High-Tech Companies Examine Critical Shortage of Power

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Jun 9, 2000 - 06:47 PM

High-Tech Companies Examine Critical Shortage of Power as Usage Booms By Cliff Edwards The Associated Press

REDWOOD SHORES, Calif. (AP) - High-tech companies wield increasing power in the American economy, but they could face dark days in the coming months unless a nationwide energy shortage is quickly addressed, participants at a regional energy summit warned Friday. The U.S. Department of Energy and energy experts in several of the nation's largest electricity-consuming states say the possibility of extended blackouts looms large this summer and next, representing the potential loss of billions of dollars to high-tech firms that rely on uninterrupted power sources.

"Our aging power grid is not able to meet the needs of the information age," said Carl Guardino, president of the high-tech industry organization Silicon Valley Manufacturing Group, which sponsored the summit.

Computers and computer peripherals now consume about 13 percent of the nation's available power, a figure that has soared from less than 1 percent since 1993 as the Internet becomes a preferred method of doing business and communicating with each other.

But the construction of new power-generating plants and transmission lines to meet that demand has virtually ground to a standstill in the same period as companies wait to understand the effects of deregulation of the electric utility industry.

The imbalance threatens to grow even larger in coming months amid projections that electricity demand will grow 17 percent by 2007 as transmission capacity rises only 4 percent.

The one-day Silicon Valley Energy Summit - "Where the Digital Economy Meets the Grid" - brought together California lawmakers, regulators, businesses and energy providers to discuss increasing concerns about the looming energy shortage as companies race to update the nation's aging energy grid.

The U.S. Department of Energy noted in a recent report that "the reliability of our electric grid is faltering" and warned the Silicon Valley and other regions of the country should be on alert for power shortages.

One of the problems with electricity is that it cannot be stored for long periods to form a viable reserve. That has forced utilities to set up grids crisscrossing the nation and extending up into Canada that can route unused power from one area into another.

For instance, a summer heat wave in the Midwest might increase air-conditioning usage, forcing utilities there to buy excess power from New England where temperatures might be cooler.

But the boost in high-tech companies' power usage increasingly is forcing individual states to turn to the grid for power, resulting in occasional price spikes from about $40 per megawatt-hour to as much as $10,000 a megawatt-hour.

The increasing energy needs also have taxed utilities' equipment across the nation, resulting in widespread power outages such as two extended outages last summer in Chicago and one in New York.

"The power system that we have today was not designed for the measures of reliability that would support a silicon-based society," said Karl Stahlkopf, vice president of EPRI Corp., a Palo Alto-based research and development company working to understand and develop new solutions for the nation's utilities.

Much of the talk about solutions Friday centered around building generating plants close to where they are needed, but lawmakers noted widespread opposition among consumers to constructing facilities in their neighborhoods.

"If you try to build new transmission lines, you ... have to kill somebody," said state Assemblyman Roderick Wright, chairman of the Utilities and Commerce Committee. "While everyone wants more power, no one wants power plants built near them."

Jeff Byron, energy director at software and data-management company Oracle Corp., said his company took an approach that many high-tech firms are likely to emulate: "We built our own power plant for emergency energy needs" at a cost of $6.5 million.

Byron noted that utilities can promise only 99.9 percent reliability - a figure that translates to about eight hours of blackouts a year - while high-tech firms stand to lose millions of dollars from a blackout lasting just a minute.

"We need 99.9999 percent reliability for e-commerce, and we need more flexibility from regulation to achieve that," he said.


-- Martin Thompson (mthom1927@aol.com), June 09, 2000

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