IEEE Spectrum April, 2017 - 52

What's happening in this industry stems from technology
improvements, economic forces, and evolving public priorities. As the changes dig away at the very foundation of the
electricity sector, the results are likely to be anything but
boring. Yet they may well cost you more money.
For about a century, affordable electrification has been based
on economies of scale, with large generating plants producing
hundreds or thousands of megawatts of power, which is sent
to distant users through a transmission and distribution grid.
Today, many developments are complicating that simple model.
At the top of the list is the availability of low-cost natural
gas and solar power. Generators based on these resources
can be built much closer to customers. So we are now in
the early stages of an expansion of distributed generation,
which is already lessening the need for costly long-distance
transmission. That, in turn, is making those new sources
cost competitive with giant legacy power plants.
Distributed generation has long been technically possible. What's new now is that we are nearing a tipping point,
beyond which, for many applications, distributed generation will be the least costly way to provide electricity.
While it certainly helps, the declining cost of renewables
and gas-fired electricity is not all that's spurring this change.
To be competitive, the entire distributed system will have
to work well as a whole. Quite a few technological advances
are coming together to make that possible: advanced control systems; more compact, smarter, and efficient electrical inverters; smart electricity meters and the burgeoning
Internet of Things; and the ever-growing ability to extract
actionable information from big data.
Amid this changing scene, a picture is beginning to emerge
of what a typical electrical grid may well look like in 10 or
20 years in most of the developed world. Yes, generation
will be much more decentralized, and renewables such as
solar and wind will proliferate. But other aspects are also
shifting. For example, the distribution network-the part
of the grid to which your home and business connect-will
likely become more of a negotiating platform than a system
that just carries electricity from place to place.
Getting to this more sophisticated grid won't be easy. Nevertheless, it's coming. What will it look like? Here is my best
guess, based on my decades of experience as a government
official charged with helping electric utilities get access to
emerging technologies. It is the future I'm now working to
help realize as an academic researcher.
he first thing to understand is that decentralization is going to be neither simple nor universal.
In some places, decentralization will prevail, with
most customers generating much of their own
power, typically from solar photovoltaics. Others might use
small-scale wind turbines. In regions where sunlight and wind
are less plentiful, natural gas will probably predominate. Intertwined among all of those, a continuously improving version
of the legacy grid will survive for decades to come.
According to the U.S. Energy Information Administration (EIA), in the first 11 months of 2016, some 48.82 million

APR 2017

NORTh AMERICAN

SPECTRUM.IEEE.ORG

megawatt-hours of distributed solar energy were produced
in the country, up 46 percent from the year before. That's
still a tiny proportion, though. In 2016, about 1.4 percent of
electricity in the United States came from the sun via solar
panels, including both utility-scale plants and distributed
ones, according to the EIA. But solar is growing fast because
of its increasingly favorable economics. For example, in
Chile's most recent power auction, 120 MW of solar power
was the lowest-cost option, at US $29.10 per megawatt-hour.
Many analysts expect that grid-connected, distributed
solar power will be fully cost competitive with conventional
forms of generation by the end of this decade. In the meantime, a dizzying array of government incentives, which vary
from region to region (even within one country) are helping
the technology to take off.
Ultimately, the lowest-cost form of generation will dominate. But figuring out what the lowest-cost option actually
is will be tricky because it will depend on both local conditions and local decisions.
For example, regulators are increasingly convinced
that the burning of fossil fuels leads to significant societal
costs, both from the direct exposure of those living near
some power plants to their noxious emissions and from
greenhouse-gas-induced climate change. Historically, these
costs were difficult to quantify. So they were typically borne
not by the producers or consumers of the electricity but by
the victims-for example, farmers whose crops were damaged.
There is growing public interest in understanding the true
cost of pollution and possibly shifting more of it to electricity
producers and possibly consumers as well. Fortunately, we
now have the modeling and computational capabilities to
begin to put a reasonable lower limit on those costs, which
gives us a defensible way to reallocate them.
Although the best strategies for reallocating those costs
are still being debated, the benefits of distributed renewable generation are already very apparent-as is the feasibility. Data collected during the Pecan Street Project, funded
by the U.S. Department of Energy, indicates that a house
in Austin, Texas, outfitted with solar panels typically generates 4 or 5 kilowatts during the midday hours of a sunny
day in summer, which exceeds the amount of power the
home typically uses during such a period.
Whether or not rooftop solar makes sense for a particular
homeowner, however, depends on the initial cost, maintenance costs, subsidies, the cost of grid power, and the selling price of the excess electricity generated.
The U.S. Department of Energy's SunShot initiative has as
its goal making solar power cost competitive-without subsidies-by 2030. (A Chinese government agency has a similar
agenda.) Specifically, SunShot's goal is to reduce the cost
of distributed, residential solar power to 5 U.S. cents per
kilowatt-hour by 2030; it costs about 18 cents today. Today,
a 6-kW rooftop residential solar system in the United States
typically costs between $15,000 and $20,000; the exact figure depends on where you live. According to data from the
EIA, the average retail cost of electricity delivered by the
grid in the United States is 12.5 cents per kilowatt-hour. So

http://SPECTRUM.IEEE.ORG

Table of Contents for the Digital Edition of IEEE Spectrum April, 2017