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The future of electric utilities – change and disruption ahead

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The utilities industry has typically been change averse, and often for good reasons, but with the technological advances of the past few years, the low carbon imperative, and pressure from customers, utilities are going to have to figure out how to disrupt their business, or they will themselves be disrupted.

I gave the opening keynote at this year’s SAP for Utilities event in Huntington Beach on the topic of the Convergence of IoT and Energy (see the video above). Interestingly, with no coordination beforehand, all the main speakers referred to the turmoil coming to the utilities sector, and each independently referenced Tesla and Uber as examples of tumultuous changes happening in other industries.

What are the main challenges facing the utilities industry?

As noted here previously, due to the Swanson effect, the cost of solar is falling all the time, with no end in sight. The result of this will be more and more distributed generation being added to the grid, which utilities will have to manage, and added to that, the utilities will have reduced income from electricity sales, as more and more people generate their own.

On top of that, with the recent launch of their PowerWall product, Tesla ensured that in-home energy storage is set to become a thing.

Battery technology is advancing at a dizzying pace, and as a consequence:

1) the cost of lithium ion batteries is dropping constantly Battery Cost

and

2) the energy density of the batteries is increasing all the time Li-Ion battery energy Density

(Charts courtesy of Prof Maarten Steinbuch, Director Graduate Program Automotive Systems, Eindhoven University of Technology)

With battery prices falling, solar prices falling, and battery energy density increasing, there is a very real likelihood that many people will opt to go “off-grid” or drastically reduce their electricity needs.

How will utility companies deal with this?

There are many possibilities, but, as we have noted here previously, an increased focus on by utilities on energy services seems like an obvious one. This is especially true now, given the vast quantities of data that smart meters are providing utility companies, and the fact that the Internet of Things (IoT) is ensuring that a growing number of our devices are smart and connected.

Further, with the cost of (solar) generation falling, I can foresee a time when utility companies move to the landline model. You pay a set amount per month for the connection, and your electricity is free after that. Given that, it is all the more imperative that utility companies figure out how to disrupt their own business, if only to find alternative revenue streams to ensure their survival.

So, who’s going to be the Uber of electricity?

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Here comes the sun… IBM and solar forecasting

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Concentrating solar power array

For decades now electricity grids have been architected in the same way with large centralised generation facilities pumping out electricity to large numbers of distributed consumers. Generation has been controlled, and predictable. This model is breaking down fast.

In the last decade we have seen a massive upsurge in the amount of renewable generation making its way onto the grid. Most of this new renewable generation is coming from wind and solar. Just last year (2013), almost a third of all newly added electricity generation in the US came from solar. That’s an unprecedented number which points to a rapid move away from the old order.

This raises big challenges for the grid operators and utilities. Now they are moving to a situation where generation is variable and not very predictable. And demand is also variable and only somewhat predictable. In a situation where supply and demand are both variable, grid stability can be an issue.

To counter this, a number of strategies are being looked at including demand response (managing the demand so it more closely mirrors the supply), storage (where excess generation is stored as heat, or potential energy, and released once generation drops and/or demand increases), and better forecasting of the generation from variable suppliers.

Some of the more successful work being done on forecasting generation from renewables is being undertaken by Dr Hendrik Hamann at IBM’s TJ Watson Research Center, in New York. Specifically Dr Hamann is looking at improving the accuracy of forecasting solar power generation. Solar is extremely complex to forecast because factors such as cloud cover, cloud opacity and wind have to be taken into account.
IBM Solar Forecaster
Dr Hamann uses a deep machine learning approach to tackle the many petabytes of big data generated by satellite images, ground observations, and solar databases. The results have been enviable apparently. According to Dr. Hamann, solar forecast accuracy using this approach is 50% more accurate than the next best forecasting model. And the same approach can be used to predict rainfall, surface temperature, and wind. In the case of wind, the forecast accuracy is 35% better than the next best model.

This is still very much a research project so there is no timeline yet on when (or even if) this will become a product, but if it does, I can see it being an extremely valuable tool for solar farm operators (to avoid fines for over-production, for example), for utilities to plan power purchases, and for grid management companies for grid stability purposes.

The fact that it is a cloud delivered (pun intended, sorry) solution would mean that if IBM brings it to market it will have a reduced cost and time to delivery, bringing it potentially within reach of smaller operators. And with the increase in the number of solar operators (140,000 individual solar installations in the U.S. in 2013) on the grid, highly accurate forecasting is becoming more important by the day.

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Friday Green Numbers round-up for Feb 25th 2011

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Green Numbers

And here is a round-up of this week’s Green numbers…

  1. After 50 Years, Nuclear Power is Still Not Viable without Subsidies, New Report Finds

    Since its inception more than 50 years ago, the U.S. nuclear power industry has been propped up by a generous array of government subsidies that have supported its development and operations. Despite that support, the industry is still not economically viable, according to a report released today by the Union of Concerned Scientists (UCS). The report, ?Nuclear Power: Still Not Viable Without Subsidies,? found that more than 30 subsidies have supported every stage of the nuclear fuel cycle, from uranium mining to long-term waste storage. Added together, these subsidies often have exceeded the average market price of the power produced.

    ?Despite the fact that the nuclear power industry has benefited from decades of government support, the technology is still uneconomic, so the industry is demanding a lot more from taxpayers to build new reactors,? said Ellen Vancko, manager of UCS?s Nuclear Energy and Climate Change Project. ?The cost of this technology continues to …

  2. UN reveals $1.3trn green strategy

    A new sustainable strategy by the United Nations proposes to invest 2pc of wealth generated by the global economy, or some $1.3trn annually, in 10 key sectors.

    The new United Nations Environment Programme (UNEP) report that was released yesterday, when more than 100 environment ministers met in Nairobi, underlines a sustainable public policy and investment path that will not only launch the transition towards a low-carbon, resource-efficient green economy, but will also …

  3. Wind generation is not increasing wholesale electricity prices in Ireland

    The growing levels of wind generation on the Irish electricity network is not increasing wholesale electricity prices, a new study published by EirGrid and the Sustainable Energy Authority of Ireland (SEAI) suggests.

    The report by grid operator EirGrid and the SEAI, employs detailed modelling tools to examine the wholesale prices in the Irish electricity system in 2011, which has a total annual value of an estimated ?2bn.

    The analysis revealed that wind generation lowers wholesale prices by …

  4. 7 Fear Factors That Move Solar Stocks

    Solar companies have seen their stocks head up over the past two months as they?ve been reporting killer sales and profits for 2010 and remain bullish about 2011. Shares of key players, such as SunPower, Suntech Power, First Solar and Trina Solar, all have seen their shares rise about 30 percent or more since the beginning of the year.

    But no stocks can keep climbing forever, and news events that …

  5. OnChip Power, aiming a shrink ray at bulky transformer ‘bricks,’ raises $1.8 million from Venrock

    I am fairly sure that if you manage to raise $1.8 million for your start-up while enrolled in a business school course called “Entrepreneurial Finance,” you are almost guaranteed an A.
    Last week, MIT Sloan student and OnChip Power CEO Vanessa Green was signing the papers on her company’s first round of funding: $1.8 million from Venrock and Arunas Chesonis, chairman of PAETEC Holding and an MIT alumnus.

    OnChip is commercializing new power electronics technology developed at …

  6. Transphorm Unveils Efficient Power Module, $38M From Kleiner, Google Ventures

    Here comes the biggest cleantech startup launch since Bloom Energy: Acompany called Transphorm has emerged from stealth on Wednesday afternoon at Google Venture?s headquarters, touting an energy-efficient power conversion module for power-hungry devices from servers to electric car batteries to solar panels, and an enviable $38 million in venture capital from Kleiner Perkins, Google Ventures, Foundation Capital, and Lux Capital.

    Founded in 2007, Transphorm is looking to make power conversion more energy-efficient and reduce the …

  7. Harvard Study Reveals Coal Energy To Be One of the Most Expensive Forms of Power

    Advocates of coal power argue that it is among the cheapest sources of energy in the United States and allows for lower-cost power. But a new Harvard study found that whatever money is saved in operation costs is completely negated by the cost coal plants inadvertently pass on to the American public: $345 billion.

    These hidden expenses are not borne by miners or utilities, but come from the detrimental side affects of coal burning, like health problems in mining communities and pollution around coal plants. The study is the first to look at the entire cost of coal, from extraction to combustion …

  8. Oil surges nears $120 a barrel on Libya and Middle East fears

    Oil prices soared to almost $120 a barrel on Thursday amid fears that the unrest in Libya and Bahrain could spread to other oil-rich countries in the Middle East, including Saudi Arabia.

    Brent crude leapt $8.54 to $119.79 a barrel, the highest price since August 2008, and later traded at $113.93 a barrel. It closed at…

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Photo credit Tom Raftery

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Friday Green Numbers round-up for Jan 21st 2011

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Green Numbers

And here is a round-up of this week’s Green numbers…

  1. 19th Century Economist Reveals Surefire Investment Strategy!

    Intel just finished the ?best year in [its] history,? and expects 2011 to be even better. This news suggests a few important questions: for how much longer are we going to keep buying more and more more powerful microchips? Will 2012 be still better for Intel and other hardware suppliers? 2020? 2050? How much can the demand for computation keep expanding?

    I first started asking myself these questions after I drew graphs (using US BEA data) of changes over time in computer cost and aggregate US corporate computer spending. They reveal a deeply weird pattern: as computers get cheaper, companies spend more and more on them. See for yourself…

  2. In Spain, the three wise men no longer bring coal

    On January 6, it is traditional that Spanish children receive gifts from the three wise men, a day far more anticipated than the arrival of Santa Claus. The most feared gift used to be coal, a sign that the children had behaved badly over the past year. Coal is also a bad sign for the environment, because it?s the largest source of CO2 to the atmosphere and a major driver of global warming. But happily in Spain, things are changing.

    In the morning of the three wise men, while children all over Spain opened their gifts and thousands of new electronic gadgets were plugged into the grid, none of the nation?s electricity was coming from coal. Over the whole day, three-quarters of Spain?s electricity was met from renewable sources while coal barely reached 4% of …

  3. New Materials Could Double Chevy Volt Battery Capacity

    Since its release last December the Chevy Volt has proven to be extremely popular ? it?s been crowned the 2011 Green Car of the Year, the North American Car of the Year and its sales eclipsed those of the Nissan Leaf. However it is set to become even more appealing as GE announced it is working on a new generation of batteries with double the energy-storage capacity. GM?s licensed battery-electrode materials developed at Argonne National Laboratory (a U.S. Department of Energy lab) use mixed-metal oxides that not only increase storage capacity, but improve the safety and durability of car batteries…

  4. Black market steals half a million pollution permits

    Nearly half a million pollution permits were stolen from a Czech carbon bank this week. The event put the spotlight on an emerging black market for the right to pollute the planet, and shut down much of the European carbon trading scheme

    The stolen permits would allow a company to pollute the atmosphere with almost half a million tonnes of carbon. Known as European Union Allowances (EUAs), they are distributed by the EU as part of its carbon trading scheme, set up to help the bloc of nations meet its Kyoto protocol targets.

    Major companies can emit only …

  5. Commission approves record amount of state aid for the deployment of broadband networks in 2010

    In keeping with the ambitious digital agenda goals set in the EU 2020, the European Commission has approved, under the EU guidelines for state aid to broadband, the use of over ?1.8 billion public funds for broadband development to support economic recovery, inclusive growth and the long term competitiveness of the EU. The public funds are aimed to ensure that all citizens have access to high speed Internet access in the European Union, including in rural or remote areas.

    Commission Vice-President in charge of competition policy Joaqu?n Almunia commented: “Smart investments into high and very high speed broadband infrastructures are crucial to create jobs, increase economic performance and to unlock the competitive potential of the EU in the long term. The Commission is committed to help EU…

  6. DOE Awards $967M Loan Guarantee for Arizona Solar PV Project

    The Department of Energy is handing out more loan guarantees for solar projects. This morning the DOE said that it has offered a $967 million loan guarantee for the Agua Caliente Solar project, a 290 MW photovoltaic facility that will be built in Yuma County, Arizona, and which NRG Energy said it planned to buy from First Solar last month.

    The Agua Caliente project will use panels from First Solar, is set for completion in 2014 and is supposed to create 400 construction jobs. Northern California utility PG&E plans to buy the electricity from the project. NRG plans to invest up to $800 million in equity in the project, and the deal between First Solar and NRG requires…

  7. Worst Traffic Congestion In The U.S.: Chicago Ranked Most Congested

    Despite high fuel prices and a tough economy, traffic congestion is getting worse. Chicago drivers spent more time and money in 2009 traffic jams than most cities in the U.S., according to the 2010 Urban Mobility Report released Thursday.

    Chicago and Northwest Indiana drivers wasted an additional 70 hours in traffic and an average of $1,738 in gas costs, according to the report published by the Texas Transportation Institute at Texas A&M University.

    Not that it’s anything to brag about, but Chicago tied with the Washington, D.C. for the time drivers spent behind the wheel. Chicago’s additional 70 hours of …

  8. 10 Creative Ways to Recycle Ordinary Objects

    Creatively artistic recycling doesn?t have to be limited to helping the environment: it can also be a challenge and opportunity to ingenious designers who work with materials most people would consider waste to create amazing things. Some of the following designs serve multiple purposes: illustrating the material possibilities of what most would consider trash while also maximizing the aesthetic potential of what would otherwise be considered waste objects. Clothes become rugs, airline trolleys become furniture, cardboard becomes bridges and sewage turns into …

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Photo credit house of bamboo

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Is there really any need for baseload power?

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No nuclear waste

Photo credit wonderferret

The electricity grid may not need “baseload” generation sources like coal and nuclear to backup the variability of supply from renewables.

Jon Wellinghof is the Chairman of the US Federal Energy Regulatory Commission (FERC). FERC is an independent agency that amongst other things, regulates the interstate transmission of electricity, natural gas, and oil – for more on FERC’s responsibilities see their About page. Chairman Wellinghoff has been involved in the energy industry for 30 years and appointed to the FERC as a commissioner by then president Bush in 2006.

Last year, shortly after being appointed as Chairman of the FERC, Mr Wellinghoff announced that:

No new nuclear or coal plants may ever be needed in the United States….

Wellinghoff said renewables like wind, solar and biomass will provide enough energy to meet baseload capacity and future energy demands. Nuclear and coal plants are too expensive, he added.

“I think baseload capacity is going to become an anachronism,” he said. “Baseload capacity really used to only mean in an economic dispatch, which you dispatch first, what would be the cheapest thing to do. Well, ultimately wind’s going to be the cheapest thing to do, so you’ll dispatch that first.”…

“What you have to do, is you have to be able to shape it,” he added. “And if you can shape wind and you can effectively get capacity available for you for all your loads.

“So if you can shape your renewables, you don’t need fossil fuel or nuclear plants to run all the time. And, in fact, most plants running all the time in your system are an impediment because they’re very inflexible. You can’t ramp up and ramp down a nuclear plant. And if you have instead the ability to ramp up and ramp down loads in ways that can shape the entire system, then the old concept of baseload becomes an anachronism.”

This was quite an unusual contention at the time (and still is) and despite the Chairman’s many years working in the sector it was, by and large, ignored – even by the administration who had appointed him to the Chairmanship. In fact, the Obama administration has since announced financial backing for new nuclear power plants.

However, a study published last week by the Maryland-based Institute for Energy and Environmental Research backs Chairman Wellinghoff’s assertion. In a study of North Carolina’s electricity needs it concluded backup generation requirements would be modest for a system based largely on solar and wind power, combined with efficiency, hydroelectric power, and other renewable sources like landfill gas:

“Even though the wind does not blow nor the sun shine all the time, careful management, readily available storage and other renewable sources, can produce nearly all the electricity North Carolinians consume,” explained Dr. John Blackburn, the study’s author. Dr. Blackburn is Professor Emeritus of Economics and former Chancellor at Duke University.

“Critics of renewable power point out that solar and wind sources are intermittent,” Dr. Blackburn continued. “The truth is that solar and wind are complementary in North Carolina. Wind speeds are usually higher at night than in the daytime. They also blow faster in winter than summer. Solar generation, on the other hand, takes place in the daytime. Sunlight is only half as strong in winter as in summertime. Drawing wind power from different areas — the coast, mountains, the sounds or the ocean — reduces variations in generation. Using wind and solar in tandem is even more reliable. Together, they can generate three-fourths of the state’s electricity. When hydroelectric and other renewable sources are added, the gap to be filled is surprisingly small. Only six percent of North Carolina’s electricity would have to come from conventional power plants or from other systems.”

With larger and more inter-connected electricity grids, the requirement for baseload falls even further because the greater the geographical spread of your grid, the greater the chances that the wind will be blowing or the sun shining in some parts of it.

So, is there really any need for baseload power any more, or is this now just a myth perpetuated by those with vested interests?

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May 25th GreenMonk Energy and Sustainability show

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Above is the video from today’s GreenMonk Energy and Sustainability show and below is the chat-stream from the show:

04:31 Tom Raftery: Can you see/hear me?
04:32 Jason Roe: yea
04:32 abby: both audible and visible, tom!
04:33 TolkienLibrary: back – o started – nice
04:34 Tom Raftery: http://web.mit.edu/newsoffice/2009/roulette-0519.html
04:36 Tom Raftery: http://www.youtube.com/watch?v=0M_XbeXDNnM
04:38 Tom Raftery: http://www.reuters.com/article/environmentNews/idUSTRE54O1I920090525?feedType=RSS&feedName=environmentNews
04:38 TolkienLibrary: well if you look who he works for… then i understand his point of view (the bastards)
04:39 Jason Roe: could be getting old too 😛 bit grumpy etc..
04:40 Tom Raftery: http://www.physorg.com/news162454033.html
04:41 mikethebee: This was discussed on RTE Pat Kenny today
04:41 TolkienLibrary: o nasty! guess US and Asia got some cleaning up to do
04:42 Tom Raftery: http://www.guardian.co.uk/environment/2009/may/24/steven-chu-environmentalist-anger
04:44 Tom Raftery: http://www.physorg.com/news162457392.html
04:46 Tom Raftery: http://www.worldchanging.com/archives/009905.html
04:46 TolkienLibrary: US voted for CHANGE now they got OBAMA LIGHT (typical American I guess)
04:48 Tom Raftery: http://earthobservatory.nasa.gov/Features/WorldWithoutOzone/page1.php
04:50 Tom Raftery: http://www.reuters.com/article/environmentNews/idUSTRE54O16R20090525?feedType=RSS&feedName=environmentNews
04:53 Tom Raftery: http://www.mywindpowersystem.com/2009/05/the-most-amazing-wind-turbines-designs/
04:55 TolkienLibrary: yes saw that earlier today. Loved some of those ideas. The balloon idea would be nice // always people complaining about the sight
04:56 TolkienLibrary: sounds great…
04:56 Tom Raftery: http://blogs.zdnet.com/sustainability/?p=410
04:57 mikethebee: Do you know what types C&F in Irleand are intending to produce after recent annoucement?
04:59 Tom Raftery: http://h71028.www7.hp.com/enterprise/us/en/halo/index.html
05:00 mikethebee: C&F (If I recall correctly) a wind turbine producer announced a major ramp up of production. Anyone know more?
05:03 TolkienLibrary: what do you think of solar panels in orbit announced by Solaren? http://www.alternative-energy-news.info/solaren-corp-to-launch-solar-panels-into-orbit/
05:06 mikethebee: I hadn’t heard of them til then, I wil research it more thx
05:06 TolkienLibrary: thanks for your opinion… also think it very expensive and ‘un-green’ to shoot solar panels up // they should concentrate on solar panels down here first
05:07 Tom Raftery: Thanks everyone for joining in and your contributions
05:07 TolkienLibrary: thnxs once again Tom… great show!
05:07 mikethebee: Thx Tom, gr8 show and content.
05:08 mikethebee: I always lose the last few seconds of the show for some reason.

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Large Hadron Collider? Our priorities are way off!

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Leaks
Photo Credit Image Editor

While it is exciting to watch the stories breaking today about the successful startup of the Large Hadron Collider at CERN, I have to wonder about the price tag.

The total cost of the LHC is estimated at between €3.2 to €6.4 billion and while that is a wide margin, even if it is closer to the €3.2 billion mark that is still a huge amount of money to spend trying to confirm “the predictions and missing links in the Standard Model of physics”. And that is just the financial cost – the amount of CO2 put into the atmosphere by its build and operation must be staggering.

I would far prefer to see all this money and effort being channelled into renewable research. Imagine how much more advanced wind, solar and wave/tidal energies could be now if scientists had €4b of research grants to work with.

I’m a scientist by training and I don’t for a second underestimate the benefits to mankind of being able to explain how elementary particles acquire properties such as mass but I do think that with our polar ice caps melting and small island nations becoming submerged, our priorities on this one are a little mixed up.