The Cooperative Difference: The pace of change

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I went to Houston, Texas, to visit my son and daughter-in-law and had the privilege of visiting NASA’s Johnson Space Center. A cool T-shirt in the gift shop had a quote from the late theoretical physicist Stephen Hawking: “Intelligence is the Ability to Adapt to Change” spelled out in cryptic letters and numbers. The point is that the human brain immediately corrects it to the English language.

As I drove home, I had 6 1/2 hours to stare out the windshield and reflect upon recent world, national and local events related to energy and energy security.

On the one hand, an ever-increasing number of people believe the earth’s climate is in crisis. A 2014 study by the Yale Program on Climate Change indicated that 48% of Americans believed that global warming is being caused by human activity; in 18 states, that number was above 50%. The same study in 2020 found that number had increased to 57% nationally, and there were now only four states where that number was below 50%.

Statistics like these explain the emphasis that is being placed on green energy and the push to replace dispatchable coal and gas power plants with intermittent wind and solar resources.

On the other hand, there is a real energy crisis in Europe due to Russia shutting off the Nord Stream 1 pipeline, leaving European countries without ample energy to power their economies and with dire predictions of not having enough energy to keep from freezing this winter. As European countries rushed to install intermittent wind and solar power, they shuttered their nuclear and coal plants and ultimately sacrificed their energy security by becoming overly dependent on Russian natural gas to fill the gap.

To put it into perspective, think about your September electric bill. That bill was generated with wholesale electricity prices of about $60 to $80 per megawatt hour (MWh). Now imagine being in Europe with that same bill being driven by prices between $600 to $800 per MWh. A
recent Reuters news article stated that the average British household can expect electric bills to increase by 80% to about $4,188 per year, and that was before Russia indefinitely suspended gas supplies from the Nord Stream 1 pipeline.

Some would say that the high cost of natural gas is exactly why Europe needs more intermittent wind and solar resources, while those operating the electric grid would say that Europe could not add enough intermittent resources to fix the problem. The inevitability of the setting sun and the unpredictability of the blowing wind create physics problems for electric generation, since it must be reliable and available 24 hours a day, every day.

Somewhere around Nacogdoches, Texas, my thoughts centered around America’s energy policies and the recent warnings from the National Electric Reliability Corporation (NERC) and the Federal Energy Regulatory Commission (FERC) that the U.S. electric grid is being strained due to a lack of dispatchable resources.

California narrowly averted rolling blackouts over Labor Day weekend by requiring citizens to severely cut usage and shut off air conditioning during a heat wave, and to not charge electric vehicles at night. Given that California recently announced a ban on gas-powered vehicles and that U.S. Secretary of Transportation Pete Buttigieg announced that this was a model for all states to follow, the irony of the real threat of rolling blackouts and energy shortages in California was not lost on me.

In the mind of this simple farm kid from Iowa, it appeared as if political science had gotten way ahead of actual science. The recently passed Inflation Reduction Act will add more intermittent resources to the U.S electric grid by providing $385 billion in funding for these resources. And there will be a corresponding number of baseload power plants forced off the grid due to a combination of the resulting economics and new Environmental Protection Agency regulations creating an environment of uncertainty for those plants.

Driving down the highway, I couldn’t get my mind around why the U.S. would step on the gas (pun intended) to move away from affordable and reliable electric service and energy independence to arrive at the same point on the energy map as our European allies.

As I crossed the state line into Arkansas, I asked myself if I was just a knuckle-dragging Neanderthal who was afraid of change. Engineer and statistician William Edwards Deming said there are two basic rules of life: 1) Change is inevitable; and 2) Everybody resists change. I rationalized that I was not a Neanderthal but perfectly normal in resisting change. However, as Stephen Hawking so eloquently stated, to be intelligent we must be able to adapt to change.

Herein lies the moral of this story: It is not change that the Electric Cooperatives of Arkansas resist. We embrace change. It is the pace of change that is the issue.

Compare and contrast the differences in energy policy of the top two superpowers in the world. America may be the world’s leading superpower, but China is rapidly growing in power and influence. According to the Asia Society Policy Institute, China is doubling down on energy security, which makes sense given what we are seeing in Europe.

Chinese President Xi Jinping has indicated that China must not dismantle its existing energy sources before new cleaner (including nuclear) resources are built out. China is investing $440 billion to develop 150 new nuclear reactors — in addition to the intermittent wind and solar resources it is adding to its electric grid. In contrast, the U.S. has only two nuclear plants under construction. Simultaneously, China began building 33,000 megawatts (MW) of new coal-based generation in 2021. To put that into perspective, the U.S. has about 286 coal plants in operation, while China has 946 coal plants in operation with 238 in construction or planned construction.

By the time I arrived at home, I was certain that it was not change that concerned me but the pace of change. Imagine that you are a few pounds overweight and out of shape, and you wake up one day and decide to run a marathon. If you got off the couch yesterday and signed up for a marathon today, how would that work out? At best you may finish but with considerable pain and suffering, and at worst, you could suffer a heart attack or severe injury. In contrast, if you approached that vision with a reasonable timeline and a training plan, you could meet that goal aggressively in six months.

The U.S. electric grid took over a century to build, and attempting to change it too rapidly without the right technology in place can and will have consequences. When the reliability of the electric grid fails in rural America, it almost always results in financial catastrophe and loss of human life. Avoiding these consequences is the motivation for pushing back on the rapid pace of change in transforming the electric grid. Advocating for a Balance of Power is our attempt to not put the cart in front of the horse as we work toward the vision of a lower-carbon future.

Vernon “Buddy” Hasten is President and CEO of Arkansas Electric Cooperatives, Inc., and Arkansas Electric Cooperative Corporation.

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