How renewable energy is a disruptive technology

I’m sitting in a café on the Champs d’Elysees amid the electric atmosphere of streetlights, neon signs, cars, trucks, shoppers, gawkers, storekeepers, and restaurateurs — an abundance of energy.

Energy has driven the development of modern civilization and conveniences. And renewable energy supplies are growing fast. But like any disruptive technology, the growing flocks of wind turbines and expanding acres of solar-equipped rooftops around the world are causing temporary growing pains for the energy industry.

Fortunately, these “problems” are really opportunities. And utilities like TXU Energy in Texas are pioneering solutions…

First, here are today’s two main problems caused by fast-growing renewable energy production:

1). “Excess” wind energy generated during off-peak times drives down wholesale prices, even into negative pricing. This has shown up in the Pacific Northwest, where Bonneville Power Authority sometimes has to choose between spilling hydro and ordering wind curtailment. It’s also an issue in West Texas, where over 20 percent of the wind energy capacity has been wasted this year through forced curtailment.

Similar problems are also happening in the U.K., Germany and Spain. There, the excess of renewable energy has grown to the point where EU countries with high renewable output are facing old-fashioned protectionism from established power producers — even though this is illegal in the EU. Some European power producers are refusing to build additional transmission lines needed to transport renewable energy across borders. Some are even attempting to disconnect existing transmission lines.

Growth of U.K. photovoltaic capacity in 2011. Source: DECC. Click to enlarge.

The losers, of course, are consumers — who have to pay more and put up with continued higher carbon emissions.

2). Intermittent resources cause system instability and, in places with large concentrations of solar photovoltaic generation, occasional excess voltage. After all, the current power grid was built for power to run “downhill” from large power stations through transmission and distribution grids, to end users.

Solutions to both problems are the same: build more transmission, add energy storage, and add demand response. This involves providing end users with energy information feedback, time-based pricing options, and automated response. On that front, the Texas utility TXU Energy just announced a great program.

Demand response is easier to deploy than transmission. It’s also more readily available than advanced energy storage. In fact, demand response includes energy storage through building thermal storage, water heaters, combined heat and power systems — and, eventually, electric vehicles.

Smart meters record when power is used, so the markets can pay consumers who cut peak demand — or reward them with off-peak discounts when excess renewable energy is available.

For instance, to support EV drivers and customers with larger off-peak electricity needs, this year TXU Energy launched a time-of-use plan called TXU Energy PowerSmart PM 24. This program offers deep nighttime discounts that would cost a driver roughly $ 1 to charge an EV with enough energy to go 40 miles — about one seventh the cost of gasoline! It also utilizes off-peak wind production that would otherwise go wasted.

Let’s hope that in 2012 the “problem” of “too much” renewable energy will be countered by a parallel increase in the commitment of states and nations to demand response.

This article originally appeared on eMeter’s Smart Grid Watch blog. Chris King is the Chief Regulatory Officer for eMeter. He is a nationally recognized authority on energy regulation and competitive energy markets, and is widely recruited by regulators and legislators to consult on technology issues in electric restructuring and grid management.

Image courtesy of Duke.

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