Al Gore and the Wedges

I came across an article by Kelpie Wilson, Truthout’s Environmental Editor on a New Zealand based web publication called Scoop that caught my eye. It was titled All Gore and the Wedges Game and was originally published on 24 March 2007.

Apparently there are some educators that are working on creating classroom games to teach students about the concept of atmospheric wedges that can help the world avoid reaching an atmospheric CO2 concentration of 450 parts per million. You may have heard of the concept where there are wedges that consist of such measures as renewable energy plus conservation, nuclear power, coal with carbon capture and storage, automobile efficiency standards and green buildings.

Like many people that do not really like to work in reality and large numbers, Kelpie Wilson likes some wedges and believes that others can be ignored. One of the favorites is the Gore idea of allowing everyone to set up their own generators and sell power to the grid. Here is the testimony that Gore provided to Congress about the idea:

“We ought to have a law that allows homeowners and small-business people to put up photovoltaic generators and small windmills and any other new sources of widely distributed generation that they can come up with and allow them to sell that electricity into the grid without any artificial caps, at a rate that is determined not by a monopsony – that’s the flip side of a monopoly. You can have the tyranny of a single seller; you can also have the tyranny of a single buyer, and if the utility sets the price then it’ll never get off the ground. But if it’s a tariff regulated according to what the market for electricity is … then, you might never need another central station generating plant. In the same way that the Internet took off and stimulated the information revolution, we could see a revolution across this country with small-scale generation of electricity everywhere. Let people sell it! Don’t reserve it for the single big seller.”

This idea looked very familiar to me; it sounds very much like a program that was tried on a rather large scale in California during the 1990s. Here is the letter that I wrote to Ms. Wilson reminding her of the results of that experiment:

Dear Kelpie Wilson:

I read your “Al Gore and the Wedges Game” and cannot help wondering how the proposed treatment of distributed energy generation is different from the experiment conducted in California during the “Qualifying Facilities” era of the 1990s.

At that time, small generating units could set up as QF’s and sell power back to the grid – I think that even homeowners could participate. The electric utility was required to buy the power at a price determined by the Public Utility Commission and the standard that they used was the “avoided cost”. This was a calculated cost based on the projected cost of power from a new power plant whose price was determined by inflating the cost of the last power plants that had been completed.

The prices set were quite high – California’s last large central station plant to be completed was the Diablo Canyon nuclear plant and it has struggled through a costly process that included rework and imposed delays which ran up its interest bill to about two times the cost of all of the rest of the components and labor combined.

The QFs received long term contracts at prices that were actually above the retail price of electricity, forcing the utility companies to pay prices that were automatically a loss (no company can afford to sell a product for more than it pays, at least not for very long.)

Anyway, even with a lot of effort and economic motivation, solar and wind energy never really produced much electricity – what CA ended up relying on was natural gas and out of state coal and nuclear plants. When 1/3 of the state’s gas supply was interrupted for several months by a serious pipeline explosion near Carlsbad, NM on August 19, 2000, the stage was set for a catastrophic rise in electricity costs and a near bankruptcy for the utilities. Certainly there was some blame to be placed on Enron and other electricity traders, but they would never have succeeded if CA was not so dependent on other sources of power.

The sun and wind simply could not carry even a minute portion of the load despite decades worth of conservation efforts.

Rod Adams