PowerSouth News Center

CEO Column: Out of the wall? There's a lot involved in getting electricity to your home

I speak to a number of civic clubs, and I always start with a question: Where does electricity come from?
The answers are surprising because they are so consistently wrong. The answer I get most often is, “Out of the wall.” Most people just don’t know much about electricity.
Before electricity gets into the wall it must be generated in a power plant of some type and delivered through transmission lines and distribution lines. Electricity is most commonly generated by combusting or burning some type of fuel. Fossil fuels, generally coal and natural gas, are burned to produce heat or spin turbines to make electricity. In nuclear plants nuclear fuel produces the heat. Turbines are spun in hydro dams and windmills by falling water or wind to make electricity. Electricity from the sun is generated by the reaction of sunlight across chemical elements in solar arrays.  
Each fuel is unique
Nationally, about two-thirds of electricity is generated by burning fossil fuels, about 20 percent comes from nuclear generation and about 14 percent from renewables, including hydro power. About 95 percent of the electricity PowerSouth Energy Cooperative generates comes from burning either coal or natural gas. In 2015, 69 percent of PowerSouth’s electricity was produced from natural gas, 27 percent from coal, 4 percent from hydro and 0.4 percent from renewables.
These fuels are all different in energy content, cost and application. Operators monitor load levels, fuel costs, plant generation and electricity costs minute-by-minute to provide the most reliable and most economic electric service.
Few people know where electricity comes from, but even fewer know how complex the process is of securing fuels, running generation plants, balancing loads, maintaining transmission lines and substations and keeping the lights on about 99.999 percent of the time. This month I will leave you with a few facts about the fuels we use to make electricity. 
Coal has been used for decades to provide a base load—a reliable and low cost supply of electricity. At one time coal provided around 80 percent of the electricity in the country. This year coal will provide less than a third of the electricity. As I’ve described in earlier columns, coal generation is under attack by the Environmental Protection Agency to reduce carbon dioxide emissions that are blamed for global warming. However, the reason the amount of coal-generated electricity has declined is not because it is not efficient or reliable, it is because the price of natural gas has dropped remarkably. 
Natural gas now accounts for almost two-thirds of PowerSouth’s electric generation and is growing. Not only is natural gas cheaper than coal, natural gas generation plants are more versatile than coal plants and can be brought online more quickly to meet changing conditions. 
Diversity is good 
Hydroelectric generation is cheaper to run than coal or natural gas, but the availability is limited.
Just like each fuel has its advantages, each has disadvantages. Those disadvantages can be overcome by not relying on just one source, but a diverse mix of fuels, and by having the ability to switch fuels when supply or cost changes.
Coal faces environmental rules that will likely drive up its cost. Natural gas prices are low today but have a history of sharp increases. Hydroelectric power is limited in quantity, especially when river levels fall. Wind and solar power are not available when the wind doesn’t blow or the sun doesn’t shine.
Making and delivering electricity requires highly skilled experts
The price history of natural gas shows the importance of fuel diversity. Today natural gas is just over $2 per million BTU. But in 2008 the price was $16. If the price of any fuel increases by 8 times a utility needs the ability and flexibility to switch to another fuel. 
Really good people and sophisticated systems and tools coordinate the costs and fuel inputs every hour of every day to ensure reliable and affordable electricity. Behind all the systems, those really good people are working hard to keep your lights on and your homes warm. There really is a lot involved in getting electricity out of the wall. 
I hope you have a good month. 

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