Cleantech Finance Insider

Is There Too Much Renewable Energy?

Some of you may have seen an article in the NY Times last week addressing the speculation that the growing integration of renewables in general, and wind power in particular may be creating big problems for the utilities that run the electric power network in the future.

This is not the first time the issue has come up.  In fact, it was a particular area of interest and study back in my days as a researcher at Pacific Gas and Electric during the 1990's.

In recent years I've seen many technical articles and whitepapers addressing the concern.  To grossly oversimplify, there are circumstances whereby the generators on the wind turbines (if you have enough of them) are thought to be able to adversely interact with the grid to drive voltages and or frequency out of allowed tolerances, causing a big outage.

One analogy might be watching a new driver learning to handle the clutch pedal.  In the fits and starts of applying and removing gas to the engine and torque to the wheels, it is possible to kill the motor. "Killing the motor" of the grid should be avoided!

Some Canadian utilities have put a temporary upper limit on how much wind power they'll accept. Others around the world are considering the same. I recently had a chance to speak to an old colleague, a transmission system engineer from my PG&E R&D days.  He currently works for the the State of California and spends a lot of time studying these problems.  With California's aggressive plans for renewable energy integration, it is clearly a question that needs to be answered.  "What WILL happen when we put all of this renewable energy into the grid?"

His reply surprised me. It seems that integrating big wind farms into the transmission grid is not a big concern in California.  The ability to predict output from wind farms is pretty good on an hour by hour basis with relatively little minute-by-minute changes. The system operators have good telemetry on those sites. The types of problems that might be caused by adverse interactions between the generators and the grid are well understood.  There are readily available devices that can be put at the interconnection point to mitigate for any such interactions.  In short, it is an engineering problem with engineering solutions.

What startled me was he went on to say "I'm more concerned about is what happens when all of Gov. Schwarzenegger's million solar roofs come on line."  He added, "no one at the utility knows where they are.  The distribution system has very little telemetry. Solar power output can quickly and dramatically change with cloud cover. The distribution system has always been hard to model with its inherent  complexity of customers, branches and interconnections.  Now with the introduction of thousands of "hidden" generators, we don't have a good handle on if or how it may cause problems.  I don't THINK that there is a problem with distributed PV, but we know that we need to keep an eye on this issue."

Somewhere, out there, a PV developer-entrepreneur is reading this, shaking his fist in the air and yelling "FEAR ME, utilities!"

Plug-In Vehicles - Part II

While I pointed out yesterday that EVs can cause some serious problems for utilities and their distribution systems, they nonetheless have and continue to be proponents of the technology. As EV's begin to make inroads into the private automobile market, utilities will have to move from conceptual advocates and come to grips with its realities for them. They will basically have two ways to respond. The generation side will see this as a politically correct load building opportunity and hope for a way to accommodate it. The distribution part of the utility will see reliability numbers (and their bonuses) going down and will want to dig in their heels.

Utility regulatory agencies and governing bodies could break this dilemma by authorizing broad capital projects to reinforce the distribution system to withstand the new loads. But that means higher rates for customers. Raising rates, even for the best of reasons, is dangerous for elected or politically appointed executives.

How will it end? I can’t say for sure. The technology of EVs is developing faster than the policy around implementation. My best guess is that like new medicines, some places will approve distribution system reinforcement spending sooner than others. Will it be fast enough to support the emerging companies developing such cars? I have my doubts. Like FDA drug approvals, utility and regulatory policymakers can be agonizingly slow to move. As a venture investor and project financier, I'm wary of markets with such prospective serial gatekeepers.

I'll keep my powder dry for now.

Plug-In Vehicles - Be Careful What You Wish For

There is an awful lot to like about plug-in or plug-in hybrid vehicles. Their high efficiency directly addresses both the geopolitical problems of fossil fuels and are low in green house gas emissions. So what's not to like?

Well, how about freezing in the dark (or if you are in California, sweating in the dark)?

One of the greatest potential train wrecks around renewables is in the area of electric vehicles (EVs). The conventional wisdom is that utilities should like EVs (or plug-in hybrid EVs, PHEVs) because they will generally be recharged by the owner upon his arrival at home, after the peak generation demand has past. It would appear to be a win-win-win. Utilities get some off-peak sales, owners get economical transportation, and the nation lessens its demands for imported oil.

The problem is that local neighborhoods and whole suburbs do not draw their peak demand during the day. Most people are at work then. Their homes draw maximum demand upon their return. They turn on the air conditioning, start cooking, and get a load of laundry going. And soon, plug in their cars. Just because there is generation capacity 100 miles away, it doesn’t mean that the local substations or even the lines and transformers out on the distribution system can handle this new load.

I've seen some studies that say the average electric vehicle will DOUBLE the peak demand of the average home that recharges one. Further, they also say that demographically, EV ownership is expected to be clustered in certain neighborhoods. So not only will we see pole top transformers going off like roman candles, but we can expect to have to reinforce entire feeders and substations as well.

So how will this all come our? Tomorrow, I'll describe what I think the big, difficult choices will be for utilities and their regulators as the EV wave continues to gain momentum.