Legal and Economic Instruments forEnvironmental Policy

Dr. Martin Wickel L.LM, Dr. Cathrin Zengerling L.LM, Ph.D. Irene Peters

- Renewable Energies -

Electricity Grids

by Benedict Adcock, Dave Huntington, Gabriel Niessen and Heather Troutman

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

electric lineNew York

1890

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

electric lineChidambaram, India

2014

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

global light pollution / grid structure

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

India

national grid

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

USA

national grid

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Germany

national grid

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

AC – alternating current_ the flow of electric charge periodically reverses direction_ commonly used_ for shorter distances

HVDC – high-voltage direct currentmore economical for longer distances _

less losses _well suitable for underwater-installation _

AC / HVDC ACsimplified grid

generation

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

nationaltransmission

distribution

regional

local

potential plants

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Germanyfuture situation

high demand

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

planned development of the German grid

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

power exchangesin Europe

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

electrical interconnection in Europe

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

ProjectDesertec

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Future grid?

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Distributed Generation

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Distributed Generation (DG)

• DG systems are made of one or many ‘Distributed Energy Resources’ (DER)

• DER are small-scale and modular devices, and consist of both fossil and renewable energy technologies

• DG systems are located close to the load (end-use customer) and usually have a capacity of 10 MW or less

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

History of DG

• DG is not a new phenomenon, but its inherent threat to centralized electricity grids and utility pricing models is

• Today, centralized grids have become the main driver of customers’ energy costs and electricity reliability or quality problems

• Efficiency gains no longer come from connecting new centralized power plants to the grid, but rather by locating smaller DG systems nearer to the demand

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

• The IEA notes 5 major factors contributed to the evolution and growth of DG– New technology developments– Constraints on the construction of new

transmission lines– Increased customer (primarily commercial, but

also residential) demand for reliable electricity– Liberalization of electricity markets– Concerns about climate change

Distributed Generation (DG)

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Why DG?

• DG offer solutions to blackouts, energy security concerns, power quality issues, tighter emissions standards, transmission bottlenecks, and the desire for greater control over energy costs

• DG reduces the amount of energy lost in transmitting electricity long distances

• DG is promising in countries with remote regions not presently connected to a centralized grid

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

IEEE 1547 Standard

• Industry standards for interconnecting DG systems to the existing grid and utility systems– Covers safety, performance, installation,

operation, and synchronism.• In 2005, the Energy Policy Act established IEEE 1547

as the national standard in the U.S.• In Europe, many national regulations set standards– In Germany, VDE-AR-N 4105 for low voltage and

BDEW-2008 for medium/high voltage

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Policy Instruments

• City of Vancouver (Canada) requires developers of any large tract of land to complete feasibility study of “district energy”

• State of Colorado (U.S.A.) enacted a law requiring by 2020 that 3% of power generation utilizes DG

• States of Louisiana, Idaho, and California have rejected calls to impose taxes on solar users

• Germany introduced an incentive program aimed at on-site self-reliant DG systems

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Distributed Generation (DG) Questions

• Does it make sense to accelerate the development of new high-voltage transmission lines that reinforce a centralized model of electricity delivery?– Should we pursue distributed solar on homes

instead of centralized, utility-scale solar plants?• Solar users drain revenue while continuing to use

utility transmission lines for backup or to sell their power back to the grid. How can utilities pay for necessary maintenance and upgrades of the grid if this “free ride” continues?

A microgrid is controlled by a supervisory controller

that decides which microgrid energy resources to use at

what times in order to balance load and generation. This

microgrid controller may take into account predicted

load profile, predicted power price profile, predicted

wind or solar power profile, predicted heating or cooling

needs (if the microgrid contains cogeneration),emissions and other parameters. The microgrid

controllermay also change the operating modes of power

resources, provide power setpoints to resources, or

regulate droop characteristics.International Renewable Energy Agency (IRENE) (2013) Kempener, et al. Smart Grids and

Renewables: A Guide for Effective Deployment (p. 35) Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Microgridssmall-scale electricity networks capable of

isolation from the centralized electricity system Island mode

• Micro-grids covering 30–50 km radius• Small power stations of 5–10 MW • Generate power locally to reduce dependence and electrical energy

lossesSources: http://galvinpower.org/microgrids, http://en.wikipedia.org/wiki/Distributed_

generation#Microgrid, http://www.rmi.org/nations_largest_microgrid_online_esj_article

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Reasons for Microgrids

• More efficient use of renewable energies such as photovoltaics, wind turbines, and fuel cells, biomass powered generators, and combined heat and power plants (CHP)

• microgrids can ensure continuity of power to critical infrastructure such as military bases, hospitals, schools and emergency services.

• Customer need for more reliable, resilient, and sustainable service

• Electrification in remote locations and developing countries

http://www.microgridinstitute.org/about-microgrids.html http://www.rmi.org/nations_largest_microgrid_online_esj_article

The International Energy Agency (IEA) estimates that to achieve its

goal of universal access to electricity, “70% of the rural areas that currently lack access will need to be connected using mini-grid or

off-grid solutions.”World Energy Outlook 2011

Energy for All: Financing Access for the Poorhttp://www.iea.org/papers/2011/weo2011_energy_for_all.pdf

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

1. Transmission networks allow energy from offshore wind farms to travel great distances.

2. Fossil power plants operate with greater efficiently thanks to enhanced management between peak and off-peak periods.

3. Solar farms located in sunnier regions contribute energy to the grid.

4. Decentralized combined heat and power (CHP) plants supplies both industrial companies as well as residential and commercial buildings with energy, while excess energy is fed back into the grid.

5. Industrial and process automation functions efficiently and productively. Energy management and smart devices make it a “smart factory”.

6. Substations and distribution networks facilitate low-loss power transmission, even over long distances.

7. Computers process data from electronic meters and control energy generators and consumers. The control logic ensures the possible site for the balance of electricity supply and removal: in a street, in the local network or on the distribution network.

8. Smart meters and comprehensive building management systems increase efficiency in residential homes.

9. Smart grids and building controls also improve the energy efficiency of commercial buildings.

ABB in Germany: Smart Grid (Press Release) 14.04.2010 [Onlinehttp://www.abb.de/cawp/seitp202/77a7e74be1ea8904c12577050030ab14.aspx [Accessed:

13.11.2014]

Overview of the „Modern“ Electricity Grid

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

ABB (2010) Review (1)10 [Online] Smart Grids. [Accessed: 13.11.2014] http://www.poweranswercenter.com/83 Benedict

AdcockHeather Troutman

Dave Huntington

Gabriel Niessen

ABB (2010) Review (1)10 [Online] Smart Grids. [Accessed: 13.11.2014] http://www.poweranswercenter.com/83 Benedict

AdcockHeather Troutman

Dave Huntington

Gabriel Niessen

ABB (2010) Review (1)10 [Online] Smart Grids. [Accessed: 13.11.201 http://www.poweranswercenter.com/83

Controls

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

http://www.terrapass.com/science-technology/demand-response/

Managing Appliances

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

http://www.mpoweruk.com/electricity_demand.htmBenedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Grid response to solar PVCalifornia

Fraunhofer USA Center for Sustainable Energy Systems (2014 ) Cleantech Notes [Online] Tracking the Duck Curve [Accessed 12.11.2014]

http://www.cleantechnotes.org/2014/05/07/tracking-the-duck/ Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

The U.S. electricity system is on the cusp of fundamental change, driven by rapidly improving cost effectiveness of technologies that increase

customers’ ability to efficiently manage, store, and generate electricity in homes and buildings.

By changing electricity pricing to more fully reflect the benefits and costs of electricity services

exchanged between customers and the grid, utilities and regulators can unleash new waves of innovation in distributed energy resource investment that will

help to reduce costs while maintaining or increasing system resilience and reliability.

~Amory LovinsRocky Mount Institute

Rate Design for the Distribution EdgeAugust 2014

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Time-of-use pricing (TOU): A tariff structure in which electricity prices are set for a specific time period on an advance or forward basis, typically not changing more often

than twice a year. Prices paid for energy consumed during these periods are pre-established and known to consumers in advance, allowing them to vary their usage in

response to such prices and manage their energy costs by shifting usage to a lower cost period or reducing their consumption overall.

International Energy Agency (2011) Technology Roadmap: Smart Grids. France

Rocky Mountain Institution. (2014) Electricity Innovation Lab [Online]Rate Designed for the Distribution Edge:

Electricity Pricing for a Distributed Resource Future. USA [Accessed: 12.11.2014] http://www.rmi.org/elab_rate_design

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Political Aspects

Sources: http://www.microgridinstitute.org/about-microgrids.html, http://www.smartgridnews.com/artman/publish/Delivery_Microgrids/)

• Regulation of contracts and tariffs

– Laws and regulations must evolve to enable utilities and third parties to compete on a level playing field to provide behind-the-meter products and services to customers

– Time of Use Pricing allows utilities to send price signals for where and when electricity generation is needed from DER

– Power Purchasing Agreements provide financial security for the recoupment of DER technology investments

• Standardized Technology

– maximize compatibility, interoperability, safety, repeatability and quality

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Innovative Policies

Sources: http://galvinpower.org/microgrids

• Microgrid long-term property assessed financing • Energy districts• Allow local government to build, own and operate

new smart microgrids• Allow local governments to invest in and direct

utilities to make smart grid improvements

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Policy Reform Ideas

Source: http://galvinpower.org/microgrids

• Reliability and performance metric standards

• Low-interest loans for local governments to direct smart microgrids

• expand consumer choice and ISO markets that value consumer participation

• Ensure new legislation like cap and trade values consumer participation

German Case StudyWildpoldsried + AÜW + Siemens

Began: 1997 Innovative Leadership Plan Goal: 100% renewable energy by 2020

Progress: 500% renewable SURPLUS in 2014 = USD $7 million annual

~5 MW solar PV : 200 residences, 12 public buildings5 biogas plants : 8.2 MMBtu/year : waste wood from local forest

biogas heat district network : 120 residences, all public buildings, 4 companies11 wind turbines : 12 MW capacity : 9 financed by local dairy farmers

10 year payback 80% annual income of dairy farmers2,100 sqm solar-thermal systems

3 small hydro-power plants

All figures have been obtained from: Rocky Mountain Institute “A Small Town in Germany Becomes a Test Ground for a Smart Grid” RMIOutlet [blog] [Accessed: 13.11.2014]

http://blog.rmi.org/blog_2014_11_06_small_german_town_becomes_testing_ground_for_smart_grid Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

All electricity generated from solarwind

biomasssold to AÜW under a

fixed-price 20-yearpower-purchase agreement (PPA)

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Integration of Regenerative Energy and Electric Mobility IRENE

200 measuring devices : ( I, V, f ) production consumption138 kWh battery storage : absorbs electricity discharges,

stabilizing the grid32 electric vehicles : leased to residence for additional storageSOEASY : self-organizing automation system : balances supply

and demand

(1) Personal energy agent : how much, what time, what price : 15 minute(2) balance master : installed at AÜW : decides which offers to accept to

meet demand(3) area administrator : communicates with personal energy agents sending

excess to storage (4) network transport agent : collects data from energy producers,

consumers, the grid, and supplies it to area administrator and balance master (5) energy police : ensure that all energy producer reach supply committal

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Results

140 : new jobsEcological training center

Increased eco-tourismOver 100 : delegations visiting the town each year500 % : surplus renewable electricity generation

USD $7 million : annual revenuemedical center, recreation center, fire station, et cetera

2,600 : population (consistent)

Benedict Adcock

Heather Troutman

Dave Huntington

Gabriel Niessen

Thank You