Micro generation
BY MATTHEW CUTLER-WELSH
It's interesting that Radio New Zealand National chose to interview economics lecturer Dr Geoff Bertram yesterday morning to discuss the challenges facing the large-scale uptake of small-scale generation in this country.
Generating electricity in lots of small units (distributed) rather than a few big ones (centralised) is not so much a technical challenge. Companies like EcoInnovation have been making and installing wind and micro-hydro generators around New Zealand for years. With the help of government subsidies, photovoltaic (PV) solar generation is now an attractive option for many Australian homes.
It's these very subsidies (or lack of them) that are preventing a similar uptake of PV and other distributed generation in this country. Hence, as we often find with transitions, the problem becomes one of economics.
Bertram concluded the radio interview lamenting that Energy Minister Gerry Brownlee would probably be equally hamstrung by the large generators as have all his political predecessors (with the possible exception of Max Bradford). Brownlee himself held true to his right side market view, stating earlier in the piece that he'd need to see clear evidence that consumers would be willing to pay "a premium for this particular style of generation".
Of course consumers aren't willing to pay a premium for their electrons. That's why subsidies are required. Large companies have a vested interest in maintaining the monopoly provided by the huge-scale investment made years previously. To balance the playing field, help is needed to encourage different technologies into the market.
There are loads of good reasons why it makes sense to generate electricity closer to where it's actually used. Individuals and communities can have more responsibility for their own generation and consumption, transmission losses are greatly reduced and the system can be flexible and resilient, performing more like a web than a hierarchical grid completely dependent on a main trunk line.
Of course there are challenges too, like maintaining a generation mix so supply can meet demand and technical issues like power factor. But I'm sure there were technical challenges to setting up the current system too. These were overcome.
The fact is, we have a centralised system that's getting less and less "renewable". But we can use this infrastructure by maintaining its advantages such as the ability to provide reliable and efficient base load. I believe that suggestions from the Sustainable Electricity Association should be listened to carefully. There are good case studies developing overseas where installation grants and guaranteed higher "buyback" (of generated power) schemes are working well to increase the sustainability and integrity of electricity networks.
This eco-issue, like many others, is an issue of economics. It will require brave and forward-thinking politicians to help tip the scales favourably.
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You are onto the right track in terms of resilience and the 'locavore' theme. But (as usual), there are two deep flaws in your argument: one technical, and one related to grid interconnection.
The technical one is quite simple: both solar and wind are subject to sudden, deep drops in output. On a non-grid-connected system, no-one cares. The loss is ring-fenced. But in a grid-connected system, the instantaneous loss of a substantial feed (as happens, for example, when the sun goes behind a cloud) must be made up for by the overall grid itself. And the generators there have to be online, idling, to take up the slack. This is a fundamental reason why, despite a lot of wind supplementation, core generation cannot really be reduced much if at all. So you are effectively having to pay twice for the generation capacity, to cover the volatility of point sources.
Of course, if you can reduce your demand to match your generation plus storage capacity, or go fully off-grid, you're talking sense. But that is a 5% of household proposition. Not gonna happen soon. And that Aussie subsidy is actually targeted at full off-grid....
Feed-in tariffs have to be negotiated with your power supplier, and there is a substantial cost associated with the interconnection. After all, they don't want a home-rigged Gentle Annie windmill in reverse mode, hooked up up their uber-SCADA'ed grid. The gear has to be certified, checked every year and re-certified, and be on Approved lists. A lot of bureaucracy, but essential for grid health.
Nice idea, chaps and chapesses, but devil's in t'details, as always....
Here's a <a href="http://www.nanosolar.com/blog3/?p=229">useful wee link</a> re feed-in tarriffs from one of the current top firms in thin-film PV - Nanosolar. Notive they urge a 20-year certainty period for subsidies, to get things rolling.
Didn't mean to be too negative - it's actually a great idea. But never misunderestimate the work needed to get it all to fly, especially in the grid-as-storage mode.
And if the off-grid aspect is considered, then power consumption of everything becomes a Big Issue, and you are looking at technologies and appliances from the marine and RV worlds, which are inherently off-grid. And which are not, coincidentally, cheap. I have a bunch of LED lights through main living areas: total power consumption if all are on: 28 watts. But they cost $300.....so it's a hobby for the elite at this point, not a panacea for t'masses.
I agree Alan, the most cost effective solution should dictate how we generate electricity. I would argue though that such costings should be compiled and assessed independently of the current profit generating entities in the current system . To be truly independent we should not assume the current economic structure, the current ownership structure, billing structure or even the current compliance requirements dictated by the existing electricity industry stay. The truly most cost effective generation might not be at all suited to any of this current state. Especially given a notion as 'radical' as disparate, small scale generation. Let’s not forget that a corporation is nothing more than a profit generating entity. Don’t expect it to be or do anything else because that’s not what it’s designed to do. Any assessment of a cost effective way to generate electricity by the industry itself is only going to be carried out in the self serving context of profit and any model not workable by the corporation will not be considered. That’s not cynical, that’s perfectly acceptable because that’s what a corporation is legally required to do! That’s what they are for. Don’t give them a task they’re not designed to do, that’s all. For example; a corporation may well decide, “Never mind the savings in transmission costs if electricity is generated closer to where it is used, that saving would pale in comparison to managing the bureaucracy and paper work generated by managing so many more supply contracts.”
However, perhaps a different structure would mean the government own and maintain the grid from taxes and local government manage compliance of wind, solar, water generators through tweaks to the existing building code compliance process? There may not be supply contracts, just a metre that runs differently. Take the RMA for example. This adds huge costs to new large scale production that wouldn’t be a problem for small scale. Get rid of the RMA I hear you say. I’m not convinced that would reduce costs at all. Maybe short term monetary costs measured by your corporation but not real costs. I’m not saying the above example(s) would work at all. My point is only that I’m not in the slightest bit convinced that any real assessment of the comparative cost of disparate, small scale generation has even taken place.
Ive tryed this independant "off the grid" idea on a small scale just to work out costings and quite frankly (i cant believe i'm saying be by far cheaper per kilowatt even in 10 yrs time. As a member of the NZPVA we have discussed this on numerous occassions that even if you removed the RMA, council bylaws concerning anything you put of your roof etc, the costs are still only within reach of the elite "greenies". A Government subsidy will never happen for such concepts aslong as they take massive tax revenue from current generators and after all the tax money that went into creating our current infrastructure i really dont see how we can turn our backs on it just to feel better about our "carbon footprint". So my suggestion is this: Intertie Inverters. Remove the legislation and lower the cost around these and you will get a happy medium of grid & self generation that every individual can decide how much they wish to use or generate according to their household budgets
If someone wants to generate their own power then they can do so under current regulations, but I don't see why any other consumer should pay extra to subsidise it.
It seems to me to be an issue of ideology over reason.
Hi there, you last comment about "it's an issue of economics" highlights to me the lack of knowledge people have of renewable technology. I personally live in a totally off the grid house, both from a green perspective but also from an economic sustainability view point. I have had no power bill for three years now. Cash flow wise this is fantastic. I have not seen a single company or vendor highlight the fact that if you are not "spending" money on a power bill, you are actually saving far more than the $$ amount on a bill. If you take into account taxation, you are saving a heap more, as power bills are paid with after tax dollars!
I have seen calculations in the USA which show that if you take into account personal tax rates a solar hot water system can be paid back in a couple of years. Not the 10-15 years most poeple cite.
If one is creative on financing and rolls just the install cost of a solar hot water system onto a home mortgage you can be better off financially month one!!
Basically it is not economics that will drive this change, people have to wake up and start choosing responsibly. Just look at recent power issues in Auckland and Melbourne, these are a sign of what is coming as the infrastructure is left to deteriorate in the name of profits.
Being more energy self reliant will become an imperative, not a luxury of early adopters.
Brendan. http://OffGridEcoStay.com
I have looked at this too. Financially I could save more money by investing extra funds into paying off my mortgage.
The biggest killer was that even if you can generate all your electricity you are left with fixed line fees, which you may reduce, but won't eliminate.
The numbers were best if you could actually use all the power you could potetially generate yourself. Of course this is difficult, because your demand and generation are independently variable. For example if you have a wind turbine in Marlborough you will have massive generation capacity in summer when the NW blows and you don't need much pwoer, but minimal generation in winter when it is calmer but you need more power. Doh!!
So you need to store. You can use batteries, but eventually they will be fully charged and you are generating power you can't bank. And in any case a decent sized battery bank is rather expensive.
This is where grid tied systems come in. You just generate year round and pump surplus into the grid and buy it back later at the same price. On that basis if you have a moderate sized wind turbine near Blenheim, you can generate a good proportion of your annual power usage and 'bank' it in the grid to draw back later.
It works on that basis if you have a good source of energy. But then as others have pointed out, you have a bunch of equipment costs to connect to the grid, and a bunch of annual compliance costs, and after that all you are left with is the feel good factor.
Things that may change this include much cheaper, and more efficient types of pv solar panels in the future, and maybe the emergence of domestic sized Vanadium Redox Batteries, which would make true off grid a much more workable proposition.
Brendan says "If one is creative on financing and rolls just the install cost of a solar hot water system onto a home mortgage you can be better off financially month one!!"
What you're proposing is financially flawed. You may experience some improvement in shortterm cashflow but it's at the expense of increased and longer lasting debt, which overall makes you a lot worse off financially in the longer term. Long term debt such as mortgages are best paid off in the shortest possible time.
I'd be interested to know how much Brendan's off-grid installation cost, and the annual consumption of electricity.
Yes, #7, read the link, intrigued by it all. Now, let us see some costings: including cost of capital employed at a stated rate plus an allowance for maintenance of the gear - one lightning strike and it's all toast. It would be good to get a per-sq-m ballpark as well, of the whole build to see the Affordability index. And an estimate of the catchment area for that leetle micro-hydro, because that ties up a big chunk of land, I would think. After all, can't have too many externalities in this here deal, or it isn't Sustainable. Data, please!
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You present no reasonable argument why the most cost-effective generation should not be used. Wasting money costs lives.
The system is not getting more centralised - for example, Northland has become substantially self-reliant since the recent expansion of Ngawha thermal generation by Trustpower.