2018 Energy & Sustainability Summit

Leadership in an Era of Rollbacks & Setbacks

Overview
In 2017, after years of forward progress, the globe took a step backward as some of the world’s most important environmental protections were loosened and jeopardized. At the same time, last year saw the global transition to clean energy intensify as well as a renewed focus on public-private partnerships to advance environmental sustainability.
With the cost of renewables continuing to fall at an unprecedented rate, policy makers and business leaders increasingly feel emboldened to advance concrete commitments and work to accelerate climate action, even in the face of determined efforts to prolong the inevitable transition to clean energy. While the U.S. government pulled out of the Paris Agreement, American businesses resoundingly said “We’re still in”, and over 50 U.S. cities put forward ambitious timetables for getting to 100% clean energy.
Business is also advancing environmental sustainability and looking to increase profitability while reducing dependence on natural resources in a constrained world. Additionally, companies are looking to align their corporate strategy with the United Nation’s Sustainable Development Goals; realizing the SDGs, it’s projected, could create upwards of 350 million jobs and opportunities worth $12 trillion across a range of sectors.

Join Us on May 24! Silicon Valley Energy & Sustainability Summit 2018
Join us on May 24 at Oracle to learn about the latest policy and regulatory developments and to explore how to employ the latest innovative technologies and practices to create lasting value and explore what you can do on a practical level to prepare for an evolving landscape. The 6th Annual Silicon Valley Energy and Sustainability Summit will include C-Suite plenaries, policy round tables and case studies, all focused on the business case for clean and efficient energy, environmental sustainability, water conservation and climate action. The event brings together policy experts, elected and appointed officials, business executives and NGO leaders for a series of thoughtful and engaging discussions.

Water Education Foundation’s Lower Colorado River Tour 2018

Explore the lower Colorado River where virtually every drop of the river is allocated, yet demand is growing from a myriad of sources — increasing population, declining habitat, drought and climate change.

Eventbrite - Lower Colorado River Tour

The 1,450-mile river is a lifeline to 40 million people in the Southwest across seven states and Mexico. How the Lower Basin states – Arizona, California and Nevada – use and manage this water to meet agricultural, urban, environmental and industrial needs is the focus of this tour.

This 3-day, 2-night tour travels along the Lower Colorado River from Hoover Dam to the Salton Sea and the Coachella Valley. Along the way, experts discuss challenges related to what is the most contested, beloved for recreation and meticulously managed rivers in the USA.

Why Am I Paying $65/year for Your Solar Panels?

Below is a great article from Lucas Davis, a UC Berkeley professor that published a report a few years ago about the closing of San Onofre, the nuclear facility north of San Diego, and how replacing the nuclear energy with natural gas was the equivalent of adding 2,000,000 vehicles to the roads of California.

Why Am I Paying $65/year for Your Solar Panels?

700,000 California homes now have solar panels; what does this mean for everyone else’s rates?

“This is the future,” one of my neighbors recently told me, proudly showing off his rooftop solar panels, “Forget the old, inefficient utility.” The panels do look great, and, for a moment, I got caught up in my neighbor’s “green glow” of eco-righteousness. Should I be doing “my part” for climate?

But wait a second. I already am! As Severin Borenstein has been pointing out for years, a big part of the reason why rooftop solar is so popular in California is our electricity rates. And because of the way rates work, every time another neighbor installs solar, my rates go up. I’m tired of it. Why should they get all the “green glow”? Why should I be paying more for their rooftop solar, particularly given that grid-scale renewables are so much cheaper?

Almost 700,000 homes in California have installed solar, about 5% of all homes in California. Today I want to figure out what this means for the rest of us. No fancy econometrics, no complicated model. I just want to do a simple back-of-the-envelope calculation to try to figure out how big of a deal this is.

brick

Note: Green glow. Image licensed under creative commons.

 

Utilities have a lot of Fixed Costs

It is helpful to take a step back and think about what it takes to deliver electricity. Utilities have lots of what economists call “fixed costs”. For example, utilities have to maintain all the transmission and distribution lines used to deliver power. These costs are fixed (not marginal) because they do not depend on how much electricity is consumed.

truck

Note: Utilities have lots of cool trucks. Image licensed under creative commons.

 

Who pays for these fixed costs? We all do. Every time you use electricity, you help pay for these fixed costs. There is a long history in the United States of regulators setting electricity prices equal to average costs.  Economists have argued that it would be more efficient to set prices equal to marginal cost. But the truth is this didn’t matter much in the past, in part because people didn’t have much choice about whether or not to consume electricity.

Until now. Rooftop solar is an opportunity for consumers to radically reduce the amount of electricity they buy from the utility. In Hawaii there is a lot of talk of “grid defection”, but in 99.9%+ of cases solar homes continue to be connected to the grid. Solar homes use the grid just as much as other households, as they are always either importing or exporting electricity, it’s just that they consume much less grid-electricity.

What this means is that good people like my neighbor contribute much less to paying for utility fixed costs. The fixed costs haven’t gone away, but my neighbor now has a lower electricity bill so pays far less of them. This leaves the utility with a revenue shortfall, and it is forced to raise prices. So who pays for the fixed costs my neighbor used to pay? Everyone else.

wires

Note: Utilities have lots of fixed costs.

 

A key subtlety here is “net metering”. Households who install rooftop solar pay only for the electricity they consume “on net” after solar generation. This is easy and simple, but also wrong. Implicitly, this means that they get compensated for their solar panels’ sales to the grid at the retail electricity rate. This is too high, significantly exceeding what the utility saves from not having to supply that electricity. Under an alternative rate structure, in which households were paid the wholesale rate, you would not have this “cost-shifting” away from solar households.

Cost Shifting 

Ok, but how much cost shifting is actually happening? Outside California, Arizona, and Hawaii, probably not much. But California has a lot of solar, about half of all U.S. rooftop solar. How much have California electricity rates increased due to the 700,000 homes with solar?

spiral.png

Note: Utility Death Spiral? Source here.

 

This is tricky because we don’t actually know how much electricity is being produced by rooftop solar. Almost everyone is on net metering, so we only observe net consumption, not solar production. Fortunately, the California Energy Commission has poured over solar radiation information and other data and estimated that total annual generation from California behind-the-meter solar is 9,000 GWh. About two-thirds of this is residential, so about 6,000 GWh. To put this in some context, total annual residential electricity consumption in California is 90,000 GWh.

So how much “cost shifting” does this imply? The average residential electricity price in California is $0.185/kWh, while the average wholesale price is about $0.04/kWh. Accounting for electricity that is lost during delivery to the end customer adds about 9% more per kWh delivered. Thus, each time a California household produces a kWh, the utility experiences a revenue shortfall of about $0.14. Multiply this by total residential distributed solar generation, and you get $840 million annually. California utilities receive $15 billion annually in revenue from residential customers, so the total shortfall is about 5%.

This is a crude calculation, and it could undoubtedly be refined. For example, distributed solar proponents argue that local generation allows the utility to avoid distribution system upgrades, which would represent an additional benefit. These impacts have been found to be relatively small, but this continues to be an area of active research. On the other hand, I’ve also made an assumption that significantly decreases my estimate of cost shift. In particular, I’ve used the average residential retail price, but California customers actually pay increasing block rates so most solar customers face a marginal price well in excess of the average price.

Conclusion

The total revenue shortfall works out to about $0.01 per kWh, or $65/year for the average California household. This is more than I expected. And, I’d bet most Californians are not even aware that this cost shift is happening.

So why am I paying $65/year for other people to have solar? It doesn’t make sense. Sure, I’m concerned about climate change, but my $65/year could go a lot farther if it was used instead for grid-scale renewables. Moreover, this is almost certainly bad from an equity perspective, as we know that high-income households adopt solar much more often than other households. Rooftop solar isn’t getting rid of the utility. It’s just changing who pays for it.

To read the article please click here.

Lucas Davis

Lucas Davis is an Associate Professor at the Haas School of Business, Faculty Director at the Energy Institute at Haas, and Research Associate at the National Bureau of Economic Research. His research focuses on energy and environmental markets, and in particular, on electricity and natural gas regulation, pricing in competitive and non-competitive markets, and the economic and business impacts of environmental policy. His work appears in leading academic journals including the American Economic Review, the RAND Journal of Economics, and the Journal of Political Economy. He blogs along with other Energy Institute researchers at energyathaas.wordpress.com.

 

IID, CAISO settlement promotes local renewable energy development

March 9, 2018

CONTACT: Antonio Ortega (760) 604-1092

IID, CAISO settlement promotes local renewable energy development

Imperial Irrigation District and the California Independent System Operator announced this week the two parties have reached a settlement that ends existing litigation between them.

As a result, more climate-friendly energy from the IID service area can be delivered to the rest of California.

“For IID, this has always been about ensuring basic fairness, a level playing field and protecting our balancing authority and our ratepayers for the sustained benefit of the region,” said Kevin Kelley, IID general manager.

As part of the settlement, CAISO has agreed to upgrade one of IID’s power lines (S-Line) that will allow more electricity to flow from the Imperial Valley to other markets. CAISO has also agreed to do more to help promote geothermal development, a priority for the district, in the Salton Sea Known Geothermal Resource Area.

Both parties also agreed to establish a local coordination working group to address important issues that may arise in the future.

Resolving the dispute gives the parties a common platform to move forward on issues that both agencies care about, Kelley added.

Located in what is considered  the “renewable energy capital of the world” IID can serve as a conduit for renewable energy development in the west, helping California meet its aggressive renewable energy and climate goals while creating added economic development and job opportunities in a region that desperately needs them.

 

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43rd Annual Stanford Geothermal Workshop 

Goals: The goals of the conference are to bring together engineers, scientists and managers involved in geothermal reservoir studies and developments; provide a forum for the exchange of ideas on the exploration, development and use of geothermal resources; and to enable prompt and open reporting of progress. We strongly encourage all scientists and engineers involved in geothermal reservoir technology to attend the workshop.

From LA Weekly

Meet the Former Angelenos Living in a Rent-Free, Ramshackle Desert “Town”: Slab City

The last hour of the 190-mile drive inland from L.A. to Slab City is a sensory-deprivation dash through frowning, scrubby nothingness where humans go only to escape or to hide, or because they’ve simply been priced out elsewhere. Beyond manicured Palm Springs and the featureless fields of the Coachella Valley, the increasingly toxic Salton Sea forms a dying mirror of the vast Colorado Desert sky, State Route 111 a thin thread of civilization between its apocalyptic abandoned resorts and the distant Chocolate Mountains.

“Make a left on Main Street in Niland and you can’t miss it,” I’d been told by Slab Gram, a six-year Slab City dweller whom I’d first met outside Sunset Strip’s Whisky A Go Go. Good thing, because no county signage conveys that you’re approaching what has effectively been a small town for half a century, three miles down an increasingly rutted road from the former “Tomato Capital of the World.”

Abandoned guard shack at Slab City

Cresting a bridge over an irrigation canal, I spot a multicolored blob on the beige blandness some half a mile ahead, as if all the pigment sucked out of its surroundings had been poured over this solitary, beckoning mound. It had to be Salvation Mountain — the cartoonishly vivid, 50-foot-high art installation that serves as a gateway to Slab City. As I approach, they appear, spread between scrawny trees across an ill-defined square mile framed with craggy peaks: improvised campsites of tarps and found objects; immobilized vehicles reimagined as dwellings; elaborate, cobbled-together compounds demarcated by tires; tents of all types; and myriad motor homes, some the size of studio apartments.

“I escaped right before it got bad, right before my lease was up,” says previously lifelong L.A. resident Tallulah Kidd. “I had to make the decision: Am I going to stay doing this, or am I going to just go toward the route of freedom?”

Please click here to read the full article.

From The Energy Collective: Wind/Solar Expansion Will Require Perpetual Subsidies

Wind/Solar Expansion Will Require Perpetual Subsidies

Highlights:

  • Wind/solar advocates point to continued cost reductions due to technological learning.
  • Wind/solar opponents point to continued value declines due to intermittency.
  • It tuns out that these two effects cancel out fairly evenly.
  • Wind and solar will thus remain as subsidy-dependent as they are today.

Introduction

There can be no doubt that wind and solar power will be important players in the energy system of the future. Over the past decade or so, these sources have grown almost as fast as nuclear power did in the seventies (see below). Since 2010, wind and solar have achieved an almost perfectly linear expansion of about 5.5% of global electricity production per decade (2.3% of global primary energy per decade).

Although wind and solar are settled as important energy players, the magnitude of their contribution to the future energy system is a topic of vigorous debate. The advocate camp points to the continued cost declines of these technologies, often claiming that wind/solar power will soon achieve competitiveness without subsidies, spelling the end of conventional power sources. The following graphs from IRENA for wind and solar illustrate this argument.

The complete article can be found here.

Don’t Get Left in the Dark When Going Solar (from Patch.com)

Over 32,000 homeowners in the Southern California Edison territory have gone solar this year, and the vast majority are likely unaware of the financial impact they will experience due to Southern California Edison’s newly altered solar rates. A typical homeowner may lose thousands of dollars in savings over the lifetime of their solar power system if it is not designed to factor in the new solar rules and rates.

Under former solar rules, it was simple for solar companies to design a solar power system that resulted in a $0 bill for electric energy. A solar company looked at how much energy a household used on an annual basis and designed a solar power system to produce that same amount of energy per year, regardless of when the system produced energy or when the home consumed energy.

Since July 1, 2017, solar customers in the Southern California Edison (Edison) territory have been on new solar rules, which have forced all solar customers onto “time-of-use rates.” An in-depth analysis is now needed to design a solar power system because with time-of-use rates, Edison charges more for the electricity depending on when a home uses energy in a day, not just how much the home uses in a given month.

Read the complete article here.