By Brandon Bowser, Energy Program Manager
Last week, Pacific Gas & Electric (“PG&E”), a major California investor-owned utility company implemented a widespread service outage in an area encompassing a significant part of its service territory in an effort to combat the risk of starting and spreading wildfires. Over 700,000 customers were affected, and, given that a “customer” can be considered the entirety of a single-family home or a multifamily building, the estimated number of Californians affected by the multi-day outage is in the millions.
While the point that precautionary power shutoff measures in an area of the country plagued by wildfires can be argued as having good intentions, PG&E is facing a wide array of public backlash for its poor execution of these measures. This includes harsh criticism from both the Public Utilities Commission and Governor Gavin Newsom. The New York Times reports that some customers were left without power from as long as Wednesday evening through Saturday morning. Further, PG&E appears to have communicated poorly throughout the duration of the outage event (their website was unable to handle the high traffic of customers accessing it for information and crashed, for example). Customers are complaining that the advance notice they received was much too short, and some allege that they received no notification at all.
This certainly is not the first time precautionary power shutoffs for public safety have occurred. And, in the face of a more tumultuous climate which presents adverse conditions continuously increasing in severity, these types of mitigation strategies will only become more common. However, reliable electricity sources with minimal and short-lived disruptions is vital to our daily lives in the twenty-first century global economy. Cases like the PG&E emergency power shutoff — those which threaten our energy security — are not a long-term solution.
Transmission and Distribution
Before delving into solutions, the central problem must first be more deeply understood. The primary reason for PG&E taking such a drastic risk mitigation step was due to its transmission and distribution (“T&D”) power infrastructure. The power generation assets themselves did not pose the threat, but rather the aging T&D lines, transformers, and substations positioned around a geographic area extremely prone to wildfires due to its dry and blustery nature. A single spark from a faulty piece of equipment is all that is needed to spark a blaze that can wipe out entire cities and claim lives, as demonstrated by the Camp Fire of 2018 which completely destroyed the Town of Paradise, California. Eighty-five people lost their lives, and transmission lines owned by PG&E are at fault, according to a May 2019 article by the Washington Post detailing findings of fire officials who investigated the blaze. The utility has declared bankruptcy in anticipation of liability claims in the US$ Billions.
It’s not difficult to surmise why PG&E chose to take such drastic measures to prevent a recurrence this year. The absence of current flowing through all of this T&D infrastructure effectively eliminates the risk of fires from these assets. However, the societal impact from lack of power has proven to be astronomical. Businesses were out of operation for multiple days, which means significant lost revenue. Millions of citizens were forced to live in darkness and without the energy needed to power the appliances in their homes. This can even be life-threatening for individuals who rely on readily-available electricity for survival (such as those on life-support systems). Those businesses and individuals fortunate enough to have onsite backup generators must pay out-of-pocket to fuel them, which becomes very costly as time goes on.
T&D infrastructure requires constant maintenance and must eventually be replaced at the end of its useful life, and all associated costs with this maintenance and replacement are eventually borne by the ratepayers. Not only that, but some of the efficiency of the power centrally-produced is lost when it is transmitted and distributed to customers. This requires a generator to produce more power than is actually consumed to meet the power demands of its ratebase. Again, more cost to be paid. But what if generation didn’t have to take place centrally?
Fortunately, we live in a time when power generation is rapidly innovating, improving, and becoming more cost-effective across the board. What was once only economical at large utility scales and confined to fuel stocks primarily comprised of dirtier fossil fuels (like coal) is now possible at smaller scales and in different, cleaner forms. Distributed generation (“DG”) is exactly that – energy generating assets which are distributed around the service territory at customer sites or in smaller, more local microgrids.
Having a DG asset in one’s home or business is different than dispatching a backup generator during a grid disruption. What sets a DG system apart from a generator is that it is continuously operating and producing power, often operating in parallel with the electricity grid, or interconnected with it so that power produced onsite is fed out to the grid and the customer’s consumption is netted against its production (what is known as “net metering”). Parallel operation simply means that both the power produced onsite and grid-sourced electricity are connected to the customer’s electricity loads so that either can supply the energy necessary to operate the facility (or a combination of both, when the DG asset isn’t quite large enough to supply total electricity needed).
Commercially-available DG systems come in many forms, but the primary types are detailed below:
- Solar Photovoltaic (“PV”) Systems: Solar PV systems are comprised of arrays of solar panels which are combined to achieve power output levels required of residential homes or commercial businesses. These systems are incredibly versatile and can be easily sized based on customer load by simply adding or reducing the number of panels. They absorb and react with energy from the sun, known as the photovoltaic effect, which produces an electric current. This process generates no emissions, making them an extremely environmentally-friendly generation source. They are also rapidly becoming widely-affordable, poising them to compete directly with fossil fuels.
- Wind Turbine Systems: Wind turbines are DG sources which are rapidly gaining in popularity for versatility and economical reasons similar to those of solar. They are also relatively low-maintenance and zero-emission when they produce power, making them ideal for customers in search of an affordable, sustainable method by which to procure electricity. Customers in areas with stable wind levels can reap the benefits of the kinetic energy contained within these air currents to generate clean and affordable energy.
- Combined Heat & Power (“CHP”) Systems: CHP systems are DG assets which are presently highly-favored energy solutions in the commercial space. They produce power by either combusting a fuel source (mainly natural gas or renewable biogas) to turn a generator, or by reacting a hydrogen-rich fuel source to generate current. In both of these generation methods, waste heat is generated by the process itself which is then recaptured to serve a thermal purpose such as heating water or conditioning space. This use of waste energy makes them highly efficient (often 50 – 90%) and thus incredibly economical when the fuel and capital expenditure costs are minimized, as compared to grid-sourced electricity. They are also not reliant on environmental conditions and can continue producing power continuously as long as they are supplied fuel. This aspect makes them ideal for a resilient, onsite power system which can operate independent of the grid when needed. And, while fossil fuel-fed systems do produce some greenhouse gas emissions, they are much lower than the associated emissions from grid-sourced electricity.
All of these systems are becoming more affordable as both residents and businesses see the considerable benefits associated with resilient and cleaner onsite production of electricity free from disruptions. This paradigm shift in thought has fueled a rapid expansion of innovation in the DG space, and many industry leaders agree that it has a significant place in the structure of the future electricity grid.
However, DG does not come without its own set of challenges. The design and implementation costs as well as project lead times currently needed to properly size systems and source capital can still prove somewhat costly to customers, both in actual cost and time invested. Both residents and businesses alike spend much of their days working, operating, and focusing on daily responsibilities at hand. They also typically do not have the total amount of funding needed to pay immediately out-of-pocket. This requires them to engage with solution providers which can either design or select prepackaged systems to meet their energy needs as well as source the capital needed to fund system implementation.
DG stakeholders have, however, noted these challenges and are actively responding. The Federal, State, and Local governments all provide incentive programs to citizens and businesses for the implementations of DG systems, either through grants, rebates, or low-cost financing options such as energy efficiency and renewable energy loans as well as property-assessed clean energy (“PACE”) financing. Utility companies themselves have begun to realize the benefits that DG systems provide in terms of reducing grid stress during times of high demand, as onsite customer generators can provide the power demanded without requiring large portions of the ratebase to curtail demand or for utilities to produce costly peak power (associated costs again borne by the ratebase). Some utilities provide rebates for CHP systems and energy efficiency projects, as an example. Further incentivization of all DG types is necessary to make their adoption even more attractive than it is presently, which many stakeholders have noted and acted upon.
Threats to the integrity of our power grid will continue to grow, whether they be through environmental disasters such as wildfires and storms or through malevolent cyberattacks. Investing in infrastructure which improves customer access to more reliable power is paramount to ensuring our energy security in the twenty-first century and beyond. A primary solution is staring us right in the face – distributed generation.