The Presidential Debates: Will We Plan for or Stumble Into the Utility of the Future?

This blog post was originally published by Dr. Mark C. Trexler in DNV Kema Utility of the Future Blog, Oct. 30, 2012.

While there was quite a bit of rhetoric regarding trends in oil and gas drilling and production on federal lands in the recent presidential debates, there was no obvious reference to the electricity sector or to the Utility of the Future. That said, a lot has been made of the fact that climate change did not come up at all in the presidential debates—the first time that has happened since 1988. What are the implications of this omission for the Utility of the Future?

Most observers accept that the utility of the future is likely to look very different than the utility of today. With new generation technologies in the wings, expanded use of energy storage to allow integration of more renewable energy, realized benefits from microgrids and smart grids, and deployment of low-carbon technologies including carbon capture and storage, the Utility of the Future may indeed be a changed place.

Between the utility of today and the Utility of the Future lie a substantial number of science-based policy decisions:

  • Will we take full advantage of the potential of technologies like offshore wind, or will NIMBY (not in my backyard) considerations prevent all but the farthest offshore wind?
  • Will we backtrack on technology innovation in the face of temporarily low natural gas prices?
  • Will we use smart grid meters and technology to their full potential, or will these be deterred by privacy concerns?
  • Will we plan for the impacts of climate change on fire frequency and seriousness, or will the political debate over climate change prevent it?
  • Will we deploy the next generation of nuclear energy technologies, or will the aftermath of Fukoshima prevent it?

Each of these decisions poses challenging decision-making contexts, juxtaposing personal privacy rights and states’ rights in the siting of generation and transmission assets against larger societal energy policy and environmental objectives. The presidential debates of 2012, which narrowly focused on the politics of oil and gas exploration and gasoline prices, barely scratched the surface of the larger issues of science policy and science-based decision making.

The fact that climate change didn’t come up in the debates is an interesting metaphor for the potential challenges facing science-based decision making needed for full deployment of the Utility of the Future. The omission of climate change from the debates is particularly interesting in light of Hurricane Sandy, the megastorm that the Eastern seaboard is currently suffering, exactly a week after the final presidential debate.

In 2010 economist Robert Repetto looked at the implications of climate change for hurricane risk to the East Coast, specifically New York City. Based on global climate change models, Repetto concluded in a 2010 analysis that by 2030, climate change will increase the risk of a major hurricane to hit New York City by as much as 25–30 percent. The likelihood of a Category 3 hurricane to hit New York City, for example, goes from one in 65 years today to one in 60 years in 2030. The chance of a Category 5 hurricane to hit the city goes from an estimated one in 330 years today to one in 260 years in 2030. There is no way to say whether Hurricane Sandy reflects these probabilities at work, but also there is no way to say that it doesn’t.

While the chances of a major hurricane hitting New York City still seem rather remote even under Repetto’s analysis, although perhaps less so after Hurricane Sandy, Repetto’s conclusions regarding the vulnerability of NYC to a hurricane are dramatic. In fact, his study concludes that the city’s vulnerability to such an event is so great that the city should be willing to pay more than $47 billion per year in 2030 to avoid the increased risk (if the risk could be avoided). That is more than 50 percent of New York City’s annual expenditure budget ($60 billion in 2009) just to purchase a climate change insurance policy against the climate-change-induced increase in hurricane risk.

It is the magnitude of these estimates that make the omission of all mention of climate change in the debates particularly notable. If you think of climate change as a proxy for the larger topic of science-based policy and decision making, it looks like we are more on course to stumble into the Utility of the Future, than to prepare for it. This could lead to a much less efficient and speedy transition than we might have hoped for.

While there was quite a bit of rhetoric regarding trends in oil and gas drilling and production on federal lands in the recent presidential debates, there was no obvious reference to the electricity sector or to the Utility of the Future. That said, a lot has been made of the fact that climate change did not come up at all in the presidential debates—the first time that has happened since 1988. What are the implications of this omission for the Utility of the Future?

 

Most observers accept that the Utility of the Future is likely to look very different than the utility of today. With new generation technologies in the wings, expanded use of energy storage to allow integration of more renewable energy, realized benefits from microgrids and smart grids, and deployment of low-carbon technologies including carbon capture and storage, the Utility of the Future may indeed be a changed place.

Between the utility of today and the Utility of the Future lie a substantial number of science-based policy decisions:

  • Will we take full advantage of the potential of technologies like offshore wind, or will NIMBY (not in my backyard) considerations prevent all but the farthest offshore wind?
  • Will we backtrack on technology innovation in the face of temporarily low natural gas prices?
  • Will we use smart grid meters and technology to their full potential, or will these be deterred by privacy concerns?
  • Will we plan for the impacts of climate change on fire frequency and seriousness, or will the political debate over climate change prevent it?
  • Will we deploy the next generation of nuclear energy technologies, or will the aftermath of Fukoshima prevent it?

Each of these decisions poses challenging decision-making contexts, juxtaposing personal privacy rights and states’ rights in the siting of generation and transmission assets against larger societal energy policy and environmental objectives. The presidential debates of 2012, which narrowly focused on the politics of oil and gas exploration and gasoline prices, barely scratched the surface of the larger issues of science policy and science-based decision making.

The fact that climate change didn’t come up in the debates is an interesting metaphor for the potential challenges facing science-based decision making needed for full deployment of the Utility of the Future. The omission of climate change from the debates is particularly interesting in light of Hurricane Sandy, the megastorm that the Eastern seaboard is currently suffering, exactly a week after the final presidential debate.

In 2010 economist Robert Repetto looked at the implications of climate change for hurricane risk to the East Coast, specifically New York City. Based on global climate change models, Repetto concluded in a 2010 analysis that by 2030, climate change will increase the risk of a major hurricane to hit New York City by as much as 25–30 percent. The likelihood of a Category 3 hurricane to hit New York City, for example, goes from one in 65 years today to one in 60 years in 2030. The chance of a Category 5 hurricane to hit the city goes from an estimated one in 330 years today to one in 260 years in 2030. There is no way to say whether Hurricane Sandy reflects these probabilities at work, but also there is no way to say that it doesn’t.

While the chances of a major hurricane hitting New York City still seem rather remote even under Repetto’s analysis, although perhaps less so after Hurricane Sandy, Repetto’s conclusions regarding the vulnerability of NYC to a hurricane are dramatic. In fact, his study concludes that the city’s vulnerability to such an event is so great that the city should be willing to pay more than $47 billion per year in 2030 to avoid the increased risk (if the risk could be avoided). That is more than 50 percent of New York City’s annual expenditure budget ($60 billion in 2009) just to purchase a climate change insurance policy against the climate-change-induced increase in hurricane risk.

It is the magnitude of these estimates that make the omission of all mention of climate change in the debates particularly notable. If you think of climate change as a proxy for the larger topic of science-based policy and decision making, it looks like we are more on course to stumble into the Utility of the Future, than to prepare for it. This could lead to a much less efficient and speedy transition than we might have hoped for.

– See more at: http://www.dnvkemautilityfuture.com/the-presidential-debates-will-we-plan-for-or-stumble-into-the-utility-of-the-future#sthash.TmVXIBcy.dpuf

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