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Grid Expectations

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In 1882, when Thomas Edison’s Pearl Street Station came online, the electrons that it generated traveled by wire directly to the consumer. But in the decades since, the grid has changed. The complexity of today’s distribution matrix, coupled with the high costs of producing energy, is forcing utilities to rethink their business models and adapt.

The energy grid, as it is structured today, was not designed to manage the elaborate exchange of electrons that contemporary demands require. Rather than follow a simple linear path from generation source to consumer, energy follows a more intricate, multidirectional course today, made increasingly complicated by the addition of distributed energy resources such as solar, wind power, and batteries.

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As the grid evolves, experts predict that it will become increasingly complex. “The next 10 years will bring a level of complexity far beyond what we’ve experienced thus far,” Mike Power, GE’s Chief Digital Officer, wrote. “The rise of prosumers, plus new mandates focusing on renewable energy from states like California, mean that disparate resources will continue to increase. The growth of electric vehicles has also put new pressures on the grid. By 2040, over half of all vehicles will be electric…”

In addition to the challenges associated with emerging operational demands, grid operators also must work harder to ensure that the grid remains secure as it is increasingly a target of attack. Russian hackers claimed “hundreds of victims” and gained access to the networks of US electric utilities in 2017, according to officials at the Department of Homeland Security, Reuters reported.

Furthermore, energy generation is simply more expensive today. A new report by Uptake Technology explains that “Investor-owned utilities that represent nearly half the US grid’s electrical load saw the effective cost of generating one megawatt of electricity rise 74%.”  As a result, producing electricity is becoming a less profitable business.

So what does this mean for utilities? How can they accommodate an increasing number of distributed generation sources while simultaneously earning less for their product? How can they manage issues like distribution complexity, rising costs, security, and grid defection?

Simply increasing prices for the consumer is not the solution. A recent WIRED magazine article compares the energy industry’s current grid dilemma to the telecommunications industry’s challenges to support and maintain landline infrastructure. As customers started switching to mobile, the phone companies had to raise rates on the cord keepers to cover the cost of their telephone lines. That only pushed more people to defect, exacerbating the problem—and increasing the cost.”

What are your recommendations? How do you see the grid evolving to accommodate these shifting energy demands? DE_bug_web

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  1. “Grid Defection” is an easy problem to solve. Eliminate the fixed monthly fees and charge all residential customers the same price per kWh. If there is no fee just for being connected to the grid, there is no incentive to disconnect. There will be times of each year when it benefits both the utility and the residential customer to do business. The surplus kWh that go back to the grid from rooftop solar panels peaks at the same time as the air conditioning load.

  2. Laura———–As to the energy grid——-what we are seeing will result in disruptive innovation, the better mouse trap. This is a natural flow where older systems find it difficult to maneuver and are ultimately replaced. An advancing economy/world is going to experience this need for changes in technology, probably at an accelerating rate. We, here of the south coast, as far as the grid goes, are on the tail end of the wires. That wire is our only source to the grid. Unfortunately, there appears to have been a bit of deferred maintenance along the line which comes in to our area. It also runs through very isolated and rough terrain. This is terrain which makes it difficult for repair crews. That is especially true for the necessary heavy equipment working on steep slippery terrain during the rainy season, and on mud roads. The utility is also alleged to have warned us that this leg would be turned off in case of fire. That fire could be tens of miles deep into the rough terrain. We also have heard that the tower structures and their concrete anchors, due in part to deferred maintenance, are potentially subject to failure. Thus, there are a series of questions that come to mind about the consistency factor in power delivery.
    Many of us have solar panels, but few have a way to store that electricity and are unsure if the battery packs are the way to go. This also then raises issues about what to do with all that solar power if the only line coming into our area is down and we cannot bleed that power back to the grid. Alternatives to consider might include adding a generating system, but the issue of where to put the solar remains. The fuel sources for these generators include gasoline, natural gas and diesel. If the power is off for extended periods, does that also affect gas pumps, hence source of fuel for a generator? Is it worth hooking generators into natural gas? Natural gas should represent an uninterrupted utility, hence source of power for a generator. There are also more sophisticated systems. These are all issues that will go into the mix for decisions auguring for disruptive innovation. The status quo is failing.
    Since we could be looking at weeks to possibly longer that this leg could be out or turned off, this will see those who can afford it start looking at what the utility might call adoption of disruptive innovations. The need for consistency in delivery of power may result in an accelerated increase in this disruptive innovation.

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