The Obama Administration released yesterday released a Presidential Memorandum on Federal Leadership on Energy Management. The Memorandum seeks to use the purchasing power of Federal agencies to encourage greater energy efficiency and the production of renewable energy. Most significantly, the Memorandum sets an ambitious new target for Federal agencies to increase their consumption of renewable energy to 20% of their total amount of electric energy use by 2020.
I applaud the Administration for recognizing the critical influence that Federal agencies can have on promoting the use of clean energy in the United States. The Federal Government occupies nearly 500,000 buildings, operates more than 600,000 vehicles, employs more than 1.8 million civilians, and purchases more than $500 billion per year in goods and services. Its purchasing practices can have a profound impact on the business of clean energy in the United States.
In fact, it was the general consensus of the companies and associations that attended the NAATBatt Policy Committee meeting last June in Washington that the single greatest help the Federal Government could give to the struggling domestic battery and electricity storage industry was simply to buy more of its products. The Memorandum seems, at least with respect to the renewable energy industry, to have come to this conclusion as well.
Where the Memorandum falls down is in its view of renewable energy and energy efficiency as simple arithmetic targets: More renewable energy is better than less; using less energy is more efficient than using more. This kind of thinking made sense on the two-dimensional electricity grid of the 20th Century. But on the grid of the 21st Century, which incorporates a new dimension—time, that thinking is dated and counterproductive.
If one is trying to reduce the environmental burden of power production, how electricity is produced and how much of it is used certainly matters. But when electricity is used matters as well.
Time of use of electricity matters for two reasons: First, the grid must be built to accommodate something more than 100% of the highest theoretical peak load at any one time. Since most renewable energy is variable, in the absence of storage the grid will always need to maintain significant non-variable thermal generation capacity, and its related transmission and distribution infrastructure, in order to hedge against the inherent variable nature of renewables.
That standby thermal generation infrastructure, whether run or not, has a huge environmental footprint, which goes far beyond the greenhouse gas emissions (GHG’s) produced when the thermal plants are actually run. Energy efficiency in the three-dimensional grid of the 21st Century means leveling the difference between peak and non-peak electricity consumption, so as to minimize the infrastructure the grid requires to deliver electricity to consumers. Leveling electricity production and dispatch over time is a key function of storage.
Time of use also matters because it impacts the operating efficiency of thermal plants and the amount of GHG’s they produce. Increasing the production of renewable energy is generally a good thing. But if that increased production requires the thermal plants offsetting the renewables’ variability to cycle, rather than run at a steady thermal pace, the GHG emission benefits of the renewables can be largely offset by the increased GHG’s produced by inefficient, cycling thermal plants.
On the three-dimensional grid of the 21st Century, energy efficiency is not just about increasing the absolute amount of renewable energy generated and decreasing the amount of energy consumed. On the 21st Century grid efficiency is about managing the entire electricity grid, in all of its dimensions, so that the impact of electricity production on the environment is minimized.
The Memorandum’s failure to take account of electricity storage and its ability to level the production, dispatch and use of electricity over time was a great oversight. The energy consumption targets of Federal agencies must calculate their energy efficiency over time, not just the number of electrons used and the number of REC’s purchased. In this way the Federal Government can help move the U.S. grid into the 21st Century.
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