January 2009

Tackling Climate Change

CONTENTS

Planning our energy future
Electric co-ops work hard to keep member bills affordable

by Scott Gates

Tackling Climate Change:

Oct. 2009 - "In search of a better battery" Sept. 2009 - "Cleaner generation"
Aug. 2009 - "The new nuclear"

July 2009 - "At the speed of light"

May 2009 - "Renewing Innovation"

April 2009 - "Defining affordability"

March 2009 - "More productive kilowatts"

Feb. 2009 - "Citizen lobbyists"

Jan. 2009 - "Planning our energy future"

Dec. 2008 - "Affordable & reliable"

Oct. 2008 - "Can we capture carbon?"

Aug. 2008 - "Reactor renaissance"

July 2008 - "Putting you first"

June 2008 - "Running out of power"

May 2008 - "A sound approach"

Electricity powers us through every day, from when our alarm clock wakes us to when we turn off lights at night. While it’s easy to take electricity for granted, that may not always be the case. Today’s economic crisis makes it all the more critical that work begin soon to address growing issues in the energy industry. Otherwise, electricity could quickly become less of an affordable staple and more of a luxury.

In recent years, the collision of several factors — increasing demand, rising fuel and construction costs and the on-going climate change debate — has created what’s been called the energy industry’s “perfect storm.”

The U.S. Energy Information Administration (EIA) forecasts that the need for electricity will climb by 30 percent between now and 2030.
To meet this growth, the U.S. Department of Agriculture projects that electric co-ops must double generation capacity over the next 11 years. Yet building new power plants will be expensive, so electric co-ops must turn to both cutting-edge and time-tested solutions.

“Without advancing technology, our options are limited,” says Glenn English, CEO of the National Rural Electric Cooperative Association. “But whatever solutions we come to in addressing this energy crisis must keep consumers in mind. With many electric co-op members already working hard to make ends meet, this is no time to enact hasty energy policy that will push electric bills higher.”

Relatively high costs for construction materials and uncertainty about climate change goals, which could place strict limits on carbon dioxide emissions, have stalled development of new baseload generation.

New nuclear power plants — sources of clean baseload generation — are stymied by high costs and local resistance. As a result, the last new reactor to become operational was a Tennessee Valley Authority plant in 1996.

Unless new, thoughtful public policy streamlines the process, that trend could continue, English warns.

In years past, the burden of meeting electric demand would typically fall to coal-fired plants, which provide about half of the nation’s electricity. But with plans for new coal plants hitting snags, utilities are being forced to turn to more expensive natural gas. In 2007, generation and transmission co-ops planned on using natural gas for 25 percent of their new power plants; in just one year, that number has climbed to 53 percent.

“The main challenge we’re facing now is that it’s hard to build new baseload generation in general, but even tougher for units that don’t burn natural gas,” remarks Paul McCurley, NRECA chief engineer. “The lower up-front costs but higher operating costs of natural gas generation traditionally made it a good fuel source for peaking power but not for baseload power plants that generate around the clock.”

“There’s no doubt it is going to be difficult to build new coal-fired and nuclear power plants in coming years,” English says. “The resulting reliance on natural gas increases the risk of higher electric bills to consumers and lowers overall reliability due to decreasing fuel diversity. Unfortunately, the question no longer is whether electric bills will increase, but just how high they will go.”

In an effort to broaden limited options and make bills more affordable, electric co-ops have come to embrace the concept of a multi-pronged solution spelled out by the Electric Power Research Institute (EPRI), a non-profit, utility-sponsored consortium. With heavy focus on research and development, an array of yet-to-be-developed and existing technologies could keep affordable electricity flowing between now and 2030 while significantly reducing carbon dioxide emissions.

Steps to achieving that diverse solution include investing in renewable energy; building advanced, clean coal-fired power plants; expanding nuclear power capacity; stringing new transmission lines; and improving energy efficiency across the board.

Fortunately, electric co-ops have a long tradition of promoting energy efficiency. “The vast majority of electric co-ops, a full 92 percent, already sponsor energy-efficiency education programs, and 77 percent offer residential energy audits to their consumers,” explains Ed Torrero, executive director of NRECA’s Cooperative Research Network.
Electric co-ops are also pioneers in load management programs, which allow them to reduce power consumption by managing when and how electricity gets used.

Consumers, who volunteer for the programs, typically don’t even notice when “load control” happens.

For example, Palmetto Electric Cooperative in Hardeeville, S.C., controls 33,000 residential electric water heaters, about half of those in its service territory. As families come home at the end of every day and turn on lights, ovens and dishwashers, electricity use spikes. This requires additional power, generally from the most expensive and least efficient generators available.

But through load management, Palmetto Electric and other electric co-ops with similar programs reduce these demand peaks by switching off water heaters by the thousands.
Noting that load management acts like “a power plant in reverse,” Torrero says roughly 37 percent of all co-ops can directly control appliances, chiefly water heaters and air conditioners. “Few realize how well electric cooperatives have done in this area.”

Between energy efficiency and load management efforts, local electric co-ops reduced demand by 2,200 megawatts in 2006 — roughly the equivalent of three large coal-fired power plants, according to EIA. That added up to $50 million in fuel cost savings and offset more than 2,000 tons of carbon dioxide emissions, equal to what 700 cars put out in a year.

As the “perfect storm’s” thunderheads continue to build, electric cooperatives are working hard to keep electricity safe, reliable and affordable.

English points to the electric co-op grassroots awareness campaign — Our Energy, Our Future — as an important part of solving the nation’s energy crisis, and encourages consumers to visit www.ourenergy.coop to continue the effort.

Gates writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association.

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