Energy 101 - electricity

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  • Civilians call the shots. The president decides which wars we enter, sets our strategy, and the number of troops. The Secretary of Defense decides how we fight them. These military bodies – the Joint Chiefs and the Combatant Commands - exist in an advisory capacity. They give their opinions but the military does not bear responsibility for which fights we wage. Civilians are also responsible for Social Policy surrounding the military; i.e. it is not the military that implemented Don’t Ask Don’t Tell … like all other policy, they’re just responsible for enforcing it. These are issues to take up with Congress, or the administration, not the military itself.
  • “Conventional” and “unconventional” sources pertain to the geological formations that the natural gas is found in. Conventional gas is usually free gas and is easier to produce than unconventional sources, which require more complicated extraction techniques. As such, it accounts for more than 90 percent of natural gas produced in the United States. However, unconventional sources like shale are becoming increasingly economical to produce. [Diagram courtesy of EIA]
  • There are many conventional and unconventional sources of natural gas in the United States. The map on the left shows the conventional fields while the map on the left shows shale “plays”, shale formations that contain significant accumulations of natural gas. These plays are large and, in many cases, only small parts of the play have been tapped. In 2010, Shale gas accounted for just over 20 percent of US natural gas production. The Energy Information Administration projects that it will account for nearly 50 percent of natural gas production by 2035. [Diagrams courtesy of EIA]
  • In hydraulic fracturing, water, chemicals, and sand are pumped into a horizontal well in order to create cracks in the shale formation. This allows natural gas to flow from the shale into the well easier, increasing access to large quantities of shale gas. There are several potential benefits. A shale boom could help reduce gas prices and secure our domestic supply. Some estimates also suggest that the boom could lead to about 300,000 – 400,000 new jobs in this country. But fracking has also raised significant environmental concerns, including contamination of local water supplies; the production of large amounts of wastewater, which may contain dissolved chemicals; and, according to the U.S. Geological Survey, small earthquakes. [Diagram courtesy of ProPublica]
  • In February 2010, President Obama went so far as to issue a challenge to the federal government: come up with a plan to achieve widespread, cost-effective deployment of carbon capture and storage within 10 years, with a goal of bringing five to 10 commercial demonstration projects online by 2016.
  • By way of comparison, Bureau of labor statistics says - 79,500 Americans work in iron & steel manufacturing. 84,000 work in coal mining.
  • Kilovolt ampere (kilovolt –amp)Bulk energy storage systems are positioned within the high voltage transmission system (115 kVA-230kVA) and are in the domain of the independent system operator (ISO), independent power producer (IPP) and vertically integrated utility. Market drivers include:Enabling more penetration of intermittent renewable resourcesBalancing supply and demand by providing ancillary servicesResponding quickly to system contingencies, e.g. equipment failure, power plant outagesBalancing load and relieving transmission congestionSmoothing or avoiding cycling of thermal power plants being used for frequency regulation or for load followingDistributed energy storage systems fall within city load centers (<69 kVA) at electric utility substations, near feeders, neighborhoods, and at industrial, commercial, residential customer locations. Can be located on either utility or customer side of meter. Market drivers include: Managing electric grid peak demandsImproving reliability and outage mitigationMore effectively using capital expenditures for new grid infrastructureAccommodating distributed renewables and plug in vehicles
  • What does “thermal storage” mean? Is this like freezing water at lower power prices to cool buildings during the day when prices are higher?

Transcript

  • 1. Truman National Security Project
  • 2. U.S. Power Industry: 3 Step ProcessGeneration Transmission Distribution Natural Gas: 25% Coal: 42% Nuclear: 19% Hydro: 8% Wind: 3% Solar: >1% Truman National Security Project 2
  • 3. 3 Different Kinds of ProvidersInvestor Owned Municipality Co-operatives Utilities (IOUs) Owned (Muni‘s) (Co-Ops)Truman National Security Project 3
  • 4. Regulated vs. De-RegulatedRegulated • Majority of US electric companies are regulated by state-run Public Utility Commissions (PUCs) • Utilities must get approval from their PUC in order to build power plants, run programs, etc. The PUCs grant the Utility a rate of return on their investment. This regulatory situation is how Utilities operate as monopoliesDe-Regulated (also referred to as Competitive) • Some states, most notably Texas, have broken up the parts of the Generation, Transmission, and Distribution process • Independent Power Generators produce power and sell it directly to consumers • Consumers can select which power provider to get their power • The Utility owning the T&D lines must allow all power to travel through their systems • Has lead to price increases when tried in the past Truman National Security Project 4
  • 5. Truman National Security Project
  • 6. US nuclear plants deliver electricity , 2011 Source: Nuclear Regulatory Commission Source: Energy Information AdministrationThe US nuclear fleet is aging, andconcentrated largely in the eastern US Truman National Security Project
  • 7. Complex science… simple conceptFuel rods make steam, steam spins turbines,turbines generate electricity Truman National Security Project 7
  • 8. Nuclear power‘s share of the DOER&D budget: large but shrinkingDOE Energy Technology Share of R&D Funding, Comparison Over 3 Periods Source: Congressional Research ServiceTruman National Security Project 8
  • 9. Nuclear power plants enjoy highsubsidies, across the value chainSource: Union of Concerned Scientists, ‘Nuclear Power: Still Not Viable WithoutSubsidies’, Feb 2011Truman National Security Project 9
  • 10. Unresolved nuclear power issueslinger, particularly after Fukushima Radioactive waste disposal  Future of Yucca Mountain facility in Nevada? Nuclear reactor safety  Pebble bed reactors Nonproliferation New reactor designs  Bill Gates‘ TerraPower traveling wave reactorsTruman National Security Project 10
  • 11. Truman National Security Project
  • 12. Natural Gas vs. Coal Gas cheaper  The price of natural gas is at a 10 year low and has recently dropped below the price of coal (EIA 2011)  Natural gas power generation costs have also fallen  For power generation, natural gas has environmental advantages over coal  Natural gas produces lower quantities of nitrogen oxides and carbon dioxide (CO2) than coal  Emissions of sulfur dioxide and mercury compounds are negligible  Despite environmental benefits of natural gas power generation, over 600 coal fired plants producing between 45% of our electricity (vs. 23% for gas)  Natural gas power generation demand outlook is mixed  Demand for natural gas power generation may increase if policies to place a price on CO2 emissions are adopted  But renewable energy generation resources may reduce natural gas demand for electric power generationTruman National Security Project
  • 13. Natural Gas: Conventional vs. Unconventional SourcesCONVENTIONAL SOURCES ―Free gas‖ Easier to produce. Accounts for about 94 percent of the gas produced in the U.S.UNCONVENTIONAL SOURCES The increasing availability of Shale gas (which is natural gas trapped in shale formations) has raised its profile among unconventional sources. Other sources include Deep Natural Gas, Tight Natural Gas, Coalbed Methane, Geopressurized Zones, and Methane Hydrates. Truman National Security Project
  • 14. Natural Gas: Where’s the Gas?Conventional Sources Shale GasTruman National Security Project
  • 15. Natural Gas: Extraction Technologies Technologies like hydraulic fracturing (aka ―fracking‖) has helped produce a shale gas boom… …BUT, there are also environmental concerns.Truman National Security Project
  • 16. Natural Gas Production Expected to Increase Globally Natural gas production expected to increase But depends on  Environmental concerns, particularly regarding fracking  Climate policy (carbon pricing, renewable energy requirements for power generation)  Fuel price relationships, which can be altered by technology and policy, affect long term demand trends  Upstream costs Truman National Security Project
  • 17. Energy (and Environmental) Security Implications Development of U.S. shale gas resources has significantly reduced need for the U.S. to import LNG for at least two to three decades, thereby reducing negative energy-related stress on the U.S. trade deficit and economy. Rising shale gas supply has led to lower domestic natural gas prices, which lowers the costs to average Americans of reducing greenhouse gases as the country moves to lower carbon/non-oil based fuels (e.g., electricity, compressed natural gas). Potential increase in demand for natural gas which can displace high carbon fuels. Increased production by U.S. and other countries weakens ability of long- term potential monopoly power of a ―gas OPEC‖ or a single producer (such as Russia) to use energy resources as a tool for political gain.Truman National Security Project
  • 18. Truman National Security Project
  • 19. Why do we need coal? Coal is largest domestically produced source of energy in United States. Coal is abundant in United States (WY, WV, KY, largest producers). 200 years+ available Half US electricity from coal and cheapest.  Separated ingredients used in plastics, tar, synthetic fibers, fertilizers, and medicines.  Coke from coal smelts iron ore. Coal provides jobs in remote areas. Coal companies support entire communities. Truman National Security Project 19
  • 20. The challenges of coal Highest carbon dioxide emissions linked to climate change. Sulfur dioxide, nitrogen oxide, and mercury, linked to acid rain, smog, and health issues. Mountaintop removal in KY/WV linked to land and water contamination. Cheap coal makes renewables expensive and efficiency unnecessary. Economic dependence not sustainable. Aging coal fired plants. Truman National Security Project 20
  • 21. ‗EPA stay off our backs‘ Politicians in coal states must promote coal Coal industry feels itself at war with EPA KY suing EPA  No new surface mining permits under Obama Administration based on amendment to Clean Water Act. Truman National Security Project
  • 22. Can there be ‗clean‘ coal?Carbon capture storageTruman National Security Project 22
  • 23. What to do about coal? Fund carbon capture and storage projects. More ‗scrubbers‘ on plants to reduce toxic release.  Fund ways to re-use waste as byproducts such as cement. Support EPA air and water regulations for future generations. Reclaim former coal mine lands for other use. Assist coal communities in creating a ‗life besides coal‘ Assess impact of state subsidies to coal on economy.Truman National Security Project
  • 24. Truman National Security Project
  • 25. U.S. Wind EnergyThere is strong bi-partisan support for Wind Energy in the United States.Truman National Security Project
  • 26. Wind Energy Costs & ProductivityThe Wind Energy Industry has evolved tremendously over the past 20 years. Consistent energy policy is needed in order to allow for continued growth. Truman National Security Project
  • 27. Installed Wind Energy Capacity Through 2011 State level Renewable Portfolio Standards (RPS) have served as the primary demand driver for the U.S. wind energy industry.Truman National Security Project
  • 28. Wind Production Tax Credit (PTC)The wind industry is facing therecurrence of the boom-bustcycle it has seen in previousyears when the PTC was allowedto expire. • 60% of a wind turbine‘s value is now produced here in America, compared to 25% prior to 2005. • Over 90% drop in the price of wind power since 1980, benefiting utilities and consumers. • The industry has made ,ore than $60 billion of investment in the U.S. since 2005. Unlike the previous PTC expirations, over 60% of the wind turbine components are now made in the United States by American workers. Truman National Security Project
  • 29. Wind Industry - U.S. Manufacturing With the threat of the PTC’s expiration, wind project developers are not making plans in the U.S. and American manufacturers are not receiving orders • Over 400 facilities across 43 states manufacture for the wind energy industry. • Layoffs have started already • Historically, in the years following the PTC expiration, installations dropped between 73 and 93%, with the corresponding job losses.If the PTC is not extended, the loss of wind industry manufacturing jobs will impact Americans across the United States. Truman National Security Project
  • 30. U.S. Transmission• A congested and obsolete power grid limits consumers‘ access to low cost power.• The U.S. Department of Energy has identified transmission limitations as the largest obstacle to realizing the economic, environmental, and energy security benefits of obtaining 20% of our electricity from wind power.• Currently, around 270,000 megawatts of proposed wind projects, are waiting in line to connect to the grid because there is not enough transmission capacity to carry the electricity. Truman National Security Project
  • 31. U.S. Transmission – Planned Expansions High voltage transmission line expansions are planned throughout the UnitedStates. These capital intensive investments, however, require stable energy policy.Truman National Security Project
  • 32. Truman National Security Project
  • 33. Residential Commercial Rooftop Utility Scale1-10 kW 10 kW – 1 MW 1 MW– 250 MW Truman National Security Project
  • 34. Solar Growing Rapidly, Averaging 65% Compound Annual Growth Rate for the Past 5 Years 17 nuclear power plants worth of solar peak power shipped in 2010Truman National Security Project Source: PV Industry Growth Data from Paula Mints, Principal Analyst, Solar Services Program, Navigant
  • 35. Global Solar Industry Growth hasProduced Steadily Falling Prices Module Pricing Trends 1985-2011Truman National Security Project Renewable Energy Sources (SRREN), May 2011; 1985-2010 data from Paula Mints, Principal2011 numbers based on current market data Sources: 1976 -1985 data from IPCC, Final Plenary, Special Report Analyst, Solar Services Program, Navigant;
  • 36. Solar is Less Expensive Than New Nuclear $0.139 $0.129 Cents per Kilowatt Hour $0.095 $0.07 Average time to permit and build a nuclear 1 GW power plant – 13 years. Average time to permit and build 1 GW solar – 1 year. The last nuclear power plant completed in the US, Watts Bar 1 in Tennessee, took 23 years 7 months to construct.Sources: 2011 nuclear price is the mid-point of the LCOE range given by Lazard, version 5.0. 2020 nuclear price is illustrative, calculated assuming 3.5% annual escalation; 2011 & 2016 PV Prices from DOE, Advanced Truman National Security Project Research Projects Agency - Energy, $1/Watt Photovoltaic Systems, May 2011, 2020 PV price illustrative, assuming 4% annual cost reduction from 2016 (further validated by prices bid by solar developers into the California markets).
  • 37. Solar Beats Natural Gas Peak Power Today $0.238 $0.226Cents per Kilowatt Hour $0.139 $0.086 250 MW Gas CT Gas peakers pollute 3 times more than natural gas power plants. Truman National Security Research Projects Agency byEnergy, $1/Watt Photovoltaic Systems, illustrative, (further validated by prices bid byescalation; 2011 &into the Californiafrom DOE, Sources: 2011 gas price is the mid-point of the LCOE range given Advanced Project - Lazard, version 5.0. 2016 gas price is May 2011 calculated assuming 1% annual solar developers 2016 PV Prices markets).
  • 38. New Coal Can’t Deliver Power for 6-8 Years, When Solar Will Be Competitive $0.139 $0.109Cents per Kilowatt Hour $0.08 $0.07 $0.07 Coal Plant 5% 500 MW Source: 2011 coal price is the mid-point of the LCOE range given by Lazard, version 5.0. 2020 coal price is illustrative, calculated assuming 5% annual escalation: 2011 & 2016 PV Prices from DOE, Advanced Truman National Security Project Projects Agency - Energy, $1/Watt Photovoltaic Systems, May 2011, 2020 PV price prices bid by solar developers into thereduction from 2016 Research (further validated by illustrative, assuming 4% annual cost California markets).
  • 39. Solar Meets Critical Peak Power DemandTrumansummer peak load shape – CaliforniaProject System Operator (CAL-ISO); For time of use rates – Pacific Gas and Electric Company (PG&E); For PV Tracking Output – Solaria Corporation Sources: For National Security Independent
  • 40. Germany, with Less Sun than Seattle,is Largest Solar Market in the World Solar Energy Capacity (2009) in GWTruman National Security Project Lazard: Compiled from multiple industry sources, May 2011
  • 41. Germany, with Less Sun than Seattle,is Largest Solar Market in the World Italy and Germany added 13 GW in 2010 Solar Energy Capacity (2010) in GWTruman National Security Project Lazard: Compiled from multiple industry sources, May 2011
  • 42. U.S. Solar Market Is Small but Growing $1.9B 69% Net Global Year-over-year $6B Exporter Domestic Total U.S. Market Growth Market Value US Total Installed PV Solar Energy Nameplate Capacity and Generation DOE, NREL, Renewable Energy Data Book, 2009; Lazard: Compiled from multiple industry sources, May 2011 SEIA and GTM Research’s U.S. Solar Market Insight Q2 1011Truman National Security Project SEIA and GTM Research’s U.S. Solar Market Insight Year in Review 2010 SEIA® and GTM Research’s U.S. Solar Energy Trade Assessment 2011
  • 43. California Adding Multiple GW of Solar in the Next 5 Years 2009 Utility RFO submittals: 30 GW2011 Utility RFO submittals: 45 GW (expected) California could be 20% solar by 2020 1Truman National Security Project 4.4 GW is below the Market Price Referent (MPR), defined as the 20-year levelized cost of energySource:new natural gas plant in California. Of the 8.6 GW under contract, from a Greentech Media, February 2011
  • 44. Utilities Recognize Solar’s Advantages Completed US PV ProjectsTotal USA Installed PV 2 GW in 50 StatesGlobal Installed 26 GW Truman National Security Project Source: Solar Electric Power Association (http://www.solarelectricpower.org/solar-tools/solar-data-and-mapping-tool.aspx)
  • 45. Utilities Recognize Solar’s Advantages US Utility Solar Announcements1 Equal to 12 nuclear plants in 4 yearsOver the next 4 years 12 GW 1Note: Utility purchases only - Does not include residential and commercial markets Truman National Security Project Source: Solar Electric Power Association (http://www.solarelectricpower.org/solar-tools/solar-data-and-mapping-tool.aspx)
  • 46. Solar Subsidies Pale in Comparison to Fossil FuelsFossil Fuel andSolar [ELI, $72.4 billion SEIA] $2 billion [SEIA, Blumenauer, $40 billion Treasury] $7-10 billion Estimating U.S. Government Subsidies to Energy Sources: 2002-2008Environmental Law Institute, September 2009SEIA (Solar Energy Industries Association) Federal Energy Subsidies in the United States: A Comparison of Energy Technologies, February 24, 2011 ― Ending Oil Industry Tax Breaks‖ Congressman Earl Blumenauer, Third District of Oregon, www.blumenauer.house.gov, April 2011 Truman National Security Project
  • 47. Solar Creates U.S. Jobs 100k 80k 60k 40k 20k 8 7 7x more jobs per MW100,237 Americans work in solar today 6 than coal 5 4Solar employment grew 6.8% while 3the general economy grew 0.7% 2 1 0 Nat ural Gas Coal Nuclear Wind CCS Biomass Solar Thermal Geot hermal Solar PV Sources: Kammen, David M et al, 2004, Report of the Renewable and Appropriate Energy Lab, Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create?, Energy Resources Group, Goldman School of Public Policy, University of California, Berkeley.Wei, Max et al, 2010, Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Create?, Energy Resources Group, Goldman School of Public Policy and the Haas School of Business, University of California, Berkeley, in Energy Policy, vol 38, issue 2, February 2010. Truman National Security Project Solar Foundation 2011 National Jobs Census U.S. Bureau of Labor Statistics: May 2010 National Industry-Specific Occupational Employment and Wage Estimates
  • 48. Solar is Ready Now Solar Coal Natural 17 GW 6.7 GW Gas 5.5 GW Solar added more Major combined than 17 GW sources of polluted worldwide energy only added 12.2 2010 GW in the US 2010 Truman National Security Project Source: Erik Shuster, National Energy Technology Laboratory, Tracking New Coal-Fired Power Plants, January 14, 2011(Natural as includes NGCC at 4GW and NG GT and 1.5 GW.)
  • 49. Bipartisan Public Support for Clean Energy 91 percent of Americans say developing sources of clean energy should be a priority for the President and Congress 85% of Republicans 89% of Independents 97% of DemocratsTruman National Security Project Sources: Public Support for Climate & Energy Policies in May 2011, Yale Project on Climate Change.
  • 50. SolarLess expensive than new nuclear and costcompetitive with new coal and gas started todayDelivers Gigawatts of power fast – 8 to 20 yearsfaster than coal or nuclearDelivers strong ROI in the form of American jobsand global economic competitivenessTruman National Security Project
  • 51. Truman National Security Project
  • 52. Definitions and Benefits?• Energy is the ONLY major sector of the economy in which the product MUST be consumed the moment it is created• Transmission provides energy where it is needed –linking Generation and Consumer in Space• Energy storage provides energy when it is needed - linking Generation and Consumer in Time• Energy Storage buffers disruptions on all levels of the Grid• Load and Generation must be balanced on the Grid • Traditionally, generation was controlled while the load was variable. • With increasing renewable penetration, generation has also become variable. • Penetration of Electric Vehicle use inserts a new and unknown variable• Each type of energy storage technology has its own capital and operating cost structures • The 3 characteristics that matter most in storage are: • Discharge Capacity (MW), otherwise referred to as Power Rating. Is a measurement of how much electricity can be released or absorbed at a given time • Energy Storage Capacity (MWh). Is a measurement of how long energy can be discharged at 1MW Power • Energy Density (MW/volume). This is a measure of how much energy can be stored in a given volume of. The higher this is, the more energy can be stored in a smaller battery.Truman National Security Project
  • 53. Size Matters Bulk energy storage Distributed energy storage • Mitigates intermittency of renewable energy • Managing electric grid peak demands resources • Balances supply and demand by providing • Improving reliability and outage ancillary services mitigation • Responds quickly to system contingencies, • More effectively using capital e.g. equipment failure, power plant outages • Balances load and relieves transmission expenditures for new grid congestion infrastructure • Smooths thermal power plants used for • Accommodating distributed frequency regulation or load following renewables and plug in vehiclesTruman National Security Project
  • 54. What can Storage do for US? Reduce risk of grid failure Defer the need to upgrade power-lines and other infrastructure Allows better renewable energy integration System applications (e.g. whereby energy storage provides wholesale market opportunities, energy arbitrage, reduced transmission congestion, lower consumer marginal prices) Commercial, industrial, and residential uninterruptible power supply Make power generation more efficient Reduce greenhouse gas emissions Diminish our reliance on fossil fuels through EV applications Truman National Security Project
  • 55. Global Storage Today Total minus pumped hydro: 2,129 MW Total: 125,520 MW Batteries: 451 MW Flywheels: 95 MW Compressed Air: 440 MW What does ―th mean? Is this at lower powe buildings duri prices are hig Molten Salt: 142 MWPumped hydro: 123,390 MW Thermal: 1002 MW Truman National Security Project
  • 56. Storage Tomorrow I‘d like to get a pictu these guys speaking and maybe cut out a I already cut the qu ―Deployment of storage technologies will make our nation‘s electricity grid more reliable while also enabling more efficient use of Lux Research guy, a existing energy sources as well as new ones, such as wind and solar.... These analysts will technologies have the potential to cut electricity bills, reduce peak power demand and lower greenhouse gas emissions.‖ - Senate Energy and Natural Resources Committee Chairman Jeff Bingaman "If one can get wind and solar and energy storage down to where the whole package is cost competitive with any form of energy, then it takes off and this is what were very focused on in the Department of Energy… We want these things without subsidies just to take off.‖ – Secretary Steven Chu When we learn how to store electricity, we will cease being apes ourselves; until then we are tailless orangutans. You see, we should utilize natural forces and thus get all of our power. Sunshine is a form of energy, and the winds and the tides are manifestations of energy. -Thomas A. Edison, 1910Truman National Security Project
  • 57. The smart grid is a simple upgrade of the 20th century power grids which generally ‘broadcast’ power from a few central power generators to a large number of users to be capable of routing power in more optimal ways to a very wide range of conditions to charge a premium to those who use energy at peak hours orTruman National Security Project inefficiently.
  • 58. The U.S. electric power infrastructure (grid) is the largest interconnected machine on earth • 9,200 Generating Units • 1M MW of Generating Capacity • 300,000 Miles of Transmission Lines • 150,000 Miles of Transmission Lines > 230kV • 99.97% Reliable Electricity Consumption in U.S.But it is old and has LIMITATIONS:• Inefficient, Antiquated & Passive • No system-wide intelligence, Minimal Customer Involvement, Labor Intensive• Size (Demand is growing)• Security/Reliability is an Issue• Limited Adaptability (as climate security concerns grow, renewables becoming more Truman National Security Project
  • 59. Today’s GridCentralized Command & ControlTruman National Security Project
  • 60. Enter the Smart Grid Use of digital technology to improve reliability, security, & efficiency of the electric system with applications for dynamic optimization of system operations, maintenance, & planning“Modernize the grid.‖ -- Energy Research & Development andIndependence and Security Act,2007 Fundamental Technologies that will move the Smart Grid forward: Integrated Communications  To connect components to open architecture to drive real-time information and control allowing every part of the grid to both ―talk‖ and ―listen‖ at the same time Sensing and Measurement Technologies  To support faster and more accurate responses such as remote monitoring, time-of-use pricing, and demand-side management Advanced Components  To apply the latest research in superconductivity, storage, power electronics, and diagnostics Advanced Control Methods  To monitor essential components that enable rapid diagnostics and precise solutions appropriate for any event Truman National Security Project
  • 61. Smart Grid’s Value Streams Smart Grid 21st Century Smart GridCharacteristics and Benefits Grid Self- Optimization Highly Differentiated Reliability Automated Efficiency End-to-End Automation Clean Resource Optimization  Enables Informed Consumer Demand Local Power Online Energy Distribution Electric Vehicle visibility Efficiency & control Management Automation Management Parks Management Participation & Demand Load Emergency Advanced Distributed Response Curtailment Power EE Programs Metering Renewables  Accommodates All Generation Capacity Power Quality & Reliability Energy Efficiency Operational Efficiency Clean Technology & Storage Options Foundation / Infrastructure  Enables New Products, Smart Grid Enables Dynamic Services, & Markets Optimization of Grid Resources &  Provides Power Quality for Operations Range of Needs  Optimizes Grid Asset Utilization & Operating Efficiency  Reduces Greenhouse Gas Emissions  Enhances Energy SecurityTruman National Security Project
  • 62. Efficient Building Systems Utility Smart Grid Challenges Communications Internet Renewables PV Consumer Portal & Building EMS • Costs and their Recovery Dynamic Distribution Operations Advanced Metering Control Interface • Interoperability Standards Systems Control Plug-In Hybrids • Technical Challenges Smart • Demand Response Distributed End-Use Data Generation Devices Management & Storage – What incentives will change consumer behavior? • Network Communications – Requires public & private communication networks, both wired & wireless • Energy Storage – Smart Grid requires a means of storing energy, directly or indirectly – New storage capabilities—especially for distributed storage—would benefit the entire grid, from generation to end use • Distribution Grid Management – Maximize performance of feeders, transformers, & other components of networked distribution systems – Integrate transmission systems and customer operations • Integration of Renewable Energy Sources – Again, we need advancements in energy storage technology • Social/Political Challenges • Consumer Interest and Engagement • Workforce Development – Lack of power systems engineers • Growing public backlash (several states are now removing smart meters) – Cybersecurity & privacy concerns – Health related concernsTruman National Security Project
  • 63. Truman National Security Project
  • 64. Electricity comes from many different kinds of fuel. Wechose which to use based (largely) on how much each fuelcosts to buy. As you can see, coal and natural gas (known as ―fossil fuels‖) currently dominate. That‘s because they are relatively cheap. Non-fossil sources – such as nuclear, hydro electric and ―renewables‖ – play a smaller role, largely because they are relatively expensive.Truman National Security Project 64
  • 65. But while cheap to buy, Those costs are not factored fossil fuels come with other into the market. Instead they kinds of costs …. are bared by society. For example: Say a you catch asthma from pollution... Who pays the medical bills? You do. The polluter (decision maker) does not. This is called a ―market failure.‖Truman National Security Project 65
  • 66. Renewables – such as sun But those benefits are notand wind – are more factored into the market either.expensive to buy, but using For example:them comes with benefits… Say your medical bills drop after a local business replaces a coal generator with a windmill. Who keeps the savings? You do. The business (the decision maker) does not. This is also calledTruman National Security Project a ―market failure‖ 66
  • 67. How do you fix a market failure?One way is to adjust the price of fuels to reflect the true costs of their use. Two ways to do that: Create A Market. Charge a Tax. Require power plants to buy a Require power plants to pay a “permit” for each ton of pollution flat fee per ton of pollution emitted. emitted. The price per ton is set by supply The price per ton is flat. and demand of “pollution permits” Whichever way you chose, power plants that pollute more (or use more fossil fuels) pay more; those that pollute less (or use more renewables) pay lessTruman National Security Project 67
  • 68. This encourages the electricitysector to go from…. To…. 2050 U.S Electricity Generation By Source Coal Natural Gas Nuclear Solar Hydroelectric Conventional WindTruman National Security Project 68