Session 26 Externalities December 03, 2015 Session 26 - Value to class members Demonstration of Enphase monitoring system Introduction to the external factors (externalities) of power generation 2 Step 8 Performance monitoring 3 APS Net Metering Step 8 Performance monitoring 4 APS Net Metering Generation Bill Avoided Electricity Cost = 0.123$/kWh * 5225kWh = $643 Step 8 Performance monitoring 5 SRP Net Metering Avoided Electricity Cost = $643 - $130 = $513 Revised current residential Payback > 10.5 13.5 years Arizona RES (details) 7 The compliance schedule is: 2006: 1.25% 2007: 1.50% (5% DR) 2008: 1.75% (10% DR) 2009: 2.00% (15% DR) 2010: 2.50% (20% DR) 2011: 3.00% (25% DR) 2012: 3.50% (30% DR) 2013: 4.00% (30% DR) 2014: 4.50% (30% DR) 2015: 5.00% (30% DR) 2016: 6.00% (30% DR) 2017: 7.00% (30% DR) 2018: 8.00% (30% DR) 2019: 9.00% (30% DR) 2020: 10.00% (30% DR) 2021: 11.00% (30% DR) 2022: 12.00% (30% DR) 2023: 13.00% (30% DR) 2024: 14.00% (30% DR) 2025: 15.00% (30% DR) In November 2006, the Arizona Corporation Commission (ACC) adopted final rules to expand the state's Renewable Energy Standard (RES) to 15% by 2025, with 30% of the renewable energy to be derived from distributed energy technologies (~2,000 megawatts). In June 2007, the state attorney general certified the rule as constitutional, allowing the new rules to go forward, and they took effect 60 days later. Investor-owned utilities and electric power cooperatives serving retail customers in Arizona, with the exception of distribution companies with more than half of their customers outside Arizona, are subject to the standard. Utilities subject to the RES must obtain renewable energy credits (RECs**) from eligible renewable resources to meet 15% of their retail electric load by 2025 and thereafter. Of this percentage, 30% (i.e. 4.5% of total retail sales in 2025) must come from distributed renewable (DR) resources by 2012 and thereafter. One-half of the distributed renewable energy requirement must come from residential applications and the remaining one-half from nonresidential, non-utility applications.final rules Externalities General term for factors resulting from a variety of sources not directly incorporated into the selling price of an object Cost of energy Manufacturing issues Environmental effects Health and safety issues Subsidies 8 Policies should aim at internalizing externalities and unlocking RE technology learning External Costs Policy intervention that includes the external costs allow proper comparison between conventional and renewables Source: IEA Renewable Energy, Policy Considerations for Deploying Renewables, 11/2011 Externalities Photovoltaics is an alternative energy source and advocates for its adoption and expansion should consider Externalities in its production Externalities in its competition 10 Environmental Externalities Not well understood in general The globe is a complex system Climate is a complex system They behave in non-linear, non-deterministic, unpredictable, and novel manners 11 Environmental Effects Acid rain Sulfur and nitrogen oxides (produced by burning fossil fuels) produced acidic components in atmosphere that returned to the earth in rain with low pH. Measureable damage to fresh water lakes. Largely eliminated with sulfur cap-and-trade program Ozone depletion Chlorofluorocarbons used in manufacturing and as working fluids in AC systems concentrated in atmosphere near the poles, reducing ozone concentrations. Largely eliminated by finding benign substitutes 12 Environmental Effects Climate Change The arguments that climate change is not occurring are non-scientific; the position that climate change should be ignored is largely economic Climate change will have certain impacts higher average temperatures, larger average temperature variations, larger extremes in weather, higher sea levels 13 Environmental Effects Climate Change Increase in global average concentrations of CO 2, CH 4, and other greenhouse gases traps IR radiation in atmosphere. There are natural earth processes that produce these gases (photosynthesis, animals, forest fires, volcanic eruptions), but the earth-scale burning of fossil fuels has caused a steady and dramatic increase since the 1850s Controversial topic not among climate scientists, but among certain political leaders 14 Environmental Effects Air and water pollution components Gases (CO 2, CH 4, SO 2, NO x, ) Particulates (ash, dust, soot,...) VOCs (TCE, PCE, other solvents,...) CFCs (freons,...) Greenhouse gases CO 2 CH 4 (21x CO 2 ) CCl 2 H 2 (15x CO 2 ) CCl 4 (1300x CO 2 ) N 2 O (310x CO 2 ) 15 PV Industry Environmental Hazards 16