According to the European Network of Transmission System Operators for Electricity (ENTSO-E), the body responsible for managing cross-border energy exchanges in Europe, the 2011-2012 winter was very mild.  Temperatures were warmer than average, and snowfall was lower than average, keeping energy demand for heating far below normal. The ultimate effect was to reduce total electricity exchanged between the European Union (EU) countries, as well as the energy settlement prices.

The main exception was a serious cold front and weather system which hit in early February of 2012, and sent a significant shock through the electric grid.  Record snowfalls and low temperatures across most of Europe, as well as northern Africa, caused a significant increase in energy demand. Electricity import prices spiked above the ENTSO-E average of approximately €70 per megawatt-hour (MWh), in some cases to more than €1000/MWh (about $1300/MWh). With an unusually cold winter predicted for 2012-2013, the European grid may be in for more volatility this year.

The European grid is becoming increasingly interconnected, which should be a boon for managing extreme weather events. Further, the flexibility of the grid increases as intermittent renewable generation comes online.  While a more robust transmission grid can deliver electricity where it is most needed, it does not address the total generation/load ratio.  Much ado has been made about potentially insufficient generation capabilities in the United Kingdom in the near future.  However, with gas and coal prices forecast to increase, simply increasing traditional generation capacities may not be enough, or may prove to be economically unfeasible.  Furthermore, tightening EU-wide environmental regulations will continue to reduce the viability of coal and petroleum plants for electricity generation.

ENTSO-E, meanwhile, suggests that developing enhanced demand response (DR) services could be the most economically efficient way to address large surges in demand.  Such programs encourage electricity consumers to reduce electricity usages during times of high demand.  However, there are few DR systems currently in place; Germany’s four transmission system operators have no specific DR programs, while the United Kingdom and the Netherlands have only limited DR capabilities.

The other relatively cheap option to address potential generation shortcomings is virtual power plants (VPPs).  Essentially, VPPs can aggregate unused generation capacity in certain parts of the grid and deliver it to the parts with excess load.  VPPs are gaining traction in Europe through companies like Spirae, which set up a 76MW VPP in Denmark in 2010.  The system is operated by Energinet.dk and consists mostly of combined heat and power plants.  Since wind power represents a large portion of Denmark’s power base, the Spirae VPP has helped to firm that generation.

Employing similar networks to address energy shortfalls on other parts of the larger European grid is a plausible extension of this technology.  While the dearth of governmental standards may inhibit VPPs from sending power directly to other countries to meet demand, individual countries may be able to maximize their electricity production and capitalize on increased power exports through VPP adoption within their own borders.  If the coming winter turns out to be a hard one, these technologies could prove critical.

As Hurricane Sandy reached the height of its fury on Monday night, October 29, the Oyster creek nuclear plant in southern New Jersey went on “alert” – the third-highest of four levels of emergency action for nuclear generating stations in the United States.

The oldest operating nuclear plant in the country, Oyster Creek is about 40 miles north of Atlantic City, just a mile from Barnegat Bay, an inlet off the Atlantic Ocean.  It has been plagued for years by environmental protests and lawsuits, mostly relating to the hot water it discharges into the bay.  It’s the same design as the ill-fated reactors at Fukushima-Daiichi in Japan that were inundated in the March 2011 earthquake and tsunami.  Oyster Creek is scheduled to be shut down in 2019.

In anticipation of the storm, emergency crews from the Nuclear Regulatory Commission were dispatched to Oyster Creek, along with eight other nuclear plants on the Eastern Seaboard.  Officials with the federal government and with Exelon, the nation’s largest producer of nuclear power and operator of Oyster Creek, were less concerned about damage to the reactor itself than about keeping the spent fuel rods, stored in a large pool onsite, from overheating.  Intake structures and pumps take water from the creek and pump it through the plant to cool off both the reactor core and the spent fuel.  While there is backup power for the reactor cooling system, there’s none for the spent-fuel pool.

“Exelon … was concerned that if the water rose over 7 feet it could submerge the service water pump motor that is used to cool the water in the spent fuel pool,” reported Reuters.  In fact, the flood peaked at nearly 7-and-a-half feet, above the threshold, but the pump motors continued operating.

Vulnerable systems like this are in place at nuclear plants across the country, where fuel rods are often stored in large pools that must be supplied with a constant source of fresh water.  Without that supply, the pool could boil in a day thanks to the residual heat of the radioactive fuel rods.  That almost happened at Fukushima-Daiichi, and the spent-fuel pool at that plant remains at risk today.  Nuclear industry spokespersons were full of assurances in the last few days that such a thing could never happen in this country.  An Exelon spokesman said the company’s nuclear facilities have “multiple and redundant” cooling systems.  U.S. nuclear power is “a whole different ballgame” than the Japanese industry, maintained Tom Kauffman of the Nuclear Energy Institute.

It could in fact happen here, and judging from the high levels of water at Oyster Creek it nearly did.  A disaster of this magnitude highlights the central flaw of conventional nuclear reactors, which are largely based on technology nearly a half-century old (Oyster Creek went critical in December 1969).  As I explain in SuperFuel: Thorium, the Green Energy Source for the Future, nuclear plants are controlled by elaborate engineering systems, with backup diesel generators and supposedly fail-proof systems, to keep the reactor and the spent fuel pools cool in emergencies.  The nature of Sandy-caliber disasters, though, is that such systems often fail.  Our nuclear fleet is one major flood away from a full-on disaster, and major floods are getting more common yearly.  Meanwhile, inherently safe reactor technology, like the liquid-fuel thorium reactor, cannot melt down or overheat due to the design and the physics of the machine.

We’ve been hearing reassurances like the ones this week from the nuclear power industry for decades, but the machines themselves just keep getting older.

The Chicago Department of Transportation has spent 2 years and $16 million to transform a 1.5 mile stretch of road near the city’s Pilsen neighborhood to demonstrate how technologies (nearly all sourced from within a 500-mile radius of the city) and progressive planning can transform an urban environment.  The third most populous city in the United States, with sweltering summers and brutal winters, Chicago makes a good testing ground.

The approach taken in the Pilsen neighborhood, also known as the Cermak/Blue Island Sustainable Street Scape, mixes technology, planning, and integrating biodiversity to upgrade the thoroughfare.  Some of the technology integrated into the project seems like the stuff of the future, like photocatalytic cement that actually cleans the air as vehicles drive over the pavement.  Other technologies, such as solid-state street lighting, are more accessible.  In other cases, the city decided on more practical street designs that emphasized pedestrian safety and encouraged bikers to use the road.  The city also introduced dozens of native plant species to the street.

The Pilsen project is not the only project Chicago has undertaken.  In an effort to reverse the effect of heat sinks in the city, Chicago has undertaken several projects to make the city more livable by renovating public spaces as a part of the U.S. EPA’s Heat Island Reduction Program.   There are several different projects that fall into this category.  One is the city’s Green Alley Program.  According to the city, Chicago is home to 1,900 miles of public alleyways, more than any other city in the world, and these represent 3,500 acres of impermeable surfaces.  Imagine five Midway airports, shuttling runoff into a city’s overtaxed water and sewage system.  About 20% of these alleyways need repairs, but nearly all of them are contributing to the city’s stormwater management problem.  The program used permeable pavements, recycled materials, reflective pavements, and other improvements to improve the alleyways’ resilience in inclement weather.

The benefits don’t necessarily stop at the end of the road, so to speak.  When cities invest in public spaces, they are improving an open access resource.  Cleaner air will affect surrounding neighborhoods.  Permeable pavements will help keep dirty stormwater away from downstream fisheries and will alleviate pressure on the city’s water system.  Less light pollution (and clearer lighting in the streets and alleyways) will improve public safety.  Creating a habitat for biodiversity will impact air quality and ecosystem services like pollination.

Even more important for the market, the Cermak/Blue Island Sustainable Street Scape and Green Alleys program should give other cities ideas for which technologies and solutions they could consider for their own jurisdictions.

Automakers Tesla Motors and CODA Automotive both operate company-owned showrooms, which are not being called “dealerships,” and which offer the ability to see, touch and feel vehicles, as well as order the vehicles.  Tesla vehicles are delivered to consumers’ homes.  Telsa claims this means these are not technically dealers, while CODA does have dealers in the traditional sense.  Similar to what we’ve seen before, traditional auto dealers are not buying Tesla’s distinction and legal battles are sure to follow.

This is a bit of déjà vu from the late 1990s, when car dealers felt threatened by companies trying to sell cars directly online.  This episode resulted in a strong response from auto dealers and legislated monopolies for dealers, under which particular dealers have exclusive rights to sell particular manufacturers’ vehicles in certain regions or cities.  This regulatory environment still exists today, including in Telsa’s home state of California.

Going back even further, to the early years of the automobile, vehicle manufacturers sold off their company owned dealers to avoid anti-trust suits from the government.  This has been the basis for complaints from auto dealers regarding any new perceived threat, whether Internet-based or manufacturer-based.  Let’s be clear on one thing: the current auto dealer business model is not going anywhere soon.  Auto dealers provide significant employment and political support in the United States, so it’s a near impossibility that the model will be demolished by a government or court ruling.  However, a consumer shift seems likely to have a bigger impact on the dealership model.  Tesla claims that it is not challenging the current dealer franchise laws so much as capitalizing on a unique marketing opportunity.  Whether that distinction matters seems likely to be answered by state courts, rather than public opinion.

A New Retail World

Dealers do provide key important services within the new vehicle purchase process.  They’re responsible for final inspections and detailing of vehicles for delivery and customer education and service during and immediately after sale.  As a manufacturer, Tesla is taking on a much bigger role and is likely to see strong support from consumers.  After all, what consumer wouldn’t want home delivery of vehicles, assuming inspections, education, and customer service are delivered with the car?  Whether Tesla can truly deliver these services with a vehicle will prove whether the Tesla business model has long-term merit.

Still, I wouldn’t be surprised if some states (particularly Texas) force changes to Tesla’s current store model.  At the same time, Tesla may be paving the way for a bold new world in automotive retailing.

Dealers are fighting what seems to be more of a consumer shift than simply a manufacturer skirting franchise laws.  The early adopters of EVs are young, wealthy, highly educated, tech savvy, and disinclined to put up with the haggling of the traditional auto-buying experience.  They want a more exclusive and customized experience than most dealers are delivering.  Dealers will have to recognize this (some already do), and I anticipate in another 15 to 20 years the dealer experience may shift toward something more similar to Costco’s model.  Costco works with a marketing firm and sells a manufacturers’ vehicle for a marketing fee or commission per vehicle sold, and the marketing firm then works with a dealer for ordering and delivery of the vehicle.  I don’t expect this shift will be smooth, but if the prognosticated long-term shift away from vehicle ownership holds true, dealers and individual state dealer laws are in for a shake-up whether they come along quietly or kicking and screaming.