The 5 hurdles to that shiny, renewables-filled future

David Crane, the outspoken former CEO of NRG Energy, saw his last day in office earlier this month. NRG Energy has chosen to turn over a new leaf with Crane's resignation and the new year-or an old leaf, if the appointment of the company's chief operating officer, Mauricio Gutierrez to follow Crane is any indication.

Crane wrote a very heartfelt and supportive note to his colleagues on his departure, full of positive points and genuine affection. But Crane couldn't resist one nicely worded jab-that clean energy is the future and we must accept that now.

That's the part of Crane's note that stuck with me longer than the rah-rah employees-are-awesome cheerfulness and the smartly worded affirmations. And it stuck with me not because I disagree-honestly, I would love for clean energy to be the future-but I'm always amazed at executive statements along these lines that never, ever reveal just how tough that future is going to be to reach-for utilities, for the employees of those utilities and, yes, for customers of those utilities, too.

The fact that Crane's statement was very similar to a recent tweet that came floating across our magazine's account in response to an article link about trying to prep the grid for distributed energy came to mind as well. (That note said that it was "incomprehensible" that any utility wasn't prepared for distributed energy right now.)

I don't think anyone, really, wouldn't love a cleaner, less dirty energy future, but just saying it's the future doesn't make that shiny future materialize instantly. If just saying something made it happen, we'd all be a lot sexier, healthier and richer. Unfortunately, for a clean energy future, there are still many, many issues to overcome and many, many investments to be made.

If we really want clean energy to be our future, here are the five problems you must solve, Crane and company:

1. The issue of status quo.
Fossils are still your big gen player, whether you like it or not. According to EIA numbers for Oct. 2015, natural gas leads with 110,000 MW. Coal is a very close second at 97,000 MW. Then comes nuclear at 60,000 and hydropower at 17,000. Then you get to the renewables numbers, with wind being the biggest boost at 16,000. Now, wanting those generation numbers from the bottom to be at the top isn't crazy, but even with great planning, it's not going to happen tomorrow (or within "immediate future" timeframe many discuss). I don't say that to be mean. To really make that change, you've got to understand your hurdles here-namely replacing 210,000 MW of fossil fuels or 300,000 if you add in nuclear, too. Them's a lot of MW to switch out, which means a lot of effort, time and money.

2. The issue of capitalism-or lack therof, really.
So, let's talk money. Who's paying for this big gen flip-flop? Customers think it should be utilities, of course. But utilities are set up to recover costs through approved regulated fees-basically paying for upgrades and issues through their customer base. Customers may want utilities to see this simply as a good business investment for the future, but, in many cases, utilities aren't like your local grocery store or car dealer or even Apple. They can't up their product's price because it's better, faster, more reliable, healthier. They don't have that option. Regulators are stuck in between trying to balance needs and wants. And we haven't even started on the amount of subsidies that renewables currently get for development and marketing that fossil fuels don't-and they still don't come equal to pricing yet. I'm not saying that can't happen or won't happen. It simply hasn't yet. So, we're all still looking for the money: customers, utilities, developers and the like. And we all see different people paying for that clean energy future. That's a problem. 

3. The issue of cheap power.
Here's another problem: Customers dig cheap power and most of them are used to it, especially in the Midwest and the South. The average residential retail price (again, according to EIA numbers for October 2015) was 12.73 cents per kilowatt hour. Will customers pay more for cleaner power? No study can come to a consensus on this, and the percentage runs from none to nearly 70 percent, but it honestly depends on the price you're pitching. One cent an hour more or two? You'll get closer to that higher number (perhaps until they figure out what that costs per year), but the higher those cost numbers go, the lower the percentage of customers willing to kick in that money. Would it be cheaper, perhaps, for customers to invest in their own tech? Possibly. Now, how many are willing to make that investment up front? And, who is compensating the utility for having to upgrade a grid system set to work one way and now must work two?

4. The issue of hardware.
When friends ask me to explain why it's such an issue to switch from the current big-power system to more renewables, I use a transportation analogy. I say: Let's talk trains. Let's say you have a massive regional train system: tracks, maintenance yards, skilled workers, infrastructure. Now, the powers that be come along and tell you that they want to be able to go to the same places along the same routes but in either a car, a boat or on a bicycle. No more trains. Now, you're doing essentially the same function: moving people along the same routes. But moving people on a train a different set of hardware involved than moving people in cars or in boats or on bicycles. Some hardware and infrastructure may translate. Some doesn't. So, it's not all as easy as saying: "hey, it's all electricity" anymore than it is saying "hey, it's all transportation."

One-way systems into two-way systems. Adaptations to substations and meters and distribution widgets and gadgets. A need to figure out intermittency issues. There's a lot of smart adaptations that need to be made to our existing infrastructure for it to work more with renewables. And that adaptation takes time. And there's one big, big science issue that's yet to be really solved.

5. The issue of physics.
Electricity cannot be stored like an average commodity since it's an energy flow. So, basically, you're converting electricity into other forms: magnetic fields for inductors, electrostatic charges for capacitors, chemical storage for most batteries. You can charge a battery, yes, but that battery isn't a perfect system. It can't hold that charge forever, and it takes more power to charge than it stores. Combine that with a constant need for power and you realize how we ended up at #1: The one way to create power as needed to meet demand is to burn something that gives off energy at a predictable, steady rate. In all honesty, your biggest hurdle to 100 percent renewables tomorrow is right here. The sun doesn't shine all the time. The wind doesn't blow all the time. The tide doesn't come in at a steady, uniform, hourly rate. So, you need storage to compensate. Unfortunately, our storage options aren't perfect. As one K-State professor and former IEEE leader told me in an interview once: She tells her students that they could have the college named after them if they could only solve the storage problem, really solve it.

In the end, we all have to understand the obstacle of #1. Regulators and the government will need to work on #2. Customers will have to tackle #3. Utilities are already working on #4, and #5 remains, as always, the wild card.

Heart and souls are already behind this clean energy future, but what we need now is a solid plan with actual solutions to these 5 issues. If you want that fairytale happy ending of clean energy, it's time to roll up sleeves and get to down to the actual business of setting those foundations right now. And no amount of magical thinking will make it happen without tackling these issues. You want to really get there? Stop thinking positively and start thinking pragmatically. We've got to mind the gap between our status quo and that clean energy future everyone keeps touting, or we will fall in. 

 

http://www.energybiz.com/article/16/04/reality-clean-energy-gap-and-are-we-really-minding-it