When Edison first performed Direct
Current (DC) transmission of electricity, the concept of DG was the paradigm of
electric consumption: consume electrons near where they’re produced. Consumption remained this way for a small
amount of time before Alternating Current (AC) allowed the gap between
generation and consumption to literally widen.
Today, this model is even more evident as most consumers cannot even
speculate as to where their electrons come from. However, several evolving forces have renewed
interest in this classic concept and reinforced the possibility of DG becoming
a valuable energy alternative for Industrial, Commercial, and even Residential
consumers. It is being seriously
evaluated by many agencies and utilities around the country.
Utility
administration must craft their perspective on this topic as it will be
continually discussed in this and several upcoming decades. First, they should settle upon why not to embrace this concept, which
includes fundamental power production and distribution issues such as power
quality. Utilities traditionally discourage multiple generation
sites on the account of power quality.
The introduction of various generation points, times, sources, voltages,
etc. greatly affect the physics of producing and transmitting “good” power:
load factor, voltage, harmonics, etc. In
many cases, DG directly erodes the effects of the natural Economies of Scale
traditional to electricity generation and the very reason Centralized Generation
(CG) exists. On a purely mathematical
basis, increasing DG, at least in 2012, will make CG less efficient. Classic Economics assures us the most
efficient player should always produce the appropriate good/services, which has
so far been demonstrated by the AC generators of the last 100 years. Interestingly, this paradigm is now also
driving a resurgence of DG discussions across the spectrum of Utility
customers.
There
are increasing instances when the actual consumer of electrons may be able to
produce them more efficiently than a centralized Utility and as such each
Utility must render an opinion on why to
embrace the concept. Micro-generation
technologies such as turbines, battery storage, PV, bio-reactors, etc. allow
for this. Utility point of view sometimes
changes as they begin to run the numbers on Avoided-cost. If the harm of DG on power quality and
planning can be minimized, it may be more efficient to allow for DG, thus
making the avoided-cost component an immeasurable real-time stat to
monitor. This is generally in contradiction
to most people’s thinking of big Utilities in that many believe they simply
want to sell as much electricity as possible just as any other business
would. In reality, Utilities want to
sell the right amount of power, which
is a delicate dance between bulk and efficiency. So does DG stand a realistic chance amongst
evolving fuel and technology prices?
Real
potential exists for DG to gain noticeable traction right now largely due to
two macro trends. First, the advancement
of micro or hyper-local generation technologies across the Utility customer
spectrum makes on-site generation economical.
Second, the real-time and decision-making power of a data-driven economy
and energy marketplace make micro control and connection realistic. The Classic Economics referenced prior state
that the most efficient player should produce any given service/good, but this
fundamental decision process has never been widely applicable to energy generation
and consumption. Energy has always been dumb.
The data-driven information revolution and the implementation of data analysis,
real-time control, and networking technologies make it possible for Generators and
Consumers to interact, which is a new element to the Utility industry. DG can generate when most efficient while CG
reduces peaking-plants and vise versa. These
are the data trends that are flipping a 100-year old Monopoly on its head and
should surely become action-items on any utility CEO’s desks if they aren’t
already.
A Final Dash of Salt…
transmission? I think so!
Extra Reading…
Check out the sections on the changing nature of risk.
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