Dissruptive Challenge

Re: Dissruptive Challenge

Read the paper on Disruptive Challenges. Lots of interesting issues, some of which I think they are grasping at straws, but it is clear that the RE industry has caught the attention of the corporate giants.

Form what I read, I take that the industry wants to maintain the status quo regardless of new technologies. Talking about investors, credit ratings, profits, and the likes does not send me a message that the industry wants to change and move forward by embracing new technologies. The paper also spins the content around those that will be left to shoulder the burden of potential increases; however, it does suggest that everyone who was on the grid be billed for any incremental increase in the cost of doing business.

The paper also infers quite clearly that the industry is still stuck in the past because it calls for legislative intervention to maintain and retain the financial flexibility required to maintain investment-grade credit ratings.

The paper does not in any way propose ways and means to adapt and grow with the new technologies. This is evident in the actions section on page 18. The only mention of a possible paradigm shift is in the fifth bullet under longer-term actions; however, the emphasis is not to identify new business models and services to enhance and grow the industry, but to recover lost revenues.

This paper clearly demonstrates the neanderthal mentality of the corporate giants, and that a system that is so integral to our modern society and way of life is stuck in the past.

So, the crux of the matter is that in the US, the RE sector has finally achieved notoriety such that it is now on the radar of some very influential corporations and people. Canada does not have quite this issue.

Since this is about money and from money comes power, be prepared for a Tsunami of legislation and lobbying to keep the RE sector at bay, and in another vein, show that upstart who really is the boss.

Just my $0.02 FWIW.

Cheers

Ernest

Re: Dissruptive Challenge

i agree and it won't be long they'll go whole hog into nec requirements making it a very cumbersome and expensive hastle for us to just have re put in making it another tool to limit the re industry.

Re: Dissruptive Challenge

ChrisOlson wrote: »

I don't think the utilities are necessarily interested in limiting the RE industry - just in protecting their bottom line and business model. They have become the proverbial dinosaur. They rule the planet at the present but they're going to go extinct eventually.
--
Chris

I agree with you in that the utilities only want to protect their bottom line; however, there does not seem to be any bright stars in their midsts who are coming up with radical ideas and plans that will allow them to do just that and change at the same time.

Governments have these shining moments every now and then. The RRSP (your 401K I think) was introduced in the '50s. Some accountant theorized that people would take to this notion of deferred taxation and later on when people retired, the government would get more taxes from these people. It actually worked. Trudeau changed from imperial gallons to litres for gas and overnight the price went from $0.50 per gallon to $0.50 per litre. Our tax system went from a deduction tax based system to a credit based tax system (percentage of what you would like to claim), worked a treat, government kept more money.

In having said this, the utilities need to find these types of people in order to make a paradigm shift in their mindsets. You mentioned that the utilities should get on the RE bandwagon as a new revenue stream that would also allow the utilities to implement some control over what they are seeing as a threat. Maybe it's easier to have politicians do the dirty work then the utilities can always say it wasn't them that are responsible for the new pain to your pocket book.

Cheers

Ernest

Re: Dissruptive Challenge

westbranch wrote: »

this morning there is a link on RSS feeds that goes into a good amount of detail on an aspect of this topic.
A slightly different look into how to integrate PV power to the 'Utility Model' .

http://www.renewableenergyworld.com/rea/news/article/2013/05/the-calm-before-the-solar-storm?cmpid=rss

Read the article. Interesting that it alms about bundling the costs of electric power generation into one lump sum. I believe that in Canada, this is not the case anymore. The distribution, generation, services, admin, etc are all broken out on a person's hydro bill. This was the case when we had our condo in Victoria. When this happened, I know a lot of people who were very insensed at the total of their bills because the electricity consumed portion of the bill did not represent the majority of their electric bill.

The rest of the article clearly states what everyone already knows and that is the utility sector is a dinosaur and does not change easily. The is not the case for one major utility, NRG, so the article goes. The overview of NRG's foray into the RE market is commendable, but there has to be more to it. You just don't offer a service such as they are apparently promoting without having some means of ensuring a revenue stream. I would submit that NRG is actively combing the RE market for acquisitions such that NRG will be able to have divisions within its company that support the bottom line, a full service provider so to speak.

I would think that you will see in the near future similar proposals from other utility providers, acquisitions as well. Can't have one utility get on the bandwagon and steal all the glory. If this were to happen, NRG will be able to promote themselves as eco-friendly and a greener utility. NRG would also be able to lobby politicians for support because they are reducing their carbon footprint, complying with national and state "green" initiatives, and such.

I also think that this will be a business model for outer urban and rural areas where it makes sense to "boldly go where no man has gone before" because of the infrastructure costs associated with the outlying areas, renewing, etc. Close in urban and city areas will always be well served by the utility companies, probably because politicians will make sure of this.

Having stated the above, I do not hold out much hope for the utility companies in Canada regarding a change in this type of direction. Too much political support and influence in the utilities, with little or no competition available. Canada also has a different form of legislative behavior. In Canada legislation is enacted; however, it is generally accepted to be voluntary in nature because we Canadians are kinder, gentler souls who do not really want to make anyone or anything really "do" anything.

Maybe there is hope for the utility sector (not in Canada though), but it won't be because they are playing nice.

Cheers

Ernest

Re: Dissruptive Challenge

And again: a new RSS feed says that solar generation is a 54% benefit to the utility

http://www.solarfeeds.com/arizona-sees-54-return-on-distributed-generation-solar/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+solarfeed+%28Solar+Feeds%29

SolarDave this is an Arizona study...

Re: Dissruptive Challenge

westbranch wrote: »

And again: a new RSS feed says that solar generation is a 54% benefit to the utility

http://www.solarfeeds.com/arizona-sees-54-return-on-distributed-generation-solar/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+solarfeed+%28Solar+Feeds%29

SolarDave this is an Arizona study...

I love that, I will read that with keen interest.

Re: Dissruptive Challenge

Looks like California is getting into the act as well.
http://www.pv-magazine.com/news/details/beitrag/california--new-group-formed-to-defend-net-metering_100010958/

CAUSE stands for Californians Against Utilities Stopping solar Energy.

Re: Dissruptive Challenge

niel wrote: »

although i laugh at this argument, it is a very serious thing as the agencies and regulators of the power industry are a bit stupid on the very subject that they are regulating and the utilities could thusly convince them to disallow the net metering to suit the greed of those utilities and insure they are top dogs with no competition.

What, you don't like the free market system?

Re: Dissruptive Challenge

Interesting topic this net-metering. Have no issue with being able to produce power and sell it back to the grid. The issue becomes you are now a producer and want to use a system that you have not put in place and are not maintaining. Prior to having solar you were a consumer and paid your monthly bill; however, you have now moved into an entrepaneurial role and are a merchant selling a product. If you want to sell to me, and use my system, you have to pay to do that. A simple comparison would be an oil and filter change at a service station. I provide the product and charge you a one up fee for the service. You want to come in and use your product and have me do the service, I will bill you for my time and use of the facility that would probably be more than if I provided the product as well.

We can debate the tax issue and state that in essence you are paying for the system through your tax system, but this is a no solution topic, especially in a slightly rather polarized forum such as this.

The utilities do have an option available to them. The utilities must stop charging a one fee covers all your requirements. My electric bills in Victoria at our condo were broken out for electricity consumption, administration, system charges, etc. Our electric bill for our boat in the marina in Victoria was based on the industrial rate. I did a comparison of the two and the bottom line was within 5%, on a $100.00 cost, the marina electric bill based on $0.15 per kWh was within $5.00 of the condo bill when all was broken out.

Having stated this, you as a producer are using a system that you are now expecting to be compensated for - paying $0.00 or getting a rebate, but not expecting the costs associated with being a provider. Chris is correct in that the utilities will get there money back in one way or another, and that the non-providers will take the brunt.

You, as a provider, do get a return on your investment by reducing your electric consumption, and even getting a rebate from the utility company, and governments are providing subsidies for your installations (I realize not all who installed solar power systems have been compensated - timing is everything); however, you should pay for using a system that you now need as an entrepreneur. Your product is not worth anything if you cannot get it to market.

Governments could also look at net-metering in another light, and that is that you are an entrepreneur, and as such, a business owner. In this regard, you would be expected to file as any small business would. Now you are paying corporate taxes and through this subsidizing the grid infrastructure.

I do not agree that net-metering should not be allowed, or that a citizen cannot go off-grid if they so choose to. For governments to legislate this because of the utilities concerns and fears is wrong, such as where Chris lives. In doing this governments are being hypocritical in that they talk the talk, that of being "green" and "eco friendly", but do not walk the talk, and in the end there is not a lot of change. Having stated this, I do believe that here has to be a middle ground.

As always there is no free lunch.

Just a few thoughts for a vibrant discussion.

Cheers

Ernest

Re: Dissruptive Challenge

BB. wrote: »

But this is sort of the problem with subsidies in the first place. They "pay" people to go places where infrastructure costs may not be justified. Whether or not that will cause over all price increases or not can be another question (farms that have to go "off grid" and pay more for power, roads, water, no-dams, etc.).

Farmers around here who need to feed their cows and heat waterers through the winter can easily go to $1000/month in their electric bill, so the $200/month "infrastructure" fee is nothing for them. However, if all "non-farmers" move from the greed because of this high fee, farmers will have to pay way more to support infrastructure and this may become a problem for them too.