This is your SolarWakeup for July 19th, 2023
It’s Getting Hot In Here. I’ve written about it the heat for what seems like months at this point. I’ve also been living in it as have many of you. Look at the headlines from today, Miami, Arizona and Texas all making the news because of the consistent heat. Step into the ocean near where I live and you find the water to be in the high 90s, bringing too much reality to the saying that the ocean is like a hot tub. I can only imagine what my utility is seeing on the demand side, 40 straight days over 100 degree heat index and reduced cooling efficiencies at the power plants.
But What To Do. The problem is that we’re not going to solve this years grid problem by next year at the rate that we’re going. Building a solar farm or storage project means at least a year in good times and likely a late 2024 or 2025 endeavor at this point given where the interconnection queue is.
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Yann
This is your SolarWakeup for July 18th, 2023
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Yann
This is your SolarWakeup for July 17th, 2023
That’s Not Their Job. Possibility does not imply responsibility. One deal that consumers, government and utilities made in return for favorable regulatory proceedings like monopolies and franchise agreements was the responsibility to serve. That means that when you want to turn on the lights or hospitals run an X-ray machine, it works. Climate is making it more complex for grids to operate and an evolving generating portfolio means that complexity includes the dimension of time. But needing to count on your car to provide power to your house in the event of backup is insanity. While it sounds cool, you could have also plugged an extension cord into your combustion engine truck or run a generator as a backup. However, none of these scenarios create monetary value for the user which is what is supposed to happen if the grid ‘needs’ you to provide your own power. Grid operators could look at the EV increases on the grid and rightfully say, we will dispatch your vehicle and pay you X dollars to do so, if they ‘need’ those resources to keep the lights on. Of course they could simply say, if you reduce your homes load, we’ll pay you those same dollars but they do neither.
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Yann
This is your SolarWakeup for July 14th, 2023
Shell’s (Possible) Move. Interesting to read that the CEO of Shell is publicly considering a sale of the renewable power unit. I say interesting because Shell was founded on the basis of the energy transition from coal to oil. It was the British Navy’s decision to use oil as the fuel that not only created a major market for Shell but ultimately built the BP empire. Now that the transition from molecules to electrons is happening, it would make sense for the oil majors to lean in on the transformation and recognize that batteries are the new oil tankers and generation is the commodity feeding the growing energy demand across the world. Given how portfolio sales have priced recently (see Duke), now wouldn’t be the greatest time to make this move.
Arbitrage Value. Curtailment is an unfortunate side effect of renewable resource growth in the market. The sun shines when the sun shines and wind is similar. With curtailment comes inherent value of arbitrage because the delta between time X and time Y expands if time X (time of production) goes to 0.
Happy Birthday! To my oldest son, turning 13 today!
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This is your SolarWakeup for July 13th, 2023
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This is your SolarWakeup for July 12th, 2023
Texas Breaks Records. Hard to fathom that ERCOT is forecasting peak demand of over 82GW several times in the next week. Not just for this individual moment with less than 10% capacity reserve margin but for what that means in the future. This week I wrote about the global temperatures causing family members across Europe to install air conditioners in their homes, when they never had to in the past. Along the electrification that consumers are going through with appliances and electric vehicles, the grid has the added strain of the real energy transition. As a society we will use more and more energy, that's the natural course of progress. The energy transition is electrification, shifting more of the energy from molecules to electrons and the grid has to be resilient and therefore intelligent enough to let the lights stay on every time the consumer wants or more critical applications like hospitals require. (originally posted on my Linkedin)
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This is your SolarWakeup for July 11th, 2023
Cheaper EVs Driven By Choice And Supply. At last count there are around 60 EV options available to US consumers, more if you count hybrids and more if you expand the global market. In any supply and demand market more choice will create some increased demand and comfort by being a follower, i.e. not an early adopter. But if that demand doesn’t outpace supply, there will be excess inventory that should drive down the price or create additional incentives for consumers to buy the cars (free charging perhaps?). With EVs there’s also the additional layer of charging complexity that follows. First, car dealers still don’t know how to sell EVs and make consumers comfortable owning this new to them technology. Second, more EVs on the road means that charging networks need to keep up, no more 2 or 4 charging pods at Whole Foods, we need an entire row of chargers. I say this noting that the three closest grocery stores to me in Florida have zero combined charging stations in their parking lot. But price elasticity will build more tolerance to the secondary objections that the consumer may have, who doesn’t want a cheaper car that also comes with a massive tax credit. This should build up the EV portfolio on the road AND on the grid.
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This is your SolarWakeup for July 10th, 2023
Can’t Stand The Heat. I returned this weekend from a trip. This took me to a location that is not heavily air conditioned, sitting at 46 degrees latitude (similar to Toronto), and the water is about 10 degrees cooler than the South Florida ocean I’m used to. It was however close to 90 degrees, including at night, which made for interesting nights hoping for a breeze to come through. Cities that have never considered air conditioners have to reimagine their needs and even their building codes. Homes in my hometown of Hamburg, Germany, are valued lower if their electricity consumption is high so builders and owners don’t install ACs but is that really livable? Grids that are built for the weak link of cold/icy environments are having some of the biggest issues with strenuous, ongoing heat events like we’re having now. Winter peaks, summer peaks, EV peaks, power plant redundancies, rising cooling liquids for generators globally, are all impacts that a grid operator did not really imagine 10 years ago.
The Piecemeal Approach. We need more deployment for grid infrastructure and we need to take a more strategic approach to it. The massive backlogs are not creating investment certainty for developers, owners, service providers that enable the grids to gain the investments they need in order to keep the lights on. Is there a single point to look at to fix this? No, and that could be a major pain point that may make this hard to solve but I don’t know what the grid will look like in 10 years if we don’t deploy, deploy, deploy.
Support ORKA. I want to introduce you to a new supporter of this newsletter. ORKA Finance is solving a massive need in the commercial solar financing market and you should consider giving them a look if you’re working on helping the largest users of electricity go solar.
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This is your SolarWakeup for July 7th, 2023
Biden Goes On Tour. Yesterday, Biden went to South Carolina. Specifically the 2nd district of South Carolina where Flex has a manufacturing facility that will be bringing another 600 jobs into the factory to build Enphase microinverters. This is one of three manufacturing lines that Enphase has discussed. Biden next heads to Georgia for another factory groundbreaking in his effort to tout the Bidenomics including bringing new factories to the US especially those for the clean energy economy.
The Winning Districts. So many of these factories happen to go to districts represented by some of the most fervent opponents of the Inflation Reduction Act. The Enphase line at Flex is in Joe Wilson’s district and the Georgia tour is in Marjorie Taylor Greene’s. By going directly to the factories, Biden is asking voters to look beyond the talking points and see that solar manufacturing is good for them, their families and everyone putting solar on their homes, businesses and land. The reality is that if the IRA had not passed, these jobs would not have been created.
Triple Crown of CHiPS, BIL and IRA. You’re seeing the administration going full speed on deploying the investments and highlighting the hundreds of billions that companies are investing for factories in tech, industrials and clean energy. The bipartisan infrastructure law is also building the tools to enable more deployment, a favorite word within the department of energy.
Oceans Need Cooling…Water Runoff. Japan will be releasing treated radioactive water from the Fukushima plant after approval by international regulators. I don’t expect anyone to want to dump solar panels into the ocean though.
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This is your SolarWakeup for July 6th, 2023
The Lender You Can Depend On. In a market that is full of uncertainty, you can rely on Dividend Finance to bring you white glove service to help you reach your long-term goals. Apply Here
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Yann