Power shift in the pipeline

Disruption to the electric utility industry is on its way and four growing energy trends are literally putting more power into the hands of solar customers, according to US-based solar expert Michael Powers.

Delivering a presentation at an event hosted by the San Diego Renewable Energy Society and Global Energy Network Institute (GENI), Powers highlighted the advent of community solar, community choice energy (CCE), peer-to-peer solar transactions and the expansion of regional and global energy grids as having significant play in meeting future energy needs. While relevant chiefly in the US at this stage, these concepts have the potential to reshape global energy markets.

“The disadvantage of renewable energy has always been its intermittent nature,” Powers said.

“Driven by the sun, solar energy provides more power than you need in the middle of the day and no power at night. It’s non-dispatchable — you can’t turn it up and down to match customer demands from one hour to the next.”

In order to take full advantage of solar energy’s new widespread popularity, Powers says, there is a need for more flexible markets and more robust transmission systems to move renewable energy to where it is needed. As the pool of solar owners grows, these important market trends are beginning to emerge.

‘Community solar’ allows groups of people to invest in large, shared solar arrays and apply some credits to their power bill. In this way, apartment dwellers and lower-income earners can gain access to affordable solar power — and it is believed that 2016 could be the ‘breakout year’ for this type of arrangement.

Certain states in the US, including California, allow cities and counties to directly purchase energy on behalf of their citizens — usually including a higher percentage of renewable energy — and regulate utilities to simply transmitting and distributing this cleaner power. These schemes are referred to as community choice energy (previously known as community choice aggregation) and have been in place for the last couple of years.

However, Powers sees the recent successful tests of a peer-to-peer solar trading scheme as being the most exciting transition. Trials in Brooklyn have allowed homes on one side of the street to harvest solar energy and sell it to homes on the other side through a trading system that is independent from the utility. The system uses ‘blockchain’ software to keep track of the monetary value of the trades. Powers likens it to Uber in terms of its disruptive ability. It allows a solar owner in one time zone to deposit solar energy into the system and another one miles away to make an energy withdrawal, with computers effectively tracking the financial side of things.

If this practice is extended to the global level, it will be possible to develop a global energy grid — a renewable energy internet — over the next 20 years, according to Powers. He suggests that it will take between $15 trillion and $30 trillion and the participation of multiple regional power grid operators on many continents, but plans are already afoot, with countries including South Korea, Japan, Russian and China signalling their agreement to participate.

Powers says that the disruption experienced by industries including publishing, entertainment, telecommunications and transport will soon move to the electric utility industry and that the impacts of change are going to be profound and long-lasting, with many knock-on effects.

“When you lower the cost of energy, you lower the cost of everything,” he said.

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