Feed In Tariffs - how to structure

For anyone not familiar with the term, Feed in Tariff  (FIT not surprisingly) is the money the electrical company pays you per unit (kWh) that you generate and send down their wires.
 
A most interesting system of feed in tariffs exists in Germany today. The government has legislated a feed in tariff equal to about 3 times what the same customer pays for electricity. The electrical company charges a little more to all customers and uses this money to subsidise the owners of home generation systems. Houses and businesses have two metres. One metre records the amount they use, the other how much they produce. You don't get the three-times rate for the difference between what you use and what you produce but on the whole amount you produce. The German government has guaranteed that this situation will continue for 20 years from the date of installation. To induce people to get in early, the small generator gets the rate for his power generation that is extant in the year he installs his solar unit and this rate decreases from year to year. Thus people who installed solar in 2004 are getting 55c per unit until 2024 while people installing their unit this year (2008) will get 45c per unit until 2028. By 2011, the rate may be around 35c per kWh (kilowatt hour)

The system is obviously not sustainable. A company can't be buying a product and selling it for a third as much. Moreover, as more and more people put solar panels on their roves or wind turbines in their garden, the power company will have to charge the conventional customers more to pay off the generating customers. However, you have to hand it to Germany. What they aimed at has worked and at a bargain price when compared with building coal fired power stations.  Best of all it is  without any involvement of the always inefficient government tax system. (well, maybe in Germany it is not inefficient.  In fact in this link you will see just how clever the German Tax Department is.)

Germany has clearly recognized that in the not too distant future, the cost of power from fossil fuels will start to increase exponentially, due to demand exceeding supply and due to increasing compliance costs. With the German scheme of feed in tariffs, they have created a renewable solar-electric generating capacity equal to the output of about 4 large coal fired generating stations (over 13 GW as of the end of 2007) and growing day by day. With energy being a large part of the cost of any product, when the rest of the world is trying to play catch up, Germany will have megawatts of stably priced, renewable energy for her industries.  This in a country with less that 2 peak hours of sunshine per day.

Here in New Zealand, I suspect, (and hope) we won't go for the subsidy model that Germany is using. Part of this is philosophical-historical. Not so many years ago, our agriculture was one of the most heavily subsidized in the world. People didn't farm crops, they farmed subsidies. With great foresight and more than a little courage, the government of the day decided to scrap all agricultural subsidies. We went cold turkey and it worked. After some admittedly hard times, our farmers have become lean and mean and of most importance, their decisions are now based on economic reality rather than how to play the system. They now compete all over the world against subsidized agricultures and compete very successfully. (or would if the Americans would pay more than lip service to their professed free trade policy)

I would like to see a much different system. It is simpler, more easily understood and sustainable. Keeping in mind the law of unexpected consequences, as a first suggestion, it would be structured as follows.

There would be only one meter in your house or business and the electricity you generate would simply turn the meter backwards.  The two meter system is a scam. The electrical company would structure its charges (as they do at present) with a fixed charge and a charge per unit (kWh) used. There have been many names for this fixed charge but for the sake of this discussion lets call it a line charge. This is the amount you pay for the privilege of being connected to the grid. This is reasonable as the electrical distribution company had to build the distribution system and has to maintain it. Now here is where we have to be a bit careful. The electric company could structure this differently for people just using electricity and for people using and generating electricity. For the generators, they could have a very large fixed cost and a very low power rate for power used or generated. For the non-generating customer the reverse. This is where the government must step in and block this possibility. They must simply legislate that whatever the charge structure the power company decides on, it must be the same whether you are generating or not. Then if the generating company tried to charge a huge line charge and a small per-unit charge, the ordinary customer could use huge amounts of power for almost a fixed cost. If they charged a very small fixed charge and a large per-unit charge, the generating customer would make lots of money. Structured so that the system is the same for both types of customer, the system is reasonably self regulating since it is in the interest of the power company to maximize its profits by a middle of the road approach.



There is also no need for the power company to send out bills every month (or payments for that matter) to the user-generator.  The amounts either way will be small and a financial reconciliation can occur once each year.  Ordinary  customers get billed as usual. So what are the implications of such a system.

Firstly, there is no need for the installation of any extra meters by the power company which they will charge to the customer. This also eliminates the VAT you would have to pay on the extra meter.

Secondly, the power company doesn't have to service a developmental loan for installing new power stations. All the capital costs fall on the private individual. The only extra wiring needed is the wiring associated with the power generating unit. The customer must have in place all the equipment that makes his system compatible with the electric company and that is the end of it.

Thirdly, this system is sustainable and good for the power company. The power company is "buying" power during the day when they charge the greatest amount for their power and the power, on average, is being generated closer to the end user than is the case with remote, high output power stations. Getting power when the demand is greatest and reducing their line losses increases their profits.

Fourth, the system can be left in place for ever and doesn't have to be changed at some time in the future as with the German system. Stability of system allows for long term business planning and is greatly encouraging to businesses.

Fifth, the power company also gains on the Internet effect. Diffuse power generation is less vulnerable to line outages than high-power point-sources.

Sixth, the power company still makes money on their line charge commensurate with the cost of maintaining the lines.

New Zealand is an innovator in so many ways. Hopefully we will also be innovative with Feed In Tariffs.

One thing we must guard against at all costs is double metering. In Germany, even, now when the government is trying to encourage as much uptake of solar electric as possible, they are adding the revenue made by the small generator to his income for income tax purposes. For someone with a high salary, the marginal rate is 46% and there is a further 5.5% Unification surcharge. They are also charging GST (VAT/sales tax) at 19% on every unit of electricity the customer uses. Note that these charges are  not on the difference between what you use and what you produce but on ever kWh you use and every kWh you produce.   When the unrealistic FIT system ends, the small generators are going to find they are still paying quite a bit for their power even if they are generating as much as they use. In fact, depending on their tax bracket, the small German generator would have to produce 2 to 3 times as much power as they use in order to reduce their net power bill to zero. Think about the cost of servicing the loan they have to take out to buy this extra large system. Think about the GST they pay the government for this larger-than-needed system.   If someone does decide to put in a system which is larger than they need for their own use, they should be allowed a fair return. For the sake of argument, let's say 80% of what the power company charges for power at the time of generation.

The correct system of metering and Feed In Tariffs which is fair to both power company and customer and which is sustainable will be a great encouragement for the uptake of renewable energy by the small generator and won't have the customer wake up one morning and realizing he has been scammed.

Growing Oysters in the Outflow of Mariculture Ponds

Mariculture ponds growing fish, prawns or other organisms provides the ideal food source for growing oysters. It depends on the fact that with a conversion coefficient of 2:1 from feed to fish/prawn, 90% of the feed goes into the water. I can just hear you saying "this guy can't add two numbers together" but bear with me.

    Conversion coefficient is calculated by dividing how much feed is used, (usually in the form of a pellet) into how much fish is produced. Conversion coefficients in the range of 2:1 are common. However, the pellet is typically around 7% water (to keep it from growing moulds, bacteria and so forth), and the fish is typically around 80% water. In the end, when you calculate the true conversion coefficient, of dry pellet to dry fish, it comes out at about 10:1 just as you learned in biology when the teacher said that only about 10% of the mass, transfers from one tropic level to the next. 

   For instance, 100kg of krill will make 10kg of penguin and 10kg of penguin will make 1kg of sea lion. From the point of view of the oyster, 90% of the food that is fed to the primary organism (fish or prawn) is available to feed the oyster. This is not some attempt by the fish farmer to bluff someone. 

    He buys his feed pellets at so much per kg and sells his fish or prawns for so much a kg. For him, this is a perfectly logical way of looking at conversion coefficient.  For a biologist who wants to know how much food is available for the next stage, the true conversion coefficient is the one to use.

Of course, this food enters the pond in the form of feces, excretory products and respiration. Not what your oyster wants to eat. For the welfare of the oyster it is important that the ponds are in a good sunny location. With lots of sun, a heavy crop of a wide range of single celled phytoplankton grow and use this bounty. If, as in one place I worked, the water is sucked through beach rock with a good proportion of organically derived silica, then the water will contain a good quantity of Si for the formation of diatoms. Diatoms are generally speaking the best food for oysters. In another location where we farmed, the water source was otherwise and I always attributed this to the much poorer results which were obtained.

Here a problem arises. In your typical mariculture pond in a sunny climate, even with an exchange rate of once every two days, the concentration of phytoplankton is much too great for the oysters. The Japanese oyster (Saccostrea gigas) survive and grow very well in this rich soup of phytoplankton but they waste a lot of food. An oyster uses its "gills" to separate out particles from the water with preferred particles moved by paths of cilia toward the mouth while unwanted particles go the other way. Every so often, the oyster snaps its shell closed and expels the unwanted items as pseudofaeces. When the concentration of normally desired food items is too great, much of this good food is expelled as pseudofaeces. The feces along with the pseudofaeces fall to the bottom of whatever container the oysters are growing in and turns anaerobic. Various systems are used to ensure that this bottom muck does not poison the oysters.  Part of the trick to produce the maximum crop from the available food is to present the  food at the desired concentration.  More of that later.

If you have ever been associated with oyster growing in the sea, you know how much work; how many processes go into handling the oysters. I mention this as I am going to describe the method we used to grow the oysters. It may sound like a lot of work but is a fraction of the work needed to grow in the sea and is all in comfortable conditions on land rather than at sea where you are exposed to whatever weather is thrown at you. Even better, most of the work you have to do in the land based system is with the small juvenile oysters so there is little weight to move around and later the oysters finish their growing pretty well by themselves.   In a sea based system, you are continually separating and sorting the oysters which are continually attaching themselves to each other.

The oyster we grew was Crassostrea gigas (now Saccostrea gigas), also known as the Pacific or Japanese oyster. It is able to handle high concentrations of food in its environment and grows fast producing, to my taste, the finest oyster available. It has one cup shaped shell and one flat shell. When grown free on mesh racks, the oyster sits on its cup shaped shell with the flat shell uppermost. If you grow on racks this orientation is necessary since, if the growing edge of the shell touches the rack (as it would do if you put the oyster flat-side-down), the oyster  will grow into the mesh and will have to be pried off every time you thin or harvest. However, this characteristic can be turned to one's advantage.

Early on, we noted that with stacks of racks of free sitting oysters, the build up of feces and pseudofaeces would soon smother the oysters unless we cleaned them every week or so.    Even then oyster on the bottom racks were often smothered. Even worse, with the oysters in contact with anaerobic mud, we often got infestations of shell worm. When you open an oyster which is infested with shell (mud) worm, you often break into a pocket of anaerobic mud in the shell.  Not the thing to impress the customer.  The system we came up with was as follows.

When we got our oyster from the hatchery at about the size of half a pea, or sometimes smaller, we grew them on trays of mesh until they were large enough so that they could be laid flat on a piece of Netlon with a 10mm hole.  We then made up racks of netlon (plastic extruded mesh) of about a meter by a meter.  We cut the mesh in strips leaving both ends connected. We put spacers at each end like a weaving so that alternate strips of net were up and down. We then placed a baby oyster on every third hole which it was now large enough to bridge. Sometimes we just laid them on and sometimes used a variety of glues. The oysters were placed cup-shell-down. As soon as the mantle of the oyster came out and touched the mesh, they started to grow into the mesh. After a couple of weeks they were firmly attached. At this point, we cut the mesh strips apart in such a way that each oyster now had a loop at the hinge end with which to hang it.

We then manufactured split rings by winding warmed PVC welding rods around a suitable shaped stick and cutting the spiral apart once it had cooled. We then attached each oyster to each cross of a 1 metre square piece of plastic coated wire weld mesh with 55mm wire spacing. The oysters were now suspended, hinge up, entrance and exit down under the mesh. These pieced of mesh were then stacked with about 150mm spacers in the flow of water from the fish and prawn ponds. With this system the area available for organic material to settle was greatly reduced and even if it did settle on the thin hinge end, it did not plug the water entrance or exit of the oyster which was now down-facing. The stacks of racks were suspended in a concrete trough of about a meter and a half on a side. Usually we had 5 layers of mesh in a stack.

An interesting aside which relates to our present acidification of the oceans was that with a high level of algae production, the alkalinity of the water increased. Not surprising since phytoplankton growth uses up Carbon dioxide which is causing acidification.

November 2011
I haven't read this blog for quite a while.  I just realized that I didn't deal with the problem of an excessive concentration of food in the water.  We got around it this way. 

Our trough where we grew the oysters, was closed on one end and the water flowed out the other end.  Instead of introducing the water at the closed end and letting it flow through the trough, we introduced it all along the trough.  This way, as the oysters removed food, it was replaced and the concentration of food in the water which the oysters experienced was much less that the concentration of food in the water straight from the pond.  This also allowed us to solve another problem. 

Oysters use up oxygen just like any animal.  One of the most effective ways of oxygenating water in a tank or trough is to jet the new water vertically into it.  This jet entrains and blasts air down into the water.  You would think it would cause the water to circulate.  It does but not the way you would expect.  If you blast this water downwards along one side of the trough, you would think that the rotation of the water in the trough would be in the same direction that the jet pushes it.  In fact it is the opposite as the bubble which are blasted down into the water rise up and cause the water to rotate.  To be effective, the pond must be a couple of meters above the trough and pipes must be large enough so as not to loose significant pressure.  Otherwise you would need a small centrifugal pump.  We drew "pipettes" from heated plastic pipes to make the nozzles just as you do with glass tubing.  It was then easy to cut the narrow part of the pipe at whatever diameter you wanted and to make two pipettes from each piece
From time to time, we would pull the plug on the trough and wash down the bottom.  The bottom of the trough was flat but would have been better if it had been deeper at the middle to aid the washing out of the anaerobic mud which collected there.  I never measured it but I suspect a given weight of oysters makes more feces that an equal weight of cow.

Of course the next stage would be to grow a commercial sea weed on the outflow of the oyster troughs.  This occasionally happened accidentally in our system but we didn't sort out a commercial system while I was there.