Micro Grid versus large utility

In the current issue of Fast Company, they have a fascinating article about the Micro Grid.

It's focused on small, local power generation technologies -- things life roof top solar, home based wind power, smart meters and related technologies. Increased use of the local, small scale power generation means there is less need for large, cross country power transmission lines and less reliance on on more carbon hungry large scale power plants.

It seems like a great idea in theory, but we have heard plenty of stories arguing it's not a viable solution because of cost, scale, home owners associations, etc.

But one thing I hadn't heard about before was the active opposition of traditional utilities worried about losing business.

Ed Legge of the Edison Electric Institute, the lobbying organization for the utility industry (and leader of the national effort to oppose federal renewables targets), is surprisingly frank on this point: "We're probably not going to be in favor of anything that shrinks our business. All investor-owned utilities are built on the central-generation model that Thomas Edison came up with: You have a big power plant and you move it and then distribute it. Distributed generation is taking that out of the picture -- it's local." This attitude is understandable. After all, if utilities don't own it, they can't bill for it. And with close relationships between power companies and state regulators, they can and do throw up a variety of roadblocks to see that rooftop-solar programs and the like remain tiny.


The tactics utilities deploy to protect their profits can make a reasonable person's head spin. "In Arizona a couple of years ago, we got a renewables incentive passed," says Adam Browning, executive director of Vote Solar, a national advocacy group. "A local utility proposed that it collect money for all the electricity that you didn't buy from it. The argument was: We've got fixed costs associated with maintaining the transmission and distribution grid. So if you don't buy from us, we want to charge you for your 'fair share' anyway," which it reckoned as everything but the avoided fuel costs -- the oil that you don't burn by choosing renewables. So regular customers would pay 11 cents a kilowatt-hour, but customers with solar panels on their roofs -- not even using the utility -- would still have to pay 6.8 cents an hour. "We hired a lawyer contesting this, and eventually we won," says Browning. Today, Arizona has decent, though not finalized, net-metering rules.

Jim Rogers, Duke Energy's CEO, told Fast Company he's a fan of putting solar panels on his customers' homes and businesses -- he just thinks Duke should own them. "I believe at the end of the day, we'll be able to do it cheaper and better than everybody else." But Urlaub says, "We know that's not true," pointing out that Duke recently submitted a public bid for a utility-owned 20-megawatt rooftop-solar program and came in higher than several independent, nonutility solar companies.

There are more stories in the article.

Utilities are trying to prohibit private generation and local energy project that threaten their business. Or they are trying to use the law and Public Utility Commission to make it cost prohibitive. Instead of encouraging entrepreneurship, innovation, new business, and job creations, they are putting up road blocks to progress.

Now, I don't expect the private ones to aid local power generation (though incentives for them to buy power from private generators might be a could idea).

But to actually use the law to prevent these types of projects is disgusting.

We need a new approach to the grid -- one that blends local, micro generation with large plants and utilities. One that uses a combination or resources -- some clean coal, some nuclear, some hydro, some wind, some geo-thermal, etc. New innovations in battery technology and power storage should round out our electrical plan.

It's a fascinating article and well worth the read.

No comments: