They say that nothing is free, but I may have come across the exception. In West Texas and Illinois, electric customers are being paid to use electricity. With the growth of wind energy in areas like Texas, Iowa and Minnesota, electric companies are occasionally producing more energy—especially during off-peak hours—than they can use. Why not store it you ask? Because there are not yet any good ways to store energy; a quest since electricity was created.

According to expert Terry Boston, who is the CEO of PJM, a company that manages the electricity grid in 13 mid-Atlantic states and Washington, the oversupply of electricity has forced prices into the negative range. The result: some customers are paid to use electricity.

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This is the most money ever awarded for clean energy in a single day from the American Recovery and Reinvestment Act!

Obama spoke at the opening of the Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center (the nation’s largest PV electricity center) to announce and discuss the various benefits of this project.

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If I could sum up last week’s conference on electric vehicles in a single sentence, it would be this: I’m now certain that my kids will grow up driving electric cars.

Advocates have been saying it for a while, but now all sides of the debate—including automakers, utilities, venture capitalists, and policymakers—are saying it too: electric-powered automobiles are the real deal, and we’re on the cusp of the biggest transformation in automotive history since the invention of the internal combustion engine.

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Everyone who uses natural gas to supply heat and to heat water, could be tapping into that heat to make their own electricity as well with a CHP unit. Unlike solar or wind power, this energy source could be supplying electric power both day and night, and whether it’s windy or not.

And who better to make such a unit but an auto company that has already put in some design time making natural gas engines work more efficiently. Volkswagen wants to make electricity in your basement.

If you live in Germany. For now.

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The utility needs a way to turn sometimes-too-much wind into anytime-always-there electricity.

The solution? Simple tech. Underground compressed air.

With compressed air energy storage; air is compressed and then pumped in natural underground reservoirs. The air is released later and converted into electricity. With enough storage, even fickle wind could actually supply base-load power.

So PG&E has applied for DOE smart grid stimulus funding under The Recovery Act; to build a compressed air energy storage project with output capacity of 300 megawatts. They are applying for $25 million.

By comparison, building a plant to burn fossil fuels would cost around $850 million for the same 300 megawatts of fossil energy.

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• » See also: Learn about the ROI of solar energy
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What is a smart grid?  According to the US Department of Energy:

Grid 2030 vision (PDF 1.1 MB) calls for the construction of a 21st century electric system that connects everyone to abundant, affordable, clean, efficient, and reliable electric power anytime, anywhere. We can achieve this through a smart grid, which would integrate advanced functions into the nation’s electric grid to enhance reliability, efficiency, and security, and would also contribute to the climate change strategic goal of reducing carbon emissions. These advancements will be achieved by modernizing the electric grid with information-age technologies, such as microprocessors, communications, advanced computing, and information technologies.

President Obama has funded smart grid technologies in the Economic Stimulus Package, and there is no doubt that a large amount of power is wasted with our current grid system; however, would it be better to invest in renewable energy now?  Off-Grid explains:

The greedy and slothful companies are in fact motivated by billions of economic stimulus dollars being handed out. The stimulus money could be used more effectively installing renewable power and microgrids in local communities. Harvesting extra efficiency from the national grid could postpone the next power plant, but so could introducing widespread household-level renewables.  Installing micro-grids everywhere  would cut down on the losses made in transmission.

The current national grid system is inefficient. Large amounts of power is lost in transmission and generating stations.  Off-Grid reports:

Transmission and distribution lines are imperfect conductors, with over 10% of power lost as heat. If these so-called line losses were reduced by a tenth on the distribution system alone, the power saved would equal all the wind generation installed in the U.S. in 2006, according to the industry’s Electric Power Research Institute, or EPRI. That’s 2,454 megawatts, or approximately the equivalent of three typical coal-fired power plants.

Why haven’t the utility companies already implemented smart grid technologies using their own profits?  The answer is because they are motivated by money, and there has been no incentive to do so until Obama’s stimulus package came along. The European Union faces another problem from its aging grid system.  According to a report from Europe’s leading science academies, the EU will not be able to distribute the renewable energy (20% of all energy) they have committed to build by 2020.  In fact, problems with the EU grid could appear as soon as 2011.  A solution is to create off-grid and micro-grid supplies for small communities rather than overhaul the entire grid system.  Off-Grid explains:

Scandinavian countries potentially have excess capacity in hydroelectric plants that could, ideally, be sold to places such as Germany. If agreements can be made with north African countries, solar power collected in the Sahara desert could be transported up into southern Europe. “In order to do that, you need to design the transmission system so it can cope with the large power flows through existing countries’ networks [but] Italy’s transmission system is not designed for that, nor is Spain’s.”

Distributing energy efficiently is important no matter the source, but we need to invest in alternative energy now.  Creating micro grids that use renewable energy seems like the logical first step while the larger grid infrastructure system is improved.

Image:  US Department of Energy

Power from the LichtBlick decentralized system can be supplied to the grid quickly. In the first year of production, 2010, these will only be available in Germany, where almost half of their electricity is expected to be renewable by 2020.

Because they are highly efficient, these home CHP units already reduce CO₂ emissions by up to 60 percent, compared with conventional heat and power generation using natural gas. Each EcoBlue unit consists of a natural gas engine that powers a electricity generation unit; while the exhaust gas is captured for the heating component.

But in future iterations, the plants will run on biogas, a renewable energy source with no impact on the climate. Says Kemfert: “the most ecological would be to feed these mini-plants with biogas” rather than natural gas.”

Volkswagen sees these home power units as amortizing their design investment; adding a new use for their natural gas engine engineering expertize. Instead of using energy only for transportation, they will be using it to power the grid. First volume production begins at their Salzgitter engine factory. Each unit will cost around $7,300.

From De Siegel:

“The centerpiece of the new mini powerplant system is a natural-gas-powered engine used in some Volkswagen Golf models. Thanks to the engine’s highly intelligent design — and the fact that the heat it produces can be directly used to heat the house — the efficiency factor of the Volkswagen mini thermal powerplant lies at around 94 percent.

To understand how that is an improvement over the current situation, you first have to know that the efficiency factor of your average nuclear power plant is only between 30 percent and 40 percent and that even modern coal- and gas-fired powerplants only reach an efficiency factor of between 40 percent and 60 percent. ”

More details from De Siegel:

“Volkswagen engineers have long suspected that the mini thermal stations could prove incredibly promising. Until now, though, they just haven’t had the technical know-how and familiarity with the electricity industry they needed. Nor did they have a concrete idea of how the relatively expensive (€20,000 or $29,000) mini thermal plants would be able to survive in a competitive energy market.

But now these problems are being solved by Lichtblick. As Werner Neubauer, a member of VW’s executive board, told SPIEGEL, the company’s proposal was so convincing that its managerial board agreed to collaborate with Lichtblick on the project almost immediately.

This week, Volkswagen and Lichtblick plan to sign a contract giving the auto manufacturer exclusive global rights to produce the mini thermal plants. If all goes according to plan, Volkswagen’s auto-production facilities in Salzgitter will be able to churn out 10,000 mini powerplants every year.

“This will be a real revolution for the electricity market,” says Lichtblick CEO Christian Friege. But there is still one question that remains unanswered: Will there be enough customers willing to give up space in their basement and foot the bill for their very own “home power station?”

A Breakthrough for Eco-Friendly Energy

The new concept may prove particularly appealing to homebuilder associations and homeowners who may already have toyed with the idea of replacing their aging central-heating systems. For an all-inclusive fee of around €5,000, Lichtblick technicians promise to tear out and dispose of any old system and replace it with a new Volkswagen mini thermal powerhouse. Repair and maintenance costs from then on are covered by the company, and the customer only has to pay for the energy actually used — a sum significantly lower (or so Lichtblick claims) than the cost of heating with gas.

Under this arrangement, Lichtblick is effectively paying the homeowner rent for being able to use their basement, while homeowners benefit from getting cheap thermal energy. As an added incentive, homeowners will also receive a bonus at the end of the year based on the revenue the system generates for the companies. After all, the system will not only generate thermal power, but also electricity, which it can sell for a tidy profit.

Thanks to a carefully devised monitoring system centrally linking the system via the Internet, the network will be set up to optimize its functioning. According to this system, water will be heated up more often in the homeowners’ basements when there is more demand for electricity on the energy market. This would happen, for example, when there’s a change in the weather and thousands of windmills can simply not provide enough energy to meet a sudden surge in demand. In such cases, as Lichtblick executive Gero Lücking explains, Lichtblick will be able to react very quickly and channel the missing amount of energy into the national powergrid.”

Related stories:
7 Quadrillion BTUs of Free Energy Available
Household Cogeneration Systems

Images from Spiegel and from Flikr user DividedSky46

Via GreenCarCongress from Spiegel

So we have all heard by now that Google is getting into the power management game, Cisco and IBM are coming to play too, but are the mega-stars of the VC and IT worlds going to be creating the new terms of energy management, or will local management solutions be more effective as the method for some markets? The easy answer is that it depends. Local grids can be made up of energy generation near recipient towns, cities or villages, just as energy can travel from another portion of a state or country, but increasingly there will be local power generation which will need to be brought intelligently to local customers on a block by block or building by building scale. ‘Micro-grids’ as they have come to be known, will likely serve most readily and immediately rural populations, who will bypass the need for state-electrification and develop power-management systems on their own because it is easier to implement than waiting for infrastructure build-out.

Many of the major players in the space have been basing their assumptions for growth not upon this notion, but upon a Western model of electrification. While the hardware developed by major California smart grid firms such as Trilliant and Silver Springs Networks will rightfully be applied toward the lucrative state or utility scale projects, these projects will only deal with the needs existing within the existing grid framework. The growth of the space will need innovation in power-management for those who either do not currently have access to an electrical grid or those who can benefit from opting-out of one altogether.

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Google’s plan to roll-out home energy monitoring systems took a step towards reality Tuesday when the company announced the first round of utility partners for its PowerMeter demand-side energy management software.

The pilot program for Google’s foray into smart grid and energy management infrastructure will be available to select customers at a group of eight utilities that have installed—or are in the process of installing—smart meters. With the move, Google will be making the company’s first significant play in energy-use data, an entirely new dimension of consumer data for the company.

By having real-time information about home energy usage on a desktop (running as a Google Gadget), those using the meter will be able to use their energy more efficiently, save money on their monthly bill, and be able to monitor/reduce household carbon emissions.

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Editor’s Note: This is a guest contribution by Richard Lowenthal, CEO of electric vehicle ChargePoint manufacturer Coulomb Technologies (ChargePoints pictured above in front of SF City Hall). This post is a followup to last week’s (and ongoing) discussion on EV Charging Infrastructure by Mayors Gavin Newsom and Sam Adams. UPDATE: Listen to Shai Agassi of competitor Better Place on Mayor Newsom’s radio show.

With all of the recent talk about who will become the EV capitol of the US, we would like to point out the obvious: without the necessary charging infrastructure, the cars won’t run.

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GE’s Electric Bus (Source: GE)

The Inspired Economist (IE) recently interviewed GE’s Bob King, a 30-year veteran of the company who has driven the company’s research in the advanced electric and hybrid vehicle space.

With the energy crisis of the late ’70s, GE began to aggressively pursue the development of an electric test vehicle, creating a prototype that included nearly all the components that can be found in today’s hybrid vehicles. Bob worked on this, and also on the development of GE’s hybrid bus in 1996. The bus established the emissions requirements for NYC’s hybrid transit buses and paved the way for those that you see on the roads today.

Bob has witnessed the cyclical nature of the country’s demand for energy-efficient cars and the changes in technology that have resulted in advancing the industry. Here’s what he had to say to IE.

IE: What is GE’s hybrid vehicle?  Can you describe it?  It’s USP?

BK: GE researchers are working on hybrid systems and battery technologies for a hybrid locomotive and for heavy-duty vehicle applications, which we believe could cascade down and help accelerate key advancements for Plug-in Hybrid Electric Vehicles (PHEVs) in the automotive sector. In fact, we also have been performing some research in conjunction with the lithium-ion battery maker A123Systems to support their battery development for automobile applications.

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GE’s MDS Mercury 3650 installation on a utility pole

Earlier this week, General Electric (GE), announced a huge step in towards transforming the electric grid in Houston, Texas — one of the largest grids in the United States.

GE will work with CenterPoint Energy to implement a smart grid system called Advanced Metering System (AMS) that is designed to provide Houston-based consumers with the ability to better monitor and manage electric use and cost in near real-time.

GE is no newcomer to the energy space. Along with Westinghouse, it is one of the oldest ‘movers and shakers’ when it comes to the development and distribution of energy to the consumer, working with development and distribution companies all around the world.

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Even for a group focused on Investing First and Green Second, this is getting a little silly.

The longer I am here at the Wall Street Green Trading Summit, the less this feels like anything to do with environmentalism.  At some point, when does off-setting stop being feasible, and when does carbon reduction become the name of the game?

>> More Wall Street Green Trading Summit:   Opening, Carbon Markets, Solar Panels and the Electric Grid

This was driven home to me by a presentation on the investment opportunities presented by species banks.  Now, I didn’t even know what a species bank was until today, but apparently you can purchase an offset credit to get around the fact that your company is destroying the natural habitat of an endangered species.  And, there is an entire market based around this principle.

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We’re coming at you no-longer-quite-live at New York’s very own Wall Street Green Trading Summit.

The summit is over for today, but I wanted to throw some concluding thoughts out after an afternoon spent discussing good business models for producing alternative energy and for overhauling our current electrical grid.

>> More Wall Street Green Trading Summit:   Opening, Carbon Markets, Weird Investments.

Two presentations stuck out to me from the afternoon, Tioga Energy and Acorn (no, not that ACORN) Energy.  Without turning this into too much of a publicity-fest for either company, here’s what they were about.

Solar Panels for All

Tioga has gotten pretty good at a business model that I’ve actually heard about in a few different places: effectively, they lease people’s roof space and put solar panels up on homes and businesses.  Then, they sell the energy to the people in the home at a fixed rate (below market value for the customer) that goes up slowly over a 20 year period.  There are options for the owner of the property to purchase the solar panels if they would like to down the line, but until they do Tioga maintains everything for them. This means that the company soaks the initial start-up costs for people: often that prohibitive thing reinventing a small business or a home-owner from taking a plunge.

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When Does an Interest Start Being “Special”?

After years of railing against special interests, I find myself presented with a quandary.  Special interests are lining up behind the Smart Grid technology I love and, in doing so, risk saddling this cool program with the baggage intrinsic to special interests.

Even as lawmakers spent yesterday grilling everyone from members of the DOE to representatives from Google about Smart Grids, the groundwork for a Smart Grid might already have been assumed.  And, no, I’m not talking power lines and sub stations, I’m talking political donations.

The Current System is… Old.  Very Old

It’s a fact: our current system for transporting, producing and storing energy is ancient and inefficient.  Plus, as has been well recorded here on Red Green and Blue, Smart Grid technology theoretically does amazing things for how we use power as a nation and maybe even how we think about consumption.  By using less energy during peak hours, and even allowing personal rigs to feed back into the electricity grid with ease, the technology refocuses the country on conservation.

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The European Union is investigating connecting a smart grid to solar thermal generators in Egypt and the Mediterranean. Mexico is also investigating solar thermal. Test plants have been built in Spain, California and Colorado.

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After congressional leaders reached compromise on a 789 billion dollar economic stimulus package that includes investment for smart grid and broadband infrastructure, there were lots of smiling faces around Mountain View, Cali., the headquarters of Google Inc.

President Obama’s stated desire to invest in smart grid and broadband infrastructures syncs quite nicely with Google’s obvious desire to improve the nation’s broadband infrastructure but it also will benefit the company’s recent incursion into smart metering.

While the specifics of Wednesday’s compromise have yet to be released, the Senate version of the stimulus slated $7 billion for broadband and $20 billion for smart grid investment, with final figures likely to be smaller. [update: CNET reports that smart grid investment was pared down in the final package to $11 billion]

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One of the biggest problems with wind power is that it’s often trapped in low-density rural areas. ITC Holdings wants to bring wind energy to major US city centers with the “Green Power Express”, a network of transmission lines that will move 12,000 MW of power from the Midwest to cities like Chicago and Minneapolis.

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Spending in the American Recovery and Reinvestment Act on environmental projects being debated in Congress right now already includes $100 billion in ‘green stimulus.’ But because of the stated preference for so-called ‘shovel-ready‘ infrastructure projects, long-term infrastructure projects like mass transit and a smart grid may suffer.

The bill already includes spending for incentives for clean energy; the retrofitting of public buildings and public housing; low and moderate-income home weatherization; clean water and environmental restoration projects. But mass transit and smart grids require the kind of planning and long-term investment not encapsulated by that tidy new buzzword, ’shovel-ready.’

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PG&E may be installing millions of smart meters in Northern California, but the nation of Malta (pop. 400,000) is about to become the world’s first smart grid island. IBM is building the island’s national smart grid network, which will consist of 250,000 smart meters placed in homes around the country.

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Part of President Obama’s proposed economic stimulus plan includes investing in smart grid infrastructure. So, what better horse to hitch your trailer to right now if you’re a big American company looking to launch your new smart grid advertising campaign?

Oh, and it also helps if you own the network.

General Electric saw this golden opportunity and for the first time advertised during the Super Bowl with a 30-second ad called “Scarecrow.” GE describes the ad as a modern take on the classic song, “If I Only Had A Brain,” from The Wizard of Oz, imagining what can happen when the old technologies that manage our energy use have a brain and become smarter.

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