Grist has a post on a recent IEA report into enabling grids powered by renewables - The top five coolest ways to integrate renewable energy into the grid.

Intermittent renewables at high penetrations will bring new challenges for the grid. But how big will they be? And is it true that wind and solar will necessarily need storage or natural gas back-up at high levels?

The International Energy Agency (IEA) wanted to know, so it modeled a variety of high-penetration scenarios in eight geographic regions around the world. Hugo Chandler, a senior policy analyst with the IEA, explains the organization's findings to Climate Progress:

Variability is not just some new phenomenon in grid management. What we found is that renewable energy is not fundamentally different. The criticisms of renewables often neglect the complementarities between different technologies and the way they can balance each other out if spread over certain regions and energy types.

Grid operators are constantly working to balance available supply with demand -- it's what they do. There are always natural variations that cause spikes in demand, reductions in supply, or create disturbances in frequency and voltage. Once you see there are a variety of ways to properly manage that variability, you start whittling away at the argument that you always need storage or a megawatt of natural gas backup for every megawatt of renewable energy.

Theoretical modeling is important. But what companies are doing in reality?

Here's five of the top methods for integrating renewable energy into the grid -- proving that intermittency isn't the showstopper that critics make it out to be. Explanations of each of these with videos are below.

1. Intelligent demand response
2. Microinverters and maximum power point trackers
3. Wind energy management tools
4. The virtual power plant
5. The hybrid solar-gas power plant

...

To categorically claim that intermittent renewables can't scale without hurting the grid ignores the very real innovations that are evolving today.

As the IEA's Hugo Chandler explains: "We want to explode the myth that there's a technological limit."

The Climate Spectator has a look at the potential for reducing infrastructure costs associated with meeting demand peaks by market based demand shaving mechanisms - It's time to reform the NEM.

Ross Fraser chairs a company called Energy Response, which makes money by encouraging large energy customers to cut their electricity consumption at times of peak load. It is the country’s only Australia-wide demand aggregator of electricity, but it shouldn’t be. And it can’t even operate on a daily basis in any other state than Western Australia, because the National Electricity Market (NEM) won’t allow it.

Energy Response has contracts with commercial and industrial business that account for 73MW of capacity in WA, and has the rights to another chunk about the same size. Basically the deal is this: when peak load soars and puts stress on the network and on wholesale prices, these consumers agree to reduce their demand by the agreed amount. Fraser won’t say how much they get paid, but it’s clearly lucrative, because it’s likely to be around 10 times more than what they are paying for the electricity if they were consuming it, and it is lowering costs for other energy consumers.

Fraser says about 2200MW of supply-side capacity exists in the NEM only to service the maximum peak loads that occur on just a few days of the year. It costs $2 billion to build that capacity and much more to put it into operation. “Why do we invest $1 million per MW to meet these occasional peaks when there is 3000MW of commercial and industry capacity that is already built and could be and reliably available if we have the right market mechanism?” he asks.

The NEM, a market that has been widely praised for delivering cheap and reliable energy, is now criticised because it is inflexible, is skewed towards suppliers simply producing more energy, and worst and most ironic of all – it adds unnecessarily to rising electricity costs. “There is no environmental objective and no demand management objective in the national electricity law, and that’s quite surprising,” says Mark Lister, head of the Alliance to Save Energy.

Fraser, who was the project leader in the implementation of the NEM, says even the efficiency of the NEM is now in doubt. “I don’t see how you can call it efficient,” he says. “It is simple for generators to build new generators and supply new energy. But it is not efficient for the end-use consumer – they are having to cope with the cost of this waste each year.” And the scale of this “waste” is enormous: around $6 billion in costs – a quarter of the annual retail cost of electricity, which is caused by servicing the extreme peaks in wholesale prices and network demand for just 40 hours a year.

The SMH reports that Sydney's heatwave (which has been inducing a lot of lethargy here at Peak Energy headquarters) prompted record power consumption in NSW this week - Third day of heat is the one to beware of. At least we aren't about to be deluged by a flood or trashed by a cyclone, unlike our friends in Queensland.

The weather also pushed electricity consumption to a record level of 14,744 megawatts yesterday. This exceeded the previous summer peak of 14,101MW reached on February 6, 2009, and the state's all-time record of 14,289MW, which occurred during the winter of 2008. The increased use of airconditioners has pushed summer usage to new highs.

Given that building peak generation capacity and the associated transmission infrastructure is responsible for a significant slice of our rapidly rising power bills, you'd think some effort would be out into finding ways to reduce the peak (or follow the load locally by encouraging more solar PV) via demand management. The Climate Spectator has a few words to say about this - The easy way to cut power bills.

Energy highways don’t do pedestrian crossings, roundabouts or traffic lights – what the consumer wants, it gets. So, when they all want it at the same time, the energy market needs a Sydney Harbour bridge the equivalent of 50 lanes wide (actually, pick your own number, but it’s a lot) that will then remain unused for the rest of the year.

All of this costs a lot of money, and it’s the consumer who pays for it. The Australian energy regulator late last year estimated that 10 per cent of the country’s transmission infrastructure – assets worth some $3.5 billion – gets used for less than 1 per cent of the year. The rest of the time it sits idle. Not that this greatly upsets the infrastructure providers in the Australian energy market – the more poles they build and wires they hang, the more money they get. ...

The biggest challenge is how to manage the growth in peak demand, which is growing at a phenomenally faster rate than baseload power. It will come as something of a shock to most consumers that their soaring power bills are not the fault of green energy subsidies, but mostly because of the neighbour’s newly installed air conditioning unit. Or their own.

The conventional view of how to solve this problem has been to implement some sort of congestion tax, to try and reduce the need for a 50 lane bridge across the harbour to a 40 lane, or at least make it really expensive. The inevitable rollout of smart meters in coming years will allow for time-of-use billing. But is it fair?

Two economists working for AGL Energy suggest not, arguing that it disadvantages businesses and the less wealthy – why should these people, they ask, be subject to higher energy prices and cross-subsidise others who decide to switch on their air conditioners all at once?

The AGL economists suggest a more complex billing system that would calculate tariffs not just on the time of use, but the change in use. This protects people who have more-or-less constant usage from the worst price spikes, while imposing greater costs on those who ramp up demand at peak periods because they are switching on air conditioners or other appliances. It sounds immensely complicated, but not beyond the bounds of smart meters, because they are, well, smart. Most of all, smart meters will allow consumers, and producers, to change the way they think about pricing. The days of low-cost energy are over, and they are not coming back.

In the meantime, if you’re struggling through the heat wave and your neighbours switch on the air conditioning, you might as well go round and ask to join them in the cool. After all, you’re paying for it.

The AGL paper referred to above can be found here - A New Approach To Congestion Pricing (pdf).

This paper was the subject of an article in the Climate Spectator last year - Australia's power paradox.

Australians are about to pay the price of cheap energy.

A landmark report by a team of analysts from AGL Energy suggests cheap energy and soaring incomes has lured Australians into larger homes with massive increases household appliances, particularly air conditioners. Now they are exposed to a looming price shock that could send retail energy prices more than doubling in the next five years, sending many homes into “fuel poverty.”

The AGL team led by economist Paul Simshauser identifies four primary causes for surging energy prices. The first is Australia’s great wealth of energy resources, which have historically been sold to energy utilities at a margin above extraction cost, but are now being developed at such scale for export that they have a potential to link with global energy indices and potentially cause a fuel cost shock in the domestic market.

This has already occurred in WA, where domestic gas prices are linked with the export price. AGL says that with a dozen new major gas plants planned in eastern Australia, most of it on the export market, a similar scenario could have a profound impact on energy costs.

The second cause is the rising cost of power plants, which has surged over the past decade, and is now being worsened by the higher cost of capital following the global financial crisis.

Thirdly, network infrastructure is now being forced to expand at record rates to keep pace with rapidly rising peak loads caused mostly by domestic energy use.

The move to lower emission technology is also forcing a shift from coal to gas, and to the increased use of high-cost renewable energy sources, although the AGL report says the impact of climate change and renewable energy policies on electricity prices is minor relative to these other drivers.

AGL has produced the report to argue for a range of policy measures. This includes rebating the estimated $1 billion-plus windfall in GST collections from rising energy prices to needy households, and to encourage the purchase of more efficient appliances by granting special credit policies to low income families.

It also wants prices to be deregulated, allowing for time-of-use tariff structures and the introduction of smart meters – not just so that people can view the the rate and cost of their own usage, but to allow demand management that will help shift consumption away from the peak load times that are adding to overall costs.

“The paradox here is, of course, that rising wealth has actually caused the pre-conditions for fuel poverty,” the report notes.

“In many respects, it’s as if consumers in NSW and QLD have historically been provided with a mispriced illicit electricity drug for long enough to establish a chronic addiction, at which point the price will progressively more than double.”

The report said the overwhelming majority of households will readily adjust their budgets to incorporate rising energy costs, as they are not unusual by global standards. But lower income households would face energy bills that could equate to 10 per cent or more of their household budgets. It estimates more than 340,000 households in NSW and Queensland alone could be tipped into “fuel poverty” – the “boomerang paradox” as AGL calls it.

The report said electricity prices in NSW and QLD have the potential to rise from about $130/MWh in fiscal 2008 to $255/MWh in fiscal 2015. Those prices soared above $300/MWh in its worst case scenario. It could not find a single element in the electricity cost stack that was not increasing at a rate faster than prevailing inflation expectations.

But one of the most material, although least certain, cost shocks could come from the upstream coal seam gas industry and the development of LNG terminals in Queensland. If this causes a link to the oil price, then the cost of existing CSG contracts will be more than doubled when they mature and are replaced with new ones.

And as new generating plant is installed in NSW and Queensland, then the long range marginal cost of baseload gas turbines will set the wholesale market prices rather than coal. In its most simplistic terms, the report said, whole-of-system average cost will rise from the coal-based $44/MWh in fiscal 2008 to a gas-based $71/MWh in fiscal 2015, or up to $98/MWh in a high gas price scenario. When the extremely low load factor of households is taken into account, these numbers ramp up to $100 - $130/MWh, excluding carbon taxation. “Importantly, for the Federal Government, their proposed CPRS and RET are not the cause of fuel poverty.”

Next100 has a post on "demand response" - managing customer demand in peak periods to reduce the need for costly, rarely used generation capacity and to allow greater penetration of renewable energy sources - The Invisible Energy Resource.

The media rush to highlight every major new renewable power project, but another clean energy resource gets far less attention, even though it's flexible, abundant, relatively inexpensive and valued overall at billions of dollars.

According to a recent report by the North American Electric Reliability Council (NERC), this unheralded resource is equal to 29,000 megawatts of capacity during periods of peak summer demand--as much as all U.S. wind, solar, geothermal, and biomass power combined.

The report calls it "an effective and efficient capacity resource, on equal footing with generation" and says it "will become a critical resource for maintaining system reliability over the next ten years."

What's not to like? Only the name: "demand response." You've gotta love the way the utility industry chose such a dull term to hide one of its hottest products.

Simply put, according to Wikipedia, "demand response (DR) refers to mechanisms to manage the demand from customers in response to supply conditions, for example, having electricity customers reduce their consumption at critical times or in response to market prices."

In most markets, matching supply and demand is no big deal. If supply exceeds demand, sellers build up inventory and sooner or later cut their prices, prompting additional demand. Sellers also regularly adjust prices based on predictable changes in customer demand--think movie matinees or off-season travel discounts.

But until recently, electric utilities had no comparable way to change prices for most customers or to store inventory (excess electricity). Utilities could mainly affect the supply side, for example by ramping up or down infrequently used gas-fired "peaking" plants.

Demand response programs now give utilities a powerful new tool for balancing supply and demand. By encouraging customers to curb demand during periods of extreme peak loads, utilities--and ultimately customers themselves--can save the considerable cost of backup generation capacity that may be needed only a few dozen hours a year.
elec_demand_graph.gif

There are other benefits of demand response. System reliability benefits because generation and transmission capacity aren't stretched to the limit. The environment benefits from fewer power plant emissions. And, last but not least, demand response programs can help utilities manage renewable resources like wind power. When the wind dies down, getting customers to reduce their load can rebalance supply and demand efficiently.

ZDNet has a report on a fairly crude form of demand management being trailed in WA, with local utility Western Power remotely turning off the compressors in customer's air conditioning systems during periods of peak demand - WA utility takes remote control of customers' aircon.

I'd prefer in-house systems that are fed with grid demand and (dynamic) price information that can be configured to make these sorts of decisions on based on the customer's own preferences, but I guess this sort of experiment is a start.

Western Australian energy company Western Power has reduced peak power energy use by 27 percent, or 3.5kW per home, by remotely switching off the compressors in trial customers' air conditioning units for a few minutes. "This is the equivalent of using four microwaves or two pool pumps. It is a substantial saving," WA Energy Minister Francis Logan said in a statement.

The figure was achieved in a trial run conducted with over 400 participants from Nedlands, Claremont and Dalkeith who volunteered to participate in a trial from January to March this year.

Equipment was installed at the substation and also on individual air conditioners. When a signal was sent down the electricity lines from the substation, the device on the air conditioner turns off its compressor, but not the fan, allowing air to still circulate but without creating any more cool air.

The compressor was turned off at peak periods for seven to 15 minutes. The compressors were turned off six times during the trial period, with devices varied so not all compressors were shut off at the same time. Western Power staff manually activated the devices when the temperature went over 36 degrees in the peak electricity usage times, betwen 3pm and 5pm in the afternoon.

According to a survey the company carried out after the pilot, many users didn't even notice the compressor being turned off. The next step, according to the Western Power spokesperson, is more trials.

According to Western Power, peak energy use in Western Australia is driven by air conditioners, with 90 percent of Western Australians owning a unit. Of these, one-third have more than one air conditioning unit in their home. ...

With reductions in peak power consumption, Western Power can delay on building new infrastructure in the short term, the Western Power spokesperson said.

AlwaysOn has a look at smart grids company GridPoint and their electricity management system - "Gridpoint: The Last Green Mile".

When we caught up with Gridpoint’s Vice President for Product Strategy, Brian Golden, he wanted to make sure it was clear they offer a lot more than storage. Gridpoint’s “Connect Series” product is a turnkey electricity management system that can be installed in light commercial or multi-unit residential buildings or at a utility substation, in order to monitor and manage electricity usage. And Gridpoint, who already counts among their customers virtually every major power utility in the USA, is one of a handful of companies who offer a suite of products to manage electrical resources more intelligently.

But Gridpoint’s “Connect Series” unit, about the size of a small refrigerator, is the only product currently available that not only helps electricity consumers and electric utilities manage energy more intelligently, each unit is also capable of storing up to 12 kWh of usable AC electricity. Gridpoint already has hundreds of these units in pilot installations throughout the USA.

With distributed sources of electricity now arriving in new, innovative forms, and capacity increasing exponentially, distributed storage is the final step necessary to completely transform our energy landscape. Wind power is intermittant, solar power peaks between 11 a.m. and 1 p.m. - but with distributed storage available, it doesn’t matter.

As Golden explained, there are several benefits to distributed storage. During power outages, stored electricity can be discharged back into the grid beyond the break in the line, maintaining reliable constant power. In markets where energy pricing is tiered, electricity can be stored during low off peak rates and discharged when rates are higher. Flattening the load by pushing power into the grid during peak hours of demand from distributed sources can relieve congestion on the grid. And, of course, distributed renewable energy sources such as wind and solar can be captured during their limited hours of collection, and utilized 24 hours per day from storage systems. Without distributed storage, new distributed sources of power cannot make nearly the same impact, and Gridpoint is the first company out there offering a product in the market, right now, that solves this challenge.

When I asked Golden what one of these units cost, he said they are about $10,000 to the consumer. Given the current prices of multi-family dwellings or light commercial buildings, that really doesn’t sound like very much. But as a tool to arbitrage between higher peak demand rates and lower off-peak rates, at $10,000 a pop, the unit has a fairly long payback. As a tool to flatten demand for a utility in order to prevent spot prices from spiking, however, the unit is already economical. It is also already economical for new land developments, where the storage capacity offered by Gridpoint’s products, combined with on-site sources of electricity from (for example) photovoltaics, significantly reduces the need for infrastructure to connect to the existing electrical grid - paying for itself immediately.

In any case, as Golden pointed out, we are only a few years away from batteries becoming far more economical. ...

Renewable Energy Access has an article on the need to commence construction of the smart grid - "Creating a 21st Century Grid".

In 1957, as Eisenhower began his second term as U.S. President, the first satellite launched into orbit and the first commercial nuclear reactor came online, electrical workers all over the country were installing the world's most advanced transmission and distribution (T&D) system. Today, much of that T&D system installed 50 years ago remains in place, holding together a patchwork grid for ever-expanding electricity markets.

Now in 2007 – the age of the internet, personal digital media and distributed energy — the grid has failed to keep pace with the rapidly changing technological landscape. While most industries rely on technologies that have been invented or updated in the last few years, the electricity delivery industry uses technologies that have more or less stayed the same for 100 years.

There's a common idiom that goes, “if it ain't broke don't fix it.” While the grid in the U.S. is hardly broken, it is beginning to deteriorate rapidly in some places, and it will need some serious repairs in order to meet the growing demand for electricity in general and distributed renewable electricity specifically.

“We need to see a very substantial transformation of the system,” says David Meyer, Senior Policy Advisor in the Office of Electricity Delivery and Energy Reliability at the U.S. Department of Energy (DOE). “We're outgrowing it in many parts of the nation. It's certainly not the high-capacity, integrated and smart system that we need.”

The current grid is a stiff arrangement of one-way transmission lines, centralized generation facilities and aging substations. The recent emergence of large amounts of renewable electricity in markets around the country are creating new challenges for both the transmission and distribution sectors.

On the transmission side, the issue is whether there are enough lines to bring renewable energy onto the grid. Because many of the abundant renewable resources are far away from load centers, additional lines must be built to bring wind, solar and geothermal energies to market. If plans to construct lines are not on the table, developers will be hesitant to build large projects in these rural areas.

“This is what we call the 'chicken and egg' problem,” says Meyer. “It's difficult to develop new generation without being certain that the transmission capacity is there or will be there. No one wants to be out front taking an undue portion of the risk.”

As planners look to build more of those lines, they may have some emerging technologies to consider; particularly High Voltage Direct Current (HVDC) and wires based on nanotechnology. HVDC transmission is certainly not a new concept — but it's gaining ground in the U.S. as renewable electricity will have to be transported further distances with higher efficiency in the future.

The other technology still in the research and development phase is the “armchair quantum wire,” made from tubes of carbon 100,000 times thinner than a human hair, called carbon nanotubes. When these nanotubes are made into a larger wire, they can conduct electricity far more efficiently and over far greater distances than the copper wires used today.

A leading researcher of carbon nanotubes, Dr. Wade Adams of the Richard E. Smalley Institute for Nanoscale Science and Technology, says that these nanotube wires can theoretically conduct 100 million amps of current over thousands of miles without much loss in efficiency. Today's wires conduct around 2,000 amps of current over hundreds of miles, with about 6 to 8% of the electricity lost in the form of heat.

According to Adams, these armchair quantum wires will also be one sixth the weight of current wires and so strong that they won't need support mechanisms. That means new transmission lines would be less conspicuous, and perhaps not as controversial to communities and interest groups concerned about their impact on the landscape. “That enables us to carry, say, electrical power from vast solar farms in the desert to the Northeast, or maybe from wind farms in Montana or North Dakota down to Florida – and in fact, even from continent to continent,” says Adams.

Of course, transmission lines made from carbon nanotubes are about 10-15 years away from commercialization. But if brought to scale, these new lines could transform how the nation, and indeed the world, transmits large amounts of renewable electricity. The distribution sector, which is made up of facilities that lower voltage for ordinary consumption, faces a different set of issues. One of the biggest challenges for distribution is the emergence of smaller renewable energy generators, which can sometimes cause issues with metering and load flow. This is where the “smart” grid system comes in.

In order to better control electricity entering the grid at the local level, interactive control devices, monitoring networks, energy storage facilities and demand response systems will need to be implemented. As distributed generation becomes more widespread and local communities start generating their own power, the grid must adapt in order to handle a steady two-way flow of electricity. “You have to think much more distributed than centralized, you have to solve the problem of storing energy, and it has to be much more like an internet system than the current grid is today in order to be effective,” says Adams.

These upgrades of the T&D infrastructure won't be cheap and they won't happen quickly. According to the Electric Power Research Institute, a California-based energy think tank, the cost of upgrading the grid with “smart” technologies could be $100 billion. Some analysts have put the figure at around $150 billion. While utilities and other developers would pay for much of the upgrade, ratepayers and taxpayers would also be responsible for the bill.

However, the economic impact associated with a failed grid could rival the price of an upgrade. For example, the 2003 Northeast blackout caused an estimated $6 billion in direct and indirect economic losses over only a few days. ...

Massive Pre-Holiday Link Dump:

* SMH - CBD to be greener and taller
* The Age - Australia lags in green investment: report
* Technology Review - Gadgets to Spur Energy Conservation
* IEEE Spectrum - The Charge of the Ultra - Capacitors
* Technology Review - Improving Fuel Cells for Cars
* Salon - The Smart car is coming
* Technology Review - Carbon-Dioxide Baed Plastic Gets Funding
* AutoBlogGreen - Ricardo and QinetiQ partner on reducing cost of lithium ion batteries
* Renewable Energy Access - Oklahoma Utility Wants to Quadruple Wind Power Production
* Hudson Valley Solar Blog - Let’s just give up…
* Bacon's Rebellion - Solar May Be Hot, But Geothermal is Cooler
* ABC - Robots deployed to measure climate change
* Transition Culture - Follow-up to ‘The Big Melt’ challenges assumptions on Co2 targets
* The Bulletin Of Atomic Scientists - An inconvenient assessment
* The Oil Drum - Saudis officially happy with $100 oil
* Ricve University - Baker Institute study shows 'Big Five' oil companies limit exploration
* The Oil Drum - Wow. Peak Oil Is on The History Channel ("Megadisasters: Oil Apocalypse")
* The Age - Black Sea faces oil catastrophe
* Financial Times - Transcript of interview with Ali Naimi, Saudi Arabia’s oil minister. Apparently peak oilers are all being overly pessimistic and promoting instability. Including the IEA. And he thinks Saudi can produce 18 million barrels a day.
* Hands Off Iraqi Oil - UK Speaking Tour
* SMH - ASIO becoming unaccountable: watchdog. The fallout from our oil war.
* Huffington Post - American Patriotism Crushed By Republican SUVs
* Singapore Peak Oil - LNG Will Not Provide Energy Security For Singapore
* Past Peak - Today's Bush Joke