Apple recently announced it has achieved complete reliance on alternative (“renewable”) energy sources for all its data centers, setting a high mark for other companies to strive for. But can the push for alternative power reach this end more generally, or is Apple an isolated case that’s unrealistic for the broader economy?
Cashing Out Apple’s Claim
Apple’s claim regarding its data centers doesn’t mean all its facilities use power directly from solar panels, wind turbines and so forth. This is not to fault Apple—constructing power-generation facilities for a large data center is beyond the capability of most companies. Even Apple’s Maiden, NC, data center still uses some grid power (which is largely coal based). Some of the energy in the company’s claim is “purchased”—but how exactly this cashes out, given the structure of the power grid, is uncertain. (If you “buy” wind power but still use coal power, what does that mean?)
Nevertheless, ignoring such details, a more important question is whether Apple should be a model for other companies—and even for consumers. Renewable energy has a checkered past sullied by government-funding debacles (think Solyndra), haranguing by environmental groups, scare tactics (particularly with regard to global warming) and so on. A world with no oil drilling (or subsequent spills), no coal mining and no emissions from burning such fuels certainly sounds wonderful, but reaching such a goal requires facing a number of challenges.
Can the Power Grid Handle Alternative Power Sources?
Most companies can’t afford to implement their own power-generation facilities. Even Apple isn’t relying exclusively on its own power, although it has made significant strides in this direction. Furthermore, for some companies—such as those in cities—space constraints alone can prohibit investment in power-generation equipment. Reliance on the grid, which is largely powered by central facilities and to a lesser extent distributed equipment (like residential or commercial solar panels) is thus the only option in many cases.
A large-scale move to alternative energy sources has at least one major problem with regard to the grid: most such sources provide intermittent power levels, at best. Solar, for instance, only generates electricity for half the day (and that’s being generous); wind can vary hour by hour or worse. The current grid, which is designed to handle a steady power level, could run into major problems if it suddenly switched to large amounts of these sources. Imagine a cloudy day that all of the sudden becomes clear, sunny and windy. Not only would the influx of energy cause potentially damaging power spikes, it could force more traditional power facilities (specifically, coal plants) to run much less efficiently.
Although it may be an extreme case, Bulgaria illustrates the potential negative effects of wind and solar power on the grid. Bloomberg notes that “Bulgaria’s grid is suffering from power overloads caused by a rapid increase in wind and solar capacity coupled with decreasing domestic consumption in the face of a weak economy.”
One of the challenges to increasing reliance on solar power is thus regulation of the supply to maintain a consistent level. Unfortunately, electrical power has a very brief shelf life; it must be used when it’s produced, or it’s lost. The obvious answer is to use some form of energy-storage system. Power-generation facilities can simply charge these “batteries” (whatever the form or fuel type) directly, and the batteries can discharge at a consistent rate into the grid, providing clean power to companies and consumers. The problem, of course, is finding a technology that can store large amounts of energy efficiently and economically.
Coal, despite all its shortcomings (particularly mining practices and emissions from combustion), has at least one enormous advantage over alternative sources like wind and solar: it stores energy in a relatively safe package (compared with, say, nuclear fuels like uranium and highly flammable substances like hydrogen) that can be transported and converted to electricity on demand. And since coal currently dominates the grid, it has momentum.
Furthermore, struggling western economies have little overall market incentive for moving to alternative energy, apart from government regulations that artificially increase prices of traditional sources. This isn’t to say, however, that environmental concerns should play no part in analyzing the relative costs of different energy sources; regulations are not inherently bad. Western governments, however, have largely yielded credibility owing to their overboard regulation of nearly every aspect of life—hence much of the hasty resistance to regulation in the energy sector, particularly relating to coal. On the other hand, winter tragedy in England illustrates the negative consequences of energy regulations, particularly in tough fiscal times. Balance is needed.
A Vision for Better Energy
One of the strangest attempts to justify even further government regulation of energy (particularly coal and similar fuels) is the claim that these sources will run out soon. How will you play video on your iPad if Apple’s cloud data centers suddenly go dark because coal supplies ran out? Obviously, this situation wouldn’t take place; if supplies of these fuels begin to decline, their prices will rise. Eventually the cost of alternative sources—and the infrastructure needed to integrate them into the grid—will become economical. At that point, the shift to such sources will take place naturally, and reliance on mined fuels will decline. If claims of a finite supply of these fuels are true, then we will run out eventually; why drag it out with excessive government regulations that only stifle the economy anyway?
A vision for a better power-supply system could well involve distributed generation. If solar panels were cheap, no doubt many consumers would enjoy gaining a bit of freedom from utility companies (and their infernal bills) by installing them on roofs, in unused open areas and so on. If such a practice became widespread (and some of the technical challenges were overcome), a large chunk of grid power could be supplied by these distributed generation nodes. Even if these deployments weren’t interconnected to the grid (i.e., they supply a particular house or company campus but no one else), the resulting decrease in demand for utility power would ease strain on the grid. Wind could also play a role, although solar avoids the unsightly towers, noise and harm to wildlife for which wind turbines are notorious.
One of the major difficulties is the expense and inefficiency of solar panels. New technologies, such as graphene, may aid in improving efficiency, and costs may decline over time, however. But even if they are inexpensive and highly efficient, the panel space needed to power a household, a company campus or a city is significant—calculating this number is left as an exercise for the reader (you can get a decent estimate using some rough efficiency numbers and the solar constant).
Does Apple’s alternative-energy portfolio signal the future for most companies? Probably not—at least not yet. Reliance on energy sources like solar is an admirable goal, but the dynamics of energy demand likely preclude them from being the sole source. Nevertheless, rising efficiencies and falling prices for solar equipment could aid in greater distribution of power generation, easing strain on the grid and reliance on utility companies. Improved energy-storage systems would be a tremendous boon in this regard. The entire process, however, will be gradual. Economic conditions, the instability of many alternative-energy companies, the momentum of coal, power demand and other factors will—despite government nannying—prevent a fast transition to alternative sources. This slow rate of change is not all bad, however; it leaves time to transform the infrastructure (the power grid) to handle these sources. Or perhaps some revolutionary new power source with sweep into the market—only time will tell.
Photo courtesy of david.nikonvscanon