Agile Energy Systems: Global Distributed On-Site and Central Grid Power

Agile Energy Systems

Global Distributed On-Site and Central Grid Power

Second Edition

Woodrow W. Clark, II

Table of Contents

Cover image

Title page

Copyright

Contributors

Overview

About the Author

Woodrow W. Clark II MA³, PhD

Introduction

Chapter One: The End of the Fossil Fuel Industrial Revolutions: The Case of California in the United States

Abstract

The Vertically Integrated Utility

The Emergence of the Transition Phase

The US Energy Crisis at the Turn of the 21st Century

Sustainability is the Future to Stop a California Electrical Crisis

Conclusion and Lessons From California

Chapter Two: The Green Industrial Revolution (GIR) Is Here Today

Abstract

Conclusion

E3 References

Chapter Three: The Global Context for Changes in the Energy System

Abstract

Introduction

Perspectives on Energy System Changes

On-Site Distributed Power and Liberalization

Consolidation and Global Electric Companies

Competitiveness in the Energy System

The Transmission System in a Competitive System

Sustainable Technologies and Environmental Issues

Energy Corporate—Civic Governance

Policies and Economics for the Future of Agile Energy Systems

Conclusion

Chapter Four: Global Changes in Energy Systems: Central Power and On-Site Distributed

Abstract

Regional and Nation-State Experiences

Overview of European Electricity System

Denmark

Germany

Summary of Nordic Countries (Denmark) and Germany

Chapter Five: Developing Nations: Africa, Latin America, and Island Nations

Abstract

Electrification of Africa

Latin America

Electrification of Island Nations

Chapter Six: Technologies, Changes, and Impacts: From a Vertically Integrated to Dispersed Energy Systems

Abstract

Historical Overview

Theoretical Underpinnings of Dispersed Systems

Concentrated or Central Grid Energy System Challenge

Large and Centralized Generators and Utilities Became Less Competitive

Renewable and Alternative Technologies Became Cost Competitive

Conclusion

Chapter Seven: Agile Energy System: Integrated GIR Technologies Into Infrastructures

Abstract

Integrated Hybrid for Infrastructure Systems

Conclusion

Chapter Eight: The Next Economic Model

Abstract

Introduction

Economic Models and Premises of Restructuring

Neoclassical Premises and Assumptions

Conclusion: The failure of Neoclassical Economics in Energy Planning in Complex Systems

Chapter Nine: Complex Infrastructures: The Role of Government in Planning for Agile Energy Systems

Abstract

Introduction

Planning for Uncertainty and Risk Aversion

Meeting the Energy Infrastructure Challenge

Return on Investment Public Finance Model: The Potential for Renewable and On-site Power

Conclusion

Chapter Ten: Conclusions: Implementing the Smart Green Development Revolution Through Agile Energy Systems

Abstract

Introduction

The Transition in Energy From Chaos to What Works

The Challenge of the Localization Model

Toward Worldwide Agile Energy Infrastructure Systems

Toward an Agile Energy System

Appendix: Agile Energy System Cases: Green Technologies for Distributed On-site Power and Central Grid

Overview

Background

Global Energy Technologies Today

Smart Green Technologies: Integrated Agile Energy Infrastructures

Fuel Cell Technologies—Status and Future—for Vehicles and Buildings

Hydrogen Fuel Cell Vehicles (HFCEV)

The Economics for Smart Green Cities and Communities

Smart Green Communities: The Case of a City: Berlin

California State Renewable Investment Plan

The Green (Renewable Sources for) Hydrogen Paradigm

Fuel Cell for Energy Storage

Hybrid Energy Technologies

Consider the Case of Zinc Air and Iodine–Sulfur (IS) Fuel Cells

Zero Emission Cars: The Cases of H2, Electric and Solar Cars

Agile Energy Systems—Infrastructures

Integrated Hybrid for Infrastructure Systems

Conclusion

Index

Copyright

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Contributors

Samantha Bobo     Independent writer

Ted Bradshaw⁎

Woodrow W. Clark, II     Managing Director, Qualitative Economist, Clark Strategic Partners

Melody Rong     Independent writer

Tor Zipkin     Independent writer

⁎ Deceased

Overview

In 2004 this book first came out with Ted Bradshaw and I as the coauthors. It was just after the recall of California Governor Gray Davis in the fall of 2003. Then Arnold Schwarzenegger was elected California Governor in early Oct. 2003 and took office the next month (Nov. 2003). Professor Ted Bradshaw, my coauthor and I had already started and written an analysis of what happened to California from the deregulation of the state’s central plant power systems from two terms of Republican governors for 16 years before Democrat Davis, who strongly believed that power plants need to be private companies whose supply and demand of energy would be based on classical neoclassic economics (Clark, 2002, 2003, 2004). The results were a disastrous energy crisis that started at the turn of the 21st century in 2000. Throughout the State, there were brownouts and even unforeseen blackouts.

Now Elsevier Press wanted us to do an updated version. But Ted passed away at 61 years old in 2006, 2 years after the first edition of Agile Energy Systems came out. He was jogging in Berkeley near where he lived. Ted is survived by his wife Betty Lou and their two boys, Niels and Liam. Clark and Bradshaw met in early 2003 and worked on the book then until Dec. 2003 as they saw it as the review of what California went through due to the change in the state’s energy programs. They were correct. And the book, now over a decade later, remains the best and most accurate account of what California went through with its energy crisis that led to some innovative solutions which have set a new standard for energy and power systems there in California and around the world.

The deregulation of the central energy plants resulted in energy problems for California in the last year of the two prior Republican Governors (1998) for 2 terms each of 8 years for a total of 16 years. In 1999 Democratic Governor Davis inherited a series of power outages and problems through 2000–01. Upon review then, and soon after Clark took office as one of the five Governor Davis’ Energy Advisors, the problem was addressed and solved in the next 3 years. Clark defined his position just after starting in late December, to be Renewable Energy, Emerging Technologies and Economics Advisor. From Feb. through Jun. 2000, Clark got companies that supplied renewable energy in solar and wind power to come to California and help resolve the state’s energy crisis. There were numerous meetings in Sacramento for wind, solar, geothermal, bioenergy, and others in order to set state standards for these systems throughout the state.

The problem for solar and wind, particularly is that they are intermittent energy sources, meaning that the sun is not always shinning; nor is the wind always blowing. Hence the ability to secure funding for these systems was difficult. After less than a year of intense meetings with companies supplying both wind and solar energy, changes in getting data on the power generated were done within an hour of the time needed to calculate energy costs and hence funding for the systems.

The results were new tariffs to measure solar and wind that the CAL ISO (California Independent System Operators) could then use for funding and costs as well as securing California and Federal tax incentives. The results for California and then the other western states led to large solar and wind farms being installed and to the Federal Energy Regulatory Commission (FERC) to use the CA ISO standards for all the 50 states (Clark and Morris, 2002). The Green Industrial Revolution had started (Clark and Cooke, 2015). But there were other issues and concerns that arose.

One was the illegal behavior of some of the new market-based energy companies that came to California (e.g., CA) in the late 1990s. Many of these companies provided questionable data and information about their energy power generation and systems. When Clark and then others saw data from firms and confirmed as valid by CPA firms for number like 1+1=7 we were disturbed and started a legal investigation. One of those companies was ERON. But there were others too. Today, far more oversight and supervision of these and other companies resulted.

However, the main issue remained: how can CA have central power plants, but also on-site or distributed power systems too for solar, wind, and other renewable energy sources? The issue was to provide economic and technological support. Yet the reality of it was (and still is) opposition from central power companies that their income levels would be diminished if on-site power is allowed. Hence a number of regulatory decisions had to be made and implemented. The issue for CA and other US states is now the same for other nations around the world: both central power and on-site energy systems need to be the key to providing energy, especially replacing power from nonfossil fuel sources.

Why?

The future of the earth depends upon what the UN COP21 nations decided in Dec. 2015. Stop global climate change through the use of renewable energy sources which need to be both central power and on-site sources of energy. For the world today and its future for our children and grandchildren, climate change must be stopped. This is what Prof Bradshaw and Clark sought to do over a decade ago. And what Cooke and Clark with their books on sustainability and the two last books on The Green Industrial Revolution and then Smart Green Cities with theory, practice, and cases from around the world. The future is already here NOW—2017.

References

Clark W.W. The California Challenge: energy and environmental consequences for public utilities. Policy Elsevier, UK: Util; 2002.

Clark W.W. Distributed generation public policy. London, UK, fall: Energy Policy Elsevier; 2003.

Clark W.W. Distributed generation public policy. London, UK, fall: Energy Policy Elsevier; 2004.

Clark, W.W., Cooke, G., 伍德罗伍德罗•克拉克,格兰特 with Jin, A.J., Lin, C.-F. 库克,金安君,林清富, 2015. Green Industrial Revolution in China (Mandarin). Ashgate and China Electric Power Press.

Clark W.W., Morris G. Policy Making and Implementation Process: The Case of Intermittent Power. International Energy Electrical Engineers (IEEE), August 2002. 2002 http://grouper.ieee.org/groups/scc21/1547/index.html.

About the Author

Woodrow W. Clark II MA³, PhD

Clark is an internationally recognized and respected expert, author, lecturer, public speaker, and consultant on global and local solutions to climate change. His core advocacy is in the economics for smart green communities. During the 1990s, he was Manager of Strategic Planning for Technology Transfer at Lawrence Livermore National Laboratory (LLNL) with the University of California and the U.S. Department of Energy. While at LLNL, he served as one of the contributing scientists and experts for the United Nations Intergovernmental Panel on Climate Change (IPCC), which was awarded the 2007 Nobel Peace Prize. He chaired the first Research Team for the UN FCCC.

From 2000 to 2003, Clark was Advisor, Renewable Energy, Emerging Technologies & Finance to California Governor Gray Davis. In 2004 Clark founded, and manages Clark Strategic Partners (CSP), a global environmental and renewable energy consulting firm using his political-economic expertise to guide, advise, and implement public and private projects advancing sustainable, smart green communities as well as colleges, universities, shopping malls, office buildings, retirement centers, hotels, as well as resorts and film studios.

From 2015 to 2017, Clark teaches courses at University of International Relations (UIR) in Beijing. And was appointed (Jul. 2016) to be a member of the Editorial Board for the Energy review journal in China. Dr. Clark was selected to be a member of the UN B20 Finance Task Force supported in 2016 by China. Then in 2017, asked to continue on the UN B20 Task Force now retitled Finance and Infrastructure and supported by Germany.

Clark has published eleven books and over 70 peer-reviewed articles, which reflect his concern for global sustainable communities. Recent authored and edited books are The Next Economics (Springer, 2012) and Global Sustainable Communities Handbook (Elsevier, 2014). In addition, his latest coauthored books, with Grant Cooke, are The Green Industrial Revolution (Elsevier, 2014), China’s Green Industrial Revolution (in Mandarin, 2015), and Smart Green Cities (Routledge, Feb. 2016).

In 2014, building on his mass media background (Clark Communications, 1980s), he founded Clark Mass Media Company (CM²C), which specializes in documentary; education; and dramatic series on economic, political, global climate, and social issues. Clark earned three separate masters degrees from different universities in Illinois and his PhD, University of California, Berkeley. He lives with his family in Southern California.

Introduction

This book is organized in three sections. The first section looks at the California energy crisis of 2000–01 in the context of global restructuring of the electricity industry. Five core concepts explain what changed leading to the problems that disrupted the electrical system in California (and to some degree in other states and nations) and that set the perspective on alternatives for crisis resolution. The second section develops these strategies for a sustainable future by setting out the criteria for a sustainable energy system and by showing how the network of suppliers, transmitters, and distributors can create a viable alternative system that relies on renewable and dispersed technologies.

The theme of this book is that the electrical power systems in advanced countries are in transition. We would argue that these transitional energy systems foretell the future for developed as well as developing countries. Furthermore, the problems with power systems are also the problems for social and financial institutions who are asked to support the people and organizations or companies responsible for the reliable distribution of power to all citizens. Multinational banks and organizations must create policies and programs for energy systems in developing and third world nations which are based upon the learned successes of the industrial nations. For ease of analysis, consider the transition in the energy sector to three stages:

1. Vertically integrated utility systems. The model electrical utility that evolved from the first development of electrical systems around the end of the 19th century until the first major energy crises of the early 1970s was self-contained, vertically integrated systems that included generation, transmission, and final distribution to consumers. In this system the larger producers had efficiencies of scale that led to consolidations, and long-distance transmission grids were established to balance loads and sources of energy in large regions. In the traditional vertically integrated utility, demand continued to grow, and technological improvements meant that new larger power plants were more efficient and cost effective than the average installed capacity of the utility. The system was controlled and planned within a single company which had responsibility for assuring adequate supply for all needs in its service area, and it was subject to state regulation on a return on investment basis which assured private investors reasonable returns with relatively small risk.

2. The transition phase. Beginning in the early 1970s the vertically integrated system started to meet its limits and a new model started unfolding in an uncertain manner. For a number of reasons during the 1970s, costs of generation no longer were lower on new power plants, fuel costs rose, and alternative generation technologies including conservation became more competitive. During this period, environmental regulations more strongly determined technology, cost, and location of power plants. The system became more complex and out of control, with deregulation coming as an experiment to manage the uncertainty. We are currently in the transition phase in the United States while the EU and now Asia, with their old central power systems are being dismantled to different degrees depending on local conditions, economics, and policy directions such are more renewable energy from nonfossil fuels and nuclear power.

3. Agile Energy System. The third stage is what we are calling Agile Energy because it responds to the challenges of the new economy in both a sustainable and civic-minded way. The agile energy stage is emerging, though it is not fully developed nor understood. Neither is its implementation likely to proceed quickly, in spite of its logical validity and its inevitability in the long run. The foundations of the emerging system are technological and economic, and supported by a growing political and civic concern for more accountability of the power system. The components of agile energy systems are greater reliance on dispersed and renewable sources of energy, using new technologies, and recognizing the civic role in promoting them. It is based on conservation and power management, with greater options for closer linkages of producers and consumers, with open access through a regulated grid. Complexity of the system is seen as an asset rather than a limitation, and neoclassical economic models are replaced with new models that look at community markets and impacts. In the agile energy model, environmental and economic development agendas are consistent with efficient power production, not a cost.

The Chapter 1 looks at the roots of the California power crisis in order to show how the traditional model ended and to show that what went wrong as an example of what is challenging electricity systems elsewhere (Clark, 2003a,b, 2004). Chapters 2–6 examine these same problems in the United States, EU, Asia, BRIC (Clark, 2008; Clark and Isherwood, 2009, 2010) nations, and developing areas of the world in order to show how traditional energy utility structures in other places are experiencing the end of the traditional central plant power system model that depended primarily upon fossil fuels (e.g., oil, coal, natural gas, and nuclear power). The purpose of these chapters is not to point blame (there is plenty to go around), but to learn the lessons of the past and to put in perspective the fact that while predictable, the current global energy crisis: (a) has deep economic ideological roots and (b) has resulted in a rapidly changing energy infrastructure system.

The five overlapping core ideas that will be introduced in these chapters get interwoven as both an explanation of what went wrong, a framework for understanding the complexities of one of the largest and most critical technical systems developed by any society, and a policy economic roadmap to the future. The first core idea presented documents the concentrated energy infrastructure to a dispersed or distributed on-site power system. California’s early experiments with dispersed energy production (solar and others) got overtaken by policy decisions to create a concentrated system (solar and wind farms) tightly tied together by a centralized energy grid have created a high level of vulnerability (energy brown and black outs) that made an energy crisis nearly inevitable and system security nearly impossible to assure.

Hence further chapters such as Chapters 3 and 10 document interdependent roles of public regulation and private economies, and how the misguided efforts at deregulation led to the violation of the public trust. These chapters are critical because the new structure set up by deregulation was the precipitating cause of the energy crisis. Actually deregulation was a faulty response to pressures on the electrical power systems from changing technology and markets that got manipulated into an unworkable system. Chapter 7 provides technologies from over a decade ago and now even more that provide cost-effective green technologies, which are significant for a growing economic and business sector in CA and now other states and nations (Clark, 2007a,b, 2008). Hence, a comparison with the municipal utilities in CA, which did not deregulate provides an appropriate perspective.

In Chapter 9, the limitations are shown due to the conventional neoclassical western economic model. This Adam Smith-based ideology is not only a limited economic theory but is only theoretical and never been implemented. The narrow set of economic values dominated the policy process that blind corporate officials and government leaders to an accurate assessment of their actions as well as causing them to miss obvious positive opportunities. The core idea in Chapter 9 draws on complexity theory to help us understand how information was vulnerable to unprecedented misinterpretation; such as how rapid swings in energy availability and price caused large effects from small changes, how undeterminable forces led to surprising outcomes, and how rapidly changing political agendas aggravated the conditions they were supposed to stabilize.

Finally in Chapter 9 and then Chapter 10, we build on the economic critiques that undermined the neoclassical analysis of the energy system and replace that model with a new understanding of interactionism and its role in the flexible energy system of the future. The last of the core ideas is then revisited where we look at the economic development implications of the future development of an agile power system. To conclude the book we consolidate some of the potential of the hydrogen economy and provide a roadmap to a hydrogen future. We end the book, presenting a philosophical argument for taking action now to achieve the sustainable future. The outline of the book is represented by the following chapter matrix (see later) where we outline not only the themes discussed in each chapter but also the core ideas. We see a significant link between these themes and core ideas.

Our purpose is diagramming the book in this manner is to both exhibit to the reader a very straightforward way in which to understand our approach, but even more importantly to demonstrate the way in which a future energy market can be created that on the supply side has diverse clean fuel, environmentally sound, robust systems, distributed networks, and economically profitable. To accomplish the transformation of the energy systems in any society requires public and private competitive collaborations. The entire volume is dedicated to that end.

Matrix of Chapters: The Core Concepts of an Agile Energy System

References

Clark II W.W. California energy challenge: solutions for the future. Energy Pulse: Insight, Analysis and Commentary on the Global Power Industry. 2003a January.

Clark II W.W. Point and counter-point: de-regulation in America. Util. Policy. 2003b Elsevier, Fall.

Clark II W.W. Distributed generation: renewable energy in local communities. Energy Policy. 2004 Elsevier: London, UK, Fall.

Clark II W.W. The green paradigm shift. Co-Gener. Distrib. Gener. J. 2007a;22(2):6–38.

Clark II W.W. Eco-efficient Energy Infrastructure Initiative Paradigm. Bangkok, Thailand: UNESCAP, Economic Social Council, Asia; 2007b.

Clark II W.W. The green hydrogen paradigm shift: energy generation for stations to vehicles. Util. Policy J. 2008 Elsevier Press.

Clark II W.W., Isherwood W. Creating an energy base for inner Mongolia, China: the leapfrog into the climate neutral future. Util. Policy J. 2009.

Clark II W.W., Isherwood W. Leapfrogging energy infrastructure mistakes for inner Mongolia. Util. Policies J. 2010 (special issue).

Further Reading

Anderson D.V. Illusions of Power: A History of the Washington Public Power Supply System. New York, NY: Praeger; 1985.

California Energy Commission. The role of energy efficiency and distributed generation in grid planning. 2000 Sacramento: State of California, report P300 00 003.

Clark II W.W. The California Challenge: energy and environmental consequences for public utilities. Util. Policy. 2002 Elsevier, UK.

Clark II W.W., Cooke G. The Green Industrial Revolution. Elsevier Press; 2014 December.

Clark II, W.W., Cooke, G., 2016. Smart Green Cities. Routlege Press.

Clark W., Lund H., Clark W., Lund H. Integrated technologies for sustainable stationary and mobile energy infrastructures. Util. Policy. 2008;16(2):130–140.

Faruqui A., Chao H.-p., Niemeyer V., Platt J., Stahlkopf K. California syndrome. Power Econ. 2001;24–27.

Governor Pete Wilson, 1996. De-regulation press release, Sacramento, CA, September 23.

LaPorte T., ed. Responding to Large Technical Systems: Control or Anticipation. Boston, MA: Kluwer Academic Publishers; 1991.

Lovins A.B. Energy strategy: the road not taken. Foreign Aff. 1976;65–96.

Munroe T., Baroody L. Lessons From California's Electricity Crisis. Occasional paper 34th ed. Boulder, CO: International Research Center for Energy and Economic Development; 2001.

Summerton J. Changing Large Technical Systems. Boulder, CO: Westview; 1994.

Summerton J., Bradshaw T.K. Toward a dispersed electrical system: challenges to the grid. Energy Policy. 1991;24–34.

Williams J.C. Energy and the Making of Modern California. Akron: Akron University Press; 1997.

Woo C.-K. What went wrong in California's electricity market? Energy. 2001;26(8):747–758.

Yucca Mountain, Wikipedia, 2017.

Chapter One

The End of the Fossil Fuel Industrial Revolutions: The Case of California in the United States

Woodrow W. Clark, II; Ted Bradshaw*    Managing Director, Qualitative Economist, Clark Strategic Partners

* Deceased

Abstract

Several basic structural features of the California energy system distinguish it from other state and national systems. First, California has a combination of three major investor-owned utilities that supply most of the state, including Pacific Gas and Electric and Southern California Edison, both among the nation's largest utilities, and the smaller San Diego Gas and Electric. Several smaller private utilities serve some rural parts of the state. In addition, the state is served by 33 public or municipal utilities, mostly owned by small- and medium-sizes cities, but also including two very large municipal utilities in Los Angeles and Sacramento.

Keywords

California energy system; Oil; Nuclear power; Energy growth issues; Electricity; Energy commission

The Vertically Integrated Utility

Several basic structural features of the California energy system distinguish it from other state and national systems. First, California has a combination of three major investor-owned utilities that supply most of the state, including Pacific Gas and Electric and Southern California Edison, both among the nation's largest utilities, and the smaller San Diego Gas and Electric. Several smaller private utilities serve some rural parts of the state. In addition, the state is served by 33 public or municipal utilities, mostly owned by small- and medium-sizes cities, but also including two very large municipal utilities in Los Angeles and Sacramento.

The private utilities are regulated by the California Public Utilities Commission (CPUC), which does not have jurisdiction over all the public utilities in the state. Prior to the mid-1980s the utilities were government-regulated monopolies with fully integrated services—they generated most of their own power, had long-distance transmission lines to link their service area to production sources, and controlled final distribution to customers. With the exception of Southern California Edison, the public utilities also supplied gas for generation (and residential and industrial consumption) within their service area.

California was an early participant in the growing electricity industry shortly after systems were first developed in the late 1800s on the east coast in New Jersey and New York City, especially by Thomas Edison. At that time a number of innovators and entrepreneurs demonstrated electricity to an amazed population. One of the first demonstrations of electricity was a single electric light bulb Father Neri of San Francisco's Saint Ignatius College placed in his office window in 1871. A decade later San Jose built a 237-foot tall light tower with six arc lamps in order to light the entire community. While it was a failure as a lighting project, it succeeded in publicizing the potential of electricity and cities rapidly followed with increasingly large and sophisticated demonstration systems (Williams, 1997, p. 170).

The first real commercialization of electricity in California, however, grew out of gold mining that started before the American Civil War in the 1860s. Initially gold mining was in northern California, where large hydro works were then built to conduct hydraulic mining, dams, and to process timber. As the goldfields became depleted, entrepreneurs tapped the water flows throughout the Sierra mountains to generate electricity, first for nearby towns and remaining mining operations. With the invention of alternating power and the construction of high-voltage power lines that minimized transmission losses, electricity from the mountains was brought to cities along the coast, at distances of up to 100 miles or more. These projects were virtually all investor owned and succeeded because of the high cost of alternative fuels for boilers, as California had no local coal.

The key at this time was that the early systems were privately owned and firms rapidly merged or were bought up so that the remaining large utilities achieved economies of scale. A few cities either had access to cheap hydropower via dams or sought to eliminate corruption, and became municipal utilities. State regulation of utilities was initiated early to prevent abuse of monopoly power, but the utilities pursued strategies of consolidation and growth in an era with rapidly growing