Clean Power

Published on March 17th, 2016 | by Guest Contributor

25

Berkshire Hathaway Dives Into Solar Gardens Again

March 17th, 2016 by  

Originally published on Sustainnovate.
By Henry Lindon

Berkshire Hathaway Energy Subsidiary BHE Renewables Purchases 66 MW Solar Energy Portfolio From Gero

The Berkshire Hathaway Energy subsidiary BHE Renewables has purchased a 66 megawatt (MW) solar garden portfolio from Geronimo Energy, according to recent reports.

This brings the BHE Renewables solar garden portfolio up to 100 MW — as the Warren Buffett owned company had already purchased a 34 MW solar garden portfolio from Geronimo Energy.

The new purchase — which was of the “Minnesota Community Solar Garden developments” portfolio — relates to solar garden capacity spread across 16 different counties, in 21 different specific locations. The solar gardens are all expected to be built by the end of 2017.

For some background here — “solar gardens” are community-utilized solar installations for grid-connected subscribers. This gives those who wish to go solar but don’t have their own roof space the opportunity to do so.

Image by BHE Renewables





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  • AllenHans

    I haven’t followed the controversy in NV very closely, but from what little I know I think Buffett’s position isn’t entirely unreasonable. Rooftop solar is a much less efficient use of capital than utility-scale solar. And, paired with net metering, rooftop solar disproportionately advantages some people (adopters) over others (including people who would like to adopt but can’t). So why, as a society, should we adopt policy that favors rooftop solar when there’s a different option (utility-scale solar) that’s much more efficient in terms of cost and spreads the benefit much more equally?

    Personally I have rooftop solar and benefit from net metering in CA. And I’m in favor of net metering, but I think Buffett has a point and isn’t just being an anti-clean energy crank.

    • Dan

      I am far from an expert, but from what I understand I do think rooftop solar distributes the capital requirents and the benefits more equally than utility scale solar. People have more incentive to take out a loan to own their power generation, like many people do with a car, home, or other significant investment, when the net metering policy is stable and pays a market competitive price for the energy produced. Owning the power generation themselves necessary means their margins for paying off their investment outcompete a third party who must make a profit by selling their electricity.

      Another thing to keep in mind is that Solar gardens may be more local than large scale utility pv, but nothing is more local than a homeowners rooftop. Producing power nearer where it is consumed will always mean less loss through transmission and resistance across the lines. Similar to the efficiency gains from using micro inverters rather than string inverters, having a smaller more modular and distributed generation infrastructure balances loads and increases efficiency when integrated into the larger electric grid.

      In my opinion, all of the above when it comes to solar is the right move. As a society we should set benchmarks for the various levels of pv to compete with one another. Utility, community, and rooftop solar all have a lot to offer and we stand to gain from transitioning away from fossil fuels faster if we support them all.

      • Armchair Hydrogeologist

        With net metering and incremental block pricing, the economics of rooftop solar is massively skewed even though rooftop cost 2x more Only about 7% gets lost in T and D.

        We could have 2x the solar for the same amount of money if we used utility scale solar rather than rooftop.

        • Dan

          My point about the capital for rooftop solar being distributed does not necessarily have to mean the total dollar amount is exactly more efficient on its own. Even if twice the money is being spent, having distributed ownership by homeowners unlocks a vast pool of capital.

          Perhaps yieldcos, or other investment vehicals, are methods of giving access to less than traditional investor income groups, also unlocking a greater amount of smaller stakes in a utility project which increases total capital.

          As the saying goes, many hands make light work. 10,000 people diverting 1,000 dollars a year to pay for a solar loan which also offsets the money on their utility is competive with 10,000,000 dollars from investors, or rather, 5,000,000 if it is a half as efficient use of capital to begin with.

          We could have 3x the solar or more if different income groups have stable investment environments to suit their own needs. Middle and low income groups can contribute a great deal more in smaller individual quantities and vastly increase the overall market, thus propelling the entire industry into higher efficiencies through scaling up every aspect of the renewables smart grid infrastructure.

          Energy storage markets may follow similar tendencies too.

        • Bob_Wallace

          But the capital for rooftop comes from a different pile than the capital for utility solar. Rooftop solar capital comes from a repurposing money consumers would otherwise spend purchasing electricity from the grid. It’s not money available for installing utility solar.

          • Armchair Hydrogeologist

            Despite some of the shakeup with some yeildco’s my understanding is that financing utility solar projects attracts some of the lowest interest rates around. There’s no shortage of potential money for utility scale projects when done in the confines of an approved RPS. Big financial institutions have far deeper pockets than consumers do.

            The utilities costs are nearly fixed whether someone has solar or not. Basically solar only avoids a small amount of cost. The LMP is usually around $0.03/kWh and several studies such as Berkely’s EI PV study in 2015 or Borenstein’s 2008 study show that PV only avoids about 20% or less in losses. Those same studies also show that most (90%) feeders have no capacity benefit from PV and a PG&E average benefit of less than a cent per kWh.

            With net metering and incremental block pricing, rooftop PV means that a utility has the nearly the same costs (just $0.04 per kWh less) yet gives up between $.18 to $.35 per kWh in revenue. It’s a death spiral for those without panels and provides less solar per dollar.

          • Bob_Wallace

            You seem very knowledgeable but I think you’re missing the point of where the capital comes from for end-user solar.

            The capital for Joe Homeowner is basically free. Not just interest free, but totally free. Borrow some money. Install panels. Pay off the loan with the money that would otherwise be used to pay for electricity. In 6, 10, some number of years the loan is paid off. There has been no capital cost for Joe.

            Joe puts out a bit of effort and after payoff enjoys one or several decades of no cost electricity.

            End-user solar is probably a PITA for the utility company. It’s lost market at best. At worst they get stuck in a net metering system in which they have to accept low-value electricity and pay it back with more expensive electricity. (Once there’s enough end-user solar online to drop the price of sunny hour electricity.)

            Keep the good info coming. And please explain ‘insider’ terms and abbreviations. What’s a LMP? (I looked it up, but readers shouldn’t be asked to do that.)

            Do you have any thoughts about whether it will make more economic sense to install high hub height turbines in the SW or ship in wind-electricity from the windy parts of Oklahoma and Texas?

          • Armchair Hydrogeologist

            LMP is localized marginal price. It’s the incremental price at the neighborhood substation before it goes out to the feeders that go to houses and business. It’s basically the wholesale price, not counting fixed costs and is basically what it costs to add 1 extra MWH in an hour interval. It’s what economists use to determine “avoided costs”. In consists of three components:
            1. The energy component (uusually around $0.02)
            2. The Losses component
            3. The Congestion component

            The losses and congestion components are designed to provide funding money for transmission line operators to minimize the losses and congestion by providing alternatives.

            Grid operators, like California ISO, publish real-time maps of this.

          • Bob_Wallace

            Most of the people who read this site would have to work to understand what you wrote. It looks well written to me if one is communicating within the field.

            Communicating with an audience outside one’s field is an art.

          • Bob_Wallace

            That’s an attempt at constructive criticism.

            I want to encourage your participation. You clearly know stuff that most of us don’t. And most of us want to learn more.

          • Armchair Hydrogeologist

            To go from windy Texas to LA, you’d need about 1000 miles of wire.
            But there’s a wrinkle, our grids run on a different 60Hz and it is historically hard to link AC that far. For such distances, you need to use “HVDC” to keep the losses down which means the stations cost about $150M per station per GW. But with a large system and economies of scale, I think the $0.5M per GW mile is probably better number with about $500M in stations needed.

            So it would cost about $1B for a GW of capacity to link LA to windy west Texas. Using some napkin finance math assuming 30% capacity factor, that’s about $0.025/kWh.

          • Bob_Wallace

            Why are you using a capacity number? (And what is likely one that’s a bit low?)

            Wouldn’t correct number be the hours of production? Midwest/OK wind is going to blow more than seven hours a day.

            Just to fill you in, the regulars on this site are pretty much to speed with HVDC.

            And, as an aside, I believe TVA is in the process of building a HVDC line from OK to eastern Tennessee. OK is already selling some electricity into SE states, Alabama and Georgia, IIRC.

            The realization that there is a good wind resource in the SE if higher hub heights are used is fairly recent. I’m trying to guess whether we’re more likely to see large numbers of turbines in Southern states or transmission lines running to the west.

          • Armchair Hydrogeologist

            I’m using a capacity # typical for wind in the US – about 30%. In TX you can maybe get higher – 35% or so. So for example, a HVDC line may be 5GW but average only 1.7GW of actual electricity if most of the energy going through it is wind. Then I’m taking the cost of the line and applying a rough discount rate that would be typical for financing such a project to arrive at a cost per delivered wind kWh supplied to California from Texas.

            The capacity factor on a TX-CA HVDC line could be higher than the wind ~30%. PV from California could go back to Texas just after the sun goes down there and PV could come from TX to CA in the morning.

            But in rough numbers I think we’re looking at about 2.5 cents per kWh to get electricity from 1000 miles away.

            I’m not sure how much higher cost the new taller, bigger windmills are compared to the smaller ones used in Texas where good wind is lower to the ground. It would be exciting if they could get over 25% capacity factor in the southeast where consumption is really growing.

          • Bob_Wallace

            Onshore wind capacity in 2014 was 34%. And that number is lowered by the older wind farms. Newer wind farms are running over 40%, as high as 50%. http://cleantechnica.com/2012/07/27/wind-turbine-net-capacity-factor-50-the-new-normal/
            http://cleantechnica.com/2013/07/01/ges-brilliant-wind-turbine-wind-power-cheaper-than-coal-or-natural-gas-part-3/
            Your 2.5c number looks similar to others I’ve seen. It would probably improve were storage added at the generation end? The amount could be held fairly constant and close to the capacity of the line.

          • Armchair Hydrogeologist

            It would be good if the capacity factor is higher than 30%, and the financing costs could get lower as the US learns how to do HVDC again.

            Adding storage could help the capacity factor as well. But consider the economics: If deep cycle storage ends up costing $100/kWh and can be cycled fully nearly every day for 10+ years, it would end up adding about $0.025/kWh to the cost of the electricity as well.

            Not to sound socialist, but I think there’s a case to be made for a large government intervention in encouraging the massive building of some major interstate HVDC lines. With or without cheap storage these will be necessary. HVDC lines usually need a 60 yard wide right-of-way and the ampacity can be increased for marginal amounts more by stringing more wires in that existing right of way. These rights-of-way don’t exist yet and are a big financial risk to the firms contemplating such lines. A big political push for government intervention to reduce the financing cost would be helpful.

            Some say that the cost of CO2 is $40 a ton, others say $100 a ton. This is $0.02/kWh to $0.05/kWh for a typical fossil fuel mix. A CO2 tax starting at $10 a ton now ramping to $100 a ton in 2026 would raise a lot of revenue (hundreds of billions) to pay for these lines. The CO2 tax would also elevate PPA prices for renewables to be a couple cents higher premium compared to fossil fuels.

          • Bob_Wallace

            Seems like a HVDC project was completed recently.* I could be misremembering. At the moment TVA is working on a new HVDC line from Oklahoma, there’s one is some stage of progress being built with private money in the upper Midwest, and planning is underway to connect the wind rich area of Wyoming to the Intermountain and Pacific interies. This would also turn the two western HVDC lines into a loop which would increase reliability.

            Storage at 2.5cents works. Use that to time shift 4c wind or 6c solar (both unsubsidized) and you’d be very able to compete with gas peakers. Wind plus storage would likely be competitive with CCNG.

            If you could install a lot of solar in the sunniest part of OK and put enough storage there to make wind+solar close to 24/365 I suspect there would be no problem selling power.

            * Checked. Fairly short run of 85 miles in the San Francisco area. 2010. Looks like there’s a project expected to be completed next year between Iowa and Illinois. The TVA (OK to TN) in 2018. And one in Vermont that should finish up in 2019,

            https://en.wikipedia.org/wiki/List_of_HVDC_projects#North_America

            Interestingly, the largest battery bank in the US is installed at a wind farm (32 MW at Laurel Grove). The cost of batteries is probably partially paid for by more consistent flow over the transmission lines.

      • Armchair Hydrogeologist

        Also, efficiency gains from micro inverters is a bit of a quirk specific to rooftop solar and safety requirements unique to rooftop deployment. DC voltage needs to be lower on a rooftop and it is harder to fuse DC since there’s no zero cross. If you’ve ever designed a power electronics product, you quickly gain an appreciation of the cost of fuses. This, and the modality of right sizing the inverter is what makes the micro inverter a good idea.

        Utility scale systems can benefit from high voltage dc series PV stacks being converted to AC on a larger scale. While peak voltage and peak current stress are cost drivers of the discrete parts of an inverter, they scale sublinear below 100A and 2kV. I’ve designed several inverters in my career and I’m not knocking enphase, which I think is an excellent idea for the rooftop market.

        • Dan

          With utility scale projects, I was under the impression that centralized power transmission lines would need an overhaul. Transformers and high voltage lines to carry the power long distances eat away at capital and any efficiency gains from modular local generation seem worth it, even if loss at 7% seems low.

          • Armchair Hydrogeologist

            It depends on the project, and it will depend on specifics.

            In California, most of the PV projects new and proposed fit easily on the existing transmission infrastructure which got beefed up a lot after the underinvestment (and Enron) caused power crisis debacle 15 years ago.

            New transmission costs about $1million per GVA mile (GVA is a GigaWatt – sort of). It gets really complicated with the specific loading factors, voltage, terrain, if there are already towers and just need to double up the wires, etc… but that’s a good ballpark metric. If a 1 GW utility solar project costing $1billion (in 2020 prices) is 150 miles away and can’t fit on the existing infrastructure, it would add about $150Million to the cost to get it in – about a 15% penalty.

            In Texas, several billion had to be invested to bring the ~15GVA+ of wind power from the west to the east several hundred miles. As an ironic aside, oddly W and Rick Perry (normally cast as idiot eco-villains in forums like this) presided over this.

          • Bob_Wallace

            A lot of transmission was built to bring coal-produced electricity into California. Now that those coal plants are closing a lot of transmission is being freed up.

            150 miles away from the foggy coast could easily mean more than 15% more available sunshine.

            What to build, where, is a complex question.

  • Steve

    The only ones who are allowed to make money, save money on solar are the utilities. As soon as battery storage efficiency increases, I’m going off grid. I am waiting 5 years to go solar. By that time, it may be feasible to go off grid.

    • Simple INDIAN

      Let BHE invest when the prices are high for say PV Panels. When PV efficiency increases let us all jump in.

  • Adrian

    Presumably BH won’t lobby against virtual net metering in states where these are planned?

    • Dan

      It depends on whether they are structured as a power generator utility company or a community owner solar garden, like a co op. I think…

  • Dan

    I just noticed a Berkshire Hathaway real estate office in my town and I cannot decide if I should promote them for actions like these or protest them for Warren Buffet’s NV Energy Nevada rooftop solar suppression. The more solar the better… we need to win over state utility regulatory commisions. Changing Berkshire Hathaway’s attitudes towards consumer owned power generation would be huge. As it stands, they seem to be looking to cut out consumers from owning the pv themselves in order to profit off the margins cheap pv affords. We need to raise awareness that those margins translate into greater savings with rooftop solar owned by homeowners themselves.

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