Thank You, Jon Wellinghoff, For Clearing The Fog

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Thanks to our friends of the Nebraskans For Solar in sharing a very important link explaining why one of the country’s (USA’s) top regulators is so bullish on solar: FERC Chair Jon Wellinghoff: Solar ‘Is Going to Overtake Everything

Sun Will Overtake Everything ( Generous Florida Sunshine, credit: sunisthefuture-Susan Sun Nunamaker)

 

Chairman of the FERC (Federal Energy Regulatory Commission), Jon Wellinghoff, is quite aware of the rapidly changing energy landscape. During a sideline conversation at the National Clean Energy Summit last week in Las Vegas, Jon Wellinghoff commented, “Solar is growing so fast it is going to overtake everything….if a single drop of water on the pitcher’s mound at Dodger Stadium is doubled every minute, a person chained to the highest seat would be in danger of drowning in an hour.” That’s what is happening in solar. It could double every two years. This phenomenon is also recently concluded by MJ Shiao of GTM (GreenTechMedia) Research. In the graph below, this phenomenon of doubling in the next 2 1/2 years, the U.S. will double its entire cumulative capacity of distributed solar–repeating in the span of a few short years what it took four decades to deploy…description of the behavior of an exponential curve:

Cumulative U.S. DG PV Installations at Year End, 2000-2015 (Chart: GTM Research/SEIA U.S. Solar Market Insight)

Wellinghoff continues, “…geothermal, wind, and other resources will supplement solar. But at its present growth rate, solar will overtake wind in about ten years. It is going to be the dominant player. Every body’s roof is out there.” And other resources have not seen declining prices like solar has. He added, “Solar PV is $0.70 or $0.80 per watt to manufacture. Residential rooftop is $4 to $5 per watt. But they are going to drive that down to $2 and then to $1 per watt.” Wellinghoff also mentions that advanced storage technology also promises lower costs in the future. He said, “Once it is more cost-effective to build solar with storage than to build a combustion turbine or wind for power at night, that is ‘game over’. At that point, it will be all about consumer-driven markets.”

Wellinghoff emphasized, “Even though the FERC oversees wholesale markets, utilities, and other jurisdictional entities at the wholesale level, the consumers needs to be our major concern….if FERC does not ensure the grid is ready to integrate the growing marketplace demand for distributed solar and other distributed resources, we are going to have problems with grid reliability and overall grid costs.” Transmission infrastructure will be able to keep up with solar growth. The big changes will be at the distributed level where FERC has less influence, he explained. But the commission has been examining the costs and benefits of distributed generation (DG) in wholesale markets. “Rate structures need to be formulated in ways that fully recognize the costs and benefits of distributed resources. In many utility retail rates, a disproportionate amount of the fixed costs are recovered through a variable rate. That is problematic, when a lot of people go to distributed generation….the net metering controversy can only be solved by fully allocated, fully analyzed cost and benefit study of distributed resources….distributed solar can be captured and realized by the distribution utility that is not currently being paid to PV system owners because they have not been analyzed, quantified, and monetized.”

Below, a video of The Hill’s ‘Energy Efficiency, Reliability, and the Smart Grid’ Briefing, with Jon Wellinghoff:


Wellinghoff noted, The Crossborder Energy study in California concluded the benefits of DG are near retail rates, “If utilities say that study is wrong, let’s get their studies and the studies from the solar side, and let’s have a hearing, let’s have a full discovery, and let’s have a full litigated process. That’s what regulatory commissions at the federal and state levels are for, to put all that data on the table and see what the accurate answers are.”

Wellinghoff explained that FERC isn’t involved in that process because it is a retail rate issue. “But DG and distributed solar can be wholesale grid resources if a wholesale grid operator can access those resources and have some control over them. What FERC has to do is ensure these distributed systems get recognized and compensated and integrated into the wholesale grid.”

Introduction of more competition is definitely the goal Mr. Wellinghoff has in mind, “I would do a full analysis of anything not now competitive, like the distributed system, and then try to ensure I could recover costs in a way that adequately reflected all costs and benefits for all users….the sales of retail energy, capacity, and ancillary services should all be competitive and coupled with the wholesale grid….Consumers should have access to and be able to respond to five-minute wholesale prices. They should have the opportunity–not the requirement, but the opportunity –to respond to those prices and modify their loads and usage to lower their energy costs. The result would be an optimized use of the grid.”

To learn more about Jon Wellinghoff, please feel free to refer to links below:

  1. FERC Chairman Jon Wellinghoff Stepping Down
  2. Departing FERC Chairman Jon Wellinghoff: A Day in the Life of the Grid

I want to clarify: FERC is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. Former FERC Chairman Jon Wellinghoff submitted his resignation letter to President Barack Obama in May of 2013. A former Nevada utility regulator, Wellinghoff served as chairman of the energy panel since 2009 and has been a commission member since 2006. Senate Energy Committee Chairman Ron Wyden of Oregon says that Wellinghoff launched important investigations to protect consumers from manipulation of energy markets and pushed to increase renewable energy supplies.

Thank you, Chairman Jon Wellinghoff, for your clarity and effort! It is truly appreciated by us consumers and earthling.

~have a bright and sunny day~

gathered, written, and posted by sunisthefuture-Susan Sun Nunamaker

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