GigaOM » PG&E Corporation

Some good news: Fewer solar projects in Cali will fail in the future

Ucilia Wang — Fri, 03 Feb 2012 17:41:57 +0000

All of those wind and solar power projects you hear about being built in California actually have a pretty high failure rate of around 30-40 percent, according to regulators and utilities. So basically between a third to almost half of all those announced clean power projects won’t ever get built. But the good news is that about a decade after the state set its mandate that required utilities to buy an increasing amount of clean power, that failure rate is expected to come down significantly now that the these markets are maturing and utilities are seeing better prepared and managed projects.

“For the contracts we’ve signed in the last three years, we are seeing extremely low failure rates,” said Aaron Johnson, director of renewable energy policy and strategy and Pacific Gas and Electric, during the Photon Solar Electric Utility Conference in San Francisco Thursday. “We have 12 projects under construction now. Some are massive – in hundreds of megawatts.”

Developers these days tend to already have secured land and are often times far further along in the permitting process than those that were in the early days of bidding for contracts with PG&E, Johnson said. At the same time, the utility also is seeing more developers bidding for projects. Johnson said he expects the failure rate to drop based on the various recent analyses that PG&E has done in evaluating bids and contracts, but he said those analyses don’t add up to one number that characterizes the overall decline in failure rate.

So overall the state’s utilities are more confident that they can meet the state’s renewable energy mandate. But at the same time it also means that the clean power developers could see less deals coming their way — another hurdle for the battered solar and wind industries this year. “The green rush that you saw in the last few years in California is unlikely to return,” Johnson said. “We have a limited need for projects and have more players.

Fewer large clean power projects

The sentiment that California is no longer the land of abundant clean power opportunities for utility projects has grown over the past year as some of the large projects finally lined up financing and permits to start construction. First Solar’s interim CEO, Michael Ahearn, cited the dropping amount of new deals in California as one of the reasons that the company must seek opportunities elsewhere around the world in order to continue its growth.

Thanks in part to the federal government’s now defunct loan guarantee program, companies such as First Solar, SunPower and BrightSource Energy are building solar power plants that are hundreds of megawatts each.

California set its renewable energy policy in 2002 and increased the renewable power mandate to 20 percent by 2010 and then 33 percent by 2020. Those are the big goals, and also the mandate includes milestones that utilities need to meet each year. PG&E, for one, has lined up enough power purchase contracts to meet its goal through 2016, Johnson said. The utility asked for more bids from developers last summer, but those bids will be considered for meeting the requirements from 2017 through 2020.

While other states have similar mandates, those mandates are usually more modest, or the states don’t have the large populations that will require such a massive amount of clean power, like California does. As a result, developers like First Solar, which also makes solar panels and other equipment, now expects much fewer opportunities to develop mega projects like the two projects of 550 MW each that First Solar is building in California now.

“We will see very few mega projects like what we’ve seen, and see more small and diversified projects in the southwest and across the country,” said Brian Kunz, vice president of U.S. project development at First Solar, during the conference.

First Solar’s gain

Interestingly, First Solar has been a big beneficiary of the failings by developers to deliver on the power contracts they signed with California utilities. The company scooped up a fat pipeline of projects under development by OptiSolar for $400 million in 2009, and that deal helped to propel First Solar to become the largest solar project developer in the country. First Solar subsequently bought project pipelines for several other developers.

OptiSolar came to symbolize solar project development failure. The California company was working on more than 1 GW worth of projects when it stumbled – it wanted to be both a solar panel manufacturer and project developer and couldn’t do either well. Other companies that ditched plans to stay in the project development business included Ausra. And it wasn’t so long ago when Tessera Solar was forced to sell its two mega projects because it didn’t have the money to continue. Those two projects had secured contracts to sell power to Southern California Edison and San Diego Gas & Electric, and both utilities canceled the contracts after the sale of the projects only about a year ago.

In the past, California regulators calculated that that about 30 percent of the power purchase agreements (in gigawatt hours, not number of contracts) for renewable energy, which includes not just solar but also wind and other sources, would get canceled. During a California Energy Commission workshop last September, PG&E and Southern California Edison said they actually used 60 percent success rate in their long-term planning for meeting the state mandate.

“We’ve learned a lot over the past eight years, and going forward we are getting projects that are much further along in the development cycle,” Valerie Winn, PG&E’s manager of state agency relations, said during the commission workshop. “We expect … our success rate to get higher going forward.”

Photo courtesy of First Solar

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Honeywell killed off its learning thermostat 20 years ago

Katie Fehrenbacher — Thu, 02 Feb 2012 21:08:32 +0000

Honeywell's thermostat with Opower software

Honeywell, one of the world’s largest thermostat makers, tells me that twenty years ago it tested out thermostats that can learn the home owner’s behavior and adapt the heating and cooling accordingly, but ultimately decided that consumers didn’t take to them, and would rather control their thermostat themselves.

I asked Honeywell’s President of its Environmental and Combustion Controls division, Beth Wozniak, in an interview if Honeywell was interested in making learning thermostats, because there’s been so much discussion about the startup Nest, which has created what it calls the world’s first learning thermostat.

“We found that consumers prefer to control the thermostat, rather than being controlled by the thermostat,” said Wozniak. Instead of learning thermostats, Honeywell is focused on adding intelligence to digital and connected thermostats through simple UI, mobile apps, and partnerships like its one with Opower.

Opower will be providing the analytics and data to help Honeywell use home and building thermostats for demand response programs, where utilities can ask home owners to turn down their heating and cooling slightly during peak times of day. The Opower thermostats are being piloted with utilities right now, including at PG&E. The Opower software will also be used to create new ways for the home owner to save money on their energy bill, and Wozniak says by the end of the year the partnership will launch other products too.

For Honeywell, connected thermostats are still a small part of the company’s overall thermostat sales. While Wozniak declined to say what percent or what volume of Honeywell’s thermostat sales are connected thermostats, she said it’s the very early days of the connected thermostat market. Honeywell sells a whole host of other connected home products such as humidifiers and security systems, and a “total connected home system.”

Who knows if Nest and its learning thermostat will one day make a dent in the thermostat market, but Wozniak acknowledges that the startup has brought some much-needed attention to consumer thermostats in general. “Cell phones and tablets have set a whole new bar for how things can be connected.”

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The Green Button project launches to unleash energy data

Katie Fehrenbacher — Wed, 18 Jan 2012 11:00:34 +0000

The potential of open access to energy data has drawn U.S. Chief Technology Officer Aneesh Chopra to the West Coast. On Wednesday morning Chopra and half a dozen utilities plan to announce the official launch of the Green Button initiative at an event in Santa Clara, Calif., which will enable utility customers to easily download their energy consumption data with one click in an easy-to-read format on utilities’ and third parties’ websites.

California utilities PG&E and San Diego Gas & Electric will announce on Wednesday that the feature is available now, presumably via a green button on the utilities’ websites. Other utilities including Southern California Edison, Glendale Power & Light, Oncor and Pepco Holdings will announce that they will offer the feature later this year.

The project is important because it is a broad-based plan to take energy data and standardize the format of it, open it up (while also providing security) and make it readily available to consumers. Data is commonly treated this way on the Internet, but for other sectors, open access to data isn’t as prevalent.

Standardizing and freeing the data can create an ecosystem for developers to use that data to create apps that can deliver new services and products. The Internet has thrived because of open data and standardized information systems. Delivering that energy data directly back to consumers is also important because it can lead to energy-efficiency measures and can help change a consumers’ energy-consumption behavior.

Chopra first introduced the idea of the Green Button initiative back in Sept. 2011 and challenged the utility sector to quickly work at offering customers standardized and easy access to their own energy information.

California utilities are moving first on this partly because last year the California Public Utilities Commission (CPUC) ordered the state’s big three utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — to follow its proposed ruling on privacy, security and access to energy data. That meant offering up consumers easy and secure access to their data.

A score of startups, utilities and government officials will be at the event on Wednesday looking to discuss the implications of energy data.

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