Powered by new developments in battery energy storage and renewables, microgrids are changing the utilities are operated in the U.S.
Electric utilities represent one of the deepest wells of capital flowing into American infrastructure.
This year, they will spend upwards of $122 billion – more many believe – reshaping how we light our lives and juice our cellphones.
As they go about this transformative stuff, and while the Trump administration wrestles with getting major new infrastructure efforts underway, you need to know about five trends that will profoundly reshape how we create and consumer electricity.
Here they are.
1. Energy Honeycomb – Microgrids
In Brooklyn a neighborhood is putting together a microgrid to push rooftop solar energy from one neighbor to the next. Sprinkle a little of cryptocurrency on it.
The New York Times reports, “the idea is to create a kind of virtual, peer-to-peer energy trading system built on blockchain, the database technology that underlies cryptocurrencies like Bitcoin.”
On Chicago’s South Side, a university has created a microgrid to kick its tires and show the coming crop of engineering students just how it works to save energy and keep the lights on when outages threaten.
In Puerto Rico and Australia, Tesla has pioneered putting in microgrids to deal with major power disruptions in the past year.
For a century, our electric grid has grown ever larger, with large electricity generating factories harnessing nuclear power and burning coal to create electricity.
But with mounting worry about cyberterrorists plotting to bring down our vast grid, and more violent storms stirred by climate change leading to power disruptions, a growing cadre of energy sector thought leaders see a solution in going small.
Rep. Tom Sloan of Kansas, a former utility executive, believes we are moving towards neighborhood microgrids. For instance, a shopping center could puts solar on its roof, installs large banks of batteries, and then hands off the power when it is not needed to homeowners.
Utilities and others are experimenting with linking small renewable power installations with batteries that could be isolated and function in an outage, while integrated into the larger grid when normal conditions prevail. First up for the microgrids are hospitals, police station and other vital urban centers.
At the forefront of the microgrid movement are business pioneers like Lawrence Orsini, the CEO of LO3.
“Today in Brooklyn we have about 60 prosumers who own primarily photovoltaics but also wind and combined heat and power units,” Orsini said. “Meters are installed, data streams into the platform. A virtual market is happening. We have about 800 consumers that are ready to either buy or sell energy as soon as we’re ready to allow them to. We’re in the last stages of conversations with the regulators in New York.”
“A shopping center could puts solar on its roof, installs large banks of batteries, and then hands off the power when it is not needed to homeowners.”
Mohammad Shahidehpour, professor of electrical and computer engineering at the Illinois Institute of Technology, has helped erect a microgrid around the school’s campus, armed with $13 million of support from the U.S. Department of Energy and the school’s Galvin Center.
It is stirring a lot of interest. “People are saying, ‘How do we do it?” he said.
Cities are eager to be on the microgrid frontier.
“The concept for a grid of microgrids brings together the strong value propositions of both independent energy eco-systems in harmony with a larger integrated energy network,” said Dr. Gregory Reed, professor at the University of Pittsburgh.
He heads up the university’s Center for Energy and the GRID Institute to work on just such themes.
2. Green Power Surging – Solar and Wind Power
Solar power and wind power turbines continue to expand their footprint across America’s energy landscape.
While the Trump administration recently pasted some onerous tariffs on imported solar panels in a bid to expand the fortunes of domestic solar companies, many industry observers say their impact will be noticeable at first – and then limited.
That is because the tariffs slacken over four years.
The importance of coal-fired generation and large baseload nuclear power plants continues to slip, largely as the result of an abundant supply of low-cost natural gas fired generation produced by America’s fracking revolution.
Equally important, the price of solar panels as well as wind power continues to decline sharply, making the green power much more prominent in a broader swath of America.
“Industry observers say solar panels’ impact will be noticeable at first – and then limited.”
Solar power, originally took off in California spurred by favorable policies, and the Southwest, because of the intensity of the sun there. Now solar is making inroads in the Southeast, as well as the mid-Atlantic and Northwest.
Growth will continue. Amory Lovins, the co-founder and chief scientist of RMI and adviser of energy executives, recently said that in America, “Renewables are a little ahead of schedule.”
As for future trends, government studies look for renewables to continue to surge.
Research into new renewable technologies continues apace in the private sector as well as at the U.S. National Renewable Energy Laboratory.
Dr. Martin Keller, NREL director, told Icons of Energy:
“Ongoing declines in the costs of advanced energy will continue to drive deployment of distributed technologies such as wind and solar. NREL’s grid modernization researchers are working to solve the challenges of integrating renewable power sources and emerging technologies with the grid—while ensuring that the grid is resilient and secure.”
One promising innovation on the solar front is the deployment of attractive solar tiles.
Tesla has just opened a new $750 million factory in Buffalo to crank out solar shingles.
Also on the horizon, Keller said, are new approaches to solar, such as perovskite solar cells. Perovskites could be inexpensive, with the potential to be manufactured in rolls spinning as fast as newspaper printing presses.
3. Putting Energy in the Bank – Energy Storage
Energy storage is the holy grail.
It will define the future of energy in America.
That is because it will play a pivotal role integrating into the grid a multiplicity of intermittent energy sources – such as solar power that is at peak production in sunny hours, or wind power that hums when the wind picks up.
Over the next decade, more than $22 billion will be spent deploying energy storage-backed solar systems, according to one recent study. America will have close to 5,000 megawatts of microgrid storage by 2026, according to the recent report by Navigant.
Dr. David Bodde, a member of the board of Great Plains Energy and professor at Clemson University, said, “Energy storage will be essential to deepen the market penetration of intermittent energy sources like wind and solar.”
Leading the charge in storage as diverse companies such as Tesla, the electric vehicle manufacturer.
Tesla has built a major battery factory in Nevada to produce batteries that link electric vehicles and solar power modules.
Utilities like Green Mountain Power are racing to put those storage units into the hands of customers.
“The real game-change is that it doesn’t look like your grandmother’s battery,” said Mary Powell, president and CEO of the utility.
Meanwhile, some visionaries believe that the utility of the future may be built primarily around energy storage.
One such company is German-based Sonnen, which aspires to get more active in the United States market.
Sonnen provides batteries to customers with installed solar and renewable energy generation that, together, provides about 65 to 70 percent of their electric power needs.
“The remaining power which a customer needs to buy from the grid he gets from us for free, so he is not paying money anymore to his utility,” said Christoph Ostermann, Sonnen co-founder and CEO.
Utilities that have been around for a century may be in for a competitive jolt from the fast-spreading capabilities of energy storage.
4. Plugging Gas Tanks – Electric Vehicles
Electric vehicles will inherit our roadways.
It is inevitable, say auto manufacturers as many American states and foreign nations demand that our transport fleet curb its emissions of greenhouse gasses responsible for climate change.
That means switching from gas to electric vehicles.
According to Bloomberg New Energy Finance, EV-related electricity consumption is projected to increase in the U.S. from the current 1 terawatt-hour — consumed annually by the 580,000 EVs sold in the U.S. as of February 2017 — to a whopping 33 terawatt-hours annually by 2025.
That is a 33-fold increase in the amount of electricity that will be filling the tanks of America’s vehicles in seven years.
Maria Pope, the president and chief executive officer of Portland General Electric, said, “Electricity is expected to grow to 51 percent of the energy sector by 2050, from 23 percent today – an enormous challenge and opportunity for our industry.”
“A huge portion of that growth will likely be driven by transportation electrification, with some predictions suggesting that from 30 percent to nearly 50 percent of all vehicles sold by 2040 will be powered solely by electricity,” she said.
When utilities have periods of peak demand – say while cars are parked outside offices – the utilities can sip some of their electricity, leaving enough for the car owner to make it home. He or she will be paid for offering the utility that flexibility.
Dr. Martin Keller, director of the U.S. National Renewal Energy Laboratory in Golden, Colorado, said, “The transportation sector in the United States accounts for 29 percent of energy use – moving people and goods from place to place. Electrification of our transportation sector, combined with autonomous driving, has many potential benefits.”
Many can now be imagined – greater energy efficiency, and a cleaner environment. Other unforeseen benefits will flow, Keller and others believe.
5. It’s Intelligence, Stupid – Data Analytics
The frontier of the energy revolution will be data – as utilities and startups get smarter about the future of electricity.
The electric grid of tomorrow will be a dynamic platform.
Across it, energy will be traded – across streets and across regions.
That energy will be “transactive” with the real-time price of the electrons embedded in the energy as it flows across transmission and distribution lines.
Michael Howard, the president and chief executive of the Electric Power Research Institute, the lead R&D arm of the electric power sector, described the vision as follows:
“Intelligence will be embedded in the grid, allowing assets to be switched on or off to maximize the system’s efficiency, minimizing waste and the environmental impact of the sector.”
“Information integration for intelligent generation creates a digitally connected and dynamically optimized power plant concept in which the operations, maintenance, and the workforce is enhanced by a digital platform that produces real-time information to estimate equipment condition, enhance maintenance, optimize operations and bolster operational decision-making abilities.”
For decades power has flowed from huge central generating stations to customers, one-way.
The new digital grid now being erected will flow in many directions at the same time.
To accommodate such sweeping transformations, greater intelligence will be embedded in the grid, allowing assets to be switched on or off to maximize the system’s efficiency, minimizing waste and the environmental impact of the sector.
Carl Imhoff, manager of the Electricity Market Sector at Battelle Pacific Northwest National Laboratory, said it all will embellish the “productivity, resilience and reliability of the power system end-to-end.”
As David Bodde, Clemson University professor and board member of Great Plains Energy sees it, “Data is the rocket fuel for the deep learning engine, and the more this engine has, the faster it learns.”
Ron Ambrosio, chief scientist and co-founder of Utopus Insights and former IBM Distinguished Engineer, said that increased intelligence across the grid will transform the industry.
“Information modeling, analytics, and optimization technologies will be critical to all aspects of the electric system transformation,” Ambrosio said.