Wednesday, April 13, 2011

Reimagining Energy Delivery - A 21st Century Counterpoint

What with the nuclear tragedy in Japan; mounting concerns about global warming amplifying the demand for energy; and fears of oil depletion – we simply cannot ignore the need for thoughtful planning to secure this country’s energy future. Typical debates have been mired in questions surrounding the domestic availability of a fuel and securing energy independence versus reducing carbon emissions through cleaner options such as nuclear, solar, geothermal or wind. These are valid questions.
However, policy planning should be based on a detailed analysis of data, and guided by a national debate over our goals for an energy future. The public has not been able to participate in the energy debate in the past in a meaningful manner. Therefore decisions related to this trillion-dollar industry (including billion dollar public investments) have been left to lobbyists of various energy companies and our representatives in the federal government.
A review of energy data reveals that in the past our national policies have supported the growth of domestic coal and nuclear energy, as well as imported oil and natural gas, with limited incentives for the alternative energy sectors. The early interest in hydropower was soon overshadowed by the ability to place coal-powered industries anywhere. At the same time, national policies perpetuated a system of centralized energy generation over stimulating a distributed generation portfolio.
There are some obvious reasons for these. For instance, at that time, this country boasted large manufacturing centers that needed uninterrupted and concentrated energy. Moreover the technology that would allow distributed generation was not available. These arguments, however, are no longer valid. We have a limited number of heavy industries left in this country that need such concentrated power, most of which are power plants. Though there is a need to improve storage solutions and conversion technologies for solar and wind power, even today without these improvements, they outperform most other energy sources in their lifecycle performance. Lastly, the Smart Grid Technology allows for a distributed energy system that was not feasible before.
Also, lets not forget that centralized power generation is an inefficient means of producing energy and that conservation remains the most viable and lucrative investment in the energy arena.
A review of our energy use policies for the past 60 years (described in depth in the report that CREƄ prepared for the RICS Foundation) describes the increasing inefficiencies we have tolerated in our energy generation. A fact not much known is that thanks to a number of key initiatives taken at the federal level in the late 70s, the consumption of energy by end users of the system has not increased greatly. Instead, total energy use (which includes the energy consumed as well as that used to generate energy – including that needed to burn fuel to create steam, lost in transmission or otherwise lost in generation) has more than tripled since the 1950s. In other words, it now takes more than double the amount of energy to generate what we consume. In other words, while buildings and appliances have become more efficient (and there is scope to make them even more efficient) we are actually using more energy to generate electricity and heat, primarily due to our move to huge central power plants.
As a country, we have moved away from heavy industry for a preference for the service and technology sectors (or what are popularly known as white-collar desk jobs). These desk jobs do not demand the type of energy that heavy industry does and more typically than not, follow the circadian clock. Therefore the lighting, heating and other electricity needs of these businesses could be well met by solar power. Some argue that solar power will never have the potential to fully meet a building’s energy use. However, buildings in Europe are being designed to perform at 50-55 kwh/m2a, about 1/3rd the level of the average US building. At such high efficiency levels, solar power can on its own deliver the heating, lighting and electricity needs of these buildings reliably. Depending on their building footprints, their rooftops should be able to accommodate much of the solar PV needs. There are inefficiencies related to the storage and conversion technologies for solar power. However, with continued investment and improvements in these two arenas, Solar Photovoltaic has the potential to outperform other technologies in emissions and lifecycle performance. Some argue that according to cost per unit energy delivered, solar still lags behind other energy sources. This argument is simplistic, since these discussions or data do not account for the billion-dollar subsidies that fossil fuel industries receive to offset their expenses, including research and development. Perhaps a diversion of these subsidies to solar research and development may expedite experimentation with new technologies or help enhance existing technologies. Solar power is not perfect; little is known of the impact of the reflection of the glare from the surface of solar panels. Also, concerns remain about the safety of their manufacturing and their safe disposal since the panels have mercury and lead. However, even with their carbon content (from being manufactured by fossil fuel plants) their toxic emissions are 300 times less than the typical coal burning plant.

The benefits of the other clean fuel, nuclear, such as the domestic availability of uranium and its clean emissions, are outweighed by the dangers surrounding the disposal of nuclear waste. Given the unprecedented increase in earthquakes across the globe, the decreasing availability of water that is necessary for nuclear power, and the absence of safe storage technologies, nuclear does not present a viable and safe alternative for the future. Would it really make sense to replace a 400-800 half-life material in the atmosphere (carbon dioxide) with nuclear radiation that has a half-life of 10,000 years? We simply cannot wish away these dangers.

Natural gas plants have increased in favor; yet it is a source that is only available in a limited amount domestically. The environmental impacts of the marine facilities from the import of natural gas, along with the potential damages caused during shipment of this fuel must be considered in planning for a natural gas based future.

For this country, a focused effort on energy efficiency, which in and of itself can set off billions of dollars of new technology development and services, is the easiest and most impactful investment that the government can make. Similarly, rebuilding and extending the national grid should be another focus of national policy. Lastly, allowing for distributed energy generation from renewable sources and coordinating the location of new industries with clean central power plants will secure this country’s economic future and maintain its leadership role in environmental stewardship and innovation.

So what is holding us back? For one, energy remains a very lucrative industry that the private sector would like to increasingly control. With empty coffers, the government is unable to construct, manage or maintain energy infrastructure – therefore it is reluctant to overly regulate the power industry. They would rather hand it over to the private sector than maintain their public ownership (for instance by creating new Public Utility Districts or Municipalities taking ownership). In the US, as a private business, the role of energy delivery as a public good is overshadowed by the legal necessity of generating shareholder profit. Therefore there are few incentives to promote conservation and invest in innovation since it could reduce revenue. Lastly, without a doubt, moving to a distributed energy system complicates the billing system, and raises issues of who takes responsibility for maintaining this distributed system.
In this new energy environment, utilities will have to address several important issues:
Who owns the grid and how does this owner recover costs to maintain and expand the grid? And, must each state and energy entity connect to the national grid?
Should energy utilities be for-profit entities? If so, how does it then address its impacts to the environment and who pays for these impacts? What financial tools can be put in place to fully protect the public’s interests in the energy delivery choices of private entities?
How can we decouple billing for capital costs and energy use to increase incentives for conservation and efficiency?
How can we plan for a gradual replacement of nuclear and coal technology with others that have better lifecycle performance?
How can we coordinate a revival of domestic energy policies through strategic national level energy investment? Even though science and financial analyses underscore our unsustainable energy policies, national level policies show no signs of change.
What will it take to stop the subsidies into carbon fuels and nuclear technology and move those to wind, solar and other renewable industries?

None of these are difficult questions or insurmountable problems. However, they will require a complete revision of our understanding and approach to energy; the role of utilities; and the responsibility of governments in energy delivery. Where can we find the leadership willing to engage and lead this discussion?

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