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22 May 2006

Reflections on Decentralised Energy Systems Following the CAT Course.

pvOne of the most useful things about the **Community Renewables** course at [CAT](http//www.cat.org.uk”CAT”) was that I got to bounce some of my ideas off the people there. Clearly I don’t have a strong background in community renewables, being more of a permaculture and plants kinda guy, and community renewables are clearly a key part of a relocalisation process. I will look at this below, firstly setting out what was my thinking prior to the course, then the reservations that the course leaders raised about that, and finally the revised version of how I am now thinking that all of this might work. This is still, of course, work in progress and an evolving process, but I offer it here in the hope that people not so advanced in thinking this process through might find it useful, and people more advanced will email in and tell me where it is still going wrong.

**My Original Concept.**

My [original idea](http://transitionculture.org/?p=198″LP”) was that one of the keys to relocalisation is to decentralise energy grids, as [many others](http://www.greenpeace.org.uk/MultimediaFiles/Live/FullReport/7154.pdf”DP”) are also arguing. I felt that the key was to set up an ESCo (an Energy Services Company) which would raise finds from within and beyond the community in the form of a share option like some community wind projects have done, and use that, combined with Government and other funding, to incrementally take parts of the town out of the grid and onto their own grids. This would offer a way of keeping local money cycling within the community and would provide something tangible with which to back a complementary currency.

**The Course Teachers’ Reservations.**

Some of the teachers were very doubtful about the idea of decentralised energy systems. They argued that the Grid is very important as a part of renewable energy systems, allowing renewable projects to generate an income and obviating the need for battery storage. They doubted that the Grid would be imperilled by energy shortages (which I would dispute), and that the regulatory hurdles to decentralised energy are at present too high. One of the key problems with the decentralised approaches is that the big thing in terms of energy supply is choice. If you take a cluster of houses out of the grid then it makes it impossible for people to have a choice of providers. There is, apparently, a thing called the 28 Day Rule, which states that everyone should be free to change their energy provider within 28 days if they so choose. If people want to switch to a different provider they no longer can if they are disconnected from the grid. They argued that the key is to build renewable capacity feeding into the grid, and that decentralised energy is, at present, almost impossible to do in terms of regulation.

**My Revised Thinking.**

windI still hold that ultimately decentralised power grids will be the only realistic option. There are concerns for instance that in the UK, where around 40% of national power generation is made with natural gas, that if there are significant gas shortages (a distinct possibility) then the Grid becomes ineffective, and all the other things feeding into it become redundant.

There is also the point that there is no point starting to build a decentralised power grid that aims to meet peoples energy needs when those renewables will only ever be able to meet 40% of current demand, and the other 60% has to come from conservation. It is important that the demand reduction measures take place first, a huge task in itself. It is also important to note that despite the regulatory barriers, if we wait until they are lifted, we won’t have left sufficient time to install the necessary hardware and capacity that we will need.

I am therefore now thinking that perhaps the way to proceed is to form an ESCO, and set up an investment mechanism whereby people can invest in community renewables. This has been done successfully at CAT, [West Mill](http://www.westmill.coop/”WestMill”), [Baywind](http://www.baywind.co.uk/”Baywind”) and others. This would then start to put into and around the town a number of renewable energy installations, mostly wind, pv and hydro. These would need grant aid to make them feasible, but such grants are increasingly available.

Once installed, the energy generated would be sold to the grid and the income would go towards energy efficiency measures in the town. This could go on for say 10 years, installing capacity and using it to fund energy efficiency. The renewables would be installed in such a way that that at some point, when the regulatory framework changed (ie. after a winter of powercuts!) it would then be possible to, in effect, turn the renewables capacity ‘inwards’, onto a localised grid.

This looks to me to be an approach that works within the existing reality but which allows for the transition to the new one. The installation of new capacity, using the current mechanisms to generate funds for the essential energy conservation measures while also building the needed infrastructure for localisation could be a good way to go. I’m sure that all this will be turned on its head after I attend a one day conference at Exeter University on June 7th called “Setting Up and Implementing
Low Carbon Energy Projects in Devon” which will explore the practicalities of setting up and operating ESCOs. For more information click here, ESCO Conference. I’ll keep you posted as the thoughts develop!

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9 Comments

James
22 May 8:26am

I am impressed that people like you exist at all – people with energy and vision for reducing the disruption of our existing systems by finding ways to adapt the infrastructure we have to a low energy future, without throwing it away. I like your approach, and hope there are enough people stepping forward to support the kinds of approaches you suggest.

I have long ascerted that the reduction of consumption has to be the major adaptation if we are to minimise distruption (and possibly avoid destruction) of the total bio-sphere systems upon which we depend for our air, water and food.

We would all do well to help each other discover the difference between needs and wants, and learn how to be ‘comfortable’ with a lot less than we are used to. This involves an inward journey, to discover the place of trust in life which so many of us suffer a lack of. A lack we try to fill through consumption of every kind.

Mark
22 May 12:20pm

I think decentralisation is a real possibility. Personally i’m starting a masters course in Modelling and Risk Management in Brunel University this year and am looking into the prospects for doing some research on this topic. My level of experience is pretty limited in this field though, so will need to do a fair amount of personal research before coming up with a specific project. If you have any suggestions / advice / pointers that would be appreciated. (the project would be June 2007-Sept 2007)

Jonathan Dawson
23 May 8:33am

Good questions, all. I too am a non-specialist, so am unable to address the
more technical dimensions of the issues you raise.
Nonetheless, some observations:

1. Here at Findhorn, we have an investment mechanism permitting community
members and friends to invest in community initiatives (an industrial
provident society called Ekopia). One of the projects being funded through
Ekopia is the installation of three new wind turbines which, together with
the original turbine, have now made us a net energy exporter to the grid.

2. I believe that Findhorn is pretty rare in that we have our own energy
distribution infrastructure – though I do not think we have any storage
capacity which is presumably why we sell the surplus to the grid. I am
pretty sure I have been told that to install community-scale energy
distribution infrastructure is today prohibitively expensive and so only
very isolated communities that are already off the grid follow this route
(aided by substantial grant funding).

3. A few questions: i) I would be interested to learn more about what the
inhibiting ‘regulatory hurdles’ are – also to know more about the 28Day
rule. ii) also keen to learn more about the CAT, West Mill and Baywind
initiatives. iii) is it really true, as you say, that if there are
significant gas shortages, the grid packs up? iv) I am interested to learn
that the CAT course instructors say that selling to the grid provides a
strong economic justification for community-scale operations. Is this
really more profitable that selling to folk within the community – I think I
heard Alex say that the opposite is in fact the case.

Given the inevitable long-term (medium-term?) energy famine, my instinct too
is to search out self-reliant generation and distribution systems that are
not dependent on the grid. Alas, I am presenting more questions than
answers in the search for workable solutions.

Looking forward to keeping the dialogue going
Jonathan

Chris Vernon
28 May 8:49pm

I think the grid is key going forward and it can still carry out a useful function during energy shortages. Look at parts of the world where demand significantly outstrips supply, a grid is still used for distribution and rationing by time.

The difficulty of not having a large grid is huge. If any sort of variable power source is used (solar, wind, marine etc) then either local energy is needed or variability accepted. The grid allows the inherent variability to be averaged out across a larger area, lessening the absolute variability for a given user and lessening the supply margin needed compared with using a local system.

I think embedded, locally owned generation infrastructure is a must going forward but that generation infrastructure should also be connected with a high capacity grid.

Jason Cole
13 Jun 10:27pm

You wrote:

“if there are significant gas shortages (a distinct possibility) then the Grid becomes ineffective”

This is actually incorrect, as the Grid is centrally controlled, and implements measures such as “shedding load” in order to keep the Grid stable.

People who argue that “decentralised is better than centralised” don’t understand how systems keep stable. Every instance of a “decentralised” system that someone has presented to me during argument is one that features some degree of central control.

There are two major elements to any system; control and implementation. Decentralised implementation works well when coordinated by central control.

A major contributory factor to the blackouts in New York in 2003 was the fact that the US Grid does not have central control. There are a number of control centres, none of which decided to use their “off” button. As a result, a cascading failure emerged.

Jason Cole
13 Jun 10:33pm

In Jared Dimond’s “Collapse of Civilisations” work, one of the common ingredients to civilisational collapse is the failure to trade.

When the provision of electricity generation in a locality becomes more variable, then the ability to “trade” electricity becomes even more critical.

We are also now seeing this trend with water; the construction of “water grids” is now underway to allow different parts of the country to effectively “trade” the resource between them.

JMG
15 Jun 7:21pm

re: Reflections on Decentralised Energy Systems

I have been giving this one a lot of thought lately and I have been more and more intrigued with the idea of applying the HMO model (that works horribly when applied to medicine because it creates an incentive for the service provider to discourage use through means fair or foul) to the electric grid (where we desperately need to reverse the current incentives for the service providers).

So I’ve been thinking that we ought to go ahead and complete the “deregulation” of electric generation, establish feed-in tariffs (standard offer contracts) that allow anyone to produce electricity for the grid at a set price (which is itself set by internalizing the externalities to encourage clean sources), and then ration power just as the HMOs ration medical care.

So the energy services companies would solely by distribution and services–they would be allowed to buy power according to how many subscribers they serve, and the per-capita amount would be carbon limited. That is, these ESCs would only be allowed to buy so much carbon-based power for all their needs–they would have to use conservation and buy green power to satisfy all demand above that. The monthly lifeline amount would be sufficient for a frugal household when it is supported by good utility-based conservation programs (appliance upgrades, weatherization, time of use metering, etc.)

Of course, they would have a free hand in setting prices above the “lifeline” amount–that is, all residences would be guaranteed a lifeline amount of power at reasonable cost — but the ESC would be allowed to pass on some of the higher costs of excess power used, sufficient to create a strong incentive for conservation on the part of both the customers and the ESCs.

That way, the ESCs–instead of being motivated to sell outdoor lighting and heated towel bars–would have every incentive to promote Pay-As-You-Save (PAYS (r)) measures, and any other productive form of conservation.

The customers benefit because it caps carbon emissions and motivates them to take the conservation steps. And the ESCs benefit because they are guaranteed a customer base and monthly subscriber revenue, and the more effective they are at conservation, the more excess power they can sell to other ESCs at market prices.

I would appreciate input from others in fleshing out the details, but I think this might well be the future of the electric service industry.

Jack
7 Jul 4:58pm

On the ’28 day rule’:

I am unaware of the exact details, but as Rob says the implications are that all domestic (although buisness I think is exempt) customers must be free to switch their energy supplier within 28 days. And as such it is not possible for energy suppliers to make long term power purchase agreements with domestic customers.

The justification for this would probably be given by saying that Domestic consumers do not have anything like the same resources available to them as a big energy company, so that in making a long term deal are liable to being ripped off.

The problem is that the rule was designed under the assumption that the only way the electricity system works is by big centralised plant feeding power down through a passive distribution system to customers who buy their power by the unit from conventional energy supply companies. And that in making this assumption the regulations effectively ignore the possibility that things could be done better another way.

The Woking system does have a private wire network, but I think that it may only supply council managed properties such as council housing, residential homes, sports centres, and council offices etc. And that this means that they can get around the rule somehow (but I’m not entirely sure – I would like to learn a little more about Woking).

Jack
7 Jul 5:09pm

I forgot to add – I have heard that there is quite a lot of pressure on the Government to make the regulatory climate more friendly to decentralised, and other innovative, energy solutuions. And Although what has been done, and what is likely to be done, essentially amounts to tweaking a system that was not really designed with this stuff in mind, the changes could yet have quite an impact (lets hope anyway).

The’the 28 day rule’, it is rumoured, is quite possibly due to be ammended.