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A friend of mine participated in the Second-Annual State of the Electric Utility survey. He also shared with me the results of the 2014 survey, which tabulates the opinions of more than 500 electric-utility professionals on the subjects of demand growth, distributed generation, power supply, regulatory models, and a number of other electricity-generation, transmission, and distribution-related issues.
Distributed Energy Generation
For those of us interested in solar energy, all the issues are important, but none more so than distributed generation. This is where, for example, a community rooftop solar project provides energy close-at-hand for the community’s homes, rather than homeowners buying electricity from an investor-owned utility.
Sounds great, doesn’t it? Generating power on-site, instead of buying it from Company A, results in lower costs and fewer inefficiencies, notes one energy firm.
Consumers must agree, because residential or community solar installations in the first three-quarters of 2014 totaled more than 100 megawatts — all without any state incentives!
The loss ratio mentioned above, estimated at up to 6 percent of the total electricity transmitted on average for the entire nation (2012 figures reported in 2014), seems very small, but it depends not only on the age of the lines themselves, but the distance from the generating plants(s) that the electricity has to travel.
In very extensive territories like the Midwest ISO, outliers might experience significant losses in very cold or very hot weather, or when infrastructure is old. In other words, they (and you) pay for electricity that might never reach them.
Fortunately, electricity line losses seem to have dropped across the board since 2012. Of course, so has generation, as commercial and residential energy efficiency measures lighten the electricity load for generators, and more and more homeowners install solar photovoltaic (PV) or solar thermal (hot water) to offset the cringe-making cost of electricity.
Many industry experts feel this is the perfect time to introduce distributed generation in the form of solar energy.
Not only have the cost of solar panels, and installation plummeted, but further reductions are seen for 2016 and beyond, once the numbers are in. In fact, according to the National Renewable Energy Laboratory, or NREL – one of 12 U.S. Department of Energy (DOE) labs working on energy, renewable energy, energy storage and the like — solar PV system prices fell below $0.65 per watt in 2016, compared with $0.74 per watt a year ago and $4 per watt in 2008.
Bottom line? That Holy Grail of solar energy – grid parity with fossil fuels — is achieved in several of those states providing solar incentives.
Add net metering and creative financing, and solar now looks like a sure shot to reduce America’s dependency on fossil fuels, both foreign and domestic, along with all the pollution (like fracking and shale oil extraction) generated by those fuels.
Most utility executives view solar grid parity and consequent distributed generation as a mixed blessing. In public, they tout it as an opportunity. In private, they discuss the threat to the traditional utility model that it represents, and in boardrooms, that threat — among coal, oil, or even nuclear-centric utilities — becomes the 2,000-pound gorilla of energy generation.
Most agree, however, that utilities should jump on that distributed-energy bandwagon and take a direct role in supplying their ratepayers with same, either via ownership of the panels (and leaseback to customers) or by partnering with companies vested in distributed generation.
Both of these, properly managed, represent modest revenue sources to an industry that has traditionally been viewed as “slow but steady” in terms of financial gain.
Other technologies that make utility executives nervous are demand-side management, or DSM, and energy storage.
The first, which aims to reduce power requirements through efficiency measures, “smart meters”, and customer-centric cutbacks rather than building more generating plants, has already succeeded in reducing U.S. electricity demand by 0.9 percent (from 1992 to 2006), and by 1.8 percent over all years.
Energy storage, still in its infancy, has created molten salt (or oil) storage for large solar thermal facilities and lithium batteries for smaller-scale energy storage, but the DOE’s labs are busy investigating a number of options and inventions, and will likely come up with some novel advances before the decade is over.
In essence, solar energy’s future is clear, and the only way to go is up!
Photo by Flickr/Intel Free Press
Jeanne Roberts is a writer at Understandsolar.com.
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