• Font Size:
  • Print

In press coverage of the alternative energy boom, new energy gets all the press. Solar panels, windmills, tidal generators, biofuels: They fill our minds with visions of plentiful and clean power. We dream of ethanol, and bio-diesel, and plug-in hybrids.

But one of the biggest and most untapped opportunities - both for the planet and investors - lies not in creating new energy, but in advancing energy efficiency. No, we're not talking about Jimmy-Carter-in-a-sweater-style energy efficiency; we're talking major technological advances with profit potentials that measure in the billions. The biggest opportunity of all may lie in improving the efficiency of the nation's power grid - the complex of wires, substations and transformers that take power from where it's made (at the power plant) to where it's used (at your home).

According to Bob Fesmire, the U.S. spokesperson for the power technology division of the ABB Group, there's a 6% - 8% differential between power generated and power sold in the U.S. That missing juice represents a 250-billion kilowatt-hour resource worth $20 billion per year if you could actually resell it, ripe for harvest and free from the environmental impact you'd get if you actually generated that additional power.

So forget, for the moment, the front-loaded glamour of new power-generating technologies from fuel cells to fusion. Turn instead to the freewheeling frontier of power distribution and transmission; territory that for the moment is being productively homesteaded by said ABB Group, a Swiss corporation (formed by the 1996 merger of the Swedish company Asea and the Swiss company Brown Boveri), and also, to some extent, by the German Siemens AG, a company that reaches more broadly across many other industries and technologies.

High-Voltage Direct Current

One area that's getting a lot of play is high-voltage direct current. Dusting off the old AP physics textbook, we know that the flow of electricity in a circuit is related to two things: voltage, amperage and resistance (Ohms(=)).To use the high-school-level analogy, the voltage is the water pressure - how motivated the electrons are to get moving. Amperage is the size of the pipe - bigger pipes mean more flow, more electrons getting where they need to go. A given number of electrons - a useful amount of power - can be pushed through a system at high voltage and low current (your pressure washer), or low voltage and high current (dumping out the kiddie pool onto the lawn). It's kind of like a teeter-totter. Joule's law tells us that the amount of loss in electrical transmission (through heat) is proportional to the square of the "current." In other words, if we cut the current (amps) in half, we will cut the loss in the system by 25%. So the lower the current, the more efficient the system. That's why the nozzle of the power washer heats up - resistance turns into heat. We use high-voltage (and low-current) transmission lines to transfer power long distances because they do so with lower currents, and therefore, less power loss.

Most of the electricity distributed around the world is distributed as alternating current, which means the voltage and current switch back and forth in direction every 1/50th of a second. AC has been the dominate form of electrical distribution for years, but it's not the only way.

Direct current - or DC power - is actually a stabler and more efficient way to transmit power over long distances than AC. The ABB Group pioneered the use of high-voltage DC transmission systems in 1954 with a submarine line connecting the island of Gotland to the Swedish mainland, and in the 1960s, during the heroic age of U.S. public works projects, with the 846-mile Pacific DC Intertie that connects Los Angeles to the hydropower resources of the Columbia River on the Washington-Oregon border.

The major challenge with DC current is that it has historically cost more to set up than competing AC counterparts. DC current must be turned into AC current before it can be used in factories and homes, as the local electrical grid is AC-only.

These DC-AC conversions historically required huge substations, which have their own inefficiencies, and cost a great deal of money and require a lot of land on which to build. As a result, despite the greater efficiency, HVDC systems have been practical only for transmitting "big juice" over long distances; you needed at least 100 megawatts and, by some estimates, a point-to-point link of 300 miles or more to justify the cost. It works well with, say, wind power generators located hundreds of miles from urban centers, or long-distance underwater power cables, but it remains a relatively niche application since it cannot penetrate deep into the electrical grid or anywhere near the last mile where power is needed.

However, since the late-1990s, technical improvements have allowed ABB to develop "HVDC Light," a system which can be used in transmission systems carrying much lower power - only tens of megawatts - through underwater or underground lines. Requiring substantially smaller rights of way, these can carry the efficiencies of high voltage further into areas where building density or other local concerns prevent conventional overhead power transmission and distribution.

In complement, ABB has developed new compact gas-insulated substations and switchgear - small conversion systems that can be located closer to urban centers. Distribution substations that previously might have required large, expensive city lots surrounded by barbed wire now can be accommodated within the space of a building basement. Of course, the closer we can get high voltage power to the end user, the more efficient we will be.

HDVC light installations are taking place in Long Island Sound, the Baltic and many other locations around the globe. ABB is not the only company pursuing these kinds of solutions, and HDVC light is not the only approach to improving the efficiency of the electrical grid. But it's an example of the kind of innovation that's taking place outside of the all the talk about solar cells, wind power and other exciting alternative energy technologies.

And while you're doing your reading, make sure it's by the light of a compact fluorescent bulb. Hey, just plain using less makes you money too.

Links:

The ABB Group

ABB, Cross Sound Cable - an energy bridge to Long Island

ABB, Gas-Insulated Distribution Substations

ABB, HVDC Light

ABB, Overview about FACTS

Bob Fesmire, Energy Efficiency in the Power Grid, Renewable Energy World Magazine

Google Earth, View HVDC converter stations from space

Inside Renewable Energy, podcast

Tom Konrad, ABB: Improving Transmission and Distribution Efficiency, Alt Energy Stocks

Power Engineering, HVDC Systems Gotland: the HVDC pioneer

Wikipedia, Pacific DC Intertie

Hard Assets Investor

From HAI:
Become a Contributor Submit an Article

This article has 10 comments:

  •  
    Jun 02 08:55 AM
    Who would think there there is so much science in the pressure washing equipment!? Resistance converting to heat? I never thought about that. It is totally amazing.
  •  
    Jun 02 09:16 AM
    Wow. Thank you. I could never get that VoltAmpsResistance-thi... straight in my mind. Plus I never knew the benefits of DC except that it could electrocute an elephant ala Tesla's demonstration, much to the chagrin of Edison who championed DC. Tesla's AC won-out on the grounds of safety, but I had never heard of DC's effiency. Thanks again.
  •  
    Jun 02 09:41 AM
    good article, a smarter grid and HVDC could definitely help.
  •  
    Jun 02 10:59 AM
    Very perceptive article. T&D is one of the last things people think about in terms of cleantech, but it could be a very important market. Especially given the need to move renewable electricity from non-populated locations to population centers.
  •  
    Jun 02 11:52 AM
    Limit new construction?

    www.prosefights.org/pn...
  •  
    Jun 02 03:56 PM
    Michael Lofrano:
    It is the other way round, Edison, DC use proponent, used high profile publicity including killing an elephant to mislead the public about lack of safety in using AC, which was advocated by Tesla.
  •  
    Jun 02 08:14 PM
    Nice article ... but for the best way to profit here, buy SOL (Renesola...) check IBD, 4th best company in the world to invest in... I am buying more long term on this temporary rare pullback today... next week it will easily go to $28 per share... read about it... any down grade by an analyst (today Morgan Stanley) is quickly met with analyst 6 upgrades in response, too many upgrades to mention... its next earnings announce will be huge, as was last quarter... it is growing by leaps and bounds... read about SOL... warmest regards...The Stockaccumulator
  •  
    Jun 02 08:59 PM
    Reminds me of the techie that wired his home with a parallel 5 volt DC circuit... He said that all the little wall-warts that you and I use and most appliances suck a lot of juice as they have to individually transform the 110 AC down to 5 volts DC. He had bypassed all the transformers in his stereo etc to allow direct feeds... Thx jegan
  •  
    Jun 03 01:18 AM
    A more efficient and cost effective renewable energy system is needed.
    A more efficient and cost effective renewable energy system is needed.
    To accelerate the implementation of renewable electric generation with added incentives and a FASTER PAYBACK - ROI. (A method of storing energy, would accelerate the use of renewable energy) A greater tax credit, accelerated depreciation, funding scientific research and pay as you save utility billing. (Reduce and or eliminates the tax on implementing energy efficiency, eliminate increase in Real estate Taxes for energy efficiency improvement).
    In California, you also have the impediment, that when there are an interruption of power supply by the Utility you the consumer cannot use your renewable energy system to provide power.
    In today's technology there is automatic switching equipment that would disconnect the consumer from the grid, which would permit renewable generation for the consumer even during power interruption. Energy storage technology must advance substantially. “Energy conservation through energy storage”.
    New competition for the world's limited oil and natural gas supplies is increasing global demand like never before. Reserves are dwindling. These and other factors are forcing energy prices to skyrocket here at home. It's affecting not just the fuel for our cars and homes, but it's driving up electricity costs, too. A new world is emerging. The energy decisions our nation makes today will have huge implications into the next century.
    A synchronous system with batteries allows the blending of a PV with grid power, but also offers the advantage of “islanding” in case of a power failure. A synchronous system automatically disconnects the utility power from the house and operates like an off-grid home during power failures. This system, however, is more costly and loses some of the efficiency advantages of a battery-less system.
    We’re surrounded by energy — sun, wind, water. The problem is harnessing it in an economical way.
    Jay Draiman, Northridge, CA
    May 29, 2008

    Jay Draiman Energy Development Specialist provides expertise in all sectors of the energy and utility industry.
    Over 20 years experience. Specializing in: Energy Audit, Telecom audit, Utility bills audit and review for refunds or better rates, Demand Management, Energy Efficiency review and implementation, Renewable Energy, Lighting Retrofit, Solar Energy, Wind Energy, Fuel-Cell, Thermal imaging, Rainwater harvesting, Energy conservation, Ice Storage, Water conservation methods, Energy and telecom audit and procurement
    Much is at stake when policy makers, regulators, and corporate executives face the challenges of evolving energy markets and efficiency.

    energysavers2.com
  •  
    Jun 06 01:41 PM
    Increasing voltage on an AC transmission system has the same effect as increasing the voltage on a DC link. The power loss in watts follows the same principles. However, long AC transmission lines, DC lines have this too, have an inductive component which increase VAR loss, VAR loss is only realised in DC systems with a change in current flow.

    Not only is the equipment for an HVDC system expensive and big it is also much more costly and difficult to maintain. AC transmission systems are widely used and therefore replacement parts are easily available, expertise is a phone call away, and downtime is limited.

    I agree, losses due to transmission put a damper on our electrical supply, however, one way to dramatically reduce loss due to transmission is to generate the power where it is needed, referred to as distributed generation.

    Having said all that, conservation is THE BEST ANSWER! The negawatt revolution.

    Written in 1989, this article - www.ccnr.org/amory.htm..., has just as much relevance today as it did then!

ETFs In Focus

  • Long Ideas

  • Short Ideas

  • Cramer's Picks