Has to be arithmetics...

Hello.
Say you own a big utility company that generates electricity from hydroelectric, diesel, whatever and serves the whole town... There is all the normal overhead as employees, trucks, maintenance equipment, all typical... selling energy at a rate of $0.10 per KWh
There is someone in town with a grid tied roof solar generation. The law says the energy received (when sunny) from that customer has to be credited at 75% of the rate (for night time consumption)

For your point of view, as owner of the utility... What is the cost of crediting energy to that customer at 75% of the rate ? Remember 25% not generated by you was already consumed by the neighbors, billed and collected by you besides of crediting only for 75% of the solar energy generated by you.

Anyone with a clear view of what is going on here, if anything is mathematically unaccounted or hiding ?

Read this. May take a while though

Externet said:

For your point of view, as owner of the utility... What is the cost of crediting energy to that customer at 75% of the rate ?

Click to expand...

It all comes down to what the utility saved from the customer export.

A KWH pushed into the grid at your meter is not a KWH used by another customer, they get less due to losses in the wires, transformers, etc. If the power can be used nearby the efficiency can be pretty high, well above 90%, but if the power can't be used nearby, it can be pretty low, maybe even down to 50%. So the power benefit to the utility varies. It is never 100%, and 75% might be a reasonable average.

A bigger problem is the peak to average ratio. Utilities don't produce the power the customers use, they produce MORE and then dump the rest in cooling towers and ponds. This is because generation can't be finely and immediately throttled, but load can. So the utility runs some margin above demand and wastes the rest. This control "headroom" still costs money to generate, of course.

Solar, in particular, is very peaky. Not only does it vary with time of day, it varies with weather. This hurts the peak to average ratio for the utility, they have to generate more wasted power just in case solar disappears from clouds showing up. In the extreme, the solar caused no reduction in the power plant output at all, they need to be able to pick up the total loss of solar export at any time, so the utility got zero benefit from the customer export. This rarely happens, of course, but exposes how sensitive the plant power output can be to changing conditions.

Then there is the issue of excess power. If there is high adoption of solar and the panels all produce more power than the grid needs, then what? You can't throttle the plant down to zero. This is happening in California right now, the "duck" curve is going negative some days, and then the utility goes from near zero to very high demand in a matter of one or two hours. This is stressful on the grid and the plants.

100% net metering without storage is not scalable. It just isn't. This is why it is going away in most jurisdictions and why local batteries are an important part of solar.

If you can store your energy during the day, use it at night, and not load the grid with so much peaky demand, then the system can work. In this case, you don't need net metering since you are mostly generating and using locally.

The best case I've seen for 100% net metering is Florida. Their peak grid demand is driven by HVAC in the late afternoon and that's when solar works best. But even then, it isn't that beneficial to the utility.

If there is any 100% net metering for new installs still allowed anywhere in the country in 10 years, I will be very surprised.

Mike C.

Our PoCo wanted to give us avoided fuel cost before my AHJ nerfed net metering completely, so off-grid with batteries and controlled grid purchase through ChargeVerters it is.
Not a bad idea, I keep getting emails from my monitoring system along the lines of:
/*
Grid Frequency is 54.7 Hz at 2024/05/12 10:39:16
*/
Nothing to see here, $0.68/KWHR for cruddy power.

1201 said:

Read this. May take a while though

https://www.pec.coop/wp-content/uploads/2023/11/Interconnected-Generation-Value-of-Solar-Study-Report-1.pdf

Click to expand...

GDS calculated the aggregate value of DG for PEC as ranging from approximately $77 to $112 per kW-year in the 2018-2020 period. The three-year average is $84 per kW-year.

Click to expand...

$84 / 8760 hours = $0.0096/kWh or 1 cent per kWh for excess solar fed to the grid. This value is calculated from co-op point of view. For large utility that operates their own power generation/transmission assets that value could be a negative number.

It is clear that the feed in tariffs will have to go at some point, as supply during sunshine hours will simply outstrip demand and they already are going in some markets. They were useful to get the ball rolling, but it is not a sustainable business model.

For simplicity I am ignoring other emerging disruptions, AI, robots, food, medicine, etc for now, each of them by themselves will alter the economic sitution, let alone My guess is that in the medium to long term, utilities will likely invest in batteries and possibly solar themselves, rather than rely solely on the large grid suppliers or homes feeding excess power into the grid. The scale depends on whether people are willing to invest that money themselves and that will depend on economics and reliability. I don't want to underestimate the hobby and self reliance considerations that brings so many of us here, but I suspect that we are a small subset of the population.

In the long run the power plants, water, gas, nuclear are going to find it difficult to compete as the only times people will pay the higher costs that they demand for their electricity, will be during those times when batteries and solar and wind are in short supply. Ironically, that could also drive investment into more solar and batteries as the fixed costs for those plants will have to be earned over shorter periods. Investing into the grid might have to be done by government, just like we do with roads because the costs associated will be hard to justify otherwise. And in some countries it will be unreliable because there won't be the investments in it to cope for the worst cases.

I am not too worried about the grid itself, the utility companies will likely survive in some form. Fossil fuels power plants will likely disappear from the energy mix sooner than most environmentalist hope or those who love or earn money in fossil fuels, fear.