When Bill McKibben reports a sensation of hope in regard to climate change, take notice.
This “fairly rare emotion” arose, he reports in the New Yorker for June 29, as he stood in the kitchen of a small house in Vermont – home to a special-ed teacher, a school-bus driver, their two children – and perused their shrunken utility bills.
Thanks to insulation upgrades, LED lighting, a small solar panel on the garage roof, and replacement of a water heater and an oil-burning furnace with heat pumps, the Borkowskis of Rutland had seen their energy consumption plummet.
No more oil deliveries, of course, and a 16 percent drop in electric usage, even with the new load of the heat pumps. Better yet, from the planetary point of view: an 88 percent reduction in household carbon footprint.
And even though they were now making monthly payments for these clean-and-green upgrades to their electric utility, which had organized and financed the project, their monthly bills were smaller, too.
By how much, I guess, is nobody’s business; the moral of the story, says McKibben, is that “innovative, energy-saving and energy-producing technology is now cheap enough for everyday use.”
The Borkowskis’ house is not an Aspen earth shelter made of adobe and old tires, built by a former software executive who converted to planetary consciousness at Burning Man. It’s an utterly plain house, with Frozen bedspreads and One Direction posters, inhabited by a working-class family of four, two rabbits, and a parakeet named Oliver.
It sits in a less than picturesque neighborhood, in a town made famous in recent years for its heroin problem. Its significance lies in its ordinariness.
The federal Energy Secretary, Ernest Moniz, has visited, along with the entire Vermont congressional delegation.
If you can make a house like this affordably green, you should be able to do it anywhere.
From oracle to advocate
There isn’t a glib line in McKibben’s “Power to the People: Why the rise of green energy makes utility companies nervous.”
This is the thoughtful journalist who gave us one of the most potent early books on global warming, “The End of Nature,” in 1989 and later semi-retired from writing to found the advocacy network 350.org.
Named for the carbon dioxide concentration in parts per million considered the uppermost limit for averting catastrophe, the organization’s handle has become instead a ubiquitous reminder of how badly we’re doing as 350 ppm continues retreating in our rear-view mirrors.
McKibben’s subject in this article is the impact of technologies and falling prices that, he argues, can have the same disruptive impact on large electric utilities that the cellphone has had on companies that send voices via twisted pairs of copper wire.
Here’s why it’s happening, he says, and at ever-increasing velocity:
- Rooftop photovoltaic panels and air-source heat pumps have become so pedestrian that do-it-yourselfers can pick one up at Lowe’s.
- The solar panel, “arguably the era’s most disruptive technology,” has fallen in price by 75 percent in the last six years and now produces electricity at a cost nearly comparable to electricity purchased from a coal- or gas-fired power plant; because the driver is technology, not fuels of finite quantity, these prices should keep falling.
- An expanding segment of the American public is persuaded by example that home-generated renewable energy makes sense from every practical angle: price, reliability and renewability.
- Thus strong and resilient political alliances that, in places, are uniting treehuggers with Tea Partiers in advocating for greater off-grid independence.
But here’s why it’s not happening faster:
- Plenty of homeowners aren’t do-it-yourselfers, nor do they feel competent to sort out their own alternative energy systems and backup utility contracts; they need someone like their power company to organize the project.
- With certain progressive exceptions – like Green Mountain Power, which organized the Borkowskis’ makeover – utilities continue to encourage doubt and delay about distributed power production, and to oppose and undermine public policies that support alternative energy, because these trends lead to a future in which they cannot find a role for themselves.
The utility ‘death spiral’
Although utilities do sell electricity, priced by the unit, what really determines how much money they make – and how much they can pay investors in dividends – is the infrastructure they build.
To a degree this setup is fuel-neutral. A utility like Xcel Energy earns a state-regulated rate of return on a wind farm just as it does on a fossil-fired generating plant or a substation.
But in our emerging era of small-scale producers who are also consumers, the utility increasingly is buying juice from your rooftop panel when it’s generating a surplus and selling it into your basement service panel when you’re in deficit.
Of course, utilities can save money independent producers save them the trouble of adding new generating capacity. But as the overall demand curve for electricity continues to fall, and non-utility power generation continues to rise, this is a shrinking and probably temporary advantage to be seized.
Which is why utilities are staring at a future characterized by, in the words of the Edison Electric Institute, a “death spiral” in which power sales and revenues keep falling, while the costs of maintaining the grid hold steady – and must be distributed across a shrinking customer base, with each remaining ratepayer watching his share go up. (See correction at end.)
Though McKibben doesn’t discuss it, really, there of course are other ways for utilities to stay in business, albeit a different business.
One model often discussed in progressive-energy circles is the conversion of Germany’s second-largest utility, RWE, from generator/distributor to a kind of coordinating, brokerage role among independent producers and consumers who, after all, still need some kind of grid for reliability reasons.
This notion doesn’t get much discussion in McKibben’s piece, as it happens.
Instead, he paints a rosy picture of Green Mountain Power’s willingness to keep reinventing itself in progressive directions, while still managing to hit the revenue numbers demanded by its owners.
And he talks at some length about the reactionary fight being mounted in Arizona, especially, where utilities have won the right to charge homeowners a steep fee for installing solar panels, and have helped finance campaigns of sympathetic candidates running for the public utilities commission.
But in arguing that utilities simply need to get out of the way of all of this change, he doesn’t address what seems to me to be the scariest prospect: that they could do so in a precipitous way, before successors are in place to manage the grid.
The cellphone reconsidered
I must say, too, that I stumbled a bit on McKibben’s use of cellular telephony as a disruptive technology in parallel to what’s happening now with electric generation, because I actually think it’s hard to argue that cellphone service is superior in quality, reliability or price to what it replaced.
Imagine for a moment that you’ve spent all your life talking on an awkward, anti-ergonomic gizmo that features crappy voice fidelilty, poor battery life, constant call cut-offs and monthly charges that rank somewhere between your gas bill and car lease.
Now imagine that somebody comes along with a new kind of telephone-by-wire offering essentially perfect fidelity and physical comfort at a low monthly rate, with service available in all homes and business establishments – on street corners, even, in a coin-operated device. (Also, the added privacy benefit of putting yourself beyond the reach of callers from time to time without needing to make up some kind of excuse.)
Would you switch? I believe I would.
By the same token, I am not sold by the utilities’ argument that their irreplaceable virtue is reliable flexibility – you flip the switch, your light comes on, we take care of all the rest.
I live in a house that has no furnace, and can be heated with considerable effectiveness by burning wood in a fairly high-efficiency fireplace enclosed in a great mass of mortar, but also relies heavily on “backup” electric baseboard heaters.
When we bought the house, I thought: How wonderfully ancient and modern! A house equipped with both the oldest home-heating technology and also the one that will bring us the cleanest, most renewable power of the future.
With a money-saving interruptible contract to boot! Who cares if the heat or cooling kicks off briefly now and then, as at my conventionally climate-controlled house in Minneapolis?
In practice, what we have here is a combination of frightfully high heating bills when the weather turns really cold, an underpowered air-conditioning unit that barely keeps the place tolerable when the weather turns really hot … and a provider that cuts off the power whenever the system load starts to spike, for periods that can be uncomfortably long.
You know, I’ve got to go to Lowe’s tomorrow for boat hardware. Maybe I’ll look at an air-source heat pump, too.
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(Correction: After this post went up I heard from Jeff Ostermayer, media relations director at the Edison Electric Institute, who said that EEI disclaims credit for coining “death spiral” to describe the threats utilities face from distributed generation; others applied the memorable term to the findings of EEI’s report on the subject. It’s a misattribution many others have made, including Investing Daily and The Wall Street Journal, but as I look back over McKibben’s text I see he avoided the error, so in this instance it’s all my fault.)