With the rich history of cost overruns in the nuclear industry, Xcel Energy and Minnesota regulators probably shouldn’t have been surprised when the retrofit cost to the Monticello nuclear power plant ballooned to more than twice the original estimate late last year. Regulators are asking tough questions about whether the cost overruns are the responsibility of … Read More
The transformation taking place in the electricity system is enormous, but twofold. But most commentators – including the former FERC chair – miss half the opportunity when they fixate on the inevitable technological rather than the more fundamental economic transformation. The 20th century electric grid was characterized by two centralized components. The technology of power generation … Read More
In this Nov. 20 interview with Baruch on his WKBM Paradigms program, we talked about: The coming decentralization of the electricity system The folly of a building inherently decentralized technology (wind and solar) in a centralized fashion The benefits for local ownership of a decentralized system How limited economies of scale for solar and wind power … Read More
As Americans transition their electricity system to the 21st century, they should ask this question. Does it make sense to pursue strategies such as accelerating the development of new high-voltage power lines that reinforce an outdated paradigm of electricity delivery, or should scarce energy dollars be spent to add new clean, local energy to the grid … Read More
Power plants use a stunning amount of water. In 2005, thermoelectric power (e.g. coal, natural gas) accounted for half of all water use in the United States. Across the country and particularly in the arid West, the water savings from renewable energy are as important as the pollution-free energy.
That makes the distinction in water use between centralized solar and decentralized solar a big deal, especially since centralized solar is only planned for the dry Southwest.
The following graphic illustrates water consumption for common types of power generation per MWh of electricity produced (additional reference here):
Traditional power generators are water hogs. For example, a nuclear power plant consumes 720 gallons of water for each megawatt-hour of electricity produced. Powering a single 75-watt incandescent light bulb for an two hours on nuclear-generated electricity would consume 14 ounces of water (more than a can of pop).
While most of that water is returned to the environment, this report by the Alliance for Water Efficiency and ACEEE notes that it’s not undamaged:
Water is returned to its original source, even though its qualities have changed, especially temperature and pollutant levels.
Nuclear and coal may be big offenders, but wet-cooled concentrating solar power uses even more water per MWh of electricity generated. Dry-cooled CSP cuts water consumption significantly, but it’s still far more than solar power from photovoltaics (or wind power).
If it were solely a question of cost, CSP and PV come out relatively close (see updated chart below) despite the former’s frequent need for transmission access.
But if the tradeoff is significant water consumption versus none, then decentralized PV may make more sense everywhere, including the sunny Southwest.
Photo credit: Flickr user Shovelling Son
From Dr. Norbert Rottgen, German Federal Minister for the Environment, in a discussion of baseload fossil fuels versus decentralized renewable energy:
It is economically nonsensical to pursue two strategies at the same time, for both a centralized and a decentralized energy supply system, since both strategies would involve enormous investment requirements. I am convinced that the investment in renewable energies is the economically more promising project. But we will have to make up our minds. We can’t go down both paths at the same time.
While seeming counterintuitive, a focus on smaller-scale distributed generation enables more and faster development of cost-effective renewable energy.
Last week I wrote about the illusion that we can “move forward on all fronts” in renewable energy development; rather, a bias toward centralized electricity generation in U.S. policy reduces the potential and resources for distributed generation.
In contrast, distributed generation provides unique value to the grid and society, and its development can also smooth the path for more centralized renewable energy generation.
First, distributed generation is cost-effective. Economies of scale for the two fastest-growing renewable energy technologies (wind and solar) level off well within the definition of distributed generation (under 80 megawatts and connected to the distribution grid). Solar PV economies of scale are mostly captured at 10 kilowatts, as shown in this chart of tens of thousands of solar PV projects in California. Wind projects in the U.S. are most economical at 5-20 megawatts, illustrated in a chart taken from the 2009 Wind Technologies Market Report.
Besides providing economical power relative to large-scale renewable energy projects, distributed renewable energy generation also has unique value to the electric grid. Distributed solar PV provides an average of 22 cents per kWh of value in addition to the electricity produced because of various benefits to the grid and society. The adjacent chart illustrates with data coming from this analysis of the New York electric grid. Grid benefits include peak load shaving, reduce transmission losses, and deferred infrastructure upgrades as well as providing a hedge against volatile fossil fuel prices. Social benefits include prevented blackouts, reduced pollution, and job creation.
Distributed wind and solar also largely eliminate the largest issue of renewable power generation – variability. Variability of solar power is significantly reduced by dispersing solar power plants. Variability of wind is similarly reduced when wind farms are dispersed over larger geographic areas.
Not only are integration costs reduced, but periods of zero to low production are virtually eliminated by dispersing wind and solar projects over a wide area.
As mentioned at the start, distributed generation also scales rapidly to meet aggressive renewable energy targets. Despite the conventional wisdom that getting big numbers requires big project sizes, the countries with the largest renewable energy capacities have achieved by building distributed generation, not centralized generation. Germany, for example, has over 16,000 megawatts of solar PV, over 80 percent installed on rooftops. Its wind power has also scaled up in small blocks, with over half of Germany’s 27,000 megawatts built in 20 megawatt or smaller wind projects. In Denmark, wind provides 15-20 percent of the country’s electricity, and 80 percent of wind projects are owned by local cooperatives.
With all these benefits, distributed generation can also smooth the way for centralized renewable energy, in spite of energy policies that favor centralized power. When distributed generation reduces grid stress and transmission losses by provided power and voltage response near load, it can defer upgrades to existing infrastructure and open up capacity on existing transmission lines for new centralized renewable energy projects. A focus on distributed generation means more opportunity for all types of renewable energy development.
It may seem counterintuitive, but distributed renewable energy should be the priority for reaching clean energy goals in the United States.
A recent Colorado news story captures the spirit of my last post on the tension between centralized and decentralized renewable energy generation, with a quote that describes the conventional (environmentalist) wisdom:
“It’s not an either or choice, that we only put solar on rooftops or on people’s homes or do utility scale, large projects,” said Pete Maysmith, executive director of the Colorado Conservation Voters.
“As we move forward toward energy independence, reducing our dependence on foreign oil, on dirty, polluting sources of energy like coal, we need to move forward on all fronts with renewable [energy], and that includes rooftop solar and community solar gardens, local power. It also includes utility-scale solar that is properly sited, and that’s really important.” [emphasis added]
As I illustrated with the example of FERC’s lavish incentives for new high-voltage transmission lines, the principled stand of “moving forward on all fronts” collapses in the face of incentives strongly skewed toward centralized power generation. From rich federal incentives for centralizing infrastructure to the basic structure of federal tax incentives, distributed generation operates at a disadvantage.