A new type of marriage is taking place in energy circles that is providing customers with some financial assurances while also giving them access to new technologies. The latest such venture is between WGL Energy and BayWa r.e. to build a photovoltaic solar farm in California.
As the utility world is changing and as customers are asking for more renewable energies, some power and gas companies are finding new markets. The goal here is to replace what may otherwise be lost income from electricity generated onsite by customers and delivered through localized microgrids.
The deal between WGL Energy — parent of Washington Gas — and BayWa is expected to generate 2,370 megawatts hours of electricity per year. WGL has more than 170 megawatts of distributed solar capacity under contract across the United States, including 15 solar arrays consisting of thousands of solar panels in California. BayWa, an international builder of renewable projects, developed the solar farm that just started generating electricity.
“WGL Energy is committed to offering renewable energy answers, and we are proud to provide a cost-effective energy source to Delano city” in California, said Sanjiv Mahan, president, Washington, DC-based WGL Energy, in a release.
While utilities are trying to redefine themselves, corporate America is welcoming the market moves. Google’s acquisition of Nest, which enables thermostats to be automatically adjusted, is just one example.
Then there’s SolarCity Corp., SunPower Corp. and SunEdison Inc., which are directly approaching electricity consumers and telling them that they can save 15 percent on their electricity bill with no upfront payments. All are in the business of installing solar panels on residential and commercial rooftops.
To be sure, most experts do not expect centralized generation and delivery to be rendered obsolete. Accenture’s research shows that the current high cost of solar-plus-battery is the main reason the old-fashioned grid will live on. And 79 percent of the utility executives that the consulting firm interviewed agree, saying that only 12 percent of customers in North America are expected to become energy self-sufficient by 2035.
Nevertheless, change is afoot, it says. “And the competition is coming from unexpected players, at least for some of us,” says Valentine de Miguel, global managing director of Accenture Smart Grid Services.
Indeed, WGL and Southern Co. are now testing a battery storage system at a 1-megawatt solar array in Georgia. If it works, the device will harness solar electrons and integrate that power onto the grid when the sun is not shining.
Edison International is the latest utility to have set up a competitive arm to win some of this market share. Duke Energy and NRG Energy are two others. The efforts can be as diverse as designing microgrids to marketing rooftop solar panels to developing solar farms. Most such efforts will require finding a light-footed technology provider with which to partner.
“I really believe (energy) storage is where (solar) photovoltaics was maybe four or five years ago,” says Gautam Chandra, senior vice president of strategy for Washington Gas, during an Accenture panel discussion. “I think you are going to see a dramatic reduction in cost and you are going to see a dramatic increase in adoption. And so we want to be part of that.”
Are the technologies being tested or rolled out hype or they are for real? While not every idea nor every tool will survive the rigors of the market, many are expected to be long lasting and to change how corporate America buys and consumes energy. For better or worse, that’s the essence of the market system.
Ken Silverstein is editor-in-chief of Business Sector Media, publisher of Environmental Leader and Energy Manager Today.
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