Distributed Energy and the City
Issue 45 April 2013
Distributed energy opportunities have received plenty of attention in Australia recently as a way for cities to reduce their reliance on traditional, coal fired, electricity. Earlier this year Kinesis presented at the Alliance to Save Energy’s (A2SE) Second Sydney Summer Study. This conference focused on decentralised energy and energy efficiency and Kinesis presented some of the lessons learned from recent work – particularly the importance of diversified technological solutions. For example, we explained how the Decentralised Energy Master Plan we developed for the City of Sydney was as much an Energy Efficiency Master Plan as it was a Trigeneration Master Plan. This edition of the Kinesis Climate Monitor looks at recent trends in the uptake of distributed technology and highlights some of the key issues we presented at the conference.
Distributed Energy Takes Off
Distributed energy is generated from small scale energy sources and can be embedded close to the areas of demand, reducing the need to transmit energy long distances (which can reduce transmission losses and improve overall energy efficiency). New technologies and cheaper costs are making distributed systems a more viable option compared to traditional energy generation and distribution systems and an increasingly popular option in Australia.
The number of solar PV installations in Australia continues to rise and the cost of those installations continues to fall, despite the recent removal of the most generous feed in tariffs in NSW and other states. In 2008 there were around 20,000 solar PV systems in Australia and the wholesale price of solar was approximately $7 per watt of power. In March this year, the one millionth solar PV system was installed, bringing Australia’s total solar PV capacity to over 2,400 MW, and the cost has fallen to as low as 55 cents per watt.
Research by the Australian Solar Council has shown that Australia is second, only to Japan, for the number of solar PV systems installed on household dwellings.
Distributed energy systems are also gaining attention in the commercial sector and at larger scales. The Lend Lease development at Barangaroo will feature centralised electric chiller infrastructure to distribute thermal energy to multiple commercial buildings within the precinct. Large scale centralised infrastructure can be more efficient than smaller plants so this approach can help reduce greenhouse gas emissions compared to a normal building by building approach.
David Crane, the CEO of NRG Energy (the largest provider of energy to US utilities), recently stated that the declining cost of distributed energy threatens to completely upturn the traditional energy industry.
Crane stated "The individual homeowner should be able to tie a machine to their natural gas line and tie that with solar on the roof and suddenly they can say to the transmission-distribution company, ‘Disconnect that line.’"
NRG traditionally operates large scale fossil fuel power plants but has begun investing in distributed energy systems. It recently purchased a solar PV provider and has been selling panels directly to households, bypassing its traditional utility customers. It is also considering offering solar leasing products directly to households that will enable them to install solar PV panels without an upfront deposit and providing micro-turbine or fuel cell technology.
To make this decentralised future possible, energy storage will be king, which is why Kinesis has been working with clients to identify and assess energy storage opportunities that can work in concert with distributed technology solutions.
Context, Context, Context
Distributed energy technology, renewable energy and energy efficiency are often discussed as if they are mutually exclusive, where one technology type must be preferred over another. The reality is that a suite of technologies are required to deliver the optimal emissions reduction and cost savings. Kinesis has worked with city authorities in Sydney, Perth, Christchurch and Auckland to identify and assess distributed energy systems at a city wide scale and for specific development sites.
While there have been common results that can be applied to each city, the main finding from our work has been the need to remain technology neutral and outcome focused. Technology that will work in one city may not be as cost effective or greenhouse efficient when applied in another city. This variance can be due to a city’s climate, urban form, energy pricing structure and/or existing energy grid.
In 2010, Kinesis delivered the City of Sydney’s Decentralised Energy Master Plan - Trigeneration which called for the installation of 360 MW of trigeneration capacity to distribute energy through a thermal network that would provide heating, cooling and electricity for much of the City of Sydney Local Government Area. The Master Plan did not overlook the need for energy efficiency improvements to be implemented in parallel with the trigeneration installations, and drew extensively on electric-drive air conditioning to work in parallel with heat-driven chillers to provide the cooling power needed by the city. Heat driven cooling will meet approximately 1/3 of the total cooling demand, with the remaining 2/3 serviced by electric-drive plant for buildings connected to the thermal network. In this arrangement, the absorption chiller provides a significant portion of the base load thermal demand, while electric chillers (which can be staged to ensure peak efficiency) will be utilised to meet peak demands. The Master Plan models the simultaneous upgrading of a building’s electric chillers as the building connects to the thermal network.
A typical summer peak can be many times higher than an average day (see above graph). Meeting this demand through a thermal network would require significantly larger pipe diameters which would incur greater costs for materials and trenching. It would also require additional trigeneration plants which would sit idle for at least 90% of the year. It was deemed to be more cost effective to retain electric chillers in order to meet peak demands, and our Master Plan ensured that these chillers would be as energy efficient as possible.
For our work with the City of Sydney we delivered the most efficient, technically feasible and cost effective solution available, one that is reliant on multiple technologies working in partnership.
Kinesis was recently engaged to work with the Canterbury Earthquake Recovery Authority to advise on energy infrastructure options for a redeveloped Christchurch CBD. We were asked to examine the potential for utilising trigeneration as part of the future energy supply system, similar to our work for the City of Sydney. After careful analysis, and considering the already low carbon intensity of Christchurch’s existing electricity grid, we recommended that it would be more cost effective (and sustainable) for Christchurch to rely on electric heating and air-conditioning supplemented with a mix of embedded generation and storage technologies. This solution would produce the greatest emissions reduction outcome, while also providing greater resilience in the case of future seismic activity.
Our work clearly demonstrates that cookie cutter solutions for cities are ineffective, which is why we have invested in developing precinct and city scale analytical tools that turn big city data into sophisticated energy and land-use planning solutions.