Thursday, July 26, 2007

Electrical Storm-Lights Out Reviewed in the WSJ

Mr. William Tucker, whose own book, titled Terrestrial Energy: Rethinking Nuclear Power in the Era of Global Warming will be published next year by Farrar, Straus & Giroux, reviews both Lights Out and Phillip F. Schewe's The Grid in the July 21, 2007 edition of the Wall Street Journal. All in all, I was very gratified by his comments, although I was a bit puzzled by why he identified me as the founder of the newsletter Common Sense on Energy and Our Environment. I am, but the publication has been defunct for over a decade. (More on Common Sense at another time.) Mr. Tucker talks about Mr. Schewe's description of Edison getting the Pearl Street Station up and running, but neglects to mention that our company is named, uh, Pearl Street.

I would, however, like to address several points he makes where I believe he mischaracterized my views.

On deregulation. Mr. Tucker writes that,
"Like many engineers, he [me] is nostalgic for the days of regulated monopoly, when the utilities built what the state approved at a guaranteed profit.The 1990s deregulation, he [me, again] charges, is at fault. But it is precisely because transmission lines are still not privatized -- serving instead as "common carriers" -- that this tragedy of the commons is occuring.
It's not so much that I long for the good ol' days of regulatory supremacy or that I think that deregulation, per se, is at fault here, but rather that I take issue with the manner in which deregulation unfolded. Most deregulatory plans were, in a word, dumb. And, in another word, shortsighted.

For instance, in one of the more egregious aspects of so-called deregulation, electricity rates were FROZEN in some states and reduced in others (in my opinion to show that deregulation was "working") and are only now catching up (in great leaps and bounds) to reflect actual market rates. Maybe I missed something in Econ 101, but I don't see how freezing or reducing prices unleashes positive market forces or changes consumer behaviors. (And, if I can toot my own horn here, I predicted this precise scenario way back when I was still Editor-in-Chief at Power magazine.)

Because of the way deregulation was conceived and implemented by state governments, transmission became the ugly stepsister...no one wanted to give her a second look, let alone invest billions of dollars, spend gazillions of hours fighting property owners and untangling redtape state-by-individual-state, just to try to dress her up and get her ready for the big dance. Transmission, as an investment, just wasn't very attractive.

As I write in the book,
Market activity and trading didn't cause a third-world grid. The way deregulation and competition unfolded simply made it much easier to make the big bucks from other parts of the value chain. And who wants to invest in something with a low return when there is an opportunity to be had over on the other side of the value chain?
But that doesn't mean that I believe competition is right for the whole system. There should be a "backbone" electricity generation/transmission capability that is regulated/monitored/secured by our government in case of national emergency and to provide a basic level of service to all consumers. My point is that the backbone shouldn't be subjected to unbridled competition, but careful competition with federal oversight. Competition is fine for some parts of the system and large customers buying at the bulk rate, but when our national interests are at stake, and consumers are affected, the backbone must be online, all the time.

On EMF. Mr. Tucker mentions the link (unfounded and overwhelmingly refuted) between transmission lines and cancer and notes that protests have often succeeded in stalling transmission installation, However, I don't think I mention EMF at all, and if I do, it is in passing...very quick passing. There are many more important problems with transmission siting than EMF. That problem is so last decade.

On distributed generation. There are several chapters in which I discuss distributed generation, but although Mr. Tucker writes that I demonstrate why backyard windmills and homefuel cells will not render utilities obsolete, I also write:
“The right side of the value chain requires a much greater emphasis on integrating generation, storage, grid interface equipment, and intelligent meters at consumer sites into an intelligent microgrid….To the extent possible, distributed microgrids should be based on renewable power systems—such as roof-mounted solar photovoltaics or small wind turbines on top of tall buildings.”

All in all, it was a very gratifying review. And if you're out there, Mr. Tucker, I'd like to buy you a beer and talk transmission.

If you have read the book, or are preparing to, please download the Lights Out Discussion Guide. We'd love to hear from you!

Thursday, July 12, 2007

Wind & Storage: Better Together

After returning from a long and much-needed vacation, it came to my attention that Mr. Tom Gray, Communications Director for the American Wind Energy Association, read the Reuters review of my latest book, Lights Out, and decided to take issue with my position on linking wind energy to electricity storage. It seems clear that Mr. Gray has not read the book, but has instead staked out his position based on the review alone. (Risingwind)

I suggest that Mr. Gray should 1) read the book, and 2) relax. In fact, he can rest easy in the fact that Lights Out does not bash wind or renewables at all and his intimation that I am an just another of the "anti-wind folks," whose "covert allies and backers in competing energy industries, are inventing new, creative additions [myths] daily" is simply, well, wrong. (Is this some sort of vast, engineering conspiracy he's referring to?)

In fact, should Mr. Gray read the book, he would find that it supports low or no-carbon solutions to the hilt. Mr. Gray should take off his ideological, one solution fits all, glasses, and look more closely at the full range of challenges and complexities inherent in the electricity generation industry.

Instead Mr. Gray is busy asserting that opponents to wind are actively promoting myths denouncing the viability of wind energy. Indeed, while Mr. Gray spreads the idea that "wind is variable, and so it really can't be a serious energy source without some form of storage" is "the oldest and most difficult [myth] to stamp out," experts across the industry are working hard to create an environment in which both physics and market forces converge to better integrate wind energy into the grid so that wind can truly become a major contributor to our energy supply.

Perhaps we would all take him more seriously should he admit that one major reason why wind energy proponents refuse to acknowledge the need for storage is that, without it, the wind industry will sell a whole lot more turbines, especially under current production tax credit subsidies and renewable portfolio mandates.

But, back to his criticism of my position on wind and storage. First of all, I don’t think I used the phrase “take off,” or if I did, it’s been taken out of context. That belongs to the journalist. (As you can see in the Reuters piece, it's not a direct quote.) In fact, I know that wind energy is taking off. It is approaching 1 percent of all the electricity generated in the US. (Coal is at 50%, nukes at about 20%, natural gas at 20%, hydro about 8.5%, wind around 1%, and biomass, solar, and geothermal make up the balance.) I know that wind is on a roll. And, I know that at percentages like this, the variable nature of wind isn't a big concern. But if the idea is for wind to become a significant contributor to our energy supply, then the fluctuations are a problem and they are different from the fluctuations imposed by other generating plants. Most of the latter are planned and can be moderated ahead of time. while wind speeds are varying all the time.

Over the last 30 or so years, I’ve sat in many technical sessions about wind and the grid impacts. Wind energy ideologues (yes, there are ideologues on all sides of an issue) refuse to admit there are any impacts, or if there are, they are someone else’s problem to solve and pay for. However, those who own, operate, and maintain the grid, continue to insist that these impacts are real, that better solutions are necessary, and the cost/pain must be shared by all. Storage is one solution; yes, it can be expensive, but there are multiple value buckets, which I point out in the book. There are other solutions for moderating the wind’s variability as well, some of which represent additions to the wind turbine system or the substation to which the turbines are connected. These also add cost. It is worth noting that all of the turbine vendors are working to solve the problem of grid impacts. We can kid ourselves politically and from a self-interest point of view that the impact is a red herring, but technologically, this is real stuff.

Electricity consumers will pay the bill either way. What I suggest in the book is that, as an industry, we should seek the best technological and the lowest cost solutions for all. It does no one any good--and indeed only impedes cooperation and progress--when we adhere to ideological positions that one thing is good and another thing is bad. When one understands the other values that storage brings to the system, I think ultimately coupling renewables with storage is the best way to maximize the fraction of renewables on the system at a reasonable cost.

One more thing...it is interesting to note that on his own blog, Mr. Gray does eventually admit that when wind does become a major contributor to the grid, variability will be an issue. Why not tackle that issue now and create the most favorable environment for wind energy's future growth and development?