How do net metering and elevators relate?

How do net metering and elevators relate?

Given the endless blog articles rehashing the same old net metering arguments, perhaps it can be helpful to examine the experience of another industry.   Specifically, what is probably, after solar, the renewable energy and smart grid storage device with by far the highest market penetration.  I refer of course to the biomass-aerobic-respiration-assisted elevated kinetic energy mass storage device (BARAEK-EMSD).

Or as it’s sometimes referred to, the “elevator.”

The National Elevator Industry, Inc.  specifies that there are just under a million elevators in the US.   Just as in our industry, major technological change is occurring, and as these systems are being replaced or renovated, the unmistakable trend is towards “regenerative” systems.  On the way up, these consume energy from the grid.  On the way down, Otis proudly touts that “The regenerative drive feeds this energy back into the building’s internal electrical utility where it can be used by other loads or users connected to the same network.”

(The biomass respiration assist comes if you walk up the stairs, but ride back down….you can use this as your own means of recreationally reducing the carbon intensity of the grid.)

That is to say, there’s an entire industry which unabashedly engages in net metering every day without for a second pausing at DSIRE to see if they’ll face special fees or limits to doing so.

Consider: a typical elevator is ~ 10 kW of consumption (or presumably regeneration).  Further, many more buildings host 10 – 100 kW of these potential generators than have an equivalent number of solar panels on the roof.   If the 900,000 elevator installed base “turns over” at its typical 2.5% / year rate of major refurbishments or new builds, and perhaps half of these are electric as opposed to hydraulic, this is a 125 MW per year / 4.5 GW ultimate potential generation source in the US.  If more than half do so, you can double those numbers.

This may seem like a triviality, – in fact it is.  But so, frankly, is much of the current kerfuffle surrounding net metering.   The fact is that electricity demand growth may have ceased, for reasons having very little to do with solar and more to do with persistent, structural, efficiency gains.

The Energy Information Administration has an inimitable way of forecasting that no matter what the negative trend for fossil usage has been in the past, it will be better in the future.    They continue to work their regressions just as hard as they can to get there – figures MT-29 and MT-33 in the Annual Energy Outlook are almost poignant in their refusal to go gently into that good night.

But even these show a significantly sub – 1% annual growth rate going forward from 2012.  Zero, even negative growth rates are not an asymptote, as the EIA appears to use them – they’re a reasonable future projection.  Utility executives face an analyst community who are considering negative “terminal growth” in demand for their product, and they need to be seen to do something.

But no matter what, defense won’t lead to growth – the best that could ever be hoped for would be to hold the line.   The only way to create growth in the face of structural change is to go on the offense.

The utilities that show positive growth in the next decades will be the ones that make investment in change – not against it.  Some are waking up to this – obtaining approval for the distribution level investments required to enable, instead of thwarting, high-penetration solar.  Promoting the largest potential source of electric demand growth in coming years – the electrification of transportation.  Or, of course, investing in the fast-growing solar industry, as we’ve enabled our investor partners to do.

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