When
journalists write about electric power issues, most
readers’ eyes glaze over. This isn’t the 1970s
when electric rates shot higher every year, VEPCO
was every populist’s favorite bogey man and
“Howling” Henry Howell made a run for the
governorship on the slogan, “Keep the Big Boys
Honest.” Today, electric rates are capped (with
minor adjustments) and Virginians enjoy lower-than-
average electric rates. People are far more
interested in which Hollywood celebrity is adopting
an African baby than in how they get their
electricity. Unless, of course, the juice goes
off.... in which case, you’d think the world had
come to an end.
Without
electricity, we're all toast -- or we would be if we
could figure out how to make our toasters work
without it. We need electricity for our ovens and
refrigerators, our blenders and automated apple
peelers, our lights and alarm clocks, our hair
dryers and nose hair trimmers, our heat pumps and
our big-screen TVs. We
need current to recharge our cell phones and laptops, and
to power our PCs. We need voltage to run the gas
station pumps that put gasoline into our cars -- and
to fill our jerry cans with fuel for the backup generators we maintain
in case the power goes off.
Without electricity, the entire edifice of our
21st-century civilization comes tumbling down.
The
supply of electricity is potentially one of the
great constraints on America's -- and Virginia's --
economic growth. Job-killing, misery-inducing
blackouts and brownouts await those who
fail to plan ahead. Therefore, as a governor's task
force studies energy issues with the goal of
articulating a state energy policy, it behooves us
to understand what it takes to ensure an affordable
and secure supply of electricity.
The
electric industry in the United States is structured
much as it was in the 1930s: Electricity is
generated primarily in large power plants located in
out-of-the-way places where they don't bother the
neighbors, and it is conveyed to people through
high-voltage electric transmission lines. As demand
for electricity increases, the system requires (a)
more large power plants based primarily on fossil
fuels and nuclear energy, and (b) more transmission
lines.
An
increasing number of people are questioning this
centralized system. "We have neglected the bigger issue
of security of supply," says Saifur Rahman, an
engineering professor with the Virginia Tech's
Advanced Research Institute in Arlington. Relying
upon a handful of giant power plants and an electric
grid to connect them subjects the system to massive
failure, whether due to hurricanes, terrorist attack
or the kind of cascading power blackout that turned
out the lights for 50 million Americans back in
2003.
Photo
credit: Crow
Wing Power
The
centralized system also has a number of
externalities, or uncompensated social costs.
Pollution tops the list. Although its worst abuses
have been corrected, coal is still dirty,
both in the mining and the burning. Coal
combustion emits compounds that contribute to acid
rain and low-atmospheric ozone, or smog, not to
mention toxic chemicals such as mercury, lead and
arsenic. All fossil fuels, including
"clean" natural gas, add to emissions of
carbon-dioxide, which is implicated in global
warming. And the long-term disposal of nuclear fuel
is a challenge that the U.S. has yet to address.
Yet
another cost is the necessity of building
high-voltage transmission lines through areas where
they are invariably unwelcome. Such a controversy is
roiling Virginia's northern piedmont right now,
where Dominion wants to run a power line to import
electricity from Pennsylvania to Northern Virginia.
(Disclaimer: The Piedmont Environmental Council, a
leading opponent to the transmission line, is a
financial backer of Bacon's Rebellion.)
Furthermore,
there is the omni-present risk of micro disruptions.
Tech-intensive businesses from server farms to
hospitals are increasingly intolerant of any
interruption of electric supply, no matter how
seemingly brief and insignificant. To many
customers, the quality of the power is as important
as the quantity. As a result, more
and more companies are investing in back-up
generators and batteries -- a cost that is largely
hidden to policy makers.
The
alternative is what Rahman and others refer to as a
"distributed" system for generating
electricity. Such a system would be decentralized,
relying upon a larger number of smaller power
sources located closer to their consumers.
Distributed generation, they argue, would limit the
risk of systemic failure and would reduce the impact
on the environment.
Writes
Richard Hirsh, a Virginia Tech historian of
technology and director of the multi-disciplinary
Consortium for Energy Restructuring:
It
makes sense to begin moving toward a decentralized
system that contains small-scale, modular, and
diverse types of equipment that produce power
close to cities or even within buildings that use
a lot of electricity. Employing diesel generators,
or better yet -- from an environmental point of
view -- fuel cells, micro turbines, and
photovoltaic cells, such a system would reduce the
strain on the existing grid by providing power to
users without depending on transmission lines at
all.(1)
A distributed
energy system would reduce pollution and dampen the
demand for unpopular new power plants and
transmission lines through (a) conservation, (b)
cogeneration, and (c) renewable energy. As
a leader in electricity deregulation, Virginia
actually has enacted a number of reforms needed to
make distributed generation a reality -- such as net
metering and variable pricing -- although additional
changes remain to be put into place.
Conservation
Conservation
may be the quickest, least expensive way to
reduce the strain on the power grid. Hundreds of
technologies and devices can trim electric
consumption. The trick is inducing
businesses and homeowners to invest in them.
That
means exists: Variable pricing. Electric demand varies
considerably during the day and throughout the year.
Adding generating and transmission capacity to meet
additional increments in peak demand is extremely
expensive. Therefore, Dominion, American Electric
Power and other Virginia electric companies benefit when consumers shift their electric
consumption away from peak periods.
Two
existing programs do that. In one program dating
back to the 1990s, says David Koogler, director of
state regulations for Dominion, the power company
sets a three-tiered pricing structure. The highest
rates are applied to the 28 peak-demand days of the year, the lowest rates are assigned to 60
days, and normal rates apply to the rest. Large
customers such as manufacturers, hotels and big box
stores agree to drop off-line during the 28 peak
days or pay a painful tariff. They can crank up
their back-up generators, change their production
schedule or otherwise switch things around. In
return, they get the benefit of extra-low rates for
60 days a year.
The
other program, which has been around about 20 years,
varies rates by time of day, says Koogler. The
principle is similar to that of the time-of-year
program: Customers, mostly residential, are
encouraged to shift energy-intensive tasks
such as washing dishes and clothes to off-peak
periods of the day.
Both
programs appear to have withered on the vine,
however. The number of Dominion customers seeking to
shave their electric bills is disappointingly small.
The first program, geared toward large business
customers, has 300 participants, according to Dominion
spokesman Jim Norvell: The residential
program has 15,000 customers: about 10,000 residential,
2,800 commercial and small business, and 2,600
government.
Why
are the numbers so trivial? One possibility is that
Dominion's rates so low that the potential
savings don't seem worth the trouble. Another is the
fact that the programs are blunt instruments: They
have limited flexibility.
But the
technology now exists to price electricity
dynamically and empower consumers to
conserve more aggressively. The
current edition of the Federal Reserve Bank of
Richmond's Region Focus magazine explores the
impact of electricity deregulation in the fifth
federal reserve district. A sidebar
focuses on "smart metering," a technology
that allows households to view real-time
electric prices, check the running total on their
monthly bills, and shift consumption of
energy-guzzling appliances to less expensive times
of day.
In
a Potomac Electric Power Co. pilot project in
Washington, D.C., reports Vanessa Sumo, each of
2,250 homes will be equipped with the smart meters
that reports consumption levels every 15 minutes to
PEPCO.
Half
of the participants will also receive a
"smart thermostat" that can, by means of
radio signals, remotely raise or lower the
temperature of an air conditioner or central
heating system during exceptionally cold or hot
days, when the price of electricity tends to be
very high. It's up to the customer to reset the
temperature to a more comfortable level, but they
will be warned by real-time electricity prices
displayed on the thermostat that doing so will
raise their bill.
Dynamic
pricing of electricity would encourage Virginians to
conserve by installing energy-efficient appliances: from ENERGY STAR refrigerators to compact
fluorescent light bulbs, from tankless water heaters to front-load washing
machines that wring out water before clothes go into
the drier. Virginia Senate
Bill 262, which directs the governor to prepare
a 10-year energy plan,
specifically charges the advisory group
to take a closer look at variable rate structures.
Cogeneration
Cogeneration
is another tried-and-true technology that could
boost energy efficiency and take large loads off the
power grid.
The
typical coal-fired power plant converts about
one-third of the coal's energy into electricity,
notes Hirsh. Two-thirds is wasted -- it is expelled
as waste heat. "That heat literally goes into
the air. You can see the large cooling towers with
the vapor." Cogeneration
generates electricity by running steam through a
turbine then uses the waste heat to heat (or cool)
buildings. "You can raise the efficiency to 80
to 90 percent."
Capturing
that energy from the fuel, typically coal or natural
gas, makes cogeneration competitive with the big
power plants. The challenge is finding a use for
the steam. Typically, cogeneration plants are
located next to large manufacturing operations that can use
both the electricity and the steam for their
industrial processes. But there is no inherent
reason that cogeneration cannot be applied
elsewhere.
Micro-turbines
have gotten so efficient that cogeneration makes
economic sense in settings, like shopping malls, it
never did before. It's only one step away from
shopping malls to supply
electricity and steam heating/cooling
to office parks, condominiums or any other compact
array of buildings. One thing the state could do to
encourage cogeneration is to survey local zoning
regulations to identify restrictions that might prevent
the technology from being applied outside industrial
areas.
Summarizes
Hirsh: "Cogeneration ... is local, it's near
the source of demand, and it's economical because
companies can get more than one product out of the
combustion of fuel."
Renewable
Energy
Solar
energy is the ultimate distributed-generation
technology. Photo-voltaic cells can be installed
house by house and go straight to the consumer --
bypassing the grid entirely. Although the cost of
solar electricity is not yet price competitive with
fossil fuels, the cost gap is narrowing. The main
obstacle right now, says Rahman, is
bottlenecks in the supply of silicon, the main
component of solar panels.
Virginia
is not as ideal for solar power generation as, say,
Arizona, but it fares pretty well, Rahman says. He's
been testing a solar unit on the Virginia Tech
campus in Blacksburg since 1988. "Our data
shows that we can provide electricity from solar
cells in that climate typically 260 days per year.
Cloud coverage does exist, but it does not last for
days at a time."
A
potential boon to solar in Virginia is a law that
allows "net
metering," says Rahman. With net metering, a
business or homeowner can sell excess energy on bright, sunny
days into the power grid. In theory, that revenue improves the return
on a solar investment. In practice, there have been
few takers. To protect against imbalances being
created in the grid, there is a net-metering cap of
one-tenth of one percent of system capacity.
Currently, there appears to be ample room to spare.
If the
installation charge
could be amortized over 30 years like the rest of
the house, that might make the economics of solar
generation more attractive. Another potential
motivation for homeowners and businesses is to
insulate themselves from blackouts, brownouts and
isolated, weather-based disruptions. As more people
work in home offices, assuring a reliable supply of
electricity is not just a matter of keeping the
refrigerator running and lights on at night but of
maintaining a livelihood.
From
a system perspective, rooftop solar generation is
attractive because it reduces electricity leakage
from the transmission grid. Nationally, energy
losses from power lines runs around six percent of
the total supply. Installing solar arrays and
micro-turbines near the consumer eliminates most of
that leakage.
What
is the state doing to encourage solar and other
renewable energy resources? Senate Bill 262, passed
this year, authorizes grants amounting to 0.85
cents per kilowatt hour of electricity produced by a
corporation from renewable energy resources, and
another program of grants to offset the cost
incurred when installing photovoltaic property (up to
$2,000), solar water heating property (up to
$1,000), and wind-powered electrical generators (up
to $1,000).
Another
bill passed this year extends "net
metering" to third parties that own the
energy-producing assets and lease it back to the
user. That bill
was backed by Old Mill Power Company,
of Charlottesville, a company that sells electricity
using renewable energy sources. If you can't make a
financial case for installing solar power on your
roof, maybe Old Mill Power can.
What's
missing from the discussion so far is an
acknowledgement that Virginia's scattered,
low-density human settlement patterns -- commonly
referred to as sprawl -- is highly inefficient.
Stringing power lines across the countryside
increases electricity leakage. Strewing
single-family dwellings across five-acre lots makes
it impossible to even contemplate serving them with
cogeneration.
To
move toward a truly energy-efficient society,
Virginia must embrace variable pricing not only
based on season and time of day but based on
location. Put antoher way, businesses and homeowners
should pay the location- variable costs of
electric service. The fact is, subdivisions located
far from existing sub-stations and served by miles
of transmission line cost more to serve than
dwellings in more compact developments. Current
electric rate structures subsidize inefficiency by
charging all households the same rate, regardless of
location. Rate structures should reward compact
development, not sprawl.
Joel
Achenbach with The Washington Post recently profiled
a North Carolina ecovillage, Earthaven, where
the inhabitants live off the grid, drawing upon
solar and hydro power and exerting great efforts to
conserve energy. Few Americans would be drawn to a
lifestyle of hand washing dishes, pinning garments
on clothes lines and squinting in the light of
low-wattage bulbs. Obsessively calculating the
energy consequences of our every action to eke out a
few extra watts of
electricity is not how most of us would
care to invest our time and creativity.
Like
the residents of Earthaven, Virginia Tech historian
Richard Hirsh acknowledges that our society's current path of
escalating energy consumption pollutes excessively and exposes
society to the risk of blackouts. But
rather than embrace a self-denying
"conservation" ethic, Hirsh advocates the
path of "energy efficiency."
Conservation
implies a diminished lifestyle: turning down the
heat, wearing cardigan sweaters, accepting
innumerable inconveniences. Energy efficiency means
compact fluorescent lights, which use one-third the
energy of an incandescent bulb and lasts 10 times
longer. Energy efficiency means junking the
1970s-vintage refrigerator and buying a new one that
uses one-third the electricity. "Your beer is
just as cool as it was in 1970," Hirsh says.
"We're not asking you to change your
lifestyle."
Hirsh's
view is appealing, but creating a sustainable energy
future may not be so painless. Achieving deep energy
efficiency also will require adopting more efficient
human settlement patterns. And that, as we've
discussed elsewhere in the context of
transportation, will require changing Business As
Usual. But until that can be accomplished, Hirsh's
prescriptions are a good place to start.
-
-
November 20, 2006
Footnotes
(1)
Research Magazine, a publication of Virginia Tech,
"The
Electric Slide... Fixing America's Power Grid,"
Summer 2006.
|