The attached Bloomberg Business article notes that solar and wind have reached critical mass in "capacity" and, as a result, will be dispatched by PJM in precisely the  "death spiral" manner described initially in the Edison Electric Institute's 2013 study of "Disruptive Challenges," which identified solar panels as the existential threat to centrally distributed electricity.

In short, the game is up; it's already too late for fossil fuels to choke the solar/wind baby in its crib. The effort to thwart development of alternative fuels by throwing up road blocks to net metering is now, unmistakably, doomed.

The article notes that:

For the first time, widespread adoption of renewables is effectively lowering the capacity factor for fossil fuels. That's because once a solar or wind project is built, the marginal cost of the electricity it produces is pretty much zero—free electricity—while coal and gas plants require more fuel for every new watt produced. If you're a power company with a choice, you choose the free stuff every time.

It’s a self-reinforcing cycle. As more renewables are installed, coal and natural gas plants are used less. As coal and gas are used less, the cost of using them to generate electricity goes up. As the cost of coal and gas power rises, more renewables will be installed.

Most of the decline in capacity factors is due to expensive "base-load plants that are being turned on less because of renewables," according to BNEF analyst Jacqueline Lilinshtein. Plants designed to come online only during the highest demand of the year, known as peaker plants, play a smaller role. In either case, the end result is that coal-fired and gas-fired electricity is becoming more expensive and the profits less predictable.

The opposite is true of wind and solar, as well as new battery systems that can be paired with renewables to replace some peaker plants. Wind power, including U.S. subsidies, became the cheapest electricity in the U.S. for the first time last year , according to BNEF. Solar power is a bit further behind, but the costs are dropping rapidly, especially those associated with financing a new project.

[I]t's remarkable that in every major region of the world, the
lifetime cost of new coal and gas projects are rising considerably in the second half of 2015, according to BNEF. And in every major region the cost of renewables continues to fall.

William V. DePaulo, Esq.
179 Summers Street, Suite 232
Charleston, WV 25301-2163
Tel 304-342-5588
Fax 304-342-5505
william.depaulo@gmail.com
www.passeggiata.com




On Thu, Oct 8, 2015 at 3:43 PM, James Kotcon <jkotcon@wvu.edu> wrote:


Frank is spot-on with this analysis.  His is the correct paradigm for analyzing this "problem".


The real issue is that utilities know that net-metering will continue to grow, and they see their market share declining. 


JBK


From: ec-bounces@osenergy.org <ec-bounces@osenergy.org> on behalf of frank young <fyoung@mountain.net>
Sent: Tuesday, October 6, 2015 1:06 PM
To: wvec-board@yahoogroups.com; WVHCBOARD@yahoogroups.com; 'WV Chapter Energy Committee'
Subject: [EC] Utilities want higher charges placed on rooftop solar customers
 

“To be sure, any customer who purchases less electricity than the average is ‘subsidized,’” Young wrote. “It is the average rate structure, not net metering, that shifts costs among retail customers.”

 

http://www.wvgazettemail.com/article/20151005/GZ01/151009735/1102


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