Wednesday, July 10, 2013

Which will end: freeloaders, traditional financing models, or both?

From a southern Ontario perspective ...
As dense Toronto suffers from blackouts due to a failure at a transmission station the province has long failed to develop appropriate redundancy for, there are pampered environmentalist claiming the problem is a lack of local distributed generation.
Which makes me wonder why you'd keep increasing the density of an increasingly vertical city if you really thought that was important... but that's not what I am posting on today.

Today I'm posting wondering if free-riding should be eliminated before flailing technologies are allowed to thoroughly disrupt existing systems.  The article cited noted the impact of solar on utilities; in the U.S. many programs for solar panels involve net metering - and where the entire cost of transmission and distribution is collected through a single rate for electricity consumption, that does allow the solar panel owner to escape fair connection charges for being on the grid.
Not that there's necessarily anything wrong with that in encouraging a new technology, but, as Severin Borenstein recently indicated, the entitled tend to become very attached to their entitlements.

In the six months since a consultant to the Edison Electric Institute wrote a paper describing “Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business,”many utility officials, analysts, investors and consultants have been mulling over how investor-owned electric utilities may have to change principally due to the growth of demand response and distributed energy, especially solar power.
Graphic from source article

At the center of the future of investor-owned utilities is this: How will regulators decide what’s in the public’s interest if the public needs less of what electric utilities provide? Are we looking at higher fixed charges for everybody connected to grid regardless of how much they use?
“The timing of such transformative changes is unclear,” wrote Peter Kind of Energy Infrastructure Advocates in his January 2013 paper for the Edison Electric Institute (EEI). “But with the potential for technological innovation becoming economically viable due to this confluence of forces, the industry and its stakeholders must proactively assess the impacts and alternatives available to address disruptive challenges in a timely manner.”
Read the entire article at The Energy Collective

The Environmental Commissioner of Ontario recently blogged enthusiastically on his department's experience with the Chevy Volt; in Driving an Electric Bargain.
A typical car is driven about 20,000 km per year. At a fuel efficiency of 10L/100km that is a cost of $2400 in gasoline versus an electricity cost of only $513 at today’s prices. Those prices could change, but I doubt if petroleum prices are going down – and even if electricity were to double it is still a bargain!
Hmmm thought I.
The Volt has a number of siblings - going by frame; the lowly Cruze, the Eco model with the more efficient engine, and a diesel model.  There are people better qualified than I to do a comparison (and the choice would depend on how much, and where, you drive), but a rudimentary check using blended mileage figures shows all would come in not too far apart not accounting for the much higher up-front cost of the Volt or trying to forecast gas prices.
Here's the thing.
The people in the cheapest version (still the cheapest 10 years of average use later) would have paid much more in fuel - and in Ontario they would have paid much, much more in excise taxes within the fuel charge.  In Ontario, fuel taxes pay for a lot of things - including roads and public transit.

It seems to me electric cars are very much like solar panels: a promising idea with an immediate impact of making freeloaders of elites.
Not that it's a problem for a few early adapters, but ... there doesn't seem to be a program for free-ride addicts to get help with their social problem.

1 comment:

  1. Simple trick to cut your electric bill up to 75%:

    Want to know how to easily produce all of the renewable energy you could ever want right at home?

    And you’ll be able to make your home completely immune from power failures, blackouts, and energy grid outages
    so even if everyone else in your area (or even the whole country) loses power…you won’t.