Three Solutions for the Supply Side of the Energy Efficiency Equation

While serious discussion has taken place at the U.N. climate change conference in Copenhagen, the lack of any concrete policy so far shouldn’t stop us from making real progress when it comes to providing cleaner, smarter, more efficient energy options.

Throughout the Copenhagen talks, and in the media coverage surrounding it, demand-side opportunities have received much attention — improving the energy efficiency of buildings and seeking alternative forms of transportation, for example.

While there are undeniable tangible gains to be made by focusing on the habits and choices of energy users, policymakers can end up wading through competing, costly, complex issues to develop a coherent strategy.

Meanwhile, power plant managers face many supply-side opportunities that can be readily implemented today. Because the number of power providers is considerably smaller than the number of consumers, solutions can be found, agreed and deployed more quickly than initiatives on the demand side, and with the added benefit, perhaps, of more immediate impact.

Here’s a look at three supply-side solutions that could be used by operations now:

1. Upgrade Gas-Fired Combined-Cycle Power Plants

Simply making what we already have today more efficient seems a smart place to start. The benefits of upgrading existing gas-fired, combined-cycle power plants could be considerable. They are a significant source of power in Asia, Europe, Latin America, Middle East and North America along with a smaller, but still meaningful, use in Africa and China.

Cost-effective solutions to retrofit many of these turbines exists today but governments and regulators, backed by consumer demand, need to create economic as well as environmental urgency to deploy this state of the art technology.

Even a small percentage change in efficiency gained through retrofitting these gas-fired plants can create large results. For example, according to the Electric Power Research Institute’s January 2009 report, a 1-percentage point efficiency improvement in the GE fleet of 1000 F-Class gas-fired turbines could reduce carbon dioxide emissions by 4.4 million tons a year.

To achieve a similar impact on the demand-side, nearly 5 million households — that’s about 4 percent of U.S. homes, equivalent to the populations of Dallas, San Francisco and Baltimore combined — would need to be persuaded to adopt all of the most efficient, commercially available green technologies, regardless of cost. In transportation terms — that equals 1 million drivers giving up their cars.

2. Create More Efficient Electrical Transmission, Distribution

The electric grid offers additional opportunities for supply-side efficiency gains. Substantial quantities of electricity are lost in the transmission and distribution of power from generation sources to end-users.

That wasted energy at every point during every second of every day costs money. The cost of “saving” electricity through implementing efficiency improvements is around 0.03 cents per kWh while the cost of generating electricity that is lost runs at 2.5 to 6 cents per kWh.

Smart grid applications to stop this flow of lost energy and wasted money are a solution we can deploy now.

Likewise, technologies that anticipate and monitor actual energy demand can help power generators minimize overcapacity, meaning more of the power produced actually gets to where it is used – homes and businesses.

3. Capture Waste Heat

Power generation naturally creates heat. When you plug something in, it gets warm.

By more effectively using the heat generated in producing electricity, plants can achieve overall efficiencies of 70 percent or more by combined heat and power (CHP). This involves capturing the heat byproduct and using it in an industrial application.

For example, a carbonated-drink bottling facility in Romania uses a GE CHP plant to supply electricity to the plant as well as hot and chilled water throughout its facility. CHP plants can be fueled by natural gas or with renewable fuels such as biogas from local farms. This reduces the total emissions of the facility, and through advanced technologies reduces costs.

Post-Copenhagen?

Even if world leaders don’t create global climate policy, many agencies — including the U.S. EPA — have declared preliminary moves that could set the stage for the regulation of emissions blamed for climate change.

Action by energy producers and industry now could enable them to reduce emissions and unlock hidden efficiency and boost their bottom line.

But beyond the substantial financial savings, investments made now will also demonstrate the responsibility of producers and energy technology companies as global citizens.

The energy sector can provide sound solutions to help solve serious global problems, be a constructive voice in the debate and help deliver meaningful improvements on emissions and climate change goals.

In a post-Copenhagen world, these proactive actions by power providers and industrial consumers can enhance valuable corporate reputation and build capital in the bank of goodwill.

Dan Heintzelman is president and CEO of GE Energy Services based in Atlanta, Georgia. GE Energy Services works with utilities and power consumers to find cleaner, smarter and more efficient energy solutions.

Click here for full coverage of COP15 from the GreenBiz.com and ClimateBiz.com teams, including posts from Copenhagen by Executive Editor Joel Makower and Senior Contributor Marc Gunther, and from dozens of guest contributors from the business world.

Image of the GE Jenbacher Gas Engine Division in Jenbach, Austria, courtesy of GE.