Renewable Energy and the Web

I am always impressed whenever I go to create the News section of EB just how much innovation is going on out there. Sometimes it really gets me thinking. One of the things that grabbed me this week was the information we came across on Enphase energy which has developed a new type of inverter for solar systems called a micro-inverter. Instead of providing a single inverter for all of the solar panels, it has developed a small micro-inverter which attaches to each solar panel individually. This allows the energy signature of each solar panel to separately managed and monitored. This struck us as a significant advance in solar energy, particularly if they can get the costs down on the product (don't have pricing data on it yet) because it allows the solar system owner to really track what is going on with their system at a discrete level. Solar panels are incredibly reliable components but occasionally they do go out. When this happens it might only show up as a slight drop in voltage on one of the strings depending upon where it is placed in the sequence. A homeowner could easily miss it altogether. By allowing it to be monitored individually it would be easy to notice when an individual panel failure occurs.

Another advantage of this type of system is that it allows the power curve for each panel to be monitored separately. Maximum power point tracking (MPPT) can be used with each panel. This function ensures that there is an optimal balance between volts and amps so that the maximum amount of watts of energy is produced. By doing this analysis at the level of each panel rather than all of them at once each panel can be optimized resulting in better overall performance. It is not yet clear whether or not the improved energy output is more cost effective than a single inverter but as component costs come down it seems likely that this is a better approach to power management.

The part about the Enphase inverter that I like the best is that it is Web connected. You can simply log on to to their Website and look up a page that will show you the output of your panels in real time. This strikes me as way cool! It seems to me this has got to be where things are going to go in renewable energy. It is part of the trend we have seen in making the output of a solar system more visible. For some time now inverters have come with displays that can provide detailed information about how your solar panels are performing. More recently, a few inverter manufacturers have made the display devices wireless so that you can mount the display somewhere convenient rather than down in your basement where the inverter probably is located. Moving the display to the Web was the logical next step.

Logical and potentially quite powerful, not only for the individual, but particularly for communities. One of the real trends in renewable energy in Europe has been the move to communal efforts to establish renewable energy. Many communities in Europe have joined together to buy a commercial windmill or a renewable energy system and then share the generated electricity throughout the community. In essence citizens are taking the future of energy in their community into their own hands, often when their governments are not responsive (something those of us in the U.S. are all to familiar with!). For a great discussion of this approach I highly recommend Greg Pahl's book "The Citizen-Powered Energy Handbook" which you can find in our main book section.

It seems to me that putting energy output on the Web would be a huge boost to citizen powered energy efforts because it makes the result of an energy investment so completely visible. At any time a member of the community could log on to the Web and see what type of output their windmill or solar system is providing. They can see the benefit immediately and tangibly. Compare this to the average state utility. Somehow I can't see Con Edison letting me see the output of the electric generators at their local coal-based electrical plant. Could be interesting though, modern home inverters on renewable energy systems actually tell you how many pounds of polluting carbon you are offsetting by not using energy from the grid. Think Con Ed will tell you how much carbon they are putting in the atmosphere?

Now that we have entered the post-peak oil era people are starting to take their energy use a bit less for granted. Making that use easily visible via the Web will make that even easier. Here's an idea; why don't we pass a law requiring all government buildings to use Web based monitor's for their energy systems and then we can see which agency is wasting the most energy. Could be fun!

A Sad Shad Story

Seems like energy issues are everywhere in the news these days, but sometimes the real impact of energy policy is seen, not in the headlines, but in off-beat local stories that make these somewhat abstract issues hit closer to home. I had this experience last week when following a story in one of our local newspapers. I've been living in the Hudson Valley area of New York for about 15 years and one of the things I like about living here is the abundance of local spring and summer festivals that come around every year. Some of them, like the popular Clearwater festival have some national recognition. But my favorites are the really small festivals focused around popular local happenings. One of the best was a little festival held at Croton Park on the Hudson River every year in April when the Shad start their run upriver to spawn.

The festival is called Shadfest, but this year it was a rather different event. That's because this year there weren't any Shad at the Shadfest Festival. Yep, this year it was a "Shadless" Festival so to speak. Why, because the Shad populations have declined so precipitously that the festival managers decided they didn't want to further endanger the fish population by serving them at the festival like they usually do.

In a certain sense not serving Shad at the Shadfest is true to the purpose of the event since because the festival was started 19 years ago by the environmental group Riverkeeper as a way of drawing attention to the health of the Hudson River estuary. Needless to say that its health is more than a little suspect given the decline in the fish populations in the river. A study commissioned by the Riverkeeper which was just released found that there was a 90% decline in the American shad populations in the river over the last 20 years. In the 1940's it was estimated that the shad populations were over 30 million, but now the whole population is estimated to be around 3 to 4 million and only about 200,000 of these come up the Hudson to spawn. At this point the entire species is at risk of disappearing from the river. Biologists from the New York Department of Environmental Conservation (DEC) are particularly concerned that the shad comprising the spawning stock (adult fish) have become smaller and younger, and mortality has increased to excessive and unacceptable levels. Meanwhile, juvenile production dropped to an all time low in 2002 and has not recovered.

There appear to be two primary causes behind this drop in population. One is extensive overfishing on the Hudson. As a result the DEC is in the process of changing fishing regulations so that it is a catch and release program only. This sounds like a common sense action to help the populations, though it is probably coming about 10 years too late. However, the other major cause of declines in the shad population is going to be a bit tougher to solve. That is because the other part of the problem are the numerous power plants on the Hudson River such as the Indian Point nuclear power plant. These power plants suck in huge quantities of water from the river for their cooling systems. When they do this they suck in the eggs of the shad which are then killed by the turbulent water flow. Local environmentalists have long advocated putting filters on the water intakes to help prevent this but the power plants have fought any such regulations. It seems 150% profits per year are not sufficient so the only choice is to save a few cents by killing off the fish populations.

Unfortunately the decline in fish populations on the Hudson is not limited to the shad alone. Last week, Riverkeeper released a study saying that 10 species of Hudson River fish are in decline. The report said shad, alewife and blueback herring are facing disappearance from the river. Riverkeeper aims to get the state to force the five power plants that pull water from the Hudson to cool their equipment, and inadvertently destroy fish larvae and eggs in the process, to switch to technology that uses 95 percent less water and, therefore, kills fewer fish. Indian Point is among the power plants that the group cited.

We support the Riverkeeper organization in trying to get the power plants to behave in an environmentally responsible manner. As much as we tend to talk about global warming on this site the environmental damage from coal and nuclear plants is not limited to just temperature change. Problems like this are yet one more reason why changing over to energy generation approaches such as wind and solar is so needed and so urgent. The cost of continuing to generate energy from coal and oil is, in every sense, just too high!

Is Food versus Fuel Really the RIght Debate?

The bio energy sector of the renewable energy market is under a good bit of fire these days. Seems like everyone, including Congress, is blaming bio fuels for the sudden increase in food prices. Not surprisingly the ethanol manufacturers have gone on the offensive (or is that defensive) in trying to counter this criticism. What's the truth of the situation?

There is no question that ethanol is one of the factors in the rise in demand for corn. According to the Department of Agriculture this year 22% of the U.S. corn crop will go towards producing ethanol rather than fuel. That's up 17% over last year. However, ethanol is not the only factor in the increased demand for corn. The biggest culprit is actually the increased demand for corn from China. Most of this demand is not for feeding the people of China directly, but instead for feeding their cows and pigs. Why, because the people of China and Asia have begun adding meat to their diets, something that used to be a rarity. Weather is also a factor in the current wave of demand. A drought this year in Asia reduced the supply of corn, wheat and soybeans. Imports increased to make up the difference. Finally there is the dollar itself. As the value of the dollar continues to fall on the currency market prices get higher.

As a result of the higher food prices Congress has begun to question the many incentives being provided to the ethanol industry. While this might be a good idea we suspect it is coming about four years too late and for the wrong reason. In our last two presidential election the Red states, most of which are large grain producers, managed to win themselves big government incentives for ethanol. Lost in the rush to win votes was the question as to whether or not ethanol is a particularly good approach for creating fuel in the first place. There continues to be much legitimate debate over the efficiency of corn-based ethanol. At best, according to industry spokesman, the fuel is only 1.25 efficient, meaning it only produces 25% more energy than it takes to make the fuel in the first place. However, recent studies that look at the full production cycle, including the cost of oil-based fertilizers to grow the corn in the first place, suggest that this number is optimistic and that ethanol could be a net negative (see our section on Food vs Fuel for more on this).

Yes, ethanol may be contributing to higher food prices but it is certainly not the only factor. The real problem is that at best corn-based ethanol is only a marginally efficient fuel. There are other renewable energy alternatives that have proven themselves in the marketplace to be far more efficient and effective, particularly wind energy and solar energy, which right now lack government incentives. Congress has still not renewed the renewable energy tax credits for wind and solar despite the fact that they represent probably the greatest energy resource that the U.S. has. Nor has the government invested in supporting the development of electric vehicles which would then make it easy for us to leverage electricity for transportation. If we are going to wean ourselves off of oil and coal and protect the planet the country is going to have to move much more forcefully to support renewable energy solutions. Therefore we support government incentives for renewable energy. But let's provide the most effective incentive for the most efficient renewable energy sources.

We are now in another election year. Let's not make the same mistake this time around. Let's have a real debate on where to put our government's energy dollars. Let's think wisely about how the taxpayer's dollars are used so that it has the greatest impact. Support the candidate that has the best energy policy and encourage your members of Congress to support energy policies that are wise, not just politically expedient.

Investing in the Earth

This morning I perused my newspaper (the New York Journal News) to get a sense of this year's obligatory Earth Day articles. Two articles struck me as particularly interesting. The first article that got me thinking was a local article which reported findings from a consumer research firm (Mintel) that found that consumers were willing to buy green products provided they did not cost 10% more than regular non-green products. My first reaction to the story was that it was presuming the negative. Why shouldn't most green products be even cheaper than regular products. For example, energy saving CFL lightbulbs clearly last much longer than traditional incandescent bulbs and use about one-third the energy. Over their lifetime that represents a significant cost savings. So why do we think of them as more expensive?

The reason we think of them as more expensive is that they cost a bit more up front compared to regular light bulbs. We think in terms of the short term cost, not the long-term value. It struck me that this type of valueless thinking is the antithesis of the values I was raised on. I remember once going to a Sears store with my father so he could buy a new hammer. I remember him pointing out to me that the Sears Craftsman hammers were more expensive than others but that it was important to think about the durability of tools and that an investment in a good tool would always pay off in the long run. It was a good lesson and one that sunk in. To this day I won't buy a cheap tool but insist on going with well-made, quality tools, even though they are more expensive.

What I find surprising is that we won't apply this same logic to products which are good for the environment. We put up a new article this week in the Solar Energy section of the EnergyBible which talks about Calculating Payback on solar photovoltaic systems. What the article showed was that a solar energy system can save homeowners lots of money while doing something good for the planet. What's the drawback, the same as with the CFL bulbs, it costs money up front. It requires an investment! It made me think of a neighbor who recently spent $20,000 to put up a new deck on his house. He argued that it would improve the resale value of his house, an understandable reaction in the rapidly declining housing market. However, I got to thinking that if he had used that same $20,000 to put up solar panels on his roof he would have also have improved the value of his property but in addition he would have dramatically cut his energy bills for the next 25 years. Seems like a no-brainer to me but clearly he didn't see it that way.

Investment was also the theme of another article I saw this morning, though this one was found, not surprisingly, in the business section of the newspaper. The article was reporting on a recent analysis by MP Morgan Securities in which the analyst recommended that investors dump stock in companies which required significant water supplies (power plants for example) in order to create their product. The premise was simple. The supply of water is no longer meeting demand given our rapid population growth so companies that rely on water are going to be at significant risk.

I make no claims on sainthood and so I have to admit my immediate reaction to this article was to conjure up an image of a Wall Street banker who is found deceased in his office, up to his armpits in mounds of cash, who unfortunately died of thirst because there was no water in the water cooler. OK, its a tempting scenario, but the point of all this is that while much of the public is hesitant to invest in a future which will protect our planet, many others who live in the investment sector are willing to invest in the probability that we will fail and that our planet will go down in ruin. It is a morbid way of looking at the world but it is real. There is money to be made in selling the planet short, or more precisely, short selling the planet!

I would like to think that the human race has more sense than this. That we will wake up, smell the coffee, and put our money to work protecting our planet instead of destroying it. However, I suspect it won't be Wall Street investors who make this happen. It will happen when individual investors large and small spend their money wisely, by investing in things that payoff in the long run!

Magnitude of Change in Energy Costs

In this time in our history when there is so much happening on so many economic fronts it is often difficult to fully grasp the magnitude of changes that are going on around us. I believe this is particularly the case when it comes to energy prices. All of us realize that energy prices have gone up a lot in the last few years but since we are all very busy managing our day-to-day lives it is hard to fully comprehend the magnitude of the change which has occurred. Fortunately, every now and then the team at the EnergyBible.com comes across data which helps us to crystallize and gain perspecitve on the changes that are occuring. In this case the data is from our friends at the U.S. Department of Energy.

The chart we will be referring to can be found at this link: http://www.eia.doe.gov/cneaf/electricity/epm/epmxlfile4_1.xls. It is a spreadsheet put out by the Department of Energy and what it shows is the cost of coal and oil from 1993 through the end of 2007. When I looked over this chart it really began to hit me just how dramatically our energy costs have changed in the last 10 years. Moreover, it helps to show how different the level of change has been based upon the type of fuel.

This particular price chart contrasts the price of coal versus the price of liquid petroleum (ie. fuel oil). One of the nice things about this chart is that it provides the prices for both in terms of cost per million BTU. This is a good way of comparing coal costs to heating oil costs since each type of fuel is measured differently. Coal is usually measured in cost per ton and fuel oil is measured in cost per barrel. By looking at the cost per btu (heat energy generated) we can accurately compare the costs.

In 1998 a barrel of oil cost $13.55 per barrel or about $2.14 per million btu. In that same year a ton of coal cost $25.64 per ton or about $1.25 per million btu. From this we can see that the cost of coal was about half or 58% the cost of oil. Therefore, it should not be a surprise to us, though it often does, that the majority of the electricity we use in the United States comes from coal fired power plants, not natural gas or fuel oil plants. Even 10 years ago coal was a lot cheaper.

Let's compare that with the situation at the end of 2007. By the end of 2007 a barrel of oil had risen to $87.46 per barrel or about $14.19 per million btu. This represents an increase in cost of oil per btu by 663% in just 10 years! What's even worse is that this data is now quite low because oil prices continued to rise dramatically in the first half of 2008 and is now hovering around $110 per barrel. Don't let anyone tell you the energy crisis is not real and not serious. These numbers prove that it is!

Now let's look at the increase in the price of coal over that same time frame. At the end of 2007 coal had risen to a price of $36.07 per ton or $1.82 per million btu. This represents an increase of 45.6%. A definite increase but nowhere near as dramatic as that for coal. Now let's put two and two together. The facts are that the price of oil has increased by an incredible amount while the price of coal has increased only moderately. America has run out of oil for the most part and has to import it, but America has a good bit of coal left, probably enough to last at least 30 years. Given this data what are electric plants running on fuel oil (and possibly even homeowners) likely to do? The answer is obvious, they will switch to coal.

So here we are in 2008 looking at the likelihood that America's electric plants and possibly even homeowners are going to be highly motivated to switch to coal, which is by far the most damaging fuel to our environment and the greatest creator of global warming. Given the economic situation oil and natural gas are no longer reasonable choices as a way of creating electricity. The only other choice is to go with renewable energy resources such as wind energy, solar energy, or hydro energy. This shows that there has never been a time when it is more urgent to push our civic leaders and legislators to get serious about renewable energy. If not we are looking at a near-term future where our skies become polluted and our planet becomes excessively warmed by the black clouds pouring from coal fired electric plants!

The Cantwell/Ensign Energy Bill

As we reported this week the federal tax incentives for both business and residential solar energy and wind energy are set to expire at the end of the 2008. Consequently there are several bills before Congress which are attempting to extend the renewable energy incentives. One bill has already been shot down because it proposed to pay for the incentives by eliminating some of the absurd tax incentives that Bush gave to his oil buddies last year. Fortunately a new bill has been introduced by Senators John Ensign and Maria Cantwell which has a greater chance of making it through. This bill, called the Clean Energy Tax Stimulus Act of 2008, does not call for the solar and wind incentives to be paid for by the oil companies so it might get through.

One of the things we like about this bill is that it not only calls for extending the tax incentives, but it also calls for removing the $2000 cap. This cap has served to minimize the extent to which larger home owners will invest in renewable energy for their home. At a time when energy prices have gone through the roof (sometimes literally) it seems utterly ridiculous to put a cap on how much renewable energy a homeowner can be credited for.

Another thing we like about this bill is that it is broad in scope, and provides incentives for many kinds of renewable energy such as solar, geothermal, wind, biomass, hydropower facilities and much more. Extending the solar and fuel cell Investment Tax Credit for eight years also encourages tremendous development of these technologies.“ Senator Ensign was absolutely correct in saying “If Congress continues to drag its feet, many projects across the country will be a sad reminder of potential that was never met."

It is gradually beginning to dawn on some members of Congress that renewable energy means jobs, local jobs, and so support for Green initiatives seems to be growing despite the current administration's attempt to crush any energy initiative that would compete with the oil conglomerates. Studies have shown that the Production Tax Credit and Investment Tax Credit for renewable energy projects would help create 120,000 employment opportunities and bring almost $20 billion in economic investment into the country.

At last count Ensign and Cantwell’s bill has 6 Democratic cosponsors and 14 GOP cosponsors. It will need to have strong support from both sides of the isle if it is to have a chance of getting Bush to sign it. Therefore, we strongly urge you to contact your own senator and let them know you support this bill and want to see the renewable energy tax credits extended. The bill needs 40 more votes if it is to make it through. Help us find the favorable forty! Thanks!

Follow the Money

It has been an interesting week in the world of energy. Oil got up to $112 a barrel and (on a personal front) my local fuel oil supplier just raised my #2 fuel oil price to $4.19 per gallon . That is triple what it was just three years ago. Not a pretty picture. What I find interesting is that all of the media energy experts seem totally baffled by all of this. I was watching CNN a couple of days ago and they kept commenting upon the fact that U.S. oil reserves are at a 5 year high and there is currently no shortage of supply. Standard economic theory would suggest this price rise just shouldn't be happening. It would be easy to just chalk it up to a single word "GREED" but I suspect the real answer is a bit more complex than that. I suspect closer to the truth is the fact that while the oil company's won't admit it (peak oil ... what peak oil) the people with the money have realized that oil is a commodity that is rapidly running out. This isn't a short-term play, this is a long-term play.

Commodities, including oil, have been on a roll lately and I believe that is because there are investors out there who have enough money to truly think in the long term. Long term financial strategies call for buying things that will run out while they are still cheap so they can charge exorbitant prices when the supplies start running out. Oil is now in that category and so is being boosted by long-term speculators. So don't let the oil companies tell you that we have not yet started to run out of oil. The guys with the big money know better. Just follow the money!