20th Century Power System Incompatible with Digital Economy
Study Calls for Greater Use of Micropower
July 15, 2000 - Today’s giant coal and nuclear power plants are failing to provide the high-quality, reliable electricity needed to power the new digital economy, according to a new report from the Worldwatch Institute, a Washington, DC-based research organization.
Power interruptions due to the vulnerability of central power plants and transmission lines cost the United States as much as $80 billion annually.
“We’re beginning the 21st century with a power system that cannot take our economy where it needs to go,” said Seth Dunn, author of Micropower: The Next Electrical Era. “The kind of highly reliable power needed for today’s economy can only be based on a new generation of micropower devices now coming on the market. These allow homes and businesses to produce their own electricity, with far less pollution.”
The new micropower technologies, which include fuel cells, microturbines, and solar roofing, are as small as one-millionth the scale of today’s coal or nuclear plants—and produce little if any of the air pollution of their larger cousins. Already, the multi-billion-dollar potential of the market for micropower has sent investors scrambling to buy into some of the new companies, sending their share prices soaring earlier this year.
One group of micropower technologies generates electricity by combustion. Reciprocating engines, traditionally fueled by diesel oil and once used largely for backup power, are increasingly fueled by natural gas and run throughout much of the day. Microturbines, advanced gas turbines derived from aerospace jet engines, are just starting to be mass-produced, shipped by the hundreds, and installed in drugstores, restaurants, and other U.S. commercial buildings. Stirling engines, which can run on wood chips and even solar heat, are becoming popular in European homes.
Other micropower systems rely on processes that do not involve combustion. Fuel cells are electrochemical devices that combine hydrogen and oxygen to produce electricity and water. Several hundred fuel cells are already operating worldwide, and will become commercially available for homes in the next one to two years.
Solar cells, or photovoltaics (PV), which use sunlight falling on semiconductor chips to produce electric current, have already entered the residential and commercial building market in nations such as Japan and Germany, and for off-grid use in developing nations. Wind power, the most cost-competitive renewable energy technology, is poised for rapid expansion in rural plains and offshore regions. Small geothermal, microhydro, and biomass systems also hold important roles in the emerging decentralized electricity system.
These small-scale generators have numerous advantages over large-scale power plants. Located close to where they are used, small-scale units can save electricity consumers millions of dollars by avoiding costly new investments in central power plants and distribution systems.
Micropower can also save homeowners and businesses millions of dollars by lowering the threat of power outages and subsequent lost productivity. An electricity grid with many small generators is inherently more stable than a grid served by only a few large plants. Banks, hospitals, restaurants, and post offices have been among the early adopters of micropower systems as a way to reduce their vulnerability to power interruptions. The First National Bank of Omaha, in Omaha, Nebraska, for example, responded to a costly computer system crash in 1997 by hooking its processing center up to two fuel cells that provide 99.9999% reliability.
Use of more efficient combustion-based micropower systems, relying primarily on natural gas, will substantially lower emissions of particulates, sulfur dioxide, nitrogen oxides, and heavy metals. These reductions would range from 50 to 100 percent, depending on the technology and pollutant.
The use of wind, solar power, and fuel cells fueled by hydrogen can also help reduce global carbon dioxide emissions, one third of which come from electricity generation. In the United States, widespread adoption of micropower could cut U.S. power plant carbon dioxide emissions in half. In developing nations, small-scale power could lower carbon emissions by 42 percent relative to large-scale systems.
Micropower will allow developing countries to leapfrog to power sources that are cheaper and cleaner than building more coal or nuclear plants and extending existing transmission lines. Many of these countries lose the equivalent of 20 to 50 percent of their total power generated through leaks in their transmission and distribution systems. In rural regions, where 1.8 billion people still lack access to electrical services, small-scale systems are already economically superior to the extension of transmission lines—and environmentally preferable to continued reliance on kerosene lanterns and diesel generators. To date, solar PV systems have been installed in more than half a million homes.
Despite micropower’s potential benefits, current market rules in most countries favor the incumbent centralized model. Many electric utilities, moreover, perceive micropower systems as an economic threat, and are blocking their deployment by charging onerous connection fees and by paying low prices for power fed into the grid. Failure to reform these rules and practices could result in the construction of another generation of marginally improved large-scale power plants of questionable long-term economic and environmental value.
The extent to which current power markets favor short-sighted solutions is highlighted in the rush to construct some 100,000 megawatts of “merchant plants” worldwide. These large gas-fired power plants, marketed as the answer to power shortages, are designed to make money by selling power in newly deregulated electricity markets when demand and prices are high. But they have raised serious concerns among investors for their financial riskiness, and among grass-roots groups for their negative ecological impacts—as many are located in rural or pristine areas.
The risk of locking in outdated central power plants is even greater in the developing world. Over the next 20 years, some $1.7 trillion of capital investment in new power capacity is projected to take place in developing countries. “These nations have a golden opportunity to get the rules right the first time, and set up markets that support power systems suitable for the 21st century and not the 20th,” concludes Dunn.
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