Distributed Energy – The Next Logical Step

by John Brian Shannon

Distributed Energy adds capacity to the electrical grid during the hours that electrical demand is highest, adding to grid stability and lowering costs for consumers

Over the centuries, different kinds of energy and energy delivery systems have been employed by human beings. In the Neolithic Period some 10,000 years ago, our ancestors sat around campfires for the light, warmth and security that a fire can provide. Neolithic people mostly ate their food raw, but are known to have cooked meat and occasionally grains over a fire.

For many centuries that general energy usage pattern continued and the only difference was the kind of fuel (coal later replaced wood and straw) and the size of the fire and the number of people it served.

New ways of using energy

The Industrial Revolution changed all that for people in those suddenly developing nations. New energy technology offered huge economies of scale — whereby the larger the power plant, the more efficiently it could produce affordable power for large numbers of people.

The first electrical grids were then formed to transport electricity from large-scale coal power plants or hydro-electric dams to population centres.

Since then, every decade shows larger and more efficient power plants and ever-larger populations being served by this wonderfully efficient grid system. Huge power plants and sprawling electrical grids delivered electricity to citizens over very long distances and at reasonable rates, while investors, utility companies, and power producers received reasonable rates of return on their investment.

It was (and still is) an excellent model to employ, one which brings electrical current from remote power plants to electricity users at an energy price that works for everyone. Except for the fact that some power plants produce unimaginable amounts of pollution and are necessarily and massively subsidized by taxpayers, this has been a winning energy model for a number of decades. And this very successful and reliable model will continue to provide our electricity for many years to come.

But there are serious drawbacks to grid power

Utility-scale power generation requires huge power plants, each costing tens of billions of dollars in the case of nuclear power plants, billions of dollars each in the case of hydro-electric power plants, and hundreds of millions of dollars in the case of coal power plants.

All coal and nuclear power plants were heavily subsidized by taxpayers, or they couldn’t have been built in the first place

It doesn’t end there, as coal fired power plants use hundreds or even thousands of tons of coal every day of the year at a cost of $50. to $160. per ton, not to mention the huge infrastructure costs required to build the ports and rail lines to transport the coal — paid for by taxpayers. And then add to that, the freight costs paid to the shipping companies and the railway companies to transport that coal to the power generation site. Most of the coal that Asia burns comes from North America and Australia. Even within coal rich North America, thousands of miles of railway tracks were laid down to transport North American coal to North American coal power plants.

Let’s not forget the environmental costs associated with all that toxic smoke either. China and the U.S. each produced 7.2 billion tons of coal fired CO2 in 2010 and that number is rising every year. Not to mention the many toxic oxides of nitrogen and sulfur, along with soot and airborne heavy metals that are produced wherever power plants burn coal.

Nuclear power plants likewise, use expensive to produce nuclear fuel rods or pellets and simply could not survive without massive government subsidies. Then there is the storage problem, as the so-called ‘spent fuel’ is highly radioactive and must be securely stored for up to 20,000 years in temperature-controlled conditions. Again, massive taxpayer funded infrastructure must be provided to store the world’s ever-growing pile of spent fuel.

Other than costing billions of dollars and disrupting river flows and fish habitat, hydro-electric power is a benign and good electrical generation solution. If only there were enough rivers to provide all the electricity that 7.1 billion people require! With almost every possible river already dammed on the planet, hydro-electric power plants provide only 16.2% of the world’s electricity.

An even better energy model has arrived in the form of distributed energy

Simply stated, distributed energy is created when many homes or businesses place solar panels on their rooftops or wind turbines on their properties — and then connect it to the electrical grid. Either solar panels or wind turbines can be used in the distributed energy context.

With progressive policies designed to strengthen and balance existing electricity grids, distributed energy can play a large role in ameliorating our present energy challenges.

Distributed energy is the opposite of utility-scale electrical power generation in three very important ways

  • Distributed energy emits no measurable pollution.
  • Distributed energy assists the grid operator to locate the energy source close to electrical demand centres.
  • Unimaginably large and expensive national utility grids crisscrossing the countryside are not required in the case of distributed energy.

Connecting distributed energy to the grid results in many positives for micro-energy producers, homeowners, businesses, and the grid operator. During the daytime, solar panels may produce more electricity than the homeowner or business can actually use — although during that same time of day, the utility company power plants may be straining to produce all the electricity that the grid demands during those peak hours.

Net-Metering to the Rescue!

Therefore, energy-sharing takes place via the use of a net-metering system allowing the homeowner or business owner to sell their surplus electricity to the utility company. Net-Metering allows homeowners and businesses to sell their excess electricity to the grid at a profit, while retaining all the benefits of grid connection. Installation of a net-meter at each home is the essential part of a distributed energy grid.

New financing options are becoming available to homeowners and businesses to install rooftop arrays — and even renters are able to purchase renewable energy through innovative programmes designed to boost the market share of renewables.

Some auto assembly plants in Germany and in the U.S.A. have installed wind turbines on their properties, or on nearby land purchased specifically for that purpose. Both BMW and Volkswagen are famous for building great cars, and for being distributed wind producers that have installed wind turbines near their factories, to ensure more reliable power and to avoid energy price spikes. Many ‘world citizens’ admire their environmental commitment.

IKEA, WalMart and Walgreens are famous for installing solar power plants on their store rooftops and warehouses, and WalMart, Google and Apple Computer and others, have purchased wind farms in an effort to Go Green and to alleviate the energy price spikes which are so common in the U.S. and Europe. Well done.

Distributed Energy pays off!

In California, homeowners with solar panels on their rooftops are receiving cheques for up to $2000. — or even larger amounts in the case of larger rooftop solar installations — from their utility company every January, to pay for all the surplus electricity they’ve sold to the utility company during the course of the year. California law mandates that distributed energy producers be paid up-to-date by February 1 of each year and other energy policies in the Great Bear state prove their commitment to a

In Australia, many thousands of homes with solar panels on their rooftops have dramatically added to overall grid capacity and stability by curtailing the power outages common there during peak demand hours, and some coal power plants have shut down while other coal plants are now planning for decommissioning.

Understandably so, the heavily subsidized coal and nuclear industries fear the rapidly growing distributed energy model, although coal exports to China from coal giant Australia continue at a frenetic pace.

Turn down the burners — the Sun is up!

Natural gas and hydro-electric power producers cautiously embrace distributed energy as an augmentation of their efforts to provide reliable electricity to the grid — as they can all exist as energy producers at different hours of the 24 hour day — and for very different reasons none of them are able to eclipse the others.

Distributed energy typically produces its power during peak demand hours, and is known for reducing electricity costs across-the-board due to the Merit Order effect, which is a ranking system utility companies use to decide which energy generator to employ (in real-time) throughout the day and night.

In fact, distributed energy is all about adding peak demand power to the grid — resulting in a stronger, more reliable power grid while displacing dirty energy in the process — and monetarily rewarding citizens for their surplus electricity.

Three islands powered by 100% Renewable Energy

by John Brian Shannon.

One of the best ways to measure the successful application of renewable energy are on those islands which are not connected to any other electrical grid.

Getting mainland grid power to islands can be an expensive proposition, making it impossible for many islands to receive electricity from the mainland. In the past, islands survived (or subsisted) on expensive diesel power units and obscene quantities of diesel fuel, in order to provide electricity for island residents. Rarely was any kind of renewable energy employed except for some Pacific islands that burned relatively small quantities of coconut oil or palm oil in their diesel generator.

However, islands now have the choice between clean, renewable electricity generation and diesel generator power. Solar power and wind power are the two main ways to have renewable energy on islands, but biomass and in some places, geothermal can provide residents with reliable electrical power.

Renewable Energy Powers At Least Three Populated Islands

At least three populated islands exist in the world that can legitimately be called ‘100% powered by renewable energy’ and more are soon to follow, as islands can now significantly benefit from renewable energy.

Samsø Island, Denmark. A 100% Wind Powered Island

Samsø Island, Denmark. A 100% Wind Powered Island

Samsø Island, Denmark is a 100% wind-powered island whose 4100 residents receive all of their electricity from 21 wind turbines and are able to sell their considerable surplus electricity to the rest of the country via an undersea cable system.

Note, Samsø does not import electricity from the mainland grid, rather, they export Samsø Island’s renewable energy to the mainland.

In less than ten years, Samsø went from producing 11 tonnes of carbon dioxide per person per year — one of the highest carbon emissions per capita in Europe — to just 4.4 tonnes (the U.S. is at 17.6), and has proven that running on 100 percent renewable electricity is possible.

The island now heats 60 percent of its homes with three district heating plants running on straw, and one which runs on a combination of wood chips and solar panels. People outside of the heating plants’ reach have replaced or supplemented their oil burner with solar panels, ground-source heat pumps, or wood pellet boilers.

Eleven onshore wind turbines provide 11 megawatts of power, enough to power the entire electrical load of the island (29,000 MWh per year). And 10 offshore wind turbines produce 23 megawatts, enough to compensate for the carbon dioxide emissions generated by the island’s transport sector.

This was all accomplished within eight years, two years ahead of schedule. — Rocky Mountain Institute

Tokelau, South Pacific is an island nation made up of three tiny atolls which has been powered by 100% solar power since October 2012.

Previous to that, the Pacific nation was powered by diesel generators which frequently broke down and cost $800,000 per year just for fuel. That is quite a burden for a nation whose population amounts to a grand total of 1500 citizens.

Tokelauans only had electricity 15 to 18 hours per day. They now have three solar photovoltaic systems, one on each atoll. The 4,032 solar panels (with a capacity of around one megawatt), 392 inverters, and 1,344 batteries provide 150 percent of their current electricity demand, allowing the Tokelauans to eventually expand their electricity use.

In overcast weather, the generators run on local coconut oil, providing power while recharging the battery bank. The only fossil fuels used in Tokelau now are for the island nation’s three cars.

New Zealand advanced $7 million to Tokelau to install the PV systems. But with the amount of money saved on fuel imports — the system will pay for itself in a relatively short time period (nine years with simple payback). — CleanTechnica.com

Iceland has produced 100% of its electrical power from renewables since 1980. The country’s hydroelectric dams provide 74 percent of its electricity — geothermal power produces the remaining 26 percent. Some wind turbines are now being installed to meet anticipated future electrical demand.

The aluminum industry was attracted to Iceland to take advantage of the low renewable energy electricity prices on the island nation, which provides an economic boost to Iceland generally, and employment for some Icelanders.

Despite a land area of 100,000 km², only 300,000 people inhabit the island, two-thirds of those in the capital Reykjavik. Yet, Iceland shows what can be done when a nation puts its mind to the task of eliminating fossil fuels.

Until the extensive development of the island’s hydro and geothermal resources, the country was dependent upon coal and oil for providing transportation, fueling its fishing fleet, and heating its homes.

The latter is not something to take lightly in a nation just south of the Arctic Circle. Iceland’s older residents can remember a time when coal smoke, not steam from the island’s famed [volcanic] fumaroles, shrouded the capital.

Iceland is a leader in geothermal development and exports its technical expertise worldwide. The country, along with the Philippines and El Salvador, is among countries with the highest penetration of geothermal energy in electricity generation worldwide.

On a per capita basis, Iceland is an order of magnitude ahead of any other nation in installed geothermal generating capacity. — RenewEconomy.com.au

Perhaps moreso than anywhere else, island residents can reap the benefits of renewable energy. The high cost of shipping fossil fuels to islands, not to mention the high cost of the fossil product itself, can make the transition to renewables an economic and environmental benefit for island residents.

Other 100-percent-renewable-powered islands include Floreana in the Galapagos (population: 100) and El Hierro in the Canary Islands (population: 10,000+).

Islands with 100-percent-renewable-energy goals include: Cape Verde, Tuvalu, Gotland (Sweden), Eigg Island, Scotland, and all 15 of the Cook Islands.

By switching to renewable energy, island nations reduce their reliance on imported fuels, keep money in the local economy, provide their residents with reliable power, and lower their carbon emissions. They can also serve as “test beds” for adoption of new technologies and models of what can happen on a larger scale.

And island nations are helping us learn what needs to be done. —  Laurie Guevara-Stone.

Wind Power Setting New Records in Asia

by John Brian Shannon.

Global Wind Power Capacity Set to Rise

In recent years, about 100,000 MegaWatts (MW) of wind power have been installed every three years, globally. As wind turbine technology and production facilities have ramped up, turbine costs have fallen significantly — resulting in a predictable demand curve.

The U.S. and China are by far, the world’s major players, with Germany, Spain, and Japan holding respectable positions in capacity and in turbine technology. As China entered the game, their massive manufacturing sector went into overdrive to meet expected demand. Some countries, (like the Netherlands) licensed their advanced turbine technology to China which worked to further speed production and installations inside the Middle Kingdom.

Huge increases in turbine supply, have resulted in huge increases in installations. The supply/demand result displays brilliantly in the chart below.

World Cumulative Installed Wind Power Capacity 1980-2012
World Cumulative Installed Capacity 1980-2012. Image courtesy of the Earth Policy Institute.

Looking at the chart, is there any doubt that the brisk pace of turbine installations will continue? Barring localized disruptions due to changing regulations or lowering of regional subsidy schemes, it looks like 100,000 MW will be added to the world grid every three years until 2020 at the very least.

Wind Power Ready for Takeoff in Asia

A recent Global Wind Energy Council (GWEC) report informs us that 2013 was a relatively ‘slow year’ for turbine installations with only 12.5% global growth over 2012 numbers. Most of the blame for this rests on the ‘on again — off again’ uncertainty surrounding the expiration of the PTC (Production Tax Credit) in the U.S. which was responsible for severely limiting the number and size of installations in that country.

Except for America, most of the world saw growth in turbine installations for 2013. China, especially, took off at a full gallop,beginning 2013 with 75,324MW of installed wind power and adding another 16,100MW by Jan 1, 2014 – amounting to almost half all new wind power installations worldwide! Installed capacity in China now totals 91,424MW leading the GWEC to speculate the country’s wind industry may be entering a new phase of maturity.”

China has embarked on the greatest push for renewable energy the world has ever seen. A key element involves more than doubling the number of wind turbines in the next six years. Already the world’s largest producer of wind power, China plans further massive increases. From a current installed capacity of 75 GigaWatts the aim is to achieve a staggering 200 GigaWatts of installed wind power by 2020.” — BBC

Wind surpasses Nuclear in China in 2013

At 2% of total electrical power generation in China wind surpassed nuclear (1.2%) last year, to become the country’s third-largest generator of electricity, after fossil fuels (all fossil fuels together total 78.2%) and hydro-electric (18.5%).

By 2020, even accounting for the growth of all other kinds of energy in China, it will represent 4% of total electrical generation. Which doesn’t sound like much, but it is a staggering number in itself, especially when compared to the rest of the world’s turbine installations combined!

What can renewable energy investors expect 2014-2020?

Plenty of growth for one thing. Better turbine technology and enhanced reliability, for another. More focus on so-called ‘wind corridors’ — those areas within a country’s boundaries where it happens to be most advantageous to place each turbine — yet close enough to electrical demand centres to be economical. Dramatically increased efficiency due to placing the turbine unit atop taller towers in the 200-300m range. Falling turbine prices will continue, courtesy of the massive entry into the global turbine market by China. And, turbine technology improvements and installations will continue at a rapid pace within China, and at a steady pace globally.

Perhaps the final word on the state of the industry in 2014 should go to David Shukman, the BBC’s science editor: “If any country can industrialise wind power and make it pay, it’s China.”

China Drops Subsidies, still Smashes Solar Records

by John Brian Shannon

China solar power record-setting installations in 2013, were mostly 'Distributed Energy' installations. (Rooftop solar PV)
In 2013, 2014 and 2015 China ramps up solar PV production/installation to unprecedented levels and drives toward unsubsidized, distributed energy solutions.

China surpasses all of its Renewable Energy targets (twice!)

In July of 2013, it was announced that China planned to add an unprecedented 10 GigaWatts (GW) of solar power per year for each of the next three years, (starting from FY 2013) for a grand total of 30 GW over 3 years.

But by October 2013 China’s solar target had been upped to 12 GW — and now in February 2014, while they are still doing the final counting, China’s total installations might well surpass 14 GW for 2013 — and yet another 14GW is planned for 2014 (for a total of 28 GW in only 2 years).

(Prior to China’s aggressive solar installation programme, Germany held the world record at 7.6 GW in 2011)

“The 2013 figures show the astonishing scale of the Chinese market, now the sleeping dragon has awoken.”

“PV is becoming ever cheaper and simpler to install, and China’s government has been as surprised as European governments by how quickly it can be deployed in response to incentives.” — Jenny Chase, head of solar analysis at Bloomberg New Energy Finance.

Distributed Energy leads the charge

Officials from China’s National Energy Administration (NEA) said that two thirds (8GW) of China’s 2014 target would come from the rapidly growing segment known as ‘Distributed Energy’ — installations comprised of small-scale arrays usually mounted on rooftops — or when not mounted on rooftops, are otherwise situated very close to electricity demand centres.

It is interesting to note that strong Chinese (14GW in 2014) and Japanese (7.2GW in 2014) solar PV demand will account for 40-45 percent of all 2014 global installations and that 2/3rds of that is expected to be small-scale, distributed energy.

Almost every week, new distributed energy sites are being announced in countries around the world. This one, announced in October 2013, is a typical installation at 120 MegaWatts in Zhenjiang, China. Click here to read more on that story.

Distributed energy will become the fastest-growing part of the solar market in China, Japan, Thailand and many other countries in 2014. Further, China continues to scale back on subsidies and incentives as the Chinese government increasingly sees solar PV as a mature industry, running near grid-parity in the country and capable of competing without government intervention.

Subsidies for Solar PV to virtually disappear by 2015

The biggest PV news in 2014 will be sustainable and unsubsidized solar power markets.

“With PV costs falling and traditional energy prices rising, there could be some 700 MW of unsubsidized PV announced worldwide.”

“While government subsidies and incentives have traditionally fueled the early growth and adoption of solar power, the recent scaling-back of these policies has left PV increasingly going solo – the signs are good, though, that the market might well be ready to take flight unassisted in 2014.” — PVmagazine.com

The Chinese ‘Year of the Horse’ will happen at full gallop

All in all, 2014 looks set to become a momentous turning point in the global PV industry, especially as Japan and China ramp up production/installation to unprecedented levels and drive towards unsubsidized, distributed energy solutions — and with no shortage of eager customers.

For very different reasons — Japan replacing it’s lost capacity due to the Fukushima meltdown and their citizens’ subsequent turn away from nuclear and China working towards improving their urban air quality — the future for solar PV and distributed energy in the Asia region looks very bright indeed.

See also:

China Opens A Window of Opportunity 2014-2020

by John Brian Shannon.

Three Decades of GDP Growth

After three full decades of impressive GDP numbers, China’s strong growth looks set to continue until the end of the decade.

Never in history has any country accomplished such staggering GDP growth numbers, modernized its infrastructure, oriented its political structures to accept a minimal degree of capitalism, and carry the demands of 1.35 billion people.

Let’s take a look at China’s 1979-2013 GDP numbers.

China GDP growth 1979-2013. Image courtesy of the IMF.

China is now enjoying stable growth rates. In short, as China’s economy has matured, it has successfully transitioned from a Frontier economy to an Emerging economy — and with plenty of momentum in hand, has settled-in to the long-term task of building a Developed economy.

For those willing to engage with China there is the potential for substantial reward, and as in any emerging economy, an element of risk is associated with investing there. In the case of investment or corporate relocation to China, responsible leaders and individual investors alike, are wise to seek the guidance from experienced professionals as they navigate several cultures and languages and the various levels and departments of a (still) communist government.

Focus on Planning

Fortunately, statist economies like China’s are centrally-planned in five year cycles, and for the most part these five year plans are released, translated, and then published by the media.

For one example of China’s long-range planning, in this case regarding China’s aggressive energy, renewable energy and conservation policies, please see: CHINA – Atmospheric Pollution Prevention Action Plan – State Council on the issuance of air pollution control action plan notification – Guo Fa 2013, No.37 [English Translation]

For a summary of that official document, please see: China’s new Atmospheric Pollution Prevention Action Plan

Addressing the Source

One of China’s most pressing problems is the quality of life for her citizens, the absence of which can affect overall citizen satisfaction and even worker productivity.

The poor air quality in China, which reportedly leads to 410,000 premature worker deaths per year, has been addressed with a huge push towards renewable energy. The Common Language Project (clpmag.org) provides a telling snapshot:

“China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth.

Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel.

It has been estimated that 410,000 Chinese die as a result of pollution each year.

Deforestation and desertification are also issues and an estimated one-fifth of agricultural land since 1949 has been lost to soil erosion and economic development. The country is also host to the trade of endangered species. The country’s rivers constitute the largest potential source of hydropower in the world.

Since 2007, China has stepped up government efforts to work toward environmental sustainability by holding local officials to national standards, publishing national climate change policies and establishing groups on climate change.” — clpmag.org

Measurable Results

To say China’s leadership has posted an aggressive response to air pollution, water pollution, soil contamination and the follow-on effects on citizen health and the economic costs of widespread pollution is a verifiable understatement.

In only a few years, China has surpassed wind and solar PV leaders Germany and the U.S. in the production and installation of wind turbines and solar panels and increased energy efficiency.

Announced in July of 2013, China’s National Energy Administration told the media that they expected to install 10 GW of solar by year end of 2013, another 10 GW of solar to be installed in year 2014, and yet another 10 GW of solar to be installed in year 2015.

While many nations were installing mere MegaWatts (MW) of solar or wind power in an effort to ‘look green’ — China’s energy officials said that although they had planned to install 10 GW of solar power in 2013, China may have surpassed that target by a full 4 GigaWatts for a grand total of 14 GW of solar installed in year 2013!

It was later announced that 12 GW would be installed in year 2014, and it has been reset once more to 14 GW of solar PV power to be installed in year 2014.

The latest pollution reduction measures announced in China now point to increased spending on energy efficiency and a commitment to the installation of 14 GW of solar panels in 2013 (already done), another 14 GW in year 2014 (in progress) and yet another 14 GW for 2015.

Now that’s an active pollution management file.

Energy news is never boring in China — so stay tuned!