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Introduction The transition to renewable energy can seem pretty daunting. There are many more “moving pieces” than using fossil fuels and figuring it all out isn’t easy. That’s the bad news. Here’s the good news. Switching to renewables is both good for the planet and your wallet. But like any opportunity, there are pitfalls that must be avoided to get to financial success. That’s where we come in, as we not only know about current commercial offerings, but what sets us apart is that we have a pretty good understanding of what’s coming next as some of these technologies aren’t mature, especially storage and solar. Nanotech Plus has worked on projects involving new photovoltaic technology (See: Efficient Multijunction Solar Cells on Flexible Substrates), storage technology (See: Battery Energy Storage in Stationary Applications), and we’ve even done some work on transmission technology. In 2024, two of our Phase 1 proposals to the CT IES program were accepted. (For this project we submitted these proposals as Community Battery.) These projects would have powered fast EV chargers with storage batteries to reduce variability in transmission, reducing costs and improving resiliency. Where Are We? The transition to renewable energy is already well underway. While growth in electricity demand stalled since 2007, recent trends driven by climate change, heat pump adoption, EVs, and data centers show strong growth for the coming years. At the utility scale, solar installations have dominated new generation for the past couple of years and account for an ever-increasing percentage of the electricity we use, while fossil fueled plants share is declining. Solar installations should grow 45% from 2024 to 2026 based on planned generation. See: Short-Term Energy Outlook. The automotive manufacturers have rolled the dice on electric vehicles (EVs). Although there have been some speed bumps, forecasts are still showing that roughly half of passenger cars will be electric by 2030. See: 2024 Data: EV Adoption is Still on Pace in the US. A little history can be helpful here. At the turn of the 20th century, the most common form of personal transportation was the horse. Horses were used to pull carts, trams, and even taxis as well as just having people ride them. In New York city, there were about 15,000 horses. These days there are about 2 million cars instead. Think about the infrastructure required for that transition. Instead of hay, you need gas stations. Instead of blacksmiths, you need car repair shops. Street cleaners no longer have to clean up horse manure and instead of stables, you need garages. Transitioning to cars from horses was a massive undertaking, but it happened. In transportation, transitioning from gasoline to electricity isn’t going to be as big a challenge as going from the horse to the car was a century ago, but there are still a lot of issues to consider such as new infrastructure requirements. While it’s easy to see that gas stations are going to start closing due to reduced demand in a few years, other changes aren’t as obvious. Heat pump adoption is also happening pretty quickly. In 2024, there were over 20% more heat pumps sold than gas furnaces in the US. See: Heat pumps outsold gas furnaces again last year — and the gap is growing . These two trends show that when consumers have a choice, they’re choosing electrification over fossil fuels. Of course, for the planet to benefit, having that electricity come from renewables rather than fossil fuels is critical. Centralized vs. Distributed Power A needed discussion that really isn’t happening is: how do we go from a highly centralized system of generation to a more distributed model? We’ve all grown up accustomed to electricity from big, reliable thermal plants (powered by coal, gas, or uranium). Both the physics and the economics drove the trend to larger and larger thermal plants till some facilities exceeded 1 GW. But with renewable sources: wind, solar, or geothermal, the physical efficiency doesn’t change based on size. Wind is something of an exception here- but there are practical limits of an individual wind turbine to < 20 MW. We can’t build a one GW wind turbine. What this means is that renewable sources of energy take up a lot more room than thermal plants. There are two big reasons why it makes sense to widely distribute generation and storage: transmission losses and resiliency. The US Energy Information Administration (US EIA) has estimated that about 5% of the electricity generated in the US is lost. See: How much electricity is lost in electricity transmission and distribution in the United States?. By siting transmission and generation closer to where the electricity generated will be used, there will be fewer losses. Resiliency is a concept that makes a lot of sense but can be hard to quantify economically. See: Valuing Resilience in Electricity Systems. For most of us, we have a very reliable power grid. Go to countries like India where there are regular blackouts and brownouts and you’ll quickly come to appreciate the US grid. There have been warnings that the grid is becoming less resilient in the face of extreme weather events which are becoming more common due to climate change. See: Why Electric Grids Need to Be More Resilient. Distributed power is more resilient than centralized power. As an analogy, look at the transition from mainframes to desktop computers which happened in the 1980s. Rather than having to submit jobs to a centralized machine, users could do more and more computation on their own. The infrastructure for mainframes became obsolete and computing costs decreased. An additional useful benefit was that if the mainframe crashed, everyone’s work stopped. If an individual machine crashed, most people could keep going. Today, the internet shows how resilient distributed computer power is- think about how long it’s been since the internet crashed? Yes, it can happen as hackers seem to take pride in annoying the rest of us, but overall, the internet is pretty reliable. A distributed grid would be more reliable too- and at lower cost since the electricity will travel shorter distances before it’s used- and that means lower overall transmission costs. Does this mean that all power production will be smaller scale and distributed? No. Cities cannot generate enough electricity within their boundaries for their needs using renewable sources so there’s always going to be a need for some centralized powerplant to supply cities with electricity, but for homeowners and businesses outside of cities, the answer is now a lot murkier. As solar power continues to get cheaper along with storage costs, does paying for the infrastructure of centralized power generation really make sense? The further away the home or business is from the power plant, the more the scale tilts to being independent of the grid. For states with very high prices for electricity, utilities may have to face a declining number of customers. Renewables Roadmaps Are Scarce and Have Lots of Blank Spaces When you want to go some place, it’s helpful to have a road map. One of the reasons that we’ve gotten used to regular improvements in computer technology is that the semiconductor industry uses roadmaps which lets everybody know what the milestones are and when they should be achieved for up to a decade (or more). There’s buy-in from the companies in the industry and so there’s been consistent progress over many years. The downside of this approach is that “disruptive” is not a word that anybody wants to hear and it’s very hard to introduce novel technology. If you want to be part of the semiconductor industry you follow the roadmap. Period. The renewables industry doesn’t have that kind of rigid plan. In fact, what’s become pretty clear is that most of the people in the electricity industry really don’t have a very good idea of how we get to a grid powered by renewable energy. Since there are a number of immature technologies involved here, there’s no way to develop the kind of long term roadmap the semiconductor industry uses as there are too many moving pieces. Luckily, the technologies of renewables have lower development costs than a new chip, so when something doesn’t work as planned, it’s easier to pivot. Unlike the semiconductor industry where people understood and planned on lower costs per transistor as new generations of chips were developed, the renewables industry is struggling because people tend to use current costs of products such as solar cells and batteries for future planning. This faulty reasoning makes renewables much less attractive. Here's an example. There are wild claims that giving up fossil fuels is going to cost $275 trillion. No joke, this is the number being tossed around. (See: Taming the Climate Is Far Harder Than Getting People to the Moon). That’s crazy! Let’s put that number in some type of perspective. The total value of all the residential homes in the US is ~ $50 trillion. If the total cost of electrification would be 10% of the value of all the homes - that would be $5 trillion. That’s still a big number, but it’s going to happen over years. If it takes 20 years, well, that’s $250 billion/yr or about a quarter of our annual spending on defense. That’s a lot more reasonable and something we can begin to wrap our heads around. Also, $250 billion is a pretty good market which can help build new companies and create new jobs. The biggest hurdle to achieving a grid powered by renewables is not the technology. It’s clear that we have all the pieces. For generation we have solar cells, wind turbines, and geothermal sources of electricity. We have methods of storing the electricity when it’s not in use: batteries or BESS (Battery Energy Storage Systems mostly for 4 hours, but some systems can go longer), supercapacitors (good for high power, short duration), and pumped hydro (good for long duration, but relatively slow response time). We know how to get electricity to customers, i.e. wires. All of these technologies are mature enough to use. Yes, lower cost solar cells, supercapacitors and batteries (potentially more efficient conductors too!) are coming, but what we’ve got now already makes economic sense and it’ll just get better. The biggest problem we face is that our business models don’t work. Most utilities have no way to pay for storage, so utilities have developed a “use it or lose it” business model which is often very wasteful. See the CT Roadmap for more details. The Role of Utilities The largest changes in the grid for over a century are underway. In contrast to the previous century of operation, utilities are now going to be faced with competition from their customers. A greater reliance on distributed energy resources (DER) means that customers will own more of their own generation and storage. If utilities cannot offer savings, the utility is going to lose market share. Understanding these price points will be critical to the long term fiscal health of the utility. These price points will depend upon the costs of solar power and storage which also has to include the electronics to make all this happen. New technologies for storage are already being implemented at scale. Battery Energy Storage Systems (BESS) can increase resiliency, increase the efficiency of generation, and reduce transmission and distribution (T&D) requirements. However, BESS technology is far from mature, and there are significant challenges to scaling up most current BESS. BESS should be evaluated on the basis of a number of factors- it’s not a “one size fits all” technology, which seems to be the business model of most engineering procurement and construction (EPC) firms. We can help utilities determine what BESS technologies should be considered for their geographical and other constraints. See: Battery Energy Storage in Stationary Applications. Legislators Transitioning to renewables is complicated because there are so many moving pieces. Legislators have to balance a wide variety of concerns here including: energy costs, environmental costs, siting, resiliency, environmental justice, safety, jobs, and quality of life within the communities they are responsible for. Some states, like New York, have already developed a road map for the transition to renewable energy. (See our CT Roadmap for some additional ideas.) Most states have not. States will need to tailor their road map to their own individual requirements. What percentage of people live in rural regions? How large are the cities? Where should storage be located? If there is a fire, can it be contained? What is the least expensive form of generation? We can help you understand the challenges of renewable energy, so you can have an informed discussion with your various stakeholders. Otherwise, your state may become uncompetitive with respect to attracting new business or residents due to sky-high energy prices needed to pay for inefficient legacy installations. Keep your state attractive for new investment! Make sure you understand all the issues when transitioning to renewables. Grid Scale Battery Energy Storage With the rise in deployment of renewables, there is now increased interest in energy storage. Let’s be clear- most of the new generating capacity installed in the last couple of years has been solar and the amounts continue to rise. EIA data shows that in 2024, there should be 24 GW of utility scale solar installed which makes up ~2/3rds of new generation. (See: Utility-scale U.S. solar electricity generation continues to grow in 2024). To really take advantage of lower cost electricity from solar, though, storage is a necessity. Installing renewables generation prior to storage is putting the cart before the horse as states like California, Texas and Hawaii have discovered. Of these three states, Texas, a deregulated energy market, has been installing solar, wind and storage at a frantic pace for the last few years. Texas now has the largest installed base of BESS with close to 11 GWh (See: Texas continues to break battery energy storage records) which is close to half of what’s installed in the country. Clearly, Texas has plenty of fossil fuel- but solar and storage is a cheaper way to generate electricity. There are significant risks with the current market developments which use lithium ion batteries for grid energy storage including:
In order for the US to gain a competitive advantage with China in the key industry of battery production, the US must leverage its superior R+D establishment and investment in nanotechnology. Nanomaterials are critical components to several battery chemistries and morphologies including electrodes for various lithium chemistries (NMC, but also LFP). Nanoengineered materials are key ingredients in chemistries such as zinc/manganese and other zinc chemistries. Zinc based chemistries make a great deal of sense for grid energy storage since the metal is inexpensive, widely available, non- toxic, and works with aqueous chemistries which reduces flammability risk. It’s just been a challenge making a rechargeable battery based on zinc, but new developments in nanotechnology have helped limit dendrite formation, one of the major stumbling blocks to rechargeable cells. Other energy storage technologies such as Enervenue’s nickel metal/hydrogen cells are based on nanocatalysts which have enabled the replacement of platinum with far less expensive metals. China has scaled up its production of nanomaterials, but nanomaterials often need to be tailored to a product - they are often very specific for a particular application. This requirement means that nanomaterials production for new battery types could be based in the US and would provide competition to Chinese materials. The FERC Tie In: In April 2022, the Federal Energy Regulatory Commission (FERC) put out a request for public comment on a sweeping reform of the utility grid (See: FERC issues NOPR to reform transmission planning and cost allocation process). One of the major issues facing greater use of renewables is the economic challenge of the interconnection queue. The interconnection queue controls how either a producer of electricity (i.e. wind farm) or a storage battery would actually connect to the grid. Currently less than a quarter of submitted projects actually reach fruition, in part because the 3-year delay (See: 2023 State of the Markets) imposed by the permitting process is too financially burdensome on smaller firms. The length and expense of this process heavily favors larger EPC (Engineering, Procurement and Contracting) firms who in turn have negotiated supply contracts with large battery manufacturers. An additional barrier to entry is the difficulty smaller firms have in dealing with Asian companies, as battery suppliers are somewhat notorious in not delivering product that meets specifications. Currently both the EPC firms and the Asian battery manufacturers have a system in place which presents major hurdles for smaller US firms competing in this critical technology space. As long as existing lithium ion battery chemistries are acceptable for the grid energy storage application, it seems probable that Asian firms will continue their market dominance, although US firms have broken ground on gigafactories of their own, generally based on manufacturing that was developed overseas. See: Battery Gigafactories. ![]() | ||||||||
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