Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on January 14, 2014
The Revolution Won’t Be Distributed
If you read the environmental press, clean tech media, or even the New York Times, you might conclude that America is on the cusp of a distributed generation (DG) revolution. “Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model to the ground,” wrote leading environmental news site Grist last April. “Renewable-energy technologies like solar and wind power,” the Times wrote, are now “challenging the traditional distribution system.”
The utility industry too is taking the threat seriously. The Edison Electric Institute (EEI) recently issued a report titled “Disruptive Challenges,” assessing the threat renewables pose to the industry. Utilities and rooftop solar companies are facing off in Arizona and other states over rate subsidies for solar. Former Federal Energy Regulatory Commission Chairman Jon Wellinghoff recently told reporters that, “Solar is growing so fast it is going to overtake everything.”
Not So Fast
But the reported death of the centralized electrical grid and the utilities that run it is greatly exaggerated. Solar panel prices have come down, but rooftop solar is still much more costly than centralized fossil generation, nuclear, or even utility scale wind and solar. Whether in Germany or California, solar deployment remains entirely dependent upon a raft of direct public subsidies and indirect rate subsidies.
Despite those subsidies, solar has yet to generate significant electricity anywhere. Germany, the world solar leader, after over a decade and $100 billion in direct public subsidies, gets only 5% of its electricity from solar. U.S. leader California generated less than 1% of its electricity from solar in 2012.
DG advocates have made much of the recent EEI report, but the report actually concludes that there will be no DG revolution. “In fact, electric utility valuations and access to capital today are as valuable as we have seen them in decades,” the authors say, “reflecting the relative safety of utilities in this uncertain economic environment.”
Disruptive Policies
If you want to know what utilities actually object to about DG, it is policies that functionally require them to purchase power from solar homeowners at $0.30/kWh when they don’t need it instead of buying it on the wholesale market for $0.04/kWh when they do. The result is not just less-profitable utilities but also higher rates for the vast majority of ratepayers. A recent California Public Utilities Commission study concluded that by 2020 the state’s net metering programs would increase rates by a billion dollars annually.
That’s not to say that the growth of renewable energy is not disruptive—just not in the way its advocates claim. Look at just about any place that has achieved significant deployment of renewable electricity, and what you find is that the vast majority comes from large, utility scale installations, not rooftop solar or any other behind-the-meter generation source. Even Germany gets over three-quarters of its renewable generation from large-scale wind, hydro, and biomass.
Given the current state of renewable technology and the scale of generation necessary to run a modern economy, these basic dynamics appear unlikely to change anytime soon. Take a peak at any of the dozens of scenarios produced by renewables advocates that claim we can run the U.S., Europe, or the world largely on renewables, and what you find is that most generation comes from massive industrial scale wind and solar developments from North Dakota to the North Sea—not DG.
In fact, a renewables-powered future will probably require more centralized generation, not less. Achieving significantly higher penetrations of renewable energy will require transmitting electricity over hundreds or thousands of miles from where large amounts can be generated to places where it will be consumed. Renewables champions may talk small-scale DG, but what they intend to build is every bit as centralized as the centralized power sources we have today.
Ultimately, what is disrupting the existing utility model is not the distributed nature of renewables, it is their intermittent nature, and the policies necessary to make them viable. Heavy public subsidization of the capital costs of wind and solar, combined with preferential purchase requirements for the power they generate, ensure that the marginal cost of wind and solar will always be lower than just about anything else when the wind is blowing and the sun is shining. Hence, Germany simultaneously boasts the highest retail electricity prices in Europe and the lowest wholesale prices—not because the power costs less to generate but because most of the cost has been shifted elsewhere. In Germany, expensive, highly subsidized, intermittent renewables generation has driven wholesale prices so low that the utilities that must manage the grid and operate conventional power plants can no longer operate profitably. This, not cheap distributed solar, is what is disrupting the utility industry here and abroad.
Just because an electrical system that relies heavily on today’s wind and solar is likely to be costly and unreliable doesn’t mean we won’t build one. Our energy systems are a reflection of our culture, ideology, and politics, not just rational economic and engineering decisions. Germans, for instance, so fear nuclear energy that they prefer to pair expensive renewables with cheap coal. Perhaps the U.S. will do the same with wind, solar, and gas. If so, it will certainly be disruptive of our current electrical system. But one thing it probably won’t be is distributed.
35 Comments on "The Revolution Won’t Be Distributed"
rollin on Tue, 14th Jan 2014 9:21 pm
Have you ever been cornered by someone who just likes to hear his own voice? They go on and on and very little content is meaningful or even true.
Sort of like this article.
J-Gav on Tue, 14th Jan 2014 10:44 pm
There is definitely some ‘wake-up’ material here for renewable fanatics.
Which doesn’t mean it has no place in our future energy mix. Just a lot smaller one than the techno-dreamers would like to think.
PapaSmurf on Tue, 14th Jan 2014 11:22 pm
Most realistic estimates are that wind and solar will be about 20% to 30% of the electric grid. Nothing has changed about that. The path we are on seems to support those estimates as realistic.
It doesn’t matter whether it is distributed or from a centralized location. Both work. Each has it’s place.
Silly article.
GregT on Tue, 14th Jan 2014 11:23 pm
I still maintain that a stand alone solar/ wind / micro hydro system, complete with a battery bank back up, is a very good transitional option for those that can afford it. Keeping the lights on at night, refrigeration, and perhaps even some entertainment is a possibility for a couple more decades. Don’t forget spare parts!
Norm on Tue, 14th Jan 2014 11:42 pm
The article is on target. It deflates the tires on the renewable bandwagon. It does so by pointing out the intermittent nature of the renewable. The utility is left holding the bag, to keep the lights on everytime the wind slows down. I am near hydro power, Columbia River, where power can be ramped up and down in a couple seconds at spillways. You cannot do that at other power sources. Even so, you should hear such engineers complain about the unstable nature. The rogue generation of renewables. If engineers were in charge, they would say you cannot generate in such unstable ways, unless you have the highly adaptable hydo station to balance it. They almost
Norm on Tue, 14th Jan 2014 11:46 pm
The article is on target. It deflates the tires on the renewable bandwagon. It does so by pointing out the intermittent nature of the renewable. The utility is left holding the bag, to keep the lights on everytime the wind slows down. I am near hydro power, Columbia River, where power can be ramped up and down in a couple seconds at spillways. You cannot do that at other power sources. Even so, you should hear such engineers complain about the unstable nature. The rogue generation of renewables. If engineers were in charge, they would say you cannot generate in such unstable ways, unless you have the highly adaptable hydro station to balance it. They almost never have that. But dont tell the latte sipping Liberals at Starbux. They think you can run a 1500 watt heater from an Ethernet wire, and they dont want to be disturbed from their windmill and rainbows fantasy world, and they do not wish to be informed that it won’t work, while they are busy passing laws in the state capitol buildings about it.
Harquebus on Wed, 15th Jan 2014 12:03 am
Renewable generators do not return the total energy used to manufacture them. Without cheap fossil fuels they would not exist. The story is different if they actually did some work like, pumping water or milling grain.
ghung on Wed, 15th Jan 2014 12:13 am
Gosh, Norm, perhaps it’s not renewables that that can’t keep their promises, but your expectations. Admitting that renewables aren’t going to allow you to continue a 20th century, obscene level of energy-use-on-demand doesn’t equate with them being useless. Having lived very successfully on PV power for most of the last 20 years, I could just as easily say you’re full of shit.
Maybe you should ask the folks in a third world village who’ve never had reliable electricity or a light to read by at night, and have had to carry all of their water, sometimes for miles, how they feel about their few PV panels and a couple of golf cart batteries. Chances are, that’s where you’re headed. I’ll put you on my list of people who aren’t going to handle this transition very well.
As for the article, same thing. It’s written from the point of view of a society that expects it’s technology to always adapt to their fullest expectations rather than having the imagination to adapt themselves to the limitations of more appropriate technology. It’s their expectations that got us into this mess in the first place. I consider such thinking as our greatest liability, and industrial age hubris isn’t welcome at my fire.
ghung on Wed, 15th Jan 2014 12:29 am
@Harquebus: Your first sentence is just wrong. As for the rest, PV pumps all of our water, including a substantial irrigation and livestock watering system. In fact, we have a lot of water; too cheap to meter.
Our house was built with renewable energy, and we’ve ground our coffee every morning with solar power for years. I’ve been planing boards today; 100% solar. You’re welcome to stop by and do all of these things for me; give the PV panels a rest. Then again, maybe not. I already have energy slaves that don’t need to be fed.
SilentRunning on Wed, 15th Jan 2014 12:59 am
The only caveat I would have here is that there is possible electrical batteries that *could* fix the intermittent nature of wind/solar. The best candidate is the “flow battery”.
http://www.spacedaily.com/reports/Organic_mega_flow_battery_promises_breakthrough_for_renewable_energy_999.html
Of course, I wish I had a dollar for every claimed battery technology announcement in the last 40 years – I could probably retire.
Makati1 on Wed, 15th Jan 2014 1:11 am
“… A recent California Public Utilities Commission study concluded that by 2020 the state’s net metering programs would increase rates by a billion dollars annually. …”
$1B divided by ~10,000,000 households = about $100.00 per year, or less. Less, as the domestic use would likely be less than the commercial use and would be paying a smaller share of the increase.
Perspective … ALWAYS important.
But, yes, renewables will be a small percentage of what we have today even when they have peaked build-out in the next decade. The broken financial system is going to stop most things in their tracks soon.
stevefromvirginia on Wed, 15th Jan 2014 2:06 am
The so-called modern economy is rotting from the inside under our noses. People aren’t paying attention.
The scale of commercial electricity waste is hard to comprehend. It is not surprising that the enterprise that provides commercial-scale electricity insists that it is the only means to do so. To power tens of millions of street lights, to illuminate office buildings and shopping centers 24 hours a day, to power aluminum smelters, electric steel making, goods distribution … none of this can be done with solar panels on the rooftops of houses or a few wind farms here and there.
Yet, industrial scale cannot pay its own way, it can only borrow … and pretend to do so perpetually. It can’t obviously, there is little return on the streetlights, the displays and the rest of it.
It is best to look toward the future when rooftop solar and some wind farms here and there along with hydro and other intermittents are all there is. We will have to adapt to that state of affairs rather than the other way around. The sooner we start the better off we will be.
DC on Wed, 15th Jan 2014 2:38 am
Q/ but rooftop solar is still much more costly than centralized fossil generation, nuclear, or even utility scale wind and solar. Whether in Germany or California, solar deployment remains entirely dependent upon a raft of direct public subsidies and indirect rate subsidies.
This is a stupid thing to believe. Rooftop solar IS indeed expensive, but why? The shill never explains why. Its largely because the end-user, is basically bearing the entire cost, upfront for his power(as it should be). Centralized power, actually, is the one reliant on a raft of subsidies. If end-users(thats us) had to pay all the direct and indirect costs for coal and nuclear or other FF power systems, they would be far less cost competitive than roof-top solar. Of course, people would still buy energy subsidized or no. Compare market distortions\failures for FF vs ‘Green’ and you would easily find ‘green’ is far closer to true market cost than FF by a wide margin.
But of course, we dont pay the true cost of energy, FF or otherwise. Although solar comes a lot closer to reflecting those costs than FF ever will. FF after all, has a century of embedded and grandfathered subsidies to call on.
This guy complain all he likes about renewables. ALL future energy production is going to be problematic(its getting that way now). But he can rest easy knowing when his ‘efficient’ centralized energy cartels finally fun out of gas, or the economy permanently tanks due to ever increasing FF energy bills, it will take green-energy down with it as well.
PapaSmurf on Wed, 15th Jan 2014 3:47 am
“The broken financial system is going to stop most things in their tracks soon.”
—————-
Banks are actually healthier than they have been in decades. The new capital requirements from Basel III have been phased in over the past few years requiring banks to dramatically improve their capital ratios (aka reducing risk).
Our financial system is much more solid than at any time during the past 10 years. The banking system from 2004-2008 was far more leveraged than we are today.
Jamie DeVriend on Wed, 15th Jan 2014 3:53 am
I have to agree with DC on this. We have to look at it as a matter of perspective. We aren’t paying for the final costs, and we certainly aren’t taking into account the impact on the environment supporting non-renewable sources causes. We also don’t seem to look at how our current support of solar technology will make it cheaper and less obtrusive down the line.
PapaSmurf on Wed, 15th Jan 2014 3:57 am
Solar has become so cheap lately that you can get a free system installed by Solar City in 17 different states. You effectively just lease the system, pay less than you used to pay to the utility, then you own the entire system after 20 years.
ghung on Wed, 15th Jan 2014 4:09 am
@stevefromvirginia: ” People aren’t paying attention.”
Of course they aren’t. Their consent was manufactured long ago. They don’t see their discretionary consumption as discretionary.
GregT on Wed, 15th Jan 2014 6:25 am
Well, I’ll be damned.
When I returned home from work today, I noticed a crew of city workers in the neighbourhood. I just went outside for a walk. They’ve disconnected every second street light for as far as I can see. Fine by me, I’m into astronomy, and I’m not a big fan of light pollution. Maybe someone IS starting to pay attention?
And then this, on the evening news. The first time I have heard any serious media reports here on climate change.
http://globalnews.ca/video/1083159/melting-polar-ice-causing-changes-to-jet-stream
Gotta wonder, why is our corporate controlled media, all of a sudden, broadcasting stuff contrary to BAU?
Truly a landmark moment here in Southern BC.
Makati1 on Wed, 15th Jan 2014 10:40 am
Papa, the Western banks are ALL insolvent, totally. You need to put down the cool aid and remove your rose colored glasses. You also need to stop reading the propaganda on the US news outlets. ALL BS!
The paper you wipe with is worth more than that in your wallet. That money is just a promise that will not be kept eventually. It does not even make good toilet paper.
If you are retired, go online and read some news that is not from a financial service or investment company. Nothing coming out of Wall Street is true. Nothing. You need to read news from the rest of the world outside Europe, Japan, the US, or Australia to get a handle on financial reality.
If you are over 50, you know how the dollar has lost most of it’s value to the Federal Reserve / Central Banking Cartel. Remember when an hours labor at minimum wage bought over 3 gallons of gasoline? I do.
Danlxyz on Wed, 15th Jan 2014 1:49 pm
Papa
How much of the low cost for residential solar is the result of the Federal 30% Residential Energy Credit? Without that credit, I think the real cost would be quite a bit higher.
simonr on Wed, 15th Jan 2014 2:43 pm
As far ss roof top systems go, we are putting one in our garden (not rooftop, so big saving) quotes for a 3 day battery bank and a load of panels come to between 9-11k if you get a bank loan for 10 years, this is still cheaper than current electricity bill, this also assumes that the cost of electricity will not go up.
So if you have the credit and earning potential, rooftop (here in france) still makes sense.
Arthur on Wed, 15th Jan 2014 2:54 pm
but rooftop solar is still much more costly than centralized fossil generation, nuclear, or even utility scale wind and solar. Whether in Germany or California, solar deployment remains entirely dependent upon a raft of direct public subsidies and indirect rate subsidies.
Don’t know about north-America, but for Europe/Holland this is BS. I am about to order this package as soon as my current client has paid me:
http://www.eon.nl/thuis/nl/zonnepanelen/overzicht.html
12 panels, 3000 Watt peak –> ca. 2800 kwh/year, which roughly covers my needs. Price 6200 euro. Add 1-2k for installation and transformer. Feed-in hardware + wifi tablet consumption reader is already in place.
There is no subsidy, other than feed-in tariffs, which is no subsidy at all. I will receive a bill from a private solar panel installation company and that’s it.
This installation will pack back itself entirely over 8-10 years, giving me 10-20 years of additional ‘free electricity’. Basically, now that I am end fifty and still vital (2845m Coopertest), I am paying the electricity bill of my household for the rest of my life. Now, how is that for prepping?
Here is a private person who has made his private power generation data public:
pvoutput . org/intraday.jsp?id=9638&sid=7817
Obviously the output in Holland/januari sucks, but if you click on ‘yearly’, you see what this installation 2160 kW installation (probably 8 250W panels a 4500 euro) produces over 12 months (1707 kW).
Arthur on Wed, 15th Jan 2014 2:59 pm
That must be:
1707 kwh
Same link, monthly perspective:
http://www.pvoutput.org/aggregate.jsp?id=9638&sid=7817&v=0&t=m
sunweb on Wed, 15th Jan 2014 4:29 pm
ghung on Wed, 15th Jan 2014 12:29 am
Our house was built with renewable energy, and we’ve ground our coffee every morning with solar power for years. I’ve been planing boards today; 100% solar. You’re welcome to stop by and do all of these things for me; give the PV panels a rest. Then again, maybe not. I already have energy slaves that don’t need to be fed.
I lived off the grid for 30 years and at no time was I disconnected from the fossil fuel supply line. My house also was built with solar energy – corn – because it was 1973 and I did it with handsaws.
Your coffee pot was made with solar energy? Your coffee was processed and shipped with solar energy? The copper in your skill saw was mined, process and manufactured with solar energy? Your panels were made with solar energy? Your plane was made with solar energy? Your chainsaw? Your windows? and on and on and on.
No rebuttal is necessary.
http://sunweber.blogspot.com/2011/12/machines-making-machines-making.html
or
http://sunweber.blogspot.com/2011/01/energy-in-real-world.html
or
http://sunweber.blogspot.com/2011/10/to-make-light-bulb.html
or
http://sunweber.blogspot.com/2013/10/a-small-fan.html
Arthur on Wed, 15th Jan 2014 4:53 pm
sunweber . blogspot . nl/2011/12/machines-making-machines-making.html
This link shows processes that run on fossil fuel. Faulty conclusion: these processes will always run on fossil or won’t run at all.
Energy = energy. What ever you can do with fossil, you can do with electricity, generated by renewables, as long as you can plug a power cable in a socket, which excludes airplanes and missiles.
About machines making machines… here is one of the latest solar panel factories by Bosch:
http://www.youtube.com/watch?v=ihEIaYsB4yg
Totally operates on electricity, that could have been generated by panels that left the same factories two days earlier. The only thing that counts is EROEI. If the plant would be situated in Spain, Arizona or Egypt that would be an EROEI of 30-60 as of 2014:
tinyurl . com/ol9t4q3
This is a very important issue, because most posters here believe the BS that renewables are necessarily an extension of the fossil fuel system and that renewables have therefor no future and hence arrive at the familiar doomer position.
sunweb on Wed, 15th Jan 2014 5:28 pm
Arthur – and the buildings were build with solar? And the machines? and the next generation of panels? and the next?
Wishing doesn’t make it happen. Wanting “Business as Usual” for the small amount people at the top of the energy pyramid is the major problem of arrogance and hubris.
simonr on Wed, 15th Jan 2014 5:32 pm
If the EROEI is positive you can make panels from solar energy.
However the plastics, and all the raw materials are they possible without petrol.
Honest question, I dont know the answer, but I hope yes.
sunweb on Wed, 15th Jan 2014 5:37 pm
Arthur – Your response doesn’t answer the question of all the appliances, tools, food and buildings that are the product of the fossil fuel supply system. Cornucopians believe the BS that “renewables” can reproduce themselves and have a high ERoEI. That we can keep mining the earth destructively – out of sight, out mind. Copper motors require mined and refined copper, recycled stuff has impurities. Maybe you can get rid of the impurities with more energy. Without the Komatsu 930 or its ilk will you go down into the copper mines?
Arthur on Wed, 15th Jan 2014 5:55 pm
Arthur – and the buildings were build with solar? And the machines? and the next generation of panels? and the next?
You say it: were build. That’s past tense since in the past there was not a renewable energy system worth speaking of. But I am asking you to concentrate on the very simple equation:
energy = energy
It does not matter what source it comes from, oil or renewable.
However the plastics, and all the raw materials are they possible without petrol. Honest question, I dont know the answer, but I hope yes.
You can make plastic from bio-fuel, if you insist on using plastic.
Without the Komatsu 930 or its ilk will you go down into the copper mines?
How many copper mines and hence ‘Komatsu 930’ are in fact in operation? While it would be insanity to try to keep a fleet of 1 billion cars going on bio-fuel, bio-fuel could be used perfectly as a niche product just for the improbably case that you can’t use electricity from renewables. Perhaps there will never be batteries compact enough to power Komatsu 930 or giant cranes to install wind turbines. No problem, use bio-fuel in those rare cases.
PapaSmurf on Wed, 15th Jan 2014 9:28 pm
“Remember when an hours labor at minimum wage bought over 3 gallons of gasoline? I do.”
———————
No, I don’t remember. I have not been to a gasoline station in over a year. 14,000+ miles and counting on my Nissan Leaf.
Those gas stations are so annoying. I stopped to buy a drink a few weeks ago and the place smelled really bad. Why do you people still use gas stations?
DC on Thu, 16th Jan 2014 12:34 am
While I will grant you Papa, that EVs do indeed have some operational virtues over the gas-powered trash-can, you ‘leaf’ was still built by oil. Your leaf is literally soaked in it, even if its not falling out the tailpipe anymore.
No oil=no leafs, or fake-wannabes like the GM ‘volt’.
I have yet to see an operational day-to-day EV in my entire province, over 6 million people and an area larger than France and the low countries combined.
Makati1 on Thu, 16th Jan 2014 1:11 am
sunweb, Arthur believes in tech and as a true believer, you cannot change his mind with facts. He will just bend them to fit his narrow world view.
You and I know that the modern tech world was born on the back of cheap, plentiful hydrocarbons and will die on the back of their depletion. Those wind towers, solar panels, etc. need a few million different components to exist, like roads and huge cranes. He doesn’t see that. Too bad.
sunweb on Thu, 16th Jan 2014 10:34 am
Makati1 – Thanks. Respecting his thoughts I went to the sites he suggested. Not science but essentially advertisements in the guise of research papers by people in the business of selling solar.
It saddens me. He thinks I am a doomer. I am a realist. We have planted 400 blueberry bushes that will come to fruition in a few years and last for many years as a pick-your-own patch. I am almost 71, a 11 year survivor of lung cancer and a recent recipient of another stent (99% blockage). You can’t get around the facts nor can you remove the emotions attached to the changes coming.
Arthur on Thu, 16th Jan 2014 11:15 am
Thanks. Respecting his thoughts I went to the sites he suggested. Not science but essentially advertisements in the guise of research papers by people in the business of selling solar.
I am sorry, but the Fraunhofer institute linked above is not in the business of ‘selling solar’:
tinyurl.com/ol9t4q3
Again: energy is energy
As a trained and graduated physics engineer I can tell you that it does not matter if energy comes from fossil or renewables. You only need fossil (or bio fuel) for plastics and planes, period.
For Bill there is no way back. Based on an imprudent intellectual 200x doomer diet of the likes of ASPO, TOD and Heinberg, he manouvered himself in the absolute doomer corner and decided to setup shop in the Philippines to ‘survive’ the ‘coming oil crash’ (not going to happen any time soon) there and necessarily will attack anything that threatens his too pessimistic and premature ‘four horsemen’ worldview, in which their is no place for ‘techie solutions’, because these solutions threaten Bill’s bleak world view.
The world coming to an end is bad enough, but being wrong about it is far worse.lol
Don’t get me wrong, there is no possibility for BAU in the mid-term. We will have to drastically change the premises of our civilization and engage in massive belt tightening, like saying goodbye to mass transport with car and plane. But there will be a role for light-weight technology (like this medium, the internet) in the future, as well as a 100% renewable energy base. No need to return to the ranch, let alone the cave.
Ghung on Thu, 16th Jan 2014 10:09 pm
@ sunweb: A rebuttal is absolutely necessary. At no time did I claim we did those things totally on renewables. I resent the implication that I did. I was responding to the statement: “The story is different if they [renewables] actually did some work like, pumping water or milling grain.” Taking things out of context is simply dishonest.