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Article filed under Energy | Written by John Farrell | 1 Comment | Updated on Oct 5, 2011

What Renewable Energy Policy Works Best? Feed-in tariffs

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/what-renewable-energy-policy-works-best-feed-tariffs/

Feed-in tariffs are responsible for two-thirds of the world’s wind power (64 percent) and almost 90 percent of the world’s solar power.  With simplified grid connections, long term contracts and attractive prices for development, that’s policy that works.

Click to see more of our feed-in tariff (also known as CLEAN Contracts in the U.S.) coverage on Energy Self-Reliant States or see some of our other work on the subject:

Feed-in Tariffs in America: Driving the Economy with Renewable Energy Policy that Works

Pricing CLEAN Contracts for Solar PV in the U.S.

 

 

 

Source for pie charts: Jacobs, David.  Applicability of the German FIT to the Taiwanese policy framework.  (Presentation to the International Symposium on Germany’s Renewable Energy Development and Power-purchasing Policy Trends, Taipei, Taiwan, 9/28/11). 

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Article filed under Energy | Written by John Farrell | 4 Comments | Updated on Oct 4, 2011

With Electric Cars, U.S. States Can Boost Energy Self-Reliance

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/electric-cars-us-states-can-boost-energy-self-reliance/

The U.S. Northwest could get an additional 12 percent of its electricity from local wind power if 1 in 8 of the region’s cars used batteries. 

That’s the conclusion of a new study from the Pacific Northwest National Laboratories investigating how electric vehicles can help smooth the introduction of more variable renewable energy into the grid system.

The study examines the Northwest Power Pool, an area  encompassing roughly seven states in the Northwest.  With around 2.1 million electrified vehicles, the grid could support an additional 10 gigawatts of wind power.  With electricity demand from those seven states of about 250 billion kilowatt-hours (kWh) per year, the additional 10 gigawatts of wind would provide 12 percent of the annual electricity demand (roughly 30 billion kilowatt-hours per year).

The results are no doubt applicable to other regions of the country.  In fact, at least 33 states have enough wind power to meet 10 percent or more of their electricity needs and if the same portion of vehicles (13%) were electrified in those 33 states, it would allow them to add a collective 100 gigawatts of wind power, meeting nearly 14% of their electricity needs. 

Northwest Power Pool

In the long-run, a fully electrified vehicle fleet would theoretically – just do the math! – provide enough balancing power for a 100% renewable electricity system.  And since the large majority of those vehicle trips would be made on batteries alone, it would be a significant dent in American reliance on foreign oil for transportation. 

Further reading: learn a bit more about electric vehicles helping wind power in Denmark, too.

Hat tip to Midwest Energy News for the original story.

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Oct 3, 2011

State Wind Energy Potential

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/state-wind-energy-potential/

At least 32 states can get 25% or more of their electricity from wind power within their own borders.  This map is updated from our 2010 report and namesake, Energy Self-Reliant States.  Click here for a larger version.

The only updated figure is Maryland, due to a new report on its offshore wind potential.

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Sep 28, 2011

Keeping Energy Dollars in Minnesota

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/keeping-energy-dollars-minnesota/

I gave a presentation last night to a public forum hosted by Think Again MN on maximizing the economic returns from the state’s clean energy resources.  I was joined by Lynn Hinkle of the Minnesota Solar Energy Industries Association (and former union labor representative) and George Crocker from the North American Water Office (and passionate community organizer).  The whole video is below, with my presentation starting around 24:00.

To view just the slide show of my presentation, click below:

The Value and Power of Distributed Energy in Minnesota
View more presentations from John Farrell

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Sep 26, 2011

The Value and Power of Distributed Solar in Arizona

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/value-and-power-distributed-solar-arizona/

A presentation I gave last Friday to the Arizona Corporation Commission.

The Value and Power of Distributed Solar in Arizona
View more presentations from John Farrell

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Sep 23, 2011

California Saves Money for Classrooms with Solar for Schools

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/california-saves-money-classrooms-solar-schools/

We previously examined how some schools are going solar, with a particular focus on the federal tax incentives. Click here for our December 2010 analysis. Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Sep 23, 2011

California Governor to Western Grid: No Imports of Renewable Energy Needed

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/california-governor-western-grid-no-imports-renewable-energy-needed/

Western grid operators have been making plans for large-scale renewable energy imports into the California electricity market, prompting the governor’s Senior Advisor for Renewable Energy Facilities to write a “self-reliance” response.

Here are a few highlights of his letter to the Western Electricity Coordinating Council (WECC):

California has plenty of in-state development: “The California Independent System Operator indicates that renewable projects totaling 70,000 MW of installed capacity [nearly enough to meet all of the state's peak summer demand] are seeking to connect to the CAISO-managed grid.”

Transmission costs are up, waaay up.  In particular, “the developer of at least one significant line, TransWest Express, expects the project to cost about 70 percent more than WECC’s original assumptions…we thus appreciate the ongoing efforts of WECC staff to review these and other assumptions and to revise capital cost assumptions upward.”

Transmission line risks: “transmission lines proposed to stretch hundreds of miles over private and public lands face significant permitting and development risk – perhaps most so in the case of DC lines, which offer few electrical benefits to the states they cross.”

In summary, California has a robust in-state market for renewable energy and sufficient in-state renewable resources to serve its entire electricity needs, so Western states would do well to temper their export optimism.

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Sep 20, 2011

Graphics from the report: Democratizing the Electricity System

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/graphics-from-the-report-democratizing-the-electricity-system/

Update 9/20/11: Graphics marked with an * have been updated since the report’s release This page contains all of the charts, maps, and graphics from the new report, Democratizing the Electricity System: A Vision for the 21st Century Electric Grid. The graphics are in order of appearance in the main body of the report.  Charts… Continue reading

Article filed under Energy | Written by John Farrell | 2 Comments | Updated on Sep 15, 2011

Solar PV Economies of Scale Improve in 2010

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/solar-pv-economies-scale-improve-2010/

Installed costs for solar PV have dropped and economies of scale improved significantly in 2010, opening the door for much more cost-competitive distributed solar power. 

The data comes from the 4th edition of the excellent report from the Lawrence Berkeley Labs’, Tracking the Sun (pdf) and shows the installed costs for behind-the-meter solar PV projects in 2010.  The following merely copies Figure 11 from that report, showing the average installed cost of “behind-the-meter” solar projects in the U.S. in 2010, by project size.

This is useful and shows the significant economies of scale for solar PV in 2010, but the history is important.  For context, the following chart shows the 2010 data along with the 2009 data from Lawrence Berkeley Labs, with the grey shaded area indicating the cost decreases.  The 2010 installed cost data from the California Solar Initiative (red) is also shown, helping validate the LBNL data.  The last data point from the CSI is an outlier likely due to having too few projects in that dataset.

Two things are clear from the new data.  First, installed costs have dropped significantly, by $1 per Watt for residential-scale solar PV and by nearly $2 per Watt for megawatt-scale projects.  We can also see more clearly how the economies of scale of solar have improved, as well.

The unit cost savings between the smallest and largest solar projects (1 MW and under) jumped from $2.80 to $4.60 per Watt, a change in relative savings from 30 percent to 47 percent.  Economies of scale were also much greater for mid-size solar (30-100 kW), with the percentage savings over the smallest projects rising from 21 to 35 percent.   The following chart illustrates the change in economies of scale, showing installed costs as a percentage of the cost of a 2 kW system.

Instead of having relatively little economies of scale for solar PV projects larger than 2 kW, the 2010 data confirms that the unit cost of solar does continue to fall significantly as solar projects grow up to 1 megwatt (MW) in size.

Unfortunately, LBNL did not have sufficient data to provide context for economies of scale for larger distributed solar projects (1 to 20 MW), with only about 20 datapoints.  However, their finding was that these larger crystalline solar projects cost between $4 and $5 per Watt, showing small but significant scale economies.

The lesson is that solar economies of scale seem to be improving as the U.S. market matures, good news for distributed solar to compete with peak electricity prices on the grid.

[note: for more context, see the previous post on 2009 solar economies of scale]

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Sep 8, 2011

Severe Volatility Illustrates the Risks of Using Solar RECs

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/severe-volatility-illustrates-risks-using-solar-recs/

This is a little taste of a project I’m doing comparing solar renewable energy credits (SRECs) with a state solar mandate to Clean Contracts (a.k.a. feed-in tariffs).  One metric for comparison is the risk created by market uncertainty, and there’s no better illustration of the risk and uncertainty in SREC markets that this chart.  In the past 9 months, SREC prices have tumbled in nearly every market in the U.S. 

Chart of Solar Renewable Energy Credits in Seven U.S. States August 2009 to 2011

The cause is the same everywhere – the solar industry met the state mandate, cratering demand for SRECs.  Prices won’t recover until the market slows down. 

From an Econ 101 standpoint, SRECs beautifully price market demand and are a powerful indicator of when the state-created market is saturated.  From an industry standpoint, however, they represent a real roller coaster.  It’s hard to be a solar installer when your entire market dries up for 9 months waiting for next year’s quota to roll in (in NJ and PA, legislation is being considered to accelerate the state mandate to solve the problem). 

Clean contracts (if uncapped) solve the problem, because the market doesn’t bust (of course, a solar mandate that can keep ahead of supply would also work). 

But rather than pricing market demand (as SRECs do), Clean contracts attempt to price the cost of solar.  It’s one reason why they tend to deliver lower cost solar to market than SREC markets or mandates.  And as you can see in this chart from a previous post, even Germany’s Clean contract (feed-in tariff) program more closely approximates the cost of solar in New Jersey that New Jersey’s SREC price.

It’s a serious question for policy makers to consider when creating a market for solar.  Is an SREC market that depends on a state solar mandate any more “market-based” than Clean contracts that simply provide a standard offer to solar developers?  And if the latter means cheaper solar for ratepayers, then shouldn’t that trump considerations of “markets”?

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