Energy futures

["Ian Murray" <seamus2001@xxxxxxxx>]

[Perhaps when Gene Coyle's unpacked his bags he could give us a rant
on this?]

[Washington Post]
Power Surge
How we're adding energy from below.
By David Morris

Monday, August 27, 2001; Page A15



>From Washington's perspective, the electricity crisis is, not
surprisingly, a national problem demanding national solutions. Vice
President Dick Cheney tells us we need one new power plant a week for
the next 20 years, each large enough to serve a city of 500,000. The
National Energy Plan would give the federal government authority to
impose thousands of miles of high-voltage transmission lines on
reluctant communities. Last month the Federal Energy Regulatory
Commission ordered the states' regulatory authorities to allow
centralization of control of the nation's transmission lines into the
hands of four new regional enterprises. Policymakers envision the
equivalent of an interstate highway system for electricity as a way to
dramatically expand long-distance traffic volume.

Yet even as our leaders look for a top-down solution, in the
communities they represent a vastly different dynamic is occurring,
one in which expanded supply comes not from distant, gigantic power
plants but from small, on-site generators. Today about 30 power plants
a day are being installed inside or on top of buildings. The growth
curve for these small-scale plants is staggering. In 1998 only about a
dozen micro-turbines were shipped. This year more than 5,000 may be
delivered. They will have a collective capacity only about half the
size of one large central power plant. But at the current growth rate,
people could, within five years, be installing the equivalent of 200
nuclear power plants each year inside or on top of our buildings.

The demand for solar cells has tripled in the past two years.
Data-processing businesses are installing 200-kilowatt fuel cells to
guarantee an uninterrupted flow of high-quality electricity. More than
100 residential-sized fuel cells will be installed for testing
purposes this year. Next year they will be commercially available.

This emerging decentralized electricity system demands new rules. Many
will be developed by local and state governments. Last year, for
example, Texas became the first state to adopt uniform interconnection
standards for decentralized power plants. Many communities are
examining building and land-use ordinances to see whether they can
guarantee continued access to sunlight for those with rooftop solar
power plants. Thirty-three states have laws that allow some on-site
power producers to sell excess electricity to their utilities.

Of course, the federal government does have an important role to play.
It will, for example, help determine whether transmission pricing will
enable or undermine decentralized power. "Postage stamp" pricing,
under which power producers pay one rate regardless of the distance
traveled, favors remote power plants. Congestion pricing, by which
producers pay a rate largely dependent on how close to the customer
they are located, favors on-site power generation.

The federal government also will help determine the way we use natural
gas. More than 90 percent of all planned power plants will use natural
gas. For the first time, natural gas-fired power plants will compete
with residential gas furnaces. Both Democrats and Republicans agree
that we have a gas pipeline capacity problem, and many believe we have
a long-term gas supply problem as well. One way to deal with these
problems is to make sure we are extracting the maximum amount of
useful work from each unit of natural gas.

Central power plants convert about 40 percent of the natural gas they
burn into electricity delivered to the customer. On-site power plants
can capture the waste heat and achieve efficiencies of as much as 90
percent. We should favor heating systems that also generate
electricity. From the top down, states and localities are viewed as
obstacles to new central power plants and long- distance, high-voltage
transmission lines. From the bottom up, states and localities are
viewed as partners in designing a new, decentralized electricity
system.

Top and bottom can and should work together, but they can do so only
if we recognize that the turbulence in our electricity system is to an
increasing degree the inevitable pain that accompanies the birth of
any new system -- and if Washington agrees to assume the role of
midwife.

The writer is vice president of the Institute for Local Self-Reliance.
He has been a consultant to the energy agencies of presidents Ford,
Carter and Clinton.



© 2001 The Washington Post Company