Here’s a piece by a friend of mine that I think you’d find interesting, since it’s about NPV for renewables. Nate Hagens and I were both editors at The Oil Drum back in the day. http://theoildrum.com/node/7147
One thing that I think is missing is the inefficiency of transmissions. Is this something you've looked into before and tried to calculate? E.g, if 5 GWh of excess solar are produced in California, as a function of distance what is the end amount of GWh that could be reasonably transmitted to other states?
Here's where an electrical engineer would be better than a finance guy. My understanding is that high voltage DC lines (HVDC) are fairly efficient even over longer distances. At a high level, even meaningful efficiency losses may look minor when compared to the status quo, where in the most saturated areas windfarms are forced to curtail entirely at peak wind resource.
Thought this was really great. One question: isn’t the lack of pipelines the type of problem that capitalism and the markets are perfectly designed to solve? Why the under-investment? Do the economics not work, or is regulation choking it off?
That is a great question. Oil and gas pipelines are much more responsive to market dynamics than electric grids, as they are owned by many independent private companies who are looking for such inefficiencies, and competing with other for these opportunities. Electric grids however are owned and operated by regulated utilities, monopolies, who have significantly less direct incentive, and a more arduous regulatory process.
Enjoyed reading your post. As always, organized, clear and well-constructed facts. Thank you!
Here’s a piece by a friend of mine that I think you’d find interesting, since it’s about NPV for renewables. Nate Hagens and I were both editors at The Oil Drum back in the day. http://theoildrum.com/node/7147
Very well written. Always looking forward your work.
Excellent read.
One thing that I think is missing is the inefficiency of transmissions. Is this something you've looked into before and tried to calculate? E.g, if 5 GWh of excess solar are produced in California, as a function of distance what is the end amount of GWh that could be reasonably transmitted to other states?
Here's where an electrical engineer would be better than a finance guy. My understanding is that high voltage DC lines (HVDC) are fairly efficient even over longer distances. At a high level, even meaningful efficiency losses may look minor when compared to the status quo, where in the most saturated areas windfarms are forced to curtail entirely at peak wind resource.
Indeed this is something I always wondered about.
Thought this was really great. One question: isn’t the lack of pipelines the type of problem that capitalism and the markets are perfectly designed to solve? Why the under-investment? Do the economics not work, or is regulation choking it off?
That is a great question. Oil and gas pipelines are much more responsive to market dynamics than electric grids, as they are owned by many independent private companies who are looking for such inefficiencies, and competing with other for these opportunities. Electric grids however are owned and operated by regulated utilities, monopolies, who have significantly less direct incentive, and a more arduous regulatory process.
I'm surprised. Brazil has a nationally integrated power grid and the US does not.