Electricity Prices Go Up Regardless

Ontario will be having an election this October, and the Green Energy Act is being raised as an issue.  I’ve decided to write this post before I know what different candidates are saying, because I’m not trying to favour one side or the other so much as discuss a point of view.

To start, I’ve heard people criticize the Green Energy Act on the basis that it will increase people’s electricity bills. It will.  But what that objection implies is that somehow, electricity prices would stay the same otherwise.  This is false.  Electricity rates are going up, period.

Why?  For starters, coal, oil and natural gas are all getting more expensive to mine or extract, and consumption for all three is increasing rapidly in China, India and other high-growth economies.  Demand for electricity is increasing in general, and where populations are growing it’s increasing even faster. In Ontario, our generation and distribution infrastructure is old, inefficient and in need of significant and expensive upgrades.  This means that it is getting more and more expensive just to keep things going at current levels, ignoring the fact that we’re already at the very edge of rolling blackouts every summer.  Added to that, some sort of cost for carbon emissions is starting to look inevitable (regardless of your opinion on global warming, that’s just political reality right now), and our current infrastructure still relies too heavily on coal.  I could go on, but you get the point.

NASA Satellite Images of the 2003 blackout in the North Eastern US and Ontario

The 2003 Blackout - The most dramatic recent example of how fragile our power grid can be.

To emphasize: No matter what we do, the price of electricity is going to go up. So, if you’re going to pay more, what would you like to buy with those extra dollars? There are many options, but here are two:

Option # 1: Invest minimally, keep electricity costs low (for now)

Some people will argue that we should spend and invest as little as possible, and our goal should be to keep electricity rates as low as possible now.  This means we don’t focus on any of the serious upgrades we badly need, and we keep importing extremely expensive power when we can’t generate enough in the summer.  This scenario assumes we don’t have to shut down any of the nuclear power plants, and we keep all of our current coal plants running. Electricity costs will still go up, but in the next few years, the increases will probably be slower. Once the growing costs of nuclear power plant maintenance, carbon taxes, rising fossil fuel prices and the long term health costs to the people living downwind from coal fired stations start to add up, things can easily very expensive, very quickly. In the long term, we’ll pay much more, and we’ll get little more than the status quo to show for it.  (And remember, all of the GTA and an overwhelming majority of the people in Ontario live downwind from Nanticoke, literally the most polluting coal plant in the Western Hemisphere.)

Option #2: Invest in a long term energy plan, stabilize and possibly reduce prices over the long term

The other alternative is to invest.  Reasonable people can disagree on the best way to invest, or even if that is a better course of action, and the Green Energy Act is absolutely not the only model for investing in a better energy future for Ontario.

With the Green Energy Act, we are paying more for electricity than we would otherwise. The extra money is used for several things: extensive upgrades to Ontario’s electrical distribution and generation infrastructure, aggressive efficiency and power reduction targets, and direct stimulation of renewable energy development via feed-in tariffs. Feed-in tariffs are controversial. They have been a disaster for Spain and Italy, but have had astonishing results in Germany and Japan.  The Ontario Green Energy Act was built with a specific set of long term goals in mind: job creation; increasing our clean energy supply; steadily lowering the price of renewable energy in Ontario by growing the market; eliminating coal-fired power plants; and, broadly speaking, avoiding instability in supplies and electricity price shocks, thereby keeping long term electricity costs low.

I can’t say if the all of the goals set out in Green Energy Act will be reached, and I certainly can’t say if it’s the best way to reach these goals.  But the goals seem worth trying to reach, and so far things seem to be working well. Unlike Spain or Italy, the OPA and the province have shown they can react quickly to make changes as needed in a timely and reasonably transparent manner. The uncertainty over the future of the Act is preventing a few companies from moving here or investing too much in Ontario operations, but in general, we’re seeing a fast growing solar energy sector.

Personally, I’d want to see strong evidence that the act wasn’t working, or that the added cost to electricity was having a clear negative effect on the province before I could be convinced it should be repealed.  Even then, there would need to be an alternate plan for our energy future, with clear goals and a way to reach them. It’s my opinion, but I strongly believe that doing nothing and focusing on the short term price of electricity without considering the bigger picture will be a bad strategy in the long run.

Relevant reading:

The International Energy Agency’s (IEA’s) World Energy Outlook 2010 Fact Sheet

OPA’s Q4 2010 Progress Report on Electricity Supply

CPV in France

John Paul was in a different European country every day last week. Exhilarating, but probably exhausting.

On one of these days, he was in France meeting with SolarQuest, who we are partnering with on a medium-scale demo site in their home city, Aix-en-Provence. The regional newspaper La Provence wrote about the visit in this article, which gives an overview of the relationship between both early-stage companies. The article resolution isn’t great – apologies – but essentially, SolarQuest specializes in project development, we’ll supply Sun Simbas for a demo site, and we hope to grow the relationship beyond this.

It’s a fairly obvious point, but partnerships like this are key when trying to enter new markets – the business development, sales, commissioning, service and support resources and know-how can quickly become overwhelming. Regional partners that have these core competencies can be valuable tools for any solar energy start-up looking to expand.

A shorter write up from La Provence is available online, in better res, here: Morgan Solar: l’ami Canadien du SolarQuest.

I have to admit though, beyond knowing that the DNI is decent (5.7 kWh/ sq. m in the South), and that the government just put a 4-month moratorium on some solar projects while it drafts new FIT regulations, I don’t know a whole lot about the CPV or PV market in the country. Anything exciting going on that you know about?


This just in from the Photon Newsletter (Feb. 24, 2011): The French Government introduced a 500MW annual cap for photovoltaic installations and a 20% reduction of the feed-in-tariffs

(The Feb .22 Press Release from the French Government is here).


Ontario Test Site no. 3: a rooftop system, but not the Sun Simba Rooftop

Last week, our third test site in Ontario went up. Six Sun Simba panels. I really wish I could say where, but we can’t yet. Keep posted.

Sun Simba Test Site on Parking Garage Roof

View of Generation Two Sun Simba solar panels on a parking garage roof in winter.

For now, you can see it’s mounted on a commercially-available tracking system and supported by a particularly strong parking garage roof; this isn’t the Sun Simba Rooftop.

Six Sun Simba panels installed on a parking garage roof.

To recap, our first test site is just outside of our facility here at 30 Ordnance St. Actually, we recently installed the same tracker at Ordnance as above, and I haven’t yet posted photos to the blog (It looked like this before). Here’s one (just set up & pre-tracking) I really like:

Sun Simba panels mounted on commercial tracker, downtown Toronto

For those who follow us on Twitter, I had posted a link to the above photo there before. Yes, we were highly skeptical of tweeting before, but so far have found it’s pretty useful for finding out about industry info, policy changes, or funding opportunities like this one quickly, and for meeting some pretty interesting, active people, beyond the solar industry – which is also good.

Details of the second test site were posted here. That one also didn’t have location information. Again, can’t wait til we can share lots more data – not only location, but performance too.

Good News: OPA extends grid connect date for approved FIT projects

Yesterday the Ontario Power Authority (OPA) announced that it’s granting developers up to one year in extensions to grid connect renewable energy projects that have already received their Notice to Proceed. I see only upsides to this. Environmental assessments, public and aboriginal consultations, and other elements of the approvals process have dragged on in some cases, and the Ontario solar supply chain has not adapted to the local content rules as fast as expected. The extension means that many good projects that are taking longer than the 15 months originally allowed won’t have to go back to the drawing board. The full story from the OPA is here.

I spoke with Nic about the extension this morning, and he made the point that the OPA’s decision really highlights their reflexivity – one of the reasons he has confidence in Ontario’s FIT program.  Italy and Spain have ended up with huge headaches because of FIT programs that had to march full steam ahead into unintended and unwanted consequences.  These countries made a set of fairly inflexible rules at the beginning, and a few years later found themselves mired in trouble.  There was a small uproar over the ground-mounted microFIT rate cut this past July, but that decision, along with this latest one, demonstrate an ability on the part of the government to react in near real-time to prevent problems down the road.

The frequent rewriting of the rules may seem frustrating, but consider this recent Greentech Media article, “How Do You Say Colossal Solar Mistake in Italian (that would be “errore solare colossale).”  More than 50,000 applications have been submitted to Italy’s FIT program (as opposed to Ontario’s 4,400 to date), putting the Italian government on the hook for an approximately $60 billion dollar incentive burden – according to Vishal Shah of Barclays Capital – a figure “higher than the German/Spanish subsidy burden.”

Granted the issues at stake in Ontario and in Italy are different – Ontario is compensating for the delays in project start times due to the learning curve that both regulatory bodies and industry are going through; Italy more so needs to put a break on the pace that applications are being submitted. As well as to make sure the applications they’re getting are legitimate. The point is, as Eric Wesoff, the author of the article, notes, “that planning and regulatory diligence can make or break a renewable energy policy. Germany seems to have done it right, while Spain and perhaps now Italy are examples of how to get it wrong.”

We may wish that the Ontario government had designed a perfect FIT program up front, but the reality is that the program seems to be working as intended, and the government seems to be on point in allowing a degree of flexibility in seeing the program forward.

Nic’s Thoughts on Environmentalists vs. Solar Farm Developers

On Monday, Emma blogged about the Sierra Club’s lawsuit to block the development of a solar farm on the basis that it presented a threat to the native plant and animal species in the area.  I don’t want to comment on the specific case as I have no special knowledge there, but it does raise an interesting question:

Do renewable energy projects deserve special consideration when considering their environmental impact?  Specifically, should the general, long-term benefit of something like reducing GHG emissions be considered when examining the local environmental impact of the project?

It’s not an easy question, and I’m not sure there’s a one size fits all answer.  It’s tempting to be reductionist and argue that not doing this will lead to more GHG-spewing fossil fuel plants.  I’m not sure I buy that, cancelling one solar project will probably just lead to a different solar project somewhere else.  Assuming that solar needs special exemptions from environmental impact assessments is assuming that there isn’t lots of non-virgin land (farm land where the soil salinity is too high from years of irrigation, farms that are in water starved areas, former industrial sites etc.).  The choice isn’t solar with environmental impact assessment exemptions or no solar at all.  There is a big difference between “Do we build a solar farm?” and “Do we build this solar farm here?”

Experience tells us that, when we have an exception for something, it often becomes a loophole for something else.  If we say that we can build solar projects on virgin desert land, would that include solar thermal plants that heat water to improve the efficiency of a coal fired station?  What would the penalty be if you built that system and ran it on days where there were too many clouds for the solar part of the plant?  What other types of power plants could qualify for the “solar exemption”, and would that list tend to grow or shrink once the lobbyists got to work?

Yesterday, the New York Times reported that the EPA cancelled the permit for a major coal mine in Virginia.  I’ve said before that if it were up to me, there would be no exceptions for anyone for these sorts of things.  Either your project passes muster, or it doesn’t.  I want more solar, but I want good environmental management generally.  I want a level playing field with GHG emitting power sources, but I want to level it by taking away their exceptions and incentives, not winning new ones for solar.

Environmentalists: a new challenge to utility-scale solar?

I’d really like to hear what you think of the Sierra Club’s decision to sue the California Energy Commission over its approval of the 663.5 MW Calico solar thermal project in San Bernandino Country, California. One of the largest environmental NGOs coming up against a renewable energy project – seems hard to believe, no?

The lawsuit, filed December 30, 2010, charges that the CEC rushed the environmental review of Calico without fully considering the impacts on rare plant and wildlife species (such as the protected desert tortoise plodding along below), and without identifying adequate mitigation measures.

Photo: Desert tortoise roaming the Calico site.  Photo from BLM biological assessment, courtesy of the Mojave Desert Blog.

I suppose the suit isn’t as big of a shock – outspoken criticism of siting solar projects on undisturbed land emerged well before, and previous projects were blocked for similar reasons.  After BrightSource Energy announced its Ivanpah project, for example, the California Wildlands Conservancy responded by introducing legislation to ban renewable energy development on more than a million acres of the Mojave Desert – incidentally some of the land closest to transmission lines and the huge Southern California market.

(Governor Schwarzenegger then countered “If we cannot put solar power plants in the Mojave Desert, I don’t know where the hell we can put it [them].”)

As a card-carrying environmentalist whose also convinced of the need for large-scale, rapid renewable energy deployment, I admit this lawsuit has left me a bit conflicted: if climate change is a real, pressing, and to many, a livelihood-threatening phenomenon, which I believe it is, should there be special consideration of the  environmental impacts of renewable energy developments in the siting process? By special consideration, I mean in this case – allowing projects to be constructed on public BLM land, and giving developers permission to relocate protected species?

The answer from certain environmentalists has been a clear No – developers should exhaust the widely available rooftops and already-disturbed land before they move on to pristine desert. Some point to the fact that transmitting electricity from solar farms in the desert is inefficient – 10 to 15% of the electricity generated can be lost en route to urban markets. Desert ecosystems in SoCal are unique, irreplaceable, and highly fragile – no place for ‘industrialized solar farms’, it’s argued.

On the other side, Michael Kanellos, editor-in-chief of the popular cleantech news site Greentech Media, was vocal in his disagreement with the Sierra Club, titling his recent editorial on the decision, “Dear Environmental Community: Please Shut Up.” In Michael’s defense, he thinks the risks have been duly analyzed, and emphasizes that renewable energy generation has a zero sum relationship with fossil fuel generation – “Circumscribing solar and wind farms leads to only one thing: more natural gas, coal and nuclear plants”.

So, where do I stand? I think the best available technologies should be deployed at a scale that will meaningfully reduce GHGs. In doing this, some landscape changes are inevitable. But projects shouldn’t be developed in a way that will cause significant and irrevocable harm to the land or to species. For this reason, I actually think the Sierra’s lawsuit could be a good thing – in the best case, it would allow a closer look at the environmental impacts of all proposed solar projects in the SoCal deserts (from my count of the CEC’s website, there are over 3,500 MW proposed), and it would allow careful weighing of what changes are permissible.  As the NYT’s Green Blog notes, casinos, strip malls and subdivisions have permanently changed the SoCal deserts. There are better and worse reasons to alter these desert ecosystems.

Efforts such as Ivanpah’s tortoise monitoring program, and NREL’s study on how to restore habitat shaded by solar panels seem promising of mitigating harmful changes. There’s room for lots more.

Relatedly: I had said I’d earlier to post slides from an SPI presentation made by Jimmy Nelson, a University of California Berkeley PhD candidate, on the environmental benefits of CPV (the type of solar panel that will be deployed at many of the utility-scale projects discussed above). Here they are:

Quantifying the Environmental Impact of CPV

Nelson’s work, which relies on a sophisticated model called the SWITCH model (what that stands for is in the pres.), calculates that CPV’s higher efficiencies mean less water is used and less land is disturbed to generate the same amount of power.  CPV’s energy and GHG payback times are also under half those of conventional solar panels.

An Update:

On February 9, 2011, more than a dozen U.S. environmental NGOs wrote a letter to President Obama urging for a comprehensive, upfront process for siting, planning, and monitoring the environmental impact of renewable energy projects. The letter followed Obama’s State of the Union Address, made on January 25, 2011, during which he announced a target of producing 80% of U.S. electricity from clean energy sources by 2035.

Happy 2010 Holidays from Morgan Solar!

Morgan Solar Sun Simba solar panel decorated for Christmas 2010
Happy Holidays and Best Wishes for the New Year from everyone at Morgan Solar!

A huge thank you to everyone who has supported us this year – in providing investments or government grants, supplying the materials that go into building the Sun Simba, or coming up to talk with us and share ideas at conferences.

If we could ask one more thing from you in 2010, it would be to comment or give some thumbs on our proposal for a rooftop-mounted Sun Simba system on ClimateSpark. It’s a Toronto-based competition that is offering $10,000 to kickstart new ideas that will improve air quality and reduce GHG emissions in the City. The competition is meant to be a place where investors, experts, and community leaders can criticize (in the good sense) new ideas, strengthening and giving their owners the chance to fine-tune them before they are introduced to the market. Seriously, please evaluate our business plan for the rooftop solution – suggesting any challenges or opportunities we’re missing, and any ways we can accelerate its time to market.

Our office will be closed starting Friday, December 24, and opening back up January 3, 2011. Next year promises to be momentous for us, and we look forward to talking about setting up large-scale solar projects, navigating changing political landscapes, and entering new markets with you on this blog.

All the best!

The Morgan Solar team

P.S: Some easy, interesting reading for the holidays: The New York Times Magazine’s 10th Annual Year in Ideas. Particularly cool: turbine-free, oscillating wind panels; a continuous-movement train with upper pods that disengage and engage at stops; and the long-life-span Smartphone.