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I too am hopeful that Bloom will lower its costs and create an economically justifiable system. I'm also hopeful for the other five dozen energy startups that also have solutions that are too expensive and just need to figure out how to lower their costs. Bloom has what appears to be a very good product and a pathway for reducing its costs. But I won't give it credit for already changing the world.
I believe that the proper context for Bloom today is the datacenter business. Datacenters have long wished for a way to produce their own power that can serve as a primary energy source and also a UPS backup. Bloom boxes are an ideal solution for that. I think the company will be able to sell its 40 MW of production capacity at current prices to datacenter clients. But they'll have trouble broadening the scope of their market until they can significantly lower their price point.
Good point Jill about the Google Power Meter. It's hard to see the connection between the new energy division of Google and the in home display right now, but that doesn't mean it's not part of Google's plans. Who would have thought that when the company started initiating the Android smartphone operating system years ago that it would lead to the point where Google is branding its own phones (like the newly released Nexus One)?
Rick,
The wording of the bill in section 1705 (which covers loan guarantees), calls for programs that further renewable energy, electricity transmission and energy efficiency. So I'm guessing (we won't know for sure until the DOE starts issuing guarantees) that a VPP would qualify for loan guarantees.
DG-Good point. We're trying to find the right balance between brevity and comprehension, and it sounds like this post didn't go far enough towards the latter. To summarize, a feed-in tariff is a form of subsidy for renewable energy in which the government sets a price at which utilities have to buy the electricity produced by renewable energy projects. Another important aspect of it is that it's a mandate: utilities have no choice in the matter. Spain, Germany and a smattering of U.S. states have FIT's, sometimes set at extremely high price points (in Germany, utilities must purchase the electricity from residential photovoltaic arrays for around 45 cents per kilowatt-hour--that's more than 4 times the average price of conventional electricity in the U.S.).
California had a FIT, but set the price so low (around 10 cents per kwh) that it got no takers. The California Public Utilities Commission has been debating a new FIT policy and finally released its policy late last week. Rather than set a price at which utilities have to purchase solar electricity, it allows the utilities to hold an auction for proposed photovoltaic projects. The developers that offer to sell electricity for the lowest price will win the auction (technically, the correct economic terminology for this type of process is "reverse auction").
I think that the CPUC proposal is a good idea and worth exploring by other PUC's and state governments. It addresses the single biggest problem of FIT's: when government mandates an inflexible price, it usually gets it wrong. If it sets it too low (as in California's previous FIT program), it doesn't spur renewable energy growth. If it sets it too high (as in the case of Spain and Germany), utility ratepayers pay too much for the product.
By holding a reverse auction, the marketplace will set the price and the lowest-cost producer will win the contracts. Utilities, ratepayers and taxpayers will end up paying the least amount of money it takes to produce electricity from photovoltaics. And society will benefit from the increased amount of renewable energy produced.
I hope that helps to make the issue clearer for you.
