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FUEL FROM THE SKY: SOLAR POWER’S POTENTIAL FOR WESTERN ENERGY SUPPLY During the few hours of peak demand each year when electricity demand reaches its highest lev- els, and wholesale power price spikes have become fairly common, utilities have curtailed their interruptible customers and issued more notifications to consumers to reduce their electricity consumption. With the changing market, especially the wholesale power price spikes, utilities are more concerned than ever before about reducing the peak demand levels. With the advent of the Internet, and other new technology, voluntary load reduction (VLR) programs are becoming increasingly efficient to implement and administer. Participants in VLR programs, which have been in existence for well over 20 years, are financially rewarded for forgoing power consumption dur- ing high-demand periods. However, many interruptible customers who were turned off for the first time in 2000 or 2001 are finding that they preferred the days when their service was not interrupted. If VLR programs can penetrate energy markets to the point that they have a sizeable effect on peak demand, the traditional relationship between peak and energy demand growth could be severed. This would result in higher load factors for the electric system. Higher load factors in turn could allow the level of reserve capacity to decline from current levels. Resource Options for the Future Technological advances, availability of equipment, low capital and production costs, and favor- able environmental performance currently make natural gas-fired combined cycle power plants the leading generating technology of choice for utilities and IPPs. Even with higher natural gas prices forecast over the next decade, gas-fired generation appears to remain competitive against its direct rival, coal. Only significantly higher than forecast natural gas prices, an inade- quate building of needed pipelines, issues about fuel diversity, and concerns about reliability of supply could threaten gas’ dominance. Policy makers and regulators will want to influence the selection of future energy resources. Environmental considerations, including regional haze, ground level ozone, or particulate matter (such as at 2.5 microns, PM2.5) are concerns, as well as an energy supply that hedges against fuel price volatility and improves national security by using domestic sources of energy. Providing adequate energy resources for western states is good public policy, as important as public health or clean water. To make good choices, legislators must understand the full range of western energy resource options. The West is approaching a point where the limits of its natural resources become visible. This is certainly already true for western water. While coal and natural gas reserves remain large, and somewhat of a moving target, we estimate that, at current consumption of 7,968 billion cubic feet per year, proven and likely western gas reserves will be depleted in 70 years, unless better development and production technologies can increase the yield of wells or natural gas is imported by pipeline from Alaska, Canada or Mexico or as liquefied natural gas (LNG) from other 25PDF Image | Solar Fuel From The Sky
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