Archive for the ‘financing’ Tag
Big announcement yesterday from the Department of Energy:
Applicants say investments will create tens of thousands of jobs, save energy and empower consumers to cut their electric bills
ARCADIA, FLORIDA – Speaking at Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, President Barack Obama today announced the largest single energy grid modernization investment in U.S. history, funding a broad range of technologies that will spur the nation’s transition to a smarter, stronger, more efficient and reliable electric system. The end result will promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar.
The $3.4 billion in grant awards are part of the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion. Applicants state that the projects will create tens of thousands of jobs, and consumers in 49 states will benefit from these investments in a stronger, more reliable grid. Full listings of the grant awards by category and state are available HERE and HERE. A map of the awards is available HERE.
My first reaction: while the improvements in monitoring capability, transmission efficiency, carrying capacity, and reliability are all welcome, one other aspect of the plan leaves me divided.
Currently, the vast majority of consumers and businesses in the U.S. are monitored with technology that is approaching its centennial. Most people would recognize an electric meter if they saw one. They record total energy usage consumed by one residential or commercial customer – but not the time of day it was used. The meters cannot transmit data and must be read manually. They do not provide price information to the customer, nor do they need to – rates are fixed.
Smart meters, on the other hand, will allow limited two-way communication between the utility and the consumer. In theory, this capability will permit utilities to discourage consumption by charging higher rates during periods of increased demand. The smart meter will notify the consumer in real time of current demand conditions and the rate being charged by the utility. Conceivably, that feedback could be configured into a power profile, allowing consumers to program air conditioners and other appliances to automatically go into power saving mode when rates go up, and activate again when overall usage drops and rates are acceptably low. This would have the effect of shifting some usage to later in the day and distributing consumption more evenly.
Of course, making this cost differential work will require some dramatic changes to the way electricity is currently priced. Most rate commissions have traditionally viewed their mission as consumer advocates, keeping rates as low as possible. That role will have to change, as Energy Secretary Steven Chu noted at a Smart Grid conference in September.
Tue Sep 22, 2009 3:35pm EDT
By Ayesha Rascoe
WASHINGTON (Reuters) – As the United States’ power grid becomes more sophisticated, electricity rates will need to rise to reflect periods of intense energy use and to encourage consumers to change their electricity habits, U.S. Energy Secretary Steven Chu said on Monday.
Chu said currently most local electricity rate commissions view themselves as consumer advocates and try to keep electricity prices as low as possible.
“Hopefully that will evolve somewhat, so that they begin to fold in some of the real costs of electricity generation and electricity use,” Chu said at conference focused on creating a “smart grid.”
For instance, on hot summer days when air conditioning use is high, utilities would charge customers more for electricity. Chu said those who set rates should be more lenient with electricity generated from cleaner sources such as wind or nuclear power.
Chu also pointed out that during periods of low energy consumption, electricity prices would be cheaper for consumers.
I must admit to some ambivalence on this development.
- I wrote earlier about the need for a more robust transmission system, and my opinion hasn’t changed.
- Naturally, I’m excited about the favored position renewables should have in the new regime. (In theory; if nuclear-generated power and power from renewables are put on the same footing, the utilities will likely favor nuclear – despite not having a long-term storage facility for waste, and the fact that there has never been a nuclear generator built on time and on budget in this country. But I digress.)
- I’m all for encouraging consumers to make informed choices about their energy consumption.
- Reducing the use of “peaking plants” – among the costliest to run, and are only brought online to meet the periods of highest demand – is a good thing for consumers and producers.
However, I worry about the implementation, and the level of sophistication needed ot take advantage of the new system.
- I am particularly concerned about the elderly. Will some choose to disable their air conditioning, in the interest of avoiding the highest tariffs during peak consumption periods, and put their health at risk?
- I also wonder what the mechanism will be for deciding how much to charge, and when rates will be allowed to fluctuate.
Perhaps some protection is needed, similar to the Homestead Exemption, which would offset rates for qualifying individuals. Another option would be to give seniors credits that would be applied against their electricity bill, much as the HEAP program does for heating during the winter months.
So is the Smart Grid a good thing? Is it needed? Will it benefit consumers?
Here’s how you do a wind farm, Texas-style:
Texas completes $1 billion wind energy complex | Green Tech – CNET News.
One of the world’s largest wind farms is now operational in the area surrounding Roscoe, Texas, E.ON Climate & Renewables (EC&R) announced Thursday.
The series of 627 wind turbines providing a 781.5-megawatt capacity covers about 100,000 acres and four Texas counties. But it’s not an isolated wind farm per se, nor a uniform series of turbines.
The wind complex is a collaborative wind project with the community that included negotiations with over 300 landowners, and a mix of different turbines made by several companies including Mitsubishi, General Electric, and Siemens.
It’s an interesting approach. To date most wind farms have been relatively compact – at least as compact as very large, moving devices that require the free flow of wind around or through them can be. This project took a different approach, resulting in the largest wind farm in the US both in terms of geography and generating capacity.
Maybe this will stimulate other development in areas with commercial-scale wind, but resistance to large numbers of turbines in one contiguous plot because of concerns over noise, or impacts on wildlife.
A story in Environment magazine details a financing program being offered in Berkley, Calif., that helps homeowners pay for improvements that increase energy efficiency:
Many barriers exist to reducing energy consumption and increasing the use of renewable energy. One is high first cost (“up-front cost”), which is both a psychological and financial barrier for many people. Our research group from the University of California, Berkeley, has worked with a number of cities, initially Berkeley to address this barrier by making financing for solar power installations and energy-efficiency retrofits more appealing and accessible to property owners. Urgency around the need to cut emissions has inspired cities to apply old tools, such as municipal financing, to the new problem of reducing the amount of carbon in the energy supply.
Here is the gist of it: the city issues special purpose bonds to create a finance pool for energy efficiency retrofits. When a homeowners’ application is approved, the work is done. The city issues a check to pay for it and puts a lien on the home. A special tax is then added to repay the city with interest over a 20-year period, and these payments are tax-deductible, similar to a home equity loan. The program is self-supporting, so there is no exposure for the city in terms of expenditures from the general fund, and only homeowners that are approved by the program are subjected to the special tax.
To say that there has been a great deal of interest in the Berkley program would be a massive understatement. The vote to authorize the program passed with 81 percent of the vote, and enough applications for the entire initial program allotment of $1.5 million were submitted within the first ten minutes. As of summer 2008, the city had recieved over 1,300 inquiries from around the world about the program.
The authors are concerned about not just reducing energy usage, but especially in the need to retrofit existing housing stock in order to meet the state’s ambitious greenhouse gas emission reduction targets – hence the mention of solar installations. However, as they themselves point out, retrofitting solar photovoltaic (PV) or solar thermal heating upgrades only makes financial sense in areas that have moderate-to-high energy costs and where rebates or subsidies are available to homeowners, and only if compared with future energy costs that include an as-yet-unimplemented carbon tax. On the other hand, increasing the energy efficiency of homes pays of in all cases. One advantage of subsidizing such “efficiency-only” efforts would be the increased number of homeowners that could participate in such programs, since the average cost of upgrading to highly efficient furnaces, sealing against air infiltration/loss, and adding ductwork etc. to improve efficiency are much less expensive than a solar PV retrofit. These measures also have the benefit of making the houses more comfortable to live in.
Saving money and having a more comfortable home? As I sit here feeling the cold air drafting through my own 30-year-old house, I can’t help thinking that if such a program were available that I would sign up in a heartbeat.