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PostPosted: Dec 26, 2015 10:56 pm 
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Russ wrote:
macpacheco wrote:
Meanwhile I predict there will be ZERO MSR reactors under construction (even demo reactors) until 2020.
While Tesla is actually doing real world work, new nuclear is stuck in the paper world.


MSR nuclear is "stuck in the paper world" due mainly to regulatory roadblocks, which in turn affects investment in R&D. As much time as you spend on this site, I would think you would know that.

As for Tesla, I strongly suspect that they are a limousine liberal fad. Liberals with lots of money burning a hole in their pocket make themselves feel better by investing in "green" technology. That's what they do instead of giving to a church or charity. Then of course they pressure the government to force everyone to contribute to "charity" through taxation.


Fords were once rich people toys. VCRs were once rich people toys. Cellphones were once rich people toys. Can't you see the OBVIOUS ?

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PostPosted: Dec 26, 2015 11:22 pm 
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macpacheco wrote:
Fords were once rich people toys. VCRs were once rich people toys. Cellphones were once rich people toys. Can't you see the OBVIOUS ?


I think there's a hole in your logic. Yes, some "rich people toys" have become commonplace, but that does not mean that all have. VCRs and cell phones provided an entirely new capability. Electric cars provide no significant new capability compared to conventional cars.

But let's say for the sake of argument that Tesla electric cars become commonplace. I'd like to see a full-cycle environmental analysis. The demand for electric power will skyrocket, and where will it come from? Gas, coal, nuclear, wind, solar? What combination? How much cleaner will it be to generate all that additional electric power than just running internal combustion engines. And of course we can't forget about the substantial losses in transmission and conversion. And then there's those pesky batteries that will be piling up like chemical mountains in our landfills. I'm sure someone has done an analysis, but I haven't seen it.


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PostPosted: Dec 27, 2015 12:11 am 
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macpacheco wrote:
Tesla energy prices will drop, substantially. The Gigafactory is still 2 years from decent self production of Li Ion cells. Again you show you don't know (or want to acknowledge) a think about how solar WILL be just a few years from now.

I've been hearing this for twenty years. Forgive me if I lost my optimism on solar power. While solar power might save the world in twenty years we can use nuclear fission now. Forget about LFTR, a technology that I can actually believe will be producing 5% of our grid power in twenty year, just the common solid fuel reactors we have been using for decades will beat anything solar can do in twenty years. How do I know this? Because even though nuclear power has stagnated for forty years it still provides 20% of our grid electricity.

macpacheco wrote:
Li Ion batteries have toxic materials ? Lithium, Cobalt, Nickel and Aluminium. Which are toxic ?
You're again thinking Ni Cd (off course Cd is toxic).
If you can't even recognize Lithium batteries than you're forfeiting the discussion, just shows your prejudice.

Lithium is toxic. If you don't recognize that then your bias is showing.

macpacheco wrote:
Many types of solar panels do have toxic materials, but there are plenty of ways to make them, Perovskite cells are still in lab, but are already producing on par with economic solar PV (20+% efficiency). It seems Perovskite cells will be the final breakthrough that will make solar ultra cheap.

I am familiar with the technology, we used it on the solar powered race car I helped build in college. We just called them "titanium" cells since that was the primary component that differentiated it from the silicon cells we also used. Titanium based solar cells are durable, thin, flexible, relatively cheap, but also very inefficient. They max out at less than 25% efficiency, real world use shows about half that.

macpacheco wrote:
Oh, and how about we remove 100% of all subsidies from fossil fuels, nuclear and renewables and make a trully fair comparison ? If you're pro nuclear you should be against ALL explicit and implicit subsidies for fossil fuels.

Yes, lets remove all the government subsidies on coal and nuclear. I say we also remove the subsidies on solar and wind too. If solar power is as great as you say then private investors should be standing in line to fund its research.

macpacheco wrote:
Very cold places tend to have lots of big hydro (Canada, Scandinavia have for instance).
Solar is excellent for all of Central America, Caribean and South America, Africa, India, Middle East, Oceania.

Heat is very bad for solar panel efficiency. The hotter they get the less power they produce. A gallium arsenide solar cell might be able to get 40%+ efficiency under ideal conditions but in the bright sun it's temperature will be hot enough to burn anyone that touches it. Gallium arsenide has a property that is relatively unique to it as semiconductors go, the conductivity reduces as temperature increases. This property is useful for things like preventing thermal runaway on a computer chip but is very bad for a solar cell. Any cooling system that is added to a solar panel increases cost and consumes power, effectively reducing efficiency.

More heat tolerant technologies like titanium oxides and silicon carbides means a reduction in efficiency. Also, those high efficiency GaAS solar cells contain arsenic. If you want to convince people to put arsenic containing materials on the roof of their home then be my guest. Just warn me ahead of time so I can plug my ears as they run away screaming.

macpacheco wrote:
You still sustain there's some magical cost wall renewables will hit soon and never move forward. That's bunk and you know it.

I didn't claim that renewables will hit some cost wall. I said they will hit a physics wall, we can squeeze only so much out of wind and solar before the cost does not justify the efficiency gains. I suspect we met that wall years ago. I also said that wind and solar is competing with a moving goalpost. As we do more research in making cars lighter, more efficient appliances, deeper oil wells, and so much more we are making fossil fuels and nuclear power cheaper. We've squeezed about all we can from fossil fuel efficiency but we've just begun with nuclear fission. In the five, ten, or twenty years that you say we can get cheap solar panels we also have some very smart people (some of whom are members here) that are working on making nuclear power cheaper. Nuclear power is already cheaper (and, BTW, safer) than solar power, and works just as well in the Arctic circle as it does on the equator, and does so rain or shine.

macpacheco wrote:
Wind will evolve towards tethered airborne wind turbines at altitudes where the wind always blow fast enough, altitude will vary to achieve minimum fast enough speeds.

More future talk, nuclear wins this with current technology and will also improve in the future.

macpacheco wrote:
I've been watching and cheering and defending MSRs and Thorium vigorously for 3 years. And so far we have no design ready for certification for demonstration. And existing PWR/BWR projects are almost dead in North America and West Europe. We need solutions. Again nuclear problems have nothing to do with solar.

Dead? Nuclear power provides 20% of the electricity in the USA, that's far from "dead". Solar power, after a half century of subsidies and other government incentives, doesn't even get 1%.

macpacheco wrote:
I'm always fighting with the anti nuclear idiots that say renewables are the magical answers, that we don't need nuclear. It's not. We need lots of nuclear too. But renewables are far from the bondogle that the pro nuclear guys make it look like too. Its a well established fact that some islands are running on solar+batteries today. Solar+batteries beat diesel generators easily already.

Small and remote islands are a special case, there will always be a place for solar power. That place is not on a power grid where cheap nuclear and natural gas is available. I do believe that wind is an important contributor to our national grids, and will be in the future. Solar power, on the other hand, is a loser. We've sunk far too much tax money on this already, we need to stop.

macpacheco wrote:
Solar subsidies in USA have been renewed until 2021. By then solar will be able to survive without any subsides.

Okay, we'll see how well that works out in five years. If I were to bet then I would bet on the solar power industry begging for more subsidies because they need just five years more to make solar power competitive with fossil fuels and nuclear.

I can recall reading about how wind and solar were going to save the world for as long as I can remember. I love science fiction and science fact, and read plenty of both while younger. What killed this dream of a world powered by "green" energy was my college education. I learned about electric circuits, motors and generators, semiconductor physics, economics, physics, and chemistry. I did the engineering on a solar powered electric race car. I learned some very important lessons. Solar power is a loser, it simply cannot compete with any other power source we have. It works well when that is all you have, like those remote islands you gave as an example, but that is a power source of last resort. Electric cars are toys, suitable only for the wealthy that want to drive what is effectively jewelry and for getting points in science fairs from educators that failed in engineering.

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PostPosted: Dec 27, 2015 2:36 am 
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E Ireland wrote:
macpacheco wrote:
We've discussed this before. For places at high lattitude solar is stupid. But it works extremely well for Portugal/Spain/Southern France/Italy/Greece/all of Africa. The worst solar month vs the best in Lisbon is about double/half deal. The more insolation the more electricity is needed for AC consumption.

You will still need massive load shift - peak insolation occurs several hours before peak temperatures, and thus peak AC load demand.

Several hours? Where I am (Edmonton, AB, Canada), peak summer insolation is at 1:30 pm local time and peak summer temperature is at ~4:00 pm. Pointing the panels 30° to the West would match things up almost perfectly, with only a ~10% drop in overall production. Solar can't be a big part of the total production capacity at high latitudes, but it could make a valuable contribution to AC peak shaving, at the precise time when higher than normal temperatures are limiting the capacity of transmission lines and thermal generating stations (including nuclear).

E Ireland wrote:
macpacheco wrote:
The optimal scenario is a hybrid local storage + grid tie system. Use storage to shave peak loads completely in the winter (buying a lot of cheap off peak power) and be somewhat autonomous in the summer. If you understand this completely, the user is helping the grid get rid of its peaking plants, and could reduce need for some grid upgrades (based on peak loads).

But grid upgrades cost about $50/kVA according to PNNL, and that is capital. Per year it amortises down to about $1.50/kVA. Remember that an 11kV circuit costs as much to install per kilometre as a 400V one (both underground and above ground - the price of the conductors/insulators is negligible) but can carry 20+ times as much power.

Its to the point that it would be almost cheaper to discontinue gas use entirely and decommission the domestic gas distribution system in favour of total electrification using CCGTs and resistive heaters, let alone air to air cycle heat pumps.

Maintaining one grid would be cheaper than two, but you are taking a big efficiency hit, even with 61% CCGTs. Until nuclear can take over from gas completely, the most efficient way to use gas would be small scale combined heat and power in every house. Peak heat demand times match up well with peak electricity demand, and the winter heating peak is complementary to the summer solar peak. Distributed generation would also enable increased urban densities without grid upgrades (which might be relatively inexpensive, but definitely not free)
E Ireland wrote:
macpacheco wrote:
Solar price will drop by a whole order of magnitude until it reaches some stability point. Solar generation at 1 cent / kWh or less. The current price needs to be low enough we can keep increasing solar PV production continously (which is still tiny if we'll ever have 1/3 of total world combined energy production coming from solar).
The curve is 22% price drop for every doubling in installed capacity. In order for solar to reach just 3% of worldwide electricity on today's demand we'll go through 4 doublings, 22% price drops, or a 2/3 reduction in costs.
With each doubling solar becomes viable for more applications.

You will run into hard material limits sooner or later.
It is dangerous to keep projecting base on past trends.

Maybe for exotic semiconductors, but silicon is everywhere and dopants like boron, aluminum, nitrogen and phosphorus are also very abundant. The cost is in the process, not the raw materials.


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PostPosted: Dec 27, 2015 3:30 am 
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macpacheco wrote:
Fords were once rich people toys. VCRs were once rich people toys. Cellphones were once rich people toys. Can't you see the OBVIOUS ?

Supersonic transoceanic flights were also a luxury only the exceedingly wealthy could afford. Turns out that the wealthy tend to have the luxury to take their time to travel, and can afford a spacious seat on a "slow" plane, which makes cramming themselves into a supersonic airplane unattractive.

Supersonic transport hit a very real physical problem, it takes four times the energy to go twice as fast. I see this as a parallel to solar power. We can make solar cells that have double the output but they'd cost four times as much. Supersonic transport and solar energy both would require some very drastic changes in economics to be viable. For supersonic transport to become viable we'd need energy cheap enough, and people that consider their time valuable enough, that turning an eight hour flight into a four hour flight would be marketable. Solar power has similar constraints on the value of energy, materials, man-hours, land, and so on.

I just don't see a future where solar power wins in the marketplace excepting a very dismal one. I believe that if we see an economy where solar power is viable then we've failed on a very fundamental level as a society.

Just last week I had a much less pessimistic view on solar power. This thread has changed my mind. I now believe that solar power is a distraction. Solar power is for communication satellites and pocket calculators, and not much more. While I was largely neutral on solar power before I am now against its use in almost any way, shape, or form. Solar power has been a money pit. It's been money wasted where that money could have been spent on something actually useful.

I've seen the ecological damage that solar power has done. Solar power farms have displaced productive farm land. That is land that is fertile now but in a few years will be worthless. If the shade from the panels don't kill anything that tries to grow then the herbicides from the solar panel owners will. Without plant life to hold in moisture and maintain nutrients it will turn to sand and blow away. Putting them in deserts don't help much, we could use that land for so many other things. Also, being in a desert doesn't mean nothing lives there, even in a desert there is life. Solar panels will kill the soil beneath it, and blind or burn what flies above it. Putting it on rooftops and over parking lots just puts lives at risk. People fall from rooftops installing and maintaining them. Installing the grid tie systems improperly put electrical workers at risk. The battery systems they require are fire hazards and piles of toxic goo that is difficult to recycle or dispose of properly. The solar cells themselves are also made of toxic materials that are difficult to recycle.

Let's assume a best case scenario. We don't make the solar panels out of toxic materials, we use titanium dioxide cells instead. Titanium dioxide is relatively benign, it's used to make Tylenol tablets white after all. We don't use lead, cadmium, lithium or other toxic elements in our batteries. We'll use the relatively benign iron-nickel batteries. Iron and nickel are not nearly as toxic as so many other options, and as a bonus they are abundant. The electrolyte used in these batteries is a precursor to fertilizers, we should be able to neutralize any spills with ease and flowers will bloom in no time. We'll enact laws and policies to reduce threats of falls from roofs and require solar farms to space out the panels so that the land beneath will still be green with plants. What this would do is make solar power even more expensive than it is now.

Making solar power cheap means using toxic materials and putting them in places where they can cause injury and death to people, animals, and plants. Making solar power safe means making it expensive. We have so many other options available to us, we should use those before resorting to something so expensive and dangerous.

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PostPosted: Dec 27, 2015 4:03 am 
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Titanium48 wrote:
Several hours? Where I am (Edmonton, AB, Canada), peak summer insolation is at 1:30 pm local time and peak summer temperature is at ~4:00 pm. Pointing the panels 30° to the West would match things up almost perfectly, with only a ~10% drop in overall production. Solar can't be a big part of the total production capacity at high latitudes, but it could make a valuable contribution to AC peak shaving, at the precise time when higher than normal temperatures are limiting the capacity of transmission lines and thermal generating stations (including nuclear).

What happens two hours later when the sun drops below the horizon and it's still 80F outside? Oh, and the humidity just went up another 10%? In the summer I like to keep the house at about 80F but the air conditioner still runs often so that the humidity is at a comfortable 45% or so. When I lived in Texas the humidity would be at 100% almost every night in the summer, air conditioners will run through the night. I suspect that air conditioners will run quite a bit as people come home to a warm and muggy house, and then cook their supper, this being about when the 6:00 news is showing.

Titanium48 wrote:
Maybe for exotic semiconductors, but silicon is everywhere and dopants like boron, aluminum, nitrogen and phosphorus are also very abundant. The cost is in the process, not the raw materials.

People have been working very hard to reduce the cost of semiconductor production. Don't act like people aren't motivated to do so. The facilities to turn silicon, aluminum, nitrogen, and phosphorus into something valuable cost billions of dollars to build. This isn't something you can just bake in your kitchen.

Even though the solar panels themselves may be made of abundant and relatively safe materials the processes to make these things involve some very nasty solvents and feedstock materials, which also tend to be expensive to produce and handle safely. Again people have been working on ways to avoid these costs for a very long time.

Making solar panels is also an energy intensive process. The silicon must be heated to about 1500C to obtain solar grade silicon. This processing of the silicon into solar cells is not something that can be made cheaper easily.

What would make solar cells cheaper is making the energy required cheaper. Where can we find cheap energy? Not with solar cells.

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PostPosted: Dec 27, 2015 9:25 am 
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Titanium48 wrote:
Several hours? Where I am (Edmonton, AB, Canada), peak summer insolation is at 1:30 pm local time and peak summer temperature is at ~4:00 pm. Pointing the panels 30° to the West would match things up almost perfectly, with only a ~10% drop in overall production.

So your power supply has got 10% more expensive. Considering solar currently soaks up enormous subsidies anyway this is not good for your plan of making it the cheapest generating scheme ever devised.
Titanium48 wrote:
Solar can't be a big part of the total production capacity at high latitudes, but it could make a valuable contribution to AC peak shaving, at the precise time when higher than normal temperatures are limiting the capacity of transmission lines and thermal generating stations (including nuclear).


Except at higher latitudes AC peak shaving is worthless.
Peak demand in the UK occurs in January or February at roughly 6pm. In the dark.

The situation is similar in most of Europe.
macpacheco wrote:
Maintaining one grid would be cheaper than two, but you are taking a big efficiency hit, even with 61% CCGTs. Until nuclear can take over from gas completely

Efficiency means little - I was talking about the total cost of the solution.
SUre we would burn more gas but savings in maintenance of two grids and two sets of billing infrastructure and alll that would overwhelm the increased raw material costs of just burning the gas.
macpacheco wrote:
the most efficient way to use gas would be small scale combined heat and power in every house.
Peak heat demand times match up well with peak electricity demand, and the winter heating peak is complementary to the summer solar peak. Distributed generation would also enable increased urban densities without grid upgrades (which might be relatively inexpensive, but definitely not free)


Actually it isn't.
100 energy units of gas in a CHP plant produces something like 30 units of electricity (assuming you actually need this much which you normally will not) and 65-70 units of useable heat.
Even assuming that you want heat in those proportions you can do much better.

100 energy units of gas makes 60 units of electricity in a CCGT plant.
30 units of electricity is supplied as electricity and 30 units is used for the houses heat pump capability.
The majority of heating demand in many latitudes is direct space heating - air to air heat pumps can obtain COPs as high as 5:1
Which means I have provided 30 units of electricity and 150 units of heat from that 100 units of gas.
And energy demand changes between electricity and gas can be easily be altered without reducing total system efficiency.
A CHP plant can't hope to match that.
macpacheco wrote:
Maybe for exotic semiconductors, but silicon is everywhere and dopants like boron, aluminum, nitrogen and phosphorus are also very abundant. The cost is in the process, not the raw materials.

Yes - and you will hit hard limits there.
You don't find crystalline elemental sillicon on a beach.
The production process is rather energy intensive.
(I know, I use it as a sample industry in my argument for Quebec levels of electricity distribution).


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PostPosted: Dec 27, 2015 12:00 pm 
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As to LWR rollout not being feasible in Europe at the present time - we still have the ultimate example of it workign in the form of France.
Where even the Greens are unable to argue for a phase out of power production.


And then there is always the promise that HVDC will save us - recent innovations have opened the way to 1100kV undersea cables.... at which point Ireland-Labrador is no longer an unassailable barrier. Canadian hydro could provide for Europe - although the US might be upset that those 120GWe of potential will not be available to them for almost nothing.


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PostPosted: Dec 27, 2015 1:44 pm 
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E Ireland wrote:
Titanium48 wrote:
Several hours? Where I am (Edmonton, AB, Canada), peak summer insolation is at 1:30 pm local time and peak summer temperature is at ~4:00 pm. Pointing the panels 30° to the West would match things up almost perfectly, with only a ~10% drop in overall production.

So your power supply has got 10% more expensive. Considering solar currently soaks up enormous subsidies anyway this is not good for your plan of making it the cheapest generating scheme ever devised.

It's worse than that. The mechanism to allow the solar panels to move with the sun is not free. Pointing the panels permanently toward the setting sun means missing out on the rising sun. Having panels to collect both the rising and setting sun means missing out on the noon peak.

Solar subsidies only make the situation worse. As currently devised the subsidies pay the solar panel owners for energy produced regardless of demand. Because the subsidies make up a good portion of solar panel owners' income they optimize the panel design for peak subsidies, not peak demand. We saw how this can affect a grid and electricity prices numerous times with wind and solar subsidies. People chasing the subsidies will produce power and dump it on the grid and the utilities have to suck it up, because the subsidies would be worthless if the utilities were not required to buy the electricity. This can lead to electricity prices going negative for a time. The solar panel owners don't care about negative electricity prices because they get government money to produce electricity, they will gladly pay the utility to take their electricity since with the subsidies they still make a profit.

Solar and wind subsidies need to end yesterday, the stability of our electrical grid depends on it.

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PostPosted: Dec 27, 2015 2:21 pm 
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Nevada PUC Decision Is The Template For The Future

Summary

Nevada PUC made some well-thought-out changes to net metering that will set a precedent for other PUCs including California.

The effects extend not just to new customers but even existing customers - a move that completely destroys the lease/PPA valuation fairy tale.

Extension of this precedent, to other utilities indicates that SolarCity equity is essentially worthless.

Nevada Public Utilities Commission, in a 3-0 vote, decided to introduce a new solar rate class adverse to the interests of residential lease/PPA industry.

Prior to the decision, expecting such an outcome, SunRun (NASDAQ:RUN) sued Nevada Governor Sandoval regarding a public records request. SolarCity (NASDAQ:SCTY) issued a stern PR warning to Nevada PUC of severe consequences if they go ahead with the proposed rate structure decision. Vivint Solar (NYSE:VSLR) also expressed its displeasure in a similar press release.

In spite of these and other aggressive tactics from the solar lease/PPA industry, the PUC went through with a set of actions that we believe are not only rational, but set a precedent for other utilities on how to set rate structures for rooftop solar.

The challenge for utilities is that Net Metering is a poorly thought out policy and leads to the tragedy of the commons. The commons problem may not appear to be big when there are a few solar users whose burden is shared by the vast majority of non-solar customers. However, as more and more customers go solar to benefit from the free ride, the cost to the non-solar users and utilities increases exponentially.

The distress to non-solar customers comes in the form of ever increasing prices as their burden increases and the distress to utilities comes in the form of stranded and underutilized assets. If left unchecked, utilities which continue under the current nonsensical net metering regimes are likely to go bankrupt sooner or later.

As we have written extensively in the past, public policy imperative demands that net metering in its current form has to end. Some of the more market oriented PUCs and utilities, cognizant of this public imperative, will change their rate structures rapidly to stem the problem. However, some of the social engineering oriented PUCs may not see the problem early and may have to get to a solution kicking and screaming. Nevada PUC, with its recent actions, has shown the necessary leadership. Whereas, California PUC, with its recent proposed ruling, fits the latter mold.

While the solar lease/PPA interests are crying "foul" to Nevada PUC's actions, our review of the structure shows disciplined thinking and does not show any malice on the part of NPUC to solar interests. Here is a review of the key changes to the rate structure approved by the Nevada PUC today.

- Excess energy will be compensated at approximately wholesale market rate: Compensation at retail rates is likely the most critical item and something that is necessary to make the rooftop solar lease/PPA economics work. However, retail compensation indicates that the utility is providing lossless energy storage to customers at no cost. No utility can afford to provide this type of service as it is not a sustainable economic model. Almost any way one looks at this problem; it is very difficult to justify a compensation level above wholesale level. Nevada PUC thoughtfully decided to eliminate this major subsidy by moving to wholesale rates. We expect substantially all PUCs and utilities to remove this retail rate export subsidy over time.

- Increase to the fixed charge and corresponding decrease to the per KWH charge: Utility rate structures built during the time when competition did not exist used a simple per KWH charge. However, most of utility costs are fixed and this rate structure makes no sense in competitive world. The old pricing makes it easy for lease/PPA vendors to poach utilities' high value customers and leave the utility with low value customers. There is no economic basis to force utilities to adopt a price structure where they penalize their high value customers. Nevada PUC got this change right. We expect substantially all PUCs and utilities to widely adopt this type of new rate structure.

- Optional time-of-use pricing option: It costs utility substantially more to provide power at peak times than at times when there is low demand. By pricing energy at all times using the same rates, utilities are enabling unwanted arbitrage detrimental to customer interests. TOU pricing attempts to rectify this problem by letting customers know when the utility power is more expensive. We expect substantially all PUCs and utilities to move to optional or mandatory TOU rates.

- Grandfathering: One of the most ill-thought-out terms of current net metering is that customers are being granted a 20-year term where the solar tariff structure does not change. In an industry that is changing dynamically, providing such 20-year protection is nonsensical. There is no basis for this 20-year support other than to support the PPA/lease business model. Nevada PUC has decided to put an end to this madness by giving a 4-year transition period to grandfathered customers. We expect substantially all PUCs and utilities will move to eliminate long-term tariff protections to solar customers.

Solar enthusiasts should note that these changes, while reducing attractiveness of solar rooftop installations, do not kill rooftop solar. Rooftop solar will continue to be an attractive option for many, albeit a smaller set of customers. The payback time will be longer, but that would be representative of the real solar economics unsubsidized by net metering. So, while decision does not kill cost effective customer-owned solar in Nevada, it will certainly kill the lease/PPA business model. Solar enthusiasts must realize that buying/loaning is a more sustainable rooftop deployment model than leasing with 20/30 year instruments. While adverse to lease/PPA vendor interests, the sensible ownership model is the right way to go for residential solar.

Looking at the details of the decision, the most defining and controversial element is likely to be the above mentioned grandfathering clause. Not only does this proposed decision change the economics of NEW solar leases/PPAs but, for the first time in the U.S., the PUC has decided to make the decision retroactive to existing customer base.

This change to the existing customers raises some big questions:

- As the new rate structures kick in, what happens to the existing customer base which was gullible enough to sign these long-term leases/PPAs in the first place?

- Will the existing customers keep paying lease/PPA vendors during and after the 4-year transition?

- If these customers continue to pay, what happens when they want to sell their houses? Who will buy the houses with these albatross leases?

- What will be the default rate for these existing leases/PPAs?

- Will SolarCity or any of the lease/PPA providers ever recover their investment in these systems?

- Will there be any class action lawsuits from customers directed toward players like SolarCity?

- And, the most important question: How long will it be before California regulators and regulators in other states implement a similar set of solutions that impact the existing customer base?

For a while now, we have been estimating that the average duration of residential leases/PPAs is likely to be 10 to 15 years. This number is far less than the 20 to 30 year term being used by residential lease/PPA providers to calculate the patently absurd Retained Value numbers.

We believe that this Nevada decision will make many investors reconsider the validity of Retained Value, Power Unavailable Cash, and such similar bogus metrics used by the lease/PPA industry. Once investors and analysts adjust the assumptions of the solar lease/PPA vendors to reflect more realistic terms, it will become clear to investors that the residential lease/PPA do not generate ANY positive value for their shareholders.

Bulls may argue that Nevada is a minor market and this will not have much impact on SolarCity or other lease/PPA providers. We disagree - vehemently.

What we discuss here is not a Nevada problem, but a fundamental problem with the residential lease/PPA business model. Just about the ONLY way for utilities and public policy interests to survive is through a reset of net metering or by separating grid ownership from power generation. The PUCs and utilities acting early can get to a sustainable path, but those PUCs and utilities delaying commonsense changes will end up witnessing the destruction of current utility models.

The forward looking PUCs and utilities acting early can at least find ways to honor current commitments and avoid retroactive measures. However, those PUCs delaying commonsense changes will likely be forced to initiate retroactive measures or watch utilities and public interests get damaged irreparably.

If the poorly thought out NEM2 proposal at California PUC goes through, we have no doubt that utilities will be severely damaged. However, even at California PUC, the precedent and the logic of the Nevada decision may change a few minds. Given the final decision for NEM2 in California is a month away, it will be interesting to see if California PUC will stick with the current NEM2 proposal or if it will opt to change the terms materially.

Even if the decision goes unchanged, it is only a question of time before California PUC makes a U-turn on net metering. Public policy imperative dictates that California would have to adopt something similar to Nevada sooner or later with retroactive effect. When that happens, one can reasonably expect the current leases and PPAs to be defaulting en masse.

Investors and customers should make no mistake: Nevada PUC has set a big precedent in restricting grandfathering to a 4-year transition period. Depending on the severity of Net Metering problems, the grandfathering terms could turn much more brutal over time at other PUCs. The solar leases that are being signed today could become toxic on a very short notice.

In spite of the incredibly favorable tax climate in terms of ITC, we continue to assert that residential lease/PPA business models are unsustainable and the likely value of all major solar installers including SolarCity, SunRun, RGS Energy (NASDAQ:RGSE) is likely closer to "0" than their current valuations. Vivint Solar, of course, is saved at the expense of SunEdison (NYSE:SUNE) shareholders.

The most overrated solar company in this list, SolarCity, has the biggest downside at the current valuation level. The irony of SolarCity valuation is that this Company insists that its 20-30 year cash flows should be discounted by 6% and there is a significant investor and Wall Street analyst contingent who believe in that fairy tale.

Readers should note that SolarCity entered the Nevada market in 2013 and that the current ruling makes its leases/PPAs worthless by the end of 2020 (4-year transition per PUC decision). In other words, a significant part of SolarCity's 30-year instruments are likely to become worthless in 7 years. This is worse than our estimated 10-15 life for these instruments.

SolarCity's financial instruments and its stock are essentially worthless.

The Company's business model is bankrupt and, on its current path, even government largesse in the form of multi-year ITC extension cannot save this company from self-destruction that result from a broken business model.

Overview on SCTY: Sell/Short

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.


http://seekingalpha.com/article/3773876 ... ure?page=2


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PostPosted: Dec 27, 2015 2:48 pm 
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Russ wrote:
macpacheco wrote:
Fords were once rich people toys. VCRs were once rich people toys. Cellphones were once rich people toys. Can't you see the OBVIOUS ?


I think there's a hole in your logic. Yes, some "rich people toys" have become commonplace, but that does not mean that all have. VCRs and cell phones provided an entirely new capability. Electric cars provide no significant new capability compared to conventional cars.

But let's say for the sake of argument that Tesla electric cars become commonplace. I'd like to see a full-cycle environmental analysis. The demand for electric power will skyrocket, and where will it come from? Gas, coal, nuclear, wind, solar? What combination? How much cleaner will it be to generate all that additional electric power than just running internal combustion engines. And of course we can't forget about the substantial losses in transmission and conversion. And then there's those pesky batteries that will be piling up like chemical mountains in our landfills. I'm sure someone has done an analysis, but I haven't seen it.


A Tesla does 90+ mpg equivalent.
A Prius does 50+ mpg.
A LEAF does 110 mpg equivalent.
The whole process of extracting, transporting crude, refining, transporting gasoline, fuelling and burning is very inefficient well to wheels.
Using California average electricity and California average gasoline prices, charging up a Tesla used to cost 1/4 as much when gasoline was expensive, now it's 1/2 as much with cheap oil. When you consider Europe gasoline prices, electrons for an EV is about 1/5 as gasoline for a prius per mile.

Again, all of this information has been detailed dozens of times, but all you read are the conservative anti Tesla articles.

There has been a comparison of a California refinery that uses cheap heavy oil (the hardest to refine) that all the electricity and NG for process heat used by the refinary per gallon of gasoline produced contains more electricity equivalent than a Tesla needs to travel the same distance the average fleet car will travel with that gallon. Leave the heavy crude on the well, burn the NG on a good baseload thermal plant, we don't need the oil. Of course there is more efficient oil to refine, but it still requires a lot of electricity and NG.

Burning coal on a baseload plant generates less CO2 per kWh needed to drive a Tesla vs burning gasoline on a Prius for a mile.

The good news is you don't need to believe it. Tesla is building cars as fast as possible, doing zero paid ads. There is a well documented phenomena that when a upper middle class hood gets its first Tesla, in the next few years dozens of new orders follow just from word of mouth. The car is soooooo good, most people are hooked with a single test drive from a owner. Owners sell Teslas better than showroom reps. So until all upper middle class hoods get their first Tesla, and a few years go by, demand will continue to sky rocket, even without ads (or your approval).

The Concorde was always an expensive aircraft to purchase AND to operate. A Tesla is neither expensive to purchase nor to operate if you compare it with similar ICE cars (Mercedes, Porsche, high end BMW/Audi, ...). What is indeed happening is lots of people that could afford a US$ 100k car but were just fine with a US$ 50k car instead, see that Tesla is actually worth the money for all of its combined benefits and are purchasing one (base Tesla S70D costs US$ 75k).

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Last edited by macpacheco on Dec 27, 2015 4:16 pm, edited 1 time in total.

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PostPosted: Dec 27, 2015 3:46 pm 
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Kurt Sellner wrote:
What happens two hours later when the sun drops below the horizon and it's still 80F outside?


I was recently discussing this issue but for heating. Basically, the UK is aiming to decarbonise the grid, and move almost all transport and heating over to electricity by 2050.

Whether you're trying to cool a house in Arizona, or heat a house in the UK, you need good insulation and high thermal mass. The latter is important because it allows the heat pump to operate independently of other supplies and demand. So in the UK, heating and car charging will take place mostly at night, when other demand is low. This can flatten UK electricity demand to somewhere between 70 and 90GW.

For cooling with solar power, the thermal mass requirement is less demanding. You can cool from 10am till 3pm, and that would keep the house cool. Especially if it's been designed for a mid-US/Canadian winter.

The UK is currently planning on 16-18GW of new Gen III nuclear capacity by 2030. What happens beyond that will depend on how well nuclear develops, and the Government is hoping that Small Modular Reactors (including MSRs) can play a role. Hence the funding and competition. It is also pushing for cost reductions in offshore wind.

The UK Government has also recognised that solar will do close to zero in reducing the 70-90GW of firm capacity that will be needed - something to do with being >50 degrees North - and is hence pulling back on solar subsidies.

However, where there is a lot of sun, and limited need for heating, then solar will be very competitive. Solar power in such places is already at about the price of the "retail mark-up" (i.e. retail prices - wholesale prices), so is going to be a fact of life, destroying business cases for central generators for a long time to come. Add in a battery, and homes, offices, small factories in Arizona, Dubai, Queensland etc will hardly ever import electricity.

Whilst the UK is pushing for wind, wind is less predictable than solar. How many days of 10% capacity do you need to plan for? Ultimately, you'll need gas plants sitting there for decades with nothing to do. However, the UK has just completed its second capacity auction and firm capacity was bid in at £18 per KW per year - so actual capacity is cheap.


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PostPosted: Dec 27, 2015 4:01 pm 
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That is because capacity is provided by ex-CEGB coal plant that is almost obsolete for actual power production capacity.

That won't continue for a long time.
Even with 3% capital CCGTs will cost far more.


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PostPosted: Dec 27, 2015 4:24 pm 
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macpacheco wrote:
The good news is you don't need to believe it. Tesla is building cars as fast as possible, doing zero paid ads. There is a well documented phenomena that when a upper middle class hood gets its first Tesla, in the next few years dozens of new orders follow just from word of mouth. The car is soooooo good, most people are hooked with a single test drive from a owner. Owners sell Teslas better than showroom reps. So until all upper middle class hoods get their first Tesla, and a few years go by, demand will continue to sky rocket, even without ads (or your approval).


Where did you get the idea that I am anti-Tesla? I am perfectly willing to consider what they have to offer, given a full-cycle environmental analysis. I noticed, however, that you did not mention anything about the mountains of used batteries that will pile up. Used battery chemicals are a lot nastier than used gasoline engines. And what about mining for all those chemicals in the first place? We need to take it all into account.

I just did a little googling, and I discovered that Tesla buyers get a $7,500 tax credit. Oh yeah, now I see why they are so popular! If people really want these cars so badly, why does the government have to bribe them with my money?

Finally, I am wondering why some people think these cars are so great. Is it because they drive so quietly? I'm just asking, because honestly I can't think of any other advantage they have over conventional cars. Maybe I'll fall in love with the quiet ride as soon as I drive one too -- no way to know until I try it I guess. (But let's not forget that a quiet car can be more dangerous to pedestrians because they are less likely to hear it coming.)


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PostPosted: Dec 27, 2015 4:35 pm 
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Kirk Sorensen wrote:


There are less than 20k rooftop solar users in Arizona.
That's what, less than 1% penetration ?
Any argument that this is to avoid losses is bunk. The market penetration is tiny.
Its about preventing rooftop PV from gaining a strong foothold.
If the debate was about protecting the utility from losses, then they would defer implementation until there's a large enough rooftop user base, like 10% penetration.

In the long run, of course forcing utilities to purchase over production at retail cost makes no sense. But right now that number is insignificant.

But they know that if they wait another 5 years, then storage will be economical, and it will be cheaper to go off grid than to be enslaved by punitive anti solar tariffs (for a end user perspective) which will be justified from the electricity distributor standpoint.

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