Posted by: Jay | January 4, 2010

Some energy thoughts…

Thought you would like a couple interesting tidbits from the world of Green Tech (from the research for our textbook). In doing my research I found that the US electrical grid is (not surprisingly) hanging by a thread. The estimated lifespan of substations on our grid is 40 years. The AVERAGE age of substations on our grid is 45 years. A government study was commissioned during the Bush years to study the state of the grid determined that the only reason we did not suffer from major and frequent large scale power outages is that we had been LUCKY. Of course, nothing has been done to correct the problem. The main problem is that nobody actually has responsibility for maintaining the grid (welcome to deregulation). As a result – nobody actually maintains it.

It would be similar to a national transportation system where the owner of the land controls and maintains their section of the road that happens to pass over their patch of ground. Not a very coordinated approach.

On the brighter side – the recent cancellation of the coal-powered plant in Meigs county may signal a significant shift in our energy future. I know the environmental activists would like to claim credit (and their efforts are certainly appreciated) but I believe it has more to do with simple economics. Projections are that within 60 years we will run out of coal (and the plant would need to operate 40 years or more). Each year that coal will cost more to obtain. Today, building a wind farm to generate electricity (on a utility scale) actually costs the same as building a coal power plant. But each year the cost of this power source is projected to decrease (and of course the wind is free). So maybe we have hit a watershed where renewable energy is not only competitive – but cheaper than fossil fuels.

And just wait as gasoline skyrockets. Here is my New Year projection (based again on some pretty intensive research). The average cost of gasoline in the US will top $6 a gallon by the end of the year (2010).

By 2013 we will have paid $16 a gallon at some point (of course it will then drop to under $10 a gallon as the spike pushes the economy back into recession). Based on historic data and supply and demand projections – I suspect these projections will prove to be conservative. How will that affect our society?

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