The War Against Terrorism Helps Build the Cas

The War Against Terrorism Helps Build the Case for Distributed Renewables

By Peter Asmus

The unprecedented terrorist attacks on New York City and Washington DC on September 11th, 2001 could fundamentally alter the debate over future energy supply in the US. And one of the first federal public policy casualties linked to the terrorist assault could be President Bush's National Energy Strategy.

Building even more fossil fuel power plants and nuclear reactors to deliver electricity, the lifeblood of the American economy, looks pretty naive if one looks at the US through the eyes of a terrorist. Relying exclusively on long distance transmission systems to transport electricity from point of production to points of consumption also looks suspect if one's top priority is providing reliable electricity service to large and small consumers. Distributed renewable energy systems, such as rooftop solar photovoltaic (PV) systems, small wind turbines and fuel cells not dependent upon fossil fuels, suddenly begin to look like an enlightened approach to generating electricity that bolsters national security while addressing global climate change and other environmental concerns.

Our current energy supply conundrum is being amplified by the nation's new war on terrorism, revealing the limits of the old transmission and distribution grid, which, in turn, is impacting the growth of the digital economy. Our electricity grid, with its emphasis on large polluting and centralized power plants sending power long distances over transmission lines, is an artifact that is over 100 years old. It is dramatically out of sync with information technologies. The architecture of the existing transmission grid is the anti-thesis of distributed networks being made possible by the Internet. The future of America's electricity supply can no longer be held hostage to a centralized network of polluting power plants that represent high-profile terrorist targets that carry huge economic and environmental liabilities.

And the central power plant and long-distance transmission model is inherently inefficient. On-site distributed generation sources avoid the 7 to 15 percent line loss that plagues the current electricity delivery system. At the wholesale prices witnessed throughout the West over the past year, those losses represents hundreds of millions of dollars.

A few forward-looking companies, local governments and other consumers are investigating the installation of new cleaner and smarter power sources as a way of generating premium grade clean electricity right on site ­ without harming the environment and upgrading our energy infrastructure to take advantage of 21st century information and communications technologies. These sources are frequently referred to as "distributed generation" since the sources are distributed throughout a region.

These new smaller, cleaner and smarter technologies are slowly transforming the electric utility industry. These "distributed generation" sources, along with sophisticated energy efficiency, storage and management innovations, and next generation power electronics devices, are ideally suited to the precise real-time needs of Information Technology companies looking for new ways to cut costs and improve productivity by insuring they have a power supply that is reliable 99.9999% of the time. Considering the following:


Businesses such as Fetzer Winery, Neutrogena, Johnson & Johnson, and Bentley Mills have all installed solar PV systems to make a statement about sustainability, boost reliability and stabilize long-term power costs. Proposition H, which will be on the ballot in San Francisco this November, would authorize the city and county of San Francisco to meet 5% of the community's peak electricity with the world largest solar network: 50 MW of solar photovoltaic panels. The equivalent of 100 football fields of rooftops would be covered with solar panels if the ballot measure is approved.

Small wind turbines are currently the lowest cost renewable electricity source. The American Wind Energy Association recently estimated that out of a potential of 140,000 MW of electricity that could be generated from small wind turbines in the US, over 16,000 MW could be feasibly installed to serve electricity to commercial and industrial customers.

With the help of state financial incentives, the Rancho Las Virgenes Municipal Water District in southern California has installed two fuel cells that rely upon methane from its sewage treatment plant to supply up to 90% of its on-site electricity needs at a cost of 5.5 cents per kilowatt hour. Fuel Cells are an ideal electricity source for businesses. Some experts predict that 10 to 20% of commercial and industrial customers may integrate a fuel cell into their energy supply strategy over the next decade or so.
The Risks of Status Quo Are Too Large

According to the Center for Strategic and International Studies, information about the nation's natural gas pipelines is much more widespread since power markets were deregulated. Sever the natural gas pipelines flowing into California, where 96 percent of all new power plants burn natural gas, and rolling blackouts could reverberate for days on end.

A representative of an oil company acknowledged the national security weak spots our natural gas pipelines represent: "There's a feeling that if we start talking about our security program, it's almost like putting a target on our bodies." The nation's oil and natural gas companies have stepped-up security measures on natural gas pipelines will continue to allow this "clean" fossil fuel to flow to the scores of new natural gas power plants coming on-line in California and elsewhere. But like our airport security systems, these systems have never been fully tested during a time of apparent war.

And the additional costs of policing nearly 180, 000 miles of natural pipelines in this country will be passed along to ratepayers and now need to be accounted for when looking to the future. As it is, there is talk of the need to import liquid natural gas from Latin America and other sources just to fuel power plants that are already going into the ground. The Middle East is home to about a third of the world's natural gas resources and the political instability evident there also calls into question this nation's seeming over reliance upon natural gas as our chief fuel for electricity. Only two years ago, UNOCAL abandoned plans to build a natural gas pipeline through Afghanistan!

Most nuclear reactors have been designed to withstand the crash of only small aircraft. While a nuclear explosion would not occur if a jumbo jet crashed into one of the nation's over one hundred operating nuclear reactors, there are a number of possible scenarios where deadly radioactive clouds could cover a region the size of Pennsylvania and create national sacrifice zones.

Southern California Edison (SCE), the primary owner of the San Onofre Nuclear Generating Station (SONGS) located on the borders of Orange and San Diego County, has asked the Highway Patrol to monitor traffic along Highway 5 because of security concerns. "I am confident that San Onofre's containment buildings are the strongest structures in all of Southern California," proclaimed Ray Golden, San Onofre business manager for SCE. "They are designed to withstand earthquakes, floods and landslides. But they are not designed to protect against the type of aircraft used in last week's terrorist attacks ." Golden pointed out that a nuclear explosion is next to impossible, but radioactivity could leak into the atmosphere if the reactor core cracked open and the emergency cooling water system failed. "We are not certain what could happen to the plant from that type of event," continued Golden referring to the terrorist strikes to the World Trade Center and Pentagon. "We cannot protect completely against it. Nor, from a security standpoint, are we required to."

The Federal Energy Regulatory Commission (FERC) chairman Pat Wood recently indicated it would consider authorizing utilities to pass along the costs of anti-aircraft and other security systems at the nation's nuclear power plants to ratepayers . Whether utilities actually move forward with such extreme security measures remains to be seen. Still, this action by FERC underscores how the costs of fossil and nuclear generators continue to add up, increasing costs, while decreasing national security.

Some may argue that coal-fired power plants are the answer. However, increasing our reliance upon coal does not address the issue of inefficiency inherent in a central power plant dependent upon long-distance transmission. A recent study conducted by two Stanford engineers concluded that large-scale wind farms represented a far better investment than coal generating capacity. The environmental superiority of wind versus coal was cited by these researchers; but they also claim that electricity generated from wind turbines of 1.5 MW in size located at the best sites in the US would generate electricity cheaper than a new coal power plant .

Harnessing the electricity from these excellent wind resource areas would require long-distance transmission. However, the environmental benefits accrued by introducing large amounts of wind power capacity into the nation's power plant portfolio is compelling. Adding significant amounts of wind power is the quickest, easiest supply option to reduce the threat of global climate change. Investments in transmission to bring clean, renewable free fuel technologies such as wind power are far more prudent investments than transmission paths tailored to the needs of the coal industry, the dirtiest of all fossil fuels.

A New Smarter and Cleaner Distributed Model

These huge potential costs and liabilities linked to large-scale fossil and nuclear generating sources are avoided entirely with solar photovoltaics (PV) and other distributed, renewable energy systems. One favor this horrible tragedy may teach us is that our energy supply is far too dependent on unnecessary security and military interventions. We now have the tools and technologies necessary to propel a revolution in energy that mimics, to a large extent, the evolution in scale evident in telecommunications and computer industries. These new technologies ­ solar photovoltaics, fuel cells and wind turbines ­ are the equivalent to wireless cell phones and portable laptops that replaced traditional grid-connected phones and huge mainframe computers, respectively.

Just how valuable can these distributed renewable energy systems be?

With solar PV and small wind turbines, there are no fuel costs and associated military expenditures, no vulnerable pipelines that require security surveillance, no need for miles upon miles of gigantic transmission lines that could also be terrorist targets. Indeed, these distributed micro-generators can operate independently from the existing grid or be grid-connected.

With the advent of electricity deregulation and the corresponding launch of the California Energy Commission's Emerging Renewable Energy Buy-Down Rebate program, more and more Californians all across the state who are connected to the grid are now too installing the latest generation of these small-scale renewable energy systems. Under this program, the state pays half of the installation costs of grid-connected systems, whose owners sell back to the grid the electricity they can't use to help stabilize the grid. At today's volatile prices, these systems will be paid off in less than ten years and then provide literally free electricity to the lucky consumers that purchased them. According to the Energy Commission, buy-down rebate applications for solar and wind systems have been averaging roughly 250 per month in 2001.

And the prices of solar PV cells continue to fall, costing just 20 percent of what they did 25 years ago. Rooftop systems that can generate roughly half of a home's electricity over 20 years or more can cost as little as $10,000 with the rebates and tax credits and other financial incentives offered by state and federal government. Sales of solar PV systems around the globe have climbed steadily over recent years. Last year, sales of solar PV grew 44 percent ­ and total sales in 2001 are expected to match that pace. In California, the combination of spiraling wholesale power prices, concerns over electrical reliability, and the dramatic drops in the cost of solar PV and small wind turbines, has resulted in a record number of grid-connected system installations.

A recent study by the federal Department of Energy revealed why solar PV technologies are particularly logical solutions to the problem of meeting peak power demands. Seven major outages last year were analyzed from the perspective of the quality of the solar resource during the exact times of the power losses. In all but one of the outages, conditions for optimal solar electricity generation were above 90 percent. Interestingly, solar conditions were close to perfect (99 percent) for generating electricity on June 14th, 2000 , the day 100,000 customers in San Francisco lost power and Silicon Valley took a $100 million bath due to lost production.

Because of their ability to use a variety of fuels and provide base-load power, fuel cells are a technology ideally suited to our current energy challenges. Among the current high-profile fuel cell installations across the country are two 200-kilowatt fuel cells manufactured by International Fuel Cells (IFC) at the Durst Organization's Conde Nast Building in Times Square, New York City. The fuel cells provide the power for the NASDAQ sign.

Banks and financial institutions in California may want to take some cues from the First National Bank of Omaha, the nation's largest privately owned bank. After a disastrous brown-out in 1997 destroyed many of the records kept at a bank that is the seventh largest credit card transaction processor in the nation, a fuel cell was installed that now generates all of the power for the bank's computer and storage devices. The fuel cell has been providing reliable electricity throughout periods of grid outages over the past two years.

Fuel cells can also be integrated into waste management systems. Among the more innovative applications of carbonate fuel cells are the following two installations by Danbury, Connecticut-based FuelCell Energy that convert global warming gases into electricity fuels: a 1 MW installation at the King County, Washington municipal waste treatment facility will consume methane-rich vapors called "digester gas" that was previously vented into the atmosphere; a 250 kilowatt system under construction at Harrison Mining Corporation's coal mine in Cadiz, Ohio, will consume methane produced at the mine, and also previously vented into the atmosphere, as fuel.

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