The U.S. Is Crushing Its Clean Energy Forecasts

Paris, schmarish...

In a February 2007 report, the United States Department of Energy made thirty-year predictions for the country"s energy usage and production. As Statista"s infographic below shows, using data from the non-profit international environmental pressure group Natural Resources Defense Council, these forecasts have so far been smashed.

You will find more statistics at Statista

Martin Armstrong details that actual CO2 emissions in 2016 have undercut the 2006 predictions by 24 percent.

In terms of the energy mix, power generated from coal was 45 percent beneath the forecast while clean(er) alternatives natural gas and wind/solar power saw overshoots of 79 and 383 percent, respectively.

Renewable energy infrastructure is also expanding at a much faster rate than was thought ten years ago. 2006"s prediction for installed solar was a massive 4,813 percent shy of the 2016 reality. The U.S now also has installed wind capacity of 82 gigawatts, 361 percent more than had been hoped for.

In fact, energy consumption in total was also 17 percent lower than expected... which is odd and perhaps a better indication of the recovery-less recovery"s reality?

Germany Forced To Pay Consumers To Use More Electricity

A stormy weekend led to free electricity in Germany, as Bloomberg reports wind generation reached a record, forcing power producers to pay customers the most since Christmas 2012 to use electricity.

Power prices turned negative as wind output reached 39,409 megawatts on Saturday, equivalent to the output of about 40 nuclear reactors.

 To keep the grid supply and demand in balance, negative prices encourage producers to either shut power stations or else pay consumers to take the extra electricity off the network.

The Race For The "Holy Grail" Of Renewables

Authored by Irina Slav via OilPrice.com,

In February, AES Energy’s Escondido battery storage facility in California was hailed as the largest one to date, with a capacity of 30 MW/120 MWh. Now, Tesla is building a bigger one—100 MW/129 MWh—in Australia.

On the face of it, it’s a race for the bigger battery storage system. But there’s much more to it than that.

The race is on for increasingly reliable, grid-scale, quick-to-install energy storage solutions that will make the shift to all-renewable power much more realistic. In this, factors such as renewable-friendly regulation and integration of storage systems with renewable power generation capacity can tip the energy transformation scales.

California is one of the places to be if you’re a renewables fan. Its authorities have ambitious plans in this regard, eventually hoping to replace all fossil-fuel generation capacity with renewables. Wholly reliable grid-scale storage systems are crucial for this strategy, and they are becoming increasingly popular in the state.

Unfortunately, the initiative to make the 100-percent renewable plan a law fell through. Unions, worried about possible job losses, pulled their support. Legislators themselves tweaked the bill, so its goal is now to produce 100-percent greenhouse-gas-free energy. The debate about the feasibility of the plan and how fast it could become a reality continues. California is a cautionary tale for other ambitious clean energy proponents. 

Meanwhile, the leaders of the battery pack are expanding. AES recently teamed up with Siemens on a joint venture, Fluence, focusing specifically on energy storage system development. Fluence will deal in AES’ Advancion and Siemens’ Siestorage platforms, the companies said, adding it will target the development of new energy storage capacity across 160 countries worldwide.

Tesla is looking in another direction. It already has the largest portfolio of completed energy storage projects globally, at 300 MWh. What it is looking for now is integrating future storage systems with wind and solar electricity producers.

When Tesla said it had won a deal for the construction of the world’s biggest lithium-ion battery storage facility in Australia, it noted that the deal involves partnering with local wind power producer, Neoen, which will supply the battery complex with electricity.

At the same time, AES is working mainly with traditional utilities to supply them with energy storage capacity, focusing on constantly improving the energy density and efficiency of its arrays. Tesla’s all-renewables focus is well documented, and now it could give it the lead in the energy storage race.

Earlier this month, Tesla closed another partnership, with wind power leader Vestas, to develop integrated wind power-energy storage solutions. The Danish company announced earlier this year that it has big plans for energy storage, with Chairman Bert Nordberg telling Reuters that the company had 3.2 billion euro (US$3.84 billion) in cash and no debt, so it could afford some good investments. So far this year, Vestas has invested in almost a dozen battery storage makers.

Energy storage, according to AES’ CEO Andres Gluski, is “the Holy Grail for renewables.” It is the key to the renewables kingdom of the future, eliminating the adverse effects of renewable power’s intermittency. Integrating this Holy Grail with the clean energy producers is the next step. Tesla and other battery makers have already made it. Yet staying with traditional utilities might not be a bad strategy either: it will be some time before renewables become the predominant energy source in the world.

In Florida, You Can't Use Your Own Solar Panels In A Crisis

Authored by Mike Krieger via Liberty Blitzkrieg blog,

When it comes to the U.S. economy, the “con” part offers the best description of the current relationship between business, government and the preyed upon consumer.

The way things work in early 21st century America is large businesses bribe politicians in a variety of ways at both the local and federal level, and the end result is laws that are designed to increase corporate profits at the expense of the wellbeing and freedom of the American public. Politicians end up with financial war chests to run their next campaign, while bureaucrats see a lucrative opportunity to swing through the ever spinning revolving door should they play ball with lobbyists and their patrons. Yes, there’s always some degree of corruption within any society of humans, but there are peaks and valleys in such cycles. I’d argue we are somewhere in the peak corruption phase.

Today’s article focuses on one of the most highly regulated industries in the country, electric utilities. It’s one of the most boring businesses in America. I know this because it fell under the umbrella of my responsibilities during my last Wall Street job, and I could barely read a utilities research report without immediately falling asleep. Nevertheless, as you’ll see in today’s piece, the industry still finds a way to generate large profits while simultaneously harming the people its supposed to service.

When I think about solar panels, its not just the use of a renewable resource I find appealing, but also the potential to take energy generation into your own hands; something that can prove quite useful in a major global crisis, or even something more minor like Hurricane Irma’s impact on Florida. The latter could’ve be a lifesaver for some Florida residents recently, but a local electric utility has done everything in its power to deny its customers such freedom.

Here’s some of what we learned about this situation from a fascinating article published by the Miami New Times, Why Didn’t FPL Do More to Prepare for Irma?

Hurricane Wilma, the last ‘cane to hit South Florida, tore through the area in 2005 and killed power to 3.24 million of FPL’s then-4.3 million customers (75 percent of the grid). Many of those customers had to wait up to two weeks for power to return. Since then, the company has spent more than $2 billion supposedly girding itself against the next storm, according to a Sun Sentinel piece published before Irma hit.

But after Irma, which by most reports brought only Category 1-strength winds to South Florida, by some measures the company did even worse. Despite all of those upgrades, an even larger percentage of FPL’s customer base — 4.4 of 4.9 million customers, almost 90 percent — lost electricity this past weekend.

FPL and its parent company, NextEra Energy, have for years heavily influenced state and local politics through donations, making billions in profits each year ($1.7 billion alone in 2016) thanks to favorable state laws that are sometimes literally written by the power company’s own lobbyists.

FPL’s lobbying wing has fought hard against letting Floridians power their own homes with solar panels. Thanks to power-company rules, it’s impossible across Florida to simply buy a solar panel and power your individual home with it. You are instead legally mandated to connect your panels to your local electric grid.

More egregious, FPL mandates that if the power goes out, your solar-power system must power down along with the rest of the grid, robbing potentially needy people of power during major outages.

“Renewable generator systems connected to the grid without batteries are not a standby power source during an FPL outage,” the company’s solar-connection rules state. “The system must shut down when FPL’s grid shuts down in order to prevent dangerous back feed on FPL’s grid. This is required to protect FPL employees who may be working on the grid.”

Astoundingly, state rules also mandate that solar customers include a switch that cleanly disconnects their panels from FPL’s system while keeping the rest of a home’s power lines connected. But during a disaster like the aftermath of Hurricane Irma, FPL customers aren’t allowed to simply flip that switch and keep their panels going. (But FPL is, however, allowed to disconnect your panels from the grid without warning you. The company can even put a padlock on it.)

The law winds up forcing residents to remain reliant on the state’s private power companies. For now, solar-panel owners can still get something out of the law, in that the “net-metering” provision lets you sell excess power back to the company. The provision also lets power companies charge a $400 or $1,000 application fee for consumers who want to install systems more powerful than 10 kilowatts.

But if power companies had their way, the net-metering law would vanish tomorrow. Both FPL and its trade association, the Edison Electric Institute, have spent millions trying to kill that net-metering law and instead win the right to charge you for installing your own solar-panel system. In 2016, FPL spent more than $8 million on Amendment 1, a ballot initiative that industry insiders admitted was written to trick customers into giving up their rights to solar power. The law’s language would have paved the way for Florida to kill net-metering rules.

This past April, the Energy and Policy Institute caught an FPL lobbyist straight-up drafting anti-solar laws for Fort Myers state Rep. Ray Rodrigues, who also took a $15,000 campaign contribution from FPL this year.

Thanks to power-company influence, one of America’s sunniest states lags far behind the rest of the nation when it comes to solar adoption.

Does this sound like an industry looking out for the best interests of its customers? Does it sound like the behavior of an industry where heavy regulation has successfully ensured that corporate interests are aligned with the general public?

No it doesn’t, and it makes me wonder how common this sort of behavior is across the country. I encourage readers to share knowledge of their own local utilities in the comment section.

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So You Wanted To Be "Long Electricity" Into The Eclipse?

Energy traders who had hoped to make an easy profit by betting that spot electricity prices would climb around midday on Monday – an idea they may have found on this website - were bitterly disappointed when, instead of spiking, prices tumbled because of an unexpectedly large drop in demand.

Utilities and grid operators had contingency plans ready to compensate for the expected drop in solar. But even with utilities’ backup grids humming, supplies were still widely expected to drop. Instead, energy providers encountered something that they hadn’t anticipated – what one trader called “an irregular human behavior pattern.”

Basically, more Americans than anticipated were outdoors during the middle of the day Monday, around the time when electricity demand typically peaks, than grid operators had expected. Therefore, while supplies took a slight dip, it was amplified by a dramatic pullback in demand, which exhibited a weird U-shaped dip over a two-hour period across the country,” according to Bloomberg. Ironically, if traders hadn’t been so distracted by the eclipse, maybe they would’ve realized that millions of Americans standing outside together staring up at the sun for an hour would have a marked impact on demand, and adjusted their positions accordingly.

“This was a bummer for traders who’d bet prices would jump as a whole load of solar-produced megawatts faded to black. “If anything, it was bearish from a trading perspective because people were more busy looking at the eclipse and talking about the eclipse,” said Tom Hahn, vice president of U.S. power derivatives at brokerage ICAP Energy LLC in Durham, North Carolina.

Spot power in California fell to negative levels as the eclipse wiped out and restarted thousands of megawatts of solar power, and they also dipped from Texas to New York. While natural gas demand rose to a one-month high on Monday, spot prices at several hubs weakened versus the U.S. benchmark.”

The dip in Northern California was particularly vicious.

“Spot electricity at Northern California’s NP15 hub averaged $21.50 a megawatt-hour at 10 a.m. to 11 a.m., less than half the price for supply secured in advance for the hour in the day-ahead market, according to grid data compiled by Bloomberg. Then at 11:50 a.m. local time - as the sun started to reappear from behind the moon -- the ramp-up in solar power sent prices to a low of minus $15.97.”

Tech firms like Alphabet Inc. helped conserve energy usage during the eclipse, part of a partnership with the state utility commission that helped it cut consumption by about 1,500 megawatts.

“Alphabet Inc.’s Nest Labs unit, which deploys thermostats and other smart home technologies, drew more than 750,000 customers into its Solar Eclipse Rush Hour experiment to cut consumption. They reduced power use by about 700 megawatts nationwide, helping to offset a 10,000-megawatt drop in solar power. In California, Nest and other partners worked with the state utility commission to cut consumption by about 1,500 megawatts.

In hubs from Texas to New Jersey, spot electricity prices slumped. Though in several cases, unexpected cloud cover helped mitigate the drop.

“While that was the most dramatic case of a power-price retreat, there were noticeable dips elsewhere. Cloud coverage in places like North Carolina, Texas and New Jersey had reduced solar output before the eclipse anyway, limiting the magnitude of the loss. The moon’s shadow also reduced temperatures a bit. And then there were all those people playing hooky from work and school.”

There were also “very evident” dips in New England, New York and the nearby 13-state grid managed by PJM Interconnection LLC, said Tom DiCapua, managing director at Con Edison Energy in Valhalla, New York, according to Bloomberg. Con Edison, which manages the largest grid in the US with 65 million people, said demand fell by 5,000 megawatts, or as much as 3.8%, during the event.

“People drove up the day-ahead price thinking that prices would settle higher in real time,” DiCapua said. That was the wrong way to go. “The people who tended to be short tended to make money. You wanted to be short.”

Luckily for traders on the east coast, they will get another shot to clinch the eclipse trade in seven years, when the eclipse"s path of totality is expected to stretch from Texas to Maine.

Trader Warns Jackson Hole's "Hesitantly Optimistic" Chatter Will Be "Nothing But Buying Time"

Hawkish, dovish, hawkish, dovish? As many market participants suspect, this week"s Jackson Hole "retreat" wil be a nothing-burger with perhaps a side-dish of temporary volatility as machines quibble over various words in headlines. Former fund manager Richard Breslow warns not to expect much...

Via Bloomberg,

Expect to Hear Jackson Hole Is Great in August

At some level, I hope I’m wrong. This week would end up being far more interesting if we do indeed get some juicy policy announcement out of one, or, why not be greedy, two, of the big kahunas headlining Jackson Hole. But it’s unlikely and markets may well end up having to figure out what they want to do between now and autumn on their own.

As much as these folks love to talk, they probably have little intention of communicating.

What do we know?

The Fed doesn’t pre-commit. But has essentially done so on a taper announcement and commencement in the fall. Their best laid plans call for as benign a start to this process as possible. Whether Chair Yellen mentions it again is largely irrelevant. They want to do it and think they can. And they won’t if something untoward happens.

If her base case is transitory inflation and one more hike this year, this is neutral not hawkish. Or I should say uninformative. Their first priority is balance sheet and rates after. A hike requires waiting to see inflation numbers tick up. We’re going to know nothing new on this subject before the Aug. 31 release, at the earliest, of the PCE deflator.

President Draghi’s notion on timing of a taper has to be influenced by the German election. And that comes after the ECB’s September meeting. The Chancellor’s re-election is widely assumed. But peace and harmony within the Zone will be the order of the day until it is over. Periphery spreads are still tight but have begun to show signs of widening out. Another 10 basis points wider in the BTP to bund spread and things begin to look interesting.

The ECB has a much harder task than the Fed in pulling back stimulus due to the structure of the PSPP and use of the capital key. Confidently dismissing the process as harmless for markets is a luxury they can’t indulge in.

Of course, if the market "misinterprets" anything (translation - sells off), there are numerous officials willing and able to step into the breach and save the world with some clarifying "that"s not what he/she meant" remark. As Breslow concludes, we have all got rather used to it...

Unfortunately, there are the speeches and then the chit chats. With all of the winks, spins and low-downs we’ve come to expect. So, no matter what is said from the podium, expect to be treated to no end of assurances as to what they really meant.

In truth, they’re buying time, hesitantly optimistic and have a plan that sounds great in theory.

This Nation Just Became The World's Newest Energy Superpower

Authored by Dave Forest via OilPrice.com,

Lots of news this week on energy companies from one particular spot on Earth.

India.

In Lebanon — where reports suggest Indian state oil firm ONGC will bid for offshore blocks. In Canada — where Indian officials are said to be negotiating coking coal supplies. And even in Venezuela, where the cash-strapped government is seeking to sell ONGC a 9 percent stake in the key San Cristobal oil field.

And a new study released this week suggests it’s not coincidence we’re hearing so much about Indian companies on the energy stage.

In fact, India has quietly become one of the world’s biggest energy investors.

That revelation came from the International Energy Agency (IEA) — which released a report yesterday on energy investment trends for 2016. Showing that India’s investment in energy projects surged during the past year.

All told, India’s spending on electricity, oil and gas, coal and renewables jumped by 7 percent in 2016, as compared to the previous year. Reaching nearly $100 billion.

As the chart below shows, that rise was enough to vault India into third place globally for energy investment. Edging out oil giant Russia. India moved into third place globally for energy spending in 2016.

(Click to enlarge)

Of course, India’s energy spending is still a long way off second-place U.S. and top investor China. But the rapid rise of energy investment here shows this is an up-and-coming spot for project funding in oil and gas, and beyond.

IEA attributed India’s ascent to new government policies helping to modernize and expand the economy. Further evidence the country is “getting its act together” in becoming a true natural resource superpower.

That’s an important point of note for project developers globally. Especially given Indian firms seem to have appetite for places further out on the risk spectrum — evidenced by this week’s action in places like Lebanon and Venezuela.

As a final point of interest, the IEA study also showed that — for the first time ever — electricity passed oil and gas as the top energy sector for investment in 2016. Coming as capital spending in the global petroleum space plunged 38 percent between 2014 and 2016.

The group says however, that petro-spending should jump in 2017. Watch for Indian companies to be a big part of those deals and new projects.

Is This The First Sign Of A US-Chinese Solar War?

Authored by Gregory Brew via OilPrice.com,

After a banner year for solar power installation in the United States, reports on the progress of solar power in the first quarter of 2017 have industry advocates hopeful that renewable energy will continue to grow throughout the year, despite competition from fossil fuels, U.S. government support for traditional energy sources and resistance towards cheap imported solar panels by domestic manufacturers.

The first months of 2017 saw 2 gigawatts of photovoltaic panels added, continuing a six-quarter streak and a huge boost in solar installations that came at the end of 2016, when more than 6 GWs were installed. The growth in Q1 of 2017 marks a slight decrease of 2 percent from the level last year, but it’s still indicative of an overall growth trend, as total additions have increased year on year since 2012, according to the Solar Market Insight Report.

Out of the 2 GWs added, about a quarter came in the form of rooftop panels added in the households segment, while utilities added the bulk of new production. The non-residential solar market has increased 29 percent year-on-year.

The growth comes as costs continue to fall. The report from the Solar Energy Industries Association indicated that for the first time, utility-scale costs for power fell below $1/Watt. Solar power accounted for 30 percent of total electricity capacity added in Q1, while natural gas came in at 41 percent and wind power 27 percent.

Solar now accounts for about 2 percent of total electricity generation in the U.S., behind wind power at 6 percent and natural gas at 34 percent.

Most of the projects currently adding new solar capacity were planned some years ago, and there is some speculation that continued growth in solar power will slow due to policies undertaken by the Trump Administration, a strong advocate for conventional oil and gas. Yet the SEIA estimates that 12.6 GWs of solar power will be added in 2017, a slight decrease from 2016 but a strong indicator of growth nonetheless.

While there is wariness on the part of the industry towards the attitude of the Trump Administration, including its decision to withdraw from the Paris climate change agreement, the mood continues to be cautiously optimistic, according to a report from the Washington Post.

A potential challenge could come in the form of federal action against important solar panels.

Suniva, an Atlanta-based solar power manufacturer, has argued that imported panels at rock-bottom prices has cut into its bottom line and forced it to lay off hundreds of workers. In late May the U.S. government agreed to hear Suniva’s claims and is now mulling the possibility of a tariff on imported solar panels and modules.

Suniva filed for bankruptcy in April, and shortly thereafter applied for relief against imported competition. Such applications, filed under Section 201 of the 1974 Trade Act, are quite rare, yet the federal government has already indicated its willingness to hear the case. Should the International Trade Commission rule in favor of Suniva, prices on solar panels would return to 2012 levels, rendering many planned projects uneconomic and potentially dooming the growth of solar power in the United States.

The SEIA has come out against the case. The ITC has determined that Suniva’s grievances are representative of the entire solar industry, but SEIA has argued that this is not the case and that a ruling in Suniva’s favor would be disastrous for solar power.

A second manufacturer, SolarWorld, has joined Suniva in requesting a federal investigation of solar panel imports. Meanwhile, SQN Capital Management, Suniva’s chief creditor, has hinted that a buy-out of the company’s assets by Chinese solar panel manufacturers would settle the issue, allowing the company to rehire its former employees and remain in business.

The U.S. has alerted the World Trade Organization that it is considering tariffs against imported solar panels, with a ruling from the ITC likely to come by November 2017.

Such an act would be chiefly aimed at China, which leads the world in solar panel production and exports, and it would be an aggressive move from a federal government which has thus far utilized both protectionist rhetoric and attitudes decidedly hostile towards renewable energy.

It will take some months before the Suniva dispute has any impact. In the meantime, solar power will continue to grow in the United States, driven by low cost, high demand and rising interest in renewable energy.

Visualizing America's Changing Energy Mix

Today’s chart plots data from the Energy Information Administration (EIA) to show America’s changing energy mix, along with their projected mix for 2030.

Visual Capitalist"s Jeff Desjardins points out that it shows the total amount of energy used each year, along with energy use per capita. It then breaks down each year’s energy supply by source, which provides another way for us to visualize the decline of coal use, the resurgence in natural gas, and the rise of renewable energy.

Energy use per capita is measured in “gallons of gasoline equivalent per day”, which we thought was easy to relate to. (For our metric friends, a U.S. gallon is just less than four litres.)

Interestingly, solar and wind only make up about 2% of energy today according to the EIA, and they are projected to combine for 6% by 2030.

Various organizations have criticized these numbers, suggesting that the EIA is not properly accounting for green energy in America – and that it actually supplies a much bigger part of the energy mix.

Consumer Confidence Disappoints As Trump Hope Dips

After surging to 12-year highs in December, following Trump"s election victory, UMich consumer sentiment faded in January and missed expectations (98.1 vs 98.5 exp). While inflation outlooks picked up modestly off record lows, economic "expectations" - hope - dipped from 89.5 to 88.9 as the Trump Bump appears to have stalled.

While not quite as big a drop as Bloomberg confidence data, it appears Trumphoria is fading...

Even as inflation outlooks bounce off record lows...

On the bright side, survey respondents improved their view of it "being a good time to buy" Household Items, Homes, and Vehicles.