Decentralizing; Danielle DeBoer

  • What will be the effect of greater decentralization of power generation?

Decentralizing power generation will have many effects, some positive and some negative.  The positive aspects as I understand will be increased reliability as there will likely be more substations serving fewer people, thus the stations are less likely to reach capacity and shut down or brown out.  Additionally, more substations and providers means increased competition in the market, better service, lower prices, and a greater need for innovation in order to compete.  One of the negatives would be the potential for a smart grid, I think with more substations and providers, there will be less income generation which means the providers may end up relying on dependable technology and less likely to expand their business, which I understand is counter to one of my previous statements.  Kind of a catch-22.

  • What new businesses will evolve in this changing landscape?

There will be an increased need for installers, both commercial and residential, an increased need for electrical engineers who are also educated in IT and IS, and I believe there will also be a greater need for government officials to regulate and rezone for the increase number of stations.

  • What business can you see yourself creating to serve this market?

A third party company that compiles and analyzes the services provided by each generator would be a tremendous asset to any market. A company that compiles costs, reliability, profitability, innovations in infrastructure, and then publishes it to the community to better assist a consumer in making their decision.

Decentralization of Power & Business Opportunities

  • What will be the effect of greater decentralization of power generation?

There will be many effects. One will be increased efficiency. Right now, power must travel from centralized facilities which results in the need for extensive infrastructure. It will also lead to greater flexibility; individuals and organizations will be able to choose between different methods of energy generation depending on their needs at the time.  Finally, it will lead to more competition between energy providers.  Those who intend to provide energy to others will have to offer competitive prices and services.

  • What new businesses will evolve in this changing landscape?

Numerous new businesses will arise.  One new business opportunity will be the installation of alterative power sources.  Another will be the manufacture of these sources.  Still another could be independent providers of electricity.  There will also be maintenance required for decentralized power sources.  All of these represent opportunities for those who want to start a business as an industry is born.

 

  • What business can you see yourself creating to serve this market?

If I were to create a business to serve this market it would be planning and installation of alternative power sources for businesses and residences. This seems like the most long-term prospect. If alternative power options become convenient or ubiquitous enough, providers of power will suffer. Maintenance may become less and less necessary as systems are refined.  Manufacturers will have to cope with obsolescence and continue to innovate to stay ahead. However, in installation, new training procedures would be the main issue, and there will undoubtedly be customers who prefer to have a professional install their equipment, no matter how easy it is.

Lesson 11: A Niche Created from Decentralized Power Generation – Rob Fulton

I think one of the greatest advantages of decentralizing power generation, is that it will improve efficiency of power generation. By reducing centralized power generation, overproduction of energy will reduce. To explain, transmission losses can be avoided by having sources of power located more closely to end users. It is generally understood that between 5% and 10% of grid losses are due to transmission losses, because of the long distance between generation sites and consumers (WADE, 2014).

Businesses both providing and supporting distributed power have the greatest potential for benefiting from increased decentralization of power generation (Owens, 2014). The outlook for Solar PV is especially bright. There seems to be a niche opening for institutions, businesses, and even residential property owners for installing solar arrays on their roofs and properties to not only reduce their energy cost over the long run, but also to produce revenue from selling power to the grid. Such ventures are even better with governmental incentives still making them economically feasible.

With the ever-increasing number of Solar PV companies launching in my home state (California), consumers need a source of information that will provide data such as approval ratings, cost comparisons, customer feedback, etc. on the list of companies serving their locations. Providing such as service would fill that void and with good marketing and advertising I believe the service would be desired and purchased. It could be as simple as paying a fee to enable access to information via the web, with more premium access, at a higher fee, which could include phone or office visit consultation services.

 

Works Cited:

Owens, B. 2014. “The Rise of Distributed Power.” THE RISE OF DISTRIBUTED POWER. http://www.eenews.net/assets/2014/02/25/document_gw_02.pdf.

WADE. 2014. “How Does DE Work?.” WADE : World Alliance for Decentralized Energy. World Alliance for Decentralized Energy. http://www.localpower.org/deb_how.html.

Lesson 11: Bethany Steiner

What will be the effect of greater decentralization of power generation?
Greater decentralization of power generation would provide many benefits. These benefits include, “improved efficiency of the distribution system, reduced strain on the grid during peak demand periods, providing back-up generation to improve system reliability, offsetting costs of new or upgraded transmission and generation assets, reducing environmental impacts of power generation, decreasing the vulnerability of the civilian grid to disruption and attack, and as a resource for the defensive and offensive operations of the U.S. military” (Ebinger & Banks, 2013).

What new businesses will evolve in this changing landscape?
I believe renewable energy businesses will evolve in this changing landscape. I think people may begin wanting solar panels or small wind turbines for their own energy needs. This way, in the long run the resident would save money since they won’t have an electricity bill. Some of these residents could even sell some of their power to utility companies. Additionally, other renewable alternatives could be made to enhance the way we can generate electricity today.

What businesses can you see yourself creating to serve this market?
I never really had a desire to have my own business in the energy field. However, if I had to I would be involved in the solar panel industry. I would like to install solar panels or work at a solar farm. I think this would be very interesting.

Works Cited
Ebinger, C. K., & Banks, J. P. (2013, November 8). The Electricity Revolution. Retrieved November 12, 2014, from Brookings website: http://www.brookings.edu/research/reports/2013/11/06-electricity-revolution-ebinger-banks

“Personal Power Systems”- Your source for limitless energy by Jonathan Barnes

          I believe personal, sustainable power systems will be the future.  They will be the final frontier in human developed energy production. The days of dependency on foreign or domestic sources of energy are dwindling. The decentralization of not just energy, but the decentralization of everything is the way of the future. There will always be entities trying to get customers “hooked” to lifelong products and services. (i.e. big pharma, big food, etc.) However, the world has come to a point where resources are scarcer than ever, actual future viability is questioned and I truly believe someone, somewhere is working on an idea that will touch on the American and more simply, human right, to personal freedom as it extends to all aspects of life on this planet to include personal energy consumption and supply. The technology will arrive soon specifically because of the current economics of energy. It will look like some sort of power pack, probably the size of a cell phone yet it will have the ability to plug in and be plugged into. It will allow various charging options like solar, pendulum motion energy, magnetism, and traditional grid electricity.  It will have sufficient power to charge “personal traveling machines” that may have the ability to fly, ride, or sail. As well as hook to public transportation track or rail systems that will be 100% powered through maglev or sustainable energy. You might then take your personal “traveler” to far away destinations and only be responsible for the power from say your home to the terminal. The real key or future issue I think is to make sure we do it right this time. No single entity should be the benefactor of the tremendous wealth generating possibility of future high efficiency limitless personal energy. However, there is tremendous opportunity for products and services that will complement this new future…

Lesson 11 blog- Reichart

 

  • What will be the effect of greater decentralization of power generation?

The greater effect of decentralization of power generation will be a balanced control between the suppliers and consumers.  Balanced control is huge, because typically it is the power generation companies how have all the “power.”  Rather than being stuck with the local power generation company, consumer will have a choice.  A choice is huge for consumers.  For example the only way in which I can get cable TV is through my local provider, and they are TERRIBLE. They are so bad that I looked for SUBSTITIONS, and I do not have an equivalent one.  So my down-grade substitutions are Netflix and Amazon.

A few years ago, that was the same trouble some people may have had with electrical companies.  Now consumers are able to compare power generation companies based upon quality, price, any type of green energy factor  they like.  Hopefully prices drop due to competition, or power generation companies compete for consumers in positive ways.

  • What new businesses will evolve in this changing landscape?

As we enter a  “changing landscape” I feel that we will see consultation firms evolve and give sustainable advice to businesses or even homeowners.  I talked to a great friend/ mentor of mine who is an architect.  He told me about how, he had questions regarding a project nearly a year ago, but he was not sure who to go to.

Sustrana is sustainable near Philadelphia, and they have a goal which really convinces me that sustainable consultation firms will evolve.

Our Goal:

To enable 1,000 organizations to build strategic sustainability programs by 2020.  -That is huge!

  • What business can you see yourself creating to serve this market?

If I were to start my own business, it would be in small scale consulting.  People need help and I will be there to give them advice.  I would take on residential and business projects, hopefully working on new buildings, but also open to updates existing structures. However I have an open mind and am willing to take on new ideas.

-F. Michael Reichart

Opportunities From Decentralization

Decentralization of power generation has introduced an element of competition to the domestic electric power market.  As states have enacted legislation to require monopolistic electric utilities to allow consumers to select the electric generation company of their choice, the competition has lowered consumer prices.  For example, prior to deregulation, Pennsylvania consumers paid roughly 15% more than the national average per kilowatt hour.  Post-deregulation, these same consumers now pay on par with the national average (1).  In fact, in my personal experience, I have been able to lock into a supply contract at the rate of $0.055/kWh, which is nearly 24% less than if I purchased my supply through my utility ($0.072/kWh).

As deregulation takes hold across the nation, we are also entering an era where traditional coal-fired power plants are being decommissioned in favor of natural gas turbines.  While still a fossil fuel, natural gas can be combusted with fewer carbon emissions than that of coal, and with EPA anti-pollution regulations, this significantly narrows the BTU price gap between coal and natural gas.  As natural gas gains market share at the expense of coal, there are also significant opportunities for renewable energy projects to begin and seek market share.  With a market determined price, these renewable projects could easily become profitable as global electricity demand increases.

Anywhere there is a change taking place, there is a business opportunity.  In the case of electric market deregulation, I believe these opportunities extend beyond that of simply becoming an electric supplier.  There are several energy cooperatives taking hold in my area, the majority of which are partnered with a renewable energy supplier.  With several large wind projects located in the nearby Laurel Highlands, I think a consulting service could be established whose goal is to partner large neighborhood developments and/or retail developments with the local renewable energy suppliers.  This would give existing and new renewable energy projects a guaranteed base demand for their electricity, allowing them to bypass the spot market for a long term contracted price with the end user.  Supplemental load would be provided by other traditional supply from the utility.

1. http://paindependent.com/2011/08/energy-deregulation-benefiting-consumers/

Opportunities in Deregulation

  • What will be the effect of greater decentralization of power generation?

While I think the idea behind decentralization is wonderful, I think in practice it’s going to be a double-edged sword.  Allowing the industry to experience the free market will help it become more efficient, but it will also free utilities from the constraints of governmental price controls.  This translates to higher prices for consumers.  In fact, deregulated states are burdened with some of the highest energy rates in the nation (Marcus, 2011).  There are a number of reasons for this, but the most interesting (and least cynical) is the concept of deintegration.  By taking these former monopolies and dividing their functions amongst several companies, you open the market to more costs along the way (Marcus, 2011).

In terms of renewable energy, I can see it playing a role in deregulation in the near-term so long as there are incentives such as Renewable Energy Certificates (REC) and policies such as Renewable Portfolio Standards (RPS).  However, in the long-term, as the costs associated with renewables continue to drop, I can see that role becoming a primary influence in generation growth.  In fact, wind energy alone has contributed 30% of the added capacity in the last 5 years (AWEA, 2014A).  This is largely due to 90% reduction in costs since the 1980s, yet the technology is still becoming more efficient and less expensive (AWEA, 2014B).

 

  • What new businesses will evolve in this changing landscape?

This question led me to think about a really interesting article I read recently about Germany.  Deregulation in that nation has led to a number of entrepreneurial ventures aimed at using spare land to generate electricity and contribute it to the grid.  Here is a quick summary of that nation’s deregulation experience:

In just a dozen years, industrial-powerhouse Germany has replaced around 31 percent of its nuclear and fossil fuel generated electricity with green power, produced overwhelmingly from moderately sized onshore wind, solar PV, hydro, and bio-energy installations (Hockenos, 2014).

The big difference with Germany, however, was that the grid became open game.  From what I understand, US utilities still own and govern the grid, so in a way they are still the gatekeeper for power.  Somewhere along the line, however, the small-business type electricity generation plants that can be found in Germany cannot be found in the US.

I can’t see small players entering the US market as long as large utilities continue to govern the grid.  There may be opportunities to service large power providers, however, and I can see many ancillary businesses for contractors servicing customers outside the purview of the traditional utilities.  What I mean is, instead of a utility employee going to fix a broken power meter, these jobs will become available for local skilled contractors.

 

  • What business can you see yourself creating to serve this market?

I’m torn in answering this question, because–given the traditional resources–in the US I can only see opportunities in offering services to the new competition for traditional utility companies.  While there may be a lot of opportunity there, it would be nice to have the same opportunity as the German entrepreneurs who are able to turn their roof into a source of income.  Also, I can see pivoting a solar PV installation business or a wind energy installation business into an energy generation business.  For example, if I were to offer lease agreements to my customers, I could perhaps make an arrangement where I would install excess capacity and charge the consumer for their consumption while charging the distributor for the added power.  I’m not sure how–or even if–this could work, of course, but I’m certain if the policies allow for this type of arrangement there could be a significant opportunity.

 

References:

  1. Marcus, William, 2011.  “Does Deregulation Raise Electric Rates? A Cross Sectional Analysis.”  jbsenergy.com.  Accessed:  http://www.jbsenergy.com/downloads/Does_Deregulation_Raise_Electric_Rates.pdf
  2. American Wind Energy Association, 2014A.  “American wind power reaches major power generation milestones in 2013.”  awea.com.  Accessed:  http://www.awea.org/MediaCenter/pressrelease.aspx?ItemNumber=6184
  3. American Wind Energy Association, 2014B.  “The Cost of Wind Energy in the U.S.”  awea.com.  Accessed:  http://www.awea.org/Resources/Content.aspx?ItemNumber=5547
  4. Hockenos, Paul, 10/31/14.  “Germany’s Revolution in Small Batch, Artisanal Energy.”  foreignpolicy.com.  Accessed:  http://www.foreignpolicy.com/articles/2014/10/31/german_green_energy_revolution_backyard_windmills_solar_gas

Lesson 11 Final Blog – Amy Johnson

The effect of greater decentralization of power generation is that there will be a larger variety of the different ways that energy is produced in the world. The focus on coal and oil is in the foreground right now, followed by gas and shale. By having different forms and sources of energy available to us, there will be a better distribution of energy usage and far less gross overuse.

There are many new businesses that will and have evolved in the ever-changing landscape of today’s world. There are businesses that are working towards a more efficient way to transport people and materials, while others are focused more on building more efficient machines to do the same. Others businesses are finding ways to protect the environment and ecosystems, or studying ways to use renewable resources. There are also businesses that are working towards finding efficient ways to produce energy and created electricity.

I see myself working for a company in a green energy field and someday developing a business of my own in this field. I currently work in the nuclear energy field and, although it is interesting and I have learned much, I desire to work in a field that is able to provide a more safe and sustainable way to generate energy for our planet. I am fascinated by the different ways that humans can produce energy, and I have wanted to be a part of this for a long time now. I have young children, and I hope that one day the youth of our world will have a more sustainable future to look forward to.

A Home Energy Control Panel

One of the effects of energy deregulation is rising prices, and greater volatility in prices, due to the change in policies that had previously dictated that energy utilities could only earn a set rate of profit on top of their operating costs. The idea with this policy change was that greater competition would incentivize utilities to reduce their costs. However, because traditional utility companies already had an effective monopoly on the infrastructure and generation capacity, it actually resulted in costs for consumers increasing because utility companies were no longer restricted in the amount of profit they earn (1). More widespread deregulation will likely result in similar increases in costs to consumers.

Energy resellers have become a booming new business in the deregulated marketplace. I see them frequently at the entrance to grocery stores and sometimes also going door to door in my neighbourhood in Philadelphia. They promise to offer customers lower, fixed rates on electricity than if they were to buy directly from the dominant electricity provider in their area. Grid management software companies and services also stand to profit from energy deregulation, due to additional independent energy producers contributing energy to the grid.

As an entrepreneur, I would work toward launching a home energy management technology company that would develop a home energy control system to help consumers manage the energy use of their home and take advantage of lowest-available energy prices. Deregulation means that in many areas, electricity costs more or less depending on the time of day. I would create a plug-and-play energy management application that would turn any home into a “smart home”. There would be a device connected to the circuit breaker box that would need to be programmed to know which appliances were on which circuits. This device would obtain real-time information on the cost of electricity via wifi and be able to communicate with a control panel in the living area of the home. The homeowner could program a day on which they wish to wash dishes, do laundry, etc and this device would activate those appliances at a time when the energy being supplied is the cheapest. It could also heat and cool the home based on energy prices rather than being programmed strictly on time.

 

Works Cited

1. http://www.ftc.gov/sites/default/files/documents/public_events/Energy%20Markets%20in%20the%2021st%20Century%3A%20Competition%20Policy%20in%20Perspective/slocum_dereg.pdf

Decentralized power generation possibilities

Decentralization of power generation has the potential to improve upon energy use efficiency, helping to lower greenhouse gas emissions and provide additional energy security (E.ON UK, plc. 2014). Rather than having only limited, yet massive, power generation sites and transmitting energy over a great distance, energy may be generated and distributed by smaller facilities reducing loss and waste (Casten, Jan. & Feb. 2005). Local communities will benefit from geographically driven solutions taking advantage of an area’s unique ecosystem and resources. Decentralization in and of itself does not prohibit any particular form of energy development; it merely focuses the efforts of the best solution in each unique locale. This is a big shift, however, spurred by improvements in technology that could change the structure of the energy utility company as it exists today. Current energy utility companies may find themselves shifting to a project management type role in helping to coordinate and maintain transmission generation from smaller, more local generators (Koerth-Baker, April 6, 2012).

Companies that are focused on research and development, environmental consultants, financial advisors, maintenance, and, of course, political and policy consulting firms will all be in great demand. This is also a time when technology improvements may increase significantly with a more competitive business environment. It is likely we will see breakthroughs in storage and computer technology opening the door to new companies that will service the infrastructure. One of the more interesting opportunities may well lie in bringing together local, regional, and national efforts ensuring efficiency while maintaining a broad focus aimed at economic, social and environmental sustainability. Policy issues and solutions will evolve over time as deemed necessary. A company well versed in regulatory affairs and the intricacies of public policy will be necessary to keep this new energy delivery structure moving forward.

References

Casten, T. R., & Downes, B. (2005, Jan. & Feb.). Critical thinking about energy: The case for decentralized generation of electricity. Skeptical Inquirer, 29(1). Retrieved from http://www.csicop.org/si/show/critical_thinking_about_energy_the_case_for_decentralized_generation_of_ele/

Koerth-Baker, M. (2012, April 6). What we talk about when we talk about the decentralization of energy. The Atlantic. Retrieved from http://www.theatlantic.com/technology/archive/2012/04/what-we-talk-about-when-we-talk-about-the-decentralization-of-energy/255873/2/

What is decentralized energy? (2014). e-on. E.ON UK plc. Retrived from https://www.eonenergy.com/for-your-business/large-energy-users/manage-energy/energy-efficiency/decentralised-energy-experts/What-is-decentralised-energy

 

Business Opportunities Through Decentralization- Mark Moore

What will be the effect of greater decentralization of power generation?

The decentralization of power generation is an important step in attaining energy efficiency and meeting future demands. First, it is important to consider the drawbacks of a centralized system. Centralized power is a wide network of transmission lines which supply residences, industries, and almost every structure demanding power. This system is very inefficient because of the distance the energy must travel and from the loss of energy through conversion. The biggest problem; however, is the systems vulnerability to natural hazards. When one section of the distribution system is cut off due to a natural hazard, the whole system suffers.

Greater decentralization will provide a more flexible system where distributive capacity could be added through the development of a smart grid. This allows consumers to generate their own power and supply the grid with any excess power not used. The formation of ‘micro grids’ will create a more efficient, reliable system that can form a symbiotic relationship with the main grid. In the event of natural disaster, a micro grid can disconnect from the main grid and still generate it’s own power. The market implications are enormous through decentralization of power generation. Of course, the decentralization depends on government policy and the massive amounts of money spent on lobbying politicians.

 

What new businesses will evolve in this changing landscape?

There will be many business opportunities in the energy industry created by decentralization. The renewable energy sector alone will have major growth potential in solar, wind, geothermal, biomass, and other forms. Within these renewable energy generation sectors there will be need for installers, maintenance workers, and designers. Battery storage is a business opportunity that will continue to expand as technology increases the storage capacity. Computer software and sensors will play a large part in the development of the micro grid, which will create opportunities for entrepreneurs to cash in on their innovations. Consulting firms will be needed to help direct entrepreneurs and forecast certain niche markets made available in the changing energy industry. Finally, capital will be needed to finance these business opportunities and investors who can foresee the potential, while understanding the government incentives, stand to make substantial returns.

 

What business can you see yourself creating to serve this market?

I could see myself starting a consulting firm. I am not a computer programmer and do not possess the engineering skills to create something innovative. I am more interested in finance and policy, and would help entrepreneurs navigate through the government incentives and regulations, while providing them with a financial analysis of project plans. My consulting firm will help align business strategy and compliance initiatives while also providing risk assessment and governance goals. The consulting aspect in this industry could provide a business the tools needed to capture it’s full market potential.

L10: Decentralized of Power Generation

The most common means of generating electricity in most countries around the world is via centralized generation. This electricity is generated large scale and then transmitted at high voltage via transmission lines over long distances. De-centralizing power generation would have several effects for the market.

Decentralizing power generation provides several environmental benefits by displacing electricity that is generated by large scale centralized  power plants. It would also generate power were it is needed, increasing the efficiency of the resource use. This would also open the doors to more local renewable energy power generation.  However, decentralized power generation may also have disadvantages. According to the International Energy Agency it has higher unit capital cost per kilowatt than a large plant. It has lower fuel economy and uses a more limited selection of fuels. For photovoltaic systems, operating costs are very low but high capital costs make it uncompetitive. “Studies by the Congressional Budget Office and the U.S. Department of Energy also point to higher costs as a possible disadvantage (Karger, 2009).

I believe that local renewable energy power generation businesses evolving in this changing landscape, as well as would be a business I can see myself creating to serve this market.

References:

Karger, Cornelia, Hennings, Wilfred. Sustainability evaluation of decentralized electricity generation. Renewable and Sustainable Energy Reviews. Volume 13, Issue 3, April 2009, Pages 583-593.

11 – Raxter Decentralization and self-consumption

Leasing companies install and operate PV arrays on individual’s homes as if they were an independent power generation company. As this trend has been growing, the largest effect of greater decentralization of power generation that I have seen is the rising cost per kWh that the utilities are imposing on their customers that have not transitioned over in order to compensate for their lost revenue.

 

Eventually, I see the utilities starting to charge more in the evening hours to be able to reduce how much per kWh that they are current crediting to existing PV production sites or introducing standards that will allow them to not credit more than the standard utility rate for alternative power production. I believe that this would open up an opportunity to install smart controls on individuals’ homes to help program their loads to operate during peak PV production times.

 

I could easily see myself running consumption reports and installing smart home controls that would allow the end user to increase their self-consumption and reduce how much they were purchasing from and selling to the utility which is what they are already starting to introduce in Germany.

http://www.sma.de/en/products/monitoring-control/sunny-home-manager.html

Decentralization offers endless opportunity

The decentralizing of power generation is filled with both positives and potential pitfalls.  Some of the biggest positives will come from the growth of renewable generation.  Creating small scale generation facilities on a residential or even business level is a much simpler and manageable process than creating large scale generation facilities that could rival today’s fossil fuel generation facilities.  As small scale generation systems continue to evolve, ultimately it gives the individual much more choice in how they get their power.  Whether it is through PV solar, wind, or any new form of power generation that is invented.  This freedom could be great for the industry.  Very similar to how the telecommunications industry has evolved since the Telecommunications Act of 1996 by lowering the monopolistic power of existing telecom companies, decentralization and deregulation of power generation will force innovation and evolution by the existing power companies.  Flood the market with competition to the existing government regulated monopoly and the industry will begin to innovate much faster.  The biggest potential negative effect of decentralization is the effect on the grid.  The nation’s electric grid is expensive to construct and maintain.  It is also central to the stability and security of the country.  With increased customers coming off the grid, the burden of maintaining the grid falls more on the customers still using the grid and cost increases become proportional with the people leaving the grid.

The potential for new businesses is potentially endless.  New PV designers, companies that install and maintain new systems.  Companies that develop, install and maintain battery storage systems for people once the new generation systems are installed.  Efficiency consultants who can show how to make better use of your new systems and allow for smaller more compact systems that do not need to generate as much power.  As the industry evolves more and more the potentials are endless.

If I was going to start my own business within this industry, it would have to be consulting.  I am not an engineer, I do not consider myself an inventor what I do believe is a strength is in analysis and project management.  Consulting is important because business owners and individuals cannot be expected to be experts in energy generation or efficiency nor should they be expected to spend the necessary time to research the systems properly themselves.  I can also see a business that does system design, either as part of the consultative aspect or as a stand-alone business.  Not actually getting into manufacturing, or install of physical equipment but as someone who puts together all aspects of a system from power generation, to battery storage, to smart meter technology and efficiency measures that finally give residential and business customers energy independence or profit.

Renewable Benefits from Decentralized Power

Distributed Generation gives consumers the opportunity to choose their supplier of energy. In the current landscape of centralized energy supply, homes and apartments are mostly forced into purchasing electricity from a large utility company. Their power plant is likely located very far away, traveling miles and miles through power lines.  With decentralization being incorporated into communities, more choices of energy become available like renewable energy sources.

This new opportunity for renewable companies gives them a greater chance to take over a piece of the energy market. Businesses like solar and wind companies can offer consumers clean energy at close distances or even directly on their property. SmartGrid companies also have a great opportunity for growth in a situation where energy management and reading is at an all time importance. Automated control gives already conscious consumers a greater ability to track their energy use. Pinpointing where and when they use energy gives SmartGrid companies a market advantage for citizens concerned with their personal energy use and where they get it from.

For me personally, distributed generation gives a good opportunity to evaluate the benefits compared to larger utilities generating and supplying power. Developing a business that is able to analyze and site the true impacts of decentralized energy on the economy, renewable companies, utility companies, and residents is crucial. There will need to be accurate evaluations with the increase in distributed generation to justify a greater change in the system. If microgrids and closely located.power plants and renewable energy generation to communities are to be widely adopted, companies responsible for measuring market effects will be needed.  Governments and society will only be willing to support this change with accurate analysis.

Source:

Driesen, Johan. “05/02120 Distributed Generation: Definition, Benefits and Issues.” Fuel           and Energy Abstracts 46.5 (2005): 312. ESAT. Web.

Influences in a changing world – MSWALE

I believe alternative energy will continue to grow in multiple forms not only for the sake of creating electricity but to also run “off-the-grid” type equipment such as aquaponics (for food), turbine powered water purifiers, solar sills, geothermal power plants, etc. I don’t believe decentralization will ever get to a point that stops electrical utility companies from having a monopoly but I do think alternative resources will continue to grow as more people understand the importance in protecting the environment and consequences to nonrenewable resources (higher costs in the future). Currently there are utility companies that do have “green” options available so you can choose energy created for renewable resources rather than coal or natural gas, but of course you pay a little more for it.

For me I plan on being in a business that utilizes all natural and sustainable resources available to protect the environment and reduce greenhouse gas emissions and pollution. After my masters in architecture I plan to design LEED certified residential homes that utilize the resources around it, use green and energy efficient material, etc. I hope to change the way people view homes and communities, but that’s a few years down the road. 🙂

Community Based Electricity: Hammonds

In theory, the greater result of decentralization should be lower prices on electricity and competition in the market place. However, as we have seen, this isn’t always the case. Take for example California and their still high prices on electricity in a post decentralized market. The choices consumers were promised weren’t really choices at all and competition didn’t happen automatically as FERC believed it would. However, I don’t believe all is lost for the decentralization of power generation. Getting the kinks of the system worked out, enforcing competition, ensuring real choice to consumers is the first step in the process. Once the economic side of things has been worked out, I see a return to smaller scale community electricity generation. Renewable energy sources that work for the landscape and resources available to a specific community could become the main source of electricity for a community that is willing to put in the effort. If not, then the use of more traditional electricity sources could still be available.

The business opportunity in this is the consultation and installation of renewable energy power generation sources. These sources could be small level wind farms or solar PV. It would be likely out of the range of consumer knowledge to plan and implement a community wide grid based on renewable energy. This business could offer an initial consultation service to help communities decide which source of power generation is best suited to them and then help them go about putting the system into place.

I’ve always been interested in helping this country move into a more sustainable way of doing things in terms of electricity generation. My relatively small town has recently seen a surge in PV installations and we’re all really excited about it. I would love to be a part of taking that movement and helping it grow into a larger, community lead push towards sustainable and self-sufficient electricity generation.

The Failure of Electricity Generation: History, Status, and Needed Reforms, Tyson Slocum
http://www.ftc.gov/sites/default/files/documents/public_events/Energy%20Markets%20in%20the%2021st%20Century%3A%20Competition%20Policy%20in%20Perspective/slocum_dereg.pdf

Lesson 11.7 Decentralized Power: The Future Of Real Consumer Power

Decentralization is independence and brings more control immediately into the hands of consumers.  Farmers markets are a decentralized method for food distribution. It unbinds us of the traditional methods of sustainability.  This is what decentralization is all about.  Taking control and thumbing your nose, so to speak, at utilities and the powers that be.  I think the greatest benefit of decentralization is independence and user control. Those participating in a micro grid can in theory, establish their own rates. The dynamic distribution system outlined in the Wisconsin Energy Institute paper seems the most feasible. “Benefits of a dynamic distribution system can include improved reliability, lower power losses, increased use of renewable energy sources, and lower total cost-per kWh.”(1)  Additionally, power needs can be determined locally. “By allowing the customer or micro grid operator to manage itself according to its needs, and then acting as an aggregated single entity to the distribution system operator allows for a number of innovations and custom operations; the interconnect point only needs to know whether power needs to be sent into the micro grid or whether power is flowing out.”(2)

I think it is important to mention Enron.  One of the downsides of deregulation, according to the lesson, was the debacle at Enron. The fault didn’t lay in deregulation.  Rather, it was corrupt management.  Deregulation set up the circumstances that allowed Enron to manipulate grids.  First buying power stocks at lower rates, shutting off grids, driving the stock values of power upward and then cashing in.  This is not evolution or cooperation.  Its crime.

Decentralization in its current forms cannot be avoided and utilities will cooperate in order to survive .  Utilities must recognize emerging consumer controlled power options such as the micro grid.  Additionally, micro grids without individual battery backup cannot truly be independent of utilities. A bipartisan existence must exit. “Most micro grids of the future won’t be making and storing enough power to be grid-independent all of the time. Instead, micro grids will maintain a constant and complex relationship with the utility” (3) As the article implies, utilities will be evolving with local micro grids to provide power during low light and no light scenarios.  Evolution has been slow in the United States.  However, decentralized power generation could save millions in capital investment, reduce power costs, reduce vulnerabilities, and cut greenhouse gas emissions in half.  In regulated power markets competition is nonexistent. However, in a decentralized market, competitive pressure should demand efficiency in the industry and increase profits while simultaneously saving households and businesses utility costs.  Decentralization also introduces new business opportunities.

Decentralized utility needs management.  The local grid needs to have an administration to handle the shared costs such as maintenance.  Third party facilitators could be hired to handle this and a local board of trustees could be hired from a pool of users who are stakeholders.  As for myself, I have already participated in solar array installs all over central California.  To be able to participate in furthering this technology and movement, either as a business owner or involved in a limited partnership, seems exciting.  There will be different and more complex challenges involved in micro grid installs and during its evolution business owners must be ready to adjust.  The lean business plan might do well in this environment.

 

(1)Beihoff, Bruce, Tom Jahns, Robert Lasseter, and Gary Radloff. “Transforming the Grid from the Distribution System Out.” Transforming the Grid from the Distribution System Out.The Potential for Dynamic Distribution Systems to Create a New Energy Marketplace (n.d.): n. pag. Https://energy.wisc.edu. University of Wisconsin – Madison, July 2014. Web. 7 Nov. 2014. <https://energy.wisc.edu/sites/default/files/Transforming-the-Grid-from-the-Distribution-System-Out.pdf>.

(2)Villarreal,  Christopher, and David Erickson. “Microgrids: A Regulatory Perspective.” Microgrids: A Regulatory (n.d.): n. pag. Microgrids: A Regulatory Perspective. California Public Utilities Commission, 14 Apr. 2014. Web. 7 Nov. 2014. <http://www.cpuc.ca.gov/NR/rdonlyres/01ECA296-5E7F-4C23-8570-1EFF2DC0F278/0/PPDMicrogridPaper414.pdf>.

(3)StJohn, Jeff. “Microgrids: Utility vs. Private Ownership.” Gigaom. Gigaom Research, 24 Feb. 2010. Web. 07 Nov. 2014. <https://gigaom.com/2010/02/24/microgrids-utility-vs-private-ownership/>.

L11 – Mulhollem – Decentralization – stock market

 

This is our last blog so I wanted to mix it up a little. I just wanted to get everyone thinking about what makes the electricity market in the United States different from other countries.

When we look at decentralization of our electrical power, we must take into consideration that the electrical utility companies are for the most part publicly owned and traded on the stock market. These stocks pay very good dividends. Some utility stocks pay 5 – 6 % dividends per year. There are a lot of these stocks in American saving portfolios such as 401K and IRAs funds. If decentralization was to take place on a larger scale it would cut into the dividends utility companies pay to their stockholders. This would affect the stock market along with the savings plans. The federal regulatory agencies realize this so I will be surprised if a decentralization of more than 20% ever takes place. With that said, I do see small scale, behind the meter projects to be the only real growth that could take place.

With the recent advances in battery technology and improvements in appliance efficiency, I would suggest that off grid home electricity will become the next energy entrepreneurial market. If we are able to reduce our residential electrical consumption to 1/4 of what we use now through efficiency, then battery storage could be a viable source of electricity. To take this further, we could re-engineer our homes to use DC current instead of AC current. There is approximately a 30% loss of efficiency in the conversion from AC to DC. All of our computers, TVs, LED lighting and appliances actually run on DC current. AC from your electrical outlet is converted to DC inside the TV through a bridge rectifier. This consumes a lot of power. If future battery storage would be able to run a house overnight, a photovoltaic array could recharge it during the day. Photovoltaic arrays produce DC current so there would be a minimal loss when charging the batteries.

The area that I feel would see a very large growth in the future is the battery storage and battering charging. Batteries need to be charged and cycled properly. I could start a business that would monitor and cycle the batteries as needed. This would be done remotely through a wireless connection. The temperature of the batteries is also critical to the output and life of the batteries. This business would complement the installation of any small scale, behind the meter electrical projects. The batteries will also need to be monitored 24 hours a day. After the installation, my business would charge a small fee for the monitoring and reporting of information pertaining to the batteries. The company could also send a daily usage report to the owner so they would know what level the batteries are at any time. The business would also develop a phone application to receive battery information at any time.

Stallard — From Centralized to Dynamic Distribution Systems

This lesson was perhaps the most interesting one in the entire course to me because of the topic — how to transition a century-old centralized or central station electric system to one of local generation or decentralization. The Wisconsin Energy Institute’s paper “Transforming the Grid from the Distribution System Out” offers clear ideas on how to transition to a dynamic distribution system and new energy marketplace while ensuring profitability for the traditional electric utility and reliable and affordable retail electricity rates for consumers — all through a new, dynamic use of the distribution system. This idea bridges the gap between developing renewable energy resources for environmental and economic reasons without regard for supply and demand requirements to a system that investigates the market and sites generation according to load requirements, availability of supply or resources, storage and available base load generation to supplement and stabilize demand. The dynamic distribution system and marketplace discussed in the article seemed to me to be the design that provided the best promise of transition. It integrates the best of central utilities and the best of distributed energy resources without creating a system of winners and losers. (Wisconsin, Page 4) The effects of greater decentralization of power generation, if done correctly, are effective integration of renewable energy resources, local reliability with a degree of independence, local control over resources and ultimately price, jobs and a boost to the local economy.

Many new businesses will have to evolve in this transition. The battery storage technology will have to be perfected to improve reliability. Small and large energy consumers will have to be educated and encouraged to participate in micro-grid or dynamic distribution systems. Residential energy consumers will also have to understand the new electricity distribution model. Engineers specializing in load controls, heat recovery, energy storage and carbon minimization technology will have to be involved. Flexible utility business models will have to be developed and promoted. Educational opportunities will exist with regulators and legislators as incentives, laws and regulations will have to be changed. Finally, the transition will require the talent of many people and firms who have the vision and knowledge to recreate the central distribution system of today to a more sustainable electric system of tomorrow.

I would absolutely love to be the person who could figure out how to recreate the electric cooperative we have today to a new cooperative that embraces a dynamic distribution system and new energy marketplace of tomorrow. I have been interested in this for quite some time and the Wisconsin Energy Institute paper advanced my thinking on the topic quite a bit. I am not an inventor or engineer, but I think I could create a business that would advance the concept of transforming our existing system to the dynamic distribution system described in the paper. I think demonstration projects are very important in the transition. Often times, people need to be able to learn from an example; and that’s what demonstration projects offer. I think I could start with our local community college, promote the development of a micro-grid that integrates with the existing electric cooperative distribution system and results in a reliable, affordable and sustainable model for others to use in the future. The business would have to either employ electrical engineers, financial experts (to secure funding) and construction workers or would have to be able to partner and collaborate with the local utility and engage the local community to be successful. I prefer the latter, in which I would be a consultant, as it is a way to start out slow, with little capital investment and grow as conditions permit. Once the demonstration project was completed, the business could use the same concept in developing micro-grids at wastewater treatment plants, hospitals and other major industries. Other business opportunities include community project coordinator, project proposal developer and educator (either through developing school curriculum to teach the new concepts, training the new skills existing linemen and utility workers will need or marketing the concepts to potential project owners).

Beihoff, Bruce, Jahns, Tom, Lasseter, Robert and Radloff, Gary. Wisconsin Energy Institute, University of Wisconsin-Madison, July 2014, “Transforming the Grid from the Distribution System Out,” https://energy.wisc.edu/sites/default/files/Transforming-the-Grid-from-the-Distribution-System-Out.pdf.

Decentralization

There will be positives and negatives of greater decentralization of power generation. There will be an increase in competition with new and/or smaller companies being able to enter the market and this could drive price in either direction. Usually when there is more competition in a market it drives the price down because consumers have options. But if there are only a couple options for consumers to get energy from, then prices could actually been driven up. Decentralization will also lead to an upgrade in the electrical grid. There will be more renewable power that will need to be put on the grid and in order for the grid to handle that, there will need to be improvements made. This will most likely lead to a more stable grid.

The new businesses that will evolve are renewable energy businesses and all the parts that go along with it. Smaller renewable energy businesses will be created to supply the energy to the consumers and these alone will range in all shapes and sizes. There will be businesses that specialize in wind and/or solar and probably biofuels. With that we will see technology evolving around those businesses. There will be companies that are created so make wind turbines smaller for homes, and PV’s that are durable but less expensive. Construction companies will evolve that specifically specialize in the installation of these products.

The business that I see myself creating is the business I have wanted to create all along: working with developing countries to survive off the grid. I want to have a business that builds renewable energy grids for communities in developing countries so they can live healthier lifestyles. By building a grid for each community that relies of solar and wind power it will supply communities with more electricity than they have and is self-sustainable.

Smaller is Better- Decentralizing Power Generation

• What will be the effect of greater decentralization of power generation?
o With cleaner, more efficient technology available for power generation, decentralizing the industry may become more of an issue than most anticipate. Natural gas reserves in the U.S. create a great opportunity to fuel smaller localized generation facilities and returns the option to use the expelled heated water for purpose as opposed to wasting it in cooling towers. The overall effect of decentralization could eventually eliminate some of the remote power generation facilities.
• What new businesses will evolve in this changing landscape?
o The obvious new business would be installation companies of such equipment. Other business might be maintenance companies to maintain and repair these centralized facilities. Extension employment will trickle down as companies or building management teams will need to hire people to manage any equipment as well.
• What business can you see yourself creating to serve this market?
o I could see the opportunity to create a consultation business to help communities, building owners and businesses evaluate the possibility to install such a centralized facility and release from the grid.

Loyd_Dencentralization of Power Generation

Times have changed, and if we do not diversify our energy sources today, we are all heading down the road of infinite environmental troubles and consequences. The importance of energy security and energy stability is the nation’s top priority in order to promote economic growth and remain in accordance with current and future environmental policies. Decentralization of power generation will lead to considerable effects on the environment, economy, efficiency, security, and reliability of the current network. First, a decentralized energy system will expand energy sources with new renewable energy companies, expanding the field of renewable energy and thereby reducing the environmental impacts such as CO2 emissions. Second, a DE system will increase competition as it will be more so based on a free market system with limited regulation. The greater number of players in the field of embedded generation will encourage firms to operate in the most cost-effective, efficient manner as possible. In essence, the companies want to offer energy at lower costs than competitors to become successful. Therefore, companies will create or adapt new technologies that increase the efficiency and profitability of the firm. Such techniques that may be considered could be more improved storage infrastructures for renewable energy plants to sell electricity during peak hours. Currently, a significant hurdle in the distribution system is that the supply must be generated as needed. Thus, when supply exceeds demand (as with the case of most renewable energy sources) the excess energy is sold at very low prices on the flooded market. Therefore, I believe that we can expect to see large advances within storage technologies such as improved batteries for PV (Photovoltaic) units, and hydro storage infrastructures that would store energy more efficiently to sell during peak hours. In addition to storage technologies, there will be a higher demand for smart infrastructures such as smart meters and smart grids to manage grid stability. These types of technologies would become invaluable in a decentralized energy system for it would allow real-time monitoring and communication between the producers and the consumers.
Implementation of a DE system would spawn job growth and create numerous market possibilities within the energy and technical sector. I can imagine myself creating a business that would either focus on improving a plants efficiency by improved technology that is original to the market or becoming a consulting business to educate future investors and companies. The renewable energy market is growing at a remarkable pace and with the help from renewable energy payments and rebates, it is only expected to increase. Thus, two years from now, equipment used today may be outdated and not as efficient. Therefore, I believe that there is a niche in the market to keep firms updated and educated in the technological advancements. Perhaps, I could create a sale representing company that conducts business audits as well to ensure that they are operating at an optimum level. If and only if renewable energy technology continues to improve, I could present companies with new more efficient technologies. I also could offer discount rates if they would sell me the old equipment. Then, I could sell this used equipment to start-up businesses or residential units that are searching for less expensive systems. Another niche would be to start a consulting company to help new businesses learn the “ropes” of the decentralized control system to diminish the chance for failure and increase the potential for success. Overall, there are significant opportunities in starting a business catered to the decentralization of power generation; but I feel that these activities would lead to great success for the fact that they both focus outside the industrial market and power plants. The companies can be integrated on a full scale both commercially and residentially increasing the likelihood of expansion.

Low carbon Green Road map for Asia and Pacific. “Decentralized Energy Systems” UNESCAP. Nd. Mozilla Firefox. November 05 2014. Found here: http://www.unescap.org/sites/default/files/14.%20FS-Decentralized-energy-system.pdf

Klitgaard, Thomas. Reddy, Rekha. “Lowering Electric Prices through Deregulation”. Federal Reserve Bank of New York. December 2000. Mozilla Firefox. November 5 2014. Found here: http://www.newyorkfed.org/research/current_issues/ci6-14.pdf

Lesson 11 – Deregulation – Jackson

The goal of deregulating energy markets is to create competition in a market that was previously controlled by monopolies. According to standard economic reasoning, this increase in competition should lead to lower prices. Unfortunately, this has not always been the case. In reality, deregulated power plants can sell power at higher prices because they are not held in check by governments. Although there is slightly more competition, most regions are still dominated by one large utility, eliminating any real retail choice. The average price of power in deregulated states is 48% higher than in regulated states. The lack of continuity also means that power grids are less reliable because several different companies need to work together to keep the electrical balance.

The business opportunity that can take advantage of deregulated energy markets is in microgrids. A report by Robert Liam Dohn defines mircogrid as,”a discrete energy system consisting of distributed energy sources (e.g. renewables, conventional, storage) and loads capable of operating in parallel with, or independently from, the main grid. The primary purpose is to ensure reliable, affordable energy security for commercial, industrial and federal government consumers.” Microgrids can provide backup to unreliable grids. They were used in New Jersey after Hurricane Sandy Hook to immediately provide electricity to damaged areas. They also have potential in underdeveloped regions of the world, with no grid access. A microgrid tied to a renewable energy source has the potential to supply critical electricity to areas of the world which are lacking. As energy markets deregulate, a market for microgrid technology should develop rapidly.

“The Business Case for Microgrids” – Siemens

http://w3.usa.siemens.com/smartgrid/us/en/microgrid/Documents/The%20business%20case%20for%20microgrids_Siemens%20white%20paper.pdf

“How Solar-Based Microgrids Could Bring Power to Millions” – MIT Technology Review

http://www.technologyreview.com/featuredstory/429529/how-solar-based-microgrids-could-bring-power-to-millions/

“Microgrids Keep Power Flowing Through Sandy Outages” – MIT Technology Review

http://www.technologyreview.com/view/507106/microgrids-keep-power-flowing-through-sandy-outages/