The First Fuel

Prior to becoming editor in chief of Utility Automation & Engineering T&D magazine, I worked as an editor for Power Engineering magazine, another of PennWell’s global energy publications. It focuses on electricity generated primarily by coal, gas, nuclear and renewable fuels. During my tenure, I heard many people in the electricity-supply industry call energy efficiency and demand response (DR) the “fifth fuel.”

In December, I attended PennWell’s POWER-GEN International Conference and Exhibition in Orlando, Fla. The event focuses on electricity generation, but energy efficiency and DR were mentioned in almost every presentation, from the keynote to the conference sessions to the editor’s lunch briefings. Instead of being called the fifth fuel, energy efficiency many times was called the “first fuel,” implying that traditional utilities view curtailing demand as a better solution than adding capacity.

In today’s uncertain regulatory and economic environments, financing, siting and building new generation is risky. It’s nearly impossible to find anyone who thinks new environmental legislation won’t affect coal-fired generation. Until new environmental regulations are enacted, any new coal-fired generation project is risky because the price of carbon is unknown. And opposition to new and even existing coal-fired generation is increasing, making it harder than ever for utilities to get new coal-fired plants approved.

Several utilities and consortiums have announced plans to build new nuclear plants, but progress is slow. The cost will be high, and it is unclear how long or arduous licensing will be.

While renewables have been touted as the answer to U.S. generation capacity needs, most technologies are expensive and few are mature enough to contribute substantially to our growing electricity demand. And the credit crisis has depleted available capital for new renewables projects.

That leaves most generators defaulting again to natural gas-fired generation. Although history shows natural gas price volatility can result in high electricity rates, many electricity suppliers will turn to this resource when new capacity is required. Many, however, would prefer investing in smart grid technologies that increase electricity delivery system efficiency rather than new generation. Most see the proven technologies for energy efficiency and DR as the lowest-risk option for future energy demand. In most cases, costs will not increase with new climate-change policies, and they can be implemented without public hearings and rigorous siting requirements. I look forward to learning how these technologies contribute to the world’s growing energy needs.

Teresa Hansen, Editor in Chief

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