The electrical industry's business model remained almost unchanged throughout the 20th century. Electricity generation was centralized in power stations, while a transmission and distribution network provides energy to residential, commercial and industrial buildings. In other words, electricity only moves in one direction on conventional grids.
However, the evolution of generation technologies has given building owners access to their own power plants, changing the rules of the game after more than a century. In particular, solar energy systems have experienced rapid growth, as the modular design of photovoltaic arrays can adapt to a wide range of buildings.
After being just energy consumers for decades, buildings can now also generate electrical energy. In fact, some high-performance buildings have become net generators, producing electricity greater than their own consumption.
Identify promising building upgrades with an energy audit.
Importance of Net Measurement
When only power companies could produce electricity, there was no need to measure the direction of energy flow between the grid and buildings. Many of these conventional energy meters still operate around the world and cannot distinguish between the electricity consumed and the electricity supplied by the building.
Many countries have introduced net metering as a way to encourage energy generation in buildings. Conventional meters have been upgraded to smart meters that can measure energy movement in both directions – when calculating the building's energy bill, consumption is charged and net generation is credited.
The exact net metering rules change by location and by utility company. Some net metering programs offer full credit for each kilowatt-hour supplied by the building, while others offer only partial credit. The way net credit is managed also changes: some energy companies pay their customers, while others transfer it to the next electricity bill.
How Distributed Energy Systems Benefit Buildings
When distributed energy systems are implemented in many buildings, the main benefit for owners is reduced energy costs. If they are able to produce their own electricity, the number of kilowatt-hours purchased from the grid will be reduced.
Note that some generation systems allow control over power output, while others only generate power when the required input is present.
- For example, a biomass power plant can produce electricity indefinitely as long as biofuel is available, while a solar photovoltaic system only provides electricity during the day.
- If the owner of a solar photovoltaic system needs a source of electricity available at any time, the photovoltaic array can be enhanced with a battery system.
With controllable energy generation and storage, building owners can manipulate their daily consumption profile to achieve greater savings. The following two examples are the most common:
- Some tariffs have a price per kWh that changes throughout the day. The price of electricity increases when energy demand is high and decreases when energy demand is low. A building can use its energy systems to minimize consumption when kWh prices are high and then take advantage of low kWh prices available during low demand hours.
- Some rates have a demand charge, which is based on the building's highest peak consumption during the billing period. Even if two buildings consume the same number of kilowatt-hours, a building with a peak demand of 200 kW will pay more than a building with a peak demand of 100 kW. Energy generation and storage systems can reduce demand peaks measured by the energy meter, decreasing the demand load.
The approach is different for each of the scenarios described above. However, in both cases, you need a power source that you can count on to deliver kilowatt-hours on demand.
Distributed power generation improves grid reliability
Conventional energy systems have a major weakness: as electricity supply is centralized in production plants and transmission lines, a failure in the system can leave thousands of buildings without electricity in an instant.
On the other hand, an electrical grid that draws electricity from distributed sources does not present the weaknesses described above – neither production nor transmission are concentrated at any point in the system. Let's consider the virtual power plant under development in Australia, which will have a generation capacity of 250 MW and a storage capacity of 650 MWh.
- The system will use 50 thousand residential installations. Each house has a 5 kW solar panel and a 5 kW/13 kWh battery, adding up to the total capacity.
- If one of the 50,000 systems is affected by a failure, the effect on total capacity will be negligible. On the other hand, the output of a centralized switchboard can be completely shut down by a single fault.
Distributed energy resources also reduce transmission load on the power grid, delaying costly grid upgrades. Existing power plants and transmission lines are pushed to their limits during peak demand hours and distributed energy systems can reduce net load. It is clear that the impact of distributed generation and storage becomes more noticeable as they are deployed in more buildings.
Conclusion
Energy efficiency measures can achieve synergy with distributed generation and storage. Meeting energy demand with distributed resources is simpler when buildings implement measures to reduce their consumption. The best measures for your building can be identified with a professional energy audit.
Depending on their location, renewable generation and energy storage systems may be eligible for local government incentive programs or utility programs. Consulting engineers can help you meet the requirements of these incentives.
