If one lives too long in Florida, sometimes it feels like stupidity is baked into the place. For example, with the most to lose from global warming and sea level rise, Florida has a US Senator -- Marco Rubio -- who is a climate change denier and won't even meet with scientists.
On the other hand, there is a lot of wealth created here. Businessmen who get very wealthy are (generally) not stupid people. Then again, it depends on how one defines "stupid".
Consider FPL; one of the largest and most successful electric utilities in the nation and based in Florida. FPL's roots in Miami go deep. Company executives are rich and may behave like royalty, but they are not stupid.
FPL is well informed about global warming, yet it is tangled in "early cost recovery" for two new nuclear reactors at sea level that will cost ratepayers about $20 BILLION if they are ever built. What scientists claim, and what FPL knows, is that within their service lifetimes (and the existing nuclear reactors at Turkey Point), the rate base in Florida will be blown apart by climate change impacts.
They know. And still, FPL foments the adversarial politics and tactics based on a strategy that is in denial. Not smart. Stupid.
Here is someone smart: founder of Tesla Motors Elon Musk. "In comments made at a panel set up by the California Public Utilities Commission, Musk said addressing climate change depends on upending traditional power providers, and he called on regulators to help lower the cost for renewable providers to compete with them."
Musk is onto something: electric utilities executives are too welded to old business models that provide wealth the old fashioned way. Specifically, under pressure of climate change the resistance of utility executives to adaptation in its business models will ultimately cause entities like FPL to collapse.
What today's top line executives need to articulate, amongst themselves, is whether they or the businesses they represent are willing to subject themselves to this degree of trauma. It should be a major topic of conversation. Is it?
"There will be some amount of strife for existing utilities, particularly ones heavy into fossil rules," Musk said. "There will be bit of a hardship for them. But we have no choice. We have to decide if we're going to have clean, sustainable energy or not and if we decide want good future...and the only good future is one with [clean] energy."
"Some amount of strife" is an optimistic way to paint a revolution.
Another panelist made the key point: "SolarCity CEO Lyndon Rive warned of the danger that regulators would allow the current monopolistic and fossil fuel-heavy power company model to persist even as renewable energy grows. "What don't we don't want to have happen is the innovation, and then old biz model still continues," he said. "We don't want two energy infrastructures. At some point someone has to shut down, and if you fast forward 10 or 20 years, I don't think we'll be shutting down cleaner energy."
At some level the nation's electric utility executives -- like the top leaders of the US military -- are game-playing this eventuality. The deniers -- like Marco Rubio and the Fox News mouthpieces -- are interchangeable pieces on the game board. What matters is how will everything hold together, how will we provide economic security and affordable energy on demand, under conditions of climate change that are just starting.
If self interest is truly -- as the right wing claims -- the organizing principle of capitalism and the most exceptional feature of America's contribution to world economic order, then it really is time for FPL executives to be part of a solution rather than risk the entire enterprise.
What does the transition to clean energy look like? It is a lot more complicated than adding wind mills. The transition involves retaining the expertise and knowledge base of the electric utilities, preserving profit models for electricity generation, but changing business models. Instead they are spending billions to maintain appearances that the old models can be adapted (ie. with windmills) without changing any of the basic structures.
The top executives of the nation's utilities need to be involved in the massive effort of reforming the nation's electricity production and distribution or risk losing everything.
(Read the Elon Musk report, by clicking here.)
MUSK: Hard Times Must Come For Utilities
Business Insider By Rob Wile
February 27, 2014 6:30 PM
Elon Musk is warning fossil fuel-dependent utilities to prepare for hard times.
In comments made at a panel set up by the California Public Utilities Commission, Musk said addressing climate change depends on upending traditional power providers, and he called on regulators to help lower the cost for renewable providers to compete with them.
"There will be some amount of strife for existing utilities, particularly ones heavy into fossil rules," Musk said. "There will be bit of a hardship for them. But we have no choice. We have to decide if we're going to have clean, sustainable energy or not and if we decide want good future...and the only good future is one with [clean] energy."
Musk argued for a carbon tax, expressing disbelief at the ongoing presence of hydrocarbons for fuel use. "It's amazing that we burn oil — it has much higher value in plastics," he said. "It's like burning the furniture in your house instead of firewood."
SolarCity CEO Lyndon Rive warned of the danger that regulators would allow the current monopolistic and fossil fuel-heavy power company model to persist even as renewable energy grows.
"What don't we don't want to have happen is the innovation, a nd then old biz model still continues," he said. "We don't want two energy infrastructures. At some point someone has to shut down, and if you fast forward 10 or 20 years, I don't think we'll be shutting down cleaner energy."
It is perhaps telling that the panel, called " Innovation and the Impact of Regulation," did not feature a single representative from one of California's utilities. The only other member of the panel was Michael R. Peevey, the commission's president who also serves as chairman of the California Clean Energy Fund. The commission regulates privately owned electric and natural gas companies among other duties.
The panel comes one day after Tesla announced details for its Gigafactory, which by 2020 will produce 50 gigawatt hours-worth of battery packs. Panasonic, the principal partner in the Gigafactory, currently makes a total of only about 6-7 gigawatt hours-worth of batteries. Tesla's batteries will be used both in Tesla's fleet and will help bring the cost of batteries for SolarCity power storage units down. The batteries currently comprise at least 50% of the cost of other solar storage units.
Musk emphasized that regulators will have to prove flexible to work around what amounts to monopoly control of power by most utilities.
Peevey seemed to be game, suggesting utilities would be devolve into "wires companies" providing basic infrastructure if they don't invest early enough in renewables. "The race goes to the swift and to the clever," he said.
On the other hand, there is a lot of wealth created here. Businessmen who get very wealthy are (generally) not stupid people. Then again, it depends on how one defines "stupid".
Consider FPL; one of the largest and most successful electric utilities in the nation and based in Florida. FPL's roots in Miami go deep. Company executives are rich and may behave like royalty, but they are not stupid.
FPL is well informed about global warming, yet it is tangled in "early cost recovery" for two new nuclear reactors at sea level that will cost ratepayers about $20 BILLION if they are ever built. What scientists claim, and what FPL knows, is that within their service lifetimes (and the existing nuclear reactors at Turkey Point), the rate base in Florida will be blown apart by climate change impacts.
They know. And still, FPL foments the adversarial politics and tactics based on a strategy that is in denial. Not smart. Stupid.
Here is someone smart: founder of Tesla Motors Elon Musk. "In comments made at a panel set up by the California Public Utilities Commission, Musk said addressing climate change depends on upending traditional power providers, and he called on regulators to help lower the cost for renewable providers to compete with them."
Musk is onto something: electric utilities executives are too welded to old business models that provide wealth the old fashioned way. Specifically, under pressure of climate change the resistance of utility executives to adaptation in its business models will ultimately cause entities like FPL to collapse.
What today's top line executives need to articulate, amongst themselves, is whether they or the businesses they represent are willing to subject themselves to this degree of trauma. It should be a major topic of conversation. Is it?
"There will be some amount of strife for existing utilities, particularly ones heavy into fossil rules," Musk said. "There will be bit of a hardship for them. But we have no choice. We have to decide if we're going to have clean, sustainable energy or not and if we decide want good future...and the only good future is one with [clean] energy."
"Some amount of strife" is an optimistic way to paint a revolution.
Another panelist made the key point: "SolarCity CEO Lyndon Rive warned of the danger that regulators would allow the current monopolistic and fossil fuel-heavy power company model to persist even as renewable energy grows. "What don't we don't want to have happen is the innovation, and then old biz model still continues," he said. "We don't want two energy infrastructures. At some point someone has to shut down, and if you fast forward 10 or 20 years, I don't think we'll be shutting down cleaner energy."
At some level the nation's electric utility executives -- like the top leaders of the US military -- are game-playing this eventuality. The deniers -- like Marco Rubio and the Fox News mouthpieces -- are interchangeable pieces on the game board. What matters is how will everything hold together, how will we provide economic security and affordable energy on demand, under conditions of climate change that are just starting.
If self interest is truly -- as the right wing claims -- the organizing principle of capitalism and the most exceptional feature of America's contribution to world economic order, then it really is time for FPL executives to be part of a solution rather than risk the entire enterprise.
What does the transition to clean energy look like? It is a lot more complicated than adding wind mills. The transition involves retaining the expertise and knowledge base of the electric utilities, preserving profit models for electricity generation, but changing business models. Instead they are spending billions to maintain appearances that the old models can be adapted (ie. with windmills) without changing any of the basic structures.
The top executives of the nation's utilities need to be involved in the massive effort of reforming the nation's electricity production and distribution or risk losing everything.
(Read the Elon Musk report, by clicking here.)
MUSK: Hard Times Must Come For Utilities
Business Insider By Rob Wile
February 27, 2014 6:30 PM
Elon Musk is warning fossil fuel-dependent utilities to prepare for hard times.
In comments made at a panel set up by the California Public Utilities Commission, Musk said addressing climate change depends on upending traditional power providers, and he called on regulators to help lower the cost for renewable providers to compete with them.
"There will be some amount of strife for existing utilities, particularly ones heavy into fossil rules," Musk said. "There will be bit of a hardship for them. But we have no choice. We have to decide if we're going to have clean, sustainable energy or not and if we decide want good future...and the only good future is one with [clean] energy."
Musk argued for a carbon tax, expressing disbelief at the ongoing presence of hydrocarbons for fuel use. "It's amazing that we burn oil — it has much higher value in plastics," he said. "It's like burning the furniture in your house instead of firewood."
SolarCity CEO Lyndon Rive warned of the danger that regulators would allow the current monopolistic and fossil fuel-heavy power company model to persist even as renewable energy grows.
"What don't we don't want to have happen is the innovation, a nd then old biz model still continues," he said. "We don't want two energy infrastructures. At some point someone has to shut down, and if you fast forward 10 or 20 years, I don't think we'll be shutting down cleaner energy."
It is perhaps telling that the panel, called " Innovation and the Impact of Regulation," did not feature a single representative from one of California's utilities. The only other member of the panel was Michael R. Peevey, the commission's president who also serves as chairman of the California Clean Energy Fund. The commission regulates privately owned electric and natural gas companies among other duties.
The panel comes one day after Tesla announced details for its Gigafactory, which by 2020 will produce 50 gigawatt hours-worth of battery packs. Panasonic, the principal partner in the Gigafactory, currently makes a total of only about 6-7 gigawatt hours-worth of batteries. Tesla's batteries will be used both in Tesla's fleet and will help bring the cost of batteries for SolarCity power storage units down. The batteries currently comprise at least 50% of the cost of other solar storage units.
Musk emphasized that regulators will have to prove flexible to work around what amounts to monopoly control of power by most utilities.
Peevey seemed to be game, suggesting utilities would be devolve into "wires companies" providing basic infrastructure if they don't invest early enough in renewables. "The race goes to the swift and to the clever," he said.
16 comments:
From my observations, I think the goal of all these big boys is to get publicly bailed out. This includes the highrises at waters edge, Big sugar, and many more. In the case of FPL the goal is to one day force the public to finance a real smart grid, install a on demand reserve capacity that will need to be larger then whats provided today. It will happen the day when electric consumer satisfaction hits a real low. Big sugars goal is to one Day sell the land to a greater fool. And the high rise on the oceans will demand special elevated access roads, damn the little people in they're single families homes around it.
In other words, it will be American crony capitalism at its best.
Great post.
An FPL employee told me that FPL is developing plans to promote infrastructure partnerships that provide roof-top solar to their customers. At the same time, FPL is lobbying state legislators to reduce the net-metering payments to those who have already invested in roof-top solar systems. It appears that FPL's plan is to extend their financial control to include the sunshine that falls in Florida.
To anon/s above, it was very discouraging to hear that FPL is trying to tinker with net-metering at the state legislature. The point I am making is that forward-thinking executives would not be fiddling at the edges, trying to make "renewables" fit into old business models. I also agree with the first anon: that the failsafe fall-back plan would be taxpayer bailout/s. After all, the electric utilities have mastered the business of using state regulatory processes governing utilities. But the final costs of proceeding in this direction are nearly unimaginable, as it also is to think about what kinds of events would first unfold for a government take-over of the nation's utilities to occur. But that is exactly what the utility executives SHOULD be thinking about, and planning to forestall in a way that is peaceful, predictable, and assuring continuity of electricity on demand.
While I am at it, let me make another point. It is ridiculous and petty beyond belief for FPL to be tampering with local politics and elections and "sponsorships" when the corporation should be strategizing about an existential battle. Top executives should know that its enemies are not its critics -- elected or not. The opposite is true. Enlightened corporate executives would be using outside critics to forge institutional change to to build constituencies within the FPL organization to meet future demands. That's what smart leadership would do.
There hasn't been any global warming in 18 years. Do a little research. Don't be an unscientific simpleton who just reads off of Al Gore's talking points.
Capitalism is about 'creative destruction'. In the case of new technologies emerging, it can be translated as 'if you are not part of the solution you are part of the problem'.
Kodak stuck to film, instead of leading the way with digital photography.
Encyclopedia Britannica could have created Wikipedia with its authors at the top of the page and survived.
Detroit automakers could have created smaller more fuel efficient cars in response to the gas crisis of the 1970s, but it refused and allowed the Asian automakers to eat their lunch.
FPL can build a smart grid, own the battery storage backup, finance rooftop solar for ratepayers, build a cyber secure weatherproof grid, it could build renewable energy facilities dedicated to power desalination plants to take pressure off our fresh water...or it can go the way of Kodak-Encyclopedia Britannica-Detroit automakers...and take our community of South Florida with it. The water FPL uses to generate power is needed to fight sea level rise, FPL contributes to global warming with its fossil fuel plants..I have seen the enemy and it is FPL executives..but watching these clowns talk about 'community' makes me barf!
Short run it is more profitable to just pay lobbyists and not evolve, but then there is no long run.
A term coined by Joseph Schumpeter in his work entitled "Capitalism, Socialism and Democracy" (1942) to denote a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." http://www.investopedia.com/terms/c/creativedestruction.asp
I see your Joseph Schumpeter and his creative destruction and raise you an Adam Smith with his invisible hand (Sounds like a cross between poker and WWF)
FPL has to balance (something it doesn't seem to be doing)between current and future profits. And lets stop the nonsense FPL is only about PROFIT ads it should be I do not consider PROFIT a dirty word.
100panteras makes some very good points and if some of the big players in power industry don't evolve the will disappear or shrink (see ATT). But the evolution of FPL also has to take into account its current survival (aka Profitability).
Deregulation is the only thing that makes sense, remember what phone rates where before they took an axe to Ma Bell (not to mention innovation and technological advances brought about by competition and PROFIT).
Pam said...
"There hasn't been any global warming in 18 years. Do a little research. Don't be an unscientific simpleton who just reads off of Al Gore's talking points."
Well Pam, it looks like you re the simpleton that needs to read and lay off the Fox News cool-aid. The leveling off of global temperature rises has been studied and an explanation found. Given the depth and tone of your commentary, I will dumb this down as much as I can for your benefit. Stronger than expected trade winds forced a "heat sink" in the deeper portions of the Pacific Ocean to emerge. This sink captured and sunk at great depths a large amount of atmospheric heat, which now sits there awaiting a shift or weakening of those wind currents. Two separate scientific panels (one US and one UK) have confirmed this by adjusting their modeling to include the greater than expected windstream and the results matched what we are seeing now. The results also showed that when the tradewinds weaken or shift to another direction, the temperatures will rise rapidly over a short period of time.
Gimleteye,
One part you left out of your analysis. FPL does not care about the potential impact of sea level rise on the local ratepayers, because by the time it occurs, they will have already bled that group dry in the up front billing for design and construction that is happening now. FPL has already admitted that the new plants are not needed for the local power supply needs but for expected needs in other out-of-town markets. Maybe they are expecting that most of South Florida's current residents will be forced out by sea level rise and are getting ready to provide power where they think these masses will move to?
Nuclear fusion and Laser technology need serious public funding which could lead to very very very cheap and safe energy in less than a decade.
I love that anon did not dispute my point that there has been no global warming in 18 years. He simply tried to offer a ridiculous explanation/ excuse for the faulty algore prediction. LOL!
P.S. algore said the arctic ice cap would be melted by now. What's taking so long!!! LOL!
I'm going to play devils advocate for the Electric utilities.
The utility's have shown such tepid "enthusiasm" for solar and wind power, because at some point in the contribution scale this green energies will need to be massively backed up or stored for night time or off time use.
At least the south east does not offer easy natural storage possibility's. Battery's are outrageously expensive today for the task. Hidro-electric pumping stations are also expensive and controversial for environmental concerns. Today and the next five Years there is no cheap or easy solution to the storage question. This may be the reason utility's are not eager to jump with both feet in to the green energy revolution.
Home owners with solar panels and no back up system are using the power company as backup system. Power companies resent that, because they are not in control of this power production. It's like a family growing they're own food in the garden and only patronizing the local grocer in the off season, but insisting to sell him the surplus in garden season time's.
Rural Home owners with stand alone solar systems are forced to invest in more then one back up system that get's costly fast. This is the situation big power company's are facing too when they start to commit big time to renewable energy.
The bottom line is, today's electric energy in the US is dirt cheap and on demand available anytime compared to elsewhere.
This is the problem when faced with big time investments for future expensive and collaborative energy.
So the business model is to milk the cow so long it works with the old paid for investments.
As an add on, read up on anybody having gone energy independent (off grid). they all stress implementing drastic energy saving measures to lower the original power producing investment cost, plus continuous smart and educated monitoring of the installed equipment.
In other words, it ain't that simple.
The only save and big system known to me is Thorium reactors, but they don't appear to be ready for prime time yet.
Pam said...
I love that anon did not dispute my point that there has been no global warming in 18 years. He simply tried to offer a ridiculous explanation/ excuse for the faulty algore prediction. LOL!
P.S. algore said the arctic ice cap would be melted by now. What's taking so long!!! LOL!"
Well Pam, I'm glad that you recognized that I, unlike all deniers and science haters, do not dispute FACTS that are clearly evident when presented with them. Instead, I accept the fact that there has been something occurring that was unexpected and pointed out that additional study led to the discovery of FACTS that explain it. It actually fits pretty well with what we know about the properties of our oceans (which cover most of the Earth's surface, by the way - wasn't sure you knew that since its another scientific fact) and their ability to absorb heat, gases, molecules, etc. Data collected from around the globe have found increased acidification and increased temperature ranges in our oceans, which are both bad signs from a scientific and global standpoint. Coral refs are dying, coastal habitats are being completely altered, et al. Since you brought it up, data has overwhelmingly shown that both the Arctic and Antarctic regions have had less ice cover this year than they ever had, and the percentage of ice shrinkage has continued to accelerate as predicted. That is a fact, not a faulty prediction. In the end, climate change is happening, it is having an impact on our environment and the only real question left to answer is what steps can we take to mitigate for it. Just because there may have been slight variations in expected outcomes doesn't mean the overall theoretical model is wrong. Its called scientific method and most of us learned it in elementary school. What saddens me most is the growing number of Americans that don't understand anything about science, so instead of educating themselves, attack the methods and purveyors of this important part of our lives when they say something you don't want to hear. A local example is Miami Beach has already started to undertake millions of dollars of work to deal with the impacts of sea level rise (another predicted effect of climate change that is happening - those darn effects!) to their drainage systems. The rest of South Florida will need to do the same (SFWMD has known this for years and has been working towards the same goal).
PLEASE GIVE ME JUST THREE EXAMPLES OF DEFINED LEADERSHIP IN MARCO RUBIO'S STINT AS A U.S. SENATOR. HE WAS A "DO-NOTHING" IN THE STATE LEGISLATURE - LIVING OFF THE CREDIT CARD OF THE STATE REPUBLICAN COMMITTEE, AND OBTAINING A FAVORABLE MORTGAGE AND RATE FOR WHICH HE COULD NOT - IN REALITY - QUALIFY. NOW HE IS SUPPOSED TO REPRESENT ALL FLORIDIANS, BUT HE CAN;T EVEN BEAT HIS WAY OUT OF A WET PAPER BAG!
From an investor analysis on the utility industries: "Millions of customers representing billions of dollars in utility revenues will find themselves in a position to cost-effectively defect from the grid if they so choose. The so-called utility death spiral is proving not just a hypothetical threat, but a real, near, and present one. The coming grid parity of solar-plus-battery systems in the foreseeable future, among other factors, signals the eventual demise of legacy utility business models."
http://blog.rmi.org/blog_2014_02_25_will_the_electricity_grid_become_optional
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