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Smart Grid Grants

Today, Oct. 27, the Obama administration disclosed the winners of stimulus bill grants for smart grid projects. The president himself made the announcement touring a large photovoltaic power plant in Arcadia, Florida, which happens to be located in an electricity operating area that will benefit from a $200 million project in which Cisco, Florida Power, General Electric, and Silver Spring Networks are involved. By weird coincidence, another beneficiary will be Arcadian Networks (unrelated to Arcadia, Fla.!), which will be working with San Diego Gas & Electric to develop wireless communications for smart meter systems, relying on IEEE's 802.11 WiFi standards. Taking matching funds from private and other public sources, the administration says that total investments in the grid will be $8.1 billion. 

The grant-making process was highly competitive, requiring many utilities and energy companies to learn application procedures they otherwise rarely have to follow. Roughly a quarter of the applicants got grants, which range from quite small to relatively large. Many of the winners—the Cuming County Public Power District, in  West Point, Nebraska;  the town of Danvers, Massachusetts; the Sioux Valley Southwestern Electric Cooperative, in Coleman, South Dakota—are not household names. But the really big winners are.

In all, thirteen companies got grants of $100 million or more. Besides Florida Power & Light, they are: Baltimore Gas and Electric;   Center Point Energy, Houston; Consolidated Edison, New York: Duke Energy and Progress Energy, both in North Carolina; Electric Power Board of Chattanooga, Tennessee; NV Energy, Las Vegas; Oklahoma Gas and Electric; Sacramento Municipal District, California; Southern Company; Services, Alabama;  Potomac Electric Power Company, District of Columbia; and Detroit Edison. Almost without exception, those grants involve large rollouts of smart meters, along with data processing and communications systems to support them.

A major category of grants go to the organizations that manage and regulate regional transmissions systems, the RTOs and ISOs. Beneficiaries of grants ranging from $3.7 million to $5.39 million are ISO New England, the Midwest Independent Transmission System Operator, PJM Interconnection, New York ISO, and Western Electricity Coordinating Council. Almost without exception those grants involve rollouts of phasor measurement units, to better monitor and control flows of electricity through the systems.

Among equipment manufacturers, the Whirlpool Corporation gets $19.3 million to further develop smart appliances and networked home communications to support them.



Obama Lays Out Clean Energy Agenda at MIT

Boasting today, Oct. 23, that the stimulus bill represents (among other things) the biggest boost to science research in history, Obama hailed (as a case in point) the beginning of construction on a wind technology test center in the Boston area. That facility is getting $25 million in funding from the recovery act, as well as support from Massachusetts.

Obama said that the whole world is engaged in a peaceful competition to devise ample clean energy to power the 21st century, and that the winner of that race will lead the global economy. He said he wants America to win that race.

For the record, the New York Times reported on Saturday, Oct. 24, that Obama attributed the historic boost in science funding to the administration's climate bill, which a Senate committee will start to work on next week. That is an error. Obama did also plug the climate bill, saying that climate change skeptics and vested interests opposing climate action are now "marginalized." But that was in a different part of the speech.

Listen to his speech at the Massachusetts of Technology and, if you haven't already, check out what he had to say about climate science and green energy technology shortly after his election.

Europeans and Canada Lead in Fast Rail

According to a story this week in the Wall Street Journal, following up on earlier reports of big Bombardier sales of high-speed trains in China, the leading fast train manufacturers--none of them U.S. companies of course--are continuing to rack up nice global sales. Alstom SA, maker of France's famed TGV, recorded a record 5.69 billion euros (almost $9 billion) in the year that ended March 31. Germany's Siemens has made close to $1 billion from the sale of eight ICE-derived trains in Russia.

Bombardier will earn an estimated $2 billion from its high-speed train sales in China, which, says a Journal source, hopes to build "the most advanced rail network in the world." 

Coal Pollution Fatalities

A report issued on Oct. 19 by the U.S. National Academies of Science, Engineering, and Medicine estimates damages to public health and the immediate physical environment from power plant and vehicular emissions. The overall effect is to reduce estimates of how many deaths result from power plant pollution by a factor of three or four. But the numbers are still shockingly high, and total estimated economic damages are very substantial. The national cost of power plant emissions in 2005 is put at $62 billion, and the damage from automotive emissions—from light vehicles, as well as medium- and heavy-duty trucks—at $56 billion. Given the report's valuation of a premature human death at $6 million, those estimates imply that about 10,000 people die each year from exposure to coal power plant emissions, and about 10,000 from vehicular emissions.

Earlier in this decade, when estimates of coal-pollution fatalities of close to 30,000 came to my attention in an excellent book called Coal, I found them hard to credit. I traced them to a 2000 report prepared for the Clean Air Task Force by experts connected with Harvard University and Massachusetts General Hospital ("Death, Disease, and Dirty Power”). Those experts stood by their claims, and leading public health experts independent of the study vouched for its credibility. The clincher came from a man who had been in charge of regulatory enforcement at the U.S. Environmental Protection Agency in the Clinton Administration: Eric Schaeffer pointed out that if you looked at the Bush EPA's estimates of how many lives would be saved by stronger regulations, it followed that tens of thousands were dying annually from coal plant pollution, and not merely thousands.

Maureen L. Cropper, an economist at the University of Maryland (College Park) and Resources for the Future (Washington D.C.) who co-chaired the National Academies‘ panel, says because of improved methodology—and perhaps also because of differences in data sets, baselines, and comparisons—the National Academies' estimates of fatalities are significantly lower than EPA’s. They are lower by a factor of about four, even though the  Academies took a wider range of damage into account, she notes. At the same time, acknowledging that total estimated damages are still high, Cropper feels that tightening air regulations beyond what is anticipated by the 1990 Clean Air Amendments  probably is warranted.

Arguably, the implications go beyond that. The report's estimate of coal-related damages equates to 3.2 cents per kilowatt hour. That's a lot. But even so, that only takes immediate health and environmental consequences into account. It does not take in the impact of coal on global greenhouse emissions. What if they also are brought into the picture, if only qualitatively?

The National Academies report is an estimate of what micro-economists call "externalities" —costs of an economic activity that do not show up in the price of the activity as determined by the free-market interplay of supply and demand. Costs to public health and to the immediate physical environment are relatively easy to monetize (though the methods involved are prodigiously complex). Estimates of the possible adverse impacts from global warming are much harder to estimate, and such estimates are much more controversial. So it's easy to see why the Academies did not include climate costs in their analysis.

But as we all know, coal-fired power plants account for a third or two fifths of U.S. greenhouse gas emissions. If, pursuant to Cropper's reasoning, the United States were to penalize coal power to account for its impacts on public health, a strong impact on carbon emissions also is to be expected.

Definitive up-to-date estimates of coal generating costs are surprisingly hard to locate, but generally they are put in the vicinity of 5 or 6 cents per kilowatt hour. So if one were to tax up the cost of coal-generated electricity by 3.2 cents to compensate for bad heath impacts, the net economic effect would be to increase the cost of coal-generated electricity by 50 percent or more. At that level, unsubsidized nuclear-generated electricity would be competitive to coal and so would wind; natural gas would be highly competitive. A 50 percent tax on coal-generated electricity, in short, would lead to rapid replacement of the country's dirtiest coal plants by brand spanking new gas and nuclear plants, and wind farms. It would be like replacing a 1952 Plymouth--a great car in its day--by a Toyota Prius.

This course of action, let it be said by way of fair disclosure, is exactly the strategy I proposed in a book several years ago. (The third chapter is devoted to the human costs of coal combustion.) Though the book may be ready for the ash can of history, its basic idea is alive and kicking. What gives the idea of replacing the dirtest U.S. coal plants with zero-carbon and low-carbon generation is this: According to the Academies' findings, 10 percent of the 406 coal-fired plants it examined account for 43 percent of the coal sector's damages to the public good; the least damaging 50 percent of the plants account for just 12 percent of the damage.

So if the United States were to shut down the half of its coal-fired plants that are the dirtiest, the immediate effect would be to save close to 9,000 lives and cut the country's greenhouse gas emissions by 20 percent or more—that is, more than the Obama administration's current action plan foresees for the economy as a whole in the next ten years.




The Smart Meter Avalanche

The Edison Electric Institute, hosting a press briefing today on the smart grid, distributed an enumeration of smart grid rollouts which indicated that 21 states have plans to install smart meters for more than half the metered population, while another eight have plans for less than half the population. Those 29 states include most of the country’s largest and most populous except for Missouri, New York, North Carolina, Tennessee, and Washington (state).

According to Edison’s Institute for Electric Efficiency, many of the country’s largest electricity distribution companies have plans to install millions of meters in the next years, with deployments to be complete between 2012 and 2015. These include the Southern Company (4.3 million), AEP (5 million), Baltimore Gas & Electric (2 million), and Michigan’s DTE (4 million).   In Texas, CenterPoint Houston expects to install 2 million by 2014, and Oncor 3 million by 2012. Southern California Edison is shooting for full deployment of 5.3 million meters by 2012, and Pacific Gas & Electric of 5.1 million. To date, by general consensus, PG&E's program is the largest and most advanced in the United States.

In total, according to the EEI compilation, nearly 60 million smart meters will be installed by 2015.

EEI’s media briefing was devoted mainly to the implications of smart metering for customers and distributors, in terms of energy conservation, monetary savings, improved reliability, and more efficient, less expensive maintenance. The representative of one energy company said it stands to make or save, over 15 years, $2.5 billion on a smart meter investment of $500 million. But there are big implications, too, for companies that specialize in processing and communicating data. This is because the data requirements associated with smart metering--not to mention all the other digital elements associated with the smart grid vision--will be gargantuan.

According to one calculation circulating this week, installation of 100 million smart meters in the United States might generate 100 petabytes per year of data that need to be transmitted, archived, and manipulated. That estimate,  by Jack Dahany of, is based on a current estimated per-meter data rate of 400 MB per year, which Dahany multiplied by 2.5 to allow for higher future sampling rates and additional smart grid data requirements. By comparison, Google handles 20 PB of data daily, observes Katie Fehrenbacher of, who publicized Dahany's calculation.   



That Radical Decoupling of Gas and Oil Prices

Kurt Zenz House, a widely acclaimed research fellow at MIT, has a recent article drawing attention to the "curious oil and natural gas price differential." In the past 20 years, reports House, gas has sold at about two-thirds the price of oil, per unit energy. Since the beginning of this year, however, gas has been selling at around one quarter the price of oil. Of course that ratio fluctuates quite a bit on short time scales but rarely if ever as much as in the last year. "It is nearly impossible," says House, "to explain the current price anomaly between natural gas and oil with historical data. So, what's going on?"

House mentions prominently the discovery last year that the Marcellus Shale formation in the northeast United States has enormous recoverable reserves, using new horizontal drilling techniques. Because of such reassessments in light of new technology, estimated U.S. gas reserves are 40 percent higher than they were a few years ago. What's more, the exercise is being repeated everywhere, with similar results expected. “It’s a breakout play that is going to identify gigantic resources around the world,” energy expert Amy Myers Jaffe of Rice University told the New York Times. Cambridge Energy Research Associates guesses that because of gas shale, world reserves could be 50-160 percent higher than previously thought.

That's not all. As relayed recently in this space, BP has made an enormous oil and  gas discovery in the Gulf of Mexico, and three other top oil companies are reaching agreement on exploitation of Australia's gigantic Gorgon field. One of them, Royal Dutch Shell, announced last week it plans to build a floating liquefied natural gas facility, which it expects to use initially in two newly discovered fields northwest of Australia. Such "stranded" fields around Australia--too far from the coast or too sparse to warrant construction of pipelines to processing facilities on land--could contain as much as 140 trillion cubic feet of gas, according to an Australian government estimate cited in the Wall Street Journal. Much larger than a football or soccer field, Shell's floating LNG facility will be 480 meters long and 75 meters wide, and will weigh 600,000 metric tons. It will have the capacity to produce 3.5 million metric tons of LNG per year.

The most recent authoritative estimate of U.S. natural gas reserves, released last June, came from the Potential Gas Committee, a consortium of academic and industrial experts coordinated by the Colorado School of Mines. The committee boosted its end-2008 estimate of reserves to 1,836 trillion cubic feet—an increase of 45 percent from end-2006, and the largest increase in the 44 years the committee has been operating. When the committee's results were combined with the Department of Energy's "determination" of proven gas reserves (said the committee), the United States has a "total available future supply" of 2,074 trillion cubic feet, a 35 percent increase over the previous such evaluation.





U.S. Car Makers Push for Hydrogen Infrastructure

Manufacturers of cars in the United States are leaning on the government to step up support for hydrogen infrastructure, reports the Bloomberg news service. Car makers including GM, Toyota, Honda, Daimler, Hyundai, Kia, Renault, and Nissan have made it known that they expect to be able to manufacture fuel cell cars running on hydrogen at competitive costs by 2015; the first four say their immediate goal is to shave the extra cost of a hydrogen car versus a regular car to $3,600.

Early in this decade, leading U.S. automakers ditched plans to deploy electric cars after the U.S. government threw its enthusiastic support behind the vision of a "hydrogen economy"--one in which motor vehicles would be powered by fuel cells--which turned out to be much too optimistic. This year Energy Secretary Chu slashed funding for development of fuel cel cars, to some dismay, which prompted Congress to restore funds. Germany's official goal is to have 1,000 hydrogen fueling stations in place by 2015, and in Japan 13 oil and gas companies have joined forces to develop a hydrogen fueling infrastructure.

Siemens Natural Gas Plant Sets New Efficiency Record

Siemens announced this week that it has completed testing of a combined-cycle, natural gas generating plant near Ingolstadt, in Bavaria. Rated at 340 MW in gas-only mode, the test run was so successful, the plant now is expected to achieve a rated output of 370 MW, running in that limited way. When the second steam turbine is connected, the plant will have a capacity of 570 MW and an efficiency of 60 percent--two percentage points higher than the most efficient gas combined cycle plant currently operating.

A decade or two ago, such efficiencies in a thermal power plant would have been considered unthinkable and unachievable. They help explain why, on balance, natural gas is still the technology of choice for electricity generation almost everywhere in the world. That is to say, if enough gas is expected to be available in the long run at acceptable prices, there's really no better way of making electricity.

Such considerations prompted me to wonder, in a recent blog, why the U.S. natural gas industry feels called upon to run big ads telling readers how good gas is. Since that post provoked some ire and aroused some misunderstandings, please permit this humble blogger to clarify a few points:

--though I have written critically about nuclear technology and the nuclear industry for 35 years, I am not anti-nuclear; in fact, I have argued elsewhere that nuclear energy will be essential in any concerted U.S. effort to sharply cut greenhouse gas emissions

--however, there are numerous well-known safety issues associated with nuclear energy, including the danger of explosions in nuclear reactors: during the Three Mile Island partial melt-down, there was acute concern about the possibility of a hydrogen explosion; the Chernobyl reactor blew up as the result of a runaway self-escalating nuclear chain reaction; in fast breeder reactors, full-fledged nuclear explosions can occur; and steam explosions are possible in any standard water-cooled, water-moderated reactor

--in the case of the catastrophic Chernobyl accident, a great deal of radiation did of course escape; the first evidence we had of the accident in the West was the detection of atmospheric radiation in Sweden

--while it's most improbable that any terrorist group would be able to extract plutonium from highly radioactive spent reactor fuel, if the fuel is reprocessed and the recovered plutonium is transported, the plutonium could be stolen and used to make an atomic bomb

--the estimate of the number of Americans who die annually from exposure to coal power plant pollution--30,000---is discussed extensively and documented in the third chapter of my book, Kicking the Carbon Habit: The Case for Renewable and Nuclear Energy

--my post is a critique of the way climate policy is formulated in the United States and, to a great extent, Europe as well, not of any particular person or party


Gas Ads Revisited

David Brooks of The New York Times appears to be a moderate Republican of conservative bent. This blogger's personal politics are somewhat different, but he and I are in agreement on the virtues of a carbon tax without special deals for special interests.

In a column this Tuesday, Brooks conjures a modern-day Jeremy Bentham--that is to say, a utilitarian with a taste for social engineering--and a contemporary David Hume, a philosophical skeptic. Brooks's Bentham would attack global warming by gathering "the smartest people in the country and he'd figure out how to expand wind, biomass, solar, and geothermal sources to reduce CO2 emissions." Etc. Brooks's Hume  would say, "I don't know how to generate clean energy, and I don't know how technology will advance in the next 20 years. Why don't we just raise the price on carbon and let everybody else figure out how to innovate our way toward a solution?"

"The people on Mr. Hume's side believe," continues Brooks, "that government should actively tilt the playing field to promote social goods and set off decentralized networks of reform, but they don't think government knows enough to intimately organize dynamic innovation."

This is exactly what I think too. As for the alleged factual errors or misrepresentations in my previous post about natural gas ads, they are addressed separately.

It's a Big Grid, and Somebody Has to Furnish It

Nearly fifteen years ago, shortly after joining IEEE Spectrum magazine to cover power and energy, I attended a briefing sponsored by Schweitzer Engineering, the pioneer in substation automation. At that time Schweitzer was not yet a household word, and the digital revolution was in its infancy as far as electrical transmission and distribution systems were concerned. So it made eminent sense for Schweitzer to bring people together to show how  every device in an electrical substation could now be replaced by state-of-the-art microprocessor-based equipment. Yet when I turned to my neighbors, two relatively young engineers from New York's Con Edison, one remarked: "The electro-mechanical switches and relays that we installed in the 1920s are still working flawlessly. Why would we replace them?"

What a difference 4.5 billion dollars make. That's the amount of money the U.S. stimulus bill allocates for direct smart-grid grant-making, to support endeavors such as replacing electromechanical relays with microprocessor-based equipment. The U.S. Department of Energy reportedly has received 570 applications from utilities and energy companies for grants totaling $14.6 billion, about triple the available funds. The way DOE winnows those grants will have a big impact on the direction grid enhancement takes, and so energy officials will have to sharpen their thinking about just what the smart grid means.

The process has been taking utility mangers outside their comfort zone as well. To be sure, many or most energy companies had internal wish lists for long-term grid improvements, but to be eligible for Federal  money, they have to convince DOE that projects are "shovel-ready" and yet not something they would have done anyway, absent public funding. "It's a sweet spot that's hard to hit," commented Marc Rosson of the Snohomish County Public Utility District in Everett, Washington, speaking recently at a press panel convened by SAP, the German database and software company.

The whole business of writing applications—"essays, not multiple choice!"—was entirely new to many utilities. So it's been a risky business not only for the DOE officials but for the energy companies themselves, observed Wayne R. Longcore, director of enterprise archicture and standards with Consumers Energy, in Jackson, Mich.  Companies seeking funds have had to be careful what they wish for, because once they get money and commit themselves to procurement strategies, they'll be stuck with what they've acquired for 20 or more years.

So what are they wishing for?

Let's just focus for a moment on the consumer's premise. In the smart grid experiment being conducted by xCel Energy and partners in Boulder, Colo., participants log onto the Internet to get a display showing how their home is using energy, hour to hour. It's nice display, but how many people are going to want to go to the trouble, ideally more than once per day, to check the details of their electricity consumption?

The Bluebonnet Electric Cooperative, which serves 85,000 meters in the southeastern area of Texas between Austin and Houston, has a different idea. It has contracted with Control4, a maker of home-area network control and monitoring devices, to provide a compact and semi-portable device that somewhat resembles an iPhone, as Bluebonnet's representative Elizabeth Kana put it in the SAP panel.

Britain's Energy Saving Trust, according to a recent BBC report, has concluded that such user-friendly devices will be crucial to any smart meter rollout. The British government has decreed that all the country's homes are to be equipped with smart meters by 2020, but the energy trust takes the position that the meters will only lead to modified consumer behavior if they are coupled with stand-alone home monitors. The British government agrees in principle, but it remains to be seen whether purchase of such monitors will be subsidized.

Speaking at SAP's grid-week conference in Washington, a representative of Accenture said that one thing they've learned in smart grid experiments, including a collaboration with xCel, is that "you have to make it easy for the consumer," and "you have to have incentives." Xcel hopes with its SmartGridCity to persuade regulators to provide incentives in the form of things like real-time pricing, but is it making things easy enough for the consumer?

Another somewhat disappointing aspect of the demonstration program in Boulder has been the absence of smart appliances. Yet Whirlpool announced in March that by 2015 all its home appliances will be able to talk to the grid, and General Electric soon followed with a similar announcement, notes Consumers Energy's Wayne.

The news that ten residences under construction in Abu Dubai will be equipped with smart appliances capable of chatting with the grid inspired a worried colleague to imagine this conversation:

Grid: Energy prices up.

Refrigerator: OK, raising internal temperature.

Me: Low on ice and expecting guests for dinner. Uh, does this mean I have to go to the store?

Getting communications right will be essential to the smart grid at all levels, from interactive appliances to the highest level of system monitoring and control. So it's no wonder that the really big shots--companies like Intel, IBM, Microsoft, and Cisco—all are getting into the game. Cisco's Chambers was recently quoted as saying that his smart-grid development team has "almost an unlimited budget."

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