NewEnergyNews: On The Road Reading - Is Net Energy Metering for Solar Power a Subsidy? The true costs and benefits of “the civil rights legislation for solar”

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT THURSDAY, Oct. 23:

  • TTTA Thursday-EVANGELICALS IN ‘CREATION CARE’ CLIMATE FIGHT
  • TTTA Thursday-ADVANCED WIND-MAKERS MAKANI, SHEERWIND READY DEMOS
  • TTTA Thursday-TEA PARTY BACKS SOLAR, ATTACKS UTILITY MONOPOLIES
  • TTTA Thursday-WHAT DRIVERS DON’T KNOW HOLDS BACK THE FUTURE
  • THE DAY BEFORE

  • THE STUDY: THE IMPACT ON REAL PEOPLE OF RISING POWER PRICES
  • QUICK NEWS, Oct. 22: SCHOOLS SAVE W/GEOTHERMAL HEAT PUMP SYSTEMS; BUILDING FOR NEXT-GEN U.S. BIOFUELS; ENERGY STORAGE MARKET EMERGING
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    GET THE DAILY HEADLINES EMAIL: CLICK HERE TO SUBMIT YOUR EMAIL ADDRESS OR SEND YOUR EMAIL ADDRESS TO: herman@NewEnergyNews.net

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    THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: WHERE U.S. OFFSHORE WIND WILL CONNECT
  • QUICK NEWS, Oct. 21: SOLARCITY TO CROWDFUND WITH $1,000 BONDS; NEW JERSEY LOOKS AT OCEAN WIND; SMART LED LIGHTING MRKT TO DOUBLE
  • THE DAY BEFORE THAT

  • THE STUDY: NEW OPPORTUNITIES IN TRANSMISSION
  • QUICK NEWS, Oct. 20: ELEVEN GOOD THINGS ABOUT SOLAR ENERGY; YAHOO BUYS WIND; SMART THERMOSTATS’ BILLION DOLLAR FUTURE
  • AND THE DAY BEFORE THAT

  • Weekend Video: The Ocean Speaks Out
  • Weekend Video: Adapting To The Inevitable
  • Weekend Video: The Joy Of Driving EVs Powered By The Sun
  • THE LAST DAY UP HERE

  • FRIDAY WORLD HEADLINE-HOTTEST SEPTEMBER EVER; WORLD’S HOTTEST MONTHS STREAK AT SIX
  • FRIDAY WORLD HEADLINE-EU WIND BEATS FOSSIL, NUKE ENERGY PRICES
  • FRIDAY WORLD HEADLINE-DESERTEC SUCCUMBS TO MIDEAST TURMOIL
  • FRIDAY WORLD HEADLINE-JAPAN UPS PUSH FOR GEOTHERMAL
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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  • Friday, September 14, 2012

    On The Road Reading - Is Net Energy Metering for Solar Power a Subsidy? The true costs and benefits of “the civil rights legislation for solar”

    On The Road Reading - Is Net Energy Metering for Solar Power a Subsidy? The true costs and benefits of “the civil rights legislation for solar”

    Herman K. Trabish, May 23, 2012 (Greentech Media)

    Southern California Edison (SCE) Manager of Customer Self Generation Gary Barsley said that at an important recent conference for the solar industry and the utilities interested in it, the number-one topic of conversation was net energy metering (NEM), the incentive some solar advocates call “the civil rights legislation for solar.”

    Utility and solar professionals asked, Barsley said, whether there is a valid way to quantify net metering’s costs and benefits and whether they total up to a subsidy for solar system owners or a good thing for all ratepayers. “The general consensus was that there isn’t a clear answer yet,” Barsley said, “but people are really interested in finding out, because solar is going to continue to grow.”

    There are 43 states with NEM programs. NEM benefits solar owners by allowing them to roll their meters backward for every kilowatt-hour they send to the grid, up to the point where their bills zero out. The return they get on the electricity they generate is the same retail rate they pay for what they consume.

    The conference chatter reflects an industry-wide concern over the future of NEM as theCalifornia Public Utilities Commission (CPUC) readies a decision, expected May 24, on the question of how to define the NEM cap. Underlying the legalism involved in the CPUC decision, as Barsley noted, is a debate between solar advocates and SCE, Pacific Gas and Electric (PG&E), and San Diego Gas and Electric (SDG&E), California’s three investor-owned utilities (IOUs).

    “There is a belief that the net metering tariff, the way it is applied today, gives an additional benefit or subsidy to solar customers and the price of that subsidy gets passed on to our other non-solar-owning ratepayers,” Barsley said. “As more customers get the net metering tariff, that’s more and more costs that shift to non-solar customers.”

    “The utilities haven’t provided any data on the increased costs,” said the CPUC Acting Director of the Division of Ratepayer Advocates (DRA) Joe Como, whose job is to stand up for the ratepayers the utilities are supposed to be protecting. NEM “cuts into their business and they’re not the ones getting the money,” he added. “They’re never upset when they’re receiving the money.”

    The CPUC decision will be on a legal question, but sooner or later the value of NEM will also have to be decided.

    Utilities are essentially arguing that of the three charges in an electricity bill -- one for power generation, another for transmission system expenses, and a third for distribution system expenses -- solar system owners should only be remunerated for the first and should have to pay for the wires they use when the sun is not shining.

    But the difference between the generation cost and the full retail cost of electricity is not necessarily a subsidy if the cost that is shifted to other ratepayers pays for benefits to them as well. Only a cost-benefit analysis would show that.

    “Our own rates group is trying do an evaluation,” Barsley said.

    Consulting firm Crossborder Energy principal Tom Beach has done one. It included a review of two previous cost-benefit analyses, one by Lawrence Berkeley National Laboratory (LBNL) and one by the E3 consulting firm.

    Both the Beach and LBNL studies, based on PG&E data, showed that if the higher value of the power not consumed by NEM customers is considered, the benefits to the utility are greater and the costs to the other ratepayers are offset.

    “The biggest component of the benefit is that when someone produces power at their home or business and exports it to the grid,” Beach said, “a power plant somewhere else on the system gets turned down because that power does not have to be produced.” That provides two cost savings, he explained -- the natural gas that doesn’t get burned and, as demand grows, the power plant that doesn’t have to get built.

    “The first kind of savings is called energy savings,” Beach said. “The second kind of savings is called capacity savings." Together, he added, “they’re 60 percent to 70 percent of the savings.”

    There are transmission and distribution system savings as well, Beach said. “When you run the meter backwards,” he said, “you’re putting power out to the grid that, as a matter of physics, basically supplies your neighbors. It doesn’t go very far.”

    That avoids a cost that provides another 10 percent to 20 percent of the benefits from NEM. “The utility does not have to generate power in a remotely located power plant and transmit that electricity over its wires,” Beach said. “A lot of power is lost in the wires and the transformers. It avoids those losses.” And, he added, “in the long run, it will mean we have to build less transmission.”

    Beach’s calculations identified a benefit from NEM of two cents per kilowatt-hour for commercial and industrial systems, a cost of two cents per kilowatt-hour for residential systems, and, in sum, no cost extra cost of any significance to ratepayers.

    NEM leverages private money for a public benefit, observed Como. “Most of the money being spent is going to be spent by the private sector. That creates jobs, stimulates business, promotes reductions of greenhouse gases, stabilizes energy costs, and diversifies the grid.” And, he added, “you have to be a little more visionary. Energy policy in California mandates that we are going to renewables.”

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