~synthesis~

Mega-Negawatts

A negawatt is a watt of power that wasn't consumed. It's a powerful (sorry) concept, and could be a great way to motivate consumers to reduce household energy usage.

The bane of a utility's existence is unanticipated demand - either negative or positive. The former means that they purchased power that was unconsumed. The latter is worse. If the demand for energy exceeds supply, then to meet demand and avoid brownouts or blackouts, the utility desperately needs to buy energy on the spot market, often at a premium, and of course the cost is passed on to the consumer.

Therefore the perfect world for a utility is steady, highly predictable energy usage curve. That gives them ample time to know what they need, when they need it, and then make sure that their buyers or suppliers are able to procure at the best-possible price.

But freak weather conditions, systemic failures (downed power lines, damaged equipment like transformers, etc.), human failures (mistakes, bad decision-making, etc.) can cause unanticipated outages, and require dramatic and expensive steps.

There are wholesale markets where a utility can sell excess energy or buy emergency energy. Assuming you bought your energy at reasonable wholesale prices, it seems likely that you stand to earn a pretty solid return on investment by selling it to a "needy" buyer.

How does this relate to negawatts? This is the cool part. Imagine if you were able to instrument your home so that all power consumption (small and large appliances, heating/cooling, lights, computers, etc.) was managed via a simple browser-based application that you could access from anywhere (think of a schematic of your home and you can turn things on/off, schedule activities, laundry, dishwasher, lights to vacation mode, etc.).

Now imagine if your electricity provider comes to your neighborhood or apartment building and makes you this offer: if all of you wire up your homes (per the paragraph above) at a cost of say $2-300 per house (not horrible), we'll periodically contact you and ask you to lower your energy consumption for a number of hours. And if you as a community are able to do this, and hit the "number" we need, we'll sell the energy you save (negawatts) on the spot market, and share the profits with you.

Ideally, it would be possible to recover the $2-300 initial cost in a matter of months. And now all the future savings are upside. And because you can more closely monitor your usage, connect to your home via the Internet (even with your phone) to make adjustments, or even just to adjust your thermostat to optimize energy usage, you can really make a difference. The utility could also set the "rebate" model so that the bigger the community that participates, the more you get back from them. This creates a dynamic where all the neighbors are interested in each others consumption and maybe even "helping" to make sure everyone toes the line.  Community guilt as it were:-).

The utility company will love this because they can use this motivation to flatten the curve of their overall energy usage; better instrumentation allows them to more accurately predict consumption; and finally, getting the community behind them and participating actively, results in everyone working together to lower our overall energy footprint.

Negawatts - we should all convince our utility companies to do this - it could be a really great way to effective, grassroots energy conservation.

Energy Innovation

I was listening to an interview on NPR yesterday with an executive from Shell who said that energy independence is impossible, we just need to talk about reducing consumption. Questions arose. What is energy independence? What happens when you have it? What ought to be the right price to pay for this?

I think it is in Americans' nature to think: "if I see something I want and I can get it, unless someone stops me, I'm going to take it." That applies to buying bad mortgages, it applies to eating fast food, and it absolutely applies to energy consumption. We have big cars, big houses, big appliances and big appetites. This isn't true everywhere in the world, though I've seen it more and more in the Middle East and some Latin American countries like Venezuela.

When gas prices rose above $4/gallon, consumption fell. Instead of driving, more people tele-commuted, conducted e-meetings (vs. face-to-face), and braved public transit. People were even more thoughtful about home heating and whether they really needed to run the dishwasher right now. But when prices came back down, the old habits returned and consumption resumed.

There were hard times. People dependent on driving long distances suffered deeply. The American urban sprawl, was built that way because gas prices have historically been so low. When you travel through or live in Europe, you notice that gas prices are two to almost three times higher than here. Moreover, public transit is much more efficient and available, and everything is a lot closer to each other - you hardly need to drive.

The very nature of American urbanization puts us at a tremendous disadvantage compared to the European Union when it comes to the COGS of our products and services. Today, American workers are a bit more productive than their European counterparts, but one never knows how long that will last, and if that advantage erodes, the increased cost of fuel will make our products that much more expensive to sell and buy.

With few exceptions, public transit is abysmal in the US - first because we don't spend any money on it, and second because people mostly hate to use it. Let's change that! There is a large public transit allocation in the stimulus package, why not take this opportunity to change the game? First, all new public transit vehicles must be natural gas or electric powered, second, let's double gas prices again (for non-public transit consumption) with a tax whose proceeds are earmarked for pubic transit investments, and to expand transit coverage beyond city-centers. The results:

1. Lower CO2 emissions
2. Lower fuel imports
3. Cheaper overall transportation costs
4. A re-thinking of American city planning

I know this hurts the already-ailing auto industry because we'd be reducing their demand pretty dramatically, but maybe it's time to smell the coffee and realize that auto manufacturing has way too much capacity as it is, and is simply not sustainable.

Also - I haven't mentioned one very significant result from all of this. American ingenuity. I think when pressed, and when our backs are against the wall, creativity and innovation will occur - this country will produce the successor to the internal combustion engine. It will produce batteries that are (maybe even organic) smaller, have greater capacity and are more safely disposed of. It will design new forms of transportation that fundamentally change the very concept.

This is really what's needed. But to get there, our backs need to truly be against the wall - that's when the magic will happen.