Academics share insights about sustainable supply chains at NC State Workshop

I had the opportunity to sit in on a number of academic presentations today, as part of the Environmentally Sustainable Supply Chain Management Workshop for Early-Career Faculty.  During the morning, we heard from a number of individuals in a session on “Inspections, disclosures and social responsibility”.  In this session, researchers from UVA and MIT explored a model that would look at the potential for investing in social responsibility in third party suppliers, and how to create the right incentives to invest in SR solutions.  Other studies looked at vertical integration as a possible solution to these issues, and how inspections in the Pennsylvania fracking market led to improved learning and reduction of safety violations.

One of the keynote speakers was Dalia Patino-Echeverri from the Nicholas School of the Environment at Duke University.  Professor Patino-Echeverri’s research was on “De-carbonizing the US electricity industry.”  Power plants are large and irreversible investments and the electrical consumption relative to power output – and load can impact demand.  But there are multiple alternatives that have different issues with respect to trade-off balance and supply, technology, reliability, affordability, and clean energy.  Coal is reliable, affordable, but not clean.  Wind is not reliable, affordable, and clean.  But wind with batteries is reliable – but now is not affordable. Natural gas is reliable, highly affordable, and not really very clean, but at least cleaner than coal.  Natural gas plants get fuel in real-time – and the problem is in regions like New England – and priority goes to residential consumers and if people demand natural gas, they do not have enough gas to run.  So the plants can be restored to dual fuel capabilities, but pipelines are needed.  Natural gas has about half the emissions of coal plants.  Leakage from plants is a concern.  Goal or gas plus clean coal is reliable, affordable a wind, and clean (ignoring the LCA of coal).  Coal or ga + flexible CCS is reliable, beteter than CC, and clean.  other combinations include hybrids of fossil fuels and thermal solar combined solar plants are another potential stable base.

We also know we aren’t good at predicting energy prices for oil and gas – we operate as if we know what it is, but don’t know.  We are thinking NG prices of $5/btu – but if we knew, we could pursue other hybrid models or others.  There is also tremendous uncertainty about wind and solar power generation, and a lot of variability in multi-decade records.  Wind and solar variability across multiple decades is extremely variable (= or – 60% or greater).  Capacity planning is also hard because of the infrastructure needed to be in place to balance demand and supply at all times, or the system will collapse.  Vertically integrated utilities are on possible solution to deal with this issue.

So the issue becomes where and when and how to install generation and non-generation resources.  This is a highly complex decision, which requires ways to consider both the uncertainties and practical investment requirements.  The Clean Power Plan mandates to create a max GHG emissions rate for new coal and gas power plants, and emissions reductions from existing fossil-fired power plants for each state are different (e.g. 7% for CN, 47% for MT).  Another problem is that the EPA assessed feasibility of the plan ignores system operations, and most organized markets involve several states.  So the operation of markets may led to defection of states from certain markets.

The forum was a great venue leading to a lot of great discussion, feedback, and learning for all of the participants!