“Small rooftop solar is an upper-middle-class hobby paid for by general taxpayers and ratepayers. For small solar the payment can be set by Georgia Power’s hourly avoided cost, similar to the prices calculated for marginal sales under the Real-Time Pricing (RTP) family of rates.”
“By compensating distributed generation and solar according to marginal cost-based payments … this problem goes away. As with marginal cost-based sales nonparticipants are not affected.”
Notice of Inquiry and Workshop to )
Examine Issues Related to the Value ) Docket: 39732
of Renewable and Distributed Energy )
Resources in Preparation for the 2016 )
Georgia Power Company Integrated )
Resource Plan (IRP) )
Renewable energy should receive no subsidies, no mandated purchases, no set-asides, and no special treatment whatsoever. Renewable energy’s value should be determined by letting the market decide. Renewable energy suppliers should bid for sales to Georgia Power just like all other bidders. The use of artificial prices set by political influence will misallocate economic resources to less than their most valuable uses.
Small rooftop solar is an upper-middle-class hobby paid for by general taxpayers and ratepayers. For small solar the payment can be set by Georgia Power’s hourly avoided cost, similar to the prices calculated for marginal sales under the Real-Time Pricing (RTP) family of rates.
The most efficient way to set prices is in a competitive market. Utility scale renewable projects should competitively bid for sales. In an unfettered market, prices approach marginal costs. Georgia Power computes its marginal cost and uses it as the basis of its hourly prices for the variable priced component of RTP sales – this approximates the market process. This marginal cost has adders to compensate for certain other costs, such as risk, transmission and reliability. For renewable purchases, or any small scale purchases, these adders would be different.
– Scientific facts are undermining the Global Warming scare, thus eliminating the need to emphasize renewables.
– Solar development has a history of failure and scandal, and not just on the federal level.
The Case
On August 10, 2015 the Commission opened a docket seeking comments from interested parties relating to the subject of establishing and setting the value of solar energy. This was in response to pressure from the solar lobby which claims the price of solar power should be administratively set to recognize what the solar lobby sees as additional subjective value of a renewable resource.
The Commission seeks comments on nine issues. Herein we comment on the specific questions posed by the Commission:
1. What are the quantifiable benefits and costs of renewable resources in Georgia – utility scale solar, distributed solar, wind, and biomass to the Georgia Power system as a whole, customers, participants and non-participants alike?
Assuming renewable energy can be produced cheaper than conventional energies, then all electricity customers can benefit by having lower power bills.
2. Does the current method for valuing distributed generation (avoided costs) properly reflect the value to participants, non-participants, the utility, and the grid?
Using avoided costs is the proper way to reflect value. However, Georgia Power’s current method can be improved by using marginal hourly cost as the basis for determining the proper payment for solar output.
3. Is distributed generation an energy resource with little impact on long term planning of base-load generation?
The impact will be small. Even with subsidies distributed generation and renewable energy sources will always be a small part of our energy future.
4. What level of distributed generation would it take to impact the future generation plans for Georgia Power?
The current fashionable promotion of renewables will pass before they have enough impact on long-range generation planning.
5. How do renewables and distributed energy resources impact the reliability of the transmission and distribution system and affect generation units’ efficient operation (dispatch)? Are there any special reliability considerations for distributed renewable resources?
Several European countries are cutting back on renewable subsidies and mandates as they start to have system power quality problems. Given Georgia Power’s strong grid we are far from having these problems and likely never will as renewables find their proper, albeit small, place in our energy mix.
6. How are impacts on the grid mitigated? What is the cost and who should bear that cost? Should a limit be imposed on the amount of renewable and distributed generation and how should it be determined?
Not only should renewables not be mandated they should not be restricted. If renewables can be justified, then they can be handled like any other energy sources. It is, however, doubtful they will ever play more than a small part in a rational energy mix.
7. Do DG solar customers pay the same fixed infrastructure costs of the system as non-participating solar customers? If not, are cost shifts presently occurring or are they projected to occur as DG penetration increases? Recognizing cost shifts have been reported to occur in other states, what safeguards can be put in place today to mitigate any current or anticipated impact on non-participants?
By compensating distributed generation and solar according to marginal cost-based payments, as explained here, this problem goes away. As with marginal cost-based sales nonparticipants are not affected.
8. Can renewable resources provide comparable levels of reliability to conventional resources at comparable prices? If the answer is yes, should renewable resources compete in resource procurements alongside conventional resources instead of renewable only procurements?
No they can’t. All the more reason to have them compete with conventional resources.
9. With distributed solar systems now being more accessible to consumers as a result of recent legislation and with Georgia Power being required to purchase the power from these arrays, is it appropriate for the Commission to continue to set-aside a certain amount of DG through the IRP, particularly if there are significant cost / benefit differences between utility scale and distributed solar?
No. No energy source should receive special treatment. Let each rise or fall on their own economic merits.
Submitted this 9th day of September, 2015
Jim Clarkson