Who Turned Out the Lights on the Power Grid?

If you are one of the millions on the East Coast who has lost power as a result of storms, you know how fragile the electric grid can be. An aging transmission system and increasingly bad weather means that lots of Americans have gone without air conditioning in triple-digit temperatures.

U.S. Power Grid Lines. Image courtesy of US Infrastructure.

As many question what can be done to limit the number and duration of power outages, it’s worth noting that as grid reliability is going down, the reliability of self-generated electricity is on the rise. The U.S. military is examining distributed generation (DG) as a possible safety net against terrorist attacks and programs like the Automated Demand Response for emergency generators provide an early example of how DG can help reliability.

Currently, waste-to-energy projects are struggling to match the low cost of grid-supplied electricity. While the gap in price between the two is closing, there is still a measured distance between them. The issue of reliability has been largely absent from discussions of the benefits smaller scale WTE projects and Better BTU thinks that now, amid the power outages, would be a good time to bring it up.

When a large factory or industrial site loses power for an extended period of time, the cost can be catastrophic. While a backup generator may protect the most critical portions of the plant, the company still faces a huge loss. Therefore, companies should factor in peace of mind and continuity when contemplating WTE projects, especially as grid reliability continues to deteriorate.   

As the reliability of the traditional power grid sinks,
newer, self-generated technologies are on the rise. 

Carnegie Mellon University researchers Anu Narayanan and M. Granger Morgan recently published a report in July’s issue of Risk Analysis discussing their solution to the increasing power outages. They propose incorporating a combination of distributed automation as well as smart meters to direct electricity to “critical” social services such as grocery stores, gas stations and schools. (hospitals and such should still be on backup generators they suggest). In response to an article in the Washington Post on the pair’s report, Scott Sklar, adjunct professor at American University and George Washington University points out that when Hurricane Katrina hit the gulf, Louisiana and Mississippi had plenty of diesel fuel to power the backup engines but couldn’t pump it out of the ground or power trucks to transport it because the electric grid was destroyed.

While we think that mass incorporation of smart meters is at least a decade away, we do agree with Narayanan and Morgan that smaller scale WTE plants could be used to provide electricity when the grid goes down. Unfortunately, state laws in more than half the country prohibit private operators from supplying even small amounts of power to anyone other than the pubic utility. Since large utilities view smaller WTE projects as competition, it is unlikely these companies will support such changes in legislature.

It is laws like these that have prevented the wider adoption of DG that you see in other countries such as Germany and Japan. But with an aging grid and increased frequency in power outages, we think it’s something that should really be looked at.

Further Reading:

Small, Local Energy Technologies to Help Sustain Vital Services During Blackouts – Homeland Security News Wire

The Next Outage Doesn't Have to Be This Bad – The Washington Post, July 6, 2012

Easy Fix Eludes Power Outage Problems in U.S. – WPVI-TV Philadelphia, Pa., July 3, 2012

State Sovereignty: New Hampshire’s Bold RPS Move

Better BTU is launching a series of blog posts that will appear over the next few months to examine RPS standards in some of the 29 states that have them and how it helps or hurts the development of the biomass industry as a whole. We’ll also examine the pros and cons of establishing a national RPS and invite you to contribute your own thoughts to this discussion.

New Hampshire has received a lot of press in the past two weeks after Governor John Lynch and state government passed legislation that adds thermal renewable energy to the state’s renewable portfolio standard. By granting the same incentives to biomass, solar thermal and geothermal projects that have been available to renewable electricity projects, the Granite State becomes the first state to fully incorporate renewable thermal energy into its RPS program.

“This is an important step forward in efforts to gain equal consideration for thermal energy,” Biomass Thermal Energy Council Director Joseph Seymour said as he pointed out that thermal energy makes up more than one-third of all energy consumed in the U.S. 

This is a bold move for New Hampshire. Only eight other states have thermal provisions in their RPS programs and they are often limited, such as the rule that a facility must provide combined heat and power in order to qualify for RECs in North Carolina.  The eligibility of thermal projects will likely drive the price of RECs down, as more projects are able to qualify for the credit. The benefit is that thermal technologies that might have been on the edge of economic viability before will now be viable as a result of the extra funds it will receive from selling RECs.

Former US Congressman and current New Hampshire Senate Majority Leader Jeb Bradley was the brainchild behind the addition of thermal energy to the RPS standard. He probably noted the same thing Better BTU has – that steam only projects weren’t getting financed in the North because of the low price of natural gas. The change means that beginning on Jan. 1, 2013, approved thermal energy projects will receive renewable energy certificates that will be worth up to $29 per Mh of useful thermal energy. The program has been authorized through 2025.

What we will likely see in New Hampshire is a shift from electricity to thermal energy projects over the next few years until the state can fill its RPS quota. We think this could be a great move for the present but could have potential side effects in the long run for the program.

Before the state changes its official motto to “Live Free and Make Thermal Energy” we’d like to hear from you. Do you think this move poses New Hampshire as a leader in RPS standards? Do you see this as a good move and how will it affect the development of the industry?

For Further Reading:

NH Adopts Full Thermal Incentive for Renewable Portfolio Standard –Biomass Thermal Energy Council; June 27, 2012