August 28, 2015

Energy in Florida

Forecast for solar power in Florida: Partly sunny

Mike Boslet | 7/28/2014

In 2009, Bob Reedy was quoted in a magazine article as saying that by 2012 “every home (in Florida) will be built covered with” solar panels. Reedy, director of solar systems research at UCF’s Florida Solar Energy Center, based his prediction on what he saw as a surge in manufacturing of photovoltaic cells, the shiny panels that convert sunshine into energy.

Well, here we are in 2014, and Reedy might as well have predicted everyone would be driving electric cars by now. Reedy says he doesn’t recall making that prediction, but he is even more certain now than he was five years ago that solar power in Florida is on the cusp of a boom.

It’s a matter of simple economics, he says. The cost of photovoltaic cells has fallen by about two-thirds since 2009 while electric utility rates have gone up every year and will continue to rise. At some point soon, Reedy predicts, the upfront cost of solar no longer will deter investment in it, as has been the case.

“It’ll be driven by money, not by wanting to help the environment,” he says. “It’s a pocketbook issue.”

Indeed it is, says Michael Kerr, a partner in Blue Energy Electric, an energy consulting company with locations in Oviedo and Stuart. Kerr says he has seen the cost of photovoltaic plummet 50% in two years, to about $2.50 a watt, but the decrease in cost hasn’t boosted demand for solar installations so far. A typical five-kilowatt residential system costs about $12,500, he says, a price that remains prohibitive for many homeowners, despite a 30% federal tax credit for converting to solar power.

While Kerr says solar investment is nearing a quick payback period, the Florida Solar Energy Center estimates that it could take as long as nine years to recoup the upfront cost. By 2025, the center says, the payback time period may be only a few years.

Orlando Utilities Commission may have found a way for homeowners and businesses to use solar without spending five or more figures to buy photovoltaic systems: Rent solar power from a utility company, as has been the practice with electric power.

OUC’s new Community Solar Farm provides solar power to 39 customers, charging them 13 cents per kilowatt hour, or about 3 cents more per kilowatt hour than OUC’s base rate. But the solar rate is fixed for 25 years. An OUC spokesman says the municipal utility is looking into expanding its solar service.

Testing Carbon Capture 

Tampa Electric’s Polk (County) Power Station is the site of a carbon-capture research project that could lead to the clean and effcient use of fossil fuel sources. The U.S. Department of Energy is funding the $169-million demonstration of RTI International’s warm synthesis gas (syngas) desulfurization system.

According to RTI, the technology “removes contaminants at warm process temperatures, eliminating the need for substantial syngas cooling and expensive heat recovery systems.” 

The project, running through next June, could yield commercially viable applications for the clean and effcient use of coal for the generation of electrical power, says Wayne Holden, president and CEO of RTI.

RTI says its system also is expected to demonstrate a process for capturing more than 90% of the carbon dioxide from the syngas stream. “Following cleanup, the hydrogen-enriched syngas will be reintroduced to the Polk 1 plant and combusted in the existing syngas turbine,” the company says.

Transactions 

Utilities trade electricity on the wholesale market to manage their costs.

> A software program called GenTrader calculates the marginal cost of generating, for example, 100 megawatts over some period of time. The software takes into account several variables, including the fuel, the facility generating the power and the overall load forecast.

> If FPL can purchase power from another generating utility at less than its marginal cost, it may buy power from that utility rather than generate it. Likewise, if FPL expects to generate more electricity than its customers need, it may be able to sell power to another utility that has higher marginal costs that day.

One example of a power sale: 

> GenTrader calculates FPL’s marginal cost of generating 100 megawatts for 16 hours at $36.45 per megawatt hour.

> An FPL trader finds another utility willing to purchase 100 megawatts for $50 per megawatt hour.

Electricity sold: Hypothetical sale of 1,600 megawatt hours from FPL 

100 Megawatts buyer needs 

x 16 Hours needed 

1,600 Total megawatt hours needed by buyer 

x $50 Price per megawatt hour buyer is willing to pay 

$80,000 Gross revenue to FPL (total cost to buyer)

- $58,320 FPL’s fuel costs

- $7,440 FPL’s transmission costs 

$14,240 FPL’s total gain

Tags: Energy & Utilities

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