The MIT Technology Review has a good article about renewable energy and the ways electrical grids will need to change in order to accomodate it. Both key points have been discussed here before. Firstly, we need high voltage low-loss power lines from areas with lots of renewable potential (sunny parts of the southern US, windy parts of Europe, etc) to areas with lots of electrical demand. Secondly, we need a more intelligent grid that can manage demand and store some energy in periods of excess, for use in times when renewable output falters.
The article highlights how the advantages of a revamped grid are economic as well as environmental:
Smart-grid technologies could reduce overall electricity consumption by 6 percent and peak demand by as much as 27 percent. The peak-demand reductions alone would save between $175 billion and $332 billion over 20 years, according to the Brattle Group, a consultancy in Cambridge, MA. Not only would lower demand free up transmission capacity, but the capital investment that would otherwise be needed for new conventional power plants could be redirected to renewables. That’s because smart-grid technologies would make small installations of wind turbines and photovoltaic panels much more practical. “They will enable much larger amounts of renewables to be integrated on the grid and lower the effective overall system-wide cost of those renewables,” says the Brattle Group’s Peter Fox-Penner.
In short, a smarter grid holds out the prospect of overcoming the biggest limitation of electricity: that supply must always be exactly matched to demand, and that prospects for efficient storage have hitherto been limited. The storage issue, in particular, could be profoundly affected by the deployment of large numbers of electric vehicles with batteries that could be used in part as an electricity reserve for the grid.
Providing incentives for the development of a next-generation grid (as well as removing some of the legal and economic disincentives that prevent it) is an important role for governments – above and beyond the need to put a price on carbon. While carbon pricing can theoretically address the externalities associated with climatic harm from emissions, it cannot automatically deal with the externalities holding back grid development, which include the monopoly status of many of the firms involved, issues concerning economies of scale, the fact that the absence of transmission capacity restricts the emergence of renewable generation capacity (and vice versa).
The full article is definitely worth reading.