Grid defection

With cheap PV and batteries, do we need grids? 


With around half of green energy generation in Germany now being in the hands of consumers and local energy co-ops, and the cost of PV falling, some look to a future in which power grids and big utility companies are less important – most people generate their own energy locally. In the USA, there has been much talk of ‘grid defection’, with consumers going off grid (see ‘The Economics of Grid Defection’ by Amory Lovins’, Rocky Mountain Institute:).What has made this more realistic, in some people’s view, is not just lower cost PV but also, crucially, the advent of cheaper battery storage, allowing PV-using ‘prosumers’ to provide their own backup.  Tesla’s new 7/10kWh, Powerwall batteries are examples.


Off-grid PV and batteries may be getting cheap, and operationally that may be fine for remote US homesteads, but does it really make sense in urban areas or for countries as a whole? Don’t grids help us to balance variations in demand and supply in different locations, for a range of renewables at various scales and even internationally, as with supergrids?  On its website Blog, RMI says: ‘Grid defection introduces its own set of considerations, including over-sizing systems to account for individual peak demand, rather than more efficiently sharing distributed resources as part of a connected smart grid’, and says they will be looking at that soon. Maybe at root what’s under discussion here is US individualism v European collectivism!  But the Rocky Mountain Institute doesn’t take sides. It says ‘the future of the grid need not be an either/or between central and distributed generation. It can and should be a network that combines the best of both’. Well yes, then we could link in wind farms, on-land and offshore, wave and tidal projects, hydro and geothermal, as well as community scale district heating using solar thermal and biomass/biogas.


Then again grid defection will only be as big a deal as expected if PV/storage costs really do continue to fall. An IGov paper from Exeter University, looking at the household level, is quite optimistic. It says: ‘Until recently, individual storage units were not seen as a viable option, but prices have fallen rapidly (from $500/kWh in 2013, to $360/kWh in 2014) and financial institution, such as UBS, are predicting further cuts, with prices as low as $100/kWh within 10 years’, driven by developments in the electric vehicle field.


Even so, for the moment some still see batteries as pricey. In Germany, Wolfram Walter, CEO of Freiburg-based ASD Sonnenspeicher, says that the purchasers of the current generation of batteries are just ‘burning money.’ He calculates that the per kWh cost of stored power generated from roof-top PV installations is anywhere from twice to five times the market cost of electricity:‘ lead-acid batteries can’t store enough power over their entire life spans to make them worthwhile.’ Lithium Ion batteries and other technical developments may change that. But for the present, rather than investing in storage, for most householders, it’s cheaper to import power from the grid when needed, and also, under most Feed-in Tariffs, more profitable to sell any excess power to the grid, rather than store it. Longer term, the balance may change to favour domestic storage more.  FiTs are likely to be reduced, and, with new battery technology, storage costs will continue to fall. So it might then be that consumers can, at times, export stored power at a profit, and thus help with grid balancing. In simple cost terms, a Citigroup analysis cites $230/kWh as the point where battery storage (e.g. for domestic PV) wins out over fossil generation and says that will be reached by the broader market within 2 to 3 years, and will then likely fall to $100/kWh. The Tesla 10kWh Powerwall retails in the US at $3500- so it’s still some way off, and that excludes installation and inverter costs.  Also remember that this 10kWh unit won’t give you enough power to meet typical home power needs for long periods. To do that, overnight or when the daytime PV input was low, you would have to buy more Powerwall units.


That’s all about electricity storage. However, adding yet another dimension, there’s also the heat storage option – heat is easier and cheaper to store than electricity.  It is true that big stores are best, since, the surface to volume ratio (and hence energy loss) is less than with small stores. But, although less efficient, there are smaller-scale domestic level possibilities, including running PV power into immersion heaters: e.g such as that offered by Immersun.


For the moment though the jury is still out on domestic scale storage, by whatever means. But it might be relevant and viable soon. However, while a degree of decentralisation seem possible, it seems unlikely that power grids will be eclipsed, given the need to balance a range of variable renewables. At best, the wide adoption of battery storage by domestic consumers might offer a new type of distributed storage capacity, aiding wider grid balancing, but not doing away with the need for grids or, for more generally, more efficient large-scale storage systems. And, in parallel, some see district-heating grids, with large community heat stores, as a much better deal than domestic heating/storage, at least for urban areas.  So grids of various sorts will stay with us for a while!


Indeed, a recent study for DECC suggested that, if the planned electrification of UK heating and transport goes ahead  (fed mainly from large wind farms, and, if they get their way, nuclear), then that would significantly increase the load on local distribution networks, with heat pumps adding 60% to the cost of network distribution for the low-carbon system, EVs 38%, under DECC’s ‘High’ trajectory for low-carbon technologies. That said, it also concluded that distributed solar PV and wind had low or no impact on distribution network investment in 2015–30. In fact they offset load growth imposed by the electrification of heating and transport.  So you can see why some people think more local energy would be best!


Dave Elliott


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