December – Could Solar Improve Electric Grid Resiliency?
In last month’s post, we discussed that there are lessons to be learned from Puerto Rico’s response to electric system outage restoration after Hurricane Maria. There are also lessons from the nearby Virgin Islands. Two months after Hurricane Irma, 70 percent of St. Thomas was still without electric service and 100 percent of St. John (that gets its electricity from St. Thomas) was still dark.
One of the themes that we have heard repeated often is that more solar power could have helped provide electricity after the storm. While this may be true in a few cases, we think it is unlikely to be very significant. There are a few reasons to be skeptical.
Second, rooftop solar panels will likely be damaged by a major hurricane. We understand that in the Virgin Islands, more than half of the roofs of homes suffered significant damage. This is particularly true of older homes that were built prior to more stringent building codes.
Third, nearly all solar power systems are designed to operate with the electric grid instead of independently. These systems will stop generating electricity if the electric grid is down. Systems designed to operate independently are available but are usually much more expensive.
All that said, solar power systems (large and small) are very popular in the Virgin Islands. With electric rates that average about 35 cents per kWh ( 3 times what we pay), the economics are very attractive. We expect damaged systems there to be repaired and new ones will continue to be installed.
Environmentally friendly? Yes.
Economically attractive compared to 35 cents per kWh? Yes.
Provide electricity after a major hurricane? Not so much.
Questions or comments about solar and grid resiliency? Let us know at firstname.lastname@example.org.
November – Electric Grid Resiliency
We’ve heard a lot recently about the problems in Puerto Rico resulting from the damage caused by Hurricane Maria. Many of the worst problems have resulted from the time it is taking to restore the electric utility grid. While some of the delays are unique to Puerto Rico (primarily related to being an island hundreds of miles from the US mainland), there are also some lessons to be learned about electric grid resiliency.
In looking at the chart above, the orange line shows electric utilities’ response in Florida to Hurricane Irma. The restoration time was fairly typical for most electric utilities in the US with nearly all electric service restored within one week of the event. The last time Wake Electric experienced a total system outage was with Hurricane Fran in 1996 and nearly all members were restored within a week.
Contrast that typical response with the red line showing the Puerto Rico restoration results. Not only was it nearly a week before any customers were back on but after nearly a month less than 25% of electric services had been restored. We think that most folks who were familiar with the Puerto Rico electric grid prior to Hurricane Maria would agree that the electric system was in very poor condition. Years of financial difficulty resulted in deferred maintenance and under-investment in the electric system.
So what are the lessons learned for Puerto Rico’s experience: 1) Deferring maintenance, such a trimming trees near power lines, increases the risk of a severe weather event becoming a disaster. 2) Under-investment in the electric system means little reserve capacity and few alternatives when lines and equipment are damaged. 3) Detailed disaster recovery plans and procedures are essential in mobilizing and managing additional manpower and equipment. Just the logistics of housing and feeding hundreds of workers can be challenging.
Unfortunately, we know that it’s not matter of “if” Wake Electric’s disaster recovery plans will be severely tested again. When that day eventually comes, we will need all the reserve capacity and recovery alternatives that have been built into the electric distribution system. All those resources cost money but, as we continue to see with Puerto Rico, there is also a significant cost of being unprepared.
Questions or comments about electric grid resiliency? Let us know at email@example.com.
October – Capacity and Energy
Wake Electric’s average cost of wholesale electricity is about 7 cents per kWh. There are two principal components of that cost: Capacity and energy. Capacity is the ability to generate electricity when we need it most, generally early mornings in the winter and late afternoons in the summer. Capacity and energy each represent about 50% of the wholesale cost or about 3.5 cents per kWh each.
In past posts, we have discussed that while the cost of solar energy has come down significantly in recent years and we expect that trend to continue, most solar farms currently market the electricity output as an “energy only” product. For large scale projects in NC, the price for solar “energy only” is becoming more competitive with traditional sources.
The challenge for us is to provide the corresponding generation capacity. Currently, the default choice for new generation capacity is a combustion turbine generator (similar to a jet aircraft engine) fueled by natural gas.
We have discussed in past posts that large scale energy storage is also becoming more affordable. Energy storage could add that missing capacity component to solar by providing electricity when we need it most. If we were able to consistently integrate the capacity component of stored solar energy into the grid during a two hour window (early mornings in winter and late afternoons in the summer), it could be very significant.
In addition, if solar and energy storage continue to maintain the current trend toward lower costs, it really starts to make “solar plus storage” a compelling alternative.
Could “solar plus storage” join combustion turbines as a default choice for new generation capacity in the future? It’s certainly possible.
Questions about capacity and energy? Let us know at firstname.lastname@example.org.
September – Charging Your Electric Vehicle
As more Wake Electric members consider buying an electric vehicle, we get more questions about the need to install a high speed EV charger at home.
It really depends on how many miles you plan drive your EV each day.
Most EVs come with a 120 volt charger that plugs into a regular electrical outlet as standard equipment. The estimated recharge speed for these chargers is 4 to 5 miles per hour. So, if you typically drive only 30 to 40 miles per day, you are all set to get a full recharge during Wake Electric’s 10 PM to 6 AM EV rate discount window. If you don’t mind recharging at the regular electric rate for an extra couple of hours, say starting at 8 PM, a standard 120 volt charger could support 40 to 50 miles per day.
If you typically drive more than 50 miles per day, you probably should consider installing a higher capacity 240 volt EV charger. The estimated recharge speed for these chargers is 10 to 11 miles per hour. For EVs that have the battery capacity, that’s a recharge of 80 to 90 miles during Wake Electric’s 10 PM to 6 AM EV rate discount window.
Of course, if you are considering a Tesla or Chevy Bolt with a range of more than 200 miles, you might want an even higher capacity EV charger. Some of these chargers can recharge at a speed of 20 to 25 miles per hour (or higher). At that recharge speed, even if you came home nearly “empty”, you could still have a full charge by morning.
There are lots of other factors to consider: Can you recharge your EV at work? Is there a Tesla supercharger along your normal route? If so, you may be able to get by with less recharging capacity at home.
For most folks, the standard 120 volt charger that comes with your EV and plugs into a regular outlet will probably be all you need. If you find you need a faster recharging speed in order to take full advantage of Wake Electric’s EV discount rate, you can always add it later.
Questions about charging your electric vehicle? Let us know at email@example.com.
August – Adding More Solar?
Governor Roy Cooper has signed House Bill 589, titled Competitive Energy Solutions for NC. The bill provides for a competitive bidding process for the next 2,660 MW of solar capacity over the next four years. That amount would nearly double the current amount of solar capacity in NC of about 2,865 MW.
The challenge will be to effectively use that additional capacity. Duke Energy has indicated that its electric system can consistently accommodate only about 2,500 MW of solar capacity without affecting the stability and reliability of the electric system.
So what happens when more solar power is produced in the middle of the day that cannot be used in the local electric grid? Generally, electric utilities can “dump” some of the excess into the regional power markets at less than cost (someone will usually take it if the price is low enough) or as a worst case, pay another electric utility to take it. For a recent example of how the process works in California, go to: http://www.latimes.com/projects/la-fi-electricity-solar/.
So why would a utility-scale solar developer continue to add capacity in an already oversupplied market for mid-day electricity and effectively drive down the price for the product they sell? The apparent answer is that the business case for these new projects is based primarily on federal investment tax credits rather than the revenue from generating electricity.
Of course, the ultimate solution is the availability of energy storage resources that could store the solar energy oversupply in the middle of the day for use during periods of peak electricity usage in the mornings and evenings. Although currently expensive, prices for “solar plus storage” seem to be dropping rapidly.
In the meanwhile, what are the concerns? The main concern is that the large utility-scale solar developers are squeezing the small scale (including residential rooftop) solar developers out of business. Most small scale projects (because they cost more per kW to install) need a significant amount of sell-back revenue to make the economics work. With the big solar developers driving those prices down due to oversupply, that sell-back revenue is diminished and the smaller projects become uneconomic.
Questions about adding more solar? Let us know at MAC@wemc.com.
July – Would it Have Made Any Difference? (Part 4 of the Coal Ash Series)
In the last several posts, we have discussed the difficulty (and expense) of disposing of 100 million tons of coal ash in NC. The primary difficulty (even the “experts” disagree) appears to be in deciding if coal ash is really hazardous or not. The result is a compromise (that apparently pleases no one) to spend nearly $5 billion excavating and transporting 12% of the ash to lined landfills as if it were hazardous.
As the project has gotten underway with more than 5 million tons of coal ash moved in 2016, the conversation has shifted to the ultimate question: Who is going to pay the $5 billion?
The NC Utilities Commission will eventually provide the answer to that question. According to news reports, Duke Energy expects to fully recover these costs from its retail and wholesale customers starting next year. On June 1, Duke Energy Progress filed for a 16.7% residential rate increase. 40% of that increase appears to attempt to recover the first half of the coal ash compliance costs.
While state politics might affect the amount and timing of increases approved by the NC Utilities Commission for Duke Energy retail rates, the process is more clearly defined by the Federal Energy Regulatory Commission for Duke Energy’s wholesale rates. Unfortunately, that process clearly allows Duke Energy to recover some of the coal ash disposal costs from its wholesale customers.
As a result, Duke Energy’s wholesale customers have agreed on a formula (based on a conservative estimate of what we think FERC would have required) to pay for compliance with NC’s new coal ash requirements. The amount for Wake Electric alone is estimated to be nearly $12 million.
We find this result particularly difficult since Wake Electric has never had: 1) any ownership interest in any coal-fired power plant, and 2) any role in Duke Energy’s decisions relating to the management, storage or disposal of coal ash.
The Dan River coal ash spill several years ago focused national attention on Duke Energy’s past management of coal ash. Environmental groups called for new rules that would be some of the most stringent (and most expensive) in the country. NC legislators agreed.
Would it have made any difference to the environmental groups and/or our legislators if they had known that most of the compliance costs would not be paid by Duke Energy but by retail electric customers and electric cooperative members across the state instead?
Questions or comments about coal ash disposal in NC? Please let us know at firstname.lastname@example.org.