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Thursday, July 27, 2006

A Proposal to Make Distributed Generation Work

Abstract:

The United States needs a new paradigm for the generation of electricity. Much has been written about the promise of Distributed Generation, yet its adoption has been extremely slow to nearly nonexistent. All the technology and systems already exist to supply a significant percentage of the country's energy needs non-disruptively, unobtrusively, while greatly reducing greenhouse gas emissions.

Tens of thousands of acres of flat, mostly empty, commercial building rooftops constitute an abundant space resource for solar panel installations. Utility companies should be granted sufficient incentives to aggressively expand generating capacity on roofs of large commercial buildings. Owners/operators of large commercial properties such as large national retailers should grant utility access to their roofs for distributed generation.

Tucson Electric Power Corp and Sandia National Laboratories have published extensive data on the real-world performance of a 44-acre solar electric generating plant, and this data supports the conclusion that this approach should be explored.

Several obstacles impede the adoption of distributed generation in this fashion. These include but are not limited to:
  • The regulations of the “deregulation” of the electricity industry.
  • The disparate federal, state, and local governmental agencies involved in the regulation of electricity generation and the licensing of power plants;
  • The operating models of public utilities and corporations;
  • The industries that are heavily vested in the current status quo.

Various incentives and legal protections and certain regulatory exceptions may be all that is required to accelerate the United States on the path towards energy independence and clean air. Conservation can never be over-emphasized, but a new model must be aggressively promoted to meet growing demand for electricity, the growing resistance to more high-voltage transmission facilities, and the urgent need to reduce consumption of fossil fuels and subsequent emission of greenhouse gasses.


Overview:

Coal-fired electric generator plants require billions of dollars to overhaul to clean their emissions that are having numerous negative health and environmental impacts. Billions must be spent to simply clean emissions, not necessarily increasing generation capacity.

Nuclear power plants may not produce smokestack emissions while generating electricity, but they are susceptible to catastrophic failures, the fuel is dangerous, the spent fuel rods remain radioactively lethal for 250,000 years, and, if they fall into the wrong hands, can be made into nuclear weapons. No safe repository exists for spent fuel and it is accumulating on the grounds of every reactor site in “temporary” storage facilities. Financial analyses never seem to factor the long term storage and protection costs, which will probably require a full time military detail for the rest of man’s time on earth.

Oil and gas fired power plants operate at peak capacity and consume dwindling resources while emitting varying levels of greenhouse gases. Many older power plants are exempt from pollution standards and emit as much as 10 times the legal limit for a modern plant. Hundreds still operate in the United States.

Solar photovoltaic systems remain too expensive, complex, and require a great deal of knowledge of electrical systems for homeowners to analyze properly. Rebates and incentive programs expire before many systems are implemented, further deterring anyone from making the required investment. Archaic rules and utility company fees often penalize those who do install oversized systems with the intent to sell excess power to the grid.

Installations of solar photovoltaic systems on commercial properties are also expensive, and outside the realm of the core businesses of landlords, commercial tenants, or buildings owned by businesses operating within.

Electric Utility-owned photovoltaic arrays large enough to provide a meaningful percentage of generating capacity require several acres, often in expensive real estate markets, and suffer losses during step-up to long-distance transmission voltages.

Many commercial buildings and shopping malls are large, sprawling, one or two-story structures with footprints that measure over one hundred thousand square feet. Nearly all also have flat, mostly empty roofs. This represents tens of thousands of acres of flat, mostly empty roof space across North America.

These large, flat, roofs are ideal locations for large photovoltaic array installations for the generation of electricity. They are already in commercially zoned land where there is usually minimal consideration for roof aesthetics.

Since electricity-generating photovoltaic arrays generally do not fit economic models or core businesses of the building owners and/or tenants, utility companies must be granted access to this under-utilized resource of open space. Additionally, utility companies must be given incentives to expand their generation capacity with photovoltaics on these roofs. The building owners/tenants must also be given incentives or compensation for providing access to this resource.

There are many benefits to exploring, testing, and implementing a program of distributed solar generation wherein utility companies install, own, and maintain the generation systems on commercial roofs. These benefits will be discussed and compared to the alternatives of nuclear and fossil fuel generation.

If this model can be made to work for all parties involved, expansion of the nation’s generation capacity can be solar, clean, and quiet. This approach costs far less than any alternative when considering Return on Investment. This approach is modular and can be funded and built incrementally. This approach will create and fund infrastructure maintenance jobs for the utilities. This approach will also create commercial roofer jobs and consistently generate moderate-scale construction projects while providing numerous benefits to the generating infrastructure of the United States.

Why bother writing this?

The same fundamental assumption pervades all the papers and opinions I've read regarding Distributed Generation--that electricity consumers will be the ones to (or the ones who won't)
install systems with excess capacity to connect to the grid. It seems so obvious that successful implementation on a large scale requires utility company component standardization, purchasing economies of scale, expertise in the local grid architecture and connection requirements, licensing, and complete lack of grid connection fees imposed on competitors that something had to be done….

Since I don’t work for a utility company or a big-box retailer, any congressional staff or public interest group, my hope is to generate public discussion on a scale too large to ignore, so that elected representatives who are truly interested in the public good can aggressively lead the standardizing and streamlining of laws and regulations pertaining to and affecting Distributed Generation; so that executives of utility companies and big-box store chains, owners of large flat-roofed commercial properties and their neighbors can be drawn into a public discussion they might have never known existed.

Other reasons:

1. National Security:
The United States national security, economic stability, and health are at risk because of our dependence on fossil fuels and increasing demand for electricity…. There is no leadership setting new trends in motion. We have been given the answer that drilling in the Arctic Refuge and building nuclear plants will be the resolution to the crisis. While these have been resisted by some valiant legislators, an alternative approach is required. Perhaps this is it.

2. Greenhouse effect, global warming:
The greenhouse effect works to keep agricultural greenhouses warm in cold weather. It is unfathomable to think that burning trillions of gallons of oil products (gasoline, home heating fuel, oil, natural gas) and trillions of pounds of coal over the last 100 years (while simultaneously eliminating millions of acres of forests) hasn’t produced an unnatural abundance of greenhouse gasses in the atmosphere that has raised the temperature of the planet and will continue to do so with catastrophic (for humans) consequences. Generating power with photovoltaics can immediately reduce our greenhouse gas emissions.

3. Pollution:
Respiratory ailments abound in record numbers. Not only do thousands die prematurely as a result of disease contracted due to breathing coal fired power plant emissions, but the financial burden borne by citizens, their health insurers and employers is staggering. The impact of acid rain on the environment is also staggering, and a result of our polluting practices.

4. Nuclear power is not clean.
There may be no smokestack emissions during the generation of electricity, but there is always potential for major disaster, the fuel is dangerous and the spent fuel is even more dangerous as it is easily converted into nuclear weapons. To date, spent fuel accumulates on the grounds of nuclear power plants in temporary storage facilities because there is no where to dump it. The half-life of plutonium-239(fuel rods) is 24,000 years, and it remains radioactively hazardous for 250,000 years.

Who are we to think it is fair to burden all life that comes after us with this garbage?

Note: The US Nuclear Regulatory Agency published all the specifics about the quantities of nuclear waste currently stored in temporary facilities at:
http://www.nrc.gov/reading-rm/doc-collections/nuregs/brochures/br0216/

5. Nuclear power plants will cost billions to locate, build, and license. Opposition to nuclear plants will delay any project by years. The only near-term beneficiaries will be the law firms representing each side. Future generations already saddled with the largest deficit in US history will be forced to pay for our stupidity, laziness, and congressional cronyism. Remember the $5Billion plus Shoreham nuclear power plant that never generated a single watt before being completely decommissioned as a shining example of the costs being passed on to everyone (massive tax write-off).

6. We need to address the problem immediately, not place all hopes on one that will produce its first watt in 10 to 20 years and leave us with a glaring reminder of our unwillingness to think outside the tiny boxes drawn by congressional lobbyists. Any such promised cure-all solution is merely an attempt to mollify the populace into obedient silence while profit agendas run amuck.

7. An answer that requires no more than existing technologies and changes in behavior and cooperation between the government, corporate, and general public is already at hand.

The Solution:

Create the legal means, incentives, and reasonable protections:
  • For utility companies, incumbent or startup, to install and maintain the largest possible solar photovoltaic arrays on large, flat roofs of commercial buildings and malls.
  • For landlords and/or owners and/or resident businesses of those commercial properties to agree to participate in the creation of a national, distributed generation infrastructure.
Create a distributed generation infrastructure:
  • Install enough large rooftop solar photovoltaic arrays to reach a necessary critical mass to generate a meaningful percentage of demand.
  • Install supporting electrical equipment such as inverters, step-up transformers, grid-connecting switchgear in close proximity to the existing utility transformers and switchgear either outside the building or in the utility entrance rooms.
  • Connect the arrays and systems to the electrical grid.

Long term success and widespread acceptance of this initiative requires that:
  • Utility companies install and maintain the systems and switchgear.
    • Utilities can standardize installations and reduce cost through volume purchasing discounts, more rapid installations, faster repairs, maintenance of fewer spare components
  • Initiatives and programs are valid and protected for the short and very long term. For example, longer than the term of one governmental administration.

The rules regarding deregulation of the electricity industry may prohibit grid owners/operators from generating electricity from any source. This prohibition may need to be modified or eliminated to permit generation from renewable sources.
  • Utilities that already maintain the electric grid can also modify the grid where needed to better support Distributed Generation, and will most likely do so if it will be financially beneficial (i.e. they sell the power generated on site).
Miscellaneous considerations:
  • Roof load-bearing capacities will need to be analyzed in every case.
    • Roof reinforcing for PV arrays, if required, will be similar to that commonly used to support heavy rooftop HVAC equipment and large satellite antennae.


Benefits

Clean solar-generated electricity will supply a growing percentage of all electricity produced and consumed in the United States reducing the amount of coal burned and its subsequent toxic emissions.
  • We begin to break our fossil fuel dependence and reduce our creation of pollutants.
  • More electricity will be generated closer to the consumer (perhaps the largest consumers), which will minimize
    • transmission losses (up to 7% in the US.).
    • step-up transformer losses.
    • the need to expand high-voltage transmission lines.
  • Net metering laws (or their absence) are not obstacles to installation and connection to the grid when systems are installed and maintained by utility companies.
  • The overburdened and vulnerable national electrical grid can get some relief without spending billions in reconstruction to help us remain exactly where we are in terms of generating capacity.

Immediate benefits:
  • Projects can begin within weeks of agreements made between all parties.
  • Lessons learned from one installation can be immediately integrated into the next, improving the cost/benefit ratio.
  • Lower startup costs.
    • Multiple, smaller projects (per building) will be easier to finance
    • Each installation can be finished and made operational very quickly when compared to building a nuclear power plant.
  • We begin to increase capacity without
    • negative impact on emissions.
    • negative impact on waterways (cooling requirements of conventional and nuclear generators).

Longer term benefits:
  • Widespread acceptance will spur advances in photovoltaic solar arrays, accelerating cost decreases more rapidly than has been realized to date.
  • Jobs for
    • skilled workers to install and maintain power systems,
    • professional engineers,
    • solar array manufacturers.

Ancillary benefit:
  • A photovoltaic array that covers a significant percentage of such a large, flat roof will prevent a significant portion of the normally incident solar thermal radiation from being absorbed by the structure, reducing summer air conditioning requirements and load.
    • May spur the adoption of solar thermal systems for winter heating, further reducing oil consumption.


Potential Obstacles

  • The numerous federal, state, and local agencies with varying jurisdictions pertaining to electricity generation must be aligned and oriented towards successful implementation of Distributed Generation infrastructure.
  • The lack of widespread adoption of grid interconnection standards.
  • Old, overburdened electric grid.
  • Local zoning ordinances.
    • Zoning and building codes probably have no standards pertaining to the construction of utility owned and operated solar power generators on roofs in designated commercial zones.
  • The “Who does what?” question:
    • Engineering review, building modifications to support extra weight on the roof, array design, repairs due to accelerated wear and tear on the roof…
      • Comprehensive planning for all contingencies is required.
      • Standardizing installations will keep costs as low as possible. However, each building is unique enough to require input from each of the multiple stakeholders for fine-tuning the specifications.
  • Liability
    • Laws and regulation can limit liability associated with such projects.
    • Keep liability insurance costs low.
    • Reduce the threat of lawsuits to keep progress rolling.
    • Preemptive action on this front will accelerate progress.
    • This really IS a national crisis and emergency that warrants preemptive action on this matter.
    • Insurers who write discounted policies to cover these construction projects and infrastructure could receive tax incentives
      • Write off a percentage of the income from sale of these policies, for example...
  • Regulatory prohibitions
    • The owners/operators of portions of the national electric grid may be the most logical owners and operators of such a national distributed infrastructure, but may be prohibited from generating any electricity.
  • Resistance
    • Who would argue against such a sound, “win-win” plan?
      • The corporate giants who build nuclear, gas, and coal-fired power plants.
      • The coal, natural gas, and oil industries.
      • The members of congress “owned” by the corporate giants with vested interests in the status quo.
      • Incumbent utility companies and property owners/operators:
        • “What’s in it for me?”
        • “Don’t have that expertise”
        • “That’s extra headcount”
        • “There goes my profit margin.”


Eliminating Resistance to Utility-built Distributed Generation:


Incentives
Since the bottom line trumps civic responsibility and duty in the eyes of most shareholders, incentives must be created all around to counter resistance in addition to liability protections. For the individual property owners, the threat of liability is a real risk to participating in anything not explicitly covered and protected by their insurance policies.

Incentives for property owners and/or resident businesses can include:
  • Discounts on electricity (regulation may be required)
  • Compensation for the roof space
  • Adjustments in tax liability for rental income earned at an electricity-generating building or limited tax liability for rent of roof space.
  • Adjustments in corporate income tax liability
    • for each location generating electricity
    • for each employee directly involved in the construction and maintenance of the distributed infrastructure
  • Reduction or elimination of sales tax on related equipment and systems.
Incentives for utility companies:

Laws requiring certain percentages of cleaner power generation are in place in some states, most having punitive repercussions for compliance failure. Incentives and rewards may spur greater participation in an initiative such as this and can include:
  • Reduced tax rate on earned income, discounts calculated based on the overall percentage of solar generated power vs. fossil fuels, or
  • The ability to write off the income earned on the solar plant for a fixed number of years, and,the ability to write off all associated construction costs.
  • Caution is required to prevent abuse and loopholes.
    • For example, corporate income tax benefits for participating would have to consider the number of systems installed or the percentage of locations or the number of square feet of generator space installed.

Easements
As a last resort to jump start such a distributed electrical generation model state and local governments can create easements for rooftop space. This should be viewed as a last resort, as it could generate adversarial relationships between utilities and property owners, and result in lawsuits.

Departments of Public Utility:
Venture capital funded distributed utility companies could rise to compete with incumbents if Departments of Public Utility fast-track requirements publication and licensing procedures. Grid connection fees for backup electric service or nighttime service need review.


Real-World Commercial Solar Generation Data:

The Tuscon Electric Power Company in conjunction with Sandia National Laboratories has published a study of their 44-acre Springerville photovoltaic generator installation. It is available on line at: http://www.greenwatts.com/Docs/TEPSolar.pdf

Their cost per kilowatt generated includes all the step-up transformers required to get the generated power to the very high voltage required for long-distance transmission. Cost benefits realized by not having to include those for local, distributed generation may compensate sufficiently to offset differences in solar insolation and roof support modifications when implementing this program in the most northern states. From their document we learn they generate power via solar at a cost of $0.096/kWhac :

“The industry roadmap goal for 2015 is a levelized energy cost (LEC) of $0.057/kWhac of PV generation. This compares to the TEP-calculated LEC in 2004 (pay-as-you-go, no financing costs) of $0.096/kWhac for the Springerville PV generation”

How large are those roofs, how much space is there, and how much power could solar panels generate?
Tuscon Electric Power's plant is rated to produce 110KWatts (ac) per acre of ground. Let's use that figure as a very rough approximation… (Northern locations will likely produce less, more southern locations may equal or exceed this figure.) One acre equals 40,000 square feet.

Not every square foot of a commercial flat roof is going to be available, nor is every existing roof suitable, but the figures of potential generation capacity demand an objective review of feasibility. The figures used in the following exercise were obtained from a company that makes steel roof deck fastening systems... They posted the square footages of some roof projects in which their components were used. Individual Home Depot, Lowe's, and WalMart stores were listed in these figures. I assumed that each company builds approximately the same sized store for each new location. The major distribution centers were surprisingly large, and only the ones listed on this website were used. Many others exist. Company websites publish that Home Depot has approximately 2000 stores across the US; Lowe's 1250; WalMart, 3700.

Company and location/Square Feet/ Acres of roof / Potential KwAC generating capacity
Sears Distribution Center
Wilkes Barre, PA 1,500,000/ 37.5 / 4,125.00

Nestle's Foods, Inc.
Allentown, PA 1,070,000/ 26.75 / 2,942.50

Stop & Shop Distribution Center
Freetown, MA 1,400,000 / 35 / 3,850.00

Jordan's Furniture Distribution Center
Taunton, MA 1,000,000 / 25 / 2,750.00

General Motors Plant
Norton, MA 1,450,000/ 36.25/ 3,987.50

Best Buy Distribution Center
Nichols, NY 1,200,000/ 30 / 3,300.00

Lowe's Distribution Center
Plainfield, CT 1,400,000/ 35 / 3,850.00

Lowe's Distribution Center
Poinciana, FL 1,450,000/ 36.25/ 3,987.50

Lowe's Regional Distribution Center
Hagerstown, MD 300,000/ 7.5 / 825.00

Lowe's of Quakertown
Quakertown, PA 130,000/ 3.25 /357.50
"The other" Lowe's stores 162,500,000/ 4062.5 / 446,875.00

Home Depot
Tewksbury, MA 130,000 / 3.25 / 357.50
The other HD stores 260,000,000 / 6500 / 715,000.00

Wal-Mart Super Center
Brownwood, TX 200,000/ 5 / 550.00
The other WalMart stores 740,000,000 / 18,500 / 2,035,000.00

Subtotal potential generating capacity for these roofs: 3,227,757.50

That's a potential 3.2 Million Kilowatts or 3200 Megawatts instantaneous generating capacity!!!
Yes, there are some big assumptions in these figures, but there are also only three national chains represented. This doesn't count any malls, freight companies, airport buildings, regional chains, warehouses, industrial parks, or convention centers. Even if 50% of the roof space of the buildings in this exercise can be used, that's still 1.6 million kilowatts of potential instantaneous generating capacity. For each hour of sunlight, the energy generated would be 1.6 million kilowatt-hours.

A conservative figure for the average (over the whole year) of usable sunlight hours per day in the United States is 5.5. Over one year, therefore, there are 365 days times 5.5 hours/day = 2007.5 hours of sunlight usable for electric generation… So for this "50%" example, 3211.2 million kilowatt-hours, or 3.2billion kilowatt-hours of electricity can be produced over a year. By contrast, the Tucson Electric Plant realized 2174 sun-hours… proving the conservative nature of the 5.5 sun-hour per day figure.

In other words…
Roughly 7000 run-of-the-mill roof support construction projects can provide for enough solar panel installations to produce 3.2 billion kilowatt-hours of electricity per year with no greenhouse gas emissions. This equals 3,200,000 megawatt-hours… roughly the six month output of the Millstone 2 nuclear plant, a non-trivial percentage of Connecticut’s electrical needs.
Source: http://www.eia.doe.gov/cneaf/nuclear/page/nuc_generation/gensum.html

Reality Check:
The roughly 7000 run-of-the-mill roof projects on which solar generating capacity would be installed will have to pass muster with hundreds of federal, state, and local agencies.
• This is precisely why the United States needs national leadership to standardize requirements, regulations, incentives, and protections from unreasonable lawsuits.

The Naysayers:
  • “It will only work during daylight hours”
    • True, but as a society we consume more energy in daylight hours. Excess energy can be stored in batteries, but that should be considered separately.
    • The distributed generation model is not limited to solar photovoltaics, but can also be applied to fuel cells, wind turbines, gas fired generators, etc, for generation during nighttimes. The same utility-owned concept should be explored for fuel cells...
  • “It won’t be worth it in the northern states during the winter”
    • Less sunlight is available during winter months, but it is still sufficient enough to make a difference. There's an average of 5.5 hours per day of sunlight usable to generate electricity across the continental US.
  • “It will be impossible to maintain.”
    • In the final state, this solution may require more staff, but revenue and incentives should offset increased headcount and operating costs.
    • NOTHING compares to the cost or complexity of maintaining plutonium enrichment facilities, guarding nuclear raw material, maintenance of a nuclear generator, guarding spent nuclear fuel rods, protecting (for 250,000 years) the nuclear waste left over from nuclear generators.
  • “Free markets should be allowed to operate, all regulations and incentives for various technologies should be eliminated and the industry should go where the consumer is willing to pay.”
    • The electricity generating industry is complex, and many divergent interests work incessantly to shape it.
    • Free market models don’t consider the long-term deferred costs of dealing with greenhouse emissions and global warming, impacts on health, other industries such as health insurance, and the protection required for nuclear waste.
    • It is a fundamentally flawed assumption that free markets can operate with a core resource such as plutonium that must be regulated and controlled by the government from its raw source to its spent and most dangerous state.
    • The largest players in a newly deregulated industry stand to benefit the most through economies of scale and operating experience with the status quo, placing all competitors promoting new technologies at an extreme disadvantage.
    • With the assault on the middle class of the United States, consumers are often forced to buy commodity products and services at the lowest price, and not necessarily their principled preference.

Conclusion:

  • The technology exists to generate a significant amount of electricity via solar photovoltaic systems, and there is plenty of space on which to do it.
  • The Total Cost of Operation or Ownership of each type of electrical plant must include cost impacts on health and environment over time for meaningful comparison.
  • The proposed solution requires only changes in behavior on the part of government agencies, power companies and commercial property owners.
  • A conversation has to start between property owners, power providers and federal, state, and local agencies to determine the final terms of “win-win” solutions.
  • You'll never again look at a flat commercial roof without envisioning rows of solar panels.

Other excellent reading includes the State of California's study on Distributed Generation:
http://www.energy.ca.gov/reports/2002-06-12_700-02-002.PDF

Also, there's a great discussion from the Congressional Budget Office of the obstacles to Distributed Generation as the market currently exists at the following link.... note the underlying assumption that the end user will install and maintain the generation equipment... http://www.cbo.gov/showdoc.cfm?index=4552&sequence=0


Please spread this around!