Diversity and Energy Supply

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These days it seems that it’s all about diversity.  We hear it every day.  Companies need to diversify; diversify their products; diversify their work force; diversify their talent.  Organizations seek to diversify themselves to capture a broad range of experience.

But, what is diversity?  According to Merriam-Webster, ‘diversity’ is the quality or state of having many different forms, types, ideas, etc. or the state of having people who are different races or who have different cultures in a group or organization.  I see this as simply, ‘variety’.

So, as a business or organization, why do we seek out diversity?  If we were all high-speed, low-drag, top notched engineers (like me!), wouldn’t our organization be better if we had 100 more just like that?  More is better, right?

In my experience, the answer to those questions is a resounding ‘no’.  We realize that different life experiences bring different perspectives to problem solving, which are highly valued by companies of all kinds.  A diverse company is positioned better to driving innovation with increased creativity which enables capture of more of the market slice.  Diversifying your financial portfolio provides some protection from industry sector crashes.  Diversifying your supply chain provides your company or organization a greater level of security of supply.

So why not ‘diversity of energy supply’?  Makes sense, right?  ‘All-of-the-above’ energy policy, to include, wind, solar, nuclear, hydro, coal, natural gas, geothermal, etc.

The act of limiting energy sources is a step back from diversification of energy supply in California.  Energy diversity acts as a balance for the risks and costs associated with production and is the bedrock for security of supply of energy.

The amount of energy supplied from coal, nuclear, wind, solar, etc. can be easily found with a simple internet search.  However, these energy sources fall into three categories that many times are not included in the numbers.  These categories are 1) base load, 2) peaking and 3) ‘occasional’, for lack of a better term.  Base load plants supply consistent electricity needed; 24/7.  Peaking plants generate power only when there is a high demand.  The ‘occasional’ sources are limited in their supply of power as they produce power when they are able.

It is wise for us to maintain a healthy mix of all three of these broad types of power generation techniques as each is subject to uncertainty of supply.  Examples of base load plants are coal and nuclear power plants.  These plants occasionally need to shut down for maintenance and refueling.  Examples of peaking plants include gas turbines, hydroelectric dams, pumped storage and geothermal.  Natural gas, as with any fuel, is subject to price fluctuations and other supply disruptions such as demand for home heating use.  They hydro and geothermal can be limited by the depletion of the source field.  Some ‘occasional’ sources are wind and solar, which are limited as the wind is not always blowing and the sun doesn’t shine 24 hours per day.

And then there is economic diversity associated with the varying energy suppliers.  In general, each of the different power producers provides a source of high paying jobs to their local communities, no matter which type.  Large power producers provide a tremendous amount of high paying jobs and tax revenues for the local communities in which they are located.  A 2013 Cal Poly study sets the impact to the local economy due to Diablo Canyon Nuclear Power Plant at $920,000,000 and over 3300 jobs.  The local sales tax revenues, alone, resulted in $5.3 million in 2011.

Additionally, the varying power producers cultivate a separate service sector industry and also result in pockets of innovation.  All power plants require servicing and spare parts and service companies make themselves available to provide them.  As a single example of innovation, engineers have been developing nanoparticle technology to conserve water in power plants.  By adding the nanoparticles to the circulating water in a power plant, the water’s thermal properties are made more advantageous for the Rankine cycle; 1) water is enabled to pick up more heat and 2) it reduces the amount of water lost while still dissipating the same amount of heat.   The nanoparticles are a ‘core-shell’ configuration, in which a solid outer coat protects an inner core that can melt above a certain temperature.  After partially melting, the particles travel to the cooling tower where they re-solidify, and thus do not escape in the cooling tower.  The bulk water carries more heat.

Multiple examples of security of supply, economic advantages and technological advances can be explained for each and every power generation method.  Maintaining and expanding this energy supply diversity only strengthens our energy security, those economic advantages and technological advances.  In order to hold off an energy crisis and prevent an economic crisis, we should strive for an ‘all of the above’ energy policy.  Diversity is variety!  “Variety is the very spice of life, that gives it all its flavor.”  “The Task” by William Cowper.

1 Comment

  1. Jay,
    Well written, well researched. It’s always been my opinion nuclear energy has the most to offer from all perspectives except for that pesky ‘half-life’ issue of depleted uranium. But if you look at the big picture, every form of energy production, even the green ones, has a dark side. Geothermal extracts tramp uranium, arsenic and other pollutants in it’s energy production. Wind turbines impart seismic vibrations into the earth that can be felt for tens of miles as well as killing birds. Electric cars cause coal/oil fired power plants to burn more fuel to keep up with green technology. There’s an answer to diversity, I just don’t think in our lifetimes.

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