Tilting toward windmills

How to solve the energy crisis. Published in California Monthly magazine.

It’s going to be a long, hot summer this year in California: the power outages we saw at the beginning of the year are likely a portent of much worse to come. As temperatures rise, and air-conditioners whir into action, there could be rolling blackouts every day somewhere in the state. Some say that Californians have only themselves to blame for this power crisis: Those energy hogs, wallowing in their hot tubs, said no to power plants in their back yards; and they insisted upon environmental rules so strict that no power plants have been built in the state for years.

But energy experts at Berkeley reject that portrayal. California, they say, is twice as energy efficient as its neighboring states. And the idea that environmental regulations blocked new power plants is, they add, just a red herring. True, California hasn’t built a large conventional power plant since 1974, but that’s simply because it didn’t need to. The state deliberately cut its electricity use, and then met excess demand with alternative sources of energy. So now, as the state and federal governments try to push through the rapid construction of new power plants, and there is talk of relaxing air-quality standards, the message from Cal is: Don’t do it. History shows that there are far less polluting ways out of the crisis. Environmental actions are not the cause of our current problems, and they could even be the solution.

While this winter’s crisis stemmed from a breakdown in California’s deregulated electricity market, this summer the state is heading for a real, physical shortage. The state is currently able to generate 50,000 megawatts; the peak demand this summer is expected to be at least 55,000 megawatts. “If we get very lucky and have a mild summer, we won’t have rolling blackouts. Anything short of that, we will,” predicts Haas Business School professor Severin Borenstein, who is also director of the University of California’s Energy Institute.

In anticipation of the summer shortfall, California governor Gray Davis is frantically trying to rustle up those extra 5,000 megawatts, so that when Californians switch on their air-conditioners the whole electric grid doesn’t short out. He is offering big incentives to get new power plants currently under construction online before July. And he wants 1,000 megawatts of small “peaker” plants—generators that only run during times of peak demand—to be ready by the same date.

Many are doubtful that Davis can hit his ambitious targets, but Tim Duane, associate professor in Berkeley’s Department of City and Regional Planning, thinks the whole plan is misguided. He fears that we are being led unwittingly down a long and dirty road, and that if we don’t stop and take a step back, we may later regret it. Duane, who is currently working as a senior policy consultant to the California Public Utilities Commission, points out that we have been here once before; and the lesson of the past is that there is a better, cleaner way.

In the midst of the present crisis it may seem incredible, but until very recently the only story to be told about California and its electricity was a success story. During the energy crisis of the ’70s, California led the country in the drive to lessen its dependence on foreign oil and natural gas. The policies set in place were hugely successful in cutting electricity use, and they remain with us today. “In the last 25 years, California attempted to find out whether energy efficiency could meet our needs, and we found that it could, rather cheaply and effectively, with little environmental impact,” Duane says. Since 1975, through the introduction of energy-efficiency standards for new buildings and electrical appliances, California quietly cut its electricity demand in half as a percentage of gross state product. “We also attempted to find out whether, if we put up tax incentives and long-term contracts, we could get renewable energy and independent power producers. And again we found that we could. Even though these facilities were smaller than the large power plants, in the aggregate they added up to quite a bit of power in a relatively short period of time,” he adds.

Since 1980, California has installed 5,500 megawatts of new power from cogeneration and renewable sources. Cogeneration plants are powered by natural gas, but are far more efficient than conventional power plants because they use energy in two ways: first they make steam to generate electricity, then that steam is used for space heating, hot water, and even cooling. Renewable energy sources include wind, solar, geothermal, and small hydro power, which produce no airborne pollutants during their operation. Because they emit no carbon dioxide, a “greenhouse gas” that contributes to global warming, they are considered especially desirable by environmentalists. But in the early ’90s, for complex political and economic reasons, another 1,500 megawatts of renewable energy that had been contracted was abruptly canceled. At that time, the offer of attractive long-term contracts for renewable suppliers was also taken off the table. Had the offer remained and new contracts been signed, says Duane, thousands more megawatts of renewable energy might now be available—enough, perhaps, to have averted the present crisis altogether. And while we can’t change the past, he adds, it’s not too late to pick up where we left off.

One person who knows first-hand what a difference energy efficiency can make is Art Rosenfeld. Emeritus professor of physics and of energy and resources at Berkeley, and a former Lawrence Berkeley Lab scientist, he helped get energy-efficiency standards for buildings and electrical appliances implemented in the 1970s. Back then, the utilities were projecting that demand would grow by 5 percent each year, and that the state would need an extra 20,000 megawatts of power by 1985—the output of 20 large power plants. Rosenfeld claimed that their forecasts were far too high, and argued that demand could be cut dramatically yet painlessly.

Despite the utilities’ attempts to silence him, Rosenfeld’s message got through; and thanks to those energy-efficiency standards, demand for electricity has grown on average only 2.2 percent a year since 1975, without anyone noticing a thing. That’s the beauty of this approach, says Rosenfeld. Conservation is not about freezing in the dark, it’s about good engineering and design. Refrigerators are his favorite example. In 1974, refrigerators used an average of 1,800 kilowatt-hours per year. In 2001, they use 450 kilowatt-hours, despite being several cubic feet larger. Since similar standards were introduced at the federal level, they have allowed the United States to avoid building 40 large power plants. Each year, says Rosenfeld, refrigerator standards alone collectively save us around $16 billion—roughly the same as the value of all the electricity produced by nuclear reactors in this country. And other energy-saving technologies have had a similar impact. Since California’s Title 24 building code has included low-emissivity windows—which allow in light, but reflect heat—we have saved as much natural gas as the entire projected yield of the Arctic National Wildlife Refuge.

“In the early ’70s, it was predicted that we would need twice as much electricity as we do today. So we saved one California’s worth of electricity, just by using our noggins!” says Rosenfeld proudly. Nothing makes him happier than saving megawatts, or as he prefers to call it, generating “negawatts.” To reach Davis’s goal of reducing consumption by 10 percent, says Rosenfeld, Californians shouldn’t have to make drastic lifestyle changes (though they might want to turn off their hot tubs).

Now one of the five members of the California Energy Commission, Rosenfeld has the ear of the governor, who seems to be listening, at least when it comes to Rosenfeld’s ideas on conservation. Rosenfeld’s most widely touted plan—real-time pricing in all commercial buildings that use more than 100 kilowatts—seems very likely to be put in place by the summer. And facilities that use over 100 kilowatts account for 44 percent of all the electricity consumed in the state. Real-time electricity meters, when coupled to energy-management control computers that govern lighting and air-conditioning, can dramatically reduce peak demand. As demands peak, prices rise, lighting is automatically reduced, and air-conditioning thermostats automatically go up a few degrees. While the building’s occupants stay comfortable, and barely notice the changes, these measures could eventually allow the state to reduce its electricity consumption by 3,000 megawatts. “It’s very fast and very cheap compared with a power plant—and very non-polluting,” notes Rosenfeld.

Reducing pollution has been a key goal of energy-efficiency research, especially reducing carbon dioxide emissions from fossil-fueled power plants as a way to limit global warming. Now, energy efficiency and conservation have also become the favorite remedy of economists who have been pondering California’s crisis. Borenstein, in particular, has been pushing forcefully for real-time pricing for commercial customers. “We could raise rates substantially at peak times, so when you get into one of these Stage 3 alerts, the price would be, say, 75 cents a kilowatt-hour. The cost to Intel of staying open at that time and paying that electric bill is trivial compared to the possibility of having a blackout—they need the power,” he says. Intel needs its computers and manufacturing systems to stay on the whole time, but a low-tech company like Safeway can turn down lighting and refrigeration without disaster, and so avoid these high rates, and even save money.

In a manifesto drawn up in February, a number of Berkeley economists, including Nobel laureate Daniel McFadden, agreed that commercial and industrial rates must go up, but they also recommended raising rates for residential customers, with substantial penalties for consumption over a baseline level. Although he didn’t sign the manifesto, Borenstein agrees that residential rates need to go up. You can ask nicely, he says, but the only way to get people to really conserve electricity is through higher prices.

Yet even the most valiant conservation effort is unlikely to be enough to stave off blackouts this summer. Dan Kammen, associate professor of energy and society at Berkeley, agrees with Davis that conservation has to be coupled with better supply. But, as director of the Renewable and Appropriate Energy Laboratory, he disagrees with the governor’s quick-and-dirty plans to generate that supply. “They’re likely to relax air standards and run the power plants a larger fraction of the time. It’s a really bad idea,” says Kammen. He fears that, come summer, the whole of California could look like Los Angeles on a bad day, as power plants run full tilt and smog levels rise. In any case, he says, there are much better alternatives. He sees the present shortage in supply as a great opportunity to stock up on the renewable power that he and others have been pushing for all along. And his predictions for just how much can be achieved by the summer are every bit as ambitious as the governor’s. “There’s no faster or more modular way to install new generation than with renewables,” he says. “It’s a matter of weeks or months, as opposed to years for traditional power plants. We could more than fix this problem—in fact we could turn California into a power exporter,” he claims.

If the state and municipalities join forces and start erecting wind turbines and solar photovoltaic arrays right away, Kammen is confident that at least 5000 megawatts could be in place by July, at a cost of around $2.5 billion—quite good value when you consider that the state has been spending $1 billion a month just to keep the electricity flowing in California. “Then we have effectively replaced the facilities that we sold off to those out-of-state robber barons with renewables. We’ve replaced brown power with green power,” says Kammen, who expects such an injection of money to spur the industry forward. “When Spain ordered $1.2 billion of windmills, windmill companies all over Europe sprang into action, opened new factories, and started cranking out windmills at a record rate,” he notes.

Another advantage is that wind and solar power generation peak in the afternoon, coinciding with the peak in demand for electricity. And since peak rates are 20 to 50 percent higher than base rates, the state and municipalities could get high rates of return for their investment by selling their electricity on the open market. Wind power currently costs around 4 cents a kilowatt-hour to produce, making it an especially attractive option at the moment, says Kammen.

Kammen’s suggestion is supported by Tom Dinwoodie, M. Arch. ’91, CEO of Powerlight Corporation in Berkeley, which sells photovoltaic solar panels: “He’s right. Last year—in one year—1600 megawatts of wind got developed in Germany. That’s the equivalent of two nuclear power plants. Could we do this in California? Amen!” Dinwoodie was once involved in the wind power business himself, and is undeniably a renewable-energy enthusiast, but he does have some questions about the logistics of harnessing wind power in the state. “I love windmills, and we should build more of them in the state, no question, but one disadvantage is that you can’t locate them in urban areas. And a big part of the problem that we have in California is we have constrained transmission and distribution, which cost a huge amount to upgrade.” Dinwoodie points out that solar power has the advantage of being well-suited to distributed generation, in which power is not just consumed but also produced at thousands of points across the grid. Kammen, too, is familiar with the problem of transmission lines. He points out that in several places around the state renewable energy is currently going to waste because utilities have simply refused to hook up existing windmills and solar arrays to the grid. At a time when we ought to be grabbing every clean megawatt we can, he finds this unconscionable.

Kammen’s plan does have its critics. Borenstein is wary of the state and municipalities getting their hands dirty in the energy business. “Being a skeptical economist, I’d ask myself why the private sector isn’t interested in building windmills. I guess I’d like to see all the numbers before I would be completely convinced,” says Borenstein, who suspects that wind power may be more expensive than its advocates claim. “That said, I think building windmills is probably part of the solution. One thing we have learned from this past year is that resource diversity has tremendous value, because it’s an insurance against one source becoming very expensive.”

Whatever we decide to do today—build windmills, solar arrays, or large gas-fired power plants—the consequences, good or bad, will be with us for years to come. Says Kammen: “Every time you put a power plant in, you’re stuck with that decision for decades. Because power plants are expensive, when you put them in you want to get the full lifetime out of them. It pollutes in the short term, but also every bit of brown power we install now hurts the market for green power down the road.” So the message from Berkeley to Sacramento is: Don’t allow the current crisis to blind you to the best long-term solutions. And don’t forget the lessons of the past—what looks like a terrible crisis could in fact be a tremendous opportunity.

Saving energy at UC

With the state in trouble, is there something the University could be doing to help? While many would argue that it has been the model of good practice, there are also calls for UC to do much more than it has in the past.

The UC system seems to have demonstrated some good conservation policies over the years. Since the ’70s, it has spent $65 million on conservation measures, such as reduced and more energy-efficient lighting and improvements to heating and cooling systems, netting $75 million of savings in the process. And overall, despite huge expansion, the University’s electricity consumption has barely increased in 30 years.

UC has also made strides in becoming more energy-independent. Over the last two decades, it has installed cogeneration plants capable of producing 100 megawatts—enough to satisfy one-third of the University’s needs. Berkeley’s own plant generates several megawatts more than it needs so that, except on the very hottest days, it actually sends excess power back to the grid.

To help do its part in alleviating the current crisis, UC is now asking the state for an additional $217 million to increase conservation and cogeneration. But Sim van der Ryn, former professor of architecture at Berkeley, and California State Architect under Jerry Brown, thinks we could do better. “The University should be taking a leadership role in sustainable design,” he says. Van der Ryn argues that the new campus at Merced is a great opportunity for the University to do just that, and would like to see the entire UC system adopt the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) standard for all new campus construction, as well as for renovations.

Green buildings can be as much as 80 percent more energy efficient than ordinary buildings, and derive between 30 and 150 percent of their energy needs from renewable sources. This goes much further than anything so far promised by UC, including Berkeley’s pledge to exceed the energy requirements of Title 24 building standards by 10 percent in all its future designs.

Other colleges have already overtaken UC in incorporating green design—De Anza College in Cupertino and Oberlin College in Ohio have both worked with van der Ryn to design environmental sciences buildings that are net energy producers. “Buildings themselves are the pedagogy,” explains van der Ryn. He is also currently renovating the whole campus of Berea College in Kentucky. “Their plan is to be carbon neutral in 10 years, putting no [net] carbon dioxide into the environment. Now that would be a great goal for UC Berkeley,” he adds.