By Richard T. Stuebi
November 16, 2001 – In the wake of the attacks of September 11, one can plausibly expect a sustained, pervasive global commitment against terrorism. This commitment will result in a variety of changes in virtually every economic sector, including the recently-burgeoning area represented by new power technologies.
One of the most obvious forces propelling the emergence of new power technologies will be increased military activity. Since terrorist activities are by definition diffuse and hidden, military initiatives against terrorists must also be stealthy and distributed in nature. In turn, this means that weaponry and other material – and the personnel who use them – must be powered by stealthy and distributed energy sources.
As a result, the military sector could represent an ideal market for fuel cells, as well as for photovoltaics and other fuelless energy technologies, and for devices that reduce energy consumption requirements, in an increasing number of applications.
The raising of military priorities will benefit the developers of these innovative but relatively expensive energy technologies, since the military customer will not be highly price-sensitive, but rather will seek technology that can perform the best to meet specified demands.
Increased decentralization will also be a major growth factor stimulating new power technologies. Since large targets are tempting targets for terrorists, one can expect a gradual trend toward decentralization in all economic and social activity. In a more decentralized world, the concept of distributed power generation is not only intellectually consistent, but essential to provide the redundancy that can ensure the desired constancy of service in the event of disruptions due to natural disasters as well as terrorist-driven calamities.
Since the electricity grid is strongest in dense metropolitan areas, a migration of the population toward more rural areas will tend to increase the number of people affected by power outages, thus providing a further impetus for market growth of distributed generation.
An increased reliance on telecommunications will also promote new power technologies. With a stressed travel industry , more burdensome and time-consuming security screens, and an increase in the perceived risk associated with flying, we will see an increase in demand on the telecommunications infrastructure – for voice traffic, and even more so with video. Given that telecommunications requires copious amounts of “clean” so-called “6-9’s” power, there will be significant growth opportunities for those who provide power systems – power conditioning equipment, batteries, and backup generators to clients in the telecommunications sector, and to those who are increasingly dependent upon telecommunications access.
Finally, increased volatility of energy prices will naturally spur interest in power alternatives. An extensive initiative to root out terrorism in various Middle Eastern countries can easily be envisioned to disrupt oil supplies, thereby propagating price spikes in world oil markets. This translates to price increases not only in petroleum products (e.g., gasoline), but also for natural gas, which in turn drives increases in electricity prices.
Locally, energy price hikes can be driven by terrorist attacks on oil refineries and major power plants. With magnified energy price volatility, fuelless energy sources (such as solar, wind, biomass, geothermal and hydro) will appear that much more attractive in many more applications – not only to hedge price volatility, but also to mitigate the risks of outright supply interruptions. Likewise, an increase in energy price volatility should also enhance emphasis on energy efficiency investment opportunities.
Synthesizing across these various trends, a picture emerges of a world filled with small energy sources that produce high quality power, emit less noise and pollutants, and require less (or no) fuel.
This reinforces the direction that the electric power industry was already heading in the past few years with deregulation and technological advancements: towards smaller and lower-emitting generation sources.
Thus, rather than altering the direction or slowing the pace of change in the electricity sector, efforts to combat terrorism should only accelerate the movement the industry was only just beginning to experience.
About the Author: Richard T. Stuebi is president of Denver-based NextWave Energy, a management consulting firm focused on renewable and alternative energy.