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How Distributed Generation is Revolutionizing Energy in Canada

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Ever since I was a little kid three smoke stacks dominated horizon across the lake where my grandfather built a cabin in 1919. Then in 2011, the smokestacks at the old Wabamun Power Plant came down, changing the landscape I had known for 50 years.

During the lifetime of that old coal-fired power plant, the pace of technological innovation was unprecedented: TVs, cell phones, computers, rocket ships, electric cars and even the Segway have all been invented and perfected.

Despite all of that innovation, the electricity system that that power plant was apart of had remained largely the same -- a massive centralized hub and spoke electricity generation system connected to ancient, expensive transmission lines. If Edison was still alive he would have recognized our system as the one he drew up all those years ago. If Alexander Graham Bell was still alive, it's doubtful he'd get past the home screen on his iPhone.

Canada's transmission infrastructure is aging and needs more than $98 billion of investment by 2030.

"There is no other industry that has stagnated for as long as the energy industry. We're still looking at 50-year-old powerplants, coal-fired facilities, that are connected to 80-year-old power lines that are located 200 plus kilometres away from the user," says Anouk Kendall, the executive director of the World Alliance for Distributed Energy Canada.

Kendall works with decentralized energy companies on some of the innovative solutions that are starting to rise to prominence today.

While cell phones and laptops have liberated us from being tied to land-lines and computers that once took up entire floors of buildings, the transmission grid remains the inflexible behemoth it was 50 years ago. The central idea of distributed generation -- where nimble, low-cost generators generate electricity where you need it -- is the equivalent of going from mainframe computer that takes up half a building to an iPad.

We spoke with Kendall standing in the middle of a 47.2 kilowatt solar system on the roof of EECOL Electric in Calgary, Alberta, just one example of the thousands of Canadians who have embraced decentralized energy.

EECOL electric sees solar as a big part of the future and got involved with solar to "kick-start us off in the industry," said Jason Zurowski of EECOL Electric.

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So what can distributed generation do for me? There are lots of good ideas in the world and only so much time, so why care about this one?

Have you ever looked at your electricity bill and tried to decipher the myriad transmission and distribution charges? Oftentimes that part of your bill can even equal the amount you have to pay for the electricity you actually used. You're paying for decisions made decades ago about giant monolithic systems that have failed to evolve with technology.

And the costs are set to mount. According to the Conference Board of Canada we have to spend $98.1 billion in transmission and distribution infrastructure by 2030 (PDF).

There is a way we can lower these charges in the long term and it's dead simple. Generate the electricity where the demand is and you don't have to spend billions of dollars.

"If there is anytime to start looking at a more modern, progressive energy infrastructure it's right now. We have to spend the money anyway so are we going to spend it on the 1940s Chevrolet or are we going to buy something more modern and make a commitment to modernizing this industry," says Kendall.

The options of distribution generation technology

The reason we built the system we did was because the economies of scale for these giant systems meant that costs were kept down. Well they're not going to be able to rely on the price advantage for long.

The cost of solar modules has dropped by two orders of magnitude in the past 35 years.

This massive price drop is due to Swanson's Law, a corollary to Moore's Law of transistor cost. Swanson's law, which was named after Richard Swanson the founder of SunPower, says that the cost of photovoltaic cells falls by 20 per cent with each doubling of global manufacturing capacity.

And solar isn't the only distributed energy solution that is bringing down costs. Combined heat and power projects, whether they're run off of natural gas, biogas, landfill gas, biomass or waste, have become far more efficient and cost effective to run. These projects can be integrated fairly seamlessly into an urban context and can take advantage of Canada's extensive natural gas infrastructure

As Brent Harris, the chief technology officer of Sustainable Energy Technologies explains, the energy landscape is changing dramatically. "How it's changing is really with the lower cost of the distributed technology... that's what's pushing the distributed generation agenda around the world."

Another big advantage distributed generation has is the speed of deployment. "You can get a solar system installed in 90 days versus 10-15 years for a new coal or nuclear plant. It's pretty hard to predict your energy demands that far ahead of time," says Harris.

The list of additional benefits is considerable including a more robust grid, reduced line losses, reduced pollution, less opposition to smaller projects, local job creation and new businesses and generally less need for big, expensive infrastructure.

Japan is pursuing distributed generation as a hedge against the catastrophic grid failure that happened after Fukushima. As far as jobs, Brent Harris' company, Sustainable Energy Technologies, is based in the oil city of Calgary, Alberta. The company designs and manufactures inverters and sells them all over the world. An inverter is a box that turns DC electricity into AC electricity and vice versa. It's a vital piece of equipment for solar systems, and most of their business happens in Europe.

In fact, Sustainable Energy Technologies just got a contract to supply 21,000 power inverters to a company in Germany that is making battery storage systems for solar systems to allow owners to delay selling power until its needed.

And when you start looking at distributed energy around the world it makes even more sense. India skipped the era of landlines and just went straight to being the second largest mobile phone market in the world. It can do the same when it comes to its energy infrastructure. Beset by blackouts they can simply hop over the step of building a centralized hub and spoke system and generate the power where it's needed.

Adding distributed generation is a no-brainer. It's the evolution of a system that has remained stagnant for quite some time. As barriers come down along with prices we could very easily see 25 per cent of our electricity coming from decentralized energy sources such as solar. Germany already gets 25 per cent of its electricity from renewable sources and is headed for 80 per cent by 2050.