The Importance of Keeping Electric Rates Affordable - Innovative Solutions for a New Era of Energy Generation and Consumption - Investment Capital Growth

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The Importance of Keeping Electric Rates Affordable – Innovative Solutions for a New Era of Energy Generation and Consumption

Posted by Cliff Locks On March 8, 2023 at 10:16 am

The Importance of Keeping Electric Rates Affordable – Innovative Solutions for a New Era of Energy Generation and Consumption

As we enter a new era of energy generation and consumption, the United States and Globally are facing a series of challenges that threaten to upend our electrical infrastructure. From weather-related outages to the transition from fossil fuels to renewable energy sources, our country’s power grid is under more pressure than ever before. One way to gauge the current state of the grid is by looking at the many “outage maps” available online. These maps show in real-time where electrical outages are occurring across the World, ranging from the entire country to state by state and even smaller jurisdictions.

At this writing, the maps show that some areas in Michigan and California are experiencing power outages due to severe weather. These outages are just the tip of the iceberg, however. In the coming years, outages could become more frequent and more widespread as our electrical infrastructure struggles to keep pace with demand. This demand will be driven by two major transitions currently taking place in the United States: a transition from fossil-based energy sources to renewable energy sources, and a transition to electricity in transportation, particularly with electric vehicles.

As we rush to electrify and reduce carbon emissions, our electrical infrastructure faces a daunting challenge. There are approximately 3,000 utilities in the United States, ranging from small public and rural electric cooperatives to large, investor-owned firms like the Southern Company and Exelon. These utilities are all part of the country’s electrical supply system, which has been described as the world’s largest engine. They all work together with surprising unity and are connected to one of three electric grids: the Eastern Grid, the Western Grid, and ERCOT, the free-standing Texas grid.

The utilities face a dual challenge of both generating enough power and transmitting it to where it’s needed. Adding to this challenge is the fact that adding two electric cars to a household can raise electric consumption by as much as 40 percent. To address this issue, many utilities are turning to distributed generation. This involves entering into contracts with customers to share the burden of power generation. These agreements can include incentives for customers to allow the utility to remotely turn off certain functions during peak hours and buy power from customers who have rooftop solar installations or backup generators.

Even with these efforts, experts predict that electricity demand will double in the United States by 2050, making it impossible to meet this demand with the current generation and transmission trajectory. The biggest frustration in the industry isn’t the siting of new wind farms and solar plants, but building new transmission lines to move electricity from resource-rich areas to where it’s needed. This is particularly true in Western states, where the wind blows and the sun shines, but transmission infrastructure is lacking.

One of the main obstacles to building new transmission lines is “not in my backyard” sentiment. While the Department of Energy is pouring money into new projects, residents often object to power lines being built in their communities. This means that while money is not a problem, selfishness and a lack of foresight could lead to worsening power outages in the future.

Ultimately, if the United States continues to electrify at the current rate, power shortages could become commonplace by the end of the decade and worsen throughout the century. Outage maps could become a regular fixture in our lives, providing a visual representation of the country’s failing electrical infrastructure. It’s essential that we act now to address these issues and invest in new transmission infrastructure to ensure that we have reliable access to power for generations to come.

Hydrogen storage is an important part of the solution to the looming electricity shortage. Hydrogen can be produced using renewable energy sources such as wind, solar, and hydropower. Once produced, the hydrogen can be stored and then used to generate electricity in a fuel cell when needed. This allows for the decoupling of the electricity generation from the electricity consumption, which is particularly useful in managing variable renewable energy sources.

Cliff Locks is available as a Board of Director or Board Advisory position as an Independent Director [email protected]

Contributor: Cliff Locks, CEO | COO | Executive Strategy Consultant and Coach | Board of Directors | Governance | Private Equity Podcast Host | Reverse Logistics | Supply Chain | Advisory Board | SaaS | Clean Tech | Med Tech | Metaverse | AI | Thoughtful ESG & DEI Email me: at [email protected], Schedule a call: Cliff Locks, or fill in the below form to start a conversation.

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