LARGE-SCALE SOLAR PLANTS REQUIRE LARGE-SCALE BATTERY SYSTEMS

PV Solar Output Variability During variable Cloudy Weather

 

Clouds are the main reason PV solar generation experiences intermittency (excluding the nighttime disappearance).

PV solar generation can rapidly decrease by 60% within seconds, due to a cloud passing over the solar panels causing a reduction in solar insolation.

The time taken for the cloud to pass is dependent upon cloud height, sun elevation and wind speed. These factors need to be considered in solar power production forecasting.

The graph shows PV output profiles representing relatively large regions in the western USA.

 

 

Reaction Times

 

Additional considerations are reaction times of other generators on the grid. Batteries have quick reaction times, i.e., can quickly charge and discharge electricity. Any rapid solar output decreases (downward spikes) due to clouds are quickly offset.

 

Gas turbines, the workhorses that have historically provided peaking, filling in and balancing services to the grid, have slower reaction times. If the downward spikes were only a few MW, gas turbines would be adequate to maintain grid frequency within the narrow ranges specified by the grid operator.

 

However, if the downward spikes were many MW, such as with the above, very large capacity, FP&L solar systems, gas turbines would be unsuitable (could not keep up), but batteries can.

 

Large-Scale Solar Plants Require Large-Scale Battery Systems

 

The upward and downward spikes of wind output are much slower, in the order of 5 minutes, instead of 5 seconds. Gas turbines (and hydro plants) can easily adjust their outputs to offset any wind spikes.

 

Till now, the solar output downward spikes have been minor, but as installed solar capacities increase for a given area, more and more of expensive, grid-scale, battery capacity would be needed to prevent roiling the grid during variable cloudy weather.

 

NOTE: This has nothing to do with the daily duck curves, which have become very evident in southern Germany and southern California, and present an additional disturbance to the grid to be managed by grid operators mostly with existing gas turbine generators and hydro plants.

 

Large-scale solar plants requiring large-scale battery systems is bad news for the future economics of solar.

 

Significantly increased solar build-outs could not happen (they would disturb the grid too much) without also building out expensive grid-scale battery systems. That is the main reason, southern Germany and southern California, each with large capacities of solar, have been installing battery systems during the past 5 years.

 

If batteries are the only source of the necessary short reaction times, then batteries are required. The only appropriate policy would be to require owners of any larger-scale solar installations to provide, at his own expense, a suitable battery system between the solar system and the grid.

 

Utility energy systems engineers in southern Germany, etc., have been well aware of all this for at least 10 years, but were forbidden to publicly talk about it, as that would have interfered with various pro-RE mantras, such as “so many households served”, or other such nonsense, as promulgated in PR releases during the past 20 years.

 

Unfortunately, the pro-RE mantras, slogans to obfuscate a gross deception, have become ingrained into the public mind. I say unfortunately, because they aim to hide the truth from reality.

 

Florida Power & Light Reactions to Solar Output Downward Spikes

 

FP&L is not putting in $360 million of battery systems, because it wants to be “seen as green”, or out of the goodness of its heart, as the pro-RE mantras might proclaim.

 

FP&L is concerned with providing high-quality electricity service at high reliability, 24/7/365, year after year, i.e., 99.98% or better.

 

FP&L is worried a series of solar output downward spikes of about 100 MW, each lasting about 5 seconds, would occur when dark, low-hanging clouds pass over the solar plants. FP&L worried they would excessively destabilize its grids.

 

FP&L had no choice, but to put in these large-scale battery systems to offset the solar output downward spikes, before feeding the solar output into the grid.

Direct and Indirect Subsidies and Favorable Electric Rate Increases

 

FP&L receives very high levels of direct and indirect federal and state subsidies for its solar plants and for its batteries to make such expensive RE investment decisions much easier (and more obscure to lay people, including almost all legislators, etc.),

 

FP&L likely would obtain additional revenue from suitable household electric rate increases, as agreed to (often behind closed doors) by the Florida Public Utilities Commission, which also wants to be “seen as green”.

 

Politicians would add extra taxes, fees and surcharges on electric bills of poorly organized households, in the name of saving the world, fighting global warming, etc. The below graph shows how that worked out for the Joe and Jane Worker households in Germany and Denmark. Also see URLs in Appendix 2.

 

Additional Services by Battery Systems

 

1) Batteries can supplement the minimal solar output during early morning hours and during late afternoon/early evening hours, which usually have peak demands with higher wholesale electric rates.

 

That means batteries need to charge from the grid during late evening/early AM hours, when wholesale electric rates are lower, a.k.a., arbitrage.

 

This also would provide more load for the gas turbine plants during late evening/early AM hours; higher turbine loads often result in increased plant efficiencies.

 

2) While offsetting the above-mentioned solar output downward spikes, the batteries could be used, at the same time, for response to frequency deviations on the grid, the so-called FCAS market, 24/7/365, a service, which would provide a part of its day-to-day income.

 

The battery spends a significant portion of its effort on frequency support of the grid, i.e., it performs minor charging/discharging, 24/7/365.

 

FLORIDA POWER & LIGHT FUTURE PLANT EXPANSION

 

FP&L is planning to install battery plants, solar plants and combined-cycle, gas-turbine plants in the near future.

The capacity of the battery plant will be 409 MW/900 MWh, delivered as AC should be added if known, i.e., 900/129 = 7 times larger than the Hornsdale Power Reserve, HPR, in Australia.

https://wattsupwiththat.com/2019/04/05/grid-scale-battery-nonsense-...

http://www.windtaskforce.org/profiles/blogs/the-hornsdale-power-res...

 

In 2020, the turnkey capital cost of the batteries would be about 900,000 kWh x $450/kWh = $360 million, to be amortized over 15 years.

In 2020, the turnkey cost of the new CCGT plants would be about 1778 MW x $1.25 million/MW = $2223 million, to be amortized over 35 to 40 years.

In 2020, the turnkey cost of the new solar plants would be about 74.5 MW x 2 x $2.5 million/MW = $372.5 million, to be amortized over 25 years.

 

"It will have a capacity of 409 MW and be able to produce 900 MWh of energy from FPL’s adjacent Manatee solar farm and another (of equal size) to be built nearby. It will provide clean, cost effective electricity."

This is a typical statement made by PR departments. Such statements cause energy systems engineers to cringe.

 

1) The battery would not produce anything. It only charges, stores and discharges.

 

2) After some aging, any electricity passing through the batteries would have about a 20% loss, on a high voltage AC to high voltage AC basis, i.e., it consumes a lot of electricity.

 

3) The Parish County existing, 50-y-old, inefficient plants, 1618 MW, will be demolished. On the cleared, 50-acre site, will be the new batteries.

 

4) New, 55%-efficient, gas-fired CCGT plants, 1778 MW, will be built at Lake Okeechobee.

 

They will be operated in base-loaded mode.  

Their output will more than replace that of the demolished plants.  

 

5) The capacities of the existing Manatee solar plant, and the nearby one, now under construction, are 74.5 MW each. The required plant area for both solar plants would be about 1043 acres, at 7 acre/MW. 

 

6) Production of both solar plants would be about 74.5 MW x 2 x 8766 h/y x 0.19, capacity factor = 248,165 MWh/y, or 680 MWh/d.

 

- The average output of the highest months, April and May, would be about 1.4 times the lowest month in winter, December.

- That ratio is about 4/1 in NE, about 6/1 in Germany. That means solar could not be relied upon during a 5 to 7 day wind/solar lull in winter, because simultaneously the panels may be covered with snow and ice.

- The production would decrease at a compounded rate of about 0.5%/y, due to panel aging. 

https://decisiondata.org/solar-by-state/florida/

 

7) The output of the solar plants would be minimal at 8 AM, maximal at noon-time, and minimal about 5 PM.

 

8) During midday, electricity would be fed into the battery at the allowed battery feed in rate, and no higher. 

 

9) During evening, electricity would be discharged from the battery at the allowed discharge rate, and no higher.

10) The battery capacity is 900 MWh; delivered as AC should be added, if known. In the real world, the battery would never be discharged to zero, or charged to the maximum, to avoid damage, which likely would shorten its life.

 

Battery Charge/Discharge Loss for Performing Arbitrage

 

PV as Electricity Source to Batteries

 

Assuming the cumulative electricity from the PV system, mostly during midday hours, would be 586 MWh/d, as DC, and

Assuming the additional charge in the battery would be 563 MWh/d as DC, then

About 519 MWh/d, as high voltage AC, could be fed to the grid during late afternoon/early evening hours, for a loss of 7.8%. See table 1.

 

Grid as Electricity Source to Batteries

 

Assuming the cumulative electricity from the grid during late night/early AM hours would be 623 MWh/d, as high voltage AC, and

Assuming the additional charge in the battery would be 563 MWh/d, as DC, then

About 519 MWh/d, as high voltage AC, would be fed to the grid during late afternoon/early evening hours, for a loss of 16.73%. See table 1

 

Economics of Arbitrage, if Grid is the Source

 

FP&L would have to draw from the grid 623 MWh/d, a cost of about $24934/d, at $35/MWh (nighttime rate).

FP&L would avoid buying 519 MWh/d at a cost of 36335/d, at $70/MWh (peak rate), for a gain of $11,401/d. See table 1

 

The question is would this energy cost gain offset the daily owning and operating cost of the battery? A detailed spreadsheet analysis would be required. Such a detailed analysis for a 2200 kW solar plant is shown as an example under Appendix 3. Only number people, such as accountants and engineers, would be interested to peruse the numbers.

 

However, here is a simplified method of economic analysis, which is easy to understand. It is commonly used for preliminary economic analysis.

 

- Assuming no direct and indirect subsidies, and 10% cost of money, amortizing the above $360 million battery capital cost (at the current price of about $400/kWh), over 15 years, would require payments $46.423 million/y, or $127,186/d.

 

- Assuming no direct and indirect subsidies, and zero cost of money, just paying back the above $360 million over 15 years would require $65,763/d.

 

- Assuming no direct and indirect subsidies, and zero cost of money, and the battery capital cost were $90 million (at a Holy Grail future price of $100/kWh), just paying back the $90 million over 15 years, would require $16,438/d.

 

- If direct subsidies, such as the federal investment credit, FTC, and state investment tax, STC, (which act as up front cash gifts by taxpayers to owners), reduced the capital cost by a total of 30%, and if zero cost of money, just paying back the 90 x 0.7 = $63 million over 15 years would require $11,507/d.

 

The $11,507/d cost is about the same as the above energy cost gain of $11,401/d.

 

However, there are other costs which were ignored, such as:

 

- Battery system aging, which increases operating costs

- Battery system maintenance and operation

- HVAC of the batteries; they must be kept near 70F for best performance and long life

Economics of Arbitrage Worse, if Solar is Source 

The same simplified method of economic analysis is used.

 

If a direct subsidy, such as federal investment credit, FTC, and state investment tax credit, STC (which act as up front cash gifts from taxpayers to owners), reduced the remaining capital cost of the solar plants by a total of 30%, and if zero cost of money, just paying back the 372.5 x 0.7 = $260.75 million over 25 years would require $40,822/d.

The daily solar production would be the above-stated 680 MWh/d.

The minimum estimate of the electricity cost would be $40,822/680 MWh = 4.20 c/kWh.

The minimum cost would be less, if indirect subsidies were added.

 

However, there are other costs which were ignored, such as:

 

- Solar panel aging at 0.5%/y, which reduces production each year

- Battery system aging, which increases operating costs

- Battery system maintenance and operation

- HVAC of the batteries; they must be kept near 70F for best performance and long life

- Bank loan interest

- Return on investment

- Battery DC to AC loss, 7.8%. See table 1

 

It is clear from the above two examples, arbitrage would be far from profitable.

 

That means, there will need to be substantial revenues from grid frequency regulation services to make this project profitable.

 

Table 1/Electricity source

PV

Grid

Electricity from source, as high voltage AC

623

High voltage to low voltage efficiency

0.98

Electricity from source, as low voltage AC

611

AC to DC conversion

0.96

.

Electricity from source, as DC

MWh/d

586

586

Charging efficiency

0.96

0.96

Electricity from source into battery, as DC

MWh/d

563

563

Discharging efficiency

0.96

0.96

Electricity from battery, as DC

MWh/d

540

540

DC to low voltage AC efficiency

0.98

0.98

Electricity from battery, as low voltage AC

MWh/d

530

530

Low voltage to high voltage efficiency

0.98

0.98

Electricity to grid, as high voltage AC

MWh/d

519

519

Loss

%

7.80

16.73

 

Comparison of FP&L Old and New Gas Plants

The new plants would produce 46.5% more electricity per year, at a 6.6% increase in gas cost, and 6.6% increase in CO2.

 

Because of the use of abundant domestic, low-cost, low-CO2, clean-burning, natural gas, FP&L would not need to have increased electric rates, because it would still make a good profit with existing rates, a major plus for the Florida economy.

 

The additional steady, 24/7/365, low-CO2 electricity could be used for future heat pumps and electric vehicles, which would decrease space heating/cooling costs and transportation costs for the households and businesses, and decrease CO2.

 

The major components of the electricity cost/kWh are:

 

- Amortizing the turnkey capital cost

- Natural gas,

- 24/7/365 maintenance and operation. See table 2.

 

Table 2/Comparison of Old and New Plants

Old

New

% Change

Capacity

MW

1618

1778

9.89

Period

h/y

8766

8766

Capacity factor

0.60

0.80

33.33

Production

MWh/y

8510033

12468758

46.52

Btu/kWh

3412

3412

Efficiency

0.40

0.55

37.50

Btu/kWh

8530

6204

-27.27

Gas consumption

million Btu/y

72590580

77351643

6.56

Gas cost

$/million Btu

3.00

3.00

Gas cost

$million

217.77

232.05

6.56

Electricity cost, gas only

c/kWh

2.559

1.861

-27.27

.

Capital cost

$million

2223

Amortizing at 10%/y for 40 y

$million/y

226.518

Amortizing, capital only

c/kWh

1.817

Electricity cost, amort. + gas

c/kWh

3.678

.

CO2 emissions

 

 

 

 

Combustion only

lb/million Btu

117

117

Combustion only

million metric ton/y

3.85

4.11

6.56

Combustion only

g/kWh

453

329

-27.27

APPENDIX 1

WIND AND SOLAR SUBSIDIES PROVIDE A BONANZA FOR WALL STREET

 

This URL shows wind and solar prices per kWh would be at least 45% to 55% higher without subsidies, and they would be even higher, if the costs of other items were properly allocated to the owners of wind and solar projects. See below section High Levels of Wind and Solar Require Energy Storage.

http://www.windtaskforce.org/profiles/blogs/economics-of-tesla-powe...

 

This URL shows about 2/3 of the financial value of a wind project is due to direct and indirect subsidies, and the other 1/3 is due to electricity sales.

http://johnrsweet.com/Personal/Wind/PDF/Schleede-BigMoney-20050414.pdf

 

An owner of a wind and solar project, looking to shelter taxable income from other businesses, is allowed to depreciate in 6 years almost the entire cost of a wind and solar project under the IRS scheme called Modified Accelerated Cost Recovery System, MARCS; the normal period for other forms of utility depreciation is about 20 years

 

Then, with help of Wall Street financial wizardry from financial tax shelter advisers, such as BNEF*, JPMorgan, etc., the owner sells the project to a new owner who is allowed to depreciate almost his entire cost all over again.

 

The loss of tax revenues to federal and state governments due to MARCS is estimated by the IRS at $266 billion for the 5-y period of 2017 - 2021, at about $53.2 billion/y.

The IRS is required to annually provide a 5-yr running estimate to Congress, by law.

The next report would be for the 2018 - 2022 period

This indirect largesse, mostly for wind and solar that produce expensive, variable/intermittent electricity, is in addition to the total of direct federal and state subsidies to all energy projects (MARCS, FTC, STC, PTC, etc.) of about $25 billion/y.

 

* BNEF is Bloomberg New Energy Finance, owned by the pro-RE former Mayor Bloomberg of New York, which provides financial services to the wealthy of the world, including providing them with tax avoidance schemes.

 

https://www.nrel.gov/docs/fy17osti/68227.pdf

https://www.greentechmedia.com/articles/read/tax-equity-investors-b...

 

Warren Buffett quote: "I will do anything that is basically covered by the law to reduce Berkshire's tax rate," Buffet told an audience in Omaha, Nebraska recently. "For example, on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit." 

 

APPENDIX 2

CASHFLOW ANALYSIS OF 2200 kW SOLAR SYSTEM IN VERMONT (STANDARD OFFER PRORAM)

https://puc.vermont.gov/document/7874-standard-offer-solar-cash-flo...

 

The table shows the project cash flow of years 1 through 6.

Download the spreadsheet from the URL to see the other years.

Electricity generation in year 1 was 2200 x 8766 x 0.145 = 2,794 MWh.

Due to aging at 0.5%/y, it would be 2,780 MWh in year 2, and 2,725 MWh in year 6, and 2,478 MWh in year 25.

The owner sells the electricity to the utility at $130.36 MWh for 25 years.

Revenue from electricity sales in year 1 were $364,288

The NE average wholesale price is about $60/MWh during midday.

The solar value is about 10 c/kWh, as claimed by GMP; no rationale/calculations to corroborate.

TheInterest Revenuei s calculated on project cash reserves the owner is required to have in escrow.

The various expenses in year 1 add up to $81,590

Earnings before interest, taxes, depreciation, and amortization, EBITDA, in year 1 were $283,968

The owner has a 6y short-term loan of $1,356,212, starting at 3%/y, increasing to 4%/y in year 6

The owner has a 20y long-term loan of $1,356,212, starting at 4.5%/y, increasing to 5.75%/y in year 6

The entire project is depreciated in 6 years, courtesy of MARCS. See appendix 1

The owner taxable income, due to depreciation and interest deductions, in year 1 was a negative $505,841

The high-income, multi-millionaire owner applies that loss against taxable income from his other businesses

The owner avoids in year 1 $42,996 in state income taxes, plus $161,996 in federal income taxes.

The owner avoids $372,375, $196,281, $89,648, $87,424, and $5,850 in years 2 through 6

The owner also receives, before the start of the project, investment tax credits, a.k.a., taxpayer donations.

Federal Tax Credit $1,190,470, State Tax Credit $185,714, for a total of $1,376,189

The owner will earn about 9.6%/y on his investment, a.k.a., internal rate of return.

The accumulated net cash at end year 25 is $1,806,660

 

 

$

$

%

Owner investment

 

1,808,283

30.66

Short-term and long-term loans

 

2,712,425

46.00

Direct cash subsidies

 

 

 

Federal tax credit, FTC

1,190,475

 

 

State tax credit, STC

185,714

 

 

FTC + STC to owner

 

1,376,189

23.33

Project cost, 2200 kW

 

 5,896,897

100.00

$/kW

 

2680

 

.

 

 

 

Revenues, 25y

 8,3334,714

 

Costs

2,848,086

 

 

EBITDA = revenues - costs

 

6,165,148

 

Estimated municipal tax = $500,287 was waived

 

 

 

Less loan repayment, interest, misc.

3,954,012

 

 

Cash

 

2,211,136

 

.

 

 

 

Tax Calculation

 

 

 

EBITDA = revenues - costs

 

6,165,148

 

Less interest

956,182

 

 

Less tax depreciation

4,210,875

 

 

Taxable income

 

998,090

 

State income tax

84,838

 

 

Federal income tax

319,638

 

 

Total federal and state taxes paid

 

404,476

 

 

 

 

 

Net Cash

 

1,806,660

 

 

 

 

 

 

Detailed Cash Flow Spreadsheet of a 2200 kW Field-Mounted Solar System

  

Solar Pricing Model

Capacity = 2200 kW

Operating Year

 

1

2

3

4

5

6

Calendar Year

2012

2013

2014

2015

2016

2017

2018

.

Generation (MWh)

2,794

2,780

2,767

2,753

2,739

2,725

.

Revenue:

Standard Offer Price ($/MWh)

Fixed Price Component

100%

130.36

130.36

130.36

130.36

130.36

130.36

Escalating Price Component

0%

0.00

0.00

0.00

0.00

0.00

0.00

Standard Offer Price

130.36

130.36

130.36

130.36

130.36

130.36

Production Revenue

364,288

362,466

360,654

358,851

357,057

355,271

RECs

Market Value of RECs ($/MWh)

0.00

0.00

0.00

0.00

0.00

0.00

Change Market Value of REC

 

2.00%

2.00%

2.00%

2.00%

2.00%

Revenues from RECs

0

0

0

0

0

0

Other Revenues

0

0

0

0

0

0

Interest Revenue

1,270

2,840

3,440

4,040

4,640

5,240

Total Revenue

365,558

365,307

364,094

362,891

361,697

360,512

.

Expenses:

O & M costs

25,528

25,988

26,455

26,931

27,416

27,910

Payroll

0

0

0

0

0

0

Payroll Overhead

0

0

0

0

0

0

Land Lease cost

14,960

15,229

15,503

15,782

16,067

16,356

FERC Charges

0

0

0

0

0

0

ISO-NE Charges

0

0

0

0

0

0

Other Expenses

0

0

0

0

0

0

Insurance

16,280

16,573

16,871

17,175

17,484

17,799

Uniform Capacity Tax

$4.00

8,800

8,800

8,800

8,800

8,800

8,800

Municipal Tax

Underlying Land Tax

0.30%

Property tax

$/MWh

6

16,022

16,311

16,604

16,903

17,207

17,517

Total

81,590

82,900

84,234

85,592

86,974

88,382

EBITDA

283,968

282,406

279,860

277,299

274,723

272,130

.

Repayment ST Loan

2012

2013

2014

2015

2016

2017

2018

Loan Balance

1,356,212

1,146,545

931,450

710,133

481,742

245,362

0

Interest

3.00%

(40,686)

(36,689)

(31,669)

(25,565)

(18,306)

(9,814)

Principal

(209,667)

(215,095)

(221,317)

(228,390)

(236,380)

(245,362)

Annual payment

(250,353)

(251,785)

(252,987)

(253,955)

(254,686)

(255,177)

Interest Rate

3.00%

3.20%

3.40%

3.60%

3.80%

4.00%

.

Repayment LT Loan

Loan Balance

1,356,212

1,305,711

1,250,805

1,194,807

1,137,483

1,078,585

1,017,843

Interest

4.50%

(61,030)

(58,757)

(59,413)

(59,740)

(59,718)

(59,322)

Principal

(50,501)

(54,906)

(55,998)

(57,323)

(58,898)

(60,742)

Annual payment

(111,531)

(113,663)

(115,412)

(117,064)

(118,616)

(120,064)

 Interest Rate

4.50%

4.75%

5.00%

5.25%

5.50%

5.75%

Debt Coverage Ratio

2.40

2.06

2.55

2.48

2.42

2.37

2.32

2.27

133%

Repayment All Loans

Loan Balance

2,712,425

2,452,256

2,182,255

1,904,939

1,619,226

1,323,948

1,017,843

Interest

(101,716)

(95,446)

(91,083)

(85,305)

(78,024)

(69,137)

Principal

(2,712,425)

(260,168)

(270,001)

(277,316)

(285,714)

(295,278)

(306,104)

Annual payment

(361,884)

(365,448)

(368,398)

(371,019)

(373,302)

(375,241)

.

.

After-Tax Equity Return

EBITDA

283,968

282,406

279,860

277,299

274,723

272,130

Plus Release of Debt Reserve

0

0

0

0

0

0

Plus Release of Other Reserves

0

0

0

0

0

0

Less Inverter Replacement

(33,333)

(33,333)

(33,333)

(33,333)

(33,333)

(33,333)

Less Principal

(260,168)

(270,001)

(277,316)

(285,714)

(295,278)

(306,104)

Less Interest

(101,716)

(95,446)

(91,083)

(85,305)

(78,024)

(69,137)

Total Cash

(111,250)

(116,375)

(121,871)

(127,053)

(131,913)

(136,444)

Tax Benefit/(Liability)

EBITDA

283,968

282,406

279,860

277,299

274,723

272,130

Less Interest

(101,716)

(95,446)

(91,083)

(85,305)

(78,024)

(69,137)

Less Depreciation

(688,093)

(1,105,836)

(673,124)

(413,211)

(412,428)

(217,430)

Taxable Income/(Loss)

(505,841)

(918,876)

(484,346)

(221,217)

(215,729)

(14,437)

State Tax Benefit/(Liability)

42,996

78,104

41,169

18,803

18,337

1,227

Federal Taxable Income/(Loss)

(462,844)

(840,772)

(443,177)

(202,414)

(197,392)

(13,210)

Federal Tax Benefit/(Liability)

161,996

294,270

155,112

70,845

69,087

4,623

Total Tax Benefit/(Liability)

204,992

372,375

196,281

89,648

87,424

5,850

Tax Credits

Federal ITC

1,190,475

0

0

0

0

0

State ITC

185,714

0

0

0

0

0

Total

1,376,189

0

0

0

0

0

Equity Investment

(1,808,283)

 

 

 

 

 

 

Total Equity Return

(1,808,283)

1,469,932

256,000

74,410

(37,405)

(44,488)

(130,594)

.

Internal Rate of Return

9.60%

837,960

.

Reserve Accounts

Beginning Balance

0

147,928

181,262

214,595

247,928

281,262

Inverter Replacement

33,333

33,333

33,333

33,333

33,333

33,333

Debt Reserve

73,800

0

0

0

0

0

Maint. Reserve

0

0

0

0

0

0

Decommissioning Fund

0

0

0

0

0

0

Working Capital

40,795

0

0

0

0

0

Total

147,928

181,262

214,595

247,928

281,262

314,595

.

Non-Interest Reserves

6,799

6,799

6,799

6,799

6,799

6,799

.

Interest on Reserves

1,270

2,840

3,440

4,040

4,640

5,240

 

APPENDIX 3

EXPLANATION OF NET PRESENT VALUE AND INTERNAL RATE OF RETURN

The net present value, NPV = - Investment + Sum of PVs @ 9.6%/y IRR = 0

The 9.6%/y at which NPV = 0 is called the internal rate of return, IRR.

Example:

A $100,000 profit at the end of year 25 is worth much less than the same profit at the end of year 1.

If an owner wants to earn 9.6%/y on investments, the present value, PV, of the year 25 profit would be 100,000/{1 + 0.096)^25} = 1/9.892 = $10,110

The sum of the PVs of the profits and losses of each of the remaining 24 years can be calculated in the same manner.

The formula for year 24 would be 100,000/{(1 + 0.096)^24}, etc.

With a hand calculator this would be laborious, but with a spreadsheet it would take just a few minutes to try various % values until the NPV is near zero; the try and error method.

NOTE: The cash flow of the above 25-y solar project is deliberately front-loaded, by means of huge depreciation write-offs in the first 5 years, for luring multi-millionaire investors. This is a favorite Wall Street tactic for tax sheltering made possible by smooth-talking Wall Street lobbyists whispering to members of the US Congress. Many owners sell such projects after 5 years, after having milked almost all of the subsidy benefits. The new owners are allowed to restart the lucrative write-offs all over again.

 

https://www.mathsisfun.com/money/internal-rate-return.html

https://en.wikipedia.org/wiki/Internal_rate_of_return

 

 

 

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Comment by Willem Post on Wednesday

Penny,

Yes.

The clouds cause downward spikes of solar output of about 100 MW for about 5 seconds, and in a little while, the next cloud comes along, and this goes on for about 6 midday hours.

If solar plants are small, say 1 MW, those downward spikes are about 0.7 MW, which have little impact on the grid.

It would take 200 solar plants of 5 kW each, located close to each other so a cloud would cover all of them, to have the same effect.

Comment by John F. Hussey on Wednesday

FP and L... not really... more like FLORIDA PILFER AND LOOT!

Comment by Penny Gray on Wednesday

Okay I'm crosseyed after reading this but am I understanding that these huge expensive battery banks at big solar installations are to counteract the effect of clouds casting shadows on the panels?

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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