Berkeley, Calif.-- We've got to come to grips with our bipolar attitude toward energy infrastructure, according to Philip Moeller.
Moeller, one of the five commissioners at the Federal Regulatory Energy Commission (FERC), says that the U.S. needs to beef up its transmission grid, and intellectually, citizens seem to understand this. Unfortunately, people also chronically object to new transmission lines, natural gas lines and the other components required to keep the lights on.
"There is a recognition that we need more transmission...There is no way to capture more renewable without more transmission," he said during the UC Berkeley Energy Symposium taking place today. "But people don't like to look at it...People hate energy infrastructure."
Moeller ticked off a number of trends that will impact FERC and the energy industry in the U.S. during a lunchtime speech. Here are some of the highlights:
--The energy debate has been somewhat moribund in Washington for the last six to nine months and has taken a back seat to health care. It could start to rev up again soon. And when it does, don't be surprised if carbon taxation or cap and trade aren't part of it.
"I don't see 60 votes (in the Senate) for cap and trade," he said. Instead, you could see energy efficiency bills, renewable portfolio standards and other issues going forward on their own. Silicon Valley execs and lobbyists have been expecting this, they've told us in the last few months, and adjusting their strategies accordingly.
--Natural gas will play a larger role in electricity generation. Nuclear takes years, large rivers for hydroelectric powers are tapped out and coal plants are dead in the water. Utilities are already planning to phase out coal plants in favor of natural gas and wind.
"We as a nation are becoming more dependent on natural gas to make electricity," he said. "You can't bet the future of your company on coal plants. If you are going to build a new power plant, it will probably be powered by natural gas."
The U.S. also has a lot of gas and the geological formations to store it.
--De-coupling is discussed in Washington, but the policy that has helped reduce power consumption in California could be a tough thing to mandate nationally. Some state regulators feel it encroaches on their turf.
"There is a lot of disparate decision making going on," he said, adding that the states need to make de-coupling profitable for their local utilities.
--Wind policies may change, or at least there will be debate around it. Now, we subsidize wind generated 24 hours a day. Unfortunately, wind typically blows at night when electricity demand is down and some of the best wind resources are located in remote, relatively lightly populated areas. Why not triple the subsidy for wind generated in peak hours and ease off the subsidies for wind generated at 3 a.m.?
The intermittent nature of wind is also changing how utilities run their control rooms.
--FERC loves the smart grid. Better transmission lines and technology for wholesale electricity could improve efficiency by 3% to 4%. That's a huge amount of electricity, considering the volumes. Demand response, meanwhile, "is a big and growing issue that we will be dealing with more at FERC."
--Expect to continue to see conflicts between individuals who want to regulate fossil fuels and those who don't.
"As long as we have been bipeds, we've been looking for the cheapest energy. If you can cut down on energy costs, the rest of your life is better," he said. "We're now trying to make energy more expensive so people use less. That is a game changer."
This divide doesn't just impact carbon debates. Real-time pricing will also be controversial because of the manner in which it will impact pricing, he predicted.