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Thread: Solar has won. Even if coal were free to burn, power stations couldn't compete

  1. #1 Solar has won. Even if coal were free to burn, power stations couldn't compete 
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    The thread title is the title of this article in The Guardian. It's about SE Queensland but could just as easily be about South Australia - though being a bit further from the equator, wind is a bigger portion of our renewable power generation.
    The thing I find surprising is just how fast people are predicting the changeover to happen, maybe because

    The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year.
    I've read similar things about some states in the USA. But those items did not predict ...

    ... driving households to take up rooftop solar, in such proportions that the level of rooftop solar is forecast by the government’s own modellers, and by private groups such as Bloomberg New Energy Finance, to rise sixfold over the next decade. Households are tipped to spend up to $30bn on rooftop modules.

    Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.


    There are a couple of specifically Australian reasons why this has happened. Mainly, a government not-quite-but-as-good-as-a guarantee of a 10% return on however much they choose to spend on transmission and grid infrastructure. Surprisingly to some people, we now have what is commonly referred to as the gold-plated grid. They went mad upgrading and extending anything and everything.

    But it's worth reading the article.
    http://www.theguardian.com/commentisfree/2014/jul/07/solar-has-won-even-if-coal-were-free-to-burn-power-stations-couldnt-compete


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    Quote Originally Posted by adelady View Post
    The thread title is the title of this article in The Guardian. It's about SE Queensland but could just as easily be about South Australia - though being a bit further from the equator, wind is a bigger portion of our renewable power generation.
    The thing I find surprising is just how fast people are predicting the changeover to happen, maybe because

    The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year.
    I've read similar things about some states in the USA. But those items did not predict ...

    ... driving households to take up rooftop solar, in such proportions that the level of rooftop solar is forecast by the government’s own modellers, and by private groups such as Bloomberg New Energy Finance, to rise sixfold over the next decade. Households are tipped to spend up to $30bn on rooftop modules.

    Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.


    There are a couple of specifically Australian reasons why this has happened. Mainly, a government not-quite-but-as-good-as-a guarantee of a 10% return on however much they choose to spend on transmission and grid infrastructure. Surprisingly to some people, we now have what is commonly referred to as the gold-plated grid. They went mad upgrading and extending anything and everything.

    But it's worth reading the article.
    http://www.theguardian.com/commentisfree/2014/jul/07/solar-has-won-even-if-coal-were-free-to-burn-power-stations-couldnt-compete
    Interesting, but I don't quite understand your comments about the grid upgrade. The thrust of the article is that distributed generation is the future and that people may even opt out of the grid.

    My second query about this would be the usual one about matching supply to demand. Storage of electricity is notoriously difficult. I am not persuaded that a throwaway line about batteries, which is all this article has to say on the subject, will quite do. Peak consumption in many countries is in the evening, whereas peak solar generation will be noon +/- say 2 hrs. So I do not find it at all surprising that the spot electricity price can go temporarily negative: that's exactly what you expect when supply and demand do not match. In fact a lot of what we all pay for in our grid-based system today is security of supply at the peaks of demand, which is the reason that installed capacity is much greater than demand. It has to be, to deal with the peaks, beause the stuff is so damned hard to store. And again, for us in countries with a lot more cloud and further from the equator, the mismatch will be a hell of lot worse in the winter than it will be in Queensland. Would the economics work in the UK or Germany, for example?

    Another thing that is missing from the article is an explanation of what has changed to cause the reported growth in solar. Is it better solar panel efficiency, or increased scale of of manufacturing and marketing, or government subsidy, or all three, and is it sustainable if the subsidy is cancelled?

    I'd like to see some of these problems addressed in an article before I get too carried away. We'd all love to see the death of coal generation but I have a feeling we will still need a grid and peak-shaving generation, which will be fossil-fuel based though perhaps not coal (gas turbines are popular for this).


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    Another thing that is missing from the article is an explanation of what has changedto cause the reported growth in solar. Is it better solar panel efficiency, or increased scale of of manufacturing and marketing, or government subsidy, or all three, and is it sustainable if the subsidy is cancelled?
    I think it's all three + the elephant in the room. The cost of solar dropping like a stone is the elephant. When we got our panels a couple of years ago (not in Queensland), we were partly impelled by the incentive of the reasonably high feed in tariff being reduced on a particular date. You'll notice from the article that, far from an enticing FIT, Queensland solar purchasers are not allowed to feed in to the grid at all, at any price.

    I'd certainly say cancelling the last of the remaining subsidies won't affect future uptake, the price is dropping so far so fast that the only consideration is how many panels you want. The subsidy also is/was restricted - to a number of panels appropriate to a household. Nowadays, people like my niece are spending the cost of a lavish kitchen or bathroom upgrade on covering their roof with as many panels as will fit. Being in a country town, I reckon she and her husband will be lining up early for any form of battery backup. (Especially if power to the town is ever cut off because of excessive heat with or without nearby bushfires. Refrigerators and aircon going down when it's that hot is not a lot of fun. I expect that she'd be on the lookout for battery power enough to go off the grid entirely the day after the heat, wind, fire dies down a bit if they have a big scare.)

    I don't know whether the roof restoration/replacement companies will still offer small solar PV systems as a freebie in their contracts once the rebates disappear entirely, but by that time panels may be cheap enough for them to continue.

    As for peak and other back up, in this state, the coal power stations are hardly used at all, gas is the in thing. Especially necessary for the time being while nearly 30% of our power comes from wind. The need will reduce as we complete a couple of windfarms in slightly different areas. What solar's done here is much the same as in Q'land, converted the power graph to having a huge dip in the early afternoon rather than the huge jump it used to be.

    As for the price of solar, look at the dropping like a stone slope for solar on the Welcome to the Terrordome graph. The Solar Industry Has Been Waiting 60 Years For This To Happen -- And It Finally Just Did | Business Insider

    And again, for us in countries with a lot more cloud and further from the equator, the mismatch will be a hell of lot worse in the winter than it will be in Queensland. Would the economics work in the UK or Germany, for example?
    Germany's certainly plugging along pretty well. My view is that rather than an all of the above approach for everyone, each country should look at its location and its circumstances and choose accordingly. Island countries like the UK and Japan should look to offshore wind, tidal as well as onshore wind and as much solar as they want to even things out. Japan also has good geothermal resources because of its location. Australia and the US are well placed to have plenty of centralised molten salt solar systems which, right now, can supply power for most of the time for most of the year.

    The important thing about rooftop solar PV is the "democratisation" of power generation. I know it's really, really stupid because it doesn't affect how much I pay for power at all, but I can't resist the urge to restrict things like doing the washing and using the oven only during daylight hours. I'm pretty sure we're more conscious of our power use because we have solar. We've also turned off or disabled all, every single one, of the clock/ standby displays on our appliances and other household items. I heard one estimate that 10% of household power in the USA is wasted on standby power. Getting more people more conscious of the power they use and the power they waste can only be a good thing.
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    Quote Originally Posted by adelady View Post
    Another thing that is missing from the article is an explanation of what has changedto cause the reported growth in solar. Is it better solar panel efficiency, or increased scale of of manufacturing and marketing, or government subsidy, or all three, and is it sustainable if the subsidy is cancelled?
    I think it's all three + the elephant in the room. The cost of solar dropping like a stone is the elephant. When we got our panels a couple of years ago (not in Queensland), we were partly impelled by the incentive of the reasonably high feed in tariff being reduced on a particular date. You'll notice from the article that, far from an enticing FIT, Queensland solar purchasers are not allowed to feed in to the grid at all, at any price.

    I'd certainly say cancelling the last of the remaining subsidies won't affect future uptake, the price is dropping so far so fast that the only consideration is how many panels you want. The subsidy also is/was restricted - to a number of panels appropriate to a household. Nowadays, people like my niece are spending the cost of a lavish kitchen or bathroom upgrade on covering their roof with as many panels as will fit. Being in a country town, I reckon she and her husband will be lining up early for any form of battery backup. (Especially if power to the town is ever cut off because of excessive heat with or without nearby bushfires. Refrigerators and aircon going down when it's that hot is not a lot of fun. I expect that she'd be on the lookout for battery power enough to go off the grid entirely the day after the heat, wind, fire dies down a bit if they have a big scare.)

    I don't know whether the roof restoration/replacement companies will still offer small solar PV systems as a freebie in their contracts once the rebates disappear entirely, but by that time panels may be cheap enough for them to continue.

    As for peak and other back up, in this state, the coal power stations are hardly used at all, gas is the in thing. Especially necessary for the time being while nearly 30% of our power comes from wind. The need will reduce as we complete a couple of windfarms in slightly different areas. What solar's done here is much the same as in Q'land, converted the power graph to having a huge dip in the early afternoon rather than the huge jump it used to be.

    As for the price of solar, look at the dropping like a stone slope for solar on the Welcome to the Terrordome graph. The Solar Industry Has Been Waiting 60 Years For This To Happen -- And It Finally Just Did | Business Insider

    And again, for us in countries with a lot more cloud and further from the equator, the mismatch will be a hell of lot worse in the winter than it will be in Queensland. Would the economics work in the UK or Germany, for example?
    Germany's certainly plugging along pretty well. My view is that rather than an all of the above approach for everyone, each country should look at its location and its circumstances and choose accordingly. Island countries like the UK and Japan should look to offshore wind, tidal as well as onshore wind and as much solar as they want to even things out. Japan also has good geothermal resources because of its location. Australia and the US are well placed to have plenty of centralised molten salt solar systems which, right now, can supply power for most of the time for most of the year.

    The important thing about rooftop solar PV is the "democratisation" of power generation. I know it's really, really stupid because it doesn't affect how much I pay for power at all, but I can't resist the urge to restrict things like doing the washing and using the oven only during daylight hours. I'm pretty sure we're more conscious of our power use because we have solar. We've also turned off or disabled all, every single one, of the clock/ standby displays on our appliances and other household items. I heard one estimate that 10% of household power in the USA is wasted on standby power. Getting more people more conscious of the power they use and the power they waste can only be a good thing.
    Very detailed and interesting contribution Adelady, thanks. Yes, the cost seems from what you say to be the key to it. Which presumably means that government subsidies have done their job by encouraging the makers of solar panels to scale up and improve, to the point that the subsidies can now be removed, leaving a self-sustaining market in them. If true, that is a real success story - probably what the article should have pointed out in fact.

    But the energy storage vs. grid backup issue remains, I think, the big one, for all these intermittent natural modes of generation.
    Last edited by exchemist; July 7th, 2014 at 11:50 AM.
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    Quote Originally Posted by exchemist View Post
    Quote Originally Posted by adelady View Post
    The thread title is the title of this article in The Guardian. It's about SE Queensland but could just as easily be about South Australia - though being a bit further from the equator, wind is a bigger portion of our renewable power generation.
    The thing I find surprising is just how fast people are predicting the changeover to happen, maybe because

    The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year.
    I've read similar things about some states in the USA. But those items did not predict ...

    ... driving households to take up rooftop solar, in such proportions that the level of rooftop solar is forecast by the government’s own modellers, and by private groups such as Bloomberg New Energy Finance, to rise sixfold over the next decade. Households are tipped to spend up to $30bn on rooftop modules.

    Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.


    There are a couple of specifically Australian reasons why this has happened. Mainly, a government not-quite-but-as-good-as-a guarantee of a 10% return on however much they choose to spend on transmission and grid infrastructure. Surprisingly to some people, we now have what is commonly referred to as the gold-plated grid. They went mad upgrading and extending anything and everything.

    But it's worth reading the article.
    http://www.theguardian.com/commentisfree/2014/jul/07/solar-has-won-even-if-coal-were-free-to-burn-power-stations-couldnt-compete
    Interesting, but I don't quite understand your comments about the grid upgrade. The thrust of the article is that distributed generation is the future and that people may even opt out of the grid.

    My second query about this would be the usual one about matching supply to demand. Storage of electricity is notoriously difficult. I am not persuaded that a throwaway line about batteries, which is all this article has to say on the subject, will quite do. Peak consumption in many countries is in the evening, whereas peak solar generation will be noon +/- say 2 hrs. So I do not find it at all surprising that the spot electricity price can go temporarily negative: that's exactly what you expect when supply and demand do not match. In fact a lot of what we all pay for in our grid-based system today is security of supply at the peaks of demand, which is the reason that installed capacity is much greater than demand. It has to be, to deal with the peaks, beause the stuff is so damned hard to store. And again, for us in countries with a lot more cloud and further from the equator, the mismatch will be a hell of lot worse in the winter than it will be in Queensland. Would the economics work in the UK or Germany, for example?
    I've been wondering for some time why industry doesn't pick up on this,. If a very energy intensive business would simply time its production to match the peak supply of electricty - they might be able to get a really good price.

    So like if you own a machine shop that makes use of electric welders - maybe you might want to time your daily welding to match the peak. Focus on other stuff like cutting and sorting and measuring during the low hours.

    Cottage industries would have an advantage here, because the shop owner can set their own hours. Maybe have an app on their phone that tells them the spot price every hour, and make sure to be available when they see that price hit the floor.
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  7. #6  
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    Quote Originally Posted by kojax View Post
    Quote Originally Posted by exchemist View Post
    Quote Originally Posted by adelady View Post
    The thread title is the title of this article in The Guardian. It's about SE Queensland but could just as easily be about South Australia - though being a bit further from the equator, wind is a bigger portion of our renewable power generation.
    The thing I find surprising is just how fast people are predicting the changeover to happen, maybe because

    The impact has been so profound, and wholesale prices pushed down so low, that few coal generators in Australia made a profit last year. Hardly any are making a profit this year.
    I've read similar things about some states in the USA. But those items did not predict ...

    ... driving households to take up rooftop solar, in such proportions that the level of rooftop solar is forecast by the government’s own modellers, and by private groups such as Bloomberg New Energy Finance, to rise sixfold over the next decade. Households are tipped to spend up to $30bn on rooftop modules.

    Last week, the WA Independent market Operator forecast that 75% of detached and semi detached dwellings, and 90% of commercial businesses could have rooftop solar by 2023/24.


    There are a couple of specifically Australian reasons why this has happened. Mainly, a government not-quite-but-as-good-as-a guarantee of a 10% return on however much they choose to spend on transmission and grid infrastructure. Surprisingly to some people, we now have what is commonly referred to as the gold-plated grid. They went mad upgrading and extending anything and everything.

    But it's worth reading the article.
    http://www.theguardian.com/commentisfree/2014/jul/07/solar-has-won-even-if-coal-were-free-to-burn-power-stations-couldnt-compete
    Interesting, but I don't quite understand your comments about the grid upgrade. The thrust of the article is that distributed generation is the future and that people may even opt out of the grid.

    My second query about this would be the usual one about matching supply to demand. Storage of electricity is notoriously difficult. I am not persuaded that a throwaway line about batteries, which is all this article has to say on the subject, will quite do. Peak consumption in many countries is in the evening, whereas peak solar generation will be noon +/- say 2 hrs. So I do not find it at all surprising that the spot electricity price can go temporarily negative: that's exactly what you expect when supply and demand do not match. In fact a lot of what we all pay for in our grid-based system today is security of supply at the peaks of demand, which is the reason that installed capacity is much greater than demand. It has to be, to deal with the peaks, beause the stuff is so damned hard to store. And again, for us in countries with a lot more cloud and further from the equator, the mismatch will be a hell of lot worse in the winter than it will be in Queensland. Would the economics work in the UK or Germany, for example?
    I've been wondering for some time why industry doesn't pick up on this,. If a very energy intensive business would simply time its production to match the peak supply of electricty - they might be able to get a really good price.

    So like if you own a machine shop that makes use of electric welders - maybe you might want to time your daily welding to match the peak. Focus on other stuff like cutting and sorting and measuring during the low hours.

    Cottage industries would have an advantage here, because the shop owner can set their own hours. Maybe have an app on their phone that tells them the spot price every hour, and make sure to be available when they see that price hit the floor.
    I'm sure there are businesses that capitalise on the low price of overnight electricity.

    And do you remember those "night storage" heaters we had in the 1970s? We had them in Oxford when I was an undergraduate: full of bricks and the theory was they were heated by cheap "off-peak" electrivity and then a thermostatically controlled fan would blow the warm air out during the day. But they were crap: you were always too hot 1st thing in the morning and bloody freezing by nightfall.
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    I have a suspicion that there will be a crossover point with costs at some time in relation to renewables and storage - or not. Maybe sooner, maybe later.

    We already have plenty of cheap, more or less routine, standard IT options for using time or temperature or other indicators to stop, start, alter operation of various things. It may eventually turn out that it's easier and cheaper to overprovide generation and instal power dumping mechanisms in buildings and industries rather than try to match generation and use and invest in storage and batteries at grid, region or premises level. The cost of some electrical and IT equipment to allow remote switching may cost less than installing and managing storage.

    Power can easily be dumped into airconditioning or ventilating vacant hotel rooms or non temperature sensitive warehouses at any time. In a region where wind is the main resource, being able to dump power at night into heating swimming pools a few degrees upwards or chilling cold stores a few degrees downwards or starting up baking ovens an hour or two early as well as lighting up and/or airconditioning offices, shops, schools, stadiums, school gyms, churches, restaurants and bars that are not in use at the time might be a cheaper option than storage in some regions. Of course in dry places with desalination plants, there's the option to increase the rate of processing and pumping water to reservoirs when there's surplus power available. Desal is horrendously power hungry so it should become the first cab off the rank in such circumstances.

    Of course, if cars and buses were generally electric rather than ITC, their batteries become collectively a huge storage and discharge mechanism all on their own. The need to dump power on especially windy nights or during especially bright but not hot days might well become a non-problem if there's a big, sooner than expected take up of electric cars and other vehicles.
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    Or another option would be to build big, huge machines that take CO2 out of the air. Or huge machines that take CO2 out of the air and then combine it with water to synthesize Methanol or Gasoline. Or in some cases automated desalinization plants.

    I'm thinking that really power-wasteful options should be entertained. Like super heating and melting down garbage from a dump to recover useful minerals. Totally silly sounding power consumption options.

    Anything is better than just wasting it.

    The main issue with trying to time production around power prices is the need to have humans available to work at a moment's notice. And having them ready like that isn't usually going to be practical. However a fully automated production process that doesn't require humans to be present when it operates - that's another story. The machine could simply sit there and wait for a price dip, and then kick on and use a lot of power. Then immediately shut itself off again once the price dip is over.


    There is a misconception about capital costs: which is the idea that a machine costs money when it isn't running. However this is almost entirely untrue. In general, a machine only loses value when it runs. When it's turned off, it is not wearing itself out. It's not getting closer to the time when you'll need to replace it.
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    Quote Originally Posted by kojax View Post
    I've been wondering for some time why industry doesn't pick up on this,. If a very energy intensive business would simply time its production to match the peak supply of electricty - they might be able to get a really good price.
    Primarily due to the lack of real time pricing. Many companies do day-ahead pricing, but the real usefulness of this comes about when prices are updated every 15 seconds, and loads can make on-the-fly decisions.

    Cottage industries would have an advantage here, because the shop owner can set their own hours. Maybe have an app on their phone that tells them the spot price every hour, and make sure to be available when they see that price hit the floor.
    Well, yes, although their smart agent does all that for them. Hot water heater, air conditioner, air compressors etc run only when power is cheap. User sets the price limits and the rules and his agent implements those limits.
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    There is a misconception about capital costs: which is the idea that a machine costs money when it isn't running. However this is almost entirely untrue. In general, a machine only loses value when it runs. When it's turned off, it is not wearing itself out. It's not getting closer to the time when you'll need to replace it.
    Maybe true generally, certainly not true of things like furnaces and some industrial ovens. Think glass making and smelting. They last a lot longer and work a lot better if they're not constantly being turned off and on. I presume there are other things like this that I've not worked with.
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    Power to the People - Four Corners

    dunno if you watched 4 Corners monday adelady. a good take on the power industry here in Oz.
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    Kojax said -
    I've been wondering for some time why industry doesn't pick up on this,. If a very energy intensive business would simply time its production to match the peak supply of electricty - they might be able to get a really good price.

    So like if you own a machine shop that makes use of electric welders - maybe you might want to time your daily welding to match the peak. Focus on other stuff like cutting and sorting and measuring during the low hours.

    Cottage industries would have an advantage here, because the shop owner can set their own hours. Maybe have an app on their phone that tells them the spot price every hour, and make sure to be available when they see that price hit the floor.
    Solar - in regions of the world with lots of sunshine - is going to keep getting cheaper when the sun shines. Whilst few industries would set out to want highly variable energy pricing, some will be able to take advantage of it if it means there are times when it's really cheap. The value of weather prediction in that case - because it enables solar energy price prediction - will be high too.

    There is strong resistance to PV fitted homes and businesses being able to sell excess locally in the current Australian context, but I think there will be use of existing poles and wires in this way. Perhaps as an unexpected consequence of the legal challenge by News Ltd's pay TV division who successfully demanded they be allowed to make use of power poles? That would be ironic. As has been pointed out, grid operators in parts of Australia are refusing to accept feed in solar, as I understand it, unless the capacity for the grid operator to switch it off when they don't want it is built in. But there are so many solar owners that they are becoming a demographic that canny politicians are reluctant to go up against; they've already forced some anti solar governments into back downs.

    Chrispen, I saw the 4 Corners show and think a lot of what it had to say was well done - we are on the cusp of dramatic and unstoppable change - but the show should not have understated the intermittency issue nor overstated what storage is capable of. Whilst large scale thermal solar can and will include thermal storage, in Australia no power companies want to build them. It's almost all rooftop PV. Not that I think storage will be the impassable barrier that the opponents of renewables desperately want people to believe it is. PV fitted homes will come to include storage but it is not cheap enough - yet. Of course it's reasonable to expect large scale storage systems, operated by energy providers, should do the job cheaper and more reliably - if they can look beyond making use of political support for resisting change, which is what Australia's Conservatives are providing.

    And I think the value of existing fossil fuel infrastructure as backup during the energy transition should not be understated. Better it happen with forethought and planning, but it's going to happen regardless. PV uptake is likely to force fossil fuel production to be intermittent - making that energy more expensive, which will create an alternative carbon price signal to the about to be eliminated Carbon Tax that Australia's Conservatives cannot repeal.
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    Quote Originally Posted by Ken Fabos View Post

    There is strong resistance to PV fitted homes and businesses being able to sell excess locally in the current Australian context, but I think there will be use of existing poles and wires in this way. Perhaps as an unexpected consequence of the legal challenge by News Ltd's pay TV division who successfully demanded they be allowed to make use of power poles? That would be ironic. As has been pointed out, grid operators in parts of Australia are refusing to accept feed in solar, as I understand it, unless the capacity for the grid operator to switch it off when they don't want it is built in. But there are so many solar owners that they are becoming a demographic that canny politicians are reluctant to go up against; they've already forced some anti solar governments into back downs.
    It makes sense for the power company not to want to buy power off the grid if it can't necessarily sell it.

    It seems that real time pricing is a double necessity. Firstly to enable energy scavenger businesses to get the cheap power that's available, and secondly to protect the power companies from needing to buy energy they can't sell.

    With real time pricing - all objections to allowing customers to sell their energy back to the grid would be eliminated. However those customers probably wouldn't get a very good price.


    We live in the information age. There is absolutely no reason at all not to have this in place.


    Chrispen, I saw the 4 Corners show and think a lot of what it had to say was well done - we are on the cusp of dramatic and unstoppable change - but the show should not have understated the intermittency issue nor overstated what storage is capable of. Whilst large scale thermal solar can and will include thermal storage, in Australia no power companies want to build them. It's almost all rooftop PV. Not that I think storage will be the impassable barrier that the opponents of renewables desperately want people to believe it is. PV fitted homes will come to include storage but it is not cheap enough - yet. Of course it's reasonable to expect large scale storage systems, operated by energy providers, should do the job cheaper and more reliably - if they can look beyond making use of political support for resisting change, which is what Australia's Conservatives are providing.

    And I think the value of existing fossil fuel infrastructure as backup during the energy transition should not be understated. Better it happen with forethought and planning, but it's going to happen regardless. PV uptake is likely to force fossil fuel production to be intermittent - making that energy more expensive, which will create an alternative carbon price signal to the about to be eliminated Carbon Tax that Australia's Conservatives cannot repeal.

    If we implement real time pricing, then the market can sort all of that out. If storage is needed, storage will be profitable. If backup power is needed, backup power will become profitable (would only be used when the energy price is high enough to justify it.)

    But it all comes down to forcing utilities to enter the 21st century, and buy a computer or two.
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    Quote Originally Posted by billvon View Post
    Quote Originally Posted by kojax View Post
    ICottage industries would have an advantage here, because the shop owner can set their own hours. Maybe have an app on their phone that tells them the spot price every hour, and make sure to be available when they see that price hit the floor.
    Well, yes, although their smart agent does all that for them. Hot water heater, air conditioner, air compressors etc run only when power is cheap. User sets the price limits and the rules and his agent implements those limits.

    It would be doubly effective if a home were set up to heat alternatively by natural gas or electric heat.

    So when the price of electricity dips low enough, the natural gas heater would turn off and the electric heater would take over for a little while.

    Individual home owners would be providing base loading infrastructure.
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    I do think that "smart" homes and appliances that respond to both current and predicted energy prices - "smart" commercial equipment maybe even more so - will have a significant role - making hay so to speak ie running energy intensive appliances and processes, when the sun shines, without people having to manage them. Commercial coolrooms already take advantage of off-peak and will do so for peak solar if prices reflect it. I've heard of excess PV being directed to electric water heating and I wonder if it might get cheap enough that electrically heating the ground in order to store heat for ground source heat pumps may have some benefit, becoming a form of long term energy storage. Just letting excess capacity go unused seems an inefficient use of excess energy. But that brings us back to the lack of utility scale storage.

    I think the capability for those homes and businesses that periodically and usually predictably have an excess to sell to sun poor neighbors doesn't entirely get covered by variable pricing, although that will help. "Network" charges that are appropriate to local energy transmission and private energy sale and purchase agreements seem to be needed. Not just the production and usage that needs variable pricing - transmission and network costs need to be variable as well. Or else running private but unnecessary transmission infrastructure will be used.
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    I think it will come down to the level of pin pointing we get for price. Electric utilities need to be able to monitor usage on a constant basis so they don't inadvertently create a brown out somewhere. They must know at every moment how much usage there is.

    Furthermore, utilities are already price regulated by government. So government just needs to revise how it regulates. It needs to create a formula where a certain amount of usage, in a certain ratio to consumption always yields a specific price. Once that formula has become law, monitoring the balance of usage to production would be all that was necessary in order to calculate a price at ever minute of the day.

    If we let the price vary by enough, then it might even become viable for private home owners who have access to the public natural gas lines to purchase natural gas powered generators, and run their home off of natural gas during the extreme spikes.
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    Quote Originally Posted by kojax View Post
    I think it will come down to the level of pin pointing we get for price. Electric utilities need to be able to monitor usage on a constant basis so they don't inadvertently create a brown out somewhere. They must know at every moment how much usage there is.

    Furthermore, utilities are already price regulated by government. So government just needs to revise how it regulates. It needs to create a formula where a certain amount of usage, in a certain ratio to consumption always yields a specific price. Once that formula has become law, monitoring the balance of usage to production would be all that was necessary in order to calculate a price at ever minute of the day.

    If we let the price vary by enough, then it might even become viable for private home owners who have access to the public natural gas lines to purchase natural gas powered generators, and run their home off of natural gas during the extreme spikes.
    There was talk, some years ago, of micro-scale CHP based on natural gas, for countries with cooler climates and less sunshine. You would heat your house by running a gas turbine rather than a central heating boiler, use the waste heat for the house and generate electricity which could be either used or sold back to the grid. The technology would be based on the turbochargers in commercial diesel vehicles. I don't know what has happened to this idea - it sounded great. I would not be surprised if what has killed it is the recognition that everyone will generate surplus electricity at the same time and it will be thus unsaleable and unstoreable.

    The problem I see with all this is that we will still need the utilities to buy, maintain and intermittently operate a large amount of generating capacity, just to cover the gaps when the solar or wind or CHP or whatever is not generating enough. So we will all be paying twice over: once for a distributed power supply in our houses and a second time to support the intermittently used utility back-up. This is obviously a very costly and inefficient use of resources. One might say it is cost we should all bear, in order to cut down on CO2 producing fossil energy consumption, but I cannot see market mechanisms bringing it in. It will need legislation, to force people to spend more than they do now for their energy.

    The only way out, it seems to me, will be some sort of breakthrough on electricity storage: preferably one that does not involve massive amounts of processing of heavy (and biologically active) metals - a reversible hydrogen fuel cell or something.
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    exchemist - there are some interesting energy storage technologies emerging. Isentropic Ltd is building a pilot Pumped Heat Energy Storage system in the UK, claiming they'll do electricity to electricity storage cheaper than pumped hydro, without the geographic or climatic constraints. It's base on paired insulated steel tanks of gravel, one hot, one cold, with Argon (distilled from the atmosphere) as the working fluid. Nothing toxic. Sounds promising and must have seemed compelling to get the funding and support for a grid scale demonstration plant. Another interesting storage development is organic chemistry based flow batteries, based on quinones which are common plant compounds. It's a whole new kind of battery chemistry. I know there are other lines of development. I still hold out some hope that nantennas will someday become a workable technology - able to convert light and IR direct to electricity - IR potentially from radiant ground and atmosphere day or night and as part of thermal energy storage systems. Greater potential as the basis of a global energy revolution in my opinion than fusion will ever be.

    What emerges as commercially viable is unpredictable and success or failure doesn't always come down to a technology being viable or not - bad management, poor implementation and insufficient finances can kill good ideas before they are incubated.

    I think that to date energy storage has not gotten the kind of R&D support such a crucial technology warrants. More like subsisting on the energy R&D funding leftovers, as an afterthought.
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    Whilst large scale thermal solar can and will include thermal storage, in Australia no power companies want to build them.
    Well, there was a proposal under way for a large molten salt solar plant in NSW (I think). They upped sticks and said goodbye when the new government made it plain it wasn't going to play ball and might actually get in the way.
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    Quote Originally Posted by Ken Fabos View Post
    exchemist - there are some interesting energy storage technologies emerging. Isentropic Ltd is building a pilot Pumped Heat Energy Storage system in the UK, claiming they'll do electricity to electricity storage cheaper than pumped hydro, without the geographic or climatic constraints. It's base on paired insulated steel tanks of gravel, one hot, one cold, with Argon (distilled from the atmosphere) as the working fluid. Nothing toxic. Sounds promising and must have seemed compelling to get the funding and support for a grid scale demonstration plant. Another interesting storage development is organic chemistry based flow batteries, based on quinones which are common plant compounds. It's a whole new kind of battery chemistry. I know there are other lines of development. I still hold out some hope that nantennas will someday become a workable technology - able to convert light and IR direct to electricity - IR potentially from radiant ground and atmosphere day or night and as part of thermal energy storage systems. Greater potential as the basis of a global energy revolution in my opinion than fusion will ever be.

    What emerges as commercially viable is unpredictable and success or failure doesn't always come down to a technology being viable or not - bad management, poor implementation and insufficient finances can kill good ideas before they are incubated.

    I think that to date energy storage has not gotten the kind of R&D support such a crucial technology warrants. More like subsisting on the energy R&D funding leftovers, as an afterthought.
    There's something wrong with this Isentropic story. Firstly, storing heat is an intrinsically terrible way to store electricity, because you are limited by Carnot cycle efficiency when you want to get the electricity back again. You are bound to lose 60% of it or more, it seems to me, regardless of what they claim. Second the numbers look wrong. They claim it costs $103/kWh for storage. But we all pay about USD 0.15/kWh or so, as domestic consumers. ????

    But the quinone battery sounds just the sort of thing I had in mind, with tanks of electrochemicals being converted one way and the other, as they pass through the cell. And you have a point that the level of R&D may ramp up now that the solar cell business seems to have become self-sustained without subsidy. Let's hope, anyway.
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    exchemist, I'm not an expert and can only say the PHES technology sounds like it has a lot of potential. Securing funding and go-ahead for a 14 million UK pound pilot plant suggests that some better qualified people than me, who have had access to prototypes and testing data think it has potential. If it's all based on BS they have a great future in sales!

    I'd be surprised if estimates of build costs prove out on the first go - pilot demonstration plants don't have the cost savings of established production. How efficiently the system actually operates is going to be a better way to figure if this system has real potential and if it's part of the UK grid there'll be a record of what goes in and what comes out, although it may not be available to the public. Frustrating that in this and similar cases the details of prototypes and their testing is unavailable. It never is. It is a case of wait and see what how impressive the pilot plant turns out - which is a better opportunity to test the technology than most start ups get.

    I thought those numbers you refer to were estimates of the capital costs per kWhr of capacity, not the cost of each kWhr of use but I concede that I don't know how they get their estimates and tend to end up confused when I try.


    I don't understand the Carnot efficiency question myself and can only refer to their FAQ's page response to questions about it.


    There is a pilot demonstration plant under construction, with all the opportunities that brings to show if it works or not. Or screw things up.
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    Quote Originally Posted by exchemist View Post
    Firstly, storing heat is an intrinsically terrible way to store electricity, because you are limited by Carnot cycle efficiency when you want to get the electricity back again. You are bound to lose 60% of it or more, it seems to me, regardless of what they claim.
    Its one advantage is that it is cheap. Tanks full of hot stuff are pretty cheap.
    Second the numbers look wrong. They claim it costs $103/kWh for storage. But we all pay about USD 0.15/kWh or so, as domestic consumers.
    Sounds about right for small scale storage. A GC2 battery will store about 1.3kwhr and costs about $100 at Costco on sale. And you have to replace them every five years or so.
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    As I am posting from South East Queensland (SEQ) I'd have to say that there are a few other things that need to be considered as well.

    When the Millmerran Power Station was added to the SEQ grid in 2002 it brought the wholesale price of electricity down by 30%. It is an air cooled system that uses recycled water and gets its coal on a conveyor belt directly from the mine.

    Millmerran Power Station - Wikipedia, the free encyclopedia

    Meanwhile the cost of network supplied consumer electricity has gone up by 100% in the past 10 years while the cost of solar power units has gone down.
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    The quinone battery thing certainly seems to have enormous potential - if it actually does turn out to be a tenth of the cost of lithium ion then every other stationary (not size or weight constrained) option, including PHES, will begin to look less attractive. Not sure how bulky they might be. It may even make tankers of electricity - or pumped, piped electrolytes an option. I've long thought that the existing flow battery technology - Vanadium Redox - should have been aimed first at the solar powered off-grid market, that really want better options, rather than utilities that generally don't; it would have the potential to eliminate the ubiquitous backup diesel or petrol generator entirely - capacity not constrained by power input and output limits - and with home delivery and swap over of charged electrolytes for depleted giving extra certainty of power supply. But recently, and increasingly it's the grid connected PV homes that are emerging as the untapped market just waiting for better batteries to fill. Not to mention the poorer, but often sunny parts of the world.
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    Seems like photovoltaic cells are following a common learning curve of new technologies, with no clear sign of leveling off. I'm very pleasantly surprised that photovoltaic cells are doing as well as they have, enough to cause serious competition for fossil fuels in some cases.

    Quinone-based batteries for better energy storage - E & T Magazine
    Organic mega flow battery promises breakthrough for renewable energy | Harvard School of Engineering and Applied Sciences
    Electrochemical processes for energy technology | Michael J. Aziz
    A metal-free organic-inorganic aqueous flow battery : Nature : Nature Publishing Group

    How it works:

    At the cathode: hydroquinone -> quinone + 2H+ + 2e
    At the anode: Br2 + 2H+ + 2e -> 2HBr

    Yes, it uses bromine. The researchers used it because it was convenient for them, though they may eventually research alternatives to it.

    The hydrogen ions go through a semipermeable membrane between the quinone and the bromine halves of the battery cell.

    Recharging it is done by running the reactions in reverse, and the researchers claim to have done 100 recycle charges without loss of performance.

    The team did a lot of experimenting to find a good quinone to use: 9,10-anthraquinone-2,7-disulphonic acid, rather similar to rhubarb quinone, 1,8-dihydroxy-3-carboxy-anthraquinone. Quinones are common biological molecules, and they are involved in organisms' electron-transfer energy metabolism, among other things. In energy metabolism, they accept hydrogen ions on one side of a cell membrane and release them on the other side, thus being a chemiosmotic hydrogen-ion pump.

    A flow battery works by pumping in fresh electrolytes, either extracting or supplying electricity, and then pumping out spent electrolytes. That saves on electrode quantity, since one does not need to have functional electrode near all the electrolyte.
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    Quote Originally Posted by Ken Fabos View Post
    exchemist, I'm not an expert and can only say the PHES technology sounds like it has a lot of potential. Securing funding and go-ahead for a 14 million UK pound pilot plant suggests that some better qualified people than me, who have had access to prototypes and testing data think it has potential. If it's all based on BS they have a great future in sales!

    I'd be surprised if estimates of build costs prove out on the first go - pilot demonstration plants don't have the cost savings of established production. How efficiently the system actually operates is going to be a better way to figure if this system has real potential and if it's part of the UK grid there'll be a record of what goes in and what comes out, although it may not be available to the public. Frustrating that in this and similar cases the details of prototypes and their testing is unavailable. It never is. It is a case of wait and see what how impressive the pilot plant turns out - which is a better opportunity to test the technology than most start ups get.

    I thought those numbers you refer to were estimates of the capital costs per kWhr of capacity, not the cost of each kWhr of use but I concede that I don't know how they get their estimates and tend to end up confused when I try.


    I don't understand the Carnot efficiency question myself and can only refer to their FAQ's page response to questions about it.


    There is a pilot demonstration plant under construction, with all the opportunities that brings to show if it works or not. Or screw things up.
    Just seen this on my return from leave. Thanks for the comment about capital cost of storage capacity rather than running cost. That would make a lot more sense.

    But I am still very baffled by the idea of turning electrical energy to heat, of all things, because you are doomed to lose over half of it, unless heat is what you ultimately want to use the energy for. Well, let's see how the pilot turns out.
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    Quote Originally Posted by Ken Fabos View Post
    The quinone battery thing certainly seems to have enormous potential - if it actually does turn out to be a tenth of the cost of lithium ion then every other stationary (not size or weight constrained) option, including PHES, will begin to look less attractive. Not sure how bulky they might be. It may even make tankers of electricity - or pumped, piped electrolytes an option. I've long thought that the existing flow battery technology - Vanadium Redox - should have been aimed first at the solar powered off-grid market, that really want better options, rather than utilities that generally don't;
    What makes you think utilities wouldn't want a viable grid storage system? It would save them tons of money. If it was actually feasible.
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    Harold, with an abundance of fossil fuels, including things like mobile diesel generators to fill gaps - and compliant regulators that avoid regulation or cost impositions around emissions reductions - I don't see they have had a strong incentive. Got evidence that energy generation businesses have a history of spending big on energy storage R&D to make it happen? How big a part of their R&D spending? Since the climate problem rose to the fore, or more recently as renewables began being part of the energy equation, has that spending increased significantly?
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    Quote Originally Posted by Ken Fabos View Post
    Harold, with an abundance of fossil fuels, including things like mobile diesel generators to fill gaps - and compliant regulators that avoid regulation or cost impositions around emissions reductions - I don't see they have had a strong incentive. Got evidence that energy generation businesses have a history of spending big on energy storage R&D to make it happen? How big a part of their R&D spending? Since the climate problem rose to the fore, or more recently as renewables began being part of the energy equation, has that spending increased significantly?
    I think utilities are very interested in storage: smoothing out peaks in demand makes their costs go down a lot. It is conventional utilities that have invested in pumped storage systems such as Dinorwig in Wales for example: Dinorwig Power Station - Wikipedia, the free encyclopedia. I suspect it may be rather an issue of scale. I doubt conventional utilities would be interested in R&D into distributed powergen and distributed power storage. And when one looks at the costs of something like Dinorwig, one might conclude that building standby gas turbines for peak shaving is no more costly, I don't know.
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    Quote Originally Posted by Ken Fabos View Post
    Harold, with an abundance of fossil fuels, including things like mobile diesel generators to fill gaps - and compliant regulators that avoid regulation or cost impositions around emissions reductions - I don't see they have had a strong incentive.
    Spot market prices are a pretty good incentive.
    Got evidence that energy generation businesses have a history of spending big on energy storage R&D to make it happen? How big a part of their R&D spending? Since the climate problem rose to the fore, or more recently as renewables began being part of the energy equation, has that spending increased significantly?
    They've built pumped storage facilities, which is really the only game in town as far as bulk storage capacity is concerned. Everything else is just a gleam in somebody's eye at this point.
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    Quote Originally Posted by Ken Fabos View Post
    Harold, with an abundance of fossil fuels, including things like mobile diesel generators to fill gaps - and compliant regulators that avoid regulation or cost impositions around emissions reductions - I don't see they have had a strong incentive.
    Well, they definitely have a financial incentive. Keeping lower levels of spinning reserves saves them a lot of money.
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    I think pumped hydro takes advantage of demand for storage when it has it available but it's primary function is maintaining maximum pondage at highest altitude, for internal water management purposes. Whilst some has been purpose built for energy storage, mostly, like other renewables, it takes advantage when conditions suit. But I still see no evidence that electricity companies have been major spenders on storage R&D; what I have seen is consistent use of the argument that storage is too expensive to argue against being forced into serious emissions reductions through use of renewables; ie it's been to the advantage in defending their existing investments and business model to argue that storage is too expensive and always will be. A bit like claiming solar would never be cheap enough to make any significant contributions to energy supply.
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    Quote Originally Posted by Ken Fabos View Post
    I think pumped hydro takes advantage of demand for storage when it has it available but it's primary function is maintaining maximum pondage at highest altitude, for internal water management purposes. Whilst some has been purpose built for energy storage, mostly, like other renewables, it takes advantage when conditions suit. But I still see no evidence that electricity companies have been major spenders on storage R&D; what I have seen is consistent use of the argument that storage is too expensive to argue against being forced into serious emissions reductions through use of renewables; ie it's been to the advantage in defending their existing investments and business model to argue that storage is too expensive and always will be. A bit like claiming solar would never be cheap enough to make any significant contributions to energy supply.
    Hmm, this is beginning to sound like a political conviction rather than objectivity. . Several of us have explained that storage, if commercially feasible, offers utilities big advantages. I do know, from discussion with my colleagues in the renewables division of the oil company I worked for, that lack of cost-effective storage technology has been one of the stumbling blocks for intermittent renewable power sources. The way electricity is priced and traded offers ample incentives to someone who can do it cost-effectively.

    I think it is simply a very tough problem and I think it is ridiculous to imply that power utilities are not open to the idea or that it somehow threatens their business model.
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    Quote Originally Posted by exchemist View Post
    Quote Originally Posted by kojax View Post
    I think it will come down to the level of pin pointing we get for price. Electric utilities need to be able to monitor usage on a constant basis so they don't inadvertently create a brown out somewhere. They must know at every moment how much usage there is.

    Furthermore, utilities are already price regulated by government. So government just needs to revise how it regulates. It needs to create a formula where a certain amount of usage, in a certain ratio to consumption always yields a specific price. Once that formula has become law, monitoring the balance of usage to production would be all that was necessary in order to calculate a price at ever minute of the day.

    If we let the price vary by enough, then it might even become viable for private home owners who have access to the public natural gas lines to purchase natural gas powered generators, and run their home off of natural gas during the extreme spikes.
    There was talk, some years ago, of micro-scale CHP based on natural gas, for countries with cooler climates and less sunshine. You would heat your house by running a gas turbine rather than a central heating boiler, use the waste heat for the house and generate electricity which could be either used or sold back to the grid. The technology would be based on the turbochargers in commercial diesel vehicles. I don't know what has happened to this idea - it sounded great. I would not be surprised if what has killed it is the recognition that everyone will generate surplus electricity at the same time and it will be thus unsaleable and unstoreable.
    If we had real time pricing, then everyone would not run their generators at exactly the same time.

    Other individuals on this thread have been talking about heat storage systems, and pointing out that they are limited by the Carnot cycle, but that is only true if you are trying to convert the heat back into electricity again. If the heat itself is useful to you directly, and doesn't need to be converted to electricity, then the efficiency of storing energy that way would be much higher.

    People would run their generator during a high price point, store the heat for use later, and sell the electricity at the high spot price.

    Probably a lot of homeowners would have an app on their computer that controls the generator through a USB port, monitors the spot price, and automatically turns on their generator when the price hits a predetermined amount.



    The problem I see with all this is that we will still need the utilities to buy, maintain and intermittently operate a large amount of generating capacity, just to cover the gaps when the solar or wind or CHP or whatever is not generating enough. So we will all be paying twice over: once for a distributed power supply in our houses and a second time to support the intermittently used utility back-up. This is obviously a very costly and inefficient use of resources. One might say it is cost we should all bear, in order to cut down on CO2 producing fossil energy consumption, but I cannot see market mechanisms bringing it in. It will need legislation, to force people to spend more than they do now for their energy.
    It depends on what kind of system we're talking about. If the system suffers lots of wear and tear when you turn it off and on, then it wouldn't be cost effective. However if it is extremely resistant to the rigors of being turned off and on, so its longevity is primarily determined by how many hours it runs in total - then the slow rate of depreciation should offset the capital cost.

    If it is a worry that the slow turn around would make investors unlikely to invest, then it would be one of those situations where it's best to let the government do the investing.


    The only way out, it seems to me, will be some sort of breakthrough on electricity storage: preferably one that does not involve massive amounts of processing of heavy (and biologically active) metals - a reversible hydrogen fuel cell or something.

    Moving the generators to the level of homeowners does a lot to solve that problem, because the homeowner can make use of stored heat directly, without needing to convert it back into electricity.
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    The intrusion of climate/emissions considerations into energy policy is having an enormous impact upon the business models of the fossil fuel dominated energy sector, profoundly effecting the projected future value of their assets. This is effecting their decisions much more profoundly than any small advantage that might be achieved by chasing high spot prices by vigorously pursuing cheap storage. Even if cheap storage would have some short term, incremental value in chasing those intermittent high prices, in the presence of intermittently competitive renewables it would be disruptive and damaging to their businesses.

    When it comes to their efforts to defend their existing business interests the perception that effective and economical energy storage is unachievable is invaluable in influencing energy policy against mandated use of renewables; that strategic recognition that it's a threat to the value of their assets can't help but influence decisions to not invest heavily in R&D to make storage cheap. Similarly the perception that anti-nuclear sentiment is so overwhelming is invaluable in lobbying against any mandated use of nuclear. And popular, mainstream politically supported climate science denial is invaluable as a blanket approach to preventing mandated emissions reductions by any means.

    These commercial interests make effective use of all these perceptions/arguments when lobbying in defense of their business models, to protect asset and stock values against government energy policy demands for a transition to low emissions. They do not want climate considerations to strand their assets and devalue their businesses, irrespective of whether that means being forced to replace them with renewables or forced to replace them with nuclear. Whatever incentives they may have with respect to taking advantage of spot prices pales in comparison to this profound threat to their existing asset and stock value.

    The perception that cheap storage is unattainable is currently more valuable to them than cheap storage.
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    Quote Originally Posted by exchemist View Post
    There was talk, some years ago, of micro-scale CHP based on natural gas, for countries with cooler climates and less sunshine. You would heat your house by running a gas turbine rather than a central heating boiler, use the waste heat for the house and generate electricity which could be either used or sold back to the grid. The technology would be based on the turbochargers in commercial diesel vehicles. I don't know what has happened to this idea - it sounded great. I would not be surprised if what has killed it is the recognition that everyone will generate surplus electricity at the same time and it will be thus unsaleable and unstoreable.
    I doubt if that's the problem, because the peak winter loads occur on cold nights when everybody's furnace is running. So, you'd need to have a lot of these in service before there's a surplus. I don't know what the reason is, really, maybe the maintenance of the engine, noise, initial expense, etc.
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    I am loosly associated with a local power company that runs a pumped storage facility. This stores electric power much more efficiently than batteries. They pump river water to a lake on top of an 800 foot high hill and run it out through turbines and generators when demand is high. A couple years ago they added several acres of solar panels to their generating capasity.
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    Quote Originally Posted by Ken Fabos View Post
    When it comes to their efforts to defend their existing business interests the perception that effective and economical energy storage is unachievable is invaluable in influencing energy policy against mandated use of renewables; that strategic recognition that it's a threat to the value of their assets can't help but influence decisions to not invest heavily in R&D to make storage cheap. Similarly the perception that anti-nuclear sentiment is so overwhelming is invaluable in lobbying against any mandated use of nuclear. And popular, mainstream politically supported climate science denial is invaluable as a blanket approach to preventing mandated emissions reductions by any means.
    Right on the money, except that I think you're looking at the wrong type of assets. Mechanical infrastructure, like power plants, wouldn't be too big a driving factor because the machinery depreciates over time anyway. If solar takes off and you're heavily invested in coal power plants, then you just stop replacing your boilers when they wear out. So long as the change happens slowly enough, you can make the transition with minimum impact on your investments in that area.

    The area the really stings them is not the prospect of seeing their coal power plants lose value (because depreciation is already going to do that anyway), but the coal fields themselves. If you've bought up coal rich land intending to mine it for coal later on, then you want coal to remain valuable until the end of time, so that land doesn't become worthless.

    You bought it as mining land. You don't want to have to turn around and sell it as residential land. That would most likely be a big price hit.

    These commercial interests make effective use of all these perceptions/arguments when lobbying in defense of their business models, to protect asset and stock values against government energy policy demands for a transition to low emissions. They do not want climate considerations to strand their assets and devalue their businesses, irrespective of whether that means being forced to replace them with renewables or forced to replace them with nuclear. Whatever incentives they may have with respect to taking advantage of spot prices pales in comparison to this profound threat to their existing asset and stock value.
    I don't think spot pricing will run into opposition for this reason specifically. Overall, spot pricing would be opposed on the basis that it makes solar viable (and devalues their real estate investments), but spot pricing itself is beneficial for "baseload" operators because they can charge more for their power during the high price times.

    Even if a large number of households were running natural gas generators, the power grid would still need some kind of a hedge to deal with the chaos of many individual homeowners making separate and independent decisions about when they feel like running their generators. Someone would get the contract to be "provider of last resort", for times when there is high demand and nobody to fill it, and they could just about name their price.

    The perception that cheap storage is unattainable is currently more valuable to them than cheap storage.

    It's two entirely different segments of the market making two different decisions. The power plant owner would see little advantage in despairaging storage alternatives. Some advantage, but nothing overwhelming.

    The owner of a natural gas well would want cheap storage to fail by any means possible. Land speculators see zero advantage from storage technology, and quite a lot of loss.

    However, the land speculators will realize they are in the same position as were the Luddites. You can delay technology, but you can never stop it, and every dime they spend on trying to delay the inevitable is a dime they have wasted for nothing. The wise ones are probably looking for suckers to unload their assets onto first, before they give up though.
    Some clocks are only right twice a day, but they are still right when they are right.
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    Quote Originally Posted by kojax View Post
    I don't think spot pricing will run into opposition for this reason specifically. Overall, spot pricing would be opposed on the basis that it makes solar viable (and devalues their real estate investments), but spot pricing itself is beneficial for "baseload" operators because they can charge more for their power during the high price times.
    I think the biggest single thing working against real time pricing is plain old complexity. It is a very hard thing to model and implement.

    Even if a large number of households were running natural gas generators, the power grid would still need some kind of a hedge to deal with the chaos of many individual homeowners making separate and independent decisions about when they feel like running their generators.
    Well, the assumption underlying real time pricing is that people will make decisions in their own self-interest; in most other areas of economics, that has proven to be true.
    Last edited by billvon; August 10th, 2014 at 05:01 PM.
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    Quote Originally Posted by billvon View Post
    Quote Originally Posted by kojax View Post
    I don't think spot pricing will run into opposition for this reason specifically. Overall, spot pricing would be opposed on the basis that it makes solar viable (and devalues their real estate investments), but spot pricing itself is beneficial for "baseload" operators because they can charge more for their power during the high price times.
    I think the biggest single thing working against real time pricing is plain old complexity. It is a very hard thing to model and implement.
    It was hard to implement in the 90's. So some people mistakenly think it would still be hard to implement now.

    I regularly play video games 1000 times over more complex than the pricing system would be, even if we deliberately made it complex on purpose.

    The in game item market systems of most online MMO games have all the features the system would need, and then quite a few additional features it wouldn't need.

    The main trick is setting up the market so the prices are 100% demand driven and 0% supply driven. Otherwise we'd be opening the door for lots of market manipulation on the part of suppliers. Also some providers would have to be on a contract where they are required to operate as a safeguard against holes in coverage. They could be given perks like "first bid priority" during normal hours.

    Probably the way we'd do it is put "kilowatt hour purchase orders" on the market. First come first served. Whoever clicks on the purchase order gets to provide the power listen on the order for that hour and get paid for it. If you provide power without a purchase order, you don't get paid. If you provide more than the amount specified, you still only get paid for the amount on the order. If you fall short of the amount, you lose your purchase order and it gets given to someone else.
    Some clocks are only right twice a day, but they are still right when they are right.
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    Quote Originally Posted by kojax View Post
    I regularly play video games 1000 times over more complex than the pricing system would be, even if we deliberately made it complex on purpose.
    Yes, video games are quite complex. But critical infrastructure has to be more reliable than video game software, and the system has to work on everyone's hardware.
    The main trick is setting up the market so the prices are 100% demand driven and 0% supply driven. Otherwise we'd be opening the door for lots of market manipulation on the part of suppliers.
    Well, it has to be both supply and demand driven or the market will be completely dysfunctional. Yes, both sides can manipulate the market - but in most cases that market manipulation is what makes the system work. (The exceptions are things like collusion or other anti-competitive actions, which are already illegal.)
    Also some providers would have to be on a contract where they are required to operate as a safeguard against holes in coverage. They could be given perks like "first bid priority" during normal hours.
    Sure, that could work.
    Probably the way we'd do it is put "kilowatt hour purchase orders" on the market. First come first served. Whoever clicks on the purchase order gets to provide the power listen on the order for that hour and get paid for it. If you provide power without a purchase order, you don't get paid. If you provide more than the amount specified, you still only get paid for the amount on the order. If you fall short of the amount, you lose your purchase order and it gets given to someone else.
    Sure, with variable terms for the power (i.e. 100 megawatts for 1 hour vs 100 megawatts for 24 hours.) Then brokers match buyers to sellers and do basic load aggregation.
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    A genuine commitment to tackling the climate/emissions/energy conundrum means uncompromising policies (that probably should have started a decade or two ago; that hasn't happened and still looks unlikely in the near term). I see too much political willingness to write the climate problem off as exaggerated and deferrable - as unwarranted climate "alarmism" - and doing the minimum necessary accepted as too hard and economically damaging - as entirely justifiable and urgent economic "alarmism". The latter appears to be winning the climate policy battle.

    I find it hard to believe that it's only the fossil fuel sellers that have a stake in stalling or preventing a global Energiewende (with or without nuclear) or that established fossil fuel users are effectively neutral and accepting of being forced to change away from FF burning as has been suggested; it's very inconvenient, looks expensive, requires the riskiness of commitment to technologies that need to be developed and improved along the way, rather than picked off the shelf. And they don't really want to. The power of lobbying, with the application of fear of recession and economic disaster means they don't have to. I think there is an abundance of motivation to defend their business as usual model and to lobby hard against policy that forces change on them, whilst there is not a lot of strong motivation within these businesses, despite the scientific consensus on climate, to commit to a transition to low emissions.

    To what extent these long term strategic considerations influence R&D choices of businesses is probably hard to tease apart. I've tried to find out how much major electricity companies here in Australia have spent on developing or deploying storage, without much success; it certainly doesn't jump out as being something they do a lot of and are keen to take credit for.

    As Sealeaf points out, there is use of pumped hydro as storage but not widespread nor high on the investment agendas of the companies that dominate the electricity industry. Here in Australia, where high elevation water supply is hard to come by, with a large element of seasonal and ENSO based intermittency it's primary role is not for enabling wind and solar; sure, they use it to maximise their generation at times of high prices but opportunity for building more capacity to accommodate renewables is limited; the very best geographic resources were where hydro got built first and any additional capacity will be in less suitable locations.

    Whilst I'm a politics and policy pessimist, in many ways I am a techno-optimist and I just don't think energy storage at large scale is an unattainable impossibility; I suspect it would cost a lot less to build and maintain per household than the cost of a single, modest small car even with existing technologies (done with economies of scale).

    Of course, treating the very low cost energy we've been enjoying at the expense of a stable climate for our descendants as an unassailable right has not helped. A bit of energy frugality, without loss of prosperity is very possible. And if it's harder to develop appropriate technological storage solutions than developing reliable, functional fusion I'd be very surprised. But if it's being pursued with a hundredth of the financial backing fusion gets I'd be even more surprised.

    Utility scale storage has been treated as an afterthought, I only hope not continuing as that, to our great and long lasting regret.
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