grid to prevent this from happening.

    Allowing residential wind and solar installations to feed excess power back into the grid at all is insanity. To pay people for it; there is no word to adequately describe the monumental stupidity of this.

  62. Hoser says:

    Texas had average prices for electricity until they decided to boost Ken Lay and Enron Wind (now GE Wind – ecomagination). After becoming the state with the most wind generators, electricity prices rose over 50%. Now T Boone Pickens wanted in on the game, but his angle was to get control over groundwater rights under the land where his wind turbines were standing. The plan was to build a pipeline to Dallas. See? Wind power is just a scam for other purposes.

  63. Ric Werme says:

    D Lawrence says:
    January 15, 2013 at 3:59 am

    The attached map showing US rates has an labeling error.
    The state of NH (New Hampshire) is shown twice, with the second NH just to the right of the first. The NH to the right is the actuallty the state of ME (Maine).

    Last week New Hampshire annexed the State of Maine. We’ll be exporting maple flavored lobster to Boston.

    That or the map was filled west to east and whoever did it was getting tired as he neared New England.

  64. E.M.Smith says:

    Willis, some of your electric costs / tariffs are too low.

    My baseline (PG&E) is 19 cents. Typical is about 26 cents. Upper bound presently 29 cents. Already in the ‘soon to come’ rate structure? 50 cents.

    The quantity you can use to be in any one traunch depends on your neighborhood (so it pays to be the smaller house in the larger block…)

    Some exploration of the mysteries of PG&E rate structure explored here:
    http://chiefio.wordpress.com/2012/06/03/strange-how-economics-works/

    At that time the rates were:

    At present the PG&E site lists the Tier 3 price as 30 cents / kW-hr for usage above 130% AND below 200% of “baseline”, whatever it may be… then it jumps to 34 cents.

    Which prompted me to figure out it was cheaper to use my camp stove and cook over gasoline:

    http://chiefio.wordpress.com/2012/05/29/camping-at-home-is-cheaper/

    Yesterday I figured out that it is cheaper to use my Coleman Lantern as combined heat and light in the winter than to use my electric heater:
    http://chiefio.wordpress.com/2013/01/15/coleman-lantern-heat-cheaper/

    In essence, I’m being motivated to live like folks in a 3rd world country using self powered appliances.

    On the “to do” list for this summer is build a ‘rocket stove’ so I can cook on the patio using sticks from the yard (more efficient and cheaper than my charcoal BBQ, that also is on the ‘use more’ list…) I’m now also considering installing ‘gas lights’ ala 1800s, as gas is so cheap and 1/2 the year I want the heat.

    Somehow this does not seem like the intended result. Or maybe it is and I’m just not creative enough to realize it.

    But can these folks really have forgotten “substitution”?

    I don’t NEED electricity. I need heat and light. I can get those from burning things…

    BTW, I have an old 500 CC water cooled motorcycle that works. It would be very easy to make a “Redneck Powerplant” and plumb the hot water to a radiator in the house. Clip a big battery in parallel with the bike battery and put the TV on an inverter. Yeah, there would be a motor making noise along side the house. But it is profitable with gasoline at $4 a gallon.

    At the present top rate for electricity (which is my marginal rate at winter peak demand) I get 144 BTU / penny. My Coleman lantern gives me 277 BTU / penny.

    I’m reminded of those folks in the old USSR who fed bread to pigs because it was cheaper than pig feed…

    So right out the gate, any business that can install a cogeneration facility and just leave grid power will do so. I’m looking at “DIY” off the grid and thinking it’s worth it. (A nice natural gas generator in a cement box next to the garage… who would know what it was…)

    This is all just so wrong…

  65. Alan Watt, Climate Denialist Level 7 says:

    One thing Willis mentioned which deserves some elaboration is the meaning of “renewable”, which California has defined to exclude hydroelectric. Rainfall is just as renewable as sunshine and wind, but because water can be stored in large quantities hydro power is much more reliable than wind or solar. So excluding it from available options has the effect of forcing the addition of less reliable power sources to meet the renewable power mandates. Just one clue the mandates were skewed to serve political interests rather than rational objectives.

    But if you think about it, every “renewable” power source also commits a limited fixed resource. The clearest example is biofuels: while you can grow a new crop each season, doing so requires dedicating a certain acreage of farmland, which is therefore unavailable for other crops (like food). The world’s total supply of arable land is fixed and converting other acreage to new farmland incurs a bunch of costs. In addition the required supply of fertilizers, pesticides and irrigation water must come out of their own limited supply sources.

    Wind and hydro are tied to suitable locations which are also limited. While continental drift will eventually make more mountains and hence potential hydro sites, it’s a very slow process and we can’t afford to wait. Once you put up a solar panel, you can’t get any more power out of the shadow. Does anyone worry about “peak grain” or “peak wind” or “peak sunshine”? They are all tied to fixed resources and we have no way to make more when we’ve committed every available site.

    So the distinction between “renewable” and “non-renewable” is as much a matter of scale as it is of kind. What is the difference between building nuclear power stations where I have probably several thousand years of recoverable uranium (and even more thorium), and building biofuel plants which guarantee I will run out of productive farmland a lot sooner?

    “Renewable” power always includes an implicit commitment of some limited fixed resource which is in shorter supply than fossil fuels which are thereby “saved”. When you consider the energy density of nuclear fuels is six orders of magnitude greater than coal/oil/gas, it is absolute insanity to subsidize even lower density power sources because they are “renewable”.

    Quite simply meeting even 20% “renewable” power is already measurably increasing the cost to consumers. How can we possibly scale up to meet the demand of the world’s population in 50 years? I don’t see how; we’ll run out of land or water or some other fixed resource well before that. Which is why the other shoe to the renewable power push is rationing, usually called by the much less ominous sounding term “smart grid”.

    Yes, according to everything we know now, coal, oil and natural gas will eventually run out. But according to that same knowledge it will be hundreds of years out. In the meantime the benefits of cheaper more available power in the present are numerous and significant. When appropriate we should replace them with something better, not something worse.

  66. D Böehm Stealey says:

    WillR says:

    “How much was your chocolate ration increased?”

    “Choco rations have been increased to 25 grams per week, up from 30 grams per week.”

    ~ George Orwell [1984]

  67. G. P. Hanner says:

    Looking at that map of the USA I can understand why electric power in the Missouri River basin is relatively cheap: hydro-electric coupled with some nuclear. Same, same along the Ohio River Valley. I also understand, from experience, why electric power in Hawaii is so expensive: Diesel generating plants on each island, along with the need to import large quantities of diesel fuel. I don’t recall ever seeing solar in Hawaii, although I haven’t covered every square inch of the larger islands.

    As far as California, and the New England states go, it’s just willful ignorance and insistence on the existence of unicorns.

  68. vboring says:

    I work in the industry and your numbers are good guesses. Pricing varies by region, but most utilities in the non-coastal West (coal country) spend about 5c to generate, 2.5c to transmit to the edge of town, 2.5c to distribute to your house.

    In a nutshell, this is the cell phone question. The cell phone was able to uproot the land line monopoly.

    Some people think solar panels can do the same thing to coal plants. With rapidly falling battery prices being brought about by EV production ramping up, I’m not sure if they’re wrong. Maybe neighborhood or house scale microgrids would be better.

    But forcing the electric utility to subsidize and accelerate its own demise – that is just evil.

  69. Chris4692 says:

    Whether you are running a water utility, a sewer utility, a telephone utility or a power utility, you know you are in trouble if you do not have excess capacity. If you are running at capacity you need to be looking at how to get ahead of demand and fast. In a sewer utility, a lack of capacity means bypasses or flooded basements. In a water utility, lack of capacity means rationing, or no water. In a power utility, getting close to capacity means brown-outs or black outs. Excess capacity and duplication in a utility from generation through distribution are not bad things, they are essential to reliable service.

    An electric utility faces fluctuating demands continuously, it does not matter if there are wind generators or electric generators in the system, that requirement is there anyway, and the technical capabilities exist. Solar and wind sources do not suddenly turn off, they fade out. With an eye on the weather, those changes are more predictable than most of the fluctuations that a utility will have to pace. One of the main advantages of a natural gas generator is their ability to pace with demand. If that generator is running at 100% capacity, you have lost your ability to pace the supply with demand, you are at capacity, and as a utility you are in trouble. Generally a natural gas generating plant should not be running at 100% capacity.

    I don’t fully know the economics of solar, but the the place for solar energy panels is on rooftops, occupying space that is otherwise unproductive, and that is close to the demand. Solar panels should be shading roofs, serving an additional benefit of preventing heat from getting into a building, along with the main function of generating electricity. They should not be occupying otherwise open space, shading rabbits, distant from any demand.

  70. chris y says:

    Great post Willis. It reminds me of the Nellis Air Base solar PV array that Obama promoted back in May 2009. I dug into the scheme back then and found this-

    After a bit of digging (about 5 minutes), the cost of this solar PV installation is $100 Million, not including the land used for the installation.

    http://www.metaefficient.com/news/north-americas-largest-solar-electric-plant-in-switched-on.html

    Also, the actual output power is 14 MW peak. That works out to at least $7150/kW(peak).

    Now, in Nevada, the average solar insolation integrated over a year for a single-axis tracking PV array is 8.1 hours/day, or an availability of 34%. That boosts the cost for energy delivered to $21,000/kW.

    Here’s the interesting part.

    “The company that owns the panels is leasing the land at no cost, and Nellis is agreeing to buy the power for 20 years at about 2.2 cents/kWh, instead of the 9 cents they are paying to Nevada Power, saving the Air Force $1 million each year. None of the $100 million cost came from the Air Force.”

    http://www.nellis.af.mil/shared/media/document/AFD-080117-043.pdf

    The Air Force is paying 2.2 cents/kWhr for 20 years. With 30 million kWhr/year of energy purchased, that is a revenue stream of $660K/year for the owner. After 20 years, the owner has received $13.2M, or 13.2% of the project cost. After another few years, the panels all need to be replaced.

    Where did the other money come from to pay for this?

    “MMA Renewable Ventures, LLC has financed and will own and operate the landmark solar energy system, selling power to Nellis Air Force Base at a guaranteed rate for the next 20 years, as well as selling Renewable Energy Credits (RECs) to Nevada Power.”

    So, the bulk of the cost, $87M, is dumped onto everyone else in Nevada Power’s service area to pay for the RECs. With 700,000 customers, that is about 50 cents/month extra charge on their power bill.

    Sounds like a bargain? Try again. That 14MW solar farm only puts out, on average, about 14*0.34 = 4.76 MW. If Nevada Power decided to build enough solar to provide the energy of two nuclear reactors (about 2000 MW), it would cost Nevada Power customers an extra $210/month.

  71. WillR says:

    People are suggesting that Solar Power and Batteries could put the power company out of business — and the power company would be forced to pay for its own demise. Really? How could that happen. How much “battery” would be needed — just for the US of A..????.

    http://physics.ucsd.edu/do-the-math/2011/08/nation-sized-battery/
    The National Battery

    Putting the pieces together, our national battery occupies a volume of 4.4 billion cubic meters, equivalent to a cube 1.6 km (one mile) on a side. The size in itself is not a problem: we’d naturally break up the battery and distribute it around the country. This battery would demand 5 trillion kg (5 billion tons) of lead.

    Get the Lead Out!

    A USGS report from 2011 reports 80 million tons (Mt) of lead in known reserves worldwide, with 7 Mt in the U.S. A note in the report indicates that the recent demonstration of lead associated with zinc, silver, and copper deposits places the estimated (undiscovered) lead resources of the world at 1.5 billion tons. That’s still not enough to build the battery for the U.S. alone. We could chose to be optimistic and assume that more lead will be identified over time. But let’s not ignore completely the fact that at this moment in time time, no one can point to a map of the world and tell you where even 2% of the necessary lead would come from to build a lead-acid battery big enough for the U.S. And even the undiscovered, but suspected lead falls short.

    Yeah yeah — pumped storage — I know — Well, read the guys article on pumped storage — please… That ain’t gonna fly either — unless maybe you try to drain Lake Superior — but the Canadians got there first — we are marketing the entire lake to the Sauds — as ice cubes. Get in line!

    Do the math!

  72. Joe Public says:

    @ P.Solar

    “I await the day they stop all the back door subsidies for the nuclear industry, which after 50 or 60 years still does not seem to be able to stand on its own two feet.”

    I’d rather pay a subsidy to an industry which provides its output 24/7/365 – i.e. for whenever I want to use it; than to one which may provide ziltch at the times I need it.

  73. Claude Harvey says:

    Re:chris y says:
    January 15, 2013 at 7:34 am

    Good work, Chris! I wish more people would dig down into the fundamentals that way. Let’s take your example a step further and see what the actual cost per Kwh is over the 20 year life of the Nellis solar plant. The cumulative plant output each year at a 4.76 Mw average output is 4,760 Kw x 365 days/year x 24 hour/day = 41,697,600 Kwh.

    The annual cost of $100 million at a bank rate of 5% compounded monthly for a 20 year term is $7,886,608.

    Therefore, the capital cost alone is $7,886,608 / 41,697,600 Kwh = 18.9 cents per Kwh. Add to that a couple cents/Kwh for O&M plus taxes and you’re up to 22 cents per Kwh when a new CCGT plant running natural gas at current U.S. fuel prices can do the same job for about 4 cents per Kwh.

    But then it gets even worse. “Availability” is not “capacity factor”. The typical photovoltaic plant capacity factor in the area around Nellis will be lucky to produce a 25% capacity factor. This drives the capital cost per average Kw output up to $28,600 and the average cost per Kwh over the life of the project to approximately 30 cents per Kwh.

  74. nickleaton says:

    Storing isn’t 100% efficient.
    Extraction isn’t 100% efficient.
    Transmitting to the store isn’t 100% efficient.
    Transmitting from the store isn’t 100% efficent.

    Now take the efficiencies, and multiply them all together.

    Not a good strategy.

  75. chris y says:

    Here is a happy map with state-by-state coloring indicating where solar PV reaches price parity, depending on year and amounts of subsidies. The site that created the map explains that states where solar PV is at cost parity today are the ones where electricity rates *ARE SUFFICIENTLY HIGH*.

    Good news that…

    http://www.ilsr.org/projects/solarparitymap/

  76. RobertInAz says:

    Good analysis.

    Here in AZ, my solar generated during peak hours offsets peak hours @ 0.24/kWh. That generated during off peak hours offsets off peak @0.009/kWh. The power company purchases any excess power I generate at the end of the year (no carry-over). The purchase price is the off-peak price (I think – it may be even lower).

    Unique to AZ and So Cal is when the clouds come out during the day, electricity demand will drop almost as quickly as the solar output as ACs run less hard. I wonder where the redistribution of excess solar is managed? I hope it is at the local substation with all of the excess consumed within a few hundred meters of where it was generated.

  77. arthur4563 says:

    We have yet to mention the costs paid by the taxpayers/ratepayers for the subsidies
    for solar power from both the Feds and California. Last tine I looked, the subsidies
    from the Feds basically paid for up to 6 KW of solar panels. The panels basically cost nothing.
    What’s left are installation costs, which are very little in terms of materials, except for the
    inverter. I see where Italy recently slashed feed in tariffs and forbid any new rooftop
    installations, since their utilities are on the verge of bankruptcy. Seventeen cents
    per kwhr makes no economic sense – solar power isn’t worth anywhere near that much,
    mostly due to its unreliability. Wind power has the same negative characteristic, as does any uncontrollable power source.
    I also saw a survey of 30 cost analyses of the various methods of power generation as well
    as their carbon emissions.: solar power generated more than twice the carbon emissions of hydro and in some studies came close to matching the emissions of closed loop gas turbines.

  78. Mike says:

    Reblogged this on This Got My Attention and commented:
    There is a MATH problem in Los Angeles. Why are they overpaying for energy they are buying back? Remember, too, that most of the solar generator units were likely to have been subsidized. It seems like “double dipping” at the public trough. Doesn’t it?

  79. Doug Huffman says:

    Quite some time ago and in a discussion far far away, I read the account of a Southern California homeowner that prevailed in his suit against his neighbor for the neighbor’s preexisting trees shading the plaintiff’s $100,000 PV installation. IIRC the cost was presented as not exceptional.

  80. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 2:03 am

    Willis – I agree with you on the basic premise that selling power to the grid at an inflated cost is a significant issue. And I agree with many of the other comments such as about back up power etc.

    That said – some comments.

    First, as Kum Dollison asked, I believe I recently read that a big part of solar’s benefit is it is most available at peak times. So customers would be paying higher rates – and the price paid for selling to the grid would I suspect be much closer in price to peak prices.

    I fear that has already been figured in. The problem is not that solar is available at SOME peak times. It is that it is not available at others (evening peak) and it is unreliable.

    Re: backup generation – I agree its a significant cost factor and issue – something I’ve railed against re: wind generation as well. But I don’t think its quite as bad as you note. The grid is fed from many points and sources, and this solar would be just one of them. And while you certainly can have massive systems come in the cause cloud banks over a wide area its more typical the clouds go to scattered first and gradually fill in – but even then – other areas may well be in daylite.

    A. Scott, virtually every grid system using solar has had to limit the installed amount. People upstream have discussed this. It’s because of the instability in the system caused by the intermittent nature of the power.

    So you can stand there and claim that such instability is not “quite as bad as I note”, but the real-world experience people discuss above shows that you are just making things up to impress the rubes.

    And while there is certainly growth in electric use my understanding is the goal is in large part to supplement existing capacity – so the main generation sources would still be available. Also, as noted, I suspect they probably don’t “idle” any generation but rather run a larger number of facilities at reduced, partial power. This way it seems they aren’t really spending much if anything for “idle” generation as multiple plants are simply running at lower.

    Please, please do your homework. You clearly don’t understand the grid and how it works. It doesn’t matter if you are calling it electricity to “supplement existing capacity”, all intermittent power needs backup. It doesn’t stop needing backup just because you give it a fancy name.

    In addition, you obviously know nothing about the efficiency of power plants. If you “run a larger number of facilities at reduced, partial power” you are running large facilities very inefficiently. They are not designed to run at reduced partial power, and that action will cost your customers through the nose. In addition to increased fuel costs, it increases maintenance costs as well. All your brilliant plan does is cost lots more money from inefficient generation.

    It would appear you may be overlooking the capital cost of the generation – the cost of the solar panels and the like. Buying from consumers means no capital costs for the generation itself – may well be other costs – but not for the panels.

    I don’t understand this. You say I’m overlooking the capital costs, but then you note correctly that “buying from consumers means no capital costs for the generation itself.” I’ve included interconnect costs, and the customers are paying for the racks and panels and their installation, so which capital costs are you referring to?

    Regards,

    w.

  81. DirkH says:

    chris y says:
    January 15, 2013 at 7:34 am
    “Where did the other money come from to pay for this?

    “MMA Renewable Ventures, LLC has financed and will own and operate the landmark solar energy system, selling power to Nellis Air Force Base at a guaranteed rate for the next 20 years, as well as selling Renewable Energy Credits (RECs) to Nevada Power.”

    Nice trick to obfuscate the real cost per kWh. You gotta give the solar people one thing, they are world class propagandists.

  82. Willis Eschenbach says:

    TimTheToolMan says:
    January 15, 2013 at 4:10 am

    Willis writes

    “Finally, the electricity has to be delivered to the ultimate customer. The price of operating this transmission network is usually referred to as a “wheeling cost”. I would expect the wheeling cost to be on the order of a cent or two per kWh.”

    This cost is not an additional cost and you’re adding it to bolster your short sighted argument. When people moved to the new fangled automobile technology from the perfectly good horses, who do you think paid for the roads?

    Sometimes, Tim, your credulity, combined with your unending mad desire to prove me wrong, does you serious damage.

    Look up “wheeling cost”, there’s dozens and dozens of technical papers on it. Do you think I make these things up? If so, sorry to disappoint you.

    I have been involved personally in negotiating Power Purchase Agreements with the utilities, have you? I assure you that they know that wheeling cost is real.

    In fact, wheeling cost refers to the real, actual cost to “wheel” the power around the network. It may surprise you to find this out, Tim, but running a power distribution network costs money, and the more power you have to wheel the more it costs.

    Accordingly, the wheeling costs are added to the other costs (generation, depreciated capital costs, etc.) to determine the total cost of delivered power.

    Do your homework first before uncapping your electronic pen, Tim. You’ll look a lot less foolish.

    w.

  83. Bob Layson says:

    I think we should stop refering to the heavy lifters in the production of electricity as ‘back up’ for renewables. Renewables don’t front up and often don’t even turn up. Renewables are unreliables. Renewables are a mere sacrifice to the gods, a ruinous gesture, an ugly and expensive ornament, memorials to the bogus virtue of genuinely deluded politicians.

  84. harrywr2 says:

    P Solar

    “In reality this will never (at least in our lifetimes) out-produce the local consumption , so it will simple reduce the load on the distribution system not overload it. ”

    I wish that was true.
    The IEA has a task force investigating countermeasures which need to be taken to assure grid stability with high density installations.

    http://www.iea-pvps-task10.org/IMG/pdf/rep10_06.pdf

  85. Chris4692 says:

    harrywr2 at 10:29

    The IEA has a task force investigating countermeasures which need to be taken to assure grid stability with high density installations.

    From page 5 of the report you cited:

    Most of the potential problems indicated have yet to become tangible problems at the
    present time. Furthermore, even the issues with the potential to become problems in the
    future are generally not serious issues, and can either be dealt with sufficiently with
    existing technologies or else avoided with proper planning and design.

  86. Willis Eschenbach says:

    P. Solar says:
    January 15, 2013 at 5:15 am

    “Remember, that network was never designed to handle excessive amounts of power, particularly heading upstream. In addition, DWP will have to install a variety of wireless reporting instrumentation for the control of the intelligent network, to keep it from going off the rails. I’d guess the cost to upgrade local networks and provide intelligent interconnects and controls would be on the order of a cent per kWh.”

    Willis, much as I generally enjoy your writings and astounding breadth of life experience you are able to bring to bear, here you are offering something with a very one-sided logic.

    We are constantly told solar is such a piddlingly small contribution that it is insignificant , now you tell us going to produce “excessive amounts”.

    Look up the difference between “solar power as a fraction of total power produced in America” and “solar power produced in a particular location”.

    Distributed generation can only _reduce_ the overall load on a system normally centrally fed.

    If a solar system is designed to supply the entire load for a house plus some (as these solar systems often are) it is most assuredly possible to have more power flowing upstream from the house than ever flows downstream to the house. All you need is a sunny day and nobody in the house. This is a particular problem where the feed-in tariff is very high. In that situation, people put in huge systems to make money … and when they do, your claim that the upstream power will never exceed the downstream power goes right in the trash can.

    Electricity can flow equally well both ways along a transmission line, There is not problem about it heading “upstream”. In reality this will never (at least in our lifetimes) out-produce the local consumption , so it will simple reduce the load on the distribution system not overload it.

    Overall, you seem to be arguing that the feed-in-tariff type of distributed solar network can be put into place without any upgrade to either the capacity or the intelligence of the network—for free, in other words. Unfortunately, the real world is never that nice. Here’s a quote for you to consider:

    Policy Objective: Cost-Effectiveness
    Economic Development
    Decisions affecting the cost-effectiveness of a FiT program are the total program cap, capacity allocation, allocation of utility-side network upgrade costs, and allocation of participant risk through specific contractual features.

    You see that part about the “utility-side network upgrade costs”? That’s the penny per kWh in the costing. You can claim that is too little or too much. But your claim that there will be no utility-side network upgrade costs is nonsene.

    Your argument about the need to expensive back up production is equally dubious.

    Cool … so your claim is that renewable energy doesn’t need backup? Good luck with that one.

    There was the usual anti-solar ranting here when there was a recent failure of a power station in California : “where was the solar when we needed it” backed up with graphs of production. What no one notices on the graph (or closed their eyes to) was that there was a surprisingly constant supply of solar_plus_wind. The two complemented each other perfectly. No one was shouting “thank goodness for the wind power being there when we needed it”.

    Since you haven’t provided anything to back up that whole paragraph but your mouth, you’ll excuse me if I ignore it entirely. Come back with some cites, we can have a discussion. Until then, that kind of apocryphal story is meaningless, and given that you are the author, doubtful. Might be true, but your record in the past isn’t all that good.

    Sadly this just shows that the political right are just a bigoted as the ecological left and while they are generally on the correct side of the argument with regards to global warming they are not more objective or honest.

    Say what? How did politics rear its ugly head? P. Solar, while it’s nice to see you have opinions about politics, what on earth makes you think that they are desirable here?

    First off, who are you calling the “political right”? I certainly hope it’s not me, because if you think I’m a right-winger, you couldn’t be more wrong. I know that’s not an unusual position for you, but still … rather than just splattering feces on the wall, how about some details about who among the “political right” you are discussing, and what you think they might have done wrong.

    Declaration if interest: I am currently buying a small PV installation for reasons similar to those of our host. I will not be taking advantage of local feed in tariff nor am I getting a grant or tax credit for the purchase.

    Recent subsidies have resulted in sufficient volume and infrastructure in the solar market to bring once stupidly expensive prices down to an affordable level. That is the aim of subsidising a new technology. Both Britain and France (and I believe Germany now) are reducing subsidies and feed-in tariffs and this is as it should be, not the market is maturing.

    While the prices are down to an “affordable” level, in almost all situations there is no solar without subsidy. And since you say that you are not taking a subsidy, I’d be interested in the economics of your installation, which I notice you haven’t provided … I say this because I’ve known folks to put up solar just to impress the neighbors.

    Second, we have been subsidizing solar for well over a quarter century now, when are you folks going to give up nursing at the government teat? If the aim of subsidy is to get people off of the subsidy, why is LA today, as spelled out in the head post, subsidizing solar? If “stupidly expensive prices” are now affordable, then tell us, P. …

    WHY ON EARTH IS LA STILL TODAY SUBSIDIZING THE SOLAR YOU CLAIM IS “AFFORDABLE”?

    I await the day they stop all the back door subsidies for the nuclear industry, which after 50 or 60 years still does not seem to be able to stand on its own two feet.

    Oddly, those who decry subsidies for solar and wind usually seems to be great fans of nuclear so adopt a different set of values where that is concerned.

    You decry nuclear subsidies, which provide baseload power. But you seem to be fine with solar subsidies, which provide us with nothing of value …

    A man who thinks we should judge nuclear and solar by the same set of values, as you obviously do, has not considered the full implications of the words “dispersed and intermittent”. Nuclear provides baseload 24/7 power.

    Solar provides nothing of the sort.

    So why on earth would we want to judge them with the same measurements? That’s why they have a separate Olympics for disabled folks … because it is not fair to use the same values to judge everyone.

    Overall, P. Solar, my question is, just what is your point here? My point is that for LA to buy expensive solar is a mistake because it is both subsidized and priced way over market … what is your point? I ask because it is assuredly not obvious from your post, which seems very concerned with finding me in error but which glosses over whatever point you were trying to make.

    w.

  87. DirkH says:

    Don’t know if somebody already said it …
    about “Solar produces power at peak times” : YES. ALL OF THEM PANELS AT THE SAME TIME.
    Oversupply is the consequence; the price at the electricity exchange drops to zero and into negative.

    The owners of the panels don’t care, they get guaranteed payments. If you would force them to take the market prices, they wouldn’t make any money as they all produce at the same time, competing against each other.

    Maybe this would result in a concentration process and economies of scale as only the biggest producers would survive under this competition. But it is of course not allowed to happen; tariffs paid to the producers are mandated.

    So, there is no drive to become more efficient on the side of the solar panel operators.

    Furthermore, if one would pay them market prices, they would have an incentive to store their electricity and sell it during times of high demand. Again, this doesn’t happen.

    The renewable energy development concentrates not on developing technological solutions but on developing better lobbying, better buying of politicians and of laws.

  88. Gunga Din says:

    To many do seem to hooked on moronomics.

    Someone mentioned the airforce base that spent $100 million to install solar stuff to save $1 million a year. That sounded dumb when I first heard it. Now I find out it isn’t even a savings by reducing electricity used off the grid but what amounts to a subsidy.
    (sarc on) But isn’t it worth it if it makes somebody feel good? (sarc off)

  89. steveallwine says:

    FYI: One of, if not the world’s largest feed-in-tariff is in Washington State. It goes like this:

    Renewables = $0.15 kWh
    System with locally made inverters = $0.18 kWh
    System with locally made panels and inverters = $0.56 kWh
    Community owned, local solar projects = $1.08 a kWh

    Each address/owner is allowed up to $5,000 annually, and the FIT is good through 2020. It’s been around since 2006, and hasn’t been a financial problem for the State – especially considering we have one of the cheapest rates of electricity in the nation.

  90. A. Scott says:

    Willis – I assure you I am not, nor am I interested in as you claim, “just making things up to impress the rubes.”

    I offered my quick initial thoughts and insights, backed up with some data – in as non-controversial a way as I could – most of which you seemingly ignored. And when you did respond it was – as is all too often when someone disagrees in any way with you – with insults, derision and denigration.

    I enjoy your writing – but am tired of the constant insults and condescension against those you disagree with.

  91. A. Scott says:

    I’ll repeat my earlier comments. First, lets start with a link to the story you quoted:
    http://articles.latimes.com/2013/jan/12/local/la-me-solar-rooftop-20130112

    You challenged the cost effectiveness of buying power from residential producers at $0.17 cents, when that number is higher than residential customers pay. The article noted this was for initially 100 megawatts of solar energy – planned to be increased to a total of 150 megawatts.

    You left out this important part “The DWP is offering a tiered-pricing schedule that drops to 13 cents per kilowatt hour as energy contracts are reserved,”

    You also left out this VERY important and relevant part – which would appear to refute your entire premise:

    DWP staffers recommended a 17-cents-per-kilowatt-hour rate as a starting point to reflect the relatively higher cost of buying solar energy compared to other commodities. The cost of getting the program up and running will raise the average residential monthly electric bill by about 4 cents, according to a staff report.

    Once again, at least the impression is that you cherry picked the article – only presented the points that supported your position, while leaving out other important, relevant, parts – such as that the plan adds a whopping 4 cents to an average residential electric bill.

    I don’t know about you Willis, but even as generally an opponent of solar, I would be more than happy to pay 4 cents a month to see 34,000 homes as the story noted powered by solar.

    I’d also note the story points out the $500 million in economic activity it would generate.

    I acknowledge they do not say how much it might cost an average consumer in the long run – but its pretty easy to get an idea. LADWP received approval in 2011 for a rate increase that will see average rate increase from 12.69 to 14.1 cents per kWh by July 2013 – an appx 11% increase.

    This rate increase is so LADWP can;

    a.) meet or exceed the state goal of 10% energy reduction by 2020,
    b.) pursue a viable, cost-effective plan for meeting the new state target of 33% renewable by 2020
    c.) modernize its older generating units to be more fuel efficient and better integrate renewable energy
    d.) meet the strict compliance deadlines to replace “once-through” ocean cooling systems at its coastal power plants
    e.) rebuild for reliability – an urgent need to ramp up replacement and upgrade of aging infrastructure – power poles, transformers and distribution equipment, as well as transmission and generation facilities – including the need to integrate new, intermittent renewable energy resources such as wind and solar power.

    Source: http://tinyurl.com/LADWP-2013rates

    The Rate Payer Advocate confirmed, after LADWP made several key changes to its original rate plan to incorporate several RPA recommendations, that the proposed rate increases are necessary and warranted to comply with legal mandates and invest in basic reliability.

    Projects like the sell-back solar tariff are clearly included in and part of the costs built in to the recent rate increase. So we generally CAN KNOW the cost, as the utilities are required to disclose in detail their justification for the spending.

    And LADWP is required to disclose that cost as well … for a standard, base residential customer, their bill would increase from $65.79 in 2011 to $69.44 in 2013.

    To accomplish all of the projects and improvements listed above – INCLUDING the renewable energy projects – the average standard residential customer will pay $3.65 per month more – in LA – one of the highest electric cost markets in the country.

    Had we simply read the entire article, and done the smallest of research – a quick visit to the LADWP rates page – we could have known the answers. And known that the costs are not exorbitant nor unreasonable.

  92. johanna says:

    A.Scott, you are missing the point when you say:

    “I don’t know about you Willis, but even as generally an opponent of solar, I would be more than happy to pay 4 cents a month to see 34,000 homes as the story noted powered by solar.”

    That’s nice for you, so how about volunteering to pay the 4 cents a month for every consumer who doesn’t give a rat’s about 34,000 lucky homeowners getting money for nothing?

    The notion that it is OK to extort money from consumers because the amount involved per household is small is typical of the casuistry that infests the ‘green’ energy lobby. It’s like running a protection racket and justifying it on the grounds that you only charge $10 a week.

  93. A. Scott says:

    I will repeat – I am no large scale supporter of solar, especially hugely subsidized solar – but this program by all appearances is a good thing. The tariff agreed to be paid – 17 cents to as low as 13 cents – surely does appear to be a respectable deal when the LADWP average energy cost in 2013 is 14.1 cents per kWh.

    Especially considering it is generated by the customers equipment – that LADWP does not have to pay for.

    Add that this energy is generated at the PEAK use time – during sunny days when AC and electric demand is at highest – and its all the better deal. During those peak times there is a huge amount of high volume and industrial users paying as much as 30 cents and more per kWh. The AVERAGE electricity cost at the PEAK times is MUCH HIGHER than the 14.1 cents year round average.

    Buying electricity at these peak demand times – whenever it is available – at 17 cents sure looks to me like a great deal. Not to mention it provides standby capacity at peak times that could help avoid rolling blackouts and the like.

    Further – there is plenty of back up generation available. LADWP has 7,200 megawatts generating capacity vs. peak demand of 6,165 megawatts. That math shows more than 1,000 megawatts of excess generating capacity available. This solar plan is for 150 megawatts total – a fraction of the excess generation currently available.

    The LADWP Castaic Power Plant alone provides 1,600 megawatts capacity – 22% of the entire system. It is a pumped storage plant – electricity is generated by stored water passed from one reservoir to a lower one during the day when demand (and electric billed rates) is highest, and the water is pumped back to top tank at night when rates lowest.

    They SELL the electricity at peak demand rates during the day – 20 to 30+ cents per kWh, and then use off peak nite electricity – that costs them 10 cents or so to pump the water back at nite.

    It would seem there would be no significant difference whether that hydro plant works at 5% or 100% from a cost standpoint – it is gravity and water thru a turbine.

    It certainly appears, when you start researching the actual full data and information, that the 17 cents per kWh tariff for solar energy fed to the system is a pretty good deal in the end.

    And I think it is a MUCH better idea than using crop land as you exposed in a recent story.

  94. A. Scott says:

    johanna says: January 15, 2013 at 4:52 pm
    A.Scott, you are missing the point when you say:

    “I don’t know about you Willis, but even as generally an opponent of solar, I would be more than happy to pay 4 cents a month to see 34,000 homes as the story noted powered by solar.”

    That’s nice for you, so how about volunteering to pay the 4 cents a month for every consumer who doesn’t give a rat’s about 34,000 lucky homeowners getting money for nothing?

    What are you talking about? Those 34,000 homeowners do NOT receive money for anything. They PAY their NORMAL energy costs just like everyone else.

    Whether you like it or not LADWP MUST meet state (and federal) standard. For renewable energy AND things like eliminating “once thru” ocean cooling plants.

    They also have huge infrastructure costs to replace 60+ year old highly inefficient, failure prone, ugly and expensive power poles and distribution network. Those costs are huge but will lead to significant LONG TERM SAVINGS for customers.

    ALL of those things and more were included in the latest rate hike – which adds $3.65 to the base residential customers bill.

    The 4 cents a month to implement this solar does provide benefits to all customers as well. Not the least being it frees up 150 megawatts of their excess capacity – which could minimize or eliminate rolling brown and/or blackouts in the next big heat wave – just as ONE example.
    .

  95. A. Scott says:

    Turns out Willis and I are both right on power plants … you have “base load” plants that operate as Willis notes – running constantly providing a base amount of energy. These include nuclear and coal – which do not change output based on demand.

    There are base load plants that have multiple generators – that can be cycled with demand – so when operating each generator runs at continuous capacity. Some coal plants are also “cycled” daily to meet demand.

    Then you have peak load plants – which can and do routinely manage loads based on demand. These plants – natural gas for example, can react quickly to changing demand.

    The pumped storage plants I noted above are one of the best methods of peak load demand plants.

  96. Hoser says:

    WillR says:
    January 15, 2013 at 8:23 am

    No, the correct ‘battery’ is H2 made from H2O. Throw the O2 away, since you can get that anywhere. LH2 fuel cells could do the trick. I recall work has been done on fuel cells using materials that can replace Pt. Yep, just checked, and here’s a link for fuel cells without Pt.
    http://news.softpedia.com/news/Hydrogen-Fuel-Cells-Can-Be-Produced-Without-Platinum-196449.shtml
    Naturally, it makes no sense to burn hydrocarbons to make H2. You need nuclear to make enough LH2 to begin to compete with gasoline and LNG. I suppose some wind or solar might be used, but generally speaking, PV is a terrible misuse of land. If you have nuclear, you can afford the losses in making, storing, and transporting LH2. LH2 would even be good for making a superconducting power distribution system. Deliver both hydrogen and power. It also would address the need for an EMP resistant power grid.

  97. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 3:30 pm

    Willis – I assure you I am not, nor am I interested in as you claim, “just making things up to impress the rubes.”

    I offered my quick initial thoughts and insights, backed up with some data – in as non-controversial a way as I could – most of which you seemingly ignored.

    As far as I know, I answered all of your point in my post upstream. If I missed one, I’m glad to answer it, but you’ll have to point it out, vague wimpering and whining about how I’m being mean to you won’t help. Give me chapter and verse if you want action.

    And when you did respond it was – as is all too often when someone disagrees in any way with you – with insults, derision and denigration.

    My comment was directed towards your foolish claim that no backup was necessary for these particular renewables. This is a stupid, laughable claim, and you seem like a smart man, so the only assumption left for me is that you were making things up. If it is merely a sign of your lack of comprehension, then you certainly have my apologies for saying you were making it up.

    I enjoy your writing – but am tired of the constant insults and condescension against those you disagree with.

    Fine. Then go away and bitch to someone else about what you are “tired of”, because I couldn’t care less what you are tired of..

    Seriously. I’m not gonna change because you don’t like my style, A, I’m too old for that, so you’ll have to decide if you can stand it. I will guarantee that if you go, I won’t miss you a bit.

    If you took a look, you would find that I condescend to those people that treat me like a fool, and I insult those who come in to do nothing but harangue me. People who come in to learn or to teach, them I’m more than happy to discuss things with. People like you who come in full of bluster, and claim that these renewables don’t need backup, and that theres no problem with running industrial power plants at partial capacity?

    At that point, you get exactly what that kind of nonsense deserves.

    w.

  98. TimTheToolMan says:

    Willis writes “In fact, wheeling cost refers to the real, actual cost to “wheel” the power around the network. It may surprise you to find this out, Tim, but running a power distribution network costs money”

    …in response to my comment “This cost is not an additional cost and you’re adding it to bolster your short sighted argument.”

    Hilarious Willis. Now how is the distribution network an extra cost when you add distributed solar PV to it as opposed to sticking with centralised supply? Distributing the load around the distribution network decreases the load on it Willis. That should lengthen the time before upgrades are needed. Maintenance is maintenance and is always going to be needed. How is that more expensive? Administratively maybe, is that your argument?

    But the funniest thing you said was “Do your homework first before uncapping your electronic pen, Tim. You’ll look a lot less foolish.”

    Because I am quite certain that I know more about the energy industry and its drivers than you’ll ever know. IT in Utiilities has been the vast majority of my working life. Right now I’m contracted to a power utility and we’re replacing its trading system. You telling me how the energy industry works would be like me telling you how to build a .

  99. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 4:37 pm (Edit)

    I’ll repeat my earlier comments. First, lets start with a link to the story you quoted:
    http://articles.latimes.com/2013/jan/12/local/la-me-solar-rooftop-20130112

    You challenged the cost effectiveness of buying power from residential producers at $0.17 cents, when that number is higher than residential customers pay. The article noted this was for initially 100 megawatts of solar energy – planned to be increased to a total of 150 megawatts.

    You left out this important part “The DWP is offering a tiered-pricing schedule that drops to 13 cents per kilowatt hour as energy contracts are reserved,”

    A. Scott, I begin to despair. I have shown that natural gas powered plants cost around 6 cents a kilowatt hour, that coal is about 8 cents, gas advanced turbine is 11 cents … and now you are impressed because after charging 17 cents for a while, they plan to drop it down to 13 cents …

    Mr. Scott, before I accused you of not being all that smart. Your response is to come back and claim that 13 cent per kilowatt hour power makes everything alright … what planet do you live on? That is double the cost of cheap power.

    You also left out this VERY important and relevant part – which would appear to refute your entire premise:

    DWP staffers recommended a 17-cents-per-kilowatt-hour rate as a starting point to reflect the relatively higher cost of buying solar energy compared to other commodities. The cost of getting the program up and running will raise the average residential monthly electric bill by about 4 cents, according to a staff report.

    Once again, at least the impression is that you cherry picked the article – only presented the points that supported your position, while leaving out other important, relevant, parts – such as that the plan adds a whopping 4 cents to an average residential electric bill.

    Heck, if you don’t mind that, A. Scott, how about this plan. Every person in the US gives me 4 cents per month …

    What’s that? You don’t think that the people of the US should have to subsidize my sorry ass, even if it only costs four cents per month?

    Well, I feel the same way about subsidized electricity. I don’t care if the subsidy is small, all that means is that you’ve spread it out widely, not that it suddenly becomes fair because more people are baying for it.

    I’d also note the story points out the $500 million in economic activity it would generate.

    “It would generate”? Damn, you are a credulous person. Do you believe everything you read in the newspaper, or just this particular article? Expensive power, 17 cent per kWh power, isn’t going to generate much “economic activity” at all, not everyone is as foolish as the author of the article.

    w.

    w.

  100. TimTheToolMan says:

    Willis also wrote “You see that part about the “utility-side network upgrade costs”? That’s the penny per kWh in the costing. You can claim that is too little or too much. But your claim that there will be no utility-side network upgrade costs is nonsene.”

    Not nonsense. And potentially negative in actual fact. ie in the short term we may *save* money by distributing generation.

    Upgrades to distribution networks are driven from the network being no longer able to cope with the load (as well as adding additional feeders for redundancy and so on but those reasons are unrelated to this discussion) and that happens when the people on that network consume more than it can handle. Addition of distributed generation (ie solar PV) throughout that network decreases the load and puts off the need for upgrades.

  101. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 4:58 pm

    I will repeat – I am no large scale supporter of solar, especially hugely subsidized solar – but this program by all appearances is a good thing. The tariff agreed to be paid – 17 cents to as low as 13 cents – surely does appear to be a respectable deal when the LADWP average energy cost in 2013 is 14.1 cents per kWh.

    That is the same asinine claim that the power companies are making. WHY DO YOU THINK THE AVERAGE ENERGY COST IN LA IS 14.1 CENTS PER KWH?

    It is because of congenitally innumerate folks like you that the price is so hight.

    You are so out of it that you think that when we can put in a new power plant for a levelized cost of 6 cents per kilowatt hour, you blithely claim that it’s a brilliant plan to put in a plant costing 17 cents an hour.

    You’re so out of touch, you think 13 cents an hour is a good deal for electricity, simply because LA has a worse deal. And in an amazing feat of self-referential ignorance, it is your same kind of inane stupidity, repeated over and over for the last decade, that is the reason LA charges 14 cents per kWh … and you are hell-bent on perpetuating it.

    Yes, LA charges 14.1 cents per kWh. BUT THAT DOESN’T MAKE 13 CENTS A GOOD DEAL, A. Scott, that’s just your misguided fantasy of how prices work. All a 13 cent deal is good for is to highlight that 14.1 cents is a really really bad deal.

    Please do try to catch up, these kinds of repeated nonsensical statements are doing serious damage to your reputation.

    w.

  102. A. Scott says:

    My comment was directed towards your foolish claim that no backup was necessary for these particular renewables. This is a stupid, laughable claim, and you seem like a smart man, so the only assumption left for me is that you were making things up. If it is merely a sign of your lack of comprehension, then you certainly have my apologies for saying you were making it up.

    People like you who come in full of bluster, and claim that these renewables don’t need backup, and that theres no problem with running industrial power plants at partial capacity?

    Bull poop Willis – I said nothing of the sort – neither was there “bluster” nor did I ever say back up generation was not required. And I was correct about running plants at partial capacity as I ALSO explained right above.

    You – as usual – didn’t bother to read what was said, but that certainly did nothing to stop you from making boorish and denigrating attacks..

    On backup power – I AGREED WITH YOU “its a significant cost factor and issue” … but I went on to note that there was already EXISTING reserve generation capacity, AND that because this solar was a supplement to existing production (and not a fulltime primary source) it could use existing generating reserve.

    You ignored that I posted exactly those details – that there is existing 1,000+ megawatts reserve capacity:

    currently maintains a generating capacity of 7,200 megawatts vs. peak demand of 6,165 megawatts by the city of Los Angeles. Coming up with 100 megawatts of standby backup power wouldn’t seem to be much problem with existing excess capacity?

    On running plants at “partial capacity” – as I showed above I was correct on that as well. SOME plants operate as you note – BASE LOAD PLANTS running steadily at fixed capacity to cover the minimum base power loads – nuclear and coal primarily.

    But there are also the necessary PEAK LOAD PLANTS that operate on an on demand basis. Typically natural gas, and things like the pumper storage type plants. I was correct that MANY plants DO operate in a partial load status – including even some base load coal type plants that are cycled throughout the day based on load status. Energy demand is NOT static and thus you MUST have the ability to manage generation capacity to demand.

    You were wrong in each of your attacks and the denigrating comments you included as a result Willis.

    And if you read my posts immediately above you will see it appears you were also wrong about your base premise as well. Implementing the solar buy back tariff costs just 4 center per month per customer.

    And with a rate paid between 13 cents and 17 cents at max, considering the majority of solar would be available and purchased at peak afternoon demand times – when rates are as high as 30 cents per kWh – the fees paid for customer generated solar fed to the system seem VERY reasonable. Even if we use YOUR estimate of the addtl costs – at 13 to 17 cents per kWh base this energy likely represents a net profit for the utility and it customers.

  103. Willis Eschenbach says:

    A. Scott, you say:

    The LADWP Castaic Power Plant alone provides 1,600 megawatts capacity – 22% of the entire system. It is a pumped storage plant – electricity is generated by stored water passed from one reservoir to a lower one during the day when demand (and electric billed rates) is highest, and the water is pumped back to top tank at night when rates lowest.

    They SELL the electricity at peak demand rates during the day – 20 to 30+ cents per kWh, and then use off peak nite electricity – that costs them 10 cents or so to pump the water back at nite.

    It would seem there would be no significant difference whether that hydro plant works at 5% or 100% from a cost standpoint – it is gravity and water thru a turbine.

    I will leave it to the readers to decide if it is true that it doesn’t matter whether the efficiency of the Castaic power storage and generation is 5% or 100%, and thus whether Mr. A. Scott has a clue, or needs desperately to purchase two double fistfuls of same …

    Me, I say it matters doubly what the efficiency of the Castaic plant might be, because it loses energy going up as well as going down. But then I’m just a guy who has built hydroelectric power plants, what the hell would I know? Engineers in the crowd, what say ye? Is it true as A. Scott says that

    … there would be no significant difference whether that [Castaic] hydro plant works at 5% or 100% from a cost standpoint

    Because I say, no way, he doesn’t have a clue what he’s talking about.

    I await the wisdom of the vox pop …

    w.

  104. johanna says:

    Quote from the increasingly hysterical (see CAPS!) A. Scott:

    “The 4 cents a month to implement this solar does provide benefits to all customers as well. Not the least being it frees up 150 megawatts of their excess capacity – which could minimize or eliminate rolling brown and/or blackouts in the next big heat wave – just as ONE example.”
    ———————————————————-
    A. Scott, I know next to nothing about energy production and use in California. But, I do know a bit about how energy grids work in advanced countries.

    It may be that home solar installations reduce the demand on conventional power sources on hot, sunny days. But, your characterisation of peaks is just wrong. Peak energy demand is after people get home from work, when they start to cook dinner, wash themselves and their kids, switch on the TV and other appliances, etc. That is in the late afternoon/early evening. Solar is not much help at that time.

    The other peak is in the early morning, when similar activities are happening. Again, solar is not contributing anything useful at 7 am.

    Solar does not address the regular, predictable peaks in any way. If it helps out on very hot days now and then, so what? The important thing is that when people come home from work, or get up in the morning, when they switch something on, it works. That means 100% backup.

    Running conventional plants at less than peak efficiency because it happens to be sunny, or windy, is ruinous economically and can only be justified by some sort of quasi-religious belief.
    .

  105. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 6:41 pm

    And with a rate paid between 13 cents and 17 cents at max, considering the majority of solar would be available and purchased at peak afternoon demand times – when rates are as high as 30 cents per kWh – the fees paid for customer generated solar fed to the system seem VERY reasonable. Even if we use YOUR estimate of the addtl costs – at 13 to 17 cents per kWh base this energy likely represents a net profit for the utility and it customers.

    Again your lack of even rudimentary math shines through.

    The fact that LA charges 30 cents at peak doesn’t make 13 cent power a good deal, not not when you can buy 6 cent per kWh power generation capabilities all day long.

    Let me say it again. The fact that LA charge a huge amount for power doesn’t mean that expensive power is a good deal. That is a child’s vision of the market. Wake up, my friend, you’ve drunk the koolaid. When you can buy generation at a levelized cost of 6 cents per hour, with falling costs for the natural gas it runs on, at that point 7 cents an hour is a bad deal, and 13 or 17 cents is ALMOST DOUBLE THE MARKET COST. It’s a mystery to me how you can claim that paying double the market cost for anything is a good deal … but then as we’ve all observed, math is not your strong suit.

    Sure, LA charges 30 cents per hour, but all that means is that LA DWP is getting ripped off by their power suppliers, like the jokers you approve of charging 17 cents per hour. Thirty cent power doesn’t mean that 17 cent power is a good deal, that’s backwards thinking.

    w.

    PS—You reveal your innumeracy even more when you claim this is a good deal “for the utility and its customers” … really?

    Buying expensive power, and then selling it for an even more expensive rate to the customers, is a good deal for the the customers?

    Really expensive power is a good deal for the customers … man, that takes the cake. I’m glad you’re not running a business for me … that kind of colossal ignorance is dangerous.

  106. A. Scott says:

    A. Scott, I begin to despair. I have shown that natural gas powered plants cost around 6 cents a kilowatt hour, that coal is about 8 cents, gas advanced turbine is 11 cents … and now you are impressed because after charging 17 cents for a while, they plan to drop it down to 13 cents …

    Simple question Willis. How much will it cost and how long will it take to design, finance, permit and build new plants that can produce electricity at your 6 or 11 cents per kWh?

    Regardless – your post did not bring up this post at all. You did briefly refer to the costs for BACKUP generation – which I have shown already exists in sufficient capacity to handle this small 150 megawatts or solar.

    “Moving the Goal Posts” … penalty …. 10 yards and loss of down Willis. THAT would be the subject perhaps of another post – but it is NOT the subject you wrote about here.

    Your entire post was about the foolishness of paying more for solar than you could sell it for. How in California, as you proclaim; “it’s a lethal idea, it will both kill businesses dead and be very hard on the poor.”

    Yet we find out by reading the entire article that it does neither. It costs a few cents on the average customers bill.

    And a few minutes research on my part shows the recent rate hike – which addresses many important issues and requirements INCLUDING the renewables requirement – costs a few dollars a month.

    And that same few minutes of research showed any of those customers that are poor already get CONSIDERABLE assistance from LADWP. They are not likely to be affected in any meaningful way.

    As far as businesses – they all know the score. Nothing is in any way new or different. They have had many, many years of exactly the same kind of issues to deal with. They always do have the choice of moving. Funny thing Willis – and I know many, many business owners in LA – they almost all seem to think the other benefits outweigh the fact they pay a little more.

    Your post was about the foolishness of pay 17 cents for solar. By simply reading the entire story I showed it was not 17 cents – it was a blended rate between 13 and 17 cents. I made the case, supported with research and facts – as did others – that because this power is available at peak time of need – when rates are at peak levels as well – that the utility is very likely selling that power for at or more than they are paying. And that these prices ARE by all appearances a GOOD deal … especially when considering there is no capital cost for the equipment generating the power.

    Which was the topic of your post.

  107. A. Scott says:

    Willis – please try not being a pompous jerk just for once. I said “it would seem” the efficiency of a pumping plant in generation mode would have little bearing … not a statement of fact, simply my impression. If you actually HAVE some useful insight then please simply post it and educate us and stop acting like a boob.

  108. A. Scott says:

    Willis … is a pumped storage plant a good peak load source of generation or is it not?

  109. A. Scott says:

    Johanna – I suggest you do your research again on peak demand. Perhaps read LADWP’s comments – or those of most any other source. Including Willis. Peak demand is afternoons, when people are at work, plants are operating, and air conditioners are running full blast. There are lesser peaks at different times.

  110. Aussie Luke Warm says:

    Willis, higher electricity charges relative to other states are a great way to get rid of poor people California. Maybe that’s what the rulers are really trying to achieve? As we know, Green = elitist.

  111. A. Scott says:

    Willis – again, simply put – here is your premise for this post:

    Willis: The problem is that in order to break even, the Los Angeles District of Water and Power (DWP) has to sell the power at more than it cost the DWP to buy it, transport it, buffer it with adequate backup, and deliver it to the eventual customer.

    I showed, contrary to your assertion, the problem you claim does not appear to exist. I showed it appears highly likely they are selling the power for more, possibly far more, than the 13 to 17 cents per kWh they are paying for it. I supported this with documented information and facts

    You admit this yourself … “Sure, LA charges 30 cents per hour..”

    All the rest of your protestations, while they may well be worthy of another post, are irrelevant to your original post and premise. Which, even by your admission, seems to be largely refuted.

  112. MattS says:

    A. Scott,

    “Willis … is a pumped storage plant a good peak load source of generation or is it not?”

    I am not Willis, but I can translate his answer into a simple form for you.

    From a cost / energy efficiency stand point, NO.

  113. A. Scott says:

    Aussie – there appear to be many reasons for California’s higher rates. In large part it a function of a very large dense population in a somewhat large geographic area for generation and transmission.

    Another, perhaps the biggest, issue it seems is the aging and increasingly fragile infrastructure. Many/most of their lines are above ground and are 60+ years old.

    But are they really that high? From Willis map there is an entire large area in the NE with as high or worse rates there.

  114. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 7:18 pm

    Willis … is a pumped storage plant a good peak load source of generation or is it not?

    Thanks, A. Depends on the efficiency of the plant. Remember, however, that pumped storage is not a source of power, just a transfer of power from one part of a day to another. If you can do it efficiently, it’s a good deal.

    w.

  115. johanna says:

    A. Scott – your assumption that peak demand has anything to do with air conditioners says it all. Firstly, there is winter to be taken into account; secondly, not everyone lives in a climate where aircon is a necessity; and thirdly, here is an example of what I was talking about:

    http://arrow.dit.ie/cgi/viewcontent.cgi?article=1065&context=dubencon2&sei-redir=1&referer=http%3A%2F
    %2Fwww.google.com.au%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Dtypical%2520pattern%2520daily%2520demand%2520electricity%26source%3Dweb%26cd%3D7%26ved%3D0CGUQFjAG%26url%3Dhttp%253A%252F%252Farrow.dit.ie%252Fcgi%252Fviewcontent.cgi%253Farticle%253D1065%2526context%253Ddubencon2%26ei%3Ddib2UJWKN66UiAe6kIG4Bw%26usg%3DAFQjCNHdwI0MXbnUU8TvU8gVS0o3Wnr4VQ#search=%22typical%20pattern%20daily%20demand%20electricity%22

    Sorry about the ungainly link – but it is a typical paper from the ‘we’re all going to fry’ crowd which documents the appalling fact that, when people come home from work, energy use rises. That is why we are all being asked to get ‘smart meters’. It is a way of punishing us for daring to cook our dinner or wash our kids when it is convenient. Gaia is angry!

    Seriously, A. Scott, if you think that there are no energy peaks when people come home or when they get up in the morning, I am just glad that I wasn’t the unfortunate teacher who tried to explain why 2 + 2 = 4 (for practical purposes).

  116. Willis Eschenbach says:

    A. Scott says:
    January 15, 2013 at 7:11 pm

    A. Scott, I begin to despair. I have shown that natural gas powered plants cost around 6 cents a kilowatt hour, that coal is about 8 cents, gas advanced turbine is 11 cents … and now you are impressed because after charging 17 cents for a while, they plan to drop it down to 13 cents …

    Simple question Willis. How much will it cost and how long will it take to design, finance, permit and build new plants that can produce electricity at your 6 or 11 cents per kWh?

    We’re talking off-the-shelf plants, so no design time. The main holdups have nothing to do with power plants, and everything to do with the dysfunctional state of regulations in California. Any power plant except subsidized solar has been so demonized that you can guarantee a fistful of lawsuits before you even get started. Estimated time to production? Probably some time between five years and fifteen lawsuits. However, the fact that California’s regulations are dysfunctional is not the issue here.

    Regardless – your post did not bring up this post [point?] at all. You did briefly refer to the costs for BACKUP generation – which I have shown already exists in sufficient capacity to handle this small 150 megawatts of solar.

    No, you have claimed that there is sufficient backup capacity to add the solar. While this is theoretically possible, most power systems in California are strained to capacity. In general, to increase the actual capacity of your system, you have to provide additional backup equal to the renewables you are adding to the system. Otherwise, clouds roll in on a hot day and you have a brownout … no bueno.

    And regarding whether I brought it up in the head post or not, really? That’s your objection? It’s not a college course, it’s a blog post. Don’t pretend to be surprised and try to bust me because it didn’t cover everything, or because it didn’t include what you wanted. You want the post that covers that, you write it. Otherwise, as always, it gets discussed here in the comments …

    “Moving the Goal Posts” … penalty …. 10 yards and loss of down Willis. THAT would be the subject perhaps of another post – but it is NOT the subject you wrote about here.

    I’m sure that has meaning to you. Me, not so much …

    Your entire post was about the foolishness of paying more for solar than you could sell it for. How in California, as you proclaim; “it’s a lethal idea, it will both kill businesses dead and be very hard on the poor.”

    Good god, is my writing really that bad?

    My post was about (or at least I thought it was about) the foolishness of paying more for solar power than you would pay for fossil fuel power.

    And you quote only half my statement above, so it seems like I’m talking about paying more than you can sell it for, but I’m not talking about that at all.

    Here’s my full statement (my emphasis):

    As I have mentioned elsewhere, expensive energy is always a bad idea. It turns out that in California, it’s a lethal idea, it will both kill businesses dead and be very hard on the poor.

    So as you can see, that particular quote was about expensive energy, and not about “the foolishness of paying more for solar than you could sell it for” as you claim. Heck, in LA that could be almost any amount, LA sells power for up to thirty cents a kWh which covers a multitude of sins … but that doesn’t make 17 cent or even 13 cent power a good deal, not when you can buy 6 cent power.

    w.

  117. A. Scott says:

    MattS

    Why not? It in effect stores energy that can be quickly released on demand. It can, as far as I can tell, relatively easily scale how much energy it produces.

    The energy is sold for far more than the cost of the energy to pump the water back into the upper reservoir – which comes from far off peak nite rates – and sometimes from essentially free electricity if they need “load” at night for base load plants. .

    It provides 22% of LA’s energy, and in a scalable fashion.

  118. Willis Eschenbach says:

    johanna says:
    January 15, 2013 at 8:21 pm

    A. Scott – your assumption that peak demand has anything to do with air conditioners says it all. Firstly, there is winter to be taken into account; secondly, not everyone lives in a climate where aircon is a necessity;

    Well, yes, but:


    SOURCE

    In all seasons except the summer, the evening peak is larger than the afternoon peak. However, when we are looking at the peak demand for the year, which is the demand that you need to size your system for, the summer demand is much larger than any other season.

    w.

  119. johanna says:

    Thanks, Willis, and no doubt the graph would have a similar shape in many parts of the world. However, in cold climates, in winter, it would look a bit different. In the UK, where people have to switch on the lights at 4 or 5pm in the middle of winter, it would be certainly be a different story. The same goes for where I live, where night (and frost) falls at 5pm in winter.

    The ‘smartmeters’ that are being rolled out across various countries are all accompanied by the same message. It is that profligate use of electricity between the hours of 6pm and 8pm is a sin which will shortly be punished with higher charges.

    I wouldn’t mind if this was a reflection of the true costs – but, guess what – when I use electricity in the middle of the night they still charge me at full rates.

    It’s a happy convergence of interests between power companies, greenies and politicians. Everybody wins a prize, except consumers.

  120. A. Scott says:

    Johanna – we are talking about LA here – not other parts of the world. And as Willis confirms the afternoon summer peak demand is the important part. It is significantly higher than the other peaks which I acknowledged. And it is the peak demand the system must be able to accommodate.

  121. A. Scott says:

    Willis – I’ll repeat – you posted about a specific issue – LADWP paying more for this small slice of solar than you believed they could get for it:

    What is wrong with the moronomic math of the Commissioners of the Los Angeles District of Water and Power? Figure 1 suggests some of the answers.

    The problem is that in order to break even, the Los Angeles District of Water and Power (DWP) has to sell the power at more than it cost the DWP to buy it, transport it, buffer it with adequate backup, and deliver it to the eventual customer. As a result, their sale price will be more than seventeen cents per hour.

    How much more? Well, that’s kind of difficult to calculate. But we can look at some of the issues and make some first-cut estimates.

    The rest of your commentary was directly related to looking at some of the issues and making some estimates.

    I showed that your premise they would take a big loss on reselling this solar was wrong. I supported that claim with sourced information and facts.

    Upon pointing this out you changed the conversation – admitting they would likely be able to sell that peak produced solar energy, which they paid between 13 and 17 cents for, for peak electric rates, as much as 30 cents and more per kWh.

    You then changed the discussion and your claim – that it was stupid to pay 13 to 17 cents for this solar, even though they will make a profit on doing so, because the energy can be produced much less expensively with new generation.

    This is a wholly different topic – well worth discussion – but not related to your original position and claims. It isn’t about busting you for not “covering everything” in your original post – its about changing the topic and discussion.

    But lets look at your new proposition anyway – that its terrible to pay 13 to 17 cents for this solar, even if LADWP makes money doing so – because that energy can be produced much less expensively.

    That claim certainly would have merit … if it could actually be done – if you actually COULD provide new generation capacity at the rates you note:

    A.Scott: How much will it cost and how long will it take to design, finance, permit and build new plants that can produce electricity at your 6 or 11 cents per kWh?

    Willis: Estimated time to production? Probably some time between five years and fifteen lawsuits.

    The simple fact – as you acknowledge – is you cannot produce new energy at the rates you claim. You cannot build a plant. Thus your proposition – that 13 – 17 cents is too expensive because you can provide this energy far cheaper with new plants is moot and of no value in this discussion.

    Which brings us back to my position. You initially said it was terrible the utility was paying so much for this solar because they could never get back what they paid. After I pointed out they were providing peak time of use energy and could sell for peak rates, you acknowledged that was correct.

    Absent the ability to construct new lower cost options this deal is good for the utlity and good for its customers as it likely generates a profit. They obtain this energy without any capital cost for the generation (saving appx 20 cents per kW according to your EIA link) – and likely make a profit, which would lower overall energy costs. And also help meet renewable laws.

    What is funny Willis is I agree with you on most of your comments. But I also believe we have a strong burden to be accurate – to find out the real data and true answers – and give credit where due.

    Here, by all appearances – you were simply wrong. It is not the bad deal you implied. And 4 cents a month to implement is not a significant expense.

    Nor honestly is the entire 2011-2014 rate increase – which includes the costs regarding the renewable standard and the many other things. A $3.65 increase on a $65 bill is not significant nor a huge hardship to anyone. Nor is it a significant burden on a small business – which will see a $14.95 increase over 2 years on a $137 bill. Even a larger commercial user using 50,000 kWh a month will see a $750 increase over 2 years on a $6200 bill – a 10.7% increase over 2 years – certainly not catastrophic. I’m guessing there also has not been a rate increase for several, or even many, years.

    Whether its 4 cents a month to implement this solar program, or $3.65 cents a month for the full rate increase or even the $750 a month increase for the larger 50,000 kWh a month commercial using already paying $6,200 none of these increases are highly significant let alone lethal to anyone.

    It would be great Willis if it was as simple as snapping your fingers and building new plants – but it is not. If you COULD readily buy “6 cent power” I would be the first to agree with you. But as you admit – you cannot.

  122. A. Scott says:

    LADWP it would appear has been no friend of solar in the past either:

    http://www.solarforward.com/back-to-the-future-dwp-shuts-down-solar-again/

    http://losangeles.cbslocal.com/2011/06/13/customers-furious-dwp-is-stalling-their-plans-to-go-green/

    And Willis – it would appear those living in LA WANT more solar – at least according to this poll:

    http://votesolar.org/2012/05/la-poll/

  123. A. Scott says:

    I have not read this but looks interesting “New study shows that net metering is a financial benefit, not burden, to ratepayers” January 15th, 2013

    http://votesolar.org/2013/01/new-study-shows-that-net-metering-is-a-financial-benefit-not-burden-to-ratepayers/

    Take with a grain of salt – coming from solar proponents …

  124. A. Scott says:

    One more for Willis – you oughta be thrilled with the LADWP …. here is a powerpoint about all the things they are doing with the 2012-14 rate increase – including building a whole lotta new Combined Cycle Natural Gas generation capacity.

    You’ll be pleased to know they’ll spend $2.2 billion on plant replacement Willis – and a whopping total $196 million on the solar tariff program ….

    http://tinyurl.com/LADWP-ratePwrPoint

    LADWP also has had no energy rate or fuel cost adjustment changes since July 2010. Makes the $3.65 a month increase for typical residential customer look like an even better deal.

    All in all an impressive and easy to understand guide – well worth a read.

  125. Willis Eschenbach says:

    A. Scott says:
    January 16, 2013 at 12:41 am=

    Willis – I’ll repeat – you posted about a specific issue – LADWP paying more for this small slice of solar than you believed they could get for it:

    What is wrong with the moronomic math of the Commissioners of the Los Angeles District of Water and Power? Figure 1 suggests some of the answers.

    The problem is that in order to break even, the Los Angeles District of Water and Power (DWP) has to sell the power at more than it cost the DWP to buy it, transport it, buffer it with adequate backup, and deliver it to the eventual customer. As a result, their sale price will be more than seventeen cents per hour.

    How much more? Well, that’s kind of difficult to calculate. But we can look at some of the issues and make some first-cut estimates.

    The rest of your commentary was directly related to looking at some of the issues and making some estimates.

    I showed that your premise they would take a big loss on reselling this solar was wrong. I supported that claim with sourced information and facts.

    A. Scott, thanks for your comment. You seem to think that I said the problem was that the power would be too expensive to sell. I said nothing of the sort. I said the problem the power was too expensive … but you can go through my post as many times as you want, I never said it was too expensive to sell.

    In fact, if you paid attention to my post, you would have seen that I specified exactly how they would sell it, viz:

    Of course, they likely won’t ask any single customer to pay that much. Instead, they’ll quietly spread the expense over all of their customers near and far, and it will be reflected in a price increase across the board.

    Since I specified exactly how I thought that they would sell it, and that is how they are selling it, your claim that I though it was too expensive to sell is shown to be totally untrue. They sold it as I knew they would—by asking all of the rest of the folks to subsidize your cockamamie brilliant plan.

    Let me say again, A. Scott. I never said it was too expensive to sell. I said it was too expensive, period. Here’s my closing statement from the post:

    As I have mentioned elsewhere, expensive energy is always a bad idea. It turns out that in California, it’s a lethal idea, it will both kill businesses dead and be very hard on the poor.

    w.

    PS—You go on to say:

    You then changed the discussion and your claim – that it was stupid to pay 13 to 17 cents for this solar, even though they will make a profit on doing so, because the energy can be produced much less expensively with new generation.

    This is a wholly different topic – well worth discussion – but not related to your original position and claims. It isn’t about busting you for not “covering everything” in your original post – its about changing the topic and discussion.

    Since I didn’t change my claim, this is meaningless. You only think it is a “wholly different topic” because you didn’t follow my post. I have changed neither the topic nor the discussion.

  126. oldfossil says:

    Alternative energy is all a communist plot to destroy the West and we’ve fallen for it hook line and sinker. Have you got a better explanation?

  127. Willis Eschenbach says:

    A. Scott, you say:

    The simple fact – as you acknowledge – is you cannot produce new energy at the rates you claim. You cannot build a plant. Thus your proposition – that 13 – 17 cents is too expensive because you can provide this energy far cheaper with new plants is moot and of no value in this discussion.

    Which brings us back to my position. You initially said it was terrible the utility was paying so much for this solar because they could never get back what they paid. After I pointed out they were providing peak time of use energy and could sell for peak rates, you acknowledged that was correct.

    A few things. First, the fact that the regulations make it hard to build a power plant in CA doesn’t make expensive power a good deal. It just means that the inmates are in charge of the asylum.

    Next, I was being a bit humorous when I said that about the length of time. There are in fact new power plants being built in California, it’s not impossible as you seem to believe. It would take a few years, maybe five … but then your solar systems are not going to materialize overnight either.

    New power plant in Modesto, California utilizes Wärtsilä gas engines to meet the state’s environmental targets.

    Wärtsilä Corporation, Local press release, 18 August 2011

    The newly commissioned power plant located in Modesto, California, provides the community with the needed flexible, fast-start peaking generation to balance the expected increase in intermittent renewable generation resources. Modesto Irrigation District (MID) built the peaking plant to support their goal of meeting California’s mandated 33 percent renewable energy in their generation portfolio by 2020.

    Next, no, I didn’t say that “it was terrible the utility was paying so much for this solar because they could never get back what they paid.” That’s merely your misunderstanding. If you think I said that, you’ll need to quote it, empty claims without quotes mean nothing. I said it was expensive, not too expensive to sell.

    Finally, A. Scott, there is one and only one reason that LA is touching this deal, and it’s not because it’s a good deal as you seem to think. LA is taking this deal because it has to. It has no choice. It is forced to buy horribly expensive power because it is renewable, because of our unbelievably asinine power generation regulations.

    But that doesn’t make it either right or economical. You’ll never convince me or any thinking man that buying expensive power at subsidized rates is anything but a bad deal, whether you can force your consumers to buy it at a higher price or not. You seem to think that because LA DWP can sell 17 cent power to the consumer at 30 cents, that makes 17 cent power a good deal for the utility and the consumer … think about that one again, and again. Eventually you’ll see that when Oregon has 8 cent power and Nevada has 11 cent power, that 30 cent power is a bad deal for the LA consumer no matter what the LA DWP paid for the power.

    And in particular, expensive power is hardest on the poor, for whom 30 cent electricity is way out of line, and who suffer the most from any increase in electricity prices … but don’t get me started on how your brilliant green plans are ending up further impoverishing the poor. Inexpensive energy is the salvation of the poor. You are doing your best to justify expensive energy, you are working to deny cheap energy to the poor, and at the same time, you seem to believe that you are taking the moral path … how is further impoverishing the poor the moral path on any planet?

    w.

  128. Willis Eschenbach says:

    oldfossil says:
    January 16, 2013 at 1:41 am

    Alternative energy is all a communist plot to destroy the West and we’ve fallen for it hook line and sinker. Have you got a better explanation?

    Sure. Environmentalism has become the new religion. Once there was a time when there was a perfect climate Eden. Humans lived in total harmony with nature. But then man ate of the forbidden fruit of the fossil fuel tree, and we were cast out of climate Eden into our world of global warming and climate disruption.

    For some reason, the myth of an idyllic Eden which was destroyed by the actions of man has a huge hold on the human psyche. I think that many people in the US have, pretty much unconsciously, either replaced the religious Eden myth with the environmental climate Eden myth, or made room for both.

    The fact that the environmental movement was totally taken over by CO2 alarmists is one of the tragedies of our modern time, since there actually are real environmental problems out there.

    Anyhow, that’s my explanation, YMMV.

    w.

  129. Willis Eschenbach says:

    A. Scott says:
    January 16, 2013 at 12:56 am

    … And Willis – it would appear those living in LA WANT more solar – at least according to this poll:

    http://votesolar.org/2012/05/la-poll/

    Yes, and they want someone else to pay for it. And LA DWP has obliged them by subsidizing the power.

    If consumers were asked “would you want solar if it would double your electric bill”, I suspect they wouldn’t be so enthusiastic … and yet that is at least the actual difference in cost.

    Sadly, they’ve been like the frog where the water is slowly warmed to boiling. The electricity rates have risen incrementally and slowly, which fools the innumerate. Me, I can see the difference between thirty cent and ten cent electricity … and so can businesses, which is one reason they are leaving the state in record numbers.

    w.

  130. Willis Eschenbach says:

    Gosh, increases in customer bills? Who could have seen this coming? Emphasis mine.

    Virginia officials, largest electric utilities proposing to repeal renewable energy incentives
    By Associated Press, Published: January 15

    RICHMOND, Va. — Virginia Attorney General Ken Cuccinelli and the state’s largest electric utilities are proposing to repeal financial incentives for using renewable energy after a report last year found that the millions of dollars in bonuses haven’t yielded the intended environmental gains and have contributed to increases in customer bills.

    Oh, wait … I saw it coming, along with anyone who was paying attention …

    High energy prices are a bad thing, folks, no matter how they are justified.

    w.

  131. c1ue says:

    Nice article.

    You did miss out on another aspect of costs which will be passed on to the retail consumer: the otherwise evenly shared out costs for existing electricity utility overhead, transmission grid costs, taxes, etc.

    Specifically: every electricity bill contains costs not just for the electricity itself, but for various bits of infrastructure and what not. If a solar install is such that the owner removes or greatly reduces his net electricity draw from the electricity utility, said owner also pays no or much less of the non-electricity charges. These in turn have to be paid, and will be pushed onto the non solar homes.

    A lovely way to shift even more societal infrastructure burden onto the lesser folk.

  132. Willis Eschenbach says:

    c1ue says:
    January 16, 2013 at 11:27 am

    Nice article.

    You did miss out on another aspect of costs which will be passed on to the retail consumer: the otherwise evenly shared out costs for existing electricity utility overhead, transmission grid costs, taxes, etc.

    Specifically: every electricity bill contains costs not just for the electricity itself, but for various bits of infrastructure and what not. If a solar install is such that the owner removes or greatly reduces his net electricity draw from the electricity utility, said owner also pays no or much less of the non-electricity charges. These in turn have to be paid, and will be pushed onto the non solar homes.

    A lovely way to shift even more societal infrastructure burden onto the lesser folk.

    Interesting point, and indeed it is a cost I hadn’t considered …

    w.

  133. Willis Eschenbach says:

    A. Scott says:
    January 16, 2013 at 1:19 am

    One more for Willis – you oughta be thrilled with the LADWP …. here is a powerpoint about all the things they are doing with the 2012-14 rate increase – including building a whole lotta new Combined Cycle Natural Gas generation capacity.

    You’ll be pleased to know they’ll spend $2.2 billion on plant replacement Willis – and a whopping total $196 million on the solar tariff program ….

    http://tinyurl.com/LADWP-ratePwrPoint

    LADWP also has had no energy rate or fuel cost adjustment changes since July 2010. Makes the $3.65 a month increase for typical residential customer look like an even better deal.

    A. Solar, perhaps you think that the LA DWP spending money to replace aging plant and equipment is some kind of noble thing that the DWP should be lauded for. If you had any business experience, you’d realize that replacing aging plant and equipment is a requirement for any well-run utility, not something for which they should be commended.

    Also, the fact that LADWP has had no rate changes for (gasp) a whole year and a half seems to impress you, and to convince you that getting rorted for 30¢ per kWh is “an even better deal” … my friend, I hate to burst your bubble, but the fact that they haven’t changed the ripoff rate in a year and a half doesn’t mean the customers aren’t getting ripped off

    A. Solar, the problem from my perspective is that you seem totally innocent of any actual business knowledge. You think that because LA DWP can force their customers to pay 30¢ for electricity that cost 17¢, that some how it’s a good deal for the consumer. You think that because LA hasn’t changed how much they are overcharging the poor shlubs they have in their thrall, that that means that they are not overcharging.

    My advice for you? Open a lemonade stand, get a job in a fast food place, take a business class in your community college, do something to get a clue how business works, so that you have at least an inkling that 30¢ power is a bad deal. You are making yourself look foolish with your childlike claims. Not only is thirty cent power a bad deal, but it’s a bad deal no matter what LADWP paid for the power, and it’s still a bad deal even if they haven’t changed their prices in ten years, much less one and a half …

    w.

    PS—Why would you think that I would be “pleased” to know that LADWP wasted $196 million dollars of their customers money buying expensive solar electricity to resell to their customers at even higher prices? On what planet is that good news? That $196 million comes out of the pockets of the poor as well as the wealthy, and you think that’s wonderful … the lack of compassion for the poor you AGW folks exhibit is mighty depressing sometimes.

  134. george e. smith says:

    Well there seems to be an exploding number of “solar energy” companies swilling at the public trough of taxpayer funded subsidies. The most popular modus operandum in California seems to be the “Why don’t you let me sell you your own solar energy.” ploy. You call them up on the telephone, they giggle giggle earth (after you give them your address), and they say the sun shines on your roof , so let me get it for you ! You don’t pay for the solar panels, you pay for the solar energy. Well they don’t really pay for the solar panels either, the taxpayers do mostly, and they don’t pay for the solar energy either; you do.
    So your first question to them should be: “What is your conversion efficiency? AM1.5 solar power in, to grid AC electric out ?

    Well they won’t tell you of course; why do you care anyway. If it was a nice high efficiency number, you would possibly buy their panels, given that you could then get the taxpayer subsidy.
    Well, another reason why you might care is that there are other companies out there doing the same thing, and if you are going to have somebody fill up your valuable solar energy collection area, with solar panels; you would want to go with the highest efficiency guy, who would consume less of your space .

    Well a much better plan, is for you to rent your roof or other collection space to one of these companies, based on your area available, and some geometry factor based on where you are on earth. So you “sell them” your AM1.5 solar energy, and you let them turn it into grid electricity, for themselves, which they can then sell to the electric utility, for whatever they can agree on; in other words, leave me out of it, you buy my sunshine, and you sell your electricity to somebody else.

    So now of course the company might start to pay attention to his panel’s conversion efficiency.

    Today, their efficiency is so low, that nobody would buy their panels (most of them); that was the Solyndra problem, you wouldn’t put them on your roof, if Solyndra gave them to you.

    So they can’t sell their low efficiency panels to savvy home owners, so lending them to you, and selling you your own solar energy, is the best they can come up with.

    When these companies are ready to pay rent for the use of your solar energy collection space, then it might be something to consider; or you could simply buy your own efficient panels and get your own electricity.

  135. TimTheToolMan says:

    c1ue writes regarding “These in turn have to be paid, and will be pushed onto the non solar homes.”

    Those costs are already being paid by all electricity paying homes and just because someone now gets a credit for the energy they produce, doesn’t change that. What will change is the proportion of cost allocation on your bill. In Australia we pay a “service charge” and energy costs. As more and more PV solar appears, the service charge proportion of the bill will (need to) increase.

  136. A. Scott says:

    willis: You seem to think that I said the problem was that the power would be too expensive to sell. I said nothing of the sort. I said the problem the power was too expensive … but you can go through my post as many times as you want, I never said it was too expensive to sell.

    Willis: The problem is that in order to break even, the Los Angeles District of Water and Power (DWP) has to sell the power at more than it cost the DWP to buy it, transport it, buffer it with adequate backup, and deliver it to the eventual customer.

    Willis: They sold it as I knew they would—by asking all of the rest of the folks to subsidize your cockamamie brilliant plan.

    Really Willis …. so now, after I addressed your most recent claim:

    LA sells power for up to thirty cents a kWh which covers a multitude of sins … but that doesn’t make 17 cent or even 13 cent power a good deal, not when you can buy 6 cent power.

    Its changed again – now back to your original “the problem is … the Los Angeles District of Water and Power (DWP) has to sell the power at more than it cost the DWP” and as a result they’re gonna have to screw all their other customers.

    First – its NOT MY idea, cockamamie or not … I am merely responding to your story and your claims.

    As YOUR story pointed out the cost to implement this program is a few cents per customer. This makes perfect sense – that there is a small cost to set up the program – as they must do that before revenue is coming in. Regardless it is a minutely tiny cost. And a program that helps them meet the REQUIREMENT – like it or not – to obtain energy from renewable sources.

    I’ve shown, and you have acknowledged, that they are selling this energy at a higher – likely much higher – price than the 13 to 17 cents per kWh they are paying.

    If they are selling for more than they are paying then there is NO cost to the other customers of the utility. To the contrary – the profit on sale is a benefit that would reduce the bills of other users.

    It is also a benefit in that it allows the utility to obtain 150 megawatts of renewable energy at little or no cost. Again – whether you agree they should be using renewable or not it is a fact and a legal requirement they do so. Obtaining 150 megawatts at no cost – or potentially at a profit – is a great deal for the customers of the utility, both from a dollars and a meeting the renewable requirement standpoint.

    .

  137. george e. smith says:

    After reading almost all of this thread, it seems that E.M. Smith gets it; and not a lot of others do.

    Solar PV is a way of getting electricity; not such a bad way if you have a place to put it. You don’t need much electricity. Charge you iPod/Pad/Pid/Ped/Pud battery, run your toothbrush, maybe turn some lights on. Not much more than you can put in a couple of Sears Die Hard batteries or perhaps modern replacement for same. Your solar PV should be off the grid; too damned expensive and complex for the whole system. So I would go off grid with a battery backup, maybe 24 Volt system Then you take your lighting off the grid too. LEDs run just fine off DC, and going grid AC to LED DC is plain silly. My whole house uses 200 Watts for lighting, if I turn everything in the house on, and we never have more than half of it on.

    Making “heat” from electricity is just plain criminal, unless it is a finely controlled industrial process, and natural frackgas is a much better idea.

    Solar thermal is not a bad way to get hot water during the day. So a system that circulates water storage through the solar heater, and provides local heating when you want really hot water.

    I don’t mind using electricity to run electric motors; they are quite efficient.

    You can make heat very efficiently from electricity, but you can’t escape the heat to electric inefficiency, so making heat electrically is a bad idea.
    I don’t have any particular position on pumped storage; it is used effectively in lots of places. Didn’t know the Castaic thing was of that nature; no wonder those lakes are always full; even though they are in a desert. What happens, if they can’t get our Northern California water to keep those lakes full (I see it running down the road to get there).

  138. A. Scott says:

    As to LA’s energy costs – there is no value whatsoever comparing with Nevada, Oregon or any other place. Neither LA (or California for that matter) are any other place. Regardless of the renewable rules – which are in effect in a large number of states – California, and LA in particular have many significant issues unique to them. Not the least is a huge population and demand operating across a creaky 60+ year old system.

    You attack the 30 cents and hour peak use rate as a terrible, expensive bad deal. Yet ignore WHY there are peak and time of use rates in the first place.

    You know the answer – you provided it with the graph about peak times above. The entire energy system MUST be designed to accommodate peak use.

    A huge amount of capacity must be built, provided and maintained for that critical couple hours a day for part of the year. There is your true hugely expensive waste Willis. And the reason why high peak rates are perfectly acceptable and wise.

    You’ve acknowledged you know this as well – that peak load generation is generally from the highest cost and least efficient generation sources in the system. That is the very nature of peak load generation. Purely from a cost of generation standpoint there is every reasonable rational reason to charge high rates to those who cause the peak load.

    It is a wise and prudent decision – that SUPPORTS your position that the entirety of the users should not bear the burden of a small subset. By charging high peak rates the majority of the cost is born by those causing the peak rate demand.

    There is still considerable benefit to the entire customer base – in having sufficient reserve capacity to avoid blackouts, brownouts and the like – and as such it is appropriate they bear some of the costs.

    The peak use rates are also almost entirely paid by commercial users – not residential. So again – those using energy to produce, rather than just to live, pay the majority of the costs for peak load.

    And another very big part of expensive peak load rates is to be an incentive. To provide a direct financial reason to be wise about time of use. To encourage the biggest users to modify their activity to minimize, where able, peak use. It is very expensive to build, operate and support peak load capacity. If expensive rates can convince a part of those suers to move to a night shift for example – and reduce the peak load – that can result in significant savings in the long run.

  139. A. Scott says:

    Regarding your comments about the poor Willis … they are both incorrect and largely a red herring. The poor do not pay 30 cents. Residential users do not pay 30 cents. Very large commercial users pay 30 cents.

    All your histrionics and arm waving will not change the fact that LADWP, like every utility in America, offers extensive support and help to insure the poor are not affected by high energy costs – providing low income, senior citizen and lifeline rate discounts, as well as many other programs and services

    Again – first off the 30 cent peak rates do not apply to residential customers at all. Second – if you are poor in LA there are a myriad of programs – from LADWP and others – to help you and insure you can afford electricity and water.

    And … these are NOT my “brilliant green plans” Willis – no matter how many times you repeat it you won’t change the facts.

    I largely believe as do you – that energy efficient and/or renewable should only be used where it is cost effective. That does not mean it has to be exactly the same price – but does mean it should not be at a huge premium.

    I am NOT justifying “expensive” energy in any way. I AM justifying cost effective business practices that address and acknowledge real world constraints and requirements. Which, contrary to your claims – is what is occurring here.

  140. Gail Combs says:

    george e. smith says:
    January 16, 2013 at 2:12 pm

    After reading almost all of this thread, it seems that E.M. Smith gets it; and not a lot of others do.

    Solar PV is a way of getting electricity; not such a bad way if you have a place to put it….
    >>>>>>>>>>>>>>>>
    Yes solar power is great for running a fence charger, yard lights and maybe even a remote well to fill a stock tank although wind used to be used for that.

    You want hot water? Try a black 55 gal plastic drum on stilts. Even a 5 gal open top bucket can get the water pretty hot in the summer.

    To generate electric for feed in for commercial use? Forget it. The money is better spent on nuclear or hydro. Both solar and wind have relatively short lifespans on top of all the rest of the draw backs.

  141. A. Scott says:

    Willis Eschenbach says: January 16, 2013 at 2:33 am

    A. Scott says:January 16, 2013 at 12:56 am … And Willis – it would appear those living in LA WANT more solar – at least according to this poll: http://votesolar.org/2012/05/la-poll/

    Yes, and they want someone else to pay for it. And LA DWP has obliged them by subsidizing the power.

    Bullpoop Willis. Prove that LADWP is providing any meaningful subsidizing of this power.

    On the solar tariff that you started this post attacking – you claimed the solar was too expensive at 13 to 17 cents per kWh – that they could not sell it for what they paid for it. That claim was dis-proven. You acknowledge they can sell this energy for more than they pay. And that is without taking into consideration that the utility incurs NO capital costs for generation equipment with this energy.

    People wanting solar Willlis generally are pretty smart types – not the clueless an immoral rubes, and worse, subsidy grabbing leaches, you make them out to be. They know exactly what the costs are likely to be. They know they’ll incur a considerable capital cost up front, which will not be repaid for a long time. They are smart folks like Anthony and other here. And like me.

    People who, while generally opposing large scale, hugely subsidized, projects that are not cost effective – do support intelligent, cost effective, use of technology when possible.

    I read LADWP’s plan – the basis for their rate hike. It is intelligent, well thought, addresses long range issues and concerns, along with past problems … AND it directs a small amount – a tiny amount really – to renewable energy solutions – as mandated by law.

    If you don’t like the law – and actually think you can change it – you should not be attacking people like LADWP that are doing their jobs in a difficult environment – and appear to be doing them wisely and well. You should be attacking the legislators YOU and your fellow Californian’s elected.

  142. A. Scott says:

    Willis – this last missive of yours is simply laughable. Categorizing me as an “AGW” type is biggest laugh of them all.

    Yet again, had you actually looked at the link you’d have seen they are building new Combined Cycle Natural Gas generation plants you’ve touted, that replace older, high cost, less efficient technology. Which will lower costs to consumers in the end.

    And with your apparent hatred of any and all solar – at least with LADWP and the solar buy back tariff – I thought you’d be pleased to see they allocate a minuscule $196 million over 3 years for the solar tariff program you so despise compared to the $2.2 billion in spending on new highly efficient power plants. I guess you couldn’t be bothered to look at the link.

    At the end of the day Willis – buying that solar at 13 to 17 cents per kWh and selling for more – as much as 30 cents per Kwh – especially considering they incur zero capital costs to generate that energy – will REDUCE costs for all ratepayers – INCLUDING the POOR.

    Further, while you clearly hate it, LADWP by LAW MUST provide a specific share of their energy from renewable sources. Buying this energy from their customers, where they incur no capital cost for generation – is a very cost effective way for them to obtain 150 megawatts of renewable energy toward the requirement. It provides renewable energy to meet their requirements at minimal, or in some cases no, cost to the ratepayers.

    Wave your arms and gnash your teeth all you want Willis but in the real world, with its real world requirements, no matter how you slice it getting 150 megawatts of renewable energy at little or no cost to the ratepayers, reduces costs overall and IS good for customers – whether rich or poor.

  143. Willis Eschenbach says:

    Guys, I give up. Anyone who can look at paying 17¢ per kWh for electricity and claim it “IS good for customers” because they’re selling it to the customers for 30¢ is another victim of moronomics. Mr. Scott, I fear here’s nothing more I can do to assist you, you are beyond my poor powers.

    For folks that are not yet aware of Mr. Scotts claims, I leave you with a representative howler …

    At the end of the day Willis – buying that solar at 13 to 17 cents per kWh and selling for more – as much as 30 cents per Kwh – especially considering they incur zero capital costs to generate that energy – will REDUCE costs for all ratepayers – INCLUDING the POOR.

    Brilliant plan. Utility buys expensive power, sells to its customers as even more expensive power, and presto! Everyone saves …

    Folks, do you see why I can’t make a dent in this good fellow’s obduracy? He actually thinks 30 cent per kWh power is good for the consumers because they are only paying 17 cents for it … (smashes head on keyboard)

    By that theory, of course, an even better plan would be the LA DWP to start paying say fifty cents a kWh for electricity, and selling it to consumers for say $2.00 per kWh. Clearly that will reduce costs even more substantially … I mean, the DWP is making a buck and a half per kilowatt, what’s not to like? … /sarc

    I leave the field to you, my friend. You have achieved levels of stubborn ignorance that to date, no one can penetrate. I can tell when moronomics has totally overtaken a man, I’d be a fool to try any further to undo your misconceptions …

    My best to you in your travels, Mr. Scott. I certainly hope you go to work for a business some time, and that when you grasp the idea of cost and profit and loss, you revisit your ideas on how thirty cent per kWh electricity is good for anyone on the planet, when much cheaper alternatives abound.

    w.

  144. A. Scott says:

    Sorry Willis. I have owned my own businesses since I was 13. Its simple math. If you buy for 13 to 17 cents and sell for 30 cents you make a profit.

    IF, as you say, there is readily available inventory that you can purchase for 8 cents you can make even more profit. But as you admit there is not inventory available in this marketplace at 8 cents.

    It is better yet when you buy inventory that meets a specific, costly government requirement for your business, and still make a profit on it. Especially if you do not have to expend any capital to get that expensive unique inventory.

    And yes – sometimes charging 30 cents is a very good deal as well. Here they charge 30 cents for a number of reasons.

    First, as Willis agrees, because they must pay much higher costs to obtain this peak energy. They must use less efficient “peak load” generation equipment as opposed to more efficient “base load” generating equipment.

    Second, they charge more as an incentive for power users to reduce peak energy use, and/or shift that use to non-peak times. It is incredibly expensive and inefficient to build generating capacity that is primarily only used for a couple hours a day during the hottest times of the year.

    It is much cheaper to try and modify behavior – to shift as much use as possible to non-peak periods where there is plenty of available capacity – than to have to build expensive capacity just for peak load use.

    The buyer of the 30 cents energy makes a decision to do so. They calculate that it is more cost effective to pay 30 cents than to make other accommodations. They are the only ones who pay more – and by doing so – by paying 30 cents for energy the utility buys for 13 to 17 cents – the profit on that sale benefits all of the utilities other customers.

    Willis – where do you think that profit goes?

  145. Willis Eschenbach says:

    My friend, I told you that I’ve left the field to you. I fear you may have misinterpreted my meaning. I simply give up on trying to get you to see that in an world containing 6 and 8 and 10 cent electricity in a variety of forms and sources, 30 cent electricity is never, ever a good deal under any circumstances.

    I simply see no point in discussing things further with you. You keep insisting that 30 cent power is a good deal, for a host of reasons. It’s not. It’s a piss-poor deal, and I’m sorry for the suckers that have no choice but to pay it or leave LA.

    My best to you,

    w.

  146. beng says:

    ***
    george e. smith says:
    January 16, 2013 at 2:12 pm

    Making “heat” from electricity is just plain criminal, unless it is a finely controlled industrial process, and natural frackgas is a much better idea.
    ****

    Yes, from an engineering viewpoint, except that a small, portable electric space heater aimed at your cold feet is less expensive then a central heat-plant heating a whole room top to bottom (or a house).

  147. Gail Combs says:

    Willis Eschenbach says:
    January 17, 2013 at 12:14 am

    My friend, I told you that I’ve left the field to you. I fear you may have misinterpreted my meaning. I simply give up on trying to get you to see that in an world containing 6 and 8 and 10 cent electricity in a variety of forms and sources, 30 cent electricity is never, ever a good deal under any circumstances….
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    Willis, A. Scott says he is in business and I certainly believe him. He also defends to his last breath Bio-fuel. Does he believe in CAGW, I doubt it but he certainly believes in the Green bubble and no doubt has a method of profiting from it.

    Just because someone spouts bafflegab does not mean he is unintelligent. Having seen A. Scott’s dogged persistence in defending bio-fuel and now solar, other motivations come to mind besides scientific truth..

    I have only noticed A. Scott commenting when the discussion is on bio-fuel or this time.

  148. george e. smith says:

    “””””…..beng says:

    January 17, 2013 at 8:50 am

    ***
    george e. smith says:
    January 16, 2013 at 2:12 pm

    Making “heat” from electricity is just plain criminal, unless it is a finely controlled industrial process, and natural frackgas is a much better idea.
    ****

    Yes, from an engineering viewpoint, except that a small, portable electric space heater aimed at your cold feet is less expensive then a central heat-plant heating a whole room top to bottom (or a house)…..”””””

    Well My whole point was that getting from “OTHER” forms of energy, to ELECTRICITY is a very lossy process. So far as I am aware; and I tend to be fairly aware, NO other form of energy can be 100% (in principle) converted to electricity. If I had to guess, I would say that mechanical (rotational) energy can be converted to electricity with a higher efficiency that any other form, using generators/alternators. Somebody may disabuse me of that thought, but that would be my guess..

    Solar via PV can be converted at about 40% with the best available solar cells (not cheap), and it is not inconceivable that 60% can be reached in practice, while the theoretical limit is higher than that.
    well aall that is academic; the point being you have to work your butt off to get electricity from any other source, whereas, almost any form of energy is convertable to heat; even completely.

    Solar PV is almost unique, in that the rest of incoming solar energy is convertted either into biomass, or waste heat.

    I don’t believe in space heaters; why heat space ? If you want to heat a person, an infrared radiant heater can do that, something that water absorbs efficiently. At 3.0 microns, water has an absorption coefficient of around 8,000 cm^-1, by far the highest value at any wavelength, so that suggests a Temperature of 1,000 K is about what you want for a radiant heater.

    For warming your cold feet, there’s an even better solution; put some socks on. I recommend New Zealand unscoured wool socks.

  149. A. Scott says:

    Gail … nice personal attack. Very subtlely done.

    You might notice my extensive work in investigating the Heartland Gleick timeline. Or perhaps my work on the Lewandowsky debacle. Or the myriad of other posts I’ve made here.

    I research my claims and positions and provide supporting source documentation. Just as I have here. You, or any others are free AND ENCOURAGED to refute anything I say or post – as long as you make a reasoned, intelligent reply – preferably with you own sourced supporting documentation.

    I didn’t disrespect Willis – I disagreed with his position, claim and conclusions and showed why. Nor do I disrespect you. In fact I’ve often agreed with you. Attack data – don’t attack people.

    If you think I am wrong then prove it. Otherwise you simply look vindictive and silly.

  150. A. Scott says:

    Willis – I hope you don’t believe my position was disrespecting you. I don’t like how you can be condescending, denigrating and rude to people you disagree with – but I;ve many times said I respect you and your work.

    Here – as I’ve done in the past – I simply disagree with you. I researched your claims, reviewed the data, and made my own conclusions. I provided sources that support my position.

    If the California was as you claim – a “world containing 6 and 8 and 10 cent electricity in a variety of forms and sources” … I’d likely be agreeing wholeheartedly with your claims and conclusions.

    The simple fact is California is not that world. They do not have “6 and 8 and 10 cent electricity in a variety of forms and sources” available. And whether we agree with it or not, they DO have a legal requirement to provide a share of their energy from renewable sources.

    In that real world, with its limitations and requirements, your characterization of the solar tariff program is not in my educated opinion accurate – for the reasons I noted.

    Is it a great program – overall nope – but under the existing circumstances and within the real world requirements and limitations – the answer is – yes – it is a good deal to buy solar for 13 to 17 cents per kWh, and sell it for as much as 30 cents per kWh.

    Doing so makes money for the utility – which reduces overall costs. It helps fulfill part of the renewable energy requirement – and does so with no capital costs for generation of the energy. And it provides – thru the peak rates – a strong incentive to shift energy use to non-peak periods – which has the ability to greatly reduce use of less efficient peak load generation equipment.

    All of which benefit the utility’s customers

  151. c1ue says:

    @TimtheToolMan

    Unfortunately your comment is in disagreement with what public electricity utility executives themselves say:

    http://www.sfgate.com/business/article/Solar-power-adds-to-nonusers-costs-4124277.php

    “You get into a situation where you have a transmission and distribution system with nobody paying for it,” said Akbar Jazayeri, vice president of regulatory operations at Edison, a unit of Edison International and California’s second-largest electric utility.

    SDG&E can’t collect about $18 million to $20 million a year in grid costs from customers with rooftop solar panels, according to Dan Skopec, vice president of regulatory affairs for San Diego’s Sempra Energy, the utility’s owner.

    Where did you get your information from?

  152. DirkH says:

    A. Scott says:
    January 17, 2013 at 3:11 pm
    ” And it provides – thru the peak rates – a strong incentive to shift energy use to non-peak periods – which has the ability to greatly reduce use of less efficient peak load generation equipment.
    All of which benefit the utility’s customers”

    It also provides a strong incentive for businesses to leave california, and now, I’ll argue like you – a company leaving california of course benefits all of the utility’s customers as well (they can now use the power that that company would have used).

    Black is white, freedom is slavery.

  153. TimTheToolMan says:

    C1ue writes “Unfortunately your comment is in disagreement with what public electricity utility executives themselves say: …”

    Which is why from the very same article, they acknowledge the required shifts in cost.

    “The rules are shortsighted because eventually rates must be raised to make up the difference, according to Southern California Edison, which has joined with competitors to estimate potential losses.”

    The rates they’re talking about there are almost certainly the fixed non-energy costs.

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