Wednesday, March 21, 2012

from adversity comes innovation

Japan, Land of the PV- and EV-Connected Smart Grid

Reeling from its post-Fukushima power crisis, Japan is fast-forwarding projects to hook up plug-in cars, solar panels, grid batteries and willing consumers. Export markets await.

One year after Japan's great Tohoku earthquake, tsunami and Fukushima nuclear power plant disaster, the country is in an energy crisis. Since the accident, all but two of Japan’s 54 nuclear reactors, which supplied 30 percent of the country’s power, have been shut down. The country has responded with emergency curtailment measures that have left office buildings sweltering during summer afternoons, factories curtailing production to avoid blackouts, and lights darkened at great displays of Japanese prosperity like Tokyo's Ginza shopping district.

The crisis has spurred increased imports of liquefied natural gas (LNG) to run the turbines Japan needs to replace baseload nuclear power. But with no fossil fuel reserves of its own, Japan is desperate to secure its own energy future -- and green energy could be the ticket. We’ve seen Japanese industrial giants announce plans for hundreds of megawatts of new solar and wind power projects, and the government has introduced a feed-in tariff, set to start in July 2012, that analysts predict will offer a very generous 50 cents per kilowatt-hour for solar PV power and about 25 cents per kilowatt-hour for wind power.

All that new green power will require a massive investment in smart grid technology to manage it. That means that, after years of relatively slow investment in the sector, Japan’s smart grid market is set to explode -- and the Fukushima disaster has only accelerated that process.

ZPryme Research predicts Japan’s smart grid market will boom from $1 billion to $7.4 billion between 2011 and 2016, an annual growth rate of 63.8 percent. That adds up to $1.7 trillion over the next five years, much of it tied up in deploying the transmission and distribution infrastructure needed to repair damage from last year's disaster and bring lots of new wind and solar power online. Marketing firm Fuji Keizai predicts the domestic market for smart meters and other grid devices could grow more than five-fold over the next decade, reaching ¥491.3 billion ($5.9 billion) in 2020.

ABB, IBM, General Electric, Itron, Elster and Echelon are among the international grid giants targeting the market. We’ve already seen Tokyo Electric Power (TEPCO) announce plans for a ¥200 billion ($2.6 billion), 17-million smart meter deployment, under government mandate. The massive utility, which was responsible for Fukushima, is in the midst of a restructuring that could amount to a government takeover, and hopes its smart meter network could cut costs by $1.3 billion over the next 10 years. It hasn’t picked its vendors yet, however.

The Smart City as Microgrid

At the same time, Japanese industrial giants are fast-forwarding projects that ask solar panels, plug-in electric cars, smart refrigerators and hot water heaters and other household devices -- as well as a willing Japanese public -- to balance power use across neighborhoods, cities and entire regions.

Japan has launched four Smart City Projects around the country, enlisting homegrown giants like Toshiba, Fuji Electric, Hitachi, Panasonic, Mitsui and Osaki Electric, as well as international players like General Electric and Accenture. Japan is actually somewhat late to this game, compared to neighbor South Korea, as well as the United States and Europe, where dozens of these types of integrated, neighborhood-side energy management technologies are being tested.

But Japan’s smart cities have an additional task, driven by the imperatives of the country’s shaky power supply: they have to be able to run on their own power most of the time. For example, the Fujisawa Sustainable Smart Town (SST) project, a 1,000-home green-field development, has a goal of making the entire community self-sufficient 70 percent to 80 percent of the time, and even put power back into the grid if needed, Peter Fannon, vice president of technology policy for Panasonic in North America, said.

Panasonic, which Fannon called the Johnson Controls of Japan, is bringing its building energy management and efficiency technology to the project, as well as its integrated residential line, which includes everything from home fuel cells and smart appliances to actually building homes with green and recycled materials via its PanaHome business.

At the same time, Panasonic’s acquisition of Sanyo has given it solar power and energy storage technologies to bring to the table, Fannon said in a February interview. The company intends to replicate its SST model as a business in other parts of Japan and overseas, he added. It’s already working on several such projects, including the University of California at San Diego’s stimulus grant-backed microgrid project.

It’s not alone. Toshiba, which bought meter giant Landis+Gyr last year, is extending its existing strengths in generation, power grid and, yes, nuclear technologies into smart grid networks and integration work overseas. It’s planning a smart city project in Ibaraki, a town near Osaka, as well as in Stratford, Conn. in the United States.

Hitachi, another Japanese smart grid leader, has also been working with Panasonic on integrating their respective home energy management and community energy management platforms. It’s been doing work in Japan, as well as in Hawaii in a joint U.S.-Japanese smart grid project, and recently invested $30 million into Silver Spring Networks, the smart grid networking startup and Hawaii project partner. Mitsubishi is working on a series of smart grid/smart building projects in Japan, aimed at testing a combination of technologies’ ability to balance power use and generation capacity.

Big Batteries and Plug-In Cars for Energy Storage

Japan is already a quiet leader in wind power energy storage, with more than 100 megawatts of sodium-sulfur batteries from NGK, which holds a monopoly on the high-temperature, industrial-scale technology. But the post-Fukushima power crisis has also pushed it to seek out other sources of energy storage, whether they’re hot water heaters or the plug-in hybrid in the garage.

Panasonic happens to be including both forms of energy storage in its Fujisawa plans, Fannon said. Toyota is planning to build 67 solar-powered model homes that manage electricity consumption and tap into weather forecasts, using battery units from Toyota affiliate Denso Corp. Mitsubishi has rushed to market a system that allows i-MiEV owners to tap the EV’s battery for home power backup, and Nissan is testing out a system that stores solar power in the batteries of parked Leaf EVs.

Of course, so-called vehicle-to-grid networks lack the volume of battery-powered cars to prove whether or not they can make a significant difference to the smart grid -- but a power-constrained Japan seems one of the most likely spots for the technology to reach grid-parity earliest. Likewise, lithium-ion battery makers such as Panasonic and GS Yuasa are bringing building-scale energy storage systems out to market in Japan, possibly at prices that wouldn’t be supported elsewhere.

Saturday, March 17, 2012


Solar Man Hours per Kw installed

H.3346 Job creation and economic development Bill

Andrew Streit 3/16/2012

Based on local, regional and national figures a baseline projection of jobs created through the passage of H.3346. If the credit is applied for then economic development and job creation MUST have occurred.

Where are the jobs?

Since 2009 a number of dedicated individuals have tried to bridge the gap between affordable conventional energy sources and future energy supplies that will support our economy. Our reasoning has always been based on facts and the reality of South Carolina’s economy. We have a 95% fossil fuel based economy and that will remain for the next generation. What we want to see is research and development into renewable energy that will lead to an “All of the above”, energy mix. This report is being put together for the sole purpose of developing a base line projection for job creation in the solar industry in SC.

The statistical data provided came from three local businesses, residing in SC and doing work in the region, one North Carolina Company doing business regionally and national statistics from Solar Energy Industries Association (SEIA), North Carolina Sustainable Energy Association (NCSEA) and the Department of Energy (DOE).

Meeting America’s Energy Demand

• The U.S. is projected by some analysts to become the world’s largest solar market by 2014.

• Solar is already the fastest growing energy sector in the U.S. and by 2014 it will likely be the largest source of new electric capacity in America.

• In 2010 and 2011 alone, 41 new U.S. solar manufacturing facilities began operations across America, including in Arizona, Georgia, Ohio, Michigan, Mississippi, Pennsylvania and Tennessee.
• Continued industry growth enhances our energy security and diversifies our domestic energy portfolio.

Industry studies completed on jobs created per MW installed the low was 3.18, the high was 48 and the average was 13 installation jobs and 14 related industry jobs per MW installed. Based on the current caps for the tax credit ($35m) the estimated amount of installs will be worth $100m of total investment over 5yrs.

Residential $15m =3.03MW installed and 24,240 man hours of construction work
18180 man hours of white collar work

Commercial $35m =8.86MW installed and 53,160 man hours of construction work
44,300 man hours of white collar work

Large Commercial $50m =16.94MW installed and 33,880 man hours of construction work;
67760 man hours of white collar work

Today’s Cost on Solar compared to 2006

The estimated amount of MW installed base on the incentive with cap is 29.1MW. This would lead to the creation of 783 man hour jobs at the end of 5yrs based on nationally compiled data.
The ramp up period will lead to these jobs being weighted much more heavily to the latter part of the 5yr period.

Based on the conservative man hour projections we know that 123.2 full time jobs will be created over the 5yr period or 24 per year.
However, if the credit passes we expect 24 jobs year one, 55 jobs year two, 96 jobs year three, 244 jobs in the fourth year and 364 in year five. Using these projections we estimate that 175 will be created at the end of the third full year of the tax credit, 2015 if the credit is fully utilized. The steep rise in year five is created because of expected increased demand as the credit sunsets but may lead to a curtailing of hiring or even lay-offs after the credit expires.

With every Kw of installed solar, there are jobs that will be impacted and benefited. The equipment must be manufactured, currently there are 4 companies identified in the direct manufacturing of solar equipment in South Carolina, Refusol, Bluestar Silicone, Optek and Velux. 3M, Bosch, Florian and others produce materials and equipment in their business that is part of the average solar install. SE, Old Dominion and other trucking companies have hubs located in SC. 29MW of panels alone would require 2891 semi-trucks to transport these goods. The average 3 man crew of installers spends $40 per day on food and beer while working at an installation and another $65 dollars per day on lodging.

The equipment must be delivered to the site, storage and tools are needed to do the work. Shops, restaurants and hotels will be used by workers. Lawyers, accountants, engineers and bankers will be involved in all installations to some degree. Ancillary benefits are hard to track but should be noted.

In conclusion, the only way the tax credit can be awarded is when a South Carolina company spends money on their infrastructure. This will create jobs and in turn tie the company to the location for an extended period.
The credit is more of a deferral on taxes during construction and should make the company more profitable going forward while planting a small seed for the growth of the solar industry.

The minimum number of jobs created thru man hours is 123 for a brand new industry to come to the state with the potential for 783 jobs if all of the economic benefits are utilized.

Tuesday, March 13, 2012

Solar moves forward carefully and thoughtfully in SC

Man what a good day I had! It didn't start that way, I was a nervous wreck about our solar bill going to the Senate finance sub-committee and getting scuttled. Amendments were swirling around and everyone seemed to be looking for a way to stop the bill. Staff and Senators actually crafted a good bill. It takes the best of surrounding states legislation and makes it better. I am proud of the bill as written. Here are the main components as of today:

$8m dollar cap for 2012 and 2013 decreasing to $6m and $5m in subsequent years.

Allocations to business segments of
15% residential
35% commercial
50% large commercial

3 equal installments on the credit.

the ability to parcel out the tax credit among owners disproportionately if one piece is too big.

The credit sunsets in December of 2016.

This bill will create jobs, economic development and build the solar industry here in SC. We have two major hurdles to get this passed. Please call a SC senator and tell them you support H.3346 as written.

Sunday, March 4, 2012

Bring the money, everything else will follow

Financing the second decade of the century

Energy and Banking are the grease of the American economy. When I entered the solar arena I had no idea how truly integrated our economy was. The federal govt is critically woven in the fabric of the private sector and vice versa. Consider that without the US military fossil fuel transportation and mining likely could not happen at a scale to support our current needs. Or without the underwriting of Nuclear plants there would not be a 20% energy infrastructure based on Nuclear energy. Of the five largest nuclear research facilities in the US all are federally funded.

Fluor, which is a huge construction company with major offices in SC, had its CEO attend the SC energy and jobs forum that I attended. He is likely a very savvy CEO but he said that the federal government should have less direct impact on the private sector. On the surface this is a wonderfully Ayn Rand concept, until you look at Fluor’s, client list; US Army, Afghanistan, Camp Adder, Iraq, CETAC I and CETAC II which has no budgetary numbers attached to it, but the 22 tasks are all encompassing. I would expect billions of dollars in taxpayer contracts. I applaud Fluor for supporting the US military and for providing 1000's of jobs. Fluor is a good company, I am glad they are working in Kazakhstan on the largest, most complex oil/gas separation facilities to date until you look at the leader of Kazakhstan, Nursultan Nazarbayev. Nursultan, who is the ultimate Oligarch of the post-Soviet era. While many of his stances place him in balance between the East and West, he has modified the constitution to allow himself to run as many times as he likes and is suspected of syphoning in excess of $1billion US to himself and family members. We need this investment and good companies running the show but..

My point being we live in a complex, interwoven world. It is easy for multi-national companies and US energy monopolies to use their political heft to influence public policy and energy decisions. When the Utilities say they are working solely in the interest of protecting rate-payers we should assume that is correct. We should also remember that SCANA is the only SC based utility company in the fortune 500 and they are beholden to their shareholders too.

While utility companies have 50yr generation plans to provide reliable, affordable energy, we as a state and country have an economy that runs in quarterly cycles and 15 minute news cycles. Investment capital is available and waiting to provide safe returns to investors through private solar power plant ownership. This would move the risk and cost of ownership away from utilities while they focus on Nuclear expansion and create much needed jobs and liquidity injections into a slowly recovering state economy. Capital likes sure bets, those sure bets are currently outside of SC. How do we entice those same people to invest in infrastructure in the future when we have not created the relationships in solar and RE where they are actively investing today. I am a solar guy, this stuff is not what I imagined I would be talking about at 6yrs in, but it is a way to bring solar to everyone over time and the more I research energy in SC the more I realise if we don't monetize it, solar will not become a viable energy source in time for the end of fossil fuels. I for one don't want to contemplate an America post fossil fuel without viable alternatives. Do you?