The dawn of micropower

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The dawn of micropower

Aug 3rd 2000 From The Economist print edition

Saturday February 3rd 2001

Much of the world gets its electricity from big, inefficient and dirty power plants situated far from consumers. That will soon change.

THOMAS EDISON was a man of great foresight, but who would have thought he could have been more than 100 years ahead of his time? When he set up his first heat-and-electricity plant near Wall Street in 1882, he imagined a world of micropower.

Edison thought the best way to meet customers’ needs would be with networks of nimble,decentralised power plants in or near homes and offices. What goes around, comes around. After a century that seemed to prove Edison wrong—with power stations getting ever bigger, and the transmission grids needed to distribute their product ranging ever wider—local generation for local consumption is back in fashion.

There are several reasons for this. One is market liberalisation. About half of America’s state governments have now forced their erstwhile electricity monopolies to face competition. In the European Union, a directive that took effect in 1999 ordered member governments to open up part of their wholesale market for electricity. Many developing countries, too, from India to Argentina, have embraced deregulation and privatisation.

Small, local power plants offer a cheap way into such markets. Even if the power they produce is more costly at source—which it often is—they do not suffer huge transmission losses when sending it to consumers. On top of that, the surplus heat they generate can be employed for useful purposes, such as warming buildings, whereas that from big generators located in the middle of the countryside is usually wasted. The result is that local power generation has now become economically competitive.

A second reason for the rise of micropower is environmentalism. Ever-higher emission standards have made it unattractive to build new coal-fired plants in the rich world. America still gets more than half of its electricity from coal, but only because many older plants have been “grandfathered”, and so do not have to meet strict new emissions standards— a derogation that is almost certain to be struck down at some point.

Europe has been even more aggressive than America in pushing industry to adopt cleaner forms of power generation. And microgenerators are exceedingly clean. The worst of them burn natural gas—a reasonably benign fuel. Others use hydrogen and sunlight, both environmentalists’ dreams.

A third, increasingly important reason is the demand for reliable, uninterrupted power. Karl Stahlkoph, the head of the Electric Power Research Institute (EPRI), an industry-financed American research body, reckons that micropower will take off in America, where brownouts and blackouts are an ever-increasing problem, as much because it is under its owners’ control as for any other reason.

These three things have stimulated the search for small, clean, reliable and above all cheap generating technologies. And such technologies are now emerging, fuelled by a surge in venture-capital investment and the prediction that, within a decade, the market for such equipment may be more than $60 billion a year.

The most dramatic breakthroughs are taking place in the field of fuel cells. These devices, which work by combining hydrogen with oxygen from the air to produce electricity, are popular candidates to replace internal-combustion engines in road vehicles. But they look increasingly plausible as replacements for power stations, too.

There are several sorts of fuel cell, but all consist of two electrodes (an anode and a cathode) separated by a material called an electrolyte. In most fuel cells hydrogen is fed to the anode, where it is ionised into a proton and an electron.

The proton makes its way to the cathode through the electrolyte, while the electron goes there the long way round—via a wire that leads into whatever the fuel cell is powering, and back again. At the cathode, the protons and the electrons react with oxygen from the air to make water which, to the joy of environmentalists, isthe only waste product of such a cell.

The leading fuel-cell technology at the moment is generally reckoned to be the proton-exchange membrane (PEM) cell. In this, the electrolyte is a polymer membrane coated with platinum, a metal that acts as a catalyst for the chemistry involved.

Ballard Power Systems, a Canadian firm, is the leading proponent of PEM technology. Firoz Rasul, its boss, says he expects his firm’s first commercial product to reach the market next year. This will be a 1kW generator, to be marketed by Coleman, an American outdoor-goods firm, for household use.

Ballard is also developing a power unit with Tokyo Gas, a utility that supplies Japanese homes with natural gas. That version would “reform” the natural gas first, by reacting it with steam to release the hydrogen in it. This means the exhaust will include carbon dioxide. But reformation eliminates the need to supply the cell with pure hydrogen, making the whole process cheaper.

A rival to PEMs is the solid-oxide fuel cell. A leading SOFC design arranges an electrolyte and two electrode layers in a tube. Air flows through the inside of this cell and hydrogen past the outside. In this case it is the oxygen that is ionised (by heating the air up to 1,000°C), and thus supplies the electrons. Although SOFC units have to operate at higher temperatures than PEM cells, they can achieve levels of efficiency much greater than is now possiblewith PEMs.

Siemens Westinghouse, a big power-equipment firm, expects to bring SOFCs to market in 2004, at a price of $1,500 per kW, dropping quickly to the $1,000 threshold that is currently achieved by coal-fired power stations. And, unlike Ballard with its 1kW units, Siemens is building generators capable of producing between 0.3MW and 10MW. These are aimed at industrial customers.

A third variation on the fuel-cell theme is the alkaline fuel cell. This requires two porous electrodes, separated by an electrolyte composed of potassium hydroxide. ZeTek Power, a British firm that is due to go public early next year, is leading the development of this technology.

Nicholas Abson, the firm’s chief executive, insists that his technology is cheaper, easier to make and more practical than either SOFC or PEM cells. Unlike SOFC, alkaline cells work at relatively low temperatures. Unlike PEM cells, they do not rely on platinum catalysts. ZeTek, according to Mr Abson, has perfected the use of cheap metal-oxide catalysts that will help to bring the cost of its stationary fuel-cell systems below $500 per kW within 18 months.

Less is more

Fuel cells are a nifty idea, but they suffer from one serious disadvantage: that the world is not set up to deliver hydrogen cheaply. Technologists are working on this problem. Hydrogen for Ballard’s cells is stored in substances called metal hydrides, which can absorb large quantities of the gas. But systems that can make use of existing fuel-delivery infrastructures are likely to have a head start—as Ballard has conceded in its deal with Tokyo Gas.

A second novel micropower technology, however, is ideally suited to natural gas. This is the microturbine. The clever thing about a microturbine—as opposed to the big, clunky sort of turbine that is used in traditional power stations—is that it has only one moving part. This is a high-speed compressor-cum-rotor that spins at up to 100,000 revolutions a minute.

The near-absence of moving parts means that microturbines are cheap to operate and maintain—costing as little as a third of the running costs of a comparable diesel generator. Even the problem of lubricating the one part that does move seems to have been solved.

Capstone Turbine, a small American firm, has developed a version of the device that uses sophisticated “air bearings” which require no liquid lubrication. Capstone, unlike many other companies in the microturbine market, is already selling its products—shipping several thousand a year, ranging in size from 25kW up to 500kW, to a number of commercial clients.

The third aspirant micropower technology is solar energy. Like fuel cells, which were first dreamed up in the 1830s, photovoltaic solar cells have been a long time coming as an everyday means of power generation. But they are almost there.

Solar cells are composed of a semiconductor such as silicon. When the sun’s rays hit a cell’s surface, some of the semiconductor’s electrons absorb enough energy to rush off towards the other side of the cell, where a lattice of delicate wires embedded in the surface gathers them up and feeds them into a cable.

The advantages of small solar-power plants are that they are clean, reliable and, of course, that the fuel comes free. The snag, however, is that the equipment does not. The energy from such plants costs between 22 cents and 36 cents per kW-hour, twice the expected cost for fuel cells.

Those costs, however, are a quarter of their level two decades ago, and look likely to fall further thanks to breakthroughs in the manufacture of the silicon wafers from which solar cells are cut. AstroPower, the only integrated solar-energy firm to be traded publicly, has come up with a very-high-speed manufacturing process which it calls “silicon-film” making, and which is akin to the “float glass” method used to make window panes. This should halve the cost of wafers, bringing the technology’s price within spitting distance of its rivals.

Back to the future?

The new micropower technology is undeniably impressive. But the big question is whether the market for distributed generation will take off this time—over a century after its first bloom. One reason to think it might is that its costs have come down to economic levels. The trends suggest they will fall still further over the coming decade, making micropower attractive to the ordinary consumer in the rich world.

The greatest potential for micropower, however, may lie in helping the 3 billion people in the poor world who have no reliable access to electricity. Gary Mittleman, the boss of Plug Power (a firm which, in collaboration with GE, a big American electrical company, is one of Ballard’s rivals in the PEM market), reckons that it costs between $1,000and $1,500 per kW to build or replace electricity grids in developing countries.

In such places, micropower is already an attractive option. International agencies such as the World Bank, as well as private-sector operators and non-governmental groups, are devising “microfinance” schemes to help bring electricity to the poor in such countries as Mongolia and India.

In time, micropower may also change the way electricity grids themselves operate—turning them from dictatorial monopolies into democratic marketplaces. Add a bit of information technology to a microgenerator and it will be able both to monitor itself and to talk to other plants on the grid.

Visionaries see a future in which dozens, even hundreds, of disparate micropower units are linked together in so-called “microgrids”. These networks could be made up of all sorts of power units, from solar cells to microturbines to fuel cells, depending on the needs of individual users.

EPRI has feasibility studies under way to develop a microprocessor-based converter that will enable “plug and play” connection of any micropower device to the power grid.

As energy markets liberalise, online energy-trading spot markets develop, and individual consumers win the right to select their energy suppliers, some even see the emergence of “virtual utilities”. Microgrids would allow such firms to combine the individual efficiency of micropower plants with the market power that is gained by bundling together their collective generating capacity.

Whether run in competition with established utilities, or by them, such virtual utilities would, according to Goran Lindahl, head of ABB, a large European generating-equipment company, result in “greater system reliability, lower operating costs, reduced environmental impact and improved overall business.”

ABB is now building microgrids that should be up and running by 2001 in both Europe and America. Much as with the Internet, the companies that develop the technology to allow the electricity grid to perform intelligent metering and switching, and that position themselves as “air-traffic controllers” for these streams of electrons, will lead the industry.

It is a heady vision for what many think of as a dull commodity business. Edison would surely be proud of the role that micropower looks likely to play in the third century of the electricity age.

http://economist.com/displayStory.cfm?Story_ID=28854

Copyright © 1995-2001 The Economist Newspaper Group Ltd. All rights reserved.

-- Swissrose (cellier@azstarnet.com), February 03, 2001


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