Green from the roots up, Sustainable from the top down
I am speaking next week at a virtual conference called “bMighty – A Deep Dive on IT Infrastructure for SMBs” – apologies in advance for the state of the website(!)
My talk is titled “How to build a hyper Energy-efficient Data Center” and is based on the CIX data center which I helped develop (and am still a director of).
This is the slide deck I will be presenting there.
Utilities are top-down.
Whenever I talk to utilities about Smart Grids and Smart Meters they always trot out the same speech. They want to use Demand Response for peak shaving and they want to implement it by having a mechanism whereby they can come in to their customer’s houses at times of maximum demand and turn down the settings on the aircon, immersion heater, etc.
Unfortunately this kind of traditional top-down, command and control attitude is more likely to turn people off Demand Response programs than to sell it to them.
I know that as a consumer I want to be able to program my appliances myself so that I decide when they turn on/off in response to price signals from the grid. The same is true for fridges/freezers and water immersions – I want them to change thermostat settings to take in electricity at times when energy is cheap and not when it is expensive by MY definitions of cheap and expensive.
I want control of my appliances. I do not want the utility deciding to come in and adjust or turn them on/off for me because it suits them.
Demand Response programs will be hugely beneficial to the utilities and consumers alike but they are complex to explain. If you couple that with the utility having control of your appliances they suddenly become a far harder sell.
Give customers more control of their electricity bill. Allow them reduce costs without reducing usage, by owner controlled, programmatic, time-shifting of consumption and suddenly Demand Response programs becomes an easy sell.
And when you couple that with how Demand Response will stabilise the grid facilitating greater penetration of variable supplies (i.e. weather-based renewables like wind and solar) and you have a win, win, win!
Said in the voice of Kent Brockman:
I for one welcome our new American overlord
This has to be one of the most hopeful pronouncements to come out of the US for decades.
I was speaking at the EventoBlog España conference on Saturday and I made the comment that electricity’s carbon footprint tends to increase as it becomes more expensive.
In follow-up questions, I failed to explain well what I meant so I will attempt to do so here.
Electricity pricing (on the wholesale market) is a function of supply and demand. When demand is high, electricity is expensive, when demand is low, electricity is typically cheap.
For weather based renewables (wind, solar, wave) – they produce power completely independently of the price of electricity, so they produce the same amount whether electricity is cheap or expensive.
Since weather based renewables are on average a constant percentage then they tend to have a higher slice of the market when electricity is in low demand/cheaper.
In other words, weather based renewables are independent of demand, therefore at times of low demand, they have a higher share of the market. This is even more so the case for wind which tends to blow more at night when demand is lower.
As there is a definite correlation between low demand and low price, it can be said by extension that the cheaper the electricity, the lower its carbon footprint!
The Energy Collective
Up next:
Wind and Solar Come of Age: Making Renewables Full Partners in Our Energy Future – Wednesday, November 5 @ 1 PM Eastern / 10 AM Pacific, Featuring Scott Sklar of The Stella Group and Tom Raftery of GreenMonk (that’s me!).
Scale, advances in technology, and the rising cost of fossil fuels mean wind turbines and solar panels are no longer novelties. But getting the most out of solar and wind involves more than new installations. In this Webinar, we’ll examine the challenges and opportunities associated with integrating peak-load, distributed power sources in our base-load-expectant society with an electrical infrastructure built for centralized generation. More info here.
And, don’t forget the final Webinar in the Series:
Decarbonization and Nuclear Power? – Thursday, November 13th @ 11 a.m. Eastern/8 a.m. Pacific, Featuring Duke Energy CEO Jim Rogers, Dan Yurman of Fuel Cycle Week and Ashton Poole of Morgan Stanley’s Global Power and Utility Group
This controversial energy source appears to promise massive benefits, but also presents some serious obstacles. Our panelists will explore the possibility of a nuclear future in America, discussing the costs of adding new nuclear plants, the potential impact of carbon pricing, and whether NIMBY politics and regulatory barriers can be overcome. More info here
A couple of interesting announcements were made in Ireland in the last week.
On the 8th of Oct., Eirgrid, the Irish grid operator launched their Grid25 strategy (pdf warning). In the strategy document they announced they are spending €4 billion reinforcing the Irish distribution grid in the expectation of a 60% rise in electricity usage.
The Irish Environment Minister, John Gormley in his Carbon Budget announced that the Irish government is going to target that 40% of electricity consumed in Ireland would be from renewable sources by 2020. This is an increase over the previously stated, already ambitious target, of 33% from renewables.
Ireland had an average electrical demand of 3.2GW in 2007. A 60% increase means an average consumption of 5GW by 2025 and an average of 4.5GW in 2020. This is the date the government has set as its target of 40% from renewables.
40% of 4.5GW means that Ireland will average 1.8GW from renewables in 2020. Assuming that this will come from wind (there is no other viable renewable energy source in Ireland), this will require 5.4GW of installed wind capacity.
Ireland currently has 1GW of installed wind capacity so to hit the target it needs 4.4GW of wind farms to be built.
That’s 366MW per annum or just over 1MW every day until 2020! A 1MW wind turbine would be a significant structure costing in excess of €1m.
So the Irish government has set as a target the sourcing of 1MW extra from wind energy every day for the next 12 years?
I also spotted today that StrategyEye in their new quarterly report are reporting that investment in the Cleantech sector is up 50% this quarter, compared to the first quarter of 2008.
The financial markets might be in trouble but renewables are definitely seeing boom times!
Microgeneration, the generation of electricity by home owners, is becoming increasingly common, especially with the cost of energy going up and the cost of wind turbines and photovoltaic panels for the home falling.
The majority of people deploying these solutions are doing so to 1) lower their home energy bills and 2) to help the environment.
What if I told you that often installing microgeneration equipment does not help the environment?
Bear with me while I try to explain. This is complex, counter-intuitive and I am not the world’s best communicator!
Grid operators have problems integrating renewable energy sources onto the grid right now because they are a variable source of supply. Couple that with the variability of demand and your grid starts to become increasingly unstable.
By far the most economic renewable energy source currently is wind but wind energy’s supply curve is often almost completely out of phase with demand (wind blows stronger at night when there is least demand for energy).
The more renewables that are brought onto the grid, the greater an issue this becomes with grid operators having to shut down production from wind farms in times of oversupply! Bear in mind also that there has to be enough generation capacity from non-wind sources (oil, gas, coal, nuclear, etc.) to pick up the slack on days when the wind doesn’t blow.
In times of oversupply from renewables, it would be far preferable to be ramping up consumption of energy using moveable loads, rather than shutting down production from renewables.
Now consider the home-owner who has deployed their own wind turbine. At times when the wind is blowing this home-owner is generating power thereby reducing their demand just when there is an oversupply on the grid! And if they have a net metering agreement with their utility, they further exacerbate the problem by pumping extra electricity into the grid, just when it isn’t required!
Conversely, on calm days, when extra energy is most needed, micro-generation contributes nothing.
There are two main problems:
1. There are no economic energy storage technologies currently available – though this situation is evolving rapidly with the ramping up of investment into battery research by the transportation industry in particular and
2. Real-time pricing data for electricity generation are not exposed to the consumer – if they were, and automated demand response mechanisms were put in place, you would see a radical shift in the energy consumption curve (people would consume energy when it was cheaper – i.e. when it is abundant).
If these two nuts were cracked i.e. economic energy storage mechanisms were available and real-time pricing data were exposed, micro-generators could generate energy when the wind blows, store it and then profitably sell it back to the grid when demand increases, or the wind drops.
For now though, while microgeneration may be beneficial in reducing your energy bills, it is of no benefit to the environment.
Note that I didn’t address CHP in this post because I was trying to keep things simple! CHP can be beneficial, as can any microgeneration, if the production of energy increases in line with the price of electricity.
As the price of electricity goes up, so too does its carbon footprint. If you consume electricity when it is cheap, you are facilitating the greater penetration of renewables onto the grid. If, as a micro-generator, you can produce clean power when electricity is expensive, then you are helping the environment.
UPDATE: Just to clarify, I fundamentally believe microgeneration is a good thing. However, given the current antiquated state of the grid in many countries, the disconnect between generation and demand profiles for wind particularly, and the lack of decent energy storage technologies, the environmental benefits of microgeneration are far from straightforward. This will change as energy storage options improve and demand response mechanisms and smart grids are deployed.
Photo Credit cactusbones
Last year the world was in shock when oil hit $80 per barrel.
Less than a year later, the media has been celebrating the fact that oil prices have dropped to below $110 per barrel.
Four years ago oil was just over $30 per barrel!
With the exception of a couple of spikes, oil prices have been inching up every year since Dec 2001.
Oil price increase
It is only when petroleum prices go above certain milestones like $3 per gallon or $4 per gallon that people start to sit up and take notice but even this would appear to be a short-term effect. How well do you remember the $3 per gallon shock?
Just how much do oil prices have to rise before we decide to get off oil for once and for all? How high does it need to go before we realise the water is boiling and we need to develop competitive, reliable alternatives?
Congressman Roscoe Bartlett [R] in the video above addresses the US congress on the liklihood that we have hit peak oil.
Congressman Bartlett has been banging this drum since 2005 but he received an unlikely ally in the International Energy Agency yesterday! The IEA is not known for being alarmist and is typically extremely conservative in these matters however yesterday’s Medium-Term Oil Market Report from the IEA contained some interesting nuggets which suggest that they are coming around to the “Peak Oil is here now”, way of thinking.
Nobuo Tanaka, Executive Director of the International Energy Agency speaking at a press conference at the World Petroleum Congress, emphasized that market fundamentals were the main underlying factor behind high oil prices. “OPEC production is at record highs and non-OPEC producers are working at full throttle, but stocks show no unusual build. These factors demonstrate that it is mainly fundamentals pushing up the price,” he added.
In other words, no build up of stocks means it is a simple case of supply and demand, not speculators, which is causing the current price increase.
This is not good news.
The report goes on:
Over 3.5 mb/d of new production will be needed each year just to hold global production steady. “Our findings highlight again the need for sustained, and indeed, increased investment both upstream and downstream — to assure that the market is adequately supplied,” stated Mr. Tanaka.
But figures for new production have been falling year-on-year, never mind increasing 3.5mb/d.
Ok, so if we say peak oil has arrived and we are never again going to see a barrel of oil go below $120 per barrel (in fact it will trend ever upwards over time), just what are you going to do now that you have that information?
Will you start an efficiency drive in your company? Remember your financial accounting – saved overhead goes straight to the bottom line!
Will you buy a hybrid car? Will you install solar/wind generation capacity at your place of work/home? Will you go vegetarian?
We are headed into challenging times but for people and companies who make the right choices, there is, as ever, money to be made!
Photo Credit chefranden
I was talking to Tom last night, and it struck me that a bubble won’t be all bad. There are a couple of reasons why. First off, unlike the last time a green bubble popped when oil prices collapsed in the 1980s, this time around we have China and India to sustain demand, and oil prices.
So why would a bubble be good? For one, we need the inward investment to create an infrastructure capable of serious lobbying, to be able to create favourable Green Tape (the rules, regulations and tax regimes surrounding renewable investments). At the moment energy lobbying is clearly in the hands of the oil and gas companies. This balance needs some redress, and massive capital injections are going to help.
Finally lets not also forget that bubbles can and do change the world. The first internet “bubble” popped, but you’re not about to tell me the transformation is over, and or has even started, yet…Innovation is discontinuous, and that’s why I am not afraid of some bubble tendencies. We just need to make sure some of the gum sticks when it bursts…
picture courtesy of chefranden on Flickr under creative commons Attribution 2.0 license.