the democratization of energy
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The Democratization of Energy. Jay Marhoefer CEO and Executive Manager Intelligent Generation LLC June 17, 2010. Tonight’s discussion. Overview of the electricity sector The challenge of renewables Intelligent Generation TM and the democratization of energy. The obligatory plug. - PowerPoint PPT PresentationTRANSCRIPT
Overview of the electricity sector The challenge of renewables Intelligent GenerationTM and the
democratization of energy
Intelligent GenerationTM is an integrated hardware/ software platform that democratizes how clean energy is produced and distributed.› The optimizer is a smart box that acquires
electricity for a building when it is cheap or free and stores it in a battery for later use during peak times. It buys low and sells high.
› The network forms a virtual power plant from the optimizers. It provides immediate, reliable power to utilities when it is most valuable.
The optimizer and network, when combined, can triple the cost savings of solar energy and cut the payback time in half.
Why aren’t the wind turbines spinning when it’s a windy day?
Why can’t we run everything on renewables and use fossil fuels or nuclear power for backup?
Will a smart national electricity grid solve our problems?
Will solar ever work without subsidies?
Types of power companies› IOUs (investor owned utilities)› IPPs (independent power producers)› Wholesale power marketers (e.g. Exelon)› Munis and co-ops› Load generating vs. “wires and meters” › ARES (alternative retail electricity suppliers)
Regulators› FERC (Federal Energy Regulatory Commission› PUCs (state public utility commissions)› ISOs/RTOs (regional transmission organizations, e.g. PJM)
Other stuff› Baseload/load-following/peaker› RPS (renewable portfolio standards)› Deregulation
For starters…
Availability/reliability› Nukes, coal and natural gas are steady› Wind and solar are not
Resource management› Grid was built to be one-way› How to match demand with (variable) supply?
Inertia› Nuclear plant: 5-7 days from cold start› Coal plant: 3-5 days› Load following natural gas plant: 30-90 minutes› Pure peaker: 15 minutes› Wind: 10-30 minutes› Solar: instantaneous
ERCOT—Houston Hub 2006 2007 2008
Average kWh price (cents) 5.2 5.4 7.2
Average daily spread 18.7 22.0 41.2
Lowest (95.0) (99.9) (153.6)
HIghest 124.8 150.0 380.6
Moral•Wind blows most when you need it least (winter nights) and least when you need it most (summer days)
•Wind’s volatility necessitates more high value ancillary services (storage, voltage regulation, spinning reserve)
•Wind potential is greatest in areas far away from major cities (other than offshore)
Probably won’t happen› Politics (see next slide)› Shifting demographics to Sun Belt
Low wind Not aligned with regional transmission
groups
› Cost of new transmission (tens of $ billions)
› Property rights
92% of Americans think it’s important to develop solar energy and incorporate it in the U.S. electricity system
Source: 2009 Schott Solar BarometerTM
But…long payback periods and high upfront costs› 15+ years even with 30% federal tax credit› 10+ years even with tax credit and $300/MWh
REC
Demand side management
Supply side management
Dem
and
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Dem
and
Demand side management
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SolarDem
and
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Purchased off-peak /wind power stored in battery
Dem
and
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Dem
and
Resulting purchased electricity
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A managed network of distributed renewable generation and storage
100,000 networked buildings is equivalent to bringing a small nuclear plant online immediately
Enormous market power even at 5% of total generation (see Texas)
The “Holy Grail”: consumer participation in the wholesale electricity market
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Solar only Solar /battery/ timer
Solar/ battery/ IG
Net installed cost $10,000 $11,600 $12,000
Annual electric bill w/o solar $2,000 $2,000 $2,000
Electricity cost savings $260 $500 $700
Solar RECs $500 $500 $500
Capacity reduction $0 $0 $200
Ancillary services $0 $0 $200
Peak demand credit $0 $0 $100
TOTAL ANNUAL Savings $760 $1,000 $1,700
Payback period—solar system 13 years 10 years 5.8 years
Payback period—battery/timer N/A 1.6 years 1.2 years
Payback period—battery/IG N/A N/A N/A
Total payback period 13 years 11.6 years 7.0 years
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Smart grid Plug-in hybrids Fuel cells
Focus has been on demand-side management and investor-owned utilities
What consumers like› Real time pricing› Rewards for peak time reductions
What consumers don’t like› Utility control of “smart” appliances (HAN)
Potential storage capacity is formidable› 10 million PHEVs could store 100,000 MWh
(enough to power California for 2 hours) “Charging” side makes perfect sense
› Excess capacity and cheap electricity Discharge side is problematic
› Peak times coincide with commute home› Higher and better use
Reducing greenhouse gas emissions? Getting US off foreign oil?
E.g., the “Bloom Box”› Darling of the cleantech VC crowd› $400 million invested to date
Reliable on-site production of electricity But…
› Won’t be affordable for 5-10 years› Needs a hydrocarbon (e.g., natural gas)› What happens in winter when the cost of
natural gas is 6x?
Hardware costs are coming down› Solar› Batteries/storage
PHEVs are coming Legislation (RPS, PACE) is driving
adoption› Lack of integrated vision › Doing what’s cheap (wind) vs. what’s smart
Those who democratize energy will reap the major benefits
Jay MarhoeferIntelligent Generation LLC