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The Democratization of Energy

The Democratization of Energy. Jay Marhoefer CEO and Executive Manager Intelligent Generation LLC June 17, 2010. Tonight’s discussion. Overview of the electricity sector The challenge of renewables Intelligent Generation TM and the democratization of energy. The obligatory plug.

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The Democratization of Energy

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  1. The Democratization of Energy Jay Marhoefer CEO and Executive Manager Intelligent Generation LLC June 17, 2010

  2. Tonight’s discussion • Overview of the electricity sector • The challenge of renewables • Intelligent GenerationTM and the democratization of energy

  3. The obligatory plug • Intelligent GenerationTM is an integrated hardware/ software platform that democratizes how clean energy is produced and distributed. • The optimizer is a smart box that acquires electricity for a building when it is cheap or free and stores it in a battery for later use during peak times. It buys low and sells high. • The network forms a virtual power plant from the optimizers. It provides immediate, reliable power to utilities when it is most valuable. • The optimizer and network, when combined, can triple the cost savings of solar energy and cut the payback time in half.

  4. Questions I hear • Why aren’t the wind turbines spinning when it’s a windy day? • Why can’t we run everything on renewables and use fossil fuels or nuclear power for backup? • Will a smart national electricity grid solve our problems? • Will solar ever work without subsidies?

  5. Electricity 101

  6. It’s a little more complicated • Types of power companies • IOUs (investor owned utilities) • IPPs (independent power producers) • Wholesale power marketers (e.g. Exelon) • Munis and co-ops • Load generating vs. “wires and meters” • ARES (alternative retail electricity suppliers) • Regulators • FERC (Federal Energy Regulatory Commission • PUCs (state public utility commissions) • ISOs/RTOs (regional transmission organizations, e.g. PJM) • Other stuff • Baseload/load-following/peaker • RPS (renewable portfolio standards) • Deregulation For starters…

  7. Seasonal demand varies

  8. As does daily demand

  9. Which leads to 3 challenges • Availability/reliability • Nukes, coal and natural gas are steady • Wind and solar are not • Resource management • Grid was built to be one-way • How to match demand with (variable) supply? • Inertia • Nuclear plant: 5-7 days from cold start • Coal plant: 3-5 days • Load following natural gas plant: 30-90 minutes • Pure peaker: 15 minutes • Wind: 10-30 minutes • Solar: instantaneous

  10. Can wind do it all?

  11. Maybe in winter

  12. But not in summer

  13. Wind’s effect on price (Texas)

  14. Capacity doubled in 2008

  15. …and so did price volatility • Moral • Wind blows most when you need it least (winter nights) and least when you need it most (summer days) • Wind’s volatility necessitates more high value ancillary services (storage, voltage regulation, spinning reserve) • Wind potential is greatest in areas far away from major cities (other than offshore)

  16. What about a national grid? • Probably won’t happen • Politics (see next slide) • Shifting demographics to Sun Belt • Low wind • Not aligned with regional transmission groups • Cost of new transmission (tens of $ billions) • Property rights

  17. Retail electricity rates vary

  18. What about solar? • 92% of Americans think it’s important to develop solar energy and incorporate it in the U.S. electricity system Source: 2009 Schott Solar BarometerTM • But…long payback periods and high upfront costs • 15+ years even with 30% federal tax credit • 10+ years even with tax credit and $300/MWh REC

  19. So what’s the answer? Demand side management Supply side management Demand

  20. Reshape electricity demand Demand side management Demand

  21. Reshape electricity demand Demand Solar

  22. Reshape electricity demand Purchased off-peak /wind power stored in battery Demand

  23. Reshape electricity demand Resulting purchased electricity Demand

  24. …by democratizing energy • A managed network of distributed renewable generation and storage • 100,000 networked buildings is equivalent to bringing a small nuclear plant online immediately • Enormous market power even at 5% of total generation (see Texas) • The “Holy Grail”: consumer participation in the wholesale electricity market

  25. Solar with IG Optimizer

  26. Intelligent Generation network

  27. Comparison

  28. Other possibilities • Smart grid • Plug-in hybrids • Fuel cells

  29. Smart grid • Focus has been on demand-side management and investor-owned utilities • What consumers like • Real time pricing • Rewards for peak time reductions • What consumers don’t like • Utility control of “smart” appliances (HAN)

  30. Plug-in hybrids • Potential storage capacity is formidable • 10 million PHEVs could store 100,000 MWh (enough to power California for 2 hours) • “Charging” side makes perfect sense • Excess capacity and cheap electricity • Discharge side is problematic • Peak times coincide with commute home • Higher and better use • Reducing greenhouse gas emissions? • Getting US off foreign oil?

  31. Fuel cells • E.g., the “Bloom Box” • Darling of the cleantech VC crowd • $400 million invested to date • Reliable on-site production of electricity • But… • Won’t be affordable for 5-10 years • Needs a hydrocarbon (e.g., natural gas) • What happens in winter when the cost of natural gas is 6x?

  32. Summary • Hardware costs are coming down • Solar • Batteries/storage • PHEVs are coming • Legislation (RPS, PACE) is driving adoption • Lack of integrated vision • Doing what’s cheap (wind) vs. what’s smart • Those who democratize energy will reap the major benefits

  33. Thank you Jay Marhoefer Intelligent Generation LLC jay@intelgen.com

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