Tomlinson: Revolution in energy begins
the best deals from electricity providers. Many of his clients were required by law to own generator sets and were spending hundreds of thousands of dollars with little to show for it. Reliability plays role
Experts at Acclaim were aware that information technology was revolutionizing power management and knew that ERCOT, which operates most of the Texas electricity grid, was looking for ways to improve reliability. In recent years, the grid’s become more complicated, with hundreds of new sources of electricity coming online, but many are intermittent, such as wind and solar.
“You have a grid right now that is under stress, and the more wind and solar you add and the more coal plants that close, the more challenges you are going to have,” Elder said.
ERCOT already had a program that paid big consumers of electricity to drop off the grid when demand peaks on hot summer afternoons and the cold winter mornings. Even with wholesale prices as high as $9,000 a megawatt-hour, for a few dozen hours a year there is not enough generation to meet demand. 100 hours of power
In March 2012, Public Utilities Commission of Texas changed the rules so that owners of new, clean-burning generator sets could sell power to the grid when wholesale electricity prices spike.
“We’re installing equipment that allows that generator to export power into the grid,” Elder said. Acclaim applies for permission from the Texas Commission on Environmental Quality to sell 100 hours of electricity from the new generator sets every year.
The cleaner generators and the extra equipment are 30 percent more expensive than a traditional emergency generator, but by selling electricity during peak periods, the equipment can pay for itself in two to three years while having an operational life of 25 to 30 years, Elder said. By routinely running the generator sets under load, they are also more likely to operate as needed when a blackout strikes, he added.
If a user chooses to own the generator set, the revenue goes to the owner. But Acclaim can also arrange for investors to own the generator set and then charge the facility a small monthly fee in return for knowing the backup power will be there when it’s needed. In that case, the investors pocket the profits, and the facility saves money by not purchasing or maintaining the equipment.
Acclaim clients Oakbend Medical Center and Jack Rabbit Road Public Utility District chose to pay a monthly fee for reliability. Elder says his company is working on seven additional projects now, with a pipeline of 15 to 20 more lined up. Only part of the picture
Emergency generator sets are only one part of the emerging energy cloud that will leverage dozens of sources of distributed electricity generation. Electric power consulting firm Navigant released a report in April showing that spending on distributed generation will exceed the capital invested in big power plants by 2018.
Investors are forecast to spend $180 billion on distributed generation in 2023, compared with only $100 billion on traditional generation, eliminating the need for hundreds of new power plants and thousands of miles of transmission lines. Home use
Navigant also predicts that consumers will use home automation, rooftop solar and batteries to actively manage their home power use, reducing their costs.
“The energy cloud is an emerging platform on which advanced technologies and solutions may be integrated and compete for market share in a dynamic marketplace,” Navigant concluded.
Consumers of electricity will need to pay more attention than ever to the opportunities and the pitfalls the energy cloud will offer. Some utilities will fight these changes to protect their businesses from disruption.
But the revolution is beginning, and it will affect where we get our power, and how much we pay for it, for generations to come. Tomlinson is the Chronicle’s business columnist. His commentary appears on Sundays and Wednesdays. chris. tomlinson@chron.com twitter. com/cltomlinson