Renewable energy policy plays catch-up
The value of renewable energy doesn't translate under current regulatory structures. That needs to change.
On December 3rd, ABB sponsored a “policy breakfast” in Washington where the audience gathered to listen to two panel discussions and two US senators–one from each side of the aisle–talk about microgrids. Across the board, the speakers agreed that the primary obstruction to further microgrid deployment has very little to do with technology (it’s already available) and much more to do with having the right market rules, regulations and incentives in place. In a word, it comes down to policy.
This week as the COP21 climate talks in Paris were winding down, I was in Las Vegas to moderate a panel on renewable energy policy at Renewable Energy World. Many of the same issues came up, which is not surprising given that most microgrids being developed now have some amount of renewable generation. But the most interesting moment came during the Q&A when a member of the audience and two panelists got into a spirited exchange regarding the question of who should pay for flexibility in the supply of electric power.
The question seemed simple enough, but it quickly became clear that where you come down on this issue has a lot to do with your assumptions going in. Should renewables be forced to conform to the status quo of the grid and come with their own solutions for mitigating their ups and downs? As the newcomers to the system, it might seem like they should.
But what are we really talking about? Where does the imperative to reduce carbon emitting forms of generation come into the picture?
One of my panelists, Jim Schetter, has spent years developing a model that assigns “responsibility” for causing ramping of conventional power plants to a host of forces, wind and solar among them. In the model, which was applied to the California grid for the presentation, more than half of the ramping that conventional power plants underwent (57 percent) was attributable to the grid itself (i.e., fluctuations in load). Next was variation introduced by fossil fuel plants, nuclear and imports (collectively 31 percent). Wind and solar each accounted for less than 8 percent of conventional plant ramping.
Clearly, the number for wind and solar will get bigger as more renewables come online, but it bears noting that the criticism leveled at those forms of generation is rarely if ever applied to others. Either way, it seems only fair that a given source be “penalized” only for the variability it introduces to the grid. Similarly, one might ask why conventional plants are not penalized for their inability to respond to changes on the grid more rapidly.
The larger issue is that variability has always been part of electric power delivery, and it will continue to be so. Wind and solar certainly do add to the variability challenge, but they address an arguably much greater one: the transition to low-carbon energy. That is exceedingly difficult to quantify in financial terms, however, and there’s the rub.
Clearly, new thinking is needed on this issue. The power system today is remarkably similar to the one(s) that Edison and Tesla envisioned, but the grid in twenty or thirty years’ time will be vastly different. It has to be. The challenge today is to put policies in place that recognize the value of renewable energy sources not only in terms of how they play within the confines of a 20th century power grid but also of how they contribute to running the world without consuming the earth.
Photo of Las Vegas courtesy Moyan Brenn via Flickr