Wednesday, January 28, 2009
There is at least one non-stimulative program in the stimulus package that I support, and that is the reconstruction of the electrical grid. Long story short, there is a staggering amount of energy wasted because our grid is old, and a national program to rebuild it to the latest standards would save a lot of power and make it possible to move power longer distances. Both objectives make sense, whether your motives are to save the ice caps or defund the jihadis. That said, this is spot on:
A smart grid would be a good thing nevertheless for the purposes of conserving electricity by allowing for variable pricing, amongst other things. The utilities would probably build it themselves if they were allowed to, but such obstacles as environmental opposition to new lines and regulations that forbid smart prices get in the way. So government has to do it.
In fact, it seems that the model we are following is this one: government and lobbyists use regulation and innovation to stop the market from innovating; government and lobbyists perceive need for that market innovation; government pays market to implement innovation by paying costs of regulation and litigation from taxpayer funds; government and lobbyists finally say the market has failed and only government can provide genuine progress.
Meanwhile, Vladimir Putin emerged as a "defender" of free enterprise.
From the official Russian news agency RIA Novosti today:
"Russia's prime minister warned on Wednesday against excessive protectionism and a bigger state role in the economy amid the ongoing financial crisis.
"Speaking at the opening of the World Economic Forum in the Swiss resort town Davos, Vladimir Putin said 'blind faith' in an all-powerful state and its bigger role in the economy was wrong."
Actually, spending on grid improvements is my idea of a proper stimulus. If we are going to go so far into debt, I think it should be for things which will have a long term benefit and for which we would not otherwise be able to justify the expenditure. Going deep into debt for food stamps seems like a very bad idea to me. But going deep into debt to make energy independence possible will in my view reduce the long term need for food stamps.
@ML: Someone has to put up miles of transmission, install the meters, build the new generation and manage the facilities.
@TH: Even if there was no power saved and no losses reduced, a smart grid would still be a large cash-saver because dialing down everyone's A/C systems two degrees at particular times would prevent peaking (read: expensive) generation from setting the supply price. Also, power markets are something one should be very careful about introducing competition into, as they are natural monopolies.
Energy prices act like a tax on all users. So to extent the grid reduces costs related to energy, it is a stimulus. Of course the coming massive inflation will wipe out all that saving as energy costs will rise.
What part of the grid are you referring to as being so wasteful? The transmission system? Distribution? Generation? End-user? Something else?
From my understanding, gains in transmission & distribution would only be incremental at best.
That leaves generation which isn't as efficient as it could be, but a lot of it isn't really that old. It also leaves end-user. A lot of ground can be gained at the end-user level, kind of like going from a regular small car to a hybrid. That much is very true. But is also a far cry from rebuilding the grid.
@ Nobrainer: One of the many things about power markets that makes then less than canonically economic markets is a near-total lack of demand response. If all homes has their thermostats set to only run of power was <$60MWh, the need for expensive "peaking" generation would be minimized, preventing easily hundreds of millions of dollars in uneconomic costs each year. Also, installing the telemetry necessary to do such a thing is no small feat.
Eric the R is all over this. A modern grid does at least two things. First, it will (as I understand it) massively increase the distances over which power can be transmitted (engineers out there who want to comment should fire away, but I believe that the new grid would use direct current, rather than alternating). That will enable us to put windmills on the plain in Texas and send the power to Las Vegas or Denver or New Orleans, for example. More significantly, a "smart grid" would be responsive to smart devices in homes or businesses. This will become particularly important once automobiles start moving from gasoline to electricity (as will happen once plug-in hybrids hit the market). A smart grid, for example, would respond to surges in demand, such as 6 pm when ever commuter suddenly arrives home and plugs in their car for the night. The possibilities go on and on, as I understand it.
Often missed secondary effect: when the demand for power gets partially levelized, because you dampen the peaks across time and lift the overnight troughs by powering electric cars, a larger amount of load is base load. This means that the demand for power is there all the time, allowing transmission to serve it with generation that has high startup and low marginal costs. In particular, this increases the capacity that can be served by plants too expensive to turn off frequently.
Along these lines is also the ability to transmit Internet broadband along power transmission lines.
The so-called "smart appliances", etc. are on the drawing boards now, and protocols for broadband internet transmission will allow the utilities to signal "smart appliances" to achieve the load leveling that is desired, per Eric the Red's comments.
This is going to happen without much help from the government, although they are sort of pushing it, and arbitrating the digital protocols to make them uniform.
The larger and more difficult question is the ability, as TH indicated, to integrate, over longer distances, supply and demand of electricity, and allow better and more economical load leveling.
Those hated coal-burning power plants in Ohio and elsewhere in the Midwest are often sending their electricity to New York (City), in a very inefficient way (something about a "loop" in the Buffalo area that is a real kludge). Remember the great blackout in 2003, I believe? This inter-connecting of different "grids" has happened in a very uneven way, and there is not much financial or legal incentive for First Energy or AEP in Ohio to fix it (carry ALL the costs) so New York can buy their excess generating capacity when they feel like it (little "guaranteed" return), which is what I think Eric is getting at. There are quite a few "ISO's" in existence (regional grids) that are quite well managed, but no coherent strategy to connect them (efficiently) and allow them to buy and sell electricity as needed.
Losses due to electrical resistance on the major transmission lines are very substantial. The wire is sized for lowest cost initial installation, not TCO.
The power companies don't have to follow NEC wire sizing rules and use their own rules...so they run their stuff small and scorching hot to save on installation costs. The thermal losses, they just pass on to the consumer.
The hotter a wire operates, the more electrical resistance it has.
I'm certainly all for increasing demand response programs and for making it easier for the industry innovate and improve on its own.
I am specifically bothered by the claims how inefficient the transmission & distribution system is. About 3% of power that is generated is lost in the transmission system. Switching over to all HVDC lines would decrease that number to about 2%. So, in the aggregate, because we generate a lot of electricity, there can be some big savings because one can argue that the current losses are "substantial". There is room for improvement. However I'm not convinced that the investment needed to improve overall efficiency by 1% is worth it.
About another 3% is lost in the distribution system. But I'm not at all sure that using HVDC makes any sense at the sub 100kV level.
In total, line and system losses for transmission and distribution are about 6%.
Additionally, line losses are a function of line length. So using longer lines to tranmit power from farther away is possible. However, it is going to increase line loss and wipe away some or all of the gains that were made by switching to HVDC.
There can be an argument made that better transmission systems will reduce congestion and allow for the use of more efficient generation. That's fine. It's an argument worth making. But my point is that it seems like some people believe that line losses are 10 or 20 or even 50%. That is simply not true and it's important to get that idea out of their heads.