Energy Grid Waste
March 17, 2009 by Chris Hunter
Filed under Infrastructure
NREL has estimated that 62% of the power generated in the U.S. is lost, either via the transmission process or by poorly optimized appliances, lights and other devices.
More or less, only a bit more than a third of the energy we create is put to use in a productive way.
This is the cumulative effect of many small causes. Old light bulbs waste energy by giving off heat. If you’ve noticed, the compact fluorescent bulbs don’t get nearly as hot.
And it’s estimated that we lose about 7% of the power we produce just by transmitting it to its final point of use due to complicated effects like Joule heating, resistive losses, and corona discharge.
More comprehensible sources of energy loss are drafty windows or inefficient furnaces.
As we enter a period of great concern for energy, this waste will prove to be unacceptable whereas in the past, cheap coal and loose emission restrictions meant abundant guilt-free energy for all.
But as utilities are forced to clean up their act and coal grows evermore expensive, reducing energy grid waste will be one of the last, and cheapest, ways to delay the eventual widespread adoption of clean energy production assets.
This falls under the broad categories of smart grid and energy efficiency. It’s renewable energy’s sister market. And there’s a lot of money to be made here as well.
Profiting from Grid Waste
You know a business is going to be special when the big boys come running.
By now you’ve seen the smart grid ads hitting the airwaves from GE (NYSE: GE) and IBM (NYSE: IBM). And while their technological contribution to a sector that will ensure future energy security will be extremely beneficial, its contribution to their bottom line will be a small percentage.
Should you invest long-term in GE and IBM? Yes, and I’m kicking myself now for not picking up some GE when it fell below $8.00 or so. But their exposure to smart grid shouldn’t be the prime reason you invest in them.
But you should follow their lead.
Steve Fludder, VP of Ecomagination at GE, has said, “We can probably improve the efficiency of the grid by 5 percent.” While that may sound unimpressive, a 5% efficiency gain translates into 41,000 MW of capacity — enough to power over 27 million homes.
That’s why the big boys are entering this game. The sheer volume of projects and devices will ensure they can turn a profit.
But to harness the profitability of improving grid efficiency for your portfolio, you must find companies that get most of their income from these activities, and whose balance sheets will impacted to a larger degree when grid improvements really take off.
I like two companies here. One is American Superconductor (NASDAQ: AMSC).
They make superconductor technology that allows the transportation of electricity without significant energy loss.
This relates to the physics-related problems covered earlier like Joule heating and resistive losses. AMSC also has great exposure to the international wind industry.
It’s come back nicely over the past few weeks, so don’t chase it. Under $16.00 is a pretty good price.
To green energy and green profits,
Chris
Clean Energy Sector
There could be no better investment in America than to invest in America becoming energy independent! We need to utilize everything in out power to reduce our dependence on foreign oil including using our own natural resources. Create cheap clean energy, new badly needed green jobs and reduce our dependence on foreign oil.The high cost of fuel this past year seriously damaged our economy and society. The cost of fuel effects every facet of consumer goods from production to shipping costs. It costs the equivalent of 60 cents per gallon to charge and drive an electric car. If all gasoline cars, trucks, and SUV’s instead had plug-in electric drive trains the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota.We have so much available to us such as wind and solar. Let’s spend some of those bail out billions and get busy harnessing this energy. Create cheap clean energy, badly needed new jobs and reduce our dependence on foreign oil. What a win-win situation that would be for our nation at large!
Can it work? Could it scale up? The PS20 solar collector tower in Spain covers 800 hectares, almost 2,000 acres and produces 20 megawatts. The U.S. consumes over 800,000 MW. Solar collector towers would need to cover 20% of all farm land in the U.S. to satisfy the total U.S. demand. Urban roofs provide a ready home on the order of 5+ million acres that could be home to PV generation at the point of use. Let’s not blindly throw $’s after any clean energy, let’s get clean energy that maximizes the economics. A powerful corn lobby pushed incentives for wasteful corn based ethanol that’s a near CO2 equal to oil all factors considered. Can we please get it right this time around.