From 2GreenEnergy Intern Nikita Rao: Demand for Renewable Resources Makes Things Tough for Grid Expansion
Here’s another short essay from one of our interns, Nikita Rao. Thanks, Nikita. -ed
The need for renewable resources is increasing tremendously in several regions of the world, due to its limitless availability. Solar power is one among the many resources that has gained a stable place in the market; it is expanding massively.
The increase in solar power is due to many reasons, one of which being the incentives provided to solar power generators by the utilities. This incentive has led to the introduction of a digital currency called “Solar Coin,” an incentive for the electricity generators in return for the energy generated using renewable resources rather than the consumption of fossil fuels.
According to SolarCoin.org, “Each Solar Coin in circulation represents 1 MWh of solar electricity generation. Each Solar Coin in electronic form represents the verified and proven amount of energy of 1 MWh of solar electricity generated.” This idea of backing energy through currency was inspired by an academic paper -“DeKo: An Electricity-Backed Currency Proposal”. By installing solar panels, consumers earn solar coins. The organization checks the installed meters to verify the production of solar energy before rewarding them with Solar Coins.
The solar industry is in the thick of a major boom, yet buying and installing solar panels is expensive. To overcome this hurdle, many states have introduced a technology called “net metering.” However, the gain in solar power has come at an expense to the utilities; increase in distributed generation on the part of electricity consumers has reduced their reliance on the grid since their needs are met by rooftop solar panels. This migration away from the grid is occurring just when efforts are being made to prevent congestion. The expense of this upgrade is heavy, but meeting this expense is the responsibility of everyone including the energy-independent consumers.
The State of Texas recently faced this state of affairs; Texas planned to upgrade its transmission lines, but the financial estimation came in at about $3.6 billion to repair or extend a total of 16 different sections , totaling 5300 Km of transmission line.
Similar situations are facing utilities in the northeast, where proposed expansions are coinciding with the current solar coin and net metering trend, and customers detaching themselves from the local utility to become self-sustaining. This contributes to the decrease in the number of customers linked to the grid and thus erodes the power of other grid operators to extend their network.
The final result is dependent on how the states configure their net metering laws and establish the amount of money that distributed generators receive relative to retail prices.
Where utilities generally offer the wholesale rate, former power customers who now feed electricity into the grid want the retail rate. This presents a challenge to regulators to find a middle ground where utilities can afford to maintain their systems and homeowners are motivated to go green.
State regulators are trying to decide how the cost of maintaining and expanding the network will be shared. How other U.S. state regulators and Europe’s national governments will settle the rift between those who want to become independent of their utilities and those who operate and use the grid remains to be seen.
REFERENCES:
http://thinkprogress.org/climate/2014/02/21/3282131/solar-coin-global-currency/#
