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Fri February 1, 2013
The Micro-Grid: The Grid Gold Standard?
For the most dedicated environmentalists, small scale renewables, right in our back-yard are the gold standard of energy generation. In the final installment of this weeklong look at New Hampshire’s energy future, we consider what a more distributed grid might look like.
Along with smart-grid, micro-grid is the newest buzz word in the energy world. Basically it’s a little island of power lines coupled with its own source of energy, that is still wired into the broader grid. They’re not totally self-sufficient but can generate their own electricity for short bursts when needed.
Gordon Van Welie, President and CEO of the regional grid operator, ISO New England, says micro-grids can also save money because, “what they also do is they arbitrage between the wholesale market and their own generation. So they sit there and watch the price and they say, ‘what’s the price on the wholesale market today?’ And then they say ‘what’s my price for producing electricity myself?’ And then they what they do is they buy more or less from the whole-sale market depending on the relative economics.”
But the other upside to micro-grids is during big storms being able to make your own power adds resiliency. If one of the big power-lines going to the nuclear plant sixty miles away goes down, you’ve still got the line to the landfill methane plant down the road.
Solar: As Competitive Here As Anywhere
But to have a micro-grid you need that local source of energy. In terms of what resource is genuinely everywhere and is being developed, the obvious answer is to look up at the sun.
That’s where the Portsmouth start-up Revolution Energy is working to carve out their niche in the market. On a whirlwind tour of some of their installations down on the Seacoast, Clay Mitchell and John Spencer start by ogling an inverter.
“Look at that Clay,” says Spencer, “We’ve generated… does that say megawatt hours? We’ve generated 101 megawatt hours.” Spencer laughs as Mitchell marvels at how quiet the machine is.
Revolution has an interesting business model. It installs solar panels for schools and other institutions, and then sells the power from those panels to the school or institution through a set contract. At the end of the contract, usually ten or twenty years, the ownership of the solar panel array transfers to the host. Meanwhile, Revolution handles the administrative work required to capitalize on state subsidies, and passes part of the savings along to the host.
This array is at East Kingston Elementary school. As we walk up toward the panels themselves Clay is surprised when the array is clear of snow. “But at the waste water treatment plant it was pretty much covered?” he says.
“Yeah but that’s 25 degrees this is 35,” Spencer points out, referring to the angel the panels are pitched at.
Standing in front of the array, Clay Mitchell debunks a common misconception: there’s not enough sun in New Hampshire for solar panels to make financial sense.
“There are 3 variables that are at play. They are how much sun falls on the device, how efficiently it converts sun to electricity, and what’s the economic value of that electricity once it’s produced. And you add it all up and you get a number that says you get this much dollars per sunlight. When you calculate those three together it turns out the amount of value from a solar array is higher in New Hampshire than in Arizona.”
Mitchell says that shocks a lot of people; there might be more sun in the desert, but with our high energy prices, that sun is worth more in New England. So solar has as good a chance of succeeding here as anywhere else.
Still A Small Slice of the Pie
Many opponents of other types of energy – nuclear, coal, wind, hydro, you name it – point to solar as the lowest impact source of electricity. But solar panels aren’t exactly springing up all over the state: government data show that PV account for .2% of the state’s electricity, putting us right on track to meet the renewable goals which took effect in 2008.
This is partly because they are still more expensive than energy from the grid. New Hampshire does offer subsidies, based on a market system of renewable energy credits, but Mitchell and Spencer say the Granite state has set the market up in such a way that the subsidies are relatively small.
“So our top level is $55 and MA lowest level is $285,” Mitchell explains.
“So, are you going do business in Massachusetts or business in New Hampshire,” Spencer jumps in, laughing, “You know I’d rather do business in New Hampshir but it just isn’t…” Spencer let’s his sentence trail off, what’s unsaid hanging in the air.
Just over our border to the South, where public policy – and public spending – has been more aggressive in supporting indigenous energy, there is sixty times as much installed solar capacity. However, sixty times almost nothing is still pretty small in the scheme of things: just short of 200 Megawatts. That’s about 1.5 percent of that state’s peak demand.
So it’s still not clear to what degree New England as a whole is moving in this direction, says grid operator Gordon Van Welie.
“As rapidly as it has been occurring, you’re still only accounting for thousands of megawatts,” which is peanuts considering the region’s record peak demand sits around 28,000 MW.
But if there were a concerted move toward micro-grids, he says this change foreshadows a big challenge for utilities; maybe even an existential challenge. People will still want to be connected to the grid for whenever they need energy, but will be using it a lot less. That means there will be less money in the pot for maintaining the power-lines.
But Van Welie thinks those kinds of changes are a long way off, and isn’t convinced they’ll ever go mainstream. “I think the economics of large scale energy production are still going to beat, sort of small scale distributed energy production. Those economies are still going to stay tilted in favor of large scale energy production,” he says.
In other words with energy prices where they are, driven down by the natural gas boom, it’s likely the only way any state will move toward micro-grids is if policy-makers decide it’s a priority.
And that’s not totally out of the question. In Connecticut after Snowtober and Irene left millions without power, the state set up a grant program to help towns developing – you guessed it – distributed generation and micro-grids.