Fri, Dec 26, 2014, 7:59 AM EST - U.S. Markets open in 1 hr 31 mins

Recent

% | $
Quotes you view appear here for quick access.

A123 SYSTEMS, INC. Message Board

  • nygogo nygogo Sep 29, 2012 12:50 PM Flag

    Sept 27 2012 Duke Energy: What a Utility of the Future Might Look Like. Xtreme power utilizes A123 Nanophosphate

    Transformation of the ageing electric power grid in the US is inevitable and urgent; most people in the energy industry can agree on that.

    But exactly at what pace and how the future electric system will look are hotly debated.

    Earlier this year, Jim Rogers, the chief executive of Duke Energy, told an audience gathered at Stanford University that the utility industry would look radically different within two generations.

    "We're going to reinvent our business, we're going to adopt new technologies," said Rogers. "When you look at our company four decades from now it will look fundamentally different."

    In the absence of federal energy policy that will shape the electric power industry in the decades to come, utilities such as Duke are transforming the country's energy infrastructure from the ground up and redefining the relationship between energy provider and consumer.

    In 2006, Rogers appointed David Mohler as Duke's vice-president of emerging technology to experiment with cutting-edge technologies that we may one day take for granted.
    Rogers' forward thinking and global view in an industry that is possibly the most domestic-oriented in the US economy, sets Duke Energy apart from its utility-sector counterparts, said Mohler.

    "When we look internationally the fact that we're doing what we're doing is the vision of Jim Rogers. It's as simple as that. He looked out about 5 years ago and said we can't just gaze at our navel, we have to get out there and learn from everyone else. He gave me the ball and told me to run with it.

    "We're kind of it, honestly [in terms of overseas partnerships]. There's some amazing stuff going on out there."

    Duke has power-generation assets in Canada and Latin America. But it's cutting edge technology partnerships are with Asian companies in Japan, China and Korea.
    "China was our first area of focus simply because they are building so much energy infrastructure so quickly and at such scale that we felt like there was much to learn," said Mohler.

    In 2009, Duke was a founding participant in the US China Energy Research Center established by President Barack Obama and the Chinese Premier, Hu Jintao.

    If my scenario is correct, we will build primarily gas and renewables and other distributed forms of resources over the next 10 -15 years," Mohler
    Several technologies have flourished out of that participation, particularly in the development of technologies to reduce carbon emissions from coal-fired power stations.

    As part of a joint venture with China's ENN Energy to use CO2-munching algae to capture carbon from coal plants, Duke Energy installed its first photo-bioreactor at East Bend Station near Cincinnati, Ohio.

    "For the first time that we can determine, we proved that we can successfully grow algae using the flue gas from the power plant because it absorbs the CO2 as it grows," he said.

    Last summer, Duke continued the work at an ENN site in Inner Mongolia to try to improve the density of algae production. The University of Kentucky joined the project this year.

    Duke's flagship attempt at adding Carbon Capture Storage at scale ran over budget. Duke's original Edwardsport unit was built in 1918 and further capacity was added in 1944 and 1951. All three units were retired last year.

    In 2007, Duke Energy received approval from the Indiana Utility Regulatory Commission to build a cleaner-coal integrated gasification combined cycle (IGCC) plant at the Edwardsport site. The project is expected to begin commercial operation by the end of the year.

    The 630MW plant will be one of the most efficient and clean coal-fired plant in the world and was built with the potential for the capture and storage of CO2.

    The original cost estimate was $1.985 billion. But Duke had to return to the IURC for permission for cost recovery through ratepayers. In July, the IURC capped costs for the state of the art facility at $2.595bn.

    But the push to nurture fledgling technology to reduce carbon emissions is a hedge position on the introduction of a price on carbon in the US. Rather than a tax, Rogers favours carbon trading, similar to the market-based mechanisms that successfully reduced emissions of other pollutants such as S02.

    Duke's investments could put the company ahead of the curve if a nationwide carbon trading system is introduced.

    "Whether Duke or the US builds any more new coal plants, the rest of the world is going to," said Mohler. "So I expect advances in coal fired generation technologies as well advances on a slower scale on CCS.

    "If my scenario is correct, we will build primarily gas and renewables and other distributed forms of resources over the next 10 -15 years, after which there's a high potential for coal to come back into the picture."

    Energy Storage Could be Coming into its Own

    In June, Rogers said that the company had looked at 700 technologies over last four years and selected 27 pilot projects in its own system and has partnerships with 63 pilots in the US.

    Energy storage technologies were high on the list of priorities for Duke, said Mohler.
    The largest energy storage project to date is currently under construction at Duke Energy's No Trees wind farm in Texas. The 153MW facility began operation in 2009 and supplies clean electricity to Walmart.

    Duke matched a $22 million grant from the Department of Energy to build the 36MWh project, which uses Xtreme Power's battery technology and is scheduled to be in service by the end of this year.

    Energy storage technologies have been so far too costly for wholesale embrace by utility companies who could use them to manage spiky loads from intermittent resources such as wind and solar.

    But Mohler said that he has already seen the costs of battery technologies decline. Duke has several smaller-scale demonstration projects under way. This month Duke is expecting the delivery from Chinese company BYD of a 250kwh battery that it will install at a substation in south Charlotte, North Carolina.

    Duke is experimenting with a variety of chemistries - lead acid, lithium-ion and iron phosphate are all in the mix, said Mohler.

    "The trajectory that whole area of energy storage is coming down rapidly in cost," he said.
    "Every year we do a tech roadmap, we had anticipated last year battery prices would come down on the order of $1,200 - $1,500 per kwh in the 5-10 year time frame. The BYD battery is $1,200 kwh today and we've also been talking with another storage entity who is willing to sell us one for $900/kwh."

    That decline might not be rapid enough for mass deployment in the very near future. But if electric vehicles gain traction in the US, demand will drive down costs, particularly when second-life uses are factored in, said Mohler.

    "When the battery is no longer desirable for transportation purposes it might be fine for us," he said. "At that point probably the cost of storage in the second use application will be more like a quarter of the initial cost."

    Increased adoption of energy storage technologies will enable greater deployment of renewable energy, a certain feature of future energy generation, he said.

    The Obama administration's SunShot project will almost certainly achieve its goal of installed solar costs of $1 a watt.

    "That would be terrific," he said. "At that point at $1/w then it really does become economically
    feasible to do it on a much smaller scale than today. Then you will start to see it integrated into the built world in a much more ubiquitous way."

    Adding Significant Renewable Energy Capacity

    Duke's own portfolio of renewables has grown rapidly over the past five years from almost zero to 1,000MW wind capacity, with an additional 700MW-800MW by the end of the year.

    "In roughly the same timeframe we've gone from zero solar to 50MW and that is intended to be 70MW or more by the end of the year," said Mohler.

    But some of Duke's renewable initiatives have not worked out so well and it withdrew a residential solar programme earlier this year.

    All this will take time, Mohler admits. "We'll see the transformation but it won't seem like it happened in a hurry until we're beyond it and we'll wonder how that happened."

    IT is one of the most exciting developments that could create massive change in the energy
    industry and revolutionize the relationship between utilities and consumers.

    IT and communications networks are essential to manage the increased penetration of electric vehicles, distributed solar and other devices that the grid was not originally designed for. These emerging tools will give consumers ultimate control, not just greater choice and transparency.

    But architecture to manage increasing volumes of data from the smart grid will first have to be addressed, said Mohler.

    "All that information has to be transferred back to some access point for the customer. That's expensive, takes a lot of communications, bandwidth and infrastructure to do that especially once you've got millions of customers on the system."

    As a former practicing psychologist, Mohler said he recognises that information is not enough to change behaviour. Consumers do not necessarily want to engage with granular detail about their energy use, but they are interested in saving money and transparency and finding the
    tools that will help them achieve both.

    "Ultimately, you've got to have the ability for machines to talk to machines. I've seen a lot of information given and behaviour change is really hard. I've known I've needed to lose 10 lbs for a long time.

    "The way we interact with our customers today is as if you went to the grocery store and filled your cart, went to the check out and the clerk weighed your cart calculated how much you owed based on the average cost per pound of everything in the store and sent you a bill a month later.

    "That's really how we do it. That's silly."

    Disruptive innovation in the energy industry is on the minds of all utility executives - some are trying to dream up ways to defend against it, while others are looking to define this emerging paradigm.

    "Changing a business model is no easy feat," said Mohler. "I do believe it's what we have to do. I very strongly believe it's what we have to do. But it requires coordination across policy, regulators, customers and industry groups. That has been historically difficult.

    "So we'll see what happens. A lot times it requires a real shock to the system or very persuasive economic drivers to make business models change."

    Sentiment: Strong Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
 
AONEQ
0.0320.000(0.00%)Jul 8 3:54 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.
Virgin America Inc.
NASDAQWed, Dec 24, 2014 1:00 PM EST
GoPro, Inc.
NASDAQWed, Dec 24, 2014 1:00 PM EST
Amira Nature Foods Ltd.
NYSEWed, Dec 24, 2014 1:04 PM EST