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Tuesday, April 19, 2011

Smarter Energy Policy Made Easy

The last post pointed out that perhaps our current method of developing energy policy could be improved a little. It's not clear what methodology is being employed at present, unless it is "energy policy by lobbying power", or "energy policy by ideology", both of which blow back and forth with the election winds. Not good for long-term management of limited resources.

Wouldn't it make a little more sense to apply energy policy by scientific and market potential?



How would that work, you ask? Let's give it a shot.

First, let's differentiate between three different energy markets...1) electricity, 2) heat, and 3) transportation. While there is certainly overlap between the three, they should be treated as different commodities for policy purposes, for reasons that will become clearer as we think this out.

Let's start with electricity. Look at this satellite photo of North America:

http://geology.com/articles/satellite-photo-earth-at-night.shtml#
This helps us visualize the concentration of electricity demand on the continent. We can see where demand for power is densest, and where there is not so much. Now, we can tie in science and market potential.

First, science. Energy comes in various forms, and those forms can be evaluated in the form of energy density. Nuclear energy is extremely dense, solar and wind power are at the other extreme, very diffuse. That means that the area of production to generate a certain amount of power from the energy-diffuse technologies is much larger than that required for the energy-dense technologies. For example, a large solar farm is 80 megawatts in capacity, and takes up 640 acres. In comparison, the largest nuclear plant in the United States, the Palo Verde nuclear power plant in Arizona generates about 40 times as much power on only 6 times as much land.

Now let's bring in market potential. The satellite photo makes it obvious where our energy needs are the densest. It almost stands to reason that the bright white spots are those that will benefit most from the densest forms of energy production. Conversely, it illustrates those areas where low-density energy production will be the most costly.

The policy decisions pursued by Europe, our Federal government, and our more progressive states focuses on forcing (or allowing?) Big Power, the power utilities, to supply all regions, regardless of their energy demand density, with energy production from less-dense energy sources. Why not, instead, allow energy policy to support technologies that better match the density of the market? Nuclear in the high density corridors, natural gas and coal in the more diffuse blurs between the white dots, and alternative energy in the darker, more open areas. This would better utilize each resource at its capability, and allow us to avoid costly sub-optimization.

For instance, one option that is being suggested by environmentalists and considered by many power companies is to co-fire their existing coal-fired plants with some percentage of wood.  Wood is far less energy-dense than coal, so any substitution of this type will reduce the capacity of the power plant and increase the cost of its energy product. Neither of which is a good thing.

http://www.old-picture.com/civil-war/Locomotive-Steam.htm

Forcing big power plants to use wood or other types of alternative fuels is similar to asking today's railroads to convert all their locomotives to wood-fired steam engines. Doesn't make much sense, does it?

So the bottom line on power policy might be something like...let's keep costs down in the densest energy markets by fully developing and utilizing the highest density fuels (nuclear, natural gas, coal) and invest our development of alternative power technologies in lower density demand areas. It seems a good fit...wood, wind, and/or solar are plentiful in most of those darker areas on the continent. And for another reason...these alternative technologies are typically better as small-project installations, because the diffuse nature of the energy sources is better implemented closer to the user.

Our current investment in the power grid means that Big Power is already set up to deliver electricity to the most remote regions of the country. But electricity cost increases as a function of distance from the generator (because of energy loss in transmission) and delivery of that remote power increases the cost of delivery of power to customers nearer the power plant. But with alternative energy projects in those "dark spots", produced by energy sources readily available near the customer, our Big Power generation could be conserved and utilized in the more cost-effective high-density markets. And because of the grids in place, alternative energy sources that are developed farther from the white spots (or industrial projects within the high-density corridors) could be utilized as secondary supplemental power in time of need.

Tomorrow, we'll look at heat...

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