November 11, 2009
It's not the ideal way to curb electricity usage. But the preponderance of energy sources saved in the last year is because of the economic recession. The rest is because of conservation and demand response.
That's just part of what the North American Electric Reliability Corporation shared with reporters during its annual assessment of the electricity sector. While projections are not as rosy as they were a year ago, the group that oversees reliability of the bulk power system in the United States and Canada, is forecasting future growth at about 1.5 percent a year -- down from the 2 percent acceleration it predicted four years ago.
"The economic recession has essentially bought us a few years to address capacity and resource concerns across North America," says Mark Lauby, director of reliability assessments at NERC. "But the 'benefits' of reduced demand growth are expected to be short lived. The time is now to address concerns like transmission siting, secure smart grid implementation, and the integration of renewable resources."
The group says that over the next decade it expects 260,000 additional megawatts of renewable power to be added to the mix. Of that, wind will make up 229,000 megawatts, or 88 percent. Solar, it adds, will comprise 20,000 megawatts.
By 2011, it is projecting that natural gas will overtake coal as the dominant fuel source for peak capacity generation in North America. By 2018, natural gas is forecasted to account for 32 percent of the on-peak resource mix -- a 38 percent growth rate, it adds, noting that natural gas is easier to permit and more environmentally friendly than coal.
The world is moving toward a carbon-constrained economy. As such, NERC is expecting the United States and Canada to do the same by setting stricter limits on coal capacity while at the same enacting countrywide renewable energy portfolio standards.
The biggest impediment to reaching national goals, it adds, will be a congested transport system. Toward that end, NERC says that the region must build more than 11,000 miles of high voltage transmission lines by 2013 -- a difficult task given that such an achievement would double the average number of transmission miles constructed during the last 20 years. Already, it adds, the Southwest Power Pool and the SERC Reliability Corp. are bumping up against their limits.
"The goal of investing in the nation's infrastructure as part of the economic recovery deserves widespread support and quick action," writes Len Rodman, chief executive of Black & Veatch, in a column. "In the long-run it's critical that the country gain competitive advantages that are part of the solution to repay the massive debt we are incurring," noting that investments in energy will jumpstart and sustain the economy.
Lengthy Delays
The one constant in NERC's message from year-to-year is that if the United States does not ease the transmission permitting process and begin to lay the foundation for an expanded infrastructure, the results would be palpable. Not only would it affect overall reliability, it says, but it would also hurt the chances for renewable energy's success.
Such power facilities are often based in remote locations, requiring high-voltage transmission systems to ensure their energy supplies make it to population centers. The matter necessitates more involvement from state and federal lawmakers, the group adds, emphasizing that a better cost-sharing formula must be introduced to pay for the expansion and upgrade. The increased attention has forced Congress to give more incentives to transmission owners and to provide greater assurances to those lines considered to be in the country's national economic interest.
Altogether, the U.S. Department of Energy says that wind energy could provide 20 percent of the generation mix by 2030. The cost, the agency adds, would be $60 billion spread over the life of the undertaking. A bigger and more modern grid not only would relieve congestion but it would also diminish the nation's reliance on fossil fuels. A cramped system, by comparison, forces utilities to rely on base-load coal and gas facilities that are nearer to customers they serve.
That's why the Obama administration has created a Memorandum of Understanding that will attempt to streamline the transmission permitting process by improving coordination among nine federal agencies and by creating timelines and deadlines to get the job done. Lengthy delays now obstruct the permitting process.
This is particularly true in the western states where the federal government owns more than one-half of the land and any interstate transmission line is likely to cross areas controlled by one or more federal entities, wind advocates say. Obama's new policy, they add, is necessary to complement a range of other, existing laws that determine how transmission is planned, paid for and permitted. Some of the strongest and most durable winds are based there, although a lack of transmission on such sites means that the energy source cannot easily be transported.
"Investment in our grid has lagged because our transmission policies have failed to keep up with changes in the electric sector, like the growing need to access renewable energy resources," says the American Wind Energy Association's CEO Denise Bode.
Reduced energy demand is affecting utility operations. But the economic lull that is causing most of the cutbacks will be temporary. And while utilities now have other pressing corporate needs, industry analysts and monitors are encouraging federal and state policymakers to ease regulatory burdens so that the companies do not forsake investment in their infrastructure.
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