AltaTerra FiT freak gives web conference

Rats! I missed it. I planned to dial in to Palo Alto-based AltaTerra’s web conference last month on feed-in tariffs (FiT) but it started at 2pm eastern time, 7pm here. Events, dear e-reader, got in the way.

Of course, it was no problem as it’s almost impossible to “miss” anything these days. Within a day, Alta Terra sent an audio transcript. I keyed in the secret password, and the very American voice of Paul Gipe boomed into my office. Gipe, a long-term renewable energy advocate and a big fan of FiTs, or “Advanced Renewable Tariffs”, as he prefers to call them, is, today, a happy man.

His talk, accompanied by a PowerPoint presentation, compared the effects – and quality - of FiTs in various countries, and held out the prospect of a national FiT for the USA. This, of course, was “unthinkable” up until recently.

And Gipe should know. He has been pushing for FiTs for three decades, and was told only four years ago by a high-level US government climate change operative that he was “nuts” for proposing FiTs. Gipe can now look see a “growing trend” in North America, led by Ontario – and in many other states and countries. He estimates that fully 50% of wind power and as much as 75% of solar PV worldwide came in under FiTs – and sees 90% for solar PV this year - worldwide.

Despite Gipe’s preference, I will refer to “FiTs” but I take his point about “Advanced Renewable Tariffs”. Both employ a system of tariffs to pay renewable generators, household or business, for every kWh of electricity fed in to the grid. However, Gipe stresses that, unlike earlier feed-in tariffs that paid one price for all technologies in all locations, these “modern FiTs” or Advanced Renewable Tariffs are more sophisticated. Price differentiation is the key. Different prices should be paid by technology, project size, and other factors, such as solar PV on rooftops v ground-mounted.

FiTs are a market mechanism, in Gipe’s view, with the legislature or regulator setting the price and the market setting the capacity. With quota systems, the reverse prevails. While not all would agree, Gipe does not view FiTs as either an incentive or a subsidy, simply a way of boosting the energy mix.

Since priority access to the grid forms the basis for any feed-in tariff, the spread of FiTs is good news, despite cuts in Spain, uncertainty in Italy and, in Gipe’s view, too much emphasis to date on wind and solar PV. Where are geothermal and biomass…? “Everywhere they’ve been introduced, FiTs have advanced renewable energy,” he said.

Gipe’s rules for FiTs: they should be simple, comprehensible and transparent. He wants the prices to be sufficient to pay for generation and to cover the range of renewable resources. He wants resource differentiation and, above all, no programme cap.

In fact, Gipe has designed a “report card” to grade states and countries on their FITs. Pls see: http://www.wind-works.org/FeedLaws/USA/WFCGradesNorthAmericanFeed-inTariffPrograms.html

Under his grading, California and Oregon got an “F”. Gipe also grades proposed legislation.

Costs v benefits

Gipe’s most frequent question: Aren’t these tariffs costly? His answer, no, as we add more renewables, we offset the increasingly high prices of fossil fuels. “Economists think in terms of costs and benefits. Why don’t these people ask about the benefits?” By investing now, he says, we can protect consumers in the future. “Inaction means higher rates later on.”

In short, Gipe believes that properly designed FiTs can “save the world”, helping us move from a culture of consumption to one of conservation. While we need a lot more renewable energy for the future, the revolution has begun, he says.

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