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April 2014 EEnergy Informer Page 1

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In this issue

In Turbulent Times US Has Less To Worry ..............................................................

Future Of US Coal: More Exports ...........................................................................Japans Energy Strategy: With Or Without Nuclear? .............................................

Appliance Energy Efficiency Standards Matter ......................................................

California Marching Ahead On Climate Target .......................................................

European Electricity Prices Rising ..........................................................................

Distributed Energy Poised For Growth ...................................................................

Teslas Business Plan Gives Utilities Strife..............................................................

Apples CEO: Dont Like Green? Get Out Of Stock .................................................

F innish Nuke Delayed Again ...................................................................................

US Solar Growing On Steroids, For Now ................................................................

Has Time Arrived For Electricity Pre-payment Schemes? ......................................

Do Renewables Contribute When Most Needed? .................................................

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In Turbulent Times US Has Less To WorryRising domestic oil & gas production is a boom in multiple ways

ith oil stuck at $100 per barrel, turmoil in Ukraine, Venezuelaand Syriaand festeringtensions in other parts of the world, increased domestic oil and gas production and fallingimports gives the US a measure of energy security that is enviable to many of its globaltrading partners. After falling precipitously since 1970s, US has experienced a renaissance in

oil production, thanks to the miracle of horizontal drilling, enhanced oil extraction and similartechnologies, resulting in dwindling net imports, illustrated in graph below on left.

An even more dramatic development has been the shale gas boom, thanks to hydraulic fracking, whichhas transformed America to a nation with plentiful natural gas supplies at historically low prices (graphbelow on right), another source of envy to its global trading partners.

Combined, the US is not only more secure but enjoying a significant competitive advantage in havingaccess to cheap energy.Average residential electricityprices in the US (blue line ingraph on page 2), for example,have been flat in the last fewyears, largely due to theprevalence of cheap natural

gas prices. Industrial USelectricity prices are roughly1/3rdof what they are inGermany, or Japan.

There are, of course,significant regional differencesamongst the states, withHawaiion top (black line ontop of page 2) exceeding 35

W

EEnergy I nformerThe International Energy Newsletter April 2014

EEnergy InformerApril 2014

Vol. 24, No 4ISSN: 1084-0419http://www.eenergyinformer.com

Subscription prices & orderform on last pageCopyright 2014.Thecontent of this newsletter isprotected under US copyrightlaws. No part of thispublication may be copied,reproduced or disseminated inany form without priorpermission of the publisher.

Double bonus of oil and gas

Rising U.S. oil production is spurring calls to

lift a congressional restriction on oil exports

Shale gas production, 1990-2035

Source: John Bussey, The Wall Street Journal 5 Mar 2014 based on data from EIA
http://www.eenergyinformer.com/http://www.eenergyinformer.com/http://www.eenergyinformer.com/http://www.eenergyinformer.com/

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2April 2014 EEnergy Informer Page 2

cents/kWhr. Hawaii, of course, is an exception since it is virtually dependent on expensive oil forelectricity generation, hence the strongcorrelation to price of crude oil as illustratedin graph on left, a rather unique case.

The US average retail electricity price, of

course, is a fictional construct as actualtariffs vary from state to state and by type ofutility and tariffs even within a given state.

It the case of Hawaii, it is not surprising thatsolar PVs are extremely popular, only if theresidents can convince the local utility toconnect their rooftop generators to the grid,

as previously reported in the Feb 2014 issue.

Future Of US Coal: More ExportsLoss of domestic demand is compensated by growth in exports

here is little if any future growth in demand for coalin the US. But that does not necessarily meanan end to US coal production. The gradual demise of domestic coal consumption is expected to becompensated by an increase in coal exports, initially to Europe, but eventually to the Asia Pacificregion. That, in a nutshell is whats in the latest ICF Internationalsprojections, a consultancy.

According to ICF, 2014 should be thenadir of US coal production. Movingforward, ICF sees production levelsstabilizing around 1,000 million short

tons per year (graph on right). ICFbelieves that natural gas prices areunlikely to go much below where theyhave been recently and stay low forprolong periods of time.

Many believe that while the

Environmental Protection Agency(EPA) may prevail in virtually

eliminating newcoal fire construction inthe US, the newer portion of the existingcoal fleet is expected to survive mostly

unscathed for some years to come.

To compensate for the domesticrestrictions, the US coal industry willincreasingly focus on the export marketto countries not as concerned about theenvironmental downside of coal, a trendthat has been in the making for a numberof years (graph on left).

Exports of both thermal and

T

Relatively cheap in America

Source: U.S. EIA and IntercontinentalExchange Inc.

Not much growth, but no major decline eitherU.S. Coal Production by Year

Source: US coal competitive in global markets: Domestic production forecast to

rebound, ICF International white paper, Feb 2014

Future growth is in exports

U.S. Coal Exports by Year

Source: US coal competitive in global markets, ICF International, Feb 2014

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metallurgical US coal have been on the rise since early 2000.According to ICF, currently 7 new export coal terminals are in various stages of planning anddevelopment in the Pacific Northwest plus5 in the Gulf coast. One can makeassumptions about how many willultimately be built, and how much

competition will the US exporters facefrom other coal exporting countries.

Historically, coal has out-priced liquefiednatural gas(LNG) on an equivalentenergy basis in the critical Japanesemarket, with the price spread becomingmore pronounced following theFukushima disasterin 2011(graph onright). With the virtual shutdown ofJapans nuclear fleet (article below), the

country has been importing more LNG,

coal and oil to keep the lights on.

Koreais another major importer of bothcoal and LNG. The countrys onceambitious nuclear plans have beenscaled down, making it more dependenton fossil fuels, of which it has preciouslittle domestically.

China, a net coal exporter until 2008has become a net importer (graph onleft), a trend that is expected to continue

for a while. It offers yet another majormarket for any excess US productioncapacity and explains the interest in

developing major export terminals on the Pacific Northwest.

Japans Energy Strategy: With Or Without Nuclear?Three years after Fukushima, Japan is still debating its energy future

hree years ago on 11 March a devastating earthquake and tsunami hit Japan with unprecedentedferocity, wiping out entire coastal towns and demolishing Tokyo Electric Power Companys

(TEPCO) Fukushima Daiichi Nuclear Plant. The accident, not only devastated the plant, butalso the reputation and fortune of its owner and operator, TEPCO, once among the biggest

privately owned global power companies.

The tremors had repercussions across the globe, including in Germany, where Chancellor AngelaMerkelsgovernment decided to shut down half its operating reactors immediately with the remainingslated for phase out by 2022. A handful of other countries, Switzerlandfor example, said they will notreplace their existing reactors once they retire. Italy, which had an on-again, off-again nuclear policy,turned it off again. Other countries had to go the drawing board, re-examining the safety and disasterpreparedness of their reactors.

T

Coal better bargain after Fukushima

Delivered Coal versus LNG Prices to Japan


China needs coalChinas Coal Imports and Exports: 2000 to 2011


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Franceand South Korea, bothnuclear happy countries, have hadsecond thoughts on how muchnuclear they would want. The USand the UK, where bothgovernments are trying to

encourage more nuclear reactorsbuilt, are still mostly trying.China, on the other hand, appearsto have not noticed that there wasa major accident in Fukushima.

Nuclear expertsand non-expertshave, of course, been making allsorts of predictions on what thelonger-term legacy of Fukushimamay be. Christoph Frei,Secretary General of theWorld Energy Council (WEC), for example, in a prepared statement to

commemorate the accident said,

In our study on nuclear energy in March 2012, we found that Fukushima had had limited impacton the global nuclear outlook and this was particularly so for non-OECD countries. But two yearson, the situation has evolved. The market attractiveness of nuclear energy has now beenundermined by the availability of cheap natural gas, collapsing solar prices, uncertainty of CO2prices, along with nuclear energys rising safety-related costs. This will have significantconsequences for our ability to deliver a diverse fuel mix for a secure, affordable andenvironmentally sustainable energy future.

President Obama,who must have learned the difference between what he wants and what he may beable to achieve, frequently refers to US energy strategy as all of the above, which suggests a mixture of

fossil fuels, nuclear and a growing contribution from renewable resources. As it turns out, that is more orless what politicians in Japanalso appear to be pursuingassuming they can keep nuclear as a viableoption in their future energy mix.

For Japan, a resource poor island nationin a region increasingly competing forimported liquefied natural gas(LNG)with South Koreaand coalwith bothKorea and China, keeping the nuclearoption alive is a top priority and asensible oneif it were not for thegrowing public opposition to nukes,

which gained momentum followingFukushima.

Following the accident all of Japansnuclear reactors were shut down forsafety reasons (graph on right). Only 2have restarted, you might say, for symbolic reasons while 46 GW of nuclear capacity is sitting idleawaiting safety reviews. TEPCOs abysmal record in managing the aftermath of the accident and the wayit has handledor mishandledcommunications with the public has not helped to smooth the publicsuneasiness about the future safety of reactors in a country sitting on tectonic faults.

Fukushimas legacy?

Source: BPs Energy Outlook 2035, Jan 2014

Before and after Fukushima

Annual historical generation volumes Japan

Source: Asia Pacific Consulting Newsletter, 1/2014, Poyry

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Successive governments have had different views on the future role of nuclear energy. The current PrimeMinister, Shinz Abe, is pro-nuclear and has proposed to gradually re-start the existing reactors that aredeemed to be safe, and if all goes well, build a few more, but not as many as were envisioned beforeFukushima.

Not everyone agrees. The anti-

nuclear lobby, pointing to theindustrys past spotty record andlack of transparency, says neitherthe operators nor their watchdog canbe trusted. Moreover, the lights havemiraculously stayed on despite thenear-total nuclear shut-down. Whynot move forward by phasing out allremaining reactors, as in Germany,relying on more energy efficiencyand renewables,the anti-nuclearlobby asks?

If Germany, a major industrial powerhouse can do it, why not Japan? There is certainly a lot of futurepotential for more renewables. Japan is blessed with hydro, geothermal, wind, solar and tidal resources.The problem, as in many other countries, is their intermittency and, in the case of Japan, the mountainoustopography making it challenging for a densely populated country consisting of several major islandswith poor transmission interconnections operating on two frequencies, a historical oddity.

According to Poyry, a consultancy,Japans solar capacity, currentlyaround 10 GW, may be increased to60 GW by 2050, give or take some(graph above). Given that total

demand is not projected to growmuch over timeJapan is a matureeconomy like other advancedOECD countriesone can envisiona future with a more diversegeneration portfolio (graph on left),potentially limping along withoutany nuclear plants.

As Japans recent experience hasdemonstrated, a future without

nuclear is notinconceivable. The question is, would it be desirable, reliable, and ultimately affordable?

Germany is likely to find out. Japan is yet to decide.

Appliance Energy Efficiency Standards MatterIt is a wonder why it has taken so long to do the sensible thing

mong Winston Churchillsmany memorable quotes is the one where he reportedly saidAmericans always end up doing the right thing after they have exhausted all alternatives. Thiscertainly applies to the great waste of energy routinely taking place in all sectors of USeconomy.

A

Nuclear comeback or wishful thinking?

Generation volume development by source


Room for solar growth in Japan?

Solar power generation capacity assumptions for Japan


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Walk inside a typical US supermarket to the food, dairy and vegetable aisles. You are likely to encountervast number of open display cases where the refrigerator is working around the clock to keep themerchandise cool while vast amounts of energy are wasted through the open cases. No wonder it isfreezing cold walking around the aisles in the supermarketwhich have to be heated to keep customerscomfortable. A typical US supermarket has over 60 such cases, many more for a large Wal-Martsuperstore, which has thousands of outlets in the US alone.

The evidence gained over the past few decades in the US and elsewhere suggests that mandatoryappliance energy efficiency standards, like mandatory building codes, do matter. The latest to go intoeffect in the US apply to refrigerators and freezers used in supermarkets, convenience stores, restaurants,and commercial kitchens, and they promise to save lots of energy and money over time.

The latest standard issued by the USDepartment of Energy(DOE) in lateFeb 2014 applies to commercialrefrigeratorsand freezers. DOEestimates that over the next 30 years thenew standards will reduce electricityconsumption by about 340 billion

kilowatt-hours, translating to roughly$12 billion in savings. The newstandards, which will go into effect in2017, will also reduce CO2 emissionsby 142 million metric tons, equivalent tothe annual emissions of 30 million cars.

While the new standards include more efficient motors, refrigerants and compressors, much of the expectedgains come from trivial design changes, such as enclosed display cases for supermarket refrigerators.

As strange as it may sound, efficiency standards for refrigeratorsor for that matter for any appliancesdid not exist until 1978which meant that fridges got bigger and more energy guzzling over time (graph

below). Californiawas the first state with fridge standards. It took the federalgovernment until 1990 tointroduce a national standard, which have been tightened over time. The latest, going into effect this year,will mean that the average fridge sold in America in 2014 will consume as little electricity as those sold in1950while three times as large with many advanced features such as ice makers and defrost cycles thatdid not exist in 1950s.

The first national standards for

commercialrefrigerationequipment were enacted as part ofthe Energy Policy Act of 2005,also based on standards adoptedearlier in California. The initialstandards applied to reach-inrefrigerators and freezers, typicallyused in food-serviceestablishments. The new standardswill reduce energy consumption bymore than 40% for solid-doorreach-in refrigerators andfreezers, by 28% and 12% forglass-door supermarketrefrigerator and freezer cases,respectively.

Three times as big yet using as little as 1950 models

Annual energy use of a new US refrigerator, kWh/yr., 1950 - 2014

Source: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy,

Building Technologies Office

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As shown in the graph on top of page 6, typical supermarket refrigerator and freezer cases without doorssold today use 3 to 4 times more energy as cases with glass doors. It is a wonder why it has taken DOE solong to do the sensible thing.

A blog posted on American Council for an Energy Efficient Economy(ACEEE) reads, Not countingtodays rule, efficiency standards adopted duringthe Obama administration will reduce CO2emissions by

1.8 billion metric tons by 2030 and will net consumers and businesses $370 billion in savings.

ACCEEE Blog

California Marching Ahead On Climate TargetItll be tough going, especially after 2020

n 2006, California legislature passed the Global Warming Solutions Act, better known as AssemblyBill 32, or AB32, duly signed into law by then Republican Governor Arnold Schwarzenegger. In anut shell, AB32 requires statewide greenhouse gas(GHG) emissions to be reduced to 1990 level by

2020. As difficult as it may sound, that is the easy part. The going gets tougher between 2020 and2050 after the low hanging fruit has been exhausted, as illustrated in graph below.

AB32 has tasked California AirResources Board(CARB) to deliverthe desired outcome, a thankless if notimpossible job. If it succeeds, CARBwill make plenty of enemies sincevirtually every citizen has to makesacrifices, make modifications in energyand transportation use as well asbehavioral changes. Things will get a

tad more expensive in a state alreadywith a reputation of being expensive tolive and do business in.

In Feb 2014, CARB released Proposed

f irst update to the climate change

scoping plan: Bui lding on the

framework, a comprehensive andupdated version of an earlier scopingstudy which describes how it plans tomeet the 2020 targetfollowed byfurther draconian GHG reductions by 2050. It is not an easy read, not only because of the detailed

discussion of the minutiawhat needs to take placebut the sheer reality of just how difficult it will be.

The chart on top of page 8 gives a flavor of the scale of challenge facing CARB. There has been a smalldent in statewide GHG emissions despite a decade of efforts. With a rising population, albeit at a slowingrate, every sector of the economy has to become cleaner, greener and more efficient. The electric powersector, already among the cleanest in the US, has to further reduce its carbon footprinthence the 33%renewable portfolio standard(RPS) by 2020 and continued emphasis on energy efficiency.

I Meeting 2020 target is the easy partFraming the Path to 2050

Source: Proposed first update to the climate change scoping plan: Building on

the framework, California Air Resources Board (CARB), 10 Feb 2014
http://www.appliance-standards.org/sites/default/files/Progress_toward_3_billion_CO2_reduction.pdfhttp://aceee.org/blog/2014/02/new-refrigeration-efficiency-standardhttp://aceee.org/blog/2014/02/new-refrigeration-efficiency-standardhttp://aceee.org/blog/2014/02/new-refrigeration-efficiency-standardhttp://www.appliance-standards.org/sites/default/files/Progress_toward_3_billion_CO2_reduction.pdf

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The biggest contributor, and amongthe toughest to address, is thetransportation sector, nearly totallydependent on polluting cars andtrucks primarily running on gasolineand diesel. California will needcleaner fuels, more zero emissionvehicles(ZEVs), massive investment

in mass transitand a slew of othermeasures to reduce the carbon footprint of its transport sector. What is left of the industryin the state hasto also tighten its belts, as with the important agriculturalsector.

The table on left shows the 2020 GHGreduction targets that would have to be metaccording to CARBs latest thinking. Muchmore needs to be done after 2020which isanother matterassuming the 2020 targets canbe met.

CARB does its best to portray a can-be-doneattitude, as it surely must. Current Governor

Jerry Brown, a green to the bones Democrat,has been highly supportive of AB32, pushing allstate agencies to support CARB in its ambitiousendeavor. And with so many initiatives alreadyunderway (table below), it is possible to see the

light at the end of the tunnel, but it will be a long and darktunnel to get through.

Assuming that the targets can be met, how much will it cost?In a section titled Evaluations, CARB claims that thenet impact of AB32, even after full implementation, isestimated to be small in relation to the $2 trillion California

economy, referring to a 2012 study by the Center forContinuing Study of the California Economy.

Tough going

California GHG Emissions 20002011

Source: Proposed first update to the climate change scoping plan, CARB, Feb 2014

Can you meet the target?

Meeting the 2020 Emissions Target

Source: Proposed first update to the climate change scoping plan,

CARB, Feb 2014

CARBs wish list

Source: Proposed first update to the climate change

scoping plan, CARB, Feb 2014

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The report ends on an upbeat note.Swallowing AB32s bitter medicine willnot only notkill Californias economy, itwill lead to a bright and sustainablefuture, it claims.

The reports conclusions, excerpts fromwhich appear on left, are uplifting, as ifpenned by Governor Brown, who is knownto prophesize and pontificate as he getsolder, and no doubt, wiser.

It will not be an easy job to convinceeveryone that the CARBs bitter medicinewill in fact be good for them. But that iswhat the law requires, and what CARB isstriving to do.

Relatively speaking, California is alreadyclean and green with many voters who arewilling to pay a little more to keep it thatway.

As this editor has noted before, hardlyanyone moves to California to save moneysince housing, labor costs and cost of livingare high.

The states relatively mild climate and its

booming high-tech sectorpromise to create high payingjobs that continue to attract thebest and the brightest, as do itsworld class universities. Thestates beaches and parks areclean and the locals like to keepthem that way.

If the costs of meeting AB32end up being manageable asCARB believes, California may

pull yet another miracle thatmay be copied by other states.

On the other hand, if Californiafails to cut its emissions or itseconomy is ruined in theprocess, it will give ammunitionto those who say itll cost toomuch for too little gain.

CARB

Uplifting

Source: Proposed 1st update to the climate change scoping plan, CARB, Feb 14

Clean, getting cleanerAverage Household Expenditures on Electricity and Associated GHG Emissions in the United

States and California.

(a) Per-Capita Fuel Costs and (b) Passenger Transportation GHG Emissions in California as a

Result of the Existing Suite of California Climate Policies

Source: Proposed first update to the climate change scoping plan, CARB, Feb 2014
http://www.arb.ca.gov/cc/scopingplan/2013_update/draft_proposed_first_update.pdfhttp://www.arb.ca.gov/cc/scopingplan/2013_update/draft_proposed_first_update.pdfhttp://www.arb.ca.gov/cc/scopingplan/2013_update/draft_proposed_first_update.pdf

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European Electricity Prices RisingNot just rising but divergent and non-harmonized

uropean consumers electricity and gas prices have risen and are still rising, is a goodsummary of a recent report, Energy Costs & Prices in Europe, released by the European

Commissionin Brussels. Moreover, whilst almost all Member States have seen a consistentrise in consumer prices of electricity and gas, the differences between national prices remain

large: consumers in the highest priced Member States are paying 2.5 to 4 times as much as those in thelowest priced Member States.

The gap between the highest and lowest prices paid for electricity and gas by consumers across MemberStates has widened over time, especially in the case of household gas prices. So while the intention wasfor the prices to converge and for markets to become more efficient and harmonized, differences atnational level persist and/or are diverging.

The recent EC report identifies the components of costs and pinpoints whythey have risen and willcontinue to do somore or less regardless of what bureaucrats at the Commission or member statecapitals say or do (graph below).

The main culprit in a number of high cost European countries has been the rising taxesand leviesthatsupport rapid growth of renewables. The energy component of electricity costs, certainly the wholesalecost of generation, has in fact been declining as renewables and self-generation erodes the livelihood ofthermal plants.

Wholesale electricity prices, the EC points out,have declinedroughly 35-45% between 2008-12on major European trading hubs and remain

depressed. Nobody can blame the largeincumbent utilities for the rising retail tariffswho have been complaining bitterly about theirunenviable plight. As illustrated in graph on topof page 11, during this period, electricity networkcosts rose 18.5% for households, 30% forindustrial consumers while taxes and levies rosea whopping 36% and 127%, respectivelythelatter excludes industries that have been spareddue to exemptions.

E

Rising and, dare we say, not exactly harmonized

Source: Energy Costs & Prices in Europe, European Commission, 2014, Brussels

Not necessarily obvious to consumers

Source: Energy Costs & Prices in Europe, EC, 2014, Brussels

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Not surprisingly, European consumers, always frugal by US standards, have been embracing energyefficiencymeasure by better insulating their homes, buying more efficient appliances and so on.

A stunning testimony to just howEuropean households are becoming evenmore efficient is the graph below left

that shows energy consumption, bothgas and electric, for household heatingfor the period 2000-11.

Rising household tariffs, as everypolitician knows, is painful. But so is theplight of energy-intensive industry,who sustains many households.Moreover, households may complain but

are unlikely to move due to rising tariffs. Industrial customers complain and have the option to relocate ifgoing gets tough.

Which explain why European energy-intensive industries receive exemptions and other forms of support,a highly contentious issue for EC who frown on special subsidies and favors. A number of import-exposed industrieshave been complaining, with some justification that they can no longer compete withtheir American or Asian rivals (graph bottom of page).

American industry is currently enjoyingrecord low natural gas and electricity pricesthat are in some cases 1/3rdthose prevailingin Europe (see lead article in this issue).Countries like South Korea, keep energyprices artificially low for industrial customersto keep them competitive with theirinternational rivals. It is a tough world outthere, with each country trying to do what itcan to maintain its high paying industrialjobs.

In Germany, which has been in the newslately due to its rapidly rising renewable levies and its abrupt decision to phase out its remaining nuclearreactors by 2022, many customers havedecided to generate more of what theyconsume. According to Michael Salcher,head of KPMGs energy practice inGermany, customers who self-generate cancut their electricity bills by as much as 50%

by avoiding the surcharges and levies that goon top of already high retail tariffs.

According to a recent article in the WallStreet Journal(3 March 2014), an estimated16% of German companies generated theirown power by mid-2013, up from 10% a yearearlier. The German Chamber ofCommercesays a further 23% of companiessurveyed indicated that they were considering doing the same. This is not good news for utilities that losethem as customers.

Whats behind the rising tariffs?

Electricity price evolution by component 2008-1012


Its called energy efficiency

Energy consumption trend for household heating (koe/m2)


European import-exposed industries disadvantaged

The share of energy costs in production costs in energy intensive industries


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In the case of Germany, the rapid rise of distributed generation(DG)reduces revenues leading to even higher prices for the remaining customers,a death spiralscenario. No wonder the two biggest incumbents E.ON andRWE have been complaining.

The same challenges face the big 7 European utilities, to varying degrees. In

late Feb 2014, GDF Suez SAwrote down 14.9 billion ($20.4 billion) inassets blaming the flood of renewables, which have zero marginal costs andare increasingly making life difficult for thermal generators. Its CEO,Gerard Mestrallet, said, We consider that the deterioration of gas storageand thermal energy production in Europe is deep and long lasting. GDF hasalready mothballed roughly 10 GW of capacity with another 5 GW underreview.

Speaking on behalfof the 10 largestEuropean utilitiesin 2013, known as the Magritte Group(see Dec

2013 issue), Mestrallet has repeatedly stated thatrenewable subsidies are making traditionalcentralized utility generation business a losingproposition.

The chart on left shows the significant erosion ofshare prices, notably among the mighty GermanandFrenchutility giants in the past 5 years.

As companies like GDF Suez begin to shed assets and lay off workers, the message is reverberatingacross EU. In January 2014, RWEsaid it would write down $4.5 billion in thermal generation assets,following similar moves by its bigger rival, E.ONwho has also been trimming down in the past 2 years.

Energy Report

Distributed Energy Poised For GrowthFuture is increasingly decentralized

here are no shortages of projections on rapid growth of distributed energy resources(DERs), aterm that encompasses anything and everything on the customer side of the meter, not justdistributed generation(DG). Viewed in this context, DERs include energy efficiency, peakload managementand/or demand response, solar PVs, micro generationof any kind including

combined heat and power(CHP), also called co-generationas well as increased reliance on emergencyback-up generators.

Rising retail tariffs combined with continuously falling cost of DERs and technological improvements instorage, back-up devices and micro-grids are among the reasons often mentioned. As described in thepreceding article, an estimated 16% of companies in Germanyalready produce some of their own powerneeds, a figure that is projected to grow.

T

Source: The Wall Street

Journal, 3 Mar 2014Falling European utility share prices not good for business

Source: Financial Times, 14 Feb 2014
http://ec.europa.eu/energy/doc/2030/20140122_communication_energy_prices.pdfhttp://ec.europa.eu/energy/doc/2030/20140122_communication_energy_prices.pdfhttp://ec.europa.eu/energy/doc/2030/20140122_communication_energy_prices.pdf

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Needless to say, the higherthe retail tariffs, the strongerthe incentives to conserveand/or self-generate, whichexplains why DERs arerapidly gaining ground in

high cost places likeGermany, Japan,California, AustraliaandHawaii, to name a few.

In case of California, thestate has in fact set amandatorytarget of 1,325MW of storageby 2020described in Dec 2013 issueof this newslettermorethan 70 times the current level.

The stakes are high for entrepreneurs who can come up with practical and affordable solutions. The mainmotivation, of course, is to be able to store the excess renewable generation when it is plentiful to be usedwhen it is needed; graph above right illustrates the case for California. If storage is to be useful, it musthave sufficient capacity to last a few hours and preferably come in large-enough size to make a differenceon utility scale (Box on page 15).

There is little disputethat there will be farmore DERs in thecoming years, but howmuch is anybodys

guess. Speaking atDistribuTECHeventin Feb 2014, Paul DeMartini, formerly with

Southern California

Edison Company(SCE), said DERs mayaccount for as much asthird of US capacity by2020. A graphpresented at the

conference (above), picked up by multiple news media, shows a flat profile for bulk power generation

assumed to include conventional centralized technologieson the bottom with virtually all growthattributed to DERs, potentially amounting to 500 GW by 2020.

It makes for good headlines, but it is not clear how De Martini accounts for the expected growth ofrenewables, nor is it entirely clear how back-up generation can be counted as a resource, since bydefinition, it must remain as stand-by capacity just in case there is an emergency. If a hospital, forexample, relies on its emergency back-up generators as a routine means of supplying its power needs,then it would have no reserves in case the grid goes down.

With big cycles such as these, storage would be nice to haveHigh penetration of variable resources presents four related planning challenges (sample

operating day in January, 2030)

Source: Investigating a higher RPS in California, E3, Jan 2014

More DERs, no doubt, but how much more?

Source: Paul De Martini, DistribuTECH conference, Feb 2014

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Teslas Business Plan Gives Utilities StrifeIt is not just the automakers that are getting nervous

lon Musk, the maverick CEO of Tesla Motors Inc.,is not to be taken lightly. First, he came upwith an elegant electric vehicle that performs as good as it looks, while offering an extended

range, something other all-electric vehicles could only talk about. Now, he says, time has arrivedto go mainstream, with a version that offers extended range but with a price tag that may appeal to

the ordinary folks, not just the rich, who have been his clients up to now.

The biggest obstacle is that there are not enough batteries for Tesla to ramp up production. The second isthat todays batteries, when you can find them, are pricey for the amount of energy they store. Now thatTesla feels confident that if it can build more, consumers will buy them, it has decided to get into batterymanufacturing business, and not in a haphazard way, but by building what is referred to as a $5 billionmega-factory (box on page 15).

Following the announcement, Mr. Musk,who is worth billions as stocks of his

company continue to defy all laws oflogic and gravity (graph on page 15),said, Shifting to greater use of solar andwind power will challenge utilitycompanies. In case his message did notregister, he added, the shift will bring,some amount of strife for the existingutilities, especially for those investedmore heavily in fossil fuels.

Speaking before a receptive, if nervous,audience at the California Public

Utilities Commission(CPUC), thestates regulator, Musk said Tesla isworking to create stationary battery

packs that last long, are super safe and are compact.

His cousin, SolarCitys CEO Lyndon Rive, went even further by predicting that There is no doubtstorage will become cost effective and deliver electricity with storage at night. As if that was not enoughto shock and awe, Rive added that utilities in California and elsewhere, who are resisting change, aremerely delaying the inevitable.

The Thought Leaderssession at CPUC, which normally draws 50 attendees or so, filled the largestauditorium and 2 adjacent rooms as hordes of people, no doubt including many job seekers with resumes

in hand, flocked to hear Musk, a high-tech celebrity worthy of Hollywood paparazzi.

Musk and Rive, of course, can say what they want and get away with it. Both their companies are on arapid growth path, pushing new technologies, enjoying increased sales, and facing declining costs. Theutility industry, by contrast, is facing tepid or no growth, for the most part relies on technologies that havebeen around for decades if not longer, and facing increasing costs, especially in upgrading the agingnetwork, the grid. While the average age of Tesla and SolarCitys workforce isunder 30, utilities aremostly dealing with an aging workforce ready for retirement. Utility stocks are stable at best, if thecompanies are well-managed while Teslas stocks keep on rising. The contrast between the old and thenew is inescapable (see table on page 17).

E

Tesla: Looks pretty, travels far, performs well, not as expensive as

Lamborghini
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As CEO of a major solar PV company, Rive was critical of utilities, who are taking months to connectresidential solar panels to their systems accusing them of playing games, because they profit from thecurrent system.

When you have a game-changing technology, those inthe game dont want to

change, Rive said. They likethe existing game, the solesource, cost-plus model.

Rive noted that it now takes 8months for utilities inCalifornia to connect aSolarCity PV customer with anenergy storage system to thegrid.

As reported in the February

2014 issue of this newsletter, Hawaiian Electric Company(HECO) placed a temporary moratorium onnew solar PV connections while trying to figure out how to deal with the surge of new installations.

Teslas new battery factory, if all goes according to plan, could make it easier for customers to store theirexcess generation during sunny periods for later use, whether in their Tesla cars or in a storage device inthe garage. Musk, who is SolarCitys chairman and the largest shareholder, has been offering Teslabatteries to selected rooftop solar customers in parts of California and New England. Once batteryproduction soars and prices plunge, as expected, more PV customers can be fitted with storage.

Teslas stock shot to $352.54 on 19 March 2014.

Why Teslas mega-factory keeps utility executives up at night, or should

Elon Musksannouncement to build a factory to supply as many as half a million EVs with advanced lithium-

ion batteriesmade headlines and made more than a few automakers nervous.

With this facility, we feel highly confident of being able to create a compelling and affordable electric car inapproximately 3 years, Musk boasted. Teslas aim is not only to mass produce car batteries in large volumes

but to slash the per-kilowatt cost by more than 30% in the first year of production. That would reduce the cost

of its first mass-market EV with a projected range of 320 kms to around $35,000. Teslas current S-model sells

for around $75,000 if you can find one. California buyers gain valuable zero emission credit, with the credit

value expected to rise under the states climate bill (see article on page 7).

Teslas aim is to cut current battery costs of around $400/kWh in half, getting them as low as $150/kWh by

2020. At that price, Tesla batteries can become affordable in other applicationssay as storage for solar PVs

something that must give utility executives plenty of strife, using Musks own words.

Being green and idealistic like everyone else in Silicon Valley, Musk wants his factory to be powered by solar

and wind energywhat else?

The applications for these battery systems include backup power, peak demand reduction, demand

responseand wholesale electric market services, Tesla said in a regulatory filing. We plan to ramp sales of

these products in 2014.

Teslas stock performance

Source: Tesla

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Apples CEO: Dont Like Green? Get Out Of StockShareholders give overwhelming support

uccessful high tech companies and startups that pop out of nowhere in Silicon Valleyare adifferent breed than your regular businesses. They grow like wild mushrooms, enjoy stock

valuations that defy logic, and create value where none existed, such as in social networksor appsthat rate the bottle of wine you are about to drink with your meal, something that no one had heard

of a decade ago or could have imagined as remotely useful.

The mostly youngsters that run these companies are also different than your regular CEOs, wearinghoodies and sneakers to work, commuting on roller skates or bicycles. Making hordes of money out ofthings this editor cannot even fathom, they must feel an obligation to do some good, or at least no evil,Googles motto. They tend to be green. Many are involved in philanthropy, as in giving lots of moneyaway.

Apple, among the darlings of the valley, is no exception. The company has vowed to meet virtually all itsenergy needs from renewable resources. It recently hiredLisa Jackson, the former head of the

Environmental Protection Agency(EPA), to oversee the companys sustainability efforts, perhaps moresymbolic than substantive.

Not everyone is enamored with the companysambitious green push, including theNationalCentre of Public Policy Research (NCPR), aconservative think tank, who decided to makean issue out of Apples self-imposed 100%renewable target. NCPPR submitted a proposalin time for Apples annual stockholdersmeeting, where activists try to convince

shareholders to intervene in company policies.

In a prepared statement,Justin Danhof, anattorney representing NCPPR tried to persuade

Apple to abandon its green energy target. Danhof wrote, We object to increased government control overcompany products and operations, and likewise mandatory environmental standards, adding, This issomething [Apple] should be actively fighting, not preparing surrender.

Tim Cook(pictured above) theunassuming and famouslysubdued Apple CEO, was visiblyirritated when the issue was

raised during the stockholdersmeeting. He defended Applespolicy by declaring thatinvesting in renewables makesenvironmental sense, andanyway, there are a lot of things(that Apple does) for reasonsbesides profit motive.

When we work on making ourdevices accessible by the blind, I

S

Green, and proud of it

Apples new 2.8 million sq. ft. office under construction in Cupertino, CA will be powered

by renewable energy
http://en.wikipedia.org/wiki/National_Center_for_Public_Policy_Researchhttp://en.wikipedia.org/wiki/National_Center_for_Public_Policy_Researchhttp://en.wikipedia.org/wiki/National_Center_for_Public_Policy_Researchhttp://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=MV2ehRkoG8SsNM&tbnid=FRWNibEOxGzs_M:&ved=0CAUQjRw&url=http://www.theguardian.com/commentisfree/2013/may/17/tim-cook-tax-holiday-suits-politicians&ei=CFoaU7nEIYODogT95YKAAg&bvm=bv.62578216,d.cGU&psig=AFQjCNFpWbhf80ba6_f9hgcMokdbFisaaQ&ust=1394322305986087http://en.wikipedia.org/wiki/National_Center_for_Public_Policy_Researchhttp://en.wikipedia.org/wiki/National_Center_for_Public_Policy_Research

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dont consider the bloody ROI (return on investment), adding, We want to leave the world better thanwe found it. According tothose present at the meeting, Cook then looked directly at the NCPPRrepresentative in the audience and said: If you want me to do things only for ROI reasons, you should getout of this stock.

The exchange was noted in local press, who follow the CEOs of big hi-tech companies as paparazzi

follow Hollywood celebrities. For anyone looking for Apples environmental leanings, Cook made itclear that he would continue to invest in sustainable energy. For some Apple observers, Cooks commenton ROI and the one on get out of this stock, was stunning. Mr. Cook is known as a numbers guy meticulous and focused to the lastdecimal point.

It turned out to be a wise move as Cookreceived the endorsement of Appleshareholders who overwhelminglysupported the companys green posture.Less than 3% of votes were cast in favorof NCPPRs motion.

Apples position, of course, is expectedand routine among a growing number of hi-tech companies. Google, Facebook, Intel, and Amazon, toname a few, also have ambitious green targets. Tesla, another rising star based in Palo Alto, CA hasvowed to run its proposed $5 billion mega-factory on 100% renewable power (preceding article). InSilicon Valley at least, you would make enemies and get bad press for doing otherwise.

Finnish Nuke Delayed AgainAreva or EPRs Waterloo?

emories of Napoleons defeat in Waterloo, like those of World War I a century ago, stillresonate in Europe. In a statement issued by the French anti-nuclear groupyes there is such athingthe Observatoire du Nucleaire, blasted Areva, the French builder of the EuropeanPressurized Reactor(EPR) for repeated construction delays at a Finnish reactor. "This is a

complete Waterloo for Areva,"the group declared.

There is no denying that Arevahas a huge PR problem on itshandsand the experience islikely to convince more investorsto stay away from any future

nuclear plants.

In early March 2014, Reuters,citing local sources, disclosedthat the startup of the Finnishreactor could be delayed until2018, if not later. In early 2013,Teollisuuden Voima(TVO) saidthe start might be delayed until2016.

MNuclear plants not getting cheaper over time?

Construction Cost for U.S. Nuclear Reactors by Year of Completion

Source: W. Dhaeseleer, Synthesis of the economics of nuclear energy, for the EC, Nov

2013

How much is your company worth?

Current market capitalization of select new & old companies, in $billion

Young Mkt. Cap Not so young Mkt. Cap

Apple 474 GE 263

Facebook 180 Microsoft 317

Google 410 Intel 122

Tesla 31 Ford 62

Amazon 171 Wal-Mart 243

NRG 9 Exxon 405

Source: Companies, as of 6 March 2014, varies by daily changes in stock prices

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The construction of Olkiluoto 3, an Areva-designed EPR, began in 2005 and was originally scheduled forcompletion in 2009.

Olkiluoto 3 is unique with Areva assuming the role ofproject manager, not just a supplier of the reactor,as is normally the case. It is the legacy of Arevas former CEO, Anne Lauvergeon,who reportedlywanted to distance the company from the mostly state-owned EDF.

Areva COO, PhilippeKnoche, blamed the delaysand cost overruns to poorrelationship with the client,the Finnish regulatoryagency and the lack ofmaturity of the supply chainwhatever that means.

There is plenty of blame togo around as both sides

accuse the other and havebeen battling in the courtswith multi-billion Euroclaims and counter-claims.

Olkiluoto 3's construction costs were initially estimated at 3.2 billion ($4.4 billion), notexactly cheapbut perhaps tolerable. The number has subsequently risen to stratospheric levels as the projects start datehas been delayed multiples of times. Late in 2012, the projects cost were estimated to end up closer to8.5 billion ($25.4 billion). Adding the extra costs of the just announced delays and including the risingcost of litigation is likely to raise it even higher.

The dispute is before the International Chamber of Commerce'sarbitration court where Areva-

Siemenshave a compensation claim against TVO for2.7 billion. TVO, owned by Finnish firmsincluding Fortum, UPM-Kymmeneand Stora Enso, has submitted a counter claim of 1.8 billion.According to Mr. Knoche, It is oneof the biggest conflicts in thehistory of the construction sector."

With the reputation of both thecompany and its flagship EPR atstake, Areva is trying to frameOlkiluoto 3's embarrassing saga as aFinnish problem. It points out thatthe 2 EPRs being built in Taishan,

Chinaare on budget and schedule.Areva also points out that Britain'srecent decision to build 2 EPRs atHinkley Point(article in Dec 2013issue of this newsletter) vindicatesits reactor design.

Areva, however, prefers not to talk about the fourth EPR currently under construction in Normandy,France. That reactor, now 57% complete, has also experienced multiple delays and billion-euro costoverruns.

Whos got nukes

Height of bars represents % of electricity generation from nuclear, the width represents the

amount of generation in 2010

Source: WNA

Not growing

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US Solar Growing On Steroids, For NowFalling costs will drive increased demand

S had another good solar yearsetting yet another record. Most

indications point to significantfuture growth potential. A major

hurdle may be possible revisions in statelevel net energy metering(NEM) laws,expected to face bruising battles as utilitieswho are mostly opposedconfront agrowing and increasingly vocal solar lobby.

The latest report of the Solar EnergyIndustries Association(SEIA) covering theperiod to the end of 2013 has just beenreleased and it justifiably notes that there is

a lot to celebrate, notably the fact that forcalendar year 2013, solar installations werethe second biggest contributor to newcapacity in the US (graph on right), morethan wind.

A decade ago, such a notion would have seemed inconceivable. True, there is not a lot of demand growth,hence not a lot of new capacity is getting built, making solars contribution pronounced, but it is a feat todwarf wind, which in contrast, did not have a good year due to the uncertainties on the expiration ofproduction tax credit(PTC).

To be sure, when

SEIA refers to USsolar, they arepractically referringto California and ahandful of otherstates sinceCalifornia accountedfor roughly half of allUS installations in2013 (map on left).There are many statesin the South and

middle of the countrywhere solar is ascommon as penguins.

Cost of solar energy,however, continues to fall across all categories and technologies, but especially for rooftop PVs (graph onpage 20). There is no reason to believe that costs have bottomed out, or will do so in the near future.

That, plus the expected falling cost of storage (article on Teslas battery factory on page 15) must beworrisome to many utility executives who see red ink when they put the two together.

UUS renewables, notably solar, have a lot to celebrate

New U.S. Electricity Generation Capacity, 2012 vs. 2013

Source: US Solar Market Insight Report, 2013 in review, Exec Summary,

GMT Research & SEIA

Mostly in California

2013 U.S. PV Installation Map

Source: US Solar Market Insight Report, 2013 in review, Exec Summary, GMT Research & SEIA

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SEIA is decidedlyoptimistic on continuedgrowth for the next fewyears, projecting annualUS solar installations to

reach 10 GW by 2016(graph below on left).But the rosy picturedoes not apply evenlyto all segments of thesolar business or allregions of the country.

For example, newutility-scalesolarinstallations may beginto wind down as mega-

projects driven by state-level renewable

portfolio standards(RPS) begin to wane.Another factor is the30% federalinvestment tax credit(ITC), expected to drop to 10% in 2017, unless extended.

Likewise, once a number of projects currently in the pipeline are flushed out in 2014 (table page 21),future utility-scale concentrating solar power(CSP) projects may face new hurdles, partly because thecost of solar PVs have fallen to the point where CSP does not look as attractive as it used to.

SEIA notes that theresolution of thedebate on the NEMlaws, expected in anumber of majorand a few marginalstates in 2014-15,will be critical insustaining futuregrowth of rooftopsolar PVs.

According to someobservers, however,in high tariff statessuch as California,

New York, NewJersey, Hawaii, the economics of solar PVs are likely to prevail even if the prevailing NEM laws arescaled back. In sunny regions of the country, Arizona, New Mexico, Nevada, Florida, Texas, theabundance of sunshine will persist even if the feed-in-credits dont.

Costs fall as installations rise

U.S. PV Installations and Average System Price, 2000-2013


Robust growth potential


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Another promisingdevelopment is theproliferation offinancing options forsolar investments. Notonly do consumers

have the option to leasesolar PVs, they canbenefit fromcommunity solaroptions.

Globally, solarcontinues to grow aswell. Bloombergprojects 44.5 GWinstalled in 2014 while

Deutsche Bank

projects 46. Well settlefor the avg. of thetwo.

Has Time Arrived For Electricity Pre-payment Schemes?Consumers on prepayment on avg. use 11% less

re-payment billing schemesare among the favorite utility perennials. The basic notion is to sellconsumers a certain amount of juice, and collect the money in advanceas in a gift or debit cardfrom which purchases can be made until the funds are exhausted. Its proponents have long argued

that it is a better way to sell electricity since consumers would become more conscious of howmuch they have already used and how much remains in the piggy bank. It encourages energyconservation and, it can be argued, it empowers the consumers to better budget and manage their usage.

Initially, prepayment schemes were introduced in poor neighborhoodswhere delinquencies tend to behigh or for transient consumerswith poor or non-existent credit history, traditionally considered highrisk. The initial experience has been encouraging since the scheme cuts down on non-payment and fraud.But the idea has not received wide spread traction, perhaps due to the stigma associated with the earlyexperiments, which were mostly targeted at low income and/or transient consumers.

The circumstances havechanged and some expertsbelieve now is a good time tore-visit prepayment, and notjust for the poor. In fact, thescheme may be ripe fortodays app loving, Internet-savvy, environmentally-conscious youngprofessionals who prefer tomanage their usage and theirbills remotely.

P

Who will fill the CSP pipeline after ITC drops in 2017?

Select Concentrating Solar Project Development Highlights


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A 2013 survey of 1,000 consumers conducted by DEFG, a management consulting firm specializing inenergy, points to growing consumer interest. There iscompelling evidence that a growing number ofAmericans are very interested in a prepay energy offering as a voluntary bill pay option, according toJamie Wimberly, CEO of DEFG. It helps them to understand and control their usage, and manage theirhomebudget.

Among the important results, 75% of those surveyed were either very satisfied or somewhat satisfiedto make purchases or contract for services using prepaymentyounger, mobile respondents more so.Moreover, the percentage of people interested in a voluntary prepaid energy option has steadily increasedsince the survey was conducted in 2010, from 17% in 2010 to 22% in 2012 and 24% in 2013 (graph onpage 21).

Prepay energy offers another big advantage over traditional billing making it especially attractive toregulators who would like to encourage energy conservation. According to DEFG, on average, there isan 11% reductionin usagecomparing pre- and post-enrollmentby customers who switched to avoluntary prepay electric service option. That is a whopping amount at virtually zero cost.

Many states in America put little or no effort to encourage energy efficiency, beyond the obligatory lip

service. This, plus disparities in retail prices, income levels, climate and a host of other variables result inrather stunning disparities in per capita electricity consumption levels. Table below illustrates the top andbottom 10 states with highest (left) and lowest (right) per capita electricity consumption in 2013, courtesyof EnergyTrends.organd based on Energy Information Administrationand US census data.

It is hard to believe that the average consumer in Wyominguses over 4 times as many kWhrs as theaverage Californian, even accounting for weather. One explanation, without knowing the facts, may bethat in the case of Wyoming, where there is little population, the per capita numbers are stronglyinfluenced by heavy mining. By contrast, California, which has relatively little industry, mild climate andstringent building codes and energy efficiency mandates, ends on the bottom of table, where regulatorslike it to remain.

Why would prepaymentconsumers be 11% moreenergy frugal than therest? For one thing, thereis the effect of self-selection. Consumerswho volunteered wereprobably more energyconscious to begin with.But DEFG reckons thatprepayment consumers,who have already paid

for energy in advance,tend to better monitortheir usage. Knowingyour daily usage andkeeping track of how much is left in the account changes consumers behavior leading to better energymanagement.

Wimberly is optimistic that times are right for wide-scale introduction of prepayment options becausesmart meters and wireless devices are becoming ubiquitous and a generation of tech-savvy,environmentally conscious consumers are ready to take charge of their energy usage as their parents nevercould. Based on these results, over a fifth of a utilitys consumer base could switch to a prepaid

Source: EnergyTrends.org

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electricity account within a fairly short period of time (2 -3 years), and perhaps more with education andgrowing awareness of the option over a longer period of time, Wimberly said. This would be aremarkable shift. It would indeed.

DEFG Website

Do Renewables Contribute When Most Needed?Query and reply

he March 2014 issue of this newsletter included an article on the contribution of renewables,mostly wind and solar, during Australias January 2014 heat wave. The article, contributed byHugh Saddlerof Pitt & Sherry, a Canberra-based consultancy, pointed out that not only did thepresence of renewable generation help meet peak demand, they played a key role in preventing

wholesale pricesto spike, as was experienced during a prior heat wave in 2009.

The article resulted in a few comments from subscribers, including the following from Sara Williams,Victoria Dept. of State Development, slightly edited for brevity:

The analysis of the January heat wave in the (March 2014 issue of) EEnergy I nformerapplaudsthe contribution of solar in keeping spot prices below $2,000 MWh in both Victoria and SouthAustralia during periods of peak demand. AEMO's records, however, clearly shows that spotprices exceeded $2,000 MWh on a number of occasions and hit nearly $6,000 in VIC and over

$6,200 in SA.

We asked Hugh Saddler, the author of the original article, to clarify. His response appears below withgratitude, also edited for brevity:

The reader is quite correct; there were higher price spikes on Wednesday 15 January in both theVictoria and SA pools. The reference in the article was to prices on Thursday 16 January, which wasthe day of maximum demand in both pools. However, peak demand was only slightly lower on thepreceding day, reserve capacity was significantly lower, as reported by AEMO, who listed a numberof reasons including the fact that there was little wind generation in SA during the peak period asshown in the graph in the original March 2014 article.

What this result shows is that, if a substantial proportion of conventional generating capacity is

T
http://www.defgllc.com/http://www.defgllc.com/http://www.defgllc.com/

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unavailable during a critical peak period, the rooftop solar capacity (at present) is not sufficient toentirely prevent high price events.

However, as illustrated in the accompanying graph, comparison with the corresponding day (28January) in 2009 shows that the price spikes in 2014 were of much shorter durationhence muchless costlyespecially in the SA market (yellow color).

Saddler adds:

It would notbe unreasonable to attribute the difference to the increased supply from rooftopPVs. Moreover, it is significant that during the 2009 heat wave, high cost peaking plants were usedin SA for many hours on both days, whereas in 2014 they were not used at all on either day.

According to Saddler, renewables didcontribute by preventing even higher and longer price spikeshismain point in the original article.

EEnergy I nformerCopyright 2014

April 2014, Vol. 24, No.4ISSN: 1084-0419

http://www.eenergyinformer.com

EEnergy Informeris an independent

newsletter providing news, analysis,

and commentary on the global

electric power sector.

For all inquiries contact

Fereidoon P. Sioshansi, PhD

Editor and Publisher

1925 Nero Court

Walnut Creek, CA 94598, USA

Tel: +1-925-256-1484

Mobile: +1-650-207-4902

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