Already the 2016 U.S. presidential campaign has been one of the more interesting in recent memory — and we are not even finished with the primaries. Whoever becomes the next president will face a wide range of critical issues. Energy and the surrounding challenges will be one of the issues the 45th president will have to face.
Fast-forward with me to February 2017. The newly elected president has heard that you are a top-tier energy expert as evidenced by your regular and noteworthy contributions to IdeaXchange. Your phone rings, and the caller ID reads “White House.” When you answer, a very professional-sounding voice says, “Please hold for the president of the United States.” After a short time that seems much longer, the president comes on the line.
The president greets you warmly, and after a few short pleasantries, gets to the purpose of the call. The president says, “[insert your name here], I recognize how critical electric power is to the welfare of the nation, and I know the industry is facing significant challenges. My staff tells me you are on top of what is happening in the utility industry, and I am hoping you can help me out.”
After a short pause, where you wonder how you can say, “That depends,” you reply, “Of course, how can I help?” Hearing the expected response, the president continues, “Glad I can count on you, [insert your name here]. I want you to join my team for the next four years as senior advisor to the president for electric energy. For your first assignment, I need you to give me the top challenge facing the industry during my first term and then tell me what I should do about it. Next, I need you to let me know what “game-changing” energy technology is out there and how I can support it. Can you do that for me, [insert your name here]?” Your response is, also expected, “It would be an honor.”
So Xperts, here are your questions. As the newly appointed senior advisor to the president for electric energy, what would you tell POTUS is the top challenge facing the electric utility industry and what should be done about it? Also, what is the “game-changing” energy technology out there and how should POTUS support it?
OK, you have just been given great latitude to influence the electric utility landscape unconstrained by real-world limitations that would nix anything that might spoil POTUS’ chances for reelection. Have fun!
John, the POTUS senior advisor on electric energy begins, "Madam/Mr. President, at any given energy conference, you will have discussion on renewable energy, microgrids, net metering, energy storage and grid security. You may hear complaints about rate fatigue, reliability and lack of charging stations for EVs. The electric energy industry sector has evolved over the years to solve many of these problems. Do problems remain? Sure. Can the government help? Yes, but..."
The president interrupts, "Listen, I don't need a dissertation on the ordinary. I want to deal with the extraordinary to which I can apply the force multiplier of the Oval Office."
John: Yes Madam/Mr. President. May I suggest we focus on the national security aspects of electricity along two fronts?
POTUS: Well, John, now you're talking as national security is my top priority.
John: Madam/Mr. President, cybersecurity is a unique area in which the government can be involved more creatively than today's efforts. Fighting cyber attacks is not a 'one and done' solution for the grid, but requires a continuously-improving, ever-evolving intelligence infrastructure that the government already has and can continue to develop. Cybersecurity not only affects electricity, but it affects all infrastructure vital to our national security as you know.
POTUS: Give me an example of how electricity is linked to national security from a cyber context.
John: Our electric energy sector has become more 'just in time' gas fueled with a growing non-hydro renewable component that depends primarily on the wind and the sun. The demand side relies so heavily on electricity that it too is becoming 'just in time.' For example, food production, distribution and storage depend heavily on electricity, and without electricity for months on a national scale, it can affect all of our citizens within days. The grid is our most complex machine with underlying dependency on electronics and telecommunications that can be impacted for weeks and months by a cyber attack. Imagine the chaos!
And it is more than the conventional utility assets that need to be protected. As we move to greater reliance on distributed energy resources, we need to ensure that those are protected too. They are becoming an integral part of the energy infrastructure and they need to have the same levels of protection.
POTUS: OK, you have me on cybersecurity, and I look forward to ways we can attack it better. You mentioned two fronts. What other front are you talking about?
John: As I mentioned, our energy future seems to have evolved to 'just in time' gas with variable output from renewable energy. While this direction seems to be the answer to 2030, we must have another dimension before the next decade is out. Don't get me wrong, renewable energy is the right thing to encourage and gas is filling gaps, but is this the sum total of our energy future?
POTUS: John, what are you getting at? I ran on renewable energy and a sustainable energy future?
John: Madam/Mr. President, with all due respect, many are talking about a sustainable energy future. What they are missing is the call for the extraordinary you inspired at the beginning of this conversation. We need to take the 'just in time' grid and its variable renewable energy component and add the endurance of energy storage on a micro and macro scale.
We also need to transform the grid into a dynamic system with adaptive flow control to ensure that we are getting the most efficient use of the resources that we are calling on. There are a number of technologies that enable the grid to be more dynamic and adaptive. We need to look at the systemic and market structures that act as impediments to integrating these technologies that would help to reduce costs and emissions.
But that is only half of it. We must re-inspire a safe and sustainable nuclear energy future. We cannot rely solely of extrapolations of today. Perhaps other alternatives can emerge to strengthen our electric energy future as we evolve our research.
POTUS: I know we are working the energy storage front in the transportation and utility sectors, and we are helping out with the DOE, but what are we doing with nuclear?
John: There are certainly advances being made in the nuclear industry, but we need to expand the research efforts on modularization, cost effectiveness, fuel use, non-proliferation, cooling alternatives and ultimately safe storage (or depleting to low levels of radiation requiring less than Yucca solutions).
POTUS: When did you become a nuclear expert?
John: I'm not an expert, but I have been following the activity of Bill Gates in this area.
POTUS: Well, let's meet with him and his experts. I also want to visit with the secretaries of defense, energy, state... Oh, heck, we should meet with the entire cabinet because electricity affects every facet of our nation.
John: Exactly. I'll get the meeting set up, and we'll progress with this initiative all the way to your State of the Union address next year.
POTUS: Thank you. How will you fund this?
John: Let me ask Congress.
Yes, Madam/Mr. President, I think I can help you. You talked on the campaign trail about good jobs, social justice and a cleaner environment. You also talked about national security. I think there are three initiatives that you can undertake around the electric power industry that will support all of these goals, and provide for a long-term boost for the infrastructure:
1. Create a federal program to replace renewable subsidies with a new national building code that requires better insulation in residential buildings and 1 kW of solar on each residential dwelling and 1 kW for each apartment/condominium in a multi-dwelling unit. Allow utilities and others to use their capital to buy and install the systems, earning their current rate of return on the capital investment for residential units where the credit ratings don’t support solar leasing today and add the costs to the customer bills over a 10- to 20-year period. New residential units would be required to have a 1-kW installation to meet the building code.
2. Create an Infrastructure Materials initiative in the rust belt that supports taking nano-materials and other emerging material sciences and use the initiatives to not only solve issues in the electric industry, but in the pipeline, drinking water and sewage systems. Provide an investment bank similar to the DOE Loan Program Office and a ARPA-M (materials) to support the initiative, but focus the investments in the most hard hit of the rust belt cities, including investments at universities and national labs in those areas. Require the research organizations to colocate STEM facilities for local students to attend, either as an alternative to local schools or as an after school enhancement.
3. Create in the lowest-income areas in the rust belt an Infrastructure Software initiative to create secure operations and monitoring software for the electric industry, the gas and oil industries, and the water and sewage industries. With this onshore development of software that uses military-grade testing support, the worry about “time bombs” in the software can be reduced. The initiative would allow any U.S.-based infrastructure company to use the real-time operating systems, software frameworks and other components that are developed by the initiative. This would put the U.S. on the same footing for new infrastructure software that China is on.
These may not sound sexy, but Madam/Mr. President, I have no doubt that the White House can put the sizzle in these initiatives and provide real progress toward your campaign promises and your re-election.
Xperts, this question and narrative also inspired me. I’m going to follow Mr. Heyeck’s lead and should things not work out, well, he started it!
Key dialog participants:
POTUS – President of the United States (I will use POTUS as it is appropriately gender-neutral —no gender cards required)
Skep Tick – The newly appointed SAP for EE, replacing his recently departed predecessor, John, who was given a critical new assignment by POTUS to be the U.S. Ambassador to Siberia.
Skep lives in a cabin in Montana, largely off the grid. His credentials are impeccable.
POTUS: Welcome to the team, Skep. A grateful nation and this president thank you for your willingness to serve, although we did have a little trouble finding you.
Skep: It is indeed a privilege, POTUS. I intend to serve to the best of my ability.
POTUS: I assume you’re aware of the discussions I had previously with John.
Skep: I was particularly aligned with John’s thoughts on grid security, POTUS. If you are looking for an area where the office of the president might provide a force multiplier for change, this might be it. However, we have to determine ways to better collaborate and coordinate among agencies. How can we leverage the utilities’ expertise with the security intelligence of various federal agencies? They have to learn to play nicely together in the same sandbox without throwing things.
POTUS: The collaboration is certainly a challenge. We must continue to work on this.
Skep: The electrical energy grid is critical to the underlying proper functioning of our society and nation. If someone shuts it down in a major way, it’s not a pretty scenario for any of us, but I should be okay at my cabin…if I can get there. I also agree with John’s thoughts related to energy storage — given the trajectory of our generation mix nationally, this appears to be a potential game-changer for the future. The government can most likely help get this moving forward more quickly.
POTUS: Skep, what else do you have for me?
Skep: POTUS, utilities are the experts in our electric energy market. In order for them to continue providing reliable electricity at a reasonable cost, I believe they need regulatory certainty; then let them do what they do best with a minimum of federal regulatory inputs.
POTUS: What role might the federal government play appropriately to help move the needle?
Skep: Are you aware that as a nation we spend much more each year on our pets than we do on electric technology research? Let’s change that trajectory and make a difference. Let’s get a laser-focus on some different priorities and see what might result.
POTUS: In my first inaugural address, I promised to “restore science to its rightful place.” Skep, I expect you to play a major role in moving this forward. I want to solidify my legacy as a president of color — and that color is green!
Skep: POTUS, this may be a little touchy, but we have to allow scientific pursuits to happen without predetermined outcomes and political bias.
POTUS: (Waving his hands to tell him more….)
Skep: Our society has benefitted historically from open, transparent scientific debate. We must not head down the path of criminalizing dissenting opinions on any subject, especially in the interest of supporting any particular political narrative or policy.
POTUS: I assume you have specific examples?
Skep: We are obviously moving nationally toward a green generation portfolio, and shutting down dissenters who suggest it may be based on highly uncertain science. At the same time, we are also shutting down proponents of arguably the greenest generation source: nuclear power. How can we have it both ways?
POTUS: Skep, I must ask you, in light of your comments, if you agree that it’s getting a bit warm in here?
Skep: POTUS, I don’t know if it’s getting warmer or just changing.
(Thanks for allowing a little mix of fact and fiction, serious and fun. Hope it contributes to the dialog!)
Electric Utility Industry Challenges
Most electric utilities were formed to provide what was deemed a service essential to growth (industrialization) and prosperity (quality of life) for the end consumer. IOUs were assured rates of return on their investments while municipals and cooperatives were formed by the owners in a not-for-profit business model. The returns on investment and/or no-profit aspects were secondary to the primary purpose: provide an essential service.
That mantra appears to have been changed through politics and regulation whereby today many utilities have taken their eye off the game of service-focused, to one that assure they are not penalized by regulation, and/or to capture every opportunity for reward of politics and/or profitability. Arguably, service has suffered in some areas because the focus has been lost. While competition amongst utilities has not been uncommon throughout history, the competition for service areas/consumers no longer is the driving motive of many utilities. Rather, we see them competing for government grants and/or tax credits, or positioning themselves politically for the same end.
Whereas engineers once managed the shop with the intent of providing the best service possible within rate structures that were allowed, today’s utility executives — seldom engineers — might often be viewed with the ideal that service is the inconvenient requirement of doing business; it’s merely the necessity to keep their ‘membership’ in the game. Programs such as carbon tax credits, special project tax credits, energy green tag sales, and other gimmicks of operating a true power supply industry often overshadow the fundamental purpose of the industry: providing electric service.
This in turn provides the basis for some large-name consumers to proudly, broadly proclaim their business is operated 100% by renewable energy when in fact it’s really simply a paper deal, purchased proclamation rights. Many utility engineers often shake their heads in disbelief when reading these accolades because they know what it really takes to provide electric service of the magnitude and duration that some of these entities require to stay in business. Their claims are simply not realistic with only solar panels and wind turbines. But the public is often duped into these stories, and that makes for good business. (Side note: this same adage of ‘sustainability’ is often seen in the food industry where some will proclaim they only buy/serve 100% organic food and chastise commercial agriculture; the parallels to our industry in these regards are eerily similar).
This change of focus has also caused the industry and its foundation backbone of suppliers, innovators, and R&D to lose its momentum in areas of improving thermal efficiency of power plants and power production; new fuel technology; energy conservation…all those things that once made the industry the shining star of the modern day world that provided the consumer with a service that was seldom if ever questioned after the excitement of its marvel had waned.
The industry needs to be re-focused on a purpose: providing safe, efficient, reliable electric energy. It needs to return to the days of partnerships with R&D to identify new technologies and processes that produce more energy per unit input. Where is the true innovation that provides technology to harness the 60+% lost heat energy in many modern-era combustion plants, power and industry alike?
Along with this loss of focus, as so many work hard in an effort to remain politically correct, the industry has failed to be honest with both society and political leaders as to the true capability of the potential for alternative fuels and their real ability to power our world. While the role of alternative fuels should not be overlooked or diminished in the whole solution of global energy resources, it needs to be truly understood and not over-stated as has been done by so many. That aspect of the industry is simply not capable of achieving the results it has been claimed to offer without some form of viable energy storage, let alone the project lifespan of many systems. One can see a major wind turbine investment (750 kW) in a small municipal stand idle for months with repeated breakdowns and might question the wisdom of investing hard-earned taxpayer dollars. A drive through a major wind farm not too distant will routinely see over 10% of the turbines standing idle at any given time. Along with all the other R&D work, viable, economic and realistic energy storage solutions are an absolute before any great expectations for renewable energy to power the world can be realized, not to mention longevity of operation.
The world has attempted to collaborate on protecting the environment; saving the planet earth. However, the means by which this will be accomplished has been hijacked by special interest groups who really seem to be more focused on the aspect of wealth redistribution and reaching that end through the use of renewable energy resources. The end is a very political question, far beyond the scope of this exercise; the means to the end is a relatively simple math exercise that quickly points to the futility of the idea, i.e. that the entire world’s population can be sustained in a state of economic prosperity and livelihood through the use of renewable energy. While some have attempted to provide ‘proof’ in research, any engineer can quickly debunk the same with a very brief review of all the assumptions that are the foundation of their work; they’re simply not realistic.
That being said, with more than 17% of the world’s population living without electric energy, and an even higher percentage of people living with minimal electric power resources, the challenge remains for the industry — globally — to arise and join forces on how to best use all of the world’s resources: natural and renewable – so as to enable all those wanting a higher standard of life via electric power use, the opportunity. World leadership is direly needed to address this shortcoming for all of mankind.
To that end, the world’s superpower would do well to jointly work on R&D on how to derive more usable energy conversion from all hydrocarbon resources; to find the evasive solution to economical and high-capacity energy storage; and to improve the efficiency of end-utilization to reduce energy waste, i.e. conservation. This cannot be a one-size-fits-all approach; different areas of the world have different resources that are not economically transferrable or viable; different energy needs, etc. Rather than force one technology (i.e. renewables) onto an entire world, without any recognition of alternative resources, the world would be much better served to consider all possibilities. For example, coal as an energy-generating resource vs. as a feedstock for other energy forms, or total-energy balance areas using heat/cold energy transfer systems.
To that end, the leaders of the world’s superpowers need to provide the element of leadership to focus the minds and resources of mankind to research and develop these world-saving solutions, and set aside the aspect of preserving their politics and lineage. In doing so they will in fact define themselves as true leaders, thereby earning their place mark in history vs. attempting to administer them.
A very wise man once shared with me, over 30 years ago, that if we thought our nation was in turmoil with the 70s-80s energy crisis, that era would pale in comparison to the strife and emotion of a water shortage. Just recently, I heard a world-renowned water engineer provide startling statistics on the world’s water supply, and the dire prediction on water shortages in vast parts of the world within the next 30 to 50 years. He recently was also quoted as saying, “It is not an exaggeration to say that governments will fall and wars will be fought because of the stresses caused by scarcity of water.”
It’s also been said that water and electricity don’t mix well. However, the needs of the world might suggest that our world’s engineers be allowed the opportunity to do just that, as the economic prosperity of the world will depend on both, not to mention the literal survival. That will require that political motives be set aside for a nobler cause.
Interesting reading materials
· Who would have envisioned a fossil-fuel heating system with a combustion efficiency of >90% in 1950? Yet today, most any heating system with an efficiency rating of less than 90% is thought to be archaic. Where is this type of earth-shaking technology for large-scale combustion?
· What is China’s real perspective of coal as an energy resource?
http://cornerstonemag.net/clean-coal-conversion-road-to-clean-and-efficient-utilization-of-coal-resources-in-china/ (This is an excellent read!)
·What is the world’s true status of electric energy use?
· Why society gets easily confused.
http://knowledge.wharton.upenn.edu/article/can-the-world-run-on-renewable-energy/ (This article references a noted person who claims the world can live totally on renewable energy; zero fossil-fuel resources. However a personal visit with the person asking the basis of their position, and questioning their analysis, simply resulted in the repeated statement…. “It’s in the numbers.” Those numbers, which were provided to me in a most extensive spreadsheet format, would hardly be considered a basis for such a claim.)
POTUS: The newly elected president of the United States
Sam: The uncle of POTUS, who always takes a long view of the country and its needs
POTUS: Sam, I understand you’ve been briefed on the recommendations from John and from Skep Tick, and you have some objections?
Sam: You asked for game-changing technology and the reasons for supporting that technology. John and Skep have outlined critical issues with cybersecurity and nuclear power, and those are important first steps, but by themselves they will not propel the United States into the lead in addressing climate change. Solar and wind power, improved energy efficiency, better conversion of primary fuels, greater conservation will all slow down the rate of growth of greenhouse gases in the planet’s atmosphere, but none of them will make a real dent. This is a global challenge, and we must present the planet with technology that will allow for plentiful supplies of energy cheap enough and reliable enough to replace coal. There is one technology on the horizon that could meet this need.
POTUS: Okay, I’m intrigued, but knowing you, this is a long play. So what is it?
Sam: True enough, quick fixes are never my first choice. The long-term solution is commercial-scale nuclear fusion.
POTUS: I know all about nuclear fusion. That’s the technology that is always just 30 years away. We’ve spent billions of dollars and still don’t have a working fusion reactor, even though we were promised one by 2015 in “Back to the Future.”
Sam: Yes, it’s true that fusion research has taken time and that the early forecasts of a quick solution were overly optimistic, but you asked for the game-changer and this is it. Research on fusion energy is now a joint international endeavor; it knits together scientific communities from every major country. Everyone has a stake in seeing this succeed, and it should be the highest long-term priority. While it doesn’t get headlines, the research underway is making significant progress. It has zero carbon emissions and zero waste products. This is the next moonshot and Manhattan Project; it deserves the full force of the office of the president and is the one real game-changer on the horizon.
In addition, while this is an international effort, each country will own pieces of the intellectual property. We need to make sure that the US leads in the development of that intellectual property and that our economy benefits not just from low cost, zero emissions power, but that our companies and citizens benefit from the ownership of the ideas that will make fusion possible.
POTUS: Sam, since you’re the last person I’m going to talk to about my energy plans, I’m going with your ideas; I’ll be addressing Congress on the need for the Fusion Now project.
It is 5:45 a.m. I am just putting on my running clothes and getting ready for my morning run. The phone rings. Ring!!!! Ring!!!!!. I look at the phone. Who could be calling at this time of the day? The caller-ID reads “White House.” Oh boy, is this a crank call? Why would the president of the United States want to talk to me?
My curiosity gets the better of me, and I pick up the phone anyway. A very professional-sounding voice says, “Please hold for the president of the United States.” After a short time that seems much longer, the president comes on the line.
The president greets me warmly, and after a few short pleasantries (Boy, he knows way too much about me!), gets to the purpose of the call.
The president says, “Dr. Vadari, I recognize how critical electric power is to the welfare of the nation, and I know the industry is facing significant challenges. My staff tells me you are on top of what is happening in the utility industry, and I am hoping you can help me out.”
After a short pause, where you wonder how you can say, “That depends,” you reply. “Of course, how can I help?” Hearing the expected response, the president continues.
POTUS: Glad I can count on you Mani. I want you to join my team for the next four years as senior advisor to the president for electric energy. For your first assignment, I need you to give me the top challenge facing the industry during my first term, and then tell me what I should do about it. Next, I need you to let me know what game-changing energy technology is out there and how I can support it. Can you do that for me, Mani?”
Mani: It would be an honor. This is the least I can do for my country. (And then I start talking.)
Mr. President, as you know, energy is one of the single-most important commodities that drives a nation, whether it is toward self-reliance or toward dominance in the world. Even internally, its importance comes from the absolute need to power everything around us. Every aspect of society depends on energy. It is used to power transportation (cars, trucks, trains, buses, planes and others), electronics (everything from healthcare, communications and others) and appliances. Pretty much everything around us is dependent on energy in some form or the other.
However, there are several top challenges, and there are no easy answers. The problem with these challenges is that solving one ends up creating more problems in another area. For example:
Gasoline and natural gas coming down in price. Mining of gas from shale and other domestic sources is directly responsible for the tremendous reduction in their prices and also for enabling the U.S. to move from a net importer to a net exporter. However, the downside to this is that this kind of extraction has the potential to cause extreme levels of pollution, even earthquakes in some instances, and harm to the environment.
EPA regulations leading to several coal-fired plants being shut down. While regulations are necessary for reduction of pollution from these coal-fired plants, they are also causing a severe shortage of available generation capacity that is so critical for maintain the reliability and resiliency of the electric grid. This shortage is being met by additional capacity from gas-fired turbines and to a smaller extent from new and renewable sources.
State Renewable Portfolio Standards (RPS) and federal tax mandates leading to an increased penetration of generation from renewable sources: Renewable sources such as wind and solar, while being very gentle on the environment when they are producing energy, have a great degree of variability of their output since it depends on the velocity of wind and exposure to sun and so on. Given that in an electric grid, supply and demand need to be balanced at all times, this variability in renewable sources of supply is met by fossil-fired generating units that need to be running as stand-by.
Mr. President, I do realize that I may have gone into several rabbit trails and taken you down into more details than necessary, but I felt that it was important to use these three examples to drive my key point on the various challenges and how their solutions all intertwine with the other.
The key takeaway from all of this is my advice to you — about not going down with one solution or the other. The energy problem in our country needs an all-of-the-above strategy. Given the diversity of our country that is coming from the Northwest (rains and clouds), Arizona (lots of sun) and others, our country cannot go in one direction alone and try to aim for all of our generation coming from renewables alone or, for that matter, from any other specific source of energy.
We MUST implement an all-of-the-above strategy, which means that fossil-fired generation may need to stay for a long time, mainly to give renewable sources of power time to innovate and mature, and also come down on a cost-performance scale.
Now, Mr. President, let us move to your next question that you asked of me about the game-changing technology.
I firmly believe, and you have been championing this as well, that our future is in renewables. That means that at some point in time in the future, and the sooner the better, we need something that has the ability to store extra energy when these sources are over-generating and deliver it back to the grid when they are under-generating.
This feature is critical to our dominance in the energy and related industries and to support our advanced way of life. I don’t believe that we need to curb our consumption at periods of high demand, which reminds me of the rationing of food and everything else that was prevalent from where I came. But, if demand or consumption needs to be flexible, then we need to have something that converts today’s generation from renewable sources that generate in a variable manner to something that is predictable and dispatchable by the grid operator.
This disruptive technology is called energy storage.
POTUS: I have heard of energy storage, but I get the feeling that I am missing something in this picture. Tell me more.
Mani: Mr. President, the key to storage is that it needs to allow us to mirror the profile of the generation that we used to have – comes in a broad variety of capacity/response rates. Let me explain what they actually mean:
Capacity: This is exactly what the name suggests. Capacity is all about how much energy it can store and retain.
Response rates: This is where it gets interesting. It is all about how quickly this energy can be released into the grid. Very often, the same technology cannot do large capacity and quick release – this means that we need both kinds so that we can mirror the consumption patterns of our consumers.
This specific technology, Mr. President, while not exactly a moon-shot moment as President Kennedy’s speech was, will position the United States of America to lead the world in allowing the penetration of distributed (and centralized) renewables into our electric system while at the same time allowing the people of our great country to continue to enjoy their current way of life while still being good to the environment. It allows you to seriously consider retiring more of the fossil-fired plants and the combination of renewables + storage to become the de-facto source of generation.
POTUS final comments: Wow, Mani, you have given me a lot to think about. Can I deliberate on this a little and come back to you for more background? Maybe, I can invite you to the White House for a beer and talk more about it.
Mani: Mr. President, it will be an honor for me.