Category Archives: Solar Energy

Ce que signifie l’électricité à coût marginal zéro

La majeure partie de l’électricité produite dans le monde provient de la combustion du charbon ou du gaz naturel. Le nucléaire, l’hydroélectricité, l’énergie éolienne et l’énergie solaire à faibles émissions constituent le reste de la production. (J’écris ceci du Québec, où l’électricité provient principalement de l’hydroélectricité.) En d’autres termes, pour la plupart des gens dans le monde, utiliser un kilowattheure d’électricité, c’est un peu comme brûler un peu de charbon ou de gaz naturel. Mais cela change rapidement : en 2025, l’Agence internationale de l’énergie montre que la part des sources à faibles émissions se rapproche des combustibles fossiles dans la production mondiale d’électricité.

Utiliser le charbon ou le gaz naturel pour produire de l’électricité signifie que la production de chaque unité d’énergie électrique (kilowattheures ou kWh) coûte de l’argent : il faut acheter le combustible. En revanche, une caractéristique commune de l’électricité à faibles émissions est que le coût marginal de production et de livraison est pratiquement nul.

Les sources solaire, éolienne et hydroélectrique au fil de l’eau peuvent produire de l’électricité tant que le soleil, le vent ou l’écoulement de l’eau est disponible. Réduire la production ne réduit pas les coûts sociétaux.
Pour l’hydroélectricité à réservoir («?grande hydro?»), c’est un peu plus compliqué. Il n’y a pas de frais d’exploitation pour ouvrir les vannes et générer plus, et pas d’économies à fermer. Cependant, la production épuise le réservoir en amont, de sorte qu’il peut y avoir un coût d’opportunité si cette énergie pouvait être vendue à des moments différents pour un prix plus élevé. Cependant, ces centrales hydroélectriques doivent aussi maintenir un débit minimal et la gestion de plusieurs centrales le long d’un réseau fluvial nécessite des compromis, de sorte qu’elles ne sont pas entièrement pilotables. Néanmoins, les coûts marginaux d’exploitation sont nuls.
Les centrales nucléaires sont souvent conçues pour fonctionner à une puissance constante, avec des montées et baisses de puissance mesurées en jours. Certaines centrales nucléaires plus nouvelles peuvent mieux varier leur production, mais le seul coût supplémentaire est celui de l’uranium, qui est très petit. Réduire la production d’une centrale nucléaire ne réduit pas vraiment les coûts.
Enfin, les coûts du réseau de transport et de distribution sont également fixes à court terme.

Ainsi, dans un système alimenté par des sources autres que fossiles, les coûts sont constants à court terme, du moins jusqu’à sa capacité de production ou de transport. Lorsque la demande s’approche de la capacité du système, les coûts marginaux augmentent soudainement. Pour équilibrer l’offre et la demande dans un système contraint, l’opérateur du système prendra des mesures coûteuses telles que :

Démarrer des générateurs fossiles, tels que les centrales au gaz naturel, qui sont coûteuses à exploiter.
Faire appel aux batteries en réseau, achetant cette énergie à certains taux précédemment convenus.
Importer de l’électricité supplémentaire d’autres régions.
Piloter des charges contrôlables, comme la climatisation et les chauffe-eau des clients résidentiels.
Payer les grands clients industriels, comme les alumineries, pour réduire leur charge.

Ainsi, en fin de compte, un kilowattheure supplémentaire est soit «?gratuit?» (n’ajoute pas aux coûts du système), soit très coûteux (près de la capacité du système).

Cette caractéristique de tout-ou-rien soulève quelques questions pour la conception des tarifs et du marché.

Les tarifs réglementés sont conçus pour recouvrer les coûts du système, mais dans un système à faibles émissions, ils n’augmentent que pendant les périodes de pointe critiques, généralement quelques heures par an. Les tarifs de prix de pointe critiques et de remise de pointe critique peuvent donc être un meilleur signal pour les clients que les tarifs fixes selon l’heure de consommation appliqués 365 jours par an. (Les tarifs de pointe critique et les tarifs horaires peuvent être utilisés en même temps, surtout lorsque de grands générateurs non distribuables sont présents sur le système, comme en Ontario.) D’autre part, les tarifs en temps réel, qui varient constamment avec les coûts du marché, pourraient signifier que les clients sont confrontés à des prix extrêmement élevés pendant les pointes, ce qui peut conduire à l’injustice.

Dans de nombreuses régions, l’électricité est achetée et vendue dans un marché ouvert de l’énergie (mesurée en kWh, une unité d’énergie) entre les producteurs et les détaillants. Le coût marginal des générateurs fossiles fixe le prix de clôture du marché, les producteurs non émetteurs soumissionnant à zéro, sachant que tout montant supérieur à zéro est mieux que rien. Que se passe-t-il lorsqu’un système n’a que (ou presque que) des sources non émettrices?? Le prix de clôture reste à zéro la plupart du temps. Oups, ce n’est pas bon pour les affaires. Dans ces cas, un marché de capacité (mesuré en kW, une unité de puissance) peut être formé. Dans un marché de capacité, les producteurs sont payés pour la capacité potentielle qu’ils peuvent fournir pendant les périodes de pointe, que leurs actifs soient appelés ou non. Par conséquent, un plus grand nombre d’administrations compteront sur les marchés de capacité dans un avenir à faibles émissions. Une autre approche consiste à se passer entièrement des marchés et à opter pour un accord d’achat d’électricité entre une agence d’achat (ou un service public) et des producteurs d’électricité. D’autres approches mixtes peuvent également être trouvées dans le monde entier. Nous sommes encore en train d’apprendre à concevoir au mieux les marchés de l’électricité avec un réseau sans émission, et ce sujet est en évolution.

En fin de compte, attendez-vous à payer différemment pour l’électricité et les producteurs seront indemnisés différemment. Parfois, les prix de l’électricité seront moins élevés, mais parfois plus élevés qu’ils ne le sont actuellement. Cette transformation économique est similaire à certains égards à ce qui s’est passé dans les télécommunications. Il y a trente ans, nous payions pour chaque appel interurbain et chaque appel cellulaire, à des taux mesurés en dollars par minute dans le cas des appels internationaux. De nos jours, nous payons des frais fixes pour une énorme bande passante ou de grands blocs de données, et nous ne réfléchissons pas à deux fois avant de faire une vidéoconférence FaceTime avec des proches à l’étranger. Payons-nous moins pour les télécommunications?? Eh bien, pas vraiment dans l’ensemble, et c’est beaucoup plus compliqué, mais nous en obtenons beaucoup plus pour notre argent. La même chose se produira avec l’électricité.

Shortlink https://benoit.marcoux.ca/blog/ce-que-signifie-lelectricite-a-cout-marginal-zero/

What Zero Marginal Cost Electricity Means

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Most of electricity generated in the world comes from burning coal or natural gas, with low emission nuclear, hydro, wind and solar making up the rest of the generation. (I’m writing this from Québec, where electricity comes mostly from hydro.) In other words, for most people in the world, using a kilowatt-hour of electricity is a bit like burning a bit of coal or natural gas. But that’s quickly changing: in 2025, the International Energy Agency shows that the share of low-emission sources is approaching fossil fuels in global electricity generation.

Using coal or natural gas to generate electricity means that producing each unit of electric energy (kilowatt-hours or kWh) costs money: one needs to buy the fossil stuff. In contrast, a common characteristic of low-emission electricity is that the marginal cost of generation and delivery is practically zero.

Solar, wind, and run-of-river hydro may produce electricity as long as the sun, the wind or the flow of water is available. Turning off generation doesn’t reduce societal costs.
For reservoir hydro (“big hydro”), it is a bit more complicated. There’s no out-of-pocket cost to open the valves and to generate more, and no savings to turn off. However, generating depletes the upstream reservoir, so there may be an opportunity cost if this energy could be sold at different times for a higher price. However, these hydro plants must maintain minimum flow and managing multiple plants along a river system requires trade-offs, so they aren’t fully dispatchable. Still, marginal operating costs are zero.
Nuclear plants are often designed to run at a constant power, with ramp-up and ramp-down measured in days. Some newer nuclear plants can better vary their generation, but the only additional cost is that of uranium, which is very small. Reducing output of a nuclear generator doesn’t really reduce costs.
Finally, the costs of the transmission and distribution grid are also fixed in the short run.

Thus, in a system powered by non-emitting sources, costs are constant in the short run, at least up to its generation or transmission capacity. When demand gets near the system capacity, marginal costs suddenly increase. To balance supply and demand in a constrained system, the system operator will take costly measures such as:

Dispatching fossil generators, such as natural gas plants, which are costly to run.
Dispatching grid batteries, buying this power at some previously agreed to rates.
Importing additional electricity from other jurisdictions.
Dispatching controllable loads, like HVAC and water heaters for residential customers.
Paying large industrial customers, like aluminum smelters, to reduce their load.

So, in the end, an additional kilowatt-hour is either “free” (does not add to system costs) or very expensive (near system capacity).

This all-or-nothing characteristic raises a few issues for tariff and market design.

Regulated tariffs are designed to recover the system costs, which only increase during critical peaks, typically a few hours per year. Critical Peak Pricing and Critical Peak Rebate tariffs may therefore be a better signal to customers than fixed Time-Of-Use (TOU) tariffs applied 365 days a year. (Both critical peak and TOU tariffs may be used at the same time, especially when large non-dispatchable generators are present on the system, like in Ontario.) On the other hand, Real Time Pricing tariffs, which vary constantly with market costs, could mean that customers face extremely high prices during peaks, and this can lead to unfairness.

In many jurisdictions, electricity is bought and sold in an open energy market (measured in kWh, a unit of energy) between producers and retailers. The marginal cost of fossil generators set the closing energy market price, with non-emitting producers bidding at zero, knowing that any closing amount above zero is better than nothing. What happens when a system has only (or mostly) non-emitting sources? The closing price remains at zero most of the time. Oops, that’s not good for business. In those cases, a capacity market (measured in kW, a unit of power) may be formed. In a capacity market, producers are paid for the potential capacity they can provide during peaks whether or not their assets are called upon. Hence, more jurisdictions will rely on capacity markets in a low-emission future. Another approach is to get away with markets entirely and go with power purchase agreement between a purchasing agency (or utility) and power producers. Other, mixed approaches may also be found around the world. We are still learning how to best design electricity markets with a non-emitting grid, and this topic is ongoing.

In the end, expect to pay differently for electricity and producers will be compensated differently. At times, electricity prices will be less, but sometime higher, than they are now. This economic transformation is similar in some ways to what happened in telecommunications. Thirty years ago, we paid for each long-distance calls and cell calls, at rates measured in dollars per minute in the case of international calls. Nowadays, we pay a flat fee for the huge bandwidth or large data blocks, and we don’t think twice before doing a FaceTime videoconference with loved ones overseas. Do we pay less for telecom? Well, not really overall, and it’s a lot more complicated, but we get much more out of our money. The same thing will happen with electricity.

Shortlink https://benoit.marcoux.ca/blog/what-zero-marginal-cost-electricity-means/

How Not-to-Succeed in the Next Decade of Energy Transition

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The 2020s promise to be a momentous time for the electricity industry, and I wanted to take some time to reflect on what businesses might need to succeed through the energy industry transition. I might have a privileged perspective on this, having worked with utilities, vendors and investors, first in the IT and telecom industries as they went through their transitions, and then mostly in the electricity industry for the last 20 years. This does not mean that I can’t be wrong (I know – I’ve been wrong many times), but perhaps my views will help others be right.

I’ve structured this post as a series of “don’ts”, based in part on actual IT and telecom examples that I’ve lived through – I’ve put these examples in italic, but I left the names out to protect the innocents. I found that many businesses have short-term views that lead them down dead-end paths, and I might be more useful in showing known pitfalls than trying to predict the future.

Don’t Fight a Declining Cost Curve

The IT, telecom and, now, electricity industries are all seeing declining cost curves. The best known one is Moore’s Law, the observation that the density of integrated circuits (and hence the cost of computing) halves every 2 years. Moore’s Law is nearly 60 years old and still strong. It gave us iPhones more powerful now than supercomputers of a generation ago, even though my iPhone ends up in my pocket most of the time, doing nothing. These days, the electricity industry sees the cost of wind and solar energy as well as that of electricity storage dropping at a rate of 10% to 20% per year, with no end in sight.^[i]

In IT, telecom and, now, electricity, this also leads toward zero marginal cost, the situation where producing an additional unit (a Google search, a FaceTime call or a kWh) costs nothing (or almost nothing).

During the IT and telecom transitions, many startups proposed solutions to optimize the use of (still) expensive information processing assets. Some sought to extend the life of previous generations of equipment (like a PBX) by adding some intelligence to it (a virtual attendant), while others were dependent on a price point (like dollars per minutes for overseas calls) that simply collapsed (calls are essentially free now).

If your business case depends on the cost of energy or the cost of storage remaining where they are, ask yourself, what if the cost goes down 50%? That’s only 3 years of decline at 20%/year. After 10 years, costs will be only 10% of what they are now. Can you survive with near-zero marginal costs? If your solution aims to optimize capital costs, will it matter in a few years? Or, will people just do as they do now, with a do-nothing iPhone supercomputer in their pocket?

Don’t Think That Transition Will Go 2% a Year Over 50 Years

Phone companies were depreciating their copper wires and switches over decades. Phone utilities were highly regarded companies, imbued with a duty for public service and providing lifelong employment to their loyal employees. Service was considered inflexible, but everyone could afford a local line, which was cross subsidized by expensive long-distance calls and business lines. Things were simple and predictable.

In 1980, McKinsey & Company was commissioned by AT&T (whose Bell Labs had invented cellular telephony) to forecast cell phone penetration in the U.S. by 2000. The consultant predicted 900,000 cell phone subscribers in 2000 – the actual figure is 109,000,000. Based on this legendary mistake, AT&T decided there was not much future to these toys. A decade later, AT&T had to acquire McCaw Cellular for $12.6 Billion.^[ii]

In 1998, I was operating the largest international IP telephony network in the world, although it was bleeding edge and tiny in comparison to AT&T and other large traditional carriers. Traditional carriers were waiting for IP telephony to fail, as the sound quality was poor, it was not efficiently using the available bandwidth, it was illegal in many countries, etc. The history did not play out as expected. In 2003, Skype was launched, the iPhone, in 2006. Today, you can’t make a phone call anymore that is not IP somewhere along its path.

I’m seeing the same lack of vision in energy industry. For example, the International Energy Agency (IEA) is famous for being wrong, year after year, in lowballing the rise of solar and wind energy in its scenarios.^[iii]

Another example is the rise of electric vehicles. There are about 77 million light-duty vehicles sold in the world, and this number is flat or slightly declining.^[iv] Of these, about 2 million electric vehicles were sold in 2019, but the number of EVs sold in increasing 50% every year.^[v] In other words, the number of internal combustion vehicles is clearly decreasing and the growth is only coming from EVs. Looking at their dashboards, car manufacturers are quickly reducing their investment in developing internal combustion vehicles, especially engines.^[vi] Disinvestment in upstream activity means that internal combustion vehicles will fall behind newer EVs and become less and less appealing. It won’t take 50 years for most light-duty vehicles to be electric – a decade, perhaps.

Don’t Count on Regulatory Barriers for Protection

Telecom carriers fought deregulation and competition, teeth and nails. Back in the 1950s, AT&T went to the US supreme court to prevent customer from using a plastic attachment on the mouthpiece of telephones to increase call privacy – it was called Hush-A-Phone. AT&T owned the telephones and forbid customers from using Hush-A-Phone. However, AT&T lost the court battle, and Hush-A-Phone was sold legally from then on. This landmark decision is seen as the start of telecom deregulation in North America.

The IP telephony network that I mentioned earlier was indeed illegal in some of the countries we operated in. It didn’t matter. We had plenty of partners willing to bypass local monopolies, even if illegal in their countries, and customers willing to make cheaper international calls, even if the quality was not always so great.

Regulatory barriers are only as strong as policy-makers make them. When constituents see an opportunity to save money or simply have choice, they pressure the policy-makers to change the rules – or elect new ones more attuned to moods of consumers. It’s just a matter of time.

Don’t Take Customers Nor Suppliers for Granted

In 1997, at a time when cellular phones were still a luxury and the Internet was still a novelty, an Angus-Reid survey of the Canadian public put Bell Canada #2 among most admired corporations in Canada^[vii], and it had been among the most trusted companies in Canada for decades. Yet, in 2017, Bell Canada ranked #291 in a University of Victoria brand trust survey^[viii]. People love their Apple or Samsung phones, are addicted to Facebook to stay in touch with friends, naturally turn to Google for any question, and use Microsoft Skype to see remote family members, but they now mostly hate their phone company.

Obviously, Bell is still around and making money, but one can only wonder how things could have been if Bell had played its hand differently. (In 1997, none of iPhones, Facebook, Google and Skype existed).

Suppliers to electric utilities should also listen to this lesson. Northern Telecom (Nortel), AT&T Bell Labs and Alcatel were among the large traditional equipment vendors to telephone utilities. However, a startup was founded in 1984, designing routing equipment for IT networks used in university networks. Over the years, it expanded into all sorts of datacom and telecom equipment – all telecom companies eventually standardized on this new vendor. Northern Telecom and the others went bankrupt or were merged and acquired to the point they could not be recognized. In the process, some telephone companies were left with unserviceable hardware.

This startup company is called Cisco Systems and is now the largest telecom vendor in the world.

The same pattern is playing out in electricity. On one hand, you have many utilities that do not understand that many customers want choice. On the other hand, you have vendors, like GE and ABB, that are in turmoil.

Will you be the future Google or Cisco of electricity? Or the next Nortel?

Don’t Follow the Herd

Full disclosure: I’m a career business consultant. Caveat Emptor.

The reason for this disclosure is that consultants are great at announcing bold trends that often do not pan out. There is a great herd mentality among consultants, and it carries over to their customers.

Twenty years ago, one of my clients was one of the early Application Service Providers, a business concept where small businesses could access shared personal computer applications over the Internet. The idea was to reduce the cost of maintaining software installed in PCs and to reduce the hardware requirements of PCs. This client was unknowingly fighting the declining cost curve of computers. It went bankrupt (and my last invoices were not paid).

The concept of application service providers was heavily promoted by consultancies like Gartner, who presented it as the future of business computing. I guess that Microsoft disagreed.

I see similar fast-fashion concepts going through the electricity industry. Walking the floor at the Distributech Conference in 2018, it was all about microgrids. In 2019, it was distributed energy resources. We will see what will be fashionable in January 2020.

My recommendation when you hear the same concept over and over again is asking yourself: is this a real trend or am I in an echo chamber? With many new consultants flocking to the electric utility industry – I call them tourists – , you can hear many concepts that are taken for truth but really too complex to be implemented or unlikely in the fragmented regulatory environment that we have.

Closing Thoughts

In the end, keep cool: sound engineering, good economics and great customer service will always win.

Which leads me to offer you this quote:

If I’ve heard correctly, all of you can see ahead to what the future holds but your knowledge of the present is not clear.
—DANTE, Inferno, Canto X

All this being said, have a great Holiday season and see you soon in 2020!

^[i] See this previous blog posts, http://benoit.marcoux.ca/blog/lower-and-lower-energy-prices-from-wind-and-solar-pv/, for an in-depth discussion of cost decline in wind and solar energy, accessed 20191220.

^[ii] See https://skeptics.stackexchange.com/questions/38716/did-mckinsey-co-tell-att-there-was-no-market-for-mobile-phones, accessed 20191220.

^[iii] See this previous blog post, http://benoit.marcoux.ca/blog/wind-and-solar-pv-defied-expectations/, for a chart of how wrong the IEA has been, accessed 20191220.

^[iv] See https://www.statista.com/statistics/200002/international-car-sales-since-1990/, accessed 20191220.

^[v] See https://www.iea.org/reports/global-ev-outlook-2019 and http://www.ev-volumes.com/country/total-world-plug-in-vehicle-volumes/, accessed 20191220.

^[vi] See https://www.linkedin.com/posts/bmarcoux_daimler-stops-developing-internal-combustion-activity-6580481304071065600-vRK8, accessed 20191220.

^[vii] The Fourth Annual “Canada’s Most Respected Corporations” Survey, Angus Reid Group, Inc., 1998, page 5.

^[viii] The Gustavson Brand Trust Index, Peter B. Gustavson School of Business, University of Victoria, 2017.

Shortlink https://benoit.marcoux.ca/blog/how-not-to-succeed-in-the-next-decade-of-energy-transition/

Energy Is Cheap; Power Is Valuable

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For a while now, I have been saying that we are entering a world where energy (kWh) is cheap, thanks to dropping solar and wind costs, but power (kW) is expensive, needed as it is to balance renewables and peaking new uses, such as electric vehicle charging.^[i]

There are not a lot of empirical evidence of this phenomenon, but Ontario offers one.

In 2005, Ontario decided to move to a “hybrid” deregulated generation market, with a “Global Adjustment” (GA) charge on customer electricity bill that is used to cover the difference between the energy market price (¢/kWh) and rates paid to regulated and contracted generators for providing capacity (kW). The energy market price was intended to reflect the marginal cost of production, with contracts meant to compensate fixed capacity costs. Over time, as contract volumes increased, more and more of the costs of generation became charged through capacity contracting rather than through energy market revenues. In addition, a significant number of zero marginal cost bidders (essentially renewables) were built, further depressing market revenues. As the chart below indicates, a growing portion of generator payments shifted from the energy market onto capacity contracts, which were then charged to customers through the Global Adjustment.^[ii]

This is for Ontario, with its peculiar market structure. However, with the advent of renewables and increasing electrification of the economy, we will see the same trend across the world: the capacity-driven cost of the grid will be exposed. The underlying trend is:

Energy, in kWh or MWh, will get very cheap.

Power, in kW or MW, will be very valuable.

For stakeholders in the industry, it means that economic value will be created with services and tools that help manage power, such as shifting peaks. If you own a generation source with non-zero marginal costs and cannot play on a capacity market, you’re in trouble.

If you think that this is sort of crazy, think about what happened in the telecom market over the last couple of decades. It used to be that local phone connections were relatively cheap, but long-distance phone calls were extremely expensive (dollars per minute for some international calls). Nowadays, long-distance calls are effectively free, thanks to Skype and FaceTime, with video as a bonus. However, Internet access is expensive.

How will this affect your business?

^[i] See my 2018 posts, http://benoit.marcoux.ca/blog/cea-tigers-den-workshop/and http://benoit.marcoux.ca/blog/a-perspective-on-canadas-electricity-industry-in-2030/.

^[ii] Data for this chart was extracted from http://www.ieso.ca/en/Corporate-IESO/Media/Year-End-Data. Contact me is you want the underlying numbers.

Shortlink https://benoit.marcoux.ca/blog/energy-is-cheap-power-is-valuable/

“The Shocking Business of Electricity”: A Short Lecture to McGill Business Students

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Today, I am grateful to have been able to present some aspects of the electricity business to business students at McGill University, where I did my MBA many years ago. It was great fun.

Here is the short deck that I presented.

Mcgill University 20190227

Shortlink https://benoit.marcoux.ca/blog/the-shocking-business-of-electricity-a-short-lecture-to-mcgill-business-students/

A Perspective on Canada’s Electricity Industry in 2030

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I wrote this piece with my friend Denis Chartrand as a companion document for my CEA presentation back in February 2018 (See http://benoit.marcoux.ca/blog/cea-tigers-den-workshop/) but I now realize that I never published it. So, here it is!

Canada Electricity Industry 2030 20180221

Shortlink https://benoit.marcoux.ca/blog/a-perspective-on-canadas-electricity-industry-in-2030/

Barbarians at the Gate (or: How to Stop Worrying and Love Your Customers)

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This mouthful title was the title of my presentation today at the Smart Grid Canada conference in Montréal.

As usual, it is written in my somewhat funky style and provocative, but was well received.

Let me know what you think!

SGC20180912 BMarcoux

Shortlink https://benoit.marcoux.ca/blog/barbarians-at-the-gate/

Lower and Lower Energy Prices from Wind and Solar PV

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Reduction in installed costs and operation costs (per kW or MW – see http://benoit.marcoux.ca/blog/the-costs-of-wind-and-solar-pv-systems-are-down-way-down/), coupled with free “fuel” converted into electricity at increasing efficiency, translate directly into lower and lower cost of energy (kWh or MWh). The dropping cost of wind and solar energy can be followed in 2 ways. First, analysts compute the costs over the expected life of a plant, estimate energy production and allocate a fair return for owners to come up with the Levelized Cost Of Energy (LCOE). Second, real-life auctions leading to long-term Power Purchase Agreements (PPA) from utility-scale plants provide actual price data.

At the global level, the International Renewable Energy Agency (IRENA) has built a Renewable Cost Database containing the project level details for almost 15,000 utility-scale renewable power generation projects around the world, from large GW-scale hydropower projects to small solar PV projects, down to 1 MW. IRENA also has an Auctions Database which tracks the results of competitive procurement of renewable power generation capacity that are in the public domain. The Auctions Database currently contains auction results for around 7,000 projects, totaling 293 GW. Figure 1 shows the LCOE and auction data for onshore wind and solar PV, illustrating the sharp decline in the cost of electricity experienced from 2010 to 2017, and signaling prices for 2020 from auction data. Auctions are particularly useful to estimate cost trends in the near future. In essence, just like computer designers are forward-pricing based on Moore’s Law, wind and solar PV developers are forward-pricing installed costs for up to 3 years.

Figure 1 Global levelized cost of electricity and auction price show downward trends for utility-scale onshore wind and solar PV.[i]

Based on LCOE, the average cost of electricity from onshore wind fell by 23% from 2010 to 2017. Based on auction price, we can expect the average cost of electricity from onshore wind farms to decline a further 17% by 2020, to US4.7¢ per kWh. Overall, from 2010 to 2020, the cost of electricity from onshore wind has seen an average reduction of almost 6% per year, or 55% per decade.

Based on LCOE, the average cost of electricity from utility-scale solar PV fell by 73% from 2010 to 2017. Looking forward with auction prices, we can expect the average cost of electricity from utility-scale solar PV to decline a further 47% by 2019, to US4.7¢ per kWh. From 2010 to 2019, the cost of electricity from utility-scale solar PV has seen an average reduction of 20% per year, or 87% per decade.

By 2019 or 2020, the best onshore wind and solar PV projects will be delivering electricity for less than 2¢ or 3¢ per kWh, as shown by the record-low auction prices for solar PV in Dubai, Mexico, Peru, Chile and Saudi Arabia.[ii]This is not missed by leading industry executives. During the January 2018 investor call, Jim Robo, Chairman and Chief Executive Officer of NextEra Energy, noted:

“[Without] incentives, early in the next decade wind is going to be a 2 to 2.5 cent per [kWh] product.”
“By early in the next decade, as further cost declines are realized, and module efficiencies continue to improve, we expect that without incentives solar pricing will be 3 to 4 cents per [kWh], below the variable costs required to operate an existing coal or nuclear generating facility of 3.5 to 5 cents per [kWh].”[iii]

This executive is saying that generating energy from wind and solar PV will cost less than just burning fuel in existing plants.

Even in Canada?

In December 2017, the Government of Alberta announced the results of its Renewable Electricity Program, for nearly 600 MW of wind generation to be operational in 2019, at prices ranging from 3.09¢ to 4.33¢ per kWh, setting a new record in Canada.[iv]Those wind farms will be located in Southern Alberta, where the onshore wind resources are the best in Canada.

Already now, and increasingly in coming years, some wind and solar PV power generation projects can undercut fossil fuel-fired electricity generation, without financial incentives, and this is coming to Canada very quickly.

Global averages do not reflect the broad variation in the quality of solar or wind resources at any given location. For example, Figure 11shows the LCOE in 3 U.S. cities for utility-scale solar PV: Phoenix, AZ (a southern high-insolation area), Kansas City, MO (an average city in the U.S.), and New York, NY (typical of the North-East). A utility-scale solar PV plant in a high-insolation area like Phoenix can produce electricity for approximately 30% less than a plant in New York. However, all geographies have seen a decline in the cost of generation. Given the average decline of 20% per year, costs in New York are about 18 months behind costs in Phoenix.

Figure 2 Cost of electricity generated from utility-scale (one-axis tracking) solar PV increases at higher latitudes[v]

Cities with better isolation can be expected to have better solar PV capacity factor, and this is true when comparing U.S. and Canadian cities, as shown in Table 1.

Table 1 Approximate annual generation of a 100-MW tracking solar PV systems in various North American cities[vi]

City	Annual generation in MWh for a 100-MW system	% vs. Phoenix

Phoenix, AZ	219,000	100%
Kansas City, MO	173,000	79%
New York, NY	153,000	70%

Lethbridge, AB	189,000	86%
Calgary, AB	182,000	83%
Montréal, QC	146,000	67%
Toronto, ON	144,000	66%
Halifax, NS	145,000	66%
Vancouver, BC	135,000	62%

Based on this table, utility-scale tracking solar PV system in Southern Canada generates approximately 62% to 86% of the electricity generated by a similar system in Phoenix, AZ. Southern Alberta has the best solar resources in Canada, above the U.S. average (represented here by Kansas City, MO).[vii]Given that cost of electricity from utility-scale solar PV sees an average reduction of 20% per year, the large Canadian cities are just 1 to 2 years behind Phoenix.

The annual generation stated in Table 1does not reflect diurnal and seasonal variations in output. After all, the sun does not always shine, nor does the wind always blow. A combination of dispatchable generation, transmission networks, demand management programs and energy storage is required to balance the grid, including the variability of wind and solar generation. However, it is interesting to note that the wind and solar resources in Canada are quite complimentary:

Geographically, the onshore wind resources are better at higher latitudes, while the solar resources are better in Southern Canada.[viii]
In Southern Canada, Alberta and Saskatchewan offer the best onshore wind and solar resources.
Offshore wind is available on the Pacific Coast (British Columbia), on the Atlantic Coast (Maritimes provinces and NF&L), on the Great Lakes (Ontario) and Lake Winnipeg (Manitoba).
Hydroelectric potential is greatest in Québec and Manitoba.
Across Canada, wind resources are, on average, better in the winter, while the solar resources are better in the summer. There is also some hourly complementarity between wind and solar potential.[ix]

References:

[i] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, Figure 2.12, p. 50.

[ii] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, p. 19-20.

[iii] http://www.investor.nexteraenergypartners.com/phoenix.zhtml?c=253465&p=earningsRelease, accessed 20180130.

[iv] https://www.aeso.ca/market/renewable-electricity-program/rep-round-1-results, accessed 20180128.

[v] U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017, National Renewable energy laboratory, Figure ES-3.

[vi] http://pvwatts.nrel.gov/index.php, accessed 20180129, and author’s calculations.

[vii] Calgary is the sunniest of Canada’s largest cities and Edmonton is the third-sunniest. Perhaps surprisingly, Alberta enjoys a much better solar resource than Germany, an early leader in solar PV.

[viii] See the The Atlas of Canada – Clean Energy Resources and Projects (CERP), http://atlas.gc.ca/cerp-rpep/en/, accessed 20180129, for the wind and solar energy resource potential in Canada.

[ix] Energy Watch Group, Global Energy System Based on 100% Renewable Energy – Power Sector: Canada, Lappeenranta University of Technology, 2017, p. 5.

Shortlink https://benoit.marcoux.ca/blog/lower-and-lower-energy-prices-from-wind-and-solar-pv/

The Costs of Wind and Solar PV Systems Are Down – Way Down

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Summary:

Insight 1
Utility-scale solar PV costs are dropping ~20% a year (including solar panels, inverters, balance-of-system, installation, and operations) while panel efficiency is improving. Solar is the renewable sector with the most patents, promising further improvements.

Insight 2
Onshore wind costs are dropping ~6% a year, and onshore wind is currently the least expensive new generation source. Wind turbine technology continues to improve through a combination of taller towers and wider rotor diameters.

Insight 3
Prices are below 2¢/kWh (unsubsidized) for projects auctioned to be delivered in 2019 and 2020. Continuing cost drivers include: larger-scale manufacturing in low-cost locations, tighter integration, higher performance, larger farms with better economy of scale, repowering of old sites with good wind or solar resources, and automation of operations.

Insight 4
The cost reduction curve of commercial solar PV over time is about two years behind the cost curve of utility-scale solar farms. Residential is two years behind commercial. Southern Alberta and Saskatchewan have the best solar resource in Canada, one year behind Southern United States. The rest of Southern Canada is just another year behind.

The rate of cost reduction in wind and solar PV systems has been wholly impressive. Solar PV modules are 20% of the cost they were in 2010. Wind turbine prices have fallen by around half over a similar period, depending on the market. Costs are dropping so quickly that some governments feel compelled to protect fossil generators. For example, in 2017, there was a bill in front of the Wyoming State Legislature to tax renewables in order to favor local coal producers. The bill went nowhere, but you know that you are onto something when it is being taxed.[i] Similarly, the U.S. Department of Energy attempted to protect coal and nuclear producers in the name of keeping power grids dependable, but this was eventually rejected by the Federal Energy Regulatory Commission in early 2018.[ii]

Spurred by a global competitive race sponsored by states and large corporations, a confluence of performance improvements, supply chain efficiencies and business innovations is driving cost reduction trends for renewables, with effects that will only grow in magnitude in 2018 and beyond.

Figure 1 A confluence of performance improvements, supply chain efficiencies and business innovations is driving cost reduction trends for renewables

Performance improvements

The last decade has seen a string of innovations and inventions for renewable energy technology. The large number of patents issued is a measure of the level of innovation, and, perhaps surprisingly, China has become the leading innovator by this measure. From 2000 to 2016, over 575,000 patents were filed for renewable energy:[iii]

Half of them since 2010.
55% were for solar energy and 20% for wind energy. Hydropower, a mainstay of Canadian Utilities, accounted for just 6% of patents.
Greater China (including Hong Kong and Taipei) accounted for almost a third of patents, well ahead of second-place United States at 18%. Canada has less than 1.5% of those patents.

Technology improvements primarily aim at raising the capacity factor, generating more energy from available resources, and reducing installations, operating and maintenance costs.

For example, in the last decade, the efficiency of solar PV panel went from about 12% to a range of 18.8-23.5%. By 2424, industry expectations place the range at 19.8-25%.[iv] Increased use of sun tracking for utility-scale plants and improvements in inverter losses are also contributing to the improvement of the capacity factor of solar PV systems, with utility-scale PV systems increasing from an average of 13.7% to 17.6% (see Figure 2).[v]

For wind power, higher hub heights allow turbines to access higher wind speeds[vi], with each additional meter of hub height added to a wind turbine increasing the annual energy yield by 0.5 to 1 percent[vii]. Average rotor diameter and nameplate capacity (in MW) have also significantly increased since 2010[viii]. Offshore installations allow even larger turbines, with the 9.5 MW Vestas V164 currently holding the world record[ix] and General Electric developing an even larger Haliade-X 12 MW model[x]. As the market for wind turbines expands, manufacturers are also offering a broader range of models to allow developers to choose the best models for the site constraints they are facing (e.g., strong winds, light winds, wind variability, setting issues, etc.).[xi] All this contributes to better wind capacity factor: average capacity factor for onshore wind plants increased from around 20% in 1983 to around 29% in 2017, with average capacity factor for newly commissioned offshore plants routinely reaching 40% (see Figure 2)[xii], with a new offshore floating wind farm, Hywind Scotland, achieving a 65% capacity factor from November 2017 through January 2018.[xiii]

Figure 2 Capacity factors of newly commissioned systems have increased since 2010.[xiv]

Supply chain efficiency gains

As the market for renewable power generation systems expands, the industry sees increasing economies of scale in manufacturing, better vertical integration of manufacturers and consolidation among manufacturers, all fueled by a more competitive global supply chain. Again, China stands as a model, for example creating the largest power company by combining Shenhua Group and China Guodian. Groups such as this are active as foreign investment agents of China, using Chinese wind turbines and solar panels, along with Chinese engineering expertise, to develop renewable wind and solar plants across the world.

With larger scale operations, manufacturers are introducing process improvements that reduce material and labor needs, while reducing overhead. The supply chain gets more and more optimized with product better adapted to local markets and resource conditions.

As a result of these efficiencies and a robust international competitive environment for developers, the installed costs of utility-scale solar PV projects fell by 68% between 2010 and 2017. Installed costs for onshore wind projects fell by 20%. For offshore wind, the total installed costs fell by 2%.

Figure 3 Installed costs have come down since 2010, on average 20%/year for solar PV.[xv]

It is striking that wind and solar PV costs went down so much while efficiency went up at the same time.

For wind electricity generation, installed cost reductions have been driven by declines in turbine prices which, which fell from a range U.S.$1,600-2,000/kW in 2008 to U.S.$800-1,100/kW for recent turbine orders.[xvi] In 2017, one developer saw a 30% reduction in turbine costs and foresees another 10% decline per year through 2020.[xvii] Even as price went down, the profitability of turbine manufacturers has generally rebounded since 2012,[xviii] with the price declines explained by turbine scale, offshoring of key components by European manufacturers and the rise of Chinese manufacturers[xix]. As a result of cost decline and the greater efficiency of new turbines, repowering old wind farms with new turbines is gaining traction.[xx]

Figure 4 compares the reduction in solar PV installed costs for utility scale (100 MW), commercial (200 kW) and residential solar PV (5.7 kW) in the U.S. market, from 2010 to 2017. Overall, the costs of utility scale have declined 20% per year on average since 2010, while the costs of residential and commercial U.S. systems have declined about 14% per year on average. As of 2017, residential installed costs are 2.5 times higher than utility-scale solar PV; commercial installed costs are in the middle, at 1.8 times. However, in order to appreciate the scale of the reduction, note that the installed costs of residential systems in 2017 are at about the same level as utility scale in 2012 or 2013 – a 4-year lag. Commercial costs are less than 2 years behind utility-scale costs. It only took a couple of years for the cost structure of residential and commercial systems to catch up with utility-scale systems that are orders of magnitude larger! With the efficiency due to the economy of scale up the supply chain, the economy of scale of the PV systems themselves is quickly collapsing. This opens the door for smaller, distributed solar PV systems to have a positive business case.

Installed cost reductions happened in all components of systems, including solar panels, inverters, structural and electrical components, install labor, and even customer acquisition or marketing. However, the cost reductions of solar panels were the largest ones. This was driven by Chinese solar manufacturers, who accounted for about 60% of global solar cell production in 2016.[xxi] China’s dominance in solar manufacturing does not come at the expense of quality, with seven of the top ten largest high-quality manufacturers supplying the U.S. residential market being Chinese.[xxii] Manufacturing capacity expansion increased in 2017, with China accounting for 70% of the expansion.[xxiii]

Figure 4 Installed costs of solar PV came down across all market segments in the U.S., with commercial and residential costs only 2 to 4 years behind utility scale.[xxiv]

The installed cost reduction of solar PV systems in the U.S. was partly driven by the reduction in solar PV module prices since 2010. Balance of system costs have also fallen, but not to the same extent (see Figure 5). Commercial systems are still relatively custom designs, with relatively high engineering, construction and developer overhead. Residential systems are a retail market, with higher supply chain, marketing, overhead and profit margins than the business-to-business markets. Furthermore, the cost of residential and commercial solar PV system in the U.S. is higher than many other countries. As an example, the installed costs of residential solar PV in Germany were around 37% of those in California in 2016[xxv] and the analysis suggests that there are significant opportunities to reduce the gap, if the right policies are put in place. Another study blames very high overhead in the U.S. for the high cost of residential systems.[xxvi] As the electrical code is adapted and permitting streamlined, this study suggests that residential costs will come down in the U.S.

Figure 5 Installed costs of solar PV came down across all market segments in the U.S., but soft costs remain high in the residential and commercial markets.[xxvii]

Business innovations

On the backdrop of improving performance and supply chain efficiencies, business models, commercial and operating innovation are perhaps the most significant cost reduction factors for developers and operators.

First, experienced international project developers, especially from Europe and China, have developed standardized approaches to project evaluation and construction, minimizing project development risks. These firms are now looking for international opportunities as that some of their home markets are slowing. These firms are generally subsidiaries of large groups, like EDF and Shenhua (the world’s largest wind power developer), with access to low cost of capital. Chinese solar module manufacturers continue to feature strongly in overseas solar generation projects. In 2017, Chinese companies took part in projects across Asia, Latin America, Australia, and Africa. No doubt that operating in cost-sensitive and low-skill developing countries in forcing Chinese developers to innovate even more, probably with the idea to bring those innovations in developed countries later.

Second, competitive procurement get a large number of experienced medium- and large-scale developers competing to develop projects, worldwide. The relatively low barriers to entry also put smaller local players into play. The resulting purchase agreements set the price of energy for typically 20 years, adding predictability to developers’ business case, and driving costs further down than the favorable feed-in tariffs initially used in many jurisdictions (like Ontario).

Thirdly, optimized operational practices and the use of real-time and big data analytics at an increasingly granular level enable predictive maintenance to reduce ongoing costs and generation loss from downtime.[xxviii] For example, new PV panels have built-in diagnostic tools accessible remotely via monitoring software. New wind and solar farms are being designed with serviceability in mind to minimize ongoing operation and maintenance costs. Benchmarking performance and digital twins with advance analytics allow operators to identify areas of improvement. Drones do aerial thermography to identify hotspots while robots clean panels and mow grass. All these tools clearly reflect the increasing maturity of renewable power generation technologies.

[i] http://www.forbes.com/sites/williampentland/2017/01/18/wyoming-considers-de-facto-prohibition-on-solar-and-wind-energy/, accessed 20180118.

[ii] https://www.bloomberg.com/news/articles/2018-01-08/perry-plan-to-help-coal-nuclear-plants-rejected-by-regulators, accessed 20180118.

[iii] International Renewable Energy Agency (IRENA), INSPIRE database, http://inspire.irena.org/Pages/patents/Patents-Search.aspx, accessed 20180121.

[iv] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, pp. 59-61.

[v] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, p. 66.

[vi] Wind power in an open-air stream is proportional to the third power of the wind speed. Thus, a wind speed 10% higher means 33% more available power, all other things being equal.

[vii] http://www.mbrenewables.com/en/world-record-for-energy-transition/, accessed 20180121.

[viii] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, p. 91.

[ix] http://www.mhivestasoffshore.com/worlds-most-powerful-available-wind-turbine-gets-major-power-boost/, accessed 20180121.

[x] https://www.reuters.com/article/us-ge-windpower-france/ge-to-develop-worlds-largest-wind-turbine-in-france-idUSKCN1GD5GW, accessed 20180310.

[xi] General Electric, Siemens and Vestas have all roughly doubled the number of offerings in their portfolio since 2010, with each now offering over 20 models. See Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, p. 90.

[xii] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, pp. 102-103.

[xiii] https://www.statoil.com/en/news/15feb2018-world-class-performance.html, accessed 20180310.

[xiv] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, pp. 42-47.

[xv] Renewable Power Generation Costs in 2017, International Renewable Energy Agency, 2018, pp. 42-47.

[xvi] 2016 Wind Technologies Market Report: Summary, Lawrence Berkley National Laboratory, U.S. Department of Energy, p. 43.

[xvii] http://www.investor.nexteraenergypartners.com/phoenix.zhtml?c=253465&p=earningsRelease, accessed 20180130.

[xviii] 2016 Wind Technologies Market Report: Summary, Lawrence Berkley National Laboratory, U.S. Department of Energy, p. 18.

[xix] Globally, Vestas, GE, and Goldwind were the top suppliers in 2016, with Chinese suppliers however occupying 4 of the top 10 spots in the global ranking, based almost entirely on sales within their domestic market.

[xx] https://www.eia.gov/todayinenergy/detail.php?id=33632, accessed 20180202.

[xxi] IEA Renewables 2017: Analysis and Forecasts to 2022.

[xxii] http://news.energysage.com/best-solar-panel-manufacturers-usa/, accessed ???.

[xxiii] China 2017 Review, Institute for Energy Economics and Financial Analysis (IFEEA), p. 3.

[xxiv] U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017, National Renewable Energy Laboratory, Figures ES-1.

[xxv] The Power to Change: Solar and Wind Cost Reduction Potential to 2025, International Renewable Energy Agency, 2016, p. 11.

[xxvi] https://www.greentechmedia.com/articles/read/how-to-halve-the-cost-of-residential-solar-in-the-us?utm_source=Solar&utm_medium=email&utm_campaign=GTMSolar#gs.UscExbA, accessed 20180131. This study shows that the cost per watt in US$3.25 in the US and US$1.34 in Australia.

[xxvii] U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017, National Renewable Energy Laboratory, Figures ES-1.

[xxviii] https://www.bloomberg.com/news/articles/2018-01-12/buffett-s-squeezing-more-power-out-of-wind-with-this-software, accessed 20180120.

Shortlink https://benoit.marcoux.ca/blog/the-costs-of-wind-and-solar-pv-systems-are-down-way-down/

Wind and Solar PV Are Becoming a Chinese Story

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In 2015, China became world’s largest producer of photovoltaic power, and this is clearly a policy enshrined in the 13th five-year plan (2016-2020).[i] This plan calls to increase installed wind power capacity to 210 GW and solar PV capacity to 105 GW by 2020 – about a third more than in 2016, although developers’ enthusiasm means that the solar PV 2020 objective will be achieved in 2018, given 34 GW added in 2016 and 54 GW in 2017 – more than the rest of the world combined. To put this 54 GW in context, it is a third more that the nameplate capacity of the electricity producers in the province of Québec.[ii] However, contrary to what happened in Europe, China’s policy followed the initial price reduction in wind and solar power. If Europe lit the renewable fire some time ago, China now fuels it.

Figure 1 The growth of wind and solar PV capacity saw Europe leading in early years, but China is now the main source of growth.[iii]

China now dominates new installed capacity for wind and solar PV, and this keen interest is enshrined in its 5-year plans – China will continue to have the largest share for years to come.

You may have noticed how small wind and solar PV capacities are in Canada in comparison to the rest of the world – just 12 GW for wind and 3 GW for solar PV, and barely visible in Figure 3. Canada is a small player for wind and solar PV. The rest of the world adds as much wind and solar PV capacity per year as the entire electricity generation capacity currently installed in Canada, all sources combined.

While new generation capacity from wind and solar is being installed at an increasing rate, investments have been essentially flat since 2011, compressed by dropping unit costs:[iv]

Figure 2 While new generation capacity from wind and solar is being installed at an increasing rate, investments have been essentially flat since 2011.

With lower unit costs per MW, developers can install more capacity for a given investment. This phenomenon can be expected if wind and solar technologies follow a pattern like Moore’s Law – we are not paying more for a computer than we did years ago, we are just getting more for the same price (or even lower price).

This flat 2011-2017 trend also masks major difference across the world: China’s new wind and solar investments went from $42B in 2011 to $123B in 2017 – almost half of global investments. Conversely, European investments went down in the same period, while North America was relatively flat. Canada’s investments in 2017 were a modest $3B.

The domination of Chinese investments is even greater when one considers China foreign investments in clean energy. China being already the largest market for renewable energy, it is developing the renewable sector internationally, aiming to be a leader along the entire value chain. China’s Belt and Road Initiative (BRI) is driving Chinese energy investments overseas. The initiative already has driven solar equipment exports of U.S.$8 billion.[v] China is not content to be a manufacturer and it is also looking for opportunities to develop Engineering, Procurement and Construction (EPC) standards that it can apply internationally, plus operating credentials. China is building corporate giants to fulfill those ambitions, such as Shenhua Group, now the largest wind developer in the world, with 33 GW of capacity.[vi] In 2016, Xinjiang Goldwind ranked 3rd for onshore and also 3rd for offshore wind turbine manufacturing[vii]. China has become the number one exporter of environmental goods and services, overtaking the U.S. and Germany.

————————–

[i] See https://www.iea.org/policiesandmeasures/pams/china/name-161254-en.php and https://translate.google.com/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2Fwww.nea.gov.cn%2F2016-12%2F19%2Fc_135916140.htm, accessed on 20180116.

[ii] Statistics Canada. Table 127-0009 – Installed generating capacity, by class of electricity producer, annual (kilowatts), http://www5.statcan.gc.ca/cansim/a47, accessed 20180131. In 2015, public electricity producers in Québec had an installed generating capacity of 37 GW, while privates ones has 3 GW.

[iii] IRENA (2017), Renewable Energy Statistics 2017, The International Renewable Energy Agency, Abu Dhabi, with estimates based on Bloomberg New Energy Finance for 2017.

[iv] Clean Energy Investment Trends, Abraham Louw, Bloomberg New energy Finance, January 16, 2018.

[v] China 2017 Review, Institute for Energy Economics and Financial Analysis (IFEEA), p. 2.

[vi] https://www.reuters.com/article/us-china-power-shenhua-guodian-factbox/factbox-shenhua-and-guodian-chinas-latest-state-marriage-idUSKCN1B918I, accessed 20180118.

[vii] https://about.bnef.com/blog/vestas-reclaims-top-spot-annual-ranking-wind-turbine-makers/, accessed 20180118.

Shortlink https://benoit.marcoux.ca/blog/wind-and-solar-pv-are-becoming-a-chinese-story/

CEA Tigers’ Den Workshop

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On February 21, 2018, I presented at the annual T&D Corporate Sponsors meeting of the Canadian Electricity Association. This year, the formula what similar to the “dragons” TV program, with presenters facing “tigers” from utilities. They asked me to go first, so I didn’t know what to expect, but it went well. Or, at least, the tigers didn’t eat me alive.

The theme was a continuation of my 2017 presentation, this time focusing on what changes utilities need to effect at a time of low-cost renewable energy.

I’ve attached the presentation, which was again largely hand-drawn: CEA 20180221 BMarcoux.

Shortlink https://benoit.marcoux.ca/blog/cea-tigers-den-workshop/

Coal, Crude Oil and Natural Gas Are Really Forms of Sun Energy

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It may sound strange, but coal, crude oil and natural gas are really forms of sun energy. Millions of years old sun energy trapped in chemical bonds by plant photosynthesis and animals that eat them…

Coal originates from dense forests in low-lying wetland areas, mostly from the Carboniferous Period, around 300 million years ago. Some of the vegetation got trapped underneath soil due to natural events such as flooding. As more and more soil deposited over the remains of the forests, they were compressed, with temperature rising naturally. Under high pressure and high temperature, dead vegetation was slowly converted to coal.

Oil is usually younger, from the Mesozoic Era, about a hundred to 2 hundred million years ago. The formation of oil begins in warm, shallow oceans that were then present on Earth. In these oceans, small animals called zooplankton and plants called phytoplankton died and felt to the floor of the ocean. As they got buried by sediments, they were transformed into shale. As pressure and temperature increase, the shale transformed into oil and, if the temperature was high enough, into natural gas.

I used to tell by children that petroleum is really “dinosaur oil.” This is not technically exact, but a nice metaphor.

Today’s solar energy obviously also comes from the sun. But it’s brand new energy, not hundreds of millions of years old stuff. Essentially, we are now building a society that bypass hundreds of millions of years of dead history long buried in the ground. Somehow, I find this refreshing.

Shortlink https://benoit.marcoux.ca/blog/coal-crude-oil-and-natural-gas-are-really-forms-of-sun-energy/

Wind and Solar PV Defied Expectations

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Insight from this post:
Our reliance on historical concepts and dated utility business models has masked the shift in the primary driving force for renewable generation, from policy obligations to least-cost generation. As a result, past forecasts have systematically underestimated the penetration of low-cost wind and solar PV. Yet, 2016 was the first year in which solar and wind net additions worldwide exceeded coal and gas.

Solar power was once so costly it only made economic sense on a spaceship. As costs went down, volumes went up, attracting innovation and driving costs further down, which drove volume further up, which caused more innovation and drove costs further down… and so on. The spaceship has come down and has now landed on Earth — no wonder that this new reality seems alien to many. Close to earth, installed capacity of wind turbine farms is even larger than solar and follows a similar virtuous cyclone, albeit at a more moderate pace, and the latest purchase agreements show that it is still the cost leader (but barely).

Worldwide photovoltaic solar generation (in terawatt-hours) has increased tenfold since 2010, following an exponential growth curve (see Figure 1). Wind increased even more in absolute numbers, almost quadrupling since 2010.

Figure 1 Exponential progression of worldwide electricity generation from wind and solar photovoltaic.

While this growth in renewable capacity is impressive, it masks that renewables are still relatively small. Half of electricity generation worldwide is from coal, oil and natural gas, and another 10% is from nuclear[i]. The share of the electricity generation was in 2017 only about 4.4% for wind and 1.5% for solar. From a small base, those percentages are, however, increasing quite rapidly: 2016 was the first year in which the net capacity additions of solar and wind net exceeded coal and gas.[ii]

While residential solar PV has attracted a lot of attention, utility-scale solar generation is far larger. In the United States, utility-scale solar PV represented 60% of the installed capacity and 69% of the electricity generation in 2017.[iii] In Ontario, 80% of the solar PV capacity resides in MW-scale systems, while residential capacity (from MicroFIT contracts) is only 8% and commercial capacity (from FIT contracts) is another 12%.[iv]

The existence of a virtuous cycle driven by innovation and industry investments rather than government policies has not always been recognized, but it is becoming clearer. For example, the International Energy Agency (IEA) publishes a yearly World Energy Outlook (WEO), forecasting, among other things, electricity generation for the next 20 or 30 years. The Outlooks implicitly assume that government policies are the main drivers of the evolving generation mix in the Outlooks. For example, WEO2010 states that the “future of renewables hinges critically on strong government” and that “the scale of government support [for renewables] is set to expand as their contribution to the global energy mix increases.”[v] Policies certainly have had a major influence in the European Union and in other areas, like Ontario, that subsidized renewables with instruments such as favorable feed-in tariffs. However, the IEA assumption that policies are the driving force may have contributed to a lag in recognizing the rise of technology and business innovation and the resulting cost reductions as the new driving forces, like what we are seeing now in renewables. As a result, past IEA generation Outlooks broadly diverged from actual wind and solar PV generation (see Figure 2). Until 2010, IEA wind Outlooks and actual generation diverged steeply. Starting with WEO2010, as wind generation reached 300-400 TWh, IEA Outlooks got less inaccurate. As for solar PV, WEO2017 still shows some divergence. However, solar generation is now at the same level as wind was in 2010 – perhaps this is a sign that the current solar PV outlook is getting more realistic.

Figure 2 IEA World Energy Outlooks consistently underestimated the future energy generation from wind and Solar PV.

The IEA is not alone in having poorly forecast the rise of wind and solar generation:

In the USA, the solar industry met the 2020 utility-scale solar cost target set by the Energy Department’s SunShot Initiative – in 2017.[vi]
The French Environment and Energy Management Agency estimated in 2015 that the cost of utility-scale solar would reach €6c per kWh only in 2050.[vii] Solar PV costs are already well below this.
Canada’s National Energy Board published a report entitled “Canada’s Energy Future 2017”. This report has a figure showing historical solar, wind and biomass renewable capacity and NEB’s own forecasts. Actual growth up to 2016 is exponential, while the projection to 2040 is linear at a sharply lower initial rate, with a distinct kink in the trend.[viii] Somehow, I am doubtful that this NEB forecast will ever happen.

Traditional wisdom is a poor guide in forecasting during a technology shift, as the case now with wind and solar power. Forecasters relying on historical policies and industry practices remain oblivious to the confluence of performance improvements, supply chain efficiencies and business innovations that arise during a technology shift. They assume that the latest deviation from past trends is just an exception and they are surprised when costs fall quickly and volume increase faster than expected.

It is not to say that policies are not important. In fact, policies have been the driving force behind the renewable growth in pioneering European countries (see Figure 3) at a time when wind and solar PV were considerably more expensive than coal and nuclear generation (more on costs of wind and solar PV later). However, the USA also saw significant growth without consistent policies at the federal level.

Government policies may also dictate the types of renewable plants being built. For instance, public tenders will tend to favor large corporations and cement the market power of oligopolies, while feed-in tariffs favor private investors, energy cooperatives and small businesses.[ix] However, while public tenders may be justified on the basis that utility-scale plants are currently more cost-effective than distributed systems, such a policy could decrease public support and ultimately slow down adoption of renewable generation in the long run.

Furthermore, some governments have policies, including direct and indirect subsidies, regarding generation from fossil sources, and those policies are delaying the tipping point when renewables become cost effective in those jurisdictions.

[i] International Energy Agency, World energy Outlook 2017, New Policies Scenario, p.650.

[ii] International Energy Agency, World energy Outlook 2017, Figure 6.1, p.231.

[iii] U.S. Energy Information Administration, Short Term Energy Outlook, table 8b, U.S. Renewable Electricity Generation and Capacity.

[iv] IESO Contracts and Contract Capacity, Progress Report on Contracted Electricity Supply: Q3-2017, Table 6.

[v] International Energy Agency, World energy Outlook 2010, p.51.

[vi] U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017, National Renewable Energy Laboratory, p. viii.

[vii] Vers un mix électrique 100% renouvelable en 2050, Agence de l’Environnement et de la Maîtrise de l’Énergie, Figure 7 p. 16.

[viii] Canada’s Energy Future 2017, Energy supply and Demand Projections to 2040, National Energy Board, 2017, page 49.

[ix] Hans-Josef Fell, “The shift from feed-in-tariffs to tenders is hindering the transformation of the global energy supply to renewable energies“, Policy paper for IRENA, July 2017.

Shortlink https://benoit.marcoux.ca/blog/wind-and-solar-pv-defied-expectations/

Virtuous Cycle of Sun and Wind Power

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Solar power was once so costly it only made economic sense on a spaceship. As costs went down, volumes went up, driving costs further down, which drove volume further up, which drove costs further down… and so on. The spaceship has come down and has now landed on Earth — no wonder that this new reality seems alien to many. Close to earth, wind power is even larger than solar and follows a similar virtuous cyclone, albeit at a more moderate pace, and the latest purchase agreements show that it is still the cost leader (but barely).

Worldwide photovoltaic solar generation (in terawatt-hours) has increased tenfold since 2010, following an exponential growth curve (see the figure). Wind increased even more in absolute numbers, almost quadrupling since 2010.

While this growth in renewable capacity is impressive, it masks that renewables are still relatively small. Half of electricity generation worldwide is from coal, oil and natural gas, and another 10% is from nuclear[i]. The share of the electricity generation was in 2017 only about 4.4% for wind and 1.5% for solar. From a small base, those percentages are, however, increasing quite rapidly: in 2017, wind and solar gained almost 1% of the global share of electricity generation. With renewable now competitive with traditional utility-scale generation, growth will undoubtedly continue. But the important insight is this:

Solar and wind power are relatively small but already competitive with traditional generation, which will continue to fuel the virtuous cycle of higher volumes and lower costs for years to come, crowding traditional generation out of the market.

We haven’t yet seen the end of this story.

[i] International Energy Agency, World energy Outlook 2017, New Policies Scenario, p.650.

Shortlink https://benoit.marcoux.ca/blog/virtuous-cycle-of-sun-and-wind-power/

Utilities Should Lead the Change

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I have worked in the telecom industry as head of marketing, in customer care and as a business consultant — I saw what happened there. More recently, I have also seen some of the best and the worst of stakeholder communications at electric utilities — including while I directed a large smart meter deployment, a very challenging activity for customer relationships. Beyond the obvious like using social media, online self-support, and efficient call center operations, There is one thing that electric utilities should do to improve their chances to maintain healthy customer relationships as the industry is transforming: lead the change.

“Someone’s going to cannibalize our business — it may as well be us. Someone’s going to eat our lunch. They’re lining up to do it.”

That was Alectra Utilities CEO, Brian Bentz, speaking at the Energy Storage North America in 2017.[i]

Utilities have a choice: lead change or have change done to them. The latter might hurt customer satisfaction more than the former.

Like telephone companies of the past, electric utilities could try to forestall the coming change, or even to reverse it, hoping to get back to the good old days. In fact, this is rather easy, as there is a lot of inertia built in a utility, often for good reasons: public and worker safety, lifelong employment culture, good-paying unionized jobs, prudency of the regulated investment process, long-lasting assets, highly customized equipment and systems, public procurement process, dividends to maintain for shareholders, etc. For utility executives, effecting change is never easy.

In the end, however, resisting change is futile. Customers are able to start bypassing utilities by installing solar panels and storage behind meters, keeping the utility connection as a last resort. It is just a matter of time before the economics become good enough for many industrial, commercial and residential customers, with or without net metering. Customers will do it, grudgingly, but they’ll do it. This will also leave fewer customers to pay for the grid, sending costs up and stranding assets, therefore increasing rates for customer unable to soften the blow by having their own generation, further antagonizing the public… A death spiral of customer satisfaction.

So, what should utilities do? Here are three examples of utilities that have embraced change and made it easy for their customers to adopt change:

Green Mountain Power (GMP) in Vermont helps customers go off the grid. Combining solar and battery storage, the Off-Grid package provides GMP customers with the option to generate and store clean power for their home that would otherwise come from the grid. The Off-Grid package is customized for each customer and includes: an energy efficiency audit, solar array, battery storage, home automation controls, and a generator for backup. Customers pay a flat monthly fee for their energy.[ii]
GMP is also deploying up to 2,000 Tesla Powerwall batteries to homeowners. Homeowners who receive a Powerwall receive backup power to their home for US$15 a month or a US$1,500 one-time fee, which is significantly less expensive the US$7,000 cost of the device with the installation. In return, GMP uses the energy in the pack to support its grid, dispatching energy when it is needed most.[iii] Not surprisingly, results of a recent GMP customer satisfaction survey showed that customer satisfaction continues to rise.[iv]
ENMAX proposed to use performance-based regulation to the Alberta Utility Commission (AUC). The AUC set the regime in 2009. performance-based regulation has since then been expanded to other Alberta utilities. ENMAX stated that a number of efficiency improvements and cost-minimizing measures were realized as a result of its transition to a regulatory regime with stronger efficiency incentives. ENMAX indicated that it would not have undertaken these productivity initiatives under a traditional cost of service regulation.[v]
PG&E selected EDF Renewable Energy for behind-the-meter energy storage. The contract allows EDF RE to assist selected PG&E customers to lower their utility bills by reducing demand charges, maximizing consumption during off-peak hours, and collecting revenue from wholesale market participation. [vi]

References:

[i] As reported by UtilityDIVE, https://www.utilitydive.com/news/alectra-utilities-ceo-someones-going-to-cannibalize-our-business-it-ma/504934/, accessed 20180102.

[ii] See https://www.greenmountainpower.com/press/green-mountain-power-first-utility-help-customers-go-off-grid-new-product-offering/, retrieved 20171229.

[iii] See https://www.tesla.com/blog/next-step-in-energy-storage-aggregation, retrieved 20171230.

[iv] see https://www.greenmountainpower.com/press/green-mountain-power-survey-shows-customer-satisfaction-continues-rise/, retrieved 20171230

[v] Performance Based Regulation, A Review of Design Options as Background for the Review of PBR for Hydro-Québec Distribution and Transmission Divisions, Elenchus Research Associates, Inc., January 2015, page A-25.

[vi] See http://www.energystoragenetworks.com/pge-selects-edf-behind-meter-energy-storage-contract/, retrieved 20171230.

Shortlink https://benoit.marcoux.ca/blog/utilities-should-lead-the-change/

An “iPhone Moment” for Electric Utilities in 2018?

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In 1977, I worked as an electric meter reader, before going to university to earn my Electrical Engineering degrees at Polytechnique Montréal. In 2012, I was directing the largest smart meter deployment in Canada, replacing some of the same meters that I had read three and a half decades earlier. In between, I worked for 20 years in telecoms, living the Internet and wireless revolutions, and then mostly with electric utilities for the last 15 years.

As this year gets to a close, I would like to reflect on the changes that technology has brought – or could bring – to utilities and what it may mean for the future.

In 1987, telephone and electric utilities were both in the wire business – perhaps 20 AWG for telephone and 4/0 for electric, but mostly copper hanging on wood poles and serviced by a fleet of bucket trucks. Telecom companies were then telephone companies, just experimenting with wireless (the first cellular call in Canada had occurred just 2 years earlier) and the Internet was still primarily a military research technology (commercial service only started in 1989). Phone and electric utilities were highly regarded companies, imbued with a duty for public service and providing lifelong employment to their loyal employees.

By 1997, I owned a cell phone and I was running what was then the largest Internet telephony network (but tiny in comparison to today), competing with international telephone carriers. However, phone companies were in denial on the Internet, seeing us as a temporary nuisance, and trying to control user experience on cellular phones, like they had been doing for a century with rotary phones on landlines.

In 2007 the iPhone was launched. Not only did it merged the Internet and wireless phone, but it profoundly changed the business of the telecom companies. Before the iPhone, the wireless carriers were subsidizing cheap handsets to get customers to lock in for 3-year contracts and using the carrier’s proprietary and closed services. But the iPhone upsets that balance of power. Apple kept control on the user interface, given choice to consumers to buy the best apps from developers. However, by fostering more innovation, the carriers’ networks got more (not less) valuable through this change. People spent – or wasted – more time on their smart phones, generating more revenue for carriers and hardware manufacturers as network capacity expanded through successive generations of technology.

In the meantime, not that much has changed in the electricity business – my father, who worked as a dispatcher at Hydro-Québec until the 1970s, would probably recognize the network today, although he would certainly envy dispatchers using electronic maps rather than the paper ones he used.

However, 2017 has seen the rise of inexpensive solar energy and energy storage. Could 2018 have an “iPhone moment” for electric utilities? After all, the Internet brought us on-demand access to information, like energy storage is bringing us on-demand power. Wireless phones allowed us to cut the cord, and so may be distributed solar energy, at least to some extent. The parallel is striking.

Now who will be the next Steve Jobs? Elon Musk, perhaps?

All my best wishes for 2018!

Shortlink https://benoit.marcoux.ca/blog/an-iphone-moment-for-electric-utilities-in-2018/

The Sun for a Penny

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I recently presented at the Canadian Electricity Association (CEA) on the future of the industry. What would happen to the power industry if the cost to generate solar electricity reached 1¢/kWh? What could be the impact of a carbon tax? What are the business opportunities arising from the need for reliable power? While electric utilities have seen tremendous transitions during the 125-year history of the CEA, the current rate of development is unprecedented. To paraphrase a famous quote by Wayne Gretzky, utilities need to “skate to where the puck is going to be, not where it has been.” This presentation tried to provide power utilities with some insights into the future direction of the puck! See the presentation here: The Sun for a Penny 20170225a

Shortlink https://benoit.marcoux.ca/blog/the-sun-for-a-penny/

The New Grid Needs to Be a Lot More Complicated

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The Old Grid used to be relatively simple, with generation following load:

It is now a lot more complicated:

The grid is transforming and getting more complicated.

We are decommissioning fossil plants to reduce GHG emission and nuclear plants because of safety concerns.
There is only so many rivers, so the solution of building new hydro plants is not sufficient.
We are then replacing fossil and nuclear base load plants with renewables that are intermittent.
To compound the problem of balancing the grid, loads are also becoming peakier, with reduced load factor. Interestingly, many energy conservation initiatives actually increase power peaks.
To connect the new renewable generation, we then need to build more transmission. The transmission network also allows network operators to spread generation and load over more customers – geographic spread helps smooth out generation and load.
Building new transmission lines face local opposition and takes a decade. The only other alternatives to balance the grid are storage … and Demand Management.
Another issue is that we are far more dependent on the grid that we used to be. With electrical cars, an outage during the night may mean that you can’t go to work in the morning. So, we see more and more attention to resiliency, with faster distribution restoration using networked distribution feeders as well as microgrids for critical loads during sustained outages.
Renewable generation and storage can more effectively be distributed to the distribution network, although small scale generation and storage are much more expansive than community generation and storage.
With distributed generation, distributed storage and a networked distribution grid, energy flow on the distribution grid becomes two-way. This requires additional investments into the distribution grid and a new attention to electrical protection (remember the screwdriver).

All of this costs money and forces the utilities to adopt new technologies at a pace that has not been seen in a hundred years. The new technology is expensive, and renewable generation, combined with the cost of storage, increases energy costs. There is increasing attention to reduction of operating costs and optimization of assets.

Shortlink https://benoit.marcoux.ca/blog/the-new-grid-needs-to-be-a-lot-more-complicated/

Utility-Scale Solar Report

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I finally got around to read the US Department of Energy report on utility-scale solar energy (https://emp.lbl.gov/sites/all/files/lbnl-1000917.pdf) published a couple of months ago. Here are my highlights:

Installation trend is compelling. Installed capacity is now 30,000 MW – about 30 times more than 5 years ago.
Installation costs are falling – by more than 50% since the 2007-2009 period, the lowest-priced projects being around $2/W (AC).
Capacity factor is now improved to 27.5%. The main factors of this variation are, in order of importance: the strength of the solar resource at the project site; whether the array is mounted at a fixed tilt or on a tracking mechanism; the inverter loading ratio; and the type of PV modules used.
Power purchase agreement prices have fallen. Utility scale solar PPA is now as low as $40/MWh. At these low levels – which appear to be robust, given the strong response to recent utility solicitations – PV compares favorably to just the fuel costs (i.e., ignoring fixed capital costs) of natural gas-fired generation, and can therefore potentially serve as a “fuel saver” alongside existing gas-fired generation (and can also provide a hedge against possible future increases in fuel prices).

Shortlink https://benoit.marcoux.ca/blog/utility-scale-solar/

Evolution of Energy Generation and Distribution in Canada’s Smart Power Grid – Innovation 360 Conference Panel

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On September 29, I was asked to participate on a panel titled “Evolution of Energy Generation and Distribution in Canada’s Smart Power Grid” at the Innovation 360 conference in Gatineau, Québec (http://innovation360.ca). Here is the essence of what I contributed.

By definition, in an electricity network, energy consumption plus losses equal electricity generation. This must be true at any point in time, or protection systems will shed load or trip generators.

There are 4 ways to balance load and generation:

1) Traditionally, dispatchable generators that can easily ramp up or down were tasked to follow the load. Big hydro plants and natural gas generators are particularly good at this. However, we are running of big hydro opportunities, and natural gas are sources of greenhouse gas emission, contributing to global warming.

2) Another way to balance load and generation is to interconnect with neighboring network that may not have the same load profile. Today, all of North America is interconnected in some way. However, building transmission lines is a lengthy process that typically faces major local opposition. As a result, most transmission lines run at capacity during peaks, weakening the bulk transmission system as the Northeast blackout of 2003 demonstrated.

3) In the last couple of decades, we have started to control load, like turning off air conditioning units by pager or getting large industrial like smelters to go offline for a couple of hours during a major peak. Time-of-use or market pricing are also attempts to have loads better follow available generation capacity. However, much of the conservation focus thus far has been on energy efficiency, not peak load reduction.

4) Very recently, energy storage has been getting attention. Traditionally, the only utility-scale storage technology available was pump-storage, like the Sir Adam Beck plant in Niagara, but few of those plants are possible, and they are not efficient. Going forward, batteries, either utility-scale or distributed storage, will grow, although for now utility-scale batteries are MW-class, when hundreds of MW or GW are needed.

Balancing load and generation is also becoming more and more difficult. On one hand, consumption is getting peakier, partly due to side effects of some energy saving programs, like turning down thermostats at night in the winter, and then turning them back up in early morning, just in time for the morning peak. On the other hand, wind and solar generators are replacing fossil generators, adding unpredictability to generation and taking away controllability, thus requiring even more balancing resources.

Integrating renewable into the grid is not only causing balancing problems. It also creates voltage management and protection problems. Those are solvable, but significant, engineering problems that require expensive upgrades to the electricity grid.

Ultimately, load and generation balancing, voltage management and grid protection adds costs that are ultimately born by subscribers. It therefore quickly becomes a political issue.

As a society, we have been subsidizing fossil fuels. Clearly, going forward, we will need to greatly invest in the grid if we want to limit the predicaments of global warming for our children and grand-children.

Shortlink https://benoit.marcoux.ca/blog/innovation-360-conference-panel/

Benoit Marcoux

The end of business-as-usual | The energy of tomorrow

Category Archives: Solar Energy

Ce que signifie l’électricité à coût marginal zéro

What Zero Marginal Cost Electricity Means

How Not-to-Succeed in the Next Decade of Energy Transition

Don’t Fight a Declining Cost Curve

Don’t Think That Transition Will Go 2% a Year Over 50 Years

Don’t Count on Regulatory Barriers for Protection

Don’t Take Customers Nor Suppliers for Granted

Don’t Follow the Herd

Closing Thoughts

Energy Is Cheap; Power Is Valuable

“The Shocking Business of Electricity”: A Short Lecture to McGill Business Students

A Perspective on Canada’s Electricity Industry in 2030

Barbarians at the Gate (or: How to Stop Worrying and Love Your Customers)

Lower and Lower Energy Prices from Wind and Solar PV

Even in Canada?

The Costs of Wind and Solar PV Systems Are Down – Way Down

Performance improvements

Supply chain efficiency gains

Business innovations

Wind and Solar PV Are Becoming a Chinese Story

CEA Tigers’ Den Workshop

Coal, Crude Oil and Natural Gas Are Really Forms of Sun Energy

Wind and Solar PV Defied Expectations

Virtuous Cycle of Sun and Wind Power

Utilities Should Lead the Change

References:

An “iPhone Moment” for Electric Utilities in 2018?

The Sun for a Penny

The New Grid Needs to Be a Lot More Complicated

Utility-Scale Solar Report

Evolution of Energy Generation and Distribution in Canada’s Smart Power Grid – Innovation 360 Conference Panel