How fast the US adopts renewable energy and electric vehicles is likely to influence microgrid growth.
So where are renewables and EVs heading? Are the big goals we hear about just aspiration or are they destination?
Hawaii, Maine, District of Columbia and Puerto Rico are pursuing 100% renewables. About a dozen states have set standards to achieve at least 50% Others like California have “clean energy” goals meant to spur renewables. And more than 100 cities are striving for 100% renewables.
At the same time, more and more cities and states are putting forth plans for charging stations, anticipating transportation going all electric.
Reaching such goals requires getting big energy users on board — organizations like businesses. Two recent surveys offer insight — some of it surprising — into how we are doing.
Deloitte concludes that organizations are picking up their pace in setting goals, but face roadblocks to reach them, in a new report, “Moving organizational energy use toward 100% renewables—aspiration or destination?”
The big green goals
In an August 2019 survey of 308 public and private sector executives, the research firm found that more than half of the organizations have set goals to cut greenhouse gases, and 45% cited commitments to increase renewables by a target year. Nearly 25% want to do more than consume renewables; they intend to generate them.
Higher education stood out as a success story. Many colleges and universities signed on early to a 100% renewable goal and more than 40 of them have already reached that goal, says Deloitte.
Healthcare too is notable in that it most often reported goals to source a specific percentage of electricity from renewables, at nearly 61%.
Most interesting, environmentalism is not the top reason these organizations seek renewables. Cost-cutting was the top driver for 36%, followed by sustainability (35%) energy supply diversity (29%) and price uncertainty (27%).
Of importance to the microgrid industry, a desire for resilience drove 17% to install renewable energy. This raises the question: Are some of these organizations operating under the all-too-common misconception that their grid-tied solar panels will keep power flowing to them when the grid is down? Many do not realize that they need at least a battery energy storage system and at best a microgrid to use their distributed energy assets during an outage.
Why getting there is hard
So the pursuit of renewable energy is on. What stands in the way?
Availability of renewable energy — and access to it — is the greatest problem cited. But it’s among a long list that also includes intermittency, difficulty attracting skilled staff, and complexity of power markets and renewable energy contracts.
What can help organizations overcome these problems? Those surveyed cited coordination with their utilities as the biggest enabler.
“In fact, utilities can directly influence the pace and scale at which these organizations can reach their energy goals,” says the report.
Deloitte offers up examples of several ways utilities can help, among them boosting renewable supply, pushing for government incentives, educating customers amd setting up appropriate tariffs.
The report concludes that the big green goals remain largely aspirational because of the barriers. We’re only at “the tip of the iceberg” when it comes to to achieving 100% renewable energy goals.
“There is a long way to go for those looking to utilize these resources to lower the carbon footprint of their operations. For many, 100% renewables will remain an aspiration unless more wind and solar energy is available and key policy initiatives and technological advances are realized,” says the report.
3 step ladder to electrification
Deloitte also looks at the related trend toward electrification of buildings and fleets. The report describes electrification as part of the three-step ladder organizations tend to take in becoming green.
First they reduce electricity use with energy efficiency; next they boost use of renewables; and finally they make electricity, rather than fossil fuels, the fuel for their vehicles, buildings and industrial processes.
Within the electrification realm, vehicles offer the most promise, says Deloitte. Transportation accounted for 28% of US energy use in 2018, but less than 3% was electrified. And 63% of those surveyed plan to electrify their fleets
But with electrification, too, obstructions exist.
The cost of electric vehicles is the top challenge. Executives also cited lack of charging infrastructure and lack of funding and incentives.
But the report notes that EV prices are falling and in many cases these vehicles offer lower fuel and maintenance costs than their conventional counterparts.
“Combine these increasingly competitive costs with the rising number of models available, and more companies will likely begin to see the business case for switching,” says the report.
Electric vehicles coming faster?
Indeed, if another survey is any indication, electric vehicle adoption may pick up quicker than many forecasters expect.
West Monroe found in a survey that 59% of consumers on the US East and West Coasts plan to make their next car purchase an electric vehicle. And most (52%) intend to do so within the next two years.
This is surprising given that Bloomberg New Energy Finance forecasts it will take another 20 years for 57% of the world to adopt electric passenger vehicles.
Of course, the West Monroe results likely reflect the locations of the 2,000 consumers and business owners surveyed. They were from California, New York, New Jersey and Connecticut — all states that are pushing green tech.
Still this survey is worth looking at as a possible early signal that electric vehicle adoption — at least in some parts of the world — could happen quicker than expected,
Intertwined destinies of microgrids, renewable energy and electric vehicles
Both surveys are important to microgrids for two reasons.
First, microgrids increasingly incorporate both resources — renewables and electric vehicles — as generation and storage assets.
Second, renewables and electric vehicles are reconfiguring supply and demand patterns on the grid in ways that increase the need for microgrids.
Renewables create sudden influxes and lapses in energy flow to the grid based on how much wind or sun is available. Advanced microgrids can inject power to help balance supply and demand when lapses occur. They also serve as a mechanism for their hosts to leverage wholesale market price spikes that can be brought on by the supply/demand shifts.
Check it out! The site is now live for Microgrid 2020: Distributed Energy and Electrification.
Electric vehicles — more in theory than practice so far — can serve as storage resources within the microgrid to help it with these activities. In addition, electric vehicles charging stations open new opportunities for microgrid installation. For example, if a remote area needs a charging station, but has minimal or no utility infrastructure, a microgrid is a logical solution. The same is true in a congested city landscape where it is difficult to install utility lines, poles and substations to feed charging stations.
Electric reliability remains the top reason organizations install microgrids. But the destiny of microgrids is intertwined with that of renewable energy and electric vehicles. So will cities and states reach their big green goals? Unfortunately, as Deloitte points out, obstructions exist. So the answer is murky and appears to lie in how fast and how thoroughly the barriers are removed.
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