How to Handle Green Tech & the Rise of Mini Grids

In the last decade, we have seen enormous growth in renewable energy, growth triggered by rising fuel costs and environmental concerns. Solar, wind, ethanol, and other technologies gained renewed interest to compete with rising costs of the fossil fuels, they began receiving not only greater investments, but also incentives and subsidies, inflating the growth further. As a result, the technology grew more affordable, more reliable, and more popular. Green tech has been the fastest growing industry over the last few years. However, this fast growth has not been without its consequences.

At first, a few people installed greener tech to reduce their dependency on the expensive power they draw from the grid, some even added power to the grid, this made the utilities happy. They did not mind paying out to a few customers for the supplemental power, which made their system more reliable, reducing brown/blackouts, and reselling it at market rate to others. Even creating contracts with new Solar/Wind farms bolstered their power supply and gave them a prestigious feeling as they were doing their part environmentally. However, as more and more customers started producing their own power, that meant less and less were consuming the power. The utilities have to maintain the grid, this is a relatively fixed expense, so as more and more switch to green energy, the utility loses revenue to pay for it. Also, the renewable energy sources are not constant, they depend on sunlight or wind to produce, which is not a 24/7 occurrence, but simply shutting down traditional energy sources until needed is not economical, as they are not build for on-demand output, but require time to build up. This is a major challenge that the utilities face today.

If the Utility is connected into a larger grid, it can feed other utilities with excess power and regain some revenue. Some utilities have cut the rate in which they pay for renewable energy, for a greater profit to offset maintenance costs. These utilities have hundreds, sometimes thousands of linear miles of power lines to maintain, and that isn't cheap. They can’t raise rates, since that would encourage more customers to switch to renewable energy, thus reducing their income further. Some utilities are attempting to place caps on how much they are willing to pay out. Some are even seeking government regulation, with the support of the fossil fuel industry, to slow the growth of green energy. It is an absolute mess, the utilities are struggling to find a way to adapt to this new technology and the customers are getting frustrated with their attempts.

Now don't overreact and ostracize me outright for my next comment, let me explain myself. There's a silver lining to the passage of the resolution to allowing “fracking” to recover oil and natural gas locked within shale. I know, I know, how horrible of me to say, I will be scrubbing my mouth out with soap later. However, hear me out, while I am against it, I realize it gives us breathing room. Just as many of us who support the green movement still drive traditional cars, use plastics, and such, do see the need to continue such practices until we can make the switch. Fracking has increased oil and gas production here in the US, this increased supply has dropped cost fuel costs dramatically across the nation. Not only that, but the development of the stoves/furnaces with a secondary burn are more efficient than before and cleaner burning. Pushing aside the environmental effects, that's not what this article is about, believe me, I understand that position and support it. I realize that by this event has slowed growth in the green industry to an extent, as it should, considering they are competing industries. 

The drop in the price of oil and gas has made renewables less of a cost efficient alternative. As I stated earlier, that gives us breathing space, and by that I mean it gives us a chance to innovate further, improve efficiency and to work out a solution for this challenge. Regulating the renewable sector is not the answer, we need to find a way to adapt to a new situation. Fossil Fuels are a finite resource, so greener tech taking over the industry is inevitable. How we respond to this challenge will impact our next generations. If we make broad sweeping regulations and restrictions, as government has done in other industries, if can turn our energy sector into a nightmare. A simple solution is to let the market find the solution. No doubt many ideas will be brought to the table, luckily for us, we have 50 states to test these ideas out in and compare results.

Here is a little idea I have been working on. Mini Grids. You take one of these subdivisions, set each house up with solar panels, or the new Solar shingles (which are cheaper than your traditional roof, thanks Elon) Then set up a vertical turbines for wind power, these attach to the side of the house and work similarly to those dome shaped attic fans. Where applicable, you can even have geothermal systems to reduce the cost of heating water. From there, in a neighborhood, you connect the homes via an underground grid, less maintenance costs. What about nightfall? What if there is no wind? New innovations in battery storage capabilities cover the demand when nature falls short temporarily.(Thanks again Elon) For the individual, you can choose to use a powerwall storage cell which can tide you over for days without a recharge, depending on your demand, and they interconnect to supply additional storage, for those who use a lot of power. Then another option is available for neighborhoods as a whole, if you are interconnected on this mini grid, then you can install an industrial size cell in the neighborhood, these hold up to a gigawatt of power. Think of it as having a mini substation in the neighborhood. With this setup, you and your neighborhood only need employ an electrician for routine maintenance. I believe this setup to be self sustaining, and worth the investment, knowing that you will not have to pay electric/gas bills again.

What does this mean for utilities? They have to stop thinking of themselves as they have traditionally operated. As the growth of mini grids takes place, if they continue as they are, they will lose money. If they raise rates on remaining customers, they make it more cost effective for more to switch to making their own. I recommend the following, shrink your grid. Disconnect the mini grids from your network, remove your lines and poles from areas where former customers are now self sustaining. This will go a long way in reducing your maintenance costs and free up workers for your new contracts. Remember those mini grids will need electricians to maintain their private grids. Keep the lines running through commercial and industrial areas, those areas have much more volatile demands and will require the Utilities ability to coordinate the power flow. Not all areas are viable for On Site energy production, even if there is a solar farm nearby, the utility can manage the lines. Of course, urban areas with high population densities will remain within the utility grid, as they can't sufficiently produce enough of their own power independently, not yet.

Overall, what I am seeing as green/renewable energy spreads, is the struggle of the traditional utilities to maintain control of the flow of energy. It literally is a struggle for power. However, our future in renewables is not one based on such, but is based on decentralization. There is not one economic theory that supports so numerous suppliers and so few consumers. Decentralization of the utility, through mini grids, reduces costs both to the utility through reduced maintenance and through those off grid, through savings otherwise spent connected to the grid. Power reliability increases for everyone, and if a failure occurs, the affected area is minimized by the size of the grid, whereas in a traditional utility, depending on where in the grid the failure occurs, it could affect hundreds, if not thousands. So ask yourself, if a tree falls where there is no grid, does your power go In the last decade we have seen enormous growth in renewable energy, growth triggered by rising fuel costs and environmental concerns. Solar, wind, ethanol, and other technologies gained renewed interest to compete with rising costs of the fossil fuels, they began receiving not only greater investments, but also incentives and subsidies, inflating the growth further. As a result, the technology grew more affordable, more reliable, and more popular. Green tech has been the fastest growing industry over the last few years. However, this fast growth has not been without its consequences.

At first, a few people installed greener tech to reduce their dependency on the expensive power they draw from the grid, some even added power to the grid, this made the utilities happy. They did not mind paying out to a few customers for the supplemental power, which made their system more reliable, reducing brown/blackouts, and reselling it at market rate to others. Even creating contracts with new Solar/Wind farms bolstered their power supply and gave them a prestigious feeling as they were doing their part environmentally. However, as more and more customers started producing their own power, that meant less and less were consuming the power. The utilities have to maintain the grid, this is a relatively fixed expense, so as more and more switch to green energy, the utility loses revenue to pay for it. Also, the renewable energy sources are not constant, they depend on sunlight or wind to produce, which is not a 24/7 occurrence, but simply shutting down traditional energy sources until needed is not economical, as they are not build for on-demand output, but require time to build up. This is a major challenge that the utilities face today.

If the Utility is connected into a larger grid, it can feed other utilities with excess power and regain some revenue. Some utilities have cut the rate in which they pay for renewable energy, for a greater profit to offset maintenance costs. These utilities have hundreds, sometimes thousands of linear miles of power lines to maintain, and that isn't cheap. They can’t raise rates, since that would encourage more customers to switch to renewable energy, thus reducing their income further. Some utilities are attempting to place caps on how much they are willing to pay out. Some are even seeking government regulation, with the support of the fossil fuel industry, to slow the growth of green energy. It is an absolute mess, the utilities are struggling to find a way to adapt to this new technology and the customers are getting frustrated with their attempts.

Now don't overreact and ostracize me outright for my next comment, let me explain myself. There's a silver lining to the passage of the resolution to allowing “fracking” to recover oil and natural gas locked within shale. I know, I know, how horrible of me to say, I will be scrubbing my mouth out with soap later. However, hear me out, while I am against it, I realize it gives us breathing room. Just as many of us who support the green movement still drive traditional cars, use plastics, and such, do see the need to continue such practices until we can make the switch. Fracking has increased oil and gas production here in the US, this increased supply has dropped cost fuel costs dramatically across the nation. Not only that, but the development of the stoves/furnaces with a secondary burn are more efficient than before and cleaner burning. Pushing aside the environmental effects, that's not what this article is about, believe me, I understand that position and support it. I realize that by this event has slowed growth in the green industry to an extent, as it should, considering they are competing industries. 

The drop in the price of oil and gas has made renewables less of a cost efficient alternative. As I stated earlier, that gives us breathing space, and by that I mean it gives us a chance to innovate further, improve efficiency and to work out a solution for this challenge. Regulating the renewable sector is not the answer, we need to find a way to adapt to a new situation. Fossil Fuels are a finite resource, so greener tech taking over the industry is inevitable. How we respond to this challenge will impact our next generations. If we make broad sweeping regulations and restrictions, as government has done in other industries, if can turn our energy sector into a nightmare. A simple solution is to let the market find the solution. No doubt many ideas will be brought to the table, luckily for us, we have 50 states to test these ideas out in and compare results.

Here is a little idea I have been working on. Mini Grids. You take one of these subdivisions, set each house up with solar panels, or the new Solar shingles (which are cheaper than your traditional roof, thanks Elon) Then set up a vertical turbines for wind power, these attach to the side of the house and work similarly to those dome shaped attic fans. Where applicable, you can even have geothermal systems to reduce the cost of heating water. From there, in a neighborhood, you connect the homes via an underground grid, less maintenance costs. What about nightfall? What if there is no wind? New innovations in battery storage capabilities cover the demand when nature falls short temporarily.(Thanks again Elon) For the individual, you can choose to use a powerwall storage cell which can tide you over for days without a recharge, depending on your demand, and they interconnect to supply additional storage, for those who use a lot of power. Then another option is available for neighborhoods as a whole, if you are interconnected on this mini grid, then you can install an industrial size cell in the neighborhood, these hold up to a gigawatt of power. Think of it as having a mini substation in the neighborhood. With this setup, you and your neighborhood only need employ an electrician for routine maintenance. I believe this setup to be self sustaining, and worth the investment, knowing that you will not have to pay electric/gas bills again.

What does this mean for utilities? They have to stop thinking of themselves as they have traditionally operated. As the growth of mini grids takes place, if they continue as they are, they will lose money. If they raise rates on remaining customers, they make it more cost effective for more to switch to making their own. I recommend the following, shrink your grid. Disconnect the mini grids from your network, remove your lines and poles from areas where former customers are now self sustaining. This will go a long way in reducing your maintenance costs and free up workers for your new contracts. Remember those mini grids will need electricians to maintain their private grids. Keep the lines running through commercial and industrial areas, those areas have much more volatile demands and will require the Utilities ability to coordinate the power flow. Not all areas are viable for On Site energy production, even if there is a solar farm nearby, the utility can manage the lines. Of course, urban areas with high population densities will remain within the utility grid, as they can't sufficiently produce enough of their own power independently, not yet.

Overall, what I am seeing as green/renewable energy spreads, is the struggle of the traditional utilities to maintain control of the flow of energy. It literally is a struggle for power. However, our future in renewables is not one based on such, but is based on decentralization. There is not one economic theory that supports so numerous suppliers and so few consumers. Decentralization of the utility, through mini grids, reduces costs both to the utility through reduced maintenance and through those off grid, through savings otherwise spent connected to the grid. Power reliability increases for everyone, and if a failure occurs, the affected area is minimized by the size of the grid, whereas in a traditional utility, depending on where in the grid the failure occurs, it could affect hundreds, if not thousands. So ask yourself, if a tree falls where there is no grid, does your power go out? 


 

Written By: Andrew Wilson

Read more of his work at Vic.Report

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