Tuesday, February 17, 2009

Misplaced Priorities on Energy Grid

We were struck by a tidbit of data in Washington Post story about logistical hurdles to getting the nation wired up for alternative energy.

It seems that California ratepayers are being asked to fund a $1.9 billion electricity transmission line from the Imperial Valley to San Diego to carry new electricity from wind turbines to the energy hungry city.

We're in favor of wind energy, but this is misplaced priorities.
San Diego is one of the sunniest cities in the nation. With all the talk of solar energy and California's initiatives in that area, you'd think you'd see solar panels all over the place in San Diego. You'd be wrong. We saw very few when we visited two years ago.

Solar power is not as economical as wind power, at least at this stage of the game, and at least when you put them side by side in the same place. BUT, when it comes to electricity, you have to also factor the cost of transport. You also need to factor in the value of the electricity produced. For example, a kilowatt hour produced at 4:00 pm on a hot day in the summer is worth a lot more than one produced at 1:00 a.m. on a comfortable fall night. Demand is high on hot afternoons and low at night.

If the money being poured into new transmission lines were instead used to subsidize the cost of distributed solar power in the heart of urban areas, it would dramatically expand our use of renewable energy sources while also alleviating one of the biggest problems facing utility companies in the coming years: shortages of peak power supply.
For most homowners and businesses with reasonably sited buildings (southern exposure with no obstructions from trees, etc.), solar power would be economical if they (1) received a subsidy of 20-40% of the cost, and (2) were compensated for the electricity they generate at market costs (i.e., what the utility has to pay for such electricity at the same time of day).

If the $1.9 billion needed to build a new transmission line to San Diego was instead used to provide a one-third subsidy to homeowners and businesses to install their own solar panels, it would generate $5.7 billion in new solar installations around San Diego. Since the new solar panels would be connected directly into the grid at the source of power consumption, there would be no need to construct new power lines. Indeed, because the solar panels would reach their maximum output at periods of peak power usage, they would most likely decrease the load on the grid and reduce the need for high voltage lines in the future.
[For $6 billion, San Diegans could install 300,000 Curmudgeon sized solar arrays (we have 14 solar panels on our roof that generate roughly 3000 kwh's per year), without any savings for economies of scale, and generate more than 900 million kilowatt hours per year--and that's based on Northern Virginia sunshine. That would replace more than 1.5 million barrels of oil per year.]

A nearly $6 billion investment in solar energy in San Diego would transform the city, making it a solar mecca with easily managed peak power demands. In contrast, building $1.9 billion in transmission lines to carry windpower to the city from the Imperial Valley will do little to address San Diego's peak power needs, because wind is most reliable at night.

We need to find a way to incentivize our power companies to invest their dollars in this more optimal manner.

1 comment:

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