Navigant Research Blog

Tracking the Rise of Distributed Energy Resources

— December 21, 2015

While leaders from nearly 200 nations reached a historic agreement in Paris last week to limit greenhouse gas (GHG) emissions, market forces are already driving the growth of distributed energy resources (DER). This rapidly evolving technology landscape is forcing stakeholders throughout the industry to reconsider the structure of the grid itself in addition to the economics of generating, distributing, and consuming electricity.

Utilities and regulators have taken widely differing stances on the deployment of these resources. While some are beginning to embrace the DER trend by developing new products and services and demonstrating the necessary flexibility to evolve, others have been lobbying aggressively to limit or halt their spread. Although all DER represent a shift away from the traditional centralized grid, the potential of different technologies to disrupt the industry varies considerably. While the term disruption can be somewhat vague, in this sense it refers to developments that can alter the relationship between incumbent service providers and their customers or require significant new investments in grid infrastructure. Navigant Research’s recent report, Distributed Energy Resources Global Forecast, explores the growth and impact of DER worldwide.

New Players Emerging

The DER expected to be the most widely deployed over the coming decade are actually those that will cause the least amount of disruption to the industry; demand response (DR) and fossil-fueled generator sets are already widely deployed and have not resulted in significant change in the industry. Equipment to charge electric vehicles (EVs) is expected to be one of the fastest growing DER segments worldwide. This emerging technology is expected to add significant load on the grid and necessitate new business models by both utilities and third parties to effectively manage this new resource, including vehicle-to-grid capabilities. Some utilities have begun experimenting with innovative programs to own new infrastructure and benefit from the integration of EVs.

Disruption on the Horizon

The rapid growth of distributed solar PV is proving to be disruptive to the industry, generating contentious debates over proper compensation for system owners as well as causing a need for new technologies on the grid to help maintain stability. Along with solar PV, the most disruptive new DER technology in the coming decade may be distributed energy storage systems (DESSs). These systems can provide end users with the ability to consume most of the power they generate onsite, lower their bills, and have power available during an outage, among other benefits. Customers empowered with these technologies may have a radically different relationship with their local energy service provider. Several utilities have taken an active role in this growing industry by offering energy storage and solar PV solutions directly to their customers. Energy providers that fail to adapt to new technologies may find their customer base migrating to alternative solutions.

The growth of DER technologies will bring about the need for a greater level of coordination between stakeholders on the grid to enable a two-way flow of energy and services between customers, utilities, and potentially between customers themselves. Known as the Energy Cloud, this concept can lead to the development of new players within the industry, such as the role of a network orchestrator to ensure a balance of supply and demand on the increasingly distributed and complex network. While the future of DER in most areas may rely heavily on new regulatory frameworks, there is no doubt that the ground is shifting under the global industry and the need for new business models is only a matter of time.


Floating Foundations in the Offshore Wind Market, Part 2

— December 21, 2015

This is the second blog of a two-part series discussing floating foundations in the offshore wind market.

Floating foundations face many challenges that must be overcome in order to become a major factor in the offshore wind industry. At the same time, there are many possible advantages these systems could have over traditional foundation types.

Obstacles to Overcome

Despite the tremendous opportunities floating foundations could provide the offshore wind industry, there are multiple obstacles and challenges that need to be addressed before this technology can be used in large-scale projects. The majority of these challenges can be attributed to the fact that this technology is still in its infancy. Numerical models that analyze and compute structural and aerodynamic behaviors of foundations are relatively advanced for grounded foundation types as a result of an increasing amount of empirical data to draw from. In contrast, there are only a handful of test sites with large turbines installed along with some small-scale experimental projects that can be used to model floating foundations on. More test projects need to be built and tested to improve the accuracy and reliability of these models. Additionally, the interface between these floating platforms and the wind turbines themselves needs to be better understood. These foundations need to be able to account for different tower types and sizes as well as varying rotor diameters and hub heights in order to be fully integrated into the market.

Around 20% of current offshore capital expenditure is in the production and installation of substructures. Thus, it’s important to developers that supply chains and port infrastructures are fully realized prior to the beginning of construction. Floating technology, being as immature as it is, will require time to catch up to the more seasoned foundation types. However, there is evidence to support the notion that construction and installation of floating substructures will be both cheaper and easier than their grounded counterparts.

Monopiles and jacket foundations need to be driven deep into the ocean floor, which requires extensive ocean floor surveys. GBS foundations require a large area on the ocean bottom to rest on, which demands extensive preparation. These grounded foundations also require large vessels and dock storage facilities to hold and transport these large structures. Floating foundations can be constructed and assembled almost entirely onshore prior to being loaded onto transport vessels. This reduces vessel usage fees, port storage fees, and potential lost time due to weather delays.

Outlook for Floating Foundations

Several projects are in the pipeline to test floating foundations in Europe, Asia, and in the United States, particularly on the west coast. Siemens has signed a contract with Statoil to install 5 6 MW turbines off the coast of Scotland that will use the Hywind floating spar foundation. A 30 MW floating project funded by Principle Power is also planned off the coast of Oregon. Additionally, France has launched a tender for floating offshore wind projects using three to five turbines of at least 5 MW. These projects and others will undoubtedly face substantial challenges, but their success could lead to a significant expansion of potential offshore wind sites across the globe.


LEDs Light the Way to Lower Utility Bills

— December 21, 2015

With the holiday season upon us, residential and commercial buildings, trees, and yards are brightly lit with holiday lights. With decorating and purchasing new lights comes the decision to use traditional incandescent lights or LED alternatives.

Light Lifespans

While the upfront cost of LED holiday lights can be 2 to 3 times the initial cost of traditional miniature lights, there are significant benefits to LED lights. Incandescent lights last roughly 2,000 hours of use before failing, while LEDs can last for up to 20,000 hours. If you left your holiday lights on for 8 hours per day for 30 days, LEDs would theoretically last you 83 holiday seasons. While this number is extremely high and users will most likely not get this many uses from their LED lights, they still do have a much longer lifespan than incandescent lights. Duke Energy advertises that LEDs will last 10 years longer than regular incandescent lights, which is a more reasonable length of time to expect to use the same decorations, since other factors such as wiring can ruin a sting of lights before the bulb no longer functions.

Energy and Cost Savings

Beyond the extended lifespan of LEDs, the amount of energy used (and thus overall cost) is substantially less. Duke Energy’s Holiday Lighting Calculator allows users to calculate the amount of energy saved by switching to LEDs. For example, someone using five strands of 100-bulb mini-incandescent lights, two strands of C7 incandescent bulbs, and one strand of C9 incandescent bulbs for 6 hours per day would add $34.20 to their electric bill each month. On the other hand, someone using the same number of strands with LED lights would spend $4.23 each month. While the savings are clear in this example of what a residential customer might spend, this is a limited amount of lights compared to many decoration displays on residential buildings. Additionally, savings for retail clients are even greater, as the number of lights increases along with the average number of hours the lights are on.

If you’re interested in decreasing energy use even more, Anear sells Solar String Lights with an attached solar panel in 100-bulb strands. Energy from the solar panel is stored in the light string’s built-in nickel-metal hydride batteries, which provide up to 8-10 hours of power to the lights at night. These will only work for exterior decorations and the solar panel will need to have full sun exposure to maximize usage.

If the initial additional upfront cost is not an issue, LED holiday lights are a preferable choice. They are better for the environment, using 90% less energy than incandescent lights. They also decrease the added cost to your utility bill and are safer than incandescents—LEDs produce less heat than traditional bulbs, reducing the chance of a fire. With the cost of LEDs decreasing over the past few years and more holiday lighting choices available, more consumers are expected to reach for the LED option in the coming years. Enterprising shoppers should look for post-holiday sales in January and save even more in preparation for next year’s holiday season.


Ford Seeks Advantage with In-House Cell Chemistry Development

— December 18, 2015

As automakers around the world have scrambled to develop more affordable and efficient electrified vehicles over the past decade, one common approach that almost everyone has taken is outsourcing battery technology. In particular, automakers are relying on companies with experience in developing and manufacturing cells such as LG Chem, Panasonic, Samsung SDI, and GS Yuasa to take the lead on developing lithium ion chemistries. Ford now appears to be one of the first automakers taking that approach in-house on a large scale.

Navigant Research’s Electric Vehicle Market Forecasts report projects global sales of approximately 3.1 million hybrid electric vehicles (HEVs) and 2.9 million plug-in electric vehicles (PEVs) by 2024. Virtually all PEVs and an increasing proportion of HEVs will be using lithium ion batteries in that timeframe.

Light Duty EV Sales by Scenario, World Markets: 2015-2024

Sam A Blog - Dec 17(Source: Navigant Research)

Tesla kicked off the outsourcing wave using the approach pioneered by AC Propulsion (ACP) on its tzero concept. Like ACP, Tesla chose to use commodity 18650 cells like those used in many portable computers for the battery pack in the Roadster and later the Model S and X. As Tesla has grown, it has worked closely with its main supplier Panasonic to further optimize cell chemistries for automotive applications.

General Motors (GM) has similarly developed a close working relationship with LG Chem since launching development of the original Chevrolet Volt in 2007. GM has a massive battery test lab at its Warren, Michigan technical center that is capable of testing everything from individual cells to full packs, but LG retains primary responsibility for developing the cell chemistry.

Ford currently relies on LG Chem and Panasonic to supply the cells used in its HEV, PEV, and battery electric vehicle (BEV) models, but that may well change as the company rolls out 13 planned new electrified models by 2020. The automaker recently refurbished the original Ford Engineering Laboratory (FEL) across the road from its main product development center campus in Dearborn, Michigan. The FEL was built in 1923-1924 and is now the new home of Ford’s consolidated and expanded electrified powertrain development efforts.

Research Continues

Thirty miles to west, on the University of Michigan’s north campus in Ann Arbor, researchers at the U-M Battery Lab, which was partially funded by Ford, are doing pilot-scale production of cells using Ford-developed chemistry. The lab is capable of manufacturing both the 18650-format cells used by Tesla and pouch cells similar to those produced by LG Chem for the Volt and the Focus Electric.

“Batteries are the life force of any EV, and we have been committed to growing our leadership in battery research and development for more than 15 years,” said Kevin Layden, director of Ford Electrification Programs.

Layden explained that Ford has no plans to use the smaller cylindrical 18650 cells for production applications but they are easier and less expensive to manufacture for use in testing and benchmarking new cell chemistries. Just as internal combustion engines have been an integral part of differentiating products for more than a century, Layden believes that owning the cell chemistry intellectual property will be critical to the success of automakers in the future. Ford doesn’t plan to get into full-scale cell manufacturing, instead preferring to work with suppliers to produce the chemistry it develops in-house.

Ford has already announced that the 2017 Focus Electric will get an upgraded battery that boosts range from the current 76 miles to more than 100 miles. It’s not clear at this point how much impact the efforts at FEL and U-M had on that vehicle, but many of the other new EVs should demonstrate what Ford can do.


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