A video from Chelan shows the benefits of a publicly owned fiber-to-the-home network in a rural public utility district in Washington State. Continue reading
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A short video of Sascha Meinrath discussing the power of community networks, the need for broadband competition, and why the National Broadband Plan misses the mark. Continue reading
A proposed revision to the United Kingdom’s feed-in tariff program may have created an uproar, but it may also help spread the economic benefits of solar more widely.
The proposed changes, announced last week, would reduce solar payments for large solar projects (50 kilowatts and larger) by 50 percent or more, but leave payments for smaller projects largely intact. The following tables illustrate:
The new tariffs will help redistribute more of the feed-in tariff (FIT) program revenue to smaller projects. The most likely manner is simply by giving less money per kilowatt-hour (kWh) to the large projects, leaving more for the small projects. The following charts will illustrate.
Let’s assume that under the old FIT scheme, each project size tranche provided 25% of the solar PV projects under the program (see pie chart).
However, since a 2 MW project produces many more kWh than a 3 kW project, the revenues will skew heavily toward the larger projects. For the sake of simplicity, I assumed that the midpoint of each size tranche was a representative project and that they all produced the same kWh per kilowatt of capacity.
The revenue distribution can be seen in the second pie chart:
Essentially, all the FIT Program revenue was going to the largest projects. Even if three-quarters of projects were under 4 kW, they would still only represent 3 percent of program revenue, with 93 percent accruing to the projects over 100 kW.
Under the new FIT scheme, the prices paid to larger solar PV projects are sharply reduced. With projects evenly distributed between the now six size tranches, much less of the program revenue goes to large projects.
The projects under 100 kW have roughly tripled their share, from 3 percent to 10 percent of revenues.
Of course, the lower prices for large solar projects could have another impact: killing large solar projects completely. Let’s assume that the new prices for projects over 50 kW (that experienced the steepest revenue decline) are simply too low and that all development ceases.
The first pie chart shows the project allocation in the FIT program without any projects over 50 kW. As described, we have an even distribution (# of projects) between the smallest three size categories, and no projects 50 kW or above.
The next chart shows the revenue allocation of the FIT program under this assumption. Now, nearly 30 percent of program revenue accrues to projects 10 kW and smaller.
If we assume that instead of an even allocation of projects, we have an even allocation of capacity between the size tranches (e.g. 30 MW, 30 MW, 30 MW), then the revenues would be split evenly between the remaining size categories and two-thirds of the solar FIT program would be flowing to solar projects 10 kW and smaller.
While it’s unlikely that the government plans to eliminate the large solar PV market with its price revisions, the overall effect is likely to be a transfer of program revenues to smaller projects. The advantage in this strategy is that these revenues will be spread over a much larger number of projects and project owners, creating a larger constituency for supporting solar power and solar power policies.
Vote Solar reports that Ohio utility First Energy is claiming for the second straight year that it can’t meet the state’s solar carve out.
First Energy Corp – which is parent company to Toledo Edison, Ohio Edison and Cleveland Electric Illuminating - reports that they were unable to find enough solar renewable energy credits in Ohio needed to satisfy their 2010 benchmark for solar energy. First Energy has filed for force majeure for the second year in a row claiming that it was a circumstance beyond their control, a legal ‘act of God’, that prevented the company from buying the needed SRECs….it’s awfully suspect that an Act of God would occur twice in a row.
It is, for two reasons. First, as we detailed in our 2009 report – Energy Self-Reliant States – Ohio is like many states in having sufficient rooftop space for solar PV to supply 20 percent of the state’s electricity. There’s no shortage of sunshine.
Additionally, it’s far less expensive for the utility to buy solar than to pay the alternative compliance payment. In 2011, utilities must either acquire the necessary solar renewable energy credits (RECs) or pay $400 per megawatt-hour (MWh) that they fail to acquire.
However, a large-scale solar PV system in Ohio with an installed cost of $6 per Watt only needs 22.6 cents per kWh ($226 per MWh) to break even over 25 years (if they use federal incentives). With a long-term contract with a known price for solar RECs (something they have yet to offer), First Energy can surely find a solar developer willing to help them out.
After all, that’s exactly what other Ohio utilities are doing:
First Energy could have followed the example of AEP Ohio, a neighboring utility that has successfully entered into a long term PPA with a 10 MW solar farm and is in development for another 49 MW solar facility as we write. If AEP can do it, so can First Energy.
First Energy’s problems with solar have little to do with God or their state’s solar resources, and everything to do with giving up.
ILSR has released the Community Broadband Map, showing the location of over one hundred communities that have rejected the tyranny of existing carriers and built their own networks. Along with the map, ILSR has released a report, Publicly Owned Broadband Networks: Averting the Looming Broadband Monopoly.
“The Community Broadband Map reveals the depth and breadth of publicly owned networks,” says Christopher Mitchell, Director of ILSR’s Telecommunications as Commons Initiative.
The Reuse People (TRP), a private enterprise headquartered in Oakland, CA, launching an expansion of its building deconstruction training program. TRP’s deconstruction training program provides students with a market advantage. Graduates of the program leave with a comprehensive understanding of deconstruction, including how to use hand and power tools, disassemble buildings, work in a team,… Continue reading
Community ownership may provide the solution for increasing resistance to wind power in the United States.
Wind power has expanded rapidly in recent years, but the new wind farms have a common characteristic: absentee ownership. These large wind farms promise a broad expansion of clean energy production, but not a commensurate expansion in local economic benefits. True, every wind power project will create some jobs and ripple effects in the local economy, but with absentee ownership most project benefits will leave the community (whereas locally owned projects have significantly higher rewards).
Without a say or stake in the turbines remaking their local skyline, communities have raised red flags. The result is more restrictive wind siting policies and opposition to new high-voltage transmission lines that may carry wind power from remote areas to major cities.
The wind industry’s initial reaction to local resistance seems to attempt an end-around, looking for states to pre-empt local siting authority and the federal government to pre-empt state transmission planning authority. Unsurprisingly, such moves win few friends for wind power.
There’s an alternative.
Some wind developers have learned that gaining local acceptance means rewarding not just the landowners who host project turbines, but neighbors who will also be affected by the turbines’ proximity. In the United Kingdom, state policy is requiring wind farms to pay into community funds (perhaps inappropriately, as a tool to offset severe budget cuts). But this policy has two drawbacks. For one, it only buys off the opposition, it doesn’t transform them into wind advocates. Second, it fails to take advantage of a community’s capital and the interest of residents in owning a stake in local wind power, rather than simply observing.
Community wind projects typically find a warmer welcome:
“In local communities, there’s been little to no opposition to wind projects,” said Eric Lantz, a wind policy analyst at the Renewable Energy Laboratory and a co-author of the study. “There’s more pride taken when you’re able to participate with an ownership stake.”
Community ownership not only eliminates most local opposition, but makes locals into stakeholders in the success of wind power. A new 25 megawatt wind project in southwestern Minnesota will feature significant community ownership. Just listen to the heartfelt pride in wind power from these members of a wind power cooperative in the United Kingdom:
Community wind projects are also more likely to reduce demand for long-distance transmission, because gaining local acceptance means wind farms can be built closer to cities and because communities lack the capital to build that largest-scale wind farms. This is a key issue, since there’s yet to be a community-owned transmission line.
While community wind could save the wind industry, it won’t be without some better rules. Community wind projects still require financial acrobatics, largely because the federal incentive for wind power (the Production Tax Credit) can only effectively be used by big banks and investment firms. And utilities tend to favor a few negotiations with large wind projects rather than many negotiations with smaller projects to meet their renewable energy obligations. Laws like Minnesota’s Community-Based Energy Development statute or CLEAN contracts can pave the way for more community-based wind projects.
Wind power is a key element of transforming our electricity system to clean energy and to combatting climate change. But it’s future may hinge on the willingness of the wind industry to embrace community ownership.
ILSR produced a video to highlight the impressive dominance of publicly-owned networks in North Carolina.
It’s telling that the insurance industry won’t touch nuclear projects unless governments cap their liability. In Canada, the cap is now $650 million on disasters that can cost many billions of dollars to battle, excluding long-term economic impacts. Taxpayers, of course, cover the rest. Without such caps, the industry argues the cost of insurance would simply be too high.
Public officials are looking for ways to reduce opposition to wind farms and the United Kingdom is piloting a “community wind fund” program for all new wind projects. Under the program, each wind project must pay in £1000 per megawatt (~$1600 per MW), per year, for 25 years into a community fund where the project is located. The funds would help maintain public support for wind power, but also (conveniently for the conservative government) replace reduced government funding for basic services:
“With all the current talk of libraries, community centres and sports halls being closed because of government cuts , here’s a great way for local communities to replace that funding. Local wind projects will from now on not just bring the benefits of local green electricity, but also the funding of vital social projects that government cuts would otherwise shut down.”
The impact for the community is significant. Compared to the typical land leases (often $5,000 per turbine for the host landowner), the community fund payments would increase local revenue by over 60 percent, with the additional funds spread to the entire community rather than just the lucky turbine hosts.
The impact on turbine owner net revenue is small but not negligible, reducing the net present value of the project by about 3 percent.
Using community funds to overcome local opposition may be worth the revenue reduction for the wind project owner, but the U.K. government strategy of using wind parks to offset (some) budget cuts represents a strategy that is unlikely to work well in the United States.