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Friday, Mar 29, 2024

Dialing Down the Megawatts

There is a lot of honest praise in America for entrepreneurship, for the usually small contributions of individuals. But we also are a country that loves anything big – from supersized burgers to outlandish mansions to Costco warehouses best traversed in a golf cart. And that desire for heft has long been a hallmark of our utility industry. Just think Hoover Dam. Of course, generating lots of kilowatts through huge hydropower, coal, gas or nuclear installations can make real sense in dollars and cents. Then again, one mistake, and Poof! goes those savings. The prime example of that these days is the fiasco that has closed the San Onofre Nuclear Generating Station in San Diego County. By now, the debacle has been well documented, but it’s still instructive to recount how it occurred. Southern California Edison convinced regulators of its plan to spend $680 million on new steam generators to extend the life of the plant for 20 years. The utility contracted with Mitsubishi Heavy Industries, a Japanese maker of nuclear generators, to build the replacement. But a design flaw led to a leak of radioactive steam and further review found unusual wear on more than 1,000 tubes. Game over. The total tab? Approaching $2 billion. Truly a utility-scale mistake if there ever was one – and by two giant, experienced companies. Which brings us to Germany. Sounds like a non sequitur, but it’s not. A recent article in the Wall Street Journal documented how Europe’s largest economy is aggressively moving to increase the use of renewable energy and shut down its nuclear plants by 2022 – something Chancellor Angela Merkel wanted to backtrack on until another more egregious utility-scale incident changed her mind: Japan’s Fukushima disaster. The renewable goals are ambitious: at least 35 percent of energy from renewable sources by 2020 and 80 percent by midcentury. Let me say, now, this is not a rant against nuclear power, though until I see more evidence, I’m not sure we should be building more plants. That said, what really caught my eye was how progress toward its energy goals was not being made by giant renewable energy projects. Rather, much of what has propelled Germany to second among all nations in the percentage of power from renewable sources – 20 percent compared to 12 percent in the United States – has come from households installing solar panels and the like. It’s also benefited from small-scale utility projects. The article highlighted a bioenergy plant in Juhnde, a rural village of 750, that is fed by manure, plants and wood. The cost of the plant wasn’t stated, but apparently the village is now energy independent and one local household investor got all his money back in three years. There is a downside worth mentioning. The aggressive switch to renewables has left Germany with some of the highest utility rates in the European Union – and far higher than the United States. Still, Germany’s experience should be heartening for anybody following what is going on in the renewable energy business in the greater San Fernando Valley. Not only are solar panel projects being constructed in the Antelope Valley, but there are companies developing innovative technologies. Esolar Inc. of Burbank, for example, is working on a technology that uses molten salt to capture the heat of the sun’s rays during the day so it can be used to generate power in the evening and during cloudy days. Ceres Inc. in Thousand Oaks is working on hybridizing sorghum for higher crop yields in the production of ethanol. And then there’s Cool Planet Energy Systems Inc., which is developing a technology that converts non-fuel biomass, such as wood chips, algae and corn cobs, into gasoline. The Camarillo company’s technology is so promising that Colorado dangled $3.1 million in tax credits before it and the company announced a few weeks ago that it will move its headquarters and build its first plant in the Rocky Mountain state. A research and development lab will stay in Camarillo. The impending departure of Cool Planet was reported by the Business Journal but didn’t seem to warrant a blip in other media. And that’s too bad. Not only was it a loss for the area but it’s exactly the kind of company that everyone should be championing. It’s a fool’s errand to predict future trends, but like many, I think small solutions to big problems will be one of them. Our planet is so interconnected these days that when big things fail the effects can be widespread and overwhelming. Could one of the Valley’s small renewable energy producers ever contribute to some utility-scale disaster? Who knows, but it seems unlikely. If anything, it seems more certain that small contributions to our power grid by a diverse set of energy producers is one way to reduce risk. Laurence Darmiento is editor of the Business Journal. He can be reached at [email protected].

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