October 9, 2009

Smart Grid Would Boost Renewables

A long-anticipated U.S. "smart grid" could be a significant part of making renewable energy sources such as wind and solar widely available, said Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission said on Wednesday.

The United States' top power regulator told Reuters that demand response, the foundation of the smart grid concept of a power system that can instantly respond to changes in supply and prices, could account for 20 percent of U.S. electricity, he said.

The market considers contracts that reduce demand as a power source, jokingly dubbed a "negawatt".

Cutting demand by just a few minutes could allow the grid to inexpensively incorporate renewable sources like wind and solar that would otherwise require backup from plants that stayed idle a majority of the time.

"I don't think we need shadow generation," said Wellinghoff, referring to the backup power stations that considerably raise the cost of a power supplies based on alternative energy.

Although alternative energy is currently such a small part of the country's power generation that a cloudy afternoon is nearly immaterial, California has set a goal of obtaining one-third of its electricity from renewables by 2020, and Hawaii aims for 40 percent by 2030.  At those levels, intermittency could become an issue.

Appliances and intelligent power meters connected to the smart grid could also work to shift power by smoothing out demand over the course of a day by conducting certain tasks at new times, such as running the dishwasher in middle of the night.  They can also help respond to abrupt changes in supply, such as turning up the thermostats in a neighborhood's refrigerators as clouds pass over a solar power plant.

Although large portions of the U.S., including the southeast and a majority of the southwest, do not yet have a market necessary for such a system, roughly three-quarters of the country's electricity load could do it -- making the goal of 20 percent achievable.

"I think there is potential to get there by 2020," Wellinghoff said.

"You've got EnerNOC, you've got Comverge, you've got 10 other companies that are out there now doing this on a very robust basis, because they understand that they could make money at it."

Such a system would also dramatically reduce the need for mid-sized natural gas plants, which turn on quickly during times of peak demand.

However, Wellinghoff has a different vision for the role of natural gas, which has been discovered in vast reserves in recent years.

"We've got more natural gas in this country than we know what to do with," he said.

"It may make a lot of sense to start shutting down coal plants and using gas for base load," he said.

"The coal industry has said for many years that they have 250 years of coal. That's not true."

Tiny, high-efficient 'fuel cell' generators could provide power and hot water for a home or a building, he added.

"Combinations of stationary storage, mobile storage like vehicles, demand response and distributed generation like solar PV (photovoltaic)... like co-generation, generation from waste heat recovery and other micro-generation on a distributed basis, could all be part of the mix," Wellinghoff said.

Locating small supplies near demand would also help when transmission lines to bring renewable power from sunny deserts and windy plains to big cities are not available.

Wellinghoff said he believed existing law would allow his agency to approve where to install and how to best distribute the costs of any new cross-state transmission lines.  However, legal challenges would likely delay efforts to push through such lines.

He said he intends to wait for Congress to pave the way with the climate change bills currently under consideration.

"It's going to be an incremental process," of building power lines, he told Reuters.

"I think in five years from the time that we have additional authority, we can move electrons from remote locations [such as Montana and Wyoming]"

Southwest states adjacent to major markets such as southern California and Las Vegas could become operational in as little as three years from the time authority was expanded, Wellinghoff said.


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