Building a smarter renewable energy future
There is no doubt that renewable energy is rapidly expanding, with about 12 GW of wind and 3 GW of solar projected to be installed by the end of 2012. Much of this skyrocketing growth is due to advances in both scale and cost reduction, which can be attributed in part to regulatory incentives and technology advances. But as renewables grow, utilities and policymakers are still challenged with how to implement renewables in a way that is smarter, and leads to better business practices and more efficient energy generation.
In an effort to answer these questions, The American Council of Renewable Energy, gathered a panel of industry experts at the recent RETECH conference in Washington, D.C. Solutions were varied, but centered around the importance of a continued focus on cost parity, and a better marriage of data and information across a number of assets. This last point becomes especially pertinent as renewable penetration expands across utilities.
Price isn't right
Price parity remains a huge hurdle facing renewable energy as it tries to go from boutique to large scale. If wind turbines and solar panels -- and the power they generate -- remain higher than other forms of generation (such as coal and natural gas), there is little motivation for development. And right now, the price of renewables, especially solar, remains relatively high.
The U.S. Department of Energy, for example, estimates the price of solar must fall about $2.80 to be competitive with prices from coal and gas generation. Regulatory policies are underway to lower that price, and some are beginning to pay dividends. One major initiative is the DOE's SunShot program, which has a goal of hitting $1 per watt by 2020 in order to be cost competitive with other sources.
IT solutions exist in the marketplace from other industries that can be tailored to meeting the needs of the growing renewable energy market . ______________________________
"We want to drive the cost down to parity so that we don't need the subsidies," said Steven Chalk, a program manager at DOE.
Chalk noted that solar prices have been reduced about 90 percent over the past decade, and that wind costs are well on their way to price parity -- at about $0.1 per kWh -- with new capacity second only behind natural gas and installation costs coming down significantly. Wind also experienced record growth in 2012, with more than 10 GW installed, according to the DOE.
It's also tough for utilities to be incentivized to construct these new technologies without a lack of regulatory force, such as mandatory renewable portfolio standards. And while the Federal Energy Regulatory Commission and state public utility commissions have taken steps to grow renewable energy, there is a general consensus among utility companies and the energy industry that regulatory incentives -- not technology -- may be the main way to make smart energy work.
Integrating renewable energy and data
As these new policies aim to encourage renewable energy growth, the industry also needs to develop better ways of looking at and synthesizing data, according to Neil Gerber, a global generation executive with IBM.
"As you start to operate [renewable energy technologies] for long periods of time, you get a large of amount of information that is stored and the ability to mine that data and understand what's happening to assets -- how they are performing, what the health of the assets are -- becomes extremely important," Gerber said.
The U.S Department of Energy estimates that the price of solar needs to fall about $2.80 to be competitive with prices from coal and gas generation. ______________________________
IBM sees the current renewable energy landscape leading a host of IT integration issues cropping up that haven't previously been major issues in renewable power generation. But solutions exist on the marketplace from other industries, such as telecom, that can be tailored to meeting the needs of the renewable energy market as it grows, Gerber said.
These IT challenges include taking an integrated view from the start and thinking comprehensively about the diversity of energy supply and utility assets.
"The earlier you think about issues associated with information flow through that lifecycle, the better off you are," Gerber said.
Renewables have a chance to do it differently due to its relative youth as an industry and a general willingness of employees and businesses to have an open mind and work toward a more seamless data transfer model, he added.
Another way of achieving better integration is through better testing of the grid and grid technologies, but this can be difficult to accomplish, especially while avoiding disrupting energy flow or impacting grid reliability. In this light, the federal government's National Renewable Energy Laboratory is pushing new advances in simulation in order to begin to eliminate these barriers.
"NREL is working to marry the simulation environment that comes from a high performance computer with configurable, experimental bays and actually look at pervasions of the system and work through the integration challenges that we all want to implement going forward," said Doug Arent, Executive Director of the Joint Institute for Strategic Energy Analysis.
The need to monitor all this data and equipment is a daunting task -- one the industry will have to wrestle with in the coming years. But perhaps integration altogether is an unrealistic goal, speculates Bill Thomas, Vice President of Origination and Energy Marketing at E.On, a European utility.
"I think integration should maybe be changed to accommodation," he said. "We have to work with different groups in the renewables sphere."
He compared the task of fitting renewables into a modern grid to trying to fit a square peg into a round hole. "There are so many different moving parts, and ultimately integration doesn't really happen."