So what’s happening with renewables in 2017?

This year is going to drive quite a lot of news on renewable energy generation records. Especially in the Northern hemisphere.

Right now energy storage is the main bottleneck

So here’s a graph.

source: BNEF

Lithium-ion packs are currently economically viable for tropical islands and wealthy suburbs but next year [2018] their price will come down so that they will be competitive in places like the UK and pretty much every Western country.

Here are just two high profile examples of the first months of 2017.

Kauai’s energy solution provided by Tesla

The electricity grids can accommodate more renewable generation if there are enough reserves embedded to store that energy which is not needed on the spot.

This is the bottleneck that hit Germany the hardest — they didn’t keep up installing storage systems at pace with solar generation. The link below was probably the most popular one and it proves to show that operating wind and solar en masse without a smart strategy around how to store the excess of it can be really costly. And then you can’t just simply turn nuclear off like you would with a gas plant. Although you can shut nuclear off completely by political will.

Still, I think Germany will be better equipped this year to cope with the issue and I hope that every other country is wary of the implications of over-generation.

Let’s talk coal — briefly

Now, even if renewable energy transition slows for a few years, coal does not have a future. Gas has — it’s more flexible and it can cover the lack of energy storage solutions.

Why? Big/rigid coal plants were commissioned based on the fact that they will run the majority of time and(!) at efficient levels of generation.

There are few factors that should make coal less appealing in the new economy. Because it all stems from the economic conditions.

1.Big vs small

Big plants are simple to deal with if you have high officials running deals around the world. Consider power plants as big black boxes then you can start negotiating the prices and the conditions. Straight-up politics.

Inherently, if a deal goes bad, there’s a big chunk of national demand that is going to be more expensive or less secure. And don’t forget about so many deals around the world that come with strings attached.

So the stakes are high and that is distorting energy economics quite a lot.

Put simply, a higher risk profile equals more planning and more planning takes more time, which in turn takes more money so the whole project just balloons up to the skies and beyond. Just consider Hinkley Point C and the handful of other single-point-of-failure projects that politicians are so keen to engage with. Risky business. So why do we do it?

After all, every humongous power plant can be broken down into smaller solar + battery systems. Nonetheless, we’ll talk more about this in another post.

Think about it: even the UK System Operator underestimated the effects of the growth of small-scale projects.

“ At the same time, National Grid appears to have been completely blindsided by the rapid growth in small-scale generation such as solar panels and small wind farms that connect directly into lower-voltage distribution networks.”

2.Decentralization

Taking what we know from the first point, behind the meter generation is something that traditional thinking in the utilities sector is not accustomed with.

In the past, a country ran its electricity sector, top — bottom. There were these dozen or so points of really high electricity generation coupled with a transmission network that flowed unidirectional, from the point of generation to smaller and smaller sub stations until it got to power your kettle or your TV.

Back to present day, transmission gets left behind — remember all those really high voltage towers?The amount of electricity flowing through that big and expensive infrastructure will start to decrease, even if our total electricity consumption will go up — think every product or service that used oil or gas being slowly shifted to electricity.

The new game in town is distribution and more precisely, smart distribution. Bidirectional, local and highly secure due to plenty of cheap storage.

3.Priorities

What happened last year in Germany rises an interesting question.

What will happen every year now for 4–5 months? Bear in mind that renewable sources have priority in the grid.

The same coal plants that benefit from political support will be heavily curtailed, not achieving their financial projections. This will be done to ensure the stability of the grid due to intermittent renewable energy generation — which will be higher and higher and also creating steeper spikes to cope with.

Therefore, conventional power plants will not operate for the number of hours predicted, resulting in a high attrition for them. And those losses will keep adding up, one sunny/windy day at a time.

4.S-curve innovation

Dirty energy supporters make the headlines every now and then. This is proof that 150 years+ of carbon-heavy energy production has a really strong inertia. It represents a challenge and a barrier to entry for renewables in the coming few years. But this is to be expected. The world advances in jumps not in incremental steps— see the S curve of innovation. So there will be periods in which it seems that renewables are already a reality and some periods where dirty energy seems to be winning again.

Energy generation will be no stranger of this — originally observed in the technology sector

5. Payback period

When it comes to fund big projects and small projects, it is best to keep in mind that they attract investors with different kinds of risk profiles. The consensus was (and probably still is) that a big project, regardless of being low carbon, 0 carbon or straight up polluting, is a safe investment due to its inherent need on the market and how the world works.

On top of that, the payback period for big projects can very well take at least 20 years whereas the pay back for renewable-type projects is quicker. And time is important in terms of that money being freed up for new investments.

All in all

As of now, April 2017, this is the best proof that renewables do work on a big scale and they are able to replace much of the dirty generation.

It shows that when conditions are favorable, renewables and low carbon sources of energy can provide quite a lot of the necessary amount for a country as big and as non-tropical as the UK.

Lastly, people often overestimate what they can achieve in 1 year and they underestimate what can be done in 10 years.

In the meantime, I’ll leave you with the experts.

“I had relatively limited expectations for the battery industry in advance of 2020, I thought that it would not really accelerate and begin to penetrate the electric grid or the transportation world for a while to come. Once again, technology is clearly moving faster than we can regulate.”
Michael J. Picker, president of the California Public Utilities Commission.

It would mean a lot to me if you can share it with people that are interested in this topic. Also, let’s talk in the comments section. Thank you! 💨☀️⚡️