California Solar gets a haircut - NEM 3.0

[Number_35]

Forced to sell at any price? Or just forced to sell?
Were they allowed to opt out?
Or did the government force them to sign contracts ?

I know canadian farming is diff than our but since our family farm was in the end a land rental business vs farming I dont know how these deals work.

The farmers were forced to sell at the price set by the Wheat Board. They were not allowed to opt out.

The rationale was that the Wheat Board could get the farmers a better average price overall than they (the farmers) could get individually.

About a dozen or so years ago the (new) federal government allowed farmers to opt out, which many did. Not surprisingly, the Wheat Board suddenly began offering the farmers better prices.

 

[UncleDave]

The farmers were forced to sell at the price set by the Wheat Board. They were not allowed to opt out.

The rationale was that the Wheat Board could get the farmers a better average price overall than they (the farmers) could get individually.

About a dozen or so years ago the (new) federal government allowed farmers to opt out, which many did. Not surprisingly, the Wheat Board suddenly began offering the farmers better prices.

Wanna see where the subsidy in something really is?

Take away all compulsion and watch what happens.

Let me opt out and we'll quickly see what I can really get for my product, I'll live with the outcome either way.

 

[KrisZ]

Wanna see where the subsidy in something really is?

Take away all compulsion and watch what happens.

Let me opt out and we'll quickly see what I can really get for my product, I'll live with the outcome either way.

Amen,
And if you had a battery pack I bet you could sell at a very high price during the evening hours when the sun goes down, but the demand is still very high. Of course during high solar production, that same power would be worth very little. But it would be up to you to determine when to sell or use up for yourself.

 

[UncleDave]

Amen,
And if you had a battery pack I bet you could sell at a very high price during the evening hours when the sun goes down, but the demand is still very high. Of course during high solar production, that same power would be worth very little. But it would be up to you to determine when to sell or use up for yourself.

I'm interested to see the NEM 3 contract and to understand what it asks or compels, specifically how it relates to batteries since the push is there.

I think you will see an enormous lobby to allow grid defection which they have been trying to fight because they are addicted to discount energy and certainly dont want to drop 18B to cover.

 

[OVERKILL]

I'm interested to see the NEM 3 contract and to understand what it asks or compels, specifically how it relates to batteries since the push is there.

I think you will see an enormous lobby to allow grid defection which they have been trying to fight because they are addicted to discount energy and certainly dont want to drop 18B to cover.

I mean the immediate result will be what happened here in Ontario with the scrapping of the GEA: Adoption rate tanked.

 

[UncleDave]

I mean the immediate result will be what happened here in Ontario with the scrapping of the GEA: Adoption rate tanked.

With absolute certainty. Retrofitting will all but cease.

The big win for power companies going forward is new construction, by forcing contracts on all new construction the energy companies found a way force homeowners to buy in regardless of their choice. New house = new contract!

As for Jeff and I they have to live with the deal they forced on us when we bought in.

 

[OVERKILL]

With absolute certainty. Retrofitting will all but cease.

The big win for power companies going forward is new construction, by forcing contracts on all new construction the energy companies found a way force homeowners to buy in regardless of their choice. New house = new contract!

As for Jeff and I they have to live with the deal they forced on us when we bought in.

I mean, Jeff is making off like a bandit, lol. You a bit less so, but you guys are doing well. The NEM 3.0 folks are on a completely different boat, lol.

 

[OVERKILL]

Amen,
And if you had a battery pack I bet you could sell at a very high price during the evening hours when the sun goes down, but the demand is still very high. Of course during high solar production, that same power would be worth very little. But it would be up to you to determine when to sell or use up for yourself.

This is exactly what they are trying to incentivize.

PG&E: OK, so we buggered things up with this duck curve, but we don't want to spend any money to fix it.
Government: *mandates solar*
PG&E: Ruh roh
PG&E: I'VE GOT IT!!! We'll gut the NEM program so that it only makes sense to install solar with storage! Then the people will buy the storage for us! Brilliant!
Consumers: *W*I*T*A*expletive*
PG&E: Welcome to California!

 

[UncleDave]

I mean, Jeff is making off like a bandit, lol. You a bit less so, but you guys are doing well. The NEM 3.0 folks are on a completely different boat, lol.

Jeffs got the goods.

Im Ok - selling at 30 and they resell at 40+ with a basket of fees - I can live with that.

Totally aligned on nem3.

 

[JeffKeryk]

Sometimes I think the gvt should take over our CA energy business, because serving 40M people and all the business we have here is a task too big, similar to the idea that the Military is too big for anyone but the gvt. But no, as a capitalist I believe in opportunity, ideas and competition. Capitalism has proven to lift countries out of poverty. PG&E has a monopoly. Viable alternatives would lead to lower cost and better service for all of us.

Regardless, I love my solar. Just plugged in the Tesla. Gotta hit that break even point!

 

[Snagglefoot]

Grain farmers in western Canada only were forced to sell their grain to the Canadian Wheat Board (CWB) for decades. Farmers were arrested for selling grain privately.

I know a guy who did time behind bars for selling grain privately.

 

[Snagglefoot]

The system cost isn't static with a market, the stack sets the rate, PG&E buys power and then sells that power at either a fixed or tiered (TOU) rate to consumers and that rate is the result of the aggregate of the stack.

If daytime demand is reduced by embedded solar to the point that the stack rate is $0.04/kWh, paying Joe Average $0.35/kWh significantly increases the delivered cost, because that cost has to be borne by the ratepayer.

During the morning/evening ramps, if the stack rate is $2/kWh, Joe Average doesn't pay that, he pays whatever his retail rate is. The utility aggregates these costs to come up with an average system cost which includes average cost of supply, administration, and of course profit.

People have a tendency to look at these systems through the lens of getting screwed by the retailer, which, with PG&E and their history, is somewhat understandable, but you can't run a business buying and selling power at retail. Retail rates are a result of a variety of different factors and wholesale rates are wildly variable. Consumers aren't exposed to wholesale costs pretty much anywhere because high demand events could bankrupt them. This happened in Texas where some people were in agreements to buy based on wholesale and during that storm where wholesale prices went absolutely insane, those people received bills for 10's of thousands of dollars. Folks on regulated plans were not exposed to that madness.

I tried to google the California “stack rate” but didn’t find anything useful. I did find this chart on electricity prices. ( consumer price on the left, cents per kwhr) How does the stack rate work?

 

[OVERKILL]

I tried to google the California “stack rate” but didn’t find anything useful. I did find this chart on electricity prices. ( consumer price on the left, cents per kwhr) How does the stack rate work?

View attachment 131139

The market rate is determined by the stack, so the stack rate is the market rate for a given group of generators that have all bid into the system for that bid period.

I'm going to over-simplify it here a bit for the sake of clarity: Say for example you have a reasonably low demand period, commercial wind bids in at $0.00 to be guaranteed to be taken, baseload gas bids in at $0.04/kWh and the peakers bid-in at $0.50/kWh. The market is able to meet its demand without the peakers so the stack rate ends up being $0.04/kWh, so everybody that participates receives $0.04/kWh. Rooftop solar gets its NEM rate, regardless of the market cost.

Let's say it's a VERY high demand evening. Solar has buggered off, all the generators we mentioned earlier have bid-in and rarely-run peakers have bid-in at $2/kWh, which they can, because otherwise the grid will collapse. The market price; the stack price for that period is now $2/kWh, which everybody gets paid.

That help?

Here's what the averages look like, you can see the insane spike in Texas during the storm where it drove the AVERAGE up to almost $1.50/kWh.

Note that these prices do NOT include the rates paid to embedded solar, which are on top of the market rate, driving up the average COST, but not the average wholesale rate.

 

[srfdude]

Of course you are subsidized, that’s called being in denial. You bought into the solar idea that it would save on energy costs for everyone, but in fact the very opposite is happening. You just choose to blame PG&E for it.

We had these discussions before. Australia, Canada, Germany all have experienced energy cost increases that were proportional to adoptation of renewables. You simply choose to not acknowledge any of this and blame PG&E.

And you know this how? While I'm not in PG&E territory, SoCal has its own lurking money eating monster, doing exactly the same things. I get a return for my surplus at pennies to the $.

 

[UncleDave]

Note that these prices do NOT include the rates paid to embedded solar, which are on top of the market rate, driving up the average COST, but not the average wholesale rate.

The embedded solar cost is in lieu of/avoids 18B in generation cost. (was that the # we came to?)

 

[OVERKILL]

The embedded solar cost is in lieu of/avoids 18B in generation cost. (was that the # we came to?)

If we restrict the parameters to new build non-emitting capacity. In reality, that capacity would likely have been met with gas. Of course it didn't help shuttering SONGS.

Now, if we go by the CAISO figures on ElectricityMap, Cali has 15.8GW of solar. If we subtract the commercial and thermal (which I assume are included?) at 7,896MW, we get 7,904MW of rooftop. if the average rate is say $0.32/kWh for NEM and NEM 2.0, and average rooftop CF is 18%, that's a cost of $4 billion/year for 12.46TWh. So, these subsidies could have paid for the $18 billion in nuclear in under 5 years (not including nuclear OPEX).

 

[UncleDave]

If we restrict the parameters to new build non-emitting capacity. In reality, that capacity would likely have been met with gas. Of course it didn't help shuttering SONGS.

Now, if we go by the CAISO figures on ElectricityMap, Cali has 15.8GW of solar. If we subtract the commercial and thermal (which I assume are included?) at 7,896MW, we get 7,904MW of rooftop. if the average rate is say $0.32/kWh for NEM and NEM 2.0, and average rooftop CF is 18%, that's a cost of $4 billion/year for 12.46TWh. So, these subsidies could have paid for the $18 billion in nuclear in under 5 years (not including nuclear OPEX).

Or decomissioning.........

I'd prefer that deal honestly. Let the people that need the grid pay for it and I'll cover me

At this stage with the generation and 20K backup all I need is a battery and I'm independent.

 

[OVERKILL]

Or decomissioning.........

I'd prefer that deal honestly. Let the people that need the grid pay for it and I'll cover me

At this stage with the generation and 20K backup all I need is a battery and I'm independent.

Decom has become quite lucrative, if you've been following Holtec at all. Apparently, many of these funds are over-subscribed, making this a very profitable endeavour. As I think I mentioned, we have ~$20 billion socked away for decom, that was captured as part of the rates paid to the plants over their lifetime. That fund is regarded as being in an over-subscribed stated.

 

[UncleDave]

Decom has become quite lucrative, if you've been following Holtec at all. Apparently, many of these funds are over-subscribed, making this a very profitable endeavour. As I think I mentioned, we have ~$20 billion socked away for decom, that was captured as part of the rates paid to the plants over their lifetime. That fund is regarded as being in an over-subscribed stated.

Haven't looked at Holtec. I can form a hypothesis for what I'll see.

Seems that 18B in avoidance basically doubles....

 

[OVERKILL]

Haven't looked at Holtec. I can form a hypothesis for what I'll see.

Seems that 18B in avoidance basically doubles....

Except it's not a capital cost, it's collected over the life of the plants as part of the rate paid.

Say for example, Diablo Canyon OPEX is $0.038/kWh, but rate paid is $0.040 as it includes a $0.002/kWh rate rider for decom and post-operation fuel management. That sounds tiny, right?

Diablo Canyon is ~2,400MW. Assuming CF is in-line with the rest of the US fleet at ~93%, that's 19.6TWh/year; 19.55 billion kWh. That means that $0.002/kWh rider yields $39 million/year. Assuming a 60 year lifespan (most US reactors are licensed for 60 years, a couple 80 years now), that's $2.35 billion in the decom fund, which is invested and produces a yield over the life of the plant as it accrues, which is how we ended up at $20 billion for ours in Ontario.