Each investor-owned utility in California has developed a program designed to use distributed generation photovoltaics as wholesale generators. The approved programs total 1.1 GW over the next 4 years–an amount equivalent to the daytime output of 2 mid-sized coal plants. The first results are coming in–and are exciting.

PG&E just filed for approval of its first purchases under the program (pdf): 3 projects, each under 20 MW, and each under the price of natural gas. That’s right–under the 2009 MPR, which is a calculation of the 20 year levelized cost of energy from a 500 MW combined cycle gas turbine.

There’s plenty more where that came from.

We have said it before and we’ll say it again: the transition to renewable energy is a source of economic opportunity, not economic pain.

A few notes on elements of successful programs in this space:

* Standard contracts. In order to reduce transaction costs and help ensure project viability, parties pre-negotiated standard form contracts for this program.
* Interconnection. PG&E provided maps to help developers understand where interconnection might be accomplished most easily.
* Competition. Over the years, California has nurtured a vibrant solar industry, and this program provides developers with multiple market opportunities
* Project viability. For any program with limited contract capacity, it is critically important to ensure that contracts go to those with the intent and means to actually bring the projects to fruition. In order to protect the integrity of the process, this program requires winning bidders to submit development security.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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The European Union (EU) is made up of 27 countries and over 500 million people. Each country (more commonly called “States”) has its own sovereign identity but the governing body of the EU has rights to set limited legislation and broader policy direction for its member States. Initially set up as a trading bloc for the free movement of goods and labor, the EU is now much more.

The EU is increasingly setting far-reaching and far-sighted policy on the environment and sustainable development. Two critical documents have come out since the start of the year. A third is due, which will steer a number of critical decisions made over the next decade.

The headline policy that most people have heard of is the “20/20/20” target. Or, in longhand, the member States of the European Union have committed themselves to reducing greenhouse gas emissions (GHG) by 20 percent, increasing the share of renewables in the EU’s energy mix to 20 percent, and achieving the 20 percent energy efficiency target by 2020. To do this, brains behind the policy have undertaken a lot of “how to” modeling work to see how to get from here to there.

Now 2020 is deemed too close and policy is looking out to 2050. As part of this “A Roadmap for moving to a competitive low carbon economy in 2050” was published in March of this year. The focus of the document is in the title – keeping (or making, depending on your point of view) the EU greener and competitive by 2050. The document is incredibly important, as it doesn’t give clues, but full-blown statements of direction for the development and deployment of policy across the Euro zone over the next decade.

Here are the highlights and implications from the roadmap:

- Electricity will play a central role in the low carbon economy. The EU’s analysis (of which we have not seen but is reported throughout the document) implies that is it possible to totally eliminate CO2 emissions by 2050, and offers the prospect of partially replacing fossil fuels in transport and heating.

- Demonstration and early deployment of technologies, such as various forms of low carbon energy sources, carbon capture and storage, smart grids, and hybrid and electric vehicle (battery and FCV) technology are of paramount importance to ensure their cost-effective and large-scale penetration later on.

All the buzzwords are here and it is clear they don’t want to annoy any one technology or industry over another, but actual rollout is going to be a lot messier than this neat sentence.

For those interested in reading about the transport section rollout, the EU White Paper on Transport provides a “comprehensive and combined set of measures to increase the sustainability of the transport system.” It caused some strong debate when it came out.

The EU Emissions Trading Scheme (ETS) is thought to be critical in driving a wide range of low carbon technologies into the market.

The implication behind this is that the price of carbon will not only need to be stabilized, but also increased above its current bargain basement price.

- Investment in smart grids is a key enabler for a low carbon electricity system, notably facilitating demand-side efficiency, larger shares of renewables and distributed generation, and enabling electrification of transport. For grid investments, benefits do not always accrue to the grid operator, but to society (with co-benefits for consumers, producers, and society at large: a more reliable network, energy security, and reduced emissions). In this context, future work should consider how the policy framework can foster these investments at EU, national and local levels and incentivize demand-side management.

- The objective of the altered directive on energy performance of buildings is that new buildings built from 2021 onwards will have to be nearly zero-energy buildings.

The sad part is that if we can make buildings nearly zero-energy now with some investment and political will, why are we waiting until 2021?

- The Commission’s analysis shows that GHG emissions in the industrial sector could be reduced by 83 percent to 87 percent in 2050. The application of more advanced resources, energy efficient industrial processes and equipment, increased recycling, as well as abatement technologies for gases such as nitrous oxide and methane, could make a major contribution by allowing the energy intensive sectors to reduce emissions by half or more.

- In addition to the application of more advanced industrial processes and equipment, carbon capture and storage (CCS) would also need to be deployed on a broad scale after 2035, notably to capture industrial process emissions (e.g. in the cement and steel sector). This would entail an annual investment of more than 10 billion euros.

So between now and 2050 there is going to be a major investment in R&D for CCS and am sure some fine subsidies for its rollout.

- The European Investment Bank, the European Bank for Reconstruction and Development, as well as dedicated funding in the next Multi-Annual Financial Framework should play a role in providing additional financing for energy efficient and low carbon technologies.

That should cause a dash to these banks.

While this blog has been very cynical, the EU should be congratulated for looking out as far as 2050. We will know much more about the energy portion of this when the Energy 2050 Roadmap is published combined with the White Paper on Transport (which is already out). It should not only give me lots of write about but do what it seems impossible to do in the United States – have a coordinated policy on energy!

Article by Kerry-Ann Adamson, appearing courtesy the Matter Network.

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A new paper by Stanford lawyer Felix Mormann argues that pricing alone will not drive the transition to renewable energy, one of the key ingredients to a low-carbon economy necessary to mitigate the impacts of climate change. He identifies and analyzes the obstacles presently barring the rise of renewables, evaluates the role of the current policy favorite emission pricing, and offers design recommendations for a comprehensive U.S. renewables policy.

He argues that a comprehensive renewables policy is required to address each and every one of the existing barriers. So why is that not being done?

“Like every new technology, renewable energy technologies first have to prove themselves in the lab. Hence, the initial focus is on their scientific and engineering aspects. As lab results make way for demonstration projects, potential for commercialization triggers more economic analysis. Only once scaling and large-scale deployment appear within reach, do regulators tend to get involved”, he told Energy Refuge. “This rather reactive role of regulators is by no means unique to renewables, but applies to almost all transformative technologies. What’s special about renewables, however, is that the potpourri of financial support policies around the world appears to have distracted from regulatory barriers to their large-scale deployment. Simply put, public policy presently tends to compensate for these obstacles, rather than eliminate them.”

Mormann believes there is a whole plethora of technical, economic, regulatory, behavioral and other obstacles to overcome. “On the regulatory side, for instance, the permit process for renewable energy plants and its requirements deserve special attention – to streamline it but also to ensure that all relevant factors receive proper consideration. The entire electricity sector will require substantial regulatory reform to integrate a growing share of intermittent renewables like solar and wind, the smart grid, demand response, and distributed generation, to mention but a few of the changes to come”, he said.

And in order to make the transition to alternative energy, multidisciplinary action is required. The trick is how to get different sectors to work together on this massive project. Mormann offers an example on how this could work. “Sweden’s Advisory Council for the Promotion of Wind Power is an interesting example of a multidisciplinary policy forum. The council brings together the Ministry of Education, Research and Culture, the Ministry of Finance, the Ministry of Industry, Employment and Communications, the Ministry of Sustainable Development, and the Ministry of Defense to collaborate for the common goal of large-scale deployment of wind turbines in Sweden”, he said.

He also believes that bottom-up action is essential. “In this context, education and outreach will be key. My work highlights the legal and regulatory challenges but there are many other factors in the renewables equation. The more we know about the benefits and risks of renewable energy technologies, the better each of us can determine whether and how to take action.”

Please follow the link to download the full paper.

Article by Antonio Pasolini, a Brazilian writer and video art curator based in London, UK. He holds a BA in journalism and an MA in film and television.

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In Arizona, the Arizona Corporation Commission just approved Arizona Public Service’s 2011 implementation plan (big PDF) for the Renewable Energy Standard. The plan includes two policies for wholesale distributed generation:

Small Generator Standard Offer. About 95 MW over the next 3 years, for systems sized 2-15 MW. Prices will be set by competitive bids (in previous solicitations, APS indicated that project prices are substantially below 15 cents/kWh). APS will use a standard contract in order to facilitate financing, set a regular interval for solicitations in order to provide for a more continuous market opportunity, and utilize development security in order to prioritize viable projects and reduce speculation and gaming. (This is in addition to the 100 MW AZ SUN utility-owned PV program, and projects under development from previous solicitations)

Feed-in Tariff. Six MW over the next 3 years under a fixed price feed-in tariff, available to systems between 30-200 kW, and only for HOA/non-profit/multi-tenant/low-income housing customers (this was developed in this manner in response to Commission request). The price is set by extrapolation from competitive bids for similar sized commercial rooftop projects–initially 19.5 cents per kWh for a 20 year contract. That’s an interesting approach to price-setting that other jurisdictions may find attractive.

Really pretty cool stuff.

Also notable, Hawaii launched its feed-in tariff on November 17. They used a cost-based approach to setting the price, and came up with 21.8 c/kWh for PV systems under 20 kW, and 18.9 cents/kWh for PV systems from between 20 kW and 500 kW.

You can track program uptake here (click on the ‘queue’ tab):

The FIT rates are below the retail price of electricity–meaning that if anyone has load to serve, they get more value from their system by using the electricity themselves. It’s a situation that every FIT program will have to deal with eventually, and it will be very interesting to see how this works in HI.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.

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Virtual power plants (VPPs) rely upon software systems to remotely and automatically dispatch and optimize generation or demand-side or storage resources in a single, secure web-connected system. In the U.S., VPPs not only deal with the supply side, but also help manage demand and ensure reliability of grid functions through demand response (DR) and other load shifting approaches, in real time.

In short, VPPs represent an “Internet of Energy,” tapping existing grid networks to tailor electricity supply and demand services for a customer, maximizing value for both end-user and distribution utility through software innovations.

Without any large-scale fundamental infrastructure upgrades, VPPs can stretch supplies from existing generators and utility demand reduction programs, delivering greater value to the customer (lower costs, new revenue streams) while also creating benefits to the host distribution utility (avoidance of capital investments in grid infrastructure or low-capacity peak power plants) as well as the transmission grid operator (regulation services such as spinning reserves). When compared to the fossil central station power plants that dominate electricity markets worldwide, one of the primary advantages of VPPs is they can react quickly to changing customer load conditions, are dynamic and deliver value in real time.

Three heavyweight companies to watch out for in the VPP space are Siemens, Schneider Electric, and Cisco.

Siemens was one of the first firms to explore the concept of VPPs, playing a key role in providing the management system for one of Germany’s pioneering efforts. A VPP project that has been operating since October 2008 aggregates the capacity of nine different hydroelectric plants ranging in size from 150 kilowatts (kW) up to 1.1 megawatts (MW), with a total VPP capacity of 8.6 MW. The VPP framework opened up new power marketing channels for these facilities that would not have been viable if these distributed energy resources (DER) were still operating as stand-alone systems.

The key technology Siemens is offering to the VPP market is its Decentralized Energy Management System (DEMS), which is designed to enhance both wholesale and distributed generation operations according to pre-defined economic, environmental or energy-related priorities. The company is now engaged in a variety of smart grid projects in the U.S. that could be considered VPPs (or at least stepping stones to future VPPs) in Kansas, Texas and Hawaii.

The Schneider Electric version of a VPP is focused on capturing and aggregating DR resources from large commercial clients. With new managers quite familiar with the evolution of DR markets, they appear to have a very focused and unique strategy, targeting various advanced wholesale/retail markets, such as the PJM control area. With an emphasis on dashboard presentations, they seem to have a well-tuned business entry strategy.

In 2010, the company has launched a new venture whose prime goal is to serve as a broker between utilities and large customers – especially those that own large amounts of commercial buildings. Worth over $27 billion, this French company has a market presence in over 100 countries, with its largest portion of business (44 percent) in Europe, followed by North America (27 percent) and Asia-Pacific (19 percent).

Last, but not least, is Cisco. Top managers for its VPP business segment come from Southern California Edison (SCE), a utility whose large-scale efforts in DR – representing over 1,000 MW of DR capacity – and development of up to 500 MW of utility-owned distributed solar PV distributed throughout its service territory in 1 to 2 MW distinct systems – represent the perfect utility partner to launch such a new business enterprise. With its “Building Mediator,” Cisco is also targeting this network device on energy-intensive corporate buildings, a venture with downside risk.

Cisco sees its function as playing a role in the coordinating aspect of bringing DR and distributed renewables together, and is therefore involved with a pilot project involving SCE, the U.S. Department of Energy (DOE), and the City of Irvine in southern California. In Cisco’s view of the world, the VPP is a much better platform to aggregate and boost value from the full capability of grid networks than the microgrid.

At present, the focus of Cisco’s VPP business strategy is DR, but in the long-run, Cisco sees its role as “developing a communications fabric that connects prices to devices, and helps create a level playing field for all of the key elements of a distributed energy network – DR, distributed generation and storage.”

Article by Peter Asmus, appearing courtesy Matter Network.

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The consumer face of the Smart Grid looks like you and me.  It is tall and short, conservative and liberal, lazy and driven.  In short, it is everyone, which means that it can be both random and ordered depending on changing conditions, geographic realities, and discordant behavioral patterns.

Capitalizing on Smart Grid opportunities in the residential consumer market means finding order and predictability across a wide range of variables: different ecosystems, temperature variation, number of people living under one roof, behavioral patterns, etc.  Currently, data is measured home-to-home, which means that fine-grained details under the roof are usually unaccounted for.

As a result, the Smart Grid ushers in many unknowns related to consuming electricity.  In doing so, it simultaneously offers the potential for substantial gains in efficiency, distributed generation, and reduced costs as well as the threat of widespread, financial-shock-inducing grid failure.

If the failure part of the equation – i.e. blackouts — weren’t so dangerous, it would be easy to test technologies and systems aggressively in order to build a new infrastructure, well…intelligently.

In addition to losing money, the risk of grid failure is a big reason why utilities are scared of the residential market.  As a result, bringing lab-tested technologies to the consumer market has many utilities putting on the brakes.  It is exactly this uncertainty and variability that raises the stakes for utilities, who must proceed cautiously when implementing consumer-facing smart grid programs to maintain grid reliability while also keeping costs low for their customers.

At ConnectivityWeek last month in Santa Clara, CA, which is the largest gathering of Smart Grid experts on the West Coast, industry insiders, utilities, and consumer advocacy groups came together to discuss the importance of engaging the consumer and best practices for doing so.

One Size Does Not Fit All

Understanding the consumer is the key to making the Smart Grid intelligent as well as manageable.

While some argue that we (the consumer) have too many interests, limited time, and limited capacity to interact with the myriad of technologies that are invented and commercialized, consumer-facing smart grid companies are exploring new frontiers in the area of behavioral psychology, marketing, and technology in spite of these assumptions.

Operating somewhere between the supply and demand endpoints in the residential market, companies like OPOWER seek to make sense of consumer-related behavioral data so consuming energy makes sense for the consumer, but also in a way that works for the utilities.

The reality today is that the average consumer spends six minutes or less per year on their energy bill.  While some might see this as a barrier to bringing control technologies to the consumer energy market, opportunists like Seth Frader-Thompson, CEO at EnergyHub, contend that the key to engaging the consumer is simplicity.  While there will be a steep learning curve for consumers once they’re given adequate information, the goal must be to enable consumers to understand the information before they can be expected to engage with it.

The consumer energy space, ultimately, is about trying different things, seeing what works and what doesn‘t, then tweaking, explains Frader-Thompson.  There is no silver bullet solution as demand response (DR) and behavioral trials producing variable results across different markets have shown.

Engaging the Energy Consumer

Although engaging you and me in the Smart Grid is of paramount interest for technologists, currently, residential consumers are trapped behind a wall of utility infrastructure and one-way control solutions (e.g. programmable thermostats and cycling pool pumps).  They lack the sophisticated tools or the infrastructural and informational capacity to align their consumption patterns with emerging time-of-use (TOU) and peak pricing (CPP) utility billing structures.

But all this may be changing.  Kirk Oatman, Founder and CEO of I’m In Control, a home energy management startup, explains that the national standards process is now effectively supporting in-home decision-making as well as the old-style direct load control.  That means more opportunity for real-time “ecosystem” control in the home for residential consumers, which Oatman demonstrated to me via a mobile phone interface connected remotely to his home.

The consensus at the ConnectivityWeek is that service providers should engage consumers proactively rather than wait for opt-ins, the utility strategy so far.

Mark Ishac of Zpryme, a business research and consulting firm, noted that there is no Smart Grid brand that has penetrated the home.  In an informal survey, Zpryme found that 8 out of 10 consumers didn’t know what the Smart Grid even is; meanwhile, 9 out of 10 consumers would take measures to save money and the environment.

The branding void is aching to be filled.  Sean Harrington of OPOWER explains that bridging this discrepancy requires utilities going beyond a “green” pitch and showing consumers how they’ll save money through education.

But a proactive approach must be mindful of the fact that power is constant (always on) and real-time information is more than consumers want to deal with.  Constant prodding can lead to resistance from consumers.  Accordingly, the goal should be to capture a fraction of mindshare.

Consumer backlash

Key to engaging consumers is educating them about how they will benefit.  Frader-Thompson explains that utilities have a long history of looking at their customers as “rate payers,” or even “load.”

Consumers are ultimately concerned with costs, and when Smart Grid build-out leads to increases in their monthly bill, expect the consumers to fight back.  The takeway: utilities need to establish better relationships with their clients and it comes down to effective communication initiated by utilities.

PG&E learned this the hard way after implementing a smart meter program, which led to bill increases for Bakersfield, CA residents.  All consumers saw were higher utility bills with ineffective communication that failed to explain the smart meter program behind it (complaints ultimately led to lawsuits against the utility).

Laurence Daniels, a lawyer with the Office of the People’s Counsel in Washington, DC, emphasizes three key elements of successful engagement with the residential energy consumer:

1. Consumers most important component

2. Education/empowerment most important investment

3. Smart grid is utility company’s 2nd chance to make a first impression

To maximize the interaction with consumers, messaging to consumers must answer the following questions, Daniels explains:

* Why do we need it?

* What is it?

* What benefits are in it for me?

* How to use it?

* How will this be paid for?

Accordingly, home area networks (HAN) must be used as empowerment tools.  To do so, they need to be easy to use with default functionality.  Pricing and billing, and the corresponding information, should take the same approach.  Consumers also need to know that their data is safe and utilities need to provide privacy and security.

Tragedy of the Grid Commons

Craig Boice of Boice Dunham Group argued that the grid’s current paradigm of low cost entry and utility-centric programs will lead to system-wide failure.  He drew an analogy to Garret Hardin’s Tragedy of the Commons framework which goes something like this: herders share a pasture on which their cattle graze; each herder seeks to maximize his profits by adding an additional cow to his herd, “and another; and another,”; until ultimately, all the grass is eaten.  In short, free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation.

The problem with lower electricity prices, Boice argues, is that while more families with limited means have access to power, those with more means will just overgraze on energy.  The only answer to stress on the grid is to lower demand.  Changing consumer behavior is the most effective strategy for accomplishing this.

While Boice acknowledges that both TOU and CPP pricing mechanisms are necessary to lower demand, they remain insufficient.  Ultimately, it must be up to the Smart Grid to change the consumer‘s behavior.

Conclusion

Building out a Smart Grid is a unique challenge that can not be compared to telecommunications in the 90s.  The grid is about transformation of existing infrastructure — if you screw it up, people die.  Telecommunications, by contrast, was about building out a whole new infrastructure on top of old infrastructure.

The challenge of Smart Grid is that a multitude of players are coming into the space, which creates an ecosystem model far different from the point-to-point approach utilities are accustomed to.

This opens up the possibility of collaboration among a multitude of players, but also dependent upon an actively engaged residential consumer market.

Mackinnon is Of Counsel with Cleantech Law Partners where he specializes in smart grid, biomass, and biofuels issues.

Image: limonada

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If Internet companies and some utilities have their way, the smart grid will rely on the existing infrastructure of the information superhighway in order to function. They argue that by relying on existing standards like Internet Protocol (IP), the smart grid will grow faster and more organically than if utilities adopt an assortment of proprietary methods. Issues like security become easier to address too because the Internet manages exceptionally sensitive data quite well with existing technologies. To that end, the players dominating in the Internet arena including Google, Microsoft, and Cisco are all banking on the Internet’s role in the future of electricity management.

Connecting the smart grid and the Internet is a thoughtful union of two sophisticated systems. As a result, issues like net neutrality that were previously limited to high-tech circles are now relevant in the energy arena. While these new issues add complexity to the creation of the smart grid, the benefits of this union far outweigh the costs.

The integration of the Internet and electricity management will help progress the development of renewable energy immensely. Software products that rely on the Internet can play a significant role in managing the problems associated with renewable energy on the grid including intermittency, distributed generation, and demand-response. In order to roll out these major software advances, it is important to consider what already exists. The Internet provides a stable, fast, and secure medium to transport vital energy data.

One might think a major source of opposition is from those operating the existing electricity grid. On the contrary, utilities like PG&E have pushed for existing standards to drive the development of the smart grid because they need help to reach the ambitious goals for renewable energy in California. At the Berkeley-Standford CleanTech Conference Series last week, PG&E’s Andrew Tang opined the backbone of the smart grid would operate in a similar way to the Internet.

This idea is not without its problems, however. Electricity management is outside the comfort zone of Internet companies. From 120-degree heat in Arizona to below freezing temperatures in Ohio, Cisco will need to design hardware that operates in uncontrolled weather conditions. The outrage due to outages with Gmail will be nothing compared to the response due to blackouts caused by the company’s software.

The Internet culture in Silicon Valley does not lend itself well to the boring (and reliable) products required by the utilities, but cultural shifts are not unheard of in Silicon Valley. Google has more than 10,000 employees and there can be little doubt that the company undertook changes in operations and even culture during their massive growth period.

Internet companies are poised to tackle this problem. Google aims to organize the world’s information; it is clear that organizing principles will be necessary for the smart grid. The transition of electricity from traditional to renewable sources is a transition that lines up well with Cisco’s strategy. What the Internet does above all is allow small players to shake up the market. Companies like OPOWER [view some of their current clean tech job openings on the CleanTechies Job Board] are looking to become a big player on the smart grid by using software that incorporates behavioral science. Ultimately, software that relies on the Internet is the critical component required to add renewable energy to the grid.

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The high tech industry will play a significant role in the battle to reduce greenhouse gas emissions as long as the Internet remains a level playing field. The opportunities for software companies to innovate in the energy generation and energy efficiency sectors are substantial if the priority of traffic over the Internet remains neutral (i.e., the FCC adopts net neutrality rules).

The smart grid is the main prerequisite to the Internet’s involvement in energy. The Obama Administration recently announced $3.4 billion in the development of the smart grid and related technologies. Much of these funds went directly to utilities to provide smart meters in homes and businesses. Southern California Edison has already started its rollout of smart meters under a program called SmartConnect; they hope to have 5 million smart meters active by 2012.

The fundamental breakthrough of smart meters is the ability to communicate information bidirectionally. Like a normal power meter, the smart meters can measure the energy consumption of the consumer, but they also can send that and other information to the local utility as well as to devices located on the property of the customer (e.g. smart thermostat, smart refrigerator, etc.). A completely new market for energy efficiency products will exist when users begin connecting these smart meters to the Internet. This connection will remove the shackles from energy software outfits such as OPOWER [view some of their current clean tech job openings on the CleanTechies Job Board] and Google.org.

The Internet has an infrastructure capable of revolutionizing energy use both at home and at the workplace. For instance, we all have widgets staring at us on our computers these days. Imagine having a widget that was giving you a real time view of the electricity consumption at your home or in your office and the ability to reduce that energy use from the convenience of your office chair. One could also schedule consumption levels based on their personal preferences and real-time electricity rates. Companies have already started sprouting up to focus on these emerging technologies and this market will only grow as utilities create the smart grid. Another dependency not often included in this discussion is a free and open Internet, more commonly referred to as net neutrality.

The reliability of software that uses the smart grid and the Internet is dependent on net neutrality to ensure Internet Service Providers (ISP) deliver bidirectional data as quickly as possible. If the Internet did not operate on a level playing field (e.g., PG&E’s Internet traffic was given priority over data from a personal web server), then the growth of distributed generation and other electricity control options could stagnate. How can someone make his car’s batteries available for use by the smart grid if ISPs constantly push the control signals to the back of their data transfer queue?

The free and open flow of data on the Internet is not only important for individuals and small companies looking to spread their message. Net neutrality is an important issue for those trying to combat climate change through improvements in energy generation and energy efficiency.

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Did you know that America’s largest installed solar power plant is located on Nellis Air Force Base in Nevada? The 14-megawatt solar array (shown at left) went live in late 2007 and remains the largest solar power plant in the United States.

While First Solar’s recent announcement of two 250-megawatt solar power plants in California dwarfs the military’s solar array, the fact remains that for a considerable amount of time the military will have operated the largest solar array in the United States. Why would the military take this step? The answer is energy security.

In late September, the National Defense University (NDU) hosted an energy security conference on its campus in Washington, D.C., located at Fort McNair and under the operation of the Joint Chiefs of Staff. At the conference, one recurring theme was the importance of distributed energy for military operations such as the solar array at Nellis Air Force Base. This includes operations on bases worldwide and deployed forces actively engaged in conflict.

The future of the military presents a considerable opportunity to push innovation in energy development and deployment. When it comes to ingenuity, discipline, and dedication, it is hard to find a more effective body than the U.S. military.

As one speaker at the conference put it, “When it comes to the military, you undertake your actions in order to save lives.” That incentive easily trumps the mighty dollar. The U.S. military could prove to be the perfect proving ground for distributed generation applications including support for a smart grid. At the conference, most suggested initiating projects at permanent bases in order to prove concepts in a more controlled environment.

The leaders in the national defense arena have acknowledged the threat of climate change and they understand the vulnerability that exists with traditional energy sources. CNA Analysis & Solutions, an expert on national defense, recently released a report on energy and the risks to national security.

Furthermore, the next Quadrennial Defense Review will incorporate the risk of climate change in determining the future threats for national security. As the military and research institutions that focus on national defense begin to develop and implement policy changes related to energy use, it will be critical that the following factors are at the core of the strategy:

1. Security and Reliability: Reliable access to energy is pivotal for national defense. This means distributed power for bases both overseas and in the United States to reduce the dependence on commercial utilities and large-scale liquid fuel transport convoys for mission critical applications.
2. Cost Effectiveness: While you cannot put a price on the safety of soldiers, the budget is not a bottomless well. In this context, the right incentives could encourage savings on energy. One example would be allowing a percentage of the savings to go directly to other programs at the discretion of the group that implemented the energy saving policy.
3. Climate Change: The military is the nation’s single largest energy consumer (0.8% in 2006). The military understands the threat to national security from climate threat; it should act in all possible ways to mitigate that danger.

In the 1960s, the Department of Defense developed a system for use in case of a nuclear attack; this system required groundbreaking ingenuity and became the foundation of today’s Internet. In a similar fashion, energy security is a new opportunity to unlock the innovation in the military.

[photo credit: Nellis Air Force Base]

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The Internet revolutionized the world of computing – it took us from a world of large centralized mainframe computers with terminals attached to a world of any-to-any connectivity. The Internet evolved from a military need for survivability; by having a mesh of network nodes that could instantly re-route traffic around outages, it could sustain failures but continue to perform. Distributed generation, referred to as “DG” in industry speak, is essentially the “Internet of Energy” by producing electricity from many small energy sources.

Historical Perspective
Power plants over time were sited further and further away from  consumers for a number of reasons:

· Coal fired power plants – were situated away from the cities to cut down on pollution in populated areas and to cut down on the cost of transporting the coal.

· Hydroelectric – obviously had to be located near the source of water power.

· Nuclear power plants have also suffered from NIMBY (not in my back yard).

This created challenges of delivering the electricity generated in the centralized plant to the consumers. Our antiquated electric grid is the means by which this is accomplished – and in implies tremendous costs surrounding the installation of transmission lines – expenses that could be saved and applied towards expensive locally generated technologies. The problem with large scale renewable plants is that even today, power is regional; according to Dr. Wade Adams of the Smalley Institute, “The average reach of today’s grid is closer to two hundred miles, maybe double that. So you aren’t currently able to ship energy from sun-rich Arizona to New York City.”[1]

New Reality
With the proliferation of solar and wind the seeds have been planted for distributed generation. However, in most cases even with these renewable sources, connection to the grid is necessary. As the sun doesn’t always shine and the wind doesn’t always blow an external source of power will be needed, unless and until you can store your excess generated electricity to draw down later. Follow this link to view such a set up at Slippery Rock Macoskey Center, and you can see from where they are obtaining their power. When I first viewed this site it was all coming from the grid because it was cloudy and the wind was only blowing at 10 MPH.

The Future
We started off with a discussion of the Internet, so what’s the connection? Well, as more and more solar, wind, and even small hydro are deployed several things come into play.

· There is a reduced demand for electricity from a central site that can slow the growth in these plants that today mostly rely on fossil fuels

· There is the opportunity to use the excess power generated from these distributed renewable sources later via storage on site or by feeding it back into the grid

· With the proper interconnections, there is an opportunity to reduce or eliminate blackouts on the massive scale we have seen several times in the Northeast, and rolling brownouts that we saw in California at the time of the Enron debacle.

What are some of the challenges?

Smart Grid: Our underlying infrastructure is key – unless we upgrade to a smarter grid, we may have thousands of energy islands, but not much shared benefit. Think of the PC revolution in the early 1980s before the Internet, only you can’t put your excess energy on a floppy disk and carry it to your neighbor (with fuel cells, batteries and other energy storage devices, perhaps one day you will be able to do just that).

Cost: Organizations like “1 Block off the Grid” are trying to address these concerns but “the economic reality [is] that small-scale distributed generation is typically much more costly, on a per-kilowatt-hour basis, than economy of scale central station generation.”[2]

Legislation: Third, there has to be some regulatory framework under which all of this can work so that the utilities and the distributed generation sites can work cooperatively, and each have their rights protected.

Quotes
[1] Ron Pernick and Clint Wilder, The Clean Tech Revolution, The Next Big Growth and Investment Opportunity (New York: Harper-Collins, 2007), p. 168

[2] Larry Kellerman, one of the nation’s top utilities experts, who works for Goldman Sachs and runs its power generation subsidiary. Quote from: Thomas L. Friedman, Hot, Flat and Crowded, Why We Need a Green Revolution – And How It Can Renew America (New York: Farr Strauss, and Giroux, 2008) p. 287, 289

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