Power systems are complex creatures. Unless hydro abounds, the ability of renewables to supply all their technical needs is uncertain, even with vast investment in over-capacity. If this is true for a centralised system, it is truer still for a decentralised system. A secure supply of electricity is reliant on a system's ability to provide reactive power, to control frequency and power output, and to get going at all times, even after a monumental blackout. The lights can go out on the most advanced systems, witness the havoc wreaked in North America by ice storms, or in Australia by a humid heat wave (page 37). If nothing else these events illustrate that power systems need -- and today's systems already have -- plenty of in-built back-up. Substantial amounts of "intermittent" wind power can be absorbed as base load generating capacity without adding much to the end price of the product. The same cannot be said for a decentralised system.
Gas is not the answer. Although, like wind, small gas plant play a useful and welcome role when embedded in the distribution network, they do not have the same ability of fossil plant to absorb fluctuations in supply (from wind) and demand from consumers. The distinction between distributed generation and decentralisation is vital. Distributed generation is beneficial; local generation adds stability and reduces waste. Renewables are well suited to this role, as wind is proving in Denmark and Germany. Decentralisation, however, is about doing away with large power plants and high voltage transmission, thereby reducing security of supply and economic efficiency. The economic benchmark for renewables penetration, for example, is reached far sooner on a decentralised than on a centralised system.
Another disadvantage of decentralisation is that it rules out concentrations of renewables plant where the resource is best. The strongest winds blow in areas where man, intelligently enough, has decided not to live. The best resource of all is offshore. To transport power from these remote areas to centres of demand requires a centralised system with transmission lines. An excellent illustration of this tenet is provided by a simulation of Denmark with a 100% wind-powered system, achieved by fetching and delivering electricity to and from its neighbours (page 45). True, Denmark is flanked by power hungry industrial nations and has access to Scandinavian hydro. But the simulation proves two important points: that with enough transmission capacity the benefits of wind power can be spread far and wide; and that liberalisation brings power pools which allow a system to cope with supply and demand fluctuations by trading its excesses and deficits.
The liberalisation factor
If renewables are to be traded in an open market, however, mechanisms are needed to ensure their environmental value is reflected in their price. Just such a mechanism is being aired by the European Commission: it is suggesting the supply mix include fixed quotas of renewable energy, to be achieved through trade in green certificates by those who fall short of the standard (page 22). Green certificates, or "Green Labels" as they are known in the Netherlands, where trading is already under way, also provide an economic incentive for independent power generation. Thus the framework of a market is emerging which not only strongly encourages the development of renewables plant distributed in the low voltage network by independent generators, but also provides a means by which the output can be traded to advantage across national borders.
The concept of the "distributed utility" is also taking off in the United States (page 44), but for another reason. Competitive markets carry risk, thus incremental increases in distributed generating capacity are becoming far more attractive than investments in huge power stations. Incidentally, wind would look especially attractive to a utility if it were bound by a Renewable Portfolio Standard, as suggested in Clinton's just released restructuring plan (page 26).
If the only way of getting large amounts of renewables into our power systems was to spend large amounts on decentralisation, then so be it. But it makes little sense to argue for such massive investment when greater amounts of renewables can be achieved, at less cost, by retaining centralised systems and adding distributed generation. Where hydro is not available, the good load-following capabilities of fossil plant provide the best basis for integrating large capacities of wind or sun. Indeed, a modified or extended centralised system, rather than the building of a new decentralised system, will provide a bigger market for wind.
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