by Steve Hodgson

Among three themes recently asserted by energy guru Amory Lovins as affecting the US energy scene is that momentum is shifting, not just from fossil-fuelled power plants to renewables, but from centralized to distributed generation.

Writing in the summer issue of its Solutions Journal, Lovins, the cofounder and now Chairman Emeritus of the influential Rocky Mountain Institute, likens traditional power station development projects to building a cathedral, and distributed generation units to mass-produced, manufactured products. He is talking mainly about solar photovoltaic (PV) panels, but the analogy works almost as well for slightly larger distributed generation technologies, including CHP.

The point has been made before – that although the emergence of utility-scale large wind farms garner a great deal of attention, the parallel growth of building-integrated solar panels, CHP schemes feeding industrial sites and commercial buildings, and new district energy schemes, is more a revolution in size, location and ownership of generating plant than simply from fossil fuels to renewable sources of energy.

With giant forest fires threatening power (and water) transmission to the city of San Francisco at the time of writing, the need for population centres and industry to be less reliant on remote, centralized electricity generation is emphasized further. US power grids tend to be highly reliable, but the consequences of occasional failure can be enormous.

Lovins’ other two themes are that progress is finally being made in terms of the efficiency with which energy is used, both in buildings and in cars; and that renewable projects of all sizes are making serious gains, not only in world-leading Germany but also in the US. Lovins sees total US electricity consumption steadily shrinking in the future, rather than following traditional growth patterns as spending on utility energy-efficiency programmes grows to serious levels.

Meanwhile, prices of solar power units have fallen to a point where the technology can undercut power even from modern gas-fired power plants. Solar power accounted, says Lovins, for 49% of new generating capacity added to US grids in the first quarter of this year.

While new ‘cathedrals’ take lots of money and time to build, Chinese PV panel factories are churning out products 24/7 and solar power prices are falling steadily. But it’s not all about size and number of units – Lovins suggests that local ownership patterns are crucial too. Denmark’s 30-year transition from centralized coal-fired power plants to distributed wind and cogeneration plants came about partly because most of these units are owned either by local farmers or communities. Likewise, half of the renewables schemes in Germany are owned by its citizens or communities.

Aside from renewables, district energy schemes are usually owned, if not operated by, local government units with a brief to lower energy costs for their own buildings and, in some cases, for publicly-owned housing, alongside local business premises. Operators of campus-based schemes are in direct control of their own energy costs.

It’s certainly true, particularly in Europe, that over recent years the green agenda has favoured the development of electricity-generating renewables much more than energy efficiency, even though the impact using (and generating) energy at higher efficiencies can have a similar impact on carbon emissions. And small-scale, high-efficiency plants are more easily financed, quicker to build, and deliver considerable to benefits to electricity grids.

This last advantage is difficult to quantify or monetize, but operators of power grids fed from multiple small sources with a variety of technologies have a more resilient power distribution system. Citizens of San Francisco may be about to experience the opposite of this.

Lovins is not complacent, though, suggesting that the battle for what he calls a more efficient, diverse, distributed, renewable electricity system is far from won. Plenty of barriers still need to be dismantled to enable the full transformation.

Steve Hodgson
Contributing Editor

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