Energy Storage and the Cost of Going Off-Grid

• New energy storage offerings from Tesla and other manufacturers are widely expected to enhance the attractiveness of rooftop solar power and other renewables.
• However, recent analysis from the Brattle Group shows that even with rapid cost reductions, grid-independence will remain beyond the reach of most consumers.

Last month's Annual Energy Conference of the US Energy Information Administration included speakers and panels on topics such as crude-by-rail, potential US oil exports, and the role of the Strategic Petroleum Reserve, all of which should be familiar to my readers here. However, the topic that really caught my interest this year was energy storage.

Storage has been in the news lately, particularly since the launch of Tesla's new home and commercial energy storage products. In fact, Tesla's Chief Technology Officer spoke on the first morning of the conference. Much of his talk (very large file) focused on Tesla's expectations for the cost of storage to decline sharply as electric vehicles (EVs) and non-vehicle battery applications grow. Whether battery costs can drop as quickly as those for solar photovoltaic (PV) cells or not, storage is likely to become a more important factor in energy markets in the years ahead.

One of the most interesting presentations I saw examined a provocative aspect of this question. Michael Kline of The Brattle Group, which consults extensively on electricity, took a detailed look at whether rooftop PV and home energy storage might become sufficiently attractive that a large number of consumers would employ the combination to enable them to disconnect from the power grid entirely.  That would be an extremely appealing idea for a lot of people. The author of a book I received from the publisher a few years ago referred to it as a movement.

Most people by now appear to understand that solar panels alone can't make a household independent of the grid. The daily and seasonal incidence of sunlight aligns imperfectly with the peaks and troughs of typical home electricity demand. This is why "net metering", under which PV owners sell excess power to their local utility--effectively using the grid as a free battery--has become contentious in some electricity markets.

In a true off-grid scenario, net metering would be unavailable. Onsite storage would thus be necessary to shift in time the kilowatt-hours of energy produced from a home PV array. However, a standalone PV + storage system must be sized to deliver enough instantaneous peak power to handle periodic high-load events like the startup of air conditioners and other devices. Another presenter on the same panel had a nifty chart demonstrating how wide those variations can be, with multiple spikes each day averaging above 12 kilowatts (kW)--several times the output of a typical rooftop PV array.

Brattle's off-grid model included PV and storage optimized to "meet load in every hour given a battery with 3 days of storage (at average load levels.)" Although that is still probably less than the peak load such a system would encounter, it is the equivalent of multiple Tesla "Powerwall" units and would only be practical with the kind of drastic cost reductions Mr. Kline assumed by 2025: PV at $1.50/W and storage at $100/kWh, installed. That equates to around a third of last year's average US residential PV installation and 1/7th the estimated installed cost of Tesla's offering on a retail basis.  

Mr. Kline framed this exercise as a "stress test", not just of the off-grid proposition but of the future of the electric power grid. If many millions of customers were to "cut the cord" for electricity as others have for wireline telephone service, even a "smart" power grid would become much less important and might shrink over time. That same logic should extend to the power generators supplying the grid. If most consumers went off-grid, the value of even the most flexible generation on the grid, which today is often provided by natural gas turbines, would fall, as would demand for the fuel on which they run.

In Brattle's assessment, despite the assumption of very cheap PV and storage, that prospect seems remote. For the three markets analyzed (California, Texas and Westchester County, NY) the levelized cost of energy (LCOE) for the off-grid configuration modeled was significantly more expensive than the EIA's projected cost of electricity in those markets in 2025. In fact, for consumers in California and Texas, as well as in all cases of the parallel commercial customer analysis Brattle performed, PV + storage would  be expected to cost a multiple of retail electricity prices.

As Mr. Kline explained, under more realistic assumptions the comparison was likely to be even worse for off-grid options. However, his conclusion that , "going off-grid...is unlikely to be the least expensive option for most consumers" does not mean that some consumers would not choose to do so, anyway. To them, a premium of 10-20 cents per kWh might seem like a small price to pay for personal energy independence. Yet at that price, it is hard to envision it would become a mass-market choice. 

Mr. Kline made a point of reminding his audience that Brattle's analysis did not mean that distributed energy  would  not be competitive in the future, or that it could not provide valuable services to customers and to the grid. Importantly, the figures he presented underlined the continued value of the power grid to customers, even in a future in which large quantities of PV and storage are deployed.  As he put it, "Distributed energy is a complement to the grid, not a substitute for it."

By extension, flexible generating assets like fast-reacting gas turbines should also continue to provide significant value, especially during those seasons when daily solar input is low, and in locations where average sun exposure is generally much weaker than in the US Southwest and other prime solar resource regions.  As appealing as the idea might be to some, storage seems unlikely to make either the grid or any class of generating technologies obsolete for the foreseeable future. As Bill Gates recently observed, that has implications for the cost of a wholesale shift to current renewables and away from fossil fuels.

A different version of this posting was previously published on the website of Pacific Energy Development Corporation.

The Bright and Dark Sides of the Smart Grid

As I was catching up on email that accumulated during my travels last week, I ran across two items highlighting the contrast between the shining potential of the emerging "smart grid" for energy and its darker, more dangerous side. In his keynote address at the first annual GridWise Global Forum, IBM's CEO Samuel J. Palmisano described the vision and opportunity of a closely interconnected, highly efficient global energy system, while the unfolding story of the Stuxnet computer worm infecting the control system of Iran's Bushehr nuclear reactor and other facilities serves as a chilling reminder of the vulnerabilities that will likely accompany this revolution. That doesn't justify clinging to our un-networked past, but it certainly strikes a cautionary note, as Mr. Palmisano himself pointed out.

Last week was a big one for energy conferences. I skipped both the GridWise session in D.C. and MIT's annual Emerging Technologies Conference to attend IHS Herold's Pacesetters Energy Conference. I'll share some of my insights and observations from the latter in the weeks ahead, but for now I recommend Mr. Palmisano's GridWise speech as a good overview of the characteristics of a truly smart energy system and the ways in which our present energy sources and distribution networks fall short of constituting a well-functioning system. Without being Pollyannish, it presents a more positive outlook than the widely-quoted comment from the same conference by GE's CEO Jeffrey Immelt, concerning US energy policy, "It's just stupid what we have here today."

Yet while most of Mr. Palmisano's remarks focused on the inevitability and benefits of knitting together and adding intelligence to regional, national and global energy infrastructure and markets (and other key systems) he also had this to say about the security concerns this would create: "And when it comes to security--the technology is robust, but as the world's infrastructure becomes networked and interconnected, the exposures multiply exponentially. How vulnerable is the world's essential infrastructure? Are our electric grids only going to be as secure as a website? If we don't come together to forge a new policy framework that protects the individual's privacy and the community's and nation's security, people may say 'stop.' And they should."

I don't know if he had intrusions like Stuxnet in mind. I also suspect it's going to take a lot more than a new policy framework to prevent governments, organized crime and random hackers from exploiting the inevitable security gaps in the smart grid and other smart infrastructure to cause mayhem. Having treated the nefarious work of spammers and hackers as more of a costly annoyance than an intolerable violation--when all that was at stake was personal and financial data--will we be as cavalier about similar risks to our physical safety and security? Or does the rise of the smart grid portend a great "hacker crackdown", to use the title of a classic book on the hacker subculture?

Much of the speculation about the sophisticated Stuxnet exploit, which apparently targets a particular kind of industrial process control hardware and software, suggests that it took the capabilities of a government to develop. However, if we've learned anything from the last couple of decades of computing advances, it's that anything a government can do today in this field a smart, motivated individual can do in the not-so-distant future, particularly once he knows it can be done; it's an irresistible challenge for some. Ubiquitous computer viruses today, endemic power plant and refinery viruses tomorrow?

I agree with Mr. Palmisano concerning both the inevitability of smart grid development and the risk that security concerns or actual events could halt this shift in its tracks. As we call on the grid--or more accurately, grids--to handle rapidly increasing numbers of distributed power sources, particularly intermittent ones like wind and solar power, and as customers demand more choices and more control over their energy usage, the old un-smart grid will soon cease to be up to the task. However, we're already seeing pushback against smart meters in some areas, without any concrete evidence of misuse of consumer data or other harm. Imagine what this would look like if the smart grid had to reboot as often as your PC or periodically became infected with malware that shut down parts of it for hours or days. I know that the companies and agencies involved in the smart grid are working hard on solutions to these challenges; however, I'm just as sure that it's going to require a completely different approach than the one we've employed for dealing with computer security, with operating system and anti-virus providers seemingly always one step behind the bad guys.

Wind vs. Natural Gas

Today's Wall St. Journal includes a very interesting article on the real-world competition between wind power and electricity generated from fossil fuels. At least in Texas, steadily increasing wind generation has apparently come mainly at the expense of natural gas, rather than displacing coal-fired power, as might have been anticipated by many wind advocates. That has implications for the effectiveness of renewable energy policy as a means of reducing greenhouse gas emissions, as well as for the utilities and independent power generators that are complaining that wind has been given overly-preferential treatment.

Texas makes an interesting laboratory for demonstrating the practical consequences of our shift towards renewable energy. ERCOT, the Texas grid, has little connectivity with neighboring grids; power generated within Texas must, for the most part, be used in Texas, while demand in Texas must be met mainly by generators within the state. That makes the relationship between wind and fossil fuel generation more transparent than it would be in another region with larger imports and exports. The resulting statistics on gas generation displaced by wind, as presented in the article, are unlikely to surprise those familiar with the technologies involved.

As I've pointed out periodically, wind power is unlikely to displace much coal, since most coal plants are mostly run in baseload mode--essentially 24x7--because that suits both their operating requirements and the grid's need for large quantities of predictable, low-cost power to handle routine loads. By contrast, wind turbines rely on the availability of wind blowing at speeds within a specified range. On average they put out about 30% of the full power for which they're rated, in patterns that vary from day to day and season to season. Gas offers much more flexibility than either coal or wind and is thus the supply most likely to be adjusted up or down to accommodate the output from wind when it's blowing or back-stop it when it's calm. From what I can tell from the article, the complaint from gas-based generating companies isn't that this is occurring, but that when wind generators come up short vs. their day-ahead commitments to the grid, the penalty falls on everyone else, not on the responsible wind farms. This constitutes a hidden subsidy, on top of the ongoing benefit of the federal Production Tax Credit (currently available as an alternative Investment Tax Credit and payable as an up-front cash grant) and the Renewable Energy Credits generated under the state's Renewable Portfolio Standard.

This competition has important implications for energy policy, and not just because backing out power from gas saves nearly 40% fewer greenhouse gas emissions than backing out coal power. It also exposes real, practical differences that go well beyond the typical incumbent vs. new entrant issues characterized in the article, by the head of the American Wind Energy Association. Because these distinctions are grounded in physics and engineering, it isn't just a question of whether the existing rules favor one otherwise equivalent technology over another, or whether wind farms are getting a free ride at the expense of other suppliers, but how to design a system that makes the best use of all these resources, including the atmospheric emissions sink. This goes to the heart of how we build a generating mix with increasing proportions of supply from technologies that are intrinsically different and less dependable than those we've relied on historically.

On one level, this is part of what the emerging smart grid is supposed to address, but it also presents a very real business problem that can't be solved by pretending that all electrons are equally valuable to the grid. The goal of greening our power supply must coexist with the goal of improving the capability of the entire grid to provide reliable, high-quality power for an economy that is increasingly dependent on electricity. If we want all power market participants to invest toward achieving that end, then we must find a way for wind and other renewables to shoulder their fair share of the burdens, rather than shifting them onto their direct competitors. That might require wind farms to contract for their own back-up coverage with gas generators, if they expect their commitments to be treated as equivalent to those from other suppliers. Or perhaps it makes the case for phasing out wind's production-based tax credits in favor of federal insurance to cover the penalties that result from its intermittent output under dispatching rules that don't favor any generating technology.

While some might dismiss the Texas situation as growing pains or whinging by those that have lost out to wind, I see further confirmation that the successful integration of new technologies into our energy mix requires more than just investment incentives and wishful thinking. If we want to capture the natural synergies between wind and gas--both of which have desirable attributes--then we must find ways to make them compatible as actual businesses, not just on paper as theoretical technologies.

Observing the Sun

The topic of space exploration has gotten much media attention lately, mainly focused on the uncertain fate of future US manned space efforts in light of the cancellation of NASA's Constellation program in the administration's new budget. After the current flight of the shuttle "Endeavor" and the four remaining shuttle missions this year, the fleet will be retired and transporting astronauts to and from the International Space Station will depend on Russia, or on unproven spacecraft from commercial start-ups like SpaceX and Blue Origin. Yet without diminishing the importance of these concerns for our long-term access to space, yesterday's delayed launch of the Solar Dynamics Observatory satellite deserved more attention than it got. The SDO mission is part of NASA's "Living with a Star" program, which is aimed at expanding our knowledge about how the sun affects life on earth, with implications for energy and our understanding of the environment, including climate change.

It's hard to think of anything we take more for granted than the Sun, yet as the material on the SDO mission website explains, we don't fully understand the variability and internal mechanics of our planet's primary source of light and heat--and thus directly or indirectly of all the energy we use except for that derived from nuclear and geothermal power. Variations in the amount of solar energy the earth receives as a result of the eccentricity of our orbit around it have long been understood to influence long-term climate patterns, including ice ages, while the impact of fluctuations due to variability in the sun's actual output remains more controversial. Climate skeptics have suggested that much of the warming of the last several decades, along with the recent temperature plateau, could be related to the approximately 11-year sunspot cycle. Meanwhile NASA scientists have assessed the impact of solar variability on climate to be significantly less than that from the accumulation of atmospheric greenhouse gases. SDO should improve our understanding of solar variability and its consequences here on earth. (I should mention that observed recent short-term variability of a few Watts per square meter isn't sufficient to have a noticeable effect on the power output of solar panels.)

The more immediate energy concern that SDO should help to clarify is the risk that currently-unpredictable solar activity, including strong solar flares and resulting geomagnetic storms, poses to power grids--smart and otherwise--and communications equipment on earth and in orbit. At the extreme, a solar flare of the magnitude of the Carrington Event of 1859 could disrupt critical energy infrastructure in much the same manner as an Electromagnetic Pulse (EMP) from a high-altitude nuclear explosion. As dependent as we all are on increasingly complex and inter-connected electrical and electronic systems, anything that improves the ability of scientists to forecast a sudden spike in solar radiation could be worth its weight in gold.

NASA's capacity to conduct missions with immediate benefits on earth, such as SDO and the forthcoming Glory mission to measure key aspects of the earth's energy balance, is crucial, but then so is building on the legacy of four decades of manned spaceflight. I have distinctly mixed feelings about the altered priorities in NASA's new budget, though I'm pleased that funding for space as a whole was preserved. The possibility that this shift will spur a vibrant private space industry that could significantly reduce the cost of reaching earth orbit is exciting, because among other things that could make large-scale space solar power practical and affordable. At the same time I worry that we shouldn't cede America's preeminent position in human space exploration at a time when other nations are setting ambitious goals in this arena.

Setting Green Power Goals

Much of the attention on the pending climate legislation in Congress has focused on its inclusion of the latest effort to establish a national cap and trading system for greenhouse gas emissions. However, a quick review of the table of contents of the Waxman-Markey Bill reveals a host of other energy provisions, beginning with "Title I, Subtitle A, Renewable Electricity Standard", which would set aggressive goals for the rapid deployment of renewable power throughout the country by 2025. Although this builds on the numerous state-level Renewable Portfolio Standards already in place, it would supersede their inconsistent targets and definitions. After comparing the bill's numerical targets, which would kick in as soon as 2012, to the current level of generation from its included renewable sources, I can only wonder whether the bill's authors actually expect the US electricity sector to attain these goals, or regard the RES as yet another source of future government revenue, when suppliers that fall short pay the penalties the legislation would impose.

The key language in the entire section delineating the national RES is found in the definitions of what constitutes a "Renewable Resource": wind, solar, geothermal, biomass power, landfill methane, marine & hydrokinetic energy, and "qualified hydropower." The latter limits the contribution from our largest current renewable electricity source to "electricity solely from increased efficiency achieved, or additions of capacity made, on or after January 1, 2001..." The US now has 77,885 MW of hydropower capacity, about 1% less than in 2001. Last year these dams generated 250 million MW-hours of electricity, 6.1% of 2008 total US generation. That large baseline quantity would be excluded from the RES, which would only count new hydropower capacity. The latest tally by the DOE indicates that between now and 2012, when Waxman-Markey would require 6% of the nation's power to come from renewable sources, only another 236 MW of hydropower is expected to come into service. They might as well not have counted it at all.

It's also worth noting that, appropriately enough, the bill counts actual annual generation, not capacity in place. That works very much against energy sources with low capacity factors--those that generate power much less than 24/7. That notably includes the fastest-growing renewable sources, wind and solar power. Last year, the average US wind turbine produced only about 28% of its rated output, based on actual generation and the simple average of reported year-end 2007 and 2008 wind capacity figures. And the theoretical maximum for solar is even lower, at around 23% even in a sunny locale such as Southern California. That means you need lots of wind and solar capacity to produce the same amount of power as from coal-fired power plants, which generated at an average of 73% of rated capacity last year.

Without counting existing hydropower, it is difficult to see how the country will achieve the 2012 RES goal, let alone the much loftier "25 by 25" target. The total contribution of wind, solar, geothermal, biomass power and landfill methane last year was 124 million MWh, or 3% of net generation. Reaching 6% by 2012 would require a sustained average annual growth rate of 19% per year. The 8.5% goal for 2014 would extend that requirement for another 2 years. Yet in the last four years, encompassing a period of remarkable growth from wind and solar power, the broader category of renewable electricity defined by Waxman-Markey grew by 8.1%. In effect, year after year we would have to beat last year's stellar growth rate of 17.5%--reflecting the high fossil-energy prices and credit bubble of the previous several years--and get further help from energy efficiency and conservation, which could help to shrink the denominator of this fraction. The most recent data-point we have is the first-quarter performance of the wind sector, which added 2,836 MW of new capacity. On an annualized, capacity-factor-adjusted basis, that would increase total renewable power output by about 22% this year. It remains to be seen whether the tax credit and grant provisions of the stimulus bill will be sufficient to sustain such high rates, without the infusions of "tax equity" from investment banks and other financial institutions that helped fund the projects now coming online. Nor do we know whether these growth rates could be sustained, once the transmission bottlenecks inherent in the current electric grid structure--which cannot change materially within the next six years, despite all the recent hype about a "smart grid"--begin to bite.

What happens if the electric power industry falls short of these ambitious goals? Referring again to the discussion draft of the Waxman-Markey Bill, we see, "A retail electric supplier may satisfy the requirements of paragraph (1) (as modified, where applicable, under paragraph (3)) in whole or in part by submitting in lieu of each Federal renewable electricity credit that would otherwise be due, a payment equal to the lesser of—‘‘(A) 200 percent of the average market value of a Federal renewable electricity credit for the previous compliance year, as determined by the Secretary; or ‘‘(B) $50, adjusted on January 1 of each year following calendar year 2009 based on the Gross Domestic Product Implicit Price Deflator." That $50 per MWh equates to 5 cents per kWh, or roughly half of the prevailing average retail price of electricity last year.

The House Energy and Commerce Committee has been holding hearings on this bill for the last several weeks, and the final bill reported to the House could look quite different, though many of its critics seem much more interested in the initial allocation of tradeable credits under its greenhouse gas provisions than in the RES. If passed by the House, the bill is likely to alter again once the Senate has its turn. I hope both bodies will take a serious look at its definitions of renewable resources and the timing of initial targets that depend mainly on our ability to continue expanding wind power at high growth rates and integrating its non-dispatchable, intermittent contribution into an existing power distribution network that will become increasingly strained, until its own expansion and updating really get under way. Missing these targets wouldn't only impede our environmental progress; it would result in a hefty new tax on electric power, over and above the effective tax from the likely cap & trade system.

Dangerous Delusions

If you've read this blog for any length of time, you know that it's not my practice to single out individual officials or politicians for particular praise or criticism, preferring an even-handed and scrupulously non-partisan approach. So it is with some reluctance that I feel compelled to share my considerable alarm about the views expressed by the new Chairman of the Federal Energy Regulatory Commission (FERC), Mr. Wellinghoff. His suggestion that "baseload capacity is going to become an anachronism" and that renewable energy can meet all our future energy needs represents a dangerous delusion, at least for the next several decades. I am not dismissing the vital contribution of renewables in addressing climate change, or the potential of a smarter electricity grid to accommodate a greater share of generation from renewable sources than would be feasible today. However, while I appreciate the benefits of visionary leadership in moving the country towards those goals, that vision must be grounded in reality, and not skewed by wishful thinking or the ingrained habits of a long career spent in advocacy for renewable energy.

My first recommendation to Mr. Wellinghoff would be to read today's Washington Post op-ed by Dr. James Schlesinger, the nation's first Secretary of Energy, and Dr. James Hirsch, a former official of that department's predecessor agency. More than 30 years ago, they were responsible for the early research initiatives that helped to develop many of the renewable energy technologies that Mr. Wellinghoff promotes. Their deeply informed comments on the inherent limitations of renewable energy lead to inescapable conclusions about the need to balance these intermittent and cyclical energy sources with the stability provided by large, central generating facilities capable of producing electricity around the clock, without daily or seasonal fluctuations.

My next suggestion to him would be to invest some time analyzing the electricity statistics of Denmark, which leads the world in deriving nearly 20% of its electricity needs from wind power. These data demonstrate the dramatic seasonal variance in Denmark's wind output. In 2008 alone, the country's 3,180 MW of wind turbines generated as little as 234 gigawatt-hours (GWh) per month (May) and as much as 1,050 GWh (Jan.), resulting in monthly effective capacity factors ranging from 10% to 44% of installed capacity. The monthly stats also demonstrate how this remarkable volatility can be accommodated without causing massive disruptions to the Danish economy. This is only possible through tight integration of the Danish electricity grid with those of its neighbors via robust interconnections--big power lines. When Denmark has more wind power than it needs, it is exported to Norway, Sweden and Germany. When its wind turbines are becalmed, it draws on the enormous hydroelectric reserves of Norway and nuclear and hydropower from Sweden. Because of the variability of wind power, Denmark's electricity import/export balance fluctuates daily, monthly, seasonally, and even from year to year. But the US isn't Denmark. We have 55 times as many people, and no neighbors with bigger power grids than ours.

We can't yet know the mix of central and distributed power, or of baseload and variable power that the US will ultimately need to power our economy and meet the emissions reduction targets we will take on. Improvement of the grid and the advent of "dispatchable demand", including smarter appliances and electric vehicles that could be preferentially recharged when renewable electricity is abundant will certainly increase the amount of renewable energy that can be absorbed usefully. However, that will not entirely obviate the need for large baseload power plants, and pursuing an agenda that makes it more difficult to build at least enough new nuclear power plants by the 2020s and 2030s to maintain nuclear's present 20% share of net generation would be disastrous for both US energy security and for our ability to reduce our contribution to climate change. I can only hope that Mr. Wellinghoff is open to modifying his views, as he adapts to his new role.

Steel on the Ground

2009 is shaping up as the Year of the Stimulus. The consensus for a massive fiscal stimulus of the US economy, in the form of direct government spending and targeted tax breaks, grows daily. The biggest remaining questions focus on how much and how quickly. Estimates of the magnitude under consideration range from $400 billion to over a trillion, spread out over two years. Some would even like to see a stimulus bill ready for President Obama's signature on Inauguration Day. As urgent as the need to kick-start the economy appears, however, there are good reasons to spend at least as much time considering what to stimulate and how to go about it. That's particularly true of the energy economy, where the results of a stimulus will be felt for the next forty years.

An essay in Sunday's Washington Post highlighted some of the pitfalls of past government spending on infrastructure. Despite the best of intentions, our elected and appointed officials don't appear to have any keener insights into the future than corporate executives. It's inevitable that some of the stimulus will end up funding inefficient and ineffective projects, and in the interest of avoiding an economic implosion and a deflationary spiral of job cuts, demand reduction, price cuts, output reduction, and more job cuts, that might not be the worst outcome. But we need to ensure that the lion's share of the stimulus is focused on things that really need doing and that the private sector, even in the best of times, has difficulties undertaking. My top candidate for this is a major upgrade of our electricity infrastructure.

It's going to be very tempting for the federal government to invest directly in energy technology deployment--not just R&D--and even in private firms. The $350 million loan sought by Tesla Motors, the Silicon Valley electric car start-up that has just sold its 100th $100,000 electric sports car, comes to mind. We need clear guidelines that avoid putting tax dollars into companies that operate in markets that are already distorted by federal mandates and subsidies, such as those supporting biofuels production. But while I would not wish the government to invest in wind and solar power developers or their projects, the infrastructure necessary to make those projects more effective and competitive is a different story.

The case for increased federal investment in our power grids is similar to that for the Interstate Highway system in the 1950s, as another great enabler of economic transformation. Ever since the northeast blackout of 2003, we've known that the grid must become more resilient and reliable, and utilities and the grid operators have been working hard on that. But it also needs to be able to accommodate a much larger number of generators, ranging from rooftop solar arrays to widely dispersed utility-scale solar power installations and wind farms. Moreover, we need more long-distance transmission, particularly from the ten or so states that are home to roughly 80% of US wind power potential. Our best solar resources are similarly concentrated. If we're serious about reducing greenhouse gases from the electricity sector, which contributes a third of US emissions, this will require a better-integrated, higher-capacity, faster-reacting electrical grid to ensure that we make the most of distributed and intermittent renewable energy sources. It is also the sine qua non of the eventual mass electrification of our transportation systems, which account for another 28% of our GHGs and two-thirds of our petroleum consumption.

Unfortunately, we must also be realistic about how much can actually be accomplished, or in stimulus terms, spent on this task within the next two years. Although we might like to imagine a massive, Works Progress Administration-like marshaling of the nation's unemployed to undertake great tasks, those Depression-era efforts faced nothing like the modern regulatory requirements for permits and environmental impact reports. I've been associated with a fair number of large projects in my day, and the practical obstacles for quickly revamping the power grid boggle my mind. For starters, it would require setting aside all of the existing regional, state and local permitting processes and handing someone--a "grid czar"?--sweeping powers even greater than the power to designate "National Interest Electricity Corridors" that was given to the Federal Energy Regulatory Commission under the Energy Policy Act of 2005. Even if permits were no problem and plans already in place, I wonder how much actual "steel on the ground" we'd see by the end of 2010, beyond "last-mile" investments, such as smart electricity meters. Perhaps the best we can hope for in this timeframe would be to fund the planning and design process and get all of the environmental impact studies done. That might stimulate a lot of engineering and consulting firms, but it wouldn't necessarily put many construction folks to work. I can't help wondering how many other aspects of a federal stimulus beyond energy will be subject to similar constraints.