Hot Button: Wake-Up Call On Electricity Needs

Grid and bear it
The answer lies in investing in new power technologies, not finger-pointing over outmoded systems

Peter Asmus, author of "Reaping The Wind," says wind turbines only generate electricity a third of the year, but they tend to produce energy in California when consumers most need it — during summer peak price spikes.

BY PETER ASMUS

The electricity crisis threatening California and the West today, and the rest of the nation tomorrow, is a profound wake-up call. It's time for executives in business and government to come to grips with the gap between the needs of the New Economy and the environment on one side and the level of electricity service our outdated and stressed energy infrastructure provide on the other.

Gov. Gray Davis has an opportunity to make history if he stops pointing fingers and acknowledges that the core problem in California is not deregulation per se, but the monolithic technologies that the current regulatory system still encourages: large, central station power plants fueled by natural gas.

And savvy Silicon Valley CEOs should realize that the right response to this crisis is investing in new technologies that can transform our grid into a big plus for doing business in the Golden State.

The run-up in electricity prices and heating bills is caused by the fact that 90 percent of all new power plants are designed to run on natural gas, which was the cheapest electricity supply source. But now its price has hit record levels unimaginable just one year ago, and electricity generators powered by gas are far more expensive than when they were originally proposed.

Obviously relying on one fuel for heating and electricity is folly — especially when it's a fossil fuel that releases carbon dioxide, a suspected prime ingredient of global climate change, when combusted.

Using so much natural gas has other problems:

• The state doesn't have the transportation infrastructure to deliver enough natural gas to fuel all of the proposed gas-fired electricity generators.
  
  
• Air quality. Power plants that burn natural gas still pollute and state law requires they "offset'' this air pollution by reducing pollution at other businesses. The cost of these offsets has skyrocketed and existing power plants are being shut down because they violate state air emission limits.
  
  
• There's a scarcity of cooling water for all of these power plants, which typically consume 4 million gallons per day. That's enough to serve about 6,000 households.
  
  
• The cost of generating electricity from a natural gas plant today ranges from 9 to 60 cents per kilowatt-hour. In contrast, the cost of electricity from a new wind turbine, which releases zero emissions, is 4 to 6 cents/kWh and is expected to fall below 3 cents/kWh within the next five years.

These numbers underscore why wind power is the world's fastest growing power source. When the California Energy Commission issued an emergency appeal for new non-fossil power plants to come online by next summer, one wind power company came forward with proposals to add more than 400 MW, more than any other power generation technology.

The short-lead time for wind power — in this case a four to five months — compares to the three years it takes to site and build a natural gas plant. Although wind turbines only generate electricity a third of the year, they tend to produce energy in California when consumers most need it — during summer peak price spikes.

California now has the tools and technologies necessary for an energy revolution that mimics the evolution in scale evident in telecommunications and computer industries. Solar photovoltaics, which convert sunlight directly into electricity, and fuel cells, which rely upon chemical reactions from a variety of fuels to create power, allow companies to generate premium-grade clean electricity right on-site without any air pollution.

These new technologies — wind power, solar photovoltaics and fuel cells — are the equivalent to wireless cell phones and portable laptops that replaced traditional grid-connected phones and huge mainframe computers, respectively.

Let's face the facts. Our electricity grid is an artifact that dates back to the beginning of the last century. It is dramatically out of sync with information technologies. The architecture of the existing transmission grid is the anti-thesis of distributed networks being made possible by the Internet.

If Silicon Valley executives learned anything from the evolution of their own industry, they would recognize that the best way to insure reliability and reduce long-term costs is to incorporate these smaller and more efficient clean energy generation technologies into their own energy management systems.

These power sources are frequently referred to as distributed generation since the sources are distributed throughout a region. They can be connected to the grid or operate as distinct, stand-alone systems, or be part of new micro-grid systems offering premium power quality. In each of these examples, these state-of-the-art distributed generation sources offer some measure of reliability during times of blackouts and supply interruptions.

The National Renewable Energy Laboratory underscored the benefit of installing the latest generation of solar PV panels, which at today's electricity prices are suddenly cost effective, last year. Seven major outages — including one affecting San Francisco last June — were analyzed from the perspective of the quality of the solar resource during the exact times of the power losses.

Not surprisingly, in all but one of the outages, conditions for optimal solar electricity generation were above 90 percent. This makes inherent sense. It is typically sunny days that lead to heat waves that stress our electricity delivery infrastructure. Why not rely on the same sun that helped create the crisis to solve the power supply problem?

Interestingly, solar conditions were close to perfect (99 percent) for generating electricity from the sun on June 14, 2000, the day 100,000 customers in San Francisco lost power. When power outages cost Silicon Valley firms millions of dollars per minute of downtime, relying upon solar energy during sunny peak periods of demand is almost too logical. They also diversify our fuel mix without generating air pollution while helping to bring our electricity grid into the 21st century.

Smart New Economy companies should recognize these trends and take a leadership role by incorporating these non-polluting energy sources right here in Silicon Valley — where much of the state's electricity supply problems originated.

The answer to the current crisis in energy in California is to transform our archaic electricity grid into a catalyst for integrating increasing amounts of wind and other renewable resources into our fuel mix. If Davis is bold enough to push a radical revamping of our grid, California can offer the rest of the world a model of a smart power generation and delivery system that serves both the New Economy and the environment.

Peter Asmus is author of "Reaping The Wind," a new book published by Island Press, and is a senior associate with the AHC Group of Saratoga, N.Y., an environmental consulting firm.