One Year after the Big Blackout, Alternative Energy makes gains

Allen Gibson

It was one year ago last Saturday that the massive power grid blackout hit the eastern United States . Caused, it turns out, mostly by a computer software flaw buried deep in a GE energy management system, that prevented operators from knowing what the problem was, and how quickly it was expanding.

The resulting blackout was enough to make people think about alternative energy sources, and the shares in renewable energy companies immediately spiked in response.

A year later, and the possibility of further electrical outages from our aging power grid is still very present. Electrical utilities are still vulnerable to software flaws or cyber-attacks, according to security consultants, who say the industry isn’t doing enough to upgrade its antiquated computer systems. More recently, an email worm caused a safety monitoring system at Ohio 's Davis-Besse nuclear power plant to be off for nearly five hours.

Electrical consumption, meanwhile, continues to grow, as does our oil and gas use. With just over five percent of the world’s people, America gobbles over a quarter of the total energy.

During the first six months of this year, the three top-selling vehicles in America were full size pickup trucks. That’s another million trucks on the road. And the EPA says our love affair with trucks and SUVs has hurt fuel economy overall while doubling their market share over the past two decades to about half of all sales.

Energy conservation is not a concept that has gone over big yet in North America , obviously. Indeed, the Administration has made it clear that we will get the oil we ‘need,’ come hell, high water, or an on-going war in Iraq . But with the price of oil looking to hit $50 a barrel before it hits $30 again, there may come a day when we as consumers finally decide it’s time to change our ways, and have some ‘off the grid’ alternatives to fall back on. For the producers of alternative energy sources, such as fuel and solar cells, wind turbines and biomass fuels, planning and development for that day is in full swing.

And the beginnings of an industry are taking shape.

Toyota can’t keep up with demand for its hybrid Prius cars, and San Diego Gas & Electric just heralded the addition of its 1,500th customer putting energy from wind and solar power back into the region's energy grid. Also in California , U.S. Wind Farming, which calls itself America 's “only publicly traded wind farming company,” hopes to establish co-operatives to help the Public Utilities Commission meet its goal: 13% of state power generated from renewable sources by 2010.

Globally, wind power is growing rapidly, with installed generating capacity increasing, by an average 32% annually, for the five years between1998 and 2002. Europe and the US create 90% of worldwide generation. Currently, that amounts to more than enough to power 7.5 million average American homes, or 16 million average European ones – another example or our profligate energy use!

Another alternative energy experiencing rapid growth is using recycled wood waste to fuel electricity generation. In Italy , for example, associates of Green Energy Resources have built 3 plants burning woodchips that produce a total of 60 MWh. One of the advantages of woodchips as a fuel source is that they are eligible for “Green Certificates” under new EPA rules in America . Green Certificates can be traded to other companies to reduce their total carbon monoxide output levels in order to comply with new environmental rules and treaties, including those contained in the Kyoto protocol.

From Crisis: Opportunity .

As last year’s blackout showed, whenever what we know and trust fails us, we immediately seek out the alternatives. Which meant that stocks in alternative energy companies spiked significantly in the days following the blackout. Compare the charts for companies such as Fuel Cell Energy Inc. (FCEL), Plug Power Inc. (PLUG), Astris Energi (ARNF), Hydrogenics Corp. (HYGS), and Ballard Power Systems (BLDP), and you’ll see what we mean! Like most stocks over the last few months, of course, these have all been sliding slowly downhill. The alternative energy market is a very event-driven animal, however, and any energy supply interruption at home in the US is likely to see a repeat of last year’s spike. Already, with oil prices spiking to new records, the traffic on our RenewableEnergyStocks.com webportal is seeing a significant increase.

Marty Kushler, of the American Council for an Energy-Efficient Economy, says the ’03 blackout was a symptom of our much larger problem – energy over-consumption. The writes that the Great Blackout was merely the energy crisis of the week, and energy use is costing our society in many ways:

“Even before the Iraq War, we were spending an estimated $100 billion on defense expenditures related to security in the oil-rich Middle East . Many people believe the war in Iraq was motivated in large part by our energy dependence (we import over half the oil we consume) and the fact that Iraq sits on the world's second largest oil reserves. We're projected to spend hundreds of billions of dollars on the Iraq effort, not to mention the tragic loss of hundreds of U.S. soldiers and countless Iraqi civilians.

The list goes on and on: the threatened loss of some of our most beautiful federal lands and coastal areas to oil and gas drilling; the worsening of our balance of payments deficit from more and more energy needing to be imported; the damaging effects on our economy from the mounting costs of wasteful energy consumption in our homes and businesses.

It is past time for federal policymakers to see the big picture. Simply building more transmission lines (for electricity) will not only be very expensive ($100 billion in one recent estimate) … it ultimately provides no solution. "Expanding the grid" alone is just a Band-Aid, and does nothing to help with any of the other energy-related problems. In fact, it is likely to make them worse, by temporarily facilitating even greater energy consumption.

The one action that helps address every one of those energy-related problems we face is to improve our energy efficiency. It reduces stress and overload on the transmission grid; it reduces demand for increasingly expensive fuels; it helps reduce energy imports; it helps put downward pressure on market energy prices; it saves real money for households and businesses on their fuel bills; and it reduces environmental pollution. The good news is that energy efficiency works!”

The Council estimates that a comprehensive set of efficiency policies alone could save 33 percent of our projected energy budget by 2020, at a savings to businesses and consumers of $500 billion annually, which would put real money in the pockets of working families while creating over a million new jobs. The makers of fuel cells, solar panels, biofuels, wind and sea power technologies have made great advances in technology over the last twenty years. All that’s needed now is for America to decide the current cost of energy is just too high.

Allen R. Gibson

Allen R. Gibson has over twenty-five years experience in media and corporate communications. His background includes radio, television, and print communications for public companies in both the US and Canada.