Community Based Electricity: Hammonds

In theory, the greater result of decentralization should be lower prices on electricity and competition in the market place. However, as we have seen, this isn’t always the case. Take for example California and their still high prices on electricity in a post decentralized market. The choices consumers were promised weren’t really choices at all and competition didn’t happen automatically as FERC believed it would. However, I don’t believe all is lost for the decentralization of power generation. Getting the kinks of the system worked out, enforcing competition, ensuring real choice to consumers is the first step in the process. Once the economic side of things has been worked out, I see a return to smaller scale community electricity generation. Renewable energy sources that work for the landscape and resources available to a specific community could become the main source of electricity for a community that is willing to put in the effort. If not, then the use of more traditional electricity sources could still be available.

The business opportunity in this is the consultation and installation of renewable energy power generation sources. These sources could be small level wind farms or solar PV. It would be likely out of the range of consumer knowledge to plan and implement a community wide grid based on renewable energy. This business could offer an initial consultation service to help communities decide which source of power generation is best suited to them and then help them go about putting the system into place.

I’ve always been interested in helping this country move into a more sustainable way of doing things in terms of electricity generation. My relatively small town has recently seen a surge in PV installations and we’re all really excited about it. I would love to be a part of taking that movement and helping it grow into a larger, community lead push towards sustainable and self-sufficient electricity generation.

The Failure of Electricity Generation: History, Status, and Needed Reforms, Tyson Slocum
http://www.ftc.gov/sites/default/files/documents/public_events/Energy%20Markets%20in%20the%2021st%20Century%3A%20Competition%20Policy%20in%20Perspective/slocum_dereg.pdf

Investing in Renewable Energy: Hammonds

Considering what I know about renewable energy, what are some of the key things I need to be able to explain to a potential funder of my project?

The biggest thing to focus on when explaining a renewable energy enterprise to a potential investor is the growth the industry is expected to experience in the near future.  As the supply of non-renewable energy sources dwindle and their cost to the consumer rises, the demand for renewable energy sources will rise.  This guarantees a demand for my product and a very strong chance of a return on their investment.  After establishing the demand for my product, I would need to demonstrate my experience in the industry and my ability to turn invested capital into profit and grow my enterprise.  It would also be wise to explain how investing in renewable energy reflects well upon the investor.

What finance-based processes would I use to explain our potential for success?

Return on Investment (ROI) and net present value (NPV) are two simple and easy to understand calculations that reflect the funds invested and the gains on said investment.  Keeping the calculations simple in the short term with ROI is beneficial as it simplifies the figures to what amounts to the viability of a project .  Using NPV clearly shows the money invested, when the investment begins to turn positive returns, and how much value is added to the enterprise after the investment.  These two figures combined can illustrate a strong incentive to invest in a renewable energy enterprise.

Building Energy Efficiency for the Consumer: Hammonds

Government could have a huge impact on energy efficiency if they make building codes for residential and commercial buildings more stringent.  The most common places a home loses energy is through lost heated/cooled air.  These loses happen through poorly insulated walls, attics, and roofs, low r-value windows, and cracks/insulation gaps.  These energy loses are relatively easy to prevent in new construction houses.  Government should implement better building codes to insure new construction houses or businesses are well insulated and well made structures.

To thoroughly implement energy efficiency someone knowledgeable in making energy efficient structures will need to be available to guide contractors through the process.  My business would provide consultation services on building to or beyond government energy efficiency standards and building codes.  This would include an initial consultation on a per site basis and carry on through a final energy audit of the building to ensure maximum efficiency.  The consultation service will increase the value of the home by increasing energy efficiency which is high in demand.  The efficient nature of the home will make a smaller foot print on the environment.  The consumer, the builder, and the environment all benefit equally.

Sources:

Department of Energy. “Air Sealing for New Construction”. May 2, 2010. Retrieved 9/14/2014. http://energy.gov/energysaver/articles/air-sealing-new-home-construction

Laura Hammonds: Lesson Two

Nuclear energy receives more funding from government and financial institutions because it is less risky than investing in renewable energy sources.  When governments and financial institutions give loans they must consider the risk of failure and rate of success.  Nuclear energy has already shown success at generating electricity in a highly efficient manner and it has proven it can do so with very few greenhouse gas emissions.  While the industry can be prone to devastating accidents it is still considered a safe and reliable manner to produce electricity.  In the short term it’s simpler to over look safety concerns and turn to nuclear as the clean energy supplier that is in such great demand.  Renewable energy won’t stand a chance of competing until a reliable and fast method is developed.

Solar and wind power are both a great opportunity for entrepreneurs to develop.  The two largest hurdles towards their development are their reliance on weather and poor storage capacity.  The development of more efficient capture devices placed in strategic areas, such as the great plains for wind power and the deserts of the southwest for solar, and greater capacity storage devices could revolutionize both industries.

Hello All!!

Hello fellow classmates!  My name is Laura Hammonds and this is my fourth semester at Penn State World Campus.  I’m in the Energy and Sustainability Policy degree program.  I currently reside in Michigan, where I’ve lived for the past twenty one years.  I had the pleasure of growing up surrounded by three colleges which made the decision of where to seek further education difficult.  I chose Penn State because of their online degree programs and their cost effective nature.  I would rather enjoy to work with the oil industry to phase out fossil fuels and incorporate their energy knowledge into a sustainable future.  My interest in this course is to gain an understanding of how to use entrepreneurship in the energy sector as an alternative to going into government when I’m finished with my degree.

Although age is no excuse, in my twenty one years of life I have yet to undertake any business ventures.  I’m shy by nature and business is heavy on communication.  A business that combined traditional energy such as oil with new ideas and technology regarding sustainability might help break down the barriers between the old and the new.  Sustainability is the kiss of death to fossil fuels and those who profit from fossil fuels will fight to the last drop if they aren’t shown what else could be profitable.