Will the country be able to keep up with
the growing demand for energy?
It’s hard to escape the media coverage
surrounding climate change. Lawmakers, business leaders, clergy, and
environmental groups compete for sound bites. According to ABC News and
other recent polls, the American public is generally aware of climate change
and the need to reduce greenhouse gas emissions. They are unclear, however,
about what needs to be done, who should do it, and what it will cost.
Resoundingly though, consumers say they don’t want to get stuck with a big
price tag to pay for climate-change solutions.
Solutions to curbing greenhouse gases,
including carbon dioxide, include energy efficiency, new technologies (such
as finding ways to store carbon-dioxide emissions produced by coal- and
natural-gas-fired power plants), nuclear power, and renewable energy
resources. But what will these solutions cost? According to one article last
year in The Washington Post, electricity bills could rise by 25 to 33
percent just to “stimulate and pay for new technologies.”
“All of this presents a huge challenge
for electric utilities, especially electric cooperatives,” says Glenn
English, CEO of the National Rural Electric Cooperative Association (NRECA),
the service arm of the nation’s 900-plus not-for-profit, consumer-owned
electric co-ops. “Electricity demand is increasing because of growth, and
we need to build more generating plants and transmission lines to meet this
According to the North American Electric
Reliability Corporation — which oversees reliability of the bulk power
system covering the United States and most of Canada — demand for
electricity will increase over the next 10 years by 18 percent, although the
electric industry’s capacity to generate power will increase by only 8.5
A longer-term forecast by the U.S.
Department of Energy predicts that demand for electricity will increase by
40 percent over the next 25 years. Clearly, the country could face brownouts
and blackouts unless additional power plants are brought into service.
“We have an obligation to keep the
lights on and prices affordable at a time when the costs of fuel and raw
materials to build new generation are skyrocketing,” states English.
“With a shortage of electric capacity, huge increases in demand for power,
and the cost of climate change, we have the making of a perfect storm.”
Based on calculations by Charles River
Associates, a utility analysis firm, climate change proposals currently
circulating in Congress, if passed, could result in a 50 to 80 percent
increase in wholesale power costs by the year 2020. Translate that into
retail rates and electricity bills could climb by 25 to 40 percent.
it comes to climate change, Congress will legislate, the U.S. Environmental
Protection Agency will regulate, and state and local governments are already
moving forward,” says NRECA Vice President of Environmental Issues Kirk
Johnson. “With carbon constraints in our future, it’s essential that
lawmakers and elected representatives understand the financial repercussions
their political actions could cost Americans.”
The New York Times and The Wall Street
Journal observed this past summer that the issue of cost should be put on
the table. If climate-change legislation is not handled intelligently and
carefully given these accumulating factors, electric bills could double or
even triple, based on the best available estimates.
The Electric Power Research Institute (EPRI),
a non-profit utility-sponsored consortium whose members include electric
co-ops, has developed a seven-part plan to reduce carbon-dioxide emissions
based on technological solutions including energy efficiency, carbon capture
and storage, and renewable sources. Although ambitious, the EPRI model would
cut carbon-dioxide emissions to 1990 levels (45 percent) by 2030.
Energy efficiency, by reducing the
amount of power needed, remains one of the easiest and most cost-effective
ways to reduce carbon-dioxide emissions. Over the past three decades,
electric co-ops have emerged as leaders in helping their members use
electricity wisely. However, energy efficiency alone can’t indefinitely
postpone the need to build new power plants or solve climate change. EPRI
notes that efficiency improvements will reduce electric demand just 9
percent over the next 22 years.
Renewable energy and nuclear power
development are greatly impacted by massive global price increases for raw
materials like nickel, copper, steel, and concrete, all of which raise
construction costs for new generating plants. And renewable energy sources,
like wind turbines, require transmission lines to move any power generated.
At present, the nation’s electric grid is not equipped to do so.
With 50 percent of the nation’s power
supply produced by burning coal, research and development of carbon capture
and storage technology becomes crucial for keeping coal-fired power plants
viable — and the lights on. EPRI asserts, however, that cost-effective
carbon capture and storage technology will take years, if not decades, to
become commercially available. The best guess — assuming the federal
government embarks on a massive $30 billion research and development program
(bigger than putting a man on the moon) — affordable carbon capture and
storage technology could hit the market by 2020.
Since no single “silver bullet”
solution for tackling climate change exists, electric co-ops are working
closely with policymakers to seek long-term, practical, and affordable
remedies to our nation’s energy challenges. Through it all, electric
cooperatives remember their commitment to delivering a reliable supply of
electricity at a competitive price.
Source: National Rural Electric
North American Electric Reliability Corporation, Electric Power Research
Institute, Department of Energy,
Charles River Associates, The
Post, The New York Times and The Wall Street Journal.