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Tag Archives: electricity

What a waste: an end of year lament

By Dave Elliott

In a post-Xmas pre-new year Scrooge-type austerity mood, I worry about the money we are wasting on energy. If you look at Sankey diagrams of energy flows from primary resources to final end use, you will see that for many countries around half the raw energy input is wasted in the conversion process, most of it being rejected into the atmosphere as heat, for example from steam-based fossil and nuclear generation systems.


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Greenpeace 2030 UK energy scenario

By Dave Elliott

85% of UK electric power could be supplied from renewables and low carbon sources by 2030, says a report for Greenpeace, produced by Demand Energy Basically it looks at a Greenpeace high renewables 2030 supply scenario to see if it can meet demand over the year, given demand peaks and weather changes – it uses 11 years of hourly weather data. And crucially it tests whether it is possible to meet a large part of the heat demand from renewable electricity, given that ‘even modest levels of heat electrification result in large increases in peak electrical demand’. It concludes that it is, but that this will only be possible if domestic heat demand is reduced dramatically, by near 60%. That is seen as vital since ‘electrification increases the size of demand peaks on the electricity network; while decarbonisation (via renewables) in turn decreases the predictability of supply intended to meet those (now increased) peaks’. And so ‘if electricity is the medium by which a reliable and clean energy future is to be delivered, then heating demand reduction must be achieved alongside heating electrification’.

On the supply side it sees wind energy growing from 13 GW to 77 GW, 55 GW offshore, 22 GW onshore, with PV solar rising from 5 GW to 28 GW. There is also 8 GW of tidal, some biogas use (but no biomass imports), including around 20 GW of local CHP (fired with gas and some biomass), but no new nuclear and no CCS, just around 20 GW of gas CCGT and some demand side management (DSM), to help with balancing. However, interestingly, domestic DSM only ‘plays a modest role in mitigating periods of deficit. Fewer than 7 periods in which total demand shifting exceeds 3 GW occur on average each year’. That is partly because DSM is as yet in its infancy and the report focuses on established technology. But it does report some interesting DSM developments in the industrial sector – where Flexitricity is the first and largest UK provider of national supply-demand balancing services.

However it notes the technical, administrative and logistical feasibility of interacting with corporate and large scale power users in this way has not been matched, thus far, in a domestic setting’. That would require National Grid to negotiate contracts to provide demand reduction at peak times with every UK household, and communicate directly with each when needed. Smart meters might allow that, but are still in their trial phase, with many issues to be resolved.

You could say the same of the electric heat pumps that the report seems to see as a key domestic heat supply option; only meeting 25% of the heat demand, not the 90% envisaged in the DECC 2050 High Renewables modeling, but still a lot more than now. Why not also look at green gas for heating (including biogas and Power to Gas conversion) and to the gas grid for supply? It’s already there, with much more capacity than the power grid! While the report does propose some CHP (oddly seen as inflexible) for heat and power, there’s no mention of solar heating and large community-scaled heat stores (as used now in Denmark), and overall it seems overly focused on electricity.

Rather than offering a clever way to balance surpluses from variable renewables, by being able to ramp down power production and ramp up heat production for storage, for use when heat demand was high, CHP is simply seen as producing too much heat in summer. So there is only around 20 GW of CHP included, compared to over 52 GW in the recent Transition Pathways’ Thousand Flowers scenario. And, on the issue of the inevitable occasional electricity surpluses from its large variable renewable capacity, rather than portraying this as a problem, why didn’t it look more to Power to Gas (P2G) to turn it into a solution – making green gas for grid balancing as well as for heating and transport use? It only talks of using P2G hydrogen for vehicles. And why not look to 2-way supergrid links for balancing? As it is, ‘exports only occur once any surpluses have been utilised to the greatest possible extent domestically’, with the level of interconnector exchanges seen as only around 12 TWh p.a. That seems odd, since there is a lot more excess available (apparently near 43 TWh on average) and there may be times when exports of surplus can earn a lot of money, and be more useful/valuable than P2G conversion or other types of storage, helping to balance the cost of importing more when needed at other times. DECC’s 2050 pathway had 30 TWh of imports/exports. It’s a little odd that supergrid links are left to one side, playing a relatively small role in this study, since an earlier Greenpeace report talked them up as a key EU balancing option: 

Trying to get to 80% renewables by 2030 is pretty demanding. The Pugwash high renewables pathway, on which I worked two years back, only reached around 80% by 2050, pushing it quite hard, with around 100 GW of wind and 35 GW each of PV and tidal: However, that excluded nuclear, long gone by 2050, had 70 TWh p.a of supergrid imports/exports, and only looked to 40% energy savings. By contrast, the new 2030 Greenpeace scenario still retains some left-over nuclear (Sizewell B) and goes for much higher levels of energy saving – and by 2030. That’s a bit of a stretch. It’s akin to the Centre for Alternative Technology’s pioneering Zero Carbon Britain 2030 scenario and adding to the list of challenging and visionary high renewables scenarios:

What it adds in particular is an interesting and helpful test of the operational viability of an ambitious energy mix, although, sadly, it does not provide an economic analysis, arguing that costs are changing too fast to make that useful. While that may be true (and the report does present some examples of falling costs), the absence of full costing may weaken the impact of the analysis – just at the point when the falling cost of renewables ought to be giving them a better chance. Even so, it’s a welcome addition to the pile of studies making the case for renewables, with balancing, as a technically and operationally viable set of options.

* Economic and financial support issues are to the fore in a new global Greenpeace scenario, which I will review shortly. It looks to getting 100% of all energy from renewables by 2050, at no extra net cost, given the fuel cost savings:

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Plenty of renewables – and they can be balanced

By Dave Elliott

Is there enough renewable energy to meet global needs and can the use of variable sources be effectively balanced?  Recent reports say yes on both counts. In terms of the total resource, a GIS-based study of land/sea use/availability has put the total 2070 global potential for renewable electricity at up to 3,810 EJ, led by solar PV, with about a third of the PV being on buildings. The total estimated resource was roughly in line with most other global renewable studies, like that from the IPCC, and well above likely total global electricity demand, put at around 400 EJ: (more…)

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Burning Answer

By Dave Elliott

In his powerful and eloquent new book, The Burning Answer, which seems to be a response to Mike Berners-Lee’s book on climate change, The Burning Question, Imperial College Professor of Physics Keith Barnham contends that, despite our much higher energy demands now than in earlier periods of human evolution, our sun can provide all our primary energy needs again. Solar technology can save us from the threats of global warming, diminishing oil resources and nuclear disaster, if we take the necessary action.


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Green energy for Africa

By Dave Elliott

The International Renewable Energy Agency says that Africa has the potential and the ability to utilise its renewable resources to fuel the majority of its future growth with renewable energy. It adds ‘doing so would be economically competitive with other solutions, would unlock economies of scale, and would offer substantial benefits in terms of equitable development, local value creation, energy security, and environmental sustainability’.

That seems a bold claim both technologically and economically, and also politically. But the renewable resource is very large (for solar especially) and the technologies are getting cheaper fast. However, with 54 very unevenly developed countries on the huge continent, whether the political and institutional cohesion is there for a co-ordinate push is  less certain. (more…)

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Smart meters and smart grids

By Dave Elliott

The newly emerging energy system will need new grids of various types. In my previous two posts I looked at international low-loss High Voltage Direct Current supergrids, and suggested that though they may well be developed in the years ahead, the process could be uneven and incremental, starting with local/national smart grids designed to aid local balancing of variable supply and demand. (more…)

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Supergrid (2) – could it work?

By Dave Elliott

In my previous post I looked at the potential and problems of supergrids. The basic idea is that, since, in various parts of the EU, there will be times when there is excess electricity generated from wind etc. over and above local demand, this excess can be shunted to regions which are short and have high demand, using low-loss HVDC supergrids. Would it work on a large scale?


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Green pricing issues – how long can a few carry all?

One of my earlier posts discussed how Austin Energy, the #1 US utility in selling renewable electricity, had posted a price for its latest GreenChoice batch of renewable electricity such that it was too high for any more takers. The major issue coming to the fore is that at some point, a small percentage of residential and commercial customers cannot pull along an entire city, much less a state or a country, toward high percentages of renewable energy all by themselves.

In trying to find a way to meet its goals, Austin Energy changed its standard 10-year fixed price (at 9.5 cents/kWh for GreenChoice charge + a standard 3.6 cents/kWh) offer for renewable energy by adding a 5-yr option as well (at 8.0 cents/kWh for GreenChoice charge + a standard 3.6 cents/kWh). Now, after no one is buying the latest batch of green pricing, the charged price has now come under scrutiny by some local experts, saying that in fact Austin Energy is not open enough about how it calculates this price. So in attempting to come to a solution, a task force has been set up to come up with a solution. Additionally, Austin Energy is now proposing charging 5.7 cents/kWh and a 5-yr fixed price for the Green Choice charge.

A local paper covered the issue well, see this Austin Chronicle article. Also see a website, PowerSmack, organized by a local energy consultant to discuss these issues.

Much of the consternation over the price for the green electricity stems from the electric grid transmission charges that are applied to much of the wind power coming from West Texas through a limited set of transmission lines. The state of Texas has a plan in motion to build more transmission lines to relieve this congestion, but the solution is 4-5 years out during the siting and construction of the transmission lines. So, we wait for the transmission lines, but this is not a unique problem, and further expansion of renewable energy in Texas and other locations will face similar issues. Even with the transmission constraint charges, reports are showing that overall electricity prices in Texas are actually lower

But as Austin Energy general manager Roger Duncan states in the Austin Chronicle article and in regard to the GreenChoice program, it was intended to stimulate the market for renewables and not continue forever. The city council of Austin (who officially approves pricing for electricity that Austin Energy) is now coming to grips with the unavoidable fact that to meet goals for low carbon emissions (and we really haven’t even started) and high percentages of renewable electricity, sooner or later everyone must contribute in one form or another. These levels of contribution by poor, middle class, rich, environmentalists, industrialists, greenies, turquoisers, left, right, up, down and everything in between is what the future is all about. The future is being determined on a local level by a small group of people representing just under 1 million citizens in Austin, TX USA, and perhaps on a global level this December in Copenhagen by thousands of world representatives representing almost every country in the world.

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Austin Energy (leading green power program in US) struggles with costs of more renewables

Austin Energy is the municipal utility of Austin, Texas that sells the most renewable energy in the United States, and it has done so for the last several years. They sell the renewable power via their voluntary GreenChoice® program, and have done so since about 2000. However, as they strive to increase the percentage of renewable energy in their total mix, the latest batch of green power is not selling as it is almost 80% higher cost than the last.

To get residential and commercial customers to sign up for the renewable power that was more expensive than the normal rate, Austin Energy sold the GreenChoice® power using a fixed charge for ten years. This was the selling point that caused the program to sell out for the last 8 years. The customer gets 100% renewable power at a fixed price that can hedge against rising natural gas prices that dictate the marginal cost of electricity in Texas. And since 2000, the natural gas price at the wellhead have risen from approximately $2/MMBtu to the range of $6/MMBtu, even though as of this writing the price is below $4/MMBtu.

Austin Energy sells electricity based upon two different charges based on a $/kWh basis. One charge is applied to all customers, but different for residential, commercial, and industrial customers and covers many of the costs of distributing electricity. For residential customers during the Summer, this base charge is 3.55 cents/kWh for the first 500 kWh consumed in a month and 7.82 cents/kWh for each kWh over 500. The second charge is the fuel charge that fluctuates as necessary to cover the costs of fuel, and the GreenChoice® charge replaces this fuel charge for those who sign up. Listed here are the charges for the GreenChoice® “fuel charge” for all of the batches of renewable power sold by Austin Energy:

GreenChoice® “Fuel Charge”
Batch-1 Green Power Charge:       $ 0.0170 per kWh
Batch-2 Green Power Charge:       $ 0.0285 per kWh
Batch-3 Green Power Charge:       $ 0.0330 per kWh
Batch-4 Green Power Charge:       $ 0.0350 per kWh
Batch-5 Green Power Charge:       $ 0.0550 per kWh
Batch-6 Green Power Charge:       $ 0.0950 per kWh

and for comparative purposes, the fuel charge since 2000 that is replaced by the GreenChoice® charge:

Austin Energy “Fuel Charge”
Jan 1999 – Jul 2000        1.372 cents/kWh
Aug 2000 – Oct 2000        1.635 cents/kWh
Nov 2000 – Jan 2001        2.211 cents/kWh
Feb 2001 – Dec 2001        2.682 cents/kWh
Jan 2002 – Jun 2003        1.774 cents/kWh
Jul 2003 – Oct 2003        2.004 cents/kWh
Nov 1, 2003 – Dec 31, 2003        2.265 cents/kWh
Jan 1, 2004 – Dec 31, 2005        2.796 cents/kWh
Jan 1, 2006 – Dec 31, 2006        3.634 cents/kWh
Jan 1, 2007 – May 31, 2007        3.343 cents/kWh
Jun 1, 2007 – Dec 31, 2007        3.044 cents/kWh
For electric bills received beginning Jan 1, 2008 3.653 cents/kWh

Batch-5 of GreenChoice® power was sold out during 2008. Batch-6 is now open for voluntary subscription, but is not selling. Recall that this charge substitutes for the normal fuel charge that is currently 0.03653 $/kWh, so the GreenChoice® charge is 2.6 times larger than the comparable fuel charge. Therefore, considering the base charge plus the fuel charge, a residential customer signing up for the latest batch of GreenChoice® power will pay 13.05 cents/kWh for the first 500 kWh, and 17.32 cents/kWh for each additional kWh – all at a fixed price for 10 years. Comparatively, a non-GreenChoice® residential customer power will pay 7.2 cents/kWh for the first 500 kWh, and 11.5 cents/kWh for electricity after the first 500 kWh in the month.

This difficulty in selling the #1 renewable power program in America provides useful data on how people perceive the value of renewables. Before Batch-6 of GreenChoice®, the only renewable energy that Austin Energy was purchasing was wind power generated in West Texas. As of this year, Austin Energy has made power purchase agreements to buy power from 100 MW of biomass generation and 30 MW of photovoltaic solar power from land just to the east of Austin. Due to the increase in wind turbine prices leading up to the middle of 2008, most of the new wind farms constructed in 2008 were built at significantly higher cost than those just a few years ago – when usually everyone expects costs to decrease due to better technology. In fact, data from the Energy Efficiency and Renewable Energy office of the US Department of Energy clearly show that wind turbine prices bottomed out in 2001 at approximately $1,400/kW and were over $1,900/kW in 2008. However, the price of power ($/MWh) is still decreasing.

All of this means that renewable energy may be becoming more expensive and some of the easy options that people thought were expensive in the past were not. This also brings to the forefront the need for conservation of electricity as using half of the electricity at twice the price is still the same expenditure. The model of decoupling electricity sales from utility profits is a good start that many utilities and regulatory bodies have made. Let’s see what other good ideas we can come up with. “Cash and prizes” seem to work for gameshows, maybe it could work for “energy conservation games!”

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Why We Should be “Flip-Floppers” … with regard to the Cost of Electricity

Today, prices for electricity are based almost entirely, over 90%, on the capital and fuel costs of power plants and transmission lines. The other small percentage of the price of grid-based electricity is based upon the ancillary services that coordinate the activities on the grid. Through the grid operator, consumers pay these ancillary services such as enabling new generation to come online or go offline on short notice (minutes) and demand response mechanisms where consumers can decide to get paid to turn off large loads, such as factories and commercial buildings.

The push for renewable energy essentially needs to flip the current price relationship to 90% for ancillary services and only 10% for fuel and capital. Well, getting the cost of electricity to be < 50% based upon fuel and capital costs may never happen, but because the fuel for renewable is free (sun, wind, geothermal heat, waves, etc.), certainly the fuel cost can be minimized and brought near zero. Many people believe this is why a grid based upon renewable electricity generation will ultimately be cheaper than the current grid based upon fossil fuels. It is not obvious that intermittent electricity with free fuel will be cheaper, but a good goal is to keep the price of electricity the same while taking the fuel costs to zero. Furthermore, electricity that is twice as expensive will not be a new burden if we design our buildings and use patterns to consume half of the electricity.

The reason that a renewable electric grid will not necessarily be cheaper than a fossil fuel grid is that the intermittent nature of renewable generation forces two basic actions to happen – both of which increase costs:

1) People adapt themselves to the grid – people can adapt their habits and usage of electricity to the output profile of renewable generation, and

2) People adapt the grid to themselves – we can adapt the electricity output profile of renewable generation to our electricity usage habits.

Both actions, or strategies, will happen simultaneously in an undetermined proportion to be discovered in the future. The first item in the list above means that people alter their schedule, which we could assume is now optimized for their leisure and income, and any changes to that schedule mean someone will have less leisure time or income, or both. No new gadgets necessarily need to be added to the electric grid except the actual generation systems themselves. The second item above implies that we install gadgets such as storage systems along with smart appliances and meters such that we can essentially program these new infrastructure items to shift and store electricity from when we don’t want it to when we do want it. Obviously, manufacturing, installing, and operating these new gadgets will cost money that is not currently being spent – although many regions of the US are in the early stages of moving to the “smart grid” and “smart home” systems that will define how much the grid will adapt to people. Ideas go so far as to even include plug-in electric vehicles in the smart grid concept, marrying devices that can be used for transportation and home electricity usage.

The future cost of electricity from a high renewable scenario is unknown, but don’t expect it to be cheaper. It may or may not even be more stable as stability costs money. Although, there are reasons that future electricity prices may be more variable on short time scales (minutes to hours), they will likely be with less long term impacts (years) for the magnitude of the variability as compared to natural gas-based generation, for example.

So we need to “flip flop” the composition of electricity prices from being primarily based upon fuel to being primary based upon the capital costs of renewable and storage systems with free fuel. We need to get these renewable systems on the grid so we can learn sooner or later how to best integrate them into our grid … and our daily lives.

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