Toby Couture is one of the pre-eminent experts on cost-effectiveness of renewable energy policies and his comparative analysis of auctions (such as California recently adopted for distributed generation) and CLEAN Contracts (a.k.a. feed-in tariffs) is a must-read. Read the full story over at our Energy Self Reliant States web site. Continue reading
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In January, we released a report – Maximizing Jobs From Clean Energy: Ontario’s ‘Buy Local’ Policy – highlighting the impressive job forecast (43,000 jobs) from Ontario’s CLEAN Contract (a.k.a. feed-in tariff) program. News from the province suggests that the program is overcoming hurdles and continuing to grow.
Forecasts for 2011 indicate that Ontario could become North America’s largest solar market, installing 455 MW, more than twice what California installed in 2009. This is nearly a 3-fold increase over 2010 installations.
Additionally, supply concerns have faded. ClearSky Advisors notes that, “Though there has been concern that development would be limited by supply shortages, it is now most likely that there will be sufficient supply to meet demand from 2011 to 2015.”
Hurdles remain for Ontario. They are still subject to a World Trade Organization complaint over their ‘buy local’ policy (discussed in detail in our report) and if liberals lose the fall elections, it could spell significant cutbacks in the province’s clean energy program.
One recent report suggests that there are new “big fees” for project development, as well, but these fees exempt small-scale projects and a back-of-the-envelope calculation suggests that the fees will comprise less than 2 percent of projects costs.
Overall, it appears Ontario’s robust clean energy program is still on track to develop thousands of megawatts of clean energy and thousands of jobs.
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Cutting non-module solar PV costs with best design practices could make solar PV cost less than grid electricity for more than 25 percent of Americans.
Half of the installed cost of a solar PV array is the solar module, but the other half (the “balance of system”) involves labor, assembly, and other components. With module prices continually falling, significant decreases in total installed cost depend on reducing balance of system costs. The Rocky Mountain Institute held a design charette last year, and the result was a concept of how to reduce balance of system costs by 58 percent in five years.
From the report’s executive summary [pdf], this chart (right) illustrates the reduced costs.
Even more interesting, the report put those cost savings in the context of the levelized cost of solar electricity. They found that the balance of system savings (and induced reduction in module costs) could lower the price of solar PV electricity from 22 cents per kWh to 8 cents per kWh.
To put that in context, we recently examined distributed solar’s cost compared to grid electricity prices, concluding that “solar PV at $5 per Watt (with solely the federal tax credit) could not match average grid electricity prices in any of the sixteen twenty largest metropolitan areas in the United States.”
With the Rocky Mountain Institute’s best design from their charette, that sentence reads: solar PV (with solely the federal tax credit) beats average grid electricity prices in 13 of the largest 20 metropolitan areas, representing 78 million Americans. With time-of-use pricing plans, the number rises to 19 of 20 metro areas, representing over 100 million – one-third of – Americans.
Rick Karr, a correspondent with PBS’ Need to Know, travels to Europe to investigate why some countries there have surpassed the US in fast, affordable, and reliable access to the Internet. Continue reading
With the federal Energy Policy Act of 2005, Congress gave broad powers to the Department of Energy and the Federal Energy Regulatory Commission (FERC) to identify "congested" transmission corridors in order to prioritize new high-voltage transmission development and to provide higher financial returns to transmission development companies. The idea created a lot of controversy especially in terms of alternatives analysis and jumping over environmental review procedures. In February 2011, the Ninth Circuit court disagreed with the idea saying, “We cannot accept DOE’s unsupported conclusion that its final agency action that covers ten States and over a 100 million acres does not, as a matter of law, have some environmental impact." Read the full post over at our Energy Self Reliant States web site. Continue reading
With the federal Energy Policy Act of 2005, Congress gave broad powers to the Department of Energy and the Federal Energy Regulatory Commission (FERC) to identify “congested” transmission corridors in order to prioritize new high-voltage transmission development and to provide higher financial returns to transmission development companies. The decision created a lot of controversy, since… Continue reading
As long as the penetration of PV on the grid is low, the utility should have no trouble maintaining power quality as the output from PV systems fluctuate. However, even if overall PV penetration levels in a region are low, it is possible to have local “hot spots” where penetration on a single distribution circuit is very high. In this case utilities have concerns that power quality will suffer on that distribution circuit due to the high penetration of PV. [Kauai Island Utility Cooperative] KIUC is testing that hypothesis to the extreme with its 1.2 MW solar farm, by supplying 100% of a distribution circuit with PV during the day. [emphasis added]
Now for the good news: as the utility monitors the distribution circuit on sunny days and cloudy days, with the PV system turned on and the PV system turned off, they are seeing very little difference in the voltage levels, harmonics, and overall power quality between the different scenarios. These preliminary results suggest that utilities could go to very high levels of PV penetration in localized areas without causing problems for the grid. KIUC is continuing to monitor the system, but the initial results look very positive for the PV industry. [emphasis added]
A state such as New York should be capable of absorbing and benefiting from well over 7 GW of high- value PV without having to incur significant integration costs beyond the cost of PV itself, further noting that the storage sizes involved could well be met with a smart deployment of interactive plug-in transportation...the low-cost penetration potential is large enough to allow for the development of a considerable localized, high-value PV generation market worth 100’s of GW in the US.
Toby Couture is one of the pre-eminent experts on cost-effectiveness of renewable energy policies and his comparative analysis of auctions (such as California recently adopted for distributed generation) and CLEAN Contracts (a.k.a. feed-in tariffs) is a must-read.
By Toby Couture, E3 Analytics
In his conclusion to a recent speech at the London School of Economics, Lord Turner, Chair of the Financial Services Authority in the UK, introduced an important distinction in reference to the financial crisis: he explained that “Stability matters a lot; minor gains in allocative efficiency matter little.”
The reference is specifically to the unprecedented financial innovation that occurred over the course of the last decade, innovation that was heralded by many within the sector as a means of improving the overall “efficiency” of the financial market. Efficiency in this context means that resources (financial and other) would be allocated in a way that would better promote human welfare.
As the economy continues to reel from the effects of the financial crisis, average citizens may be excused for failing to see the welfare gains that came from all this “innovation;” indeed, two years on, it is now generally acknowledged that this innovation was taken too far, and resulted in a net loss of welfare for society, and for the taxpayers who are now footing the bill.
One of the insights behind Lord Turner’s comment is that, in such situations, it is indeed possible for us to be penny-wise and pound-foolish, to put too much faith in efficiency at the expense of market stability.