Today we’re going to talk about the grid of the future. I was at. Actually over the past year I’ve been at several power generation conferences where I’ve had conversations with people from companies like Duke Energy Southern Company which owns Alabama and Georgia Power Mississippi Power and Gulf Power. And let’s see who else…Ameren over in the Midwest. I don’t deal with the ones out west very much. Dynegy and Luminant over in Texas all of these guys are saying the same thing the grid of the future is coming and it’s going to look a lot different than what we have right now. And it’s going to surprise a lot of people how different that it is. And so when I was out this last one down in Alabama.
I was talking to a guy and he was telling me that both Alabama Power and Georgia Power are creating smart neighborhoods. So these companies that make their money off of converting nuclear reactions and coal dug from the ground to energy or to heat which then creates steam which creates energy. These guys are investing quite heavily in renewables and now in what they’re calling the grid of the future and so. I thought to be interesting to talk through some of that stuff today. If you go to a smart neighbor dot com that’s the Web site for this program that they’re doing and it’s really neat. I mean it’s super high efficiency appliances smart houses you know where things are voice activated and your refrigerator tells you when you’re running low on milk and you can change your thermostat from your cell phone while you’re at work. All of these things and then it’s also there all the houses have solar panels on them.
The neighborhood itself has a natural gas powered backup generator. And then there’s a micro grid for the neighborhood. And what’s needed about that micro grid is it allows properties that are generating an excess of electricity from their solar panels to take that and put it onto the micro grids so that another person in their neighborhood can utilize that without having to pull any electricity off of the bigger overall grid. And so this essentially creates a fully self-sufficient neighborhood. We talk about self-sufficiency a lot and how you know solar thermal solar photovoltaic systems can be part of that self-sufficiency. But this is a system that that extends out from just the house itself and goes to the neighborhood. And I think about what that might do for a community.
One of the things that happened when we know they are able to take these vast amounts of energy from certain places in the country transport them on railroads to other places in the country generate electricity and then through the magic of alternating current. Transfer that electricity all over the United States and create these massive grids with this step down transformers and all these different things one of the things that that did was it created the ability for humans to exist without community. It created the ability for people to you know either move far away from other people and still have access to all the things that they really wanted. Or you know to move out of the city and away from the customs around there being everyone in a neighborhood knowing each other and talking to each other and helping each other out and getting together for cookouts and things like that you know that. Those are pretty strong customs in the in the cities and where people started moving out to the suburbs a little below that stuck around. But you know by the way the 70s and the 80s you weren’t talking to your neighbor in the suburb that much. And by the 2000s you might not even know your neighbor’s name.
And so what I’m hoping is I look at some of these technologies and one of the things that I think about is well if you’re buying electricity from me Monday and Tuesday and I’m buying it back from you Wednesday through Thursday and then Friday Saturday and Sunday when we’re home you know we’re sharing the grid we all go maybe four of us guys get together at one guy’s house and I’ll watch the football game on his super massive four K TV with the surround sound system and everything else and we’re all donating electricity to the house to run to run that stuff or we get together in the backyard for a little firepit party and we’ve got you know the speakers go on in the stereo blazing and everyone hanging out. And we’ve got other people in the neighborhood don’t donating power to run those big lamps and everything. You know I think that that would open the door for the creation of a new type of community that you know we haven’t really seen before.
So the other thing that you’re going to begin hearing a lot about is the smart grid. And so what the smart grid is going to do is it’s going to take a look at where its power is being generated and where power is being consumed and when there is an excess. It will take the excess generation and store it and then when it’s when there’s you know when it goes back the other way then it will pull electricity out of story. And right now you know it’s all about the lithium ion. There’s the big I think it’s a 60 or 80 megawatt storage facility that was put in in California last year where they’re doing just that. They’re saying hey we don’t need to build a peaking station anymore when all these solar panels are creating more electricity than people are using. We’re going to stick it in these batteries and then when everyone gets home in the evenings when the solar is not doing that great and everyone flips their TV on in their electric stove and we need more electricity we just pull it out of the batteries. And that’s the most cost effective way right now. Today in California to handle that excess load right now you’ve got you know systems in place in Texas for example where they’re essentially dumping load. They’re saying well you know between the wind and the solar in Texas we’re generating more than we need. So they’re paying people to use electricity. You know that’s what they’ve got to do right now because we’re on a dumb grid we’re on a grid that we can’t put too much power onto because we’re break it. Now if we’ve got a place and a way for that grid to get a lot smarter about you know when it when it stores and when it uses and not curtailing these renewable systems that’s going to have a double whammy effect of really helping to take the lid off the top of utility scale renewable energy sources. And it’s also going to drive battery prices way down. When you’ve got these utilities with these big pocket books funding or R&D or funding indirectly or indeed by buying millions and millions of dollars worth of batteries. So I definitely see that smart grid is having kind of a double effect there. And oh I don’t think I miss you but that smart neighborhood actually has battery banks as well. So it’s got a battery bank it’s got solar panels. The neighborhood is all connected in a micro grid and a center that microgrid there’s a natural gas generator for backup power.
So you know again it’s the utilities that are going to drive this this cost renaissance that’s going to continue. I mean it’s in a couple of days ago you know the price of a solar panel wholesale right now is less than 40 cents of what. And that’s going to continue to go down. I think it was Swansons law or Schrader’s law. Can’t think I don’t have any notes in front of me. I’m sitting in a car right now. But one of those guys there’s a post on Facebook about it for every doubling in shift capacity the price per watt goes down by half. So we’ve shipped a lot of capacity in the past 50 years. But once every time we double that capacity we essentially reduce the price by half. And as a matter of fact recently it’s gone down by more than half. So one more doubling of delivered capacity and you’re going to be looking at you know solar panels in the range of 20 cents per watt. And when you’ve got solar panels in the range of 20 cents per watt and you’ve got utility companies dumping hundreds of millions of dollars into battery. Either. Again our Indee or through purchases those economies of scale are going to start ramping up.
We’ve talked before about the car the whole thing how cars are going to change the way that we live because this idea of car ownership is going to go away. You’re going to have a membership to Ford or Chevy or whoever. And you’re going to go pick up the car that you want that week. And then that weekend if you meet a moving van or a pick up truck to pull your boat. Or something like that you’ll just go trade your one car and get the other one that you need. And that’s it. You don’t actually own the car when that happens. This whole issue with how do we take care of the waste on the back side of an electric car goes away because they’re going to take care of it’s their problem and they have the deep pockets that come up with a solution for it. The other thing you’re going to see at the same time as that system is again we’ve got all this need and we’ve got all this generation and the two things don’t line up when it comes to renewables. Well you know electric cars are a great way to help offset that. You know you go to work and you plug your car and work. And it gets charged during the middle of the day when overall usage or consumption is down. But generation is up. And then maybe you go home and you know hey I need you I need five percent of my battery to get to work. And so you know just for safety sake I’m never going to go below 20 percent of my battery. But I can plug my battery into my house overnight and use the other 80 percent that’s in that battery to run my house and I’m using electricity that I got for free at my place of employment while I was working. How does that sound. I mean that’s coming that’s going to be a thing. They’re already piloting these types of systems up in Michigan right now. Ford is. And then you’re going to continue to see this whole move towards the smart appliances. You know particularly in areas where you’ve got different cost structures for different times of the day for using electricity you know it’s at peak times more electricity or rather electricity cost more excuse me. That’s coming you know where you’re going to have all your systems attached to Wi-Fi and you might throw all your laundry in your laundry in your washing machine and you may throw all of your dishes in your dishwasher and you may set your refrigerator to a slightly higher setting and your thermostat to a slightly higher setting and your house the brain inside your house looks at it says OK from 11 to 2. That’s the cheapest electricity we’ve got so we’re going to go ahead and wash these clothes from Melinda to wash dishes from 11 to two and maybe we’re going to turn the freezer down a little bit and maybe we’re going to do the math and say all right this is the beach to use we have on the air conditioning unit and this is how many square footage we have in the House. Here’s the kind of you know the difference to the inside and outside temperature. So we’re going to the calculations determine does it make sense to turn the thermostat down right now in a day when electricity is cheaper and take a little bit of that based cooling load off. Turn it back up as we get closer to peak. And then when the car gets home tonight in plug in then we’ll crank the AC up and use the car batteries energy to run the air conditioning in the house. Does that make sense or maybe does it make sense to even turn it up a degree or to let the House 80 degrees in the middle part of the day and then maybe 15 to 20 minutes before we would normally turn it back down before the master is home. We turned it down a little bit earlier so that it gets to our target temperature at the moment.
The car walks in through the door or the car but the car gets parked and the owner walks into the door. Those systems are coming your house is going to be able to run itself very efficiently. And so when I talk about things like the microgrid and the smart grid when you talk about things like a smart house your house that communicates with your neighbor’s house and shares resources when they’re available.
These are not pie in the sky. You know utopian ideals these are things that are being researched. They’re being tested right now and they’re coming to market. I don’t know if it’s going to be five years I don’t know if it’s going to be 10 years but the people with the pockets the people that are you know are. Their job is to know what’s coming in to be invested in it so they can continue to make money and be leaders in their fields. They know it’s coming and they’re already doing that investment right now. Well guys I hope you all enjoyed the show today. If you’ve got any questions comments or things you’d like for us to talk about on the show you can send me an email. Sean SHK and at HACC my solar dot com you can visit us at HACC my solar on the on the web page. You can also go to the blog every one of these podcasts post has a blog post that goes with it. Hacked my silver dot com. Feel free to leave us a message there. And again we’d love to hear back from you on NEW things that you’ve heard about you’d like us to do some research into or questions that you have or problems that you’ve run into are ideas that you have and you want some vetting on them. All of that stuff reach out we’d love to hear from you.