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Generation Roundtable: Power Flux

Generators struggle to plan for the future as they cope with an unstable present.
Fortnightly Magazine - December 2003

of the grid-based transmission problems and bottlenecks. DG is about keeping supplies secure. It is using energy and deploying it most efficiently, and it creates jobs in a new industry.

However, several things are still missing. DG doesn't seem to have strong leadership coming from within the industry, state commissions, or from Wall Street to push and explore the fullest vitality and viability of the option. DG needs a blueprint that removes the artificial barriers standing in the way of full deployment.

Fortnightly: What are these artificial barriers?

Zimmer: A simple example is the ability to deploy DG in a commercial building. It may be economically impaired and not considered because standby, backup power rates have never been updated, and the demand-ratchet clause in existing rate schedules might be triggered by the use of power in one week out of a month.

This is not the only example of artificial barriers that are preventing new technology from being deployed. Transmission and interconnection issues are another example. The Cross-Sound transmission line [connecting New Haven, Conn., with Long Island, N.Y.] couldn't be turned on because the state of Connecticut feels there are continued environmental concerns, and the attorney general questions whether it will benefit Connecticut customers. If the same processes were deployed in transportation, we never would have built the interstate highway system.

Here's the question: Is it better to continue with the status quo, and nurse it along with plant life extensions and repowering at old, dirty plants, or would we be better off directing that capital toward new technologies-coal gasification, for example, or other technologies such as energy efficiency or fuel conversion systems that solve the natural gas challenge, support fuel diversity as well as regional and technology diversity, and create more high-quality jobs? The renewable energy industry could create more jobs, if it had the technology and equipment to expand. DG is the same thing. It could become the energy industry's equivalent of the cell phone. Technology, regional, and fuels diversity would promote better risk diversity for financing purposes, learning from the experience of the gas turbine troubles of the 1990s.

Of course there are dots that need to be connected, linkages that need to be drawn that aren't clear yet. But what is clear is that there are forces at work that are dragging down full and fair deployment of DG and other new energy technology solutions. And it's also clear that we are lacking leadership on these important issues compared with other countries and systems.

Power generation and infrastructure is the most capital-intensive pursuit of any industry in our country, except maybe real estate. We need to bring the best thinking in technology, regulation, and finance together to ensure that the solutions for the future meet the new, difficult challenges. We can't do it with old statutes enacted in 1935, or with state commissions whose authority hasn't been reviewed since 1922, or without fuller cooperation and regional coordination.

The institutions and processes that brought us so far in the last 50 years need to go through rehabilitation of their