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NextEra Insights Inc.

Low-carbon, Reliable, AND Affordable Electricity

Executive Summary

Over time the governments, regulators and utilities have largely figured out a way to provide reliable and affordable electricity. But now they must also figure out a way to make electricity low-carbon while still maintaining reliability and affordability. This paper (see link below) lists the main challenges and provides a roadmap for overcoming these challenges.

The most common types of low-carbon electricity generators are powered by nuclear energy, renewable natural gas, water, sunshine or wind. Some jurisdictions like Alberta do not have nuclear, renewable natural gas or large water powered electricity generators however many sunshine or wind powered (“green” thereafter) electricity generators have been built and many are in the works. Even when we have sufficient amount of green generators, we cannot count on them for two reasons: (a) producing enough electricity in every hour of every day, and (b) sudden large swings in electricity production.

There is no sunshine at night and reduced sunshine on cloudy days. And while wind patterns are not as obvious, there is a seasonal or daily pattern at most locations. This means we may run out of electricity in some hours of some days. With climate change, it is possible that the locations that are sunny or windy now may not remain so and we may run out of electricity for many days altogether and not just some hours. Currently coal and natural gas powered generators cover up this hourly or daily shortfall.

Electricity is unique in that it travels at the speed of light which means that its generation and use must be balanced every second. Any imbalance lasting even a few seconds could damage both generators and devices that are using electricity. When green generation increases or decreases rapidly, other generators must respond in the opposite direction within seconds. At present natural gas powered generators provide this real-time response for the most part.

This means to get uninterrupted and reliable electricity, we would have to pay the costs of coal and natural gas powered generators in addition to the green generators. This doubling down doubles the electricity bill, generally speaking. Even more troubling, if natural gas use is prohibited or made prohibitively expensive via carbon tax etc. we would have to turn to even more costly alternatives such as batteries which could quadruple the bill.

Is not there a cheaper way to complement the green generators? Yes there is: all of us working together as one giant generator i.e., Distributed Energy Management (DEM). We use electricity in many ways: fridge, stove, washer, dryer, air conditioner, space heater, TV, microwave oven, toaster, computer, light and perhaps even electric vehicle (EV). What if we could manage our electricity use up or down to match the green generators? Since DEM uses all these existing devices at our home it does not add much costs.

While this idea has been around for some years now, it has not been pursued seriously. The main barrier was lack of technology that could take us from limited demand side management to DEM. With mesh networks, powerful computers, big data, block chain and artificial intelligence, DEM is not science fiction anymore. In fact DEM is already operational in a few places. Not discounting the effort required, we do not have to invent or develop, we just have to adapt and apply DEM to our jurisdiction.

Other notable barrier is some aspects of the legal and regulatory framework. Government, regulator and industry collaboration can make short work of this barrier. This collaboration would be similar to one in Alberta in the 1990s that created the framework which has delivered generally good results. If we could do it then, we can and must do it now. Fortunately Alberta can still call upon folks who created the framework and who can now guide the next generation in creating the framework for the future.


Link to the NextEra Insights paper: Low-Carbon, Reliable, AND Affordable Electricity

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