CAISO bound

En route to the hub of the California energy market, the California Independent System Operator (CAISO). 

Power!

Cracking the nut of energy storage

Did you see last week the California Public Utilities Commission (CPUC) approved establishing a target of 1.3GW (1,300 MW) of energy storage to be procured (contracted) by the 3 main utilities serving the state by 2020?

California has an aggressive (relative to the US) renewable portfolio standard (RPS) of 33% by 2020.  This means 33% of the generated electricity contracted by utilities on behalf of their customers shall come from renewable energy sources.  As I mentioned in yesterday's post, public policy of this nature is a strong driver of investment.  Policy mandates create certainty of the future. 

Policy mandates also cause a domino effect.  More renewables coming online on the California grid creates operational and reliability issues with more intermittent resources in the mix.  More renewables, specifically solar, also introduces a new need for generation ramping to meet evening demand after the sun goes down.  Check out peak load shift for more information. 

So, here comes storage! Storage provides flexibility of generation (ie, when we use the energy we stored) as well as rapid response time (from what they say, I'm going on an assumption here.  But, if it responds like my cell phone, I have to believe response is pretty quick).

The below diagram is a good illustration of how energy storage is a great partner to renewable energy production- storing when we are producing in abundance and releasing storage to the grid when needed.  

 

So, why are we only now just seeing energy storage in the mix?  Well, with all new things, the technology is still expensive.  Research continues to mark progress and work towards figure out the best solution.  Once the nut of energy storage is cracked, I predict we will see a complete revolution in electricity.  

cheers from one nutty energy economist,

blondee

bits and pieces....

I recently read a story on Google purchasing the entire output of a 240MW wind farm in Texas.  While Google will not directly consume the power generated by the turbines, the electricity generated by the new wind farm will be sold into the Southwest Power Pool (SPP) market, the same grid system serving Googles Mayes County, OK data center.  Then, Google can retire the generated Renewable Energy Certificates (RECs) against the company's carbon footprint.  

source: DOE Green Power Network email

This is a perfect little example of how policy, be it public policy or company policy, drives investment in renewable energy projects.  When a developer can achieve some level of 'certainty' of ROI, projects like this new wind farm in Texas get built. 

Oh, and, if you would like to know more about RECs, why don't you google it?  I'll write about them another time.

Cheers, 
blondee

Happy birthday Ford Model A...celebrating the learning curve

Did you know, on this day in 1903 Ford Motor sold it's first automobile?  Thank you Garrison Keillor and 'The Writers Almanac' for this little gem of information.  If you don't get The Writers Almanac daily email, I highly recommend it and you can see it/sign up for it here.

The Model A sold for $850 in 1903.  It sold fewer than 2,000 cars but that was enough to make Ford profitable.  And, through continued innovation, engineering, scaling and process improvements, Ford was able to bring the price of the basic Model T down to under $350 by 1918. 

This is a simple real world illustration of what economists like to refer to as the 'experience curve' and the notion of cost reduction per unit of production based on learning functions, often classified as 'learning by doing' and 'learning by researching.'

The gist of the experience curve: as cumulative production of some good doubles, cost per unit of production decreases by some percentage.  This percentage is usually referred to as the learning rate or learning ratio.

I recently applied the experience curve to an exiting new technology with great potential as a future fuel for the auto way of life Mr. Ford and the Model T helped build.  I modeled an experience curve for algae biofuel production and scale up in order to quantify potential investments necessary for the technology to reach cost parity with fossil fuel sources of transportation fuel.  I'll share my work in some upcoming posts.  I thought Model A's birthday was a particularly symbolic way to kick things off.

I love Schoolhouse Rock!

Do you remember Schoolhouse Rock episodes?  One of my personal favorites was 'Conjunction Junction.'  My friend, Josh, just reminded me of the one below, 'The Energy Blues'. Ironic I remember one about sentence structure better than one about energy- I don't consider grammar, writing and spelling skills amongst my strong suits.

Amazing how something created in 1978 is still relevant today.  And, they produce a nice little summary of energy evolution over time in this cartoon (save starting at whale oil way back, that might have been a little traumatizing for the kiddos).  Discovering oil up to the gas crisis in the early 70's. 

My personal favorite line is around 2:15 'Nuclear, thermal, and solar. If we miss it'll get colder and colder.'  That's a fun little fact about 'global warming' you don't hear about as much.  The earth will warm, however, it is predicted warmer temperatures in the short term will create more precipitation and cloud cover.  Clouds, combined with more particles in the atmosphere, will act together to reflect solar energy coming to the earth.  The overall effect will ultimately cool the earth and will experience another ice age.
 
I hope you enjoy the throwback as much as I did.

Which Schoolhouse Rock is your favorite?

Rock On,
lisa

Why reinvent the wheel? A cap-and-trade versus a carbon tax.

I read this short piece from The Guardian this morning and think it gives a really nice overview of what a 'price on carbon emissions' is and why we need one.  I can write the same thing, but this article is concise and digestible, so, I figured I'd just share it.  Take a read here.

The article talks in general concepts but gives a nice overview of the two main policy mechanisms employed to place a price on carbon emissions: a carbon tax versus a cap-and-trade system.  

Cheers from the Pacific,

lisa

energy and water.. two peas in a pod

Summer is upon us and the US is feeling the heat!

In southern California we are very thankful at times like these- just another day at 75 degrees and sunny.  As we joke- the easiest market for a weatherman/woman in the country. 

Something we often take for granted here are the nice lush greenery of gardens and golf courses.  Technically, SoCal is pretty arid and we water the heck out of it.  It's beautiful, no doubt.  And, this brings me to my fun little fact for the day.

The California Energy Commission finds that water-related energy use (transporting water around the state, treating water and heating/cooling water) consumes about 19% of the state's electricity. (source: here)

Wowza.  Water and energy- hand in hand.  Water rights in the State of California is a whole other interesting issue.  That is for another post my friends.

Hope you're staying cool!

cheers,
lisa