The Power Industry's Spring Fever

As I write this column at the beginning of spring, I have two kinds of spring fever: excitement about warming temperatures that bring spring flowers and the “hay fever” caused by tree pollens. I have mixed feelings about spring. I mention this only because the power industry is experiencing a spring fever of its own.

Aside from the familiar feverish activity of routine spring maintenance outages at many plants, there’s a lot happening in the industry that could be seen as spring-like, including the emergence of new technologies; the re-emergence of perennial technology improvements; the development of new market mechanisms at state, system operator, and federal levels; and new types of power project developers. Our cover story set this month addresses many of those developments.

These are all positive, hopeful signs for many stakeholders in the electricity sector, while they are akin to allergens for others. Hay fever allergens, as I’m sure you know, are very small airborne agents, typically pollens, that can cause nasal and other types of distress way out of proportion to their size. Luckily, allergens are only a problem if you have a sensitivity to them. Just as different people have sensitivities to different allergens, businesses in the electricity sector vary in terms of what they are sensitive to—and to what degree.

Industry Allergens

For many industry incumbents, the increasing dispersion of distributed generation and energy storage, especially when not owned by traditional generating companies, is looking like an allergen.

One notable development this spring was the announcement by SunEdison on Mar. 5 that it would be the first renewable energy company able to offer wind and solar generation as well as storage to utilities and end users worldwide. Though the company’s press release did mention the role of storage in grid integration of renewables, it also mentioned “emergency back-up power from storage.” You don’t need much experience in reading between the lines to see this as a possible model for utility and grid defection. In related news, a report from Rocky Mountain Institute, The Economics of Grid Defection, finds that, thanks to grid-connected solar-plus-battery systems, within 15 years, “the Northeast U.S. alone faces a maximum possible load defection of ~58 million MWh annually or 50% of utility residential [kWh] sales, 9.6 million customers, and $15.4 billion,” according to a March press release. (An open question is how much storage a residential rooftop solar customer in a “triple-decker” residence would need to ride out the more than 100 inches of snow and accompanying cloudy days that Boston faced in February.)

On Mar. 16, SolarCity made arguably bigger news than SunEdison concerning distributed power when it announced that it would begin offering microgrid services worldwide. Microgrids themselves are not new. However, most existing microgrids have been one-off enterprises, typically developed for a specific academic, medical, industrial, or military site. What makes SolarCity’s proposition different is that its GridLogic microgrid solution promises a service that delivers all the parts—“solar, batteries and controllable load.” (Note that a diagram of the system also includes a “backup generator.”)

Given that integration of the various components of a microgrid has proven to be one of the stickiest problems for developers, this microgrid-as-a-service approach should, at least theoretically, be attractive. SolarCity is targeting the traditional microgrid customers—remote communities, campuses, and military bases—as well as “municipalities,” promising to supply electricity to essential services in times of emergency. Though SolarCity has often overtly pitted itself “against” utilities, that may be more marketing ploy than reality, at least for now. The company notes that GridLogic can work “in conjunction with or independently of the utility grid.”

A New Flowering of Distributed Generation

For decades, POWER has focused on matters of concern “inside the fence” of central station power plants. There’s more than enough to keep us busy following business and technology developments around the world with that tight focus. Occasionally, we include news of major transmission and distribution issues or larger utility trends that reach as far as the end user, but that’s been rare. Over the past few years, however, that neat boundary has become increasingly difficult to keep in line. One reason for that is the proliferation of new distributed energy resources, including more-affordable energy storage options.

Though you can also find central station plants in the midst of load pockets, distributed generation’s predominant traits include small size and proximity to load. Though many today equate distributed generation with solar energy, especially rooftop photovoltaics, the category also includes engines and turbines fueled by fossil energy—and may some day include small nuclear generation. In many cases, distributed generation is popular with utilities because it is faster and cheaper to build than central station capacity. Its strategic use also can eliminate the necessity of building new transmission and distribution infrastructure. How utilities view this springtime of distributed generation and storage usually depends on how much control they have over its siting and revenue stream.

In some ways, one could argue that the current popularity of distributed generation is just a swing of the pendulum back to where we started—with smaller, “community power” facilities serving customers with locally available fuel: coal and water back in the day; gas, diesel, biomass, water, solar, and wind today. ■

—Gail Reitenbach, PhD is POWER’s editor.