Cashing in the energy chips in Las Vegas: Bob McDonald

Las Vegas is a city of outrageous power consumption, with dazzling lights lining the streets, casinos packed with blaring slot machines, huge theatrical productions and thousands upon thousands of hotel rooms.

It also sits in the middle of a desert.

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So it made a lot of sense when several casinos installed the largest rooftop solar arrays in the U.S. to take advantage of abundant free energy that falls from the sky year round.

But the local monopoly power utility, NV Energy, which operates a network of coal and natural gas generating stations, is crying foul.

It says the casinos are its largest customers, so the loss of income will have to be compensated through multimillion-dollar "exit fees" to leave the utility. 

Otherwise, local homeowners will be charged higher fees for their electricity. The company has also reduced the payback to those who owned solar panels and were feeding excess energy back into the grid.

So now there is incentive not to go solar in Las Vegas, even though it gets more sunshine than most other cities. In other words, there is resistance to change, even though that change is for the better.

It's a strange case where new technology — designed to save money — ends up costing more because of the loss to the old technology it replaces. This is a conundrum for regulators and a situation that has happened before throughout history.

New ways to operate

When the automobile came along, horse farms, blacksmiths and saddle makers were eventually replaced by garages, gas jockeys and mechanics. The printing press replaced hand printing, automation changed the way assembly plants operated. The list is long.

In every case, one profession — and along with it, many jobs — was lost. But at the same time, a new trade came along, demanding a new set of skills — such as robotics technicians or computer programmers — that kept people employed. In addition, many new industries that didn't even exist before spun off from the new technology.

The difficulty with changing the energy sector is how large that elephant in the room really is. Energy companies are huge multi-national industries that drive the economy, employ thousands and have huge political sway. They will not embrace change easily because it is perceived as a threat to their very existence.

So, how do we embrace new technology without putting thousands of people out of work?

One example of a fossil fuel company that did embrace change in a forward-thinking way is Shell Oil during the 1990s, when it was helping Iceland change over to a hydrogen economy. 

Shell was taking care of the distribution of hydrogen across the island nation to power hydrogen fuel cell cars. The company referred to itself as an energy company — rather than just an oil company — with the attitude of not caring what fuel the cars were driving on, as long as they were filling up at Shell. 

Unfortunately, the economic downturn in 2008 put Iceland's plans to convert to hydrogen on hold, but the strategy is a smart one.

In retrospect, had NV Energy in Las Vegas diversified more into solar, it would now be the supplier for the casinos. Instead, it finds itself trying to compete in an energy market with outdated technology.

There is no shortage of clean energy on Earth, just a shortage of technology to capture it. Rooftops are a huge untapped resource. They cover vast areas and collect vast amounts of sunlight as well as rain water.

Both are largely neglected. Solar panels on every roof would dramatically cut down on energy demand and rain barrels connected to house plumbing could be used to flush toilets, reducing our demand for clean water. 

It all makes ecological sense. But despite the urgency of climate change, the transition away from fossil fuels will be slower than what is technically possible because of corporate influence, political lobbying and unemployment fears.

The challenge is to find ways to make the transition smooth so we can go out with the bad and in with the good, while taking care of those who could get hurt along the way.