Small-scale solar a must to reduce energy costs

Small-scale solar a must to reduce energy costs

DISTRIBUTION utilities (DUs) can save up to 40 percent on the cost of maintaining their local grids by promoting investment in what are called "non-wire alternatives," which include rooftop solar, community solar, and battery storage systems, along with "demand response" systems such as certain electric vehicle charging systems and interruptible load programs. So says an extremely complicated research paper entitled "Valuing Distributed Energy Resources for Non-wires Alternatives" from the University of Texas at Austin published last month in the journal Electric Power Systems Research.

Let me tell you something: If there is research on energy, or really any form of engineering, coming from the University of Texas, you can take that to the bank. Consider it scripture. UT was the home of legendary chemical engineer and my great-uncle John J. McKetta Jr. for over 70 years, during which time he authored something on the order of 400 papers and 80-odd books, including the "Encyclopedia of Chemical Processing and Design," which has 68 volumes. He also, at various times, served as an energy advisor to four US presidents, including a stint as chairman of the US National Energy Policy Committee, as well as a term as president of the American Institute of Chemical Engineers; he was also a member of the National Academy of Engineering, which is part of the National Academy of Sciences.

Those Longhorns know what they're doing, in other words, although the research team behind the paper here apparently passed through the program that Uncle John built after he'd already gone (he died in 2019 at the age of 103) because it does not have the hallmarks of what he taught everyone, which is to find ways to express horribly complex engineering problems in simple terms.

Fortunately, I did learn a few things from Uncle John about explaining technical topics in normal human language, so while the paper is available online, if you really want to saturate your visual cortex with letters from the Greek alphabet representing 18 different decision variables and 29 model parameters, allow me to summarize.

For consumers, the biggest cost item on a monthly electric bill is, of course, the electricity itself, indicated by the generation charge. The next biggest cost, which is wrapped up in the distribution charge, is the maintenance, repair, and replacement of the distribution grid infrastructure. This is a headache for DUs as well, and the cost and effort associated with keeping up with this work are often too much to handle, and as a result, many distribution systems have aging and unreliable equipment. The problem is likely not so drastic for big electricity distributors with deeper pockets but for smaller utilities and electric cooperatives who operate on very narrow margins; maintenance concerns can lead to serious financial difficulties and interruptions in service.

The higher the electricity demand, the faster these already well-used systems wear out, so what the researchers wanted to look at is if "non-wire alternatives" could extend the life of distribution systems, and if so, how much cost could be saved.

The research was as much about economics as it was about engineering. It modeled the effects of electricity demand on a neighborhood-size distribution grid over a 20-year period, first if there were no demand-reducing resources, and then if there were "optimal incentives" to encourage households and businesses to invest in those resources, i.e., rooftop or community solar installations, battery storage systems, and the like. Taking into account a large number of variables, such as equipment repair and replacement costs and variations in market prices of electricity according to demand, the model determined that the cost of providing electricity (exclusive of the electricity itself) would be $7.2 million per year in the first case. In the second case, where the demand-reducing resources were applied, the cost dropped to about $4.2 million per year, which would result in lower consumer electricity bills.

It is not made entirely clear in the paper (again, good engineers are not always good communicators), but the presumption is that every customer in the hypothetical "neighborhood," which might correspond to the coverage of a small co-op, would be connected in some fashion to a demand-reducing resource, as well as connected to the regular distribution grid. Although that kind of situation is not implausible, it might be a bit idealized; even so, even partial coverage by non-wire alternatives would reduce costs by a corresponding amount.

The study also assumes that the resources would be customer-owned, but the math is largely ownership-agnostic; it works the same way regardless of who initially invests in the resources. If the DU is the investor, for example, sets up and maintains a community solar plus battery storage facility for the sake of trying to maintain a revenue stream, the capital expenditure and operation and maintenance costs would cut down the savings from reducing demand on the distribution grid, but they would not make those savings disappear entirely.

One variable that the study did not attempt to account for is the impact of net metering, where solar users can sell their excess electricity back to the grid. It seems the reason for this is that adding this to the model would make an already complex calculation even more complicated. It is perhaps something that can be overlooked for now, particularly if non-wire alternatives are applied in places where they would be most useful in the Philippines, the smaller and less stable co-ops, because net metering is still virtually non-existent. However, it is something that we can anticipate will have to be dealt with at some point in the future, requiring an update to the current research.

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  • https://www.msn.com/en-ph/news/opinion/small-scale-solar-a-must-to-reduce-energy-costs/ar-BB1pKKu9?ocid=00000000

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