I've been learning about venture capital funds for electric utilities. The lesson has run the gamut: from competition to cannibalization; from portfolios to the laws of thermodynamics; from the next new thing to the renaissance of a 19th-century technology.
Some might ask: Isn't venture capital just like gambling? Not so, say execs from two utilities now getting their feet wet in a venture fund. All the same, this story will take us to Atlantic City casinos before it's done.
The Romans Did It
In 1877, in Lockport, New York, Birdsill Holly set up the first commercial system in the U.S. for district heating (em a central plant providing thermal energy to multiple buildings in the form of steam or hot water. The idea wasn't new. The Romans in Pompeii had circulated warm water through open trenches to heat buildings and baths. Later, by the turn of the century, most electricity in North America was generated downtown, close to load. Like the Romans, utilities in New York, Denver, Boston, Seattle, Philadelphia and Kansas City were routing waste heat from generating plants through steam systems to serve local needs. (See, "The Renaissance of District Energy," by John L. Fiegel, president, International District Energy Association.)
District heating had declined by mid-century, driven out of fashion by rising economies of scale, which convinced utilities to build large central stations far from urban centers and closer to primary energy sources. But lately the pendulum has swung again. Natural gas combustion turbines promise cheap power in small bites. Attention has turned to distributed generation. Fuel-cell technology spun off from NASA's space program suggests that, before long, Americans will want their own PGs (em personal generators (em to run their PCs.