Things are changing fast in the world of electricity generation and distribution. As always, changes are to the advantage of some and the disadvantage of others. The sharp drop in the cost of renewable energy in the past few years is the primary engine driving the changes. The next revolution is bulk energy storage, the piece of the puzzle that will turn traditional ideas of how an electrical grid should operate completely upside down. Here’s a look at what is happening right now and what the utility grid of the future may look like.
What Happens When Electricity Is Free?
A decade ago, people began saying that one day electricity would be too cheap to meter. That day may be right around the corner. At the Stanford Global Energy Conference in November, Lei Zhang, founder and CEO of Envision Energy, said, “We are convinced renewable energy is going to be dominating. It is going to give us almost, close to zero cost of energy, eventually. So we started to be worried. What’s the future of the energy company if you actually have almost-zero cost of energy?”
He pointed out that utility scale solar is reaching 3 cents per kilowatt hour and wind energy in Mongolia is down to about 1.5 cents per kilowatt hour. “Renewable energy is basically like a teenager,” Lei told the conference. “It started in 2000. So already a teenager is being so dominating, so invasive. I started to worry.” What business opportunities remain once the cost of electricity approaches zero? Managing grid stability, he says. “You could have zero cost of energy, but you are going to have a huge cost of synergy.”
A recent article in Forbes explains it this way. “As renewable energy expands and transportation electrifies, the grid will become increasingly fragmented. Energy companies will have to manage fluctuating amounts of power generated by solar panels and wind turbines and fluctuating demand not only from homes, businesses and industry, but from electric vehicles charging and discharging at will.”
Lei asks, “How do you synchronize your demand with the supply is the key. That’s why I say we are shifting from the cost of energy to the cost of synergy.” The solution, he says, is the use of artificial intelligence and “the energy internet of things” which includes smart breakers and EV charging equipment that can regulate the use of energy at many points to manage demand on an as needed real time basis.
Some of what Mr. Lei is hinting at is summed up in what are referred to collectively as “non-wires alternatives.” These are strategies utility companies can utilize to manage energy demand without building new generating facilities and stringing new utility lines. A recent report issued jointly by E4TheFuture, PLMA, and the Smart Electric Power Alliance provides several examples of real world instances in which utilities found new ways to manage demand successfully with NWA strategies.
Generating plants, sub-stations, and electrical grids cost a lot of money to build and maintain. If demand can be managed in a way that makes those expenditures unnecessary, utilities can increase their profits considerably. In an e-mail to CleanTechnica, Steve Cowell, president of E4TheFuture says,“If you look for solutions beyond stringing power lines, you can find plenty of real-world examples of less expensive alternatives that meet consumers’ energy needs, enable clean energy, allow utilities more flexibility, and shrink energy infrastructure’s environmental footprint. The new report’s case studies offer excellent guidance and documentation. There’s no need to completely re-invent the wheel.”
The report documents ten instances in the US where non-wires alternatives have benefited utility companies and their customers. “What was really exciting for us to see was the range of technologies and the different applications being used in these projects — behind and in front of the meter, combined heat and power, solar, storage, energy efficiency,” adds Brenda Chew, a research analyst at Smart Electric Power Alliance. “Technology-agnostic approaches to these projects are providing multiple avenues for innovation, flexibility and reliability that benefit both customers and the grid.”
Sun In A Box
Researchers at MIT have come up with a new way of storing electricity they claim can be installed anywhere and costs less than half as much as pumped hydro, which is the least expensive energy storage technology currently available. Pumped hydro requires enormous amounts of space and is not suitable for every type of terrain. Having lots of hills helps. The MIT team says their system,which they have nicknamed “Sun In A Box,” could power an entire city of 100,000 people using a container that is no more than 10 meters square.
The system, which is known officially as Thermal Energy Grid Storage — Multi-Junction Photovoltaics, uses a novel approach. The research began with an attempt to make concentrated solar technology more efficient so it could be competitive with the cost of pumped hydro storage. In CSP, greater efficiency means higher temperatures. Ordinary CSP facilities use molten salt at around 1,000 degrees Fahrenheit to store energy from the sun. At dusk, the molten salt is pumped through heat exchangers to make steam. The steam, in turn, powers conventional electrical generators.
What the people at MIT did was replace the molten salt with silicon, the most abundant element in the world. Silicon can be heated to as much as 4,000 degrees Fahrenheit and that’s were things get interesting. You might expect that high temperature silicon would be ideal for making steam but the researchers went in a different direction entirely. When silicon gets that hot it gives off a brilliant white light. The Sun In A Box system uses that light to make electricity from specialized hetero-junction solar cells.
The system posed some unique engineering challenges which the team was able to solve one by one. “Even if we wanted to run the grid on renewables right now we couldn’t because you’d need fossil-fueled turbines to make up for the fact that the renewable supply cannot be dispatched on demand,” says Asegun Henry, an associate professor of mechanical engineering. “We’re developing a new technology that, if successful, would solve this most important and critical problem in energy and climate change, namely, the storage problem. This is geographically unlimited, and is cheaper than pumped hydro, which is very exciting,” Henry says. “In theory, this is the linchpin to enabling renewable energy to power the entire grid.”
Siting Of Renewables Is An Important Consideration
Researchers at Rice University in Texas claim there needs to be more coordination of where wind and solar energy systems are located in order to maximize their contribution to a stable grid. For instance, they find that offshore wind in the Gulf of Mexico can be relied upon to deliver electricity during times when wind power in West Texas is low and solar power throughout the state is waning due to darkness.
The research was spearheaded by Joanna Slusarewicz, a junior at Rice. “A major problem with clean energy is that it’s not necessarily reliable,” she tells Science Daily. “Sun and wind, by their nature, are not going to consistently provide power when you know you need it.” She reviewed historical weather and energy output records in Texas over a 6 year period and decided that battery storage is still too expensive for large scale use. (Some may disagree with that finding.) “I did this project to see if there is a way, before we even start building more wind and solar farms, to distribute their current output to take advantage of differences in climate throughout the state,” she says.
Daniel Cohan, an associate professor of civil and environmental engineering at Rice, supervised the research. “There’s a legacy in Texas to identify the most sensible places to locate wind power, but that hasn’t carried over yet to where solar farms should best be located or how to bridge some of the coastal wind sites to West Texas transmission zones,” he says. “Only in the past couple of years has solar become competitive with wind. Now Texas has two strong renewable options. That’s why this is the time to look at integrating these sources so they can do better than either can do on its own.”
Some utility companies, like Arizona Public Service, are being dragged kicking and screaming into the 21st Century. Their management resents renewables, resents having their familiar business model disrupted, and resents any new idea about the utility industry dreamed up since Harry Truman left office. The more they resist, the more they risk being put out of business by companies that are more nimble and forward thinking.
Lei Zhang is right. Successful energy companies of the future will thrive by managing the flow of electricity from renewables rather than building enormous new fossil fuel and nuclear generating plants. The utility business is being turned on its head. Those who manage the transition best will survive. Those who do not will simply go out of business.
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