Electricity is this seemingly magical and invisible form of energy that all of us in the United States take for granted, although almost one billion people in the world are still without it. We plug a device into the wall and presto amazing things happen. We charge our smart phone, run our computer and light our house. It keeps us warm in the winter and cool in the summer. It entertains us when we are bored. Electricity is not a biological necessity like food and water, but most of us feel like we need it to survive.
When there is a power outage, we must read by candlelight and we can’t watch television. Food spoils in our refrigerator or freezer if the outage lasts too long. We must use our car to keep our smart phone charged and we risk being cut-off from social media and the constant barrage of 24-hour news channels (perhaps a good thing). Some of us have electric cars and our mobility is limited since we can only go so far before we need a charge. Power outages are big news. They are at the top of news websites and the lead-in for news channels. Some buildings like hospitals and nursing homes have special emergency generators to keep the juice flowing even through electric outages. Outages emphasize the importance of electricity in our lives.
But electricity comes with an evil side. The coal and gas generators that produce our electricity are responsible for the largest share of greenhouse gases that now exist in our atmosphere. Coal is the worst and most polluting of our fossil fuels and about 70% of it is used to make electricity. It’s not just carbon dioxide that’s the problem. Burning coal also produces soot, sulfur dioxide and other pollutants that cause acid rain and is responsible for an estimated 800,000 deaths each year, on par with a COVID-19 scale pandemic every year.[i] In the United States, 100,000 miners have lost their lives in coal mining accidents since 1900 and another 200,000 have died from black lung disease.
We think of electricity as being clean, but this is a misrepresentation. Electric buses and cars are labeled as zero emissions. There are no emissions inside our house when we turn on our television. While electricity is clean where it is used, the majority of electricity in the United States is produced by burning fossil fuels at remote power plants. Emissions still occur but they happen at a far-away location that is easy for us to put out of our mind. Some pollutants like soot and other particulates don’t drift very far from the power plant, but greenhouse gas pollutants like carbon dioxide are global. Emissions in China or India affects North America in essentially the same manner as if the emissions were domestic.
The Harvard Medical school published a detailed study in 2011 that estimates the cost to human health and the environmental impacts of coal, including mining operations, its transport primarily by rail, its combustion in coal power plants, and the waste stream it leaves along the way. They estimate that Americans spend $500 billion (that’s half a trillion dollars) each year related to everything from loss of work; public health damages from NOx, SO2, PM2.5, and mercury emissions; fatalities due to rail accidents during coal transport; the public health burden; government subsidies; and lost value of abandoned coal mine lands.[ii] The public is paying these costs, not the coal or electric industries.
There are parallels in electricity with Robert Louis Stevenson’s narrative about Dr. Jekyll and Mr. Hyde. Dr. Jekyll is the well respected and intelligent scientist who represents the good side of electricity. He improves the quality of our life through the amazing devices and comforts powered by electricity. But Jekyll transforms himself into Hyde, his wicked alter ego who does not repent or accept responsibly for his evil ways. Hyde pollutes the environment not only with immediate effects on human health and degradation of the environment, but longer impacts on global warming and climate change that will be paid for by our grandchildren and subsequent generations. Like Jekyll and Hyde, electricity has its good side and its evil side.
The good news is that we can do something about the evil side. We are all users of electricity and we have choices about where we get our electricity, how much we use and when we use it. Retail competition is available in one form or another in 18 U. S. states which means that residents of these states don’t have to buy their power from just their local monopoly. In Massachusetts, for instance, home owners and business managers can choose from dozens of electricity providers and some offer electricity made with 100% renewable energy. There used to be just one phone company and only one airline provided service along each route. With deregulation or restructuring of these industries, we now have a choice of multiple phone services and numerous airlines are competing for our business. A similar process of restructuring has occurred within the electric industry in much of the United States; competition between electricity suppliers at the wholesale level already exists for about 75% of us. In states with retail competition, electric utilities have become “wires companies”, like the telephone companies were right after deregulation. They maintain and operate the transmission lines, substations, and local distribution lines, but they are required to offer access to third parties for a reasonable fee. An independent power producer or community choice aggregator can sell you electricity and deliver it over the common set of wires and transformers.
Even if you don’t live in an area where you can choose where your electricity comes from, you can still do something. Emissions from electric power plants scale with use. If we use more electricity, there are more emissions. If we use less, there are fewer emissions. This is why energy efficiency is such an important consideration as we address global warming and associated climate change.
In addition, renewable energy systems, in particular solar energy systems, are becoming less expensive, and many of us are installing them on our roofs. The prices for utility-scale solar systems are even lower because of economies of scale. Utilities in most states have some form of net-metering, whereby the utility will buy your extra solar-generated power when you are making more than you are using and give you a credit for power you will buy from them later in the evening when the sun goes down.
Emissions by the electric industry are declining. Coal plants in the United States are slowing being decommissioned, taken out of service, and replaced by natural gas and renewable energy. Taking account of all the costs of building and running a power plant from the initial investment to fuel and maintenance costs during operation, the cost of making electricity with coal is much higher than the alternatives and this is without paying for the environmental damage related to mining the coal, delivering it to the power plant and the carbon and other pollution that occurs when the coal is burned, as well as the impacts on human health.
As we incorporate more renewable energy and especially solar onto the electric grid, the electricity produced in the middle of the day when the sun is out will be relatively clean, but the electricity produced in the early evening when the sun is down and we are all arriving home to turn on our air conditioner, cook dinner, and watch TV will be generated by gas or even coal power plants. California and other states are already seeing this pattern. When we use electricity and when we generate our own matters as much or more than the balance of consumption and production over a whole year. Each local grid has a signature of emission that varies by time of day and month of the year. To have the biggest impact on carbon emissions and other pollutants, we should shift our energy use to periods when emissions are low and avoid using energy during periods when emissions are high. Unfortunately, many of the zero net-energy buildings being built today do just the opposite. They export power to the grid when emissions are low and draw from the grid when emissions are high. Some of this mismatch is due to poorly designed rate structures that encourage us to use electricity at night when the grid is dirtier. We will see these tariffs change in the coming years. Storage and other load shifting techniques are needed so that the export and import signature of buildings and other energy consumers aligns better with the carbon emission signature of the grid.
Our existing electric grid is designed to deliver power in one direction, from large power plants located in remote areas to our cities and communities. As more customers become both consumers and producers, electricity will begin to flow in both directions, much like the internet, where each connection can be both a consumer of information and a producer of information. Bidirectional flow of electricity will present challenges for some distribution circuits. The Electric Power Research Institute (EPRI) defines the hosting capacity of each circuit as the amount of distributed renewable energy that can be accommodated before that circuit needs to be upgraded. Upgrades can range from expensive reworks like making the conductors larger, increasing voltage, or replacing transformers, but the hosting capacity can also be increased by storage technologies behind the customer’s meter, by using smart inverters that can communicate with the grid and other less expensive solutions. In any event, the electric grid will definitely change as distributed renewable energy systems become less expensive and more prevalent.
The declining cost of roof-top solar systems supported by net-metering programs have caused alarm among many electric utilities and the main trade organization for investor-owned utilities, the Edison Electric Institute or EEI, published a paper a few years back that triggered fears of a possible utility “death spiral”. Like most industries, there are two costs in delivering electricity: fixed costs that do not change with the amount of product delivered, and variable costs which scale with the amount of product. Electric utilities have a lot of fixed costs including the construction and amortization of their power plants, substations, distribution networks, and control systems. The emphasis on fixed costs will only increase as wind and solar replace coal and gas. The death spiral narrative goes like this. Utilities need lots of customers over which to share their fixed cost so the burden on each customer is reasonable. When some customers start making their own electricity, the burden of paying for the fixed costs transfers to the remaining customers, which means that their rates will go up and they will be encouraged to install solar themselves. And the downward cycle continues.
The threat of a death spiral is exaggerated and is being addressed by tariff changes, but what is certain is that the electric utilities that serve us today will be different tomorrow. Pressure from regulators and the need to clean up carbon emissions and other pollution associated with electricity production will continue to mount, in spite of the lull in clean-up pressure we saw from Republicans during the Trump administration. Most electricity customers already have choices on how to acquire the electricity they need and innovative companies will offer even greater choices in the future. Batteries and other technologies like flywheels and pumped storage will enable us to store the extra power we make from solar in the day for use overnight. Just like solar panels, the cost of these technologies is rapidly declining relative to conventional power plants.
The electric grid consists of a lot of above-ground wires and poles that can be damaged in severe weather and the risk of wildfires in the west has caused many utilities to shut down power for days at a time in order to reduce their liability. The frequency and severity of weather-related power outages will increase as our planet warms and our climate changes even more. New solar generation and storage technologies give home owners and businesses who can afford it the chance to “island” themselves from the electric grid and power at least some of their operations with a combination of on-site solar, batteries, and perhaps auxiliary fossil-fuel generators. Some college and corporate campuses are already creating their own microgrids that can operate in two modes: grid-connected or islanded. This provides them with the best of both worlds. They can enjoy and exchange power with the electric grid for the majority of time, but seal themselves off during emergencies and use their own electricity. I know some old hippies who have been living completely off the grid for decades using pretty primitive technology compared to what is available today, so the technology exists and has been around for a while.
Some describe the electric grid as the most far-reaching, important and complicated invention of mankind. It is certainly those things. Unlike our highways that are managed almost entirely by governments, ownership and management of the grid is shared by a mix of private companies and government entities at all levels. Regulatory bodies exist at the federal, state and local levels. Electric cooperatives are owned by the people, as are many municipal utilities. Investor-owned utilities have an obligation to their shareholders to maximize profits, but they must do so within the constraints of the public utility commission that grants them the right to operate as a monopoly. At the regional level, a relatively new group of entities called Regional Transmission Organizations or Independent System Operators have emerged that buy and sell power at the wholesale level and balance supply with demand on a near instantaneous basis.
This book is about the transition taking place in the electric industry and the choices we have as consumers. It starts with a little history and a description of the grid we now have; the pollution it creates; and the challenge faced by current balancing authorities and utilities. It describes the renewable energy technologies that are emerging at the utility-scale and how these technologies along with traditional pumped storage and batteries are replacing legacy coal and gas power plants. The second part focuses on what each of can do as consumers of electricity to use less dirty electricity, and for what we have to use, how we can acquire renewable energy from the grid or install our own solar systems. Part three looks at the pressures for change on the electric utility industry and speculates on what these big companies might look like in the future.
Parts I is recommended reading for all, although those of you that are already familiar with the operation of the electric grid may skim these chapters. Part II will be of most interest to property owners, building design professionals and sustainability coordinators who are making decisions about the construction of new buildings, considering renovations and upgrades to existing buildings, and looking for ways to buy cleaner electricity. Part III will be of greatest interest to city planners, environmentalists, regulators, electric utility personnel, and policy wonks as they consider ways to address climate change by making the electric grid carbon free.
[ii] The Harvard report is titled “Full Cost Accounting for the Life Cycle of Coal.” It was released and published in the Annals of the New York Academy of Sciences and authored by Dr. Paul Epstein, the Director of Harvard Medical School Center for Health and the Global Environment, and eleven other co-authors. A summary was published in https://cleantechnica.com/2011/02/17/cost-of-coal-500-billion-year-in-u-s-harvard-study-finds/ a