Wednesday, November 30, 2011

The Brave New World of Microgrids

By Ceal Smith, Renewable Communities Alliance

The concept of a decentralized, stand-alone microgrid has long been viewed as the stuff of science fiction, so it may come as a surprise to many that U.S. military bases, college campuses and utilities are already moving forward with pilot projects and research designed to prove that microgrids are not only feasible, but they're a boon to system reliability.

San Diego Gas & Electric's Borrego Springs project is one example. In another, AEP's hosting, for more than a decade, of the Consortium for Electric Reliability Solutions (CERTS) test site (see "Not Just Any Microgrid") has allowed for key breakthroughs in potential microgrid commercialization.

The Sacramento Municipal Utility District (SMUD) has taken the CERTS research out of the laboratory and into the real world with its headquarters-based microgrid (download the SMUD project pdf here) that includes three 100 kW CHP combined-heat-and-power natural gas-fired generators, 10-kW of solar PV panels, and a 500-kW battery for storage purposes. The project will test, monitor and refine the electrical integration of micro-generation systems with the larger utility electrical supply systems and other small power sources such as photovoltaic or fuel cells.

University of San Diego, microgrid

The state-of-the-art UC-San Diego microgrid has four times the energy density as a typical commercial/ industrial complex. The campus can provide 85% of its own energy needs and the remaining 15% of power provided by SDG&E still allows the facility to rank as the utility’s fourth largest customer. The microgrid is therefore planned to operate in “island” mode for 85% of the time.

Why the microgrid?

There's been lots of exploration at the national level on incorporating computing architectures (data services plus sensors) into the grid system (known under the rubric "the Smart Grid"). Unfortunately, these efforts suffer from the step function problem. This means that the changes contemplated are too expensive and too wrenching to accomplish on a large scale (akin to boiling the ocean). The only way to implement these new technologies and methods is to find a way to do it organically. The Microgrid enables this by creating a local network (electricity plus data services) that can become a platform for the organic growth of a diverse and innovative ecosystem of solutions and providers.

What does a microgrid do?

A Microgrid enables the ability to:
  • Disconnect from the regional grid when there is a general utility failure. This enables a combination of back-up power systems from third party providers -- everything from flywheels to back-up generators (very much the same approach that data-centers use).
  • Build a local market for power production. Since the Microgrid buys power in volume from the regional grid, it will likely get dynamic pricing data (time of day, etc.). This data allows the Microgrid to offer local producers of electricity the ability to sell to the Microgrid at competitive prices (peer to peer production). Of course, if local power production is a priority, then the price comparison can be weighted via subsidies to favor local producers.
  • Add smart features that will only get nominal deployment on the national grid. For example, the ability to add smarts to devices and homes to allow customers to manage their consumption of electricity at a granular level -- from price to device.
Brave new world?

According to the author of "Integrating distributed generation into electric power systems", Pecas Lopes, the architecture of our utility system is undergoing historic change. "The power system architecture of the future will look very different from that of today," he and his colleagues wrote. "Whilst the pace of change is likely to be evolutionary, the change itself is expected to be nothing short of a revolution as many traditionally held views and approaches to system operation and planning developed over the past 100 years are challenged and transformed to suit the requirements envisaged in the brave new world of the future."

More news and information on microgrids:

Consortium for Electric Reliability Technology Solutions (CERTS) Microgrid Concept Explained.

Siemens Microgrid White Paper

New Scientist: Virtual power plants could tame coming grid chaos

CleanTechies: Virtual Power Plants: Which Heavyweights Should Investors Bet On? (Siemens, Schneider Electric, and Cisco)

Much of the information for this post comes from Kate Rolin's article, Enabling distributed generation, published for Intelligentutility.

Wednesday, November 23, 2011

Bigger Subsidies Make Bigger Solar a Bad Bet

The latest from Energy Self-Reliant States....

Americans seem unable to resist big things, and solar power plants are no exception. There may be no reasoning with an affinity for all things “super sized,” but the economics of large scale solar projects (and the unwelcome public scrutiny) should bury the notion that bigger is better for solar.

In fact, smaller scale solar and the right solar policy could get more solar for the dollar and more public support for renewable energy.

There are three problems with large-scale solar (100 megawatts and up).  First, no solar power plant of this size has ever been constructed without a government loan guarantee.  The 250-megawatt California Solar Ranch is an example, and the project was recently targeted in a New York Times expose on subsidies for large solar power.  The loan guarantee is extremely valuable to NRG, the project owner, so much so that its chief executive was rather hyperbolic when describing the opportunity to investors:

“I have never seen anything that I have had to do in my 20 years in the power industry that involved less risk than these projects,” he said in a recent interview. “It is just filling the desert with panels.”

So far, the federal Department of Energy has provided loan guarantees to 16 large-scale solar power plants. The benefits for the California Solar Ranch (and likely other federally-backed large solar projects) also include lower interest rates (3.5% rather than 7%).  No comparable subsidy exists for small-scale solar, despite there being many times more solar electricity coming off distributed solar projects (20 megawatts and smaller) than large solar plants.  The irony is that these large loan guarantees typically back large corporations with deep pockets like NRG, whereas small-scale solar projects are frequently financed without comparable federal largess by individual homeowners or small businesses.

The second problem with large-scale solar is that it has a minimal cost advantage over small-scale solar.  According to the LBNL Tracking the Sun report for 2010, there are economies of scale for solar power projects.  But residential solar is installed for as little as $4.40 per Watt as part of a group purchase program in Los Angeles, whereas utility-scale solar is only marginally better at $3.75 per Watt in mid-2011.  In Germany, small solar (up to 100 kilowatts) is installed at an average price of $3.20 per Watt

There’s also the question of speed.  A small-scale solar project can be operational in months, but the California Solar Ranch has been in development since mid-2008.  Another large-scale solar project, the 280-megawatt Mojave Solar concentrating solar thermal power plant, has been in development for 5 years (as with most concentrating solar thermal power plants, it takes much longer to develop).  For perspective, the U.S. has installed 1,600 megawatts of smaller-scale solar over the past three years, the Germans have installed 12,000 megawatts.  J.R. DeShazo, director of UCLA’s Luskin Center for Innovation explains why small-scale solar can deploy faster (especially with the right policy).

Distributed solar has an edge in the speed with which it will respond to financial incentives...The private sector will begin to install solar panels in response to a feed-in tariff much more quickly than developers of large solar projects can negotiate power-purchase agreements with utilities and win regulatory approval from the government.

The Solar Electric Power Association has identified barriers to speedy deployment of large-scale (greater than 50-megawatt) solar power plants:

PV projects, which ranged in size from 1-kilowatt residential installations to 48-megawatt power plants, have much shorter planning horizons and project completion times, along with lesser siting, permitting, financing and transmission requirements at these small- and medium-sized scales.

However, larger PV and CSP projects (those greater than 50 MW) require overcoming financing, siting/permitting, and transmission barriers that might emerge at these larger sizes. [emphasis added]

Ultimately, it’s a question of picking winners: large corporations or the average citizen.  Subsidies for solar that are only for big projects and big corporations don’t generate popular support for solar.  In fact, the desert location of these power plants is often a point of contention

In contrast, when solar policies support local ownership of solar, the average rooftop PV system generates two solar voters and greater support for favorable solar energy policy as well as electricity.  This political value has been captured in a German study of attitudes toward more wind power, focusing on two towns with nearby wind projects, one locally owned and the other not.  Support for expanding local wind energy is 40 points higher when existing projects are locally owned, and overwhelmingly negative when they are not.

The German energy program plays off the popularity of local ownership, with their easy-to-use feed-in tariff allowing anyone to become a clean energy producer by offering a guaranteed, long-term contract at an attractive price.  Half of their 53,000-megawatt renewable energy market is locally owned, making their clean energy policies nearly inviolate despite the (completely transparent) cost increase to German ratepayers.

The German program is also equitable, offering contract prices based on project size, helping democratize their energy system by letting any citizen participate.  The big boys can play, but without additional handouts.

Big solar projects shine with big numbers, but if Americans are serious about solar power they should support policies for smaller scale.  Otherwise, the clean energy future may look a lot like the dirty energy past, with big companies in charge and ordinary citizens left holding the bag.

Thursday, November 3, 2011

Xcel drops SoCo transmission line

We hope Xcel's decision to drop the Southern Colorado Transmission Line project (SoCo) opens the door to a real dialogue about the San Luis Valley's energy future.  This story ran in the Colorado Independent today....

Xcel plan to scrap San Luis Valley project greeted with cheers, jeers

Thursday, November 03, 2011 at 1:15 pm
Xcel Energy’s announcement this week that it’s pulling the plug on a controversial and hotly contested transmission line project in the San Luis Valley is being cheered by local environmentalists but viewed with skepticism by Xcel’s partner in the project, Tri-State Generation and Transmission.
Sangre de Cristo Mountains and Great Sand Dunes National Park (Park Service photo).
Tri-State, which provides power to the majority of Colorado’s member-owned rural electric co-ops, announced it will “move forward to identify options to ensure electric system reliability following Xcel Energy’s reconsideration of its participation in a joint transmission project …”

“The need for reliable electric service across the San Luis Valley, south-central Colorado and northern New Mexico has not changed,” said Joel Bladow,

Tri-State’s senior vice president of transmission. “Tri-State will examine all options to ensure reliable power for the region, and it is premature to eliminate any options without further investigation.”

A spokesman for Xcel Energy, the state’s largest power provider, told the Colorado Independent nothing has changed since the company filed its bi-annual electric resource plan and SB07-100 plan (which looks at related transmission needs) on Monday.

“We regularly look at how much energy our residential and business customers will need; it’s our job to ensure we have sufficient electricity for that demand,” Xcel spokesman Mark Stutz said.

“This year we saw lower electricity load forecasts, low natural gas prices, lack of federal carbon regulation, expiring tax credits, potential future litigation and a continued sluggish economy. Our conclusion, in light of these factors and also to keep costs low for our customers, is to re-consider our participation in the Southern Colorado Transmission Improvements Project.”

The project had already been approved by the Colorado Public Utilities Commission (PUC) but was opposed by local conservation groups worried about the scenic San Luis Valley becoming an industrial hub for utility-scale solar plants. The groups advocate for more distributed solar generation on residential and commercial rooftops across the state.

“Xcel has made a smart decision that will save rate payers $500 million and preserve one of Colorado’s last undeveloped wild-land corridors,” said Ceal Smith, founder of the San Luis Valley Renewable Communities Alliance. “Energy technology and market trends all point to a leaner, cleaner and smarter decentralized utility system in the future.”

Smith said she wants Tri-State and state regulators to see the light as well.

“We hope the PUC and Tri-State support Xcel’s decision and start to look more seriously at the San Luis Valley’s abundant and diverse solar, micro-hydro, geothermal and biomass resources to meet local energy reliability needs,” Smith added. “We want a more secure, efficient and democratic energy distribution system that benefits our local communities, not just a few big corporations.”

Xcel’s Stutz said the company had projected that by 2018 Colorado would need 2,000 megawatts of additional power, but in its filing on Monday dropped that forecast to 292 megawatts.

“There is not a great need for new generation period,” Stutz said, “thus lessening our need to participate in the transmission line project.”

Officials for Trinchera Ranch, owned by hedge-fund billionaire Louis Bacon, were cautiously optimistic about Xcel’s decision this week. Bacon has been the project’s biggest opponent, battling against it at every turn because it would cross the land he bought from Steve Forbes. But Bacon also has invested heavily in Minnesota-based Xcel.

“Trinchera Ranch remains committed to fighting for a win-win solution for the people of the valley that helps to improve energy reliability, bolsters renewable energy and conserves and protects this spectacular region of Colorado,” Trinchera Ranch spokesman Cody Wertz told the Valley Courier in Alamosa.