Category Archives: Solar Energy

The Sun for a Penny

I recently presented at the Canadian Electricity Association (CEA) on the future of the industry. What would happen to the power industry if the cost to generate solar electricity reached 1¢/kWh? What could be the impact of a carbon tax? What are the business opportunities arising from the need for reliable power? While electric utilities have seen tremendous transitions during the 125-year history of the CEA, the current rate of development is unprecedented. To paraphrase a famous quote by Wayne Gretzky, utilities need to “skate to where the puck is going to be, not where it has been.” This presentation tried to provide power utilities with some insights into the future direction of the puck! See the presentation here: The Sun for a Penny 20170225a

The New Grid Needs to Be a Lot More Complicated

The Old Grid used to be relatively simple, with generation following load:

Old Grid

It is now a lot more complicated:

New Grid

The grid is transforming and getting more complicated.

  • We are decommissioning fossil plants to reduce GHG emission and nuclear plants because of safety concerns.
  • There is only so many rivers, so the solution of building new hydro plants is not sufficient.
  • We are then replacing fossil and nuclear base load plants with renewables that are intermittent.
  • To compound the problem of balancing the grid, loads are also becoming peakier, with reduced load factor. Interestingly, many energy conservation initiatives actually increase power peaks.
  • To connect the new renewable generation, we then need to build more transmission. The transmission network also allows network operators to spread generation and load over more customers – geographic spread helps smooth out generation and load.
  • Building new transmission lines face local opposition and takes a decade. The only other alternatives to balance the grid are storage … and Demand Management.
  • Another issue is that we are far more dependent on the grid that we used to be. With electrical cars, an outage during the night may mean that you can’t go to work in the morning. So, we see more and more attention to resiliency, with faster distribution restoration using networked distribution feeders as well as microgrids for critical loads during sustained outages.
  • Renewable generation and storage can more effectively be distributed to the distribution network, although small scale generation and storage are much more expansive than community generation and storage.
  • With distributed generation, distributed storage and a networked distribution grid, energy flow on the distribution grid becomes two-way. This requires additional investments into the distribution grid and a new attention to electrical protection (remember the screwdriver).

All of this costs money and forces the utilities to adopt new technologies at a pace that has not been seen in a hundred years. The new technology is expensive, and renewable generation, combined with the cost of storage, increases energy costs. There is increasing attention to reduction of operating costs and optimization of assets.

Utility-Scale Solar Report

I finally got around to read the US Department of Energy report on utility-scale solar energy (https://emp.lbl.gov/sites/all/files/lbnl-1000917.pdf) published a couple of months ago. Here are my highlights:

  • Installation trend is compelling. Installed capacity is now 30,000 MW – about 30 times more than 5 years ago.
  • Installation costs are falling – by more than 50% since the 2007-2009 period, the lowest-priced projects being around $2/W (AC).
  • Capacity factor is now improved to 27.5%. The main factors of this variation are, in order of importance: the strength of the solar resource at the project site; whether the array is mounted at a fixed tilt or on a tracking mechanism; the inverter loading ratio; and the type of PV modules used.
  • Power purchase agreement prices have fallen. Utility scale solar PPA is now as low as $40/MWh. At these low levels – which appear to be robust, given the strong response to recent utility solicitations – PV compares favorably to just the fuel costs (i.e., ignoring fixed capital costs) of natural gas-fired generation, and can therefore potentially serve as a “fuel saver” alongside existing gas-fired generation (and can also provide a hedge against possible future increases in fuel prices).

Evolution of Energy Generation and Distribution in Canada’s Smart Power Grid – Innovation 360 Conference Panel

On September 29, I was asked to participate on a panel titled “Evolution of Energy Generation and Distribution in Canada’s Smart Power Grid” at the Innovation 360 conference in Gatineau, Québec (http://innovation360.ca). Here is the essence of what I contributed.

By definition, in an electricity network, energy consumption plus losses equal electricity generation. This must be true at any point in time, or protection systems will shed load or trip generators.

There are 4 ways to balance load and generation:

1) Traditionally, dispatchable generators that can easily ramp up or down were tasked to follow the load. Big hydro plants and natural gas generators are particularly good at this. However, we are running of big hydro opportunities, and natural gas are sources of greenhouse gas emission, contributing to global warming.

2) Another way to balance load and generation is to interconnect with neighboring network that may not have the same load profile. Today, all of North America is interconnected in some way. However, building transmission lines is a lengthy process that typically faces major local opposition. As a result, most transmission lines run at capacity during peaks, weakening the bulk transmission system as the Northeast blackout of 2003 demonstrated.

3) In the last couple of decades, we have started to control load, like turning off air conditioning units by pager or getting large industrial like smelters to go offline for a couple of hours during a major peak. Time-of-use or market pricing are also attempts to have loads better follow available generation capacity. However, much of the conservation focus thus far has been on energy efficiency, not peak load reduction.

4) Very recently, energy storage has been getting attention. Traditionally, the only utility-scale storage technology available was pump-storage, like the Sir Adam Beck plant in Niagara, but few of those plants are possible, and they are not efficient. Going forward, batteries, either utility-scale or distributed storage, will grow, although for now utility-scale batteries are MW-class, when hundreds of MW or GW are needed.

Balancing load and generation is also becoming more and more difficult. On one hand, consumption is getting peakier, partly due to side effects of some energy saving programs, like turning down thermostats at night in the winter, and then turning them back up in early morning, just in time for the morning peak. On the other hand, wind and solar generators are replacing fossil generators, adding unpredictability to generation and taking away controllability, thus requiring even more balancing resources.

Integrating renewable into the grid is not only causing balancing problems. It also creates voltage management and protection problems. Those are solvable, but significant, engineering problems that require expensive upgrades to the electricity grid.

Ultimately, load and generation balancing, voltage management and grid protection adds costs that are ultimately born by subscribers. It therefore quickly becomes a political issue.

As a society, we have been subsidizing fossil fuels. Clearly, going forward, we will need to greatly invest in the grid if we want to limit the predicaments of global warming for our children and grand-children.