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Published in CTBusiness Magazine

Are Electric Utilities Obsolete?


Wayne A. English

[This article is excerpted from “Are Electric utilities Obsolete?” published in the March - April, 2005 issue of The Futurist magazine a publication of the World Future Society.]

With the advent of worldwide terrorism, oil independence is now a matter of national security. A side effect may be the end of electric utilities as we know them.

For the United States and other oil-dependent economies to migrate to hydrogen-fueled automobiles will require wide-scale hydrogen production and distribution capability. That is so obvious that it almost sounds silly, yet it is that very production and distribution capability that may have far-reaching effects on utilities and their customers.

Hydrogen technologies can power a cell phone, automobile, truck, railroad locomotive, house, commercial building, or factory. Further, unlike our current electrical system, hydrogen need not be used in real time. This means that hydrogen can be produced, accumulated, and stored for later use.

Hydrogen technologies will provide oil independence for our vehicles in the next twenty or thirty years. The U.S. government is facilitating the transition to hydrogen through programs such as the 21st Century Truck Partnership, the FreedomCAR (Cooperative Automotive Research), Fuel Partnership, and others programs under the Department of Defense and the Department of Energy. Many automakers are currently operating experimental fuel cell-powered cars. Also, existing internal combustion engines can be fueled by hydrogen with an increase in efficiency of roughly 25% over gasoline and reduction in tailpipe emissions.

Fuel cells and microturbines
are capable of providing electrical power to far more than cars alone. In fact, anything that is now powered by electricity can be powered by hydrogen-electric technology. Power is power. Projects currently under way include:

  • The installation of a one-megawatt (1341 horsepower) fuel cell into a 102 metric ton railroad locomotive

  • Caterpillar and FuelCell Energy are developing ultra-low emission electric generating products for industrial and commercial use

  • Toshiba is developing a fuel cell to power laptop computers.

Hydrogen-electric technology and the era of self-powered machines are dawning. Soon homes; business; factories; vehicles including heavy equipment, trains, busses, cars and perhaps even aircraft will be hydrogen powered.

Today's electric system
was designed by Edison in the nineteenth century and is antiquated. One of the causes of the blackout of August 2003, experts said, was the age of the system. The energy industry has called for spending as much as $450 billion on infrastructure improvements.

The money will be spent, that is not an issue. The question is whether we spend it on an antiquated nineteenth-century system or on twenty-first-century technologies of hydrogen. On an obsolete system or on a system that will our society into the 21st century and beyond.

Fuel cells may generate electricity at a cost competitive with utility power in regions with high electric rates. In the Northeast fuel cells may be a cost-competitive option for on-site power production. This will depend on the retail cost of hydrogen. But there, too, is danger, for to charge too high a price for hydrogen will only drive corporations to produce their own. New Thinking about New Energy
Almost all customers have a single connection to their electric utility. Interrupt that connection and the customer is out of power. In the world of hydrogen, that may change.

Consider a small office building of three floors, each floor 100kW of electric power for a total of 300kW. You would think that a single 300kW fuel cell is the way to go, or perhaps one 100kW fuel cell on each floor, but let's not do that.

Rather, let's install a 150kW fuel cell on each floor, for a total capacity of 450kW. This provides a system in which any one of our three fuel cells can be out of service and yet the entire energy needs of the building can still be met. Business and industry will be very interested in a system that offers virtually uninterrupted power.

Extend this situation to a factory where the machines are powered by a system that can have any one generator off line, as in our example above. For and industrial customer even an interruption of several seconds can cost thousands of hard, bottom-line dollars. In today's high-technology manufacturing world, electrical outages are not taken lightly.

Commercial and industrial users will probably be the first to embrace hydrogen. Penetration of the residential market is difficult to predict because of differences in what people are willing to spend. Fuel cells will likely get their start in new home construction, just as wall-to-wall carpeting did: by rolling the cost into the purchase price of the home and amortizing it over the life of the mortgage. When this begins, electric utilities will be faced with the loss of residential customers.

In the near future utility competitors will not be other utilities, but new technology. Thus is the legacy of September 11, 2001. New world, new rules.