Report: US Electricity grid needs $1.5 - 2 Trillion investments by 2030 (7 Ideas to Watch)

November 11 2008 / by Garry Golden
Category: Energy   Year: Beyond   Rating: 2

What happened?
An Edison Foundation funded report conducted by The Brattle Group has some sobering news that could radically change the tone of infrastructure investment in the incoming Obama Administration, and lead to a boom in energy startups able to deliver lower cost, innovative solutions.

The new report “Transforming America’s Power Industry: The Investment Challenge 2010-2030” [Full Report / Exec Summary] estimates that the U.S. utility industry will have to invest between $1.5 and $2.0 trillion between 2010 and 2030 to maintain current levels of reliable energy service for customers throughout the country.

“This study highlights the investment challenges confronting the power industry in the coming decades,” according to Brattle Group Principal Peter Fox-Penner. “The industry is facing enormous investment needs during a period of modest growth, high costs, and very substantial policy shifts.”

Why is this important to the future of energy?
This investment figure challenges some deeply held assumptions and visions of the future promoted by people on all sides of the political spectrum. Free market advocates will have to confront role of government spending on infrastructure. Unless we completely abandon the centralized power plant to home model that exists today, most of these investments will come from states and the federal government.

But the more emotional conversation deals with the dreams of new sources from solar, wind and ocean power. This report confirms the brutal reality- Renewables alone, cannot scale to meet demand through 2030. While Al Gore’s We Campaign is trying to make a convincing case that we can go ‘all green’ in a decade, the numbers do not add up without a radical social-industrial engineering project with no budget limits.

The most likely near term future through 2030?
All sources of energy used in electric power generation will grow.

What to watch for
These types of reports often grab headlines, but are quickly forgotten by the public. Yet there is evidence to suggest that America is preparing to make significant investments in our energy infrastructure and change its regulatory framework to enable the Utility industry to transform its business and operating models. [Until those regulatory changes are made, the utilities will remain locked in their current business models, and will be unable to introduce innovative and cost saving efforts.]

Here are Seven Ideas to Watch:

1) Smart Grid- Software, Sensors & Storage
The Enterprise IT industry (e.g. IBM) pushes for Federal policies that support the vision of a ‘smart grid’ based on software, sensors and storage

2) Distribute Power & Energy storage
Centralized power plants need help managing energy at the local level. Energy storage and distributed power via batteries, hydrogen fuel cells, capacitors and micro turbines can offer a near term way to manage the grid and reduce capital investments needed to build new plants only used during ‘peak demand’

3) Cleaner Coal conversation gets emotional, but coal wins
Coal generates 50% of our electricity, and it is not going away anytime soon. Watch for America to confront its biggest challenge cleaning up coal
[Hint: Watch for algae]

4) Next generation biofuels push corn aside
Biofuels are most likely going to end up in transportation fuel markets, but are very relevant to power plants. We move beyond distraction over corn and accelerate next generation biofuels (e.g. carbon eating algae / cellulosic) ‘Biomass Waste to energy’ should grow as new form of electricity production.

5) Solar grows, but real breakthroughs still waiting in the lab
There is still a lot that we do not know about basics of solar and bioenergy. Expect massive investments in R&D funding for basic scientific research for solar to enable real disruptive technologies to emerge within the next twenty years

6) Nuclear tries to reengage public and political leaders
The nuclear energy conversation could be ready for revival. But most expect a long road ahead. Without leadership in D.C., the industry could remain stuck in neutral. Wildcard industry concept – ‘micro nuclear’

7) Geothermal energy
There is a growing case to be made for investing in geothermal energy capture. Look for the government to lead this conversation since our largest geo-energy potential exists on Federal lands.

Quotes from Brattle Group Press Release

The report was sponsored by the Edison Foundation

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Kleiner invests in Smart Grid startup, ‘Big Grid’ prepares for disruptions ahead
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The future of electricity:A guide to the Smart Grid
Warren Buffet invests in Chinese battery & electric car maker

Image Credit: woodleywonderworks Flick CC License Attribution 2.0

Comment Thread (4 Responses)

  1. I think solar is going to go through some massive changes in the next 10 years, let alone 20… The sun is the final destination in all of this. The ideal “power unit,” if you will. They are working on “fusion reactors” which leaves me optimistic, though.

    Posted by: Covus   November 12, 2008
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  2. Re: Covus Think most energy visionaries would agree with you… Sun plus storage is sustainable and abundant. (key is we need storage system for solar energy) Lots of potential with solar – thermal, silicon, thin film – et al…. we should see commercialization and should hit a performance/cost point within 5-20 years that puts it into accelerated growth path. So agree with you on optimism!

    And yes, fusion or something like Blacklight Power (non combustion; non nuclear) should never be taken off our list of potential game changers.

    Posted by: Garry Golden   November 12, 2008
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  3. @Garry – Thank you! I would like to be able to espouse my ideas and people will listen.. Maybe someday (If and when I get a PhD)!!

    Storage will be the main issue when we have efficient solar panels upwards of 80%.. That will be almost enough for any energy needs. When battery technology gets better, we will be much more inclined to use solar because when we can capture and store heat/thermal/infrared energy and can use it effortlessly.

    Now, the second part of this equation is a controversial one: hydrogen will be the counterpart to all of this. Some people have some concerns about the volatility and storage but those are technical details – the proof of concept has already been demonstrated..

    Solar + Hydrogen + Water = all the energy we ever need. Coal and oil is an issue but once their “voting” power and their price balloons, people will open up to these 21st century technologies more and more. The problem is their high cost compared to low cost of these “low tech” but really powerful technologies. Their costs need to be balanced to solar, wind, et al. REALLY feasible, but I am 100% confident that it will happen.

    I am also intrigued about those reactors.. How cool will it be to have “mini suns” on the planet?

    Posted by: Covus   November 12, 2008
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  4. Covus I hope your PhD does happen!!! And think you are absolutely on target with

    Solar + Hydrogen + Water = all the energy we ever need.

    In fact this is all the universe has ever done - take sunlight, tap biology (plants or algae)’s power to split hydrogen- bind with carbon…. use chemical bonds as the way to store energy.

    You might want to check out an MIT video ’...whales…’ by Prof Dan Nocera from MIT… his team developed low cost catalyst for splitting water using light.

    Hydrogen haters are working off false assumptions in my book… all their cases against don’t stand up to developmental path of research and commercial applications.

    So stay strong—don’t buy into the ‘anti’ hype of hydrogen… chemical bonds are the best way to store energy!

    Posted by: Garry Golden   November 13, 2008
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