Saturday, December 15, 2018

Power Industry For The 21st Century

                                                                                                written 8 December 2018
                                                                                                published 15 December 2018

            The power industry has not changed much in the last 140 years ago.  Large central plants generate electricity, which is shipped over vast grids, to supply power to their customers on demand. In my opinion, electricity is the most versatile energy form to come from the industrial revolution.  Any future civilization should include widespread access to electricity, but we need a new model for a 21st century power system which would address four powerful factors.  
            First, distributed power production and storage is now economically viable. Second, our growth economy is crashing into the reality of a finite planet, requiring that we learn to thrive while consuming less power.  Third, the global money system is a bloated debt bomb and most human values cannot be reduced to fiscal solutions.  Fourth, most importantly, the climate is becoming more extreme and hostile to our current way of life due to our addiction to fossil fuels.
            The myth that privatization is always best is colliding with this rapidly changing reality.  The last two fire seasons have shown the limits of capitalism for providing essential social industries such as electricity.  A corporation's first priority, no matter what the product, is maximum shareholder profit.  This is contrary to society's need for low-cost electric power delivered by a safe infrastructure.  PG&E's corporate profit model has shown it is incapable of handling this, and is facing liabilities for fire damages that exceed their insurance, threatening to bankrupt the company.  Typically, they are asking their ratepayers and the State to cover the loss.  
            There is a place for socialism, as we see in other basic social needs such as street, water, and sewer systems.  Most major cities in California already have publically owned power.  As an alternative to bankruptcy or bailout, the State should take a controlling equity stake in PG&E as the price for covering the company's insurance liabilities.
            As fire seasons become more extreme, fire insurance problems will continue to grow. Merced Property and Casualty was made insolvent by the Camp fire.  As other companies decide to leave, or rates become unaffordable, California may need to cover fire insurance to keep the housing market from crashing.  The Federal government covers flood insurance for the same reason.  State control of both insurance and the power system, would incentivize rebuilding the system for fire resilience.  
            Undergrounding power lines costs up to $3M per mile, and California has over 200,000 miles of distribution lines.  To put this in perspective, the insurance liability for just the last two fire seasons exceeds $30B, the cost to place 10,000 miles of distribution lines underground. 
            In this new model, power would be routinely shut down whenever weather condition dictate. Since electricity is a necessity, the system would invest in onsite renewable power systems and battery storage, starting with areas where shut-downs are expected.  Houses would be rewired so basic necessities remain powered during shut-downs.  Having a modest amount of power in an emergency is very different than having none.  The weather extremes we have created can no longer accommodate unlimited 24/7 power.
            Over time, customers outside problem areas would receive these distributed systems as well, moving the state toward 100% renewable power production.  The function of the grid would shift away from one-way distribution from a central plant to the customer, and become a load-sharing system, shipping excess production and filling distributed storage as needed.  Regional and neighborhood micro-grids would increase system resilience and be coordinated into the statewide system.
            Eventually, the world will awaken to the collective threat of extreme climate change and the need for equitable investment to make the transition to a zero-carbon power system.  This type of household scale unit would be of use all over the world, creating a huge export opportunity.  Distributed production and storage can be scaled from household-size up through village-size.  The basic systems can be added in parallel, allowing for expansion in small, affordable increments as funding and need increase.  If we think in terms of what could power a third-world village, and begin producing that for ourselves, as well as for export, we might just avoid climate suicide, and give our children a chance to thrive.