The article quotes the Economy and Energy Minister on the fact that European electricity rates are twice what they are in the US. This is true but highly misleading b/c the amount European countries and ratepayers pay for electricity as a whole, a function of rates AND consumption, is actually far lower than in the US. So there is no competitive disadvantage because European nations are so much more efficient than the US. Inefficiency is the curse that abundant energy produces and nations that "enjoy" higher rates also enjoy greater efficiency. This is good for ratepayers as well as for the environment. The same dynamic exists with respect to California and the rest of the US. Historically higher rates in California have been a large incentive for much higher efficiency and the net result is that Californians actually pay much less overall for electricity than the large majority of people in other states. Again, what ratepayers pay for electricity is a function entirely of rates AND consumption, not rates alone.
Typo in the first paragraph: gigawatts not megawatts.
Paula, congrats on finally giving FITs some credit and not slamming (at least not much) FITs at the same time. As you know, FITs are responsible for the vast majority of solar and wind coming online around the world in the last decade.
As for your numerical predictions, it comes across as a bit, er, silly, to state numbers like 31% likelihood of a very vague thing happening. More accurate statements would be "likely," "less likely," etc.
As for energy storage, it is indeed expensive now, but I'll wager with you that within 5 years it's here in a very big way. CA, Germany, Japan and many other jurisdictions are now investing heavily in energy storage and my expectation is that we'll see a similar cost curve decline with storage like we've seen in solar. Time will tell.
Cliff, time will tell how storage technology progresses, but the two reports I cite are from credible analysts and they do project a strong continuation of the trend we've already seen over the last few years. As I write in the article, costs were at $1,200/kWh just a few years ago and are now at about $400 (I've learned this since I wrote the article, in which I cite $500-600 for today's costs). So we've already come down by 2/3. It's not unreasonable to expect another 2/3 reduction as we get to far larger scales of production. I don't know the energy storage technology space very well, but I do know that most technologies, once they're in production, benefit most from simply getting to scale in terms of cost reductions. This is of course what happened to solar and we're likely to see the same kind of scale occur with storage technologies as both EVs and stationary storage facilities grow exponentially in the coming decade.
Tom, your article title is itself misleading. As you state, solar panels in hot areas produce significantly more power during peak demand if they face west. Ergo: it's a lot better to have panels facing west in such areas, particularly from the utility-scale perspective and public policy perspective.
Great piece, but the recommendations are far too focused on behind the meter projects. The vast majority of renewables around the world have come online under feed-in tariffs, and a tiny minority under net-metering. Accordingly, any hope for a truly distributed energy model should focus more on what has worked in the past, spectacularly well: feed-in tariffs. The really big news now is that major FITs like Germany's and Italy's have now brought solar costs down dramatically so all countries can now deploy solar quickly under smart FIT policies and take advantage of the new world of much lower prices. Transformation is afoot.
Steven, I'm afraid your conclusions are off-base because your facts are off-base. Tackling your comments in turn:
- Germany's FIT and most FITs are indeed crowdsourcing of energy b/c even though you're right on the need for a topdown policy to come first, the actual implementation of the FIT is entirely crowdsourced, be definition. Who is doing the FIT projects if not the crowd? That's the point of a FIT, particularly FITs like Germany's that provide different price points for projects of various sizes. And as I point out in the article Germany now has over 1 million solar systems of 10 kW and below. That's a good-size crowd. (You also confuse crowdsourcing with crowdfunding, a more specific category of crowdsourcing, but I won't go into that)
- You state correctly that Germany's power prices are on average far higher than here in the US, but you've got the causation backwards: it's not because of FITs that Germany's power prices are so high but b/c they're so dependent on imported energy. This is a big reason why they have a bipartisan comprehensive FIT policy: b/c they see the need to become far more energy independent than they currently are and of course to tackle climate change, which they take very seriously. As for the charge that Germany ratepayers pay for renewables and the FIT policy, the charge you refer to is actually only comprised fractionally of the charge for the FIT: http://www.renewablesinternational.net/energiewende-makes-power-expensive/150/537/72472/. The large component of the price charge increase is comprised of the exemption for industry, which makes the rates higher for residential and commercial ratepayers.
- "only the rich can use energy-intensive appliances": this is just silly. Even in Germany, electricity still comprises a small portion of most households' total budget.
- Coal use in Germany increased temporarily but is now diminishing and Germany is planning to phase out coal and nuclear entirely, in favor of renewables and natural gas: http://www.smartplanet.com/blog/take/myth-busting-germanys-energy-transition/1275
- as for exports, Germany is a highly interconnected country, which is a major advantage for meeting high percentages of renewables. This is good for consumers and for costs more generally because they have import and export markets readily available to draw from and to feed excess power into.
- last, surely you know that Germany's FIT policies have been supported for years by both right and left. Germany has had a center-right government in power now for many years under Merkel and yet the FIT policies continue. Why? Because they have wide support among the public. If they're so expensive, why would this be the case? Well, because as I wrote above they're not that expensive and most Germans benefit in a big way from FITs. And all Germans benefit from the major energy transition that the FIT has made possible.
Steven, I'll comment further on your follow up later, but for now I want to stress again in the article what you seem to have overlooked: I'm calling for a cost-effective FIT, like PURPA, not an above-market FIT like Germany's FIT has been until recently (prices have dropped of late to the point that they're arguably not above market any more). So, if a FIT is cost-effective, by law and by definition, most of the objections melt away.
Cliff, sorry but you've fallen for a debunked myth about wind turbines: http://reneweconomy.com.au/2013/abandoned-turbines-another-madigan-wind-energy-myth-debunked-76570. There are certainly some unsightly and abandoned wind turbines in the US and around the world, but they're fairly rare. Most wind sites, once developed, will surely be developed with newer turbines if the first generation have run their course, because the site has demonstrated its viability as a good wind site. Palm Springs is an area that is seeing some retrofits and it's taking longer than I'd like, but there are still few truly abandoned turbines at that site. More generally, as I responded to Steven, what are FITs if not crowdsourcing? Once the policy is place, an admittedly top down move, like any policy must be, by definition, FITs rely on the people and companies to build out projects. If FITs are designed to provide economically viable pricing for home-sized systems, as in Germany, then the crowd will be primarily homeowners and farmers. If the FIT policy provides viable payments only to larger systems, then the crowd will be primarily companies. But in Germany there is a broad diversity of companies and financiers also.
Anonymous, REMAT is not a feed-in tariff, which is why I don't list it. I follow CA programs very closely (it's my main focus) so I'm aware of the history and nuances of this program. SB 32 was supposed to modify the existing FIT (AB 1969) but the CPUC chose to change the price mechanism to the REMAT and did itself stop calling it a feed-in tariff. Rather, It's a market-adjusting tariff - not a feed-in tariff. FITs do adjust over time but they do so in predictable ways (known as "degression") and predictability is perhaps the key feature of FITs.
REMAT is highly unpredictable b/c market participants have no way of knowing if the offered price is going to go up or down or where it will be a year from now. There are numerous other problems with this new program, including its extremely small size (just 5 MW per bimonthly tranche for each utility and only about 200 MW statewide). Compare 200 MW for this new program to the 10,000 MW that CA installed under PURPA in the 80s and 90s or the 60,000 plus MW that Germany has installed under its FIT policies and we begin to see how ineffective this new program is.
Steven, PURPA required costs paid to be at the "avoided cost" of fossil fuel generation, so by definition and by law these contracts were cost-effective and they worked for new wind and solar projects at that time because the avoided cost of fossil fuels was very high (this was not too long after the Iranian revolution, the second oil shock). In retrospect, these contracts were higher than fossil fuel energy cost in the ensuing years b/c as we know now fossil fuel prices dropped again by a lot.
But the best projections at the time were used to set the long term avoided cost under PURPA, b/c the law was designed specifically to reduce dependence on fossil fuels. Anyway, the cost-effective FIT I'm calling for now would be very easy to implement in CA b/c we've already had a cost-effective FIT in place under AB 1969, which was replaced by the SB 32 REMAT program (not a FIT). AB 1969 used the Market Price Referent, a type of avoided cost, which is still in use for some purposes and this figure represents the cost of power from a new 500 MW natural gas plant. If renewables can come online at the same cost as a new 500 MW natural gas plant I think a lot of people would agree that's a good deal for ratepayers.
The reason CA's current RPS is less than perfect is that it does nothing for distributed generation and it automatically socializes the cost of transmission. A distribution-focused cost-effective FIT would not socialize the cost of interconnection b/c there is no reimbursement by ratepayers for this cost, as there is for transmission interconnection under FERC rules.
CA also has a Renewable Auction Mechanism (RAM), which is very similar to the RPS request for offers auction system, but designed for projects 20 MW and under. But, again, this program seems to work only for projects between 10 and 20 MW, which is still much bigger than ideal if one's focus is on DG and distribution-interconnected projects. We have huge untapped potential for projects 10 MW and below and there are almost no programs now in CA that work for this size project. As we've seen in Germany and elsewhere, we can utilize this market segment to make the grid more reliable and resilient, while also creating large economic opportunities for many business, landowners and even homeowners.