Wednesday, September 27, 2017

Great. How About Some Happy News For a Change?

Found this on The Tyee. Many Canadians aren't too familiar with the B.C. Hydro Site C dam controversy that has plagued the province especially during the Liberal Party of British Columbia reign of darkness and corruption. Relax, I won't drag you through it here either.

The endless debate may be rendered moot, overtaken by events:

Energy expert Tony Seba from Stanford University specializes in crunching numbers on disruptive energy issues. His most recent projections, detailed in a June 2017 presentation, illustrate just how far BC Hydro has shoved its head in the sand (or somewhere else).

According to Seba, the electrical grid itself is ripe for disruption. So-called peaker plants are brought online only to meet periods of high demand and are thus inefficient capital assets. Fully one-third of giant utility Consolidated Edison’s generating capacity sits idle 94 per cent of the time. That fragile model is about to be shattered by a disruptive new business approach akin to an Uber for energy storage.

Most North American energy consumers spend up to 50 per cent of their energy costs on what is called demand charges — paying higher prices for electricity at times of high use. New companies like Stem are now offering battery storage as a service to businesses. They install and maintain a battery behind your electrical meter with zero upfront cost. It stores electricity from the grid when it’s cheap and splits the resulting savings with their customers.

According to Seba, by 2020 this service would cost residential consumers about 20 cents per day for four hours of energy storage. Who wouldn’t want to pay $6 per month to cut their energy bill in half? This transformation may spell disaster for old school utility companies, since shaving peak demand will eliminate the most profitable part of their business model.

Then of course there are the plunging costs of solar energy. Back in 1977, solar cells cost about $77 per watt. They are now as low as 20 cents and dropping fast. The installed capacity of solar generation is doubling every two years.

A doubling every two years means that solar is on track to replace all installed global energy generation by 2030. Obviously there will be other sources of energy than solar in our future. However the overall economic trends for renewables are crushing for conventional energy sources.

We have heard a lot about grid parity, where solar generation costs meet or beat those of conventional sources. Deutsche Bank now believes that 80 per cent of energy markets are already there. Seba instead speaks of something he calls “God parity,” where rooftop solar generation and storage is cheaper than the cost of sending electricity over transmission lines — about four cents per kilowatt hour. At that point, even if utilities could generate electricity for free, they could not deliver it cheaper than consumers could make it themselves.

Would this not be a posterior puckering prospect for most utility companies? It already is. Power companies throughout the U.S. and Australia have been in pitched battles with their own customers for years over the existential threat from rooftop solar. Add in the recent availability of cheap battery storage and this may soon become a death spiral.

How close are we to this “God parity” of four cents per kilowatt hour? A new project in Dubai is generating solar at less than three cents a kilowatt hour. Tucson Electric just signed an agreement for a 300-megawatt solar plus battery storage project for only 4.5 cents a kilowatt hour. Incidentally, the former head of the Site C Joint Review Panel pegged the delivered energy costs of this 1950s era project at about three times that much if it ever gets built.

What to make of this? It certainly sounds promising, nay wondrous, if it comes to pass.  However there are powerful vested interests, such as those sitting on $27 trillion worth of proven fossil fuel reserves, standing in the way and they know how to buy power, political power, even in Canada. That's a global economy wrecking amount of money and the Fossil Fuelers know it and so do our politicians. That's why Schellnhuber warned the enthusiastic pols at the 2015 Paris climate summit that their goal of holding warming to 1.5C was viable but only if the governments of the world triggered an "induced implosion" of the fossil fuel industry.  The alternative, the path we're now on, is this.


Anonymous said...

the graph from your 'power curve' post a while back struck me then as odd, as it shows a linear incline in renewable capacity, which, from what i've been reading (including here) over the last few years, is not what has been happening. the post states it comes from a BP report; my guess is that they are still trying to downplay the threat to their business model that renewables represent.

not in disagreement with the general point of that post, though: still too little, too late.

Lulymay said...

We spend just over 3 months in Arizona each year just out of Yuma. We are surrounded by agriculture production and not far from where we live, there was a huge multiple acreage growing cantaloupe. That is all gone now as the property was purchased a few years back in order to install solar panels. As well, driving on I-8 between Yuma and driving about 80 miles out to where the highway divides north to Phoenix and east to Tucson, is another huge solar farm which seems to get bigger every year. There is also wind power on both sides of I-10 between San Bernadino and Palm Springs. All this power is added to the grid, replacing traditional dam produced power. The governor of California is charging ahead at a fast pace to develop alternatives for power, creating lots of work and improving the financial position of that State.

It wouldn't hear for some of these naysayers to take a look at what they have done in that part of the US and what they are continuing to do to reduce their reliance on old technology.

The Mound of Sound said...

Anon, there are some major international agencies that argue that fossil energy simply isn't going away and I think we may mislead ourselves by imagining what we may accomplish in advanced economies will necessarily be copied in emerging economies.

It's great to imagine a North America that is largely fossil energy free, save for transport fuels, but I'm not confident that will be tolerated.

Lulymay's insights on what is underway in Arizona and California are encouraging. Yet, as I've noted in this post and elsewhere it may take that "induced implosion" to clear the way for clean alternative energy. Fossil fuels, if we keep burning them as we're expected to do for the next several decades, could easily be the end of human civilization. Can we stop that powerful lobby? Let's ask Justin.

the salamander said...

.. Phenomenal update ! Thanks !

Toby said...

Rooftop solar is not cost effective where I live because, even though the panels are getting cheaper, other hardware and labour are getting more expensive. Added to that, credit for solar power to the grid is only 12 cents per kwh and only if the the power company (in our case, Fortis) wants it. I assume this to be similar throughout BC but can only speak for the quote we got. My interpretation is that the natural gas lobby has persuaded the government to keep solar, wind and geo-thermal non-competitive. Essentially, the government is frustrating change.

Trailblazer said...

Considering the author of this report I am unsure of it's bonafides.


Anonymous said...

Anyong...There are a few Mayors in the US who have managed to close down 240 coal mines. "Climate of Change" by Carl Pope and Michael Bloomberg.

The Mound of Sound said...

Thanks for the link, TB. Interesting.

The Mound of Sound said...

Shutting down coal pales in comparison to the Herculean challenge of shutting down oil and gas. We talk about a carbon tax to slow consumption and that's dandy talk coming from a political leadership that will do everything it can to avoid Schellnhuber's prescription, an "induced implosion" of the fossil energy industry. Look at the scales. On one side you have a vulnerable global economy. On the other, the very survival of human civilization. You might think this economy versus survival issue would be an easy call but not when you have the courage of our current political leadership. That should scare people, infuriate them, but obviously it doesn't.