This hypothetical thesis is wrong. Grid Defection as the driver of massive change is not going to happen. 80% of the revenue of a large electric utility is from 10-15% of the customers, which are commercial and industrial customers. A few Affluent Residential customers defecting will not make a significant or meaningful difference in the overall commercial model.
But it's not just going to be a few affluent customers: it could easily be those big C&I customers. My employer is likely going to be co-locating (BTM) huge amounts of renewable to power our hydrogen facilities, cutting the utility out of a big revenue stream. As Lorenzo discussed, too, big factories have big roofs, parking lots, and (usually) additional land to site solar+storage, taking yet more load away from the utilities.
most big C&I customers need reliable power 24/7 delivered economically. Large solar with batteries won't likely to be economical for 24/7 generation. just my perspective...
Google, MS, others have commitments to renewable energy. Their loads are somewhat flexible - they can adjust when the ML models are being trained, etc. And one of the bills in the current legislature ( SB-1018 - https://www.billtrack50.com/billdetail/1696919/ ) is clarifies that a private connection between a generator and consumer is NOT under CPUC control )
Great conversation, and hello again, Lorenzo! FWIW, the ISO-NE portion of Maine has only about 100 T/D substation interfaces, and 10 more up in the NMSA area interconnected to New Brunswick, so we're working with a much easier electrical problem than California.
The current fights about building new large-scale transmission and allocating the costs thereof (e.g. around FERC Order 1920) should be a wake-up call that the current top-down model is not going to serve us well. As you point out, we're living with a business model built on the economies of scale of building a few giant power plants, far away from people to minimize safety/health concerns. Solar+storage is cost-effective at much smaller scale, and we need a new business model to match. Frankly, if we keep on as we are, we will simply not make the energy transition fast enough to prevent serious repercussions--and with long-haul transmission taking 10-15 years to build, we simply cannot rely solely on transmission-linked solutions.
Not buying most of this. Try to go along with the flow:
"Grid defection" by 10,000 sf houses in CA becoming independent microgrids will reduce income to utility.... death spiral. Actually, those houses went almost "net zero" via solar, reduced the income to the utilities to the $10 monthly charge, but are still using shit tons of grid services for export and backup. That's one reason the utilities want to increase that fee and go to TOU. If that makes them want to "defect" fine, it probably decreases costs for everyone else not increases.
Solar on parking lots: Recent large projects cost $6/W, probably more for smaller ones. Lots of extra concrete and steel. And less yield than solar farms. Sure there is "no opposition" because no one sees the $0.25+/kWh cost because its hidden in some gov't or university budget.
38% of national electricity from solar on buildings, NREL study sez: I've read it; like so many NREL studies, that's a maximum technical potential, like 500% of load can be met from wind in a few states, only 1% of land can give us all solar.... Also that's our electric use now, not after we get EVs and HPs and make green H2, etc. But yeah, to utilize that reform regs so warehouses can be net positive. See how many want to when they only get $0.06/kWh for their production. Comm'l PV costs need to come down. Same w/batteries.
Holy Cross Electric: I know a bit about this; they serve a fifth of my town, other parts of our valleys. They are net 60-70% renewables. Most of that is from wind on the plains 300 miles away. They've built maybe 100 MW of local solar, but more out on the plains. They have awesome optional TOD rates, but few utilize them. They have some nice riders for load shedding, and "soaking" VRE overproduction. They tried rate reform in the past, and proposed a structure which seemed to have a lot in common with CA's regulated utility/PUC NEM3 or whatever they ended up with. Definitely increased the monthly service charge. Local PV installers went ape, the governor may have even piped in. They canned the "radical" change for now.
In the end we need to rely on all of the above, but in most places most power will come from "central" but very clean, and OMG land-using...
BTW, recent huge desert solar farms are coexisting w/tortoises.
Also from NREL - the US could power its entire electricity demand with 10 million acres of solar panels, which is only one-third of the land currently devoted to corn ethanol. Makes a lot more sense to me to plow down some corn fields (that are not producing food) than try to deal with the complexities of building on/over existing infrastructure.
Local generation has benefits, and disadvantages, over remote generation, starting that in many places, like California, the transmission grid is maxed-out.
The topic should not be "either/or". We need all of these: more renewables in the grid, more storage in the grid, more transmission, AND, more local resources on the distribution grid.
This was a fantastic interview. Thank you so much! It's incredibly heartening to know that I'm not the only one that sees how easy this could be if we could just break the grip of monopolistic fossil fuel tyranny. Also kind of hilarious how people are so disturbed by grid defection. That seems like a small part of the total threat of remaining stuck in a top-down centralized grid structure.
One point I wanted to make as a member of a rural Electric co-op, and something that drives me personally nuts. As electricity rate-payers of our distribution grid, we have already paid for all the poles and wires. And yet the anti-arguments always act like they are not ours to use. I think that we need to change this narrative and reclaim ownership over our own distribution grids. Instead of giving them away to private interests outside of our communities, strengthen the messaging around the fact that we paid for those distribution assets in our rates and now we should have the right to use them for our own benefit instead of giving them away to the Monopoly.
I'm going to go back and read David's 2018 paper as well. I'd love to figure out how to easily and simply communicate this to a group of people so that they see that all we really have to do is change our focus as a society. I love the way Lorenzo explains the evolution from a natural Monopoly now to a much more distributed nested grid services. Thank you!!!
Great conversation! Nice to hear the emphasis of local PPAs without going thru the bulk power system - we're already doing this is South Africa under a mechanism called wheeling. We've implemented a simple credit method which simplifies the billing substantially. Happy to hear we're aligned!
This and several other recent podcasts is making me re-think how to approach the wider adoption of DERs, including for consumers that do not have access to a nice solar-friendly roof. I wrote down some thoughts at https://pelegri.substack.com/p/battery-first-or-solar-first
There are policy discussions in many areas on the value of local energy resources versus centralized resources. Most of these discussions are fairly "soft", with different people claiming different benefits. Something that is missing is exactly how today's DERs are contributing to the grid.
Here is a question: how much of the energy my household imports from the grid is produced within my distribution grid? Same for everybody else in my distribution grid.
My local grid operator is PG&E. They know this information but it has never been made public. Disclosing this information would ground debates on the value proposition of DERs.
I just subscribed to Volts for this topic. I'll finish listening to the pod and then I'll be back. I live in San Mateo County and my CCA is Peninsula Clean Energy. PCE has a program to install solar panels (and later batteries) in Government buildings (GovPV). The interconnects are under NEM 2.0, so they are constrained by those rules.
I'd love to see how we can leverage the community power ideas moving forward.
I first heard Lorenzo Kristov's proposal in the Energy Transition show and I've been a fan of it since then. The tricky part is how to make it happen in California given the current stakeholders (the IOUs) and the CPUC position.
Question for Lorenzo, or whoever. Is Community Solar a practical path towards this goal? Assume that the CPUC does the right thing on Community Solar on the 30th (or whenever they kick this hot potato to, for a 3rd time). Can we leverage Community Solar to add more resources on the distribution network, and run from there over time?
I like Lorenzo Kristov's whole Idea about DER. It has already been done on the nation-wide millions of aggregated utility customers. I, too, believe that there has to be some centralized power, but even that is already from clean energy in some cases. Looking at this from the bottom-up sounds like it just must be the best way to do it. The local independent aggregates already can take the next step of virtual power plants, sharing Li-ion batteries, charged by the sun, on rooftops or backyards, or, from, say, more parking lot solar, charging even more batteries for the local microgrids.
The description of DSO appears to match exactly how many REMC's are structured, where they own the distribution and manage the customer interface and buy power from a generation and transmission company. So what stops RMECs from doing this?
Every RMEC could, but the vast majority of US customers are served by investor-owned utilities, and prying the grid away from them is next to impossible. It's been tried recently in Maine and San Francisco. Leaving aside that only a small fraction of customers are served by munis/coops, the other challenge is start-up costs and risks: we don't have proven models, financial frameworks, tariff designs, software controls, etc. to make implementing the DSO model "off the shelf." It takes a real visionary, like Dan Burgess at the Maine Energy Office, to push this model forward.
This hypothetical thesis is wrong. Grid Defection as the driver of massive change is not going to happen. 80% of the revenue of a large electric utility is from 10-15% of the customers, which are commercial and industrial customers. A few Affluent Residential customers defecting will not make a significant or meaningful difference in the overall commercial model.
But it's not just going to be a few affluent customers: it could easily be those big C&I customers. My employer is likely going to be co-locating (BTM) huge amounts of renewable to power our hydrogen facilities, cutting the utility out of a big revenue stream. As Lorenzo discussed, too, big factories have big roofs, parking lots, and (usually) additional land to site solar+storage, taking yet more load away from the utilities.
most big C&I customers need reliable power 24/7 delivered economically. Large solar with batteries won't likely to be economical for 24/7 generation. just my perspective...
Different customers will have different needs, solutions, and ability to implement these solutions.
Microsoft has a director of nuclear technologies (see https://www.datacenterdynamics.com/en/news/microsoft-hires-archie-manoharan-as-director-of-nuclear-technologies-joins-from-micro-modular-reactor-firm/ )
Google, MS, others have commitments to renewable energy. Their loads are somewhat flexible - they can adjust when the ML models are being trained, etc. And one of the bills in the current legislature ( SB-1018 - https://www.billtrack50.com/billdetail/1696919/ ) is clarifies that a private connection between a generator and consumer is NOT under CPUC control )
Great conversation, and hello again, Lorenzo! FWIW, the ISO-NE portion of Maine has only about 100 T/D substation interfaces, and 10 more up in the NMSA area interconnected to New Brunswick, so we're working with a much easier electrical problem than California.
The current fights about building new large-scale transmission and allocating the costs thereof (e.g. around FERC Order 1920) should be a wake-up call that the current top-down model is not going to serve us well. As you point out, we're living with a business model built on the economies of scale of building a few giant power plants, far away from people to minimize safety/health concerns. Solar+storage is cost-effective at much smaller scale, and we need a new business model to match. Frankly, if we keep on as we are, we will simply not make the energy transition fast enough to prevent serious repercussions--and with long-haul transmission taking 10-15 years to build, we simply cannot rely solely on transmission-linked solutions.
Not buying most of this. Try to go along with the flow:
"Grid defection" by 10,000 sf houses in CA becoming independent microgrids will reduce income to utility.... death spiral. Actually, those houses went almost "net zero" via solar, reduced the income to the utilities to the $10 monthly charge, but are still using shit tons of grid services for export and backup. That's one reason the utilities want to increase that fee and go to TOU. If that makes them want to "defect" fine, it probably decreases costs for everyone else not increases.
Solar on parking lots: Recent large projects cost $6/W, probably more for smaller ones. Lots of extra concrete and steel. And less yield than solar farms. Sure there is "no opposition" because no one sees the $0.25+/kWh cost because its hidden in some gov't or university budget.
38% of national electricity from solar on buildings, NREL study sez: I've read it; like so many NREL studies, that's a maximum technical potential, like 500% of load can be met from wind in a few states, only 1% of land can give us all solar.... Also that's our electric use now, not after we get EVs and HPs and make green H2, etc. But yeah, to utilize that reform regs so warehouses can be net positive. See how many want to when they only get $0.06/kWh for their production. Comm'l PV costs need to come down. Same w/batteries.
Holy Cross Electric: I know a bit about this; they serve a fifth of my town, other parts of our valleys. They are net 60-70% renewables. Most of that is from wind on the plains 300 miles away. They've built maybe 100 MW of local solar, but more out on the plains. They have awesome optional TOD rates, but few utilize them. They have some nice riders for load shedding, and "soaking" VRE overproduction. They tried rate reform in the past, and proposed a structure which seemed to have a lot in common with CA's regulated utility/PUC NEM3 or whatever they ended up with. Definitely increased the monthly service charge. Local PV installers went ape, the governor may have even piped in. They canned the "radical" change for now.
In the end we need to rely on all of the above, but in most places most power will come from "central" but very clean, and OMG land-using...
BTW, recent huge desert solar farms are coexisting w/tortoises.
Also from NREL - the US could power its entire electricity demand with 10 million acres of solar panels, which is only one-third of the land currently devoted to corn ethanol. Makes a lot more sense to me to plow down some corn fields (that are not producing food) than try to deal with the complexities of building on/over existing infrastructure.
Local generation has benefits, and disadvantages, over remote generation, starting that in many places, like California, the transmission grid is maxed-out.
The topic should not be "either/or". We need all of these: more renewables in the grid, more storage in the grid, more transmission, AND, more local resources on the distribution grid.
This was a fantastic interview. Thank you so much! It's incredibly heartening to know that I'm not the only one that sees how easy this could be if we could just break the grip of monopolistic fossil fuel tyranny. Also kind of hilarious how people are so disturbed by grid defection. That seems like a small part of the total threat of remaining stuck in a top-down centralized grid structure.
One point I wanted to make as a member of a rural Electric co-op, and something that drives me personally nuts. As electricity rate-payers of our distribution grid, we have already paid for all the poles and wires. And yet the anti-arguments always act like they are not ours to use. I think that we need to change this narrative and reclaim ownership over our own distribution grids. Instead of giving them away to private interests outside of our communities, strengthen the messaging around the fact that we paid for those distribution assets in our rates and now we should have the right to use them for our own benefit instead of giving them away to the Monopoly.
I'm going to go back and read David's 2018 paper as well. I'd love to figure out how to easily and simply communicate this to a group of people so that they see that all we really have to do is change our focus as a society. I love the way Lorenzo explains the evolution from a natural Monopoly now to a much more distributed nested grid services. Thank you!!!
Great conversation! Nice to hear the emphasis of local PPAs without going thru the bulk power system - we're already doing this is South Africa under a mechanism called wheeling. We've implemented a simple credit method which simplifies the billing substantially. Happy to hear we're aligned!
This and several other recent podcasts is making me re-think how to approach the wider adoption of DERs, including for consumers that do not have access to a nice solar-friendly roof. I wrote down some thoughts at https://pelegri.substack.com/p/battery-first-or-solar-first
Damn good stuff. Jigar S. was talking a lot about already built landscape as the next chapter of DERs in this Latitude pod that just dropped:
https://www.latitudemedia.com/news/could-vpps-save-rooftop-solar?utm_campaign=Pod%20Newsletter&utm_medium=email&_hsenc=p2ANqtz-95Shf9HS67KMgGfGRPWecxxR_fl4jdEv4zcGAqboR5bAOvcpPnPX9XZZuz4PvNorAi4EOmfkx0zXpK4EtHCZZse315IA&_hsmi=308637382&utm_content=308637382&utm_source=hs_email
There are policy discussions in many areas on the value of local energy resources versus centralized resources. Most of these discussions are fairly "soft", with different people claiming different benefits. Something that is missing is exactly how today's DERs are contributing to the grid.
Here is a question: how much of the energy my household imports from the grid is produced within my distribution grid? Same for everybody else in my distribution grid.
My local grid operator is PG&E. They know this information but it has never been made public. Disclosing this information would ground debates on the value proposition of DERs.
I just subscribed to Volts for this topic. I'll finish listening to the pod and then I'll be back. I live in San Mateo County and my CCA is Peninsula Clean Energy. PCE has a program to install solar panels (and later batteries) in Government buildings (GovPV). The interconnects are under NEM 2.0, so they are constrained by those rules.
I'd love to see how we can leverage the community power ideas moving forward.
I first heard Lorenzo Kristov's proposal in the Energy Transition show and I've been a fan of it since then. The tricky part is how to make it happen in California given the current stakeholders (the IOUs) and the CPUC position.
Question for Lorenzo, or whoever. Is Community Solar a practical path towards this goal? Assume that the CPUC does the right thing on Community Solar on the 30th (or whenever they kick this hot potato to, for a 3rd time). Can we leverage Community Solar to add more resources on the distribution network, and run from there over time?
He has certainly logged a few hours on ETS, with the highest Geek Ratings.
https://xenetwork.org/ets/guests/lorenzo-kristov/
I like Lorenzo Kristov's whole Idea about DER. It has already been done on the nation-wide millions of aggregated utility customers. I, too, believe that there has to be some centralized power, but even that is already from clean energy in some cases. Looking at this from the bottom-up sounds like it just must be the best way to do it. The local independent aggregates already can take the next step of virtual power plants, sharing Li-ion batteries, charged by the sun, on rooftops or backyards, or, from, say, more parking lot solar, charging even more batteries for the local microgrids.
The description of DSO appears to match exactly how many REMC's are structured, where they own the distribution and manage the customer interface and buy power from a generation and transmission company. So what stops RMECs from doing this?
Every RMEC could, but the vast majority of US customers are served by investor-owned utilities, and prying the grid away from them is next to impossible. It's been tried recently in Maine and San Francisco. Leaving aside that only a small fraction of customers are served by munis/coops, the other challenge is start-up costs and risks: we don't have proven models, financial frameworks, tariff designs, software controls, etc. to make implementing the DSO model "off the shelf." It takes a real visionary, like Dan Burgess at the Maine Energy Office, to push this model forward.
I'm newbie to forum, and I live in California. Is REMC this? https://en.wikipedia.org/wiki/Utility_cooperative#Electric_cooperatives
Yes. Rural Electric Membership Corporation
This is awesome. More conversations like this! Thanks for this