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  • Writer's pictureMohit Chandak

Power grids

Today marks one year since we started this initiative and it has been a great journey - I want to thank everyone who has supported us throughout this journey. From a newsletter, today we have our own podcast and presence on social media. Thank you from all of us from the bottom of our hearts.

On our anniversary, we bring to you possibly one of our most important editions. Bear with us because this is going to be a long edition - but hopefully this will answer a most basic question we are sure everyone has wondered -

“Why can't we replace all our energy sources with renewable energy?”

In this edition we will not only understand how energy is generated but also why it is extremely difficult to replace all our energy needs with renewables. We will also look at initiatives which are helping us to get to a path to net-zero for the energy grid.

What to expect today:

  • How does electricity get to you?

  • Net zero path for the US energy grid

How does electricity get to you?

Image Source: Photo by Pok Rie from Pexels

From generation to electricity reaching your homes, there are 8 steps - all of which require modernization but to help us get started; here are the steps (also explained through an image)

  1. Electricity is made at a generating station by huge generators. Generating stations can use wind, coal, natural gas, or water

  2. The current is sent through something called as “transformers” to increase the voltage to push the power long distance

  3. The electrical charge goes through high-voltage transmission lines that stretch across the country

  4. It reaches a substation, where the voltage is lowered so it can be sent on smaller power lines

  5. It travels through distribution lines to your neighborhood. Smaller transformers (similar to the ones above only to reduce voltage this time) reduce the voltage again to make the power safe to use in our homes

  6. It connects to your house and passes through a meter that measures how much your family uses

  7. The electricity goes to the service panel in your basement or garage, where breakers or fuses protect the wires inside your house from being overloaded

  8. The electricity travels through wires inside the walls to the outlets and switches all over your house

Image Source: Alliant Energy

Matching demand and supply

Unlike your favorite yogurt which can stay fresh for months in a refrigerator, there is still no way to efficiently store electricity at a large scale. Which means for utility companies, when forecasting electricity demand, they need to factor in the hour, day, season, location, and plenty more to EXACTLY predict demand and instantly match supply.

To do this, they layer different energy sources on top of each other. Often, the lowest layer is Nuclear Power. Nuclear power stations aren’t designed to be able to turn off and on easily—it would take the better part of a day to shutdown and start up again—so it’s rather impractical to operate these in response to demand. In addition, considering how massively expensive their construction is, it would be economically inefficient to let these stations run idle. Therefore, they’ll run nearly continuously for the entirety of their service lives, except for during planned maintenance. This means they provide the most stable supply of electricity 24/7.

The next layer is coal power stations. Like nuclear, most of these coal plants cannot be fired up quickly, as they take some time to get up to temperature, so utilities will also run them essentially continuously. Coal and nuclear combined typically fulfill what’s called the base-load. Their continuous production essentially equals the valley of demand—they’ll make the minimum amount of power needed at a point in the day. So then, on top of that, utilities need production methods that can fire up and shut down far faster—they need to be able to produce the power to operate all those AC units in hot summer afternoons. The bulk of this job is completed by natural gas fired plants.

A simple cycle combustion turbine is the simplest means of turning natural gas into electricity—much like a jet engine, the fuel is used to turn a turbine, which turns a generator, which produces electricity. More advanced natural gas power plants recover the hot exhaust to convert it into electricity too, but the startup process for these takes longer, so simple cycle stations are used for applications where speed is key. Most can reach full power within 15 minutes, making them an effective tool to respond to those short peaks in demand.

Predicting supply (not demand) with renewables

Nuclear, coal, and natural gas are some of the more traditional means of generating electricity which are fairly predictable on how much electricity they will generate -> predictable supply. So even though we have a demand variable which is difficult to predict; we know exactly how to generate that supply because that side has traditionally been very easy to predict (put ‘x’ tonnes coal in-> generate ‘y’ kwh electricity). However, the recent proliferation of renewable energy sources, has kickstarted a reinvention of this system of base-load and peaker plants and creating a new bottom layer to the energy mix—but it’s a bottom layer that’s uncontrollably variable. One sunny, windy day could mean that a state has an excess of electricity when added to its base-load sources, while one cloudy, windless day could mean that the peaker plants have to operate at full force. Suddenly with renewables in the mix; both sides of the equation have become unpredictable!

Solar and onshore wind power are now some of the cheapest sources of electricity, but because they rely on natural phenomena, they can’t match supply to demand the way that the traditional nuclear, coal, natural gas trifecta can. Therefore, grids are being reinvented so that supply doesn’t have to match demand—at least minute-to-minute.

Challenges of the grid today

  • Baseline in renewables is not predictable: The foremost challenge that renewable energy sources face is the unpredictability issue. For instance, it’s hard to forecast the amount of wind or sunlight the country will receive in the upcoming month

  • No efficient cost effective way of storing renewable energy: In a world that is transitioning from traditional fossil fuels to renewable sources, improved electrical energy storage is vital to support these technologies, ensuring that electrical grids can be balanced and can contribute to the maximization of every green megawatt generated

  • Old grid infrastructure not built for two-way energy transfer: In earlier days, power companies used to be the only generators in town, control devices like regulators, capacitors or relays were designed to assume that power flowed in only one direction. Upgrading them to two-way transfer might be very easy but it needs capital investment and time to replace to achieve at scale

Net zero path for the US energy grid

Image Source: Photo by Kindel Media from Pexels

In April 2021, the United States set a target to create a carbon pollution-free power sector by 2035—an important element in the country’s goal of reducing emissions 50 to 52 percent by 2030 and achieving net-zero emissions by 2050.

Path to net zero

The following list aims to provide a brief overview of the initiatives that can help contribute towards net zero emissions from the energy grid in the US.

  • Expand interstate transmission corridors: Regions with high renewable penetration already face increasing transmission congestion, which has led to prohibitive interconnection costs and caused many renewable projects to drop out of the development pipeline. For example, expanded transmission linkages between New England and Canada could enable the United States to import low-cost hydroelectric power, offsetting the construction of 15 GW of higher-cost wind and solar. Federal and state agencies are working on solutions to achieve the scale of this scenario through initiatives.

  • Expand intraday flexibility across the grid: Generation in a decarbonized power sector will come largely from intermittent renewable sources. Matching power supply to demand on an hourly basis will require deployment of flexibility resources to complement low-cost renewable energy. Grid-scale storage, including lithium-ion batteries will integrate renewables while also increasing the use of the transmission infrastructure.

  • Accelerate coal retirement: The zero-by-2035 scenario would lead to a rapid retirement of existing coal baseload generation due to a combination of emissions constraints and economic inefficiency. Recent years have seen an uptick in retirement announcements.

  • Keep existing nuclear facilities online: Many nuclear plants are struggling economically today due to low power prices and high fixed costs.10 Discussions are under way at the state and federal levels to provide additional financial support to keep some plants online.

  • Deploy dispatchable zero-carbon generation: Gas-generation capacity will likely continue to grow under the zero-by-2035 scenario. Such growth could both provide seasonal flexibility and bridge the gap during periods of low regional renewable output. Given the net-zero emissions trajectory, however, these plants could not run as they do today. Thus, a mix of zero- or low-carbon fuels, such as hydrogen, biomethane, renewable natural gas, and ammonia, will likely be needed to provide peaking capacity to bridge extreme weather events.

  • Using Electric Vehicles (EVs) as battery packs: Using more energy efficient vehicles like hybrid and electric vehicles supports the U.S. economy and helps diversify the U.S. transportation fleet.

Where are the billions into energy transition going?

In 2021, energy transition and climate tech — including renewable energy, energy storage, electrified vehicles and heating, hydrogen, nuclear power, sustainable materials and carbon capture — attracted more than $900 billion.

Energy transition pulled in $755 billion, a 25% increase over 2020 investment, double what was invested in 2015, and a more than 20-fold increase since 2004. Below is a breakup of the energy transition investments.

Image Source: Photo by Bloomberg

With $366 billion invested last year, renewable energy is still a driver of investment volume (it is still almost 50% of all investment). The investment growth distinction belongs to electrified transport, which exceeded $270 billion last year.

Energy transition investment follows familiar patterns in global capital markets. Large, established financial institutions supply hundreds of billions of dollars a year to finance construction of long-lived assets using familiar zero-carbon technologies — i.e., deployment. Smaller institutions (some well-established, others quite new) supply tens of billions to fund company formation and the proving-out of new technologies and business models, or innovation.

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