Power, Energy, and Policy: Looking Ahead
When I listen to debates about the financial crisis, I often wonder: do most people understand the difference between the debt and the deficit? One shows how deep in the hole we already are, and the other measures how fast we are digging deeper. It’s subtle, and you can get by without understanding the difference (we are basically screwed either way). But knowing the distinction refines our understanding of the issues and improves our ability to make decisions.
In the energy field, the difference between power and energy is an equivalent concept. It underlies the services we receive from the electricity grid, which provide context for debates about how our current system should evolve. Our Power and Energy Primer delved into some of these features of the grid, and explained the basic physical system that brings electricity to our homes and businesses. Some of the most important issues in clean energy policy are tied to these ideas. A few examples:
The cost to integrate alternative energy sources into the grid:
Renewable energy sources like wind and solar have rigid production profiles, since they depend on the real-time availability of their fuel. That pattern determines the value of renewables as a peak power resource (not just an energy resource), and the mix of technologies required to create a stable renewable grid. (See Parts 1 and 2 and 3.)
The value of saving different kinds of energy:
The fact that power and energy are independent services also changes the cost of different types of load growth on the electricity system. For example, data centers are a growing baseload demand, because they provide services globally, and the internet is always being used somewhere. Conversely, the rise of air conditioning installations creates demand peaks. Saving the same amount of energy from each will not save the same amount of power.
The efficiency of new technologies that use different fuels than the ones they are replacing:
As more devices become electrified, such as electric vehicles or water heaters, they substitute a low-value fuel with a high-value fuel. An apples-to-apples efficiency comparison must therefore look at their upstream “source” energy, which accounts for the generation and transmission of the different fuels. But given the complexities of the grid, those upstream fuels can change daily or hourly. So how should the efficiency of these new technologies be characterized? (See Part 4.)
The value of reliability and who should get paid for that service:
A significant part of our electricity service is reliability. Although consumers pay by the kWh, what we really pay for is the ability to have as many kWh as we want, at any time of day or night. Grid operators prevent power surges and frequency drops by vigilantly responding to changes in demand, and they use generation resources to perform that function. If our grid and the devices that feed from it become “smarter,” consumers and third parties can also offer that service through demand response. How should that contribution to reliability be valued? And what is the business model of the utility if those services get moved behind the customer side of the meter? (See Part 5.)
The value of reliability to society:
Furthermore, the cost of reliability, and especially outages, raises the question of how much we should pay for that service. What would happen if consumers were willing to live with less reliability for certain energy uses? How much more flexibility would we have with our grid, and the resources that fuel it? (See Part 5). The cost to maintain a reliable grid is higher for an AC system. In many respects, the fact that our grid is AC was an accident of history. This has influenced everything from generator technology, grid operations, to the devices we plug in. (See Part 6.)
Those are some reasons why understanding the difference between power and energy is important.
Image credit: DOE/NREL- Raymond David; Sound Bytes Blog