Captain Obvious

The latest emphasis on beneficial electrification reminds me of when I first entered the electric utility sector almost 35 years ago.  Cogeneration and gas cooling had the electric utilities flummoxed.  They simply did not know how to “compete” with low natural gas prices and a seemingly endless supply of manipulative wheelers and dealers who made it easy for customers to switch.

As some of you know, I became very popular because I seemed to be able to dissuade customers from these ideas.  Very few of my clients took my techniques to heart … they were just glad to be rid of what they thought was a distraction on the part of customers.  After all, customers should not be interesting in being in the utility business.  So they thought.

When I wrote the book, “Cogeneration Issues and Options,” for the Edison Electric Institute (EEI) I illustrated that customers were simply trying to solve operational and financial problems and that cogeneration was nothing more than one of the ways they could do that.  Project developers made it easy for them, that’s all.

The key attribute that was most difficult was the attitude of the electric utilities at the time.  They viewed the idea of self generation as competition … somehow wrong in the spirit of the customer-electric utility relationship.  They didn’t see it as an opportunity to partner with customers.  They saw it as a “win-lose” battle and that stance put them at odds with the customer.

I would show them the famous scene from Miracle on 34^th Street where Santa when speaking to a small child and then that child’s parent told her she could get the toy that child wanted from Gimbles … the arch rival of Macy’s just across the street.  The toy manager wanted to fire the Santa … but the parent’s raving about the Santa’s helpfulness stopped him.

Why be “for or against” any customer idea.  Be “for” the customer and their success.  Let the chips fall where they may.  And, just like that scene in the movie, your customer will always want to shop first at Macy’s.

Today’s USA Today website had an interesting editorial based upon the most recent climate change study.  They suggest that the results are so dire that something equivalent to the National Rifle Association should be formed to push environmental agendas.  Here … read it for yourself.

Does this really make sense?  Don’t we already have a host of environmental groups with huge impacts such as the NRDC and others?  Hasn’t the NRDC made huge impacts in the US on a host of energy efficiency and resource sustainability issues?  I think so?  Hasn’t the work of Amory Lovens with his books, lectures, and testimonies changed the way we plan energy supply systems?  Sure has!

In fact, we are the victim of our own successes … energy use in the US has stagnated and even fallen, and we are producing more energy than ever before!

Maybe the intent here is simply to create another organization that can spend money wastefully like all the political ads we have seen this last few months.  I don’t know about you, but I would have rather seen all that money spent doing things that add to the well being of the planet rather than fill the airwaves with polarizing rhetoric.  I have stopped watching … perhaps you have as well.

Oh … I forgot … the editorial board of the USA Today benefits from all this advertising … oh …

 

It seems we now have clear parallels between the electric utility industry and the automotive industry.  The link here does a pretty good job of describing Detroit’s problem in a mature market.  Very simply, Detroit is in a flat or declining market and is watching Tesla get way too much attention.

Read the Evannex Article Here

It is interesting to me to watch the Europeans who seem more eager to offer electric vehicles.  Perhaps it is because they do not have significant market shares, so they view the electric vehicle as additive.  Maybe it is because the high price of gasoline in their home countries makes them more economically attractive.

What I find most interesting is the design of the European cars has nothing to do with economy.  They are after performance.  Detroit is still putting out relatively slow electric vehicles.  Hasn’t anyone talked to people who have EVs and found out what they like best about them?  Could it be that customers want the perky performance?

Nah …

 

This week’s blog is simply a reposting of an article from the USA Today on water in the west and how government incentives can distort sustainable thoughts.  It is an honest recount of a rancher who has received subsidies over many years and now finds himself in a moral dilemma.

Read the USA Today Article. 

There’s no going back after taking a handout

I get a sense of unreality from all of this. By rancher standards, federal agencies and their generous staffs are the Cadillacs in a used-pickup world: too expensive to expose to daily wear, but without them, very little of modern agriculture would exist out here.

Our family has always hewed very close to the original meaning of productive self-sufficiency. We have made every effort to evade the outpourings of government help, refused to sign the forms that opened the government coffers, rejected the smooth counsel of advisers whose common theme has always been to take every possible advantage of every well-intended government handout. To us, this has been the difference between freeborn and serfdom.

But now I find myself faced with the very real possibility that to carry on with my commitment to life, I may have to join the serfs. If I don’t, 15 square miles of desiccated shrublands and forests, now anticipating that trickle of water, will pay a much higher price than disappointment.

The NRCS has soothing answers: eligibility lists and connections with many other government programs, which can be bundled to make this near catastrophe a financial opportunity. And suddenly it becomes clear how stern, independent, long-suffering ranchers can so easily be beguiled into the honeyed rat trap of federal subsidies.

And from there, is there any going back?

You are all aware that wind turbines have been getting bigger and bigger … and for good reason.  However, nobody seems to be focused on the consequences of these mega machines on the operational reliability and true final costs of the grid to enable and integrate their contribution.  And, no, I am not talking about the bird loss, NIMBY or other obvious concerns.

The key here is the true financial and operational impact.  Power plants have always had economy of scale benefits, but the concern has also been LUOS (largest unit out of service) consequences on reliability and balancing.  Reliability is now more complex because the individual variability of the output of these devices is going to be significant and possibly impossible to meet with the current design of the load following power plants in our electrical system.  Solar has the same concerns and the alarm has gone up about the ramping loads which, if the future solar plants are built according to plans far outstrips our load following generation capabilities.

The problem by comparison here is the sun is much more predictable.  The wind tends to gust and die with almost no warning.

The other problem that no one seems to be asking about is the cost of these load following power plants on the true economics.  It is not being priced into the short term markets so that we can clearly see it.  It is being priced into long term costs with what are called uplift charges … a dull instrument of price correction and evaluation.

When will we learn that there is always more to the story?