May 4, 2007 (From the CalCars-News archive)
At a major gathering for the oil, gas and electric utilities, each leading utility leader topped the one before with ringing endorsements of PHEVs that could resonate within the industry as much as Federal Energy Regulatory Commissioner John Wellinghoff's "Cash Back Plug-In Hybrids." (See our report from January http://www.calcars.org/calcars-news/668.htmlor stay tuned for more info from Wellinghoff.)
Business and Technology for the Global Generation Industry
Conference Report: April 2007 issue
At CERA Week 2007, most life was carbon-based
[The report below certainly contradicts the headline!]
For the past 25 years, Cambridge Energy Research Associates has hosted an annual conference that has drawn the captains of the worldwide oil and gas and electricity industries. The 120 distinguished speakers at this year's summit attracted more than 2,000 delegates from 55 countries, making it the largest and most diverse ever. Naturally, one of POWER's contributing editors was there, too; here's his take on what transpired.
By Mark Axford
Daniel Yergin, founder and CEO of Cambridge Energy Associates (CERA), is among the best at connecting the dots of the energy industry's past and turning them into a coherent picture of its future. Dr. Yergin's accomplishments include a Pulitzer Prize for The Prize: The Epic Quest for Oil, Money & Power, a book that was made into an eight-hour PBS documentary. When Yergin talks, people listen.
The theme that Yergin chose for CERA Week 2007 in Houston this February--"Strategies for a High Stakes World: Innovation, Investment, and the Future of Energy"--correctly cast today's energy business as a game with big financial risks and rewards. High and volatile gas and gasoline prices, concerns about global warming and the long-term adequacy and security of energy supplies, and the behind-the-scenes geopolitical maneuverings that shape today global energy environment have become front-page news.
The first two days of the conference were devoted to worldwide oil and gas supply and demand. The third day-Power Day, the one of most interest to readers of this magazine--began with a panel of utility CEOs discussing "The Next Big Ideas" for the electricity industry.
Seven steps to heaven
Jeff Sterba--CEO of PNM Resources (the parent of Public Service Co. of New Mexico), and chairman of EPRI as well-kicked off the discussion with a presentation titled, "Technology Needs for a Carbon Constrained World."
... it's clear that the only near-term way to decelerate climate change is to deploy proven technologies.
Sterba described a step-by-step approach for halving the 3,300 million tons expected under the "do nothing" scenario to 1,700 million tons by 2030:
- Increase the efficiency of appliances and lighting to reduce annual demand growth from the current 1.5% to 1%. This step alone would reduce CO2 emissions 9% by 2030.
- Build 50 GW of wind farms and solar power plants by 2020, and an additional 2 GW/year thereafter.
- Add 24 GW of nuclear capacity by 2020, and another 4 GW/year thereafter.
- Target raising the efficiency of new coal-fired plants to 46% by 2020 and to 49% by 2030.
- Make 90% of the new coal plants carbon capture--ready by 2020.
- Strive to have electric cars constitute 10% of all U.S. vehicles by 2017, and 30% by 2027.
- Increase distributed generation's share of U.S. installed capacity from less than 0.1% today to 5% by 2030.
Sterba's concluding remarks were directed to the U.S. Congress. He urged the House and Senate to join forces and pass legislation that would impose a tax on electricity consumption and thereby curb demand and power plants' overall CO2 emissions. The rate, said Sterba, should be high enough to provide $2 billion to $3 billion per year for research into carbon-constrained generation technologies.
Use the plug, not the pump
The next speaker, Thiery Vandal, CEO of Hydro-Quebec (HQ), stood apart from the other utility panelists in that his province is blessed with and relies heavily on hydro power. He explained that HQ invests more than $100 million annually to research and develop new hydro turbine and transmission technologies.
Vandal explained that there is a way for global warming's two main causes--coal-fired plants and petroleum consumption by cars and trucks (Figure 2)--to work in concert to reduce each other's negative impact. He praised plug-in hybrid cars as the single best idea for achieving large reductions in CO2 from the transportation sector. Several car makers agree, and they are preparing to introduce vehicles with that capability over the next few years.
CAPTION: Inconvenient truths. CO2 emission rates of various power generation technologies. Figures for fossil fuels include emissions from transporting them to the plant. Source: Hydro-Quebec?
Plug-in hybrids differ from the conventional hybrids on the road today because their batteries can be charged directly from a standard AC wall socket. Ideally, drivers would plug them in overnight in their garages, when electric rates are lower. If the practice were to become popular on a broad scale, it would more fully leverage the existing fleet of coal-fired plants. Looking down the road, plug-in hybrids would seem to have a big advantage over vehicles powered by fuel cells because the infrastructure for "refueling" the hybrids is already in place--unlike an infrastructure for transporting and delivering hydrogen.
Plug-in hybrids could even help many utilities avoid having to build another power plant just to meet peak demand. Think of that hottest summer afternoon in July when the grid is stressed to the limit. Now imagine thousands of plug-in hybrids plugged into sockets backed by smart meters in home garages and in office garages and parking lots. If the cars have been plugged in for a while, their batteries are fully charged. Utilities could draw down the batteries--a distributed storage system, of sorts-to meet the peak with margin to spare.
One of the best parts of this scheme is that the utility would credit your account for the number of kilowatt-hours the meter recorded while it ran "in reverse." If you were at work, you could spend the money to gas up on your way home, if your battery charge fell low enough to require using the car's internal combustion engine.
Hydro-Quebec has dabbled in the design of electric cars. By Vandal's own admission, the company's styling department may need to work overtime to get the HQ prototype (Figure 3) looking spiffy enough to attract buyers. But that's an insignificant concern, he added, considering that the technology exists today to get 70 miles of driving from $1 of electricity.
CAPTION: From power plant to pedal. Hydro-Québec's prototype plug-in vehicle car holds great promise for reducing CO2 emissions in the future.
A third speaker on the opening panel of CERA Week 2007's Power Day was just as enthusiastic about plug-in hybrids, but he also saw the scheme as an opportunity to expand power markets. Indeed, David Crane--CEO of NRG Energy Inc.--boldly declared that utilities have "A Moral Imperative to Act" to reduce their greenhouse gas emissions.
Crane explained that utilities would have to generate 33% more kilowatt-hours annually if the 240 million automobiles in the U.S. were to be retrofit with plug-in hybrid technology. As Vandal suggested, the additional revenues would not have to be invested in new plants or transmission lines because the growth in demand would be during off-peak hours. "Try to think of any other thing that an electric utility could do to increase its capacity factor by one-third," Crane asked. He then reminded the audience that it took eight years from Alan Shepard's first orbital flight until Neil Armstrong walked on the moon. "CO2 reduction? We can do this!" The best of the rest
Among the other highlights of Power Day was the keynote address by John Rice, vice-chairman of General Electric Co. and president and CEO of GE Infrastructure. Rice described GE's commitment to develop and manufacture products that have less adverse impact on the environment--part of its ?Ecomagination initiative.