In the coming years, electricity generation, like many forms of manufacturing, will be more and more decentralized, moving closer to users and even making most users into producers.  Every building and house will become both a supplier as well as user of electricity.  This is the way technology is developing and is consistent with the way nature distributes energy around the earth.  It is the obvious future of electricity.

In 1983, I edited a book called Decentralizing Electricity Production, which grew from a conference I organized on the subject at Wesleyan University.  Contributors including Amory Lovins, physicist Bent Sorenson, economist David Huettner, and renewable resource consultant Lisa Frantzis collectively addressed why and how decentralizing a power grid would work.  They demonstrated that changing the grid from a one-way distributor of central power to a multi-directional absorber and distributor of power would improve overall grid performance and allow for the effective use of alternative sources.  This kind of grid, which you can think of as more of an organic model than what we have currently, would constantly adjust to changing conditions, supply, and demand.  The underlying thesis of the book was that having a large number of smaller producers was much more advantageous than having a small number of large producers.  The benefits of re-conceptualizing the grid this way are many:

  • Fewer line losses.  Nearly two thirds of the fuel energy used by power plants is lost before it gets to the end user.  Moving generation closer to users (and making more users into producers) would reduce the amount of energy lost in transmission.  Indeed, Sorenson's analysis showed that as users become renewable energy producers, transmission losses would decline significantly, saving energy and reducing fuel mass.
  • Less financial capital (and mass capital) required for back-up reserves. When there are a small number of large plants supplying a region, the amount of back-up capacity has to be large.  When a plant goes down, there needs to be an equivalent amount of reserve plant capacity available to make up for the loss.  But with more points of generation incorporated into the grid, the likelihood of large scale failure declines.  It is less likely, for example, that 30 percent of 3,000 small systems will go down at the same time than it is that 30 percent of three large systems will go down simultaneously.  So, as the number of generators increases, the grid requires a smaller proportion of reserve capacity (backup systems not in use at any given time).  In addition, it is now easier to precisely match supply and demand with a larger number of small producers using new nano sensor technology.
  • Increased reliability and decreased risk of failure.  Diversity and decentralization improve stability.  A large-scale failure is less likely due to a greater diversity of energy sources (wind, sun, hydro, gas, etc.) and a larger geographic distribution of those sources.  Using a mix of different renewables and traditional fuels together in a grid reduces risk because the sun might be shining when the wind isn’t blowing and vice versa.  In addition, the sun may be shining in one part of a regional grid when not in another.
  • Economies of scale. As the number of smaller systems increases, the economies of scale shift from a small number of huge energy generation plants to the mass production of smaller plants.  A more robust maintenance and repair industry that creates employment and other local economy benefits will also result.  In addition, many renewable technologies work well in distributed applications at smaller scales that are not practical for large companies to operate.

When we wrote the book, there were few small-scale energy generation technologies available and none were cost-competitive.  There were certainly no sophisticated sensors and information technologies that we now know can literally allow an electrical grid to diagnose, learn, and regulate itself.  And there was certainly no talk about a smart grid.  That's all changing now.  The technologies that will enable decentralized electricity generation look different from the technology we're accustomed to.  There are small systems that can deliver more power from their mass than large-scale generators.  These technologies will allow electricity generation to happen almost anywhere.  Entire building surfaces will become small-scale solar electric generators.  Biofuel from algae can be grown in decentralized systems.  In wind power, the number of large-scale, three-rotor wind turbine farms will level off as a new generation of innovative, smaller-scale technologies become available and are incorporated into the evolving smart energy grid.  More wind systems will be integrated with building designs that can actually amplify wind.  After all, buildings create as well as change wind currents.  Innovative designs for turbines using building-influenced wind are much more effective at harnessing available wind, using lower wind speeds, taking advantage of rapidly changing wind directions, and are cheaper and quieter than large systems.

We are already seeing thousands of businesses across the US and around the world installing wind and solar systems as a hedge against increasingly volatile fuel prices and uncertain supplies.  As more and more products and services are being transformed using biomimicry (copying the way living systems solve problems), it’s time to apply biomimetic thinking on a large scale, such as designing electric grids that mimic the way organisms regulate themselves to deal with constantly changing conditions and needs.