Many utilities think that wind and solar PV can only provide a small percentage of power without undermining grid stability. But Amory Lovins, the founder of the Rocky Mountain Institute, says that those utilities risk the same fate as some of Europe's biggest utilities — losing half of their value as renewables flood the grid. So in a short video he explains why it's easier than most utilities think to ramp up renewables.
Nevertheless, even as utilities incorporate higher and higher levels of renewables, they still consider traditional baseload power the bedrock of their energy mix, whether coal, nuclear, hydro, or gas. Lovins doesn't agree, but he's still considered an outsider — an annoying gadfly — by the industry.
The only hurdle is mindset
The whole issue was still very contentious until last week in Houston, Texas, when CERAWeek moderator Daniel Yergin quizzed Chinese executives from China State Grid Corp, the world's largest electric grid, about the common “all of the above” energy strategy. Chairman Liu Zhenya reportedly said that the “solution was to accelerate clean energy, with the aim of replacing coal and oil.”
Liu didn't stop there and then promptly dismissed coal’s claim to be indispensable to “base load” generation. As the audience listened, Liu then noted that as the network builds out clean power sources, coal-fired generators serve as “reserve power” to supplement renewables.
“The only hurdle to overcome is mindset,” he added. “There’s no technical challenge at all.” Whether he knew it or not, Liu, the industry insider and veteran, had Lovin's back.
New data bears this out. In China thermal power plant capacity factors declined from 56.2 percent in 2014 to just 50.9 percent in 2015. Although coal-fired power plants aren’t designed to run only half the time, that's exactly what's happening.
Apparently, other grid operators feel the same way. The head of UK’s National Grid says that “centralized energy” will soon be a thing of the past. The Australian Energy Market Operator says that the exit of “base load” coal generation in South Australia should not impact reliability or security of supply.
Lovins likes to point out that countries with some of the highest wind and solar penetration in the world, like Denmark and Germany, have better supply reliability than the US — ten times more.
He says that in the US almost all power failures originate from the grid. So the more distributed the sources are, the closer to the load, the more you avoid the main cause of outages.
Lovins also says that two years ago 27 percent of German power came from renewables, while Denmark and Scotland claimed 50 percent.
How do they do it? According to Lovins, the Danes run their grid the way a conductor leads a symphony orchestra: No instrument plays all the time, while the ensemble continuously produces harmonious music.
Denmark also swaps electricity with neighbors to balance its variable output, sending surplus wind power to Scandinavia, and getting hydropower back. But even robust interconnections may not be crucial.
Out on the edge of the European grid, Portugal, interconnected only with Spain, claimed an astonishing 70 percent (30 percent excluding hydropower).
Lovins has a package of grid modifications to help utility clients build reliability from the bottom up. The first thing he has them to do is optimize efficiency, which makes loads less peaky as well as smaller. Next they have to use the latest generation forecasting services, while adding demand response. (Read his guide to ramping up renewables.)
He also wants them to build a diversified portfolio with variable and dispatchable renewables, so they're not the same kind and in the same place, seeing the same conditions and responding the same way.
It's important to integrate the various power sources with thermal storage, like ice-storage air conditioning, and distributed electric storage, especially from smart electric vehicles.
Finally, you could resort to fossil-fueled backup, and even bulk storage, but these options may not be needed. (See this short interview with Lovins.)