First of all, we have to accelerate the rollout of new clean energy, solar, wind and battery storage.
That said, a lot of the panicky rhetoric about “running out” of electricity might be a bit overblown, or amplified by some utilities who like to build power plants, but also have other, cheaper options.
So much info coming out on this topic in recent weeks, I am breaking this up into smaller bites. Stay tuned.
Last month, the energy modeling nonprofit Energy Innovation released a report showing how utilities can meet growing demand without building new fossil fuel plants. They found many alternatives that don’t just result in fewer emissions, but would also cut utility bills across the country.
Some of those solutions have a long track record of success and simply need to be deployed at a greater scale. Energy efficiency—the breakout star of last year’s global climate conference—is one such solution.
Between 2006 and 2021, utility energy efficiency programs cut electricity demand by 220 TWh, as much power as the entire state of Florida consumes each year. Efficiency programs like these were one of the main reasons why power demand remained flat for the last 15 years. But many utilities are investing less in these programs than they were in 2019.
Duke Energy—the utility that wants to build a country’s worth of natural gas capacity—invests less in energy efficiency than most utilities in the country, according to the American Council for an Energy-Efficient Economy (ACEEE).
Efficiency programs can cut the total amount of electricity consumed each year, but much of the recent power panic has been over short periods of intense demand. Utilities like Georgia Power argue that the only way to meet these short bursts of demand is to build gas “peaker plants.”
But building gas plants to run for just a few hours on a hot summer day is inefficient and costly. Energy modelers have consistently found that it’s often more effective to just pay people to use less power during these times, a strategy known as demand response.
Last year, policymakers in Texas proposed spending $10-18 billion building new gas power plants to meet the state’s growing electricity demand. But when ACEEE ran its own independent model, they found that demand response and efficiency programs could achieve the same goals at a fraction of the cost. The programs ACEEE modeled would save $1.3 billion per year for seven years.
None of this research or technology is new. Demand response programs have already saved Americans billions of dollars. What is a bit more novel, is the idea of bundling a group of electricity consumers—say all the water heaters in a neighborhood or a bunch of EVs in a city—and paying them all to stop using power for a set amount of time. Do this and you have yourself a “virtual power plant” (VPP) that addresses peak demand by reducing power instead of generating it.
A recent Department of Energy report found that the country could meet the bulk of its new power demand between now and 2030 by deploying more VPPs. And they could do all this while saving consumers and businesses $10 billion per year in grid costs.
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To the degree that new gas builds are justified as “peaker” plants, that only need to be used during the highest demand hours, California and Texas are showing us, right now, that battery storage goes up faster, and is cheaper, than new gas.
Note that while home and EV batteries are measured by how much energy they store* (typically expressed in kWh or kilowatt-hour), grid batteries are measured by how much power they can produce on demand (MW or GW for megawatt and gigawatt, respectively). The grid controller sees “power plants” in terms of power and availability.
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*Power output for an EV (kW or “horsepower”) varies with motor/battery design, and customers are typically interested in the range estimate (a calculation which depends in part upon the mass of the vehicle) or how it performs as a home power supply.