[Graeme]

Google Aims To "Fundamentally Change the World of Power"

$this->bbcode_second_pass_quote('', 'G')oogle Inc. plans a deeper push into the $363.7 billion U.S. power-sales market by working on tools that help utilities deliver electricity to homes and businesses more efficiently, people with knowledge of the matter said.

The operator of the most popular Internet-search engine is in the early stages of building software and hardware tools to manage power lines and other infrastructure, said the people, who asked not to be identified because the matter is private. The technology is being developed by Google’s EnergyAccess team and led by Arun Majumdar, vice president of the company’s energy unit, the people said.

Google, a big consumer of electricity for the computer servers that power its services, is looking at ways to transform the century-old utility industry, which has been struggling to adapt to changing demands for power management and production. As solar, wind and other renewable energy sources come online, the power grids that transmit electricity will need to be more flexible and efficient.

“They recognize there is a huge wide-open space and that the utility companies are not stepping up to the plate,” Steven Chu, former secretary of the U.S. Department of Energy, said of Google during an interview last month at an energy conference in Fremont, California. “They see a huge market opportunity.”

[Graeme]

Heres a Way to Get Utilities to Embrace Solar and Batteries: Let Them Own the Inverter

$this->bbcode_second_pass_quote('', 'U')tilities own a wide range of devices on the transmission and distribution grid to manage power quality. The technologies are likely unfamiliar to the average homeowner: capacitor banks, load tap changers, shunt reactors and synchrophasers are just a few.

But there's another power control device that may be much more familiar to the hundreds of thousands of American homeowners with solar on their roofs: inverters.

Should utilities own those too?

As solar's gateway to the grid, inverters are extremely important. But they've historically played a relatively simple role. For the vast majority of grid-tied applications in the U.S., inverters convert DC electricity into AC and feed it through a circuit breaker for self-consumption. Any excess solar electricity is pushed back onto the distribution grid and the homeowner is credited through net metering.

However, the role of the inverter is changing. The emergence of new "smart" designs combined with increasing worries about the financial and technical impact of distributed PV on the grid are pushing inverters to the center of conversations around the future of solar.

Aside from utility-scale projects, the inverter is almost always on the customer side of the electric meter in the U.S. Some in the solar and utility business are now asking if the inverter should be like any other device a utility operates to manage power quality. As solar starts saturating the distribution network, should the utility handle that asset and use it to better control how PV -- and possibly storage -- interact with the grid?

Answering that question raises all kinds of thorny scenarios about ownership models and how to monetize inverter services. It also opens up potential opportunities for lowering the installed cost of systems, engaging utilities in PV deployment and smoothing out the electricity system when lots of solar gets installed in concentrated areas.

The idea is still very new, but it's getting more attention within the power sector.

[Graeme]

What Cost Shift? New Study Shows Solar’s Value to Grid

$this->bbcode_second_pass_quote('', 'I')f you listen to many utility executives, distributed solar energy has the potential to destabilize electrical grids and result in huge cost shifts for many American consumers. Well, as the Irish are fond of saying: blarney!

A new, independent study prepared for the Nevada Public Utilities Commission estimates that the grid benefits of rooftop solar systems installed in the state through 2016 will outweigh costs by more than $36 million, confirming that solar energy can provide real savings for both solar and non-solar customers alike.

According to San Francisco-based Energy + Environmental Economics (E3), the state’s net energy metering (NEM) program – which gives Nevada residents full credit on their energy bills for the clean electricity they deliver to the utility grid – has “no substantial cost shift to nonparticipants…given the current and proposed reforms to the program.” What’s more, accounting for the cost savings of avoided distribution upgrades, E3 estimates a net benefit of $166 million over the lifetime of solar systems installed through 2016.

These findings are critically important because the Nevada PUC is reviewing whether solar customers should be in a separate class for future rate-making decisions.

This new reports confirms what we have been saying all along: utilizing solar energy benefits Nevada families, schools and businesses. And net metering is one of the most important state programs for empowering Nevadans to install solar. This, in turn, creates new jobs, pumps tens of millions of dollars into the state and local economies and helps to protect the environment, too. That’s a win all the way around.

[Graeme]

Utility of the Future: Paradigm Shift to Meet a More Distributed, Customer-Focused Energy System in the 21st Century

$this->bbcode_second_pass_quote('', 'U')tilities and energy providers around the world will face unprecedented challenges and changes in the 21st century, and successfully addressing these will require a paradigm shift in thinking by utilities, regulators and customers alike. Among these challenges and changes are the needs to:
Integrate more intermittent renewable sources such as wind and solar generation
Integrate more distributed energy resources (DER), such electric vehicles and rooftop solar
Balance the more intermittent and distributed energy supply with a shifting peak demand
Comply with more stringent environmental mandates and constraints
Continue modernizing the aging grid infrastructure
Participate in new business models that are beginning to emerge
A paradigm shift of thinking in utility regulation and business models will be required to meet the needs of a more distributed, customerr-focused energy system of the 21st century. With distributed generation and energy efficiency efforts offsetting demand, some industry pundits characterize this challenge as an “existential threat” or a “death spiral” under existing business models.

Today there are more questions than answers, but one thing is already clear: Traditional Return-on-Equity and Cost-of-Service business models will need to evolve to ones that accommodate the dramatic changes that are expected to occur in both energy generation and energy consumption during the 21st century.

[Graeme]

Dismantling the Utility Model is the Fastest Path to a Cleaner Electricity Infrastructure

$this->bbcode_second_pass_quote('', 'I')n 1882 the Pearl Street Station became the first central electrical generation plant in the U.S., providing power to lower Manhattan. In 1935 FDR labeled the power companies which were then providing electricity to increasing numbers of American’s “evil”, which marked the beginning of regulated and price controlled electric utilities in the United States. The underlying premise was that guaranteed monopoly revenues would support low cost borrowing for the large capital investments needed to build out the system. In return the electric utilities would be tightly regulated and price controlled. The regulated utilities did complete the system build-out and succeeded in electrifying virtually every home in America by 1965. Despite having fulfilled the original rationale for the regulated industry, there has not been any effort to move to a comprehensively free electricity market in the intervening 50 years.

Utilities have come under increasing pressure from constituents, customers, and politicians in recent decades. Grueling battles are fought over how fast to reduce the industry’s air pollution, how much to spend to reduce water use, what generation plants should be built, and how progressive utility rates should be. Many of these issues have migrated from the states to Washington for resolution, and national politicians find themselves in increasingly uncomfortable and untenable positions. For example, we have politicians’ arguing against emissions reductions, arguing in favor of the federal government owned utility model as exemplified by the Tennessee Valley Authority, and even proposing to tax homeowners for their rooftop solar systems! The parallels to the Russian and Chinese controlled economies are also notable. The result of politicians being in charge of industry decisions for the past 80 years has been (perhaps inadvertently) deleterious environmental impacts and a dim record of new technology adoption.

Recent technological advances provide the opportunity to change all this. It is now becoming technically feasible to restructure our generation portfolio to deliver cleaner, more reliable, and less expensive electricity. We can get there by unshackling the forces of innovation from the control of PUC’s, politicians, and monopoly utilities. We often hear that new generation technologies are “more expensive”, and that renewable generation resources are “still subsidized”. Let’s take a look at those claims.

There are three fundamental issues that complicate broad claims about electricity costs:

[Graeme]

Utilities Cry “Fowl” Over Duck Chart And Distributed Solar Power

$this->bbcode_second_pass_quote('', 'p')laceholderThe rapid changes to the electricity system being wrought by distributed solar have utilities crying out, and they’ve poured much of their distributed solar angst into a chart being shared throughout the energy nerdocracy – the duck.

The Duck Chart, Showing Net Supply/Demand on the California Grid in 2012-13, Forecast through 2020

[Graeme]

Renewable Energy Pushing Utilities & Grid Operators To Invest In FACTS

$this->bbcode_second_pass_quote('', 'T')hough the first flexible alternating current transmission systems (FACTS) were implemented in electric grids in the 1920s, the recent surge in renewable energy deployment has rapidly increased their demand. And according to a new report compiled by Navigant Research, utilities and grid operators are soon to be investing more than $42 billion into FACTS between 2014 and 2022.

Flexible alternating current transmission systems mitigate drops in voltage across a power grid — not something that was as vital in the 1900s with their reliance upon very stable fossil-fuel energy sources. However, with the recent increase in renewable energy sources being installed across energy grids the world over, FACTS have become a necessity.

“New utility-scale generation resources like wind farms and large solar parks now compete with traditional coal, gas, and nuclear generation plants in global markets, creating new transmission grid problems and opportunities,” the authors write, adding that “the installation of FACTS solutions will continue, both to replace existing aging infrastructure and to support the trouble-free interconnection of wind and renewable generation.”

[Graeme]

Hurricane Sandy Is Ushering in a Smarter Power System

$this->bbcode_second_pass_quote('', 'I')t’s ironic that a storm whose widespread blackouts left millions of Americans in the dark is finally helping us see the light.

Hurricane Sandy brought devastation and loss to the Eastern seaboard. The storm exposed the severe vulnerability of our electricity infrastructure and made global headlines as a harbinger of nature’s impacts in a climate changed world.

Beyond the shock, New Yorkers found a silver lining in the destruction. The storm made crystal clear that the existing electricity system is not suited to address the challenges of the 21st century. In response, New York State recently released a powerful report illuminating how it plans to create a more affordable, efficient and more reliable grid.

Titled Reforming the Energy Vision, this game-changing documentcalls for a new approach to generating, managing, and delivering electricity throughout New York. The state proposes to replace aging infrastructure by investing nearly $30 billion over the next decade to develop a smarter electricity system. State officials, seeing the performance and cost benefits, are moving quickly to put this vision into action.

[Graeme]

EVs Are Win-Win-Win-Win For Utilities*

$this->bbcode_second_pass_quote('', 'T')he green tubes are starting to cheer over a new white paper from the Edison Electric Institute, which makes the case that electric utilities can get a “quadruple win” by converting their existing gas and diesel fleets to plug-in electric vehicle fleets. That’s great except the last time we checked in on EEI, the organization was lobbying heavily against distributed solar power.

That’s why we put that little “*” thing up there in our title. So, let’s take a knee and floor our our pom-poms for a couple of minutes while we take a closer look at the new EV white paper, Transportation Electrification: Utility Fleets Leading the Charge.

[Graeme]

Morgan Stanley: Fixed Charges on Solar May Cause ‘Tipping Point’ for Grid Defection

$this->bbcode_second_pass_quote('', 'W')ithin the next decade, tens of millions of homeowners could find it economically advantageous to invest in solar combined with energy storage, further distancing themselves from their utility.

But will they actually sever ties completely?

Barring extraordinary circumstances, the economic case for grid defection is still very weak for U.S. consumers. The electricity system offers valuable backup in case a customer over- or under-invests in an on-site system. It also offers a transactive marketplace that can help a customer or solar installer earn a return faster, assuming there are tariffs in place that value the electricity produced by solar.

Even SolarCity, a company at the forefront of promoting hybrid solar and battery storage systems, believes grid defection is a bad idea. In a recent blog post on the issue, SolarCity's CTO Peter Rive called the idea "polarizing" and described why the company doesn't believe it is an optimal outcome.

"While this is technically feasible, SolarCity has no interest in this scenario. While cutting the cord enables one household to be 100% renewable and self-sufficient, it limits what these technologies can do. In short, the grid is a network, and where there are networks, there are network effects," wrote Rive.

For now, defection is more of a theoretical scenario in the U.S. rather than a definite outcome. But could anything change this dynamic and make it more likely that customers abandon the network?

[Graeme]

RMI Blows The Lid Off The “Baseload Power” Myth (Video)

$this->bbcode_second_pass_quote('', 'T')here’s a good deal of common sense in what Sinclair says. One of his latest climate crock stories takes on the myth that primary fossil fuel or nuclear generation with renewables and energy storage backup on the side is the only way to choreograph multisource energy use. To illustrate this point, Sinclair presents a clear, cogent video on the subject from Amory Lovins and the Rocky Mountain Institute. We liked it so much that we’re repeating it for you.

Lovins very effectively debunks the myth that a reliable electricity supply from renewable resources will need either giant “baseload” power stations or yet untested cheap mass electrical storage. He reviewed this at the international nonprofit Technology, Entertainment, Design (TED) 2014 global conference in Vancouver, Canada. (The original talk is scheduled for a TEDTalks release. In the meantime, RMI issued its own interim recording. It’s brilliant.)

[Graeme]

You are mistaken. Watch the video; it's only 4 minutes long.

[Graeme]

What Do Utilities Think About Microgrids?

$this->bbcode_second_pass_quote('', 'W')e’ve been reading nasty stories about utilities for years. In 2010, PG&E appears to have spent $46 million of ratepayer dollars to promote anti-community choice legislation in California. The Arizona Public Service Co. reputedly spent at least $9 million in anti-rooftop solar ads in Arizona. These are probably extreme episodes, but often seem to colour public perception of the ongoing reports of skirmishes across the US. Only, as there are actually 3,269 utilities in the United States, we are actually reading about a small number of companies. The next skirmishes are likely to involve microgrids. Before the stories start, Utility Dive polled 209 utility executives and 56 executives from independent producers to find out, “What do utilities think about microgrids?”

The question is highly relevant:

45% said microgrids said microgrids are already operating in their territory.

85% either have non-utility owned microgrids in their territory or expect to see them in the future.

Though only 14% were presently involved in a microgrid project, 59% expected their company to have a microgrid.

97% of the participants believe microgrids will present them with a viable business opportunity within the next decade.

“… Conventional grid equipment is aging and microgrids are seen as a part of modernization — part of a new distributed green network that employs smart grid technologies. And finally, microgrids are a green choice, since they often incorporate renewable energy or highly efficient technologies.”

[Graeme]

Should Behind the Meter Energy Storage Be Controlled by Grid Operators?

$this->bbcode_second_pass_quote('', 'A') few weeks ago, Peter Rive, the Co-Founder and Chief Technology Officer of SolarCity, posted a blog entitled “Put Battery Storage in the Hands of Grid Operators”. In his post, Mr. Rive argues that while battery storage for residential, commercial, and utility-scale customers is one of the most anticipated developments in the energy space and might allow consumers to “cut the cord” on their relationships with utilities, that would be a bad idea. Mr. Rive suggests that grid operators, not electricity consumers, are best positioned to optimize the use of storage technology:

[Graeme]

How Much Longer Until Solar Eliminates the Utilities?

$this->bbcode_second_pass_quote('', 'I')f you’re thinking of packing up the kids and moving to Hawaii, you better consider this one drawback: energy is crazy expensive there! A few months ago, Bloomberg covered a story about how a family living in a neighborhood on the island of Oahu was paying 37 cents per kilowatt-hour (as opposed to the 12 cent national average). Since Hawaii must pay to import expensive oil to power its electric grid, customers are left paying more than normal. Most are turning to rooftop solar as a way to alleviate the financial burden.

While energy customers living within the continental US are not experiencing such drastic utility bills, many are still adopting this Hawaiian approach. And utilities are not happy about it.



In most cases, solar does not produce 100 percent of the energy required of its residents…yet! Solar power is an intermittent resource, meaning it only generates electricity when the sun is shining. Though some may view solar as useless at night, several tech companies are working to reverse this problem.

Tesla Motors is currently working on a battery pack that can be used in conjunction with solar panels, allowing customers to store the electricity they generate when the sun is out, and use it when needed. For this concept to catch on, Tesla must continue to lower the price of a battery to an affordable level for consumers. Business Insider reports that “Tesla has single-handedly brought down the cost of batteries over the past few years, from about $1,000/kWh in 2009 to $300/kWh in early 2014. If the company’s gigafactory successfully ramps up, costs could plummet.”

Utilities appear to be safe for the time being, but some are beginning to realize their fate may be in the hands of consumers. What do you think? Will solar power slowly eradicate the utilities we’ve been relying on for centuries? Or will utilities stand their ground and force customer to find other ways to lower their energy bills?

[Graeme]

When Will Battery Storage Attain Grid Parity?

$this->bbcode_second_pass_quote('', 't') is now generally recognised that rooftop solar has reached “socket parity” – meaning it is comparable or cheaper than grid prices – in many countries over the last few years. The big question for consumers and utilities is when will socket parity arrive for solar and battery storage?

Some suggest it is years away. Others, such as UBS and the Rocky Mountain Institute, say it could arrive in Australia and the US within four to six years. It may come even earlier.

The graph below comes from Germany Trade and Invest and outlines the metric that will govern the arrival of grid parity for battery storage. Electricity prices are rising, solar PV prices are falling, which means that if battery storage can fall to around €0.20 per kilowatt-hour, then parity will be achieved.

Australian research house Morgans, in an assessment of Brisbane-based battery storage developer Redflow, suggests that its zinc-bromine flow battery may already be commercially economic in Germany, which leads the world in terms of household adoption and government support for renewables.

[Graeme]

A tale of two solar markets

$this->bbcode_second_pass_quote('', 'O')n a recent trip to Australia, I noticed that very few residential solar systems are leased. The vast majority are customer owned. Talking to industry experts, some claimed more than 90 per cent of residential solar systems in Australia are customer owned. This is in stark contrast to the US, where last year 66 per cent of residential solar is leased from third-party owners like SolarCity. Why such different approaches to ownership of residential rooftop solar?

Americans, for one, love finance. The average American household carries nearly $US16,000 in credit card debt. We finance almost everything: our homes, our cars, our smartphones. And now we finance our rooftop solar, as well. Leasing – not to own, but to obtain electricity – has been an important driver of solar’s impressive ascent here.

The growth of the solar industry in the US has been exceptional. Just this year we surpassed Germany, the former world leader, in new annual installations (though Germany still has more cumulative installed solar capacity). It is no coincidence that the massive growth of residential solar installations has coincided with the growth in solar leasing. No-money-down, third-party-owned residential solar leases have removed the significant hurdle of upfront costs, making rooftop solar accessible to more homeowners than ever before. Thus third-party ownership is expected to hit a record 68 per cent of residential solar in the US this year, with third-party-owned systems accounting for as much as 90 per cent of new installs in places such as Colorado.


Is third-party or customer ownership the solution? Neither. Both. Which one makes sense depends on what the customer wants economically, socially, and culturally. The US and Australia both need to shift the way their markets work in order to make both options viable and give customers the freedom to decide, rather than predominantly favoring one. This is going to ensure the lowest prices, the maximum of customer choice, and (overall) the greatest adoption of rooftop solar. That last point is great for everyone, so we can live in a world where we harvest the limitless (for a few billion years, at least) energy of the sun and have minimal carbon in the atmosphere.

In the meantime, we’ll watch two of the world’s leading nations for distributed solar PV approach residential rooftop solar from nearly opposite ends of the ownership spectrum. What each can learn from the other and how their respective solar markets continue to evolve will be illuminating to watch.

[Graeme]

The Argument for Why Utilities Should Give Up Operational Control of the Distribution Grid

$this->bbcode_second_pass_quote('', 'R')egulators in New York are about to make one of the most important changes to the modern electric grid. But is it enough?

As part of the state Public Service Commission's ongoing effort to reform the electricity system, distribution utilities may soon be turned into Distribution System Platform Providers with an explicit mandate to acquire more demand response, solar and storage, while encouraging as much energy efficiency as possible in order to avoid building new grid infrastructure.

Compared to the status quo, in which utilities have little structural incentive to invest in these technologies as part of a long-term growth strategy, the plan is quite radical. But some are calling on regulators to go further.

Clean Power Finance (CPF) has teamed up with former FERC Commissioner Jon Wellinghoff to push for an even more disruptive plan for utilities: taking distribution system operations out of the hands of the power company and putting them fully in the control of an independent body.

The idea is disruptive in the sense that it's a big change to current operations. But Wellinghoff and James Tong, CPF's vice president of government affairs, argue that the end outcome will be a far more stable and less costly system for utilities.

"Diminished reliability and unfair rates are not inevitable consequences of disruptions to the regulated utilities that own the grid. Nor are grid operations and ownership inextricably linked. In fact, new technologies, changing regulatory priorities, and shifting customer needs indicate that dissociating grid ownership from grid operations will greatly benefit the public and arguably the utilities, too," write Wellinghoff and Tong in a piece outlining the concept in Public Utilities Fortnightly.

[Graeme]

How EVs Could Make Solar Viable Without Subsidies

$this->bbcode_second_pass_quote('', 'I')nvestment bank UBS says the addition of electric vehicles, and the proliferation of battery storage, will solve the problem of intermittency for rooftop solar and make it viable without subsidies. So much so, it says, that households will be able to budget for 12 years of “free electricity” for a 20-year solar system.

In a major report on the “revolution” that could hit energy markets any time soon, UBS says – as we report here – that the combination of EVs plus solar plus storage will deliver a payback time of 6-8 years by 2020 – effectively making centralised fossil fuel generation redundant.

It says this is not understood by the utility industry or the market, because they are “not yet looking at the topics of solar, EVs and stationary batteries with a holistic view.”