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The EPA, through the Clean Power Plan (CPP)[1], is in the process of setting Greenhouse Gas (GHG) emissions rates for each state electric power sector. This is part of a larger effort, executed by President Obama's Climate Action Plan (CAP)[2], to cut US GHG emissions by 30%, relative to 2005 emissions, by 2030. The emission rates are  based on the carbon intensities of each states power sector. They are calculated by dividing the GHG emissions(lb of CO2) of all electric generation unites (EGU), by the electricity generated (Megawatt hours) from all   EGU's (fossil, renewable and nuclear), plus an energy efficiency adjustment. The percent reduction in emission  rates, for each state, range between -72% for Washington, to -11% for North Dakota. At first glance these reductions look very intimidating, however if you dig into the CPP you will find the EPA has based the reductions  on a solid economic foundation of improved efficiency, by implementing current best practices. The reductions arebased on individual characteristics of each state EGU's, by which EPA determines the potential of each state to improve its emission rates. The EPA offers four potential paths to achieve the reductions. Improving efficiency  of existing EGU's, changing from coal EGU's to gas EGU's, increasing renewable's and nuclear, and improving end-use energy efficiency.

Power producers and consumers will both benefit if these methods are used to reduce emissions, because they willimprove over all efficiency and take advantage of new cheaper sources of energy. Basically, if state utility commissions are not currently pursuing these goals, they should be, and all the EPA is doing is helping them see the light. In fact the CPP approach is so practical you begin to wonder if more could be done to reduce CO2 emissions in the power sector, considering the challenge the World faces in reducing CO2 due to climate change. This becomes even more apparent when you look at what other large industrial countries, including China[3], have been doing, and are planning to do in confronting climate change[4,5]. One of the most visible examples of the impact that international efforts are having is the precipitous drop in the cost of Solar Photovoltaic systems (PV). This drop has largely been driven by an increase in demand, initially in Europe[6], but now the World[7], and increased economy of scale in production, particularly from China[8]. 

This process has been so impressive that anybody familiar with what has been happening, in the power sector, must begin to think that something big is about to happen[9]. Something in which if you do not pay attention,   you may be left behind. This happening is not just about PV, but is touching every aspect of the power sector, potentially shaking its foundation, and literally turning it up side down. Will there be a tipping at which there will be a wholesale adoption of these technologies, similar to what happened with mobile phones? To a certain extent wind and solar are already there, because their cost are both competitive with traditional forms of power generation[10].

To understand what is happening one needs to appreciate the history of the development of electric power, including both its great achievements and failures to provide electricity to the people. A great source of this history is Phillip F. Schewe's book "The Grid: A Journey Through the Heart of Our Electrified World", February 20, 2007, Joseph Henry Press, Washington DC. Phillip, provides a captivating history of electric power and the grid, from the battle of the currents, between Edison and Tesla, to the Great Northeast Blackout of 1965 and the breakdown of Big Allis, the worlds first Million-Kilowatt generating unit. One of the main points of the book is that, with Tesla's and Westinghouse victory of AC current over Edison's DC current, the grid developed from highly centralized power plants, such as Big Allis, and large scale hydrology projects, such as Niagara Falls and the Tennessee Valley Authority. However, this highly centralized system eventually became a liability, increasing the chance of catastrophic failure, such as in 1965. This top down approach, to development of electricity production and the grid, has had an even greater impact on the availability and reliability of electricity at the International level. Many people in the world still do not have access to electricity, and many more people who have access do not have it reliably. This cost of buying into the top down approach is just too great.

This is all in the process of changing largely due to the incredible drop in the cost of Solar PV, improved energyefficiency, development of micro grids, and improvements in electricity storage. These changes enable bottomup, highly distributed, energy production and transmission. The cost of investing in electricity can be as littleas the cost of a small solar panel, which makes it feasible for microfinance investments. Electricity infrastructurecan grow bit by bit, as the financial capital becomes available, first with Solar PV and thermal, then battery  storage and finally micro grids. Of course there will still be investments using the old top down approach, butthe reliability of those types of systems will benefit from the bottom up approach. All of this makes it a no  brainer for developing economies to embrace the bottom up approach, and this in turn will assure that this approach will grow, continue becoming less expensive and more effective.

It is also a no brainer for developed economies to use the bottom up approach, although the need for it is not as evident. Historically, renewable's such as solar and wind were seen as not reliable, due to their intermittent nature. However, as the cost of renewable's have dropped and the government has offered subsidies, significant  amounts of renewable energy, from solar and wind, has been developed. This is requiring power utilities to takecloser look at how best to manage them, which is leading to some new interesting insites.

During summer months, in the United States, peak energy use is driven by air conditioners[11]. Over a day much of the period of high energy use coincides with the optimum time for solar energy production[12], so solar PV has become very effective at reducing much of the demand for energy caused by air conditioning. However, peak energy use occurs between 3:00 and 7:00 PM, when solar energy is declining or not available.  In California, this has created a problem referred to as the Duck's Back, in which the grid experiences a steep increase in energy demand due to decline solar energy as peak energy usage occurs, create a shape thatlooks like a Duck's back[13].

The most important thing to understand about this graph, is that it has nothing to do with the CPP, wherethe EPA suggest a few percent increase in the use of renewables[14]. The second most important thing to  understand is that a decade ago if you said we were going to have this problem you would have been called naive, or even a nut. It is a great example of how economy of scale can impact the cost of new technology. One of the most astonishing things about this problem is that it offers utilities a great opportunity touse their transmission lines, with high efficiency, in the middle of the day. One of the most obvious usewould be to charge thermal storage devices, such as Ice Bear[15], which would reduce cooling demands later in the day. Another possibility would be to use inter-regional power exchanges to transmit extra energy, produced from solar, to other parts of the country. The continental US has four times zones, so moreEastern zones could transmit electricity to more Western zone in the morning, and Western zones could do the opposite for Eastern zones in the evening.

Inevitably, the boom in intermittent renewable energy production will lead to greater investment in electricalstorage. Historically, electrical storage has been dominated by large scale pumped hydro, which is restrictedto areas with enough relief to make it possible. This is changing with the development of large scale Geological compressed air storage[16], and cost reductions in large flow batteries[17]. However, the real revolution isaffordable batter storage. Recently, this got a lot of news, thanks to Elon Musk and Tesla's announcement thatthey were building a "gigafactory". The gigafactory gets its name, from its planned yearly battery cell production capacity of 35 gigawatt-hours[18]. To appreciate this economy of scale, that is greater then the total global production in 2013. This level of investment in lithium battery production, is encouraging greater investments in developing new techniques to extract lithium at lower cost[19]. Other companies are pursuing this technologyas well, developing batteries specifically for the power sector[20]. All of this increased investment, in electricity storage, is causing a dramatic decrease in the cost of batteries[21], as well as other forms of electricity storage. It is starting to look like the same thing that happened to the cost of Solar PV. If thishappens, then a true Revolution is in process!

References

  1. http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule
  2. https://www.whitehouse.gov/share/climate-action-plan
  3. http://www.cccep.ac.uk/newsAndMedia/Releases/2015/NewstudyfindsChinasemissionslikelytopeakby2025.aspx
  4. http://www.dena.de/en/topics/the-energy-turnaround-shaping-the-new-system/systematic-and-well-planned-renewable-energy-expansion.html
  5. http://ec.europa.eu/clima/policies/eccp/index_en.htm
  6. http://www.theguardian.com/environment/2015/jun/09/record-boost-in-new-solar-power-continues-massive-industry-growth
  7. http://www.pv-magazine.com/news/details/beitrag/world-to-add-57-gw-of-solar-pv-in-2015--says-ihs_100018839/#axzz3fDjMvpyh
  8. http://www.forbes.com/sites/greatspeculations/2014/04/30/the-state-of-the-chinese-solar-market/
  9. http://opinionator.blogs.nytimes.com/2013/09/11/the-next-wireless-revolution-in-light/?_r=0
  10. http://www.nytimes.com/2014/11/24/business/energy-environment/solar-and-wind-energy-start-to-win-on-price-vs-conventional-fuels.html
  11. http://blog.opower.com/2012/09/hot-and-heavy-energy-usage-how-the-demand-and-price-for-electricity-skyrocketed-on-a-100-day/
  12. http://energystorage.org/energy-storage/technology-applications/distributed-grid-connected-pv-integration
  13. http://www.caiso.com/documents/flexibleresourceshelprenewables_fastfacts.pdf
  14. http://www.epa.gov/ttnecas1/regdata/RIAs/111dproposalRIAfinal0602.pdf
  15. http://www.raponline.org/featured-work/teach-the-duck-to-fly-integrating-renewable-energy
  16. http://www.sciencedaily.com/releases/2013/05/130520142823.htm17
  17. http://mitei.mit.edu/news/new-rechargeable-flow-battery-enables-cheaper-large-scale-energy-storage18
  18. http://www.treehugger.com/cars/teslas5-billion-gigafactory-looks-even-cooler-expected-22000-jobs.html
  19. http://www.nytimes.com/2014/03/17/business/energy-environment/lithium-producer-chases-teslas-bold-battery-plan.html?ref=business
  20. http://www.renewableenergyworld.com/articles/2014/10/from-ashes-to-energy-1-billion-alevo-battery-factory-surges-one-the-scene.html
  21. http://blog.rmi.org/blog_2015_06_11_tesla_hitting_the_battery_accelerator

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