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June 23, 2008

Passing the BTU

Without a lot of fast planning or a drop in oil prices before winter many parts of America may face an electricity crisis when the heating season begins. At the worst, there could be serious repeated failures of transmission facilities. At best, there is likely to be pressure for steeply higher electric rates. There isn't much planning time left let alone time for action; nevertheless there's lots of action that should be taken. This is a good time for incumbent politicians including the two incumbent US senators running for President to go beyond rhetoric and actually take action.

The problem (or maybe opportunity) is that it costs Americans less to heat with electricity at $.15/kWh than with oil at $5.00/gallon. In most parts of the country using electric radiant heat from either baseboard heaters or space heaters used to cost much more than oil heat. But now the price of oil has gone up much faster than the price of electricity. Moreover, partially substituting electricity for oil, propane, or natural gas can be done by simply buying some electric space heaters and turning the furnace down – no construction required. It's reasonable to assume that people will do what they can to reduce this winter's heating cost. IT's much easier to switch the fuel we use in our homes than the fuel we use in our cars.

But, if there is a substantial cutover to electric heat during peak periods, the extra electricity required will either be very expensive OR perhaps not even available if there isn't sufficient transmission capacity. Moreover, we could easily end up burning more fossil fuel rather than less with the "wrong kind" of cutover to electricity

Baseload electricity – the electricity used in non-peak times – comes largely from coal, nuclear, and hydro facilities in most of the country. Here in Vermont our baseload energy comes from Vermont Yankee (nuclear) and Hydro Quebec. During peak times, the extra energy required is often produced by burning natural gas. Natural gas plants have proliferated both because they can be spooled up and down quickly depending on how much power is required and because they are relatively clean and don't generate as much neighborhood opposition as other types of power plants. So, if more electricity is required during peak periods, we burn more natural gas to get that electricity.

If you burn natural gas in your house to get heat, you extract about 78% of the energy available in the gas as useful heat. If a utility burns natural gas to make electricity, at best about 38% of the energy in the gas will become electrical energy at the generating plant. Even ignoring the fact that some electricity is lost in transmission (surprisingly little), it takes more than twice as much fossil fuel burned in a power plant to heat your house through radiant heating as it would take if you simply burned the fossil fuel in your furnace. So, if we all suddenly switch to heating our houses with electricity and the result is a lot more natural gas burned in power plants, electric utilities – with justification – will scream for economic relief and electricity for all purposes will become much more expensive – assuming the facilities are even available to generate and transmit it. Whoops.

So should we ignore electricity as an alternative? Should we just put up with the high price of oil for heating? No!

There is a way we can have our electricity and use it too – that's where the planning comes in.

During some hours of the day – currently the middle of the night – most parts of the country use LESS power than baseload capacity can deliver. Extra use of baseload power during these periods is actually an economic advantage to the power companies because it lowers the average price of power they purchase or generate. Moreover, transmission facilities have extra capacity during offpeak periods so electricity can be moved (wheeled) from where it is cheaply available to where it is needed. Everyone except fuel importers wins if we can substitute OFFPEAK electricity for oil.

Fortunately, the technology to use electric heat selectively is cheap given the cost of modern electronic components. Unfortunately, most houses are not equipped with smart meters which allow information from the grid to directly control use in the home. That's why we need to cobble together some solutions with timers and off-grid information dissemination (web sites, for example) so that we can use electricity this winter at times when it is effective to do so. We also will need to cobble together time-of-day electric rates and ways to do time-of-day measurement quickly (that'll be hard but is not impossible if done first in the places where it'll have the most impact).

Here's an outline of a quick action plan at the state level:

  1. Quickly inventory from the utilities and regulatory records where there is the most offpeak capacity available.
  2. Map where the existing transmission facilities can deliver that electricity to.
  3. Enact enabling regulation for on and offpeak pricing of electricity where capacity IS available offpeak.
  4. Plan the winter's fuel assistance program to aid and encourage the use of electric heat where it is the best alternative to fossil fuel (In some place in Vermont, wood pellets, for example may be a much better alternative).
  5. Convert recipients of fuel aid to time-of-day metering as a priority.
  6. Target time-of-day meter conversions for this winter to the places where the most offpeak electricity is available.
  7. Try to assure that those who are going to switch to electric heat on their own can get time-of-day rates and have an incentive to do so (the trickiest part but crucial to the health of the grid).
  8. Switch government buildings to electric heat during non-peak periods.
  9. Help municipalities do the same.

Note that these are all short-term actions. Longer term electric geothermal heat is an effective use of electrical energy even if some of that comes from fossil fuels. Electric storage heat IS efficient and makes more effective use of available generating capacity for daylong space heating. We obviously need a greater baseload supply of electricity that isn't generated from imported (and/or carbon producing) fuels. And we need really smart metering everywhere.

But the surge in oil prices as compared to electricity means we need to plan for this winter now and concentrate on what is feasible in the shortterm.

Electric Heat Savings Estimator is a calculator to determine what you might save by switching to electric heat.

Time of Day Pricing for Electricity is about exactly that.

A Modest Proposal is about really smart metering and appliances.

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