Innovative supply mix key to energy future, say Globe panelists
By Robert Colman
Conservation, the improvement of current assets and further development of renewables are the three main issues we must tackle in Canada to ensure a secure electricity supply in coming years. This was the conclusion reached by the participants in “The Future of Energy Dialogue” at Globe 2008. The effective integration of renewables into that mix will be of the utmost importance — an opinion expressed in a number of sessions at the conference.
By Robert Colman
Exporters and experts?
Bob Elton, president and CEO of BC Hydro, opened the discussion by showing a map of what the world would look like at night if we could take a picture of it. “This can tell you a lot about grinding and unacceptable inequality,” he noted.
At the same time, Elton stressed that the map is changing quickly, and in the next 50 years will look a lot different.
“In China in the last year, they added more coal to their fleet than the entire world did of renewable power,” he stated. “I don’t think that all of these countries that are now in the dark are going to turn to renewables and conservation unless it’s cheaper than fossil fuels.”
Elton suggests that Canada can become exporters and experts in renewables, and B.C. is working to lead the way in this respect. The stated goal of the province is to have half its supply of energy growth in the next 15 years come from efficiencies and conservation. The province will also work over the next 10-15 years on improving its middle-aged hydro system to make it more effective. The third thing the province is doing is purchasing more renewable power, to twin with its hydro assets.
“Doing all these things means a $3.5 billion investment over the next few years, considerably more than we’ve spent before,” Elton notes. “This will mean significant buys from independent power producers, and significant new ideas in conservation and efficiency. The biggest challenge will probably be finding enough people to do the work.”
Fossil fuels – here for the long term
B.C. is, in some ways, quite blessed — a large supply of hydro power, and a relatively small population. In such a state, a fossil-free society doesn’t seem so far-fetched.
But as Bill Smith, vice-president of power generation for Siemens Canada emphasized, primary energy demand will grow by 40 per cent over the next 25 years, and “it’s still dominated by fossil fuels.”
“Fossil fuels are still going to dominate, they are not going away,” he continued. “And it kind of places us on the horns of a dilemma. At this level it almost looks insurmountable.”
Smith, and Siemens, accept that there’s no panacea to solve this problem, but there are plenty of different actions that can be taken — conservation strategies, for example. Smith notes there also has to be comparatively simple behavioural changes among Canadians, and real time price signals should support that.
Siemens is attempting to do its part by committing to reduce its footprint by 20 per cent relative to revenues and in terms of overall CO2 intensity. The company is also putting additional revenues into R&D directed towards technologies that will help utilities and power generation companies reduce their carbon footprint, and technologies that drive the efficiencies of fossil-based fuels.
The company is also very involved in the wind turbine business, having installed over 300 MW of wind turbines.
Smith believes that more is needed for Canada to develop a healthy, effective power system. He stressed the need for the development of new technology, the building of effective demonstration projects, and the commercialization of those technologies.
“We see these demonstration projects in Europe, even in the U.S., but not so much in Canada,” says Smith.
Secondly, he suggested that more market mechanisms need to be put in place, to make investment reliable for the long term. He noted that some of the programs that BC Hydro and the Ontario government have developed are creating some of this necessary support. Smith also suggested that a government policy framework that transcends special interests needs to be established.
Coal – the 21st century fuel
Marc Josz, head of strategy and portfolio management for Suez Energy International of Belgium, agreed with Smith’s prediction that fossil fuels would continue to dominate. He went so far as to state that “coal could be the fuel of record for the 21st century.”
Josz backed up his assertion by noting that coal continues to be very abundant — 1.5 times the reserves of those of oil and gas combined; the political risk is lower because of the geographic location of reserves; and the price is far less volatile.
He also asserted that nuclear is part of the solution for the energy crunch. “The fourth generation of nuclear plants will make better use of the fuel,” he suggested.
The integration challenge
A couple of weeks before Globe 2008, 2,000 MW of wind generation in Texas stopped suddenly in a two hour period. While demand reduction program immediately went into effect, Bob Huggard, president of home and business services, North America, for Direct Energy, noted that this is a good reminder of how markets have to adjust themselves to the intermittent nature of new energy supplies. Again, while B.C. may be blessed with substantial amounts of hydro, other communities that depend more on a mix of wind, solar, oil and gas will have to integrate their power supplies effectively to create the “smart” grids we are all hearing are the next wave of power management.
In another panel on optimizing integrated energy solutions, John MacDonald, chairman and CEO of Day4Energy, echoed Huggard’s concern when he suggested that the main challenge is how to enable renewable energy to become a mainstream source of electrical generation.
MacDonald believes the future will depend on “renewable-dominated grids.” The challenge will be to effectively integrate traditional and non-traditional sources of power. Texas managed its loss of wind power through a demand reduction program, but as MacDonald pointed out, there isn’t yet a system that can “respond in milliseconds to unpredictable changes in supply,” although he believes this is solvable. The other problem is storage — another issue that MacDonald sees as solvable but certainly not yet available.
What was clear from these and other presentations at Globe 2008 is that Canadian companies and multi-nationals like Siemens are developing a number of technologies that are having an impact in the energy sector. More rapid commercialization and adoption will be required over the next few years for these technologies to make the impact so essential for our future energy and efficiency requirements.