A big opportunity for distributed clean energy
With the kick-off of the international climate negotiations in Paris today, global leaders are discussing high level goals and commitments.
A major part of the solution that will help us reach these commitments will be transitioning our energy infrastructure to clean and low carbon sources. Part of this involves constructing large utility-scale clean energy projects, like the 175 Turbine London Array 20km off the coast of the UK, or the Ivanpah solar thermal plant in the Nevada desert, with over 350,000 mirrors to reflect the sun.
Increasingly though, a significant element of our shift to a low carbon future involves energy that is focused at the building or the community level - distributed energy. Between 2014-2023 distributed energy generation is projected to displace the need for 300–350 GW of new large-scale power plants globally; in 2018, new distributed generation capacity is expected to surpass that of new central power facilities.
This means thousands of smaller systems being installed on and in buildings, communities, and cities – including solar panels on rooftops; geothermal heating and cooling systems in buildings; battery storage systems in our communities; LED lighting, building automation, and efficient chillers to reduce energy where we live and work.
This also means that as individual consumers, you and I are becoming more empowered to make positive energy choices! Some people call this the prosumer revolution, as homes and businesses become both producers and consumers of energy.
Here are 3 major trends in distributed generation that world leaders can focus on going into Paris:
1. Energy efficiency as the cheapest fuel:
Our built environment uses 40% of energy- and much of it is wasted. The economic opportunity to profitably reduce the amount of wasted energy and make our homes and buildings more efficient is over $250B in North America.
Governments have an arsenal of tools that can unlock huge energy savings. Past policies have focused largely on rebate and incentive programs, but this year marked a turning point, with the acceleration of new private sector financial and business model innovations: for example Property Assessed Clean Energy (PACE) in the USA has attracted over $1B of private capital for energy upgrades to homes and commercial buildings. Toronto’s similar Home Energy Loan Program (HELP) means you can qualify for low-interest financing towards energy upgrades that ultimately save you money.
2. Your home as a utility:
Technology is enabling homes and other buildings to serve as their own mini-utility through a combination of on-site generation and energy storage. In 2014 over $70B was invested in smaller system, predominantly rooftop solar. Any global climate solution will certainly involve a focus on ‘solarizing’ millions of additional rooftops globally.
According to a report from the Rocky Mountain Institute released this year, the economics of becoming your own utility are increasingly compelling -- for some customers where electricity prices are expensive –for example Hawaii— the cost of a solar + storage system is the same or better than utilizing energy from the grid -- and the same will be true for millions more in New York and California by as soon as 2020.
3. Powering remote communities:
A sustainable energy future includes providing power (and the ancillary health, education, and economic benefits) to the over 1 billion people with limited energy access today.
Across the globe, remote areas face the same energy challenge: connecting to the grid is technically challenging and too expensive. Many communities instead rely on costly and dirty on-site power, usually in the form of diesel generators. In these scenarios, clean distributed generation will often be the most viable and economical option – and there are numerous technical, operational, and business model solutions that are enabling remote communities from Northern Canada to Nepal to access clean energy.
World leaders will spend the next 2 weeks over complex international negotiations in Paris. The macro targets around carbon emissions will ultimately trickle down to the individual choices you and millions of other make about energy in our homes and business. And that is an empowering thought!