Electricity Democratization and Decentralization

Please join us for a free webinar on February 29th where we'll be discussing the role of sustainability in economic recovery. Energy supply is slowly moving from centralized utility-scale power plants to small distributed renewable sources, a large number of which are privately owned. This trend has been dubbed the Democratization of Energy. Jeremy Rifkin calls it “lateral power” in his new book, The Third Industrial Revolution.” Rifkin says that the combination of the Internet and renewable energy, conjoined by a globally connected smart grid, will have the same kind of transformative effect on society that the tandem team of steam power and the printing press first had, followed by electric power and television. This latest transformation from centralized to democratized power, claims Rifkin, will fundamentally reshape our society into a more sustainable one. This sounds like some kind of utopian dream, but is it really happening? “Grow your own,” and “do-it-yourself,” are not terms that we generally use to talk about generating electricity. A comprehensive paper by John Farrel, entitled “Democratizing the Electricity System: A Vision for the 21^st Century Grid,” published by the New Rules Project, is filled with facts to support that assertion.

• Fact: Germany has installed over 10,000 MW of distributed photovoltaic (PV) systems in the past two years. Over half of that is privately owned.
• Fact: California plans to generate 12,000 MW from distributed renewable power plants by 2020.
• Fact: Sixteen states have added distributed or solar PV mandates into their energy policy portfolios.
• Fact: Utilities are investing in a 21^st Century smart grid with the flexibility and sophistication to accommodate the intermittent nature of a renewable supply. Xcel Energy has installed an 11.5 MW battery-integrated wind project in Minnesota, while Long Island Power Authority is considering a 400MW storage facility in lieu of a new generating plant. Smart grid development is seen to be a significant driver of green jobs.

Indeed half of the world’s new electric energy capacity is now renewable due to its lower costs and risks. Amory Lovins of Rocky Mountain Institute says in the introduction to Reinventing Fire, “Humans are inventing a new fire–not dug from below but flowing from above, not scarce but bountiful, not local but everywhere. This new fire is not transient but permanent…and grown in ways that sustain and endure. Each of you owns a piece of that $5-trillion prize.” The book lays out a plan that utilizes a combination of efficiency and renewables to eliminate coal, oil, and nuclear power, reducing carbon emissions by 85 percent below 2000 levels while saving $5 trillion in the process and growing the economy by 158 percent. As utilities become increasingly familiar with distributed renewable generation, a number of collateral benefits beyond the additional power provided are becoming apparent. Among these are:

• Reduced transmission losses
• Reduced transmission and distribution infrastructure costs
• Reduced environmental costs
• Increased generating capacity

Farrel says on CleanTechnica, that we should move to this distributed paradigm because, “it’s a more democratic and participatory paradigm, with homes and businesses and communities becoming energy producers as well as consumers actively involved in designing the rules for the new electricity system.” But there are also a number of very practical reasons to make the move. Most states have enough solar potential to meet 20 percent or more of their electricity needs. It can be deployed much faster than conventional utility power because of the lower construction and regulatory overhead. Renewables are coming down in price and in the case of wind, can already be less expensive than traditional sources. Small projects are generally easier to finance than large ones. Local ownership of electricity keeps more money in the local economy which strengthens the community. A distributed grid is also far more resilient that a centralized one. With a distributed grid, widespread regional blackouts will become a thing of the past, and society will be less susceptible to large scale interruptions of any kind. And, finally looking at the carbon footprint of solar from a life cycle analysis perspective, carbon payback generally takes less than two years. This transformation will require action on both ends of the equation. We have already seen changes at the utility level. This will be further aided by federal governments getting involved (as they have so effectively in Europe, especially in Germany). At the consumer end, people need to take control of their own power generation, but first they have to want to. This requires awareness, which is being aided by emerging new efforts like Opower, which recently announced a partnership with Facebook and NRDC to provide just such awareness of energy consumption and of the opportunities afforded by the “energy internet.” As we witness this new transformation unfolding around us, it’s good to remember what Lovins said about energy coming from both above and below. The realization of this vision will also require participation from above (i.e. government, utilities, and industry) and from the grassroots level below (individuals and communities) coming together to embrace a more democratic and more sustainable future. Image credits LoraxV, sonofabike, Flickr]