Recently, I attended the Global New Energy Summit in Colorado Springs. The GNES covered diverse geographies and topics ranging from hydraulic fracturing to venture capital. What each of the panels had in common was a peppering of Colorado expertise in science, policy-making, and business, highlighting the state’s central role in the global cleantech industry.
The state is home to extensive university research and the National Renewable Energy Laboratory, which is working to commercialize these innovative technologies. As a traditional oil and gas state with a plethora of solar, wind, and biomass resources, Colorado understands the challenges faced when integrating renewable energy onto the electric grid and is striving to develop a policy environment that appropriately accommodates both industries. Colorado currently has the second highest Renewable Portfolio Standard (RPS) in the United States. These resources have attracted multinational corporations from around the world spanning various energy sectors, including Vestas Wind Systems, Abound Solar, IBM, and Lockheed Martin (just to name a few).
The GNES was an opportunity for all of these pieces to come together and for discussions on local, national, and international trends in the energy sector. After two days of panels and discussions with industry leaders, I came away pondering the following topics:
- Natural Gas: A good partner with renewables for grid reliability, decreased capital expenditures, and lower greenhouse gas emissions from power generation
- Transmission Infrastructure: High-voltage direct current equipment leading new transmission infrastructure
- The Consumer and the Smart Grid: The home becoming like an iPad for the grid
In subsequent posts, I will highlight the activities taking place here in Colorado, but for now I will leave you with an overview of some of the key trends that were among the hot topics at the Global New Energy Summit and some of my thoughts.
Natural Gas: This isn’t something we discuss too frequently on the Pike Research blog, but any realistic discussion about the future of renewable energy needs to touch on it. Natural gas has supplied electricity since the 1940s and natural gas power plants operate approximately 30% more efficiently than coal-fired plants while emitting significant fewer toxins. Recent advances in drilling technology have unearthed substantial reserves and the redeployment of drilling rigs and more efficient practices have driven down the price of natural gas and initiated a revival of the industry.
Natural gas is frequently discussed as a backup source to renewable power, to ensure grid reliability. Less frequently we talk about the way natural gas can decrease the capital costs to develop renewable power. Integrated solar and natural gas facilities present an opportunity to create more favorable financial conditions for renewable project development. By combining gas and solar at one facility the need for duplicate equipment is eliminated. The costs can become even more favorable if existing combined cycle facilities are retrofitted with solar equipment or other renewable technologies. The first such facility was just completed and connected to the grid by Florida Power & Light (FPL), where 75 MW of solar was added to the 3,800 MW combined cycle gas power plant already in operation in Martin County, Florida.
Siting and constructing new transmission infrastructure is not only essential to the future of the cleantech sector, but it is also time-intensive and costly to achieve. There are few firms with sufficient political and financial capital to get the task done. However, technology advances and creative project development may provide a solution.
The future of transmission infrastructure is heading towards high-voltage direct current (HVDC) equipment. While the cost of converting power from DC to alternating current (AC) on the distribution system is high – costs can be roughly $250 million per inverter – the economics become more favorable when building lines over distances greater than 400 miles. Using HVDC is favored by some merchant transmission line companies like TransCanada, which is connecting 3,000 MW of wind generation resources in Wyoming to Southern Nevada, the gateway to markets in Southern California. Even smaller firms like Clean Line Energy Partners, another GNES attendee, are banking on the favorable economics, diminished land footprint, and power losses associated with HVDC infrastructure.
Direct current is likely to see more action for distributed locations as well. Companies like GE, Panasonic, and Sharp are looking at using DC equipment in homes and commercial buildings to power appliances and electric vehicles. GE recently acquired Lineage Power, which specializes in power conversion technology for the use of DC power at distributed locations such as telecom towers and data centers.
The Consumer and the Smart Grid: Pike Research analysts have covered the market that is (or will be) smart grid services, but there is no harm in repeating. The smart grid is a means to an end. The real market for the smart grid will be about the high tech innovations that are applied to the edge of the smart grid – think demand response, energy storage, and consumer-facing products and services.
The home is the key to accessing a variety of services that will eventually benefit consumers and optimize grid efficiency. Think of the home as an iPad for the grid (this was how Bryan Hannegan, VP of Environment and Renewables at EPRI encouraged us to think about it) where future services will be like applications plugged into the home and accessed via the home area network (HAN). Lucrative products and services will need to employ business models that allow them to seamlessly integrate with the HAN and deliver tangible and measurable benefits to the consumer. This will ultimately be what sells the consumer on the whole smart grid idea. There are many smart grid projects to point to, and the consumer aspect has been a stumbling block for some, but the consumer-focused approach is at the core of the Pecan Street Project in Austin, an interesting case study to check out.