(October 17, 2014) WASHINGTON, D.C. — The Renewable Fuels Association’s (RFA) Vice President of Industry Relations was on hand to congratulate Abengoa Bioenergy at the grand opening of its new cellulosic ethanol facility in Hugoton, Kansas. The facility converts agricultural residue, dedicated energy crops, and prairie grasses into cellulosic ethanol. At full operation, Abengoa Bioenergy’s facility is expected to produce 25 million gallons of cellulosic ethanol annually.

“Abengoa Bioenergy should be proud of the hard work that took place behind the scenes to make today’s grand opening a reality,” stated Robert White, VP of Industry Relations for the RFA. “The opening of this facility goes to show that cellulosic ethanol is here to stay. This year we saw the grand opening of not one, not two, but three facilities that are now producing cellulosic ethanol with more to come. It is an exciting time for the industry and the energy here at the event is contagious. From where I’m standing, the future looks bright for next-generation biofuels.”

U.S. Energy Secretary Ernest Moniz attended today’s grand opening. Bob Dinneen, President and CEO of the RFA, commented, “This is indeed a great day, and it’s wonderful that Energy Secretary Moniz is on hand to congratulate Abengoa Bioenergy for seeing their cellulosic vision come to fruition. Hopefully, Secretary Moniz will return to Washington with a deeper appreciation for the importance of maintaining the integrity of the Renewable Fuel Standard and convince the President not to rollback our nation’s commitment to biofuels. It would be the height of hypocrisy for the Administration to sing the praises of cellulosic ethanol today, only to pull the rug out from under this nascent technology tomorrow.”

Two other cellulosic ethanol facilities began production this year. Quad County Corn Processors opened a bolt-on facility at their plant in Galva, Iowa, converting corn kernel fiber into cellulosic ethanol, while POET/DSM opened Project Liberty, a cellulosic ethanol production facility in Emmetsburg, Iowa, that utilizes corn crop residue.

The findings are the most detailed study yet of Africa’s energy demand and suggest the continent will take “a major step forward” in spreading electricity to rural areas and bringing people out of poverty, the IEA said.

“Many governments are now intensifying their efforts to tackle the numerous regulatory and political barriers that are holding back investment in domestic energy supply,” the report said. “But inadequate energy infrastructure risks putting a brake on urgently needed improvements.”

The IEA, which advises industrial nations on energy policy also sketches the scale of the challenge in bringing the African continent closer to the energy standards enjoyed in industrial nations.

Sub-Saharan Africa accounts for 13 percent of the world’s population and 4 percent of energy demand. Only 290 million of the region’s 915 million people have access to electricity. Two thirds of the cash put into energy is for developing resources to export.

Energy Boom

Since 2000, energy use in sub-Saharan Africa has risen by 45 percent. The IEA expects the capacity of power generation connected to traditional grids to quadruple by 2040 from about 90 gigawatts today, about half of which is in South Africa. It expects more than a half billion people will remain without power in 2040.

Other renewable sources led by solar energy will also make a growing contribution to power supply. Only about 10 percent of the potential hydropower resources are being exploited now, the IEA said.

Large hydro and fossil fuel power plants will improve coverage in urban areas while other clean energy sources lead electrification in rural areas. Mini-grids and off-grid systems will provide power to 70 percent of those gaining access in rural areas, of which two-thirds will be powered by solar, wind and small hydroelectric plants.

Those technologies are becoming more attractive against diesel generators because of their falling costs, the IEA said.

Copyright 2014 Bloomberg

Lead image: Africa via Shutterstock

Excellent article.

In the debate Food Vs Fuel,fortunately there are alternatives like Agave and Opuntia for Corn and Sugarcane as biofuel.

According to Arturo Velez, Agave Expert:

“On an annualized basis agave produces 3X more distilled ethanol than sugar cane in Brasil; 6X more distilled ethanol than yellow corn in the US; at least 3X more cellulosic ethanol than switchgrass or poplar tree. Producing one gallon of distilled ethanol from agave costs at the most half the cost of one gallon from sugar cane and one fourth of corn’s production cost.

One hectare of Agave captures at least 5X more CO2 than one hectare of the fastest growing Eucalyptus on a high density plantation and in one single year agave produces the same cellulose pulp Eucalyptus produces in 5 years”..

CAM species such as Agave show considerable promise as a biofuel crop for the future due to their high water-use efficiency, tolerance to abiotic stress (e.g., drought and high temperatures), and potential for high biomass production on marginal lands .

The optimal use of water to grow a selected feedstock is of critical importance because water scarcity, more than any other factor, determines whether land is suitable for growing food crops. Thus, growing plants with high water-use efficiency on land that is too dry to grow food crops is a potentially powerful strategy for producing biomass feed stocks in large amounts while minimizing competition with the food supply. Additionally, making productive use of semi-arid land can have positive effects on poor rural areas. The water-use efficiency (WUE) value (grams CO2 fixed/kilogram water transpired) varies markedly among plants with different types of photosynthetic metabolism. C3 plants typically have WUE values of 1–3; C4 plants, between 2 and 5; whereas crassulacean acid metabolism (CAM) plants have values between 10 and 40. Therefore, CAM plants can be cultivated in arid or semi-arid land normally unsuitable for the cultivation of most C3 and C4 crops. It is exceedingly unlikely that a C3 or C4 plant could be developed, with or without genetic modification, with water-use efficiency approaching that of CAM plants.Moreover, CAM plants are native to essentially every state in the USA except Alaska, although they are prominent parts of ecosystems only in the Southwest.

In spite of this potential, CAM plants have received much less systematic study or development as energy crops relative to inherently less water-efficient plants such as corn (maize), sugarcane, switch grass Miscanthus, poplar, sugar beets, Jatropha, soy, and canola.

Cellulose content is far more in Agave Americana compared to Deciduous Wood,sugarcane,wheat straw,corn stover and switch grass while lignin content is far less in Agave Americana as compared to the others mentioned.

A group of Mexican researchers believe they’ve discovered what they call the «missing energy crop,» and though it hasn’t exactly been missing-it grows abundantly in Mexico and in some southern U.S. and South American locations-these scientists claim agave possesses characteristics superior to other feedstocks currently being examined for biofuel purposes, such as cellulosic ethanol production.

Agave is arguably one of the most significant plants in Mexican culture. It has a rosette of thick fleshy leaves, each of which usually end in a sharp point with a spiny margin, and is commonly mistaken for cacti.

President Barack Obama’s Plan to tackle Climate Change includes,” The US will increase its research and development of bio ethanol as fuel. I believe biomass and ethanol are a part of the solution and belong in the green transition. Yet bio fuels and ethanol are many things. Not all are green and not all are sustainable in the broadest sense. For bio ethanol to belong in the green economy it has to deliver substantial greenhouse gas savings and avoid negative impact on food prices. Only then will it be good business for farmers and good for the climate. The technology is available and ready to be scaled up. Second generation bio ethanol is an emerging market with the potential to reduce 85 pct. of CO2 emission compared to regular fossil fuels in transportation. It is also a local resource increasing energy independence and creating local jobs in agriculture, factories and logistics.”. It is most welcome.

Hitherto Corn and Sugarcane are used in the biofuel production. In the debate on FOOD Vs FUEL, it is necessary to find alternatives.

“Agave has a huge advantage, as it can grow in marginal or desert land, not on arable land,” and therefore would not displace food crops, says Oliver Inderwildi, at the University of Oxford. The majority of ethanol produced in the world is still derived from food crops such as corn and sugarcane. Speculators have argued for years now that using such crops for fuel can drive up the price of food.

Agave, however, can grow on hot dry land with a high-yield and low environmental impact. The researchers proposing the plant’s use have modeled a facility in Jalisco, Mexico, which converts the high sugar content of the plant into ethanol.

The research, published in the journal Energy and Environmental Science, provides the first ever life-cycle analysis of the energy and greenhouse gas balance of producing ethanol with agave. Each megajoule of energy produced from the agave-to-ethanol process resulted in a net emission of 35 grams of carbon dioxide, far below the 85g/MJ estimated for corn ethanol production. Burning gasoline produces roughly 100g/MJ.“The characteristics of the agave suit it well to bioenergy production, but also reveal its potential as a crop that is adaptable to future climate change,” adds University of Oxford plant scientist Andrew Smith. “In a world where arable land and water resources are increasingly scarce, these are key attributes in the food versus fuel argument, which is likely to intensify given the expected large-scale growth in biofuel production.”

Agave already appeared to be an interesting bio ethanol source due to its high sugar content and its swift growth. For the first time Researchers at the universities of Oxford and Sydney have now conducted the first life-cycle analysis of the energy and greenhouse gas (GHG) emissions of agave-derived ethanol and present their promising results in the journal Energy Environmental Science.

On both life cycle energy and GHG emissions agave scores at least as well as corn, switch grass and sugarcane, while reaching a similar ethanol output. The big advantages agave has over the before mentioned plants is that it can grow in dry areas and on poor soil, thus practically eliminating their competition with food crops and drastically decreasing their pressure on water resources.

Plants which use crassulacean acid metabolism (CAM), which include the cacti and Agaves, are of particular interest since they can survive for many months without water and when water is available they use it with an efficiency that can be more than 10 times that of other plants, such as maize, sorghum, miscanthus and switchgrass. CAM species include no major current or potential food crops; they have however for centuries been cultivated for alcoholic beverages and low-lignin fibres.

They may therefore also be ideal for producing biofuels on land unsuited for food production.

In México, there are active research programs and stakeholders investigating Agave spp. as a bioenergy feedstock. The unique physiology of this genus has been exploited historically for the sake of fibers and alcoholic beverages, and there is a wealth of knowledge in the country of México about the life history, genetics, and cultivation of Agave. The State of Jalisco is the denomination of origin of Agave tequilana Weber var. azul, a cultivar primarily used for the production of tequila that has been widely researched to optimize yields. Other cultivars of Agave tequilana are grown throughout México, along with the Agave fourcroydes Lem., or henequen, which is an important source of fiber that has traditionally been used for making ropes. The high sugar content of Agave tequilana may be valuable for liquid fuel production, while the high lignin content of Agave fourcroydes may be valuable for power generation through combustion.

Along with Agave species described above, some other economically important species include A. salmiana, A. angustiana, A. americana, and A. sisalana. Agave sisalana is not produced in México, but has been an important crop in regions of Africa and Australia. Information collected here could thus be relevant to semi-arid regions around the world.

Agave is a CAM Plant. Crassulacean acid metabolism, also known as CAM photosynthesis, is a carbon fixation pathway that evolved in some plants as an adaptation to arid conditions in a plant using full CAM, the stomata in the leaves remains shut during the day to reduce evapotranspiration, but open at night to collect carbon dioxide (CO2). The CO2 is stored as the four-carbon acidmalate, and then used during photosynthesis during the day. The pre-collected CO2 is concentrated around the enzyme RuBisCO, increasing photosynthetic efficiency. Agave and Opuntia are the best CAM Plants.

Agave Competitive Advantages

* Thrives on dry land/marginal land. Most efficient use of soil, water and light

* Massive production. Year-around harvesting

* Very high yields with very low or no inputs

* Very high quality biomass and sugars

* Very low cost of production. Not a commodity, so prices are not volatile

* Very versatile: biofuels, byproducts, chemicals

* World-wide geographical distribution

* Enhanced varieties are ready.

Agave can be grown in huge areas of waste lands in Developing countries like India. Another route of power production is biogas generation from Agave as well as Opuntia. Biogas power generators are commercially available. This way power can be generated at local level with local resources. Both agave and Opuntia are regenerative plants.

In their research paper SARAH C. DAVIS et al conclude:

«Large areas of the tropics and subtropics are too arid or degraded to support food crops, but Agave species may be suitable for biofuel production in these regions. We review the potential of Agave species as biofuel feedstocks in the context of ecophysiology, agronomy, and land availability for this genus globally. Reported dry biomass yields of Agave spp., when annualized, range from 1 to 34Mg /ha/yr without irrigation, depending on species and location. Some of the most productive species have not yet been evaluated at a commercial scale. Approximately 0.6Mha of land previously used to grow Agave for coarse

?bers have fallen out of production, largely as a result of competition with synthetic ?bers.

Theoretically, this crop area alone could provide 6.1 billion L of ethanol if Agave were reestablished as a bioenergy feedstock without causing indirect land use change. Almost one-?fth of the global land surface is semiarid, suggesting there may be large opportunities for expansion of Agave crops for feedstock, but more ?eld trials are needed to determine tolerance boundaries for different Agave species(The global potential for Agave as a biofuel feedstock, GCB Bioenergy (2011) 3, 68–78, doi: 10.1111/j.1757-1707.2010.01077.x).»

Agave and Opuntia are the best choice to grow in waste and vacant lands in Asia,Africa and Latin America.The advantage with the plants is both are regenerative and thrive under harsh conditions.

Another plant of great use is OPUNTIA for biofuel / biogas production.

The cultivation of nopal((OPUNTIA FICUS-INDICA), a type of cactus, is one of the most important in Mexico. According to Rodrigo Morales, Chilean engineer, Wayland biomass, installed on Mexican soil, “allows you to generate inexhaustible clean energy.” Through the production of biogas, it can serve as a raw material more efficiently, by example and by comparison with jatropha.

Wayland Morales, head of Elqui Global Energy argues that “an acre of cactus produces 43 200 m3 of biogas or the equivalent in energy terms to 25,000 liters of diesel.” With the same land planted with jatropha, he says, it will produce 3,000 liters of biodiesel.

Another of the peculiarities of the nopal is biogas which is the same molecule of natural gas, but its production does not require machines or devices of high complexity. Also, unlike natural gas, contains primarily methane (75%), carbon dioxide (24%) and other minor gases (1%), “so it has advantages from the technical point of view since it has the same capacity heat but is cleaner, “he says, and as sum datum its calorific value is 7,000 kcal/m3.

Javier Snchez et al in their extensive study on Opuntia as potential input for bioethanol concluded:

“Prickly pear is a widely-known crop in the SE of Spain, where it is currently used for forage, fodder and fruit. Now it is being considered as a potential crop for bioethanol production from its whole biomass. In order to estimate the potential bioethanol production in the province of Almeria (SE-Spain) and the optimal location of bioethanol processing plants, a GIS analysis involving a predictive yield model of prickly

pear biomass was undertaken following specific restriction criteria. According to this analysis, the total potential bioethanol production in Almeria would be up to 502,927.8 t dm•year–1 from 100,616 ha maximum that could be cultivated with prickly pear, with a calculated yield ranging between 4.2 and 9.4 t dm•ha–1•year–1. An exclusive suitability analysis and a preferable suitability analysis based on the

Analytic Hierarchy Process were performed in order to estimate the optimal location of the subsequent processing plants within Almeria’s road network by a discrete location-allocation model.”(Javier Snchez , Francisco Snchez , Mara Dolores Curt Jess Fernndez (2012) Assessment of the bioethanol potential of prickly pear (Opuntia ficus-indica (L.) Mill.) biomass obtained from regular crops in the province of Almeria (SE Spain), Israel Journal of Plant Sciences, 60:3, 301-318).

In the developing countries like India which has vast waste land Opuntia can be grown along with Agave for Biofuel/Biogas and subsequent power generation.

Corn ethanol, for example, has an energy balance ratio of 1.3 and produces approximately 300-400 gallons of ethanol per acre. Soybean bio diesel with an energy balance of 2.5, typically can yield 60 gallons of bio diesel per acre while an acre of sugar cane can produce 600-800 gallons of ethanol with an energy balance of 8.0. An acre of poplar trees can yield more than 1,500 gallons of cellulosic ethanol with an energy balance of 12.0, according to a National Geographic study published in October 2007.

Dr.A.Jagadeesh Nellore(AP),India

E-mail: anumakonda.jagadeesh@gmail.com

The new VW Golf SportWagen (which is replacing the Jetta SportWagen) was unveiled at the Paris Motor Show in the souped-up Alltrack edition.

photo credit: autoblog

photo credit: autoblog

It’s not only the angular, more masculine lines that differentiate the Alltrack from its less adventure-oriented SportWagen sibling. According to AutoBlog, the suspension is bumped up, it has the latest 4Motion all-wheel drive system, improved traction, and individual wheel braking for better handling. Plus, like the SportWagen, the Alltrack has a TDI turbocharged diesel engine option.

photo credit: autoblog

However, there’s no word on if we’ll see this bumpy-road-ready Alltrack version in the States. We’ll have to settle for the regular 2015 Golf SportWagen TDI—I can handle that!

See more photos and get the full rundown from Autoblog.

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Modi’s government wants to attract $100 billion of investment in clean energy over the next five years. Companies and lenders say that will require a shift in policy from India’s current auction-based system, which caps installations to control the scale of solar fitted and the amount of subsidy payments incurred.

“Bidding is now counter-productive,” Vineet Mittal, managing director of Welspun Energy Ltd., India’s biggest photovoltaic developer, said in an Oct. 10 interview in New Delhi. With global panel prices stabilizing after a three-year decline, auctions risk encouraging over-aggressive bidding that could lead to unviable projects, he said.

India led the world in competitive bidding — followed by Brazil and South Africa — which helped push down the cost of solar power by about half since 2010. In recent months, government officials and developers including Goldman Sachs Inc.-backed ReNew Power Ventures Pvt. have begun calling for a transition to feed-in tariffs. That system sets a uniform price and invites any generator willing to supply at that rate to install as much as they want.

The government is considering whether to grant fixed solar tariffs instead of holding competitive auctions, Tarun Kapoor, joint secretary at the Ministry of New and Renewable Energy, said in August. As the price of solar converges with the cost of conventional power, state distribution utilities would be “more comfortable” with such a shift, he said.

Recent coal power projects in India price their electricity at about 5.5 rupees a kilowatt-hour. In comparison, the most recent national solar auction priced photovoltaic power at about 6.5 rupees a kilowatt-hour, according to data compiled by Bloomberg.

Germany has installed 35 gigawatts of solar, compared with India’s 2.7 gigawatts, according to data compiled by Bloomberg.

Copyright 2014 Bloomberg

Lead image: Taj mahal via Shutterstock

Variability is not a new issue for grid operators, as they are accustomed to loads varying on similar time scales and the fact that sometimes power plants and transmission infrastructure fail.  These “traditional” sources of variability are well understood and significant effort has been devoted to developing systems to manage these sources of variability. 

Until PV reaches a certain level of penetration on the grid, it is essentially noise in the system with no noticeable impacts on reliability.  At some point, however, PV penetration levels results in this new, less familiar and more random form of variability impacting grid operations.  This is already happening in certain service locations such as several of the Hawaii islands where installed PV represents a significant portion of the overall generation.  Furthermore, some locations in California, New Jersey, and Arizona have reached threshold levels where PV variability is beginning to have noticeable impacts on grid operations.

Solar forecasting should be the first response to managing the variable nature of solar energy production, before the more costly strategies of energy storage and demand response systems are put in place.  Furthermore, once a forecasting system is in place, it provides additional benefits through the optimized use of these demand-side resources.

Sophisticated tools have been developed using data from weather models and cloud images from geostationary satellites or total sky imaging devices to provide solar power forecasting services for various time horizons, from day-ahead forecasts of power production from PV systems to sub-hourly forecasts.   Modeling the random nature of clouds, which drives the short-term variability in PV system output, is an active area of research and will likely lead to improved accuracies of sub-hourly forecasting. 

Forecast can be produced for individual solar arrays or for numerous arrays within a defined geographic area.  The geographic dispersion of the installed PV capacity for area forecasts reduces error due to the fact that localized weather conditions do not impact the installed capacity uniformly.  Tom Hoff of Clean Power Research and Richard Perez of SUNY Albany’s Atmospheric Sciences Research Center demonstrate this phenomenon empirically using correlation coefficients between geographically dispersed PV systems, which decline predictably as a function of distance.  Increasingly, grid operators are interested in ramp forecasts, which seek to predict significant changes in solar output within a predefined time step (e.g. 15-minutes).

Grid operators have been using wind forecasts for close to a decade to manage the variability of wind farm output.  The California Independent System Operator (CAISO) has been using a wind forecasting service since 2004, and all the other major ISOs/RTOs (regional transmission organizations) currently utilize central wind forecasting services for reliability planning and market operations.  CAISO has begun to experiment in recent years with integrating solar forecasting into planning and market operations.  The CAISO solar forecast is provided by AWS Truepower, a leading renewable energy project development and operations solutions provider.

Market reforms in several wholesale power markets now allow intermittent resources to participate in wholesale power markets on par with conventional sources of generation.  Thus some wholesale power markets allow wind forecasts to be used to bid wind energy into day-ahead, hour-ahead, and real-time markets.  Renewable energy forecasting has a variety of other uses, including developing bidding strategies for owners of renewable energy plants to system reliability planning. 

While there is much we can learn from wind power forecasting and centralized solar system can benefit from recent market reforms, there are unique challenges for solar given the largely distributed nature of solar deployment.  Behind the meter solar is largely invisible to grid operators and the variability becomes manifest in changes in the net load to be served.  Thus, solar forecasting can provide value by feeding into existing load forecasts models to improve net load forecasts.

Solar forecasting’s accuracy is enhanced when historic production data is integrated into the forecast model to “train” the models.  Modeled historic production data using satellite cloud cover images can be used as a substitute for actual historic output; this requires access to central database of technical specification and array characteristics for thousands of installations.  Clean Power Research, a solar forecasting provider, is working with the CAISO to build systems specifically for forecasting the tens of thousands of distributed PV systems across their service territory.  The CAISO load forecast saw a statistically significant increase in accuracy when driven with behind the meter production inputs from Clean Power Research’s forecasting tool, SolarAnywhere FleetView.

In pursuit of policies to encourage solar energy deployment, policymakers and regulators should consider standards that require grid-connected solar plants to monitor and report real-time production data to enhance forecasting accuracy over time and establish the requirement that information on behind the meter solar including array orientation, angle, shading, etc. be made available to the forecasting community.

The solar age is upon us; while the variable nature of solar energy production is real, we have tools that will allow us to efficiently manage this variability.  Eventually, energy storage and demand response will allow even greater levels of solar PV generation.  Solar forecasting, however, represents the lowest-cost, near-term opportunity to manage the variable nature of solar energy production.  Today there are over a dozen companies globally that provide solar forecasting services, the low-hanging fruit of solar integration.  Let’s take a bite!

Lead image: Fruit trees via Shutterstock

The “utility death spiral” is a term that is becoming all too familiar as distributed energy technologies expand. But how real is it? Are regulated utilities going way — or are they on their way to new business models?

According to a new study by Berkeley Lab, distributed solar photovoltaics (PV) are the most immediate threat to investor-owned utilities and their shareholders, by depleting revenue from demand growth and need for capital investments in traditional power plants. A recent New York Times article highlights the effect solar and wind industries have had in Germany, a leader in renewable energy technologies and business models, with utilities now finding themselves unprofitable.  In the U.S., as policies that encourage distributed energy models — such as net metering — increase and PV prices decrease, utilities are starting to push back. But they are just the start. Policy makers — and customers — are putting pressure on the utility system to address environmental, sustainable, resiliency, and customer control issues.

Is this really the death of the utility sector? Or is it the beginning of a utility of the future?

According to the Lisa Frantzis, Senior Vice President, Strategy and Corporate Development, at Advanced Energy Economy, “there is a tidal wave coming over the utility sector.” There is tremendous opportunity for the utility sector to reform and recreate a business model that will work for them and for a growing distributed energy resources industry.

About 40 percent of the carbon emitted in the U.S. is from stationary power generation, Frantzis points out. New regulatory and business models can help to foster environmental sustainability, resiliency, greater customer control, and more customer service options.

Modeling after Proactive States

Three states — Massachusetts, Hawaii and New York — are at the forefront of activity making changes, encouraging a transformation of the utility sector that will keep all parties alive and thriving.

The Massachusetts Department of Public Utilities has two major dockets creating a shift in the utility sector including: grid modernization and time varying rates. Other initiatives in Massachusetts, such as dockets for rebate programs for electric vehicles, are also increasing activity in distributed energy.

In Hawaii — a state with some of the most expensive electricity prices — after a huge solar push, the PUC was put under pressure to overcome issues in connecting PV to the grid.  An recent article said that, “as part of the PUC order, the plan outlined ‘a growing role for non-utility energy service providers that can intermediate the relationship between the utility and the customer’ by aggregating distributed resources into virtual power plants.”  The PUC addressed these issues with the 2014 IRP (Integrated Resources Plan) that will triple rooftop solar in Hawaii by 2030.

But New York State is especially pushing the envelope. The state’s Public Service Commission is conducting the most comprehensive proceeding to shape the future utility business model with its Reforming the Energy Vision (REV) proceeding.  

Challenges ahead

As New York’s energy leadership takes steps toward a utility business model for the future, certain questions arise. Who has access to customer data? What about security as utilities share customer data with third parties? How do you transition from a cost of service model to an outcome or performance based model, and what are the metrics to be used?

Those are the details yet to be worked out. But change is coming, Frantzis says, and done right, it can make winners of all. “Business and regulatory changes can help to provide additional revenue opportunities for both the utility companies and third party suppliers.” 

This discussion will continue as Frantzis moderates a panel titled “Utility of the Future” at Forum 20/20, hosted by GTM and MassCEC in Boston, MA on October 29^th. To attend Forum 20/20 and partake in the discussion on “The Utility of the Future” register here with REW10 with an exclusive 10 percent discount.

Lead image: Transmission via Shutterstock

Cost-effective storage for wind and solar energy is the industry’s “Holy Grail,” Morgan Stanley says. That’s because times of high output during sunny days or windy nights don’t always match up with peak demand. While batteries are currently too expensive for large-scale use, improving technology is cutting costs, which means storage systems could replace some plants and avoid the need for new ones, as well as cut demand for oil, according to UBS AG and Citigroup Inc.

“We’re at the infancy of this,” Ron Nichols, the senior vice president of regulatory affairs for Rosemead, California- based SCE, said in a telephone interview Oct. 1. “The technology is important. I don’t know if it’s a game-changer yet, but it has the potential to be, particularly if it gets implemented more deeply and the costs come down.”

In the next seven or eight years, the price of batteries used for storage may fall by about half, to $230 a kilowatt hour of generating capacity, said Sofia Savvantidou, an analyst at Citigroup in London. Policy makers are setting more targets for renewable energy and demand is increasing from companies including electric-car maker Tesla Motors Inc., she said.

Prices Falling

Electric-car battery prices already have fallen by 50 percent since 2010 to about $500 per kilowatt hour, and “by drawing on auto-battery technology, battery makers may also be able to supply storage batteries at a lower price,” Citigroup said in a Sept. 25 report. Tesla Chairman Elon Musk said in July that battery packs for electric cars will drop to $100 in the next 10 years. The Tehachapi batteries are supplied by LG Chem Ltd. and are the same type used in General Motors’ Volt.

The Southern California Edison project is part of a push for more wind and solar power in the state, among the sunniest in the U.S. A third of California’s electricity must come from renewable sources by 2020, and mandates also require that the three biggest investor-owned utilities store 1,325 megawatts by 2024. California already has more than 12,000 wind turbines, the most of any state, according to the American Wind Energy Association.

Excess Energy

Most electricity in the U.S. is produced at the same time it is consumed, and suppliers bring plants on and offline depending on demand. Coal and nuclear plants provide much of the base load, accounting for a combined 58 percent of domestic output last year, government data show. Peak-load plants, usually fueled by natural gas, which accounted for 27 percent of U.S. output, are more flexible. They run when demand surges, often on hot days when consumers run air conditioners.

Only about 4.1 percent of U.S. power came from wind turbines last year, and less than 1 percent was generated by solar panels, both of which are more erratic than fossil fuels. Most of the rest was supplied by hydro-electric dams, geothermal steam and petroleum.

California already produces more solar energy than it can consume during certain hours in the spring, when it’s sunny but still too cool for air conditioners, SCE’s Nichols said. Excess generation may reach 10,000 to 15,000 megawatts by 2020, when the state meets its renewable targets, so batteries will be needed to avoid wasting energy, he said. The Tehachapi facility can store 32 megawatt-hours of energy, making it North America’s largest lithium-ion battery project by output, the company says.

Tesla’s Gigafactory

Other countries are pursuing similar projects. Wemag AG, a northern German utility, opened Europe’s first commercial battery-storage facility last month, a 5-megawatt unit built by Younicos AG that stores power on lithium-manganoxid cells made by Gyeonggi, South Korea-based Samsung SDI Co. In Japan, Toshiba Corp. is supplying lithium ion batteries for a Tohoku Electric Power Co. pilot project that will create a 40-megawatt energy storage system in Sendai, the largest of its kind when completed in 2015.

Tesla, based in Palo Alto, California, is planning a $5 billion “gigafactory” in Nevada with help from Japan’s Panasonic Corp. that will be the world’s largest battery factory, Musk said last month. Samsung is partnering with Chinese investors to build a car-battery plant in Xian, China. Electric vehicles may make up 10 percent of new car registries in Europe in the next decade, according to UBS, which estimates battery costs will drop by more than 50 percent by 2020.

‘Smart Grid’

Besides helping bring battery costs down, electric cars themselves may become a source of energy storage for the power grid, said Patrick Hummel, a utilities analyst for UBS in Zurich. In a “smart-grid world,” consumers would recharge cars while at work during the day, when solar output is the highest, and then feed some of that energy back to the grid during the high demand periods in the evening, he said. This could eliminate the need for some peak-load plants, he said.

“Demand peaks typically only last for a few hours, and having electric vehicles during those hours that can also supply to the grid would be a huge, huge benefit,” Hummel said by telephone Oct. 6. “It avoids billions in expensive backup or peak power stations or other expensive demand-side responses.”

Some utilities including SCE’s owner, Edison International, may benefit if their spending on grid upgrades and new technologies includes a focus on electric vehicles, UBS said. Renewable generators and battery manufacturers including Saft Groupe SA and Blue Solutions SA probably will also see benefits, while conventional power generators stand to lose, HSBC said in a Sept. 29 report.

Less Oil

Consumption of oil, natural gas and coal also may drop as battery storage reduces demand for traditional fossil fuels, Citigroup said. Global oil consumption may fall by as much as 4 million barrels a day over the next 15 years as the technology becomes further integrated, Savvantidou said. The world used 91.33 million barrels a day in 2013, BP Plc data show.

In Europe, Germany is leading the transition toward renewable energy. The German government has set a goal that 80 percent of the country’s electricity be supplied by renewable sources, including solar and wind, by 2050. The country also provides subsidies to consumers in the form of loans to buy and install batteries alongside solar panels. There are more than 4,000 residential energy-storage systems in the country because of the subsidy program, HSBC said.

Power Plants

The U.S. is still a long way from having enough battery capacity to replace power plants, SCE’s Nichols said. The Tehachapi site, half funded by the U.S. Department of Energy, is capable of storing enough energy to power about 1,600 to 2,400 homes.

“If battery storage ever gets to the point where we have a breakthrough technology, where they can run for eight or 10 hours at their full capacity, that would be a real game changer,” Nichols said. “We don’t see that right now, but one never knows what technology could bring us in the future.”

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