Why a Distributed Energy Grid is a Better Energy Grid

by Andrew Meyer
May 20, 2016

We are standing at a crossroads in the history of electric utilities.

For over a century, the structure of the electric energy network has remained largely unchanged, revolving around a centralized system of electricity generation, storage, and distribution. This system has weathered industrialization, and with it, an exponential rise in power demand… and it hasn’t always weathered it well. Now, a hundred years later, many are calling on an overhaul of the entire energy infrastructure.

But let’s start at the beginning.

The Centralized Electrical Network is Born

In the 1880s, people started getting tired of using the hot, smoky, dim lighting provided by gas lamps, and started opting for an improved lighting source: electricity. The popularity of the electric lightbulb rose quickly, and electric utility companies swiftly took advantage of the economies of scale, and created a centralized system of power generation, distribution, and overall management. This meant large-scale generation of electricity at a smaller number of facilities, located a longer distance away from customers. Power was then sent through a network of high-voltage transmission lines referred to as the “power grid.” Though the transmission of power now traveled over a longer distance, stations were able to balance loads much easier. By the 1920s, electric utilities in the United States teamed up to share peak load coverage and backup power. As electricity became more and more indespensable across the country during the second half of the century, regional systems took up the job of coordinating electricity generation to ensure reliability.

Since then, our electrical grid has remained largely unchanged. Though new policies have come into play regarding ownership and competition (and virtual monopolies that had formed), the structure of the network itself has held steady. If this concerns you, you’re not alone.

Problems with Today’s Centralized System

The original institution and design of the electricity network was novel and exciting, but as society continues to develop and demand for electricity is ever on the rise, power delivery infrastructures are suffering due to a number of factors:

  1. Old Equipment. A high percentage of interruptions in power supply are because of the aging equipment used by the current grid. So many components of the electricity system are in need of repair and restoration. This not only compromises grid reliability, but it ups the maintenance costs of facilities as well.

  2. An Obsolete Layout. The current system layout is beyond inadequate when it comes to meeting the rising electricity demand in older areas, requiring additional substation sites, and a complicated system of crisscrossed wires that aren’t getting the job done.

  3. Outdated Engineering. When plans for the current system were drawn up, no one could have anticipated the major changes in power delivery that the future would bring. We don’t have the tools to rework the concepts and procedures that are causing problems in today’s deregulated industry.

  4. Environmental Concerns. Though the environmental impact varies by energy source, centralized energy generation contributes to a number of concerns, like air pollution, water use and discharge, land use, and waste generation.

  5. Efficiency. Much of the total energy content of fossil fuels burned at centralized plants is wasted in the process of generating power, and delivering it over long distances to customers.

Though we’ve been using this centralized system for decades, it’s not the only option… or the best option.

The Distributed Energy Network

The response to the aging, inefficient electricity network has been a rise in distributed energy. Distributed Energy is the utilization of smaller power generation and storage systems used to power homes, businesses and communities. Most distributed energy generation systems take advantage of renewable energy sources such as solar, wind, and hydro power. Energy storage systems, like batteries, play an important part of the system by storing the energy generated by intermittent renewable power sources to ensure energy reliability, and to ease the demand on the power grid.

In the United States, net metering (which compensates electricity customers for on-site generation if it feeds back into the grid) and tax subsidies have enabled the rapid spread of distributed solar. There are now more than 1 million solar panel installations in the U.S., with a growing demand for more.

Distributed energy solves many of the centralized grid’s most troubling issues, and also presents advantages across the board.

The Impressive Pros of the Distributed Energy Systems

  1. Efficiency. When electricity is generated closer to those who use it, all of the electricity potentially lost in transportation is now usable.

  2. Flexibility. The maintenance and replacement of components of the distributed system is much easier than that of the centralized grid. New energy generation and storage systems can be built and integrated without disrupting the system as a whole.

  3. Modularity. The decentralization of the distributed energy network mean that if one part of the system breaks down, it doesn’t disrupt the entire system.

  4. Economy. As renewable energy generation and storage becomes more and more popular, the production and maintenance costs of these technologies continues to fall. Many predict that solar power generation is set to rival the cost of non-renewable power sources within the next few years.

  5. Environmental Responsibility. A distributed energy system, particularly one that uses renewable energy sources, had a much more positive environmental impact than the grid, specifically when it comes to land use and air pollution.

  6. Reliability. If there’s anything you can count on, it’s the sun. As the electrical grid equipment continues to age and become more vulnerable, sun, wind, and water are here to stay. Battery storage solves the problem of intermittency, allowing renewable energy sources to be used day in and day out.

Speaking of reliability, the rise of electricity demand on the grid (and with it, a higher demand on natural gas), has resulted in some pretty major problems in service. This summer, the Los Angeles area may have to resort to rolling blackouts to ease the unmanageable demand on the grid during peak hours. With a wider distributed energy network, especially in areas where demand for electricity is high, would prevent the need for planned service interruptions. Distributed energy could provide a much-needed restructuring an outdated system.

The Future of Energy

The next era of energy distribution is one that won’t be controlled by the power companies, but one in which customers and utilities work together to create a greener, stronger, and more reliable energy network. The technology is here, and now, and with a cooperative effort, a new electrical energy structure is possible.

Swell is on the forefront of this movement with already one of the largest distributed energy networks in the United States. We call it The Peoples’ Grid.

The Peoples’ Grid is a comprised of a network of homeowners across the nation who have equipped their homes with a home battery, which often coupled with their own generation source like solar or wind, to experience the power of the distributed model. Swell is actively engaging utility companies across the grid to provide opportunities for The Peoples’ Grid to monetize their collective power.

As with any collaboration, this means that both customers and utilities have to give a little. Power companies need to relinquish some control over where and how energy is generated, and customers who are generating energy on-site need to work with power companies to find a net-metering deal that works for everyone. Together, we can create a distributed network that is reliable and responsible. Everyone wins.

Swell Energy believes that a distributed energy network is a stronger energy network, and we’re doing our part to play a responsible, cooperative role in our energy future.