"Talking 'bout My (Distributed) Generation"
Several years ago, I attended a conference about renewable energy at the Association of the Bar of the City of New York. The City Bar is a great granddaddy of a bar association -- housed in a beautiful but stodgy old building with many of its members hailing from the largest and oldest law firms in New York -- and I was pleased that the City Bar was so forward-thinking to have a conference on renewables.
The conference, however, was immediately disappointing; it was mostly about financing and siting issues relating to large wind projects, with almost nothing about solar, distributed generation or energy efficiency -- the things I was most interested in.
Upon reflection, the reasons were obvious. Clearly, large wind projects were moving forward and law firms wanted the legal work. But beyond that, why is large wind moving forward faster in the U.S. than other renewables? Is it solely that large wind technology is inherently better and more cost efficient than other renewables? Is it a quirk of nature that large wind is more efficient than solar? Or is something else going on?
Whatever technical advantages large wind may have, one major institutional factor favoring large wind is that it fits the model of traditional electricity generation. Although large wind has great environmental benefits, from an energy and economic perspective it is similar to coal, natural gas and nuclear. The power is generated in large facilities and transmitted through the electric grid to consumers. Large wind is financed, sited, developed, and implemented almost identically to how the energy business has been conducted for years by utilities, governments, lenders and lawyers.
By contrast, distributed generation -- where energy is produced at the point of use and every home and business can be an energy producer -- is revolutionary and threatening to those who benefit from the current infrastructure. For that reason (and others), it doesn't receive the same favor from governments as coal, natural gas and nuclear, and is resisted by utilities and other entrenched interests. This is one reason why, for example, utilities in the United States are almost universally against improved net metering laws (that allow locally generated electricity to be put back into the grid). Utilities claim there are "safety" issues, but there doesn't appear to be evidence of danger, and the real reason appears to be that distributed generation is threatening to utilities' income base and method of doing business.
The benefits of distributed generation are great: a more stable grid, more energy security, more efficiency, elimination of transmission costs and waste, and more possibilities for use of renewables such as solar and small wind. Fortunately, the institutional barriers against distributed generation can be largely overcome by good government policies and sufficient incentives to get the industry started, as evidenced by German and Japan. New Jersey and California have made signficant strides, and the province of Ontario just implemented a "Standard Offer Contract" (similar to feed-in tariffs in Germany).
All the states and the federal government need to implement similar programs so that the next City Bar program on renewables will focus on legal issues relating to distributed generation.
