How The Sunshine State Can Live Up To Its Name, while enabling all to prosper

November 2016

William (Coty) Keller

 

The past year has seen a lot of bantering about solar power in Florida.  I am  of the opinion that all the bickering has caused most citizens to miss the most important points. Instead of being about selfish interests, it should instead be about a stable climate, jobs and the economy.  The bad news is we are wasting a lot of time and energy while being distracted. The good news is that solutions are available that can benefit us all.  

 

Background

Anyone trying to keep up with the "solar" issue has been tortured with competing rhetoric from Floridians for Solar Choice (the distributed power/roof top solar people, who failed to get enough signatures to get their amendment on the ballot) and Consumers for Smart Solar (fronting for the utility companies, they hoped we would act dumb and vote for their Amendment 1 in November - we didn't).   We  did pass Amendment 4 in the August primary election, which probably did not do much harm by allowing tax breaks for residential and commercial solar power installations.  Given the current situation, Amendment 4 makes sense as we try act a little bit like the Sunshine State with incentives for solar.  But in the long run, I feel that we would do better not to subsidize any form of energy, and instead let market forces pick the winners and losers.  More on that later.  

All this solar amendment chatter has deflected attention from the urgent and important reality that we must (according to the Union for Concerned Scientists and the UN Panel on Climate Change) reduce the emission of greenhouse gases (GHGs) about 40-50% by 2025 and by 70- 80% before mid century.  Failure to achieve these reductions will lead to exceeding average global temperatures of more than 2 degrees Celsius (3.6 degrees Fahrenheit) above the pre-industrial level, which will cause the world to face truly alarming consequences. The power industry is the place to start because plants emit more carbon dioxide than our cars, planes and homes combined, and it is this greenhouse gas that is the principal culprit behind the alarming warming of our planet. The provisions in any of these previously mentioned amendments are not going to get us there- not even close!  What we need to do is focus on replacing our old fashioned GHG emitting fuels (Coal, Gas and Oil) with non-emitting sources of energy (Wind, Solar, Hydro, Nuclear) in a really meaningful, and dramatic way. 

We have been caught up in this fight between competing interests, meanwhile ignoring the common good. On one side are those who see distributed energy sources (DES), smaller power generators like those of rooftop solar, as essential to their livelihood. They believe they can, under the right policies, provide a source of reliable and cheap power.  On the other side are the utility companies who say large scale solar plants are more efficient than rooftop generators. They prefer to keep control of inputs to the electric grid. Utilities also have stockholder profit as a motive, so they don't want to lose  revenues to people generating their own power.  Both sides have views that need to be respected.   But all need to concede that to achieve a stable climate, and therefore assure prosperity in the decades to come, we need lots and lots of solar power, and the only way to get to a 70-80% reduction in GHG emissions is by having lots of distributed solar and lots of utility grade solar plants - and fast! 

 

We can achieve this in a way that respects everyone's interests, but everyone has to put forth a super effort.  We need our power companies, builders and developers, governments (local, state and federal), and most of all our citizens to work to make it happen.   Here's how:

(Electric) Utility companies

Reducing emissions by 80%, in the face of a growing population, is going to take an effort akin to the mobilization that won World War II. 

·         Less is better. Conservation is key: The challenge for our utility companies is to change their business model from more is better to less is better.  This is because of two factors being key to achieving the needed 80% reduction in GHG emissions: (1) major conservation efforts (customers using use less power), and (2) lots of DES  (customer making lots of their own power with non-emitting generators).  The secret to this, according to the Brookings Institution and National Resources Defense Council (NRDC) is to break the link between a utility's profits and the amount of electricity it sells,  allowing utilities to generate less power and still make a profit.  This is a turn from the old model of making more money by selling more electricity - which is a disincentive for a more efficient grid. Having a more efficient grid adds to the bottom line. 

·         The other key of course is to shift sources of power from GHG emitters to energy generation that does not emit.  Since the utility will be generating less power on its own (due to less demand from conservation and increased DES), this challenge will be less ominous than many imagine.  Here is where the analogy to WWII comes to play.  We won in large part because of our 1940s advances in technology, changing the focus of our industrial processes, together with a shared vision and commitment by most Americans.  These same characteristics can pull us thru our shift to a carbon-free society, and like we experienced in the post war period, we can enjoy the prosperity of an invigorated economy.

 

Utility Statements:

 

We should modify the reports that electric utility companies provide their customers so the most important information is presented: how much GHG emissions is your home or business responsible for, and where is your power coming from?  We want to keep this information in front of us so we can gauge our progress in conservation, shifting from old fashioned emitting energy to non-emitting sources and most importantly  reducing emissions by 80% before the middle of the century.  Here are some examples of the kinds of displays that could be useful in our Electric bills.

 

Emissions you are responsible for

Heat Trapping GHG

Pounds CO2  Equivalent  this period

Pounds CO2  E last period

Pounds CO2  E this period last year

Carbon Dioxide CO2

 

 

 

Methane NH4

 

 

 

Nitrous Oxide N20

 

 

 

F- gases

 

 

 

 

For a point of reference, the Union of Concerned Scientist estimates the average American is responsible for a total of 21 tons (24,000 pounds) of CO2 annually.  CO2  is the most abundant GHG (about 76% of GHG emissions).  Methane (CH4) and Nitrous Oxide (N2O) emissions are relatively low compared to CO2, but pound for pound they are more potent as GHGs.  Methane (about 16% of GHG emissions) is emitted by Fracking for natural gas and oil, agriculture, and from landfills. While methane does not stay around as long as CO2  its impact is far more dramatic.  Methane is 25 times more potent as a global warming gas in the atmosphere.    Nitrous Oxide -N2O (a bit over 6% of GHG emissions) is know by some of us from the dentists' office.  But more common sources are from the combustion of fossil fuels and chemical fertilizers used on crops,   Among the "F-Gases" (about 2% of total GHG emissions) are hydrochlorofluorocarbons such as refrigerants which are potent heat trappers,  but not  abundant.

 

Energy Sources - where your power came from

Source of Power

KWHs and Percent of your Power this Period

KWHs and Percent of your Power last period

KWHs and Percent of your Power this period last year

Solar

 

 

 

Wind

 

 

 

Hydro

 

 

 

Nuclear

 

 

 

Biofuels

 

 

 

Coal

 

 

 

Natural Gas

 

 

 

Oil

 

 

 

Other

 

 

 

 

 

Triple Bottom Line:  Besides immediate financial interests in the form of profits, companies want to make their shareholder proud by contributing to society at large.  By reducing emissions and allowing for the affordable shift to cheap and clean energy, utilities will be able to show a positive triple bottom line with benefits to the economy, society, and the environment over the long haul.  Such a long term view will pay clear and consistent returns and self-actualization for employees, management and stockholders.

 

Local government,  developers & builders

The Union of Concerned Scientists tell the "tale of two houses" built in Lakeland, side by side, by the same contractor, using the same floor plan and basic amenities. One was built with energy efficient materials and design, including more wall insulation, a white roof,  high efficiency heating and cooling, and solar systems for water heating and electrical power.  The initial investment for the efficient home was substantially higher, but its consumption from the electrical grid was found to be 92% lower than the conventional house next door.   The savings on the future electric bills alone pays a healthy return on the extra investment.  We need to alter our home development processes so people are able to realize these savings, and we can avoid the extra electricity needed to feed old fashioned, inefficient buildings.

 

A first step is to adjust local building codes to require homes to comply with the latest conservation standards.  We want to  implement the strictest and most up-to-date codes so that new and remodeled buildings will be as  energy efficient as possible.  Developers and builders play an important role here.  They can help make clear the benefits for prospective buyers by showing how their up-front investment in conservation will pay returns in the long run in terms of monthly energy savings and home value.   LEED (Leadership in Energy and Environmental Design) and, Energy Star standards can be put to use in our homes and buildings with dramatic financial pay backs. Meanwhile every KWH of power we avoid is less GHG emitted. 

 

State Government

The most powerful tool in the state's policy quiver, according to the Union of Concerned Scientists to require electric utilities to generate a certain percentage of their power from non-emitting sources  by specific dates. To meet the goals needed for a stable climate, Florida's state goals should be:

·         50% from non- emitting sources by 2025

·         80% by 2050

 

It's becoming clear that such a shift in energy sources can lead to economic benefits.  Writing in the Atlantic this July, Ronald Brownstein reported that several states (California, New York, Oregon, Vermont, Hawaii) are leading the way with landmark requirements that their utilities generate fully half their power from non-emitting sources in the near term.   “There is a strong trend toward strengthening portfolio standards,” said Jocelyn Durkay, an energy specialist at the National Conference of State Legislatures. Policy makers are seeing the economic benefits (jobs, investment profits) provided by the growing clean energy industry. 

 

Two other areas where the State Government has to play key role are Conservation and Virtual Net Metering.  Helping our citizens reduce their electrical consumption by conservation and efficiency measures, leads to a direct reduction in emissions because it avoids the use of electrical power.  Programs such as energy audits enable us to find out how to use energy more efficiently, how to conserve it, and yes how to save lots of money.

 

Net Metering is the concept that allows somebody like me to run my solar generator without having to invest in a storage system.  My utility company (FPL) agrees to take my excess power and use it on the grid, and when I need power (for example, at night when the sun is not shining), they provide me with electricity.  My meter runs forward (when I take power from the grid) and backwards (when I send them juice). We agree to compensate each other according to the "net" reading.  The utility pays me a wholesale (about 3 cents/kwh) price for my excess power, and I pay them retail  price (about 12 cents/kwh) for what I get from them.  It's a nice arrangement, for the most part, and serves the interests of the customer and the utility.  I don't have to invest in batteries to store my excess power (and carry me thru the nights) and FPL makes money on my excess power, offsetting their cost of maintaining the grid.

 

What we need to do in Florida is expand to Virtual (or group or neighborhood) Net Metering.  This allows utility customers to share the electricity output from a single solar power generator, typically in proportion to their ownership of the shared system.  This allow folks in a Condo, for example to share the benefits from a common, larger photovoltaic system.  Researchers from Brookings evaluated reports from utility regulatory bodies, national laboratories, academic and think-tank studies, including notable solar valuation studies from Maine to Nevada. The conclusion is that net metering is a net benefit to the grid and all ratepayers. That's good news because increasing the numbers of small (including neighborhood) solar generators - in quantum leaps - is necessary to achieve our goals of 80% emission reductions.  Virtual net metering is essential to achieving our goals in the Sunshine State.

 

Federal Government

The federal government must help by putting a price on carbon.  Let me say directly that I am not talking about a carbon tax which can have a negative impact on family budgets, jobs and the overall economy. 

 

Business leaders and energy companies have recognized for a long time that a price on carbon is inevitable.  The reason that carbon pricing is becoming a reality (several nations and provinces are doing it already)  is the social cost of GHG emissions is not universally included in their dollar price.  Damages to health and the climate caused by GHG emissions are simply not yet part of their price.  Meanwhile, without a national rule on carbon pricing, the uncertainty of the timing and value of the pricing is a source of frustration and risk. Companies and the overall economy are suffering while we wait.   Its time to set a price on carbon in a way that benefits household budgets, increases jobs, stimulates the economy and yes - drastically cuts GHG emissions.

 

The solution is called Carbon Fee and Dividend (CF&D) and it's been proposed by the non-partisan, non-profit group, Citizens' Climate Lobby.  Here's how it works:

·         A fee is placed on emitting fuels at the source (well, mine, port of entry). This fee starts at $15 per ton of CO2 equivalent emissions, and increases steadily each year by $10.

·         The money collected is returned to American households on an equal basis. Under this plan about 2/3 of all households would break even or receive more in their dividend checks than they would pay in higher prices due to the fee, thereby protecting the poor and middle class.

·         A border tariff adjustment is made on goods imported from or exported to countries without an equivalent price on carbon. This adjustment would both discourage businesses from relocating to where they can emit more CO2 and encourage other nations to adopt an equivalent price on carbon.

·         A predictably increasing carbon price will send a clear market signal which will unleash entrepreneurs and investors in the new clean-energy economy. 

 

What does this do for the economy? Regional Economic Modeling, Inc (REMI) estimates that the Southeast Region of the US will experience a net gain in gross regional profit of $15.1 billion by 2025 (3rd highest among all of the 9 regions), a net increase in jobs by 400,000 (2nd among all regions), and a sizeable increase in real income per capita (4th among all regions). Improved air quality will also results in the prevention of around 1,000 premature deaths annually by 2025. 

 

What happens to GHG emissions from power generation if we put CF&D in place? One way to see the super impact of CF&D is to compare it to what happens with the Clean Power Plan.

 

market based vs regulation-cropped more.jpg

REMI 2014

 

The goals for the EPA Clean Power Plan are shown on the red trend line. You can see a 30% reduction by 2030 from the baseline of doing nothing ("business as usual"). While this 30% by 2030 is better than nothing, it is not close to the 40% reduction the UN Panel and Union of Concerned Scientists say we need  by 2025. 

 

Look at the impact of the CCL plan shown with the orange line.  CF&D exceeds EPA targets before 2019 and by 2030 we achieve a 91 % reduction in CO2 emissions from power generation.  Now we are talking about an effective solution! And we are having a positive impact on jobs, the economy and health at the same time.

 

It is simple- all this just by taking the revenues from a steadily increasing fee on carbon, and returning them to households in the form of a monthly dividend.  The extra money allows people to afford the rising prices on old fashioned energy sources until they are able to make the transition to the relatively cheaper, non-emitting forms of energy. Meanwhile, non-emitting sources of energy (wind, solar, hydro, nuclear) will become cheaper for utility companies, and add to the shareholders' bottom line.  CF&D is good for the climate and hence our Florida lifestyles, the local tourism base, insurance prices, home values, health care costs, and our grandchildren's' livelihood.  It's also good for jobs, the economy and family budgets.

Citizens act

We can sum it up by saying the problem is that unless we reduce our GHG emissions by 40% shortly, and by 80% by mid-century, we will face the terrible effects of climate change.  Generation of electrical power is a large, and solvable part of the emissions problem.  Unfortunately, we have been distracted from real solutions by the bickering of selfish interests fighting over differing views of how solar power should play. Roof top solar folks and utility companies are entitled to earn a living and make a profit for shareholders. But we would do better to focus on outcomes that serve the greater good of a stable climate and prosperity for all. 

 

Continuation of the fighting about solar amendments is not going to help us achieve our goals.  Let's get the word to our elected officials that it is time for action. Here are solutions that citizens should support:

 

·        Congress should enact Carbon Fee and Dividend legislation.  The fee is imposed at the mine, well or port of entry.  It starts at $15 for every ton of CO2 the fuels will emit. Every year the fee is increased another $10.   Money collected from the carbon fee are returned directly to households as a monthly dividend.  About two-thirds of households will break even or receive more than they would pay in higher prices.  This proposal is supported by energy companies such as Exxon-Mobile because they will be able to plan and reduce risk.

·         Electric Utilities should upgrade business models so they will be generating less power even with inevitable population growth.  This can be achieved by expanding distributed power (roof top solar in particular) and helping customers conserve power by making their homes and businesses more efficient.  Utilities will also be shifting from GHG emitting sources of energy to non-emitters (Solar, Wind, Hydro, Nuclear) and making money doing so because of the steadily  increasing price on carbon.  Monthly statements to customers will make it clear how much (and of what kind of) power everyone is using and how much GHG they are responsible for  emitting.   These sorts of statements will also let everyone know what progress we are making towards our goals. 

·         Local Governments should tighten up building codes so all new construction and renovated buildings conserve energy.  The 90 plus percent savings that can be achieved (with LEED and Service Star standards) in energy bills will pay handsome economic returns to home/building owners. Meanwhile, utilities won't have to generate so much power.

·         State government must require electrical utilities to produce at least 50% of their output from non-emitting sources (Solar, Wind, Hydro, Nuclear) by 2015 and 80% by 2015.  Because of the steadily increasing the price on carbon, this transition will happen more by choice than by mandate. Because the revenues will be returned to households in the form of monthly dividends, family budgets will be bolstered and the economy will be stimulated. Florida also must upgrade the our energy conservation program (free energy audits, etc.) to help people use less energy. We also must make Virtual Net Metering into law.  Also called Group or Neighborhood Metering, this allows utility customers to share the electricity output from a single solar power generator.  Folks in a Condo or apartment building, for example, could share the benefits from a common, larger photovoltaic system.

 

With these kinds of solutions, Florida will quickly begin to look like the Sunshine State, with solar panels on roof tops and in large power plants - everywhere you look.  The shift from old fashioned, unhealthy  and climate warming energy to modern and non-emitting sources will also fuel (sic) a new and robust economy with more jobs.  There is no alternative.

 

 

----------------------------------------------------------

Coty Keller is a retired Naval Officer who commanded two ships and served as professor of national security affairs at the Naval War College. He is the author of the 40,000 lb. Carbon Diet (how a middle class American Family reduced their carbon footprint by 40,000 lbs annually and made money doing it) and Urgency & Action (why it is so urgent that we take action to reduce carbon emissions; and what we can do about it).  He is co-leader of the Port Charlotte/Punta Gorda chapter of Citizens' Climate Lobby.  You can visit Coty's homepage at http://www.ecopapak.org/