From blackout to shock and awe: renewable energy and the shared Canada-United States electricity grid.

• Author: Salliant, Roger
• Position: Conference: US and Canadian Energy Relationship

Session Chair--Dianne Anderson

Speaker--Roger Salliant

Speaker--Carol Battershell

Speaker--Gene Ameduri

Speaker--David B. Raskin

INTRODUCTION

Dianne Anderson

MS. ANDERSON: Good afternoon. Thanks for joining this panel. I am Dianne Anderson, (1) Executive Director of Case Western Reserve University Great Lakes Energy Institute. (2)

Today the panel has an opportunity to address many aspects of bringing renewable energy, including the infrastructure, and the assets into an electricity utility marketplace. We have the opportunity to have views that align and some views that may not align, and I always think that it is good to represent both. As for the way we set it up, I almost utilize a walk, in essence, through the supply chain where like an analogue to a Hollywood film you have a writer, producer, director, actors and actresses, and critics.

Today I have the opportunity to introduce Roger Salliant. (3) Roger is the Executive Director of Case Western Reserve University's Fowler Center for Sustainable Value. (4) Roger will be able to set a bit of the stage for a course that may have some unacceptable outcomes for us.

I will then introduce Dave Raskin. (5) Dave is partner at Steptoe & Johnson and he will look at how energy right now is progressing in the United States, energy policy, and some of the regulatory regimes and what it is for.

Then I will actually represent a schematic from Dr. Ken Loparo (6) at Case Western Reserve University, who is currently working on energy research in the electricity grid and the connection to renewables. I will talk a bit about how Case Western Reserve University and its professors work. He is working to bring the cost of renewable energy down. (7)

We then will continue with Carol Battershell, (8) who is a leader in the Department of Energy ("DOE"), (9) discussing energy efficiency and a renewables energy department. Carol, in general, will be able to talk about the role of government and what role it plays in bringing the aspects, in this case renewable energy, to market and specifically about the United States Recovery Act. (10)

Next, Gene Ameduri, (11) who is managing partner of Great Lakes Wind Energy (12) and an investor in bringing wind to Lake Erie, (13) will talk about the Great Lakes project and, importantly, about what it is to be an investor in bringing renewables to marketplace.

It is just today that the DOE is asking everyone around the country to comment on their strategy mission and in that strategy mission they speak of three reasons to have policy in energy. (14) One reason is to enhance energy and national security around it. (15) The second reason is to reduce the environmental impacts. (16) The third reason is to increase United States competitiveness. (17) All of these themes play a role in today's discussion.

When I think of being here and representing this Great Lakes region, both for Canada and for the United States, it is interesting that in the last twelve months Brookings has put out a report about the incredible assets this region holds. (18) The assets between these countries start with the science exchanged between the universities and national laboratories; these ideas are then cultivated through the region's manufacturing assets. (19) In addition, there are significant assets such as a large lake for wind, the largest solar energy company in the United States located in western Ohio, vast renewable energy storage sites, and an eighty to ninety year history between this region and the National Aeronautics and Space Administration in this region in bringing storage to market. (20)

With that, I look forward to a good afternoon, and again, thank you for joining us. Roger?

REMARKS OF ROGER SALLIANT

MR. SALLIANT: Thank you, Dianne. This is about Canadian and United States relationships, right? One of my sons-in-law is a Canadian and I can tell you that there is a lot of negotiating that goes on, especially during hockey season, so I have some experience in that.

I assume some of you are lawyers, and one of my daughters is a lawyer. So I have to be careful what I say because I have been trained to be exact, precise, short, brief, and so forth.

With that as the context, I would like to speak to you as a businessperson and to try to remind or suggest to you that as I practiced business in the past, people would spend a lot of time arguing. In fact, they found many hills to die on just looking at X and Y. I used to feel like all you needed to do was to get the quadrant right, and eventually you could converge on the X and the Y. I think when we talk about renewables and fossil fuels, we talk about policies, and I would really like to see us converging on the right quadrant. This talk today is about that and in order to converge on that quadrant, I am going to give you a relatively straightforward simplistic view of some activities that we need consider when we look at making choices, particularly with regard to technologies and specifically about energy. I am also going to look, just briefly, at comparing coal, natural gas, and wind in kind of a pew diagram sense.

There is a lot happening today that indicates it is a tension-filled time. (21) This is not new to us. We have had tension filled times in the pasty Business people should be asking themselves, "How do I make money during this tension-filled time, and how can I drive my business to be successful?" A back question to that is, "how do I do well by doing good?" And then a back question to that is, "what does 'good' mean?" I am going to try to frame some questions today and present a quadrant definition of what moving to "good" or "better" is like and how to make these choices.

But first, I should tell you, as a member of the Fowler Center for Sustainable Value, (23) what sustainable value really does mean. I am going to be careful because I want to be a little legalistic about this. Sustainable value is the dynamic state that occurs when a company creates ongoing value for its shareholders and stakeholders. (24) The addition of stakeholders is very important. By doing good for society, the environment, and the part of the stakeholder array, the company does even better for its customers and shareholders than it otherwise would. (25) I can go on and talk about the shift to shareholder value as opposed to sustainable value, but I do not think I need to do that here.

What I would like to do is to offer that humanity, for a long time, has embarked on taking actions to create human systems that eventually come back and have some consequences. We have created systems, whether they are energy systems, water systems, social systems, or economic systems. (26) And we have done it with the idea of moving forward, but there are consequences when you do that. (27) How do the consequences interfere with the natural systems that are often taken for granted, that are often transparent but actually support all living life support systems on the planet?

If you look at the nine boundaries of nature, which have been really defined pretty well by the Resiliency Institute at Stockholm and published in 2009 by Nature, (28) they basically found that in the last 25,000 years humanity has thrived because the planet has operated between norms that can basically be described as the nine boundaries of nature. (29) There are not a hundred; there are just nine. (30)

If you are interested, there is, just by Googling "nine boundaries of nature," a video you can get of people with very impressive foreign accents explaining to you why this is true. (31) The nine boundaries include climate change, (32) which we are all familiar with or have some feeling for it. Climate change is governed, of course, primarily by carbon dioxide, methane, other greenhouse gases, and ozone depletion, which has been going up and going down. (33) At the moment, it is relatively steady, but it is affected by carbon dioxide and methane. (34) Another boundary is ocean acidification, which is primarily affected by carbon dioxide and the formation of carbonic acid. (35) Biodiversity loss is a third boundary of nature, which is the rate of species loss. (36) Fourth is fresh water usage, which is getting a lot more conversation today. (37) Both the nitrogen and phosphorous cycles and chemical contamination, which have not been measured yet, either specifically or quantitatively, are also boundaries of nature. (38) Additionally, land system change, or in other words, how much land we are using and the size of the footprint, and what is changing in terms of densification and aerosol loading, are the final two and have yet to be dimensioned. (39)

From a businessperson's or policymaker's perspective, you need to be thinking about these boundaries so you do not end up having an unanticipated consequence. This criteria is useful. If you take a look at the state of the world today, you can see that in climate change, biodiversity loss, and the nitrogen cycle, we have begun to exceed the boundaries that have been set up for the last twenty-five thousand years, and that is why they are colored in red. (40)

It would seem to me that if you are going to analyze a process or product design that you should be very weary about aggregating those particular areas and you can see in other areas where we are approaching the problem. (41) So how would I apply this in a simplistic way knowing that what I want to do is to get it right? From a sustainability perspective, if you have a product, say this pen, you should be concerned about where it came from. In other words, it is an extractive source. (42) How is it used? How am I using it in daily practice? How is it going to be disposed of? Where is it going to go? If you think about it and then take a look at the nine boundaries and begin to compare it, it results in sort of a plus, plus, plus. I did not use pluses or minuses in a standard pew kind of diagram; I just simply decided it was tougher to read minuses than...