[NukeNet] Why we never need to build another polluting power plant

Mon Jul 28 17:43:31 EDT 2008

Hello gang,

I don't think I've seen this article posted yet to either of these lists and
it's really a very good one. Check it out, and pass it on.

All the best,
Mark Haim

=============================

Why we never need to build another polluting power plant

Coal? Natural gas? Nuke? We can wipe them all off the drawing board by using
current energy more efficiently. Are you listening, Washington?

http://www.salon.com/news/feature/2008/07/28/energy_efficiency/index.html

By Joseph Romm

Jul. 28, 2008 | Suppose I paid you for every pound of pollution you
generated and punished you for every pound you reduced. You would probably
spend most of your time trying to figure out how to generate more pollution.
And suppose that if you generated enough pollution, I had to pay you to
build a new plant, no matter what the cost, and no matter how much cheaper
it might be to not pollute in the first place.

Well, that's pretty much how we have run the U.S. electric grid for nearly a
century. The more electricity a utility sells, the more money it makes. If
it's able to boost electricity demand enough, the utility is allowed to
build a new power plant with a guaranteed profit. The only way a typical
utility can lose money is if demand drops. So the last thing most utilities
want to do is seriously push strategies that save energy, strategies that do
not pollute in the first place.

America is the Saudi Arabia of energy waste. A 2007 report from the
international consulting firm McKinsey and Co. found that improving energy
efficiency in buildings, appliances and factories could offset almost all of
the projected demand for electricity in 2030 and largely negate the need for
new coal-fired power plants. McKinsey estimates that one-third of the U.S.
greenhouse gas reductions by 2030 could come from electricity efficiency and
be achieved at negative marginal costs. In short, the cost of the efficient
equipment would quickly pay for itself in energy savings.

While a few states have energy-efficiency strategies, none matches what
California has done. In the past three decades, electricity consumption per
capita grew 60 percent in the rest of the nation, while it stayed flat in
high-tech, fast-growing California. If all Americans had the same per capita
electricity demand as Californians currently do, we would cut electricity
consumption 40 percent. If the entire nation had California's much cleaner
electric grid, we would cut total U.S. global-warming pollution by more than
a quarter without raising American electric bills. And if all of America
adopted the same energy-efficiency policies that California is now putting
in place, the country would never have to build another polluting power
plant.

How did California do it? In part, a smart California Energy Commission has
promoted strong building standards and the aggressive deployment of
energy-efficient technologies and strategies -- and has done so with support
of both Democratic and Republican leadership over three decades.

Many of the strategies are obvious: better insulation, energy-efficient
lighting, heating and cooling. But some of the strategies were unexpected.
The state found that the average residential air duct leaked 20 to 30
percent of the heated and cooled air it carried. It then required leakage
rates below 6 percent, and every seventh new house is inspected. The state
found that in outdoor lighting for parking lots and streets, about 15
percent of the light was directed up, illuminating nothing but the sky. The
state required new outdoor lighting to cut that to below 6 percent. Flat
roofs on commercial buildings must be white, which reflects the sunlight and
keeps the buildings cooler, reducing air-conditioning energy demands. The
state subsidized high-efficiency LED traffic lights for cities that lacked
the money, ultimately converting the entire state.

Significantly, California adopted regulations so that utility company
profits are not tied to how much electricity they sell. This is called
"decoupling." It also allowed utilities to take a share of any energy
savings they help consumers and businesses achieve. The bottom line is that
California utilities can make money when their customers save money. That
puts energy-efficiency investments on the same competitive playing field as
generation from new power plants.

The cost of efficiency programs has averaged 2 to 3 cents per avoided
kilowatt hour, which is about one-fifth the cost of electricity generated
from new nuclear, coal and natural gas-fired plants. And, of course, energy
efficiency does not require new power lines and does not generate
greenhouse-gas emissions or long-lived radioactive waste. While California
is far more efficient than the rest of the country, the state still thinks
that with an even more aggressive effort, it can achieve as much additional
electricity savings by 2020 as it has in the past three decades.

Serious energy efficiency is not a one-shot resource, where you pick the
low-hanging fruit and you're done. In fact, the fruit grows back. The
efficiency resource never gets exhausted because technology keeps improving
and knowledge spreads to more people.

The best corporate example is Dow Chemical's Louisiana division, consisting
of more than 20 plants. In 1982, the division's energy manager, Ken Nelson,
began a yearly contest to identify and fund energy-saving projects. Some of
the projects were simple, like more efficient compressors and motors, or
better insulation for steam lines. Some involved more sophisticated
thermodynamic "pinch" analysis, which allows engineers to figure out where
to place heat exchangers to capture heat emitted in one part of a chemical
process and transfer it to a different part of the process where heat is
needed. His success was nothing short of astonishing.

The first year of the contest had 27 winners requiring a total capital
investment of $1.7 million with an average annual return on investment of
173 percent. Many at Dow felt that there couldn't be others with such high
returns. The skeptics were wrong. The 1983 contest had 32 winners requiring
a total capital investment of $2.2 million and a 340 percent return -- a
savings of $7.5 million in the first year and every year after that. Even as
fuel prices declined in the mid-1980s, the savings kept growing. The average
return to the 1989 contest was the highest ever, an astounding 470 percent
in 1989 -- a payback of 11 weeks that saved the company $37 million a year.

You might think that after 10 years, and nearly 700 projects, the 2,000 Dow
employees would be tapped out of ideas. Yet the contest in 1991, 1992 and
1993 each had in excess of 120 winners with an average return on investment
of 300 percent. Total savings to Dow from just those projects exceeded $75
million a year.

When I worked at the Department of Energy in the mid-1990s, we hired Nelson,
who had recently retired from Dow, to run a "return on investment" contest
to reduce DOE's pollution. As they were at Dow, many DOE employees were
skeptical such opportunities existed. Yet the first two contest rounds
identified and funded 18 projects that cost $4.6 million and provided the
department $10 million in savings every year, while avoiding more than 100
tons of low-level radioactive pollution and other kinds of waste. The DOE's
regional operating officers ended up funding 260 projects costing $20
million that have been estimated to achieve annual savings of $90 million a
year.

Economic models greatly overestimate the cost of carbon mitigation because
economists simply don't believe that the economy has lots of high-return
energy-efficiency opportunities. In their theory, the economy is always
operating near efficiency. Reality is very different than economic models.

In my five years at DOE, working with companies to develop and deploy
efficient and renewable technologies, and then in nearly a decade of
consulting with companies in the private sector, I never saw a building or
factory that couldn't cut electricity consumption or greenhouse-gas
emissions 25 percent to 50 percent with rapid payback (under four years). My
1999 book, "Cool Companies," detailed some 100 case studies of companies
that have done just that and made a great deal of money.

There are many reasons that most companies don't match what the best
companies do. Until recently, saving energy has been a low priority for most
of them. Most utilities, as noted, have little or no incentive to help
companies save energy. Funding for government programs to help companies
adopt energy-saving strategies has been cut under the Bush administration.

Government has a very important role in enabling energy savings. The office
of Energy Efficiency and Renewable Energy at the U.S. Department of Energy
has lots of (underfunded) programs that deliver savings every day. Consider,
for instance, Chrysler's St. Louis complex, which recently received a DOE
Save Energy Now energy assessment. Using DOE software, Chrysler identified a
variety of energy-saving measures and saved the company $627,000 a year in
energy costs -- for an upfront implementation cost of only $125,000.

The key point for policymakers now is that we have more than two decades of
experience with successful state and federal energy-efficiency programs. We
know what works. As California energy commissioner Art Rosenfeld -- a former
DOE colleague and the godfather of energy efficiency -- put it in a recent
conversation, "A lot of technology and strategies that are tried and true in
California are waiting to be adopted by the rest of country."

So how do we overcome barriers and tap our nearly limitless efficiency
resource? Obviously, the first thing would be to get all the states to
embrace smarter utility regulations, which is a core strategy of Barack
Obama's plan to reduce greenhouse gases. But how does the federal government
get all the states to embrace efficiency?

We should establish a federal matching program to co-fund state-based
efficiency programs, with a special incentive to encourage states without an
efficiency program to start one. This was a key recommendation of the
End-Use Efficiency Working Group to the Energy Future Coalition, a
bipartisan effort to develop consensus policies, in which I participated.
The first year should offer $1 billion in federal matching funds, then $2
billion, $3 billion, $4 billion, and finally stabilizing at $5 billion. This
will give every state time to change their regulations and establish a
learning curve for energy efficiency.

This program would cost $15 billion in the first five years, but save
several times that amount in lower energy bills and reduced pollution. Since
the next president will put in place a cap-and-trade system for greenhouse
gases, the revenues from auctioning the emissions permits can ultimately be
used to pay for the program.

We should restore a federal focus on the energy-intensive industries, such
as pulp and paper, steel, aluminum, petroleum refining and chemicals. They
account for 80 percent of energy consumed by U.S. manufacturers and 90
percent of the hazardous waste. They represent the best chance for
increasing efficiency while cutting pollution. Many are major emitters of
greenhouse gases other than carbon dioxide. A 1993 analysis for the DOE
found that a 10 to 20 percent reduction in waste by American industry would
generate a cumulative increase of $2 trillion in the gross domestic product
from 1996 to 2010. By 2010, the improvements would be generating 2 million
new jobs.

For these reasons, in the 1990s, the Energy Department began forming
partnerships with energy-intensive industries to develop clean technologies.
We worked with scientists and engineers to identify areas of joint research
into technologies that would simultaneously save energy, reduce pollution
and increase productivity. The Bush administration slashed funding for this
program by 50 percent -- and keeps trying to shut it down entirely.

Indeed, conservatives in general have cut the funding or shut down entirely
almost all federal programs aimed at deploying energy-efficient
technologies. Conservatives simply have a blind spot when it comes to energy
efficiency and conservation, seeing them as inconsequential "Jimmy Carter
programs."

I recently testified at a Senate Environment and Public Works Committee
hearing on nuclear power and spoke about how alternative technologies,
particularly energy efficiency, were a much better bet for the country.
Senator George Voinovich (R-Ohio) said this was "poppycock," and then asked
all the pro-nuclear witnesses to address the question, "If nuclear power is
so uncompetitive, why are so many utilities building reactors?"

Voinovich apparently has forgotten about the massive subsidies he himself
voted to give the nuclear industry in 2005. He seems to be unaware that
states like Florida allow utilities to sharply raise electric rates years in
advance of a nuclear plant delivering even a single electron to customers.
If you could do that same forward-pricing with energy efficiency, we would
never need to build another polluting plant.

Although he is a senior member of the Senate and a powerful voice on energy
and climate issues, Voinovich doesn't seem to know the first thing about the
electricity business; namely, that a great many utilities have a huge profit
incentive to build even the most expensive power plants, since they can pass
all costs on to consumers while retaining a guaranteed profit. But they have
a strong disincentive from investing in much less costly efforts to reduce
electricity demand, since that would eat into their profits.

The next president must challenge the public service commission in every
state to allow utilities to receive the same return on energy efficiency as
they are allowed to receive on generation. That single step could lead the
country the furthest in solving our ever-worsening climate and energy
problems.

Mark Haim
1402 Richardson St.
Columbia, MO 65201
(w) 573-875-0539
(h) 573-442-2360

E-mail:  mhaim at riseup.net
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