Electricity Policy

Assumptions, projections – and apathy

“Evidence of Things Unseen” is a fine 2003 novel by Marianne Wiggins. The things “unseen” are the x-rays and atomic radiation that figure in the story, which stretches from the end of World War I to the atomic bombs dropped on Japan essentially ending World War II.

Our world is rife with things unseen, beginning with electricity itself. But the policies that shape our electricity future are projections of that future – assumptions about growth rates, discount rates, fuel costs, penetration of technologies, demographics, and more. The future is a minefield of assumptions, which everyone is free to challenge. And they do.

Last week, Guido Bartels, chairman of the Global Smart Grid Federation and manager of IBM’s Global Energy and Utilities Industry, told us that electricity prices in western countries will climb 400 percent by 2050 if adequate investment in smart grid isn’t made now.

My snap reaction was that Bartels’ number seemed outsized, but I changed my mind allowing for both the cost of outages and declining reliability as our infrastructure continues to age, as well as the inability to integrate renewables efficiently without a smart grid. Introducing a smart grid, Bartels told an Israeli audience, will make it possible to reduce this cost increase to just 50 percent.

Last week, the American Council for an Energy-Efficient Economy informed us that existing appliance standards, taken from the inception of each national standard through 2035, will net consumers and businesses more than $1.1 trillion in savings cumulatively. New and updated standards will add another $165 billion – and perhaps much more; who can say? – to those savings.

Also last week the Energy Information Agency’s “Annual Energy Outlook 2012” saidrenewable energy production will more than double by 2035 even without federal tax credits. That projection seems conservative.

Why do we make these mind-numbing projections? For two reasons: (1) We need goals to aim for and (2) we need reasons to aim for them.

It’s a plain, indisputable fact that there is widespread public indifference, even ignorance, about how these three areas – appliance efficiency standards, renewable resources, and the smart grid – can make our society and the world more efficient and prosperous, environmentally as well as financially.

There’s a mountain to climb in these and other areas. We make progress slowly, but we domake progress. Perhaps it is “evidence of things unseen” – projections of a future we can hardly imagine – that pulls us reluctantly along on our upward climb.

— Robert Marritz