These are all good ideas except it would involve the dismantling of the present grid which I would suggest cannot survive without paying customers.

The more who switch to their own generation the fewer customers are then available to support the common grid and the plants that power it. The big power utilities will go broke and then we will all HAVE to produce our own power like it or not.

Fortunately I don't foresee this occurring to any large extent. While distributed power systems are available (and have been for many years) the cost for most applications is still far higher than electricity available from the grid and most (with possible exception of CHP systems) have very long repay times.

For DG systems that require storage (solar & winds) the cost of storage needs to be included in capital cost. It isn't now because the grid is a handy storehouse of electrons but if grid systems disappear as would be the case if DG becomes widespread then no such source of handy electrons exists and solar/wind generators would need to build such storage. That, I suspect is not cheap.

In Toronto Canada some buildings are cooled in summer by deep lake water from Lake Ontario to alleviate the need for electrically powered air conditioning plants. It is a costly proposition to dig tunnels and lay the pipes necessary but I am told that a substantial number of city centre buildings are now using it with good savings....and reduced maintenance costs. I can see this type of system having some merit as well as CHP systems but pure electrcity production is not likely to compete...at least not at the rates we pay here in Canada which are quite low in relation to other jurisdictions. I have looked at many possibilities for operating my house and no technology available now or likely in the future comes close to the $75 bucks a month I pay for grid power. Solar power I costed out to be $15,000 - and installing it myself. Even if I survived the installation process (not falling off the roof) I would still need to buy grid power at night and non sunny days or buy some big batteries that would need replacing every 4 to 5 years. Geothermal (for heating only) would cost $40,000. I heat with natural gas by the way which explains the low dollars for electrcity...but I am also quite frugal.

Small gas fired microturbines might work but I can't see the capital cost coming down to anything affordable for a single household. And of course most people do not have or are not willing to tie up large capital sums in a home system. While the grid has suffered through some major weather conditions and avoidable problems as Harry wrote about it is still extremly reliable (in the 98% plus range) so most people do not see the point in laying out large sums of money...they'd sooner buy a car or a TV....which of course they do.

Good article Harry always give us food for thought.

Malcolm

To me the focus should be on upgrading the already established grid system before it falls apart. We are not going to be able to continue keeping it operating without taking good care of it...and once it has gone it will never be rebuilt.

I agree the current high cost of a distributed micro generator on a rooftop is really the only barrier to prevent their mass commercialization. But commercial cost has an uncanny way of coming down over time for anything new, particularly once it gets a foothold in commerce, and ESPECIALLY if the general population is sold on it becoming "fashionalbe". Remember too a rooftop generator has the economic advantage of not requiring any part of the existing grid for its owner to exclusively use its output.

If mass commercialization of distributed micro generators substantially reduced the incomes of large central generators and threatened their viability, this is precisely where our governments have a huge role to play - in helping to keep the large central generators and the grid infrastructure viable so that both could co-exist someday. It might very well mean fewer large central generators, particularly fossil fuel ones since they are gradually becoming disfavored from the climate change crisis, and may disappear gradually over time. But big nuclear and existing hydro shouldn’t' disappear, we'll surely still need them.

I also agree that mass production will lead to lower costs but the demand has to be there first and it is not at present. The successful systems are likely those that can perform the dual functions of heating (and cooling) the home or office, heating hot water and providing electricity as a "by product". The fuel source would almost certainly have to be natural gas to achieve all of these things at once. Gas turbine microgenerators are an obvious fit but their costs would have to be reduced by an order of magnitude to make it worth the while of the average householder or business.

The other concern I have, and it is a very serious one, is that many renewables rely on the stability of large generators to take up the slack when they are not able to produce. Wind and solar have poor capacity factors simply based on the fuel source and no amount of innovation is going to change that fact. Once the grid loses its funding base (its customers) utilities will find it increasingly more difficult to fund the necessary maintenance let alone make much needed improvements. Those costs will then fall directly on the DG producers unless they disconnect from the grid so a blended system of DG and large generators is unlikely to be the case if DG becomes cheap enough that it becomes widespread.

That is a very scary proposition and one that needs to be very carefull thought out before we start to dismantle a system that has served the public and industry supremenly well over the las 60 - 100 years.

My view is that DG is a very slippery slope. Good (maybe) for those that can afford it. Disastrous for those that cannot.

Malcolm

Your last concern on funding grid maintenance is indeed a huge potential issue with DG. There are probably simple ways to potentially avoid the problem though.

If a micro generator wants the privilege of selling power back into the grid, and if its owner wants to use power from the grid even part time, they must pay some sort of transport fee to the utility company that goes into funding overall grid maintenance. Or a government could use transport taxes much like all rate payers essentially pay now by sharing the cost of grid maintenance. In Ontario we have specific and substantial "transmission" charges on every bill.

There is no reason to suspect that widespread use of DG will "break the grid financially". The grid simply needs to be separated from generation, and set up as an independent rate-based monopoly with guaranteed returns. What DG could possibly do is make life difficult for the resulting open market generating entities, though given the near-future widespread deployment of PHEV's and EV's I rather expect the opposite. That should not cause anyone any serious disruption I would think, though a well-implemented IMEUC woulld tend to transfer a lot more loads from short-run peakers to high-eficiency baseload units like nuclear. Still, if the renewables lobbies get their way with wind, the potentially idled peakers will still be required to fill in when the wind isn't blowing, provided anyone is still willing to pay the enormous real costs of that power.

What I was trying to get across in my previous posts was that I do not see the average Joe with a rooftop or few square feet in the garage having the desire to install systems costing many thousands of dollars with long repay times. Similarly I do not see Municipalities or private individuals committing millions of dollars of ratepayers or their own money and getting into the business of electricity. And when one adds the grid charges that such generators would be required to pay to support the grid they are using then I see a great inertia facing the widespread application of DG. Here is a case in point. When I suggested to my wife that we could install a 115% efficient ground source heat pump by digging up the front yard and installing a few hundred feet of pipe to reduce our gas bill I was greeted with hoots of derision. (I just laid new grass). When I added that it would cost a mere $40,000 Canadian (the cost of a nice new car) to install it and would pay for itself in a mere 27 years (if I nothing major went wrong) ..a very cold and perturbing (for me) silence pervaded my kitchen.

I can imagine a similar scene playing out in many households. While I will not comment on the insanity of spending $40k on a vehicle that will be worth nothing in 10 years it is hard to imagine the majority of households wanting to make this type of investment or choosing between making electricity and buying something nice for their family.....and that will prevent DG from make the inroads that many expect it to.

Indeed after the admission of NUG's (non-utility generators) into the market the amount of electricity produced by them is tiny compared to the large generators and one has to ask why that is. There is nothing preventing a SOFC from attaching itself to the grid and I suspect the reason they are not widespread even though the technology works is the cost and the risk and all the regulatory hoops that are necessary. Making electricity is not an easy task.

Most people would sooner leave it to the people who know how to do it best and pay a hundred bucks or so for it a month. I am sure I can make aspirin if I had the recipe but I think it wise to buy it from people who know their business.

Malcolm.

Of course the average Joe isn't going to spend $40k on something that pays back in 27 years, no one will dispute this. But I firmly believe both of these numbers will change as time goes forward.

Firstly the $40k is typical of the gouging of homeowners that ANY kind of retrofit job usually costs. To put the same stuff into new homes is usually priced much less. Here in Ontario, just wait for it, the Ontario Power Authority is already studying ways and consulting with the home builders industry to lower retrofit costs for residential consumers of conservation and efficiency upgrades. They are already throwing lots of conservation budget money at commercial and industrial retrofit projects all over the province.

Secondly, the payback times will come down too if the electricity rate crisis I predict unfolds, where in most places in North America we are going to see painful rate hikes to pay for all the new generation and infrastructure refurbishments that are badly needed, and carbon taxes or Cap & Trade schemes on fossil plants that are on most politicians radar screens.

I'm just waiting for the chance to spend under $10k and on some type of solar system on my roof, with storage backup in my basement, that pays back in under 10 years. I would strongly consider borrowing the money for it against my mortgage if it got me off the grid especially when you consider $10k is a paltry portion of the total value of the house.

But Bob you are far from the average Joe judging by the intelligence of your comments on power issues. Also I don't mean to be condescending to you or to the Mr & Mrs Average out there but they will be faced with spouses whose priorities are not that much different than mine. That is reality....Holiday in Mexico or Solar Panels......go figure which most will choose.

Not only do prices of solar installations (for example) need to come down dramatically, the price of storage batteries to make them work off grid is still prohibitive even after years and years of research and development. So in addition to the cost of the installation you will also need to add the cost of a replacement battery every few years. I am quite sure the majority of people will prefer to just pay their bill every month.

Also DG is really not feasible when high loads like electric ranges are included. OK for running low power electronics but high consumption devices....forget it. You would also then need to convert electric ranges electric heaters etc to gas. In my case I would need to add at least $2000 to $3000 in gas appliances to my solar panel costs...so the $10k quickly changes to $13k plus storage replacement every few years. So even at 10k still a very expensive venture for most people.

The real key to making wind and solar DG work is cheap storage...and that nut is technically a very hard one to crack...and as soon as it is solved the price of grid electricity will come down because peaking generation is no longer required.

So I am not going to hold my breath for DG to make any significant inroads - I have seen too many failed promises over too many years to have any confidence that DG will deliver any time soon....and that is if large numbers of people can throw $10k into it even if they wanted to. The fact is that most people can't afford that outlay and most people don't want to make that outlay even if they could afford it.....that spells massive interia. The very reasons it has not become popular.

Add to that the fact that you as the owner of the system are now responsible for ensuring system output...that means going up on your roof to clear the snow and freezing rain off and keeping the panels clean and clear. I really can't imagine my 86 year old Mom doing that and she sure can't afford the hundred bucks or so to have someone come in and do it. Even if she could her electricity bill is only $80 a month so why should she bother at all. It just does not make any practical or financial sense...even if the Government GAVE the systems away.

If these systems are installed in new homes it will take decades to make any inroads into the present large generator supplied grid system and will likely cause major generators like OPG and Bruce Power to go bankrupt...the Government subsidies will soon disappear when that reality strikes and revenues from these organisations dry up.

Like hybrid cars they look good on paper....the reality is not nearly as good and much the same bizarre economics as ethanol fuel.

Malcolm

Yes it's true many have failed over the years to significantly reduce the cost of solar or wind after considerable research. Today though R&D in just about everything has enjoyed an accelerated pace thanks to my industry and computers, so although I am not holding my breath either, I'm not counting anything out in my lifetime yet, especially on the battery front. The peak oil crisis that will continue to unfold after the current economic mess recovers (if it ever does) will drive more efforts to crack the battery storage nut. In the meantime I hope here in Ontario our provincial government sticks to its plan to massively spend on new nuclear and grid refurbishment to keep our lights. on.

I feel sorry for many parts of the US though, they are in much deeper trouble than Ontario is. No matter which way it plays out there and here, we're all in for rate hikes as the days of electricity being a bargain are numbered I'm afraid.

Now a move from suburban to urban increases the payback and availability for more power options; apartment buildings offer similar low usage per floor area (density) compared to commercial or industrial buildings. TODAY multi-family housing facilities can cost effectively (~10year ROI) incorporate building integrated PV, Wind, CHP, a building management system, and the commissioning without subsidies. The buildings could technically become distributed resources to a utility if they produce substantially more energy than they use, but grid connected and with nameplate DG rating less than the secondary service cabling. Naturally the subsidies in urban centers and the economy of scale should make these very attractive, but then it becomes an issue of knowledge, funding, and vested interest. The electrician costs in major US cities could make or break these budgets, but if the design is cost effective it could be a win-win.

Many properties that are rentals, the owner passes energy costs to the occupants. Where the owner(s) occupies, they have a vested interest in reducing energy costs and increasing efficiency. As Bob pointed out, the economics are going to get better and better as electric rates increase, the mass production or R&D bring the costs of these technologies down.

My employer, a consulting engineering firm, has substantial experience designing facilities with building integrated renewables (generally PV~5% base load, CHP for DHW and HHW) like the Solaire and 4 Times Square in NYC. We have also worked on some high profile hush-hush projects where the owners wanted "Energy Positive" features, but the costs of the PV along and limited subsidies in EU broke the budget and these are currently not being built. When the building costs are as large as they are for high-rises in urban centers, the engineered systems almost pale in comparison (not to mention our fees, which are less than the costs of commercial carpeting). I think solar will eventually become feasible economically but it has to come down in unit price and increase in output. Both are happening.

The economic issue is extremely important - how do utilities remain financially solvent when customers are becoming producers? For now, this is not an issue as the bulk electric rates for commercial, municipal and industrial facilities are well below the rates that residential facilities have. Additionally new construction is generally more cost effective than retrofits - that is if they can afford to build anything in this market (not for a while I'm afraid).

Matt

I am not against the idea of DG - in theory it seems like an ideal solution - but one cannot ignore the fact that utilties and their shareholders have hundreds of billions invested in power plants and for society to simply write that investment off as a problem for the utilities is very short sighted. I am sure that many pension plans are invested in those utilities and their plants.

I bekieve that power system changes need to be made gradually and systematically and I suggest that is precisely what will happen as the various DG technologies are improved. But it isn't going to happen any time soon.

There is another post here related to PHEV's - I found it most intriguing since it overcomes the capital cost problem quite nicely by putting the storage battery in ones car. I am sure my Mrs. would not mind buying a brand new car but it's a thumbs down to $10k - $20k on solar panels.

PHEV's seem a better approach...but the same problem exists....now the problem is not what to do with all the power plants that no longer make money - it is what to do with all that gasoline we no longer need.

Malcolm

Malcolm

A large portion of retrofit costs for anything in existing buildings is often the exorbitant labor charges. The skilled labor gets a premium because they know the building's owner will pay it given the only alternative if they want the upgrade is to sell the property and have new construction built.

Now with the tanking world economy and good paying manufacturing jobs in North America continuing to disappear in droves, there's a large available labor pool emerging that could potentially drive the costs down of retrofitting DG into existing buildings. Just a wild thought here but if governments believe in the "green jobs of the future" ideas being touted around, all they would have to do is retrain many laid-off workers to become electricians and home renovators.

There is an even bigger opportunity for DG technology developers to come up with do-it-yourself kits. The HomeDepots and the like have thrived on a substantial portion of the consumer population prepared to do their own retrofitting of just about everything.

Even with an incentive of 42c per KW hour for solar power in Ontario people are still not flocking to install PV panels. The explanation is rooted in my proposal that people would rather by a car or a TV or something nice rather than install solar panels.

The price of electricity will need to rise many times before most would even have DG on the radar let alone commit thousands of dollars to it. And when that happens almost all of the industrial base will have left so it will not happen.

So large DG...it has been talked about since the 70's and I do not see solar panels on every roof top I doubt if I will see it in my lifetime.

Malcolm

As long as electricity prices stay at the bargain levels they are now, or even double, and even if solar costs come down to half from where they are now, I agree we won't see solar on every rooftop in our lifetimes. My point here is that if everyone agrees we need to build thousands of nuclear plants or other plants to stave off the looming disconnect between supply and demand growth, including in North America, electricity prices will skyrocket.

Now combine the above with emerging electrification of autos and the peak oil crisis that will rear its ugly head in the near future, and you have recipe for gut wrenching changes to our energy economies. The economic pain will foster many more R&D efforts, probably with much more government incentives support, to find lower cost DG solutions. IF they are found, just watch for it to show up on every rooftop in new home construction first, then eventually in HomeDepots. And once it becomes “fashionable” with the public, you wont believe how fast consumers will jump on the bandwagon.

I agree "electricians" is a poor choice of words. "Multi-disciplined contractors" might be better.

You raise a good subject point. A big concern in installing any DG system in homes or in commercial/industrial buildings is the installers must know what they are doing to hook it up properly to the local utility grid. Certification of a contractor is a big requirement before a utility company will even consider allowing it.