Renewable Energy Nay-sayers
Obviously, renewable energy has a whole host of nay-sayers who make a variety of points, including:
• It’s expensive. (This is true, though it’s becoming less so each day – and it depends on how one does the accounting. Some of us think we should assign a value to human health, biodiversity, and the natural environment — at which point clean energy becomes the deal of the century.)
• It relies on variable resources. (Again, this is true, but at the rate we’re integrating it now, that variability has very little effect, and energy storage looks increasingly viable as we go forward.)
• It hasn’t made a significant dent in the energy supply. (That can be argued, though realize that wind was about 4% of our grid-mix in the U.S. last year, which is nothing at which to sneeze. Also, let’s keep this in perspective: The fossil fuel boys and the mega-corporations behind them have been doing their thing for 200 years. Is renewable energy expected to clean up a mess in a few years that six generations of robber barons and latter-day Wall Street profiteers took two full centuries to create?)
As a clean energy advocate, I’m quite inspired with the progress the industry has made, and I’m proud to be a part of it.
I start to believe that the bigger issue of renewable energy is the change in business model needed for the utilities and grid operators. We need to figure out a good system whereby they still make the profits needed to enable and manage the energy transport. I can envision a day where power is produced and sold on an open market and a percent paid to the transmission companies who manage this. The decision on storing or selling or using power and from what source would be automated. This will lower the overall price of electricity as is already seen in Germany where the Utilities are suffering now because that business model has not yet changed.
When this nation expanded and developed the use of fossil fuels was far superior to anything else for energy development; the country needed energy and the technology didn’t exist for wind, solar nuclear, etc. Why bash those industries now? They will be replaced as we develop alternative cleaner energy generation. As the storage industry and market is developed the problems of supply and demand will diminish and the grid will stabilize; it just takes time. Even the stepping stone natural gas will face harsh criticism being only half as bad as coal but in time that industry will be replaced as other cleaner methods are developed.
Point 1 expensive – not always and not everywhere. In favourable locations it is hard to beat the cost of onshore wind power, especially when high winds coincide with local loads and good transmission infrastructure. The same is true for some hydro generation.
Point 2 variable – true, though in the case of wind this is less of a problem than some might think especially where you have a strong and large electrical grid and dispersed wind capacity across a large area. In the case of sun in hot regions, solar power generation tends to peak shave – meeting part of the demand when demand is highest. This too requires less back up than some might think – especially where a significant part of the capacity is directed to face the afternoon sun.
Point 3 hasn’t made a significant dent in the energy supply – Iceland and Norway have almost no fossil fuel power generation, and countries like Denmark (40%), Germany (25%) and Spain (23%) are getting a very substantial contribution to their electricity supply from wind and or solar power. True, these countries are now having to work out strategies for integrating more renewable power into the grid without losing its stability, but that is at levels way in excess of anything now seen in the USA.
My utility bill is calculated as follows:
Customer charge $8.84/period (for the meters and billing and so forth)
Generation charge $0.07860/kWh (Actual cost of generated electricity)
Transmission charge $0.00750/kWh (Charge to move electricity from generating facility to utility distribution system)
Distribution charge $0.0610/kWh (cost of delivering electricity to customers)
My last bill was for 454 kWh over 30 days or 15.13kWh/day. That makes my customer charge $0.01947/kWh. This is actually high for me as I usually use around 11kWh/day and have seen bills with as little as 9kWh/day. I had 8 days of running 2 window AC units this period. So 8.84/330kWh is $0.02678 making my customer charge an even bigger component of my bill.
So my total this period for non-generation charges is $0.08797/kWh while my actual cost for the electricity is only $0.0786. More than half my bill is for just moving electricity around and servicing my account. This is an example of how utilities can make money without actually generating electricity in order to profit and maintain their distribution system.
Whilst the non-electricity charges seem high compared to the actual cost of electricity, you must surely recognise that the utility has to maintain a substantial quantity of transmission infrastructure, and that such infrastructure costs money.
Utilities in rural areas with a dispersed population will be especially expensive to run because of the large amount of infrastructure required per customer.
In regards to any solar net metering policy going forward, what needs to be addressed is utilities looking to nominally make all their profit from infrastructure rather than electricity so as to artificially reduce payments for exported electricity – especially as solar power tends to have a favourable time value in the sunnier parts of the USA
The utility makes plenty of money to maintain their infrastructure with the charges they have. They get to write off capital expendatures like any other business and they probably have insurance for infrastructure damaged by natural disasters. This is the new business plan for utilities in this area as they are getting out of the generation business leaving customers to choose the generation company of their choice.
For any place rural, there has been significant government help to build up their infrastructure. Utilities are not installing any new infrastructure to houses that are not already wired out of the goodness of their heart. People that I am in touch with that have chosen to live off grid are doing so because the price quoted to them by the utilities to run wire from the nearest stub to their houses is more than the price to install and operate an alternate energy system. I have heard prices in the $20K-$30K range to run wire a mere 1/2 mile and of course longer runs are far more expensive. All of this expense to the customer so he can pay a monthly bill when all is said and done. You can get a pretty nice alternate energy system for that price and not have a monthly bill after you spend that money.
As for net metering, the arrangement here is that the customer only earns full price for power generated by the customer up to the point where it matches the customer’s use. Any power generated in excess of the customer’s use is paid at the generation price plus the transmission price leaving the utility with the ability to add the distribution charge to the power generated by the customer and sell it to another customer.
There is no way I can iumagine the utility losing money on any of these deals.