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Technology Corridor

Outdated "wisdom" wastes the nation's electricity infrastructure. Distributed CH&P is the answer.
Fortnightly Magazine - September 1 2003

Technology Corridor

Outdated "wisdom" wastes the nation's electricity infrastructure. Distributed CH&P is the answer.


The use of wasted heat-which now comprises two-thirds of the energy value of the fuels used in generat-ing electricity in this country-may be the most important benefit from using more distributed generation.

The 2001 Annual Energy Review, published by the Department of Energy's Energy Information Administration (EIA), camouflages the waste of the energy value contained in the fuels used to generate this nation's electricity. The camouflage occurs in the otherwise highly informative "Energy Flow 2001" diagram for electricity generation, reproduced with additional color coding on page 41.

As the diagram shows, by far the largest output of our nation's electricity generation infrastructure is in the form of so-called conversion losses. The EIA, a part of the U.S. Department of Energy, cites the laws of thermodynamics as the culprit for this egregious waste of resources. The real culprit, however, is the industry's century-old paradigm for building large, central generating stations and then transporting (albeit relatively efficiently, with suitable voltage transformation) the electricity over an expensive and complex transmission and distribution grid. That model remains the basis for how most regulators and utilities view the world. Increasingly, this view is shortsighted, wasteful and expensive.

The EIA graphic shows the magnitudes of energy inputs coming in on the left and the resulting uses of the heat energy or electricity exiting on the right. Most striking, even from a casual look at the chart, is that the biggest output -no less than 67 percent, according to EIA-is in "conversion losses" (shown in red).

In an explanatory note some 35 pages after the graphic, the EIA states, in part:

The highlighted language from the EIA report matter-of-factly dismisses the reality that our nation wastes the majority of the energy it uses to produce electricity because of the choices we have made in designing the system! This waste goes up the smokestacks of our largely coal-fired, largely single-cycle steam turbine-based generation fleet.

This is not a call to repeal the laws of thermodynamics. Plant inefficiencies are what they are. This is, however, a call for regulators and other policy-makers to acknowledge the consequences of a choice to build our nation's electricity infrastructure around large, central station generation plants. It is also a call for regulators to rethink how they look at electricity generation, including how new technology is evaluated. It is, finally, a call for regulators to recommit to the idea that the public interest is best served when electricity is delivered to customers at its lowest cost measured on a whole system basis.

For much of the last century, electricity was produced and delivered without much regulatory turmoil or legal wrangling. To the credit of regulators and industry alike, the system did what it was supposed to do, given the practical choices available at the time.

However, many new choices exist today. If industrial and commercial electricity consumers can utilize small gas turbines and other clean generation technologies to generate electricity cost-effectively themselves, then the potential exists to whittle away the