What Ron Lehr finds interesting and exciting in this energy transition
by Allen Best
Never expect a simple story when you sit at the knee of Ron Lehr, and that certainly wasn’t the case when he spoke before the Colorado Renewable Energy Society meeting on April 17. He gave a fascinating talk that, at times, had my head spinning as he laid out a future that looks increasingly bright for renewable energy.
Lehr is an attorney, and for eight years he served on the Colorado Public Utilities Commission, several as chairman of the commission. He also served on the board of directors of Denver Water.
Obviously, people in high places hold Lehr in great regard in these vital matters of water and energy. So do I. I have consulted him several times. Our most substantial conversation occurred about four years ago, when I was trying to get my mind wrapped around electrical transmission. It took several weeks, much reading, and many interviews, including an hour on the phone with Lehr, who was then the regional representative for the American Wind Energy Association.
After the 3,000-word story was published in Planning, the magazine of the American Planning Association, I forwarded a copy to Lehr, who commended me for delivering a great 101-level explanation of transmission. He meant it kindly, and I took it as such. But note that he didn’t say 300 or 400 levels.
Lehr’s mind is wrapped around the higher levels of energy policy. He continues to advise the wind industry but has been working more broadly on energy transitions. In one project, teaming with Ron Binz, another former chairman of the Colorado PUC, he has been trying to create a conversation about a new business and regulatory model for investor-owned utilities.
The story, in brief, is this: More than a century ago, electrical utilities decided it best to accept government regulation in exchange for monopoly status. Thus, most states have PUCs or their equivalent, and a good many of us are served by investor-owned utilities. The IOUs, as they’re called, most fundamentally make their money by the amount of generating facilities they own and the amount of electrons they deliver.
A long time ago, Amory Lovins challenged this paradigm. We should be paying for energy services, not energy per se. The utilities have no incentive to be efficient. Too, the traditional model made no provision for other values, such as the external environmental costs of burning coal.
In recent years, other criteria were introduced for judging performance of utilities and the rates they should be allowed to charge customers. In Colorado, for example, Xcel Energy, through its subsidiary, the Public Service Co., got the rights to build a new coal-fired power plant in 2004. To get the environmental groups to withdraw their opposition, Xcel agreed to institute programs to make electrical use at homes and businesses more efficient.
But Xcel resisted stoutly in another case that same year. The utility devoted large sums in a failed effort to persuade voters to defeat a constitutional amendment mandating 10 percent renewables. The company then went forward briskly to achieve the standard and, two rounds later, looks to rather easily hitting the 30 percent requirement. This, in just a decade.
In fairness to Xcel, it wasn’t clear in 2004 how well renewables could be integrated with other existing sources of power to provide reliable service. But the case does testify to a corporate culture that, at the time and perhaps still, drags its feet on innovation and change.
Some claim that same fundamental forces are now at work in Colorado as Xcel seeks to cut incentives for roof-top solar. The company, on billboard messages, TV ads and speeches by executives, touts that it can do solar – but in concentrated locations that it owns. Implicit is the idea that distributed locations, such as roof tops, is not the way to go.
In his presentation at the Jefferson Unitarian Church, Lehr laid out a future that, at least in the West, will dramatically shrink the carbon footprint of electrical generation. That strategy sees roughly 25 percent gains in energy efficiency, 25 percent of generation coming from small, distributed sources such as roof-tops, but then 50 percent from big wind farms, concentrated solar and so forth.
“We will use gas, but very carefully,” he said, in explaining the strategy for achieving carbon-reduction goals outlined by the International Panel on Climate Change.
To achieve this new world of generation, transmission will be necessary, to better interlink the renewables. It’s often said that the wind doesn’t always blow, nor does the sun always shine. Actually, the wind is nearly always blowing somewhere. It’s then a matter of linking the sources.
“You have to at least tolerate transmission,” said Lehr, noting that environmental groups have begun to understand this trade-off as it affects public lands in the West.
This being Colorado, the emphasis was on Colorado. But a statistic Lehr provided at the outset of his talk makes a compelling argument that half of CRES meetings should be devoted instead to California: 48 percent of power used in the Western Grid is used in California, he said. Too, as much as is now going on in Colorado, there’s even more interesting wrinkles in California.
At the meeting’s end, I asked Lehr what was the most interesting and perhaps exciting news in the world of renewable energy. Prices, he responded, have been falling rapidly, both for wind, but also for solar. In other words, these once expensive renewables are approaching and in some cases achieving parity with generation by fossil fuels. This suggests that adoption will accelerate.
But grid parity is just part of the story. Making all the pieces fit together is another part, and that partly requires energy storage. Exciting work is underway at the National Renewable Energy Laboratory in Golden in the new energy integration laboratory.
Brian Parsons, who is a director of the Western Grid Group, formerly directed that lab at NREL. He also spoke at the CRES meeting and emphasized that the grid of the future needs flexibility. It’s a complex topic, not easily reduced to a few sentences. But he, like Lehr, was full of optimism that this task of reconfiguring our energy foundation is not so daunting as it seemed in 2004.
Of course, not to be omitted is this fact: During those 10 years, we’ve gone from 383 ppm of CO2 concentrations in the atmosphere to 400 ppm. We need to be quick about this matter of rethinking our energy.