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THE MICRO GENERATION

Will we really soon all be generating our own energy — maybe even for profit — or will an alternative Big Power simply emerge? Richard Lofthouse reports

As far as green pornography goes, the brochure for the Omega Center for Sustainable Living in Rhinebeck – one of the crunchiest enclaves in upstate New York’s granola belt – is pretty hardcore. The six-month-old, €2m campus is the first certified ‘living building’ in America, which means that instead of taking from nature, it makes a positive environmental contribution.

Designed by Kansas City, Missouri-based BNIM and John Todd Ecological Design of Woods Hole, Massachusetts, this yoga-promoting, non-profit operation is a beacon for the sort of people who wonder why we can’t all churn our own butter and keep our own bees. At its heart is a facility for processing five million gallons of water, which involves gravel-filled cells sprouting cattail, and lagoons stocked with papyrus, koi carp and possibly the world’s only energetic snails, to clean the water. The water, inevitably, is rainfall, harvested from strikingly modern roofs, while the electricity comes from photovoltaic solar collectors: the building is entirely off-grid.

This is wind-chimed music to the ears of various start-ups and providers of small-scale energy solutions, who are betting their farms on a distributed, local micro-generation future. Take London, UK-based Solarcentury, founded by a former consultant for Shell Oil, Jeremy Leggett. While the renewables convert doesn’t necessarily subscribe to Omega’s whole lentils and sandals vibe, he does see household micro-generation becoming a large contribution to Europe’s net energy supply, perhaps as high as 30%–40% in the overall mix 20–30 years from now.

“The challenge is to get our customers to see a capital investment in a solar panel as an investment rather than an expenditure,” says Leggett. From April, anyone in the UK with a solar roof will be able to offset their utility bills with self-generated renewable energy. Leggett calculates that by hoarding its own energy and going off-grid a household could save around €950 annually for 25 years against a start-up investment of €11,000.

However, Leggett claims that technology already allows for something potentially far more profitable: rudimentary smart grids. “If we install a solar roof, we don’t add batteries; rather, we install a two-way meter. If the solar energy exceeds usage, the meter literally runs backwards.” Theoretically, consumers could soon be supplying surplus energy back to the national grid – getting cheques in the mail instead of bills from their energy providers.

James Woudhuysen, however, will not be among those rushing to meet the postman. Woudhuysen, co-author of Energise, a lively manifesto for future fuel production, and a former senior analyst at Philips Consumer Electronics, believes that eco-warriors’ small and local rhetoric does not hold. He argues that whenever there is a “truly green solution” – huge solar plants in the desert, say, or vast offshore wind farms, or hydroelectric dams on the Zambezi – there’s always another group of greens whining about the threats to wildlife. “Their ‘renewables’... are meant to renew the world morally – by leading it away from industrialism and modernity,” he says, mockingly, of the green agenda.

Woudhuysen calls local generation of the sort advocated by Leggett “a fool’s errand”, citing Britain’s Prime Minister-in-waiting David Cameron’s foray into wind generation at his upmarket, Kensington home in London. In 2007, Cameron installed a D400 Stealthgen wind turbine, a €3,500 piece of kit estimated to save him just €80 a year on electricity. As a result of poor wind velocity – the turbine was designed for offshore use on yachts, where lack of wind is really not a problem – Cameron’s Stealthgen was estimated to have produced a mere 40W – barely enough to power a dull light bulb. In any case, the turbine had to be taken down less than a week after it was put up because it had fallen foul of planning restrictions. The result, far from being smart, contends Woudhuysen, was simply dumb.

In fact, Woudhuysen claims: “Individuals could be thoughtless about their energy use if the world could be more thoughtful about energy supply.” By 2050, he believes, we will be living pretty much as we do now, with centralised energy produced and delivered so you never look beyond a socket. He is not against renewables, but only sees them working at massive, industrial scale, connected to an even bigger, more centralised supergrid.

But General Electric, the world’s largest conglomerate, doesn’t see it this way. Indeed, Keith Redfearn, who manages GE’s transmission and distribution businesses throughout Europe, the Middle East and India, sees a massive future for smart grids. He predicts that the market in the EU alone could be worth €40bn over the next 20 years, a figure that could be trebled, he recently told a private seminar at GE’s London headquarters, “if you include all the networking software and ancillary products”. Redfearn notes that smart meters are already evolving rapidly into mini-computers capable of turning your dishwasher on in the middle of the night when the grid is swirling with surplus energy, and powering it down on a hot afternoon when businesses are turning on their air conditioning units.

To allow devices to talk to each other means having a communication capacity like a cell phone; or, says Matthew Smith, vice president of marketing for Silicon Valley start-up Greenbox, at least like a cellular modem, which he believes will allow smart meters to intelligently communicate with smart devices. Either way, you can bet your life that in the near future there will be an iPhone app that empowers the user to remotely jiggle their domestic thermostats even when they’re abroad on business. Last September, smart meter networking outfit Silver Spring Networks snapped up Greenbox.

Meanwhile, the next hot topic is ‘demand balancing’, a mechanism gaining traction at start-ups such as Demand Logic and RLTec, both UK-based. Demand balancing means that a whole office block might dip its air-conditioning blowers temporarily to allow for a spike in demand somewhere else in a city. The utility would pay for these services because demand balancing saves it the huge cost of switching on reserve power stations to make up shortfalls in supply. If the likes of Demand Logic could capture even a tiny sliver of these revenues between end-user and supplier, they could make a fortune.

According to RLTec founder and inventor David Hirst, the EU Commission recognises the significance of balancing technologies – a four-year SmartGrids project is running until 2012, involving 25 partners from 11 countries, coordinated by Italian utility giant Enel; however, Hirst says: “One reason this technology hasn’t really picked up on commercial level is that while notionally each country manages its own centralised grid, in practice there is plenty of energy traded across borders. So, in what may amount to a sort of crude balancing, Denmark both supplies and draws energy with Germany, Albania with Italy, and so forth.”

Nevetheless, Redfearn predicts 100% European coverage by smart meters of one sort or another by 2022, citing the EU’s push towards 20% renewables in its energy mix; the EU Emissions Trading System; green stimulus funding; and additional regulation to reward grid efficiencies. GE thinks European consumers will even come to love solar panels on their roofs, as domestic energy bills have risen over 100% in most European markets since 2000. Redfearn says: “The key to smart consumer devices is that they empower the consumer and do not control them. It’s all about providing the ability to lower your energy bill without compromising your lifestyle.”

Yet Ian Bowles, the Massachusetts state secretary of energy and environmental affairs who passed the 2008 Green Communities Act, paving the way to micro-generation, highlights a not insignificant problem: the entrenched interests of utilities. “It’s like we’re still with that goldenrod 1970s rotary phone,” adding that the utilities are “fat, dumb and happy cruising along, building their stuff, getting their rates recovered, and delivering a good return for their shareholders.” Bowles says what has held back micro-generation so far – other than the obvious regulatory issues as state level in the US about who can generate electricity – is the absence of a “big heavy-balance-sheet company doing a marketing push out there, on TV, with a toll-free number: ‘Take your home and cut your energy use in half! Brought to you by Home Depot’”.

Until the US brings in its own federal- or state-level feed-in tariff to oblige utility companies to purchase more expensive renewable energy, micro-generation will continue to look much like the Omega Center – the preserve of the wealthy few with yoga mats. But seen globally this is no longer the case, with 21 countries in Europe already funding feed-in tariffs and the UK, South Africa and the Canadian province of Ontario embracing the concept earlier this year. Germany has had one since 1990, and today 15% of its energy is from renewable sources.

This is why Europe, although behind with fancy new terminology, is actually far ahead on the basic provision of solar panels and wind turbines – as anyone driving through Spain or Denmark can attest. Indeed Germany has already produced the world’s fi rst solar billion-aire, at least on paper. In 1988, Frank Asbeck founded SolarWorld, making the solar panels that are today found on millions of German rooftops. A decade later he floated the company on the Frankfurt stock exchange, cashing in on German enthusiasm for solar and by 2004 the shares had risen by 500%, valuing Asbeck’s holding at over €1bn.

Nevertheless, local or central, the big question is still what the future overall energy mix will be. To say that things have moved rapidly is an understatement. Only two years ago, the International Energy Association was predicting that global oil production might soar above 100 million barrels a day over the next few years. But the Great Crash of 2008, which collided with the publication of data about the quickening pace of climate change, altered all that. The agenda, fired up by the election of US President Barack Obama, has been transformed into a serious attempt to see what a completely non-fossil-fuel energy supply might look like by 2050.

In last November’s issue of Scientific American, Mark Jacobson and Mark Delucci, using Stanford University research, sketched a world fuelled only by renewable, calling for
3.8 million large wind turbines, 90,000 solar plants, and numerous geothermal, tidal and rooftop photovoltaic installations. Unsurprisingly, the magazine’s website has been grid-locked with posts ranging from those who envisage a return to sailing ships to others who fret that China controls too much of the world’s neodymium, the substance used in the manufacture of wind turbine gearboxes, not to mention a smattering of advice from those who oppose the factory farming of bees. Meanwhile, more significantly, the giant utilities are also now speaking freely about renewables; although they do not see a renewables-only future in the short-term, they acknowlege that a smart grid catalyst is now available. What is certain, in such a scenario there is no room for squabbling over local and central visions of renewable energy production – both will inevitably be vital.

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January 2010

Environment

THE MICRO GENERATION

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