Sunday, July 31, 2011

New rules for a changing landscape

How do you find an equitable solution to the solar question?

I try to understand the whole energy issue. I have studied the history of the electrification of America, from the Rochdale Principals to the first hydro plant purchased by James Buck Duke and his subsequent decades of philanthropy. I have studied The french physicist A. E. Becquerel who discovered the photovoltaic effect, Thomas Edison's pursuit of a DC electric grid and his loss of market and eventual dominance of John Westinghouse and Nikola Tesla's AC grid.

The reason I have done this is because I knew very little about electricity before getting involved in solar except that I like electricity and want to continue to have access to it.

I have been extremely lucky in that I have been invited to see a working hydro, coal and nuclear plant. For someone who grew up loving motors and horsepower this has been fantastic, a lifetime memory. I have seen the immense raw power that drives our way of life and keeps our economy running. The bone tingling hum of 125MW of hydro turbines is more impressive than an F15 fighter jet or a 1000cc motorcycle at 150mph. I like to think I get it, the grid is immense, powerful, complicated and difficult to maintain. All of the people who run and operate electrical distribution or generation should be proud of what they do and are greatly under-appreciated. I recently had a capacitor break on my condensing unit in July during a 99' day, I sincerely recognize that electricity is the life blood of South Carolina.

I am a solar guy, I always will be. What does that mean? It means that I have looked at all the energy generation methods available to us, including fusion and I have come to the conclusion that only one resource can eventually permanently satisfy our energy needs and that is solar power.

The earth is a closed system, the only thing entering our atmosphere is photons from the sun. We are told the earth is round so we have finite resources other than the sun. That being said I need to emphasize that I said eventually. Solar today cannot directly compete with the energy output of coal or nuclear. Both of these combined currently account for 70% of our total electrical power generation in the US. I believe we currently consume 374 Terawatts or 374 trillion watts annually. This is a lot of power!

Solar today accounts for less than 1% of that power. If we covered every roof in the state with today's solar we could get 25% of our daytime power from solar. So the technical challenges are huge. I recognize that SC is a nuclear state with heavy investments from the federal government in research and development. Does this make SC mutually exclusive when we talk about starting a solar industry, far from it I think it means we have a much higher threshold of integration before we have to worry about dispatchability or base load generation issues.

I also recognize we are asking for a new paradigm from our electrical generation and distribution companies. We want cheap, reliable, electricity all the time and we want you to shoulder the burden of research and development of the next generation of electrical production today at no cost to us the rate payers and members.

So how do we come together, me the rabid solar guy and the thousands of engineers and other professional who provide today's electrical needs? Luckily I think it is possible, with careful steps, open dialogue and economic development we can achieve a new set of rules for this changing electrical industry.

Solar in North Carolina has been regulated and mandated. What has this achieved? 1350 solar jobs created during the recession, $300m dollars of economic activity and less than 1% increase in rates for North Carolina. This seems to be a positive step towards the solar future I envision.

It all has happened with no true impact to the overall health and well-being of NC power generation and distribution companies. So I promise to take into account the history, economics and politics of our energy landscape if I can find willing partners to build a nascent industry in the state we all love and live in.

Monday, July 25, 2011

Where does all the money go?

The cost of energy; this will make some historians chuckle and hopefully make some of you angry.
It cost Saudi Arabia $5-$12 a barrel to extract oil from 1986 to until 2002, 16yrs of steady prices.

Emerging countries saw economic growth over that period only hampered by the currency bailout in the 1990’s. Developed countries saw an overall decline of 1% over 20yrs all caused by the banking fiasco otherwise it would have been 1% growth.
Here is a quote from today’s Wall St Journal, the bastion of pure capitalism...

“Several OPEC countries have boosted spending this year to create jobs and build more housing. They therefore need a historically high oil price to cover the increased costs. Merrill Lynch said in an April research note that Saudi Arabia now needs as much as $95 a barrel to defray the costs after announcing the equivalent of $129 billion in new spending.”

While the US borrows to soften the economic impact of the downturn, Saudi Arabia and other Oil producing nations are charging us to bribe their people not to have democracy.

Does Saudi Arabia actually get $95 dollars a barrel? No of course not, how could Exxon report the single largest profits in history if it all went to the Arabs.
Don’t get me wrong, I am a capitalist, I just want you to recognize when people talk about ‘transference of wealth’ they mean they want it to continue to go to them and not to you.
So the cost of solar today per energy unit produced is high if you do not take into account 100yrs of infrastructure support from Governments for fossil fuel; the energy industry when regulated has guaranteed profits and receives between $23 and $52 dollars in incentives from government per ratepayer, per year; and new Nuclear cannot be built without government loans, insurance and guarantees, private capital won’t touch it with a ten foot stick.

I think we need Nuclear for one more generation of energy so we can develop dispatchable renewables or storage; which no energy source today has other than pump storage via fossil or nuclear. None of this broaches the subject of environmental impact, which is becoming so abundantly clear that to deny it makes you appear extreme and out of touch. So the next time someone tells you that solar is expensive please ask them in relation to what?