Distributed power generation and other distributed energy resources (DERs) in the modern power grid is undeniable. It seems that electric distribution companies have two options: fight the inevitable rise of DERs or embrace them and benefit from new opportunities. After years of resistance, the time has come to enable the deployment of DERs by restructuring not only grid infrastructure and technology but also rethinking utility revenue models.
Don’t Resist, Restructure Distributed Power Generation
With the pace that DERs are being deployed it makes sense for utilities to embrace new technologies and their associated challenges, but there are still battles to be fought. It is unlikely that utilities will ever be comfortable with net metering policies that reimburse distributed generators at their billing rate.
Many states are changing their net metering policies to either add fixed fees to net metering customers or to reduce reimbursement to the wholesale distributed power generation rate, but that fight is far from won. It is obviously unsustainable and unacceptable for utilities to lose massive revenue streams to distributed generation and energy efficiency while also being responsible for maintaining an increasingly expensive system to support these DERs, but fighting net-metering and government subsidies doesn’t have to be the solution.
Although revenue is lost to power generators, there is also untapped potential from DERs that is not being exploited because of the way that utilities earn on capital investment. While utilities dismiss net metering as unfairly shifting costs, a similar argument of unfairness could be made for guaranteed return on capital investments. Currently, utilities are incentivized to build distributed power generation infrastructure because they earn on those projects, but they are not incentivized to solve problems efficiently. Using grid-scale storage to offset an 18-million-dollar transmission investment is a nightmare for utility revenue despite being a simpler and cheaper solution. Perhaps it is time that utilities earn on the services they provide rather than the infrastructure they build.
Electricity as a Service
Electric power is bought and sold as a product. Customers pay for how much power they use. This model works very well until customers start making their own product. While utilities understand that they are providing the infrastructure that enables the customer to utilize their power, customers and legislatures rarely understand or care to see the difference. Since many of us already see grid infrastructure as a service that enables the consumption of power, it is only natural to formalize that notion and create new business models that align with selling a service.
Can control be localized based on utility specifications or should it be centralized? Will locational marginal pricing be calculated on a decentralized system and how will that impact the economics of DERs? These are difficult questions, but utilities should play a critical role in answering them.
Adapting the Utility Workforce
Not many utility engineers have experience analyzing terabyte sized data sets and implementing drone-like distributed power generation control systems.
The skillsets of utility engineers and analysts need to adapt in order to keep up with these changes. How can we expect a utility to transform into a DSP without a workforce that can help build and maintain the platform?
With such a massive disconnect between traditional utility operations and the way a modern grid full of DERs must operate, it makes sense for utilities to invest in tech startups. While larger companies are investing in these startups, it makes sense for any size utilities to utilize their skills and platforms.
Regardless of how much the utility workforce may evolve, there will still be an increased dependence on these third-party tech companies to enable many of the advancements that will allow DER integration. We will still need a traditional workforce to design substations, size equipment, manage projects, and maintain GIS records. Partnerships with startups and tech companies can help close the gap between the keeping-the-lights-on workforce and the grid-of-the-future skill sets.
Take a company like Enbala Power Networks, which enables utilities to “aggregate, control, optimize, and dispatch distributed power generation energy in real time”. Partnering with companies like Enbala to perform demand response, peak load management, and a multitude of other services can allow utilities to maintain a focus on their traditional skills while still enabling a completely modernized grid.
Distributed Power Generation in Disruptive Technologies
Disruptive technologies such as DERs are often seen as the downfall of the industries that they disrupt. But unlike many other industries, the role of the utility in the power grid is so critical to society that it is unlikely utilities will ever go extinct. However, it is up to utilities themselves to decide how to respond to the changing grid. Is it possible to resist new technologies and revenue models and instead continue to focus on capital investments and regulated business?
Would it be better help enable these new technologies and reap the benefits provided by a paradigm shift in the industry? Certainly, utilities will mitigate risk by combining these two strategies. Duke Energy, for example, continues focusing on its regulated business while ramping up investments in renewables and new tech. It is transitions like these that will allow utilities not just to survive, but to thrive in the modern distributed power generation industry.
Trends in geothermal power generation is technology has some promise as being proven to be a clean, renewable resource providing energy around the world for centuries in various forms of hot springs. Keeping special areas with signs like hot springs aside, the heat of the earth is available for everyone everywhere.
Modern use of geothermal energy include electricity production, heat source applications for industrial purposes, and commercial as well as residential HVAC purposes through geothermal heat pumps.
Trends in geothermal power generation shows that plants use geo-fluids extracted by drilling wells into a geothermal reservoir. Such plants pose three main challenges in exploiting geothermal energy for power generation:
- High cost and risk of exploration and drilling of a well (around USD 10 million per well)
- Low temperature (typically in the range of 80 – 300 degree C)
- Disposal or re-injection of toxic brine that comes out of geothermal reservoir
Whenever high temperature super-heated steam is directly available from geothermal wells it can be used with steam turbines for power generation. But this is not the case with low temperature geothermal reservoirs. Low temperature geo-fluids require use of Organic Rankine Cycle (ORC) turbines through heat exchange mechanisms. This adds to the cost of geothermal power plant as compared to those using steam-turbines, in addition to the cost of wells. However, the high cost of drilling a well can be avoided by selecting abandoned oil wells which have depleted hydrocarbon reserves.
Trends in Geothermal Power Generation since 1989
US Department of Energy (DOE) test operated such a plant in 1989 demonstrating depleted reservoir conversion to geo-pressurized thermal power plant as part of its geo-pressured-geothermal energy program. The program aimed to utilize the heat brought to surface in the form of produced hot water (thermal energy), burning any entrained hydrocarbons on site for generating electricity (chemical energy) and high well head pressure (mechanical energy) to generate electricity. Pleasant Bayou in Brazoria County in Texas was chosen as the site for the power plant.
The plant generated electricity from the geo-fluid and separated the natural gas to test the production of electricity from combustion in an on-site hybrid power system.
The binary power plant with a design output of 905 KW (541 KW from ORC turbine, 650 KW from gas engine and subtracting an operational load of 286 KW). The plant operated at only 10,000 bbl of water per day with small volumes of gas flow.
Bottom hole temperature was given as 154 degrees C, with a maximum brine T of 136 degree C. The overall plant availability was 97.5%, at par with many other geothermal plants.
BP Statistical Review 2016 reported total consumption of coal, natural gas, oil, nuclear, hydro-power and renewables as 13147.3 MTOE in year 2015 to produce electricity. The renewable sources including geothermal power generation contributed 364.9 MTOE (on the basis of thermal equivalence assuming 38% conversion efficiency in modern thermal power station) which is less than 3%.
The representative of Enel Green Power Innovation Department has following views on the future of geothermal power plants:
“Renewable sources can interact between each other in order to fully exploit the characteristics of the single technologies and to use Balance of Plant to increase utilization factor,”
Hybrid among Trends in Geothermal Power Generation
Enel Green Power has taken lead where 33 MW Stillwater geothermal power station in Nevada was commissioned in 2011, got paired with 26 MW of photovoltaic facility in 2014 and another 17 MW CSP (Concentrated Solar Power) facility in 2016. The triple hybrid power plant has been reported by National Renewable Energy Laboratory to achieve 5% reduction in the levelized cost of energy (LCOE).
Like solar energy, the resource is indefinitely available with demonstrated potential of these trends in geothermal power generation via hybrid power systems as reliable source of green energy which is now receiving the attention of engineers, technologists and investors in proportion to the benefits that it will deliver.
Electrical power generation and distribution took a big leap in 2007 when the trajectory for electrical use in America peaked and started down a different course, declining for reasons we don’t fully understand yet. No, this wasn’t a one-time drop but a clear shift, moving in a new downward direction that continues to this day. While the seismic forces in electrical power generation are occurring, there should have been celebrations and parades, even dancing in the streets, but no one noticed.
In much the same way animals, not humans, are able to pick up on weak signals for an impending earthquake, our ability to sense an industry’s peak still mystifies us. To make matters even more complicated, it may not be the peak.
Seismic Forces in Electrical Power Generation
The future of electricity can best be broken into four fundamental categories – power generation, power distribution, electric storage, and changes in demand.
After looking at some of today’s most important trends, it was easy to uncover a few emerging trends that analysts haven’t been considering.
While some of these may only represent a miniscule probability over the next few years, the interplay between emerging technology and social acceptance, coupled with an exponential growth curve or two inserted into the mix, will make electrical power generation and the energy industry a truly dicey market to predict over the next 2-3 decades.
Our emerging electric car and trucking industries coupled with plummeting battery prices, solar roofs, IoT devices, industrial automation, artificial intelligence, home battery packs, and energy efficient everything are just a few of the interrelated issues that will turn virtually every prediction about our future electrical power generation and distribution needs into a low probability forecast before its even mentioned.
Full article on Seismic Forces Change Electrical Power Generation
The electrical power generation industry has already entered a state of disruption, but is ripe for much more. Today’s politics will be a distant memory 2-3 decades from now. At the same time, wind and solar have proven to be a lower cost form of electric power generation across some parts of the U.S., even without subsidies. Renewables are already at grid parity and will continue to drop in price.
Electric power will endure to be a battleground industry for decades to come. Our shifting base of technology, startups, lifestyles, culture, and politics will continue to make this a highly unpredictable landscape for the foreseeable future.
Read the full article on seismic forces changes in Power Generation and Power Distribution from the futurist Thomas Frey