Decentralized power, microgrids and EVs

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The beauty of publishing in a digital environment is that a writer essentially goes fishing. You never know what you're going to catch, but if you use a barbed hook, reeling in some flak is likely.

Time to review a week's worth of bold statements and the bracing zingers that came from those who took the bait. (I've edited for length and clarity.)

In "Decentralized Power and Smart Grids [3]" I referenced an analyst's remarks that distributed generation technologies offer 90 percent efficiencies while base-load, coal-fired generation offers only 35 percent and that transmission lines taking renewable energy to load centers suffer 10 percent to 15 percent losses. I typed quickly, while the conversation was fresh in mind. I did not research the numbers.

"You missed the mark," wrote one reader, who provided a chart from the Massachusetts Institute of Technology report "The Future of the Electric Grid."

The chart showed transmission and distribution losses plummeting from about 16 percent in the 1920s to about 6 percent in recent years. Our correspondent also questioned the 90 percent efficiency claimed for distribution generation, asserting that it's much lower due to variability and capacity factors for renewables and that microturbines are in the 25 percent to 35 percent efficiency range.

"I'm a big proponent of microgrids and distributed generation, but we as an industry have a long way to go to make the cost for small generation systems compete with the economies of scale achieved through base generation," this reader wrote. "Let's be careful to under-promise and over-deliver."

I continued my blithe journey in "Grid-tied Microgrids: A Utility's Best Friend?" [4] having considered the symbiotic relationship between San Diego Gas & Electric and the University of California at San Diego, which runs a campus-wide microgrid. (During a wildfire emergency in 2007, UCSD cut significant load, aiding SDG&E.)

Not so fast, a reader cautioned. For many utilities, control and/or ownership of the microgrid in question is critical to their acceptance of them.

"Investor-owned utilities will continue to resist microgrids unless they can own them, because to do otherwise is tantamount to allowing unfettered competition, loss of market share and a process of voluntarily shrinking the regulated business," this correspondent wrote. "What are regulators likely to do? Candidates for microgrids may also want to own them because doing so is clearly cost-effective, but allowing unfettered private ownership affects not only the utility, but potentially customers that do not choose the microgrid option."

The same column inspired another query on microgrid economics.

"I understand that utilities are now saying that microgrids could be a 'secure' form of demand response," wrote another reader. "Can someone explain the economics to me? In what cases do microgrids make economic sense to end-users?

"It's virtually impossible to beat  $0.12/kWh when you're using small, locally operated generation units. T&D costs and efficiency losses are minimal compared to generation and operation and maintenance costs. I'm not aware of many places in the U.S. where power reliability is so poor and the economic cost of outages so great that people wouldn't instead opt for a UPS (uninterruptible power system) solution instead of a microgrid."

(We'll attempt to bring readers an answer to this basic question in a future column.)

In "Electric Vehicles: Rorschach Card for Election Year?" [5] I asked how EVs will fare in a year that sees certain subsidies and tax incentives come up for renewal while presidential candidates debate the role of government in incentivizing new markets.

Two readers took a decidedly brass tacks approach, both based on price issues.

"A column that discusses battery technology and manufacturing hurdles, and a roadmap for surmounting them, would be useful," wrote one reader. "Batteries that are cheaper, lighter and have more storage capacity aren't going to magically appear. What's the plan for getting there?"

Another reader gave one obvious forecast but added a little-discussed, sobering thought.

"There is probably a role for EVs but it is not the consumer market," this reader wrote. "Rather, it is more likely to be various fleet applications such as delivery vehicles or limited urban transit applications.

"Cost and performance aside, there is another difficulty ... that few seem to speak about," our correspondent continued. "If you loved Big Oil, you will really love Big Monopoly Electric Utility extending its dominance to the transportation sector.  Consumers [should] pause over whether they want to be held hostage to their local electric utility for necessities such as driving to work. Gasoline prices ... [are] sufficiently elastic that they respond to consumer demand. Consumers still have a choice of providers. Hence, there is at least some semblance of a free market at play, even if it is an oligopoly. In contrast, a consumer's only choice for recharging that overpriced EV is the local monopoly utility and to pay whatever its regulator-approved rate is. Good luck there."

Good points, all. Unfortunately, we're out of space to run excerpts from the vitriol I received from smart meter opponents, but rest assured I've managed to get the cream pie out of my hair. Til next time.

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com [6]
303-228-4757