June
12
2010
HARRISBURG – State Rep. Camille “Bud” George, chair of the House Environmental Resources and Energy Committee, today noted that a study by a national group indicates that ratepayers paid higher rates under deregulation despite continuing profits by deregulated utilities and sharply lower wholesale electricity costs.
“The study by the American Public Power Association shows consumers suffered a double-whammy last year from the recession and deregulation,” said George, D-74 of Clearfield County. “Despite the economic downturn and lower wholesale costs for electricity, ratepayers faced higher prices while deregulated utilities showed consistent and even higher profits.
“The report is an indictment of the regional wholesale distributor of power, PJM Interconnections, and those who consider oversight of the utilities to be “silly.’” said George, whose House Bill 1909 would create a public power agency to purchase cheaper electricity on behalf of Pennsylvania’s citizens and businesses and spur development of new generation in the state.
APPA, the national service organization for more than 2,000 community- and state-owned, not-for-profit electric utilities serving 45 million customers, said the study “at a minimum demonstrates that the question of whether the [Regional Transmission Organizations] RTO-operated markets are providing benefits to consumers in terms of just and reasonable rates has not been answered.”
“A reasonable person would think the state Public Utility Commission would make answering this question a priority and prompt the Legislature to consider fixing the 14-year-old deregulation debacle,” Rep. George said. “Instead, we’re force-fed the ruse that consumers are saving money by shopping and paying more for electricity.”
According to the APPA report:
Earnings by companies, including Pennsylvania utilities, “indicate that their revenues from the sale of electricity greatly exceed their costs of producing electricity”;
The continued profitability of these companies is a direct indicator of insufficient competition and higher costs for consumers;
Most of the primary owners of unregulated generation in PJM reported returns on equity about even with 2008 and significantly above regulated returns;
Three of the subsidiaries owning unregulated generation increased their profits between 2009 and 2008;
Gross margins from the sale of electricity increased in 2009 for three of the four companies reporting this measure;
Shareholder gains for the companies in the study greatly exceeded returns from investments in the S&P 500 by almost $40 billion over the last 10 years.
The report notes that PPL’s supply segment earnings from continuing operations increased from $303 million to $333 million. Net income from competitive energy services for First Energy – which includes Met-Ed and Penelec — increased from $472 to $517 million between 2008 and 2009.
“An often-made claim is that under deregulation, these profits are justified because it is the companies who bear the risks of excess costs, while consumers are freed from such risks,” the APPA report said. “But the persistence of these high earnings and stockholder prices raises the question of whether companies are in fact bearing such risk.”
In a news release, APPA President and CEO Mark Crisson said the study strongly suggests once again that wholesale electricity markets “are producing undue profits for merchant generators at the expense of electricity consumers.”
“If these RTO-run wholesale electricity markets were truly competitive, during a time when demand and energy prices are falling, generator profits shouldn’t be increasing,” Crisson said. “Yet publicly available data identified in this new analysis shows that most generators continue to enjoy increased profits above what one would expect in a competitive market.”
by Gant Team – GantDaily
The report, “2009 Financial Performance of Owners of Unregulated Generation:
High Profits Earned in Restructured Wholesale Electricity Markets During the Recession,” is available online.
June
11
2010
“Graetzel cells” could advance the renewable energy revolution
Scientist and professor of photonics and interfaces at the École Polytechnique Fédérale de Lausanne in Switzerland, Michael Graetzel, won the Millennium Technology Prize of $1.07 million for his dye-sensitized solar cells, also known as “Graetzel cells.”
These new dye-sensitized solar cells are low in cost, and can work on a broad scale. Graetzel cells do not require a large setup to manufacture, they should be considerably less expensive than solid-state cell designs in bulk, they’re mechanically robust and can be engineered into flexible sheets. They also require no protection from minor elements such as tree strikes or hail.
“The constraint of solar energy has traditionally been its price. Graetzel cells provide a more affordable way of harnessing solar energy,” said Ainomaija Haarla, president of the Technology Academy of Finland. “Graetzel’s innovation is likely to have an important role in low-cost, large scale solutions for renewable energy.”
In addition, the Finnish academy notes that “finding ways to replace the Earth’s diminishing fossil fuel supply was one of mankind’s greatest challenges,” and that the sun would be “the most obvious energy source.”
Graetzel cells are expected to be a “significant contributor to the future energy technologies,” and Finland hopes the Helisinki-based Millennium Technologies Prize will both further renewable energy research and someday become as recognized and esteemed as the Nobel Prizesawarded in Norway and Sweden.
The Millennium Technologies Prize is awarded every two years for a “specific and groundbreaking innovation that has a favorable impact on the quality of life and human wellbeing.” The first winner was Tim Berners-Lee in 2004 for his invention of the World Wide Web. Graetzel is the fourth winner of the biannual prize.
Runner ups who won 150,000-euro prizes were Cambridge University Professor Richard Friend for his new organic semiconductor components, and University of Manchester Computer Engineering Professor Stephen Furber for his design of the ARM 32 bit RISC microprocessor, which is found in 98 percent of the world’s mobile phones.
Chairman of the academy’s board Stig Gustavson said that “all three inventions benefit mankind as broadly as possible, both today and in the future.” The Millennium Technology Prize is awarded by the Technology Academy of Finland and is funded by the Finnish industry and state.
Tiffany Kaiser – Daily Tech
June
8
2010
The world could generate 95 percent of electricity from renewable energies by 2050 in a drastic shift from fossil fuels, with the United States paying about a third of a giant bill.
The report, by Greenpeace and the European Renewable Energy Council (EREC), representing Europe’s main renewable energy companies, is one of the most detailed to work out the nuts and bolts of a near-total shift to green energy such as wind or solar power. Such proposals often stop at wishful thinking.
The report said that global investments in energy would need to total $18 trillion by 2030 — almost five times the entire U.S. federal budget for next year — to set the world on a path to generating about 95 percent of electricity from non-polluting renewables by mid-century.
However, the International Energy Agency has estimated that investments of $11.3 trillion will be needed anyway by 2030, in all forms of energy, to cover the world’s growing needs. The IEA’s central scenario assumes fossil fuels will remain dominant.
Renewables now make up about 18 percent of electricity generation and governments want to raise the share.
This is partly to combat global warming caused by greenhouse gas emissions from fossil fuels, and partly to diversify and guarantee energy supplies as fossil resources decline, and to combat other forms of pollution.
Sven Teske, lead author of the 260-page report at Greenpeace, said there would be long-term economic benefits from a phase-out of subsidies for fossil fuels and from the fact that inputs to renewable electricity — such as wind or geothermal energy — are free. The plan would also phase out nuclear power.
“The costs at the beginning are because renewables are more labor-intensive,” he said.
To pay the bill, the report suggests looking at historical responsibility for greenhouse gas emissions and at ability to pay. That meant the United States would pay 36.3 percent of the annual bill in 2010, falling to 28.9 percent in 2030.
China, which recently overtook the United States as top greenhouse gas emitter, would pay only 4.3 percent of the bill in 2010, rising to 13.6 percent by 2030, since it is poorer and has a shorter history of industrialization.
The report said the shift would mean there were about 12 million jobs, including 8.5 million in the renewables sector, by 2030.
“Under business as usual, global renewable power jobs would be only 2.4 million of the global power sector’s 8.7 million jobs,” it said.
Negotiators from about 185 nations are meeting in Bonn from May 31 to June 11 to discuss a new U.N. climate deal after a summit in Copenhagen in December fell short of agreeing a binding treaty on reducing greenhouse gas emissions.
by Kevin Liffey – Reuters
June
8
2010
The past two decades have witnessed efforts throughout the world to deregulate electricity markets. The world´s main economies have carried out schemes to put in place efficient and competitive wholesale markets for electricity within the framework of globalization and liberalization. Yet the physical peculiarities of electricity make it a rather complex commodity, and frequent inefficiencies and position abuses by major market players have clearly established that completely free electricity markets are simply not possible. Electricity deregulation instead requires careful monitoring by ad hoc authorities and, rather paradoxically, a whole new regulatory framework.
1. Towards electricity deregulation.
Analysis of the electricity industry begins with the recognition that there are three rather distinct components of it: generation, transmission and distribution. For many years, each sector was thought of as a natural monopoly for physical reasons (economies of scale for generation plants, losses with long-distance transmission, impossibility to duplicate transmission and distribution networks,…) and common practice was to vertically integrate the three components into state-owned or state-controlled private utilities, each region or country being effectively managing electricity as a public good. One important feature of this paradigm was supply overcapacity to ensure continuous service to end customers.
But technology improvements in the 70s and 80s shattered this model and offered the possibility of competition. Additionally, inefficiencies in the system, particularly significant regional rate disparities in the US, began to rouse the ire of consumers towards regulated monopolies and fueled the desire for change. Within the general deregulating movement in the early 90s and the widely spread faith in markets as the optimal socio-economic organizational pattern, it hence appeared natural to start thinking about commoditizing electricity, just as any other major standardized good. The rationale at that time was that any electricity consumer should be able to choose among a large set of energy providers, and competition between them would naturally increase the affordability and dependability of the service.
The key event took place in 1990 when the UK Government under Margaret Thatcher privatised the UK Electricity Supply Industry in England and Wales. The thus launched process was followed by similar measures and led to a fully deregulated market in 1998, making the UK an absolute pioneer in electricity deregulation.
This example was soon imitated throughout the world and triggered efforts whose main common traits were:
• privatization of state-owned firms
• vertical deintegration of utilities
• allowing new entry in the generation market and fully deregulate its prices.
• presence of an Independent System Operator (ISO) responsible for reliable grid operation
2. The trouble with deregulated electricity markets.
The schemes that have been put in place have worked quite well in some cases, such as the Pennsylvania-New-Jersey-Maryland (PJM) market, widely acknowledged to function properly by reliably providing cheap electricity to consumers, and often cited today by deregulation proponents.
But much less successful stories have also come up.
In the first place, the case of UK which paved the way to worldwide electricity deregulation is far from compelling and has an extensive record of questionable price savings, failure in developing competition, complaints over the practices of electricity companies and higher prices for low-income consumers .
Europe has also seen rising prices and the emergence of electricity giants rather than flourishing competition, and it still struggles with cross-border frictions and price inefficiencies. In 2006, the absence of centralized management of the European network even caused a local congestion in Germany to burst into a major blackout in Western Europe.
But the most striking example of the potential detrimental effects of deregulated electricity markets lies in the successive issues faced by the state of California between 2000 and 2001. California had hastily launched its deregulated electricity market on March 31st, 1998 due to growing anger towards a costly and unsatisfactory electricity market. Problems started arising in June 2000 with an average monthly wholesale price of $143 per megawatt-hour (more than twice as high as in any previous month since the market opened). This resulted in enormous pro?ts for generating companies and ?nancial crises for the regulated utilities that were required to buy power in the wholesale markets and sell at much lower regulated prices in the retail markets. The state’s largest utility, Paci?c Gas & Electric, declared bankruptcy in March 2001. The state of California took over wholesale electricity purchases and spent more than $1 billion per month buying power in the spring of 2001, with average prices more than ten times higher than they had been a year earlier. Some massive blackouts that hit the state were also directly attributed to deregulation as they occurred in winter, usually a time when energy consumption is low because nobody uses power-guzzling air conditioners.
Those experiences and numerous similar cases throughout the world have shed a light on inherent inefficiencies and costs of deregulated electricity markets:
(i) There are first and foremost significant economic contradictions
• The cost of setting up and operating an ISO is substantial (on the scale of an American state, several millions of dollars for setting up and between $100M and $200M every year to operate the ISO).
• Instead of improved competition, most countries that have implemented deregulation have witnessed a quick reintegration, which led to new non state-controlled electricity oligarchies that could easily extract surplus from consumers.
• Because of the non-storability of electricity, supply and demand are very inelastic and prices are very volatile.
• In addition to inelasticity, very low price-responsiveness of the demand-side gives suppliers natural market power. During peak-use hours, a supplier can indeed become pivotal, or essential, in meeting the demand, in which case he can ask for artificially high prices (which will raise the price for all the electricity sold at that point in space and time if the network operates in a single auction system as in the US Standard Market Design). Conversely a market share as low as 6% is sufficient for a seller to push prices higher by physically withholding its supply . This kind of artificial scarcity is known to be the cause of the above mentioned winter disruption in California.
• The physical specificities of electricity requires a complicated market design which invites gaming by traders and retailers, as observed with Enron highly profitable and ethically shaky strategies.
• The end of a state-controlled guaranteed rate of return for utilities combined with higher volatility of fuel prices has increased risk and hence the cost of capital, which causes insufficient generation and transmission investment and eventually congestion and higher prices
As a result, the net benefits of electricity deregulation, if any, are unevenly distributed and clearly shifted towards suppliers to the expense of users.
(ii) Electricity deregulation is also very complicated and policymakers often fail to address properly the technical and institutional challenges of introducing competitive wholesale and retail markets. This complexity also tends to empower technical knowledge and reinforce the authority of the centralized and autonomous power exchanges, independent system operators and regional transmission organizations, further excluding local decision-making and governance from a process which the very rationale of was giving a choice to consumers.
(iii) In case of congestion, the power plants used to meet excess demand are often coal fired and have detrimental effects on the environment. The environmental cost is indeed not factored in electricity market prices which encourages producers to use cheap and dirty energy sources.
3. Discussing the adequacy of electricity with market principles
Even by making the (very daring) assumption that deregulated electricity markets could in some cases lower prices in the long term, the unavoidable reduction of monopolistic overcapacity by the market and the higher risk of disruption associated with it is potentially so harmful that even fierce electricity liberals admit that it’s impossible to give the same breathing space to sellers as in another market.
To that respect, additional measures have been put in place in the years following full deregulation. For instance on July 31, 2002, the US Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking on standard market design (SMD) that would help states to set up efficient markets. Similarly the EU has worked on a third energy package that would tackle the remaining impediments to competition after the full opening of the market in July 2007. The most promising source of competition seems to rest upon the improvement of the transmission network but it requires investments so substantial that they could offset the expected benefits . Projects to render the demand-side more price responsive are also noteworthy but they imply an education of consumers and the purchase of intelligent electricity meters which at the moment are materially and financially difficult to put in place. Finally, incentive mechanisms for electricity providers or carriers to operate in a socially optimal way are often quite complex and can bear potential hidden gaming opportunities.
The fact of the matter is that despite the complex mechanisms surrounding them, the vast majority of deregulated electricity markets do not operate in a satisfactory way as of today. Some US states (in the first place California) have backed away from deregulation and now enjoy reliable service and low prices.
Therefore one might contemplate with awe the formidable amount of thinking produced to stick to deregulation no matter what empirical evidence shows, on finding new tricks to stitch money leaks in the system and the perilous contortions of an increasingly complex regulatory framework desperately trying to keep up with the last trouble caused by those decidedly mischievous markets… A July 2006 research paper of Severin Borenstein (“Customer Risk from Real-Time Retail Electricity Pricing : Bill Volatility and Hedgeability”) is to that regard absolutely enlightening. It advocates the use of “straightforward” financial instruments to hedge away the price risk for consumers, in effect “recreating the effects of cross-subsidy under conventional billing”. Apart from the obvious pleasure of US electricity consumers to have to read an academic research paper to be able to pay a fair price for their electricity bill, one might wonder what benefit a market structure brings in that case. More generally, if electricity markets require policy design to succeed, why wouldn’t it be appropriate to recognize policy as the key factor, rather than markets? What if free markets were simply not an adequate response to the challenge of providing electricity?
If a change in the former monopolistic framework is certainly needed, one should bear in mind that consumer choice of electricity suppliers is only one of the several options that societies have traditionally exercised with regard to electricity. More collective and deliberative decision-making processes could be worth exploring for the future of this key sector.
By Sylvia Beneyto and Julien Vantyghem, Mines Paristech
June
6
2010
Some time something looking very scaring but they are trying to help to you. Same thing happened with me a huge man trying to jump over my gate with special steps designed for jumping railing. Ultimately the man was not there to kill us or rob to us. He was doing his occupation for a reputed energy provider and installing electric meter. In fact he had been jumping over every railing and installing these meters all around our localities. I’m not pronouncing there was not pre intimation; it is sure who care to read those kinds of intimation. Anyways, now that we have this new machine on our house I thought it would be significant to figure out what the heck it does and why Texas energy providers felt the need to install these meter in everyone’s homes.
At present every industry and family in Texas is required to have an electric meter on their possessions to maintain accurate Texas energy rates, the reason for this is pretty observable, it’s to make sure there is an accurate and consistent way to measure the energy rate going into your home and or business each and every month. This is helpful for both of us the customers as well as Texas energy provider because it allows for a more accurate bill each month and all the meter is designed in a efficient manner. But because we live in a planet where innovative technology
is always being developed, a more interactive and smart energy meter has been created to not only help the consumer but to help the energy provider too.
Something I’d like to point out before I continue is the companies that distribute electricity are called public Utility Broker. Another name for them is PUB. This energy provider is responsible for quite a lot. PUB installs and maintains the meters, poles and transmission lines. They also are the ones who actually provide the power to the retail organization where you get your power from. An example of this type of company is the best Texas Energy Providers United States. Further many informative information please visit: http://publicutilitybrokers.com
June
5
2010
Nevada is serious about going solar.
The state already has more solar energy per capita than any other, but with its small population that hasn’t meant much to solar developers and manufacturers.
Enter the state Office of Energy.
It announced this evening plans to contract with solar photovoltaic installers and developers in the state to build solar installations — including panel-covered parking shades — at several state buildings across Nevada.
The office is preparing a request for proposals that should be ready for developers and installers by the end of the month.
It is seeking proposals for projects at 15 specific sites, including nine in Clark County, as well as proposals for Department of Corrections sites.
Among the proposed projects are solar panel-covered parking shades at the Grant Sawyer building in Las Vegas, the Henderson, Flamingo Road and Decatur Boulevard Department of Motor Vehicle buildings, and shaded parking structures and removable solar installations on vacant land between Charleston and Oakey boulevards.
“We will lead by example and make use of clean solar power for state buildings,” Gov. Jim Gibbons said in a statement. “We will save taxpayers millions of dollars in utility costs.”
The new solar installations are to be paid for out of money set aside to pay electricity bills on state buildings.
The state is expecting the proposals to include contract details by which the state will pay the installer back the costs of components and installation through a set per kilowatt hour fee. With the cost of solar panels dropping over the past few years, the state expects the fee proposed by the installers to be less than the cost of buying electricity during the day from NV Energy.
The endeavor is inspired by a recently completed project at the state National Guard facility, which was overseen by state Energy Director Jim Groth.
By Stephanie Tavares
June
4
2010
Ohio House and Senate agree on new tax policy for power projects.
COLUMBUS — Negotiators for the Ohio House and Senate on Thursday, June 3, appeared to reach agreement on tax breaks aimed at bringing “green energy” projects to Ohio as the legislature worked to finish up and recess for the summer.
Also, the House approved a bill to overhaul how telephone companies are regulated and the Senate was expected to concur with the House version.
The Ohio Telecommunications Association and Communications Workers of America supported the bill but consumer groups said it would wipe out consumer protections and bring higher monthly bills.
Landline customers with bundled services will no longer have protections, such as an automatic month of credit if their phone is out for more than 72 hours or the guarantee that their service will be reconnected within 24 hours of paying a bill, said Marty Berkowitz, spokesman for the Ohio Consumers’ Counsel.
The bill also allows phone companies to hike basic service fees by up to $15 a year, he said.
Behind the scenes, Sen. Jon Husted, R-Kettering, worked to find votes for a constitutional amendment to replace Ohio’s system for drawing new state legislative districts with a plan geared to creating fairer and more politically competitive districts.
In other action, the Democratic-controlled House approved legislation aimed at highlighting the wealth of GOP gubernatorial candidate John Kasich, legislation that is expected to die in the GOP-controlled Senate.
The “green energy” tax breaks represented a rare bipartisan cooperation as partisan bickering heated up with the approach of the November elections.
Democratic Gov. Ted Strickland was poised to sign the legislation, said Amanda Wurst, Strickland’s spokeswoman.
The House Ways and Means Committee voted 12-5 on a modified version of Senate Bill 232, sponsored by Sen. Chris Widener, R-Springfield, and already approved by the Senate. The House and Senate were expected to approve the new bill later Thursday.
Widener said it could create up to 1,000 jobs.
One proposed wind farm is in Champaign County.
Under the legislation, projects that qualify would pay annual fees based on how much energy they generate instead of property taxes, both real and tangible.
Revenue from the taxes goes to school districts and local governments and a coalition representing these groups objected to the bill.
A statement from the coalition, which includes the Ohio School Boards Association and the Ohio Township Association, said it “falls woefully short in replacing losses in local tax revenues for schools and local governments.”
Widener has said the new system is necessary for Ohio to catch up with other states in attracting renewable energy projects that generate electricity from sources such as wind and solar power.
Ohio’s current effective tax rate is up to eight times higher than neighboring states, the Ohio Wind Energy Association has said. Also, the legislation will help the state comply with the energy bill passed in 2008 that requires 12.5 percent of Ohio’s electric energy to be generated by renewable sources 2025, Widener has said.
County approval would be required for companies to receive the tax breaks and counties could increase the per megawatt fee to $9,000. Otherwise, the top fee would be $8,000, depending on the project.
By William Hershey and Laura A. Bischoff
June
4
2010
Jason Ross makes his living installing solar power panels on homes and businesses. His Brookfield-based company, Ross Solar Group, has work lined up for the immediate future.
But Ross said the state’s Clean Energy Fund has only about $1.5 million to offer homeowners as incentives to add solar panels to their homes.
“That will pay for 20 or 30 jobs,” he said. “There are 30 or 40 companies doing the work in the state. So that’s maybe one job for each of us, and a job only lasts about three days.”
That is why Ross and others are so vexed by Gov. M. Jodi Rell’s decision to veto a far-reaching energy bill approved by the General Assembly — a bill that would have provided a clear boost to alternative energy in the state, including solar power.
“It’s a really bad vote, and I’m incredibly disappointed in her,” Ross said.
The bill would have mandated a 15 percent reduction in state electric utility rates by 2012. Its advocates said because the electric rates state consumers pay are the second-highest in the U.S., after Hawaii, the reduction would have simply brought Connecticut in line with its neighbors.
It would also have reorganized the Department of Public Utility Control, bringing all the state offices dealing with energy policy under one roof and the name Connecticut Energy and Technology Authority.
And the bill would have provided strong support for energy efficiency and alternative energy sources, including fuel cells, solar power and wind power.
In vetoing the bill, Rell said in a letter to Secretary of the State Susan Bysiewicz that she objected to the bill because it was introduced so late in the session.
That, she said, “was disrespectful to those who honestly desired to read and deliberate the bill’s provisions, and unfair to the people of Connecticut whose electric bills and taxes would surely be affected.”
Rell also said the bill, rather that lowering rates, could end up increasing them. She said the remaking of the DPUC would just add another layer to the state’s bureaucracy.
“While I appreciate this well-intentioned effort is in the best interests of the ratepayers or the taxpayers of our state,” Rell said, the bill was “eerily-reminiscent” of the energy deregulation legislation of 1998, which promised consumers lower rates but never delivered on that promise.
Advocates of the bill — which included both environmental and consumer groups — used words like “preposterous” to answer Rell’s rationale for vetoing the bill.
“It’s an absolute canard,” Charles Rothenberger, an attorney for the Connecticut Fund for the Environment, said about Rell’s claims the bill would raise utility rates.
Christopher Phelps, director of Environment Connecticut, said what makes Rell’s veto so surprising and disappointing is that she’s supported many of the bill’s provisions in the past.
While the bill’s different parts were pulled together at the end of the session, all of the parts had been debated and subjected to public hearings in the General Assembly this year and in years past.
Phelps said he believes Rell listened to the state’s utility companies, which lobbied hard to defeat the bill in the Legislature.
“Those were the forces who sold the state on deregulation,” Phelps said. “And they were the forces that supported the veto.”
Robert Miller, newstimes bmiller@newstimes.com or at 203-731-3345.
June
1
2010
Construction is ongoing at the Martin Next Generation Solar Energy Center in Indiantown recently.
INDIANTOWN — Florida Power & Light Co.’s newest solar-energy plant will have enough mirrors to cover 80 football fields. But those mirrors will focus sunlight onto surfaces that add up to slightly less than the area of a single football field.
That concentration of solar power will generate temperatures of more than 700 degrees — hot enough to make electricity for 11,000 homes.
The Martin Next Generation Solar Energy Center here will rank as the world’s second-largest solar plant when it begins pumping out as many as 75 megawatts of electricity late this year. It will also be the only system of its kind in the world.
Conventional wisdom holds that solar plants using mirrors — which generate heat that produces steam that, in turn, spins an electrical generator — aren’t worth the effort in Florida because of the regularity of afternoon rain clouds much of the year. So far, all of the solar plants built in the state convert sunlight directly into electricity using photovoltaic panels, which produce a charge, if only a reduced one, even on cloudy days,
But FPL is building its “thermal” solar plant on a campus near Lake Okeechobee that already has 13 generators fueled by oil and natural gas. Steam from the solar plant will be combined with steam produced with the heat exhaust from four natural-gas plants to spin an existing generator — an approach not taken before. FPL thinks that makes thermal more feasible, because the utility won’t have to spend millions of dollars building a generator for the solar plant.
The project costs about $420 million, which will add about 16 cents a month to the average FPL residential customer’s bill.
FPL also owns the world’s biggest solar plant, a thermal unit in California’s Mojave Desert that is four times the size of the Martin County project. The Florida plant is based largely on the technology of the 30-year-old Mojave system, though it has been given far stronger pylons, frames and mirrors to withstand hurricane winds of up to 130 mph.
John Gnecco, FPL project development director, said dropping one of the California plant’s glass mirrors could lead to much bad luck, because it would shatter. But the Martin County solar mirrors, though also made of glass, bounce unscathed when they hit the ground.
To demonstrate, Gnecco laid one of the curved mirrors on a gravel parking lot recently and jumped on it repeatedly, causing it to flex trampoline-like. The special mirrors were made in Spain, one of the few countries where FPL could find a suitable manufacturer with kilns large enough to temper the 56-by-67-inch pieces of glass.
The thermal unit’s mirrors are also highly reflective — much more than a typical bathroom mirror — and there are a lot of them: more than 190,000.
Workers are installing the mirrors in aluminum frames to create long, linear dishes. The more than 6,800 frames each contain 28 mirrors and will be arranged in parallel rows that are linked together for a total length of about 50 miles.
Each frame also holds a tube a few feet in front of the mirrors. The tube contains a synthetic, oil-like fluid that costs $15 a gallon and is designed for heating to 740 degrees. The hot fluid flows through a separate component that acts something like a boiler to create steam.
The tubes are made of stainless steel and painted black but encased in the airless vacuum of a glass tube. Birds can land on the glass tubing and not be roasted, Gnecco said.
Nearly 150 miles of pipe and related plumbing, some as much as 30 inches in diameter, will hold 1.2 million gallons of the synthetic fluid.
The relatively costly project is likely to fuel the debate among state lawmakers about the risks and rewards of government incentives and mandates for solar-power development. FPL and other power companies — including Central Florida’s two other major utilities, Progress Energy and Orlando Utilities Commission — have been experimenting with solar in response to growing government concern about climate change triggered, in part, by relatively cheap power plants that burn coal and natural gas.
One thing utility engineers hope to solve once the Martin County plant is operating is the problem posed by partly cloudy days, when some of the plant’s mirrors will be reflecting full sunlight but others will be shaded. Plant engineers don’t want alternating pulses of cooler and hotter steam arriving at an electrical generator that runs most efficiently, and with the least wear and tear, when operating conditions are kept constant.
But they’ll have plenty of time to figure that out: Gnecco said the Martin Next Generation Solar Energy Center is likely to be operating for the next 50 years.
Kevin Spear can be reached at kspear@orlandosentinel.com or 407-420-5062.
May
30
2010
SunEdison, a Beltsville firm that develops solar energy plants around the world, is teaming with one of the industry’s largest private-equity companies in a joint venture that could generate up to $1.5 billion in new projects.
The deal with First Reserve comes as the price of manufacturing photovoltaic cells has dropped sharply in the past 18 months, making new projects much more affordable. At the same time, a growing number of governments around the world are requiring utilities to generate more power from renewable sources — helping to kick up demand for solar.
Rhone Resch, president and chief executive of the Solar Energy Industries Association, said the deal could be a harbinger of what’s to come in the industry.
“The biggest challenge we have faced in recent years is project financing,” Resch said. “This starts to free up capital and allow the industry to begin to scale up.”
With 350 projects built or underway, SunEdison is already one of the world’s largest developers of solar energy projects. The company has a healthy backlog of plants going through the permitting process and waiting for funding.
SunEdison specializes in developing projects in areas near existing portions of the electrical grid in order to avoid large transmission costs. Its plants range from big, utility-scale operations to smaller rooftop systems feeding power to everything from Kohl’s retail stores to Montgomery County school buildings. Any excess is typically sold back to utilities.
SunEdison employs about 100 people at its Beltsville offices. Last November, the company was bought by MEMC, a St. Peters, Mo.,-based manufacturer that sells silicon wafers to the semiconductor and solar industries.
“Our model has not changed,” said SunEdison President Carlos Domenech. The joint venture “serves as an accelerator.”
SunEdison and First Reserve have agreed to put $167 million into their new venture, which they say should be enough to attract additional debt financing to fund as much as $825 million in new projects. First Reserve may raise an additional $150 million of equity, which can be leveraged to bring the total amount of projects funded to $1.5 billion, the companies said.
“We’re looking for a way to invest in solar projects and a way to do it on an economical scale,” said Mark Florian, managing director of First Reserve Energy Infrastructure.
First Reserve has $20 billion under management and invests exclusively in energy projects. It has offices in Houston, London and Greenwich, Conn.
Demand for solar power is projected to grow. At least 24 states have adopted rules requiring utilities to generate power from renewable sources, and federal climate legislation contemplates a national standard. Maryland and D.C. have adopted portfolio standards, as they are known, and Virginia has established nonbinding goals, according to an Energy Department summary.
In addition, the federal government has adopted tax credits, grants and loan guarantee programs to create incentives for new solar projects.
The cost of manufacturing solar cells has fallen 40 percent in less than two years, which many attribute in part to a decision by several countries to curb incentives. Spain, in particular, moved to cap the size of its market, shrinking the opportunities there by roughly 75 percent, Resch said. Many manufacturers that ramped up production in anticipation of new orders suddenly found themselves with a glut of supply.
By Dan Beyers