A smarter way to deploy smart meters

It’s no secret that PG&E has created an enormous controversy in California — encouraged by the PUC — with its aggressive push to force smartmeters on its customers. The newspapers and TVs have run story after story on the controversy, there have been hearings and a state investigation, and still cities are “banning” smart meters on a variety of grounds.

The imposition of smartmeters is the ultimate manifestation of a technocratic view of energy management, fueled by $3 billion in stimulus money. On the one hand, smart meters allow demand management and time-of-day metering, and are seen by many as the lynchpin of $200 billion in worldwide investment on bringing the electric distribution grid from the 19th century into the 21st.

On the other hand, customers are seeing their bills increase — both to pay for the meters and for time-of-day use — without any increase in the available energy. The meters are being fought on the left over price increases and on the right over the invasion of privacy.

Now a Texas utility wants to try a different approach. As VentureBeat reports:

It’s interesting to see that one pilot happening in the U.S. is coming at the game with a new approach: Focus on the making the consumer happy about the smart grid. In particular, it wants to demonstrate that the smart grid can improve the quality of consumers’ lives, much in the same way apps add value to the lives of iPhone and smart phone users.

Brewster McCracken, director of the Pecan Street Project in Austin, Tex., says its smart grid demonstration project is unlike any others in that is most concerned with the value to the customer, and not the utility. Part of the project’s goal will be to study how — and whether — the smart grid can provide value to the customer.

How about that? A public utility working to do something that benefits customers? (I’m guessing they came up with this on their own, without any help from the Public Utility Commission of Texas.)

The idea of being customer-driven is not something that comes naturally to big monopolies, particularly utility companies who get their revenues by spending money by lobbying for rate increases, then increase their rate base that is multiplied by guaranteed rate of return. (NB: This culture proved to be a disaster for the phone companies during the 1980s and 1990s when they actually had to compete for customers.)

This also applies to the big suppliers to the power companies, who wouldn’t know a consumer if one bit them on the backside. Even GE — with more than $90 million spent on its Ecomagination consumer PR blitz — isn’t really interested in listening to customers, but instead wiring its meters into local smart grid procurements.

With their assumption of all-knowing, all-seeing command-and-control planning, the top-down government bureaucracies are even worse than the top-down ones at the utilities or the industrial manufacturers. If you want to see Soviet-style central planning in North America 20 years after the collapse of the Soviet Union, this is where you’ll find it.

So the Austin public-private collaboration and its leaders should be applauded for their initiative. The old “small is beautiful” Jerry Brown would have loved and trumpeted a decentralized initiative like this, but I guess the state budget quagmire and its $25 billion deficit are occupying 110% of his attention right now.

Environmentalists against solar energy

Normally when it comes to environmental policy, the renewable energy industry is on the side of the angels. A rare exception is Sen. Diane Feinstein’s imminent proposal to block off portions of the Mojave Desert from renewable energy projects.

As the AP summed it up:

California's Mojave Desert may seem ideally suited for solar energy production, but concern over what several proposed projects might do to the aesthetics of the region and its tortoise population is setting up a potential clash between conservationists and companies seeking to develop renewable energy.

Nineteen companies have submitted applications to build solar or wind facilities on a parcel of 500,000 desert acres, but Sen. Dianne Feinstein said last Friday that such development would violate the spirit of what conservationists had intended when they donated much of the land to the public.

Feinstein said she intends to push legislation that would turn the land into a national monument, which would allow for existing uses to continue while preventing future development.

The main focus on the controversy has been on solar energy. The Mojave is the site of America’s first commercial-scale solar (thermal) energy system, the nine plants of the Solar Electricity Generating Systems dating back to 1985. The 354 MW capacity were once the largest in the world.

However, the desert is not far from the wind farms of the Tehachapi Pass, which with more than 4000 turbines is said to be the 2nd largest collection of wind generators in the world (after the Bay Area’s Altamont Pass). Depending on the boundaries, the monument might impact either wind generator or transmission.

While exacerbated by the increased clout of environmentalists in the White House and and Congres, the controversy has been simmering for a while.

Nearly 12 months ago at the Yale Climate Change Conference, Gov. Schwarzenegger blasted environmentalists. It was in the context of the San Diego’s planned powerline to Imperial County, but it would also apply to this month’s dispute:

One energy expert the other day said that the California Mojave desert which is a vast space with thousands of square miles is one of the best spots on planet earth for solar power plants. Pacific Gas & Electric wants to put three huge solar plants right there. And the whole world the Germans, the French, the Canadians, the Japanese they all want to come out to California and put solar power plants in the Mojave desert and in other places. The only thing is that the problem is getting that new energy to the power grid because of environmental hurdles.
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What they have here is a case of environmental regulations holding up environmental progress. I don't know whether this is ironic or absurd. But, I mean, if we cannot put solar power plants in the Mojave desert, I don't know where the hell we can put it. (Applause)

Ladies and gentlemen, this is the real world. We have to make some tradeoffs. I think both the environmental activists and their opponents cannot let "perfect" become the enemy of "possible," because the fact of the matter is nothing is perfect. Solar still needs transmission lines.

The governator is well-informed. For now, utility-scale plants appear to be the future of solar energy generation in California (if not the Southwest), and those plants require land that has high insolation, proximity to population centers and transmission lines back to those cities.

Moving the panels out of California will increase the transmission costs — both in terms of capital costs and transmission losses. It will also make it harder for California utilities to meet their 2020 renewable energy mandate.

Even the progressive editorialists of LA Times are skeptical:

We'll withhold judgment on Feinstein's monument proposal until she actually produces it -- the senator is still studying which lands to protect in a swath between the Mojave National Preserve and Joshua Tree National Park. The decision-making process presents a welcome opportunity for dialogue about balancing the need for renewable power with the need to conserve sensitive lands.

Yet perhaps it's possible to love the desert too much; if we go too far in protecting it from solar development, those wide arid spaces promise to become a lot wider in the scorching future.

Utilities: where the PV money is

I attended last month’s SVPVS meeting where Chuck Hornbrook of PG&E was the guest speaker. It really changed my viewpoint on California’s PV industry.

Although I’ve had no time to write up here what I heard, blogger Eric Wesoff of GreentechMedia was there and summarized what he heard (and picked up by Seeking Alpha.) Hornbrook’s Feb. 11 slides are also posted to the SVPVS past events website (while some slides match a December 2008 presentation at the City of San Jose).

Wesoff captured the sense of the talk: PG&E wants to avoid generating greenhouse gasses, but will do so by the cheapest means possible. If increasing efficiency is cheaper than PV, then it will use efficiency.

Hornbrook said PG&E is using a three-pronged attack: energy efficiency, increased used of renewable energy that meets California’s Renewable Portfolio Standards, and the ClimateSmart carbon trading scheme. Overall, it sounds like California’s policy to encourage a EE/RE shift seems to be having the desired effects.

I don’t have a chance to elaborate on all the details of the presentation, but there were two big ideas that stick in my mind, even weeks later.

One is that Wesoff says that PG&E has a huge advantage over many (perhaps every) other utility. As Wesoff reports, Hornbrook said PG&E has half the grid-tied solar (i.e. customer-owned panels) in the US. By another measure, PG&E has 2/3 of the PUC’s California Solar Initiative but only 43% of the state’s population.

I didn’t capture the money quote, but the Hornbrook’s point is that PG&E has a lot of customers installing solar — not because we get a lot of insolation, but because of their beliefs. The PG&E territory overlaps some of the most progressive parts of the US — not to mention above-average affluence — so a lot of consumers (and perhaps businesses) are buying solar panels because they believe in them. True believers are a great way to spurt adoption until consumer PV can achieve grid parity.

The second aha! moment was that the PV equivalent of the (alleged) Willie Sutton’s quote. PV manufacturers are making and selling utility-scale PV solutions because that’s where the money is.

On Saturday morning, the lead of the business section in the Merc made my point:

Viewed by many as a potential bright spot in a gloomy economy, solar power's prospects appear to be dimming, at least for the near term.

Applications for new solar projects have plunged in recent months in California as homeowners and business owners struggle to get credit and rein in spending on big-ticket items such as a rooftop full of solar panels.
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Solar-sector players remain bullish on the long term, and hope the combination of an increased federal tax credit passed late last year and the stimulus package approved in February will persuade people to add solar. They note that more megawatts of solar power were installed in California in 2008 than ever before.
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[PG&E spokeswoman Jennifer Zerwer] blamed the decline mostly on the economic downturn. But reductions in state rebates for both residential and commercial solar installations didn't help, Zerwer said. Others in the industry cited seasonal factors as well — fewer people buy solar panels during the rainy winter months.

Statewide, the three big investor-owned utilities, including PG&E, received about half the applications in January and February that they had in each of the last four months of 2008.

Both this week‘s story and the Feb. 11 talk point up a key point. Consumer and producer confidence — and also their ability to pay — have collapsed with the recession.

Electric utilities have capital, cash flow and a credit rating to pay for the mega-million dollar plants; small and young PV startups don’t. Utilities also have a gun to their heads: 20% RPS under contract by 2010 and 33% by 2020.

If the economy remains soft for the next 18-24 months, then (even with government subsidies) PV system purchases by electricity customers could continue to remain soft. If so, then utilities will be the customers driving down the costs of PV through the experience curve — favoring those firms and technologies (like CPV) that are particularly suited to utility-scale generation.

Transmitting clean power

California has a state goal of increasing the share of renewable energy used in the state. Of course, as with elsewhere in the country, the supply of such energy isn’t always where the demand is.

In particular, any large-scale solar energy plants will be built in Imperial, Riverside and San Bernadino counties, where it’s sunny and dry and land is cheap. (You won’t ever find solar plants on Palm Canyon Drive). For example, the big Kramer Junction power plant is in the Mohave Desert in San Bernadino County.

In the southwest corner of the continental US, San Diego is a geographically isolated metropolitan market without the hydro of the Sierra Nevadas or the windmill farms of the Tehachapis or the Altamont Pass. Instead, for years San Diego Gas & Electric has been pushing to build a new 123 mile power transmission line called the Sunrise Powerlink, to connect to a planned 900 MW power plant in Imperial Valley. In response to opposition by environmental groups, the environmental impact report runs 11,000 pages.

Now, Fortune reports that the power line has been rejected by Jean Vieth, an (Obama supporting) administrative law judge for the state Public Utilities Commission. The PUC uses law judges to develop the legal record, although the final decision is made by PUC commissioners. Oral arguments before the commissioners were held yesterday in San Francisco, towards a possible Dec. 4 decision.

The core arguments seem to be energy vs. the environment: the irony is that this energy would enable a shift by SDG&E from fossil fuels to renewable energy. Critics have claimed that San Diego doesn’t need the line to import the power, an argument that has been repeatedly rebutted by the state’s own power transmission bureaucracy, the Independent System Operator.

Perhaps this is the wrong project and there really are viable alternatives; I have no direct knowledge. However, rejecting efforts to increase the production and supply of clean energy will eventually either result in brownouts (as in the Gray Davis era) or the state failing to meet its goal of 33% renewable energy supply that’s 11.1 years off.

A belief in small is beautiful is not going going to eliminate the fundamental economic laws related to scale economies. Right now, solar thermal is the best option for California to gain the capacity necessary to replace fossil fuels.