As part of last week's 2020 New York Climate Week, Credit Suisse and Dynamo Energy Hub co-hosted an informative online panel in collaboration with IBM. The panel, titled Cleantech, Collaboration and Climate Action: Driving the Clean Energy Transition Through COVID-19, brought together industry leaders to discuss their experiences and insights on trends over the previous — very disruptive — six months.
I think it’s safe to say that, with the possible exception of a psychic or two who claim to have predicted the global pandemic that we’re all hoping would stop plaguing us, none of us had any idea that 2020 would be turned on its ear by a virus we’d never heard of a few short months ago. We’re all wondering what the short- and long-term impacts will be on all aspects of our lives, and at Enbala, we’ve been studying, pondering and prognosticating what the impact will be on the world’s evolution to distributed energy resources — and a greener, more sustainable energy future.
- Will business and residential customers continue to demand clean energy alternatives, and how will the answer to this question impact the market for renewables?
- How long will overall reductions in electricity demand persist, and how will the ramifications impact short- and long-term energy costs and the impact of these costs as drivers for cleaner energy alternatives?
- Can an increased focus on distributed energy resources help speed recovery from the pandemic?
- How will on-again, off-again stay-at-home orders and summer high-demand expectations impact grid reliability/stability, and how can distributed energy resources help?
I’m wondering how everyone out there is doing today. As I sit down to write this blog, many thoughts and ideas swim through my head about what to write. Should I ruminate on how the virus that has turned all our lives upside down will impact the utility industry? Should I speculate on what the future will bring, offering theories on how long this will last and the different scenarios that might play out when summer peak loads arrive? Or perhaps offer beacons of hope and optimism?
The French author Andre Gide coined an oft-copied phrase, “Everything that needs to be said has already been said,” and in this case, there is a lot of truth in that. The virus is all anyone has been talking and thinking about for days, weeks or months now—depending on where you happen to live. Many of us, including me, are experiencing serious information overload; I feel like I’ve been drinking from a fire hose.
From mainstream media to social media, the world is abuzz with the topic of climate change. A simple Google search on the phrase today yielded 1,100,000,00 results, and typing “gret” into Google is all it takes to bring up 107 million stories about Greta Thunberg. This 16-year-old Swedish environmental activist whose lone mission to protest climate change outside the Swedish Parliament has ignited a flame within millions of young people from more than 100 countries who have joined her with demands for climate action and a cry to “listen to the scientists.”
Even those associated with the oil industry are taking up the charge. For example, the former CEO of BP, Lord John Browne, is speaking globally about the need to clean up the atmosphere and reduce reliance on fossil fuels. His new book “Make, Think, Imagine” considers whether our demand for energy has driven the Earth’s climate to the edge of catastrophe and suggests that the same spark that triggers innovation can be used to counter its negative consequences and that it is time to “listen to the engineers.”
Energy systems are changing. As variable renewable energy generation replaces retiring fossil fuel-run power plants, we see a shift from our century-old mindset of centralized supply following demand, to a more distributed grid with distributed energy resources (DERs) playing an essential role in a sustainable energy future. In order for renewable energy resources and DERs to replace conventional power plants, they need to be able to act like power plants – virtually at least.
At technology and innovation’s finest hour, we are able to aggregate disparate, geographically dispersed DERs and orchestrate them in such a way that they are able to respond to the grid’s needs at the same speed and accuracy as a traditional power plant. That’s where the Virtual Power Plant (or VPP for short) comes in. Navigant Research defines a VPP as:
VPPs are critical for the transition to more sustainable energy systems – so where is the technology at? Where can we find VPPs? And what can we expect in the future?
There is no doubt that we are facing real problems with climate, fossil fuels and carbon emissions, but as we look to solve these problems, I think that we need to look carefully at the underlying facts, rather than focusing (as some do) on the short-term elimination of fossil fuel.
- The biggest sources of emissions in the US are the generation of electricity from coal and transportation-related emissions (60% of which is for personal transportation). These two sources are responsible for more than 2/3 of total emissions. Canada is only slightly better, in that its electric system generates almost 60% of total energy with hydro, and nuclear is a large contributor to clean electricity as well. Canada’s petroleum industry ranks second, behind transportation.
- Electricity provides less than 20% of total energy, and the remainder is almost all fossil fuel. The average person gets fuel in three forms: electricity, natural gas and transportation fuel (gasoline or diesel fuel). Any major reduction in the direct delivery of fossil fuel will be expected to be replaced with electricity, and that may be a big challenge, given the fact that the electric grid at present delivers only about 20% of the total energy.
- Many people seem to think that if they can convert their current electricity use to solar energy, the problem will be solved. They tend to forget, however, about heating and transportation fuel. In most cases, the fossil fuel energy is far larger than the electrical energy delivered.
- I keep hearing that the problem is someone else’s fault – blame India, China, the oil industry or the government. We all need to look in the mirror – and recognize who the big users are. The fact is that North Americans are among the largest users of energy per capita in the world. As “Pogo” would have said, “We have seen the enemy, and it is us!”
There are two areas to look at: the supply of energy and the use of energy.
For more than 100 years utilities have supplied electrical power to customers and have done so with good reliability. The principle is simple. Loads may do as they wish. They may be random or intermittent and generally are not individually monitored by the utility. Generation, on the other hand, MUST be both dispatchable and monitorable, and electric system operators must be able to manage the real and reactive power from a generator.
Historically, utilities have become very adept at managing generation capacity to maintain a continuous balance between supply and demand. But today, the world is faced with a need to reduce or even eliminate carbon emissions, which complicates the supply-demand balance. Most electricity in the US, for example, is generated by burning fossil fuel. This needs to change, along with change to the electricity supply system and the direct customer use of fossil fuel. We are looking to remove the steady performers, and to replace them with supplies that are intermittent and perhaps random, all the time maintaining a balance between supply and demand.
Science has told us that we must reduce carbon emissions if climate change is to be kept below acceptable limits. The transition has led us in many new directions. Most politicians outside the US believe that our energy supply must be based entirely on renewable energy. This alone creates a large issue, in that the electric grid supplies less than 20% of total energy needs. The proposal to replace all fossil fuel with renewable capacity would require a potentially large increase in grid capacity. Ironically, many politicians typically include nuclear generation among the sources to be eliminated. The one bit of good news is that the efficiency of electrical devices is often better than fossil fuel, and the existing grid operation using a generation following load approach results in a system that can deliver more energy.
The results to date have been frustrating, both in costs and performance, and there are many serious problems that may make a complete conversion very difficult. These challenges include a lack of grid and generation capacity to handle the added electrical load, as well as the operation of the existing grid with extensive distributed devices.
Our blog post this week was authored by our friends and fellow Coloradans at the Rocky Mountain Institute (RMI). We think it's one of the best posts we've read in a while, and RMI kindly gave us permission to share it.
In April, U.S. Secretary of Energy Rick Perry announced a 60-day study on electricity market design and grid reliability, meant to assess to what extent current market designs fail to adequately compensate “baseload” (i.e., coal- and nuclear-fired) power plants.
The memo commissioning the study presents as “fact” a curious claim: “baseload power is necessary to a well-functioning electric grid.” This notion has been thoroughly disproven by a diverse community of utilities, system operators, economists, and other experts that moved on from this topic years ago. To these practitioners, this premise seems as backward as if President Eisenhower, instead of launching the interstate highway system, had called for restudy of the virtues of horse-drawn carriages.
Today, the grid needs flexibility from diverse resources, not baseload power plants. Leveraging market forces to help us decide between options offers the best chance of avoiding the multitrillion-dollar mistake—and gigatons of carbon emissions—of blindly reinvesting in the past century’s technologies.
Cities around the world, including 22 cities in the United States and a growing number in Canada have pledged to go 100% renewable. It’s a noble, collaborative effort to be the cleanest, most environmentally sustainable cities on the planet, with an ultimate and cumulative end goal of each city doing its part to reduce worldwide carbon emissions.
Many cities that have made the pledge don’t yet have a route to an all-renewables, carbon-free destination. Some don’t have ownership of their electricity providers and thus have little or no influence over power fuel sources. Others depend today on energy sources that are based almost entirely on fossil fuel, making the renewables transition particularly difficult. Still others are dealing with high permitting costs for popular renewable options like rooftop solar, as well with other regulatory obstacles. Technologically, anyone switching to a renewables-based grid must, by default, deal with the intermittency and reliability issues imposed by wind and solar. Even hydro electric energy is generally limited by the amount of water flowing in rivers, a quantity that can vary significantly over time.
A broader question, however, is why a fully renewable grid is more desirable than any other combination of zero-carbon energy sources. And what the overall effort and cost would be to decarbonize via that pathway alone.