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Distributed vs. Utility Scale Renewables: A Dead-End Battle

Michael Hoexter, Ph.D.
April 03, 2008  |  30 Comments

On a rainy January day in Sacramento, I attended a plenary meeting of California's Renewable Energy Transmission Initiative. At one point, a smartly dressed man from one of the largest rooftop solar finance companies got up to tout the benefits of distributed energy, harping on the drawbacks of high-voltage transmission. Given the backlog of renewable energy projects in California requiring transmission, it was kind of amazing that he had bothered to come to a remote corner of the city to speak against the cause of his renewable energy brethren, an initiative that has zero impact on his firm. Needless to say, next time any of the assembled had a customer referral they would not be turning to this company.

While not all renewable energy company reps are so tone-deaf, the practice of selling distributed energy projects in opposition to all utility scale or central station power projects is outdated and an aid to the continuing dominance of fossil fuels in our electric system.

Distributed energy will continue to grow in importance and popularity, but alone it is insufficient to address the climate crisis. Large-scale renewable power in combination with aggressive energy efficiency and distributed generation will be absolutely necessary to meet the very ambitious GHG reduction and energy independence goals that we are setting for ourselves.

There are many in the RE community, some frequent commenters here, who have embraced the dream of renewable energy in which communities or individual buildings would become energy self-sufficient or even net energy producers. This dream will probably become reality on a broad scale at some point in the future, but unfortunately not fast enough to cut GHG emissions rapidly when we need it most. This is not for a lack of trying by technology firms, as there is big money and much glory involved in more cost-effective and productive distributed technologies.

Some fans of self-sufficiency are willing to devote time, mental bandwidth, and money to set themselves up to live off the grid (or live in remote areas anyway). But most of the population is either not inclined to live this way nor in the position to act on the inclination. The ideal of autarky is not everybody’s social or energy utopia; however, a substantially more energy-efficient lifestyle and built environment is, in my book, a categorical imperative.

Currently, grid-tied distributed generation is the far more user-friendly option. A hidden component of the argument for these systems is “grid storage,” the notion that when your system isn’t producing energy, the grid will supply you with the energy that you need.  Unfortunately, that grid is emitting some of the GHGs that you may be trying to avoid with your distributed generation system, especially in areas with coal-fired baseload, a fairly common situation in the sunny Southwest or windy Great Plains.

Well, now is the time to start thinking about cleaning up that “grid storage.” We can, through a combination of new geothermal, concentrating solar power with storage, small and medium hydro, concentrating photovoltaics (PV), regular PV, wind, marine renewables and pumped hydro, reduce the carbon footprint and therefore the ecological footprint of the grid. To clean up the grid means building some transmission lines (though less will need to be built if we build generation in areas with stronger renewable energy flow).

As it turns out, even if we follow the very favorable policy conditions for distributed and large-scale renewable energy found in Germany, most energy will be generated in large installations, owned by cooperatives or by corporations, and those installations will cost less per unit of energy. Much to the chagrin of some people, a lot of those larger projects may need to be cited on undeveloped land.

The people holding onto the ideal that power generation should be exclusively on developed land are avoiding the tough choices and inevitable compromises involved in building renewable generation facilities. They complain about the visual impact of wind turbines, solar farms or transmission lines without offering a realistic present day alternative that they and we will be able to afford.

Choices within the area of transmission lines provide a graphic example of a tradeoff: Overhead transmission lines are about one tenth the cost of underground transmission infrastructure. Do you want to pay perhaps three or four times as much for electricity for this luxury? Nature does not just put electrical energy on tap, even if you own a renewable energy system; it takes various industrial and construction processes that cost money and involve compromises to bring you that power.

Knee-jerk criticisms of the transmission system and utilities (sometimes found in the pages of this publication) flirt with a similar form of moral hazard. The utilities and grid operators, historically relying most on large-scale power plants, work to respond to our demand for electric power and the conveniences it offers us. In combination with related government agencies and transmission authorities, they have invested in and manage a huge infrastructure that is sending us the power that makes it possible for us to communicate, eat fresh food, get safe medical care, and move around safely. They have figured out ways to do this with a high level of efficiency and service, though unfortunately with fuels that are now endangering our climate. Some critics speak as if it is a breeze to reproduce this service on a smaller scale. This, I believe is either wishful thinking or ignorance.

As Pogo said:  "We have met the enemy and he is us."

So think carefully when you declare distributed energy the only solution: Is this going to be the sole road via which we transition from a fossil fuel to a renewable energy economy?  Have you figured out what the costs and availability of generation and storage are that will allow us to energize the devices that we need or want to use, individually and as a society? If you do the calculations, you will realize that developing judiciously sited central station renewable energy plants, new transmission lines, clean storage and ancillary services, as well as distributed generation is the only way we as a society are going to stop climate change while keeping our impact on the earth to a minimum.

Michael Hoexter, Ph.D., a renewable energy and energy efficiency advocate, has helped California utilities implement and market energy and resource efficiency programs. His views on the transition to a sustainable energy economy and the valuation of energy and energy services can be found at www.greenthoughts.us.

30 Comments

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Mitch Buzza
Mitch Buzza
April 7, 2008
I agree with your comments about building large scale transmission lines overland. We can now afford to think of overland grid lines as a 100 year project, an interim necessity.

I would like to see each of the millions of existing towers retro fitted as mini solar or wind towers, as it seem that adding energy into existing lines is also a good idea.

We will grow to love these towers, and in time we may see large scale beautification or advertising projects for urban transmission lines, as the concept of distributed energy revenues catches on too.
Thomas Schmidt
Thomas Schmidt
April 6, 2008
It took several thousands of years (from the beginnings of mankind) for human population on Earth to reach an estimated 2 billion. That 2 billion mark was hit some time shortly after the beginning of the 1900's.
From that time upto present day 2008, only about 100 years, human population has increased to 6.5 billion.
Thats 4.5 billion humans in less than 100 years.
Now your going to tell me that the only way to "save the planet" is with renewable energies?

If we as a race of human being cannot make the decision to reduce our numbers on Earth then the Earth itself will make that decision for us. If the Earth cannot pull this off, then the cosmos most certainly will and without prejudice. One needs only to remember that we are dealing with extremes here and once the balance falls to one side, times up!

Reading stories like the one above reminds of the time I saw to ants fighting over a piece of food the size of a crumb when only inches away was a half eaten sandwich.
Thomas Schmidt
Thomas Schmidt
April 6, 2008
Of course the two ants could not recognize the half eaten sandwich in the same regard as I could. If only there were someway to comunicate to them... Oh well.
Pity about Earth.
Thomas Schmidt
Thomas Schmidt
April 6, 2008
As a young boy I enjoyed nothing better than walking the Eastern shore line of the Chesapeake Bay. Always with my sights set on where I was going. With no thought as to the walk back home. When I got to where I wanted be and saw what I wanted to see there was that all to familiar site of the trip back to where I came from.
Most of that shoreline is gone now. Waves from the cargo ships now wash against manmade bulkheads. It was less than 35 years ago that I made those journeys.
Tell me, I would like to know. When renewable energies gets to where it wants to be are they going to see the way home, or are they going to do just like all other industries and turn a blind eye to the path from which they came?
When I hear the phrase "energy independence" my thoughts are not about being free of the need of the natural resources of some other nation but being free from the need for energy.
Jonathan Cole
Jonathan Cole
April 5, 2008
In response to Mike Zagorsky. No one is saying that we should get rid of centralized power production. Only that some healthy competition to this 100 year monopoly is needed to shake out some of the moral hazards that arise when an entity has had so much time and resources to skew the outcomes away from the public interest.

We are on the verge of technological revolution that will allow the possibility of super-efficient, smart, distributed energy generating and conditioning systems that can be mass produced and can last for up to 40 years. In the community where I live, power outages are common. The solar powered systems I have used for years don't have power outages because they are basically solar powered uninteruptible power supplies.
Michael Hoexter
Michael Hoexter
April 5, 2008
Jonathan,
I agree that distributed energy can have a competitive role with centralized generation especially as it becomes cheaper. That competition is a healthy thing but it is still not a substitute for an integrated resource planning approach on the part of utilities/government/grid operators to transition to sustainable energy solutions.

Mike,
Yes, total decentralization seems to be swimming against the tide of many public services but I keep an open mind over the long term. Certainly extreme energy efficiency/net zero and plus energy houses will grow in importance over the longer term.

Sean,
Co-generation is good especially if you have a renewable source of heat, like the sun, sustainable biomass, or geothermal. On the other hand, it doesn't seem particularly wise at this point in time to build new co-gen that depends on fossil sources, even natural gas. Co-gen's up to 90% efficiency looks great but that alone should not be the deciding criterion.
Michael Hoexter
Michael Hoexter
April 5, 2008
Joel,
I am hoping that more utilities wake up to the challenge and set themselves the task of being co-leaders of the sustainable energy revolution along with renewable technology companies, regulators, and Departments/ministries of Energy.

Paul and Tom,
I am advocating both distributed and centralized renewable generators not either/or. There is also a category of generators that have some of the advantages of both which are distributed wholesale generators like 1-40 MW PV/CPV/CSP/Wind farms located near distribution lines. The latter have what are called "locational benefits" for easing grid congestion.

stop....,
I am not sure that you in the position to talk about my ethics as you are judging me from the position of anonymity. In my opinion, ethics starts with taking personal responsibility, in this case, for one's own opinions. The Internet allows you here to bear no responsibility for your opinions.

con't
Michael Hoexter
Michael Hoexter
April 5, 2008
stop... con't
If your position is substantive and well-thought out you are free to submit a piece to REW under your own name and I imagine that the editors would put it up.

Turning to the substance of my opinion, I believe that this position, which is shared by many concerned folk, is based on strong ethical principles. I have, like many others in the renewable energy and environmental movements, made a calculation that our society's energy use will remain high even with strong efficiency measures. Many of the rapidly scalable technologies we have that can threaten coal's domination of our grid need to be sited to capture a portion of some of the better renewable energy resources.
Michael Hoexter
Michael Hoexter
April 5, 2008
con't stop....
Some of these resources are located in areas which everybody agrees are not to be touched for environmental reasons; however, some of these lands are less sensitive and, rather than endanger the ENTIRE CLIMATE, building renewable energy facilities and transmission in a VERY SMALL FRACTION of these areas is BY FAR the lesser of two evils. If you assert that all these lands are equally sensitive, then you have, I believe, a tragically unrealistic overestimation of the local impact of wind turbines and solar plants in a fraction of the areas that we all want to help protect. You are also underestimating the impacts of GHG emissions on these very areas that you claim to love.

In fact, your position may give aid to the fossil fuel lobbies, the "big energy" that you claim that I am representing. You are proposing the somewhat more distant solutions as the alternative and not proposing realistic near-term solutions that compete with coal/NG generation.
Michael Hoexter
Michael Hoexter
April 5, 2008
Fred,
Security is an issue for the grid. A future secure smart grid will have a modular structure that will allow regional faults not to interfere so much with total energy flow; taking advantage of both centralized and distributed resources were possible. As we use electricity more, we will need to build in more grid security...this will require more investment through either rates, tax dollars or individual purchases.

Sandra,
These pieces are supposed to run 1000 words or so, requiring some shorthand to get to the end of the argument. You are free to look up concepts that interest you on the internet to get more background. I would however say that for green energy to start to deliver most or all the power in our society, discussions of it will have to get technical in some articles. People study in universities and get on the job knowledge that is not always going to be so easy to pick up for the casual drop-in reader.
Gerry Wolff
Gerry Wolff
April 4, 2008
It is nonsense for anyone to suggest that we can do without electricity transmission grids. Proponents of distributed generation make much of transmission losses on the grid. But, without the grid, there would be much greater losses than with the grid. Without the grid, surplus power in any area is wasted. With the grid, it can be transmitted to where it is needed

There are several other advantages of transmission grids, described at http://www.trec-uk.org.uk/elec_eng/grid.htm .
Keith Vosburgh
Keith Vosburgh
April 4, 2008
The overall system for the use by all must be considered. There are always parts of the population who want to plug into the grid and pay the bill. Others will take on a more ambitious CHP project for larger power hungry sites. New technologies enabling efficiency gains combined with proper system integration will make the dreams a reality.

We must capture waste heat since it is energy paid for and every drop of energy should be used completely. California is being forced to look at the picture after dealing with rolling blackouts, and so couldl the rest of the nation.

Renewable/CleanTechnology application combined with more efficient demand by all customers is key to reducing our consumption problem. Our society is sliding behind the rest of the world due to mental inertia regarding changing our usage patterns. If we morph our society and urban planning with a more sustainable focus like is done in poorer nations, we will save energy AND money.
Keith Vosburgh
Keith Vosburgh
April 4, 2008
Look to efforts in Europe fostering better efficiency and sustainable urban planning to see what our future could look like. Once we correct the negative effects of repeating the same errors of the past (because change is too hard for us to wrap our brains around) we can begin the process of fixng the poorly maintained society that we increasingly find ourselves dealing with.

From a system perspective, the first step is fixing the demand side to decrease the rate of demand growth. Next, apply the correct technologies to maximize supply. DON'T don't look for ONE magic bullet to fix the whole system....that argument is dead. Suppliers of technology need to get together with grid suppliers to engineer a holistic approach and make the total system solution be a well orchestrated effort or we continue to slide into relative obscurity.


Keith Vosburgh
Total Energy Solutions LLC
Joel Davidson
Joel Davidson
April 4, 2008
Now that utilities have competition, they are starting to listen to their customers...after almost 50 years. In 1960, Theodore Levitt wrote about short-sighted utilities in his classic Harvard Business Review essay, "Marketing Myopia" http://www.numotion.nl/download.asp?file=marketingmyopia.pdf "Who says that the utilities have no competition? They may be natural monopolies now, but tomorrow they may be natural deaths. To avoid this prospect, they too will have to develop fuel cells, solar energy and other power sources. To survive, they themselves will have to plot the obsolescence of what now produces their livelihood."
Paul Johnson
Paul Johnson
April 4, 2008
Isn't it possible to have both? Isn't that the most likely outcome?
Tom Street
Tom Street
April 4, 2008
Should we have centralized generation of solar electricity and distributed generation that feeds into the grid. And, is the Southern California Edison project to install 250 mw on commerical roods a hybrid? It is a centralized project spanning a large swath of Los Angeles but it is distributed in the sense that it is installed on individual roof tops.

Can we blanketly state that centralized prouduction of solar will be chaper than installations on consumer owned rooftops that are done on a one by one basis?


What I'm trying to get at is this. Is there a good argument for distributed solar if the alternative is centralized PV or CSP?
stop killin our wilderness
stop killin our wilderness
April 4, 2008
Dead end is right, but killing off a million acres of wilderness is the "dead" part. Man, you are totally lacking in ethics and vision if you think the answer to saving the planet is to kill off huge sections of it for antiquated, remote, utility-profiteering models. Please step aside while people with ideas conduct this conversation. Your plan just continues to externalize the costs of global destruction to keep things "cheap" and utilities rich.

Firstly, we advocates of using previously developed land challenge you to retrofit all existing buildings with massive conservation measures and on-site renewable generation, then start looking at killing off nature AFTER that is completed.

(continued)
stop killin our wilderness
stop killin our wilderness
April 4, 2008
Nobody is proposing killing the grid. Utilities will be mostly in the "grid load leveling" and "power storage" business instead of the killing nature for profit business. Edison's 250 MW system is a great example of how utilities can stay in the game with a distributed energy on previously developed land plan. Many others have done it, even though you act like it's not possible.

We do NOT start with killing off our pristine ecosystems - that is an absolute last resort, and by the time it's "necessary," the technology will have caught up. To blame people who do not want to permanently destroy our planet for ongoing fossil fuel dominance is to ignore the elephant in the room - Big Energy who owns our government.

We could have had every building at net zero 20 years ago - this is a question of political will, not cost and not feasibility. We have a Mars Rover but are helpless when it comes to energy independence? Please. I don't buy it.
Fred Widicus
Fred Widicus
April 4, 2008
Centralized generation that relies on robust distribution lines is simply a formula for disaster. It may shock some of you but 30 people with small arms can take our grid down for 6+months...replacement parts are not available, hitting the "right" points will cause cascading damages. It is simply a matter of time until this comes to pass...How well will we be prepared? We will look like a bunch of fools and then ask all the questions of our government that we should be asking right now.
We are the ones to blame...elected officials are simply going with the "votes".
Subsequently there will be a run on NG, gen sets, and solar apps.
Jonathan Cole
Jonathan Cole
April 4, 2008
Mike Zagorsky wrote:
From what Jonathan seems to desire is that energy cost more, because his personal moral judgment is that we use too much. He has a right to that opinion but it seems like a hell of an ulterior motive.

What a bizarre comment. I did not say we use too much. I said we waste too much. What is the sense of perpetuating wasteful use of a resource when we can accomplish the same advantages using half the amount at half the cost simply by paying attention to what we do. I do have an ulterior motive. I want my grandchildren to have a habitable world.
Mary Saunders
Mary Saunders
April 4, 2008
DIY'ers already are being advised not to attach to the grid because of bureaucratic cost and inconvenience. We will likely have a distributed, under-the-radar source which advance adopters would probably share with their immediate neighbors in case earthquake or something takes out the grid in certain places.
Mary Saunders
Mary Saunders
April 4, 2008
It seems too bad to me that the urge to monopolize, fancify, and control is so great in so many jurisdictions that it drives stuff underground except for wealthy conspicuous consumers, some of whom have had photovoltaics for 20 years. Cheers to them for using their excess income with long-term thinking, but the masses can't do that. We need the masses to get enough change soon enough.
Mary Saunders
Mary Saunders
April 4, 2008
On a different topic, some useful crops can use CO2. It baffles me why Disney Florida's eco exhibit hasn't been copied in other places, notably Portland Oregon where I live. We do draw eco-tourism here, even though in many ways Arizona is ahead of us with alternative-water and -energy implementations.
Mike Zagorsky
Mike Zagorsky
April 4, 2008
I think the real question is what is intrinsically wrong with centralized control of our power system by corporations so long as it is reliable, affordable, and appropriately taking externalities into account?

Centralized generation has an uptime of in excess of 99.99%, and a large number of the faults beyond that are within the distribution system close to consumers and therefore would be just as prevalent within a distributed approach. Centralized generation is also amazingly affordable, the cheapest forms of renewable energy are centralized (Large scale Wind farms, Solar Thermal, Hydro, and Geothermal).

My argument is simple: provided that centralized energy is affordable (it is), reliable (it is), and clean (it can be)--Who cares who controls/owns it? Arguments about reliability--that have not materialized in the last 100 years of centralized generation don't seem too convincing.
Sandra Williams
Sandra Williams
April 4, 2008
I have a very different comment on all this. The article - while highly interesting - assumes a great deal of knowledge on the part of the reader. No base explanation or definition is ever given of what is being discussed. Go back and read that first paragraph with the assumption that you are an average person off the street and it reads like puzzle wrapped around a conundrum. If an average person happened to try to read this (something we all hope for!) they would feel terribly confused. They would have exactly the reaction we DON'T want them to have - assume green energy is only for an educated few. Which it isn't! We want it to be for everyone.
Jonathan Cole
Jonathan Cole
April 3, 2008
While I agree with most of what Michael is saying, there are a few moral hazards that are not dealt with. Such as the often opaque interlocking interests that the fossil fuel distributors have with utility company management and boards of directors. Because of these types of vested interest situations, the utilities must be forced to do the right thing. The best way to do this is with distributed energy systems that are competitive with centralized systems. In the end it is the utilities that should be providing these products, but they won't until they have to.This can only occur when modularized, integrated, mass-produced distributed energy systems are brought to market. These systems can be smart and maximize their energy utilization as well as acting as storage for the grid.

continued in next panel
Jonathan Cole
Jonathan Cole
April 3, 2008
A reason that favors distributed systems is that self-interest of the user becomes aligned with energy efficiency and conservation and it is very easy to deliver the information about energy use on an instantaneous basis.
If you think of household energy use as the support to lifestyle and standard of living, I would suggest that we can achieve the same with 50% less energy use. Our current system is floating on a vast system of waste. Unfortunately it is not in the interest of the utility companies to change this pattern. Serious competition from distributed systems is an absolute must.
Mike Zagorsky
Mike Zagorsky
April 3, 2008
Overall, my philosophy is that energy should either be produced were consumed or centralized. I remember hearing a one proponent of decentralized generation speak of a vision of everyone generating their own energy, 'uploading' and 'downloading' energy to a decentralized network. I'm sorry but how anyone can sell this to a society where getting electricity was simply a matter of paying your electric bill is beyond me. How this can be cheaper or more reliable than centralized energy-hard to fathom.

History has looked at cities moving towards centralized water and sewage systems as a great step forward in the human condition. Decentralized generation is along the lines of turning back towards everyone digging their own wells and having to dispose of their sewage on their own.

From what Jonathan seems to desire is that energy cost more, because his personal moral judgment is that we use too much. He has a right to that opinion but it seems like a hell of an ulterior motive.
sean costello
sean costello
April 3, 2008
Actually, distributed systems generally only have lower levellized energy costs if they are cogeneration systems and heat is recuperated as hot water or industrial process heat. Otherwise you're better off developing a utility-scale project and wheeling to yourself (or net-metering across both or multiple locations) the energy that you're using and selling the rest.

There are hotel chains that have done this successfully on the corporate level in the past, though I know of none that currently retain ownership of power stations.
Mike Zagorsky
Mike Zagorsky
April 3, 2008
I like co-generation, but I think that there are some real limits: First centralized combined cycle gas plants are hitting almost 60% efficiency, so the net waste heat is dropping. Also, you trade that efficiency gain in the cold months for a less efficient single cycle turbine during milder weather.

The biggest issue with CHP is that the biggest proponents of it forget to realize that the population is continuing to relocate from colder climates to warmer ones, so the benefits of co-generation in a non-industrial sense are decreasing over time.

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Michael Hoexter

Michael Hoexter

Michael Hoexter, Ph.D., a renewable energy and energy efficiency advocate, has helped California utilities implement and market energy and resource efficiency programs. His views on the transition to a sustainable energy economy and the...
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