Not that you need anything else to worry about, but the nation's electricity supply is in danger. With supply near its grid capacity and demand growing rapidly, experts are predicting major blackouts in the coming year, with staggering costs.

NextGen Energy Council has issued a new report, "Lights Out in 2009?" that warns of an impending disaster in the nation's electricity power grid as usage overtakes power generation.

The NextGen report states: "The U.S. faces potentially crippling electricity brownouts and blackouts beginning in the summer of 2009, which may cost tens of billions of dollars and threaten lives. Unless major investments are made immediately in both electricity generation (power plants) and transmission (power lines), the threat of service interruptions will increase."

"Lights Out" quotes a recent AP story recalling the 2003 blackout that left 50 million people without electricity: "Five years after the worst blackout in North American history, the country's largest utilities say the U.S. power system faces the prospect of even bigger and more damaging outages."

The report explains that reserve margins are less than half what they were in the early 1990s and barely the minimum necessary to ensure reliable electric supply, while demand is expected to grow 18 percent over the next decade. To avert massive blackouts by maintaining a barely adequate 15-percent reserve margin, the U.S. will need to add 14,500 miles of electric transmission lines, as well as additional power plants, requiring a total investment of $300 billion or more, according to utility officials.

So what's keeping the power suppliers from contracting with state and local governments to build the necessary infrastructure to keep a reliable electricity supply?

Environmentalists.

The report cites five inter-related obstacles. "Of these impediments, the single biggest threat to system reliability is opposition from well-funded environmental groups that oppose and file lawsuits against virtually every new electricity project proposed."

Environmentalists -- who could be better described as anti-industrialists since they oppose new energy plants even when they employ safer, cleaner technology than existing plants -- use all manner of legal maneuvers to block new energy supplies.

While electric suppliers expect to increase use of alternative energies, their generation is deemed "intermittent."

The report states: "The probability that wind generators are available at their rated value during annual peak periods is only between 5-20 percent and varies greatly from year to year and region to region. Wind cannot be considered a reliable baseload capacity resource."

Environmental organizations can count on consistently good press in the mainstream media where stories about Davids standing up to Goliaths play well, though often the opposite is nearer reality. Lawmakers, corrupted by contributions and intimidated by the environmental lobby, kowtow to their agenda.

That is why 85 percent of our nation's offshore oil reserves are off limits. That is why enormous known oil reserves on the Alaskan north slope, an uninhabitable wasteland, are off limits. That is why vast shale oil reserves, rivaling the oil reserves of Saudi Arabia, in the upper Great Plains are off limits. That is why no new oil refineries or nuclear power plants have been built in the U.S. for a generation, while in the rest of the world construction of both continues unabated. That is why the U.S. now imports two-thirds of its oil.

And that is why the country's electricity supply is threatened.

At some point, better sooner than later, that state of affairs must change.

Enviro Group Lawsuits, Cost Concerns, Climate Regulation Uncertainty Cited As Major Obstacles To Grid Improvements

DENVER - A new study released this week highlights what experts have been saying for years: the U.S. faces significant risk of power brownouts and blackouts as early as next summer that may cost tens of billions of dollars and threaten lives.

The study, “Lights Out In 2009?” warns that the U.S. “faces potentially crippling electricity brownouts and blackouts beginning in the summer of 2009, which may cost tens of billions of dollars and threaten lives.”

“If particularly vulnerable regions, like the Western U.S., experience unusually hot temperatures for prolonged periods of time in 2009, the potential for local brownouts or blackouts is high, with significant risk that local disruptions could cascade into regional outages that could cost the economy tens of billions of dollars,” the report warned.

U.S. baseload generation capacity reserve margins “have declined precipitously to 17 percent in 2007, from 30-40 percent in the early 1990s,” according to the study. A 12-15 percent capacity reserve margin is the minimum required to ensure reliability and stability of the nation’s electricity system. Compounding this capacity deficiency, the projected U.S. demand in the next ten years is forecast to grow by 18 percent, far exceeding the projected eight percent growth in baseload generation capacity between now and 2016.

The study, which can be downloaded here: http://portal.nextgenenergy.org/ estimated that the U.S. will require about 120 gigawatts (GW) of new generation just to maintain a 15 percent reserve margin. That will require at least $300 billion in generation and transmission facility investments by 2016.

“The facts presented in this study should stimulate a call for action by policymakers everywhere. Our nation’s electricity system is clearly in trouble and we need to take rapid steps as soon as possible to remedy the situation,” said Bob Hanfling, Chairman of the non-profit NextGen Energy Council, which conducted the study. “This isn’t the first study to come to these conclusions, and it won’t be the last. We hope it illuminates current policy debates, from those on climate change to resource development to infrastructure build-out to national security. We also hope it will sound the alarm for every elected official, policymaker, business leader and citizen concerned about the future prosperity and security of our nation.”

The study also identified the primary barriers to getting new power plants and transmission lines built. Chief among these is the “opposition of well-funded environmental groups that oppose and file lawsuits against virtually every new infrastructure project proposed.”

Other obstacles include opposition to natural gas production, which is needed to fuel the growing reliance on natural-gas fired power plants; challenges associated with putting more intermittent renewable power sources on the grid; regulatory uncertainty associated with climate change policy development; reluctance by state regulators to approve rate increases related to the imposition of new environmental or climate-related regulation; and the relatively shorter-term approach to resource planning and acquisition that industry has been forced to adopt because of all of the above factors.

Among its other findings were these:

The U.S. will require more than 14,500 miles of new electricity transmission lines by 2016. Regions represented by the Florida Reliability Coordination Council (FRCC) and the Northeast Power Coordinating Council (NPCC) may require less than 400 miles of new transmission lines, while the Southeast Reliability Council (SERC) may require nearly 2,300 miles. Western Electricity Coordinating Council (WECC) may require nearly 7,000 miles.

Substantial increases in wind turbine orders, and new wind capacity, has been slowed by a worldwide turbine shortage and local opposition to wind projects. Since wind generation is expected to grow substantially throughout the U.S., the integration of intermittent resources into the bulk power system is becoming increasingly complex and difficult.

While renewable energy proponents, and some elected officials, are saying that the U.S. needs to only add renewable power facilities such as wind farms, the annual capacity factor of wind generators is typically about 25 - 35 percent. However, the probability that wind generators are available at their rated value during annual peak periods is only between 5 - 20 percent and varies greatly from year to year and region to region. Wind cannot be considered a reliable baseload capacity resource.

Rapidly increasing demand for steel and copper has caused spot scarcity of the resources required to manufacture key electrical components, and this commodity demand has increased the theft of critical system components. Manufacturers have attempted to eliminate excess inventories and capacity to increase productivity of their assets, but they are reluctant to add more capacity until they can be certain about future industry investments.

The study also presented a survey of political developments and trends that amount to “structural political barriers being erected to system reliability.” It pointed to the fact that “environmental activist groups” are now:

Suing to block the construction of virtually every single baseload coal-fired power plant, in spite of advanced environmental technologies these plants would deploy.

Gearing up to block construction of any baseload nuclear power plants across the West. Suing or protesting virtually every proposed lease on public lands in the Rocky Mountains for natural gas drilling.

Working to slow or stop the completion of the two main multi-year, stakeholder-based transmission corridor processes that both Democrats and Republicans in Congress approved as part of the Energy Policy Act of 2005.

Pushing for additional endangered species designations, which will make siting and construction of both power plants and transmission lines difficult.

Pressuring government leaders to limit access by larger, baseload technologies to the region’s high-voltage transmission grid and, instead proposing to artificially favor non-baseload, intermittent power facilities that will (at some point) further stress the reliability of the entire Western grid.

Study Authorship: The NextGen Energy Council is a non-profit, 501(c)(3) organization comprised of a wide variety of energy and technology leaders and companies that work collaboratively with Governors, federal and state officials, academic institutions and others to promote the rapid development and commercialization of cutting-edge energy technologies.

A report from a pro-technology advocacy group calls attention to the shrinkage of spare electric generating and transmission capacity in the nation. Though a recession may suppress demand and postpone the threat of blackouts, these problems need a more vigorous and imaginative attack than they have been getting.

The survey by the NextGen Energy Council - an assembly of some government agencies, businesses, state and federal legislators, and several governors from the Midwest and West - should be must reading for those who think conservation, coupled with solar and wind generators, can take care of power needs in the foreseeable future. (For one thing, solar and wind are not "baseload" power; that is, they cannot be run around the clock in all weather for months at a time.)

Relying on recent research by trade associations and government agencies, the council estimated that needed new generation and transmission-line investments would require $300 billion by 2016. Some 14,500 miles of new lines are needed (but only 400 miles in New England, New York and eastern Canada); 120 gigawatts of new baseload generation capacity (about 120 large generating stations) are projected as necessary to maintain a 15 percent baseload capacity reserve in the face of an 18 percent growth in demand.

Three years ago, Congress gave the Federal Energy Regulatory Commission authority to take over siting of transmission lines from state agencies in certain cases. More should be done. Every proposed line is attacked in the courts by environmental groups and others (new generators also are often attacked); Congress should make these often frivolous lawsuits more difficult.

The United States faces significant risk of power brownouts and blackouts as early as next summer that may cost tens of billions of dollars and threaten lives, says the NextGen Energy Council.  It will require about 120 GW of new electricity generation just to maintain a 15 percent reserve margin; this will require at least $300 billion in generation and transmission facility investments by 2016.

Examining the current state of energy generation in the United States today, researchers found that:

• The United States will require more than 14,500 miles of new electricity transmission lines by 2016.
• While renewable energy proponents are saying that the United States needs to only add renewable power facilities such as wind farms, generators, at their peak, only produce between five and 20 percent of required energy.
• Rapidly increasing demand for steel and copper has caused spot scarcity of the resources required to manufacture key electrical components; manufacturers are reluctant to add more capacity until they can be certain about future industry investments.

Moreover, the researchers identified the primary barriers to getting new power plants and transmission lines built. Chief among these is the opposition of well-funded environmental groups that oppose and file lawsuits against virtually every new infrastructure project proposed.  Other obstacles include:

• Opposition to natural gas production, which is needed to fuel the growing reliance on natural gas fired power plants.
• Challenges associated with putting more intermittent renewable power sources on the grid.
• Regulatory uncertainty associated with climate change policy development and the reluctance by state regulators to approve rate increases related to the imposition of new environmental regulation.
• The relatively shorter-term approach to resource planning and acquisition that industry has been forced to adopt.

The United States faces threat of electricity blackouts and brownouts come next summer because of dwindling power capacity nationwide.

A new study by NextGen Energy Council warns of “potentially crippling electricity brownouts and blackouts beginning in the summer of 2009, which may cost tens of billions of dollars and threaten lives.” The report calls for major investments in generation capacity and transmission line expansion and improvements.

NextGen Energy Council is a non-profit collaborative of governors, state and federal legislators, government agencies, business leaders and conservation groups.

According to the study, electric capacity reserve margins have declined to 17 percent in 2007 from 30-40 percent in the early 1990s. The report said a 12-15 percent capacity reserve margin is minimally required to keep the grid reliable and stable.

The study said an anticipated growth in power demand of 18 percent in the next 10 years makes expansion of that capacity crucial. The situation is most dire in the western, midwest and eastern states, according to the report.

TVA spokesman Jim Allen said the agency’s reserve margins “are more than adequate and area above the 12-15 percent minimal amount referenced in the report.”

Part of TVA’s efforts include:

- Building an average of 100+ miles of transmission lines each year.

- Spending $200-$250 million each year on its transmission system.

- Adding enough generation to meet load growth and maintain reserve margins between now and 2016.

Blackouts are more than an annoyance. They are costly in terms of economic loss and needless deaths.

In less than 48 hours, the Aug. 14, 2003, blackout, the largest power outage in U.S. history, ran up as much as $12 billion in economic losses. Life went dark for roughly 60 million Americans and Canadians, many of whom also lost their water supplies, as well.

At least 11 died from various causes linked to the loss of electricity. Looting, fires and general civic unrest plagued the big cities affected by the blackout.

A once-in-a-lifetime event, an anomaly that shouldn't require a second thought? Not necessarily.

"The U.S. faces potentially crippling electricity brownouts and blackouts beginning in the summer of 2009, which may cost tens of billions of dollars and threaten lives," says the NextGen Energy Council's report, "Lights Out In 2009?"

If the nation is to avoid a repeat of the 2003 blackout, its power supply desperately needs to be boosted through new construction of nuclear-, coal- and gas-fired plants. NextGen estimates that 120 gigawatts of new generation, enough to power as many as 48 million homes, will be needed to provide a 15% reserve margin. That's the rough minimum needed to ensure that the system is reliable.

But that's only half the fix. Additional electricity is worthless if it can't be distributed to users. NextGen estimates the U.S. needs more than 14,500 miles — that's New York to Los Angeles and back three times — of transmission lines by 2016 to relieve congestion that will inevitably cause power outages if the issue isn't addressed.

The improvements need to begin immediately. Power demand is expected to grow by 18% over the next 10 years while estimates indicate that power output will increase only 8% through 2016.

In a fully rational world where markets are left to themselves, the work would get done. The capital is available and the incentives are in place.

But our world is filled with irrational actors who foolishly — and predictably — resist the changes that are obviously needed to move forward by erecting difficult regulatory and policy hurdles. The "development of numerous coal plants," for instance, has been canceled or deferred in recent years, NextGen says, because of environmental rules.

"The single biggest threat to system reliability," says the NextGen report, "is opposition from well-funded environmental groups that oppose and file lawsuits against virtually every new electricity project proposed."

Report authors say at least $300 billion will be needed to update the system. But as long as policymakers let themselves be bullied and bought off by environmental groups, it might as well be $300 trillion.

A new study warns crippling blackouts could hit the U.S. next summer, and the senior policy advisor to the nonprofit group that did the study warns California is most likely to be “ground zero” for a blackout that could take out most of the Western United States.

The study – from NextGen Energy Council, titled “Lights Out in 2009?” – adds up to what could be a knockout punch to an economy that will still be reeling next summer from the combined impacts of the credit crunch, rising unemployment and reduced consumer spending. America’s power markets are in crisis the way its credit markets are, the advisor, Jim Sims, former director of communication for President Bush’s National Energy Policy Task Force, told EnergyTechStocks.com. “We’re flirting with disaster,” he said.

While Sims said that inadequate generation and transmission have combined to leave California most exposed, he quickly added that, for the same reasons, people and businesses in Florida and throughout the Southeast are also at great risk. He further said that, notwithstanding greater industry efforts to stabilize the U.S.’s region-wide high-voltage power grids, once a blackout begins it could easily “cascade” for hundreds, even thousands of miles.

A blackout starting in California, he said, could reach all the way to the Rocky Mountains, while a blackout that started in Georgia might go as far north as Pennsylvania and New Jersey.

As startling as NextGen’s warning may be for many Americans, the fact is many other countries are already gripped by power crises, according to information compiled by the website EnergyShortage.org. As a number of experts have noted, the core problem is a decades-long failure by governments to adequately spend on new generation and transmission.

Just as it has taken many years for the U.S. and other countries to get into this fix, it’s going to take many more to get out of it, the NextGen study indicates. But with time running short, and with Congress having already dipped deep into the national treasury, Sims has real questions about whether the U.S. economy could fall victim to a long power crisis, as we’ll explore tomorrow in the second part of this newsmaker series.

The latest victims of the credit crunch? U.S. utilities, which after the government and the finance sector are the nation’s third-biggest borrowers. Rebecca Smith reported in the WSJ that power companies are increasingly feeling the pain. The capital-hungry industry is finding it harder, or at least more expensive, to get cash. And that cash is needed to build new power plants and transmission lines to keep the lights on. The credit crunch is just the latest blow to a sector that has already felt deregulation, looming environmental regulation, and wild swings in fuel prices.

How serious is it? The NextGen Energy Council, a not-for-profit made up of Western governors and utility companies, warns that America increasingly faces the prospect of brownouts and blackouts unless power companies make some serious investments in new generation and transmission. The group figures a minimum of $300 billion is needed by 2016 just to meet growing demand for electricity. (Though NextGen blames litigious environmentalists, rather than tight-fisted capital markets, for the difficulty in building new power plants.)

So what’s the answer? Well, now that the government appears to be in the business of providing liquidity, it can provide liquidity to power companies—by making their business more expensive.

That’s the counterintuitive argument put forth by Andy Stevenson at the Natural Resources Defense Council. His idea? A cap-and-trade scheme that puts a big pricetag on carbon emissions can actually become a vehicle to help part of the power industry adjust. If cap-and-trade becomes “cap-and-invest,” Mr. Stevenson says, the government can plow back some of the money it makes selling emissions permits to energy companies, who can then use the cash to jumpstart new energy projects. The cash flow would also ease lending requirements:

This amount of committed capital would provide a total of over a trillion dollars in the early years of a “cap and invest” program that could be deployed to help finance innovative energy solutions for our economy. This revenue stream would effectively be used as a form of collateral, giving the banks confidence to once again finance longer-term investments at reasonable interest rates.

Of course, getting Congress to pass something as complicated and controversial as a cap-and-trade scheme makes the current bailout negotiations look quick and easy. And a cap-and-trade scheme would take years to get underway, so there’d be no quick relief for the power sector buffeted by today’s financial crisis. Another big question is whether government largess would extend to large-scale generation technologies like “clean coal” and nuclear power, or if it would be limited to clean-energy like wind and solar power.

But at a time when it seems everbody’s got a cup in their hand, or is about to, it will be interesting to see how the financial market meltdown plays out in the energy market.