Since I did the look-back on 2015 yesterday, now’s the time to offer the three big things to watch in 2016 on the fight to reduce greenhouse gas emissions:
3. Presidential Election: This is huge, as the current leading Republican candidate would say. The November election will determine whether the US sticks with the Paris agreement, continues support for renewable technologies and corresponding lack of support for coal, and fights for the EPA Clean Power Plan. The EPA finally released this plan in 2015, as required by a 2007 Supreme Court decision, and the plan underlies the US commitment to greenhouse gas reduction enshrined in the Paris agreement. While the final legal outcome won’t happen for a few more years (it will assuredly go to the Supreme Court), a Republican administration will try to gut the proposed rule from within.
2. Electric Vehicle Progress: As I mentioned yesterday, electric vehicle sales were down in 2015. But with the new Chevy Volt coming out, a slightly improved LEAF, and the much-hyped Tesla Model X all hitting the road, it will be important to see progress on the sales front this year. As a related honorable mention, we’ll need to see continued decreases in battery prices, not just for vehicles but for energy storage more generally.
1. California’s SB 32 2030 Climate Goals: The state has been an international leader fighting climate change, thanks to 2006’s AB 32, which set carbon reduction goals for 2020. But the effort to extend and ramp up the targets by 2030 failed spectacularly in the Assembly last year. It’s vital for the climate fight that the law pass this year. Otherwise, existing legal authorities to continue carbon reduction beyond 2020 are weak, and the signal a failure would send to the country and world would be detrimental. Meanwhile, the state would risk undermining the progress it has made nurturing in-state clean technology industries. While federal action on climate is important, California’s role as the guinea pig and pioneer on climate has been central to showing leaders in advanced economies how to decarbonize while growing the economy.
And with that, let’s see what the new year brings.
Happy 2016! With the new year here, I wanted to reflect on some of the big environmental accomplishments of 2015. Here are my top three best pieces of news on climate change:
3. Paris Climate Agreement: Sure, it was mostly political theater, with a non-enforceable international agreement that could be undermined as soon as next year by a Republican U.S. president. But it was necessary theater. No international action can happen without it, and it’s sets the political foundation for domestic action on carbon reduction in countries and states all over the world. It was also an example of how China’s new commitment to reducing greenhouse gas emissions has changed the politics of climate change.
2. U.S. and California’s Continued Commitment to Solar: Solar PV has made huge gains in terms of efficiency and price competitiveness over the past five years. But its progress could have been badly undermined had the U.S. federal government not continued the policy of giving a 30% investment tax credit for solar PV (and other renewable energy) purchases. Meanwhile, California, solar PV’s largest market, could have dramatically killed demand by gutting the rate incentives for homeowners to go solar. Fortunately, both governments backed away from the brink. The new federal budget continues the investment tax credit, while California’s energy regulator appears committed to keeping the current rate incentives intact (although Severin Bornstein offers a compelling case for an alternative approach). The resulting demand will ensure that solar PV is here to stay and will only become more cost-competitive with fossil-fuel sources of power going forward.
1. Tesla’s Increasing Sales Rate: It was a down year for EVs, with cheap gas prices and not a lot of new models to choose from. Tesla vehicles may still be a plaything for the wealthy, but the company’s dominance at the top of the EV market will eventually lead to an energy revolution for all — and that’s no understatement. Encouragingly, Tesla sales were up 60% in 2015 over 2014, to over 50,000 units, blowing by Nissan LEAF’s sales of about 18,000. And with the new all-electric SUV Model X ramping up, we’re starting to see Tesla’s long-range plan take shape: start at the top, and then use the sales to fund a mass-market EV. When that model comes out, we’ll finally get the transition to a low-carbon economy we need: cheap battery electric transportation, coupled with mass energy storage from the batteries, both in and out of the vehicles.
We’ll see what 2016 brings, but for now, we certainly have something to celebrate as 2015 hits the books.
BP isn’t exactly synonymous with clean and green energy, given the oil blowout in their Deepwater Horizon rig in the Gulf of Mexico back in 2010. But their analysis of the future of green energy is pretty positive [PDF]. As Greenbiz summarizes:
Bringing together previously internal analysis from BP’s energy experts, the document predicts the world will have a plentiful supply of affordable energy through the next few decades thanks to advances in all forms of energy technologies — from battery storage innovations to better extraction techniques for oil.
BP predicts the global energy system will remain heavily reliant on fossil fuels for decades to come. However, it also envisages strong growth potential for clean energy systems and supporting technology such as battery storage and electric vehicles.
What struck me among the five key points was #3, regarding the need for — and effect of — carbon pricing on future energy scenarios:
3. Carbon pricing will have a massive impact on competitiveness of renewables
Without a carbon price, gas and coal will remain the lowest-cost options for generating electricity in North America through 2050, according to the BP analysis. However, with the introduction of a relatively modest carbon price of $40 per tonne of CO2, new-build gas and renewables will start to displace coal.
With a higher carbon price — $80 per tonne of CO2 — onshore wind will be cost-competitive with natural gas by 2050, according to BP. This is based on analysis that applies a grid integration cost to renewables because of their intermittent energy supply.
This conclusion points to the importance of the international talks in Paris next month, where for the first time international negotiators may finally agree to even a modest floor on carbon pricing worldwide. We’ll need it as something to build on, while subnational entities like California and more progressive nations move forward to implement their own carbon pricing, either through cap-and-trade or direct taxes.
It’s on, and we’re up against global warming. Energy storage is the critical clean technology piece to decarbonize the grid (at least without nuclear power). The good news is that innovation is really taking off, now that the market for storage is clearer, with more renewables and electric vehicles.
From the San Francisco Chronicle:
In October, an international team of scientists announced a breakthrough in overcoming major obstacles in next generation energy storage and creating a battery that has five to 10 times the energy density of the best batteries on the market now. In September, Whitacre won a $500,000 invention prize for his eco-friendly water-oriented battery. And in April, Elon Musk announced plans for his Tesla Motors to sell high-tech batteries for homes with solar panels to store electricity for night time and cloudy day use, weaning the homes off dirtier power from the burning of coal, oil and gas.
“The pace of innovation does seem to be accelerating,” said JB Straubel, chief technical officer and co-founder of Tesla with Musk. “We’re kind of right at the tipping point where the current performance and lifetime of batteries roughly equal that of fossil fuels. If you are able to double that, the prospects are huge.”
Some of these breakthroughs will take years to commercialize, but at least we know in the near-term that lithium ion battery costs are coming down about 8-10 percent a year. Bottom line: lots of changes will happen on both the grid and in vehicles with these innovations.
And it can’t come soon enough.
As I’ve covered before, the State of Hawaii has halted its rooftop solar incentive program (“net metering,” where solar customers get full retail electricity credit for any surplus solar they generate). Now state regulators are proposing to replace it with two options, a “grid-supply” option and a self-supply option. The outcome will be a “postcard from the future” for other states, given that Hawaii leads the country in rooftop solar penetration and high electricity prices.
The grid-supply option would replace the full retail rate credit for surplus solar electricity that happens under net metering. Instead, customers would get a new tariff for surplus solar power, based on the avoided costs of fossil fuel-based generation during peak generation hours, as measured from July 2014 to June 2015. That translates to $0.151/kWh for Oahu, $0.154/kWh for Hawaii, and $0.172/kWh for Maui. That’s still a good payment for the surplus electricity, but it’s about half of what customers used to get under the full retail rate under net metering. Plus new customers will have to pay a minimum monthly bill of $25.
The self-supply option is primarily designed to support customers who do not export their surplus to the grid. Instead, they would earn retail rate credit for on-site generation that aligns with their demand. In other words, customers would strategically shift their electricity usage to soak up all their surplus solar power, such as by running all their appliances during peak daylight hours. Or they could buy a battery to store surplus solar power for dark times. Utilities would then be required to streamline interconnection for these systems.
The environmental and solar communities basically hate what state regulators are doing, as Utility Dive reports. But these proposals in fact may not dramatically stall the rooftop solar market. For example, my favorite utility, Kauai Island Utility Cooperative (KIUC), ended net metering in 2009 and replaced it with the similar grid-supply option, and their installations continued to climb. Plus, the self-supply option could serve to encourage ‘grid defection,’ as customers with batteries and solar realize they don’t actually need their utility anymore.
Certainly I’d prefer to see a more gradual transition away from net metering, as opposed to the sudden halt that happened in Hawaii. But in the long run, with continuing price declines on solar and batteries, we need to move in this new direction anyway. However, regulators shouldn’t pull the plug too quickly on the current incentives, or they may end up destroying the only bridge to this future. And that’s not a postcard I want to see, no matter how many palm trees are on it.
It may be a long shot, but an initiative to replace the state’s three investor-owned utilities with a single, statewide public power district was just approved for signature-collecting by the California Secretary of State.
As Utility Dive reports, a new measure would establish the “California Electrical Utility District” (CEUD) to replace the three major investor-owned utilities (IOU), Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric. It would replace their corporate structures with an elected board of directors from 11 wards across the state — formerly IOU service territories.
So who’s backing it?
The initiative is led by Ben Davis, an anti-nuclear activist and former SMUD Rate Advisory Board member. He got an identical ballot proposal cleared for signature gathering in March, but did not get enough people to sign on before that proposal’s deadline was reached on Sep. 23.
This spring, Davis told Utility Dive the new entity would lower costs to electricity consumers and create other economic benefits by removing regulatory complexities and eliminating shareholder profit considerations.
Given the general public frustration with IOUs, in part from incidents like the San Bruno natural gas pipeline explosion back in 2010, this initiative — if it qualifies — could have some legs. Of course, it would be a radical transformation that utilities would spend millions to defeat, but it presents an interesting question for the state’s environmental goals: in a purely public power setup, what would it mean for the effort to increase renewable energy, energy storage, and energy efficiency efforts?
It’s not clear based on the proposed governance structure, but my guess is the initiative would help dramatically, given how investor-owned utilities have tried to strangle rooftop solar and have fought many of the major clean energy efforts. Of course, it’s all conjecture.
But if the backers get 365,880 signatures by April 26th to qualify for the November ballot, we may actually find out.
Kauai island’s electricity co-op (KIUC) is running circles around pretty much every other utility in the U.S. when it comes to renewables and energy storage. The utility just brought online Hawaii’s largest solar installation to date, with a 12 megawatt facility.
But the bigger news is that the solar PV is paired with a 6 megawatt lithium ion battery system, as UtilityDive reports. The 60-acre facility will supply 20 percent of the island’s annual power needs.
What about the cost? Well, given that Hawaii imports diesel fuel to burn for electricity, this plant will be an economic winner. KIUC announced that the project will save the utility $250,000 each month on operating costs alone, with the storage helping to smooth the intermittent solar power.
Overall, Kauai is lapping everyone else when it comes to renewables. California just patted itself on the back for setting a goal of 50% renewables by 2030, which is great. But Kauai is on the way to meeting its goal of 38% renewables just by the end of 2015, with 50% by 2023 and 100% renewables by 2045, as a new Hawaii state law will require.
This progress shows what can happen when you have a cooperative ownership model for electricity, as opposed to an investor-owned utility or even municipally owned utility. It also helps of course that Hawaii has high electricity prices and abundant renewable resources. But the leadership at KIUC deserves kudos for pioneering a range of important policies and projects:
KIUC, for its part, has been making waves in the power sector lately with it aggressive adoption of solar, storage, and rate structures to optimize their use.
In September, the cooperative unveiled a deal with SolarCity to construct what it calls the first fully-disptachable solar-plus-storage system, a combination of a 13 MW solar array with a 52 MWh battery system.
That month, KIUC also announced it would conduct a pilot program offering discounted electric rates to encourage customers to shift their energy use to the daylight hours to take advantage of the utility’s solar resources. The program will offer a 25% discount on standard electric rates from 9 a.m. to 3 p.m.
Let’s hope that state regulators and the retrograde investor-owned utility on the other islands take note of KIUC’s success, as well as utilities all across the country. KIUC is showing how you get it done, cleaning the environment and saving ratepayers money in the process.
As I’ve covered before, the grid of the future will encourage people to use electricity at optimal times and not use it when electricity comes from dirty or expensive sources. It sounds straightforward but hard to execute in practice. Some have dubbed this demand response as “flexiwatts” — a term I admit to liking.
Now California is going after this demand response opportunity big time, with aggregators facing a deadline today to submit bids to investor-owned utilities. What that means in practice is that a company will be bundling a bunch of customers, ensuring the ability to moderate their electricity use on command and in unison, and then selling those bundled “flexiwatts” to utilities as a resource on par with generation.
The precedent is already there:
In September, Stem Inc. successfully bid aggregated customer storage systems into the CAISO real-time market using Olivine technology, as a demand response resource, part of a pilot program testing integration of the new resources. What to the wider grid looks like a reduction in demand can in fact be battery storage serving a client load, the company said.
“We’re sending energy to serve the clients’ load, so it looks to the grid like load going down,” Ted Ko, Stem’s director of policy, told Utility Dive last month. “It’s a new form of demand response, but it looks to the grid like demand response.”
Stem, along with EnerNOC, SolarCity and Tesla are all expected to submit proposals, GTM reports.
Experts expect a big response — ahem — to the solicitation today.
Hawaii leads all states in rooftop solar adoption, and the state has the most aggressive renewables goal in the country, with a target of 100% renewables by 2045. But paradoxically, Hawaii’s regulators just ended the policy that has led to high levels of rooftop solar uptake: net metering.
Net metering is what most states use to encourage distributed renewables. Customers don’t get cash for any energy they generate on-site but instead get a retail credit on their bill for any surplus power they generate and don’t use on-site. In Hawaii, it’s been a great deal, because electricity rates are ridiculously high, as they generate electricity from burning imported diesel. And of course sunshine abounds there.
But the policy is no more:
The PUC said nothing will change for existing net metering customers, nor those who submitted applications for the program before Monday. But those who submitted the applications afterwards will have to choose two new options when installing solar.
The self-supply option — a non-export option — allows a limited amount of inadvertent energy exportation to the grid without any compensation. Residential customers who choose this option will have a minimum bill of $25, while small commercial customers will have a $50 minimum bill.
The grid-supply option will open the door for exporting excess energy to the grid for credits against customer bills so long as the exports benefit the electric system. While similar to net metering, this option does not credit customers at the retail rate. Instead, the new grid-supply programs credits customers at a fixed rate between $0.15/kWh to $0.28/kWh, depending on the island on which they are located.
My guess is that these two options will still provide economic incentive for many Hawaii customers to go solar, just given how expensive electricity is there (typically in the 30 cents per kilowatt hour range or more). But not as much incentive, and therefore there will be less rooftop solar. And I’m dubious about utility doom-and-gloom claims that the existing amount of rooftop solar is putting grid reliability and affordability in jeopardy.
But in the long run, we know rooftop solar incentives everywhere will start to head in this direction. California regulators are already in the process of revamping and scaling back net metering incentives here, per a 2013 state law. My hope is that costs will come down on solar, both in terms of hardware and soft costs, to offset some of the incentive decreases and that the new rates will encourage energy storage purchases, such as home batteries.
But I don’t see that energy storage incentive built in to Hawaii’s two new options, which is troubling. There ought to be an incentive to encourage supply of renewables at key times, which batteries can do. In other words, we need to reward customers for supplying steady and well-timed solar power to the grid.
Ultimately, we’ll need to encourage everyone to purchase both solar and storage, and smart rate design should find the sweet spot between those two. Hawaii would be a great place to start figuring that out.
The company is at it again. With a software update sent over the air to anyone who bought a Tesla since the fall of 2014 and is willing to pay $2500, the vehicles will now be able to do the following:
Autopilot allows Model S to steer within a lane, change lanes with the simple tap of a turn signal, and manage speed by using active, traffic-aware cruise control. Digital control of motors, brakes, and steering helps avoid collisions from the front and sides, as well as preventing the car from wandering off the road. Your car can also scan for a parking space, alert you when one is available, and parallel park on command.
Musk keeps making big promises, but this latest rollout is evidence that he might be able to actually keep them. In particular, he recently pledged that the company will be making 745-mile range batteries in completely autonomous vehicles by 2020.
No hands required.
What would this mean for the environment? To quote Trump, HUGE. On the EV side, it means an accelerated move from petroleum fuels to electricity in battery electric vehicles. It means more mobile battery storage that can provide grid services like smart charging (soaking up surplus solar power, for example) and possibly vehicle-to-grid power (sending electricity back to the grid from the car battery when it’s needed). And it means cheaper batteries more generally that can be used for stand-alone energy storage.
But it also means that a revolution in passenger vehicle travel could be around the corner. With autonomous vehicles, cars can drive more efficiently and therefore reduce tailpipe emissions, and they potentially could be more easily rented on-demand, meaning reduced auto ownership and the associated need for real estate devoted to parking (downtown parking garages and home garages, most prominently).
So even if you’re not a technophile or car person, there’s plenty of reason to be optimistic with this latest development.
