Are Cryptocurrencies a Fad or a Revolution in Finance?

Duane M. Tilden, P.Eng
November 5, 2017

As I was walking to my weekly bridge game at the local club, I was pondering my newfound interest in cryptocurrencies, Bitcoin, Ethereum, the block chain, and related topics such as mining, smart contracts, ICO’s; the list goes on. I also thought about the value of things from my childhood, like marbles, hockey and baseball trading cards, comic books, coins, stamps, post cards, and other things that I have collected. All which created markets and gained extrinsic value over time, and could be held speculatively. I then asked myself, “Are cryptocurrencies a passing  fad or here to stay?”

What Makes a Currency Valuable?

Some things, such as coins may be made of a valuable base metal alloy, like gold, silver, nickel and copper. Coins are currency, and as such a perfect example to assessing intrinsic value and extrinsic value. In the past coins were minted with higher contents of the base metal alloys.  The metal content gave them an intrinsic value due to the metals rarity and utility. In time, these metals gained value, to the point where it cost more to mint a coin than it was worth.  People would then begin to horde or “mine” the coin for its intrinsic value which was greater than it’s face value as a currency.

metcalfe_curve

Figure 1. The Metcalfe Curve (1)

Extrinsic value, however, could be likened to what we would consider the “fiat” aspect of a currency. As currencies have moved away from a gold or silver standard, the value of money is largely based on consensus. Markets are also consensus driven, without a universal agreement or set of rules, there could not be trade. This is the reason for the development for money or currency. I work and get paid in the common unit of currency, which I can then use to buy and rent goods and services.

Currency and Security

Until recent developments, Governments and their agencies in partnership with banking institutions have generally controlled currency and financial markets. The operation of the economy is the basis upon which society functions. Money exchanges hands for goods and services, including wages. One currency usually denominates value in a physical market. However, these markets can be subject to various forms of attack or manipulation. Physical money could be counterfeited, transfer of money and assets could be lost or stolen, other forms of fraud could occur where one loses their assets.

Another form of attack is personal, or on the individual. Local regulations and taxation laws require valuation of assets and income which are held by the individual to be known to the public agency and could be subject to economic deprivation and restrictions. This is an instance where individual privacy is violated in built-in, systemic and semi-transparent.

Examples of this are everywhere, such as income tax, sales tax, medical tax, alimony and child-support, retirement and pension plans, insurance. If you owe the government money in a disputed case, they often will violate an individuals rights to deprive them of assets, such as money in bank accounts, garnishee of wages directly from the employer, denial of services, loss of principal residence and other such actions.

Most of the money that we earn, own, or spend is being tracked by the government. There are lots of taxes and lots of “rules” made by the big boys. Unfortunately, the present financial system is often disadvantaging us. Why? Because it often collects more than it provides. (2)

Consensus and Fiat Money

Since a currency in today’s world generally consists of a consensus agreeing in a trading market place, then the truth is anything can have value. As the internet has opened up trading across international borders, and companies have sprung up in the financial market place to provide services beyond their physical location, often catering to the world. I can purchase electronics from China and have them delivered to Canada on eBay, using PayPal or a credit card to exchange in their accepted currency. Buy and sell ads have sprung up, such as Craigslist and Kijiji , allowing wider ranging access to markets at a greatly reduced costs as compared to paper advertising in magazines.

Computer users over time had an edge over non-users, as information became available in a vast manner over greater areas. Shopping for the best price of a desired item, good or service can be searched for on my laptop and obtained at a fair cost. No longer does one have to go out and purchase a paper magazine or ad book, in their search. We now can now open a browser on our computer, or digital device, ask a question on a search engine and sort through a selection of answers. Phone numbers, addresses, reviews, prices, hours of operation, names of staff, job openings and more information is all available quickly and efficiently.

Enter the Bitcoin, blockchains and crypto-currencies. In one report recently obtained, sourced from the international Engineering Firm ARUP (2) it has been stated about Bitcoin, a technology introduced by Satoshi Nakomoto.

At the start of 2009,when the world was in the middle of a major financial crisis, a paradigm shift in technology quietly made its debut. That technology is called Bitcoin, and it’s the biggest innovation in finance in 500 years, and certainly the greatest invention of the 21st century so far. (3)

Cryptocurrencies Create Markets

Beyond creating an anonymous system of financial transactions and storage, crypto-currencies are creating new markets of value and trade. There has been a recent wave of new crypto-currencies coming on the market, most of which have issued whitepapers, and have sales landing pages which outline the details about structure, their markets or business plan, how to participate, and their projected timeline.

In my opinion, issuing tokens for sale is very similar to crowd-funding, which may also be likened to buying or selling shares on the stock market, without the restrictions or regulations necessarily placed on participants. Whether or not these activities are legal may depend on local jurisdictions. However, as long as no laws are broken for the purposes of making transactions in a business manner, or the proposed ecosystem,  then personal privacy of participants and security should be secured to all qualified participants, which are traits of a crypto-currency like the original Bitcoin.

The tokens offered in the pre-ICO sales are generally intended to fund the business operations, which, if all goes well, will turn a profit and be able to provide token based services. Details of the venture and how proceeds from projected profits are to be distributed are usually outlined in the white paper. Tokens may be able to be openly traded as a currency, depending on various applicable rules and regulations which may apply and being able to be listed on the various exchanges.

For example a current energy token on the market, PowerLedger.io (4) –  is a blockchain-based peer-to-peer energy trading platform enabling consumers and businesses to sell their surplus solar power to their neighbours without a middleman.

<From a Media Press Release>  Power Ledger is based in Perth and uses blockchain technology to allow households to trade excess solar power over the electricity network.

Major Australian power retailer Origin Energy recently announced a three-month trial with Power Ledger to explore the benefits and challenges of peer-to-peer energy trading across a regulated network.

“Blockchain technology and cryptocurrency underpins our business offering and we are excited to be working with Perth-based DigitalX” said Power Ledger Chair Dr Jemma Green.

POWR tokens will be offered via the Ethereum cryptocurrency network in an uncapped price offer, meaning the tokens’ final price will be determined by the market demand.

“POWR will be the Ethereum blockchain protocol token required throughout the Power Ledger eco-system that can be converted to ‘Sparkz’, which is the crypto-currency we have set up for users to trade electricity using the platform,” said Dr Green.

As part of the engagement,DigitalX will introduce cryptocurrency investors to Power Ledger in exchange for a fee which consists of a mix of Ether (ETH) and POWR tokens.

“Blockchain-enabled innovation is disrupting traditional industries and digital currency is changing the way companies access capital. DigitalX is pleased to be able to facilitate this quantum shift in traditional mechanisms for accessing funding,” said Mr Travers.  (5)

Generally speaking, however, most crypto-currencies will have many advantages over fiat currency or stock markets. For one, their trade is not restricted to one market, or country to operate. Beyond anonymity one can store value in one token, exchange it for another, buy services on a network, or hold it speculatively. There are the other aspects related to smart contracts and the block-chain where physical assets or other attributes, such as counting operations of a machine or device can be linked to a token. In fact the possibilities seem endless, only bounded by the limits of imagination.

Cryptocurrency Offerings and Exchanges

Every day I receive more notifications regarding new offerings on a multiple of news feeds. Many of these offerings look good and viable. There are many new white-papers to read, and some are quite technically advanced and detailed in outlook and projections. As more cryptocurrencies are introduced into markets and traded on platforms investments will be expected to continue.

As cryptocurrencies are rapidly gaining acceptance and appeal, the task of evaluating all emerging offerings would be odious without methods of categorization, comparison and establishing legitimacy. At this time, according to the coinmarketcap.com, there are 1257 Cryptocurrencies with a total market cap of $199 Billion USD currently listed on exchanges. Currently there are 121 active exchanges trading cryptocurrencies (5) and in the last 24 hours there was a “volume of 614,489 BTC and $4,396,051,516 on 5915 trading pairs” (6).

Other resources of current token or coin offerings and other related information can be found on various websites, including tokenmarket.net and coinranking.com.

The Future of Cryptocurrency

At the current pace of innovation, new offerings, and investment as determined by market capitalization, it does not appear that current rapid growth in cryptocurrencies  slow down. Rather, examining current trends in cryptocurrency and comparing to models, it appears that we are in the innovation and early adoption phases of a technological innovation, as seen in figure 2. (7)

TechAdoptCurve2

Figure 2. Technological Adoption Curve (7)

In addition to the known bell curve of adoption, the value of the networks being formed on the internet, obeys Metcalfe’s law, see figure 1.

Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2).

As we can surmise from the effect of Metcalfe’s law as it applies to the development of cryptocurrencies is that we are currently in the earlier phases of value development, which will be expected to grow at an exponential rate associated with a nodal peer to peer model.

220px-Metcalfe-Network-Effect.svg

Two telephones can make only one connection, five can make 10 connections, and twelve can make 66 connections.

For innovators and early adopters these are exciting times as the number of participants continue to grow, and more capital continues to be invested in fledgling commercial enterprises. New business plans for ICO and Token issues are being issued every day. There are technical developments coming, apps, games, lenders and financial instruments, as well as new types of Tokens being issued with a variety of proof’s or calculation methods. Blockchains technology is changing to become increasingly efficient to handle ever increasing numbers of transactions. At this time there appears to be no limit to the possible applications of blockchain technology.

combined_curve

Figure 3. Combined Curve – Crossing the Chasm (1)

[…] The combination of Moore’s and Metcalfe’s laws explains the rise of information technology and the growth of the Internet as we know it today. […] And finally, in an unprecedented apotheosis, by combining the three preceding charts and by ― I have to admit ― visually cheating with axes, scales, and representations I came to the observation that the chasm is actually the point where the transition from a technology driven business to a value driven business needs to take place ― and if this doesn’t happen, that any new product or technology introduction is doomed to fail.

Disclaimers:

Expect that there are traps and pitfalls, some ventures may be fraudulent or simply fail. No guarantees on individual outcomes of ICO’s or other value propositions, and, as in all markets expect that there will be both successes and failures.

Expect, in various regions, government control and regulation, which may attempt to prevent or limit participation by populations or otherwise affect and manipulate markets.

Every participant in any new market, such as a cryptocurrency,  is advised to perform their own due diligence and research before investing capital.

No guarantees or warrantees are implied or expressed by the author, who, may at any time, hold vested interests in a variety of cryptocurrency tokens for speculation or other purposes.

End

References

  1. The Metcalfe Curve
  2. 7 Trends in Cryptocurrency Entrepreneurs Should Know
  3. Blockchain-Technology (for the Built Environment)
  4. How PowerLedger Works -Snapshot
  5. PowerLedger.io Home Page
  6. cryptocoincharts.info
  7. The Early Days of Cryptocurrency

 

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Microgrid as a Service (MaaS) and the Blockchain

It is a splendid event to observe when two new technologies combine to create a new marketplace. In recent years as new sources of distributed energy have been entering the electrical grid to provide power they are necessitating a change to the existing large-scale infrastructure model of power supply.

Classic Electric Power Grid Model

Figure 1. Classic electric power grid model with bulk generators transferring power long distances to reach the consumer.  Image courtesy of NetGain Energy Advisors. (1)

The old model utility was large and centralized and tracking transactions was simple as consumers were on one side of the ledger, while the provider as on the other. And whereby currency and energy flowed only in opposite directions between two identified parties, consumer and provider.

In the emerging markets of small-scale independent energy providers, we can see buildings, communities and even individual residences having built capacity to provide intermittently or on demand power at times, and consume or store power from the grid at other times. Solar power is only available during the day, and will require new commercial methods of energy storage.

How-Microgrids-Work

Figure 2. An example Microgrid (2)

In the transition from decentralized utility is the development of the Micro-grid.  The Micro-grid offers many benefits to society, including; (a) use of renewable energy sources that reduce or eliminate the production of GHG’s, (b) increases in energy efficiency of energy transmission due to shortening of transmission distances and infrastructure, (c) improved municipal resilience against disaster and power reductions, and finally, (d) promotion of economic activity that improves universal standard of living.

As buildings and communities evolve they are moving toward renewable energy sources to supplement their energy requirements and reduce operating costs. Even the building codes are getting into the act, requiring buildings be constructed to new energy efficiency standards. Also, we are seeing the development of new technologies and business methods, such as solar powered charging stations for electric vehicles.

The existing electrical grid and utility model has to develop and adapt to these new technologies and means of locally generating power. The future will include the development and incorporation of peer to peer networks and alternative energy supply methods. Consumers may purchase power from multiple sources, and produce power and supply it to other users via the electrical grid.

Micro-grid and the Blockchain

As new energy sources/providers emerge there is added complexity to the network. Consumers of power can also be an energy providers, as well as having different energy sources available. This increased functionality raises the complexity of possible transactions in the network.

Imagine a financial ledger, where each user in the system is no longer constrained to be a consumer, but also a supplier to other users in the system. In order to track both the credits and debits it has been proposed that the exchange of blockchain tokens be utilized to sort out complicated energy transfer transactions in a distributed P2P network.

P2P TRADING

This class of Platform Application gives retailers the ability to empower consumers (or in an unregulated environment, the consumers themselves) to simply trade electricity with one another and receive payment in real-time from an automated and trustless reconciliation and settlement system. There are many other immediate benefits such as being able to select a clean energy source, trade with neighbors, receive more money for excess power, benefit from transparency of all your trades on a blockchain and very low-cost settlement costs all leading to lower power bills and improved returns for investments in distributed renewables. (3)

One blockchain based energy token that has caught my attention is called POWR and is currently in pre-ICO sales of the tokens by the Australian platform Power Ledger. One of the uses of the platform that is being suggested is peer to peer trading.

 “We are absolutely thrilled with the results of the public presale,” says Dr Jemma Green, co-founder and chair of Power Ledger. “Selling out in just over 3 days is a very strong performance in line with global ICO standards, which speaks to the strong levels of interest from consumer and institutional buyers.”

The proceeds from the total pre sale were AU$17 million and the main sale on Friday offers approximately 150 million POWR tokens (subject to final confirmation before the sale opens) in an uncapped sale, meaning that the level of market demand will have set the final token price at the end of the sale. (4)

 

References

  1. The Changing Power Landscape
  2. Siemens – Microgrid Solutions
  3. Power Ledger Applications
  4. PRESS RELEASE Having Closed $17M In Their Presale ICO, Power Ledger Confirm Their Public Sale Will Commence on 8th September 2017

Sustainable Smart Cities and Disaster Mitigation – Preparing for the 1000 Year Storm

Hurricanes Cause Massive Damage

In light of recent events, such as the current hurricane season of 2017 which has already struck large sections of Texas with Hurricane Harvey causing massive damage which has been estimated at $180 billion by Texas Governor Greg Abbott (1) there are questions about how we can prepare cities better for disaster. One method considered is in our building codes, which are constantly being upgraded and improved, by constructing buildings to be more resilient and handle harsher conditions.

There is a limit to what a building code can do and enforce. Areas and regions that have seen widespread destruction, will have to be rebuilt.  However, to what standards? The existing building codes will have to be examined for their efficacy in storm-proofing buildings to withstand the effects of high winds and water penetration, some of which has already been performed.

Codes do not prevent external disasters such as from storms, tornadoes, tidal waves (tsunami), earthquakes, forest fire, lightning, landslides, nuclear melt-down and other extreme natural and man-made events. What building codes do is establish minimum standards of construction for various types of buildings and structures. Damage to buildings, vehicles, roads, power systems and other components of a city’s infrastructure are vulnerable to flooding which cannot be addressed in a building code. Other standards are needed to address this problem.

Storm-Proofing Cities

Other issues arise regarding flooding, and how water can be better managed in the future to mitigate water collection and drainage. These may require higher levels of involvement across a community and perhaps beyond municipal constraints, requiring state-wide developments. Breakwaters, sea walls, levees, spill ways and other forms of structures may be added to emergency pumping stations and micro-grid generator/storage facilities as examples of infrastructure improvements that could be utilized.

Bigger decisions may have to be considered as to the level of reconstruction of buildings in vulnerable areas. Sea warming as noted occurring has some scientists pondering if there is a connection between global warming and increased storm volatility as indicated by water temperature rises and tidal records (2). If bigger and more frequent storms are to come, then it must be considered in future building and infrastructure planning.

Regional Infrastructure and Resiliency

Exposed regions as well as larger, regional concerns in areas of maintaining power, roadways, and diverting and draining water are major in the resiliency of a community. When a social network breaks down, there is much lost, and recovery of a region can be adversely affected by loss of property and work.

Many of the lower classes will not have insurance and lose everything. Sick and elderly can be especially exposed, not having means to prepare or escape an oncoming disaster, and many will likely perish unless they can get access to aide or a shelter quickly.

Constructing better sea walls and storm surge barriers may be an effective means to diverting water in the event of a hurricane on densely populated coastal areas. Although considered costly to construct, they are a fraction of the cost of damage that may be caused by a high, forceful storm surge which can obliterate large unprotected populated areas. The Netherlands and England have made major advancements in coastal preparedness for storms.

Storm Surge Barriers

Overall Effectiveness for Reducing Flood Damage

There are only a few storm surge barriers in the United States, although major systems installed abroad demonstrate their efficacy. The Eastern Scheldt barrier in the Netherlands (completed in 1986) and the Thames barrier in the United Kingdom (completed in 1982) have prevented major flooding. Lavery and Donovan (2005) note that the Thames barrier, part of a flood risk reduction system of barriers, floodgates, floodwalls, and embankments, has reliably protected the City of London from North Sea storm surge since its completion.

Four storm surge barriers were constructed by the USACE in New England in the 1960s (Fox Point, Stamford, New Bedford, and Pawcatuck) and a fifth in 1986 in New London, Connecticut. The barriers were designed after a series of severe hurricanes struck New England in 1938, 1944, and 1954 (see Appendix B), which highlighted the vulnerability of the area. The 1938 hurricane damaged or destroyed 200,000 buildings and caused 600 fatalities (Morang, 2007; Pielke et al., 2008).

The 2,880-ft (878-m) Fox Point Barrier (Figure 1-8) stretches across

the Providence River, protecting downtown Providence, Rhode Island. The barrier successfully prevented a 2-ft (0.6-m) surge elevation (in excess of tide elevation) from Hurricane Gloria in 1985 and a 4-ft (1.2-m) surge from Hurricane Bob in 1991 (Morang, 2007) and was also used during Hurricane Sandy. The New Bedford, Massachusetts, Hurricane Barrier consists of a 4,500-ft-long (1372-m) earthen levee with a stone cap to an elevation of 20 ft (6 m), with a 150-ft-wide (46-m) gate for navigation. The barrier was reportedly effective during Hurricane Bob (1991), an unnamed coastal storm in 1997 (Morang, 2007), and Hurricane Sandy. During Hurricane Sandy, the peak total height of water (tide plus storm surge) was 6.8 feet (2.1 m), similar to the levels reached in 1991 and 1997. The Stamford, Connecticut, Hurricane Barrier has experienced six storms producing a surge of 9.0 ft (2.7 m) or higher between its completion (1969) and Hurricane Sandy. During Hurricane Sandy, the barrier experienced a storm surge of 11.1 ft (3.4 m), exceeding that of the 1938 hurricane (USACE, 2012). (3)

The biggest challenge is to build storm surge barriers large enough for future Hurricanes. There is a question that given the magnitude of current and future storms that these constructed barriers may be breached.  Engineers design structures to meet certain standards, and with weather these were the unlikely 1 in 100 year storm events. However, this standard is not good enough as Hurricane Katrina in Louisiana exemplified, as being rated a 1 in 250 year storm event. With climate changes these events may become more frequent.

Much of the damage from Katrina came not from high winds or rain but from storm surge that caused breaches in levees and floodwalls, pouring water into 80 percent of New Orleans. To the south, Katrina flooded all of St. Bernard Parish and the east bank of Plaquemines Parish. Plaquemines Parish flooded again in 2012 with Hurricane Isaac.

Soon after Katrina, Congress directed the Corps of Engineers to build a system that could protect against a storm that has a 1 percent chance of happening each year, a “1-in-100-year” storm.

The standard is less a measure of safety and more a benchmark that allows the city to be covered by the National Flood Insurance Program. Louisiana’s master coastal plan calls for a much stronger 500-year system. The corps says Katrina was a 250-year storm for the New Orleans area.

Since 2005, the Army Corps has revamped the storm protection system’s 350 miles of levees and floodwalls, 73 pumping stations, three canal-closure structures, and four gated outlets. The corps built a much-heralded 26-foot-high, 1.8-mile surge barrier in Lake Borgne, about 12 miles east of the center of the city.

During Katrina, a 15- to 16-foot-high storm surge in Lake Borgne forced its way into the Intracoastal Waterway, putting pressure on the Industrial Canal levees that breached and caused catastrophic flooding in the city’s Lower 9th Ward.

“In New Orleans, we know that no matter how high we build this or how wide we build it, eventually there will be a storm that’s able to overtop it,” New Orleans District Army Corps spokesman Ricky Boyett says, admiring the immense surge barrier from a boat on Lake Borgne. “What we want is this to be a strong structure that will be able to withstand that with limited to no damage from the overtopping.” (4)

500 Year Floods

Hurricane Harvey brought an immense amount of extreme rain, which brought a record 64″ in one storm to the Houston metropolitan region. This is a staggering amount of water, over 5 feet in height, this amount of water could only overwhelm low-lying areas, and depressions in topography. Flash floods can happen during extreme storms, where a drainage system is designed for a 1:100 year flood event, and not for a 1:500 or 1:1000 year flood event. Road ways can easily become rivers as drainage systems back up and surface water has no place to collect.

500-year-floods

Figure 1. 500 year flood events in the USA since 2015 (5)

New standards in development may need to accommodate more stringent standards. Existing municipal drainage systems are not designed to handle extreme rain and other means of drainage systems may have to be developed to divert water away from centers of population. Communities will be built to new standards, where storm water management is given a higher priority to avert flooding.

BN-UX285_HARVEY_M_20170831100012

Figure 2. Floodwaters from Tropical Storm Harvey (6)

Given the future uncertainty of our climate and weather, we cannot continue to ignore the devastating effects that disasters have on cities and regions. We must ask some difficult questions regarding the intelligence of continuing to build and live in increasingly higher risk regions.

On a personal level every citizen must take some responsibility in their choices of where to live. As for governments they need to decide how best to allocate limited resources in rebuilding and upgrading storm protection systems. It is anticipated that some areas will be abandoned as risks become too high for effective protection from future storm events.

The Oil and Gas Industry

It seems there is an irony involved with the possibility that storms severity is linked to global warming, and that access to vulnerable regions often are in part economically driven by the oil and gas industry.  Hurricane Harvey is the most recent storm which is affecting fuel prices across the USA. Refinery capacity has shrunk due to plant shut-downs.  Shortages in local fuel supplies are occurring, as remaining gasoline stations run dry.

Goldman Sachs estimates that the hurricane has taken 3 million barrels a day — or about 17% — of refining capacity offline, and that’s likely to increase the overall level of crude-oil inventories over the next couple of months. (7)

Oil and gas are particularly vulnerable to exposure to the weather, and it is in their own best interests to provide local protection to the area so that they can continue extracting the resource. However, ancillary industries such as refining may better be served by relocation away from danger areas. Also, supply lines become choked by disaster, and can potentially have consequences beyond the region which was exposed to the disaster.

The Electric Vehicle in the Smart City

Such events can only put upward pressure on the price of fuel, while providing further incentive to move away from the internal combustion engine as means of motive power. Electric vehicles would provide a much better ability to recover quickly from storm events as they are not restricted by access to fuel. Micro-grids in cities provide sectors of available power for which electric emergency response vehicles can move.

By moving reliance away from carbon based fuels to renewable electric sources and energy storage, future development in cities may see the benefits inherent in the electric vehicle. Burning fuels create heat, water and carbon dioxide in the combustion process. They consume our breathable oxygen and pollute the atmosphere. Pipelines, tankers and rail cars can break and spill causing pollution. Exploration causes damage to the environment.

A city that is energy efficient and reliant on renewable sources of energy that benignly interact with the environment can approach self-sustainability and a high degree of resilience against disaster. This combined with designing to much higher standards which keep in mind the current volatility our climate is experiencing, and uses the lessons learned in other areas as indicators of best practices into the future.

 

References

  1. Hurricane Harvey Damages Could Cost up to $180 Billion
  2. Global warming is ‘causing more hurricanes’
  3. “3 Performance of Coastal Risk Reduction Strategies.” National Research Council. 2014. Reducing Coastal Risk on the East and Gulf Coasts. Washington, DC: The National Academies Press. doi: 10.17226/18811.
  4. Rising Sea Levels May Limit New Orleans Adaptation Efforts
  5. Houston is experiencing its third ‘500-year’ flood in 3 years. How is that possible?
  6. Hurricane Harvey Slams Texas With Devastating Force
  7. GOLDMAN: Harvey’s damage to America’s oil industry could last several months

High Efficiency Clothes Washers

Nowadays we are searching for more ways to be energy efficient at home, work and elsewhere.  Our resources are not infinite, even if they are renewable. And, as such, we should be seeking ways to reduce our energy and water consumption, not only to be a good citizen but also for the money it saves which can be utilized elsewhere.

Yesterday I did my laundry, packed all my smelly and soiled clothes in a plastic garbage and headed off to the laundromat in Canmore. I chose a double loader which cost $4 + another buck for the heavy soiled clothing option. Not sure how this thing worked, I bought two small boxes (it’s a double loader after all so two boxes should do, I thought) of Tide for a buck apiece.
Samsung WF210ANW High Efficiency Washer

Figure 1.  Image of a Samsung’s WF210 HE Washing Machine top loading washing machine. (1)

The instructions on the machine were not clear, so I opened the boxes and sprinkled them on my clothes, set the temp for warm and started the machine. It was a 30 min cycle, and after about 5 minutes I did not see any appreciable amount of water in the washer, also I noticed that there was a slot for the detergent. So, I decided to buy another box of detergent and put it into the pull out. The machine was on 10 minutes now, and still no water… wtf?

Image result for high efficiency washing machine

Figure 2.  Graphic comparing a HE washing machine to a traditional top loader. (2)

Okay, so I call the management which operated the local motel, informing them that the machine is broken, and a girl comes out to see what is going on. She assures me it’s fine and working, that the machine uses very little water. Okay, I am skeptical and concerned that with so much detergent and very little water my clothes would not get clean and be covered with a residue.

In the meantime a nice German lady comes over to me and says that she has never seen a top loader before and they only use front loading machines where she is from. I laughed and told her that in Canada we have a tendency to waste our resources as we have so much, whereas in Germany they have a larger population crammed in a small country. The government of Canada has a tendency to give lip service to energy and water efficiency.

The end result was that the clothes came out brilliantly clean with no residue. Most of the water was spun out and the clothes were only slightly damp, which meant that my dryer time was greatly reduced. The amount of heated water and energy used for drying is greatly reduced. Is it not time to get rid of the energy hogs?

 

References:

(1)  High Efficiency Washing Machines Save Money With Less Water, Energy

(2)  High Efficiency Washing Machine

Energy Certificates and the Blockchain Protocol

In the world of energy production, renewable energy sources, micro grids, large scale users, and other forms of electric power schemes there is a concentrated effort being placed on utilizing the Blockchain protocol.  This is because of the unique way in which a unit may be defined and tracked, similarly, can be associated to tracking quantities of value created and utilized in a complex trading scheme.

In a recent article (1) it has been reported that Jesse Morris, principal for electricity and transportation practices at RMI and co-founder of the Energy Web Foundation (EWF) received $2.5 million to develop the Blockchain protocol for energy purposes.

“We have a strong hypothesis that blockchain will solve a lot of long-running problems in the energy sector,” said Morris. “Overcoming these challenges could make small, incremental changes to energy infrastructure and markets in the near term, while others would be more far-reaching and disruptive.”

Certificates (also known as guarantees) of origin would assure the user that a particular megawatt-hour of electricity was produced from renewables. According to Morris, the U.S. alone has 10 different tracking systems, Asia-Pacific has several more, and each European country has its own system of certification. Blockchain could be used to transparently guarantee the origin of the electrons.

Longer-term, and more radically, RMI sees the future of electricity networks being driven by the billions of energy storage and HVAC units, EVs, solar roof panels and other devices and appliances at the grid edge.

Blockchains can allow any of them to set their own level of participation on the grid, without the need for an intermediary. And crucially, they can be configured so that if a grid operator needs guaranteed capacity, the grid-edge unit can communicate back to the grid whether or not it’s up to the task.

This is an example of what Morris described as blockchain’s ability to “fuse the physical with the virtual” via machine-to-machine communication.  (1)

Another example of the emergence of the usefulness and interest in the Blockchain protocol is in crowdsourcing and distributed ledger applications.

Illustration by Dan Page (2)

At its heart, blockchain is a self-sustaining, peer-to-peer database technology for managing and recording transactions with no central bank or clearinghouse involvement. Because blockchain verification is handled through algorithms and consensus among multiple computers, the system is presumed immune to tampering, fraud, or political control. It is designed to protect against domination of the network by any single computer or group of computers. Participants are relatively anonymous, identified only by pseudonyms, and every transaction can be relied upon. Moreover, because every core transaction is processed just once, in one shared electronic ledger, blockchain reduces the redundancy and delays that exist in today’s banking system.

Companies expressing interest in blockchain include HP, Microsoft, IBM, and Intel. In the financial-services sector, some large firms are forging partnerships with technology-focused startups to explore possibilities. For example, R3, a financial technology firm, announced in October 2015 that 25 banks had joined its consortium, which is attempting to develop a common crypto-technology-based platform. Participants include such influential banks as Citi, Bank of America, HSBC, Deutsche Bank, Morgan Stanley, UniCredit, Société Générale, Mitsubishi UFG Financial Group, National Australia Bank, and the Royal Bank of Canada. Another early experimenter is Nasdaq, whose CEO, Robert Greifeld, introduced Nasdaq Linq, a blockchain-based digital ledger for transferring shares of privately held companies, also in October 2015. (2)

 

References:

  1. Energy Companies look to Blockchain
  2. A Strategist’s Guide to the Blockchain

A Modern Renaissance of Electrical Power: Microgrid Technology – Part 1

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Figure 1:  The original Edison DC microgrid in New York City, which started operation on September 4, 1882 (1)

A.  Historical Development of Electric Power in the Metropolitan City

The development of electricity for commercial, municipal and industrial use developed at a frantic pace in the mid to late 1800’s and early 1900’s.  The original distribution system consisted of copper wiring laid below the streets of New York’s east side.  The first power plants and distribution systems were small compared to today’s interconnected grids which span nations and continents.  These small “islands” of electrical power were the original microgrids.  In time they grew to become the massive infrastructure which delivers us electrical power we have become dependent upon for the operation of our modern society.

1) Let There Be Light! – Invention of the Light Bulb

When electricity first came on the scene in the 1800’s it was a relatively unknown force. Distribution systems from a central plant were a new concept originally intended to provide electric power for the newly invented incandescent light bulb.  Thomas Edison first developed a DC power electric grid to test out and prove his ideas in New York, at the Manhattan Pearl Street Station in the 1870’s.  This first “microgrid” turned out to be a formidable undertaking.

[…] Edison’s great illumination took far longer to bring about than he expected, and the project was plagued with challenges. “It was massive, all of the problems he had to solve,” says writer Jill Jonnes, author of Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World, to PBS. For instance, Edison had to do the dirty work of actually convincing city officials to let him use the Lower East Side as a testing ground, which would require digging up long stretches of street to install 80,000 feet insulated copper wiring below the surface.

He also had to design all of the hardware that would go into his first power grid, including switchboards, lamps, and even the actual meters used to charge specific amounts to specific buildings. That included even the six massive steam-powered generators—each weighing 30 tons—which Edison had created to serve this unprecedented new grid, according to IEEE. As PBS explains, Edison was responsible for figuring out all sorts of operational details of the project—including a “bank of 1,000 lamps for testing the system:” (1)

Although Edison was the first to develop a small DC electrical distribution system in a city, there was competition between DC and AC power system schemes in the early years of electrical grid development.  At the same time, there were a hodge-podge of other power sources and distribution methods in the early days of modern city development.

In the 1880s, electricity competed with steam, hydraulics, and especially coal gas. Coal gas was first produced on customer’s premises but later evolved into gasification plants that enjoyed economies of scale. In the industrialized world, cities had networks of piped gas, used for lighting. But gas lamps produced poor light, wasted heat, made rooms hot and smoky, and gave off hydrogen and carbon monoxide. In the 1880s electric lighting soon became advantageous compared to gas lighting. (2)

2) Upward Growth – Elevators and Tall Buildings

Another innovation which had been developing at the same time as electrical production and distribution, was the elevator, a necessity for the development of tall buildings and eventually towers and skyscrapers .  While there are ancient references to elevating devices and lifts, the original electric elevator was first introduced in Germany in 1880 by Werner von Siemens (3).  It was necessary for upward growth in urban centers that a safe and efficient means of moving people and goods was vital for the development of tall buildings.

Later in the 1800s, with the advent of electricity, the electric motor was integrated into elevator technology by German inventor Werner von Siemens. With the motor mounted at the bottom of the cab, this design employed a gearing scheme to climb shaft walls fitted with racks. In 1887, an electric elevator was developed in Baltimore, using a revolving drum to wind the hoisting rope, but these drums could not practically be made large enough to store the long hoisting ropes that would be required by skyscrapers.

Motor technology and control methods evolved rapidly. In 1889 came the direct-connected geared electric elevator, allowing for the building of significantly taller structures. By 1903, this design had evolved into the gearless traction electric elevator, allowing hundred-plus story buildings to become possible and forever changing the urban landscape. Multi-speed motors replaced the original single-speed models to help with landing-leveling and smoother overall operation.

Electromagnet technology replaced manual rope-driven switching and braking. Push-button controls and various complex signal systems modernized the elevator even further. Safety improvements have been continual, including a notable development by Charles Otis, son of original “safety” inventor Elisha, that engaged the “safety” at any excessive speed, even if the hoisting rope remained intact. (4)

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Figure 2:  The Woolworth Building at 233 Broadway, Manhattan, New York City – The World’s Tallest Building, 1926 (5)

3) Hydroelectric A/C Power – Tesla, Westinghouse and Niagara Falls

Although Niagara Falls was not the first hydroelectric project it was by far the largest and from the massive power production capacity spawned a second Industrial Revolution.

“On September 30, 1882, the world’s first hydroelectric power plant began operation on the Fox River in Appleton, Wisconsin. […] Unlike Edison’s New York plant which used steam power to drive its generators, the Appleton plant used the natural energy of the Fox River. When the plant opened, it produced enough electricity to light Rogers’s home, the plant itself, and a nearby building. Hydroelectric power plants of today generate a lot more electricity. By the early 20th century, these plants produced a significant portion of the country’s electric energy. The cheap electricity provided by the plants spurred industrial growth in many regions of the country. To get even more power out of the flowing water, the government started building dams.” (6)

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Figure 3:  The interior of Power House No. 1 of the Niagara Falls Power Company (1895-1899) (7)

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Figure 4:  Adam’s power station with three Tesla AC generators at Niagara Falls, November 16, 1896. (7)

Electrical Transmission, Tesla and the Polyphase Motor

The problem of the best means of transmission, though, would be worked out not by the commission but in the natural course of things, which included great strides in the development of AC. In addition, the natural course of things included some special intervention from on high (that is, from Edison himself).

But above all, it involved Tesla, probably the only inventor ever who could be put in a class with Edison’s in terms of the number and significance of his innovations. The Croatian-born scientific mystic–he spoke of his insight into the mechanical principles of the motor as a kind of religious vision–had once worked for Edison. He had started out with the Edison Company in Paris, where his remarkable abilities were noticed by Edison’s business cohort and close friend Charles Batchelor, who encouraged Tesla to transfer to the Edison office in New York City, which he did in 1884. There Edison, too, became impressed with him after he successfully performed a number of challenging assignments. But when Tesla asked Edison to let him undertake research on AC–in particular on his concept for an AC motor–Edison rejected the idea. Not only wasn’t Edison interested in motors, he refused to have anything to do with the rival current.

So for the time being Tesla threw himself into work on DC. He told Edison he thought he could substantially improve the DC dynamo. Edison told him if he could, it would earn him a $50,000 bonus. This would have enabled Tesla to set up a laboratory of his own where he could have pursued his AC interests. By dint of extremely long hours and diligent effort, he came up with a set of some 24 designs for new equipment, which would eventually be used to replace Edison’s present equipment.

But he never found the promised $50,000 in his pay envelope. When he asked Edison about this matter, Edison told him he had been joking. “You don’t understand American humor,” he said. Deeply disappointed, Tesla quit his position with the Edison company, and with financial backers, started his own company, which enabled him to work on his AC ideas, among other obligations.

The motor Tesla patented in 1888 is known as the induction motor. It not only provided a serviceable motor for AC, but the induction motor had a distinct advantage over the DC motor. (About two-thirds of the motors in use today are induction motors.)

The idea of the induction motor is simplicity itself, based on the Faraday principle. And its simplicity is its advantage over the DC motor.

An electrical motor–whether DC or AC–is a generator in reverse. The generator operates by causing a conductor (armature) to move (rotate) in a magnetic field, producing a current in the armature. The motor operates by causing a current to flow in an armature in a magnetic field, producing rotation of the armature. A generator uses motion to produce electricity. A motor uses electricity to produce motion.

The DC motor uses commutators and brushes (a contact switching mechanism that opens and closes circuits) to change the direction of the current in the rotating armature, and thus sustain the direction of rotation and direction of current.

In the AC induction motor, the current supply to the armature is by induction from the magnetic field produced by the field current.  The induction motor thus does away with the troublesome commutators and brushes (or any other contact switching mechanism). However, in the induction motor the armature wouldn’t turn except as a result of rotation of the magnetic field, which is achieved through the use of polyphase current. The different current phases function in tandem (analogous to pedals on a bicycle) to create differently oriented magnetic fields to propel the armature.  

Westinghouse bought up the patents on the Tesla motors almost immediately and set to work trying to adapt them to the single-phase system then in use. This didn’t work. So he started developing a two-phase system. But in December 1890, because of the company’s financial straits–the company had incurred large liabilities through the purchase of a number of smaller companies, and had to temporarily cut back on research and development projects–Westinghouse stopped the work on polyphase. (8)

4) The Modern Centralized Electric Power System

After the innovative technologies which allowed expansion and growth within metropolitan centers were developed there was a race to establish large power plants and distribution systems from power sources to users.  Alternating Current aka AC power was found to the preferred method of power transmission over copper wires from distant sources.  Direct Current power transmission proved problematic over distances, generated resistance heat resulting in line power losses. (9)

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Figure 5:  New York City streets in 1890. Besides telegraph lines, multiple electric lines were required for each class of device requiring different voltages (11)

AC has a major advantage in that it is possible to transmit AC power as high voltage and convert it to low voltage to serve individual users.

From the late 1800s onward, a patchwork of AC and DC grids cropped up across the country, in direct competition with one another. Small systems were consolidated throughout the early 1900s, and local and state governments began cobbling together regulations and regulatory groups. However, even with regulations, some businessmen found ways to create elaborate and powerful monopolies. Public outrage at the subsequent costs came to a head during the Great Depression and sparked Federal regulations, as well as projects to provide electricity to rural areas, through the Tennessee Valley Authority and others.

By the 1930s regulated electric utilities became well-established, providing all three major aspects of electricity, the power plants, transmission lines, and distribution. This type of electricity system, a regulated monopoly, is called a vertically-integrated utility. Bigger transmission lines and more remote power plants were built, and transmission systems became significantly larger, crossing many miles of land and even state lines.

As electricity became more widespread, larger plants were constructed to provide more electricity, and bigger transmission lines were used to transmit electricity from farther away. In 1978 the Public Utilities Regulatory Policies Act was passed, making it possible for power plants owned by non-utilities to sell electricity too, opening the door to privatization.

By the 1990s, the Federal government was completely in support of opening access to the electricity grid to everyone, not only the vertically-integrated utilities. The vertically-integrated utilities didn’t want competition and found ways to prevent outsiders from using their transmission lines, so the government stepped in and created rules to force open access to the lines, and set the stage for Independent System Operators, not-for-profit entities that managed the transmission of electricity in different regions.

Today’s electricity grid – actually three separate grids – is extraordinarily complex as a result. From the very beginning of electricity in America, systems were varied and regionally-adapted, and it is no different today. Some states have their own independent electricity grid operators, like California and Texas. Other states are part of regional operators, like the Midwest Independent System Operator or the New England Independent System Operator. Not all regions use a system operator, and there are still municipalities that provide all aspects of electricity. (10)

 

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Figure 6:  Diagram of a modern electric power system (11)

A Brief History of Electrical Transmission Development

The first transmission of three-phase alternating current using high voltage took place in 1891 during the international electricity exhibition in Frankfurt. A 15,000 V transmission line, approximately 175 km long, connected Lauffen on the Neckar and Frankfurt.[6][12]

Voltages used for electric power transmission increased throughout the 20th century. By 1914, fifty-five transmission systems each operating at more than 70,000 V were in service. The highest voltage then used was 150,000 V.[13] By allowing multiple generating plants to be interconnected over a wide area, electricity production cost was reduced. The most efficient available plants could be used to supply the varying loads during the day. Reliability was improved and capital investment cost was reduced, since stand-by generating capacity could be shared over many more customers and a wider geographic area. Remote and low-cost sources of energy, such as hydroelectric power or mine-mouth coal, could be exploited to lower energy production cost.[3][6]

The rapid industrialization in the 20th century made electrical transmission lines and grids a critical infrastructure item in most industrialized nations. The interconnection of local generation plants and small distribution networks was greatly spurred by the requirements of World War I, with large electrical generating plants built by governments to provide power to munitions factories. Later these generating plants were connected to supply civil loads through long-distance transmission. (11)

 

To be continued in Part 2:  Distributed Generation and The Microgrid Revolution

 

References:

  1. The Forgotten Story Of NYC’s First Power Grid  by Kelsey Campbell-Dollaghan
  2. The Electrical Grid – Wikipedia
  3. The History of the Elevator – Wikipedia
  4. Elevator History – Columbia Elevator
  5. The History of Elevators and Escalators – The Wonder Book Of Knowledge | by Henry Chase (1921)
  6. The World’s First Hydroelectric Power Station
  7. Tesla Memorial Society of New York Website 
  8. The Day They Turned The Falls On: The Invention Of The Universal Electrical Power System by Jack Foran
  9. How electricity grew up? A brief history of the electrical grid
  10. The electricity grid: A history
  11. Electric power transmission

Hybrid Electric Buildings; A New Frontier for Energy and Grids

.OneMaritimePlaza-300x225 PeakerPlantSanFranHybrid Electric Buildings are the latest in developments for packaged energy storage in buildings which offer several advantages including long-term operational cost savings. These buildings have the flexibility to combine several technologies and energy sources in with a large-scale integrated electric battery system to operate in a cost-effective manner.

San Francisco’s landmark skyscraper, One Maritime Plaza, will become the city’s first Hybrid Electric Building using Tesla Powerpack batteries. The groundbreaking technology upgrade by Advanced Microgrid Solutions (AMS) will lower costs, increase grid and building resiliency, and reduce the building’s demand for electricity from the sources that most negatively impact the environment.

Building owner Morgan Stanley Real Estate Investing hired San Francisco-based AMS to design, build, and operate the project. The 500 kilowatt/1,000 kilowatt-hour indoor battery system will provide One Maritime Plaza with the ability to store clean energy and control demand from the electric grid. The technology enables the building to shift from grid to battery power to conserve electricity in the same way a hybrid-electric car conserves gasoline. (1)

In addition to storage solutions these buildings can offer significant roof area to install solar panel modules and arrays to generate power during the day.  Areas where sunshine is plentiful and electricity rates are high, solar PV and storage combinations for commercial installations are economically attractive.

For utility management, these systems are ideal in expansion of the overall grid, as more micro-grids attach to the utility infrastructure overall supply and resiliency is improved.

In recent developments AMS has partnered with retailer Wal-Mart to provide on-site and “behind the meter” energy storage solutions for no upfront costs.

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Figure 2.  Solar Panels on Roof of Wal-Mart, Corporate Headquarters, Puerto Rico (3)

On Tuesday, the San Francisco-based startup announced it is working with the retail giant to install behind-the-meter batteries at stores to balance on-site energy and provide megawatts of flexibility to utilities, starting with 40 megawatt-hours of projects at 27 Southern California locations.

Under the terms of the deal, “AMS will design, install and operate advanced energy storage systems” at the stores for no upfront cost, while providing grid services and on-site energy savings. The financing was made possible by partners such as Macquarie Capital, which pledged $200 million to the startup’s pipeline last year.

For Wal-Mart, the systems bring the ability to shave expensive peaks, smooth out imbalances in on-site generation and consumption, and help it meet a goal of powering half of its operations with renewable energy by 2025. Advanced Microgrid Solutions will manage its batteries in conjunction with building load — as well as on-site solar or other generation — to create what it calls a “hybrid electric building” able to keep its own energy costs to a minimum, while retaining flexibility for utility needs.

The utility in this case is Southern California Edison, a long-time AMS partner, which “will be able to tap into these advanced energy storage systems to reduce demand on the grid as part of SCE’s groundbreaking grid modernization project,” according to Tuesday’s statement. This references the utility’s multibillion-dollar grid modernization plan, which is now before state regulators.  (2)

References:

  1. San Francisco’s First Hybrid Electric Building – Facility Executive, June 28, 2016
    https://facilityexecutive.com/2016/06/skyscraper-will-be-san-franciscos-first-hybrid-electric-building/

  2. Wal-Mart, Advanced Microgrid Solutions to Turn Big-Box Stores Into Hybrid Electric Buildings, GreenTech Media, April 11, 2017  https://www.greentechmedia.com/articles/read/wal-mart-to-turn-big-box-stores-into-hybrid-electric-buildings?utm_source=Daily&utm_medium=Newsletter&utm_campaign=GTMDaily

  3. Solar Panels on Wal-Mart Roof  http://corporate.walmart.com/_news_/photos/solar-panels-roof-puerto-rico

Water Conservation and a Change in Climate Ends California Drought

Water scarcity is becoming a greater problem in our world as human demands for water increases due to population growth, industry, agriculture, and energy production. When the water supply is being pushed beyond its natural limits disaster may occur.  For California residents the end of the drought is good news.  Return of wet weather raises reservoir levels and effectively prevents wildfires.  However, another drought could be around the corner in years to come.  Thus government and water users need to remain vigilant and continue to seek ways to conserve and reduce water use.
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Figure 1. 2017 California Major Water Reservoir Levels
By Bark Gomez and Yasemin Saplakoglu, Bay Area News Group (1)
Friday, April 07, 2017 05:17PM

Gov. Jerry Brown declared an end to California’s historic drought Friday, lifting emergency orders that had forced residents to stop running sprinklers as often and encouraged them to rip out thirsty lawns during the state’s driest four-year period on record.

The drought strained native fish that migrate up rivers and forced farmers in the nation’s leading agricultural state to rely heavily on groundwater, with some tearing out orchards. It also dried up wells, forcing hundreds of families in rural areas to drink bottled water and bathe from buckets.

Brown declared the drought emergency in 2014, and officials later ordered mandatory conservation for the first time in state history. Regulators last year relaxed the rules after a rainfall was close to normal.

But monster storms this winter erased nearly all signs of drought, blanketing the Sierra Nevada with deep snow, California’s key water source, and boosting reservoirs.

“This drought emergency is over, but the next drought could be around the corner,” Brown said in a statement. “Conservation must remain a way of life.” (2)

References:

  1. https://wattsupwiththat.com/2017/04/08/what-permanent-drought-california-governor-officially-declares-end-to-drought-emergency/ 
  2. http://abc7news.com/weather/governor-ends-drought-state-of-emergency-in-most-of-ca/1846410/

What Does Moist Enthalpy Tell Us?

“In terms of assessing trends in globally-averaged surface air temperature as a metric to diagnose the radiative equilibrium of the Earth, the neglect of using moist enthalpy, therefore, necessarily produces an inaccurate metric, since the water vapor content of the surface air will generally have different temporal variability and trends than the air temperature.”

Climate Science: Roger Pielke Sr.

In our blog of July 11, we introduced the concept of moist enthalpy (see also Pielke, R.A. Sr., C. Davey, and J. Morgan, 2004: Assessing “global warming” with surface heat content. Eos, 85, No. 21, 210-211. ). This is an important climate change metric, since it illustrates why surface air temperature alone is inadequate to monitor trends of surface heating and cooling. Heat is measured in units of Joules. Degrees Celsius is an incomplete metric of heat.

Surface air moist enthalpy does capture the proper measure of heat. It is defined as CpT + Lq where Cp is the heat capacity of air at constant pressure, T is air temperature, L is the latent heat of phase change of water vapor, and q is the specific humidity of air. T is what we measure with a thermometer, while q is derived by measuring the wet bulb temperature (or, alternatively, dewpoint…

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Site C Dam Construction in BC – A Political Water Grab?

Mega projects grab headlines and provide many photo opportunities for politicians.  Since the construction of the depression era Hoover Dam, these massive construction projects have historically provided for jobs and opportunity when the economy is slow.  However, some questions remain, such as; are these projects in everyone’s best interests, what are we losing, and is there a better way to accomplish our goals?

“‘Water grabbing’ refers to a situation in which public or private entities are able to take control of, or reallocate, precious water resources for profit or for power — and at the expense of local communities and the ecosystems on which their livelihoods are based.

The effects have been well-documented: examples include families driven away from their villages to make room for mega dams, privatization of water sources that fails to improve access for the public, and industrial activity that damages water quality.”

[…]

“…hydropower comprises about 70 per cent of the world’s renewable energy mix, and guarantees a lower amount of total emissions than fossil fuel plants, its overall impacts are not always positive. This is especially the case when dams are not planned with an emphasis on the impacts on people and the environment.

In North America, many dams built in the 1980s are now being demolished because of their impacts on fish species such as salmon. In some cases they are replaced with more modern dams that do not require building large-scale reservoirs.” (1)

A Short Political History of the Site C Dam

Site C dam construction

Figure 1.  Construction on the Site C dam on the Peace River in the fall of 2016. Photo: Garth Lenz. (2)

“On May 10, 1990, the Vancouver Sun reported remarks made by then Energy Minister Jack Davis at an Electric Energy Forum: “Power projects initiated by B.C. Hydro will be increasingly guided by environmental concerns because of mounting public pressure.” Noting the province’s abundance of power sources, he said: “We have the scope to be different.”

However, during a 1991 Social Credit party leadership campaign the winner, Rita Johnston declared in her policy statement that she wanted to accelerate construction of the “$3 billion” dam. Johnston’s leadership was brief because the Socreds were defeated in October 1991.

In 1993, the dam was declared dead by then BC Hydro CEO Marc Eliesen. Site C is dead for two reasons,” Eliesen said. “The fiscal exposure is too great … the dam is too costly. Also it is environmentally unacceptable.”

Despite these twists and turns, B.C. Hydro’s staff worked diligently to keep the dam alive.

Fast forward to April 19, 2010, when then B.C. Liberal Premier Gordon Campbell made his announcement that Site C was on again, now branded as a “clean energy project” and an important part of “B.C.’s economic and ecological future.”

Campbell claimed the dam would power 460,000 new homes and repeated the mantra of an increasing power demand of 20 to 40 per cent in the following 20 years.

In the ensuing seven years since the 2010 announcement, power demand has stayed virtually the same, despite BC Hydro’s forecast for it to climb nearly 20 per cent during that time. The reality is B.C.’s electricity demand has been essentially flat since 2005, despite ongoing population growth.

Campbell resigned in 2011 amidst uproar over the Harmonized Sales Tax (HST), opening the field for a leadership race, which Christy Clark won. That brings us to the May 2013 election, during which Clark pushed liquefied natural gas (LNG) exports as the solution to B.C.’s economic woes. With the LNG dream came a potential new demand for grid electricity, making Site C even more of a hot topic.

Four years on from Clark’s pronouncement there are no LNG plants up and running, despite her promise of thousands of jobs. Without a market for Site C’s power, Clark has started ruminating about sending it to Alberta, despite a lack of transmission or a clear market.

Oxford University Professor Bent Flyvbjerg has studied politicians’ fascination with mega projects, describing the rapture they feel building monuments to themselves: “Mega projects garner attention, which adds to the visibility they gain from them.”

This goes some way to explaining the four-decade obsession with building the Site C dam, despite the lack of clear demand for the electricity. (2)

 

References:

  1.  Water and power: Mega-dams, mega-damage?
    http://www.scidev.net/global/water/data-visualisation/water-power-mega-dams-mega-damage.html
  2. Four Decades and Counting: A Brief History of the Site C Dam https://www.desmog.ca/2017/03/23/four-decades-and-counting-brief-history-site-c-dam