At $2 trillion a year, electricity is one of the largest industries in the world. Despite a 100-year history, its core business remains surprisingly unchanged: it is still a regulated monopoly burning fuels in giant, centralized power plants.
But, things are changing. A better product has entered the market – clean, renewable energy from the sun and wind. Solar panels and wind turbines emit no greenhouse gases, no sulfur, and no toxic ash. Even more compelling, clean power is quickly becoming less expensive than fossil fuel powered electricity. From 1995 to 2015, the price of a solar module, the building block of power plants, dropped from $7.00 to 57 cents per watt. Over the same time, US consumption of solar and wind energy increased 25-times. Investment bank, Deutsche Bank, reports that more than 40 US states will be at “grid parity” by 2017 – this means the price of renewable energy will be the same or less than local utility prices in most of the US.
Despite its early success, sun and wind only accounted for 2.3% of electricity generated in 2015. Sadly, the current path towards more clean energy will only become more challenging:
- The modern grid is unimaginably complex and difficult to change – Utilities and policymakers must plan out every tiny detail when they make changes to the grid. Any misstep risks widespread outages and even bankruptcies.
- Existing energy providers will fight to maintain the status quo – Just as coal providers are fighting cheaper and cleaner natural gas, fossil fuel and nuclear providers will not easily step aside for even cleaner and cheaper sun and wind power.
- Power from the sun and wind isn’t available 24/7 – People need power around the clock. Until batteries are less expensive, natural gas plants are the best way to provide power at night and on windless days.
Fortunately, there is a faster path to clean power – it’s called Local Energy. Like the farm-to-table movement, individuals, communities and businesses generate much of the energy they consume. Within the industry, local energy takes many forms including microgrids, distributed generation and community solar. These approaches won’t replace fossil fuels overnight but they can put us on a path to clean power more quickly and less expensively:
- Smaller projects are easier to finance and can be put into production faster
- New technologies, like batteries, can be piloted and deployed with little risk to the overall grid
- Independently run systems are less entangled with the bureaucratic and politicized policy making that regulates the large public utilities
- Electricity buyers directly benefit from the lower price of wind and solar without having it diluted by the utilities’ legacy costs from fossil fuel and nuclear plants
- Local energy offers electricity buyers a choice beyond their monopoly provider. Choice creates competition which ultimately results in better products at lower costs
- Connecting multiple local energy systems together creates an “Energy Internet” or “Smart Grid” which improves the reliability and lowers the cost of the existing grid
In the same way personal computers upended the legacy mainframe computing world and mobile phones disrupted the landline telephony business, local energy will revolutionize the way we produce and consume electricity. By freeing energy from centralized fossil fuel power plants and the one-size-fits-all grid, entrepreneurs and innovators can re-invent the electricity business from the outside-in. Local energy also offers the bi-partisan benefits of local jobs, healthier communities and greater independence from large government bureaucracies.
Microgrids and distributed generation are not new ideas. Early microgrids, built on natural gas, have been powering campuses and hospitals for years. Modern microgrids, built on solar and wind, are already powering military bases and remote islands across the world. Clean energy microgrids are also the fastest and least expensive way to bring power to the one billion people in the developing world who still have no electricity. With near-term improvements in technology and small changes in policy, local energy will become the fastest path to clean power for your office, your neighborhood and your country.
Freeing Energy is written for people who want to understand the clean energy movement and are interested in how they can play a part. The book explains the technologies and policies driving the industry, from its birth a century ago through today. It will lay out a path that goes through garages of entrepreneurs and through rural villages of Africa to deliver the cleaner, cheaper power of tomorrow. It will explore emerging business models and early areas for smart investments. With interviews of people like Jigar Shah, Jim Rogers, Amory Lovins, and many others, it will chronicle the visionaries and leaders who are shaping the future of clean energy.