The Real Utility Death Spiral: Our Energy Bill

And what you can do about it while decarbonizing

The impending doom of the Cascadia Earthquake and preparedness is garnering a significant amount of attention these days, in addition to the ad nauseam of hollow presidential campaign stagecraft. For those paying attention though, the real cataclysmic change on the horizon is how we sustainably produce and consume energy without continuing to increase our bills.

Without a natural disaster necessitating new energy infrastructure investment to modernize our inadequate grid built decades ago, we need an actionable plan now for affordable, reliable and carbon-free power. The longer we put off these big, long-term decisions regarding our grandfather’s and great grandfather’s energy supply, the larger burden we saddle on future generations, already sapped with unfathomable debt. Failure to act now will also risk irreversible determent to our environment, creating an inhospitable and inhabitable planet.

If we lead and act now, the opportunities are abound for local jobs, economic development, prosperity and the vibrant health of our natural environment that sustains the richness of our lives in the Pacific Northwest.

In the West, there are many earth shattering, convergent changes afoot that include EPA’s Clean Power Plan, California’s recently enacted 50% Renewable Portfolio Standard, their massive and growing solar oversupply and ramping needs, a 50% Oregon RPS ballot initiative, a west-wide Energy Imbalance Market, PacifiCorp joining the California power system and the irrelevance of Bonneville Power Administration in a fast-paced modern day world prompting their Focus 2028 conversation.

Bonneville Power Administration has traditionally been an economic engine for the region and public power national leader, but it faces increasing uncompetitive rates and financial insolvency to cover its operations, infrastructure reinvestment and paying down their debt.

Juxtaposed with potentially declining revenues of their secondary power sales to California that has kept their rates low, a bold course must be charted on par with the 1960s when the Federal agency faced a similar financial crisis on the same order of magnitude. With visionary leaders, this crisis was transformed into a major revenue generating opportunity vis-a-via the Columbia River Treaty and Bonneville’s decision to build of the AC-DC Interties.

With many uncertainties along the path to a clean 21st century power system, the destination is very clear. We need to de-carbonize our grid by getting off coal and the natural gas “bridge fuel.” These buried fossil fuels must be urgently replaced with reliable, inexpensive alternatives that don’t emit carbon to prevent our climate and ecosystem from spiraling into a tsunami of costly unpredictability.

Unfortunately, these carbon-free, renewable resources have one huge problem. Their Achilles’ heel — they are intermittent and flood the grid with way too much energy when it isn’t necessarily needed causing massive oversupply and negatively priced energy.

With big problems, innovative solutions must be on the decision table for serious consideration. One such answer is simple and elegant — hydroelectric pumped storage.

We need to develop adequate, large-scale storage that is proven and affordable. Even Pope Francis is preaching the need to develop more storage.

The low hanging fruit is to pool resources from utilities across the region to help balance this intermittent renewable energy. However, a regional market and software platforms taking advantage of resource diversity to squeeze out the value of the existing power system is not the lone remedy.

The underling physical and antiquated hardware such as dams on the Columbia River, past their design life, and the associated transmission system is in need of enormous investment. In modernizing, these leviathans must adapt to be more fast responding and flexible.

PacifiCorp’s old coal plants, with an average age of 43 years old, are not flexible capacity. They basically boil water and ramp very slowly. New natural gas plants are far from a panacea, contributing half as much as carbon as coal plant, unable to absorb energy in increasing oversupply conditions. These thermal plants lack the ability to run backwards to soak up this oversupply.

Additionally, energy efficiency advocated by the Northwest Power & Conservation Council in their draft Seventh Power Plan and other well-meaning organizations is not a resource for replacing the energy we need to grow a prosperous economy for all that attracts business to the region with cheap, clean power. Energy efficiency alone is insufficient against the “war on carbon.”

More importantly to the end user and ultimate check writer, energy efficiency puts the burden on the cash-strapped consumer to buy many shiny new “smart-grid” gadgets when the best solution might be to just let the professionals — your boring utility — do it more cheaply and reliably.

Wise use of energy through energy efficiency is important, but we still need to produce affordable electrons on a real-time basis to power our homes, industry and businesses that are committed to 100% clean energy like Nike, Starbucks, Goldman Sachs and Walmart.

So, if more renewable energy and storage is the answer pontificated from high, where do we begin in the Northwest to reinvigorate and lead in the clean energy economy?

There is abundant, high-quality and untapped wind power generation that can be developed with relatively low environmental conflict and cost in the Columbia River Gorge, Montana and Wyoming. Additionally, abundant and cheap solar mid-day oversupply can be imported from California.

But, our energy-water nexus conundrum could benefit greatly if stitched together with a large-scale, centralized energy storage project. A bulk storage project strategically located in the Northwest’s grid could market services and products to take advantage of this impending energy crisis brewing in California.

Where the median household income in Oregon is around $50,000, everybody owning a Telsa, electric vehicle or Powerwall is certainly not affordable or economical. Even purchasing a Nest is a luxury for many. We need to produce low-cost energy to grow our economy and provide additional revenue for cost-cutting utilities to reduce our bills, not increase them.

Still expensive batteries can help at the distribution level on a smaller scale, but this renewable energy integration gigawatt conservation dilemma is a grid scale problem that takes a proven, cost-effective storage technology such as hydroelectric pumped storage to minimize environmental and ratepayer impact.

Also, how environmentally sustainable are batteries when taking into account lifecycle costs, recycling, disposal and waste?

Globally, 1.46 gigawatts of pumped storage capacity came online, with significant capacity under construction or in the planning stages, bring the world’s total pumped storage capacity to 142 gigawatts. In the United States, we haven’t built a large pumped storage project in almost 2 decades. Isn’t it about time?

In the Northwest, there are several energy storage projects in active development such as JD Pool or the Columbia Gorge Renewable Energy Balancing Project. This project holds great promise for the region, but its fate is uncertain in a Balkanized power system where it is difficult to aggregate the full spectrum of value. Characterizing and articulating the myriad of benefits is puzzle of the day for our young minds.

In conclusion, utilities need to incorporate proven, cost-effective storage into their integrated resource planning process. Specifically, economic analysis and modeling of sub-hourly energy grid services and environmental benefits at a regional level is necessary to capture the revenue and cost savings these viable, large-scale projects brings both as a generation and load in balancing intermittent renewable energy cost-effectively.

Only with storage will Oregon reestablish its leadership in paving the way for a 100% clean energy economy.

By embracing proven, cost-effective storage technology and developing more renewable energy such as wind and solar, we can decarbonize our grid to aggressively combat climate change and reverse the alarming trend of increasing electricity bills.