Who can resist a headline like this:  "FERC to utilities: 'Change or die'"?  The headline comes from a quote of FERC Chairman Jon Wellinghoff, "The traditional utility is either going to have to change or die."

What he's talking about here is a future where each end-user has the opportunity to be their own mini-utility and save money simply by having access to real-time load and pricing information.  Of course, you can also do that right now by installing your very own power generating system.

Fierce Energy has published a series of articles about what they are dubbing "prosumers" -- consumers who produce their own energy, whether its through installation of their own solar, wind, geothermal or other renewable energy source, or through response to price signals that curtail their energy use to produce "negawatts," which they then sell back to their utility.

Change is hard for investor-owned utilities with a sense of entitlement to bigger and bigger profits at your expense.  The times, they are a-changin'.  But watching them thrash, struggle and die will be entertaining, at least. 

Take a look at this story on The Daily Beast blog at Newsweek's Web site.

In 2008, 33,500 rooftop solar systems were installed in the United States, a 63 percent increase over the amount of capacity installed in 2007. In California, the solar capital of country, the increase was 95 percent.

Meanwhile, the outlook for the other side of the solar industry—the large, centralized power plants—isn't so sunny. These megaprojects—think acres of desert landscape covered in thousands of solar panels sending electricity through transmission lines—controlled mostly by utility companies that have had a monopoly over the country’s electricity grid since the turn of the last century, were supposed to be the key to the future of the solar industry. So far, they're getting vastly outpaced by the decentralized rooftop approach. According to the Interstate Renewable Energy Council's 2006-08 count, consumers added 522 megawatts to the grid; whereas utility generated sites added just 96 megawatts.

Are power companies making an extra effort to increase investment in solar to catch up with homeowners and distributed generation?  No.

The disparity has utilities worried about losing their grip on the country's energy industry, and the $130 billion residential electricity market. In some cases, utilities are actually taking direct steps to thwart rooftop solar. Two weeks ago in Colorado, the state's biggest utility, Xcel, tried passing a surcharge on homes and businesses using rooftop solar power. The public went ballistic, and with pressure from Democratic Gov. Bill Ritter, the proposal was eventually shelved. In early July, New Mexico's biggest utility, PNM, filed an official request to dramatically reduce incentives for businesses and homeowners to install solar panels, and is now fighting with state lawmakers over whether it has the right to exclusively own solar panels systems hooked up to its grid.

So far, all of the innovation in solar power in the US has come from homeowners, small businesses that install solar generating equipment, and local innovators.  The media lead us to believe that business innovation involves some whizbang technology.  It doesn't.  Business innovation is almost always figuring out how to get the best products into the hands of the most people.

Right now, some of the most advanced business innovation in solar power is coming out of the People's Chapel in Philippi, WV.  Here's the story from the Pittsburgh Post-Gazette.  Ruston Seaman and John Prusa have created a charitable business called New Vision that puts solar power in the hands of local people for a fraction of the cost of a manufactured, turnkey system.  They use innovative labor credits and partial assembly of PV panels to make their products available to nearly everyone.

Here is real business innovation that cannot be matched by power companies operating our obsolete, centralized grid:

Families who receive solar panels pay for them with two currencies: money and time.

One home can cost between $7,000 to $10,000 to outfit, with trees to clear and supplies to buy. Families pay for the panels with some of the savings they start to see on their electric bills each month. The money goes into a general community fund that finances more solar panels on more homes.

"Once 10 families start paying back, there's enough for Family Eleven," said Mr. Seaman.

Ten families are already slated to receive the panels, and already nine mission trips are planned this summer for groups from Pennsylvania and West Virginia to come and help install more.

In addition to those upfront expenses, outfitting a home also takes manpower; Mr. Seaman calls it Philippi's version of Amish barn building.

To pay back their neighbors for their time, families must volunteer by either installing solar panels somewhere else or putting in community time at the church.

Mr. Prusa printed "dollar bills" that are exchanged as currency for the volunteer hours.

Here is the closing comment from a solar installer in the Daily Beast story:

"We're buying panels at prices I didn't think we'd see for at least another decade," says John Berger, founder of Standard Renewable Energy, a Texas-based company that provides homeowners and businesses ways to reduce their energy costs, including on-site solar generation. Berger expects to have revenues of $50 million in 2009, this after doing $11 million in business last year, and only $1.5 million in 2007. He gets particularly agitated when talking about the utilities. "When solar came along, they thought they could ignore it. Then they thought they could just monopolize it. But the private sector is giving them competition, and now they're scared."

Power companies should worry even more now that innovators like New Visions are in the solar power game.

by Bill

As I re-read the AP's story by Larry Messina in this morning's Charleston Gazette, I noticed that he referred to the Coalition for Reliable Power as "[a] group that advocates for West Virginia consumers."  Mr. Messina has clearly failed to read anything on the Coalition's Web site.  C4RP "advocates for" WV electricity producers, specifically those producers that produce electricity at or near where they use it.  That is why it is called the Coalition for Reliable Power, because the laws of physics prove that this is the most reliable way to run an electrical system.  Go to the C4RP site yourself and see what I mean.

In fact, if Mr. Messina had done much reading at all about C4RP, he would have come across our admonition for West Virginians to "stop thinking like consumers, start thinking like producers."

This is hardly "advocating for WV consumers."

This correction goes to the point of what is wrong with the discussion of rising electrical rates in WV.  Producers invest in new equipment to produce electricity realizing that high up front costs can lead to lower long term rates.  Consumers are only interested in the short term price that they have to pay.

To have a truly affordable and reliable electrical system, West Virginia needs far more people who think like producers, not consumers.  Our state also needs leadership that recognizes that the somewhat higher initial costs of installing small scale solar generating systems across our state is an investment that will pay dividends in reducing and eliminating skyrocketing fuel costs.

Here's the link, but it will go dead in a week.  So here is the meat of the piece:

"Byron Harris, consumer advocate of the Public Service Commission, says federal figures rank West Virginia home power usage as 12th-highest in America.

The reason, apparently, is that more Mountain State homes are aging, with poor insulation and drafty windows -- letting costly heat escape in winter and failing to block muggy warmth in summer. Many lack cost-cutting heat pumps. Older appliances and incandescent lightbulbs also waste power.

In California, where energy-efficiency efforts are intense, the average home uses a mere 562 kwh per month, according to the U.S. Energy Information Administration.

Two Kanawha Valley activists, Mike Harman and Cathy Kunkel, told a Charleston church group this week that preventing energy waste could save West Virginians millions in utility bills and reduce the need to build more power plants."

And:

"A crusading group named Energy Efficient West Virginia has created a website to push the war on waste. It can be found at www.eewv.org.

A couple of years ago, the federal stimulus program gave West Virginia $37 million to weatherize low-income homes. In the coming 60-day session, the Legislature should expand the struggle by passing stronger energy codes and prodding utilities to increase efforts against loss.

Wasting money is senseless. Saving is wise. Energy is too valuable to be squandered needlessly."

by Keryn

The town of Vineland is keeping electric rates low for their customers by installing their own, local generation instead of relying on PJM's much more expensive supply of electricity.

"The utility has spent years relying on PJM, a wholesale electricity distributor, to produce energy during high-demand times because it is capacity short, but that comes at a cost, Vineland Municipal Utilities Director Joseph Isabella said.

Each of the new units, however, has the potential to save the utility between $6 and $8 million a year, Isabella said. That's money the utility now collects from customers to pay PJM, he said.

Once the new unit is in next year, a rate decrease could come by fall, marking the third rate drop since Isabella took over as director in 2008.

"My goal is to have the lowest rates in New Jersey and the cleanest utility in New Jersey," he said.

Vineland Municipal Electric Utility has spent the past four years moving toward clean, efficient energy production, Isabella said. That included adding the two turbines and 16 megawatts in solar projects that are either complete or will be by the end of the year.

Isabella also plans to seek proposals for 4 to 8 more megawatts of solar powered projects in a few weeks to further close the capacity gap.

"We want to be able to take care of our needs with our own units," Isabella said."

New Jersey is making great strides toward energy self-reliance lately.  The state has been bickering with Regional Transmission Organization PJM Interconnection and FERC over installation of two new gas-fired generation plants in the state, instead of relying on PJM and coal-dependent generators in the Ohio valley to supply the state with electricity via hugely profitable (for their coal-fired generation owning builders) new transmission lines.

New Jersey is taking real action to shape their own energy future and lower electricity prices for their citizens through self-reliance.  Bravo to New Jersey and the town of Vineland!

by Bill

If you read this blog, you know the Coalition supports the creation of a new, more reliable, less expensive electrical grid in the US based on distributed generation instead of our current centralized grid.  Distributed generation is the reduction of the size of individual generation sources so that they can fit into communities and homes, widely distributed in local and regional power networks.

The development of a distributed grid won't just happen.  A lot of changes have to happen with electrical hardware, integration protocols and operating standards if we are going to make the transition from the current centralized grid to a more stable and secure distributed grid.

Fortunately, there are a lot of smart people working on these things.  One of those groups is the Regulatory Assistance Project.  They have published a new report called Interconnection of Distributed Generation to Utility Systems: Recommendations for Technical Requirements, Procedures and Agreements, and Emerging Issues.

If that title sounds intimidating, it shouldn't keep you from taking a look at the report here.  There are some great pictures in the report of small electrical generating systems that will give you a good idea of what we mean by distributed generation.  You will also get a good idea of how much work we have to do to make this a reality.  We should not be wasting time and money propping up our obsolete generation and transmission system when we need to be investing in real innovation.

The rebuilding of the Glen Ferris hydroelectric power plant on the upper Kanawha River is an excellent example of the kind of diverse power generation we need across West Virginia and the US.  Here is a look at that project.

by Bill

Recently, I picked up a book called The Grid by Phillip Schewe.  I haven't finished reading it, but Schewe has some interesting things to say about the efficiency of how we generate electricity.  C4RP is co-sponsoring energy efficiency training sessions around the state with Energy Efficient West Virginia, but these sessions focus exclusively on increasing our efficiency in the consumption of electricity, not its production.

How efficient we are at producing electricity can have even more important economic impacts than the efficiency of our consumption.  As Schewe points out, producing electricity from coal using steam turbines is only about 30% efficient.  That means that 70% of the coal that is burned in the steam turbine furnaces is not producing electricity.

Here is how Schewe describes producing electricity from natural gas on page 194 of The Grid:
"Gas turbines are quite popular at this moment in the history of the electrical grid.  They can be built quickly and can be as large or small as a company wants, depending on the amount of extra electricity needed, from many hundred megawatts down to kilowatts.  In a gas turbine pressurized gas is mixed with air to produce an explosion, escaping gas directly spins a turbine to generate electricity.  The process is even more attractive when heat is captured from the exhaust gas coming out the back, heat used to make steam, which turns a second turbine to generate extra electricity, [This second cycle is why modern gas power generation is referred to as "combined cycle."] for an overall efficiency as high as 55 percent...Sill more efficiency can be wrung out of the whole operation.  If the leftover steam is used for heating, the total energy efficiency (electricity plus heat divided by the energy input) for the combined heat-and-power process could be as high as 90 percent."

Schewe points out elsewhere in The Grid that the extra boost in efficiency from gas turbines that using excess steam for heating provides, is not really available to most modern coal-fired generating plants.  These plants are so big, and produce so much air pollution, that they are located away from population centers.  Because they are located so far from where people need heat, their extra heat cannot be economically piped to heat homes and businesses.  Instead, massive coal plants must have cooling towers to waste heat into the air so that exhaust water can be returned to lakes and rivers without destroying their ecosystems.

As Schewe points out, natural gas generators can be scaled down to the community level which makes them readily able to generate heat for home and business heating.  In Denmark today, no new electrical generating plants can be permitted unless they also include the technology to recycle all of their "waste" heat.

There has been a lot of discussion among scientists and engineers about natural gas contributions to global warming compared with coal.  I have seen quite a few reports on leakage in the natural gas system, as well as comparisons between carbon emissions from coal and gas, but I have not seen any factoring in of the extremely high efficiencies provided by natural gas in electrical production and cogeneration as compared with burning coal to generate electricity.

If you can recover far more "work" from any unit of natural gas than you can from a unit of coal burned, you will only need to burn a fraction of the gas to do the same amount (or more) of the work you get from a similar amount of coal. 

And this is all before you even get to the increased reliability from having a distributed system of power generation.

by Bill

I just got this excellent link from C4RP steering committee member John Christensen which explains distributed generation clearly and simply.  The article demonstrates clearly why Chairman Wellinghoff is dead wrong to be streamlining the FERC transmission process at this time.

The article includes the following list under the heading "Why Distributed Generation".  How can Wellinghoff's obsolete centralized grid compete with distributed generation?

"There are a number of benefits to a democratized electricity system, in addition to the monumental shift toward energy self-reliance.

1. Vast potential and deployment speed.  Nearly every state could meet 20 percent of its electricity needs with rooftop solar PV alone.  Two-thirds of states have sufficient wind, solar and geothermal power to get 100 percent of their electricity from in-state (and distributed) sources.

Distributed generation can also come online much faster than centralized generation.  For example, while the entire world has installed barely 1,000 MW of centralized solar thermal power, Germany installed 7,400 MW of distributed solar PV in 2010 alone.   Similarly, large wind projects often experience long delays awaiting new transmission capacity whereas distributed wind projects can often connect to the grid without significant infrastructure upgrades.  Ontario’s feed-in tariff program, for example, provides fast-tracking for small-scale distributed generation (projects smaller than 500 kW) because it rarely creates significant grid impacts.

2. Favorable economics.  Some renewable energy technologies (with federal subsidies) already compete toe-to-toe with fossil fuel generation, and others – like solar – are rapidly becoming less expensive.  Furthermore, the vast majority of economies of scale for renewable energy technologies are captured at a modest size, well within accepted size definitions of distributed generation.

3. Local ownership and political support.  The economic impact of locally owned renewable energy projects can be several times greater than absentee-owned projects, and distributed generation lends itself to ownership.  Such local ownership also dramatically increases local acceptance of more renewable energy production.  And because it’s a more efficient use of the electricity grid, distributed generation reduces the number of political fights over new high-voltage transmission lines.

The political support for distributed generation also stems from its inherent democratic nature.  By dispersing the sources of power generation and opening the grid to producers large and small, a distributed grid allows for maximum participation in power production, creating a constituency for supporting the expansion of clean energy and distributed generation.

4. Value to the grid.  Distributed generation is more resilient to disruption, with power generation spread over thousands of generators and over a wide geographic area.  This makes it harder for a large area to be without power and easier to maintain grid stability.

A distributed grid can also be more efficient, by maximizing the potential of existing infrastructure.  In California, the Public Utility Commission requires utilities to publish data on “sweet spots” on their grids and assist distributed energy developers to plug in where it’s of greatest benefit.  This efficient usage can reduce the demand for new grid infrastructure, particularly expensive high-voltage transmission lines."

by Keryn

New Jersey is tired of playing victim to out-of-state energy conglomerates who fatten their own bottom lines by keeping electricity prices high in the state.  In addition to taking on the PJM cartel by financing and building their own new in-state generation, the New Jersey Office of Clean Energy is also soliciting renewable energy storage projects to help manage new wind and solar generation.

"The proposal is part of the state’s effort to develop alternative forms of energy, particularly renewable sources and distributed generation. Distributed generation -- power plants that serve a localized need --reduce congestion on the electric grid, which drives up the cost of electricity for consumers."

Bravo, New Jersey!  There's a lesson here that needs to be quickly learned by other states as FERC's Order No. 1000 is implemented.  Encouraging localized renewable generation to meet their individual state's Renewable Portfolio Standards not only prevents new, renewable energy transmission development that is estimated to cost their consumers over $200 Billion, but it also boosts the local economy and provides good-paying, local jobs within the state.  Don't sit around and wait for others to supply your needs at an outrageous cost  -- self-reliance pays big dividends.

by Bill

Here is a town in Bavaria that isn't whining or watching its coal based economy erode out from under it.  They are doing it.  A town of 2600 people.  Looks like a lot of places in WV.

Wildpoldsried produces 321% more electricity than it needs and earns $5.7 million per year selling its surplus.  Of course, this is in Germany where power companies and the federal government are serious about getting off both coal and nuclear power.

No 765 kV transmission lines needed for Wildpoldsried.  But lots of new jobs and income.  And the power is controlled by the town and sold by the town, not some distant conglomerate.