New Book: Agile Energy Systems

Beginning in June 2000 and through the winter of 2001, the lights went out in rolling blackouts in California as a result of electricity deregulation that enabled energy companies to manipulate the markets. Wholesale electricity prices rose from $30 per MWh to $750. The largest private utility in the state, Pacific Gas and Electric, went bankrupt. The economy of the state was in a mess and threatened the economy of other states and the US as a whole.

In a new book called Agile Energy Systems: Global Lessons from the California Energy Crisis, Woodrow W. Clark II and Ted K. Bradshaw discuss the California crisis for developing a model for the future for jurisdictions all over the world. The book is divided into three sections. The first section examines the California energy crisis presenting five core themes on what led to the crisis and alternatives to preventing a similar crisis in the future. The second section sets out the criteria for an agile energy system. The third section discusses the potential of the hydrogen economy and a roadmap for a hydrogen future.

The authors agree that the pressures against monopoly utilities make change necessary. During the 1970s, the large power monopolies that controlled generation, transmission and final distribution to consumers were no longer able to achieve the economy of scale of the past. But deregulating responsibility for essential energy to a market that is not free but dominated by a few large corporations is wrong. Markets have no incentives to pursue the public good and have little interest in demand reduction, meeting peak demand and load shifting.

Re-regulation to the old publicly-regulated and sometimes publicly-owned systems is not an option anymore. The authors recommend a civic market in which government and the public maintain oversight of market forces for long term civic benefits such as the environment, community values, public health and economic development. Agile Energy Systems are not particular technologies or market mechanisms but rather a concept they explore to describe this market-orientated paradigm.

Agile energy systems are flexible and adapt to change effectively and efficiently for economic, environmental and social benefits, the triple bottom line. They have the following features:

• Diversity. Using diversified and renewable energy sources makes agile systems less vulnerable to disruption and more reliable especially because they are less reliant on distant suppliers who are dependent on declining fossil fuels. This diversity also builds in needed redundancy.
• Balance. Agile systems emphasize best use of energy not just amount. Balance involves promoting conservation, encourage shifting of use to non-peak times, and reducing consumption not just selling power.
• Interdependence and interconnection. Agile systems find ways to avoid bottlenecks in delivery and integrates energy that are traditionally separated. For example, co-generation integrates electricity and heat systems. Hydrogen pairs technologies: e.g. wind-produced electricity can be stored in hydrogen fuel cells and then used for transport fuel.
• Spatially appropriate. Agile energy systems are smaller, located close to where energy is needed and coupled with renewable resources. Neighborhood scale systems are ideal because they recognize environmental costs and can be linked to the grid.
• Regional. An agile system links the community to other levels such as regional, national and even global.
• Public good. Agile systems have the public good as a primary goal.

Both government and industry need clear, concise and consistent market rules, standards, codes and operating protocols in order to achieve the goals of society in the civic market. Five principles are outlined for the framework of the civic market:

1. Government oversight of existing utilities. The traditional regulatory framework is close to micro-management as all aspects of the utility are regulated --- for example, prices are set, specific technologies are mandated. A new model of oversight would not replace existing utilities or micromanage them but help them move towards being agile systems by the right combination of incentive and mandate. An example is favorable contracts by the state for renewable power and distributed power. Another is working on helping intermittent power producers use the grid for backup connections and for intermittent power.
2. Strategies for transitional costs. The transition from the regulated systems to the agile system needs tools for dealing with unknowns and negative unintended consequences. The energy mess cost California at least $40 billion and the State has signed long-term energy contracts at inflated prices that cannot legally be rewritten. Innovation is more difficult due to these huge costs.
3. Joint public-private investment. Public ownership may not be the right solution. Rather investments from public sector pension funds would allow public influence in the utility. Another example is government and public sector leadership in green power in public buildings.
4. Innovative renewable technological systems. Governments can develop market mechanisms to direct the market to innovative technologies through new regulations, codes and standards. For example, sustainable building codes can factor in energy and material efficiencies.
5. Systematic and regional implications to the power system. Opportunities for energy include economic development such as jobs and business development from emerging technologies as well as environmental solutions such as clean energy.

While the authors approve of the hydrogen economy as part of the future, they discuss some of the conflicts of the hydrogen paradigm. "Green" hydrogen derived from renewable sources is preferred by many to "dirty" hydrogen derived from fossil fuels and nuclear. Hydrogen has the potential to increase fuel efficiency e.g. hydrogen fuel cell vehicles such as.

Toyota's FCHV-4 have fuel efficiency of about 60% compared to 18-20% of gasoline internal combustion engine. For hydrogen and other renewables, the role of government is very important including standards for better auto fuel efficiency, encouragement of hybrid cars, use of smart technologies, Kyoto Protocol and targets for renewable energy.

This is a book for the serious reader who is interested particularly in the integration of energy policy with sustainable development relating to environment, social and economic issues. There are lots of examples that indicate that many steps have already been taken. Both authors are academics and researchers in renewable energy issues from an international perspective. In addition, Woodrow Clark was brought into the California State Government to serve as an advisor on California's blackouts and worked on a practical level to encourage government to link energy to the environment and climate change.

Clark II, Woodrow W. and Ted K. Bradshaw. Agile Energy Systems: Global Lessons for the California Energy Crisis. Kidlington, Oxford UK: Elsevier Limited, 2004. ISBN: 0080444482

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