Another Aloha Friday from our friends in Hawaii, where record-setting rooftop solar deployment on the island of Molokai is leading to an avoidable and largely policy-made crisis. As the Molokai Dispatch reports:
As of last March, 65 solar applications on Molokai were in limbo, following an effective shut-down of Maui Electric to accept additional rooftop solar systems onto the island’s grid. At 51 percent as of last year, Molokai has the highest percentage in Hawaii of rooftop solar compared to the island’s peak electricity demand. Most of the rooftop solar is installed under a program called Net Energy Metering (NEM), which pays customers the retail electric rate for excess energy generated from their panels. Maui Electric asked the PUC to close that program, and their request is still being reviewed.
During a meeting on Molokai in March 2015, Mat McNeff, MECO manager of engineering, told residents because the high volume of solar generation on Molokai could cause fluctuations in electric frequency resulting in potential island-wide power outages, MECO is no longer able to connect new rooftop photovoltaic (PV) systems under the NEM program.
I’m sympathetic to the challenges that this level of solar penetration can cause for grid operators. But there should be a logical and immediate policy response to address the challenges.
First, the utility needs to get permission immediately to revise electricity rates to encourage as much usage as possible during peak solar hours. State regulators should require these time-of-use rates to get island residents to shift as much discretionary usage to mid-day hours and away from night time as possible. I recognize there may be some equity impacts for those unable to shift their usage, but think of the equity impacts right now from holding up all of these solar applications.
Second, state regulators need to develop an immediate incentive program for those with solar applications to also purchase on-site energy storage. Home batteries could help moderate the output from this rooftop energy and provide electricity after the sun goes down. This would greatly help grid operators deal with the frequency fluctuation and avoid having to ramp up other resources quickly around sunset.
While it’s a bit unfair to require this only of new solar customers, it’s a long-term and unavoidable need and better than letting them languish. Plus the incentives could also target existing solar customers.
To be sure, these policy responses aren’t exactly new ideas. They are commonly discussed throughout the U.S. and other places with strong solar policies as long-term needs to deal with increasing solar uptake. But the island of Molokai is experiencing a solar crisis right now, and it’s small enough to implement these ideas quickly and see how they play out.
I hope the utility and state regulators can move quickly to address this problem. The rest of the world will certainly be watching.
For Aloha Friday, I wanted to cite a Utility Dive write-up on a conference in Maui devoted to figuring out how to actually achieve 100% renewables in the islands. The lessons are instructive for all of the world, as Hawaii truly is our postcard from the future for renewables and a clean grid.
The big topics focused on integrating all these intermittent resources, with better distribution grid visibility for the utility to manage all these “local” storage and renewable assets, as well as better rate design to encourage flexible demand that mirrors intermittent supply.
But the conference also touched on new business models for the local utilities going forward, as the economics of the grid will change dramatically with 100% renewables.
All in all, another reminder that the island state is worth watching as the rest of the country slowly follows suit.
To clean the grid, we’re going to need lots of energy storage to capture surplus renewables and dispatch them when the sun isn’t shining and the wind isn’t blowing. This market for energy storage technologies is growing rapidly, helped by battery innovations spurred in part by electric vehicle deployment.
But batteries aren’t the only way to store energy, and the recent push is spurring some creative ideas. As an example, gravity could be used in more ways than just pumping water uphill for pumped hydro storage, according to Business Green:
The ARES [Advanced Rail Energy Storage] Nevada project uses the same principles as pumped hydroelectric energy storage projects, but instead of relying on water in a water-stressed region it plans to make use of an inclined rail track and generator locomotive cars that will run along it.
Once operational, the project will encompass 106 acres of public land in Southern Nevada, near Pahrump in Clark and Nye Counties. ARES plans to connect the energy storage system to the power western grid via the facilities of Valley Electric Association, providing grid stabilization services to the region.
It reminds me of a pumped hydro example I read about using the tides: an enclosed container fills up at high tide with seawater, and then the height differential created with low tide allows the water to spill out and spin a turbine. I guess you could call that Tidal Energy Storage.
Either way, it’s encouraging to see some creative and hopefully low-cost projects that could help us solve the energy storage challenge.
Last month I summarized Republican front-runner Donald Trump’s views on various environmental issues. Since then, the candidate completed an environmental and energy questionnaire from the Koch-supported American Energy Alliance that sheds further light on his thinking, or at least where his thinking isn’t.
One thing that stood out is that he seems to have backed away from his desire to completely eliminate the U.S. Environmental Protection Agency. Instead, he wants more scrutiny:
Under my administration, all EPA rules will be reviewed. Any regulation that imposes undue costs on business enterprises will be eliminated.
Of course, EPA rulemaking already is required to take into account cost-benefit analyses in its major rules, but Trump answered affirmatively in the questionnaire that agencies have abused this analysis in order to give themselves more regulatory power.
On energy, he takes a position that may actually hurt the oil and gas industry:
Subsidies distort markets and should be used only when national security is at stake. Eventually, all subsidies should end so that the demand for energy will set prices, allow consumers access to the best values and encourage all facets of the energy industry to do all they can to keep their particular source competitive.
Ironically, the oil and gas industry receive significant subsidies from government, possibly close to $40 billion or more per year by some estimates. I’ve often thought of ending these subsidies as a sort of “dormant carbon tax,” because they could potentially raise the cost of oil and gas the way a carbon tax would.
But Trump seems to contradict himself somewhat in the next answer, where he says he favors subsidies if it means “energy independence.” He thinks that urgent need means “we must support all energy sources.” By that logic, he may be persuadable to support renewable energy and electric vehicles, although he rules out support for a carbon tax, which would be the most efficient way to boost energy independence and those clean technologies.
Trump also supports the renewable fuel standard (RFS) for the energy independence reason (although I’m sure Iowa politics played a role). He wants the RFS program to continue, although environmentalists don’t like the mandate because it doesn’t have an environmental screen on what fuel is produced. But that policy is actually an important backstop for California’s low-carbon fuel standard, which does have that screen (not that it’s a reason to keep the federal program as-is).
Trump went on to give muddled and confused answers on what the U.S. government should do with the federal land it owns (establish “a shared governance structure” with states) and on clean water (it’s the “responsibility of all citizens and governments” and “shared governance of waterways seems a logical way to go”).
Overall, a bit more of a window into the candidate’s thinking on issues. But these bits and pieces are all we’re likely to get at this point, given how little substance is on his website on environmental topics.
Much of our efforts to reduce carbon emissions involves fairly complicated and advanced technologies. Whether it’s solar panels, batteries, flywheels, or fuel cells, these technologies have typically required public support to bring them to scale at a reasonable price, along with significant regulatory or legal reforms to accommodate these new ways of doing old things, from generating power to driving a car.
Yet ironically, here in California we seem to be making the most progress on some of these more technologically advanced areas, and not enough progress in one of the simplest and most cost-effective means of reducing carbon emissions: using less energy in our existing buildings.
Being more energy efficient certainly can involve technological advances, like LED lights instead of incandescent bulbs, lights with sensors that turn off when people leave a room, or more efficient heating or air conditioning units. But it is fundamentally about doing the same with less, and it can often pretty quickly pay off, given the reduction in utility bills that result.
But in California, despite billions spent on energy efficiency efforts, our energy efficiency efforts are barely keeping pace with the increasing demand for electricity. Current utility efficiency programs focus on voluntary, often self-financed measures, with rebates and fixed incentives meant to spur them on. Meanwhile, administrator costs are taking up half of the budgets for many efficiency programs.
Clearly, something needs to change if we are to have any hope of achieving our long-term climate and energy goals in the state. After all, it’s a waste to focus on expensive new renewables and energy storage if we’re not making better progress on the efficient use of the energy we already have.
Given this challenge, the state legislature recently acted to change the nature of our efficiency programs. SB 350 (De Leon, 2015) requires a doubling of efficiency in our buildings by 2030, while AB 802 (Williams, 2015) in part requires utilities to plan for efficiency programs that compensate building owners based on the measured energy saved. These steps will be necessary to change the paradigm and unlock more private investment in energy efficiency retrofits.
To recommend policies to boost this capital market financing for energy retrofits, UC Berkeley and UCLA Law are today releasing a new report “Powering the Savings: How California Can Tap the Energy Efficiency Potential in Existing Commercial Buildings.” The report is the 17th in the two law schools’ Climate Change and Business Research Initiative, generously supported by Bank of America since 2009.
The report describes ways that California could unlock more private investment in energy efficiency retrofits, particularly in commercial buildings. This financing will flow if there’s a predictable, long-term, measured and verified amount of savings that can be directly traced to energy efficiency measures. New software and methodologies can now more accurately perform this task. They establish a building’s energy performance baseline, calibrating for a variety of factors, such as weather, building use, and occupancy changes. That calibrated or “dynamic” baseline can then form the basis for calculating the energy savings that occur due specifically to efficiency improvements.
But the state currently lacks a uniform, state-sanctioned methodology and technology standard, so utilities are reluctant to base efficiency incentives or programs without regulatory approval to use these new methods. The report therefore recommends that energy regulators encourage utilities to develop aggressive projects based on these emerging metering technologies that can ultimately inform a standard measurement process and catalyze “pay-for-performance” energy efficiency financing, with utilities able to procure energy efficiency savings just like they were a traditional generation resource.
To learn more about the report and its recommendations, please join us for a webinar on Monday, April 18th from 10 to 11am. Speakers will include:
- Jeanne Clinton, Special Advisor to Governor Brown for Energy Efficiency, California Public Utilities Commission
- Cynthia Mitchell, energy economist and TURN consultant
- Dennis Quinn, Chief Operating Officer and Co-Founder, Joule Assets. Inc.
You can register via this site.
Hopefully, by tapping into the state’s spirit of innovation, California leaders can show the way to an energy efficiency revolution the way the state helped create a strong market for other clean technologies, like solar panels and energy storage. Because failure on the efficiency front could otherwise nullify so much of our progress in these other areas.
Donald Trump is the presumptive Republican nominee for President, so it’s worth looking at his views on the environment. And from the perspective of environmental protection, they are not promising, to say the least.
For starters, Mr. Trump would like to eliminate the U.S. Environmental Protection Agency, which would mean undoing federal protections for clean air and water and devolving that authority to states. It’s unclear then how states would manage interstate pollution problems. It would also mean the United States would no longer be able to uphold much of its international Paris commitments to reduce greenhouse gases: US negotiators relied on EPA’s Clean Power Plan and its effect of reducing emissions from the electricity sector to meet our country’s commitments under the accord. Of course, the plan is under judicial attack anyway, but eliminating EPA destroys the institution that would administer and enforce it.
On energy, he doesn’t seem to be a fan of renewables, although he doesn’t discuss this issue much in public. But he once sued to stop wind turbines going in near his Scotland real estate project and complained back in 2012 that solar panels are not economical. Meanwhile, he’s a big fan of fracking. And he not only supported the Keystone XL pipeline, he’s an investor in one of the companies that would have built it.
On climate change, he does not accept the scientific consensus, per his recent exchange with the Washington Post editorial board:
I think there’s a change in weather. I am not a great believer in man-made climate change. I’m not a great believer. There is certainly a change in weather that goes – if you look, they had global cooling in the 1920s and now they have global warming, although now they don’t know if they have global warming. They call it all sorts of different things; now they’re using “extreme weather” I guess more than any other phrase. I am not – I know it hurts me with this room, and I know it’s probably a killer with this room – but I am not a believer. Perhaps there’s a minor effect, but I’m not a big believer in man-made climate change.
But there is a potential positive that a President Trump would bring for the environment: namely, his views on infrastructure spending and mass transit investment:
We have to spend money on mass transit. We have to fix our airports, fix our roads also in addition to mass transit, but we have to spend a lot of money.
He’s also — amazingly for a Republican — spoken out in favor of Obama’s priority of high speed rail deployment:
You go to China they have trains that go 300 miles per hours and our just go chug, chug, chug and then they have to stop because the track split. We’re like the third world.
These views appear to spring from his background as a real estate developer who likes to build stuff (not just a wall with Mexico). But it also may come from his non-interventionist foreign policy, where he decries “nation building” overseas while our cities crumble from the lack of infrastructure investment:
And I just think we have to rebuild our country. If you look at the infrastructure — I just landed at an airport where, not in good shape, not in good shape. If you go to Qatar and if you go to (inaudible) you see airports the likes of which you have never seen before. Dubai, different places in China. You see infrastructure, you see airports, other things, the likes of which you have never seen here.
…
We have a country that is in bad shape, it’s in bad condition. You look at our inner cities, our inner cities are a horrible mess. I watched Baltimore, I have many, many friends in Baltimore, we watched what happened. St. Louis, Ferguson, Oakland, it could have been much worse over the summer. And it will probably be worse this summer. But you look at some of our inner cities. And yet you know I watched as we built schools in Iraq and they’d be blown up. And we’d build another one and it would get blown up. And we would rebuild it three times. And yet we can’t build a school in Brooklyn. We have no money for education, because we can’t build in our own country. And at what point do you say hey, we have to take care of ourselves. So, you know, I know the outer world exists and I’ll be very cognizant of that but at the same time, our country is disintegrating, large sections of it, especially in the inner cities.
So if Donald Trump becomes president, we could actually see more mass transit, high speed rail, tall Trump-like buildings in our downtowns, and rebuilt inner cities. And whether he believes in it or not, this kind of downtown, transit-oriented development is one of the best ways to reduce greenhouse gas emissions.
It’s about the only bright spot in what is otherwise a dismal set of views on environmental protection.
From a clean tech perspective, Nevada’s been getting lots of bad press recently for killing its rooftop solar industry. But a recent announcement and ceremony on EV charging puts them in a better light, at least on electric vehicles (of course, by killing rooftop solar, the state is making it less likely people will want to buy EVs).
Highway 95 between Las Vegas and Reno connects Nevada’s two biggest cities. I’ve done the drive twice, including last summer, and I think it’s one of the most beautiful, desolate roads in the country. It’s also super dangerous — I saw accidents each time I drove it, due to the two-lane configuration, blurry rural vistas, lots of cars, and lots of passing that narrowly misses oncoming traffic.
But it’s nice to see that soon EV drivers can make that trip without stress (at least related to running out of juice):
About 40 people — a mix of Valley Electric Association board members and executives, residents of the small town that is the gateway to Death Valley National Park, employees of Eddie World, an iconic stopover on the seven-hour trip between Las Vegas and Reno, and curious travelers on U.S. Highway 95 — gathered to watch Sandoval and others cut a ribbon marking the official opening of the charging stations.
There are two charging stations at the site with three ports each. Two of the ports have connections that will fully charge a vehicle in four hours, but one of them has a fast charge that can take a vehicle to 80 percent charged within 30 minutes.
“It was just great looking out in the crowd and seeing all the happy faces of the people of Beatty because they know that they will always know they were the first to have this,” Sandoval said after the 20 minutes of remarks by several dignitaries.
The opening of the Beatty charging station is the first of four planned along U.S. 95, the 448-mile primary route between the state’s two most populous cities, Las Vegas and Reno.
Other stations are planned in Tonopah, Hawthorne and Fallon. Sandoval said he plans to celebrate them all.
What’s crazy is that California has not done the same level of planning and infrastructure investment for its key highways. That includes both Highway 99 in the eastern Central Valley and Interstate 5 connecting L.A. to the Bay Area and Sacramento, not to mention Interstate 101.
At least on EVs, California has something to learn from Nevada.
Lots of pundits are trying to explain the unexpected dominance of Donald Trump in the Republican primaries, following his Super Tuesday victories yesterday. For example, Professor Bainbridge at UCLA Law offered a relatively convoluted explanation that centered on cultural factors and vague policy grievances among Trump’s supporters.
But to my mind, there’s one chart that explains it:
There’s only so long that the middle class will tolerate being left out of the economic growth in this country. Sure, there are cultural factors at play, and you can’t discount the unique individual appeal of a celebrity businessman who’s made it his life’s work to build a personal brand and sell it.
But context matters, and the relative economic decline of America’s middle gives rise to a candidacy like his.
Could environmental policy be helpful here? In the broad sense, yes. Policies that encourage more downtown development in rural areas, deregulate land use to boost housing production in economically successful areas, and boost clean technology such as microgrids and renewable energy could provide an economic help for many communities.
But larger economic trends related to offshore manufacturing and the rise of the service and technology economy will leave these areas in the dust, unless we develop a national plan to resuscitate America’s middle.
Otherwise, what we’re seeing this election cycle may just be the tip of the iceberg.
The utility death spiral is a constant topic among energy wonks. The argument is that cheap solar + batteries will lead to declining revenues and grid defection, putting the electric utility on a one-way trip to bankruptcy.
Environmentalists sometimes celebrate this potential, given how many electric utilities have stood in the way of clean technology advances.
But Michael Murray raises the equity question in his inaugural edition of the “Murray Telegraph,” after seeing a presentation from Danna Bailey of Chattanooga’s publicly owned Electric Power Board:
When public commons such as public schools are neglected, then the rich can afford to make their own private schools, and by pulling out their children (and sometimes their money, through vouchers) the public schools grow weaker, encouraging more parents to explore private schools, which begins, perhaps, the educational analog of the utility death spiral.
I found the collectivism of Danna Bailey’s entreaty quite compelling. I want clean energy, but I want the grid to serve the less fortunate, too. The grid provides me with electricity, but in return for my monthly expenditure, I receive much more than electrons: I receive the benefits of an electrified society because my neighbors have power, too. Where is the collectivism of solar plus storage, when rich liberals buy solar panels and PowerWall batteries from Tesla, effectively islanding themselves from the community?
And this future may be coming sooner than many of us realize. As David Roberts summarizes in Vox, solar+storage is getting cheaper and more inevitable:
Grid parity, the moment when solar+storage is as cheap or cheaper than utility power, will arrive on different schedules to different places. But in some places, it’s coming soon — and no place escapes it for more than a few decades.
A few decades may seem like a long time, but it’s much shorter than the life of a power plant. It is well within the time frame in which utilities and regulators need to start planning for it.
Count me among those who celebrate these trends, given the importance of decarbonizing and decentralizing our energy supply. But if it leads to greater inequality and less access to energy for America’s poor, it will be both an economic and moral failure. And an environmental one, to boot.
What’s the answer? Ideally, the technologies become cheap enough that the vast majority of residents can afford to go “off grid.” Then society will have to subsidize access to clean electricity only for the very poor, much like it subsidizes bus transit for those who cannot afford an automobile. And if the technology is truly cheaper, the subsidies shouldn’t be too onerous.
But there may be an awkward transition time in the middle, and it behooves policy makers to figure out how to address it before it’s too late. Otherwise, it will be low-income ratepayers who may be left holding the bag of a deflated electric utility industry.
It seems ironic, but the big win to extend the renewable energy tax credit in the federal budget deal last year may make state solar rooftop incentives more controversial. Or so suggests Greentech Media:
Many states were reviewing their net energy metering policies and programs while awaiting the ITC decision.
“The solar industry has gotten its holiday wish list,” Zach Pollock, also in PA Consulting’s energy and utilities practice, said of the ITC extension. “What that has done is put additional pressure on the state policies.”
For states with vertically integrated utilities that have been avoiding the policy considerations related to potentially robust third-party solar markets, “It’s going to be more about blocking and tackling,” said Mooren.
Nevada is the perfect example of the controversy, where the rollback of rooftop solar incentives, even for existing customers, has sparked a clean tech backlash and lawsuit, despite electric vehicle companies Tesla and Faraday locating in the state. And in California, which went the other way recently, opponents of rooftop solar incentives noted that the federal tax credit means states don’t have to keep subsidizing rooftop solar to the same extent.
Meanwhile, one industry may benefit from the net metering rollback: energy storage. Some analysts think Nevada’s new rules could push existing solar customers to buy on-site energy storage, like home batteries. That way customers could capture surplus solar power they produce and use it when the sun goes away. It would be a way to salvage their investment: otherwise the utility would no longer compensate them for the surplus, so it would be wasted.
In the long run, net metering incentives will have to ramp down, but the industry isn’t quite there yet. That’s why it’s important for solar advocates to keep the fight going state-by-state.
