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On Why Did Apple Pay So Much for 130 MW of Solar? Is Google Part of the Answer?

Joe, thanks for providing PG&E's agreement. We still don't know the details of Apple's agreement, but PG&E's is exactly as I describe, and the agreement is not "dependent on output" as you claim:

PG&E will receive all of the generation output from the Project [150MW capacity] starting December 31, 2018. The PPA is for the purchase of an as-available product (“Product”)...Total deliveries from the Project are expected to average 381 GWh per year over the 15 year term of the PPA.

#2 on the First Solar's list of weasel words is "expect", and I foresee an afternoon in a courtroom in 2031, wasting taxpayers' money, devoted to whether whether First Solar's failure to include the past participle of that word obligates them to actually provide that much energy:

These forward-looking statements are often characterized by the use of words such as "estimate," "expect,"...These forward-looking statements involve...factors that may cause our actual results...to differ materially from those expressed or implied by these statements.

Fortunately (p28):

The PPA includes certain performance criteria and milestones that PG&E includes in its form RPS PPA contracts.

Unfortunately, for ratepayers and the environment, those criteria are redacted:

These and other contingencies and milestones are addressed in Confidential Appendices A and D.

Fascinating. Why do both First Solar and PG&E want to hide exactly how much FS is required to deliver? Here's an idea: if ratepayers knew how lax the performance criteria and milestones were, the project might never happen.

What do you think?

March 5, 2015    View Comment    

On Why Did Apple Pay So Much for 130 MW of Solar? Is Google Part of the Answer?

Joe, sure - it's technically a "power purchase agreement" (Apple will be getting some power in return) - but payment appears to be in exchange for whatever their "130MW" corner of the park is good for.

You say "we do not know all the terms of the PPA", followed by "there is no doubt that payment is dependent upon output". Since you don't know, your certainty on the matter is perplexing. Apple is cash-rich to the tune of $160 billion, so as Keith points out this drop-in-the-bucket appears to be worth far more in greenwashing and tax credits than energy to the company, or reduced emissions to California.

First Solar is quite a bit less certain than you are. An excerpt from the CYA/disclaimer which accompanies your press release:

These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements.

As a significant shareholder in Apple, I hope this PR investment permits them to continue to make great computers and cellphones, if not reduce their carbon output.

March 4, 2015    View Comment    

On Why Did Apple Pay So Much for 130 MW of Solar? Is Google Part of the Answer?

Joe, according to the article Apple paid a flat fee of $848 million for

25 years of the output of a 130 MW block of First Solar’s California Flats project

so it's really not a PPA, but an agreement to buy the 25-year output of 130MW of new panel capacity. Thus Keith's assessment is correct in terms of the value of their investment.

March 4, 2015    View Comment    

On Clean Power Plan vs. Reliability: A False Dilemma for States

Caitlin, you make coming up with an answer for "how did Brattle and NERC reach such different conclusions" much more difficult than it needs to be.

The Brattle Group is a for-profit corporation which was paid by an industry consortium to come up with a glowing report on its products. The NERC is a non-profit council whose purpose is maintaining the integrity of the electrical grid.

Who do you trust?

March 4, 2015    View Comment    

On Why Did Apple Pay So Much for 130 MW of Solar? Is Google Part of the Answer?

Catherine, much of solar activism centers on the avoided "externalities" which translate to added value. These include the avoidance of detrimental effects being wrought by fossil fuels on the climate, and of atmospheric pollution with its more immediate health consequences.

As valid as these benefits are, that's only the plus column. Studiously avoided are assessments of the negative externalities - particularly deferred costs like tax benefits and other subsidies. In much the same way the financial industry invented accounting tricks to shield the real value of derivative investments, solar investment capitalizes on the unwillingness (or inability) of taxpayers like you and your husband to pull out their calculators at the dinner table and do the math. And when taxpayers like those at the Energy Information Administration use their calculators to create a detailed levelized cost analysis, solar entrepreneurs point to their plus-column analysis and deride the EIA for ignoring solar's explosive growth. It's growth which has been financed by kicking the cost down the road - in essence, inflated by borrowing money from our kids.

Hopefully, we'll pay careful attention to what's going on in Japan, which has followed in Germany's unfortunate missteps. To their credit, the Japanese aren't being as stubborn as the Germans, however. In today's New York Times is an article describing how PM Shinzo Abe is quickly moving to restart nuclear reactors after throwing trillions of yen down the solar toilet:

The faltering solar boom is threatening an important goal for Japan as a whole: finding clean sources of power to replace the nuclear output lost after the Fukushima disaster four years ago. So far, the country has been relying mostly on fossil fuels like coal and natural gas to fill the gap, leading to sharply higher emissions of greenhouse gases.

http://www.nytimes.com/2015/03/04/business/international/japans-solar-power-growth-falters-as-utilities-balk.html

March 4, 2015    View Comment    

On Nuclear Communication

Suzanne, your blog post is thought-provoking. I've never heard Aristotle linked to P.R. before, but these are timeless ideas.

Some experience with political activism and advertising has left me with the general impression that both pathos and logos play important roles. What rhetoric gains in immediacy is mostly in trade for longevity. While a great slogan or a perfectly-framed political message can be extremely effective for drawing attention to a product or candidate, without the logos part of the equation they're soon forgotten.

Yet as you astutely point out, assuming policy changes can result from even the most persuasive logic alone, as a verdict might in a courtroom, is "magical thinking". Also important are the resources to effectively disseminate a message. Speaking to a crowd gathered on a stony hill had the potential to catalyze a political movement in biblical times; today even Jesus would have difficulty getting airtime.

I'm not a believer in the assumption that society is too stupid to understand nuclear energy, or be part of the discussion. You don't have to understand neutron flux to have a grasp on relative risk and reward, for which everyone is born with an innate genius. I am a believer that society has had lousy teachers, particlarly over the last four decades - not educators per se, but media, politicians, and self-professed antinuclear experts who have gotten it badly wrong. It's up to people like you, me, Joris, and others on this board to hammer away with the truth. With persistence and legitimacy, opinion will come around.

March 3, 2015    View Comment    

On The IEA's Central Projections for Renewables Continue to Look Way Too Low

Adam, the U.S. EIA is fairly in line with IEA, and is fairly specific about the considerations they're using to predict wind growth. It has more to do with demand, and is based on the general assumption that policy remains status quo indefinitely:

In the AEO2014 Reference case, capacity additions from 2013 to 2040 total 351 GW, including new plants in the power sector as well as end-use generators. Additions through 2016 average 16 GW/year, with 52% consisting of renewable plants built to take advantage of federal tax incentives and to meet state RFS. Eligibility rules for the wind production tax credit (PTC) allow new wind capacity coming online before 2016 to qualify, leading to a large increase just at the deadline.

Annual capacity additions drop significantly after 2016 and remain below 9 GW/year until 2023, while existing capacity is adequate to meet relatively slow demand growth in most regions and satisfy renewable requirements under state standards.

In any case, AEO2014 is almost a year old, with AEO2015 due in April. Maybe we'll see some corrections to their outlook.

March 2, 2015    View Comment    

On Nuclear Communication

Suzanne, as usual many good points here.

Nuclear faces a couple of dilemmas - its awesome power tends to engender a primal mistrust in people who don't understand it. General Relativity was in scientific limbo for half a century until tests were available to provide conclusive proof, and like GR, nuclear energy involves phenomena which are completely outside the scope of our day-to-day existence.

Second, the best scientists, by nature and training, shun editorializing in any description of their work. Good science requires sticking to the facts and presenting them in an impartial manner. Yet some salesmanship is in order because of the significant investment nuclear will require.

Somehow we need to bridge these gaps. I was encouraged to hear about Nuclear Matters, the new nuclear advocacy organization, but discouraged after efforts to contact them were unsuccessful. And reminded of a riddle:

Q: How do you identify extroverted mathematicians?
A: While talking to you they look at your shoes.

C'mon guys - out on the dance floor. In environmental terms, we can't let it be the last one.

March 2, 2015    View Comment    

On EPA: Methane Emissions from Natural Gas Production Fell 35% Since 2007

Steve, though it's certainly better than venting, flaring has increased dramatically in the same period. According to EPA, vented and flared natural gas combined is up 45% since 2007.

March 2, 2015    View Comment    

On Energy Quote of the Day: Keystone XL has Become Perfect Symbol of Washington’s Dysfunction

Ed, like CCS, carbon emissions "deals" have proven notoriously ineffective, so I have no idea how Michael Bloomberg expects environmentalists to approve such a path.

But the offer is encouraging. A modified version of Gandhi's famous quote is in order:

First they ignore you, then they laugh at you, then they fight you, then they negotiate, then you win.

March 2, 2015    View Comment    

On A Lesson in Oil Pricing

Geoffrey, agreed and you've provided a valid and apropos last word on the topic.

March 2, 2015    View Comment    

On Nuclear Energy: The Sixty-Year Pitch

Joris, thanks for looking into that - my patience is limited with fact-checking these "independent" analyses.

The root problem, of course, is they aren't independent at all. In this case, Ecofys is in the same boat as Forrester Research, the Brattle Group, and other corporations which are paid to come up with "research" which verifies a pre-ordained conclusion.

Can we really expect an objective characterization of nuclear from a group whose tagline is "Sustainable Energy for Everyone"?

March 2, 2015    View Comment