Renewable Energy Distributed Generation

Renewable Energy Distributed Generation

Can electric utilities keep up with the demand for renewable energy?

On the heels of the announcement of a $60-million grant from the U.S. Department of Energy (DOE) for upgrades to and coordination of the country's three major interconnection transmission networks (Western, Eastern, and Texas), T. Boone Pickens has delayed plans to build the world's largest wind farm in Texas due to a lack of transmission capability. As the first pillar in the Pickens Plan — the energy investor's 10-year plan for American energy independence — wind power would generate up to 22% of the nation's electricity, supplemented by solar generation. Not coincidentally, building a 21st century backbone electrical transmission grid is the second pillar of the plan.

In May 2008, Pickens' Dallas-based Mesa Power ordered almost 700 turbines for the 1,000MW wind farm to be located in the Texas Panhandle near Pampa, Texas. In its final stage, the wind farm is expected to generate 4,000MW of power from 2,700 turbines. However, Pickens will now take delivery of only 300 turbines for 2011, siting them at wind farms in Minnesota and Canada. According to Pickens, the wind farm in the Panhandle will have to wait until transmission capability is built.

Limited transmission capacity has been the greatest factor stunting the development of renewable resources in much of the western United States, according to the 2009 Regional Assessment by the Western Electricity Coordinating Council (WECC), the regional entity responsible for coordinating and promoting bulk electric system reliability in the Western Interconnection. Whereas total U.S. electricity generation experienced a 1% year-over-year decline in 2008, renewable generation increased by 5% compared to 2007, according to data from the DOE's Energy Information Association (EIA). Yet, combined U.S. installed generation capacity of wind, solar, and geothermal power in 2008 represented less than 3% of the country's total electricity supply (click here to see Fig. 1).

Furthermore, despite a 51% spike in wind generation, the wind sector accounted for only 1.3% of total U.S. generation from all energy sources — a paltry total considering wind power could meet 20% of the nation's electricity needs by 2030, according to the American Wind Energy Association (AWEA), Washington, D.C., if the appropriate policies and transmission assets are put into place.

Golden triangle

Historically, the nation's three transmission networks have maintained separate systems. Terms for the $60 million in funding from the DOE require the agencies responsible for managing these grids to sign a memorandum of understanding that they will work together on transmission planning and execution. As a result of these planning efforts, each of the awardees will produce long-term resource and transmission planning studies in 2011, with updated documents in 2013, which will inform policy and regulatory decisions in the years to come and provide critical information to electricity industry planners, states, and others to develop a modernized, low-carbon electricity system. This collaboration could finally advance the integration of renewable sources of power on a national scale, allowing it to compete with coal and natural-gas fired generation.

However, engineers at Santa Fe, N.M.-based Tres Amigas, LLC don't want to wait that long. Provided all federal and state regulatory commissions get onboard with their plan, electricity generated from the increasingly abundant wind and solar installations in the American Southwest could more easily and reliably make its way to populated areas of consumption through a one-of-a-kind renewable energy transmission hub that would link access points to the three separate transmission networks.

To be located on 22.5 sq mi in Clovis, N.M., 1 mi from the Texas border, the privately funded Tres Amigas SuperStation is designed to move power between the interconnections. “It's the only place in the country where the three interconnections come together,” says Phil Harris, CEO of Tres Amigas, LLC. “And that region of the country has 80GW of renewable energy potential.”

Through a triangle of 3-ft underground pipeline containing high-temperature superconducting (HTS) cables that will act as a bus work for terminals containing solid-state voltage source converters (VSCs) at each point of the triangle, the Tres Amigas station would convert the alternating current (AC) power flowing from the power lines feeding into the hub from wind and solar installations from states such as Idaho and Oklahoma into DC power and then transition the DC power into AC power at the adjacent terminals.

In essence, the Tres Amigas station would resemble a power roundabout, according to Harris, with superconductor cables serving as the main pathway for electricity and VSCs acting as on-ramps and off-ramps. To further mitigate intermittency, the station would be equipped with large-scale 150MW batteries, which would handle the numerous charge-discharge cycles needed for reactive system support. “Tres Amigas, by its design, solves the major issues of bringing intermittent renewable generation into an AC-interconnected network,” Harris explains. “These are real problems when you start getting a larger percentage of renewable resources as part of the total on the AC system.”

At the outset, the proposed station would have the capacity to move 5GW of electricity among any or all of the three grids, with the potential to move up to 30GW once all modules are built. However, before the station can be built, Tres Amigas first needs approval from the Federal Energy Regulatory Commission, now occupied with the DOE plan for collaboration among the transmission networks.

Hot wired

Recently, this type of heavy investment in a national, centralized electrical infrastructure has come under some criticism. In a New York Times op-ed column from March 2009, Ian Bowles, the secretary of energy and environmental affairs for the State of Massachusetts, warns against legislation fortifying transmission systems to carry bulk energy generated in remote areas to populated cities as too expensive and too large of an undertaking. Instead, Bowles argues regions should take advantage of their own natural resources, such as hydroelectric capacity in the Northwest and offshore wind farms in the Northeast. “Renewable energy resources are found all across the country; they don't need to be harnessed from just one place,” Bowles writes. “In each area, developing these power sources would be cheaper than piping in clean energy from thousands of miles away.”

The La Crescent, Minn.-based grassroots group, the Citizens Energy Task Force (CETF), represents the concerns of citizens who question the need for particular high-voltage power lines in Minnesota and Wisconsin and support clean, sustainable, locally generated power sources. CETF would like to see the United States move toward local power generation and advocate conservation and energy management; the use of diverse clean, renewable energy that is community-based and community-owned, helping to develop wealth and strengthen the area's rural economy. The group also champions compensation for landowners whose property is used for wind turbines, power lines, or other energy facilities. “We're not against shoring up the grid,” says Jeremy Chipps, CETF member. “But we are against massive costs of systems only designed to retain market share of big power companies. We think it would make more sense for power to be generated much closer to where it is used.”

Renewable distributed energy generation technologies — principally wind and solar photovoltaic (PV) installations between 1kW and 5MW located close to the point of consumption — are one way around costly investment in transmission systems, according to a new report, “Fuel Cells for Residential, Commercial, and Industrial Applications: Market Analysis and Forecasts,” published by Pike Research, the Boulder, Colo.-based market research and consulting firm that provides in-depth analysis of global clean technology markets. The report reveals the use of renewable energy distributed generation experiences strongest growth in areas of the country with the highest prices for conventional electricity combined with the highest levels of environmental consciousness. Simultaneously, with technological advances and resulting cost reductions, renewable energy distributed generation technologies are generating power at prices comparable to grid-produced electricity.

For example, a 500kW PV system was recently completed on the roof of a historic building at a former military installation in Watertown, Mass., purchased by Cambridge, Mass.-based Harvard University in 2001. The project was made possible through a $1.1-million rebate provided by the Massachusetts Technology Collaborative, Westborough, Mass. The system is owned by Crimson Solar, LLC, a wholly owned subsidiary of Integrys Energy Services, De Pere, Wis. Harvard has committed to buy the power generated from the system and the associated renewable energy certificates, for 25 years at a predetermined rate, with no up-front capital cost.

Independent variables

The system at Harvard is tied to the grid. In fact, distributed generation systems are becoming increasingly grid-tied. Prior to 2004, off-grid PV installations accounted for more than half the market, according to the recent report, “Rebound: U.S. Photovoltaic Market Growth Through 2010,” from AltaTerra Research, New York. In 2008, only 15% of PV installations were off-grid. For 2010, the growth rate for grid-tied PV in the United States is expected to reach 1GW. In 2008, the U.S. small wind turbine market sold 3,764kW of off-grid wind-produced energy, compared to 13,610kW from on-grid sources (click here to see Fig. 2).

The primary benefit of a grid-tied system is the assurance of receiving power from the electric utility when the system is not producing power, eliminating the need for an energy storage system (Storage Units). “The grid itself provides the storage that you need,” says Michael Goggin, manager transmission policy at AWEA. “As many as hundreds of wind turbines are not going to significantly affect the stability of the grid.”

Goggin explains that output from wind turbines is random. In general, in low penetrations, especially with smaller-scale turbines, the grid provides all the services needed for integration. “All that variability balances out on the grid,” he adds.

An additional benefit for grid-tied power generators is the ability to sell power back to the electric utility through net metering.

The use of distributed generation can also benefit the electric utility, according to San Francisco-based Solarbuzz, an international solar energy research and consulting company. Grid-tied distributed generation helps meet peak power loads, diversifies the range of energy sources in use, and increases the reliability of the grid network. Distributed resources can also provide needed system support during emergencies and lower the cost of power.

Mandates limiting the installation of new transmission lines and construction of power plants, coupled with requirements for higher reliability and a potential federal mandate requiring a percentage of electricity to come from renewable sources (possibly 20% by 2030), are prompting utilities to consider distributed generation options. An electric utility's portfolio of energy storage and distributed generation systems could be key essential assets in future smart grid configurations. The ability to accommodate a diverse range of generation types — including both centralized and distributed generation — could play a major role once the smart grid comes to fruition.

Million rooftops

Gary Hunt, a San Francisco-based global power market strategy and risk advisor, predicts that a convergence of market, economic, environmental, and regulatory forces will require investor-owned electric utilities to add renewable energy distributed generation to their portfolios. “The central station electric utility business model is largely under assault because of the desire for more of a distributed generation renewable-based supply mix,” Hunt explains. “Solar, especially, is a credible threat in that it is possible for players other than the traditional electric utility provider to aggregate customers and deliver energy.”

As part of its $50-million solar rooftop program, Duke Energy, Charlotte, N.C., has installed PV panels atop four commercial buildings in the state. At all four installations, Duke leases the rooftop but owns the solar array. Power generated at the sites feeds directly into the local electrical grid.

To hit its 8MW goal, Duke will announce additional commercial, industrial, and residential rooftop sites in 2010. Renewables must account for 12.5% of the electric utility's retail sales in North Carolina by 2021. “There's no reason we couldn't do something similar in a wind-power project capacity, but where we normally site wind power projects, there's not a ton of development in those areas,” says Greg Efthimiou, communications manager for Duke Energy. “They're not sited in urban areas or population centers.” (See Urban Wind Power) Although Duke has invested heavily in renewable energy in the last two years — $1 billion alone in wind energy — Efthimiou estimates it currently generates less than 5% of its overall electricity from renewable sources.

To cover its costs in the solar rooftop program, Duke will add 16 cents a month to residential customers' bills and can reap federal tax credits for 30% of its investment and accelerated depreciation, whether the electric utility makes its own solar power or buys it. North Carolina awards tax credits worth 35% of the investment and excuses property taxes on 80% of the property's value.

Hunt says the only thing standing in the way of solar right now is cost. But in the future, when solar technologies are affordable and more efficient, Hunt foresees a policy goal of net-zero for every commercial building and home — and the electric utility will no longer have to balance the pluses and minuses of energy use. “We're moving to a world that opens the door to aggregation of customers and distributed generation in ways that we haven't seen before,” Hunt explains. “The technology is still young, the costs are still high, and the efficiency is still low. But I think that's the way it's going.”

Sidebar: Urban Wind Power

Difficult local permitting practices or a lack of permitting thwart an estimated one-third of all potential small wind turbine installations, according to the “AWEA Small Wind Turbine Global Market Study,” published by the American Wind Energy Association (AWEA), Washington, D.C. Unnecessarily restrictive regulations, particularly height limitations, can limit a turbine's productivity, discourage customers and investment, and repel local industry-related businesses from communities, the study notes.

In urban settings, turbines are scarce. In 2008, approximately 200 building-mounted turbines were sold to be used for urban or rooftop applications in the United States, according to AWEA. Although this represents less than 250kW of the 80MW of installed small-wind capacity (less than 0.002% of the U.S. small-wind market), it marks a slight increase over the approximately 100 units sold in 2007.

For more information on permitting rules, read the AWEA permitting guidebook, “In the Public Interest: How and Why to Permit for Small Wind Systems,” at

Sidebar: Storage Units

Energy storage technology is an emerging and controversial topic in the renewable energy arena. Advocates say it will allow higher penetration levels of intermittent energy sources, whereas those in opposition argue its redundancy.

Charlotte, N.C.-based Duke Energy intends to match a $22-million grant from the U.S. Department of Energy (DOE) to design, build, and install large-scale 20MW batteries to store wind-produced energy at its Notrees Windpower Project wind farm in Ector and Winkler counties, Texas. The batteries at the wind farm will store excess wind-produced energy and discharge it whenever demand for electricity is highest. The intent of the grant is to demonstrate how energy storage can help overcome the problem of intermittency with solar and wind energy sources. “You don't get power if the sun's not shining or the wind's not blowing,” says Greg Efthimiou, communications manager for Duke Energy. “Energy storage could turn that equation on its head by letting us store wind power, and then use it at times when demand is highest and perhaps when the wind isn't blowing.”

The 95 wind turbines in operation at Duke Energy's Notrees site can generate 151MW of electricity. Duke will work with the Energy Reliability Council of Texas to understand the project's implications and establish requirements for its implementation. The Electric Power Research Institute (EPRI), Palo Alto, Calif., will provide advisory services throughout the development of this energy storage project. This project represents one of the nation's first demonstrations of energy storage at a utility-scale wind farm. “We believe that large-scale energy storage in the form of these very large batteries holds the potential to be a true game-changer for renewable energy,” Efthimiou continues.

However, analysis from Washington, D.C.-based American Wind Energy Association (AWEA) claims that the necessity for energy storage with wind installations is a persistent myth. According to the analysis, the United States was able to add over 8,500MW of wind power to the grid in 2008 without adding any commercial-scale energy storage. Flexible power, large regional balancing areas, and wind forecasting techniques allow large amounts of wind energy (and other variable renewable sources) to be integrated onto the grid. “Every day, grid operators accommodate variability in electricity demand and supply by increasing and decreasing the output of flexible generators — power plants like hydroelectric dams or natural gas plants that can rapidly change their level of generation,” says Michael Goggin, manager transmission policy at AWEA. “Grid operators use these same flexible resources to accommodate any variability introduced by wind energy. Because these power plants and other sources of flexibility have already been built, it is almost always much cheaper to use this flexibility than to build new sources of flexibility like energy storage facilities.”

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