Energy Security and Independence

In this world of ours, you’d be hard-pressed to find a country that is entirely independent when it comes to resources, trade, labour, and even energy. In the case of countries that rely on others to supply them with natural gas, oil or electricity, they are often at the mercy of changes in energy prices and policies that can drastically affect their own. As such, many countries are pursuing avenues in which to decrease their dependence on foreign oil and gas imports through energy reduction, becoming self-sufficient in terms of energy production, and by diversifying their energy generation with more clean and renewable sources. This is something in which all countries must pursue, not just for the sake of economic and political stability, but also for the sake of the planet.

The most recent example of energy dependence backfiring horribly is Ukraine. Russia is the Ukraine’s biggest natural gas supplier by far and has supplied Ukraine with natural gas since the latter’s independence. As a result of the ongoing crisis in Crimea, Russia has threatened to increase Ukraine’s gas prices by 44%. Such an increase could potentially cost Ukraine an additional $2.5 billion (US), which is the main reason why Ukraine is now looking westward to France and Germany to supply its natural gas.

Ukraine imports most of its natural gas from Russia and now finds itself in a very heated political standoff.

According to the US Energy Information Administration, 40% of Ukraine’s energy comes from natural gas and of that natural gas, around 60% was imported from Russia. It’s no wonder then that Ukraine’s energy fate is so closely tied with Russia’s foreign policy. In order to counter this, last August, the Ukrainian government approved an updated energy strategy through to 2030 shifting from natural gas to more nuclear, coal (of which Ukraine has a lot), and more renewable sources. Unfortunately, Crimea was supposed to play a large role in securing Ukraine’s domestic energy production, and with the ongoing crisis, those plans are now in jeopardy.

Island nations are also particularly vulnerable to sudden changes in fuel prices. Many countries in the Caribbean import diesel for electricity so when the price of fuel increases, they have few alternatives but to increase the price of electricity. As such, electricity prices in many Caribbean islands are often more than $0.42/kWh (nearly triple the amount most Europeans and Americans pay). In Anguilla, they pay an astronomically high $0.63/kWh!

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Anguilla, blessed with beautiful beaches, and incredibly high electricity prices.

Such energy inflexibility is the main reason why the Caribbean region is now getting more than $1 billion in loans to fund renewable energy, particularly wind and solar. Spearheaded by billionaire philanthropist Richard Branson, these loans are to help reduce electricity bills amongst some of the more impoverished people in North America, and at the same time, help the region become more sustainable and less vulnerable to sudden shifts in fuel prices.

Photographer: Robert R Gigliotti

Wind farm at Vader Piet, Aruba. There is a lot of wind power potential in many Caribbean islands.

Some countries (such as Canada) are rather fortunate to have a plethora of natural resources in its own backyard. Other countries, not so much, and there will always be countries that need to rely on neighbours to provide what they cannot create themselves, but even so, that shouldn’t stop countries that have fewer options from exploring potential options.

It is absolutely paramount that countries around the world begin to shift from energy importers to energy producers. And so long as they are relying on non-renewable sources like oil and natural gas, their fate will be tied to fuel prices. The more we rely on finite resources to spur our economic growth, the more vulnerable our economic prosperity becomes. Along with a shift from importer to producer, we must also rely on clean and renewable sources like wind and solar. The sun and wind aren’t subject to market variability, only natural fluctuations, which are much easier to predict. If we start to depend more on dependable resources, energy independence becomes much easier.

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Smart Meters: A Smart Idea

Despite pockets of resistance in various parts throughout North America, utilities are continuing to deploy smart meters as part of a greater vision to build a smart grid. Ontario began installing smart meters en masse in 2007. BC Hydro has been installing smart meters with the goal of having all of its customers with one by the end of 2012. SaskPower has also started installing smart meters to customers in October of this year.

Smart meters have also been deployed in many jurisdictions in the United States as well. According to Greentech Media, one third of all US households have had smart meters installed. Larger states like California, Texas, and Florida will have installed smart meters in more than half of all households by 2015.

 Expected smart meter deployments by state

The rationale for this is quite simple; a smart grid is a sound investment for the future with significant added benefits such as more efficient energy use, renewable energy accommodation, and decreased chance of a massive power outage.

Since smart meters are able to timestamp a customer’s electricity consumption, it is possible to implement time-of-use pricing, which will compel people to think twice about their energy usage. Now customers will be able to shift more energy intensive activities to less expensive times like early in the morning or late at night where demand is considerably less than in the middle of the day. Or they can save money by decreasing energy usage during higher demand periods. This will ease the strain on the grid, allowing for a more consistent daily demand without major spikes in the middle of the day. It will also help customers choose wisely when it comes to energy use resulting in an overall decrease in demand.

Ontario Hydro Time of Use Rates

Ontario Hydro Time of Use Rates

The future of our grid is looking greener. A previous Energent blog post indicated that wind power is going to make up a significant portion of Ontario’s grid in the coming years. Other regions around the world continue to increase renewable energy production as well. As more renewable and intermittent energy is added to the grid, utilities will need to balance demand with generation even more carefully. But with a vast network of smart meters consistently sending utilities energy consumption data, this balancing act becomes much simpler. Armed with this data, generators can scale down energy production from more polluting sources allowing renewables to supply the grid instead, which will reduce pollution and carbon emissions.

Solar Wind Farm

Solar Wind Farm

As a result of less strain on the grid brought about by consistent communication between utilities and smart meters, power outages are less likely to occur. As the complex balancing act between generation, distribution and consumption is more simplified by a smart grid, the chances of power lines coming into contact with branches causing surges is less likely to occur. In the event of a power outage, utilities will know much quicker as the smart meters will stop sending data altogether, allowing them to respond quicker.

Toronto skyline during the 2003 blackout

Toronto skyline during the 2003 blackout

For utilities, the rationale is simple for smart meters; more information concerning the grid will improve service by preventing and responding quicker to power outages, and in the long run, help save energy through load shifting and decreased demand brought about by time-of-use pricing. The integration of renewable energy sources to the grid is an added bonus that can drastically reduce our carbon emissions. The fact that there is resistance to smart meters shouldn’t and won’t deter utilities from deploying them when the benefits are so obvious. The world is getting smarter; the grid needs to get smarter with it.

The Simplicity and Effectiveness of Energy Conservation

As any business owner or head of household will know, the simplest way to save money is to spend less on what you don’t need. In the same vein, the simplest way to save on energy expenditures is to use less. Now it may sound like a simple solution to our vast and complex list of energy problems, but then again, the simplest solutions are often the most effective.

In these hot summer months, power grids across North America will feel the strain of millions upon millions of people turning on their air conditioners while using all the other electronic devices modern lives and employment require. In order to meet demand, power generators need to increase their output significantly, which often means burning more coal and natural gas. Although building new power plants running on clean, renewable energy is good for the grid, good for the environment, and necessary in future years, such projects cost millions, possibly billions depending on size and scale, and may take several years to complete. Energy conservation, on the other hand, may prove to be the cheapest and cleanest energy resource as it requires little to no additional infrastructure, and it is readily available.

According to Jack Gibbons, head of the Ontario Clean Air Alliance, Ontario spends $36 on new generation for every $1 invested in conservation, despite the fact that conservation is much cheaper than building any other type of generation. Such imbalance has likely contributed to a review in Ontario’s energy policy with Minister of Energy, Bob Chiarelli, recently speaking out in favour of conservation in this past Tuesday’s Toronto Star.

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Grids struggle to meet demand during the hot summer months

Ontario isn’t the only jurisdiction looking to conservation to solve their energy issues. Over the past few years, British Columbia has been at the forefront of energy conservation in Canada. In 2007, BC Hydro identified a massive 22,000 GWh of electricity that can be accessed by 2026 simply through conservation. So if all savings are realized as predicted, in a little more than a decade, BC Hydro can “create” 50% of their current generation capacity simply by using what energy they already have more efficiently. Since 2008, BC has saved about 3,400 GWh/year. That’s enough to power more than 300,000 homes.

BCHydro

BC Hydro could potentially increase their demand capacity by 50% through conservation

California has also reaped the benefit of energy conservation. According to the Natural Resources Defense Council, since the 1970s, California’s energy conservation policies have negated the need for 30 power plants, and prevented the same amount of carbon emissions generated by some 5 millions cars annually. In total, these energy policies have saved California residents more than $65 billion dollars and helped lower their energy bills by 25% below the US average.

For business, a significant obstacle to energy conservation strategies is that any ensuing renovations are very expensive, time consuming, and may interfere with operations. However, some companies are only making the simplest of changes, barely affecting operations as a whole. Unilever, for example, has merely encouraged its employees to turn lights off that aren’t in use. This very simple request alone saved the company €99 million (approximately $135 million). Likewise, since 2007, the Fairmont Winnipeg has saved 882,000 kWh per year in electricity by merely replacing all 60-100-watt light bulbs with more energy efficient ones. This resulted in no interruptions to service, and has saved the hotel approximately $44,000 per year.

Energy Savings

The Fairmont Winnipeg saves $44,000 annually because of a change in lighting

Other low cost, high savings options for business include installing an energy management system to track and monitor energy consumption. One example where savings can be easily realized is through shifting high intensity energy activities to later at night or early in the morning (load shifting) to take advantage of cheaper energy prices where time-of-use pricing is in effect. Energy management systems that can identify these areas for savings can be deployed at a fraction of the cost of large scale renovation projects.

Over the long term, power grids across North America will have to upgrade their current generation capacity and accompanying infrastructure, which will likely take decades at the cost of billions. As well, businesses that want to make their operations more efficient will have to take more complicated steps than turning the lights off. At the same time, however, solutions based primarily on conserving energy can and should be taken beforehand because energy conservation requires no additional infrastructure, it can be done immediately, it is simple. Although simple may be easy, and simple may be cheap, simple is also effective.