[frankthetank]

Read this today...

$this->bbcode_second_pass_quote('', 'I')n the dark. The second threat is a severe electricity shortage in the Northeast--with possible brownouts or blackouts. Deregulated natural-gas-fired power generators, under no legal obligation to serve customers as the old monopoly electric companies were, can simply stop generating power. Some plants will be interruptible customers with no backup fuel source. But in other cases, power plants that have firm natural gas contracts will stop generating electricity anyway and sell their fuel at enormous profit. That is precisely what happened during the three-day January 2004 cold snap, when more than 25 percent of New England's generating capacity went off line and the reserve margin was near zero. The market weathered that storm, but ISO New England, the organization responsible for managing the electric grid, says that even under normal weather conditions, electricity demand this winter most likely will set a new record surpassing that of the perilous 2004 cold snap. The grid operator has taken steps to head off a shortage, spearheading a public-relations campaign to urge New Englanders to conserve electricity, attempting to work out agreements with big customers to curtail demand, and asking the Coast Guard to station ice-breaking barges in locations that will assure fuel oil deliveries can make it downriver to electric plants. But Connecticut Attorney General Richard Blumenthal says as long as power generators are allowed to shut down and sell natural gas during a weather crisis, there is a risk of the kind of market chaos, as well as manipulation, that roiled California in 2000 and 2001. "The result could be a calamity," he says.

Neal Costello, a Boston lawyer who represents deregulated power plant operators, argues "the generators benefit, but so do others" from the system in which they sell to hospitals, schools, and businesses that otherwise would have no natural gas. In January 2004, he says, "the lights stayed on, and no one was cold; the market worked as it should have." However, he is quick to add that there is reason for alarm. " New England clearly has a looming energy crisis, not just this winter," due to overreliance on natural gas for electricity.

[backstop]

Under the Reagan/Thatcher "De-regulation" of the energy industries, which has since been propagated in many countries and heavily blurred with the title "Globalization"

and given the accelerating destabilization of the climate over northern hemisphere industrialized nations,

it seems to me that such energy-supply shortfalls are a matter of when, not if.

regards,

Backstop

[gt1370a]

Whoa. Considering this, when you take into account the fact that some big power companies like Duke and Progress are more than 50% nat gas-powered, that sounds like a recipe for disaster. Are they still regulated or could they sell off their gas supplies if it was more profitable than using them to produce power?

The bigger concern I have is not so much that they will just stop generating, but that they will pass on the extra fuel cost. Businesses in their areas that are energy-intensive and have slim profit margins will either have to scale back or shut down and move to mexico.

[lawnchair]

$this->bbcode_second_pass_quote('gt1370a', 'A')re they still regulated or could they sell off their gas supplies if it was more profitable than using them to produce power?

[The_Toecutter]

More incentive to power your house on your own with wind and solar electricity. Wind is now cheaper than coal in many areas, solar competitive with 70s era nuclear when you take away nuclear subsidies and add in waste disposal costs. Further, that $.04/kWh of coal is often charged as $.10 to the consumer. A small household wind generator in an area with adequate weather could generate electricity for $.06-.08/kWh. Solar panels for $.16-25/kWh.

In California, electricity prices from coal and natural gas power companies are often in the area of $.20/kWh. Most of the United States, consumers are charged around $.10/kWh, much more than it cost the company to make that electricity.

With a proper setup conmbining wind and solar for home use, it is reasonable that a small percentage of people would actually save money on a per kWh basis, most would break even, and a very tiny minority would actually find it more expensive per kWh.

Further, with greater efficiency, perhaps decreasing electricity use by half through better insulation, more efficient refrigirators and air conditioners, and flourescient lightbulbs, you'd be garunteed to save.

The problem is, to save money on electricity in the long term AND become independent, the cost of entry is high. At least as much as a new car. And you have to do it yourself.

But in most areas where the weather is suitable, it is a very realistic option and a way to avoid blackouts.

Further stability can be provided with electric vehicles. Not only would you be able to power your own home off of energy stored in an electric car for days on end(I know many that did this through hurricanes Rita and Katrina, ran their home air conditioners and refrigirators, and still had access to television, computers, videogames, ect.), but you'd also be independent from flucuations in gas prices and their inevitable increase. Most electric cars are cheaper to operate than comparable gas-powered cars when gas exceeds $1.50/gallon. Efficient electric cars will break even with gas cars at about $.80/gallon! Adjusted for inflation, gas in america has probably never been $.80/gallon, ever, making EVs extremely cheap. even at $.30/kWh, electricity is still the lowest portion of the car's operating cost and has negligable effect, and if you make your own power, you're independent of that as well.

Imagine how mkuch LESS money and how much LESS resources we could be using to see the same or even an increased standard of living. But that would make a bunch of rich corporate shareholders no longer as rich, and hence it is discouraged and ridiculed.

I hope I have my goals completed before peaks effects show up, but I won't be upset if I don't. I'm a 20 year old college student, and there's not much control I have due to financial reasons. If I manage to achieve what I have in mind though, I'll be extremely pleased, and keep the firearms handy since a high performance electric sports car that can hit 150 mph and would be extremely cheap to run(even by today's standards, as my car would break even with a gas car at about $.80/gallon) would be in VERY high demand if gas were $3./gallon, $5/gallon, or god forbid, rationed. Further, if everyone is suffering from week long blackouts or longer chronic ones, they sure as hell would be eyeing my solar panels and wind generators after seeing me using them to power this fast car and to play videogames and connect to the internet and cook food at my leisure. Of course, I would share and would be glad to help people become independent and would help teach them how to build their own generators and attain solar panels, and would help them convert their cars, labor free of charge in extreme circumstances, but they would have to be willing to pay for and or trade for the materials needed for their generators and cars to become independent. I'd be glad to help, but if they try to steal or rob, they'll get a stomach full of lead in a hurry.

Would circumstances be severe, trading electricity and homeade wind/solar generators for food might not be such a bad idea. Might leave some space to grow and process my own biofuels, however little of an amount that would be.

Off the grid as much as possible would be the best place to be pre peak so that there will be less worries post peak. If peak is soft landing or there arent even any effects, at least you'll still save money. If the situation is dire, by most standards you'd have it quite good. Win win.

You just need to be able to afford the cost of entry and have the motivation to do so. If you still cannot afford it, at least try...

Big business and big government are not going to do it for you. that would shrink their revenue and profits and decrease their control over your life. Bureacracies would rather increase their control, hence today's increasing totalitarianism as the situation worsens. Your only choice is to pull your ass up by the bootstraps as an individual. If your arms are broken, pray peak oil is marginal in consequences and try anyway.

[Doly]

$this->bbcode_second_pass_quote('The_Toecutter', '
')You just need to be able to afford the cost of entry and have the motivation to do so. If you still cannot afford it, at least try...

[The_Toecutter]

$this->bbcode_second_pass_quote('', '
')And if you live in a rented flat in town, what do you do?

[SHiFTY]

$this->bbcode_second_pass_quote('The_Toecutter', 'M')ore incentive to power your house on your own with wind and solar electricity. Wind is now cheaper than coal in many areas, solar competitive with 70s era nuclear when you take away nuclear subsidies and add in waste disposal costs. Further, that $.04/kWh of coal is often charged as $.10 to the consumer. A small household wind generator in an area with adequate weather could generate electricity for $.06-.08/kWh. Solar panels for $.16-25/kWh.

[Revi]

$this->bbcode_second_pass_quote('The_Toecutter', '')$this->bbcode_second_pass_quote('', '
')And if you live in a rented flat in town, what do you do?

[frankthetank]

OR stock up on candles, food, propane, dirty magazines, and beer and ride the thing out until spring

[gt1370a]

$this->bbcode_second_pass_quote('The_Toecutter', 'M')ore incentive to power your house on your own with wind and solar electricity.

[The_Toecutter]

$this->bbcode_second_pass_quote('', 'A')ssuming you can get planning permission,

[AlCzervik]

I was fading on Mike Ruppert a little, but he has a great article this week on the very subject.
http://www.fromthewilderness.com/free/w ... mary.shtml

[SHiFTY]

Well it certainly seems as if you have thought it through. I have followed that other thread, and it does contain some pretty interesting info. I certainly agree that none of these things are impossible to do and that there are some significant energy sources which can be tapped; whether it is cost effective at the current time, given the opportunity costs, is another matter. I have often thought about building my own EV but the terrain near me is too hilly and the controller and motor too expensive to justify. Good luck with your Triumph conversion! Out of curiosity which EV forum do you recommend?

I still maintain that the technology isn't there yet, for whatever reason; otherwise commercial EVs would be widely available. Maybe if fuel prices continue to rise, they will become more available.

I take issue with your final statements though:

$this->bbcode_second_pass_quote('', 'I') don't intend to stay in 'society'. I cannot stand cameras everywhere, rapidly eroding civil liberties, drug laws, free speech restrictions, corporate fascism, gun control, ect. Survivalist fantasyland, maybe, but regardless of what peak oil will pose(if anything at all), I still intend to get away from society as much as possible even when completely diregarding the issue of peak oil.

I'll have my engineering degree, my car, a source of electricity, perhaps a trailer or shack, my guns, and that will be that.

[aahala]

The_Toecutter

The figures you have estimated for solar cell costs and its production
seem to be overly optimistic. The solarbuzz.com site estimated a
fully installed 2K system at about $18,000 and that's about
the estimate being given by the California rebate program. The
amount of actual electricity you have estimated may be the case
somewhere in the US, but its not typical.

You also don't seem to realize in the average costs per kw, present
values and future values are not the same. Future values of the benefits
must be discounted to compare with present costs. It's like the inverse
of compound interest.

Even taking a historically low discount rate of 6%, the present values
of future cash flows(electricity generated) is worth a lot less, making
the average kw cost much higher than you have shown.

[The_Toecutter]

$this->bbcode_second_pass_quote('', 'T')he figures you have estimated for solar cell costs and its production seem to be overly optimistic. The solarbuzz.com site estimated a fully installed 2K system at about $18,000 and that's about
the estimate being given by the California rebate program.

[gt1370a]

Toecutter, have you been reading "Possum Living"?

[The_Toecutter]

Never heard of it.


***edit***

gt, thanks for mentioning this book. I just entered it into a google search engine, am now reading it, and on Chapter 5. Good stuff.

[aahala]

The_Toecutter

It's preposterous to figure average costs without adjusting for the
timing of costs and benefits.

If you really believe in your method, then do I have a deal for you.

Send me $25,000 and I will send you $1,001 at the end of each of
the next 25 years. Since by your reasoning the average cost to you is
nothing and the average benefit is $1, when can I expect your check?

[The_Toecutter]

Lets say you pay $20k for the panels up front and they make X amount of electricity over the time period specified.

The price of electricity would also change with inflation, would it not? You still paid $20k for the panels, and the cost of inflation would make that $20k worth Y amount of dollars when all is said and done after each year.

The figure I used would assume electricity prices remained constant(adjusted for inflation) and thus that 22 cents per kWh be adjusted for that as the value of money adjusts due to what your money was worth before. So instead of A dollars in 2006 and B dollars in 2026, which if you adjust B for 2006 dollars, A might very well equal B, it was near A dollars and a certain cost per kWh.

You and I were comparing two totally different criteria, but if you want to adjust for those things, you also have to keep in mind, electricity isn't going to remain $.10/kWh either, it will go to $.12, then $.15, and so on(although in today's dollars, it may still be worth $.10). I made the assumption that there was no inflation to keep it simple, that things stayed constant and value of the initial setup stayed constant. If you were to simply adjust each of them for every year afterwards, you'd come out with a similar number when you'd adjust everything back to today's dollars.

What you save 20 years from now would also be in dollars 20 years from now, compared with electricity costs 20 years from now.

What is preposterous, is to still account for changes in the value of the solar system when prices for its competition are assumed to stay constant. I'd have to account for both electricity price changes AND the changes in the value of the asset, not just one or the other, or else I'd be putting one of them at a false disadvantage and not get an accurate comparison.

I don't believe in my method so much as I used it for a rough estimate.


But, lets assume that 6% discount rate you mention, and also assume electricity prices increase accordingly.

This corresponds to an interest rate of 6.383%. Of course, it is continuously compunded each year.

From equation d = i/(i+1), where d is discount rate, i is interest rate expressed as decimal. d is .06, i is thus .06383.

To find the average, the equation V = P*e^i*t must be integrated and divided by the amount of t, where V is the value at time t, P is the base value, e is the logarithmic constant(2.718...), i is the interest rate as a decimal, and t is the time in the number of years.

Integrating the equation gives you V*t = (1/i)*P*(e^i*t-1), and to find the average V over the entire time, divide that by t.

Increasing at 6.383% per year continuously compounded, the cost of electricity being $.10/kWh retail to consumer in 2006 and $.358/kWh in 2026(from the 6% discount rate), the average price paid would be $.202/kWh.

So, there's said $25,000 system of solar panels(from first post) plus inverter and $7,000 battery system(replaced every 10 years). In 2026, at 6% discount rate, that $25,000 set would be worth $89,611. The second battery pack after 10 years(year 2016, last another 10 years) would cost $13,253(This is the value P for calculating the average value of the second battery pack at point of purchase in 2016 to retirement in 2026).

Average value of the $25,000 origianlly spent on the solar panels over the 20 years: $50,612

Average value of the money spent for first battery pack combined over 20 years: $14,171

Average value of money spent for second battery pack from years 10 to 20: $18,547 (Over first twenty years, still averages at $14,171)

Total average over 20 years: $78,954

$78,954/175,200 kWh = $.451/kWh average counting 6% discount rate for combined solar, inverter, and batteries over 20 years.

Compare that with the $.202/kWh average over 20 years for the initial $.10/kWh retail electricity in 2006 with 6% rate.

Ratio with discount rate of average solar electricity price to average conventional retail electricity price: 2.23

Ratio without discount rate of average solar electricity price with no inflation, price estimated at $.223, to conventional electricity retail price of $.10/kWh today with no inflation: 2.23

The difference? 0%.

The ratios are the same. The discount rate was unnecessary for a rough estimate, but it would have made things much more specific. Now do you understand why I never bothered with it?

Say you are in an area where in 2006, you pay $.25/kWh. If the rate at which the electricity price increases is the same as the rate at which dollars needed to equal one dollar the previous changes, then solar will still save you money.

Go and adjust the average cost per kWh for today's dollars, and the solar scenario I outlined will still equal $.223/kWh in today's dollars.