Our National Challenge
L to R: Tom Kuhn, Edison Foundation, Dr. Michael Howard, EPRI, and Diane Munns, EEI, at the “Keeping the Lights On: Our National Challenge” two-day conference in New York, April 21-22nd sponsored by the Edison Foundation.
By Dick Flanagan, Publisher
U.S. utilities must build at least 150 gigawatts of new generating capacity to meet electricity demand by 2030, at a cost of about $457 billion, according to preliminary findings of a new study being prepared by the Brattle Group on behalf of the Edison Foundation.
An additional $900 billion will need to be invested by 2030 in transmission and distribution facilities to modernize the nation’s power grid, setting the stage for perhaps the largest single electricity infrastructure investment cycle in history.
The Edison Foundation was launched in 2006 in an effort to further Thomas Alva Edison’s spirit of invention.
The conference brought together a broad group of stakeholders—including regulators, utility executives, environmental leaders, consumer advocates, labor leaders, Wall Street and media including World-Gen to discuss new electric industry infrastructure investment requirements and the extent to which they can be offset by energy efficiency efforts to rein in America’s appetite for electricity, against a backdrop of looming carbon constraints.
“The power sector is becoming increasingly energy-efficient, and we’re working aggressively to maximize the potential energy savings made possible by new technologies,” said Edison Foundation President Tom Kuhn. “This will become ever more crucial as we transition to a carbon-constrained environment. But we also are acutely aware of our industry’s unbreakable commitment to ensuring a reliable and affordable electricity supply, which means we clearly will have to continue building substantial new generating capacity for years to come.”
The Brattle Study
The Brattle Group’s preliminary findings suggest that efficiency gains could allow utilities to meet this demand by building 150 gigawatts of new capacity, a more realistic projection of efficiency improvements indicates that nearly 190 gigawatts of new capacity will be needed by 2030.
The Brattle study found that impending carbon constraints will significantly drive up the overall cost of electricity while also altering the mix of new generating capacity, with renewable energy sources growing the most. The cost of connecting those renewable sources, along with so-called “distributed resources,” to the grid will comprise part of the huge transmission and local distribution price tag.
eei-epri joint study
The impact of accelerated efficiency initiatives on future electricity demand also was studied jointly by the Electric Power Research Institute and the Edison Electric Institute. Stepped-up initiatives could reduce electricity consumption by 7 to 11 percent by 2030.
“This study demonstrates the potential of energy efficiency to offset some of the projected need for new electric generation as cutting‐edge technologies become available and are adopted,” said Dr. Michael Howard, senior vice president at EPRI. “We think a 7‐percent efficiency improvement is realistic – and gains of 11 percent or more are technologically feasible.”
Diane Munns, executive director at EEI said, “Achieving efficiency improvements going significantly beyond those already in the pipeline will be a major undertaking. No matter how you slice it, we’ll have to build significant new generation to ensure that we meet demand.
“While electricity rates will rise due to increasing across‐the‐board costs of producing electricity, energy efficiency improvements can help reduce some of these costs to consumers,” Munns said. “To maximize utility investment in efficiency programs, energy efficiency must be treated as an energy resource on par with new generation.”
“We are making remarkable technological advances in the area of efficiency,” Howard said. “The question is how much more can we achieve?”
“What these studies tell us is that we don’t have the luxury of choosing a single option and that we need to throw everything we have at this challenge,” Kuhn said. “We must make the changes necessary to become more energy-efficient, we will have to modernize the power grid and we also will have to build more power plants.”
The Electric Power Research Institute, Inc. (EPRI) conducts research and development on technology, operations and the environment for the global electric power industry.
The Edison Electric Institute (EEI) is the association of U.S. shareholder‐owned electric companies. Our members serve 95 percent of the ultimate customers in the shareholder‐owned segment of the industry, and represent approximately 70 percent of the U.S. electric power industry.