Electric cars are one of the key pieces of the renewable energy economy of the future, but they do come with a few challenges: charging them currently takes a while (30 minutes to a few hours), charging can add considerably to a home’s overall electricity use, and — when scaled up to thousands or millions of homes — that charging places a lot of extra demand on an electrical grid. At the same time, smart grid technology offers two-way information and communication between consumers and providers, allowing the first to better manage their electricity use and costs, and the second to better manage electricity supply. But so far, there hasn’t been much investigation into how smart grid technology could help with electric car charging specifically.

Enter a new demonstration project from the Australian state of Victoria. As part of the Victorian Department of Transport’s Electric Vehicle Trial, the firm DiUS outfitted ten electric-car-owning homes with their ChargeIQ system. The participants could pick “on demand” charging, which works the same way recharging something like an electric razor or drill works — you plug it in, and it immediately starts drawing power. Or they could pick the “smart” charging option, using the ChargeIQ’s smart grid technology to manage the charging of their cars. This would allow them to monitor their charging from a website or a smartphone app, respond to suggestions for the best time to charge, make choices, and react to unanticipated events.

The designers used flexible pricing so participants could respond to peak and off-peak costs, and they were even occasionally hit with simulated events such as an outage due to weather, a demand peak, or a heat wave to see how they’d respond. The result? Participants using the smart grid option cut their charging costs in half, and the electrical utility itself enjoyed less strain and smoother power utilization.

Based on residential electricity tariffs and the project outcomes, Victorian electric vehicle drivers could save around $250 per year, or around 50 per cent on their charging costs, by adopting ‘Smart’ charging practices. Grid-integrated ‘Smart’ charging technology would deliver this saving without sacrifice or effort on their part.

Managing electric vehicle charging at the network level will not only defer costly infrastructure upgrades through peak demand management, but may deliver better returns on existing investments through improved asset utilization. Grid-integrated ‘Smart’ charging technology would deliver these benefits and avoid creation of a ‘second peak’ in electricity demand as drivers individually defer charging to the off-peak period. Importantly, the outcome from these improvements will be lower costs for all electricity consumers – not just those who drive EVs.

“Using ChargeIQ to manage EV charging through the Smart Grid, the project has demonstrated how EVs can be integrated into our electricity networks — easily, conveniently and cheaply,” said Clency Coutet, Director at/of DiUS Computing, arguing for the global relevance of some of the demonstration’s findings.

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In the new report Rate Design Matters: The Impact of Tariff Structure on Solar Project Economics in the U.S., GTM Research uncovers the often-not-discussed effect of utility rate structures on distributed solar generation.

In the report, GTM analyzes the electricity rates charged by Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) and calculates the avoided cost (i.e. rate savings) for a 500-kilowatt commercial photovoltaics (PV) system within each utility. This is where the importance of rate design comes in.

Generally, there are three types of utility rates for commercial electricity customers: fixed charges, which are set fees; demand charges, which are calculated based on the customer’s maximum kilowatt usage (usually measured in 15-minute intervals); and consumption charges, which are based on total kilowatt-hours of energy used. Consumption charges offer customers with installed solar the highest potential for avoided cost, especially when time-of-use pricing (rates increase when electric demand is higher) is in effect since solar can help to avoid the higher costs during peak hours.

The bottom line is that when fixed and demand charges are a large share of the commercial utility rates, distributed solar does not make as much economic sense for the commercial customer. Alternatively, when demand charges are reduced and time-of-use rates apply (what GTM calls a “solar-friendly tariff structure”), distributed solar becomes an attractive investment that can provide electricity at lower-than-retail rates.

GTM came to this conclusion by analyzing the effect of two rate scenarios at SCE and SDG&E: a default (incentive-free) rate structure and a solar-friendly rate structure. The results from their analysis are included in the figure below (Figure 2.8 on page 13 of the report).

Commercial Solar Discount to Retail Rates, 2013 & 2017

The figure above demonstrates the role that utility rate structures can play when it comes to determining the cost effectiveness of installing a commercial PV system. Note that the dotted line at 10 percent represents GTM’s assumption that solar would become competitive with traditional generation at that point and the solar discount in 2017 takes into account the decline in investment tax credit (ITC) from 30 percent to 10 percent.

Even though “rate design” doesn’t sound quite as exciting as net metering, the GTM report points out that it is just as important in “determining the long-term viability of distributed generation, particularly as the U.S. transitions to a post-subsidy reality.”

As we consider the policies that are needed to incentivize distributed generation, it’s clear that we should also consider how utility rates are designed and how they affect the economics of distributed solar.

Mari Hernandez is a Research Associate in Energy Policy at the Center for American Progress.

The military has begun a transition to efficient and renewable energy. The Army is proceeding with its “Net Zero Energy” initiative, which means that they will aim to produce as much energy (and water, and waste) as they use. Cost and reliability are the primary reasons, but cutting carbon pollution is one of the outcomes.

Last month, the head of U.S. forces in the Pacific said that climate change was the most likely issue to concern the military. Two recent discussions shed some light on the efforts currently underway to allow the military to use less carbon-based fuels, and the explicit and implicit reasons behind those efforts.

Fueling the combat theater

Yesterday afternoon, Mike Breen, Executive Director of the Truman Project, hosted a conversation with Sharon E. Burke, Assistant Secretary of Defense for Operational Energy Plans and Programs at the Department of Defense. Entitled “Clean and Mean: DoD’s Tactical and Operational Energy Innovations,” it covered some of the tactics the military uses to more efficiently carry out its mission on the front lines.

Breen, a former U.S. Army infantry officer who served in Iraq, recalled the status quo at forward operating bases dependent on fossil fuel. Loud, inefficient generators burning gasoline. Unsealed tents that allowed air conditioning systems to cool the desert (racking up a $20 billion a year utility bill). Transmission and supply lines that began to feel more like a ball and chain weighing down mission-ready units.

The U.S. military is the largest single consumer of energy and oil on the planet. Assistant Secretary Burke explained how the DoD is dealing with a different frame of war with distributed operations all over the globe, from disaster relief to deterrence, fighting terrorism to peacekeeping. The military has to move fuel through long supply lines and sometimes contested areas. “It’s a challenge for us,” she said.

Burke has noted that “a $1 rise in the price of a barrel of oil translates to approximately $130 million over the course of a year.” It’s not just money at stake — fuel resupply endangers the lives of our men and women in uniform. Delivering fuel via truck over dangerous roads has led to heavy-lift helicopters often being used to deliver fuel to bases in Afghanistan.

To cut inefficient use of, and therefore dependence on, fossil fuels in the combat theater, the military has been doing things like adding solar panels to tents and backpacks and sealing tents with an insulating coating so cooled air does not leak. Mortar pits can be powered by the sun instead of an idling Humvee. Radio towers are getting electricity from solar panels instead of a generator that drinks gasoline, requiring resupply. The DoD now dispatches energy teams to these forward operating bases with deep policy knowledge of how renewable energy systems can be used, and they can work with soldiers on the ground to ascertain the best practical implementation. This leaves an experienced Chief Warrant Officer behind who can support the unit with these systems. As Ms. Burke said, it “doesn’t sound very exotic, but it adds up.”

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By Adam James

This week the National Association of Regulatory Utility Commissioners heard from Amory Lovins, founder of the Rocky Mountain Institute, about his new book “Reinventing Fire.” One of his key messages was that the vast majority of changes that need to occur in transforming the energy system lie at the state regulatory level.

Amory had an excellent summary as to what such a regulatory wish list would look like:

• Equality in interconnection: Ensuring that renewables have an opportunity to compete on equal footing by accessing the grid.
• Supporting entrepreneurial activities at the edge of the grid: Regulations allowing new market entrants to creatively compete with incumbent utilities.
• Moving ahead on net metering 2.0: Net metering is absolutely essential to capturing the true value of renewables. However, there are very real problems with compensation to utilities and cost-shifting to other customers that do need to be addressed. Integration with dynamic pricing and behind-the-meter PV will require regulatory innovation.
• Aligning rate structuring and business models: On the topic of regulatory innovation, utilities need to be given the incentives to make the kinds of forward looking investments which will lead to climate stabilization (i.e. investing in renewables and efficiency).

On this last point, it is important to remember that since utilities are highly unlikely to make investments that undercut their rate base, it will be crucial to find a way to prevent leaving utilities overly reliant on the “fixed cost” portion of utility bills (which reflect sunk costs in infrastructure, centralized generation, and operations and management) while the “variable costs” (how many KWh are consumed) shrink with the introduction of net metering, dynamic pricing, and behind-the-meter solar PV. There needs to be a radical realignment of incentives to shift utilities to a “network management” role, and push for distribution systems that move towards an overlapping microgrid model. Rocky Mountain Institute did excellent work on this here.

Lovins walked through a very compelling, and integrated, vision for what the American electricity sector could look like. A fundamental premise of this vision is that by 2050 we will have to replace America’s electrical infrastructure. The process of upgrading the grid will cost approximately $6 trillion no matter what technologies we include. The question, then, is do we continue down the path of centralized, fossil fuel dependent infrastructure- or do we begin investing in decentralization, microgrids, efficiency and smart energy management?

The difference, Lovins notes, between these technology pathways are the risks associated with each. As Lovins put it, America faces a multiple choice test. Do we want to:

A) Die by oil wars
B) Die from climate change
C) Die from nuclear holocaust
D) All of the above
E) None of the above

I will admit, I am personally biased towards whichever technology pathway allows for “E.” By Lovins estimation, pursuing “E”, will require an integrated approach to all four energy sectors: electricity, transportation, buildings, and industry. This approach has to harnesses innovation in design, policy, and technology to solve real world problems. The result? An energy system that runs on 80 percent clean energy.

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The village of Oak Park, a suburb west of Chicago, was recently selected from a list of competing volunteer neighborhoods to be the test site for smart grid technology.

The project is a joint venture between the Korean Smart Grid Institute and the Institute for Sustainable Energy Development, and will involve placing a set of twelve or thirteen 3-kilowatt solar panels, along with a battery system, on the roofs of 100 residential and 100 multifamily buildings. They’ll also all be linked up to an electrical grid boasting smart meters, and once the test run of the system is over the building owners will get to keep the installations, worth $20,000 to $30,000 a pop.

Oak Park’s sustainability manager, K.C. Poulos, sat down with Grist for an interview about the project that ran on Friday. The hope, as she put it, is to demonstrate new ways to generate, transmit, and use electricity — providing greater efficiencies, lower costs to consumers, and hopefully the seed bed for a more sustainable energy economy:

[The Korean Smart Grid Institute] did the demonstration on an island in South Korea called Jeju Island. It’s kind of like their Hawaii — it’s a resort area. They were able to put up a demonstration that showed how distributed generation like solar can be connected to a network operations center. All of these houses got battery storage so when you weren’t using your solar power in the house, you could store it in a battery system. When the grid on that island became overloaded with demand, the network operating system could send messages to those households saying, “You need to use to your battery. We’re going to take all of the energy from your solar panels for the next four hours and put them right on the grid. And then we will send you a check next month. Thank you very much for letting us buy your power for four hours.” [...]

The [scenario for Oak Park homeowners] we talk about the most is this idea of collecting the solar energy during the day and storing it in the battery and then having the house run on the battery at night so you’re completely offline at night and the battery provides a phantom load — your clocks, TV. Your energy load is pretty low at night but that means you’re not taking anything off the grid. So you’re reducing your bill right there.

Then let’s say there’s an outage in your neighborhood. What we want these systems to be able to do is operate off the battery so these houses can stay somewhat energized. It’s only a three kilowatt system on the house so it’s not like you could have every appliance running at the same time. You’ll have enough for lights, fans, and the refrigerator or A/C. But at least you’re online still and you’re not losing an entire freezer of meat. [...]

The [average number of outages] for Oak Park is 45 minutes per year. What the number doesn’t tell you about is the stories I hear when [residents] call up on day three of still not having power. Then I get calls from restaurants. You’re talking about an entire week’s or month’s inventory gone.

The total bill for the project will be $5 to $6 million, though Oak Park itself will not have to pay the tab. Half the cost will be covered by the South Korean research institute, and the other by the ISED’s efforts to secure government funding. Oak Park’s residents are instead agreeing to participate in the project, to allow workers to set up the installations on their homes, and to allow data about their power usage to be gathered and transmitted digitally for further study and development of the technology. The information will be collected as an aggregate in order to help protect individuals’ privacy, and to keep the experiment consumer-oriented.

As with other smart grid systems, the Oak Park project will allow for two way communication between consumers and the grid hub, which will lessen the chances of outages and help improve efficiency of energy use.

What did it feel like to publish a book on the future of cleantech in the U.S. just as the sector became a target in national politics?

“It was pretty tense there for a while. We were holding our breath,” says Ron Pernick, managing director of the market research firm Clean Edge and co-author of the new book, Cleantech Nation.

Forget about selling books. This is an industry that Pernick, along with his co-author and Clean Edge co-founder Clint Wilder, lives and breathes. And for people who’ve watched the industry grow from lab-scale tinkering to a full-on industrial powerhouse, the vicious attacks were, well, insulting.

“It was very disconcerting to all of us to watch the amount of money that came from entrenched interests and helped influence a very strong partisan line attacking and marginalizing the industry,” says Pernick. “But it backfired. It didn’t work.”

In 2007, about a year after I started covering this sector, Pernick and Wilder released their first book, Cleantech Revolution. It was one of the best resources out there on activity in the public and private sectors. At that time, cleantech was just becoming a mainstream term in investment circles. It was also right around the time when some of the biggest industrial companies started making strategic investments in renewables, smart grid technologies, and advanced transport.

Driven by concerns about climate and bi-partisan support for diversifying our energy mix, 2004 through 2011 was a period of incredible growth in cleantech. In 2004, global clean energy investments amounted to $53.5 billion. In 2011, global investments reached $260 billion — surpassing fossil fuel investments for the first time and marking the trillionth dollar put into the sector.

But in the last 18 months, the turbulence that has always defined the clean energy sector intensified: Countries have pulled back financial support due to economic struggles; venture capitalists have changed investment strategies after realizing the amount of capital required to scale; once-promising companies have fallen in dramatic fashion due to intensifying competition; and a new unconventional fossil fuel boom in the U.S. driven by fracking has deflated some of the bipartisan enthusiasm for renewables.

If Cleantech Revolution marked the first era of major growth, then Cleantech Nation marks the second: one filled with even greater political uncertainties and market risks, but even greater rewards as the sector continues to expand. For anyone who wants to understand the scope of investment activity underway in cleantech — along with the political imperative for encouraging growth in the sector — Cleantech Nation is a good read.

My biggest gripe with Pernick and Wilder’s new book is that it focuses almost entirely on the positive stories when there are so many important lessons to be learned from countries over-investing in certain sectors, companies being too optimistic in their technologies or market forecasts, and the realities of how political ideology can present enormous barriers. The authors touch on these a bit in the book, but mostly breeze over them in favor of success stories.

As a book designed to provide a forward-thinking framework for policy making and corporate planning, I suppose that makes sense. Indeed, it does provide a detailed look at the forces driving the sector — from CEOs, to mayors, to venture capitalists, to the biggest countries in the world — and wraps them together into an action plan for capturing the sector’s value in America.

Post-election, as we come out of an intense period defending the industry, it’s time for proponents to go on the offense. Cleantech Nation provides a blueprint for a potential game plan to get the job done.

I spoke with Ron Pernick about the post-election environment for cleantech and about what excites him about the next phase of growth. Below is an excerpt from our interview:

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by Adam James

Smart grid advocates have done a decent job of developing and deploying innovative new technologies in a short period of time. They also have done a relatively good job marketing those technologies. Where they have fallen short, however, is in selling the whole smart grid package to utilities, customers, regulators, and policymakers. Many are still skeptical, close-minded, or plain old belligerent about it.

There are a lot of reasons for this. Due to a lack of a unified messaging strategy among the diverse stakeholders in the smart grid community, there is a lot of disagreement about how to “sell” the smart grid to utilities.

Here Is What We Want: A Clear Four Point Message

Everyone likes the sound of a smart grid. It’s snappy, sounds high tech, and has clear connections to everyday life. Although a lot has been done to make a smarter grid, we are still a long way from a fully functional 21^st Century energy network. So when people, specifically in government, ask what is needed — what should (and shouldn’t) smart grid advocates say?

1) We don’t want your money; we just want you to help us make money.

Recovery Act funding is drawing to a close, and has been very successful in sparking smart grid development and demonstrations across the country. There is very little chance, particularly in this fiscal climate, of a massive new infusion of cash. And that’s okay. There is plenty of money parked in utilities, and a built-in rate base for revenue. The problem is, the kind of capital investments we want utilities to make will undercut their ability to make money. There are insufficient cost recovery mechanisms in place to recuperate these investments.

Here’s an example. We want utilities to make investments in distribution wires and substations that better facilitate distributed generation. But, as more distributed generation comes online in conjunction with friendly net metering and interconnection, the “variable costs” portion of a consumer’s bills shrinks (since it is based on energy consumed, and distributed generation offsets that consumption). This leaves only the traditional “fixed costs” part of the bill, which doesn’t compensate utilities for centralized generation that is only used intermittently or for their new role shuttling energy back and forth across wires and monitoring transactions.

What does all that mean? We are asking utilities to invest in their own demise. So what do we need from Government? Not more money, just rate regulation that compensates utilities in a new way and incentivizes them to make money creating the kind of grid we want.

2) Set the Standards. But not too quickly. Or too slowly.

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by Elisa Wood, via Renewable Energy World

Who among us has not eagerly described the smart meter to a non-energy person only to be greeted by a blank stare, or worse the retort: “Why would I want to track my electricity costs all day?”

You try to explain the profound applications: smart appliances that talk to the power grid, consumer clubs that sell energy savings, your car serving as a power plant. But the conversation then becomes one about fascinating toys, not a world change.

A new paper by Joseph Stanislaw, independent senior energy advisor at Deloitte, eloquently gets to the real meaning of smart grid. Moving beyond the gadget talk, he describes the bigger picture, how new energy efficiency and smart technologies will democratize energy.

Energy efficiency could have “a greater impact on the global energy picture than any other development,” according to the paper, titled Energy’s next frontiers: How technology is radically reshaping supply, demand and the energy of geopolitics.

“The breakthroughs have been stunning, and often elegant in their simplicity. Among the least appreciated technologies are those that empower companies and individuals to understand and manage — and thus significantly reduce — their energy consumption. Last year, venture capitalists invested $275 million — up 75 percent from 2010 — in start-ups that make software and other technologies to manage energy use,” the paper says.

Stanislaw explains how smart technologies are bringing about the ‘Power of One’ in the energy game.  No longer passive receivers, consumers and businesses become active choosers; hence they influence the kind of generation plants we build — or if we build them at all — simply by the way they use electricity. Our market signals, not central planning, shape the infrastructure we build.

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Re-energize Regional Economies with New Electric Transmission Lines

High-voltage electric transmission lines are silhouetted against the late day sky near Spearville, Kansas. SOURCE: AP/Charlie Riedel

By Richard W. Caperton, Matthew Kasper in a CAP repost

With unemployment at 8.6 percent and our economy still struggling to gain momentum after the Great Recession, it’s clear that we need to do everything we can to provide more opportunities for Americans to find work. Immediate job creation is critical, but we also need to focus on creating an environment that’s conducive to long-term, sustainable economic growth. Central to this is building the power infrastructure that will enable growth, ultimately making our economy healthier.

A key piece of this economic development infrastructure has to be a robust electricity transmission grid. Unfortunately, many people don’t realize the economic benefits of building out a 21st century transmission grid, instead picturing wires and towers that carry electricity from one place to another without much economic activity associated with them. But this view misses why we need a more effective and efficient transmission grid—far from just delivering electricity, a robust transmission grid makes our country’s economy stronger.

This issue brief describes four ways that new transmission lines lead to economic growth:

• Delivering new energy sources to our homes and businesses
• Reducing costly power outages
• Lowering power prices
• Putting tens of thousands to work directly, and hundreds of thousands of to work across our economy

Certainly this is not an exhaustive list, but it does demonstrate the job-creation power of investing in new transmissions lines alongside the billions of dollars that consumers and businesses will save as a result. So let’s examine in turn each of these ways to build a better and more competitive 21st century economy.

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by Adam James

This is the third article in a series exploring various issues within the evolution Smart Grid and provide some insight into the conditions shaping the debate. This article will discuss the impact of electric vehicles — particularly the chicken-or-egg problem of whether the infrastructure needs to be in place to support EVs before they can impact the market or whether significant market penetration should precede investment in structural changes.

Issue 3: “Infrastructure Build out vs. Market Penetration”

Consumer choice: or “why am I not charging my electric car right now?”

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