Predictions for the cleantech energy industry in 2017
December 30, 2016
The U.S. election, microgrids, energy storage and the internet of things take center stage for green buildings and the cleantech industry this new year. Oh and say good bye to net metering.
Here’s what to keep an eye on in 2017:
1. What the election means for green and clean tech
With a new U.S. administration leaning away from the federal regulation of the environment, leadership in the U.S. Environmental Protection Agency may be changing in a direction not likely to favor cleantech. As a result, states may take a bigger lead in the green building movement. Net zero will continue to trend positively in California and other states will follow. However, more state rule for energy efficiency can cause a lot of turmoil. If, for example, minimum appliance standards for efficiency are not passed each state would set their own different efficiency standards. Federal regulation gives certainty.
Under the new administration renewable energy incentives from the U.S. Department of Energy may also be on shaky ground. Should renewable incentives end or are greatly diminished, the costs saving advantages of thermal energy storage for cooling will still make a great financial case for building owners. Expensive demand charges which penalize owners for surging use of power on hot summer days are not going away. As you will read below, utility costs will actually go up.
Fortunately, costs for renewable resources are nearly competitive with traditional forms of power meaning investment in solar and wind will continue. Generation of coal will continue to go down and gas prices remain low and energy storage will fill in the gaps. On the building side, property owners will use energy storage to fully capitalize on renewable energy investments. The sun may not shine all day.
In fact the Duck Curve shows the impact of a lot of solar installed. Take a closer look at the Duck Curve and note that March 31st is not even the peak cooling season when impact of solar would be much greater. Thermal energy storage to meet cooling loads will play a significant role in meeting electricity demand.
As for other types of distributed energy storage, batteries have improved volume production and prices are coming down. However, a loss in renewable incentives could shake up the competition as costs for batteries are still high.
Lastly, the new U.S. administration plans to affect existing trade deals. Removing trade barriers is aimed at keeping jobs in the U.S. but can also raise the costs of goods made in other countries. Globalization lowers average costs.
2. Say goodbye to net metering. Solar is here to stay.
However, the more solar installed on buildings, the higher the demand charges will be. Demand charges are a normal part of a commercial energy bill but they may find their way to more residential bills. Demand charges account for peak energy usage similar to the speedometer on a car. By knowing the most energy used in a billing period, utilities know how much infrastructure (utility poles, power plants) are needed to ensure everyone has power, especially on hot summer days.
With the advance of solar, demand charges will skyrocket. Though less overall energy may be used with on-site renewable energy, the fact remains that the sun doesn’t always shine and the grid is called upon to provide power whenever the need arises. Solar or wind powered buildings will use the grid for back-up power.
"With the advance of solar, demand charges will skyrocket."
Zero-energy buildings that employ net metering are being credited for energy they sell to the grid. While, this billing mechanism is great for building owners, net metering is not sustainable. Net-metering triggers a utility death spiral. To see how, imagine if you owned a car rental company and offered a one year lease. Let’s say you offered the leased car with a full tank of gas and as long as the car was returned with a full tank the customer owned you nothing. Sounds ridiculous. That’s because it is. As unpopular as it may sound net metering will go away. Utilities need to be reimbursed for power.
3. Microgrids and the decentralized grid
The grid is changing. Years ago people talked about a smarter grid. Today two way energy flows, the internet of things, microgrids and energy storage are reinventing the grid.
The grid is changing and buildings are becoming smarter thanks largely because of the internet. The Internet of Things changes how we view and use data. By being able to forecast events ahead of time through internet enabled devices, both grid operators and facility managers gain more flexibility and can plan the best times to store and release energy.
Sensors that predict system overload send that information to grid operators who can then prevent blackouts and brownouts by calling on distributed energy resources like energy storage. Smart buildings can communicate to the grid via software for demand response adjusting energy loads as grid requests come in or as demand for power in the building changes.
Microgrids allow buildings owners to connect to the grid or run independently in “island-mode.” Navigant Research expects the microgrid market to reach a $20 billion valuation by 2020, a nearly $16 billion jump from its 2013 valuation.
Expect adoption of microgrids to increase at event and conference centers as well as where there is dependence on renewable resources or power needs spike during peak demand hours. Communities like universities create their own power grid at a much smaller scale and get more use out of their renewable resources.
Under a multi-physics approach for microgrids demonstrated by a U.S. Naval lab, energy is either used when generated or stored. By using ice based thermal energy storage, the microgrid improves efficiency by storing energy in the form it will be used in.
Furthermore, block chain technology takes the internet of things to the next level and enhances the future grids, with a ledger of things. Each thing in the ledger (pole, thermal storage tank, transformer) in the electricity system is identified, providing faster more reliable communication for the energy marketplace. New entrants to energy markets and localized energy market will emerge in this new environment. Microgrids can connect to each other. The grid can automatically reroute power during an outage. The new grid will run itself.
