[Paleopsych] Gaming the power grid

Werbos, Dr. Paul J. paul.werbos at verizon.net
Tue Aug 17 14:24:04 UTC 2004

At 06:38 PM 8/16/2004 -0700, Steve wrote:
>You may recall that a couple of years ago
>we had a power crunch out here in
>California- rolling blackouts and such.

More than a little do I remember. I remember setting up a workshop, joint 
with EPRI,
in Palo Alto in October 2001 (a month after 9/11, I even had to fly on the 
same flight....)..

The key EPRI guy tabulated up about $50 billion worth of California state 
subsidies, which kept explicit
price rises only about 50 percent in California (versus much bigger rises 
in San Diego)..
but taxpayers were paying twice, in effect...

It is very sad that we did not keep with the guy, and were unable to get a 
realistic citeable figure
on how much of the California deficit is related to electricity. But 
California is still paying through the nose today for
the inefficiency of the system.

Prior to the workshop, the White House and other announced very loudly that
it would take three years at least to physically implement technical 
solutions --
like increasing transmission capacity from the underutilized coal plants in 
the Rockies to the markets
in California. But in our workshop, people from Brazil -- which is ahead of 
the US in many aspects
of practical grid technology, in part because they invest much more money 
in the area -- showed what they
have working on VERY long power lines, and discussed how they could 
retrofit our lines for a small fraction
of the original cost (e.g. no new right-of-ways) and increase capacity by 
60 percent in a couple of MONTHS.
It withstood scrutiny by all kinds of experts and ISO people we had at the 
The ISO response, roughly: "That's great stuff, but we have no incentive... 
and are almost prohibited.. to
make these kinds of investments."

>The amount of power that was triggering
>those blackouts was only about 1-2% of
>the total.  People reacted by buying
>many household florescents and doing
>other micro-measures that the we got
>under the trigger point.
>For example, last year we looked into
>buying a more efficient furnace.  Then
>we found that our house had no insulation.
>Now our first goal is to put on an insulating
>roof.  In the winter our west-facing windows
>make the kitchen to hot in the afternoon
>that I use a fan to blow cool air from other parts
>of the house into it, storing the heat in the mass
>of the building.
>As I recall in economics this is called
>working at the margin.  As the price
>of petroleum slowly increases, more
>and more drops will be added to the
>flow of alternatives, and at some point
>the political will to make structural
>changes in the economy will emerge.

The effect of the regulatory system is to make sure that these kinds of 
natural market
signals aren't really there.


By the way... the Financial Times this morning has a long story on the 
return of coal.

This may be partially good news.

But there is a VERY important caveat -- it would be nice if the return to 
coal could
be strongly linked to the use of proven NEW CLEAN COAL technology.
More precisely -- the high-efficiency oxygenated coal gasification technology
("Tennessee Eastmann," "Texaco," "Cool Water."). Much cleaner than old
coal technology; more efficient; and suitable for someday retrofitting to 
carbon sequestration.

But -- because of capital costs, the clean coal technology today is not 
competitive with the older technology,
they tell me, if electricity is the only product. It IS economically 
competitive, or even superior
(the clean coal engineers tell me)... **IF** it is used to produce 
electricity and methanol as coproducts,
and if a market is developed to sell the methanol at BTU equivalence to 
what gasoline was a year ago.

I am frankly surprised that the clean coal and NRDC haven't jumped on the 
obvious logical conclusion --
in order to encourage the use of clean coal technology as much as possible, 
with the minimum possible
market distortion, we should  pass laws REQUIRING more three-way 
gasoline/ethanol/methanol (GEM)
fuel flexibility.

GEM flexibility is NOT so hard or expensive. Basically, a rational law 
would say that any car tank designed to hold gasoline
should  be made of slightly better (but standard) materials, to handle 
ethanol or methanol as well (likewise gaskets) -- and
then a simple old system using an oxygen sensor and adaptive fuel mixing. 
Ford sold thousands of those cars in California
back in the 80's, and charged nothing extra for the flexibility. In a 
conservative version... the US government could
allow states to decide whether they want such a flexibility requirement for 
cars sold in their state.
At $200/car (assuming old and proven technology), it would be a LOT cheaper 
than the energy plans I hear
about elsewhere, either Bush's or Kerry's...

(I also know how the cost of flexibility might be cut in half, roughly, 
using newer technology. Hybrids are
easier to make flexible than regular cars. New engines are coming into 
production which are INHERENTLY

This is actually an urgent life or death matter.

Best of luck to us all...


>Steve Hovland
>paleopsych mailing list
>paleopsych at paleopsych.org

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