Which Frontline Entities are Best Suited to Lead this Stage of the Energy Transition?
“TOGETHER, WE CAN POWER THE CLIMATETECH REVOLUTION. We need all hands on-deck.” Greentown Labs Motto.
“Aye, Aye – How should we organize ourselves?" Suggestions follow.
This is a continuation of Racing with Climate Change - Part 1.
The electric grid is integral to virtually every aspect of our lives in the US and across much of the globe. It is arguably the most complex machine that humankind [1] has ever built and yet it is ubiquitous to most of its users. That was not by accident. The roots of today’s grid are found in in the ingenuity of 19th century technical giants like Thomas Edison, Nicola Tesla, and George Westinghouse, but also in the savvy, creative business acumen of lesser-known folks like Samuel Insull. Insull the founded the world’s first utility company in 1895. Today’s electric utility retains many of the hallmarks and shortcomings of Mr Insull’s original vision – from its reliability and ubiquity to its inequities, monopolistic qualities, and innate dependency on “burning fires”. It took several decades to build and refine today’s grid. It has served as a central girder of the incredible human expansion and improvement in standards of living over the last 130+ years. Today we are seeing how the grid’s age, legacies and overall state-of-repair inhibit our ability to rapidly address climate change and stem the damage that humanity’s expansion has done to the planet. With the recent passage of the Infrastructure Bill, we are at a rare moment where communities can have significant influence in the next generation grid. Communities can choose to stay ignorant of its operation and structure and repeat its past shortcomings or they can seek to understand the electric grid and engage in the direction it takes. In the end, through the various communities that we belong to, we will end up with the grid that we deserve.
Part 1 of this series painted the landscape for the grid as renewable, non-dispatchable energy sources (e.g., wind and solar) increase their contribution to the energy mix. To recap, according to Rocky Mountain Institute’s “Power by the Hour” study, as renewable energy resources approach 50%, the value of adding more will plumet unless an increasing amount of energy storage (BESS) and the use of smart grid interactive (SGI) tools are added to better match the variable-supply to demand. The degree that these distributed, community-centric tools fall short must be made up for by utility-scale, federally driven (blunt) tools - if we are to maintain grid reliability and meet GHG reduction goals. The chart below, also presented in Part 1, illustrates this dynamic. This has far-reaching implications across the social fabric and political spectrum as John Oliver portrays in a recent episode of his comedy show about the grid.
This clarifies the imperative for community action on this matter, not only for a given community’s self-interest, but in the broader system level interest. “Communities”, almost by definition, have different composition and characteristics. They universally take pride in their differences and are understandably protective of their independence. Communities are generally oblivious to the symbiosis of its character with the power grid. A less reliable grid or one imposed from on-high undoubtedly affects a community’s characteristics. Consider rolling blackouts and brown outs where some communities must go without power to avoid complete grid collapse or situations where massive high voltage transmission line rights-of-way can split or isolate a community.
The “ubiquity” of today’s 130-year-old grid intentionally played a significant role in creating widespread obliviousness to its operation and resulted in our excessive dependency on its centralized, monopolistic nature. The grid’s old age, the new wave of emerging intelligent energy technologies and climate driven imperatives are conspiring to open a “perfect storm” window for communities to gain more agency over their grid’s direction. This can be achieved this through the rapid scaling of distributed energy resources, that, in addition to generation, must include energy storage, flexible demand aggregation and intelligent “edge” control. Benefits of energy cost savings, economic activity and jobs accrue locally the sooner a community gets them underway.
Detailed modelling and analyses integral to a spate of recent reports and programs, (e.g., A Plan for Economy Wide Decarbonization for the United State, DOE’s Solar Futures Study, SEIA’s 30%x2030), highlights the system-wide benefits of maximized distributed, community-centric measures in the march towards 80% clean electricity by 2030. This approach results in the least cost energy transition that simultaneously, is tailored to the needs and wants of individual communities. Cumulative benefits nationwide include:
$109 Billion in Savings by 2030 over “utility-scale alone” approach.
Additional 1.2 million local solar and storage jobs by 2030.
The analysis also shows that this approach enhances the prospects for more effective utility scale installations. For example, the charts below from Vibrant Clean Energy’s analysis show a much more stable demand on the utility scale generating assets when serving loads with optimized distributed energy resources (DERs). Suffice it to say that under steady, predictable loads, utility-scale generating assets perform much better and produce higher returns for their investors.
Utility Scale with Optimized Local Solar + Storage Smooth the Load
(Source: Vibrant Clean Energy)
Most importantly, the development of distributed, community-centric energy resources is the single most powerful means to achieving the equitable and community-resilient grid envisioned for its next generation. Reasons abound, including:
Utility-scale projects, such as major transmission lines or power plants tend to impact the more vulnerable populations (e.g., rural, low-income) that lack to resources and/or knowledge to influence the siting process. The fewer - but better designed and more effective - the utility scale, “blunt instrument” projects, the more equitable the grid.
Many local DERs that include energy storage can and should be outfitted with “microgrid” capabilities. This mitigates the impact of macro-grid outages – particularly during a severe event - placing less burden on emergency services, speeding response and recovery times, and reducing the cost on the community. A recent Guidehouse report evaluates the economic benefits of widespread microgrid adoption.
Low-to Moderate Income (LMI) households, facilities, and services as sites for and beneficiaries of local DER projects represent triple-win opportunities. As end-users their energy burden is significantly reduced, and with storage and microgrid capabilities they have buffer against grid-outages. As part of the surrounding community, they gain the same awareness of clean energy imperatives and play an integral role in achieving overall decarbonization goals. They are similarly integral to achieving national goals, but also in setting examples for other communities to follow. Ultimately 8-15 million LMI households [2] could benefit from nationwide adoption by 2030.
This begs the next question: if local
communities are well suited to serve as early shepherds of the energy transition, what traits should put certain communities in leading roles? Naturally those communities that have a healthy head start on their climate/energy transition journey [3] represent good candidates, but they should not be the only ones. There are communities that may not top any of today’s “green community scorecard” but have a structure, character and/or resources that enable them to move more decisively through their journey. In essence these communities have what it takes to be “agile”.[4] This particular use of the word “agile” comes from the world of software development. A software platform is most effectively developed in the shortest time by getting it into the hands of real customer/end-users and working hand-in-glove with the developer to optimize its performance. State-of-the-art machine learning and AI makes that process practically seamless. Tracing back to Part 1 of this series, the distributed, community-centric tools lend themselves to this “agile” approach to development. Utility scale tools, such as nuclear generally do not.
Several US cities are developing or seriously contemplating developing “Eco-Innovation Districts[i]” districts or zones.[5] These are designated areas within a city where a panoply of innovative technologies, best practices and policies can be integrated in holistic ways into a subset of a larger community. Some of the best examples of this come from Europe, Canada, and Middle East (e.g., Malmo Sweden, Western Harbour District Vancouver, Masdar Abu Dhabi), but there are hundreds such districts taking root across the globe. They are not only helping to refine emerging technologies, but innovative approaches to local regulations and community behaviors as well. Establishing such districts require engagement and approval of many stakeholders but is much faster than attempting such an endeavor on a city-wide scale. Such districts are likely to face constraints from overlapping bureaucracies that include the city government and the utilities that serve the district.
Municipalities with their own municipal light plants (MLP’s) have the potential to be uniquely “agile”. Contrary to common impressions of these provincial energy providers, they represent particularly strong candidates for leadership roles in the energy transition. The MLPs are unburdened by the level of regulation and shareholder demands of the investor-owned utilities (IOUs). They are, by definition, community-centric and, by law, must put their constituents first. Their decision-making and implementation process can be swift. They can create pilots and support rapid feedback loops to developers. They bring diversity in operations and customers served and are often connected through cooperatives enabling conduits for lessons-learned and refinement exchanges.
CONCLUSION (PART II)
None of this is to say that distributed community-scale efforts can do the job on its own. We need all hands on-deck to make a complete transformation to a reliable, carbon-free grid that offers universal access and robust community resilience. However, there is a least-cost, lowest risk path to the vision and it starts with fielded distributed community measures. The more effective they are, the lower the risks and costs of the utility-scale measures when they commercialize. While advanced utility-scale technologies should be developed in tightly controlled, highly secure settings under time frames that engender safety and quality, distributed, community-centric tools should be rapidly deployed in agile and holistic real-world settings. This strategy of countervailing paths brings diversity, balance, and healthy “coopetition” to the daunting challenges of energy transition.
Part 1 concluded that Smart Grid Interactive (SGI) community-centric tools facilitates “agility” – an essential element to a successful energy transition. Part 2 affirms the obvious - that those tools should be first put into the hands of communities that can be agile. The intentional cultivation of local eco-innovation hubs with spokes to surrounding communities and region seems only logical. Municipalities and counties that own and operate their own “public” grid (MLPs) possess many critical elements, (e.g., consolidated decision-making, fewer stakeholders, less regulation) to show the way. As organizations whose sole objective has historically been to keep the lights on for the lowest cost and otherwise stay out of public view, this role is understandably outside of their comfort zone. They need support and encouragement from all sectors to assume this mantle. State legislatures assessing how to leverage the pending federal infusion of Infrastructure and Build Back Better funds most effectively should seriously consider putting action oriented MLPs high on the list of recipients. In turn, MLPs should be striving to reinvent themselves as dynamic change agents, fully engaged in the thoughtful shepherding of the energy transition - in a way that serves both its own constituents and the surrounding region.
Benefits go well beyond generating carbon-free electricity. Think of exciting trends in innovative local business models that are playing increasingly important roles in the economy. The explosion of local farming, brewing and homemade goods are just a sampling of such trends.[6] They have been attracting energetic talent from all corners of society. Imagine local power business models of similar ilk. MLPs can nurture lush grounds for such a movement to thrive in its community. To do this many, MLPs will have to adjust its organizational mindset, composition of staff and ways that they engage with its stakeholders. They will need to preserve the long-established trust while setting ambitious goals with realistic expectations. Accountability and transparency are at the core of maintaining trust while making change - and the subject of part III of the series. In the meantime, don’t hesitate to send your ideas, comments, and questions on this blog or related inquiries here.
[1] The Grid 2015, Dr Gretchen Bakke https://microgridknowledge.com/energy-future-fraying-wires/ [2] Modeling 80% Clean Electricity by 2030 - Summary (squarespace.com) [3] “Going to Town” with Climate Action (beaconclimate.com) [4] Pandemic Parallels Published in Municipal Advocate's Latest Issue Dedicated to Climate Change. (beaconclimate.com) [5] It’s Time to Get In the “Eco-Innovation” Zone (beaconclimate.com) [6] What Microgrids and Microbreweries Have in Common (beaconclimate.com)
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