How we produce and distribute electricity is grossly wasteful
Jim Harris, Financial Post Published: Tuesday, December 15, 2009
Getty ImagesNorth American power plants vent 66% of energy input as “waste” heat.
What is the future of energy? is a critical question. The three fastest-growing sources of power in the future will be: negawatts, smart systems and clean power.
Negawatts This is a term coined by Amory Lovins to signify electricity that isn’t needed to be produced due to energy efficiency. Mr. Lovins is one of the world’s leading energy efficiency experts — and coined the term when he saw a typo in a report — “negawatt” instead of “megawatt.” Every kilowatt hour (kWh) that I save through energy efficiency is a kWh that someone else somewhere else on the grid can use. It’s the cheapest form of power generation. A negawatt strategy can apply to: 1) how electricity is produced; and 2) how it is consumed.
The way we produce and distribute electricity in North America is grossly wasteful. For every 100 units of energy input at a nuclear-powered or coal-or gas-fired plant, less than 20% is actually used for practical purposes. A staggering 66% of energy is vented as “waste” heat -the average power plant is only 33% efficient. By comparison, combined heat and power (CHP) — or co-generation– uses the waste heat to heat buildings and hot water, reducing the need to burn natural gas for heating.
CHP systems are up to 90% efficient, so if all electricity was generated from co-gen, our electricity system would be more than 250% more efficient. A further 10% of electricity that is actually produced is lost through transmission and distribution, so more than 75% of the electricity is wasted before it even gets to the wall socket for use.
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Using existing proven, practical technologies we can dramatically reduce energy end use, e.g. more-efficient motors, pumps and energefficient buildings. It is far, far cheaper to increase the efficiency of our industrial, commercial and residential energy use than it is to build new electricity plants and find new energy sources.
And the need for efficiency doesn’t just apply to electricity but to all energy use. Here’s a simple but stunning fact: If every car on North American roads got the same fuel efficiency as my Toyota Prius, there would be no need to import any oil into North America.
In 2008, the United States consumed 7.1 billion barrels of oil — and more than half of it was imported — requiring the United States to pay almost half a trillion dollars to other countries for oil imports. T. Boone Pickens has called it the “biggest transfer of wealth in history.” And all simply because North American governments refuse to get really aggressive with mandatory fuel-efficiency standards for vehicles.
As the transportation sector accounts for 70% of all oil consumption, fuel efficiency is the high leverage activity.
So we’re paying a high price for ridiculously low energy-efficiency standards.
Smart grid Our electric grid has not fundamentally changed in 100 years. Electricity is produced at large, centralized plants and delivered via transmission lines.
But the smart grid will allow for decentralized production (the co-generation described above). So, for instance, a manufacturing plant could generate its own electricity and sell any excess into the grid — and use the heat from generation for its plant operations. Some industries, such as pulp and paper, already use co-gen but it will become more widely adopted by other industries.
The smart grid promises to create greater transparency into how electricity is consumed and give greater control over consumption to businesses and homeowners.
Over time, the smart grid will become like the Internet, where every device that draws power will have an Internet Protocol (IP) address, allowing each device to be remotely managed. For instance, smart buildings have sensors throughout that adjust lighting and heating levels in real time, reducing the unnecessary use of power.
Clean Power Wind and solar are the fastest-growing categories of power production. The installed base of wind has been growing at a 30% compounded annual growth rate (CAGR) for the past decade, while solar had experienced a 40% CAGR. In 2008 a staggering 42% of new electricity capacity was wind power.
The fastest-growing sources of power — negawatts, smart grid, smart buildings and clean power — promise to wean North America from foreign oil imports, reducing foreign payments and creating greater energy security.
jimh@jimharris.com—
- Jim Harris is the author of Blindsided. He speaks at conferences and seminars around the world on topics of leadership, change and going green.
May 19, 2010 | Posted by Erudyte Ltd | pp. Jim Harris 
Categories: Jim Harris, Thoughts from the Rainmakers | 
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