Professors Baldick, Patzek and Edgar discuss the policy barriers, vivid realities and future strategies to close the gap between the need for diversified, sustainable energy and the steps toward that goal.
Understanding the Policy Barriers to Renewable Energy
Take a thicket of sometimes contradictory incentives, subsidies, and regulations, add traditional emphasis on fossil fuels, and stir in low prices. That recipe makes transition to renewable energy difficult in this country, according to Ross Baldick, professor of electrical engineering, with price representing one of the greatest barriers.
“We could be sustainable now,” he says, “but those sources are considerably more expensive than fossil fuels, and more than people are apparently prepared to pay.”
Policies keep energy artificially inexpensive compared to true costs, including environmental externalities, and Baldick believes academia has not convinced average Americans that our costs should reflect those externalities. The failure to make that case bears more blame than does our lack of a coherent policy.
“We’re blowing a ton of money on rooftop solar, which is a very expensive method of saving the planet,” he says. “That is driven less by coherent policy than the sexiness of rooftop solar panels. Money would be better spent on insulation, especially in low-income homes. We’re misguided in our evaluation of appropriate choices.” Wind energy is more sensible but alternatives such as wind and solar are only growing today because they are subsidized. “A generic policy mis-step, in my opinion, is that we subsidize what we think is good rather than penalize what we think is bad.” Penalties for carbon emissions, for example, would move our society toward these other methods of energy production, he believes.
The only way to significantly alter choice of fuels for electricity is to increase price. But that must be done carefully because of the effects on society. “You need to slowly increase price over a period of five to ten years,” Baldick says. “For example, we need to commit to a slow and well-understood rise in carbon tax or a tightening cap and trade regime over, say, a decade. That allows decision-making that takes rising price into account and doesn’t cause economic turmoil.” Our democratic processes, however, make it difficult to commit to such long-term decisions.
“I’m not advocating that we not have a democratic process, of course. It is just hard to envision a process to set us on this path. That goes back to us not making a strong enough case that we need to be on this path.”
Encouraging research and development to decrease costs for renewables would be better policy right now than deploying renewables at current costs. “Carbon dioxide is a 50- to 100-year problem. Whether we build 100 megawatts of solar this year or in three years won’t make much difference in that context,” he explains. “But if we build it now, we’ve blown money that would be better invested in lowering cost.”
Federal tax credits encourage the “build now” mindset over bringing costs down first. “We need to do both, it’s not either/or, but as a policy we need to emphasize more R&D and less deployment, at least with solar until costs are reduced. There are a number of ways in which we fail to appropriately price our uses of energy. Until we fix that, we’re always going to have to subsidize sustainable energy, and we’ll be unlikely to see large-scale, fiscally responsible sustainable development taking off.”
Ross Baldick’s current research involves optimization and economic theory applied to electric power system operations and public policy. Dr. Baldick has been a Visiting Researcher at the University of California Energy Institute, a Research Fellow at the Harvard Electricity Policy Group and an Erasmus Mundus Scholar at the Universidad Pontificia Comillas, Madrid, Spain. He has served on the UT faculty since 1994 and currently holds the Leland Barclay Fellowship in Engineering.
The Outlook for Traditional Fossil Fuels
“People have no idea how far we are from living on renewable energy,” says Tadeusz Patzek, Ph.D., chair, Petroleum and Geosystems Engineering Department. “Renewable energy sources will not likely out-produce fossil fuels in our lifetime. Energy will, however, become scarce. We’ll no longer be able to waste it so wantonly.”
Conventional production of oil peaked in 2004, Patzek says, and unconventional production, such as tar sands, peaked in 2008. Production of coal will peak in two or three years, unconventional natural gas perhaps not for 20 or 30 years. Peaking production doesn’t mean a fuel goes away, though. “We have an enormous abundance of fossil fuels, they are just more and more dispersed and more difficult to produce. Enhanced recovery will become more important.
It’s essentially an uphill battle. We’ll be valiant warriors and will produce more oil, but the rate of production will decrease with time.”
The current U.S. lifestyle is completely based on fossil fuels; some 85 percent of U.S. energy now depends on fossil fuels, he says, and the percentage is likely to remain at 80-plus for several decades. In the future, he predicts, we will use less energy proportionally in every sector of the economy.
“There are things small and big that we can do to reduce our energy consumption but we are kidding ourselves that suddenly renewables will go from one part in 10,000 to one part in 10. It doesn’t work that way. They will be there, richly subsidized, and we will grow production, but renewable production will peak, too, because we will simply run out of environment. If we keep destroying the environment, in the end the productivity of the entire ecosystem will decrease. We will reach the peak of clean water and soil.”
Patzek, a frequent critic of corn ethanol as an energy source, says corn is not remotely as harmful as soybeans displacing the rainforest in South America, or palm oil production replacing the forests in Indonesia and Equatorial Africa. “Ironically, we’re destroying these ecosystems to preserve our comfortable lifestyle, yet those systems are critical to our very survival,” he says.
Many find his news depressing, but Patzek believes it needs to be heard. “We have to start looking the truth in the eye and acting accordingly, like adults and not spoiled children. We must face up to the reality of an energy-constrained world. It will be extremely difficult for society, and cause a lot of pain for people who live 30 or 40 miles from their workplace and drive inefficient cars and live in inefficient homes. We will have to address the displacement. We in the U.S. are actually more vulnerable because we are so dependent on fossil fuels.
On the other hand, he does see some optimistic opportunities--easy solutions with broad positive effect. “Something simple but non-sexy we could do that would have a significant impact would be passive solar water heaters. These could be put on any roof in the U.S .and would cut about five percent of energy use. That would introduce huge savings.”
Tad Patzek spent seven years at Shell Development in Houston, where he improved oil recovery methods and evaluated the future U.S. energy supply. He joined the UT faculty as department chair in 2008 after 28 years at UC Berkeley. He holds two endowed chairs: The Cockrell Family Chair #11 in Engineering and The Lois K. and Richard D. Folger Leadership Chair.
Nation to Use Austin as Laboratory for Smart Energy Delivery
An enthusiastic and well-prepared Texas team recently invited this challenge: reinvent the nation's energy delivery system, and use Austin as the living laboratory.
Named the Pecan Street Project, the ambitious concept began in 2008 as a collaboration of more than 200 volunteers from The University of Texas, City of Austin, Austin Energy, Environmental Defense Fund, Greater Austin Chamber of Commerce, and local and national technology and energy companies. The project seeks to empower customers to consider energy delivery in new ways, according to Tom Edgar, Ph.D., a chemical engineering professor in the Cockrell School who also serves on the board of the Pecan Street Project.
"Our goal is to design and implement a system that generates energy from clean sources within the city and delivers it by means of an advanced system that allows management and conservation at the customer level," said Edgar, who holds the George T. & Gladys H. Abell Endowed Chair of Engineering. "We're turning Austin into America's clean energy laboratory."
The Project received a $10.4 million grant from the U.S. Department of Energy in November, 2009, for a demonstration project at Austin's Mueller community. The five-year grant will help fund four research teams from the university to design, test, and analyze the system. The demonstration includes creating an Energy Internet, or next-generation smart grid that will make it possible to integrate rooftop solar, smart grid software, energy storage, electric vehicles, and water and sprinkler systems. The Mueller Energy Internet, integrated with Austin Energy's next-generation smart grid, will include 200 in-home smart grid water systems, 200 smart sprinkler systems, and 1,000 residential and 75 commercial meters. In addition, the demonstration project will include four commercial rooftop solar arrays, four energy storage sites, smart appliances, and 10 electric vehicles.
Commercial and residential customers at Mueller have been offered the opportunity to participate voluntarily. Those who do will be among the first to use some of the world's most advanced clean energy and smart grid technology. For example, residents will be able to monitor energy and water use from their mobile phones, using software to adjust thermostats, washers, and other appliances to take advantage of price adjustments. Dynamic pricing, where utilities adjust price to reflect demand during the day, has been correlated with reduced energy use during peak periods, Edgar said. Mueller's rooftop solar panels will feed power into the Energy Internet, further reducing energy costs. Smart sprinkler systems will be able to detect leaks and shut off water, saving money and reducing water waste.
"Mueller will show that smarter energy management, clean generation, and advanced integration are possible, and what they can achieve," Edgar said. "We're creating a system that reliably produces carbon-free clean energy and gives consumers greater value and more control over their bills. In the next few years, we hope renewable energy makes up 15 to 20 percent of all energy consumption in Austin. Ideally, other cities will follow our model, not just in this country, but around the world."
Data collected from Mueller will be analyzed against control groups and distribution feeder systems in other Austin Energy service areas in order to quantify the effect of the technologies on electricity use and customer bills, the utility's finances, environmental outcomes, and overall system performance.
"Students, faculty and staff at the university bring a wealth of energy expertise in engineering, architecture and business to the effort," Edgar said. "We're excited to be involved in such a large-scale project. "
In January, the U.S. Department of Commerce Economic Development Administration provided funds for a smart grid project, a partnership between the Project and Capital Area Council of Governments. The CAPCOG project will focus on job opportunities arising from the smart systems the Project is developing and testing.
Thomas Edgar has served as associate dean of research for the Cockrell School, chair of the Cockrell School's Chemical Engineering Department, director of Information Technology for the university, as well as a faculty member and researcher in process control since joining UT in 1971. He also co-directs the Texas-Wisconsin-California Modeling and Control Consortium.
Professional Development on Energy-Related Topics
Professional development and continuing education is offered through the Cockrell School of Engineering Center for Lifelong Engineering Education (CLEE). CLEE provides results-based learning through weekend Master's degree programs and professional development courses. Upcoming energy-related learning opportunities include:
THE FUTURE OF THE ELECTRICITY INDUSTRY – June 10, 2010 - Discussion topics will include climate change issues, the need for reduction in carbon emissions and the role of renewables in the electricity industry.
ENERGY, TECHNOLOGY & POLICY – August 17-19, 2010 - Fast-paced and information-packed lectures that include real-world examples; entertaining anecdotes; engineering fundamentals, historical perspectives; and an outlook for the future of energy.
ENERGY SOLUTIONS WORKSHOP – August 24-26, 2010 – Focuses on tools to implement key projects enabling a reduction of energy costs by 10 percent with paybacks of less than a year.
For more information, review the full schedule of CLEE events and programs.
