An honest opinion – Why Electricity Prices are Rising

It started, if one cannot express an honest opinion to one another – than we have no freedom. So why was a recent writer not particularly pleased when we said: “The ‘why’ needs a follow up and maybe a sharper focus on the Institute of Public Affairs motivations”? By this was meant they are an institution that makes a claim as the ‘The Voice of Freedom – Freedom and Optimism” – yet they seem so negative to progress and innovation. So we feel it is fair to say what motivates needs a sharper focus.

What was it all about? It started with the comment: “Good article on the ‘what’ – Elegant, eloquent, easy to read. The ‘why’ needs a follow-up and maybe a sharper focus on the Institute of Public Affairs motivations? That regulators tend to anticipate growth and expenditure from information supplied by the networks. Then there is the ‘how’. How did this happen, or at least more detail on the how! For instance: Is falling demand from energy efficiency, or the commercial sector in decline and/or manufacturing slowdowns/showdowns. Will it happen anyway because to be more effective you need to be more efficient? “ The article being commented on was “Why Electricity Prices are Rising, 27 June 2014” – posted by Turlough Guerin. In the preamble he said “When I worked in the telecommunications sector someone told me that you don’t need a PhD to understand how pricing works – but it sure helps. Perhaps the same holds for electricity. However there is no doubt that power prices are rising across Australia. This is clear not only from federal government statistics, but you need look no further than your power bill with the average household now paying close to $1000 each year.”

But, CO2Land org finds a major issue with the use of past data in determining the facts. – For instance the variable are changing in their focus, the model of the business are changing or at least being forced to change. More importantly the changes are being driven by the need to more efficient. All brought about the world wanting us to be measured on comparative advantage of our products. It you do not believe us: Why is carbon a focus elsewhere in the world? Why is it that penalties are being sought against those that do not seriously consider carbon in the world markets? This is not an argument on the setting of the price, it is about the need to be aware that future predictions from past data is dangerous, and you must consider the circumstances are changing.

In the article above, it was good, but only because it was the first installment in what should be a series of facts being presented. For instance we could write about why Victoria sold it assets and that at that time Victoria had an excessive redundant infrastructure available, and this gave rise to ‘a good buy’ to those that buy the asset with a cash cow potential. Bring that forward to today, and those that own the Victorian Assets have a conundrum; the private owners need to find more money to improve the services in a tight market. Now if we move to NSW, today, we see a very different problem; they are trying to sell a run down network that might not be viable to buy. Queensland has another set of problems and the long runs between population centres and the concentration of the southeast corner make dissimilar circumstances that make it difficult to say a common variable affects the business.

All that said what are the variables? We propose a new model the give weight to:

  • What is the costs to maintain the existing the Poles and Wires (Transmission and Distribution networks)
  • What is the costs of stink of politics – Science v’s Fiction argument
  • The reality of a carbon market and its global significance to our local markets
  • The existing infrastructure – new and aging generation coefficients
  • The existing infrastructure – transmission and distribution future needs
  • The infrastructure – gas system – this is a very complex issue as it is sensitive not just to the environment as it is to world politics. In effect we have very little control of what is happening in that industry. Why because the deals done elsewhere are linking the gas price to movements on peak oil price predictions.
  • The potential of the suite of alternative energy sources. This means the current infrastructure is very likely redundant. The really sensitive fact is that the models of distribution will change because of it.
  • The Electricity Demand. Be it new or additional generation, the transmission and distribution constraints, the regulator findings or simply consumer behaviour (despite climate change); the biggest problem is the supply demand balancing equation. The supply demand balancing equation is persistent is being 20% of the time is setting 80% of the costs. It then follows that of that 20 % of time the larger costs are 80% likely to occur 5% of the time. With this sort of issue it become apparent consumer behaviour set the theme. We should also put out there to you business slowdowns affect consumer behaviour.

That last comment leads us to the question: Is electricity a commodity or a service? It is not a new question, and political ideology will elicit different answers. Our point is no mater what you think the provision of electricity does determine if we are third world or not. In the pure sense price is simply the cost of providing? Ironically, when you crunch the numbers of our Treasury recommendations our ‘budget emergency’ does seem to settle on 17% increases in everything as good. Justifying the need is far more complex.

So while we liked the quoted story, it is only the first part of a big story. If you are looking for a really good read of how it all happened in Australia, read: Booth Robert R (2000) Warring Tribes: the story of power development in Australia, West Perth WA: Bardak Group. Robert is no longer with us, but bet you he would have plenty to say – had he been here.

 

 

 

 

Selling short in the energy market – symptom or disease

Have you ever suspected your Energy Company of gaming the rules? Consider this: A energy retailer in NSW has argued they can remain silent on an energy supply transfer and then penalise the customer with adjusted early termination fees. Small business is particularly vulnerable to this activity. Have you been affected? Speak up now.

We write this after a story recently ran that was commissioned by the St Vincent De Paul, 28 May 2014, ‘Energy Retailer not Adequately Disclosing Additional Fees’. It would seem some success has been the outcome. You may find similar matters very common for small business and the protection is less clear. It also follows that small business can be classified under the electricity rules as large when under company rule they are small business. The tactics of taking advantage of a customer is part of our story.

Consider the retailers argument: Section 6.10 AEMO rules prevent them objecting to Transfers in NSW. A wonderful twist that Tony the Weasel would be proud of for sure. What this retailer then did was objected to a ‘to the market to transfer DCL’ (Form called a CR1000) and then withdrew the objection. They then remained silent on their intention to levy the charge. In one instance we know of near $10,000 is the adjusted fee charged.

We find it difficult to think other than they are gaming the rules and defining as it suites them. They are embarking on ‘it may be immoral, but is not illegal’ game at the expense of a trust in what we say not what we do.

If you want more evidence consider that the Energy and Water Ombudsman NSW (EWON) web site is showing up to 85% increase on complaints with energy retailers in 2013, benchmarked over 2012 figures. Just imagine what 2014 must have in store for the Ombudsman.

If we go back to the reference instance – it was claimed they broke a deemed supply agreement and fees are payable. The retailer then ignored requests for transparency of the charges and to explain how is was reasonable to claim so much money. The retailer even ignored that the new retailer offered to give back the customer without penalty to any party. It became obvious the old retailer only want the money and not the customer.

What is wrong with that – big business only says show me the money! We are all nothing but an asset.

Our frustration is such that when we looked for an explanation it seems most feasible that the retailer is actually short in the market for black energy. This term is where it is not renewable or green sources. In effect a panic that they are overexposed to the renewable market because of the current government sending out signals ‘old king coal’ will reign for some time. It follows that the amount of contracted energy into the future and the books determine the risk of that business. It would seem the retailer does not want you to consume black energy, nor do they want you to export renewable energy – you might notice if had considered putting in Solar Array, either covertly or overtly you might be discouraged.

If you accept this short sell idea you could consider the behaviour of finding reason to add fees to your exit is akin to double dipping. They want you to pay for what they do not have, or they have already sold it elsewhere. Possibly this matter should go before the AER, they are quoted as saying they have an eye on these sort of things.

If you check out the AER site and the government site www.energymadeeasy.gov.au you will notice they recommend you lay a complaint with the Energy and Water Ombudsman NSW (EWON). If you do so you should definitely know your wants for any outcome.

One want we recommend you consider is consistent and effective communication is your right.

 

energy efficiency barriers – problem 1,2,3

They are at the end of political and economic capital and old Generation assets have a problem – they are competing with innovation that promotes efficiency. The problem is not new, just reborn ideals that have new tools available. Recently the ACT Energy Minister said it very well (as reported this week in the RENeweconomy ) as the real issue is not that wind, solar and other technologies are added to the grid. It’s that old and inefficient generators are refusing to leave. Therefore new renewables are not the problem.

Looking at the problems of our energy system as a whole CO2Land org sees, just like our bills read – three pricing areas that can be improved. Or should we say need to be addressed.

Problem 1 – the price of energy is set by a market mechanism that in Australia is opportunistic. Old inefficient generators can remain viable by gaming based on availability and triggers to elevate prices. So long as they remain the ‘baseload’ capability and sufficient ‘events’ occur in the market they will remain viable. With or without a renewable target review, the Old King Coal will remain. But we will pay more – not less. Why? Like an old car it needs maintenance and those costs must be passed through. Of course the fuel cost factors in too.

Problem 2 – the Grid system is a capital hungry beast. Both transmission and distribution networks (poles and wires) are encouraged to overinvest. Overinvestment is encouraged in the name of reliability and capability. How can this be necessary? Our regulatory system set the network charges and penalties. When the prices are set for the charges (network tariffs) the weighted cost of capital and the need for maintenance and cash injections need to be reliably for at least 5 years is part of the formulae. Estimated is approximately 10% more is payed than need be – with or without a carbon price – OK!

So what should we do? Agree to keep up prices or encourage a write down of the asset – In 1996 or thereabouts the answer was do no maintenance other than priority works. The system had sufficient redundancy that it could take it. In this way privatisation can look promising. Then some time later the capital injections will be required again and up go costs – it does sound very much like todays 2014 talk too does it not!

Problem 3 – the issue of managing costs to consumers. This is the vexed issue – the supply side believes costs should go up, demand side costs should go down. Therefore you could say energy efficiency means demand decreases and prices will go down. But, think this Problem 2 shows the networks are overinvested and cost will be recovered even if not actually expended – they can be anticipated! Then think Problem 3, the market anticipates events 5% of the time and this accounts for 20% of the costs. A nice little earner lost if you change that!

We know some of you will be saying but a capacity market will fix that, just change the rules will be your cry. The reality those with the courage to change things will have 5 years to bring about the change and then need to predict 2 years in advance. They will need to establish how to impose penalties on the gamers. And, we know the gamers are very good at lobbying for no change. They might even say climate change bah humbug!

But, you know all three problems have another issue: Each problem area participant can be asked what does efficiency mean to you – The answers are very likely to differ and that is an issue for policy makers too. Think this – Federal government will side with security of supply, state with balance of supply and local and consumers with the cost of supply. Makes for interesting responses does it not!

Trade with Asia – price points of gas

We are part of Asia, and an island. We are isolated and that works for and against our security. Energy Security that is, our trading partners have different views on what is a benefit. As an island we need to transport singular purpose vehicles with product from point A to Point B in the most direct line and this method does not share any of the wealth or contribute to other points and their economy.

If you did not know Russia is on top of this issue and they intend to supply gas to Asia and have been into the driver’s seat in the last two years, to do so: A related project to the gas deal announcements is the intention to build a railway transport system from South Korea though to North Korea into Russia, and then connecting to the Trans-Siberian Railway. The intention is to create high-speed rail connections directly from South Korea to the markets of Europe.

“If such a natural gas line and railway were to be built — and there is strong support for this in parts of the South Korean establishment and business community — it would not only provide South Korean producers direct land access across Central Asia and all of Europe.

It would also provide the impetus for transforming the North Korean economy — and change that region’s frozen geopolitics in the process.

In short, if its vision comes to pass, Russia would become anchored in Asia as it never has been in the past. Better yet for Moscow, all major economies of East Asia would become linked to Russia in a way few had previously imagined possible. And that would be truly a pivot to Asia.” Source The Russia-China Energy Agreement Is the world’s largest commercial deal ever. By Kenneth Courtis, May 25, 2014

What about our (Australia’s) great trade hopes? We are deliberately killing off our innovation capabilities, our industries are moving out – even New Zealand seem more preferable! Even the US learnt it lesson that being a service industry country is a lesson of folly. It takes innovation and small innovations to grow into big to be great. So the question must be asked: Do we think we will be rewarded for thinking Asia revolves around Australia? I guess Russia is laughing uncontrollably at this time at such a thought. After all we have our leader saying I am confident, and the advisors or facts did not substantiate that. It seems that Russia will become enmeshed in East Asia in ways to pose new challenges for Russia and Australia.

The opening paragraph of this post said there are differing views on energy supply within Asia. This evolves around the fact that the new Russian Deal on Gas supply to China has been based on an oil price reference formula. Meaning when oil prices are high, the oil-based price formula for natural gas allows the sale of gas at a higher price than if it were based on spot-market natural gas prices. The implications are the entire world’s gas price will follow this formula. The only difference will be transport costs!

Should have mentioned earlier “the size of the Russia China Deal The largest previous natural gas deal which China has signed was with Australia, a dozen years ago. That was a $25 billion deal and runs through to the end of the next decade. The China-Russia natural gas deal is about 16 times larger.

By any measure, it is a big, big deal. Indeed, it is the single largest trade deal ever.” Again the source is Kenneth Courtis.

Now it seems the odd one out of this deal is Japan, our shining light, maybe:

“Japan is the world’s largest importer of natural gas. It continues to seek to diversify its sources of supply.

Japanese buyers are less focused on price than is China, as they also include in their calculations security of supply, stability of supply and consistency of the composition of imported natural gas. Japan also has accepted an oil reference formula for pricing its natural gas purchases.

Now comes the big question: Who in Australia is talented enough to head us in the right direction?

IPAT the Difference – Technical

Its simple mathematics (part 3): subject – calculus & the Affinity Laws

Technology is the third variable in IPAT. It can be good and it can be bad. Technology allows things to be made for a much lower price on one hand, meaning that a lot more people have the ease of financial access to the products. On the other hand, technology allows more efficient use of resources, so environmental degradation is reduced by a percentage factor.

An example of the benefits of technological efficiency is found in the Affinity Laws and their application to motors. The International Energy Agency has estimated that 45% of global electricity consumption is by motors. It is estimated that 20% of global electricity consumption is by the motors that drive pumps (Pump Lifecycle Costs: A Guide to LCC Analysis for Pumping Systems, Europump and Hydraulic Institute, 2001).

The basis of the Affinity Laws is that pump and fan flow rates are related to pressure and power consumption. The calculus is as follows (assuming the impeller diameter remains constant):

Law 1a Flow is proportional to shaft speed:

Law 1b Pressure or Head is proportional to the square of shaft speed:

Law 1c Power is proportional to the cube of shaft speed:

 

To make the maths simple, I will explain what the key points to understand out of the above formulae:

If you reduce the speed of a pump or fan by 10%, you will use approximately 25% less power. If you reduce the pump or fan speed by 20% you will halve the amount of power consumed.

But how do you control the motor speed. Easy, with capacitors incorporated into variable frequency technology (VFD’s). Their connection to a motor is like giving the motor an accelerator pedal, allowing them to back off the gas as appropriate. VFDs are like big buckets of electric charge. The charge comes into the bucket as an alternating current at 50 or 60 hertz (depending on the country you are in). In Australia it is 50 hertz. The VFD deals out the power at the hertz rate necessary to maximise motor operational efficiency. Sensors are often connected to the VFD telling it:

“Hey mate, the motor doesn’t need to be running at maximum speed at the moment, so back off”.

Now for some rough estimates of the potential benefits of VFDs applied on a mass basis. Say there is an opportunity to reduce the electricity consumption of half the pumps and fans in the world by an average of 25% from their current consumption (by slowing their speed by 10%). This is a conservative estimate that incorporates situations where the pump has to run at 100% capacity, where VFDs are already in operation and finally, it presumes only a 10% reduction in speed. The estimate means that total global power consumption of motors could be brought down from 20% of total electricity consumption to 17.5% of the total. Given the total electricity consumption from fossil fuels will be approximately 16 TWH in 2014 (based on estimates derived from 2011 data of the International Energy Agency), then there is the opportunity here to reduce fossil fuel generated electricity consumption by 400,000 MWh in that year. Given that each MWH generated from fossil fuels causes the emission of approximately one tonne of CO-2e, the emission reduction would be of the order of 400,000 tonnes of CO2-e in 2014.

Going back to consider the algebraic consequences in IPAT, carbon emissions make up a significant part of the calculations of the ecological footprint (approximately half). Therefore, if VFD technology is introduced on a mass scale EPM/WTB estimates there will be a noticeable reduction in per capita global gha.

Finally, a specific example of the benefits of VFDs. David Bartush, the aquatics facilities manager for the Blue Mountains City Council, near Sydney, introduced VFDs to the two x 15 kWh pumps to the Springwood leisure pool. The pump power consumption has reduced by 56 MWh per annum since.

In following newsletters we will look at other ways of reducing motor power consumption with more efficient motors, correct pump and pipe sizing and power factor correction.

 

IPAT the difference – global footprint

 

Its simple mathematics (part 2): subject – algebra & IPAT

Have you ever heard of the formula:

I = P x A x T

From Ecoprofit Management: The formula’s evolution was the outcome of a debate between three guys, Barry Commoner, Paul Ehlich and John Holdren. “I” stands for environmental impact or environmental degradation, “P” is population, “A” is affluence, “T” stands for technology.

A basic tenant of algebra is that both sides of the equation have to be equal. Therefore, if you increase one side of the equation, the other side increases by the same amount.

According to the IPAT formula, if the world’s population increases by 655,000 in three days, then the other side of the equation i.e. environmental degradation, has to increase the same amount.

What we need is a common unit of measurement to apply to the formula. This is where the calculation principles of ecological footprinting come in handy. It uses global hectares (gha) as its unit of measurement. The total gha of the earth is calculated as all the productive land and sea available to provide the natural resources needed for all the things humans consume. Wealthier per capita countries like the USA (8 gha per person) and Australia (6.8 gha per person) have higher per capita footprints than countries like India (0.9 gha per person). This is because wealthier countries consume more things on a per capita basis. So for the USA, 8 gha represents the amount of productive land and sea needed per person to not only meet the demand on natural capital, but also to allow the natural capital consumed to be regenerated and all associated waste assimilated.

Currently we are in overshoot. The average global per capita footprint is 2.7 gha.The average global biocapacity is 1.8 gha per capita. That means humans need the earth to be another 50% bigger in order for it to be able to meet the demand on natural capital. At the current rate of increased consumption, the world will need to be three times as big to meet demand by 2050.

We are turning resources into waste faster than waste can be turned back into resources and depleting the very resources on which human life and biodiversity depend.The result is collapsing fisheries, diminishing forest cover, depletion of fresh water systems, and the build-up of carbon dioxide emission. Overshoot also contributes to resource conflicts and wars, mass migrations, famine, disease and other human tragedies and tends to have a disproportionate impact on the poor, who cannot buy their way out of the problem by getting resources from somewhere else.

So what is the impact of the extra 655,000 people on earth in the 3 day period? All we have to do is multiply the net increase in people by the average per capita gha (i.e 655,000 x 2.7 gha) which equals 1,768,500 gha. This is how much extra global hectares are needed. Over a year it will be 216 million gha (80 million extra people x 2.7 gha). The “I” in IPAT must therefore increase by the same amount and is reflected as an extra 216 million gha in overshoot.

The next variable in IPAT is affluence. This is where one looks at not only the bigger consumersin the west, but also the rise of the middle class in economies such as China and India. Worldwide 700,000 TV sets and 5 million phones have been sold in the last 24 hours. For the year, 20 million cars have been manufactured and 85 million computers have been sold. Just today, 5 billion dollars has been spent on the military enterprise.

In both China and India, the average per capita income has increased significantly in the last 30 years and is reflected in the rise of the middle class. Over this period the average per capita gha in China has risen from 1.3 gha to 2.2 gha now. In India it has risen from 0.7 gha to 0.9 gha over the same period. Worryingly, India’s biocapacity has collapsed in the same period by almost half down to 0.4 gha per person. This means it is regenerating its own natural capital at half the previous rate.

 

World Meters – Population

Its simple mathematics (part 1): subject – multiplication & the population

Direct from Ecoprofit Management newsletter: Recently I had cause to travel from my home in the Blue Mountains (west of Sydney) to Perth on the other side of Australia. It was the trains, planes and shuttle bus thing. On the way back passengers have the option to catch the redeye flight, an overnight flight. I chose that option.

While I waited in the Perth Airport terminal I had time to kill. Out came the laptop. For some odd reason I decided to look up the estimated world population at that time on www.worldometers.com. At 7pm (Perth time) the website showed the total as 7,223,729,300 people. After that I did the emails response/catch-up thing and before I knew it, it was time to board my flight.

Observing the passengers as they waited at the baggage return once we arrived in Sydney, I was able to confirm that the person who came up with the nickname redeye wasn’t a creative genius. No doubt too, others were looking at me and going, wow that guy needs a sleep bad.

Anyhow, I was so glad to get home to my family and before I knew it, it was Saturday. At 10pm on that night I had a sudden thought: its 72 hours since I looked up the world population at the Perth airport terminal. Why don’t I look up how much it is now? I was shocked. The number of people on the earth, after allowing for deaths was 7,224,384,300.

That’s a 655,000 net increase in human beings in three days.

My first thoughts were: how many people are aware of the rate of increase in the human population? It works out to an 80 million per annum increase.

This thought reminded me of Paul and Anne Ehlich’s 1968 book The Population Bomb that predicted mass starvation events in the 1970’s and 80’s as a result of the inability of agricultural output to match the predicted population explosion. The book content was essentially an extension on Malthusian Theory.

The Ehlichs were incorrect in the timing of their forecast, but their prediction has every chance of coming true, with the population expected to rise to 10 billion by 2062, and especially when the spectre of the fall-out from global warming is thrown into the mix.

Renewables require less incentive money – because

Having read a good news story that renewables require less incentive money because they are very successful, it is then you will notice other media is displaying it as a negative. We suspect the matter will always be reported ‘on balance’ – code for a licence to adjust for the audience. So which story do you want to hear? Is your glass half empty or half full?

Example one: “Global investment in renewables fell by 14% during 2013, but the percentage of electricity generated by renewable sources still grew, a report shows. It said investment fell for the second year in a row because of cheaper technology, but also as a result of uncertainty surrounding energy policy. However, falling costs meant renewables accounted for 8.5% of the global electricity mix, up from 7.8% in 2012. Renewables accounted for 43.6% of newly installed generation capacity in 2013.”

Unfortunately the above is reported as a negative, and actually was a good news story. The good news is – renewables have continued to get cheaper and the industry built more Gigawatt capacity with less dollars. If you continue to research you would notice:
Globally, renewables – excluding large hydro -accounted for 43.6 per cent of newly installed generating capacity in 2013.

Also the costs of generating electricity via onshore wind turbines and crystalline silicon PV systems have fallen by some 15% and 53% respectively since the third quarter of 2009. This means increasingly, the competitiveness of wind and solar compared to conventional options for generation of energy – such as coal-fired power stations, gas or diesel generators, or nuclear reactors. Other evidence is also supplied by the NSW Government that this is a fact. Globally, an increasing number of wind and solar projects are being built without any subsidy support. Especially noted is Latin America, the Middle East and Africa.

Example two: ”The global power utility market is currently undergoing an increase in capital expenditures. Increasing power demands, aging infrastructure, new energy sources and regulatory pressures are contributing to this growth in capital spending and projects.”

Coupling these factors with the staffing constraints of many utilities often results in difficultly completing this increase in workload. However, with these challenges come opportunities to evaluate and create more efficient project delivery models.

The report – Global Trends in Renewable Energy Investment 2014 – was produced by the United Nations Environment Programme (Unep) and Bloomberg New Energy Finance. The assessment said the US $214.4bn (£129.2bn) worldwide investment in the renewable sector during 2013 was 23% below the 2011 record. One of the report’s lead editors, UN energy expert Eric Usher, described 2013 as a “mixed year” for global renewable energy. Identifying the reasons behind the fall in investment, he explained: “One of the major factors was the fall in the cost of equipment. “Another negative factor was a touch of policy uncertainty, which saw investors delay spending their money.” He told BBC News that the fall in the cost of the clean energy technologies – particularly solar – had “left some governments thinking that they had been paying too much and reviewed their subsidies”.

Mr Usher added that while some nations, such as Germany, had been able to adapt very quickly, “other nations have not handled it quite so well, causing nervousness among investors”. He explained that for a number of years, there was overcapacity in the sector and supply was greater than demand, making it difficult for firms to record a profit. But lower costs, improved efficiencies and market consolidation had allowed companies to return to profitability. Mr Usher observed that there were a number of positive signs during 2013, including the fact that the renewable energy sectors in a number of nations, particularly in Latin America, were able to grow completely free of government subsidies. He added: “For the first time in 2013, China installed more new generation capacity using renewables than fossil fuels. “So it is a good sign for the sector that the world’s largest emerging economy is taking the sector very seriously indeed.” Responding to the assessment, Unep executive director Achim Steiner said: “A long-term shift in investment over the next few decades towards a cleaner energy portfolio is needed to avoid dangerous climate change, with the energy sector accounting for around two-thirds of total greenhouse gas emissions. “The fact that renewable energy is gaining a bigger share of overall generation globally is encouraging. To support this further, we must re-evaluate investment priorities, shift incentives, build capacity and improve governance structures.” The report’s findings are being presented to a Future of Energy Summit in New York, US, which runs until Wednesday – article attributed to Mark Kinver (BBC News), 7th April, 2014.

For more on the article please visit http://www.bbc.com/news/science-environment-26923260

If you take the time to read this report you will notice it is a good news story, equipment prices are falling, and therefore not a much is needed to be spent to implement. So investment needed was 23% lower in 2013 compared to 2011. In example 1 the story said prices have fallen by as much as 53% for solar equipment. This can be construed by the shrewd to askew what ever story you want. Enough to sit you ‘Bolt’ upright hey Andrew?

Solar black spots and Specs

What’s the story about solar – simple answer: It’s complicated. Why, it delivers less than you are led to believe; yet it is very sensible, and misinformation prevents you seeing the ‘real’ picture? Should you buy: Probably yes, but are you fully aware of what you buying? Two different buyers have asked very similar questions. For instance, my friend said they would be free of energy bills after fitting solar – $25,000 later they still get bills! A commercial entity is getting nervous about a $70,000 outlay after having heard that you can expect on hot days up to less than 20% less energy output from solar – the return on investment (ROI) would not stand up on those numbers. The obvious in all this: They did not ask the right questions about performance and reliability, they believed the mantra of free energy without considering what was the quantity of free and the quality of claims. Greenwashing and false claims become the issue.

On 17 January 2014, the Australian Competition and Consumer Commission (ACCC) successfully prosecuted and had imposed fines of  $145,000 penalty for fake testimonials and false solar energy country of origin representations. You can find the ACCC media release 003/14 on http://www.accc.gov.au .

In direct quote from the media release is “Businesses making misleading representations can harm consumers by influencing them to purchase products, sometimes at a premium price, they otherwise wouldn’t choose to. They can also harm competitors who accurately represent their products by creating an unfair playing field.”

So CO2Land org with the help of WINTELBOFF went looking for a fair playing field specific to Australia. We found something and while it might mention Australia, we think it is applicable for all to take note of:

http://www.solarquotes.com.au/blog/the-top-10-things-to-check-on-every-solar-panel-specification/

The Top 10 Things To Check On Every Solar Panel Specification

The message from the author is look carefully at the specifications sheet, “If the spec sheet combined with the quote doesn’t have the answers, call up the solar supplier and ask. If they don’t know the answers, that’s a bad sign”.

The Top 10 Criteria

1. Warranty.

It seems that all panels claim to have a minimum 25 year Power Output Warranty. I’ve covered how to go thru the solar panel warranty with a fine tooth comb here. But the main criteria is to check that the Warranty is backed by an Australian Entity that has to comply with Australian Consumer Protection Laws, and that it is an “on site replacement” warranty. You really don’t want to be removing the panel from your roof and going down the post office to send it back to China! Plus the last time I checked, Chinese consumer protection laws weren’t that hot. (Note: There are some excellent solar panels, made in China, these days and also some shocking ones – the best way to know if the supplier believes in their quality is to see what responsibility they take for the warranty they offer on them)

2. Cost

Typical prices for solar power systems of different kW sizes are shown here. If the cost of your quotes solar system is substantially less, then make sure you are getting a bargain, not a liability by reading this post.

If the price is much more expensive than those show, then either you have a particularly difficult install, or you are paying too much. Get multiple quotes to check which is the case.

3. Manufacturer

Do a quick Google of the manufacturer – What’s their website like? Is there a “warranty” section? Is there an Australian office? How long have they been around? Has anyone had any bad experiences with them on the forums?

4. Panel Type

Is it a mono crystalline, multi crystalline or thin film solar panel, or some wacky new technology? The types of solar panels and their pros and cons are discussed here. Make sure you are happy with the technology that you choose.

5. Solar Panel Efficiency

Unless you have a huge roof, you probably want an efficiency of at least 12%. Otherwise if you ever want to upgrade in the future, you’ll probably struggle to find any roof space left over. However don’t fall into the trap of believing that efficiency is the be all and end all of solar panel quality. You can get great quality panels at the lower end of the efficiency scale. There’s an in depth discussion on solar panel efficiency, when it matters and when it doesn’t here.

6. Power Tolerance

This is the amount that the actual power output of your solar panel can vary from the output specified by the supplier. For example a 165W module with a tolerance of +/- 5% could actually produce from 156.75W up to 173.25W.

So be aware of this number, as it will directly affect the amount of power you can get.

Some manufacturers have a “positive only” power tolerance, which means you are guaranteed to get at least the specified output from the panel and usually more. For example: a 200W solar panel with a tolerance of +5%/-0% will produce a minimum of 200W and a maximum of 210W.

7. Framing Quality

The aluminum frame which goes around the solar panel is a good indicator of the overall quality of the solar panel’s manufacture.

Look at the corners. Are they tidy joins? Are they anodized after the cut, or before. Anodizing after the cut is more time consuming, but means that the 45 degree edge is anodized too, helping protect from corrosion. Are the panels glued (bad), screwed or welded at the corners.

If looks are important to you – then you may want to look for a black anodized frame – they look damn sexy when mounted in a solar array on a roof.

8. The Backsheet.

All solar panels have a plastic backsheet glued on the the back of the panel to protect the solar cells. A flimsy backsheet with any air bubbles or signs of coming unstuck is a sign of a crappy panel.

9. Bypass Diodes

If your panel is mono or multi crystalline then these are a must. They are diodes that cost a few cents each and are put across neighboring of cells inside the solar panel. If you don’t have bypass diodes then a small shadow on a tiny part of your solar panel can stop the entire panel from making electricity.

10. Temperature coefficient.

This is especially important in sunny Australia!

The temperature coefficient is a number that describes how well the panel handles hot temperatures – where hot is defined as greater that 25 degrees Celsius.

The units of this number are “% per degC”

The lower this number, the better.

The higher this number, the more your power will degrade on hot days, when the sun is at full force! And you though that the more sun you had on your roof the more power you would get. Not if this number is too high…

A high temperature coefficient is a sign of a crappy panel. A reasonable number is about 0.5%. If you can get this down to 0.3% that is the sign of an excellent panel. Over 0.7% is a warning sign.

I’m a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last “real job” was working for the CSIRO in their renewable energy division. End quote.

 

CO2Land org ponders the Castrol advertisements of some standing: Oils aint Oils. You can speculate Solar aint Solar = get the facts first.

Then there is the elephant in the room – if you brought junk panels where do you dump them? Are they not still classed as dangerous and capable of shock! We better check that out ASAP too!

 

Regenerative Energy a better product

Very recently, in conversation it became obvious, that apart from hard line protagonists, on both side of the political divide they agree that climate change is happening. The disagreement is whether is it anthropogenic and how exact any remedial action might be in saving the planet. In common with all is that reliance on fossil fuels will remain to dominate our need for comfort. The degrees of the need for comfort and the energy needs to supply it will be lowered or raised by how we control our demand.

But, you know it might be possible that innovators are coming up with better product – a more affordable alternative that provides the same service. More affordable, not just in terms of price but also cost of resources.

If you have followed CO2Land org you will notice there is a strong emphasis on regenerative energy and innovation. You might also notice a practical stance on comments on the campaigns for emissions trading systems (ETS). It had never been denied that ETS has a role for helping switch from coal to natural gas right now and to some extent renewables. It is also advocated that the Mandatory Renewable Energy Targets (MRET) in Australia has encouraged uptake of renewable energy. But carbon allowances themselves have not been observed as being able to produce a better product.

Regenerative energy might be a better product and while renewables have made inroads and are already on the right path in the electricity sector. If you don’t think so take a look around you and you will see wind power is quickly moving to be a mature technology, and the cost of solar having plummeted in the past few years, and China is about to flood us with even cheaper solar products. Another reason to consider regenerative as a better product choice is efficiency as waste can be stored in what you might describe as a battery waiting for peak demand periods before being used. Our comforts for heating, transport, mobility, communications and peak energy use can be provided without the need for compromise.

CO2Land org is optimistic that this transition can succeed mainly because people will view it all as an improvement in their lives. The down side is there will be business as usual type resistance to the term ‘unburnable carbon’. Meaning if we remove the increasing demand trend for finding new fossil resources – such as shale oil and gas – and instead stretch out the fossil reserves by lowering current demand, and hence allow us to leave this carbon in the ground we will be accused of hurting jobs and shareholder returns.  What would be even more interesting is how BAU types could reinforce the constant negative when we can continue to feel comfortable.

Motivation for the post comes from:

http://www.renewablesinternational.net/keeping-carbon-in-the-ground-requires-a-better-alternative/150/537/73336/

 

Keeping carbon in the ground requires a better alternative

Thoughts on the new IPCC report