Is New Hampshire on the verge of battery energy storage history?

Is New Hampshire on the verge of battery energy storage history?
The only question left to be settled is a big one: Should utilities own behind-the-meter batteries?

A small investor-owned utility in New Hampshire may be on the verge of regulatory approval for one of the most ambitious U.S. tests yet of utility-owned, customer-sited battery energy storage systems.

In the process, regulators and stakeholders of the DE 17-189 proceeding are wrestling with a question of vital interest to the rest of the 3,000-plus U.S. utilities: Should a utility own customer-sited storage or is it a distributed energy resource (DER) that should be left to private sector providers?

Utilities have already seen the benefits that large-scale battery energy storage offers in shaving peak demand, providing grid services, and making systems more flexible. There is a clear opportunity to use customer-sited battery storage in the same way. But the question of how far utilities can intrude into markets so far served by private sector vendors must first be answered.

Vermont goes first

The only major U.S. utility-owned, behind-the-meter (BTM) battery storage is the Green Mountain Power (GMP) pilot project, according to GTM Research Energy Storage Analyst Brett Simon. GMP, the dominant Vermont electricity provider, is installing 2,000 behind-the-meter Tesla Powerwalls that will provide dispatchable energy and other grid services to New England’s wholesale electricity markets. Customers pay a one-time $1,300 fee or a monthly $15 fee to participate.

(https://www.utilitydive.com/news/is-new-hampshire-on-the-verge-of-battery-energy-storage-history/525876/

ECLAC, IDB, UNDP Partner to Accelerate SE4ALL in Latin America and Caribbean

23 February 2015: The UN Economic Commission for Latin America and the Caribbean (ECLAC), Inter-American Development Bank (IDB) and UN Development Programme (UNDP) have formed a partnership in support of the Sustainable Energy for All (SE4ALL) initiative in the Americas.

The partners intend to create a joint work plan, capitalizing on the unique strengths of each organization to enable on-the-ground implementation of the SE4ALL goals.

Meeting in Washington DC, US, on 23 February 2015, the three institutions discussed undertaking cooperative activities such as: creating knowledge products; helping to plan for universal energy access; coordinating with national and international partners; monitoring progress in the region; policy analysis; and improved project preparation and finance access. According to the partners, increasing their coordination will provide attractive investment opportunities to further speed the transition to universal sustainable energy access.

The stated potential objectives of the partnership are: providing resources that support policy and institutional reforms and regulatory frameworks that encourage the development of sustainable energy production and use; the comprehensive mapping of regional energy programs run by regional stakeholders; and determining indicators and data that will be collected from all countries. [ECLAC Press Release] [IDB Press Release] [SE4ALL Press Release] [UNDP Website]

read more: http://larc.iisd.org/news/eclac-idb-undp-partner-to-accelerate-se4all-in-latin-america-and-caribbean/

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Here’s Why Al Gore Is Optimistic About the Fight Against Climate Change

Al Gore has something of a reputation as the Cassandra of climate change. But amid the doom and gloom—melting glaciers, ever-rising carbon levels, accelerating species extinction—the former vice president has been positively sunny of late.

Why? Solar energy. “There is surprising—even shocking—good news: Our ability to convert sunshine into usable energy has become much cheaper far more rapidly than anyone had predicted,” Gore wrote recently in Rolling Stone. “By 2020—as the scale of deployments grows and the costs continue to decline—more than 80 percent of the world’s people will live in regions where solar will be competitive with electricity from other sources.”

Now a new report substantiates Gore’s optimism. Research firm Bloomberg New Energy Finance predicts renewable energy will account for 49 percent of the world’s power by 2030, with another 6 percent coming from carbon-free nuclear power plants. Solar, wind, and other emissions-free sources will account for 60 percent of the 5,579 gigawatts of new energy capacity expected to be installed between now and 2030, representing 65 percent of the $7.7 trillion that will be invested.

Gore is right that solar is driving the shift away from fossil fuels, thanks to plummeting prices for photovoltaic panels and the fact that solar fuel—sunshine—is free.

“A small-scale solar revolution will take place over the next 16 years thanks to increasingly attractive economics in both developed and developing countries, attracting the largest single share of cumulative investment over 2013–26,” the report states.

Solar will outpace wind as an energy source, with photovoltaic power accounting for an estimated 18 percent of worldwide energy capacity, compared to 12 percent for wind. That’s not surprising given that a solar panel can be put on just about any home or building where the sun shines. Erecting a 100-foot-tall wind turbine in your backyard usually isn’t an option.

In the United States, solar is projected to supply 10 percent of energy capacity, up from 1 percent today. In Germany, though, solar and wind will account for a whopping 52 percent of all power generated by 2030, according to the BNEF estimate.

These are all projections, of course, based on the existing pipeline of projects and national policies and involving a certain amount of guesswork.

The big wild card is what happens in developing nations like China and India, where energy demand is expected to skyrocket with a burgeoning middle class. Energy consumption will grow to an estimated 115 percent in China and 200 percent in India over the next 16 years. (Falling birth rates in the West mean that energy use will drop 2 percent in Japan, for instance, and 0.2 percent in Germany.)

Whether the world kicks its reliance on coal-fired electricity will depend in large part on what kind of energy choices China and India make. China installed a record amount of solar capacity last year and has set ambitious goals for ramping up renewable energy production.

But old ways die hard. While the Obama administration has proposed regulations to slash carbon emissions from coal-fired power plants, the U.S. Export-Import Bank, on the other hand, is considering financing a 4,000-megawatt coal-fired power station in India.

The good news, though, is that individuals around the world can make a difference with their personal power choices. According to BNEF, much of the solar energy to be generated over the next 16 years will come from solar panels installed on residential roofs. More

 

© 2014

Major Companies Push for More, Easier Renewable Energy

Some of the largest companies in the United States have banded together to call for a substantial increase in the production of renewable electricity, as well as for more simplicity in purchasing large blocs of green energy.

A dozen U.S-based companies, most of which operate globally, say they want to significantly step up the amount of renewable energy they use, but warn that production levels remain too low and procurement remains too complex. The 12 companies have now put forward a set of principles aimed at helping to "facilitate progress on these challenges" and lead to a broader shift in the market.

"We would like our efforts to result in new renewable power generation," the Corporate Renewable Energy Buyers’ Principles, released Friday, state. The companies note "our desire to promote new projects, ensure our purchases add new capacity to the system, and that we buy the most cost-competitive renewable energy products."

The principles consist of six broad reforms, aimed at broadening and strengthening the renewable energy marketplace. Companies want more choice in their procurement options, greater cost competitiveness between renewable and traditional power sources, and "simplified processes, contracts and financing" around the long-term purchase of renewables.

Founding signatories to the principles, which were shepherded by civil society, include manufacturers and consumer goods companies (General Motors, Johnson & Johnson, Mars, Proctor & Gamble), tech giants (Facebook, HP, Intel, Sprint) and major retailers (Walmart, the outdoor-goods store REI).

These 12 companies combined have renewable energy consumption targets of more than eight million megawatt hours of energy through the end of this decade, according to organisers. Yet the new principles, meant to guide policy discussions, have come about due to frustration over the inability of the U.S. renewables market to keep up with spiking demand.

"The problem these companies are seeing is that they’re paying too much, even though they know that cost-effective renewable energy is available. These companies are used to having choices," Marty Spitzer, director of U.S. climate policy at the World Wildlife Fund (WWF), a conservation and advocacy group that helped to spearhead the principles, told IPS.

WWF was joined in the initiative by the World Resources Institute and the Rocky Mountain Institute, both think tanks that focus on issues of energy and sustainability.

"The companies have also recognised that it’s often very difficult to procure renewables and bring them to their facilities," Spitzer continues. "While most of them didn’t think of it this way at first, they’ve now realised that they have been experiencing a lot of the same problems."

‘Too difficult’

In recent years, nearly two-thirds of big U.S. businesses have created explicit policies around climate goals and renewable energy usage, according to WWF. While there is increasing political and public compunction behind these new policies, a primary goal remains simple cost-cutting and long-term efficiencies.

"A significant part of the value to us from renewable energy is the ability to lock in energy price certainty and avoid fuel price volatility," the principles note.

In part due to political deadlock in Washington, particularly around issues of climate and energy, renewable production in the United States remains too low to keep up with this corporate demand. According to the U.S. government, only around 13 percent of domestic energy production last year was from renewable sources.

Accessing even that small portion of the market remains unwieldy.

"We know cost-competitive renewable energy exists but the problem is that it is way too difficult for most companies to buy," Amy Hargroves, director of corporate responsibility and sustainability for Sprint, a telecommunications company, said in a statement.

"Very few companies have the knowledge and resources to purchase renewable energy given today’s very limited and complex options. Our hope is that by identifying the commonalities among large buyers, the principles will catalyse market changes that will help make renewables more affordable and accessible for all companies."

One of the most far-reaching sustainability commitments has come from the world’s largest retailer, Walmart. A decade ago, the company set an "aspirational" goal for itself, to be supplied completely by renewable energy.

Last year, it created a more specific goal aimed at helping to grow the global market for renewables, pledging to drive the production or procurement of seven billion kilowatt hours of renewable energy globally by the end of 2020, a sixfold increase over 2010. (The company is also working to increase the energy efficiency of its stores by 20 percent over this timeframe.)

While the company has since become a leader in terms of installing solar and wind projects at its stores and properties, it has experienced frustrations in trying to make long-term bulk purchases of renewable electricity from U.S. utilities.

"The way we finance is important … cost-competitiveness is very important, as is access to longer-term contracts," David Ozment, senior director of energy at Walmart, told IPS. "We like to use power-purchase agreements to finance our renewable energy projects, but currently only around half of the states in the U.S. allow for these arrangements."

Given Walmart’s size and scale, Ozment says the company is regularly asked by suppliers, regulators and utilities about what it is looking for in power procurement. The new principles, he says, offer a strong answer, providing direction as well as flexibility for whatever compulsion is driving a particular company’s energy choices, whether "efficiency, conservation or greenhouse gas impact".

"We’ve seen the price of solar drop dramatically over the past five years, and we hope our participation helped in that," he says. "Now, these new principles will hopefully create the scale to continue to drop the cost of renewables and make them more affordable for everyone."

Internationally applicable

Ozment is also clear that the new principles need not apply only to U.S. operations, noting that the principles "dovetail" with what Walmart is already doing internationally.

In an e-mail, a representative for Intel, the computer chip manufacturer, likewise told IPS that the company is "interested in promoting renewables markets in countries where we have significant operations … at a high level, the need to make renewables both more abundant and easier to access applies outside the U.S."

For his part, WWF’s Spitzer says that just one of the principles is specific to the U.S. regulatory context.

"Many other countries have their own instruments on renewable production," he says, "but five out of these six principles are relevant and perfectly appropriate internationally."

Meanwhile, both the principles and their signatories remain open-ended. Spitzer says that just since Friday he’s heard from additional companies interested in adding their support. More

 

 

© 2014

China’s Solar Panel Production to Double by 2017

China installed a world record amount of solar photovoltaics (PV) capacity in 2013. While this was the first time the country was the number one installer, China has led all countries in making PV for the better part of a decade.

China now accounts for 64 percent of global solar panel production—churning out 25,600 megawatts of the nearly 40,000 megawatts of PV made worldwide in 2013—according to data from GTM Research.

Five of the top 10 solar panel manufacturing firms in 2013—including Yingli at the top and runner-up Trina—were Chinese companies. Coming in third was Canadian Solar, which produces 90 percent of its modules in China. Two Japanese companies and one each from the United States and Germany rounded out the top 10. (See data.)

As demand for increasingly affordable solar power continues to climb around the world, GTM Research projects that China’s annual solar panel output will double to 51,000 megawatts by 2017, representing close to 70 percent of global production at that time. Beijing no doubt had such a quick industry ramp-up in mind when in May 2014 it announced a new national PV capacity goal: 70,000 megawatts of installed PV by 2017, up from 18,300 megawatts at the end of 2013. To put that in perspective, if it meets that goal China will add more solar electricity-generating capacity in four years than the entire world had in place in early 2011.

For more information, see the latest Solar Indicator from Earth Policy Institute, at www.earth-policy.org.

 

 

© 2014

World first: Australian solar plant has generated “supercritical” steam that rivals fossil fuels’

A solar thermal test plant in Newcastle, Australia, has generated “supercritical” steam at a pressure of 23.5 mpa (3400 psi) and 570°C (1,058°F).

CSIRO is claiming it as a world record, and it’s a HUGE step for solar thermal energy.

"It's like breaking the sound barrier; this step change proves solar has the potential to compete with the peak performance capabilities of fossil fuel sources," Dr Alex Wonhas, CSIRO’s Energy Director, told Colin Jeffrey for Gizmag.

The Energy Centre uses a field of more than 600 mirrors (known as heliostats) which are all directed at two towers housing solar receivers and turbines, Gizmag reports.

This supercritical steam is used to drive the world’s most advanced power plant turbines, but previously it’s only been possible to produce it by burning fossil fuels such as coal or gas.

"Instead of relying on burning fossil fuels to produce supercritical steam, this breakthrough demonstrates that the power plants of the future could instead be using the free, zero emission energy of the sun to achieve the same result,” Dr Wonhas explained.

Currently, commercial solar thermal or concentrating solar power power plants only operate a “subcritical” levels, using less pressurised steam. This means that they’ve never been able to match the output or efficiency of the world’s best fossil fuel power plants - until now.

The commercial development of this technology is still a fair way off, but this is an important first step towards a more sustainable future. More

Watch the video to see the plant in action.

 

© 2014

IRENEC 2014 - International Renewable Energy Conference

 

For More Information Click Here

 

© 2014

Renewable Sources Provide Over 20% Of Global Power Production

Global renewable electricity energy capacity rose to a new record level last year — more than 1,560 gigawatts (GW), up 8% from 2012. More than 22 % of the world’s power production now comes from renewable sources. Renewables currently meet almost one-fifth of world final energy consumption.

That is one of the conclusion of the new Renewables Global Status Report published by REN21, “the global renewable energy policy multi-stakeholder network.”

The Renewables Global Status Report relies on up-to-date renewable energy data , provided by an international network of more than 500 contributors, researchers, and authors.

With developing world’spolicy support, global renewable energy generation capacity jumped to a record level; 95 emerging economies now nurture renewable energy growth through supportive policies, up six-fold from just 15 countries in 2005.

These 95 developing nations make up the vast majority of the 144 countries with renewable energy support policies and targets in place. The rise of developing world support contrasts with declining support and renewables policy uncertainty and even retroactive support reductions in some European countries and the United States.

In 2013, an estimated 6.5 million people worldwide worked directly or indirectly in the renewable energy sector. O ther important developments include:

• Renewable energy provided 19% of global final energy consumption in 2012, and continued to grow in 2013. Of this total share in 2012, modern renewables accounted for 10% with the remaining 9% coming from traditional biomass the share of which is declining.

• Heating and cooling from modern biomass, solar, and geothermal sources account for a small but gradually rising share of final global heat demand, amounting to an estimated 10%.

• Liquid biofuels provide about 2.3% of global transport fuel demand.

• Hydropower rose by 4% to approximately 1,000 GW in 2013, accounting for about one-third of renewable power capacity added during the year. Other renewables collectively grew nearly 17% to an estimated 560 GW.

• The solar PV market had a record year, adding about 39 GW in 2013 for a total of approximately 139 GW. For the first time, more solar PV than wind power capacity was added worldwide, accounting for about one-third of renewable power capacity added during the year. Even as global investment in solar PV declined nearly 22% relative to 2012, new capacity installations increased by more than 32%. China saw spectacular growth, accounting for nearly one third of global capacity added, followed by Japan and the United States.

• More than 35 GW of wind power capacity was added in 2013, totalling just more than 318 GW. However, despite several record years, the market was down nearly 10 GW compared to 2012, reflecting primarily a steep drop in the U.S. market. Offshore wind had a record year, with 1.6 GW added, almost all of it in the EU.

• China, the United States, Brazil, Canada, and Germany remained the top countries for total installed renewable power capacity. China’s new renewable power capacity surpassed new fossil fuel and nuclear capacity for the first time.

• Growing numbers of cities, states, and regions seek to transition to 100% renewable energy in either individual sectors or economy-wide. For example, Djibouti, Scotland, and the small-island state of Tuvalu aim to derive 100% of their electricity from renewable sources by 2020.

• Uruguay, Mauritius, and Costa Rica were among the top countries for investment in new renewable power and fuels relative to annual GDP.

• Global new investment in renewable power and fuels was at least USD 249.4 billion in 2013 down from its record level in 2011. More

 

© 2014

Japan's 25-year plan to have space solar power

Solar energy experts have long known that the best place to collect the sun's rays is in space. A solar farm in orbit could collect energy all the time, whereas ground-based arrays sit idle during the night.

And huge chunks of real estate are easier to come by in space, where solar collectors can be as enormous as they need to be. But the problems with turning solar energy in space into useable energy on Earth have kept space solar stuck in the land of science fiction since the 1960s.

Yet Japan's version of NASA, the Japan Aerospace Exploration Agency, is optimistic. JAXA recently unveiled a technology roadmap that says it can make solar arrays in orbit a reality by the 2030s, and that plant could supply 1 gigawatt of energy, the equivalent of one of the country's nuclear plants. Susumu Sasaki reports for IEEE Spectrum.

Microwaves are key to JAXA's plans. Some space solar concepts have proposed using lasers to beam the energy in orbit down to collectors on the surface, but the water molecules in the clouds can scatter laser light. That means you'd lose some of the energy on anything less than a perfectly clear day. Microwaves don't have that problem. So JAXA has designed multiple concepts in which the DC (direct current) power generated in orbit would be transformed into microwaves and then beamed to Earth's surface, where a farm of antennas would collect the microwaves and transform them back into DC electricity. JAXA says it can now perform these transformations with at least 80 percent efficiency on each end.

Another major hurdle for space solar is keeping the collectors pointed at the sun at all times so they can collect energy continuously. JAXA released one design that features a square panel measuring 2 kilometers (1.2 miles) on each side. But the panel's orientation is fixed, meaning the amount of energy it can produce varies. Another JAXA design solves this problem by incorporating two enormous mirrors that reflect sunlight onto photovoltaic panels positioned between them.

More hurdles: If a space solar array had to burn fuel to adjust its position, for example, that would add millions of dollars to the cost. So Japan is trying to design its components in such a way that they naturally counterbalance Earth's gravity and stay in position without adjustment. In the case of the two-mirror design, all those pieces would need to fly in careful, precise formation, something that has not been tried on so grand a scale.

In the transmission phase, more than a billion tiny antennas affixed to moveable panels would be required to receive the microwave energy coming from space. Those panels must constantly adjust their orientation to maximize how much energy they receive. JAXA plans to help them by sending a pilot signal from the ground to the satellite that would tell the satellite how to adjust the beam.

Despite these and more challenges, JAXA has rolled out an ambitious timeline: It plans to unveil a ground-based demonstration this year, then reveal progressively larger experimental satellites in 2017, 2021, and 2024. The major goal would come to fruition in the following decade: A 1-GW power station in 2031, and then one power station launched per year by the late 2030s.

Within a quarter-century, then, perhaps Japan's energy will come not from nuclear plants -- which are vulnerable to earthquakes, tsunamis, and planetary outbursts -- but from solar arrays that aren't even on the planet. More

 

© 2014

Scientists Discover How to Generate Solar Power in the Dark

Meet 'photoswitches,' a breakthrough set of materials that act as their own batteries, absorbing energy and releasing it on demand.

The next big thing in solar energy could be microscopic.

Scientists at MIT and Harvard University have devised a way to store solar energy in molecules that can then be tapped to heat homes, water or used for cooking.

The best part: The molecules can store the heat forever and be endlessly re-used while emitting absolutely no greenhouse gases. Scientists remain a way’s off in building this perpetual heat machine but they have succeeded in the laboratory at demonstrating the viability of the phenomenon called photoswitching.

“Some molecules, known as photoswitches, can assume either of two different shapes, as if they had a hinge in the middle,” MIT researchers said in statement about the paper published in the journal Nature Chemistry. “Exposing them to sunlight causes them to absorb energy and jump from one configuration to the other, which is then stable for long periods of time.”

To liberate that energy all you have to do is expose the molecules to a small amount of light, heat or electricity and when they switch back to the other shape the emit heat. “In effect, they behave as rechargeable thermal batteries: taking in energy from the sun, storing it indefinitely, and then releasing it on demand,” the scientists said.

The researchers used a photoswitching substance called an azobenzene, attaching the molecules to substrates of carbon nanotubes. The challenge: Packing the molecules closely enough together to achieve a sufficient energy density to generate usable heat.

It appeared that the researchers had failed when they were only able to pack fewer than half the number of molecules needed as indicated by an earlier computer simulation of the experiment.

But instead of hitting a projected 30 percent increase in energy density, they saw a 200 percent increase. It turned out that the key was not so much packing azobenzene molecules tightly on individual carbon nanotubes as packing the nanotubes close together. That’s because the azobenzene molecules formed “teeth” on the carbon nanotubes, which interlocked with teeth on adjacent nanotubes. The result was the mass needed for a usable amount of energy storage.

That means different combinations of photoswitching molecules and substrates might achieve the same or greater energy storage, according to the researchers.

So how would molecular solar storage work if the technology can be commercialized? Timothy Kucharski, the paper’s lead author and a postdoc at MIT and Harvard, told The Atlantic that most likely the storage would take a liquid form, which would be easy to transport.

“It would also enable charging by flowing the material from a storage tank through a window or clear tube exposed to the sun and then to another storage tank, where the material would remain until it's needed,” Kucharski said in an email. “That way one could stockpile the charged material for use when the sun's not shining.”

The paper’s authors envision the technology could be used in countries where most people rely on burning wood or dung for cooking, which creates dangerous levels of indoor air pollution, leads to deforestation and contributes to climate change.

“For solar cooking, one would leave the device out in the sun during the day,” says Kucharski. “One design we have for such an application is purely gravity driven – the material flows from one tank to another. The flow rate is restricted so that it's exposed to the sun long enough that it gets fully charged. Then, when it's time to cook dinner, after the sun is down, the flow direction is reversed, again driven by gravity, and the opposite side of the setup is used as the cooking surface.”

“As the material flows back to the first tank, it passes by an immobilized catalyst which triggers the energy-releasing process, heating the cooking surface up,” he adds.

Other versions of such device could be used to heat buildings.

Kucharski said the MIT and Harvard team is now investigating other photoswitching molecules and substrates, “with the aim of designing a system that absorbs more of the sun's energy and also can be more practically scaled up.” More

 

© 2014

Building the Electricity System of the Future: Thinking Disruption, Doing Solutions

The speed of disruptive innovation in the electricity sector has been outpacing regulatory and utility business model reform, which is why they now sometimes feel in conflict.

That disruptive innovation is only accelerating. RMI’s recent report,The Economics of Grid Defection: When and where distributed solar generation plus storage competes with traditional utility service, sets a timeline for utilities, regulators, and others to get ahead of the curve and shift from reactive to proactive approaches. Becoming proactive and deliberate about the electricity system's transformation, and doing so ahead of any fundamental shifts in customer economics, would enable us to optimize the grid and make distributed technologies the integral and valuable piece we believe they can and should be.

When RMI issued The Economics of Grid Defection three weeks ago, our intent was to stretch the conversation among electricity system stakeholders by looking out far enough in the future to discern a point where the rules of the system change in a fundamental way. We used the best available facts to explore when and where fully off-grid solar-plus-battery systems could become cheaper than grid-purchased electricity in the U.S., thus challenging the way the current electricity system operates. Those systems, in fact, don’t even need to go fully off grid. The much less extreme but perhaps far more likely scenario would be grid-connected systems, which could be just as or even more challenging for electricity system operation and utility business models.

The takeaway is this: even under the fully off-grid scenarios we modeled, we have about 10 years—give or take a few—to really solve our electricity business model issues here in the continental U.S. before they begin compounding dramatically. The analysis also suggests we should carefully read the “postcards from the future” being sent from Hawaii today, and take much more interest in how that situation plays out as a harbinger of things to come.

As an institute with a mission to think ahead in the interest of society, consider this a public service message that these issues will crescendo to a point of consequence requiring dramatic and widespread changes well within current planning horizons. For those who are serious about finding solutions, this is also a call to action and a commitment to partnership.

At RMI, much as we pioneered the concepts of the “negawatt,” the “deep retrofit,” and the “hypercar,” we have also defined what it means to be a “think-and-do tank.” It is not enough to do smart analysis. The solutions we champion must be practically tested, broken, fixed, refined, iterated, and ultimately adopted at scale for us to feel satisfied with our work. Partnering with leading companies and institutions is how we prove an alternative path is possible to a world that is clean, prosperous, and secure.

The highly distributed electricity system of the future

The Transform scenario of our Reinventing Fire analysis, the most preferable outcome of the electricity futures we have examined, described a future for the U.S. electricity system in which 80 percent of electricity is supplied from renewable sources by 2050, with about half of that renewable supply coming from distributed resources. Given the current grid is only a few percent distributed and less than 13 percent renewable (counting a generous allotment of hydropower), we have quite a ways to go.

Achieving that end state requires many changes. Some of those changes already have momentum and likely won’t require intervention, but others will need a kick start or some other form of “strategic acupuncture” encouragement. At RMI, we would certainly prefer that a transition of this scale be orderly and proactive, because having disruption rock the boat of the current system unprepared would undoubtedly leave some combination of shareholders, ratepayers, and taxpayers smarting.

As we look at the future electricity system—the one we need to be building today—we see five critical differences from the present system. Redesigning our regulatory and market models should reflect these emergent needs.

• The future electricity system will be highly transactive. Increasingly, the grid will become a market for making many-to-many connections between suppliers and consumers, with those roles being redefined on a daily basis as self-balancing systems decide whether to take from or supply to the grid at any given time.
• Correspondingly, asset and service value will be differentiated by location and timing of availability, and perhaps even by carbon intensity or other socially demanded attributes. In a system that requires instantaneous load matching at the distribution level, and where virtual and real storage are distributed throughout the system, resource coordination will require transparent markets (with increasing automation) that provide the ability to balance autonomously using value signals. A system historically governed by averages will instead migrate to specific, dynamically varying values.
• Innovative energy solutions will proliferate. As a consequence of market forces already unlocked, we are assured to see a regular stream of distributed resource innovations that better meet customer needs at costs comparable to existing utility retail prices. These could be market-based aggregation plays (e.g., demand response) or personal technologies (e.g., a home “power plant” such as solar plus storage or a gas microturbine).
• A consequence of these first three points is that the rules governing the network must be adaptive to constantly shifting asset configurations, operations, and other factors. For example, charging EVs may make more sense at night or during the day, depending on the penetration of renewables relative to base needs. There will be lots of inflection points on how and when to encourage the development of different types of assets to reach efficient and stable outcomes.
• Finally, the customer will be increasingly empowered. The services of the grid must de-commoditize to deliver against exact customer needs for reliability, “green-ness,” and other attributes. Failure to do so will result in customers finding higher-value alternatives.

This future still prominently features a robust wires network; defection from the grid would be suboptimal for a number of reasons. We would assert that everyone is better off if we create a future network that is easier to opt in to, rather than opt out of via the risk of defection.

Moreover, distributed resources—the same ones that could but needn’t threaten defection—have the potential to become a primary tool in the planning and management of grid-based distribution systems. Already, we are working with utilities and regulators in several parts of the country in exploring new ways to incentivize electricity distribution companies to take full advantage of distributed resources to reduce distribution system costs, increase resilience, and meet specialized customer needs. Good regulation will reveal value and facilitate transactions that tap that value, thereby increasing the benefit of distributed resources for all.

Forging solutions: our work on the emerging system

Our programs at RMI are designed to honor and accelerate progress toward an electricity system that harnesses these distributed investments. Hence, we have parallel and interactive efforts to accelerate the progress of economic, distributed, and low-carbon disruptive technologies (because we believe they have an important and positive role to play in the electricity system of the future), even as we work with utilities, regulators, and other key stakeholders to migrate to new business models that deploy and integrate these resources in ways that maximize the benefits to society as a whole. We think these dual efforts place “creative tension” in the system from which progress manifests.

Our work on disruptive technologies is focused on driving down the economic costs of deploying these systems by stimulating direct cost reductions, improving risk management and access to capital, and building new business models that are either behind the meter or aggregations across meters. To do this, we work specifically to help drive down solar “balance of system costs” through understanding cost reduction opportunities and then working to implement them, through identifying pathways to more market capital and then working with consortia like truSolar and Solar Access to Public Capital to unlock, and through working on issues like microgrids or researching the prospects for alternative asset models with a wide range of partners.

These insights into disruptive models directly inform our dialogue with utilities, regulators, technology providers, and other stakeholders around ways to migrate existing business models. Our most ambitious effort at transformation is the Electricity Innovation Lab (e-Lab), a multi-year, multi-stakeholder initiative focused on rapid prototyping and fast feedback on solutions for the future energy system. This network has issued seminal thought pieces on future business models, surveys of the costs and benefits of solar, and worked directly with stakeholders like the City of Fort Collins and the U.S. Navy to develop perspectives on pieces of future solutions for all. Beyond that, we work directly with utilities such as PG&E and states like Minnesota on one-off engagements to test different ideas together in a way that provides important experience for the “think-and-do” cycle that epitomizes our approach.

We at RMI are committed to expanding and accelerating the capacity to transform the electricity industry to one epitomized by innovation and customer service above all else, in a way that meets environmental, social, and economic demands. Toward this end, we are convening 13 cross-disciplinary teams from across the country in two weeks for our first-ever e-Lab Accelerator, designed specifically to workshop some of the toughest issues facing the industry in the transition to the next electricity system. This is just one of the broader set of commitments that we have made to not just thinking about solutions, but putting them immediately to the test. Therein lies the key to our change model: think and do. Then repeat. More

 

© 2014

The energy transition tipping point is here

In late February, Bloomberg finally addressed the most problematic issue in shale gas and tight oil wells: their incredible decline rates and diminishing prospects for drilling in the most-profitable "sweet spots" of the shale plays. I have documented that issue at length (for example, "Oil and gas price forecast for 2014," "Energy independence, or impending oil shocks?," "The murky future of U.S. shale gas," and my Financial Times critique of Leonardo Maugeri's widely heralded 2012 report).

The sources for the Bloomberg article are shockingly candid about the difficulties facing the shale sector, considering that their firms have been at the forefront of shale hype.

The vice president of integration at oil services giant Schlumberger notes that four out of every 10 frack clusters are duds. Geologist Pete Stark, a vice president of industry relations at IHS—yes, that IHS, where famous peak oil pooh-pooher Daniel Yergin is the spokesman for its CERA unit—actually said what we in the peak oil camp have been saying for years: "The decline rate is a potential show stopper after a while…You just can’t keep up with it."

The CEO of Superior Energy Services was particularly pithy: "We've drilled all the good stuff…These are very poor quality formations that I don't believe God intended for us to produce from the source rock." Source rocks, as I wrote last month, are an oil and gas "retirement party," not a revolution.

The toxic combination of rising production costs, the rapid decline rates of the wells, diminishing prospects for drilling new wells, and a drilling program so out of control that it caused a glut and destroyed profitability, have finally taken their toll.

Numerous operators are taking major write-downs against reserves. WPX Energy, an operator in the Marcellus shale gas play, and Pioneer Natural Resources, an operator in the Barnett shale gas play, each have announced balance sheet “impairments” of more than $1 billion due to low gas prices. Chesapeake Energy, Encana, Apache, Anadarko Petroleum, BP, and BHP Billiton have disclosed similar substantial reserves reductions. Occidental Petroleum, which has made the most significant attempts to frack California’s Monterey Shale, announced that it will spin off that unit to focus on its core operations—something it would not do if the Monterey prospects were good. EOG Resources, one of the top tight oil operators in the United States, recently said that it no longer expects U.S. production to rise by 1 million barrels per day (mb/d) each year, in accordance with my 2014 oil and gas price forecast.

Coal and nuclear

When I wrote “Why baseload power is doomed” and "Regulation and the decline of coal power" in 2012, the suggestion that renewables might displace baseload power sources like coal and nuclear plants was generally received with ridicule. How could "intermittent" power sources with just a few percentage points of market share possibly hurt the deeply entrenched, reliable, fully amortized infrastructure of power generation?

But look where we are today. Coal plants are being retired much faster than most observers expected. The latest projection from the U.S. Energy Information Administration (EIA) is for 60 gigawatts (GW) of coal-fired power capacity to be taken offline by 2016, more than double the retirements the agency predicted in 2012. The vast majority of the coal plants that were planned for the United States in 2007 have since been cancelled, abandoned, or put on hold, according to SourceWatch.

Nuclear power plants were also given the kibosh at an unprecedented rate last year. More nuclear plant retirements appear to be on the way. Earlier this month, utility giant Exelon, the nation’s largest owner of nuclear plants, warned that it will shut down nuclear plants if the prospects for their profitable operation don’t improve this year.

Japan has just announced a draft plan that would restart its nuclear reactors, but the plan is "vague" and, to my expert nose, stinks of political machinations. What we do know is that the country has abandoned its plans to build a next-generation "fast breeder" reactor due to mounting technical challenges and skyrocketing costs.

Grid competition

Nuclear and coal plant retirements are being driven primarily by competition from lower-cost wind, solar, and natural gas generators, and by rising operational and maintenance costs. As more renewable power is added to the grid, the economics continue to worsen for utilities clinging to old fossil-fuel generating assets (a topic I have covered at length; for example, "Designing the grid for renewables," "The next big utility transformation," "Can the utility industry survive the energy transition?" "Adapt or die - private utilities and the distributed energy juggernaut" and "The unstoppable renewable grid").

Nowhere is this more evident than in Germany, which now obtains about 25 percent of its grid power from renewables and which has the most solar power per capita in the world. I have long viewed Germany’s transition to renewables (see "Myth-busting Germany's energy transition") as a harbinger of what is to come for the rest of the developed world as we progress down the path of energy transition.

And what's to come for the utilities isn't good. Earlier this month, Reuters reported that Germany’s three largest utilities, E.ON, RWE, and EnBW are struggling with what the CEO of RWE called “the worst structural crisis in the history of energy supply.” Falling consumption and growing renewable power have cut the wholesale price of electricity by 60 percent since 2008, making it unprofitable to continue operating coal, gas and oil-fired plants. E.ON and RWE have announced intentions to close or mothball 15 GW of gas and coal-fired plants. Additionally, the three major utilities still have a combined 12 GW of nuclear plants scheduled to retire by 2020 under Germany’s nuclear phase-out program.

RWE said it will write down nearly $4 billion on those assets, but the pain doesn’t end there. Returns on invested capital at the three utilities are expected to fall from an average of 7.7 percent in 2013 to 6.5 percent in 2015, which will only increase the likelihood that pension funds and other fixed-income investors will look to exchange traditional utility company holdings for “green bonds” invested in renewable energy. The green bond sector is growing rapidly, and there's no reason to think it will slow down. Bond issuance jumped from $2 billion in 2012 to $11 billion in 2013, and the now-$15 billion market is expected to nearly double again this year.

A new report from the Rocky Mountain Institute and CohnReznick about consumers "defecting" from the grid using solar and storage systems concludes that the combination is a "real, near and present" threat to utilities. By 2025, according to the authors, millions of residential users could find it economically advantageous to give up the grid. In his excellent article on the report, Stephen Lacey notes that lithium-ion battery costs have fallen by half since 2008. With technology wunderkind Elon Musk's new announcement that his car company Tesla will raise up to $5 billion to build the world's biggest "Gigafactory" for the batteries, their costs fall even farther. At the same time, the average price of an installed solar system has fallen by 61 percent since the first quarter of 2010.

At least some people in the utility sector agree that the threat is real. Speaking in late February at the ARPA-E Energy Summit, CEO David Crane of NRG Energy suggested that the grid will be obsolete and used only for backup within a generation, calling the current system "shockingly stupid."

Non-hydro renewables are outpacing nuclear and fossil fuel capacity additions in much of the world, wreaking havoc with the incumbent utilities' business models. The value of Europe's top 20 utilities has been halved since 2008, and their credit ratings have been downgraded. According to The Economist, utilities have been the worst-performing sector in the Morgan Stanley index of global share prices. Only utilities nimble enough to adopt new revenue models providing a range of services and service levels, including efficiency and self-generation, will survive.

In addition to distributed solar systems, utility-scale renewable power plants are popping up around the world like spring daisies. Ivanpah, the world's largest solar "power tower" at 392 megawatts (MW), just went online in Nevada. Aura Solar I, the largest solar farm in Latin America at 30 MW, is under construction in Mexico and will replace an old oil-fired power plant. India just opened its largest solar power plant to date, the 130 MW Welspun Solar MP project. Solar is increasingly seen as the best way to provide electricity to power-impoverished parts of the world, and growth is expected to be stunning in Latin America, India and Africa.

Renewable energy now supplies 23 percent of global electricity generation, according to the National Renewable Energy Laboratory, with capacity having doubled from 2000 to 2012. If that growth rate continues, it could become the dominant source of electricity by the next decade.

Environmental disasters

Faltering productivity, falling profits, poor economics and increasing competition from power plants running on free fuel aren't the only problems facing the fossil-fuels complex. It has also been the locus of increasingly frequent environmental disasters.

On Feb. 22, a barge hauling oil collided with a towboat and spilled an estimated31,500 gallons of light crude into the Mississippi River, closing 65 miles of the waterway for two days.

More waterborne spills are to be expected along with more exploding trains as crude oil from sources like the Bakken shale seeks alternative routes to market while the Keystone XL pipeline continues to fight an uphill political battle. According to the Association of American Railroads, the number of tank cars shipping oil jumped from about 10,000 in 2009 to more than 230,000 in 2012, and more oil spilled from trains in 2013 than in the previous four decades combined.

Federal regulators issued emergency rules on Feb. 25 requiring Bakken crude to undergo testing to see if it is too flammable to be moved safely by rail, but I am not confident this measure will eliminate the risk. Light, tight oil from U.S. shales tends to contain more light molecules such as natural gas liquids than conventional U.S. crude grades, and is more volatile.

Feb. 11 will go down in history as a marquee bad day for fossil fuels, on which 100,000 gallons of coal slurry spilled into a creek in West Virginia; a natural gas well in Dilliner, Pa., exploded (and burned for two weeks before it was put out); and a natural gas pipeline ruptured and exploded in Tioga, ND. Two days later, another natural gas line exploded in the town of Knifely, Ky., igniting multiple fires and destroying several homes, barns, and cars. The same day, another train carrying crude oil derailed near Pittsburgh, spilling between 3,000 and 7,500 gallons of crude oil.

And don't forget the spill of 10,000 gallons of toxic chemicals used in coal processing from a leaking tank in West Virginia in early January, which sickened residents of Charleston and rendered its water supply unusable.

No return

At this point you may think, "Well, this is all very interesting, Chris, but why should we believe we've reached some sort of tipping point in energy transition?"

To which I would say, ask yourself: Is any of this reversible?

Is there any reason to think the world will turn its back on plummeting costs for solar systems, batteries, and wind turbines, and revert back to nuclear and coal?

Is there any reason to think we won't see more ruptures and spills from oil and gas pipelines?

What about the more than 1,300 coal-ash waste sites scattered across the United States, of which about half are no longer used and some are lacking adequate liners? How confident are we that authorities will suddenly find the will, after decades of neglect, to ensure that they'll not cause further contamination after damaging drinking water supplies in at least 67 instances so far, such that we feel confident about continuing to rely on coal power?

Like the disastrous natural gas pipeline that exploded in 2010 and turned an entire neighborhood in San Bruno, Calif., into a raging inferno, coal-ash waste sites are but one part of a deep and growing problem shot through the entire fabric of America: aging infrastructure and deferred maintenance. President Obama just outlined his vision for a $302 billion, four-year program of investment in transportation, but that's just a drop in the bucket, and it's only for transportation.

Is there any reason to think citizens will brush off the death, destruction, environmental contamination of these disasters—many of them happening in the backyards of rural, red-state voters—and not take a second look at clean power?

Is there any reason to believe utilities will swallow several trillion dollars worth of stranded assets and embrace new business models en masse? Or is it more likely that those that can will simply adopt solar, storage systems, and other measures that ultimately give them cheaper and more reliable power, particularly in the face of increasingly frequent climate-related disasters that take out their grid power for days or weeks?

Is there any reason to think the billions of people in the world who still lack reliable electric power will continue to rely on filthy diesel generators and kerosene lanterns as the price of oil continues to rise? Or are they more likely to adopt alternatives like the SolarAid solar lanterns, of which half a million have been sold across Africa in the past six months alone? (Here's a hint: Nobody who has one wants to go back to their kerosene lantern.) Founder Jeremy Leggett of SunnyMoney, who created the SolarAid lanterns, intends to sell 50 million of them across Africa by 2020.

Is there any reason to believe solar and wind will not continue to be the preferred way to bring power to the developing world, when their fuel is free and conventional alternatives are getting scarcer and more expensive?

Is there any reason a homeowner might not think about putting a solar system on his or her roof, without taking a single dollar out of his or her pocket, and using it to charge up an electric vehicle instead of buying gasoline?

Is there any reason to think that drilling for shale gas and tight oil in the United States will suddenly resume its former rapid growth rates, when new well locations are getting harder to find, investment by the oil and gas companies is being slashed, share prices are falling, reserves are getting taken off balance sheets and investors are getting nervous?

I don't think so. All of these trends have been developing for decades, and new data surfacing daily only reinforces them. More

 

© 2014