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.
Figure 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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A. Scott says:
January 16, 2013 at 12:41 am=
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:
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:
w.
PS—You go on to say:
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.
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?
A. Scott, you say:
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.
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.
oldfossil says:
January 16, 2013 at 1:41 am
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.
A. Scott says:
January 16, 2013 at 12:56 am
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.
Gosh, increases in customer bills? Who could have seen this coming? Emphasis mine.
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.
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.
c1ue says:
January 16, 2013 at 11:27 am
Interesting point, and indeed it is a cost I hadn’t considered …
w.
A. Scott says:
January 16, 2013 at 1:19 am
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.
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.
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.
Really Willis …. so now, after I addressed your most recent claim:
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.
.
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).
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.
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.
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.
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.
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.
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 …
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.
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?
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.
***
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).
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….
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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.
“””””…..beng says:
January 17, 2013 at 8:50 am
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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.
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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.
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.