Wednesday, December 19, 2012


You don't need to speak French to appreciate this
My coworkers and I spend a lot of time discussing TV shows, movies, music and P.I. stories. Brock has been pushing Let's Go to Prison for the last two months. I just finished it. It's a surpisingly good flick considering the subject. Check it.

My buddy Brian works in special effects. He's worked on high level stuff. He recently suggested The Core. The Core is apparently so bad it's good. I've yet to verify this recommendation but I intend to immediately.FOLLOW UP: Yeah... Awesomely Awful! Watched it twice it was so bad.

I grew up on film. One of my first memories was at a drive in theater where my dad worked. He stopped by to check on me between shows in a double feature. Good times. My dad and I never stopped going to movies together. If I had a nickle for every movie we snuck into I'd have a lot of nickels. In all the years we snuck into movies we only got caught once. Good times.

When I was in college I had a neighbor who was a movie afficianado. He had nothing but Academy Award winning movies/performances on VHS. That's how I got into The Godfather type films...

If you really want to see a good film just google Academy Award Best Picuture and start with the 60s. This is how I found Midnight Cowboy, Raging Bull and The French Connection. These movies give you insight into things. They make jokes and stories make sense. So.... If you haven't seen one of the movies on the list do a couple shots of your favorite spirit and watch it. If you don't like it try the next. And so on... If you don't hit a film you like within 3 tries you don't need to bother with film. Some people don't like sex. Life's a fucking mystery. I don't bother with people who don't like movies or sex. They don't have much to say that's interesting to me.

Actual News

China to Promote Solar-Power Consolidation


Energy Supply Policies need Complementary Energy Demand Policies

These ladies are very upset with the Memo Situation
National Grid: More than 10GW of solar will overload UK grid

The Germans used the 70% rule as a quick and cost-effective way to defer this 10 GW problem the National Grid is so concerned about. You'd think the big brains in the National Grid office would have heard of the 70% rule? I'm thinking the memo system in Europe must be completely fucked at the moment because nobody seems to be getting their messages. But I digress...

The secondary solution to the over-production problem is to increase daytime demand. You do this by installing smart appliances that delay start up or shape their demand in coordination with solar production. As an added bonus the smart appliance will also seek out excess wind or thermal production in the dead of night. A smart appliance could also help maintain stable system frequency by shutting down when frequency dips below some critical threshold. These smart appliances may sound magical but it turns out we can put a lot of functionality on a $10 chip. It's great that the Brits and the Germans and the Japanese and Australians et al. have Energy Supply Policies... All we need now is for everybody to realize we need complementary Energy Demand Policies. 

Tuesday, December 18, 2012

Goals for the US Solar Market

1. Phase out the ITC and assorted support mechanisms smoothly
2. Transition from net-metering to value based tariffs
3. Implement solar equipment standards that help reduce integration costs
4. Implement appliance standards that help minimize integration costs
5. Eliminate subsidies to unsustainable solar constituencies
6. Harmonize best practice installation standards nationally
7. Establish a Temporary Loan Guarantee program that supports Residential PACE loans
8. Get new leadership at the DOE and SEIA that pushes a sustainable solar agenda
9. Establish an international solar free trade agreement

Gimme Some Money

EPIA demands Commission take action against member states for renewables cut-backs

I'm no fan of retroactive cuts but there's a lesson to be learned here. If the industry self-regulated itself we wouldn't see these steep subsidy dropoffs. Why has the industry chosen short term gains over sustainable policy? Hmmm... Gonna have to go with greed on that one.
The industry should look at itself in the mirror and eliminate those participants who aren't in the game for the long haul. The players that are left will me much more interested in balanced long-term policies.

Saturday, December 15, 2012

The Futility of Utility

Persistence is Futile you goofy mooks
Even with decreasing PV prices, producing equipment that generates solar power at prices competitive with electricity generated from fossil fuels remains a challenge for manufacturers. This is especially true for utility-scale installations, as wholesale purchasers of electricity will compare the cost per megawatt hour of solar power directly with the cost of power from other sources. The cost-competitiveness of solar power is better in the residential and business markets, as the relevant comparison is with the delivered cost of electricity rather than with the generating cost. But even if the popularity of solar systems grows, falling equipment prices are likely to further challenge the profitability of manufacturers and interfere with efforts to sustain a solar manufacturing base in the United States.
CRS Report, U.S. Solar Photovoltaic Manufacturing: Industry Trends, Global Competition, Federal Support - Michaela D. Platzer - June 2012

These graphics are from the SunShot Solar Vision Study. The question that keeps me up at night is why has the DOE squandered so much effort subsidizing Utility projects if this is really where they see the cost structures of Residential, Business and Utility projects going? As the second graphic shows, the LCOE of utility is lower than the R&B projects but not by much. Or to put it another way, the R&B projects may be marginally more expensive than Utility projects but as previously mentioned they are competing against retail prices rather than wholesale prices. R&B projects may have a minor price disadvantage on the front end but they have a large competitive advantage on the back. As explained multiple times:
  • A properly designed and operated Residential or Commercial project will use most of its production to offset retail purchasess. Any excess power can be sold into the wholesale market at prices below those of a utility project.
So again, why subsidize Utility projects when we can see that this method of deployment will become uncompetitive and obsolete. You'd rather subsidize R&B projects exclusively because these markets reach sustainability and can be de-subsidized. To me the whole DOE Loan Guarantee program appears to be a political excercise of some sort. One slice of pork for you and you and you and you. What about me? And one for you. But I'm a Vegetarian. I know... That's Vegetarian pork. It's a mystery to me why the NREL et al. type folks go along with this plan.

Wednesday, December 12, 2012

A Quick Thought on Solar Insurance

Why guarantee modules for 25 years? Why not guarantee production up to payback? For example, if payback comes in X years go ahead and buy an insurance product that guarantees X years of production. This doesn't prevent module manufacturers from building 25 year modules. It instead reduces the cost of insurance by focusing on eliminating risk only up to payback. Hmmm...

Parkinsons' Laws and Beyond

Parkinson's Law was first articulated by Cyril Northcote Parkinson in a humorous essay published by The Economist back in 1955. Cyril was a man after my own heart. The essay is a quick and highly recommended read. The Law’s first formulation was simply.

·       Work expands so as to fill the time available for its completion.
A more generalized version of the original goes something like:

·       The demand upon a resource tends to expand to match the supply of the resource.
A notable corollary to Parkinson’s Law is the Bennett Hypothesis which was first put forth in 1987 by then Secretary of Education William J. Bennett. The Bennett Hypothesis comes out of this controversial scribble in the New York Times.

·       If anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase....Federal student aid policies do not cause college price inflation, but there is little doubt that they help make it possible.

The Sec Ed festered the nest on a hunch but solid research has come along to back him up. For an in-depth analysis of the Bennett Hypothesis see Introduction to the Bennett Hypothesis 2.0 by Andrew Gillen.

The solar corollary to Parkinson's Law and the Bennett Hypothesis is a two parter.

Part I, Return of the Parkinson:

·       Solar subsidies tend to set the price of solar. Who’s gonna bell the cat?
Setting subsidy levels correctly is an essential element of a successful subsidy program. The basic idea is that if you know the cost of a product (within reasonable bounds) you can set the subsidy such that it delivers the desired price. The trouble is that setting subsidies is a dynamic process in the best of times and solar has been an extraordinarily difficult product to price over the last 8 years. Solar prices dropped regularly year over year for several decades until 2003 only to rise consistently from 2004 through 2007 and then nose dive from 2008 through 2012. How does one subsidize this sort of a product? It’s a magician’s task – a game of pin the tail on the donkey.
The difficulty of setting subsidies over the last 8 years in the solar industry led to many markets setting reasonable subsidies for the 2004 to 2007 time frame which became over generous subsidies from 2008 on. This generosity led to development booms and overextended budgets. The busted budgets coincided with macroeconomic shit from the Credit Crisis which in turn led to sharp subsidy curtailments most notably in Spain. When you aggressively de-subsidize an industry before it’s ready to compete you kill that industry. Historically, many de-subsidized industries have seen this play out. The markets in Spain, Portugal and Hungary are case studies in how this part of the story applies to solar.
Part II, Parkinson’s Curse:
·       Subsidies create constituencies (AKA: BUREAUCRACIES) that work to lock in subsidies. Complex subsidies create complex constituencies.
Solar subsidies have generally been applied in Tiers or categories The idea behind categorizing incentives is to counterbalance economies of scale, favor specific technologies for growth and/or incentivize some social good such as environmental rehabilitation or local employment.

In FiT markets such as Germany, Italy and Australia the Tiers are generally structured like so:
·       Small systems: A cents/kWh.
·       Medium systems: B cents/kWh.
·       Large systems: C cents/kWh.
·       XL systems: D cents/kWh

In Quota markets such as the US the Tiers are more confusingly structured.
·       Small systems may get X cents/kWh and/or net-metering and/or a buy down subsidy in the form of a direct payment or a tax credit.
·       Medium systems may get some combination of the above plus depreciation and/or accelerated depreciation.
·       Large and Very Large systems get some portion of the above plus grants, PPAs, RECs and RPS carve-outs.

Both simple and complex subsidy Tiers inherently result in small, medium and large solar constituencies – neighboring rivals with each their own rules and advantages. It bears repeating here that the incentives provided to each Tier are meant to be relatively balanced but in practice things never quite balance as expected.

We also must remind ourselves that the First Principle of solar subsidies is to jumpstart a sustainable competitive market. With any solar subsidy scheme the plan from the start is to eliminate subsidies over time in a smooth and predictable way as the underlying product becomes more competitive. The subsidy reduction plans have worked in Germany, Italy and Australia. The plans have faltered in the US. What's the difference? In a word - BUREAUCRACY. Some markets leash their solar bureaucracies and others allow them to run wild.

Leashed Bureaucracy

In Germany’s case, leashing bureaucracy meant moving from a Six Tier FiT system to a Four Tier system, eliminating loopholes/abuses and steadily reducing the subsidy rates over time. Italy and Australia are both following the same basic course – fewer Tiers, tighter rules and lower subsidies. The reasons to reduce subsidies and eliminate loopholes are obvious. The reasons behind streamlining the Tiers are slightly more complicated.
The first Subsidy Category that’s been repeatedly targeting for restriction and/or elimination has been the 10+ MW Tier. The general pattern we’ve seen in Germany, France and Italy is to first see restrictions which limit development on agricultural land followed by support for these projects being eliminated altogether. The reason for this Tier being restricted first is because it’s the most prone to over-heating.
Another driver behind consolidating the number of Tiers has been the flattening of economies of scale between project sizes. A generic subsidy scheme might initially be set up with graduated subsidies for systems sized W to X, X to Y and Y to Z. If the unit costs of X to Y projects converge with the costs of Y to Z projects you end up over-subsidizing the X to Y projects. The solution to this problem is to consolidate the Tiers with converged pricing.
As it turns out, reducing subsidies and consolidating Tiers are interrelated mechanisms. When you eliminate a Tier you eliminate a constituency pulling for favors. The reduction in bureaucracy makes it easier to subsequently lower and/or modify subsidies for the remaining Tiers because there’s less balancing required.
Bureaucracy Rum Amok
The US has allowed a wide variety of subsidy programs to populate the solar landscape. The interaction of subsidies at the federal, state and local level has resulted in a stacked deck that has favored certain solar constituencies over others. Two solar constituencies in particular deserve special attention: Mega Solar and Third Party Solar.
Mega Solar
For some reason the US never put the brakes on Mega Solar in the way the Europeans did. By my count there are at least 9 mega-solar projects currently under construction in the US that are over 100 MW in size.
·       Desert Sunlight – 632 MW
·       Topaz Solar Farm – 632 MW
·       Blythe Solar Power Project – 575 MW
·       Agua Caliente – 333 MW
·       California Valley Solar Ranch – 287 MW
·       AV Solar Ranch One – 264 MW
·       Quinto Solar – 126 MW
·       Mesquite Solar Phase 1 – 124 MW
·       Henrietta Solar Project – 115 MW
The Europeans had already identified the Mega Solar strategy as overly expensive and were eliminating support well before any of the US projects mentioned above broke ground. The US government apparently didn’t get the memo. If they did they said meh… America! Fuck Yeah!
These days it’s looking like the era of Mega Solar may finally be coming to an end but a terrible amount of damage has already been done. We’ve committed billions to a dead end strategy all the while neglecting First Principles. Instead of focusing support on competitive deployment strategies the US Federal Government single headedly created a solar constituency which has sucked up much more than their fair share of the pie and worked to undermine development in competing Tiers. The US walked right straight into Parkinson’s Curse.
Third Party Ownership
Third Party Ownership has been hailed as the bestest thing on the block by all the solar rags. TPOs operate as sub-category players in the Small and Medium sized solar space. Problem Numero Uno with TPOs is that their competitive edge is founded on accounting tricks which border on fraud. Problem Numero Dos is that the accounting tricks need the Investment Tax Credit to pencil. If SolarCity’s failure to launch is any indication the TPO play is also coming to an end. This is good news but again the damage has already been done. Here’s a short list of least favorite things about TPOs. 
  • SunRun, a prominent TPO, worked behind the scenes to hamstring PACE
  • TPO companies have been a source of distracting anti-ownership propaganda
  • TPO companies don't have a sustainable business model
The Law of Demand
Subsidies are useful but they need to be built and maintained with careful attention. A few points are worth repeating here.
·       The First Principle of solar subsidies is to choose strategies that lead to sustainable markets.
·       With any solar subsidy scheme the plan from the start is to eliminate subsidies over time in a smooth and predictable way as the underlying product becomes more competitive.
·       If your subsidy scheme isn’t showing a reduction in installed costs you’re doing it wrong
If we build our subsidy programs correctly we activate the Law of Demand. Here’s what Wikipedia says about the Law of Demand.
The law of demand is an economic law, which states that consumers buy more of a good when its price is lower and less when its price is higher (ceteris paribus)
Here are the ceteris paribus criteria
·       Habits, tastes and fashions remain constant.
·       Money, income of the consumer does not change.
·       Prices of other goods remain constant.
·       The commodity in question has no substitutes or is not in competition by other goods.
·       The commodity is a normal good and has no prestige or status value.
·       People do not expect changes in the price.
·       Price is independent and demand is dependent.

I underlined factor six specifically because the U.K. market has seen flattish demand in 2012 despite significantly lower prices. I suspect the combination of all the bad press in the market following the FiT cuts coupled with factor six has flattened demand. It’s a temporary problem but a problem just the same.
In conclusion, if a subsidy program results in lower prices (ceteris paribus) it should also lead to higher demand. The higher volumes drive efficiencies which result in even lower prices which then drive higher demand – a virtuous cycle. This is how we should do solar.

John La Grou

Neil Abercrombie is Officially my Favorite Governor" title="Hawaii News Now - KGMB and KHNL">Hawaii News Now - KGMB and KHNL

Tuesday, December 11, 2012

OH NO IPO for SolarCity

One Euro Per Watt

A big deal was made when First Solar got manufacturing costs below $1/Watt. The industry has come a long way since then. Here's the first complete PE system I've found with total system costs under €1/Watt. An extraodinary feat.

Friday, November 30, 2012

PACE + FHA loan Guarantee = FPO

Who Needs Third-Party Finance? Loan Programs Offer Low-Cost Direct Ownership Opportunities.

After reading this article I couldn't help but think... Why not combine these FHA loan guarantees with a PACE loan? This would certainly satisfy those meshuggeners at Freddie and Fannie right? And you're actually using the FHA program for its intended purpose more or less right? Seems worth a shot.

Do we have to wait for Solar City's IPO to bomb before the get on with fixing PACE? That seems to be the case. If only the DOJ would indict the TPO shmucks. That would send the rats packing.

Economics of Photoelectricity - December 2012

The Wolves pursuing Sol and Mani
EPE Update - December 2012

  • Expanded kWh/kWp tables
  • Harmonized Capacity Tables
  • Streamlined Calculator and Help Section
  • Fixed Italian FiT tables and Malaysia to FiT tables
  • Added some Transmission Capacity stats
  • Added Assumption Sets for coal, natural gas and nuclear
  • Added a table of regional coal energy densities (US, Australian, South African etc.)
  • And lots more...

Thursday, November 29, 2012

Daylights, Nightlights and LEDs

  • According to the EIA, lighting accounts for about 10% of residential electricity use (It's actually 9% to 14% depending on the document). I'm always thinking about self-consumption so my quesiton is... what percentage of this lighting occurs during daylight? I would SWAG for an average distribution of 25/75 to 33/66 day to night.
  • Why SWAG when you can model? I added a few lines of code to PEPE just now that allows me to estimate the amount of lighting demand in dark vs. sunny hours. Initial results indicate that about 75% of lighting demand occurs when the sun is down compared to 25% when the sun is up. This is only an initial result but I'm going to roll with it.
  • If LEDs reduce electricity used for lighting by 50% then the share of lighing in overall residential electricity demand goes from 10% down to 5%.
What does it mean for photoelectrics? Here's a basic sketch.

Pre-LEDs Conditions.
Overall household electricity demand is 100 kWh/year.
Lighting demand makes up ~10 kWh/year. 2.5 kWh during daylight and 7.5 kWh when dark
Self-consumption rate = 50% = 50 kWh/year

Post-LED Conditions.
Overall household electricity demand is shifted down to 95 kWh/year
Lighting demand makes up 5 kWh/year. 1.25 kWh during daylight and 3.75 kWh when dark. If you assume a worst case scenario 1.25 kWh decrease in daytime self-consumption due to the lost daytime lighting load your total consumption goes down to 48.75 kWh/year but your self-consumtion rate actually climbs to a smidge over 51%.

This is obviously only a sketch based on a preliminary simulation but caveats aside the results show that LEDs will positively complement photoelectrics in a non-negligible way. For me this means PEPE would be improved by adding a few lines of code that simulate how lighting stocks will/can/could change over the lifetime of the modeled photoelectric system. How many dollars is it going to add up to? All by itself it's not much but a little here and a little there adds up.

Tuesday, November 27, 2012

Subsidies, HUH, Good God Ya'll... What are they good for?

Edwin Starr
Here's a quote from an article I've just read.
I actually did my homework on the subject more than three years ago and chose a 27-panel (3.9 kilowatt) system for my home in the Ojai Valley.
The total upfront cost was $31,000. I reaped $7,500 in federal tax credit with another Southern California Edison $7,500 rebate in the first year. That left me with a total cost of $16,000 installed.
The math... $16,000 after subsidies for a 3.9 kW system works out to about $4/Watt. The Australians, Germans, Flemish, Brits and Italians are currently paying $2 to $3/Watt for unsubsidized photoelectric systems. If Michael from Ojai was willing to pay $4/Watt for a system you'd have to think he would certainly buy again at $2 to $3/Watt. I'd argue that he'd be even prouder of his system for having bought it himself without the aid of Uncle Sam.
The subsidies that Michael took advantage of were training wheel mechanisms that are no longer necessary. The investment has been made and it's paid off. The first movers took the subsidies and the risks of investing in a new technology. The new technology is now a strapping young lad who is ready to go out into the world and prove himself. The First War is won... The Second is coming.

The NFL refs and TRON guys ain't got shit on Edwin.

PEPE Updates

  • Added weather data from NASA for Monthly Average Temparature, Windspeed and Insolation. I cross referenced the data against a UN LOCODE database to eliminate Data from uninhabited areas. This filtering shrunk the weather database down to about 5 MB.
  • Yesterday I wrote some water heater energy demand simulation code. The algorithm starts with a water mains temperature simulation that's based on an NREL paper. On top of this sits an EPRI/LBL algorithm that uses household characteristics to statistically estimate daily water demand. Daily water demand, coupled with mains temerature is then used to estimate daily electricity use for water heating. The results are within 10% of where you'd expect them to be... Score...
  • Started conceptual work on an energy management algorithm. At this point I'm probably only a few hours from having an initial result to a project which has been years in the making.

Hawaii is Given'er

Code Changed to Ease Permitting of Photovoltaic Systems

Saturday, November 24, 2012

The Militarization of Sunshine

The Next Niche Market for Solar? Drones—Yes, Drones


GE's New Smart Fridge Commercial

Guy 1: Hey... New fridge. Nice
Guy 2: Yeah... This is my wicked smart fridge... She talks to the internet.
Guy 1: She huh? What do you need that for? *sarcastically* To save the environment?
Guy 2: You know me *holding tree* No... That's not it.
Guy 1: What's the big deal then?
Guy 2: My fridge sends my phone photos of its contents when I'm at the store. How many extra trips do you think that saves me? This beautiful baby can also choose when to run to minimize the cost of electricity she uses.
Guy 1: How's that work?
Guy 2: Beats me... Satellites... Doesn't matter... I like the extra time and money this fridge keeps in my pocket. But check this out. You put your warm beer in the freezer... The camera up there sees it and... BEEP... she tells you when it's cold.
Guy 1: Bullshit.
Guy 2: Seriously.
Guy 1: Whatever... any other fake abilities?
Guy 2: Yeah... Customizable accents... My baby's from Boston.
Guy 1: Double bullshit..
Guy 2: I'm serious. There are all sorts of accents. There's French, British, Brooklyn, Boston, Red Neck, Stephen Hawkings.
Guy 1: You are so fucking full of it.
Guy 2: Ten bucks.

Commercial closes like the end of a TV show. Long break. Commercial comes back for the Easter Egg shot with the guys sitting on the couch watching TV. The phone rings...

Guy 2: It's for you.
Guy 1: Whaddaya mean... It's your phone.
Guy 2: Trust me...
Guy 1: answers... Beep... Your beer's cold.
Guy 1: No fucking way.
Guy 2: Bam! How do you like dem apples. I love my fridge. Pay up bitch!

Thursday, November 22, 2012

Thoughts on how to Phase Out the ITC

If you assume the average installed cost for a photoelectric system in the US is currently $3/Watt this implies the 30% tax credit costs the government 0.9 $/Watt. Approximately 4.3 GW are expected to be installed in 2012 so assuming a $3/Watt average installed cost the total ITC will cost the Treasury about 4 billion. One way to gradually phase out the ITC would be to set this 4 billion as a step budget that triggered an ITC degression. i.e. You'd get a 5% ITC degression for every 4 billion spent on the program.

First drop would be automatic to 25%. If prices stayed the same at $3/Watt the budget allocations would progress like so.
  • 25% step: 5.3 GW
  • 20% step: 6.7 GW
  • 15% step:  8.9 GW
  • 10% step: 13.3 GW
  • 5% step: 26.7 GW
Experience shows that prices wouldn't stay the same. There's good evidence to suggest that average prices could well come down to $2/Watt. If this happened you'd significantly extend the GW per step.

Wednesday, November 21, 2012

Must Read Civil Beat Story

I gotsta have my tax credit fix. Paweese!
Just one more.... Paweese 
Do you think the pro-tax incentive folks (Yani and Au) in this story realize how childish and greedy and irresponsible they sound?

Tuesday, November 20, 2012

I Mo Love you when you're down

EEG Surcharge on Heavy Electricity Users

The Germans seem to be stuck on the question of how to deal with the EEG surcharge with their heavy electricity users. Why not set it up such that electricity users pay the full surcharge on the first X GWh per year, a 50%  surcharge on the next Y GWh per year and a base surcharge on all consumption above this. If you set up the surcharge apportioning system this way it would prevent companies from inflating their consumption in an attempt to avoid the surcharge.

Monday, November 19, 2012

Light Pricing

  • At the network level the reliability of a solar power forecast should eventually play into new reserve requirement rules. It stands to reason that a solar heavy grid with a cloudy forecast would need to carry a higher reserve percentage than the same grid with a clear sky forecast. Higher reserve requirements mean higher costs.
  • If end-users manage their loads to avoid cloudy hours that has the effect of dampening demand. Dampened demand counters the upward pressure on prices due to reduced supply.
  • If loads seek out sunny hours where there's presumably cheaper electricity the increase in demand counters the downward pressure on prices.
  • These effects balance each other nicely. Solar availability is effectively a proxy for price. You end up with Light Pricing.
  • Could you use the expected load and price patterns along with unit commitment rules to project which power plants are going to be removed in Power System Jenga? I suspect you could project the next few plants but not too far forward. Not enough is known about load shifting.
  • It occurs to me you could model a range of scenarios with made up numbers for your load shifting capability. That would be a dangerously fun way to play Power System Jenga far into the future.

Saturday, November 17, 2012

Shallow with Mac Bandy

On the walls of my university they had pictures of graduating classes from years gone by. The 60s and 70s had cool hair. It got boring after that.

People who have a problem with retard should have someone change their pampers and fuck off.

 Edison knew how to work.
“Genius is 1 percent inspiration and 99 percent perspiration.” 
That quote took a lot of tinkering.

The world is full of boundries. Some require strict respect. Others require ridicule.

You have to do.

I have strange dreams where I'm chased by Irishmen.

Armstrong won his tours, Rose belongs in the Hall and Madoff should be hung.

Imagine if the moon had the face of a tiger. We'd all worship cats.

Tetris with Electricity

  • Scheduling loads with an energy management algorithm is like playing a game of Tetris where you have a surface to fill with blocks of various dimensions.
  • These blocks have a time dimension and a power dimension. Together these dimensions add up to a quantity of energy.
  • The solar resource is your board. You have an idea of what the board is going to look like based on weather prediction but you don't have perfect information - you only have an estimate.
  • You have an idea of how accurate your estimate is based on what the estimate actually is. Let's say it's 8 a.m. and your estimate for noon is for a clearness index of .8 (clear sky). Let's assume the error of this prediction is +/- 10%. Alternately, let's say that your clearness index estimate for noon is .5 (cloudy). Your error bounds with a cloudy sky prediction will be more like +/- 30%.
  • Example: If you estimate having 4 kW to work with in a clear sky situation you plan for 3.6 to 4.4 kW. If you estimate having 2 kW to work with in cloudy weather situation you set your bounds at 1.4 to 2.6 kW.
  • The reliability of your weather prediction plugs into your energy management decisions. If you have loads with a range of flexibilities you want to assign those flexibilities to counter the unreliability of your weather prediction where possible.
  • Back to Tetris. The most flexible block you could possibly have would have a 1 x 1 dimension. Blocks of 1 x 2, 1 x 3, 2 x 2 and so on are still flexible but less so. Blocks of 5 x 5 and 10 x 20 are flexible in terms of scheduling but you still have to fill them into the resource frame which is unpredictable.
  • Your Tetris board fills up unpredictably with unscheduled loads. People turn lights on, cook dinner and watch TV. Your EMS system will make a fuzzy prediction of these unscheduled loads. It will assign error factors to the prediction of unscheduled load just as it assigns error factors to the prediction of weather. Your EMS learns you.
  • An EMS system will want to scatter flexible load blocks such that the 10 x 20 blocks are matched up to the most reliable predictions, the 5 x 5 blocks are used in the medium error zones and the 1 x 1 blocks are used in the high error zones.

Friday, November 16, 2012

Power System Jenga

Spiegel recently interviewed the German Energy Agency's head Stephan Kohler. The questions were softballs but I enjoyed the story. The standout point Kohler made was that the expansion of renewables in Germany could not continue in a willy nilly fasion.
Today anyone can build a solar power system wherever he wants. And anyone who owns one of these systems also has the right to be connected to the grid operator. Just take a drive through Bavaria, and you'll see entire fields full of solar power plants, even though there is zero consumption there and there is no grid. Solar systems should be expanded only in places where the electricity is needed and there are grids that can absorb it; in other words, in industrial areas, on stadium roofs and at indoor swimming pools. To that end, I would propose that the grid operators provide a map of available grid capacities.
I agree with his point here but I think he's incorrectly describing the direction of solar development in Germany. It is true that Bavaria's countryside is dotted with solar farms but those farms were the result of past policy. Current FiT policies make it difficult to build solar farms going forward. When I say difficult I mean economically difficult. Between September and October the FiT rates for solar farms fell from18.76 cent/kWh to 13.5 cents/kWh. The much lower FiT suggests Bavaria's countryside will see far fewer solar freckles in the future.

Kohler also takes a shot at rooftop solar.
SPIEGEL: You would get rid of Germany's Renewable Energy Act?
Kohler: It is pure insanity! You put a solar panel system on your roof and, thanks to government guarantees, you don't have to do anything more except make sure that you clean the snow off the panels in the winter. We now have to say to everyone who benefits from this feel-good law: Listen, people, it can't go on this way!"
Ooh la la! An exclamation point... He must mean business... I think Kohler is over-simplifying the issue here and again using past policy to project into the future. As I've repeatedly pointed out here the captive use (AKA: self-consumption) of generation will increasingly become an essential part of operating a photoelectric system profitably in Germany. Raising self-consumption rates will require investment in energy managing equipment. The profit motive may have driven willy nilly expansion in the past but it encourages much more controlled expansion going forward. This will lower the grid costs Kohler is so rightly concerned about. I must say though... It's a pity to see this situation being so grossly mischaracterized by the man who should see it most clearly. Less and less is solar a government promise where benefits accrue thanks to a feel-good law. The government policies have actually worked to build a competitive beast child. More and more is solar an industrial endeavor. Kohler should be able to see the potential.

Here's a snippet of Kohler's thoughts on conventional plant dynamics.
We have to make sure that operating power plants remains economically attractive. Nowadays, solar systems are often in operation around noon, when there is high demand for power and the price was high in the past. As a result, conventional power plants can no longer make enough money, which is why existing plants are being shut down and no new ones are being built. Anyone who guarantees the security of supply in the future has to be paid for it, even if his power plant is only needed at certain times.
Again, I can see his point here but I think you need to let the competitive process work itself out. I suspect Kohler is prejudiced to reliability over economics because that's the way grid operators rank the priorities. I'm this way too but that doesn't mean we have to be pussies with the power system. I agree we want to make sure that operating the power system remains attractive overall but that doens't mean all power plants have to be profitable. Imagine a game of Power System Jenga. The objective is to keep the system intact while you remove the least competitive and least structurally important power plants. Power system operators have been playing Power System Jenga for over a 100 years - we're just playing with a more complex structure now.

If you decommision a power plant this lowers supply which should then naturally lead to higher prices on the energy exchange. The remaining power plants make a little more money. If more solar comes in you'd expect the extra supply to push down prices until you expose the next weakest link. If it's not structurally essential you remove that link and keep playing the game. It looks as though Kohler is trying to make the point that solar is not only reducing prices but also lowering reliability. Solar, in other words, isn't playing by Hoyle's Handbook on Power System Jenga. There's a pinch of truth and a pile of lie in this position.

Solar produces intermittent supply but consider that loads produce intermittent demand. Is the supply of solar more intermittent than the demand from load? Is it technically possible to match up the intermittencies of solar and load such that you get a smoother output which behaves more harmoniously with the existing system? I think so. I also think it's economically desirable.

Technically achievable + Economically desirable = Hot Damn!

Let me finish by coming back to Kohler's strongest point - the anchor of the interview.
...A grid map would give us the opportunity to control the installation of additional solar systems to minimize additional grid costs. And it would also give us a tool to finally prevent too much power from migrating into the grid. Under the current circumstances, we have to invest about €28 billion ($36 billion) in the distribution grid to integrate renewable energy, while we have entire areas where there is still available grid capacity.
A grid map seems like a fine idea but why not take it one step beyond that and put a locational marginal price (LMP) on electricity that scores the reliability related aspects of the electricity and assigns a price to those aspects. This would give us a better idea of how much renewable energy costs outside of the EEG surcharge. Between a grid map and an LMP signal you not only have a better idea of where to build but you also have a better method of choosing the next coal plant to remove from the Jenga stack.