The Loma Prietan
May/June 2001
Power Rate Hikes: A Blessing in Disguise?
by Dale F. Mead
As statewide debate continues on the expected skyrocketing cost of electricity this summer, a new wave is forming to install a long-term strategy for sustainable power in Silicon Valley and throughout the State. It’s called distributed power: smaller, on-site power plants that sever dependency on
remote generators and regional power grids.
If the emerging strategy prevails, the distribution grid that sustained us through the past century could become a quaint symbol of the past.
Ironically, the greed of profit-hungry
energy wholesalers is driving demand for change and could be hastening their own industry’s demise.
This new wave would consist of a two-pronged strategy for sustainable power, brought out at the Energy Summit organized in March by Santa Clara County Board of Supervisors Chair Jim Beall, San Jose Mayor Ron Gonzales, and James Woody, Chair of the Board of the Silicon Valley Manufacturing Group. The first prong is widespread
promotion and use of energy-saving design techniques for new and existing structures. The second is smaller, on-site sources of power generation.
“With all the noise about short-term price increases, we had not heard a whole lot of divergent opinions,” Gonzales told the Loma Prietan later to explain the summit.
“Whatever solutions we come up with now we will live with for decades. We felt, let’s not develop policy in an atmosphere of chaos. Let’s be cautious.” A follow-up meeting is slated to take place on May 4th.
To provide a fact-based rationale for the sweeping change in approach, Gonzales
invited energy sustainability guru Amory Lovins, founder of the Rocky Mountain
Institute in Colorado, to give the keynote presentation.
Lovins’ fast-paced overview revealed two aspects of sustainable energy conservation through advanced building materials and design, and distributed power generation to drastically lower both generation needs and blackouts.
Most or all of these concepts could find their way into San Jose’s Green Building guidelines, due to come before the City Council in June. The Green Buildings movement gained a boost last summer when Gov. Gray Davis issued an executive order establishing a sustainable building goal for the State (See “Green Buildings: A Move Toward Sustainable Development,” Loma Prietan, Nov. 2000, page 6).
What’s new is the universal incentive for changes triggered by the power rate hikes. Long considered a luxury for companies that could afford the capital investment with a slow payback, these techniques are suddenly becoming cost effective and attractive across the board as traditional energy prices skyrocket. Lovins displayed cost statistics that quantified the return on investment.
First, Lovins backed the viability of improved building design, such as extra insulation, architectural techniques, and super-
windows, by citing demonstration projects with which his organization was involved in conjunction with Pacific Gas & Electric Co. (PG&E) in the early 1980s and mid-1990s.
PG&E’s $9 million ACT2 (Advanced Customer Technology Test for Maximum Energy Efficiency) program demonstrated major reductions in energy use at low, zero, and even negative net cost in a range of residential and commercial buildings, Lovins told the assemblage.
Among other projects, his group also helped Monsanto Company develop the energy-efficient design of a new plant science laboratory at the company’s St. Louis headquarters and research campuses.
The technology has improved since then, so the results today are likely to be better, he stressed.
He addressed the second aspect—on-site power generation—in even more spectacular fashion, showing before-and-after satellite pictures of a nighttime blackout that quickly darkened the entire Western United States.
Ninety-five percent of uncontrolled blackouts stem from cascading failures in regional transmission grids, Lovins pointed out. Therefore, a power generation system that doesn’t depend on the grid is inherently 20 times as reliable.
In addition, long-distance power transmission requires the generation of double or triple the power demand to offset energy loss in the lines. So only a fraction as much power needs to be generated if it is on-site or near-site, reducing fuels used and pollution
released.
Key to the success of local generation, however, is generating that power cleanly and unobtrusively. Huge, old-style, smoke-spewing, fossil-fuel generators don’t stand a chance of being placed in a populated area. Happily, power generation advances have rendered that image obsolete.
Many new on-site plants proposed by companies are just big enough to supply their needs, and are fueled by relatively clean
natural gas. Even more impressive are improvements in solar roofing tiles, which
enable individual homeowners to turn their residences into on-site power plants. Power generation couldn’t get much cleaner than that. Again, this technology has been considered prohibitively expensive; but if electricity costs quadruple, it quickly becomes economically viable for new homes and
replacement roofs.
Lovins capped his talk by unveiling the Hypercar, a fuel cell-powered vehicle he described as having performance capabilities and a price tag comparable to a contemporary gasoline-powered sedan. Its advantage is that it is pollution free. And, since it is an electric power generator on wheels, when parked it could actually be plugged into a home or office—the ultimate on-site power plant.
Lovins’ organization has launched a company to “exploit new market opportunities for super-efficient vehicle design,” as the Rocky Mountain Institute website describes it. For more information, visit their site at www.rmi.org.
Dale F. Mead, an ongoing contributor to the Loma Prietan, is seeking a position as a professional environmental reporter. He can be reached at dfmead1@home.com or 408/446-4435.