Utility company insiders see large scale energy changes ahead

by Zachary Shahan

The folks at Utility Dive recently conducted its first annual survey of 500+ US utility professionals, The State of the Electric Utility. Overall findings? Utility insiders see the industry changing considerably over the coming decade, with a particular focus on greening the grid.

Some of the overall findings included:

  • 95% anticipate that their utility’s regulatory model will change over the next 10 years, and 57% believe it will change significantly
  • 70% of utilities already offer or plan to offer dynamic pricing to customers within the next five years
  • 54% of utilities say they face stakeholder pressure to supply cleaner and more sustainable energy

There are a ton of interesting findings in the report, which you may download for free here. Here are just a few that stood out to me:

Interesting stuff. And there’s a lot more in there. Download Utility Dive‘s report for more. (Full disclosure: we have no relationship with Utility Dive and don’t benefit from you downloading the report; I just think it’s cool.)

Check out more stories regarding cleantech and utilities on our utilities channel. Keep up to date with all the hottest cleantech news via our overall cleantech newsletter.

This article, Utility Insiders See Major Changes Coming (Charts), is syndicated from Clean Technica and is posted here with permission.

About the Author

JBS News Renewable Energy. Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

Iowa: The #1 Solar Utility in America. Iowa? Kudos to Iowa!

by John Farrell.

It may be one of the oldest cooperative utilities in the country, but in the next six months, Farmers Electric Cooperative (FEC) of southeastern Iowa will be leading the nation in this 21st century energy source. Upon completion of a new solar array, the 640-member cooperative will have over 1,500 Watts of solar per customer on their system, nearly double the #2 utility. It’s also the most reliable utility in Iowa. How can a small, member-owned utility be “America’s Most Progressive Utility“?

Find out in this interview with FEC Manager Warren McKenna, recorded via Skype, on November 18, 2013.

Local Energy Rules podcast: Play in new window | Download | Embed

Flexibility

Unlike many small cooperative or municipal utilities, Farmers Electric Cooperative only buys 30% of its energy on long-term contracts. Instead, McKenna explains, they buy power on the spot market, using local power generation and demand management to avoid price spikes. This leaves them open to buying power from local generators, especially solar.

Creativity

FEC hasn’t limited itself to just one strategy for adding solar to the grid. In fact, they don’t even have net metering, the most common policy for connecting small-scale solar projects.

Instead, they have a feed-in tariff at pays 20¢ per kilowatt-hour (kWh) for solar energy, as long as it’s 25% or less of a customer’s own use. For solar energy produced that is between 25 and 100% of a customer’s monthly usage, customers still get 12.5¢ per kWh (the retail electricity rate for residential customers). Surplus generation is purchased by the utility at 6¢ per kWh.  Participating customers still buy all their electricity from the utility

FEC also has a 25 kW community solar project, selling shares to new customers in phase 2 for just $1.63 per Watt. Current participants can buy additional panels for $2 per Watt.

Finally, the cooperative has also commissioned a new 750 kW solar array which will sell power to the utility for its first 10 years, and the revert to cooperative ownership thereafter.

Participation

Since it’s a cooperative, technically every FEC member is an owner in a local solar project. But ignoring that for the moment, about 20% of the cooperative’s members either have their own solar array, own shares in the community solar project, or participate in the Green Power Project (a $3 per month green pricing program for purchasing local renewable energy).

Replicable?

The big question is, could your local utility do what Farmers Electric is doing?  If your utility happens to be locally owned, says McKenna. Cooperatives are often very open to comments from their members, and if not, you can run for the board.  Municipal utilities are overseen by elected officials, who are always looking for examples of strategies to increase local jobs, particularly from clean energy.

It’s inspiring to see what FEC has accomplished, regardless.  Most of the greenest utilities in the U.S. are among the largest, and Farmers Electric shows that you don’t have to be a big utility to do big things with locally owned renewable energy.

This is the 12th edition of Local Energy Rules, an ILSR podcast with Senior Researcher John Farrell that shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion. Other than his immediate family, the audience is primarily researchers, grassroots organizers, and grasstops policy wonks who want vivid examples of how local renewable energy can power local economies.

It is published twice monthly, on 1st and 3rd Thursday.  Click to subscribe to the podcast: iTunes or RSS/XML

Sign up for new podcast notifications and weekly email updates from ILSR’s energy program!

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This article, The #1 Solar Utility Is In…Iowa?, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy. John Farrell.John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

The State of Cleantech in 2014

by Guest Contributor Maud Texier.

Where does cleantech stand?

 

Renewable Energy. A technician standing on top of a wind turbine. Image Credit: Glenn J. Asakawa.
Renewable Energy at work. A technician standing on top of a wind turbine. Image Credit: Glenn J. Asakawa.

After a big boom in early stage investments and a green policies kick-off a few years ago, the cleantech industry has been through the struggles that always come with a young and maturing industry. Where are we standing now?

Unavoidable growing pains

Back in 2008, VC funds for cleantech were blossoming; some of them arguing that it would be the next internet boom. Politics started to raise their awareness about climate changes and environmental issues. Europe had led the way with the first feed-in tariffs for renewables and even a cap and trade market for CO2 in 2005. The US introduced Renewable Energy Standards in 30 states, and created ARPA-E as the new government agency to support innovation in the energy industry.

However, overproduction of solar cells and panels, combined with rapidly falling prices for that and other reasons, led to the demise of numerous solar startups. Meanwhile, many European countries, facing a financial crisis, stepped back and reduced their support for cleantech. The early growing pains that face all industries as they mature also showed up. That included some innovators going bankrupt or struggling to make it to their teenage years. Iconic cleantech companies such as Fisker, Better Place, and A123 went bankrupt; a lot of other startups had poor exits as they were struggling raising new funds.

Now VCs are defiant and most of the main teams are being dismantled as their cleantech portfolio did not perform well enough. Was that to be expected? Actually, VCs historically targeted rapidly growing markets in order to ensure high returns in a few years, whereas the energy industry bets on 20+years returns. There has obviously been a mismatch. Also, a lot of investors and entrepreneurs — new to the energy industry — underestimated the barriers of entry for this market, as well as the resistance of utilities.

However, a few VCs did well and are still in the game. Today, most of them are either targeting this new “cleanweb” segment, which is more likely to be capital-light with a rapid return by focusing on apps and softwares. Others are partnering with corporates to ensure a more sustainable investment and facilitating industry alliances for the ventures.

The cleantech coming of age

Funding a hardware cleantech company is currently very difficult, if not impossible. However, we still need those technologies to evolve and mature, as they will be the pillar of the next infrastructures. Cleanweb, new business models, and financing are key and definitely necessary to mainstream those innovations, but let’s not forget our final goal by focusing too much on the means….

I believe that the solar industry has never been better than it is today. It is true that a lot of people are struggling, we have seen the number of module manufacturers dramatically dropping over the last two years, and now the pressure is put on other types of hardware from the balance of system, such as inverters. But the price drop has been so strong and the emergence of new business models so impactful that PV is becoming mainstream. The market has been maturing into a more sustainable industry, and it will keep growing but likely with a trend towards verticalization.

Also, storage is going to see a huge change this year. A lot of companies have been working on their technologies for years now, and the market is finally getting ready, one step at a time. Timing is always critical for innovations: now as energy demand keeps increasing despite limited and decreasing capacities, storage starts making sense even at a higher price. California once again pioneered by introducing the AB 2514 bill that makes storage capacities mandatory for the state IOUs (PG&E, SCE, SDG&E). Is storage on the same path as solar was a few years ago?

I will just add a few words on the energy efficiency industry, this low-hanging fruit that companies have been trying to grab for some years now. Despite huge potential, energy efficiency is still looking for the right model. The concept of monetizing negawatts needs a lot of structure: policies, regulations, standardized measure, and verification processes. Some promising technologies for consumption disaggregation and new financing structures could dramatically change the picture with the right business models.

The energy industry is re-shaping itself as it faces new challenges. The emerging segments of this market have definitely been going through difficulties to reach technology viability and find the right business model. This market is a tough one, where you need heavy investment and strong will to upgrade infrastructures and modify a legacy system which has been running for decades. But we are finally witnessing the development of those technologies at large scale, creating new economies. Beyond solar, the grid is finally starting to change with storage, energy efficiency and consumer-oriented services.

About the Author: As an engineer, Maud dedicated her efforts towards the energy market. She hails from the oil & gas industry, and started her career working in electricity markets. As an analyst on a power trading desk, she studied the market mechanisms that can develop new demand-response models. She has been scouting new technologies such as renewables, storage or energy efficiency for a large power utility in Silicon Valley before joining a solar start-up.

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This article, The State Of The Cleantech Industry, is syndicated from Clean Technica and is posted here with permission.

Local Renewable Energy or Utility Co. Who’s Your Energy Daddy?

by John Farrell.

Photo Credit: Michael Kappel
Photo by Michael Kappel

For now it remains large, investor-owned utilities, and ostensibly locally-focused rural cooperatives and municipal utilities. But the energy landscape of today gives me uncomfortable reminders of the Athenian tragedy by Sophocles – the Oedipus tale.

John Farrell, ILSR’s Director of Democratic Energy, gave this panel presentation at the 23rd annual conference of the Society for Environmental Journalists in Chattanooga, TN, on Oct. 4, 2013.

For those who don’t recall their college or high school English class, that’s the tale of the man who grows up to murder his father the king and marry his mother.  And in this 21st century version, the utilities are the king and Little Oedipus is represented by rooftop solar panels, wind turbines, and other ways that utility customers can produce their own energy. I won’t speculate who is the mother.

Earlier this year, the Edison Electric Institute (the daddy’s club of the investor-owned utilities) released a report suggesting that Oedipus has grown up and his daddy may not be prepared for the climax of this play. It’s summarized in two headlines from the clean energy press this summer. In Grist: “solar panels could destroy U.S. utilities” and in GreenTechMedia, “adapt or die.”

The problem is that customer power generation from local renewable energy reduces utility sales.*

(I asterisk this statement because there’s a robust debate about whether this distributed renewable energy brings other benefits to the grid not reflected on the balance sheet – for more information, read up on Minnesota’s value of solar process.) But if your utility (or state regulatory regime) has built its business model around growing energy sales, this creates what some are calling a utility death spiral. Falling energy sales force utilities to raise rates, which further enhances the attractiveness of generating your own energy from solar.

It explains why the chair of the Federal Energy Regulatory Commission, Jon Wellinghoff, recently said: “solar is going to overtake everything.”

So Oedipus a growing threat, and the utility daddy is trying desperately to stave off the storybook conclusion.

The problem is that the energy daddies grew up in a very different era.  In the early days of the electric system, you needed big capital to build big power plants and big power lines to bring energy to big cities. We gave them monopolies to facilitate that infrastructure development. And for decades, it worked.

But in the next 10 years, electricity from rooftop solar energy will be competitive – without subsidies – with utility energy prices in almost every state. The overlay of renewable energy standards and incentives for distributed renewable energy illustrates how the public interest, the energy model, and the economics have changed.

The way utilities respond will determine whether this Oedipus tale ends like the play. In Arizona, Wisconsin, and many other states, utilities are trying to gut the basic policies allowing people to generate their own energy. In some places, they are successful.  But a recent story from Georgia should give them pause – a “Green Tea Coalition” of environmentalists and tea party activists successfully lobbied the public utility commission to require the state’s biggest utility, Georgia Power, to launch a large distributed solar program.

Utilities that try to maintain the status quo, to remain the energy daddy, are going to have a hard time. Their customers will fight them for the right to self-generate, especially if it costs less than utility power, and these local energy producers will also be energy voters.

What we need is to have the utility become the facilitator rather than the ruler, the kindly elder sibling rather than an energy daddy. Because even as utility customers look to their own options for electricity generation, they will still need the utility network…

1)  to help them use their rooftop solar to power their electric vehicle.
2)  to finance high-efficiency appliances, efficient lighting, insulation and other strategies to cut their energy use and energy bills.
3)  to use existing on-demand energy sources (like natural gas) and future ones (like batteries) to keep power delivery smooth and high quality as the grid transitions to primarily renewable energy.

This won’t be easy. For one, utilities have a lot of money sunk into power plant and transmission infrastructure that may or may not be useful in this new era. For another, the regulatory system doesn’t necessarily reward this facilitation role rather than energy sales. But there’s no real alternative, because people are not likely to accept, nor should they, giving up this opportunity to have more control over their energy future.

Photo Credit: Michael Kappel

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This article, Who’s Your Energy Daddy?, is syndicated from Clean Technica and is posted here with permission.

About the Author

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.

Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World. John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

City-Owned Texas Utility Already Serves 40% Renewable Energy

by John Farrell.

City of Denton, Texas
City of Denton, Texas logo.

Is having local control of a utility the key to ramping up renewable energy?

In 2011, Boulder citizens voted to have their city take over the electric utility, joining 1 in 7 Americans served by municipal electric utilities. Their feasibility study suggests they can more than double renewable energy on their system to over 50%, slashing greenhouse gas emissions. A study in Santa Fe, NM, suggests a similar increase (to 45% clean energy) is possible, while reducing electricity costs. Other cities, like Minneapolis, MN, are also studying the option.

Many of these communities are inspired by examples like Denton, TX, a municipal utility that already gets 40% of its power from renewable energy. The presentation to the Boulder city council is from Mike Grim, the head of the Denton city utility.

Mike Grim Presentation from Boulder, Colorado on Vimeo.

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This article, City-Owned Texas Utility Already Serves 40% Renewable Energy, is syndicated from Clean Technica and is posted here with permission.

About the Author

John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.