When governments subsidize projects, citizens pay twice—once as taxpayers who indirectly pay the subsidy, and then again as consumers in higher prices for the goods they buy and in reduced consumption.
All to buy votes from “low information voters” that don’t understand why the cheese is FREE in the mousetrap.
Apparently it has to be said over and over again, the average capacity factors fall short of indicating the real weakness of the intermittent providers. For solar, the capacity factor is zero overnight and during severe wind droughts that can lasts for days (and nights) the capacity is can be little more than zero.
Hence windless nights are the weakest link in the wind and solar chain and in the absence of grid scale storage that can last for several days the shooting match is all over. There will be no transition to wind and solar in our lifetime. Game, set and match.
It is five minutes to midnight for the power system, in some 19 states authorities have warned that there will be critical problems within three or four years if conventional power continues to run down under the influence of the inflation-promoting Act.
Trump is a billionaire because Nixon signed the legislation creating the EPA…no EPA and NYC real estate would be slightly more valuable than Cleveland real estate. Coal is dirty and it is the easiest to mine and so it should be treated as sacred fuel to be used in case of emergency.
Capacity Factor does not tell the whole story: As long as solar capacity correlates with utility demand, it can be a valuable part of the energy mix. Many regions are dominated by AC load... which correlates quite well with sunshine.
This would be more clear if we could apply time-of-use (TOU) rates ideally. A KWH in the peak hour is worth far more than a KWH off-peak. The ratio in TOU rates is often 5:1 and I believe the value reflected is more like 10:1. Math and machines can deal with this variability but average humans need a simplified model.
Often utilities are rewarded for selling less product.. They have one actual customer… the PSC. They couldn’t care less about you, as long as the PSC is happy. Doesn’t sound much like a normal business.
In the penultimate paragraph is the $1.4 Billion figure correct? Seems pretty small. Also, in the paragraph under the map of the US, what is the PTC that is referenced? You are absolutely right that subsidies get people to do irrational things.
It also leads to really awful legislation because to scale solar for utilities massive amounts of land needs to be purchased - in Michigan: House Bill 5120, which provides the Michigan Public Service Commission (MPSC) with the authority to approve large scale renewable energy projects — including solar, wind and battery storage – removing that exclusive control from local governments was signed into law.
Educating the political elite is a daunting task, especially when they aren’t interested in being educated. Remember when good ole Grassley from Iowa claimed wind subsidies would end in 2015. …. That is so yesterday and 18 trillion dollars ago….. Great job guys, soldier on in hopes a few will begin to come out of their drunken state and sobriety will get a hold of them.
A bit too simple on ratemaking and the implications of rate base. While over the long term, additional rate base (investments found used and useful for electricity service) is the only way to produce earnings as a result of rate cases, the short term offers other opportunities (or not0 if actual expenditures vary from revenue requirement expenditures. Investor-owned utilities (IOUs) are, allegedly, the only utilities with a profit motive, although it always amazed me how few differences there were in decision-making between publicly-owned utilities, such as co-ops and public utility districts, and IOUs: the former must keep an revenue surplus for purposes of their lenders that looks suspiciously like equity, although lenders can't access it even in bankruptcy, unlike IOU equity. In any event, while I certainly agree with many of your points, I suspect neither of you worked in utility ratemaking and/or regulation. After 100+ years, every participant's expectations of the other participants heavily influences each ratemaking outcome. I also see looming issues on rate spread and rate design, that I haven't seen anyone write about yet. I put a few resources on rate base and rate spread/design on my LinkedIn page (https://www.linkedin.com/in/pamela-morgan-763b98/) in case you are curious. Thanks for writing about these issues. Electric energy and its myriad issues are a passion of mine and I like to read about them!
Glad I found about this substack through Doomberg and The Electric Grandma.
Can you please comment about the electrical grid situation in Puerto Rico? I live in Puerto Rico and we have plenty of issues with PREPA. The service is unreliable and expensive.
Puerto Rico, not being in mainland is somehow off the radar in terms of the kind of rational discussion seen in this substack. We need the perspective of outsiders with engineering knowledge and a practical and pragmatic approach.
Maybe a look to one of our bills would make you wonder how and why we are billed the way it is done to the PREPA customers.
I look forward to continue reading what is published here and the respective comments which are very interesting.
The billing is designed to provide enough money the utility can remain a going concern and raise capital. Everything else is negotiable. Sounds harsh but how else could it be?
So let's say in a State like CA, where this sort of game played between Utility companies and Policy-writers has been going on so long that the rate-payer is @ 44 cents/kWh... What is the solution at a residential level? Yes, in a perfect world, the policy writers would throw away their CARBON NEUTRAL targets and move back to Nuclear/Natural Gas to bring cost down to the consumer; but we all know that won't happen. Is solar + battery storage a valid solution when your local Utility is so-far gone, the grid is unstable, and you have excellent annual Sunhours?
This is a great question. The issue is the PUC will change the rates on rooftop solar to make them more like the wholesale price of power. If they don't do that, it's a massive wealth transfer from those who can't afford solar to those who can. https://energybadboys.substack.com/p/stealing-with-solar-the-net-metering
It already has. Since April 2023, all 3 main California Utilities compensate solar energy next to nothing during sunhours. However, even so, it seems like solar panels + backup storage is the only solution because the cost for grid energy is outrageous.
Your capacity factor graphs are misleading, maybe to favor nuclear vs all other types.
Solar is that low, in Alberta the AESO says it’s 18%, but the only way gas and coal could be that low is if they are constantly forced to dial down to make room for wind and solar as per climate/insane green dictats.
Coal should be close to nuclear, with gas not far behind.
The solution to all this is for grid operators to state renewables are welcome but any generation with less than 50% real capacity must build their own backup to provide 2-4 hours continuous supply.
A 500mw solar farm forced to provide 2 GWHR of battery backup will quickly rebrand themselves as 100mw.
No matter.
I would clean this piece up to clear up that coal and gas capacity factors are actually much higher than shown.
Hi Pat, I can assure you we did not manipulate the state-level EIA’s statistics to favor nuclear or any other generator.
What often happens is states build gas capacity to replace the coal plants. As a result, during the overlap years, both types of plants run at less than their optimal capacity factors until the coal plants are shut down, at which time gas capacity factors generally rise so long as wind and solar aren’t soaking up that market share.
The issue is that most operators are mandated to take all those wind and solar electrons if present, to save the universe, which gives them max possible capacity factors but gas especially is forced to dial back to allow all the ruinable electrons.
Then at the end of the year the ruinable advocates point at the 50% that gas was online, it’s “capacity” and say it sucks too.
But the consequences subsidies produce are only irrational to the customer and taxpayers. Like all corrosive government intrusions, those subsidies are a godsend and completely reasonable to the companies that are enriched by them and the lobotomized who cheerlead them into being. An apparent majority of the left don't let empirical knowledge stand in the way of judgement. Ugh.
Do you guys know what the capacity factor for solar is in Germany? They seem to love it but what actual good is it? 22% in Mississippi sounds low, but I don’t doubt it.
Not sure about Germany but Gem Analytics would know. In MS they have a miss that grows quickly on the solar panels that makes it hard to keep them clean
When governments subsidize projects, citizens pay twice—once as taxpayers who indirectly pay the subsidy, and then again as consumers in higher prices for the goods they buy and in reduced consumption.
All to buy votes from “low information voters” that don’t understand why the cheese is FREE in the mousetrap.
Welcome to 1984.
Apparently it has to be said over and over again, the average capacity factors fall short of indicating the real weakness of the intermittent providers. For solar, the capacity factor is zero overnight and during severe wind droughts that can lasts for days (and nights) the capacity is can be little more than zero.
Hence windless nights are the weakest link in the wind and solar chain and in the absence of grid scale storage that can last for several days the shooting match is all over. There will be no transition to wind and solar in our lifetime. Game, set and match.
It is five minutes to midnight for the power system, in some 19 states authorities have warned that there will be critical problems within three or four years if conventional power continues to run down under the influence of the inflation-promoting Act.
PS Coal could do 95% like nuclear if the playing field was level.
We have some very old brown coal clunkers in Victoria (Australia) and the unreliable energy admirers like to refer to them as worn out and unreliable.
Through a hot spell in summer last year they ran near 100% for days on end!
It is just about the cheapest power in the world as well. Not top quality coal, just very cheap and the clunkers are sitting on top of it.
Trump is a billionaire because Nixon signed the legislation creating the EPA…no EPA and NYC real estate would be slightly more valuable than Cleveland real estate. Coal is dirty and it is the easiest to mine and so it should be treated as sacred fuel to be used in case of emergency.
Capacity Factor does not tell the whole story: As long as solar capacity correlates with utility demand, it can be a valuable part of the energy mix. Many regions are dominated by AC load... which correlates quite well with sunshine.
This would be more clear if we could apply time-of-use (TOU) rates ideally. A KWH in the peak hour is worth far more than a KWH off-peak. The ratio in TOU rates is often 5:1 and I believe the value reflected is more like 10:1. Math and machines can deal with this variability but average humans need a simplified model.
"Some economists have suggested that utility companies are not truly private companies..."
The other economists are the ones you want on the other side of the table when playing Texas Hold 'Em.
Often utilities are rewarded for selling less product.. They have one actual customer… the PSC. They couldn’t care less about you, as long as the PSC is happy. Doesn’t sound much like a normal business.
In the penultimate paragraph is the $1.4 Billion figure correct? Seems pretty small. Also, in the paragraph under the map of the US, what is the PTC that is referenced? You are absolutely right that subsidies get people to do irrational things.
That was for the Mississippi PSC! Nationally the number is far higher
Thank you very much. Makes more sense now.
It also leads to really awful legislation because to scale solar for utilities massive amounts of land needs to be purchased - in Michigan: House Bill 5120, which provides the Michigan Public Service Commission (MPSC) with the authority to approve large scale renewable energy projects — including solar, wind and battery storage – removing that exclusive control from local governments was signed into law.
Educating the political elite is a daunting task, especially when they aren’t interested in being educated. Remember when good ole Grassley from Iowa claimed wind subsidies would end in 2015. …. That is so yesterday and 18 trillion dollars ago….. Great job guys, soldier on in hopes a few will begin to come out of their drunken state and sobriety will get a hold of them.
Very interested to hear the news in next couple weeks!
A bit too simple on ratemaking and the implications of rate base. While over the long term, additional rate base (investments found used and useful for electricity service) is the only way to produce earnings as a result of rate cases, the short term offers other opportunities (or not0 if actual expenditures vary from revenue requirement expenditures. Investor-owned utilities (IOUs) are, allegedly, the only utilities with a profit motive, although it always amazed me how few differences there were in decision-making between publicly-owned utilities, such as co-ops and public utility districts, and IOUs: the former must keep an revenue surplus for purposes of their lenders that looks suspiciously like equity, although lenders can't access it even in bankruptcy, unlike IOU equity. In any event, while I certainly agree with many of your points, I suspect neither of you worked in utility ratemaking and/or regulation. After 100+ years, every participant's expectations of the other participants heavily influences each ratemaking outcome. I also see looming issues on rate spread and rate design, that I haven't seen anyone write about yet. I put a few resources on rate base and rate spread/design on my LinkedIn page (https://www.linkedin.com/in/pamela-morgan-763b98/) in case you are curious. Thanks for writing about these issues. Electric energy and its myriad issues are a passion of mine and I like to read about them!
Hi Pam! Do you know how long ago you posted those? The link you posted is only taking me to your main profile
Glad I found about this substack through Doomberg and The Electric Grandma.
Can you please comment about the electrical grid situation in Puerto Rico? I live in Puerto Rico and we have plenty of issues with PREPA. The service is unreliable and expensive.
Puerto Rico, not being in mainland is somehow off the radar in terms of the kind of rational discussion seen in this substack. We need the perspective of outsiders with engineering knowledge and a practical and pragmatic approach.
Maybe a look to one of our bills would make you wonder how and why we are billed the way it is done to the PREPA customers.
I look forward to continue reading what is published here and the respective comments which are very interesting.
The billing is designed to provide enough money the utility can remain a going concern and raise capital. Everything else is negotiable. Sounds harsh but how else could it be?
Excellent, straightforward explanation. Thanks.
So let's say in a State like CA, where this sort of game played between Utility companies and Policy-writers has been going on so long that the rate-payer is @ 44 cents/kWh... What is the solution at a residential level? Yes, in a perfect world, the policy writers would throw away their CARBON NEUTRAL targets and move back to Nuclear/Natural Gas to bring cost down to the consumer; but we all know that won't happen. Is solar + battery storage a valid solution when your local Utility is so-far gone, the grid is unstable, and you have excellent annual Sunhours?
This is a great question. The issue is the PUC will change the rates on rooftop solar to make them more like the wholesale price of power. If they don't do that, it's a massive wealth transfer from those who can't afford solar to those who can. https://energybadboys.substack.com/p/stealing-with-solar-the-net-metering
It already has. Since April 2023, all 3 main California Utilities compensate solar energy next to nothing during sunhours. However, even so, it seems like solar panels + backup storage is the only solution because the cost for grid energy is outrageous.
Your capacity factor graphs are misleading, maybe to favor nuclear vs all other types.
Solar is that low, in Alberta the AESO says it’s 18%, but the only way gas and coal could be that low is if they are constantly forced to dial down to make room for wind and solar as per climate/insane green dictats.
Coal should be close to nuclear, with gas not far behind.
The solution to all this is for grid operators to state renewables are welcome but any generation with less than 50% real capacity must build their own backup to provide 2-4 hours continuous supply.
A 500mw solar farm forced to provide 2 GWHR of battery backup will quickly rebrand themselves as 100mw.
No matter.
I would clean this piece up to clear up that coal and gas capacity factors are actually much higher than shown.
Hi Pat, I can assure you we did not manipulate the state-level EIA’s statistics to favor nuclear or any other generator.
What often happens is states build gas capacity to replace the coal plants. As a result, during the overlap years, both types of plants run at less than their optimal capacity factors until the coal plants are shut down, at which time gas capacity factors generally rise so long as wind and solar aren’t soaking up that market share.
Great
The issue is that most operators are mandated to take all those wind and solar electrons if present, to save the universe, which gives them max possible capacity factors but gas especially is forced to dial back to allow all the ruinable electrons.
Then at the end of the year the ruinable advocates point at the 50% that gas was online, it’s “capacity” and say it sucks too.
Mustn’t let them play their obnoxious games.
Yep I agree. That’s why we’ve been pretty clear about the differences in capacity factors for dispatchable and non dispatchable resource
But the consequences subsidies produce are only irrational to the customer and taxpayers. Like all corrosive government intrusions, those subsidies are a godsend and completely reasonable to the companies that are enriched by them and the lobotomized who cheerlead them into being. An apparent majority of the left don't let empirical knowledge stand in the way of judgement. Ugh.
Bad Boys are good, again. US can’t get good results with bad incentives, to paraphrase Charlie Munger.
Save the climate, squeeze the wallet!
Do you guys know what the capacity factor for solar is in Germany? They seem to love it but what actual good is it? 22% in Mississippi sounds low, but I don’t doubt it.
Not sure about Germany but Gem Analytics would know. In MS they have a miss that grows quickly on the solar panels that makes it hard to keep them clean