The nation’s electricity system, while impressive, is not sufficient for the 21st century. Today’s average generating plant was built in 1964 using technology from the 1950s.  Utilities have not improved their delivered efficiency in 50 years.  With stagnant efficiency at 33 percent, we essentially burn three units of fuel to generate one unit of electricity.  Put another way, two-thirds of the fuel burned to generate power is wasted. Electricity generators, moreover, are this nation’s largest polluters, spewing tons of mercury, sulfur dioxide, carbon dioxide, and other contaminants into America’s air and waters.  Despite significant government and industry effort, 46 of the top 50 emitters are power plants.

The consequences of the system’s inefficiencies and stresses are staggering, if little noticed.  Unreliable supplies – ranging from milli-second fluctuations that destroy electronic equipment to the blackout of the 2003 summer that left 50 million people without power – are annually costing Americans more than $150 billion.  To provide some perspective, this unreliable power adds more than a 45 percent surcharge to the cost of U.S.

The U.S. economy, in fact, is being transformed from one based on an analog mechanical structure to one based on digital electronics.  The U.S. electric system must undergo a similar transformation if we are to obtain reliability, quality, and environmental vitality. Consider that only 20 years ago, the share of the nation’s electrical load from sensitive electronic equipment – such as computerized systems, appliances, and automated manufacturing – was limited.  In the 1990s, that share grew to roughly 10 percent.  Today, the load from chip technologies and automated manufacturing is 40 percent, and is expected to grow to more than 60 percent by 2015. Unfortunately, we are falling behind our international competitors.  China, India, the Gulf States, and Eastern Europe are investing in electric power infrastructure at rates that far exceed ours.  Taiwan, Scotland, Denmark, and Istanbul have grid performance and capabilities that we can only dream about.

Electricity innovation is particularly important for the Northeast and Midwest region, which already faces relatively high power costs and relative shortages of coal, oil, or other indigenous fuels.  Fortunately, however, the region has an array of strengths, including many of the world’s foremost universities and research centers, a strong investment and finance community, a tradition of entrepreneurship, and leadership on environmental issues.  Relative to other areas of the country, moreover, the Northeast and Midwest have a history of cooperation and coordination on electricity.

If we get electricity innovation right, this region will become the center for electricity innovation, which will make it a magnet for investment, a place where high-quality businesses want to locate.

Reports:

• Midwest Electronic Book of Industrial Resources
• From Edison to Enron: The Business of Power and What It Means for the Future of Electricity
• An Energy Plan for the Great Lakes
• Power Plants in the Great Lakes Basin
• Output-Based Emission Standards: Advancing Innovative Energy Technologies
• Clean Air-Innovative Technology Link
• CHP Education and Outreach Guide to State and Federal Policy Makers
• Financing Combined Heat and Power
• Combined Heat and Power: How Much Carbon and Energy Can It Save for Manufacturers?
• Electricity Restructuring, Innovation, and Efficiency
• Integrated Assessment of Energy Savings and Emissions-Reduction Potential of Combined Heat and Power