Is the potential of distributed energy on your radar yet? If it isn’t, it probably should be. Energy transforms economies and lives, so it should demand the attention of politicians, thought leaders, industry and, hopefully, the consumer. And it does, but not necessarily with an eye to the future. The potential of distributed energy hasn’t really been recognized yet. The question is why?
Distributed energy (also known as distributed generation) is electricity generated from small-scale power generation technologies, which when combined with load management and energy storage improve the amount, quality and reliability of electricity supplies. Typically, such technologies focus on renewable sources. Most importantly, however, because distributed generation projects are small in scale and more numerous, they move supply closer to the consumer thereby lowering environmental impacts and improving security of supply. It also avoids the enormous cost of energy wastage which – if we could figure out how – could cut your bills in half! For example, in 2009 about 58% of energy generated was wasted. (Source: Good Infographics)
Sounds good? Distributed energy is not just good news for consumers and corporations in the developed world where the key problem is wastage. It can also bring low cost power to the 25% of people worldwide, over 1.5 billion mainly in Africa and Asia, who have no access to electricity. A majority of Africa’s billion inhabitants survive with little or no electricity; in 11 countries more than 90% of people are without electricity. By the way, we will need 53% more energy by 2035 to meet global demand. Power station next to your house, anyone? Or perhaps you’d prefer a more discrete windmill, solar or geothermal unit?
Even better – some of the technology we need is here. More is in development, although progress is slower than could be hoped. The challenge is that distributed energy is not a high priority for enough governments or energy providers – yet. Perhaps awareness is lacking. More cynically, some might argue entrenched interests remain focused on exploiting scale as that’s where current assets are invested. The corporate clout of energy producers is undeniable. Amongst the largest companies in the world, they exert significant influence on the global economy, as well as the societies in which they operate. ExxonMobil’s 2010 revenues exceeded the GDPs of Thailand and Denmark. Shell’s £2million per hour profits are making headlines around the globe.
So, assuming that the energy majors have sustainable delivery of value for money energy at heart – which I believe most do – what’s getting in the way of progress on distributed energy? Subsidies for one: Worldwide fossil fuel subsidies reached US$409 billion in 2010 up US$109 billion from 2009 – driven ever higher by rising energy prices. Contrast this with renewables – global subsidies for biofuels and renewable electricity stood at $66million in 2010. But it’s not just subsidies that need a government rethink. Legal and policy hurdles can make it expensive, confusing and time-consuming to connect to the electricity grid – requiring money and skills that communities who want sustainable, local and cheaper power do not necessarily have.
Another challenge is the investments required to make smart grids work so as to realize their potential to lower energy usage, costs, waste, energy imports and emissions while increasing efficiency, reliability and security. The earliest and largest example is an Italian system installed by Enel S.p.A. in 2005 – it is widely regarded as the first commercial scale use of smart grid technology to the home. But there is a long way to go yet before the often-outdated global energy infrastructure can support large deployments of smart grids. Trillions of dollars will need to be invested by governments and utilities – many of whom are cash-strapped.
Finally, we need to be able to store the energy we generate, whether from renewables or distributed systems before we upload excess power to the smart grid. Next generation batteries are in the pipeline, but again the technology advances need to be speeded up. Flow batteries have existed for some time, but have used liquids with very low energy density (the amount of energy that can be stored in a given volume), so take up much more space than fuel cells and require rapid pumping of their fluid, further reducing efficiency. A new semi-solid, flow battery developed by researchers at MIT could provide a lightweight and inexpensive alternative for electric vehicles and power grids. The technology could even make “refueling” such batteries as quick and easy as pumping fuel into a conventional car.
Insurmountable challenges? Not really. Interestingly, the distributed energy revolution is starting with the consumer and customer. Consumers’ are beginning to the vote with their wallets and renewable schemes are gaining traction. In Bristol, England, a community-owned energy cooperative raised 60% of its share offering in less than a week. (See http://www.bristolenergy.coop/) Customers, in particular industrial players, are getting even more involved, lowering their energy costs and improving their environmental footprints in the process by tapping into distributed, local and renewable energy technologies. For example:
- Part of a larger sustainability project, Birmingham Airport installed 200 solar panels, generating 40,000 kwh a year and avoiding the emission of 22 tons of carbon dioxide every year.
- Similarly, Rengo, the Japanese corrugate manufacturer, recently completed a construction of a biomass incineration facility at its Tonegawa Division. The facility utilizes paper sludge and other waste from the plant’s paper production processes and should reduce fuel costs as well as cutting 6,000 tons of CO2 emissions.
- A new IKEA store in the Denver area will employ 500-foot-deep holes in its cooling and heating system. Temperatures in the holes hover around 55 degrees year round, so air inside them can be pumped up into the cooling and heating system to reduce energy costs by up to 50%. In the U.S. – and worldwide – geothermal has the potential for saving billions of dollars in energy costs (Source: Care2).
- In July 2011, a BMW dealership near Vancouver became the first business in British Columbia to install a commercial-scale wind turbine. Following their lead, a BMW factory in Leipzig, Germany will power its factory using 100% wind power by 2013. BMW hopes the plant can become an example of green best practice for its other factories. BMW also pipes methane gas 15.3 km from a landfill site to serve the electric and thermal needs of its manufacturing facility in Greer, South Carolina. By recovering the waste heat from turbines the heat and power project satisfies more than 60% of the facility’s thermal needs, as well as nearly 20% of its electricity use.
So what’s the future of distributed energy? Bright is our view. And it will happen despite the obstacles. Meeting future energy and electricity challenges requires a radical rethink of how we produce energy, from what feedstock, how the power grid is organized and managed, as well as where investments are made – geographically and in terms of the mix between traditional and renewable sources. Producing electricity is one huge challenge; getting it to where it is needed, at the right time and cost is another. The challenge is to move from excessive dependence on fossil fuel towards affordable, accessible and sustainable energy. This is why innovations in distributed energy are so exciting – and so possible.
It’s time to get distributed energy on the radar – so stay tuned. Ask: How can my company or community engage in distributed energy – and how can we benefit over the long-term?
Just to leave you with a final thought – the future’s really about distributed everything…
