The changing role of power utilities

[semipro]

Good read here on how the role of power utilities is changing from one of producer 1st and distributor 2nd to that of distributors who may or may not produce. There are some interesting market dynamics at play with increases in energy conservation and local energy production.

http://www.msn.com/en-us/money/comp...se-threat-to-power-grid/ar-AA8UuxL?srcref=rss

 

[Blackjack Dan]

Thanks for sharing!
If they're going to make a economical generator that uses natural gas why don't they invest in the technology to make a generator that uses wood? Especially for those that want to go off grid.

 

[peakbagger]

By the way, NRG is basically the old Enron energy division with a new name. Leopards rarely change their spots.

 

[burnham]

I think people are always going to want and need grid power, and the utilities are always going to charge what they have to, to stay in business. How many people are really going to rely on their own generation to power their home? I totally see using solar to lower a bill, but the utilities are going to limit the impact it has on their bottom line. As far as lowering overall power consumption, that would be a great benefit in many areas. The cost of reconductoring is huge, and much of the grid is at capacity. We will see some more small changes, but we're not changing directions any time soon.

 

[iamlucky13]

I totally see using solar to lower a bill, but the utilities are going to limit the impact it has on their bottom line.

Regardless of the technology used to generate the electricity, the utilities have to at least break even on the deal (PUD's) or make a profit (private utilities), or they will cease to exist, and we'll all be stuck in far-from-ideal off-grid arrangements.

There is a substantial cost to maintaining an electric grid, especially with all the low volume residential, and it seems to be somewhere in the ballpark of $0.05/kWh for residential at current use levels. As a result, it is guaranteed that market-rate net-metering will be phased out in the future. I believe parts of Arizona have already started doing this.

If more people generate their electricity and use some or all of it, then the amount of power going over the same wires drops, but those same wires still have the same installation and upkeep costs, so the price per kWh goes up. That would be particularly painful for those who can't afford the up front cost of solar panels, although realistically, most utilities would probably offer multiple rate schedules depending whether you net meter or not.

The death spiral is an exaggeration, especially with how little power is currently net metered back to the grid right now, but the dynamics of the electricity market will change greatly if net metering continues to grow significantly.

I was amused they mentioned Goal Zero and said they aim to bring solar power to the world's poor. They sell $75 solar panels for $200 and $500 battery + inverter combos for $1400. They're neatly built, and I've heard people who have to travel with a CPAP machine like them, but they're also willing to pay a steep premium for reliability and convenience.

 

[iamlucky13]

Thanks for sharing!
If they're going to make a economical generator that uses natural gas why don't they invest in the technology to make a generator that uses wood? Especially for those that want to go off grid.

Natural gas is easier to design for (not only is it straightforward to fuel automatically and can be throttled more easily, but it has a lot less contaminants to deal with) and represents a much larger market. If this sort of product does find a market in the US, I'm sure eventually we'd see wood-fired units become available, too. I've seen a few examples, but they're all expensive custom devices, mostly built by tinkerers.

The combined heat and power idea, by the way, is a very good one. From some quick math, it looks like the electricity generated would have an effective cost (because the heating value is reduced as a result - conservation of energy and all that) in the ballpark of 5-6 cents / kWh at current residential gas prices.

 

[Where2]

“You can’t run a country on solar panels.”

Sooner or later, the cats running some of these utility monopolies are going to have to realize, you can't extort more $$$ from every customer every year to please your investors. As a worker, I'd love to get a raise every year, but I don't.

MG&E trying to extort $68/mo as a basic grid connection charge for residential customers is a prime example of a pathway that will disrupt the electric business. $816/yr (plus utility taxes) will buy a lot of batteries. The PV array and inverter setup will run for years. It's the batteries that are the weakest link right now. Charge more than the batteries cost, and off-grid defection is a definite outcome for those who have means to afford to go off-grid.

As more drivers convert to plug-in and plug-in hybrids, the electric consumption trend will continue to grow. These news pieces never mention that on the horizon.

I also appreciate how the news blurb failed to mention that any conservation is being driven by businesses and government. Blame was clearly placed on the residential consumers?? I've been in plenty of modern business offices and government buildings with occupancy sensor switches, and automated climate control systems. It's not like the old days where every wall had a Honeywell mercury thermostat and every store was lit with magnetic ballast fluorescent or incandescent lighting.

 

[jebatty]

IMO storage technology (batteries ?) is rapidly advancing and will be available at reasonable cost for installations as small as residential to as large as grid scale. The "grid" of the near future likely will look little like the grid of today. I remember only too well the Bell telephone system, a large grid infrastructure. Ring a ringy dingy. The communication world changed. The electrical world is changing now.

 

[woodgeek]

The problem is that EVs as a source for higher elec demand is that if everyone had an EV, they might use 25% more electricity, but it would take 20+ years to make the transition....maybe 1%/year growth tops.

And the same thing that makes EVs mass-adoptable, cheap large batteries, also makes home energy storage and wider adoption of RE possible.
By the time EVs are contributing to total elec usage, grid defection would likely already be underway.

 

[semipro]

The future of the utility grid to me looks a lot like what the Internet is now with shared distribution infrastructure and "content" providers, whether a large-scale power plant or residential rooftop PV system.
Obviously this analogy is not perfect but I thinks there's already a strong trend in that direction.

 

[jebatty]

When the only way to talk with telephone was by wires, wired infrastructure had to connect everyone. No more. With electricity at this point, wired infrastructure is needed to connect. But I easily foresee a time in the near future when that will not be necessary. Distributed generation/storage of varying kwh and mwh capacity will be the norm. That also should result in a much more secure energy distribution system. Wires will have a much different role than now.

 

[iamlucky13]

IMO storage technology (batteries ?) is rapidly advancing and will be available at reasonable cost for installations as small as residential to as large as grid scale.

Unfortunately, I have to disagree. Batteries will be at most a small part of the grid for the foreseeable future, and mainly to buffer increasingly variable (due to solar and wind) supply to constantly varying demand on short time scales.

Lithium ion battery technology is rapidly advancing, but its benefits are minimal to grid applications, and the cost advances are relative to a major cost disadvantage compared to more mature technologies. Those more mature technologies like lead-acid have plateaued in their cost and capacity. It would take an unanticipated breakthrough to achieve any meaningful improvements there.

Lithium ion may eventually approach life cycle cost equivalence to lead-acid, but it's got a long ways to go.

Lead acid, for its part, over the full life cycle of the batteries, has a cost in the ballpark of $0.20-0.30/kWh stored, and since it's just stored, not generated, that cost gets added to the current cost.

Less conventional technologies like flow batteries may push the storage cost lower, but the DOE is still predicting life cycle costs in the ballpark of $0.15-0.20/kWh for them.

And I'm not even going to try to discuss here the challenge regions like the Pacific NW would have trying to store energy generated during the low demand/high production spring season (when local winds and hydro production both peak) for 6-9 months for the following high demand/moderate production winter season.

The future of the utility grid to me looks a lot like what the Internet is now with shared distribution infrastructure and "content" providers, whether a large-scale power plant or residential rooftop PV system.
Obviously this analogy is not perfect but I thinks there's already a strong trend in that direction.

On this I agree - more widespread "content," shared by subscription with those who own and operate the power lines.

 

[woodgeek]

I see a future with few grid defections, lots of grid storage and lots of wires....

As Iam pointed out, even if you had cheap grid storage to even out daily variation in renewables, it would not be practical to use the same hardware for seasonal storage. Unlike Iam (and the DOE) I think we will get cheap diurnal battery storage, sooner than many think (next 10 years)

In some places, that won't matter much....the solar resource is 'good' all year round. This is basically the West outside the PNW and the deep South. There it might be possible to go off-grid with mostly residential solar + diurnal storage (you'd prob still need a backup generator for v unusual weather events).

In most other places, the solar resource is really terrible in the winter (>50% of US pop), when (total) energy demand peaks (for space heating). So these folks that go off grid are going to need to buy FF or use biomass for winter energy. And might still struggle for elec in the winter without a grid battery for seasonal storage.

Bottom line: a RE driven future, outside of the Southwest and a few other areas, will need contributions other than just residential solar + diurnal stroage, at least during some seasons, so there will still be a grid for most people, to distribute hydro power (PNW), and wind power (everywhere else). I also think that our energy needs in the future might not all fit on our respective roofs, e.g. in cities and condos, so we will have big industrial solar (just like big hydro and big wind), grid storage and a grid for those customers.

IOW, lots of wires.

 

[woodgeek]

Good read here on how the role of power utilities is changing from one of producer 1st and distributor 2nd to that of distributors who may or may not produce. There are some interesting market dynamics at play with increases in energy conservation and local energy production.

http://www.msn.com/en-us/money/comp...se-threat-to-power-grid/ar-AA8UuxL?srcref=rss

I'm gonna call a bit of BS on the article. I don't like the blame game....if there is a problem, its due to the customers buying less? Give me a break. We have had efficiency programs in place, many run by the utilities themselves....like MassSave and a zillion others, and ay the Fed level with the EnergyStar program. Did all those utility CEOs sit on their hands for the last 20 years and assume those programs would have no effect whatsoever?

I think its a stealthy or retread version of "your high elec bill is due to those guys putting solar on their roof. They use the grid but don't pay for it!" crap that they floated in 2014. Now its the folks with energy star appliances causing the problem.

The real problem: utilities with completely brain dead management.

BTW, that 'Edison Electric Institute' report that came out saying that the existing business model would be a death spiral....came out two years ago, in January 2013. IT did have a huge effect on how utilities saw the future of their industry....but was not picked up by the media for a while. The WSJ is getting around to this about 18 mos after the other papers.

Consider: http://grist.org/climate-energy/uti...-coming-look-to-clean-and-distributed-energy/

 

[blades]

Ain't nothing being bandied about right now that wasn't blamed on the consumers in the very late 70's- same old song and dance routine- Not saying that there haven't been significant advances on both sides of the coin, but I fully remember the cat being left out of the bag on a day when an utility executive slipped up and admitted the primary reason of rate increases ( which were blamed on the publics conservation efforts to reduce usage hence lower income for the utilities)were to satisfy the guaranteed rate of return to investors.

 

[Dune]

Unfortunately, I have to disagree. Batteries will be at most a small part of the grid for the foreseeable future, and mainly to buffer increasingly variable (due to solar and wind) supply to constantly varying demand on short time scales.

Lithium ion battery technology is rapidly advancing, but its benefits are minimal to grid applications, and the cost advances are relative to a major cost disadvantage compared to more mature technologies. Those more mature technologies like lead-acid have plateaued in their cost and capacity. It would take an unanticipated breakthrough to achieve any meaningful improvements there.

Lithium ion may eventually approach life cycle cost equivalence to lead-acid, but it's got a long ways to go.

Lead acid, for its part, over the full life cycle of the batteries, has a cost in the ballpark of $0.20-0.30/kWh stored, and since it's just stored, not generated, that cost gets added to the current cost.

Lithium (the lightest metal) will never have a place in grid storage regardless of potential energy density. It's advantage (low weight) is immaterial in the grid storage application.

This technology does and will continue to;

http://www.nickel-iron-battery.com/

 

[peakbagger]

Nickel Iron is a niche product for very specific applications and is not the solution. Many companies have tried and failed to improve on Edison's design to overcome its limitations and basically they have proved that Edison got the maximum out of the technology. Currently there are two manufacturers in the world, a chinese firm that bought an obsolete production line from a European manufacturer and a start up in florida that is trying to prove that they can be a viable company. Standard lead acid batteries still have a far lower life cycle cost than nickel iron. NI batteries can "last forever" but while they run they have a poor charge cycle. They are abuse tolerant. Therefore they are popular with the survivalist crowd who are planning for the SHTF scenarios. The vast majority of off gridders go with lead acid.

There are two tracks on current battery technology, Light weight/high density for transportation to replace fossil fuel and high capacity/low cost for utilities. The current leader for auto use is Lithium variations with few major future competitors. On the utility side, flow batteries seem to be the leader. The major issue on both sides is that fossil power is cheap, several orders of magnitude less expensive than batteries.

The "evil" utilities will gladly deploy any technology that they are guaranteed to make a profit on. If they get a long incentive to deploy hamsters in wheels connected to generators, they will do it. Currently the gird in New England pays power producers for "capacity" which is the ability to quickly supply power to the grid when there is an unbalance between the generation and demand which would be when batteries get used. The utilities have numerous oil fired gas turbine generators sitting next to large tanks of fossil fuel, they are cheap to build and put out a lot of power in a short period of time. Until batteries can put out the same power for less installed cost, they will keep installing turbine generators. Texas does not pay for capacity and they routinely are running out of power to the point that they have to import it from Mexico when the wind stops blowing.

 

[Dune]

Research on Nickel Fe batteries is ongoing.
Improvements have been made, and they are being manufactured in 4 countries including the US.
There are a lot of people who are going to be surprised when they find out their storage systems are not the solution.
Edison manufactured them for 75 years for a reason, and they never should have stopped building them.

http://scienceillustrated.com.au/bl...el-iron-battery-gets-a-21st-century-makeover/

Stanford University scientists have dramatically improved the performance of this century-old technology. The researchers developed an ultrafast nickel-iron battery that can be fully charged in about two minutes and discharged in less than 30 seconds. The results were published in the journal Nature Communications.

“We have increased the charging and discharging rate by nearly 1,000 times,” said Stanford graduate student Hailiang Wang, lead author of the study, in a press release. “We’ve made it really fas

 

[peakbagger]

Okay you have drank the kool aid on NI FE so I will let you ramble.

 

[woodgeek]

Aaah....Battery wars.

I think the winner is hard to predict, in a VHS versus Betamax kind of way. There are economy of scales here, and if Li tech is getting built out for EVs, that does give it a leg up on grid storage, but I agree that it is not the best solution. But it still might be the QWERTY keyboard and VHS of grid storage.

There are many other techs out there, and startups chomping at the bit. Many of which I learned about from you guys.

At some level, like a lot of people, I DONT CARE how grid storage works. But given the number of competing techs, I am confident that one (or two) of them will get developed to scale once the market for diurnal storage opens up....which is when RE gets to signficant energy penetration, as will happen for PV in CA in the near future, and which is already happening with wind on many other locations.