Congratulations. To the next Secretary of Energy, Jennifer Granholm. I met her when she was Governor of Michigan and a strong supporter of solar then, she remained an ardent advocate for the clean energy market afterwards. Her expertise and executive leadership will be great for the amazing team at DOE.
Paint The Box. The opposition for a clean energy standard will say something about picking winners and losers. In reality, and more and more so publicly, utilities and investors want the Government to state the obvious which is that the energy transition is happening today. By having a ‘mandated’ goal, they have the coverage against the short term traders about doing the work they know will be done anyways.
Sunshine. Is the best disinfectant. Companies with climate risk should state as such, whether they need to do anything about it is up to them and their shareholders. I’ve lived in Florida for over 20 years with a hiatus in Northern California and Maryland. Most of you have lost your power more hours/days in the past 10 years than I have. That’s my way of saying that infrastructure and climate events that threaten that intelligent and reliable grid is no longer an isolated risk.
Have A Great Weekend! Big news next week.
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Yann
Right Job Right Location. Part of our job is to make sure that the energy transition doesn’t change the location of the jobs that people have today. As someone that has moved for work, as many of you have, it isn’t easy to leave behind friends, family and comfort for a new beginning. For many in coal, gas and power sectors they are working jobs that may have been jobs in their families for generations, think coal miners. We’re getting data that show that job opportunities match where the energy transition is impacting the most workers and it’s up to many of you reading this to grow your businesses in those locations and not put them where you are comfortable. Hiring talent is surely one of the toughest challenges you will face in the coming years so go to the talent.
Speeding The Replacements. The fiscal climate dilemma will surely be centerstage this decade. The dilemma is to determine what to do with existing assets that have not reached their end of life while also acknowledging that they are not the best solution anymore especially with societal costs being included in today’s analysis. Yes, it was the wrong decision to build in the first place but now they are installed, capitalized and millions of retirement accounts, pension funds, and investments are taking the assumption of a full life for granted. Should we replace many of those plants? Yes, the climate and grid need it to happen but that doesn’t happen in a vacuum either.
Climate, Jobs And Wealth Creation. We are the center of the greatest wealth creation opportunity in a generation, that is a certainty. Because of that and how the grid is changing, it is also where the largest growth of jobs will happen. As I said in a recent interview, tell me the job you want and I’ll show you the job opportunity in our industry. While this is the SolarWakeup and I remember at every CALSSA board meeting that we have become the big S, solar plus storage industry. The best part is that we are creating jobs, careers, and wealth while ensuring that our kids inherit a cleaner planet.
The First Step. In the coming months and years, we are going to have tough conversations, some of which I outline above. We’ve been having net metering battles since the day I joined the industry 15 years ago and even in California, the biggest market in the Country where solar is literally keeping the lights on during peak shutoff events, the fight continues. The grid is transitioning, changing for the better. We can either work together to make it work better for everyone or we can fight the battles where one side shuts their eyes and points that clean energy is bad, bad, bad. Look at SEIA’s statement about Texas last week, no finger-pointing just simply saying we can solve this problem, shutoffs, and rampant costs, by including the lowest costs and more resilient technologies. It is a long past time for anti-renewables forces to stop saying that consumer choice and self-reliance by investing in their own energy source is bad for the grid and if they aren’t going to stop, then it’s time for regulators to stop hearing it because consumers are tired of it.
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Investigations Start. FERC is going to start looking at what happened in Texas. Meanwhile 4 members of the ERCOT board have resigned after last week’s shutoffs. However, most headlines have failed to highlight the role of the railroad commission and their oversight of the gas infrastructure which were some of the biggest cause of problems. The biggest question will come around winterization, what mandate is needed or what market signal has to be created for generators to spend the extra dollars and prepare for edge cases.
Impact To Generators. We learned quite a bit about the stress test that $9,000/MWh will cause to generators, especially with the situation that the fuel source is unavailable or the external weather event renders the generator inoperable. First, I have yet to hear the compelling reason why anyone will hedge the output going forward. Forget the leverage that the hedge opens up because the lender is going to ask about the what if scenario when you fail to deliver electrons and have to settle in the real-time market. Some generators are thinking about the revenue they lost not being able to monetize once in a lifetime energy rates.
To Retail Companies. This is going to get ugly. Most retailers sell energy to consumers with the plan to buy that commodity at a price lower than that. Sometimes they are upside down but it’s all within a risk range. When rates in the realtime market exceed the delivered price by 200x or more for several days, it’s bad news. You’re going to hear about retail companies seeking bailouts or risk going out of business. Free markets, am I right?
To Consumers. We talked about this on Monday but some consumers took the spread risk themselves. I assume that most had no idea what would possibly happen, not that any energy experts thought $9/kWh was possible. I can almost guarantee that these bills will be forgiven in some form, people aren’t going to pay $10,000 for 5 days of electricity, which means survival in some cases.
A Frozen Slinky. I can’t do this but if you want to explain Texas to your kids and live in the cold, put a slinky outside to freeze and then stretch it. Then compare the one from inside and see what happens to the resiliency and flexibility of the material. ERCOT could have avoided all of this with winterization but we’re also recognizing that the grid everywhere is going to need more mitigation capabilities. DERs, storage (on all parts of the infrastructure) and resilient generation are going to play a role to keep the lights on and business running.
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Save California Net Metering. Sign this petition if you want to see the largest solar market continue thriving. Pass this on to your friends and colleagues, make sure to join CALSSA as well.
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