Kenya’s M’KOPA Pioneers Decentralized Power

Kenya is on the leading edge of decentralized solar power.  M’KOPA provides a 4 watt solar panel, three LED lights, a DC radio and a cell phone charger, all in a box.  The kit costs about $200.  The purchaser makes a small down payment and uses his/her cell phone to make small daily payments, about $.45, for one year.  Once the system is paid off, a code is transmitted by cell phone, and the charger system is unlocked.  Free electricity follows, for the life of the solar panel.

80% of Kenyans live off the electrical grid.  A few lights, a radio and a cell phone charger are life altering changes for most of these families.

Here’s how an article on Bloomberg explained it:

The M-KOPA system, which is marketed by dealers in Nairobi and western Kenya, comprises a 4-watt rooftop solar panel, a control box that attaches to the wall of a home or business, three lamps and mobile-phone chargers.

Under the payment plan, the system costs 16,900 shillings, or about $199, in a country where the annual per-capita income is $820. Clients make a down-payment of 2,500 shillings and then daily installments of 40 shillings until it’s paid off.

After that, the owners get power for free. By comparison, Kenyan families spend an average of 50 shillings a day on kerosene to light their homes and fees to have their mobile phones charged at places that have electricity, according to research by M-KOPA.

George Miruka, a 36-year-old father of four, said he stopped worrying about the fire-risk from kerosene lamps after outfitting his mud-walled hut with an M-KOPA system last month. “My children are safe,” Miruka said.

Even if you can connect to the grid, you need $412 just to hook up.  Then you have to pay for the electricity.  With the M’KOPA system, once you pay your $200, your electricity is free.

This is the future of decentralized electricity, and the innovations will come from places like Kenya and India.

Karl Cates – The Other War: Underreported but Not Insignificant

Karl Cates has an excellent piece over at the IEEFA blog that will give you a good look at how decentralized solar power is under attack by the electrical industry around the US.  Cates also describes how this story is being suppressed in the US media.

Here’s what Mr. Cates has to say:

But there is a war on solar. It’s happening nationally in congressional reluctance to extend tax credits that encourage solar-energy development. It is being waged locally and effectively in states that most recently include Hawaii, Indiana and Washington, where utility and mining interests have had lawmakers draft legislation to put restrictions on solar development.

Organizations pressing the war on solar are numerous and well funded. They include the American Legislative Exchange Council, or ALEC, a regressive organization that brings big companies and lawmakers together to write or rewrite state laws. (ALEC has crossed the line in so many ways on so many issues that some high-profile corporate members have left out of sheer embarrassment, including most recently Northrop Grumman and—before them—Blue Cross/Blue Shield, Coca-Cola, PepsiCo, and Kraft.)

Other soldiers in the war on solar include the Edison Electric Institute, a Washington-based utility-company association that lobbies Congress; Americans for Tax Reform, the Grover Norquist group that focuses maniacally on undermining the financial stability of the U.S. government; and Americans for Prosperity, the shadowy and notoriously well-financed organization that works at the behest of the industrialist Koch Brothers.

The goal of the war on solar, of course, is to kill a budding industry before it can get its legs. Much of its strategy is in a state-by-state campaign the employs two tactics: reducing state-government commitments to the percentage of energy acquired from renewables and repealing “net-metering” laws that fairly compensate homeowners and businesses for the solar energy they produce.

The stakes in the war on solar are not insignificant. The Solar Energy Industries Association, which has been around since 1973, reports it its latest numbers that 36 percent of all new electricity-generation capacity in the U.S. in the first three quarters of 2014 came from solar. It puts the total number of solar-industry jobs in the U.S. at 174,000, almost twice the number of coal-mining jobs nationally.

Yet the war on solar remains starkly underreported, and vastly deserving of much more and better coverage than it’s gotten so far.

Regular readers of The Power Line are familiar with my posts on efforts in other states to suppress decentralized power, stretching back to my post on EEI’s strategic report on the industry’s plan to, as Mr. Cates puts it, “kill a budding industry before it can get its legs.”

While the Republican leadership in the WV Legislature has preserved net metering in its recent repeal of WV’s ARPS law, lobbyists from the two Ohio-based holding companies that control WV’s electrical system have managed to get amendments to the new net metering bills that open the door for future mischief for ALEC and its minions.  Citizens have let our legislators know that we are watching them closely.

Power Company Misinformation on HB2201 Exposed

A funny thing happened in the Senate Energy, Industry and Mining Committee meeting this afternoon.  The Committee took up and passed HB2201 without any changes, but a lot more happened during the discussion of the bill.  AEP’s obstruction of solar advocates’ efforts to correct a serious error in the bill collapsed in disgrace.

HB2201 is very odd.  Designed by the House Judiciary Committee as a way to add the definition of net metering back into the new article in the WV Code that remains after the repeal of the ARPS joke law, the Committee contradicted both the existing definition of net metering in the current statute and the Senate’s Senate Bill 1 that also added a definition of net metering to its net metering statute.

Sub-sectiion (11) of §24-2F-3 (current statute) reads as follows:

(11) “Net metering” means measuring the difference between electricity supplied by an electric utility and electricity generated from an alternative or renewable energy resource facility owned or operated by an electric retail customer when any portion of the electricity generated from the alternative or renewable energy resource facility is used to offset part or all of the electric retail customer’s requirements for electricity. [emphasis added]

HB2201 reads:

(a) “Net metering” means measuring the difference between electricity supplied by an electric utility and electricity generated from a facility owned and operated by an electric retail customer when any portion of the electricity generated from the facility is used to offset part or all of the electric retail customer’s requirements for electricity. Provided, That this section shall not preclude an educational or religious organization customer-generator, that either owns or operates its own facility, from utilizing a net metering system in this state. [emphasis added]

What’s the difference?  HB2201 requires that a retail electricity customer is only eligible for net metering if he/she both owns and operates a solar power system.  Current law allows a person or business that does not actually own the solar panels to still get the benefit of those panels if electricity passes into their neighbors’ homes from the system on their roof.

One of the fastest growing segments of solar power growth in the US is the leasing of solar panels owned by installers or businesses to home owners or other businesses.  Many renters who live in houses with solar panels also get the benefit of net metered electricity in other states.  Businesses that install solar panels may have reasons for having their panels owned by one company and their building owned by another company, and there is no need for government interference in their freedom to do this..

The House’s HB2201 change in the current “or” language is a radical departure from current policy and would prevent all of these options for making solar investment more affordable for West Virginians.

Now comes the strange part.

AEP’s head lobbyist has been telling legislators for the past week that HB2201’s “and” language is already in WV’s net metering law.  That is clearly wrong.

Today, in the Senate Energy, Industry and Mining Committee’s meeting, that same lobbyist asserted the same wrong claim to the committee members.  He was publicly corrected in the meeting by the Committee’s attorney, who informed him that, in fact, the language in the current law clearly stated that a retail customer could either own or operate a solar power system and still have that system eligible for net metering.

How embarrassing.

Let’s hope AEP’s lobbying team will be honorable enough to admit to Senators that they were wrong.  Let’s hope that they will support correcting HB2201 to allow both owning and operating net metered PV systems when the Senate Judiciary Committee takes up HB2201 this week or next.

Duke Energy Holding Company Using Bogus Arguments to Attack Net Metering in Indiana

The desperate multi-state holding company Duke Energy is attacking net metering in Indiana.  RTO Insider has a good summary of the situation.

Duke trotted out the tired old propaganda that adding extra charges to solar power producers “balances the interests of customers who have their own generation and those who don’t.”

RTO Insider reporter Chris O’Malley points to:

…a study conducted for the Public Service Commission of Mississippi found “very little substantiated evidence that there are significant costs incurred by grid operators or distribution companies as a result of low levels of solar distribution resources.”

The study, by Synapse Energy Economics, concluded that solar net metering would have estimated benefits of $170/MWh and estimated costs of $143/MWh, resulting in $27/MWh of net benefits to Mississippi.

So the Mississippi study indicates that all rate payers should actually be paying solar producers for the benefits they are receiving from net metering.

The fundamentals of net metering are really based on the science of electricity, not power companies’ needs to recover past bad investments from rate payers.

Uninformed descriptions often claim that solar power producers “feed their electricity back into the grid.” This is wrong.

Current flows along the path of least resistance to the nearest loads.  When my solar panels produce more electricity than I can use, those electrons don’t go “to the grid,” they go to my nearest neighbors’ houses.

Mon Power collects the retail price of that electricity from my neighbors.  I already pay $5 per month to Mon Power for my connection to their system.  My electricity only uses an infinitesimal amount of Mon Power’s entire generation, transmission and distribution system, the couple of hundred yards to my neighbors’ houses.

Mon Power charges my neighbors retail prices for the electricity I supply.  If Mon Power added extra fees or reduced the price of the electricity I sell them, they would be getting a windfall profit that they didn’t earn.  This is a windfall from my generation equipment that I asked no other rate payers to pay for.

Science is on the side of net metering, and more and more independent studies, like the one by the Mississippi PSC, are demonstrating that it’s the power companies, not the solar power producers who are pushing “unfairness.”

More on Holding Company Strategies

A friend in Morgantown posted a comment under this morning’s Oak Park post that is actually much more connected to my “Dangerous Holding Company” post.  The comment contained a link to the video below.  This is an interview with Michael Liebreich Chairman of the Advisory Board of Bloomberg New Energy Finance.

At the end of the interview, Mr. Liebreich describes the choices that power companies face in the US: adapt to the new reality of decentralized renewable power or try to cling to their obsolete businesses by controlling regulators.  Take a look:

The first part of the interview is great too, especially for those of you who think solar power is “too expensive.”

Oak Park, IL Microgrid Project Moving Forward

I posted back in 2013, here and here, about the pioneering project to turn more than 100 homes in Oak Park, IL into a resilient microgrid.  The project is moving forward as you can see from this link.

Here is the latest from Oak Park’s Web site.

A project to demonstrate the potential cost savings of electric smart grid technologies in Oak Park took a step closer to implementation Monday, as the Village Board confirmed its commitment to environmental sustainability by hiring an organization credited with creating the national model for smart grid project planning, implementation and management.

Pecan Street Inc., a not-for-profit research organization located at The University of Texas at Austin, was hired to assist in preparing to launch the Oak Park Smart City USA Project, which will link as many as 200 Oak Park homes and residential buildings into a neighborhood smart grid.

“Having the demonstrated knowledge, experience and expertise in getting smart grid projects up and running is a major step toward achieving our goal of keeping Oak Park a leader in environmental initiatives,” said Village President Anan Abu-Taleb. “With Pecan Street’s assistance, we can move closer to implementing a project that will underscore the Village’s commitment to environmental sustainability.”

Smart City USA began in 2010 as a partnership between the Village, the Korea Smart Grid Institute (KSGI) and the Illinois Department of Commerce and Economic Opportunity (DCEO), with coordination support from the Wagner Institute for Sustainable Energy Research at the Illinois Institute of Technology.

The project entails installing equipment such as solar panels with batteries that would allow residences to collect and store energy for personal use and to sell back to the grid during peak times. Property owners would not have to pay any equipment or installation costs. KSGI and state grants will help fund the project.

Plans call for having 100 single-family homes and 100 multiple-family units participate, with the number of multi-unit buildings depending upon the number of units in each. Participants would form a micro-grid featuring two-way information and energy flow. Their aggregated energy data and usage would be managed through a cloud-based network operating center, which may include a public monitoring screen at Village Hall.

More than 300 Oak Park property owners already have expressed an interest in participating via an online form at www.oak-park.us/smartcityusa that gathered basic information to ensure the property was compatible with the program’s basic needs.

Dangerous Holding Companies Rebuilding Empires at the Expense of the Rest of Us

Back in the 1910s and 1920s, Samuel Insull, president of Commonwealth Edison in Chicago, and banker J.P. Morgan put together a network of privately owned holding companies that controlled must of the major electric utilities in the US.  In the late 1920s and early 1930s, this dangerous pyramid of companies collapsed, threatening the stability of electrical service across the country.

In 1935, the US Congress passed the Public Utility Holding Company Act which limited the size and activities of utilities to prevent the collapse of dangerous financial structures that threatened the US electrical and natural gas infrastructure.

This federal law remained in place until the Cheney Administration and the Republican-controlled Congress repealed it as part of the 2005 Energy Policy Act.  The 2005 Energy Policy Act was the same law that granted massive rate payer subsidies to power companies for building new high voltage transmission lines.  Readers of The Power Line are very familiar with the disastrous impacts of this transmission subsidy scheme.

So erstwhile “free market” Republicans passed the 2005 Energy Policy Act to encourage the growth of new, unstable monopoly holding companies in the electricity markets and huge subsidy schemes for those same holding companies to build obsolete and unneeded high voltage transmission, all at the expense of electric retail customers.

We are witnessing the results of the repeal of the 1935 Utility Holding Company Act in real time.  Holding companies AEP and FirstEnergy have dumped obsolete coal-fired power plants onto the captive electric bills of West Virginians.  New post-2005 repeal holding companies are merging into ever fewer monopolies that operate in multiple business lines and exert increasing power in regional transmission organization cartels across the US.  The attempt by Chicago-based Exelon to swallow regional distribution company PEPCo Holdings on the East Coast is just the latest in the holding company monopoly game, and this one even includes Atlantic City.

I have posted a number of times, here, here, here and here, about the Exelon merger, because the forces at play in this case offer real insight into the train wreck that is West Virginia’s electrical system.  In the last few years, the WV PSC and the two Ohio-based holding companies that control WV’s electric utilities have played West Virginians for chumps.  AEP’s and FirstEnergy’s coal-fired power plants can no longer compete in wholesale electricity markets, so friendly regulators have forced their WV customers to pay for much more power plant capacity then customers will need for the next thirty years.

Exelon is moving to create that same situation for the customers of PEPCo’s companies.  Exelon’s shaky holding company structure is almost entirely dependent on expensive and obsolete nuclear power plants.  Like coal-fired power plants, nukes are struggling to compete in the free market.  Exelon is paying billions of dollars above PEPCo’s stock value because it wants access to PEPCo’s captive rate payers in stable regulated retail markets.

Wall Street bankers have seen the dangers facing unstable electric holding companies and their obsolete generating plants.  Starting last May with Barclays Bank, major investment banks have been downgrading the bonds of the entire electrical generation sector because they can no longer compete with natural gas plants, investment in energy efficiency and renewable power.

Last week, the Institute for Energy Economics and Financial Analysis published an in depth report by WV’s own Cathy Kunkel describing exactly how and why Exelon wants to control a captive PEPCo Holdings for its own profit.

Also last week, the always entertaining and informative David Roberts provided an overview of the Exelon/PEPCo merger, plus some important history and context.

If you are interested in real electricity innovation in the US, you need to understand the massive forces that are arrayed against us.  Understanding the newly hatched monopoly holding companies that control electricity in our country is essential for identifying who is resisting change and why they are doing it.

While the new holding companies still control most of the US electrical grid, they are becoming increasingly desperate as their market base erodes and their financiers get weak in the knees.  These companies have become the enemies of the free market in electricity.  Their only hope is to manipulate the political and regulatory process to maintain their slipping grip on power, as their industry association recommended back in 2013.

Look closely at the links in this post, and you will be able to see beyond the misleading information that pops up in the media (most of it from power company press releases) to see what is really at stake.  As I have always said here on The Power Line, knowledge is power.