Generac Grid Services Blog

A few days ago, I listened to a group of environmentalists on the evening news protesting a plan to build a new bridge that would solve traffic congestion and make it easier for people get in and out of a local large city. The protestors wanted the money spent instead on public transit, claiming that this options had not even been examined, and arguing that their solution would solve the transportation problem without requiring construction of new infrastructure.

I looked more closely at both alternatives. The government and the consultants retained to propose solutions to the problem had advanced several standard options, all of which revolved around either a bridge or a tunnel, while the environmentalists had extended the options by one – adding public transit as a means to achieve a similar result.

This seemed logical until I started thinking about the need to add one other criteria to the equation: the need to reduce carbon emissions. 

My mind wandered down a path that’s occupied a lot of my attention recently – disruptive change, which is something that society has experienced many times over:

1. The change from horses for transportation to automobiles, aka, the "horseless carriage"
2. The revolution from corporate-owned computer systems to central server systems that deliver a service to many companies, based on a small number of very large computers that can be shared
3. The move from a wired telephone network to cellular phones
4. The wholesale transformation that the Internet has brought to all aspects of our business and personal lives

Each of these “disruptions” had a number of common characteristics.

1. People closest to the technology being displaced refused to believe that a change would occur quickly, if at all. In 1904, there were some 80,000 horses in London, UK, and the minister of transport stated that there was no risk that the auto would change reliance on horses as the primary means of transportation. Nevertheless, in less than 10 years, the horses were virtually gone, not only from London, but also from cities around the world.
2. In all these examples, government involvement was minimal, largely because the changes occurred quickly and often were almost invisible until well underway. Additionally, the change was generally widespread, with many people all over the world following similar paths simultaneously.
3. The disruptions occurred where the utilization of a resource was low and an option that allowed some form of sharing to drive utilization up resulted in a significant reduction in costs.

My mind wandered still further. Most automobiles burn gasoline, with an overall efficiency of less than 20%. The average domestically-owned auto is parked more than 90% of the time. Transportation in the US is the second largest source of emissions, after electricity generation (from coal). Based on the three common factors for disruption mentioned previously, is this not a mix that provides a near perfect scenario for another disruption of the status quo?

Consider a major change to electric self-driving vehicles for city use. If sharing was used to drive up usage, this approach would deliver transportation at a cost of approximately 10% of current costs – reducing owner costs by about 90%. It would also reduce congestion, parking requirements, maintenance and other service costs. Furthermore, every EV has a storage battery, allowing it to be charged during surplus periods and utilized during peaks. A shared EV service would reduce consumer costs, reduce government infrastructure and could help utilities increase the energy delivered by increasing the current capacity factor.

Behind the scenes, a system of this type could also be leveraged to participate in grid optimization, managing the delivery of power to be constant. One might want to add local firming electricity capacity at the charger location, but it is assumed that chargers would be near large electrical loads. The added generation might best be done using natural gas fuel. The benefit of natural gas near load sites is that it reduces or eliminates delivery losses and allows remote generation to operate at maximum efficiency. Plus, by providing heating, cooling and electricity, as well as grid services, the overall efficiency could be as high as 85-90%. The small amount of carbon emissions would be a vast improvement over current methods.

So, reconsider the alternatives: a new bridge, public transit or a new, disruptive EV car-sharing program as described. What make most sense from cost, timing and sustainability perspectives?

There will be many people who claim that such a system will take many years to implement, but where cost savings are large, and the benefits are equally large, speed of implementation may well become a non-issue. Plus, the speed of disruption is getting faster and faster. Consider that Google Maps completely disrupted GPS devices seemingly overnight; The GPS market lost as much as 85% of its market cap within just 18 months after Google Maps Navigation was launched. The market is littered with the business models and lifestyle choices that were disrupted by new thinking and more nimble and innovative approaches.

One recent presentation that I saw suggested that electric vehicles would overtake existing fuel-powered sales shortly after 2020. That is just three years away – much less time than the 10+ years it would likely take to build the bridge or plan, fund and construct a new transit system.

CONCLUSION:

We live in a time where forward thinking may help to bring a new, cleaner environment at a low cost. Mistakes could be costly for those that choose to ignore cost-changing technologies that will be driven not by government regulation and subsidies, but by private sector groups that see opportunities to reduce costs and share those reductions as a form of profit.

Food for thought as disruption – and new ways of thinking about things - become the new normal.