Hybrid Future

Introduction

Hybrid Energy Solutions is a new buzz word that came back into the headlines in September 2017, when the iconic Elon Musk, CEO of Tesla, backed his Australian sales director up with a promise that Tesla would build the World’s largest battery in 100 days – or it would be free of charge!

That in itself was an outrageous bet to place with the shareholder’s money, if it was not because Tesla was so sure it could fulfill the pledge, win the bet

But Elon Musk was right – it takes real aggressive marketing to burn through the carbon lobby.

We will look deeper into the new development with hybrid power solutions. These are now being developed with a strong emphasis on storage, driven in part by new cost-efficient batteries that can be either distributed to home owners and businesses or can be combined to create big central storage facilities.

Other storage options are hydro and heating systems

For ease of presentation we will adopt the distinction before the meter and behind the meter, which is also used by Lazard investment bank and discuss the projects and the potential in that order.

The reality is much more fuzzy and what is going to happen depends a.o. on what rules and legislation are adopted in the various countries. As usual national priorities often influence the interpretation and adoption of EU secondary legislation. In the United States it is also dependent on state legislation as the attempt to have federal regulation have been stalled.

Grid

The power system in most countries consist of a grid that is usually shown as a linear system, originating from the generator, and reaching the consumer via transmission and distribution lines. The real world is more complicated, and as we shall see later in the sections after the meter it is becoming even more complicated. But to get an overview it is still a good and simple model.

The electricity grid is complex and an incredibly important system, and one of the most impressive engineering feats of the modern era. It transmits power generated at a variety of facilities and distributes it to end users, often over long distances. It provides electricity to buildings, industrial facilities, schools, and homes. And it does so every minute of every day, year-round.

What makes up the electricity grid?

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The importance of effective grid transmission

The interconnected and complex nature of the electricity grid delivers several benefits [12], including:

Reliability: Since the grid is an enormous network, electricity can be deployed to the right places across large regions of the country. The large transmission network allows grid operators to deal with anticipated and unanticipated losses, while still meeting electricity demand.

Flexibility: The electricity grid allows a power system to use a diversity of resources, even if they are located far away from where the power is needed. For example, wind turbines must be built where the wind is the strongest; the grid allows for this electricity to be transmitted to distant cities.

Economic competition: Because the grid allows multiple generators and power plants to provide electricity to consumers, different generators compete with each other to provide electricity at the cheapest price. The grid also serves as a form of insurance – competition on the grid protects customers against fluctuations in fuel prices.

A historic blackout in 2003 in the United States showed why effective grid transmission is so important. On August 14, 2003, an Ohio power company set off the largest blackout in human history simply due to human error [13]. The blackout spread across New York, Pennsylvania, Connecticut, Massachusetts, New Jersey, Michigan, and even parts of Canada. Offices had to be evacuated, and thousands of people flooded hospitals suffering from the heat [14]. Our electricity grid has come a long way since 2003, but many more opportunities exist for improvement.

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Our nation’s electricity grid consists of four major components, each of which is detailed below.

Individual generators

We will deal more with the individual generators below. The are power plants – coal, gas, oil, waste or nuclear, and renewables – hydro, biomass, wind and solar.

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Catenom nuclear power plant on the French border to Luxembourg. ©2017.

Transmission lines

Transmission lines are necessary to carry high-voltage electricity over long distances and connect electricity generators with electricity consumers.

Transmission lines are either overhead power lines or underground power cables. Overhead cables are not insulated and are vulnerable to the weather, but can be less expensive to install than underground power cables. Overhead and underground transmission lines are made of aluminum alloy and reinforced with steel; underground lines are typically insulated [3].  

Transmission lines carry high voltages because it reduces the fraction of electricity that is lost in transit – about 6% on average in the United States [4]. As electricity flows through the wires, some of it dissipates as heat through a process called resistance. The higher the voltage is on a transmission line, the less electricity it loses. (Most of the electric current flows close to the surface of the transmission line; using thicker wires would have minimal impact on transmission losses.)

Transmission-level voltages are typically at or above 110,000 volts or 110 kV, with some transmission lines carrying voltages as high as 765 kV [5]. Power generators, however, produce electricity at low voltages. In order to make high-voltage electricity transport possible, the electricity must first be converted to higher voltages with a transformer.

These high voltages are also significantly greater than what you need in your home, so once the electricity gets close to end users, another transformer converts it back to a lower voltage before it enters the distribution network.

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Transformator station on the Spanish grid. ©2016.

Transmission lines are highly interconnected for redundancy and increased reliability of electricity supply, as this map of U.S. transmission lines shows. There are three main transmission networks across the United States: the Western Interconnection which is west of the Mississippi River; the Eastern Interconnection, which is largely east of the Mississippi River; and the Electric Reliability Council of Texas (ERCOT).

Like electricity generators, transmission lines must be approved by the state (PUCs or PSCs) before being built. However, wholesale electricity transactions, which are made between regional grid operators, are regulated by a national agency called the Federal Energy Regulatory Commission (FERC) [6].

FERC regulates the electricity grid on a larger scale than PUCs and can resolve disputes among different market participants on the grid. Transmission networks are sometimes managed by utilities, but some networks are managed by separate entities known as Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs). These companies facilitate competition among electricity suppliers and provide access to transmission by scheduling and monitoring the use of transmission lines.

Local area distribution transformaor. Copemhagen. ©2018.

Distribution

The distribution network is simply the system of wires that picks up where the transmission lines leave off. These networks start at the transformers and end with homes, schools, and businesses. Distribution is regulated on the state level by PUCs and PSCs, who set the retail rates for electricity in each state.

Consumer use or load

The transmission grid comes to an end when electricity finally gets to the consumer, allowing you to turn on the lights, watch television, or run your dishwasher. The patterns of our lives add up to a varying demand for electricity by hour, day, and season, which is why the management of the grid is both complicated and vital for our everyday lives.

The evolution of the electricity grid in the United States

The electricity grid has grown and changed immensely since its origins in the early 1880s, when energy systems were small and localized. During this time, two different types of electricity systems were being developed: the DC, or direct current, system, and the AC, or alternating current, system [7, 8]. Competition between these two systems was fierce. Competing electric companies strung wires on the same streets in cities, while electric service for rural areas was ignored.

Despite a campaign by Thomas Edison to promote the direct current system, businessman George Westinghouse and inventor Nikola Tesla won the support of electric companies for the alternating current system, which had the distinct advantage of allowing high voltages to be carried long distances and then transformed into lower voltages for customer use [9].

Nikola Tesla, age 40, 1896. Photo: Wikimedia Commons

As the electricity system grew, the advantages of AC allowed utility companies to build grids over larger areas, creating economies of scale. To stabilize the business environment, the utilities sought a regulatory compact granting them monopoly status from state governments, and placing limits on how rates would be set for customers. From roughly 1920 to 1980, that approach was locked in place. Under this structure, utilities controlled every aspect of the electricity grid, from generation to distribution to the customer.

With the energy crisis of the 1970s [10], however, Congress changed this structure to allow wholesale competition in electricity production; facilities that produced power more efficiently or used renewable energy could enter the marketplace, while the transmission operators (ISOs and RTOs) maintained a monopoly over the management of the grid – a change known as restructuring.

This led 17 states, plus the District of Columbia, to restructure the management of the electricity grid, allowing customers to buy electricity from competitive retail suppliers [11]. Many states, however, remain vertically structured meaning that all aspects of the electricity grid are managed by the same company.

We can compare this to Denmark, where the transmission system now has been turned over to a public corporation, Energinet.dk.

Denmark has two separate grids: Western Denmark and Eastern Denmark.  Eastern Denmark is synchronised to Sweden, with 1900 MW of AC connectors.  It also has a 600MW DC connector to Germany.

Western Denmark is synchronised to Germany and the continental grid (formerly UCTE) via AC connectors that can export at 1500MW and import at 950MW. It also has 740MW of DC connectors to Sweden, and 1040MW of DC connectors to Norway. The first interconnector between West and East Denmark, a 600MW DC link, was commissioned in July 2010.

The generators are wind, district plants and central plants.

Wind generation covers onshore and offshore wind. District plant covers local power stations which supply combined heat and power [CHP]: heat to District Heating schemes, and power to the grid. These plants were, until recently, controlled locally rather than by central dispatch. Central plant is controlled by central dispatch; some central power is generated as CHP, some in condensing mode. In 2000, 52% of electricity came from CHP,