UTILITIES CONTINUE TO FIND INNOVATIVE WAYS TO AVOID building out new infrastructure—or at least to delay the cost of doing so. More often than not, those strategies involve turning to renewable energy sources such as solar, wind, fuel cells and advanced energy storage.
Utilities are discovering that it pays handsome dividends to delay or outright eliminate capital expenditures for things like transmission lines and substations and even new power plants that might be necessary if not for aggressive distributed energy and distributed generation programs.
Some, like Detroit Edison (DTE Energy) not only have solar generation plans in place, but also rely on innovative programs such as diesel and natural gas-powered mobile trailer-mounted generators that act as microgrids and can be moved to remote areas to keep the lights on for customers while they conduct maintenance and repairs on substations. In some cases, the 1- and 2-megawatt units are being permanently mounted on a partition in rural areas, a lower-cost option than rebuilding a new substation.
Opportunities in the sky
But the sky is where the real opportunity lies. DTE’s SolarCurrents program calls for photovoltaic systems to be installed on customer properties or rooftops over the next five years. The program hopes to generate 15 megawatts (MW) of electricity throughout southeast Michigan. The ultimate goal of the SolarCurrents program, which saves some residents more than half the cost of installing solar, is to determine the feasibility of using renewable energy as part of Detroit Edison’s generation portfolio. Currently, DTE officials say it’s hard to determine whether renewables will be a cost-effective way to defer distribution infrastructure. Short-term, it will help Detroit Edison meet the state’s renewable portfolio standard of 10 percent by 2015.
In addition to solar, DTE is looking to other resources to meet the 2015 mandate, which will require adding about 1,200 megawatts of renewable power.
In August, the utility signed a pair of contracts totaling 20 megawatts of renewable energy capacity—or enough to power nearly 14,000 homes. The deals will add to DTE’s renewable energy portfolio by tapping energy to be generated from landfill gas and wood waste biomass. However, DTE expects the majority of its renewable energy to come from wind resources, and has acquired easements on more than 75,000 acres of land in Huron County in Michigan’s Thumb region for development of large-scale wind farms.
Harvesting California sunshine
In California, where the movement to harvest energy from the sun is the greatest, the three investor-owned utilities in the state have a goal of 3,000 megawatts of solar-produced reconnected electricity by the end of 2016. The primary driver is the California Solar Initiative (CSI), a three-year-old program designed to spur interest in solar energy.
In addition, the California Public Utilities Commission’s Self-Generation Incentive Program (SGIP) provides incentives through California utilities to support existing, new and emerging distributed energy resources, providing rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter. Qualifying technologies include wind turbines, fuel cells and corresponding energy storage systems. Solar was covered in the initiative until the CSI initiative passed the California Senate, therefore eliminating the need for solar to be in both plans.
To date, California’s three publicly owned utilities have received more than 45,000 CSI applications for a total of 801 megawatts, which equates to about $1.4 billion in incentives.
“That 801 megawatts will go very far toward reaching our 3,000 megawatt goal statewide,” said Jeff Lidskin, a project manager in the California Solar Initiative program at Southern California Edison. “These programs promote energy resource diversification, and reduce the need to build power plants because solar electricity is usually produced when electricity demand is at its highest.”
Aggressive commercial development
The California Solar Initiative isn’t the only way that utilities plan to meet the 3,000-megawatt statewide goal. Southern California Edison (SCE) has its own aggressive plan to harvest another 500 MW of solar power from rooftops of commercial buildings through what is being called the nation’s largest solar power project. SCE will own and operate 250 MW of the solar array, while independent solar project developers will operate the rest. SCE’s first two solar installations already generate enough power for homes and businesses in Fontana and Chino, Calif.
The race to install solar as a way to reduce U.S. dependence on foreign oil will rely greatly on lower costs, government incentives and consumers’ desire to reduce utility bills and help the environment. Of course, the end result is less infrastructure costs for utilities, as well. One of the hurdles in developing more renewables is transmission, but these projects usually don’t require new transmission lines because they feed directly into the distribution circuit. That’s a major benefit for utilities, since nobody wants transmission lines in their own back yard, and since it can take 10 years to permit, plan and construct a transmission line.
Lidskin stresses that recent advancements in solar technology, coupled with the unprecedented size of SCE’s project, should result in a cost per unit roughly half that of common photovoltaic installations in California. SCE believes the project could help drive down installation costs for solar generation everywhere.
In fact, between the CSI rebate and the federal tax credit, the average homeowner can save as much as 45 percent off the average cost of an installed solar system.
Of course, energy conservation is the best practice. SCE and other utilities urge consumers to perform an energy audit of their homes before installing solar. Switching to energy-efficient appliances, for example, and limiting the use of incandescent lightbulbs can result in dramatic energy savings. Then, the cost to install solar drops because less energy generation is required for the home.
“We’re busy making sure that customers are aware that the cheapest megawatt is the one that you don’t have to produce,” said Lidskin.