Our own Thomas Lee led the latest installment in Wharton Energy’s Energy 101: Renewables vs. The Grid. The future of renewable energy is limited not so much by generation capacity, but more so by complicated aspects like transmission, storage, and dispatchability. As Thomas pointed out, there has actually been a rapid expansion of renewable capacity, driven by fallen costs, generous policies, and advances in financing. In some political spheres there are exceptionally ambitious targets for renewable production: Austria, Denmark, and Nicaragua are all international examples while the state of Hawaii and the Sanders campaign’s national platform are domestic ones. While this may seem rosy for the more environmentally conscious, such boons are only problems to come for the cynically minded. The argument is that the grid as it currently exists may not be ready for the new cycles and strains presented by renewable sources of electricity. While the incident was not related to renewables, the 2003 Northeast Blackout, which impacted 45 million Americans in 8 states, as well as 10 million in Ontario, was presented as an example of how exceptionally the grid can fail when subjected to excess stress. In response, Thomas proposed that there must be a diverse portfolio of energy sources to meet total demand, broken down into baseload, dispatchable, and renewable. The final, parting lesson was that additional renewable capacity does not necessarily guarantee a decrease in reliability or a specific change in price, as was proven by Germany’s Energiewende (Energy Transition), which has shifted national electricity generation towards renewables and has seen a 38% increase in grid reliability, a decrease in wholesale electricity prices, and an increase in price at the retail level. Thanks to all those who joined us and to Thomas for an incredible presentation. Be sure to join us for our final Energy 101 on Tuesday, April 12: Energy Storage and Fuel Cells.
On March 16, the Wharton Undergraduate Energy Group had the privilege of hosting Vicky Bailey, who shared tales and nuggets of wisdom from her incredible career in both the private and public sectors of energy. Born and raised in Indianapolis, Indiana, and the holder of a bachelor’s degree from the Krannert School of Management at Purdue University, Ms. Bailey began her career working out-of-state for a glass manufacturer. Upon returning to Indiana, she became aware of what was the Public Service Commission (and is now called the Indiana Utility Regulatory Commission); she would serve as commissioner from 1986-1993 after being appointed by Governor Bob Ore. in 1993 President Bill Clinton chose her to be Commissioner of the Federal Regulatory Comission, a position which she held until 2000. Ms. Bailey described Order No. 888, 889 as the landmark decisions in her career as FERC Commissioner, which were effectively watersheds for the opening up of electricity markets. This was accomplished by the unbundling of transmission lines and removing barriers to entry. Before joining the Bush administration, she spent time in corporate America, joining Cinergy Corp., which is now Duke Energy, and PSI Energy, Inc.. Under President Bush, Ms. Bailey was the first person ever appointed to be Assistant Secretary of the Department of Energy for both Policy and International Affairs. During that tenure, she had to respond to 9/11, which reinforced to her how interconnected/dependent the world is as well as the importance of energy and data security. Dealings with Brazil, Russia, India, and China cemented her belief in the effect of their energy demand on worldwide production, and indirectly general economic stimulation. Since her time spent in the federal government, she has held many positions including her membership on the Blue Ribbon Commission on America’s Nuclear Future, her seat on the boards of Cheniere Energy and the Batelle Memorial Institute (which oversees the National Laboratories), as well as her appointment to the Presidential Commission for the National Museum of African American History and Culture. Given her lifetime of experience in energy, from both the public and private perspectives, I would recommend paying attention to these gems she left us with:
- It is important to remember that in much of the world access to energy is not guaranteed. This has educational, technological, economic, and health impacts.
- She believes in a diverse energy portfolio.
- In her career and in many others, critical thinking and constant learning are key.
- Ethics can’t be taught or bought, but they are important to know. It is also important to be authentic and true to yourself; it’s easy to get lost as to why decisions are being made in political and business environments.
- Recommended reading: The Prize by Dan Yergin; Energy Primer, a staff document from FERC, World Energy Outlook from the IEA, and Lights Out by Ted Koppel
- Relationships are important; every year, around Christmas, the Bailey FERC team goes to lunch.
- “We have to be good stewards of the environment.”
- “Public health and safety are key issues, they’re not going to go away.”
The Wharton Undergraduate Energy Group hosted another edition of its popular Energy 101 series on February 22, this time focusing on Power Markets. The main attraction was in fact not the catered Wishbone, but rather Professor Andrew Huemmler from the School of Engineering, a WUEG staple known for courses like “Electricity Systems and Policy” and “Energy Systems and Policy.” In addition to his academic background, he brings over 20 years of experience in the utility industry with PECO. On this night, Professor Huemmler chose to talk about trends in oil, natural gas, and renewables, and how they will affect electricity prices, as well as how public policy factors in and what is to come. For those keeping tabs, these are the professor’s predictions: oil prices will be flat in the foreseeable future, as will natural gas, while residential solar is “virtually unstoppable” and “awesome” thanks to improving technology and corporate efficiency, as well as a bevy of subsidies and beneficial government policies. He demonstrated the potential conflict between solar and nuclear plants, as well as the reason why natural gas plants will be the greatest portion of new capacity. He also showed the audience several graphs specific to the power industry, the dispatch curve and the duck curve, which show electricity generation and consumption, respectively. In the end, Professor Huemmler’s talk was an engaging, informative, and successful event and in addition to the hard hat we gave him as a token of our gratitude, we would like to thank him here for taking the time to speak with us. We at WUEG would also like to thank everyone who came out for the event and encourage them to spread the word and stay on the lookout for more events to come.