One of wind power's many advantages is its availability in flexible modular units. Fully exploiting its application range is what net metering is all about. Wind power can be ordered in blocks of 1400 MW, as just done by Energ’a Hidroeléctrica de Navarra in Spain, or it can meet the needs of a single farm in Iowa-if the politicians so please. It is up to legislators to devise mechanisms so that both markets can function optimally, side-by-side. They have clearly got the mechanism right in Spain for stimulation of huge wind farm development. Now it's time to see if net metering can be made to deliver the economic and environment benefits of distributed generation, while avoiding the "blank cheque" excesses which have caused utility executives to see red in the past.
The net metering concept is beautifully simple. People generate their own electricity, sometimes feeding excess power to the grid, and sometimes drawing power out. Ideally, at the end of the day, the meter stands at zero to reflect the net sum of electricity consumed. A net meterer pays for use of the grid and utility services, but only pays for electricity if more is used than produced. Liberalised markets, where charges are often "unbundled," has added transparency to electricity bills and smoothed the way for net metering. Yet nowhere in the world does a fully functioning net metering market exist.
In countries like Denmark and Germany this is understandable. Early net metering legislation was superseded by payments for all the kilowatt hours a generator fed to the grid, and not just payment for the excess power not consumed, but put into the system. In most cases, subsidised pricing proved a better option for turbine owners than generating their own power and selling the excess. What's more, subsidies are easier to administer than a complicated balancing account. But what of countries like North America, where such "command and control" subsidy policies are generally disliked? Net metering payments are not arbitrary, but market-based-assuming the utility has fairly split the rates to reflect fixed and variable charges. Thus net metering, surely, fits well with the American self-sufficiency dream.
Yes, indeed it does. More than half the states have net metering rules and more are set to join in. For net metering to be economic for ordinary people, though, they need to be able to generate kilowatt hours which cost no more than those they buy from the grid. Only utility scale wind power is that economic-and in nearly all states utility scale wind turbines are banned from participating in net metering markets. Where there is no ban, utilities raise impenetrable barricades. Thus net metering in the US today is a mechanism for allowing green enthusiasts and hobby engineers to tinker with electricity generation in the backyard. Constrained as it is to small generators, it will never create a market for distributed generation-and that is a market going to waste.
The constraints exist because utilities fear the consequences of a free for all-the "blank cheque" syndrome. Dozens of generators linking to the wrong end of a frail and imbalanced grid would increase system losses, destabilise voltage and require costly grid reinforcement. Yet in many locations the reverse is true. Small scale generation is just as likely to add value to an electricity system-reducing losses, stabilising voltage and possibly deferring reinforcement. If the power system was big enough, these imbalances might balance out over the whole. But that solution does not help the utility with a voltage problem on its doorstep for the sake of one wind turbine. Regulation is required.
The simplest way of dealing with the problem is for system operators (at the local level) to classify regions where generation "embedded," or "distributed," in the network (including net metering plants) can and cannot be accepted. It is a way of identifying unused "pockets of value" on a system. This procedure is already used to identify "generation opportunities" and constraints on a national basis in England. Extending it to the local level is a logical next step, made easier with liberalisation and the separation of supply and distribution businesses. Coupled with rules to discourage excess generation (such as not paying for it) and a system-wide cap on net metering (say no more than 1% of generation), site classification dispels most grounds for opposition.
In this way, net metering provides the advantages of distributed generation without the disadvantages. In America, such net metering with "flexible size caps" would open a secondary market for wind power of 200-500 MW per state. That's not to be sneezed at. Schools, hospitals, sewage works, agricultural businesses could all choose to generate their own clean power. More importantly still, the introduction of "human scale" wind power, especially in wind plant-fearing countries like Britain and the more crowded US states, could well encourage greater acceptance for the mega wind projects now coming over the horizon.