Earth Day 2015 offers us a time to reflect upon the thin biosphere surrounding the planet, that most important niche that we depend upon for our existence. At Smith, we realize the significance of the challenges that we face, and through our actions, we support many efforts to create a sustainable future, including renewable energy, recycling, and repurposing.
Many of the larger issues in the debate around our impact on the environment arise from our usage of energy. As Houstonians, we well know that our comfort and productivity depends upon an uninterrupted supply of electricity. As someone who spent three weeks living without air conditioning in August of 1982 as a result of Hurricane Alicia, I can attest to the fact that mechanical a/c is a necessary condition for this city to grow and prosper. Without that technology, a large percent of the population would have to relocate to a more benign climate.
In order to understand the environmental impacts of electricity, it is critical to understand the source of those electrons. Currently, about 81 percent of the electricity used in Texas comes from natural gas or coal fired power plants. Nuclear plants produce about 11 percent, and renewable sources such as wind and solar produce the remaining 8 percent of the electricity that we consume. The power plants that use natural gas or coal are the primary producers of CO2 , one of the key greenhouses gases that are tied to global climate change.
The entire issue of electricity generation and consumption is compounded by one simple matter – we don’t have any method for storing electricity! We have to generate what we need at the time when it is demanded, and when demand falls we have to shut down the plants that are producing the electricity. Think about a typical day in Houston; as people wake up they turn on TVs, hairdryers, ovens and washing machines. They take showers, and electricity is needed to generate the hot water. As people leave their homes for work, the demand for residential electricity drops off dramatically. The cycle repeats itself later in the day as people return to their homes, with one important difference: most people will turn on their air conditioner to cool down their house. So, in the late afternoon in Houston, there is a large spike in demand for electricity, with the peak demand occurring around 8 p.m.
So, we find ourselves in a quandary; our demand for electricity spikes up and down during the day, and lacking a means for storage of electricity, our generation capacity must also spike up and down to match the load. (I realize that there is also a commercial demand curve that is different, but it doesn’t change the overall situation very much, so we will ignore it for now.) To meet the electricity demand at “peak times,” you need power plants that can be spun up quickly to produce power, and can then be turned off in late evening when the demand for power has fallen way down. This is very inefficient, as we have to invest in power plants, known as “peakers,” that are only used for six or seven hours each day. And, the only power plants that fit this operating profile are natural gas fired generators, so we are in the position of having to keep building more new plants that produce CO2 as the population of Houston grows.
Further compounding the problem is the fact that the cost of residential electricity is set at one price; we all pay the same amount for a kilowatt hours’ worth of electricity whether we are using that energy at 8 p.m. (peak time) or at 3 a.m. in the morning. As we well know at Smith, in a free, open market, demand drives price. And in the short term, higher prices are a signal to producers that there is real demand, and that they should work to increase the supply of that commodity to the market. This is basic economics, and the result is an efficient supply of the goods that are truly desired by the market. In a better world, electricity would also have “time of use” pricing, so that people using power when demand was high would pay a higher price, and there would be an incentive to use electricity at 3 a.m. when demand (and thus price) was very low.
Fortunately, there are new, developing technologies that offer the promise of reversing the inefficiencies that abound in the Texas electricity market. One innovation that has been in play for a few years is the smart grid. In theory, this technology will give more control to the electricity network operators, through such concepts as a remote appliance control. In a time of heavy demand for electricity, the network operators could turn your home a/c off for a period of 15 minutes, and then turn it back on. By having the ability to do this for many homes across the state in a serial fashion, a sort of man-made rolling blackout wave, they would be able to reduce the “peak” demand for electricity. Other ideas involve the time at which home appliances are used: think a dishwasher that runs at 3 a.m. and an appliance that charges your phone and laptop only in the middle of the night when demand is low. In the radical envisioning of the smart grid, there is a continuous spot pricing of electricity throughout the day, and your home appliances respond (i.e., turn on) to pricing signals. This also encourages new generators of electricity, such as solar farms, that can take advantage of higher, market driven prices. Of course, all of this technology is made possible through the use of semiconductors, so Smith is a huge beneficiary of this trend.
The second innovation promises even bigger potential changes in the generation and use of electricity. Great advances are being made in electrical storage technology, specifically through a breakthrough known as the liquid metal battery. The critical factor in batteries is finding a way to bring down the unit cost to store one kilowatt-hour of electricity, so that very large batteries that can store large amounts of electricity become practical. For lithium-ion batteries commonly used in phones and laptops (and Teslas), the unit cost of storage is high, and so far there have been very few improvements that have made the batteries cheaper, or increased storage at a set price. Liquid metal technology could be four or five times less expensive than current lithium-ion, as it uses a much more abundant metal, namely antimony. Why is grid storage such an important goal? For starters, it makes wind and solar much more practical. Wind power is generated at random times throughout the day; the wind velocity needs to be above a certain threshold to generate power. Often times, power is generated in the middle of the night, when demand is low or non-existent. And conversely, the wind might not be blowing at 5 o'clock in the afternoon when everyone needs power for their home a/c. Large scale storage gets around all of these issues: you store power when the wind is blowing, and the battery is available to discharge when that power is needed.
New large scale battery technology will also be a boon for the nuclear power industry. In essence, nuclear power, which is also a carbon free technology, has a slightly different load generation challenge. A nuclear power plant cannot be turned on and off in a short time period; this process takes many weeks. So, a big nuclear power plant, such as South Texas Nuclear in Bay City, is producing electricity all the time, day and night. Battery storage makes this method of generation much more efficient, as the electricity generated in the middle of the night can now be stored, and used when the demand is there. As we move towards a grid that has large scale storage capability, market pricing of electricity, and smart, efficient consumption patterns, we will greatly reduce the need for generation technologies that produce carbon pollution. The future of electricity generation and consumption rests upon a foundation of information technology, at the heart of which will be semiconductors. There is no doubt that Smith will be a part of this transformation, serving the companies working to bring about this change.
It is often helpful to step back from the recent history of society to see what developments really had the greatest impact of the growth of the human race. Ten thousand years ago, methods were developed that allowed food to be stored. Electricity has been in development for about two hundred years, a mere speck on the timeline of human history. Perhaps the greatest advances in civilization lie ahead of us, as we figure out how to store large amounts of electricity. This is a great challenge, but it will be solved by the best minds among us. Happy Earth Day, everyone.
Robert Ackerley is co-founder of distributor Smith & Associates