Are Electric Utilities Obsolete?
Wayne A. English
With the advent of worldwide terrorism, oil independence is now a matter of national security. A side effect may be the end of electric utilities as we know them.
For the United States and other oil-dependent economies to migrate to hydrogen-fueled automobiles will require wide-scale hydrogen production and distribution capability. That is so obvious that it almost sounds silly, yet it is that very production and distribution capability that may have far-reaching effects on utilities and their customers.
Hydrogen technologies can power a cell phone, automobile, truck, railroad locomotive, house, commercial building, or factory. Further, unlike our current electrical system, hydrogen need not be used in real time. This means that hydrogen can be produced, accumulated, and stored for later use.
Hydrogen technologies will provide oil independence for our vehicles in the next twenty or
thirty years. The U.S. government is facilitating the transition to hydrogen through programs such
as the 21st Century Truck Partnership, the FreedomCAR (Cooperative Automotive Research), Fuel
Partnership, and others programs under the Department of Defense and the Department of Energy.
Many automakers are currently operating experimental fuel cell-powered cars. Also, existing
internal combustion engines can be fueled by hydrogen with an increase in efficiency of roughly
25% over gasoline and reduction in tailpipe emissions.
Hydrogen-electric technology and the era of self-powered machines are dawning. Soon
homes; business; factories; vehicles including heavy equipment, trains, busses, cars and perhaps
even aircraft will be hydrogen powered.
The money will be spent, that is not an issue. The question is whether we spend it on an antiquated nineteenth-century system or on twenty-first-century technologies of hydrogen. On an obsolete system or on a system that will our society into the 21st century and beyond.
Fuel cells may generate electricity at a cost competitive with utility power in regions with
high electric rates. In the Northeast fuel cells may be a cost-competitive option for on-site power
production. This will depend on the retail cost of hydrogen. But there, too, is danger, for to charge
too high a price for hydrogen will only drive corporations to produce their own.
New Thinking about New Energy
Consider a small office building of three floors, each floor 100kW of electric power for a total of 300kW. You would think that a single 300kW fuel cell is the way to go, or perhaps one 100kW fuel cell on each floor, but let's not do that.
Rather, let's install a 150kW fuel cell on each floor, for a total capacity of 450kW. This
provides a system in which any one of our three fuel cells can be out of service and yet the entire
energy needs of the building can still be met. Business and industry will be very interested in a
system that offers virtually uninterrupted power.
Commercial and industrial users will probably be the first to embrace hydrogen. Penetration of the residential market is difficult to predict because of differences in what people are willing to spend. Fuel cells will likely get their start in new home construction, just as wall-to-wall carpeting did: by rolling the cost into the purchase price of the home and amortizing it over the life of the mortgage. When this begins, electric utilities will be faced with the loss of residential customers.
In the near future utility competitors will not be other utilities, but new technology. Thus is the legacy of September 11, 2001. New world, new rules.