Chapter 11 Flashcards
distributed generation
DER systems are
Distributed energy, also district or decentralized energy is generated or stored by a variety of small, grid-connected devices referred to as distributed energy resources
decentralized, modular and more flexible technologies, that are located close to the load they serve, albeit having capacities of only 10 megawatts (MW) or less.
inverter
device that converts direct current into alternating current
there are some losses in the conversion process
solar constant
amount of sun hitting any perpendicular surface over time
this is always the same
insolation
how much sun is available for capture at any point on the surface of the planet.
depends on: where? (insolation higher/more consistent near the equator. how much dust/moisture in atmosphere?) when? how certain? (weather conditions, clouds, pollution)
balance of system
encompasses all components of a PV system other than the PV panels. This includes: mounting, racking, wires, inverter and power management, and labor and inspection
trackers
move the PV module so that the panels are more perpendicular to the incoming solar radiation. usually only used for ground-mount systems
(single-axis vs. two-axis tracking)
soft costs
project developers will often charge a developer margin over and above the cost to components to compensate these costs and provide profit incentive for their efforts. soft costs: customer acquisition costs design and approvals financing monitoring and billing
third party ownership
an alternative to install and sell systems to customers
allows for the PV customer to purchase the electricity that comes out of the system, and requires the system integrator to construct, monitor, and maintain, and finance assets on the customer’s behalf
minimizes risk and maximizes value created from system installation
interconnection
to the gird. there are interconnection rules to make sure that DG systems are connected safely.
net metering
once the DER system is connected, NET METERING counts the net kilowatt hours that flow into the house and charge the customer for JUST that amount. any surplus generation from the DG system can be used by the brid
demand charge
the grid has to be prepared to provide adequate power at any given time to all customers — this creates capacity requirement for which the grid must contract (must accommodate for peak times)
customers are charged a fixed demand charged based on their highest historical power requirements = DEMAND CHARGE.
when DG can reduce peak power requirements, this = benefit
investment tax credit
incentive mechanism for DG
similar to an issuance of monetizable tax credits, offered by US govt and some states
30 percent federal tax credit for solar systems on residential and commercial properties
feed-in tariff
provides customers a preferential payment for the kwh they feed into the grid with their DG system.
customers then purchase their electricity consumption on a gross basis, as if they had no PV system
renewable portfolio standard
require utilities within a jurisdiction to procure a certain % of their supply from renewable sources
usu. do this through a forward contract procurement process that allows generators to get paid a competitive rate based on their cost structure
solar carve-out
For RPSs: portions of the RPS that have to be met with solar energy, also Solar RECs or SRECs
For RPSs – if utilities build renewable generators directly (or purchase from other generators in the market), utilities have to produce a Renewable Energy Certificate - to show how much energy they produced to meet the RPS. REC can be traded through formal exchanges
experience curve
the more times an operation is performed, the more efficiently it is executed. can apply to individuals as well as whole industries.
aggregate learning/experience in industries benefits the whole industry as new methods are developed.
EC = analytic tool to understand the march of production and process innovation across many firms.
Y axis = observed market price or cost data for a product
X axis = cumulative volume that has been produced for that product by all manufactures
the slope of the EC tends t be relatively stable over long periods of time
learning rate
the %age drop in the cost to produce the technology for each doubling of cumulative production.
dictated by the nature of the technology.
higher learning rate (and lower progress ratio) = steeper experience curve (or, a technology that is more susceptible to cost reductions from scale)
progress ratio
Progress Ratio = 1 - learning rate.
higher learning rate (and lower progress ratio) = steeper experience curve (or, a technology that is more susceptible to cost reductions from scale)
economies of scale
cost advantages that a firm can obtain by producing more or larger units of its output
a proportionate saving in costs gained by an increased level of production
market shakeout
non-linear change in experience curve. happens when “price umbrella” closes — supply catches up to demand and a shakeout occurs until margins are normalized and the price returns to the normal experience curve trajectory
consolidation of an industry or sector, in which businesses are eliminated or acquired through competition
price umbrella
for a short period of time, demand can outpace supply. this tends to bid up the market price of the device (even as the underlying cost to manufacture it falls through experience curve effects). — price umbrella happens this persists – when margins for producers expand (for a period of time until shakeout occurs)
grid parity
parity = the point at which a technology becomes competitive with the current competitive solution for a particular customer need in a market
grid parity = the point at which distributed PV falls to the same level of cost as grid electricity
early adopters
not every potential user has the same reserve price (or next best alternative). some adopters may find immediate economic benefit in smaller/more niche application. May find benefit like novelty or pollution reduction valuable. early adopters help to buy down the cost and scale of production until other customers find it economic to buy as well
sustaining technology
in situation where the emerging technology is absorbed into the existing infrastructure and its deployment is limited by the existing deployment architecture, the new technology = sustaining technology
such innovations may help to improve or optimize the incumbent business model and its economics, but do NOT fundamentally change the system architecture
