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Global Futures Report 2013 - Great Debate 5

27 Great Debate 5 | Centralized or Decentralized Power Grids? Industry experts, “decentralization advocates,” utility managers, researchers, and other experts interviewed had widely divergent views on the question of distributed (decentralized) energy systems and the degree to which current centralized power systems will evolve into more decentralized and distributed versions.a Some believed that centrally managed grids would become relics, and envisioned networks of smaller, interlinked local grids with renewables and energy storage embedded throughout. One expert said, “My intuition tells me we will head strongly to localized grids, with everything a distributed technology. Local semi-autonomous micro-grids will operate to minimize the balancing needs on the centralized systems, with sophisticated control systems, although the central grid remains available if needed.” On the contrary, argued another expert, “I just don’t see the case for the power system becoming like the Internet—the economic case still very much favors centralized power systems, as decentralized systems are more expensive.” Still others cited specific motivations and conditions that could herald distributed power systems. Constraints to building more transmission capacity were cited by several experts, who said that lack of transmission could force more distributed systems. For example, industrial companies that demand high reliability will increasingly find the desired reliability in local power systems rather than from centralized grids, claimed one expert. Another believed that “resilience” rather than “reliability” would drive the adoption of distributed systems—and called the resilience of distributed systems an “emergent property” that would counter shocks and disruptions. Another expert thought that decentralized power systems would emerge strongly in rural parts of developing countries where centralized systems do not yet exist—and where adding new centralized systems will be expensive. “Rural electrification through mini grids will emerge as a major phenomenon … providing electrification at competitive cost to rural consumers,” the expert said. (See also developing countries in Chapter 5.) And one expert pointed to the coming “logic of mini-grids” at the level of a small island, a remote rural community, an urban neighborhood, or an entire city. “Cities start to look like islands,” the expert said. On balance, many experts actually had little to say about distributed energy, simply believing that the future could be a balanced combination of both centralized and distributed, with renewables at all levels and scales. Centralized grids will still be needed to accommodate large-scale wind farms, including offshore wind, along with CSP and nuclear, they said. “The coming era of distributed generation will not necessarily seem like a revolution, but simply an evolution of current systems,” one claimed. Most scenarios do not address the issue of centralized vs. decentralized power systems. The Lovins/RMI (2011) “Transform” and NREL (2012) scenarios for the United States are two exceptions. Lovins/RMI models an electric power system in which fully half of renewable power capacity takes the form of distributed sources—700 GW of rooftop solar PV and 250 GW of distributed wind power by 2050—connected through interlinked micro-grids. Both scenarios show an 80% share of renewable electricity by 2050, but NREL only projects 85 GW of distributed solar PV. Overall, a picture of power systems of the future emerged as a complex combination of on-site, mini-grid, and centralized grid levels, with renewables and natural gas generation and energy storage at all levels, and with all levels coordinated and interacting, according to a range of requirements for cost, reliability, flexibility, and service. Notes and discussion: See Annex 4 02n Solar Hot Water and Space Heating (“Solar Thermal”) Solar thermal experts saw the integration of solar hot water and space heating into buildings as an extremely strong and continu- ing trend. In 2011, about 50 gigawatts-thermal (GWth) of new solar collectors were installed globally, enough new capacity to serve at least 25 million homes. China represents 60% of the global market, with about 120 GWth of capacity existing at the end of 2010. One Chinese solar thermal expert expected to see that capacity increase 5-fold by 2030, to at least 450 GWth. Other experts envisioned solar thermal collectors being integrated into building components in new and innovative ways. And they pointed to the growing use of solar “combi” systems, which provide both space heating and hot water, as an important future trend being led by Europe.34 Many experts believed that the highest-growth segment of solar thermal markets would become large systems for public and insti- tutional buildings (i.e., hospitals, hotels, and schools), multi-family residences, and commercial buildings. Hundreds of such systems already exist in Europe and are appearing in other countries. One example is a recent solar thermal system in Riyadh, Saudi Arabia, for supplying hot water and heating to a university of 40,000 students. Installed in 2011, this system became the largest such installation in the world. Chinese experts envisioned large systems integrated with new commercial buildings. Solar for heating will also be used increasingly with district heating systems alongside biomass, noted one Danish expert, who said that, “in Denmark, solar-assisted dis- trict heating is booming because of the high price of gas.”35 a) Some experts preferred the term “decentralized” rather than “distributed.” One expert preferred to think in terms of “on-site” vs. “remote,” because large-scale generation resources like wind turbines can also be “distributed” on local grids.

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