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A Few Thoughts On the True Value of Distributed Photo Voltaic Generation

A Few Thoughts On the True Value of Distributed Photo Voltaic Generation. Conference on Renewable Energy for Vermont Burlington, Vermont September 21, 2005 Michael Dworkin, Professor of Law & Director, Institute for Energy and the Environment Vermont Law School

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A Few Thoughts On the True Value of Distributed Photo Voltaic Generation

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  1. A Few Thoughts On the True Value of Distributed Photo Voltaic Generation Conference on Renewable Energy for Vermont Burlington, Vermont September 21, 2005 Michael Dworkin, Professor of Law & Director, Institute for Energy and the Environment Vermont Law School MDworkin@Vermontlaw.edu 802/831-1319 A Few Thoughts on The TrueValue of Distributed PhotoVoltaic Gneration

  2. One Minute, Four Sentences, About Vermont Law’s Institute for Energy and the Environment* Energy policy is our world’s most important environmental issue.* Environmental issues are the energy sector’s most important challenge. * America’s legal system will critically affect how humanity deals with this* VLS can teach people how to work with -- and improve -- that system.

  3. The “Value” of ALL Forms of Power Is Rising: The Basics In Rough Numbers6.1 Billion People in the late 1990s world0.6 Billion averaging 10,000 kWh/household (US level ca. 12,000)2.0 Billion averaging 5,000 kWh/household (Latin/Eastern Eur)2.0 Billion averaging 1,000 kWh/household (Asia, Africa)1.5 Billion without electricityWhat happens if 5.5 billion people want 5,000 kWh/ year in 2025 ? Answer: about 200% of 1990s’ electricity demandWhat happens if 9 billion people want 5,000 kWh/year in 2030 ? Answer: almost 300% of 1990s’ electricity demand What happens if 9 billion people want 10,000 kWh/year in 2030 ? Answer: over 500% of 1990s’ electrical demand.Pareto assumption – new need met without reducing current usage levels of 600 mm peopleWith thanks to, but different from, Stanford Electricity and the Human Prospect Forum, December 2004

  4. The “”Value” of Non-Fossil Sources is Rising Faster in A Carbon-Constrained World The clearest consequences of increased concentrations of carbon in the atmosphere have now been well documented: rising temperatures and sea levels, altered precipitation patterns, increased storm intensity, and the destruction or migration of important ecosystems. Most unsettling, however, is the growing scientific concern that climatic changes may not happen gradually. (emphasis added). • Wirth, Gray, Podesta, The Future of Energy Policy, Foreign Affairs, July/Aug., 2003

  5. Lovins: US energy/GDP already cut to 1973 “soft path” government actual total energy consumption gas nuclear renewables but that just scratches the surface, esp. for oil & electricity…

  6. 50 Years of Solar Dreams • The International Solar Energy Association’s roots go back to meetings at end of 1954 in Arizona. • Central stations, mirror concntrators, and Bell PV silicon – at 6% conversion rates. • Now thin films, nano-solar and multi-substrates all offer better conversion, easier installation, and lower maintenance.

  7. OldQuestions: Some New Answers Will PV solve all our energy needs? No. Will PV move from incidental to significant? Yes. Is PV expensive? Yes. Does PV have a much of a price premium as many think? No. Why not? Let’s see.

  8. Face Prices and…. • Most of today’s system was built on the assumption of wholesale power costs of between four and seven cents per kWh. (HQ & VY). • Wholesale power prices have been about 50% higher than that for the last two years, and often double that. (ISO-NE) • That seems likely to last. • Each kWh of PV production avoids this….and more

  9. & Some Other Costs and .. • Ancillary Charges add 1-2 cents to each kWh obtained through the ISO-NE system. • Transmission line losses cut 10% (8-12%) out of the value of power purchased at a distance. • Distribution line losses cut 8% (5-10%) out of the value of power moved within a local system • Transmission construction costs are expected to triple within the ISO-NE system from 2004 to 2006. • And…

  10. … A Few More and.. • Comparative Risk Adjustment: Contingency costs, cost over runs, and delays all have affected central station power plants and transmission lines more than they have affected distributed PV installations: • Scalability of PV, especially distributed PV has major financing benefits. • Reduced SO2, NOx and Mercury Emissions.

  11. Two Large Matters. • System Reserve Margins are between 15% and 20% now, and Likely to Rise as Grid-Stress and Reliability Measures both Increase. This shows up as a Capacity Charge (LICAP) in Markets, as an economic cost in integrated utilities. • Line Extension Costs for new customers can be over $50k per mile. • (Recent PSB filings – VTEL $30l 2700 ft, CV $7k for 700 ft, Verizon $5k 600 feet.)

  12. And..on the horizon. • Carbon emission limits are real in the world, and coming to the US. Market value is already over one cent per kWh in EEU. • Reduced fossil imports mean security gains, foreign policy freedoms, and casualty drops. • Distributed PV can reduce system stress, increase reliability, enhance islanding. • Off-system PV< blended with off-system wind and good on-site energy efficiency can suport good lives.

  13. Some Closing Questions • Is this enough? • Are these savings enough to move PV from the fringes to the core? • Can PV lower its life-cycle costs, too? • If the California PUC requires utilities to install a million solar roofs will that..and a million more.. move PV to the mainstream ? • Should the EPAct of 2005 had put as many billions into PV as into carbon sequestration and nuclear guarantees? • Lets talk..lets think..and lets act, too.

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