Category Archives: Energy

2017 Early-career Sustainable Operations Workshop

Re-posting the call for presentations from Professors Kraft and Agrawal:

Dear colleagues,

We are happy to announce that the 2017 Early-career Sustainable Operations workshop will be held March 3rd – 5th, 2017 at the Darden School of Business, University of Virginia.

The program will follow a format similar to the past two years, with a dinner to be held Friday night, followed by a full day of presentations and panels Saturday, and then a half day of presentations on Sunday. The conference is sponsored by the Darden School of Business, the McDonough School of Business at Georgetown University, and the Ray C. Anderson Center for Sustainable Business at the Georgia Tech Scheller College of Business.

The program committee includes Atalay Atasu (Georgia Tech), Eda Kemahlioglu-Ziya (NC State), Beril Toktay (Georgia Tech), Vishal Agrawal (Georgetown), and Tim Kraft (Darden). We plan to schedule 6-8 presentations on Saturday and 3-4 presentations on Sunday. We are inviting junior academics (untenured faculty) and PhD students who are interested in presenting to submit a 1-page abstract or a working paper, if one is available, to SustainableOM2017@gmail.com by November 4, 2016. Notice of acceptances will be sent by December 16, 2016. Ties will be broken in favor of full papers.

For more information or questions, please email Tim Kraft at kraftt@darden.virginia.edu or Vishal Agrawal at va64@georgetown.edu.

Thank you!
Vishal and Tim

Tim Kraft
Assistant Professor
University of Virginia
Darden School of Business
Charlottesville, VA 22903

Vishal Agrawal
Associate Professor
McDonough School of Business
Georgetown University
Washington, D.C.

Links 20160629: Thoughts on the Renewable Revolution

End of the era of baseline power plants?

[Hydro storage at the Helms Pumped Storage Plant, located 50 miles east of Fresno,] which began operating in 1984, was supported by regulators because it was assumed there would be excess power at night from California’s baseload nuclear power plants. Now the opposite is occurring. As more and more solar power gets connected to the grid both in front of and behind the meter, there is the potential for excess power being generated in the middle of the day. The 1,212-megawatt Helms project and other sources of energy storage can be used to absorb excess solar power and dispatch it later in a flexible manner when consumers need the power.

Good discussion of effect of tax credits and grid parity on renewables. Currently, wind can bid negative prices in and still make money if the market clears in the negative $/MWh range, because of tax credits. When the tax credits expire and renewables dominate the grid, what do the markets clear at? How do renewable developers make money if peaks are eliminated from the load curve? They’re not making much money installing the power, as a race to the bottom has dropped payments to installers.

Solar plus storage: With SolarCity deal, Tesla aims to speed clean energy transition.

In order to solve the sustainable energy problem, you need sustainable energy generation, you need storage because of the intermittency of solar and wind, and then you need to have electric transport,” he said. “Those are the three ingredients we need to have a good future, so that’s kind of how I think about things — not that we’re an automotive company or anything like that. -Musk

The Rise of the Regional Solar Installer. I’m finding it more and more likely that the most prominent national solar installers today are putting all the work/money into developing cheap solar power. In a few years, a new company will swoop in (perhaps from these regional installers), use the ‘lessons learned’ from the current solar developers, and use a demonstrably better business plan to corner the market. Thus, it is possible that the big gorilla of the solar industry will not be one of the national names you may have already heard.

Tesla makes bid to buy SolarCity

Tesla offers all-stock deal that values SolarCity at $2.5 billion. Musk was already a large shareholder at SolarCity.

On the one hand, this is cool from a vertically-integrated clean energy offering:

Musk saw this as a compelling solution and a “no-brainer” where a consumer can go into a store and “with a few clicks” buy an electric vehicle, a solar system and an energy storage system. It makes “more effective use of our stores said Musk.

On the other hand, neither SolarCity nor Tesla have shown any interest in making money, and neither is close to profitable. Combining them will probably hasten bankruptcy (most likely) or world-domination (possibly).

One of GTM’s analysts said, “A 21-30 percent premium on a depressed stock price, paid entirely in equity in another risky company. Don’t know that I’d take this as a SCTY shareholder.”

Intersection of Behavioral Operations and Energy

An intersection I am very interested in with my research interests. From an interview with Tendril CEO Adrian Tuck:

Under today’s demand response — whether you are turning someone’s air conditioning off or sending them a message to do something else — you are really just making a problem on the network the customer’s problem. Nobody else does that.

Netflix is an example that I often use. Netflix often has huge capacity-constraint issues, but they don’t tell you not to watch a movie on Saturday night or charge you more during a peak time. They just do really clever things behind the scenes. It might take slightly longer to spool the movie up on a Saturday night than it does on a Tuesday morning, or the pixelation on the movie is not quite as good as it would be — but they manage all of that to ensure the service.

The utility equivalent would be to tell people not to watch a movie on Saturday night. I think a fixed-price model — say $200 per month based on what you use — is better than a time-of-use rate. Time-of-use just takes a problem on the network and makes it a customer’s problem. I think the company that uses all these smart technologies to deliver a flat price of energy, and to take away demand response or time-of-use, is going to succeed in the market.

Links 20160523

Google will guesstimate how much solar power your roof could provide. Now available for most Indiana houses.

Kelley Roof

“What do a Catholic, a Muslim, a Mennonite, a Methodist and a Unitarian talk about when they get together? Energy conservation, of course.”

Just plan 2 starters for each Reds game. I really like this idea. The Reds need to evaluate a lot of young rotation arms and their bullpen is a dumpster fire.

Book Review- The Boom

The Boom: How Fracking Ignited the American Energy Revolution and Changed the World
by Russell Gold, 2014

the boom

Hydraulic fracturing, or fracking, is the process of pumping water and chemicals down an oil/gas well to crack the shale rock formation many miles underground. The cracks in the shale then release the fossil fuels, which flow up the well and are collected and pipelined to markets. This book does a good job of explaining the process, the market, the opportunity, and the risks of fracking. It is relatively unbiased and has in-depth looks at Chesapeake Energy and efforts at detecting unsuitable cement well-walls that may be leaking gas.

The book was published in 2014, so it does not contain reference to the oil/gas prices drops of the last ~12 months. I think that companies have been in too much of a rush to pump the oil/gas from fracking as fast as possible, and the glut of product into the market has killed the economic benefit of the new reserves. Many of the fracking rigs are now idle, as the lower market price of gas/oil is not enough to justify drilling. The rush has also led to many environmental issues. I’m of the opinion that fracking seems to be an acceptable process overall, but it has been badly planned out by the energy companies and poorly regulated by the government.

“The stone age didn’t end because we ran out of stones.” And the fossil fuel age will hopefully end before we run out of carbon sources, as we are really good at finding new sources and their cumulative effect on the planet is not good.