One giant leap


Will that be one jump, or two?

I find hiking exhilarating. I love hearing the sound of the wind in the treetops, the birds calling to one another, the crunch of dry leaves and twigs underfoot. I love picking my way through some rugged ground, solving the puzzle of footholds and jumbled rock. I love coming to a clearing, and seeing a magnificent vista open up before me.

Most of the trails I hike are in well-managed conservation areas. Where there are watercourses – brooks, streams, even swampy areas – there are boardwalks and bridges to make passage easier. But sometimes you come to a stream and discover that the bridge has rotted out or washed away. You can’t tell how deep the water is. If you want to get across, you have to commit to one big leap. A double hop is not an option.

We are hiking a path from the old world of electricity generation to the new. In the old world, a small number of massive facilities consumed finite resources to produce power. On the way, they produced such nasty by-products as greenhouse gases (which cause global climate change), sulphides (which lead to acid rain), and nuclear waste (which remains deadly for thousands of years). In the new world, a vast number of tiny facilities will produce clean power from inexhaustible sources like sun and wind. Our hike is taking us from centralized to distributed, from finite to renewable, from brown to green.

Market pressures are already moving us along the trail. The fossil fuel supply is dwindling, forcing prices inexorably upwards.  Short-term shocks like a revolution in Libya or an embargo against Iran are enough to drive the entire global economy into recession. Wind and solar, once niche players used only where grid power was unobtainable, become cheaper with each deployment. As prices drop, the size of the market increases. Eventually the cost of new renewable energy facilities will be lower than the alternatives.

However, we cannot wait that long. The evidence is clear – our climate is changing, and human use of fossil fuels is the cause. The consensus is that long before market forces drive fossil fuels into oblivion, runaway climate change will have had catastrophic and irreversible effects. We cannot wait for the market. We must act now. We need to use government policy to speed up our hiking pace.

We need it even more because of the intertwined, complex technological systems that await us in the post-carbon era. As I mentioned last week, we will need to be able to generate power from renewable sources, store it for when the sun isn’t shining and the wind isn’t blowing, replace our internal combustion-based vehicle fleet with electric vehicles, and build a mosaic of tiny, intelligent, interconnected electricity grids to support it all.

That’s a pretty tall order.

Let’s take a look at energy sources first. Let’s say we have a coal-fired generating station. You might think we can just knock it down and build a wind farm in its place. However, it isn’t that simple.

The coal-fired plant probably isn’t conveniently located in an area with strong and steady winds. So the wind farm must go where the wind is. However, that is typically an isolated location with no nearby high voltage transmission lines. So now you have to upgrade the grid infrastructure to accommodate the wind farm output.

Then there’s the whole proactive-reactive thing. Electrons are electrons, but a wind farm supplies them very differently. The thermal power plant is dispatchable – when demand is high, you throw a switch and start it up; when demand is low, you shut it down.

The wind farm is at the mercy of air movements. When the wind blows, you take the power. When it dies, so does the electricity. The wind doesn’t adjust itself depending on whether power use is at its peak or its nadir. A wind farm will merrily churn out electricity even if nobody needs it, or the turbines may be stock-still on a windless midsummer day when all the A/C is running flat out.

You need a way to store up the energy produced during low demand periods, and retrieve it when demand outstrips supply. Once you have that nut cracked, you have a complete solution. But that whole chain of problems and solutions adds up to significant cost and complexity. It’s also a long way beyond the utility’s comfort zone.

The alternative is to abandon the idea of having one big power plant. Instead, you spread your generation capacity as far and as wide as possible. After all, the wind may not be blowing in my town, but it is somewhere else. This means that in wind power generation (and also in solar), bigger is not better. Concentrating generation capacity in one location does not manage the risk. It is far more effective to spread the wind turbines out across the landscape, ensuring that one small mass of still air doesn’t rob you of a big chunk of generation capacity.

As an added bonus, the grid likely won’t need upgrading. Since a single turbine produces a lot less electricity than an entire wind farm, it won’t overtax the wires. Much of the power generated will be used up in the local area anyway.

Centralized renewable energy only gets you halfway across the stream. As a policy maker, it’s not enough to encourage renewable energy. You need incentives for distributed renewable energy.

One policy instrument used extensively in the United States is the Renewable Portfolio Standard (RPS). This mandates that a certain percentage of power must come from renewable sources by a specified date. The problem is, the RPS has a built-in bias toward large-scale installations like wind farms and solar farms. If I can meet my RPS obligations by building a few big facilities, it’s a much simpler undertaking. However, it is storing up trouble for the reasons described above. It also means that once the RPS is met, there is nothing to maintain the local market for renewable energy products and services, and the industry will crumble.

A better alternative is the Feed-In Tariff (FIT).  This type of incentive allows policy-makers to decide on the shape of their renewable energy sector. For example, the FIT can encourage small-scale rooftop solar installations and stand-alone wind turbines by offering a higher rate than the one applicable to big solar and wind farms. This is a much more market-friendly option, as it encourages the efficient allocation of capital and provides a more organic environment for the local renewable sector to grow. It also means that the FIT rates can track the declining cost of the various technologies.

This is by far the better way to get across the stream in a single leap.

Will that be one jump, or two?

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