The energy sector is going through a seismic transformation; the tremors of change are coming from behind-the-scene research and projects.

- By Wilfred Smith

The average age of coal-fired generation units is 37 years old, but most plants continue working for 48 years. The natural gas steam turbines are pushed to their age limits also, with the average unit age being 45 years old. Fuel prices have fluctuated in unison with growing world demand and supply disruptions, and the government is pushing the energy industry with numerous regulations intended to move it towards producing cleaner energy. What a mess!

The average consumer has not been aware of the enormous shakeup going on, except in terms of their utility costs. However, the culmination of years of policy changes, recent economic challenges, new technologies, and fluctuating energy prices have created a climate of enhanced awareness. Businesses are not just responding, they have become innovative energy production leaders.

The end goal of the government is to reduce carbon emissions and dependence on fossil fuels. These goals cannot be met unless the energy industry adapts. Regulations do not produce energy. Energy companies produce energy. It is easy to get bogged down in whether the regulations make sense or have legal standing, but a lot of time is wasted in determining how, or if, the regulations apply. There is no easy way to convert from being a fossil fuel dependent country to one that relies on a mix of energy production sources. In the wake of these changes, the coal industry is going through a painful transition period, leading to loss of jobs and plant shutdowns. However, energy companies, including the coal industry, are not just sitting still. They are innovating because that is what Americans do. For example, many of the coal-fired units have already installed efficient emission controls that will be able to meet the EPA’s Mercury and Air Toxic Standards (MATS) which are effective 2015.

Vortex of Innovation

There is a vortex forming, created by innovative energy companies using their resources to develop technologies that produce alternative energy sources. DTE Energy in Michigan is a good example. The company directly invested $1 billion to develop wind projects, reducing, but not eliminating, fossil fuel dependence. Another billion dollars is being invested in Michigan third-party owned renewable energy facilities. The company’s SolarCurrents initiative is developing large solar arrays (photovoltaic systems) that are strategically be placed on properties where easement rights are obtained. The property owners earn income from the easement payments, while DTE Energy gets the energy. Another fascinating project is DTE Biomass Energy, which captures landfill gas and converts it to renewable energy, and which currently extracts 90 million cubic feet of gas per day.

Energy companies are good at describing their visions of the future of energy production and transmission, but have been modest about heralding their efforts. Entergy, which operates more than 40 plants using natural gas, nuclear, coal, oil and hydroelectric power, has been stabilizing carbon emissions since 2001 and has committed to reducing them by the year 2020 to a level 20 percent below the year 2000. Operating in Louisiana, Arkansas, Texas, and Mississippi, the company is managing this through technology improvements and improved operational performance. The generation fleet emits much less nitrogen, carbon dioxide, sulfur dioxide, and oxide than the average for all U.S. utilities. This was accomplished despite adding 6,000 megawatts of new energy resources over the last ten years. Entergy increased the use of renewable energy sources, including hydro and wind, and increased the amount of energy produced by natural gas-fired production units.

One of the most contentious energy discussions concerns hydraulic fracturing (fracking). The process of extracting natural gas and oil from shale is under a lot of scrutiny because the long-term consequences of changing underground landscapes are unknown. No matter what opinion is held as to its advantages or disadvantages, fracking has forced a widespread public discussion on energy generation. The controversy about fracking appears to come from those who have been a bit complacent about energy production. Some of that complacency comes from the sheer size of the U.S. and a belief that the country can handle anything coming its way, whether it is a shortage of oil or climate change. So agree or disagree with fracking, it goes down in the history books as an event forcing people to think about how energy companies produce the energy they use in their homes and businesses.

Energy from Thin Air

Stakeholders, and not just the government, are putting pressure on energy production companies to stay ahead of the innovation curve. It is important to recognize that the behemoth energy companies are the ones with the resources to develop alternative energy resources, and they are working (modestly behind the scenes) to do just that. PG& E has a video with the headline that reads “Electricity Out of Thin Air? PG&E Exploring New Type of Clean Energy” In the San Joaquin County, (Calif.), a rig is drilling a mile deep to determine if compressed air could be stored in depleted natural gas reservoirs. The air would be pumped underground when electricity demand is low and released through a gas turbine when the demand is high. Right now, the only utilities using this technology are in Alabama and Germany.

A lot is going on in thin air. Mike Medeiros, manager of PG&Es renewable energy development stated, “We have a lot of wind and wind can blow quite a bit at night in California. And obviously loads aren’t very high at nighttime. So what we would do is use that excess wind energy to run these compressors, store the air underground and then when the peak loads hit — afternoon, late evening when people start getting home — we would take that air that was generated from the excess wind energy and generate electricity for when it matches peak loads we have at that point in time.”

As environmentally aware people demand the energy companies “do something,” the reality is they are already doing a lot more than most people recognize. It is not just government pressures forcing the changes through regulation. It is the market at work. Energy companies want a sustainable future, and the future is in renewable energy sources. Just remember there is a lot going on in the background that has not made it to the headlines yet. Here is the message: Keep reading because change is coming.

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