Balance and the Grid

by Planning Engineer and Jill Tietjen

The power system is a matter of extreme importance relating to economic development, quality of life as well as health and safety. In order to best meet the needs of any given area, it is necessary to balance the factors of economics, reliability and public responsibility. An imbalance in any area will lead to repercussions in other areas and may, in fact, prove to be counterproductive across all areas.

Note – The authors wrote a piece called “Drivers & Determinants for Power System Entities” (located here on P#31) describing the impacts and motives of various entities responsible for the bulk power grid. This post summarizes parts of that article and expands upon its concluding remarks with regard to balancing the priorities of economics, reliability and public responsibility.

Economics

The price of energy has tremendous direct and indirect costs on society. Energy costs make up more than one-fifth of the after-tax income of America’s lowest income quintile. Higher energy costs for agriculture and manufacturing production are passed on to consumers in higher prices for products, thus lowering overall the standard of living. To the extent that energy costs are high in a region, the less economically competitive that region will be with likely correspondingly lower wages and higher unemployment.

Affordable energy provides greater comfort, health and safety while allowing machinery to improve lives and reduce drudgery. Higher energy costs limit these benefits to smaller segments of the population. Affordable energy is associated with high standards of living, improved health and better environmental protection. Third world countries see a dilemma. Low cost energy greatly increases the value of manpower. But, unfortunately, although low cost energy would help spur economic growth and development, many of these countries cannot yet afford the needed energy systems.

Reliability

Reliability of electric service is a critical factor in most modern societies. Power outages have serious socioeconomic impacts. Businesses in the US lose billions of dollars annually and, in addition, outages disrupt lives and threaten health and safety.

The costs for improving reliability increase exponentially as outage times are reduced.

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Building a system that can endure extreme weather without risk of outage would be extremely costly. When evaluating reliability, it is important to look at both the expected impacts and the likely frequency of potential outage events. In recent years, high-impact, low-frequency events including geomagnetic disturbances (GMDs), electromagnetic pulses, coordinated attacks and pandemics have garnered a lot of attention and exposed the challenges in providing certainty for high levels of reliability. However cost-reliability tradeoffs occur at multiple levels on all grids – for each of generation, transmission and distribution.

Public Responsibility

Essentially all generating and transmission resources have some adverse impacts upon the environment. Materials must be mined and components manufactured. The resources take up space that might otherwise exist in a natural state. Power systems must be sustainable and not create excessive adverse impacts. Significantly degrading the environment would work against the goals of the power system to improve living standards, health and safety.

The impacts of power system additions must be compared against what would happen in their absence. A huge central generating plant might be a large point source of emissions when looked at in isolation. Comparing the net impacts of the plant to the small widely scattered resources it would displace, might show considerable environmental benefits, however.

As with reliability improvements, the costs associated with mitigating environmental impacts tend to increase exponentially as well. As an example, although scrubbers remove emissions from the air, the associated costs may include increased infrastructure, increased solid wastes, and decreased plant efficiency. There are multiple tradeoffs between technologies and alternatives as to how they impact different parts of the environment. For example, some resources have a big impact on a small footprint, others a small impact on a huge footprint. Seeking the best solution in terms of limiting environmental impacts from a public responsibility perspective is challenging enough, but these concerns must be balanced with reliability and economic concerns.

The Balance

The balance among the three factors will vary by location and across time. These factors should be weighted and evaluated very differently depending upon such factors as wealth, technological developments, support required for existing infrastructure and population densities. While rotating blackouts are seen as unacceptable in the U.S., intermittent electric power might be vastly preferable to the alternative of no affordable power at all in other parts of the world. Thus, it might be counterproductive to insist upon higher reliability levels that make the electric power unaffordable.

Too much of a focus on any single factor might backfire. Too much attention on reliability might result in exorbitantly priced electricity. Too much concern with environmental impacts could result in expensive power as well as dirtier alternatives filling the need. Too much attention on cost could result in unacceptably low levels of reliability as well as unacceptable environmental impacts.

Can Environmental Regulations End Up Causing Greater Net Harm?

The third world case may provide the most easily grasped illustration of an example of a case where environmental regulation could result in greater harm through unintended consequences. Poor inhabitants of third world nations burn dung, cardboard and twigs inside their homes to cook and provide heating. It has been estimated that this results in 3.5 million deaths a year. The environmental benefits associated with the substitution of fossil fuels for these far “dirtier” resources would result in an overall net benefit. While replacing these resources with “clean” technology may theoretically provide even greater benefits, none will accrue if the “clean” technology is unaffordable. A more widespread penetration of fossil fueled generation is likely to have greater net benefits than the more narrow adoption of “clean” resources. When outside entities seek to limit the expansion of fossil fueled resources into third world countries, they may unintentionally be increasing damage to the environment as well as limiting the quality of life and potential for economic development.

Current Efforts to Make the Grid More Environmentally Responsible May Have Net Adverse Environmental Impacts

Current efforts to make the grid environmentally responsible place a large weighting upon reducing carbon dioxide (CO2) emissions. Some challenge that the externalities and adverse impacts of non-coal based generation do not receive the same amount of scrutiny. However, operating on the presumption that “clean” alternatives are in fact environmentally sound and existing resources are “dirty”, a singular “unbalanced” focus on swapping out such resources might lead to counterproductive results. Replacing old “dirty” technology with “clean” technology creates a short-term impact as the new technology will be manufactured with “dirty” technology. Premature retirement of “dirty” technology might result if “lifetime” impacts of resources are not balanced.

An unreliable power system imposes burdens on the environment. Also if the “clean” technology does not provide the same degree of reliability, there will be pressures to provide that relativity through other, perhaps less clean, alternatives. Germanys Energieweinde (Germany’s energy transition plan to encompass more renewable energy) was accompanied by increased CO2 emissions, in part attributable to the backup measures required to provide needed grid reliability.

In the U.S. as well as in third world countries, higher electric costs lead to a higher likelihood that energy consumers will turn to other alternatives which may have more significant environmental consequences.

How Do We Ensure Balance in the Future?

The Clean Power Plan (CPP) will have a major impact on the future grid. Whether it is upheld or overruled, how will the proper balance be maintained in the future? In formulating the CPP, the EPA was apparently unconcerned with economics and reliability, relegating those issues to the states. The North American Electric Reliability Corporation’s (NERC) goal is to ensure reliability. NERC has taken no position on the environmental necessity or impacts of the CPP and they also explicitly reject being involved in considerations of economics. The other players including the state commissions and other regulatory entities may struggle to bring economics back into the mix. The fair interplay of competing interests will be important as we noted in “Drivers and Determinants for Power System Entities“:

Whether the CPP is overturned on constitutional grounds or not, we will likely see continued pressures from the various relevant entities as they promote competing visions for the future. We need the independent and collective voices of economics, reliability and public responsibility to speak up and be part of the dialogue. Only if the resulting voices are merged will we arrive at policies that provide for balance.

As was the case for earlier rules and regulations affecting the electric power system, it is important for consumers’ voices to be heard around issues like the CPP. Elected officials need to be aware of the balance between the three goals and the tradeoffs that are required. Our form of government often seems like making sausage, but its value is that all voices are heard and considered in the process of developing legislation and regulations. A presidential election year, a vacancy on the U.S. Supreme Court, and the actions of the states all will affect the trajectory of the CPP as we move through 2016. Our sincere wish is that all three goals will be considered through this process as a reasonable balance is struck.

Bio Notes: Jill S. Tietjen, P.E., President and CEO of Technically Speaking, Inc., has spent 40 years in the electric utility industry, most recently as a planning consultant and expert witness.  She serves as an outside director on the board of Georgia Transmission Corporation (Tucker, Georgia) and as Vice Chair of the Board of Directors of Merrick & Company (Greenwood Village, Colorado).  A graduate of the University of Virginia and the University of North Carolina at Charlotte, she is a registered professional engineer in Colorado.

Moderation note:  As with all guest posts, please keep your comments civil and relevant.

 

94 responses to “Balance and the Grid

  1. Pingback: Balance and the Grid – Enjeux énergies et environnement

  2. Thank you Planning Engineer and Jill Tietjen

    The power system is a matter of extreme importance relating to economic development, quality of life as well as health and safety. In order to best meet the needs of any given area, it is necessary to balance the factors of economics, reliability and public responsibility. An imbalance in any area will lead to repercussions in other areas and may, in fact, prove to be counterproductive across all areas.

    I agree 100% with this opening statement. I’ll have to cone back later to read this post.

  3. Pingback: Balance and the Grid – Enjeux énergies et environnement

  4. Great work Jill….. I have worked as an electrical engineer for more than 35 years from hydro and nuclear on the electrical utility side and a wider range of energy power generation sources all through to the client side including Oil and Natural Gas cogeneration, combined cycle NG turbines etc. and I agree with your article…… as do the vast majority of my colleagues. But will the politicians listen to any of us?

  5. The environmental benefits associated with the substitution of fossil fuels for these far “dirtier” resources would result in an overall net benefit. While replacing these resources with “clean” technology may theoretically provide even greater benefits, none will accrue if the “clean” technology is unaffordable.

    Clean Technology (nuclear power) is competitively priced – particularly if the country doesn’t have fossil fuel resources.

  6. When outside entities seek to limit the expansion of fossil fueled resources into third world countries, they may unintentionally be increasing damage to the environment as well as limiting the quality of life and potential for economic development.

    You can change unintentionally to intentionally. Many of these people are really promoting population control and many of them don’t really don’t care if the poor people starve to death.
    That is what happens if you deny them affordable abundant energy.

    • Vox article says:

      The Eastern US could get a third of its power from renewables within 10 years. Theoretically.

      […]

      The pressing question facing today’s policymakers is whether the EI can, relatively quickly, accommodate much more renewable energy, which is variable, i.e., only available when the wind blows or the sun shines.

      Prior to the question of how that might be accomplished socially or politically is the simple question of whether it’s technically possible.

      That is the question examined by NREL in its newly released Eastern Renewable Generation Integration Study (ERGIS, if you’re nasty).

      The study is a remarkable technical achievement, marrying enormous datasets with enormous computing power to produce incredibly rich scenarios (one reason it stretches to 220 pages, with six appendices).

      But the basic conclusion of the study can be summed up in four words: It can be done.

      … theoretically. Now let’s suppose somewhere in the middle of this decade-long project we hit 20% penetration and it starts looking like 30% penetration is going to be an issue. My question for Denizens is to tell me whether the wheels fall off the economy, and whether that sends us back to the Stone Age or not.

      • Let the Yankees freeze in the dark.

      • Now let’s suppose somewhere in the middle of this decade-long project we hit 20% penetration and it starts looking like 30% penetration is going to be an issue. My question for Denizens is to tell me whether the wheels fall off the economy, and whether that sends us back to the Stone Age or not.

        Build more CCGT. As long as you’ve got the fully dispatchable CCGT capacity to cover your peak demand, your grid can be reliable. (Remember that CCGT is cheap to capitalize, and can be rolled out in under a year with proper force majeure to drive the permitting process.)

        But on a short timescale like that the only way you can get wind/solar above their natural capacity factor is to overbuild their peak capacity and either curtail when they’re putting out more than you need, or dump to storage.

        And the only storage that could be built even halfway cheaply that soon is rapid-response electrolysis, with a round-trip efficiency down around the 30% level.

        I doubt the wheels will fall off the economy, because people will simply blow off the penetration milestones before that happens. But it could become a serious drag before that happens, if the proper contingencies haven’t been provided.

        That’s why the whole idea of emission reduction targets is so stupid.

      • Any money spent on solar and wind over the cost of fossil fuel electricity is wasted. This entire problem is one of government.

      • Wind and solar certainly don’t seem to be able to wean themselves off the Government teat, despite all the grandiose promises.

      • A Mexican politlogue, Alfredo Jalife, gave a presentation a few days ago in which he argued that the era of globalization is rapidly coming to an end. He is not alone. He cites FT, the Economist and Straffor as all saying the same thing.

        Politics plays a role in this change, he says, but the main driving force behind the change is a new technological complex (not unlike what you foretell). Trump, he argues, is well ahead of the power curve. George Soros, on the other hand, symbolizes the obsolete paradigm of globalization and neoliberlism and is well behind the power curve.

        So here’s the thing: If industry does indeed “come back home” to the developed nations as Jalife and others argue, won’t the demand for electricity in the United States grow rapidly?

      • So here’s the thing: If industry does indeed “come back home” to the developed nations as Jalife and others argue, won’t the demand for electricity in the United States grow rapidly?

        I’d expect it to.

        Ideally, IMO, the need should be filled by dual capacity: (flex-fuel) CCGT and some mix of solar/wind. With recent discoveries, the US won’t be dependent on foreign oil or gas, but the price needs to be high enough to cover the cost of getting it out of the ground, which will make solar and wind cost-effective at the margin.

        IMO storage should be addressed short-term with dam-free pumped hydro, which will need some seed R&D to get the technology up and running. But both deap-sea lower reservoirs (for coastal applications) and very large fabric tanks (for inland areas) could probably be done without needing any significant lab-work.

        The advantage of pumped hydro is that the pump/turbine technology is mature and fairly economical, and it provides built-in frequency support. There’s also the fact that with artificial, dam-free, reservoirs the power capacity is pretty much independent of storage capacity.

        Large numbers of megawatts can be rolled out for voltage support and other ancillary services (to handle minute-scale fluctuations in solar/wind as well as transition to/from CCGT), then as the need for storage (Megawatt-hours) increases as solar and wind capacity start to bump up to normal demand levels it can be rolled out separately.

        This also would allow mature technology to be deployed right away, while the storage technology would have a little time for Wright’s “Law”/learning curve to kick in and bring down the cost.

        The mid/long-term approach should be power→gas/liquid fuel, despite its low (~30%) round-trip energy efficiency. By 15-25 years from now the cost for installed utility-grade solar should be around 1/10 what it is today, which would make it very cost-effective.

        That way, an immediate rapid expansion of infrastructure for gas CCGT would continue to be valuable, rather than ending as sunk costs.

        To make that work, what’s needed, IMO, is a much more general public awareness of the exponential nature of technological growth, and the capacity for converting a robust gas-based generating system from fossil gas to “green”. All our culture’s experience and research demonstrates that this would be feasible given the right political environment.

        But if people keep thinking in terms of linear growth curves rather than exponential, the political climate would be much more resistant, and many people would be influenced by the appearance of a conflict between growth and the environment (including climate).

      • AK,

        I doubt the wheels will fall off the economy, because people will simply blow off the penetration milestones before that happens.

        That’s my thinking.

        But it could become a serious drag before that happens, if the proper contingencies haven’t been provided.

        I didn’t read the main report, but I scanned through the executive summary, which is itself a lengthy document. The model they built had the explicit goal of understanding what the contingencies would look like. Despite the length of the main document, the executive summary says that no cost estimates were done. So the scope of that entire report is technical feasibility only.

        That’s why the whole idea of emission reduction targets is so stupid.

        I agree that they’re meaningless without detailed planning. Way I see it, one requires the other.

    • first i am french, so be tolerant with expression…
      well in such scenario, there is a flaw IMHO, it is assumed that the size of the system will remain the same, what if, for financial resasons, some areas decided to make electrical secession?

    • One note as to penetration levels: Currently in the U.S., solar has a penetration level of about one-half of 1%.

    • The video shows they think they can stretch the eastern grid to 30% renewables. … And then what? The graph in this post shows an exponential relationship between cost and reliability. Are there any plans or even prospects for dealing with diminishing returns? It looks to me like it’s going to top out.

    • “Could you comment on the major story on the eastern grid of last week (30% penetration) — Thanks:”

      Models, models,… more models…. and here we know all too well how models behave vs reality.

      There’s no way that intermittent renewables can replace fossil fuels or nuclear for electricity production. A fraction of it? Yes? A large fraction of it? With difficulty? At lower costs? No way.

    • A decent study but it left significant issues unaddressed:

      “This study did not investigate all aspects of the reliability problem faced by system planners and operators. It did not include an analysis of the capital costs for generation and transmission, or contingency analysis. Similarly, there is no analysis of the impact our natural gas expansions would have on natural gas infrastructure such as pipelines and gas storage.”

      • This one should be stated twice:

        “It did not include an analysis of the capital costs for generation and transmission…”

  7. While replacing these resources with “clean” technology may theoretically provide even greater benefits, none will accrue if the “clean” technology is unaffordable.

    *IF*

    A more widespread penetration of fossil fueled generation is likely to have greater net benefits than the more narrow adoption of “clean” resources.

    Are we talking utility-scale generation and all its associated infrastructure, or portable diesel generators here?

    When outside entities seek to limit the expansion of fossil fueled resources into third world countries, they may unintentionally be increasing damage to the environment as well as limiting the quality of life and potential for economic development.

    *MAY*

    More details would be nice.

    ***

    I’m not really sure that hand-wringing about the plight of poor Africans might or might not be able to afford should matter much to what the already industrialized world can afford to do first.

    • Brandonrgates – except for advocacy for a balancing of the factors or economics, reliability and public responsibility, this post is descriptive not proscriptive. The future of sub-Saharan Africa will no doubt include more renewables, utility scale generation as well as diesel generations. The concepts here apply to all three.

      Improving electric capabilities in Africa is a major international issue and issues surrounding that challenge work very well to illustrate the importance of the concepts discussed here. There are many efforts to “influence” the development of renewables within Africa. Certainly we can debate to what degree “aid” tied to renewable goals is coercive. But at a minimum there are considerable efforts being made to limit fossil fuel expansion into the third world. Here are some links:

      https://www.iea.org/publications/freepublications/publication/AEO_ES_English.pdf
      https://www.whitehouse.gov/the-press-office/2015/07/25/fact-sheet-power-africa
      https://www.brookings.edu/wp-content/uploads/2016/07/africa-sy.pdf
      http://siteresources.worldbank.org/EXTENERGY2/Resources/SREP_financing_instruments_sk_clean2_FINAL_FOR_PRINTING.pdf
      https://www.ustda.gov/program/us-africa-clean-energy-finance-us-acef-initiative

      While we see many calls stressing the provision of “clean” resources, it is my hope that those behind the advancement and implementation of such efforts understand and accept the balance of factors discussed in this piece. I am afraid that many in the general public do not recognize the need for such balance and that among that group there are many who believe that unmitigated green is good.

      If you want to read just one piece, this one “How Rapidly Should Africa Go Green? The Tension Between Natural Abundance and Economic Scarcity” from “The World Financial Review” is thoughtful and thought provoking . To me it seems to show an honest grappling with the issues. I look forward to hearing your take on it.

      http://www.worldfinancialreview.com/?p=899

      • aplanningengineer,

        If you want to read just one piece, this one “How Rapidly Should Africa Go Green? The Tension Between Natural Abundance and Economic Scarcity” from “The World Financial Review” is thoughtful and thought provoking. To me it seems to show an honest grappling with the issues. I look forward to hearing your take on it.

        I scanned through all the documents you provided and there appears to be a good deal of useful information, thank you for providing it. I will take some time to read in more detail before responding further.

      • aplanningengineer,

        If you want to read just one piece, this one “How Rapidly Should Africa Go Green? The Tension Between Natural Abundance and Economic Scarcity” from “The World Financial Review” is thoughtful and thought provoking.

        Yes, overall excellent piece. Here I think is the crux of the matter:

        Choices made in Africa will (and should) be shaped by the local costs of alternatives. These differ from those in high income countries because of the distinctive features of Africa, of which four are most relevant. The first is Africa’s natural endowment. Africa has natural advantage in hydrocarbons (12.2 percent of world oil production and 9.5 percent of proven reserves, plus significant quantities of coal and gas). It has hydro-electric potential, producing 2.7 percent of world hydro-electricity but with an estimated 8 percent of world potential. It has copious sunlight and is well endowed with land.

        However, utilization of these natural assets requires other inputs, in which Africa is scarce. One is the capital endowment, i.e. the accumulated stocks of physical capital and levels of human capital and skills. Another is governance endowment, meaning the institutional and governance capacity required to implement and regulate economic activity. A critical consequence of these weaknesses is that Africa has not been able to harness its natural endowment: the region is chronically short of energy, with firms and households facing acute shortages of power.

        The fourth distinctive feature follows from these; Africa is a latecomer. Developed regions have sunk capital in their power supply, transport networks and urban structures. Africa has yet to do so on a large scale. New technologies will be available at the time when Africa is making these investments, offering a potential for more efficient and less polluting investments. However, as a latecomer currently suffering energy shortages, Africa also needs to make these investments soon.

        So. When I read something like the above in the same context as this statement from your article:

        The price of energy has tremendous direct and indirect costs on society. Energy costs make up more than one-fifth of the after-tax income of America’s lowest income quintile.

        My eyes kind of roll. It’s like comparing apples and Tang. Basically, nobody but the Africans have been preventing them from developing their fossil energy economy, and what the US should be doing about its own emissions is wholly independent from the structural mess that is most of the countries on the African continent.

        In terms of international agreements, yes, “fairness” certainly becomes an issue. The morally correct thing to do if rich industrialized nations — especially the US — want Africa to “go green” is compensate them for the fossil resources they’ll be asked to leave in the ground. That could be quite expensive. I also doubt they’d be able to make that deal.

        I’ve been saying for some time now Africa is probably screwed no matter what happens. Doesn’t mean the rest of the world needs to be. I would say that the better off the rest of the world is in terms of decarbonizing, the better Africa will fare.

        ***

        From the IEA report:

        Natural gas resource-holders can power domestic economic development and boost export revenues, but only if the right regulation, prices and infrastructure are in place. The incentives to use gas within sub-Saharan Africa are expected to grow as power sector reforms and gas infrastructure projects move ahead but, for the moment, as much gas is flared as is consumed within the region. More than 1 trillion cubic metres of gas has been wasted through flaring over the years, a volume that – if used to provide power – would be enough to meet current sub-Saharan electricity needs for more than a decade.

        That’s astounding. They could nearly double their energy return from natural gas with zero additional emissions just by not flaring it.

      • Brandonrgates – Thanks for the response. I don’t know if we differ all that much on issues of substance. I agree strongly that if rich industrialized nations want Africa to go green, the morally correct choice is to fully compensate them for foregoing fossil fuels, and that arranging/financing such deals would be tough to nearly impossible. I guess I’d agree that Africa alone stand in their way of going it alone. (I might quibble that rich industrialized nations are not seeking to help them as much as they could in properly effective of ways. But bottom line you are right, they are the ones who can’t pull themselves up by their own bootstraps.)

        You may be right that my comparisons are not helpful. You may have the more serious concern that they are misleading. That certainly was not my intent. As regards apples and Tang, the posting notes:
        “The balance among the three factors will vary by location and across time. These factors should be weighted and evaluated very differently depending upon such factors as wealth, technological developments, support required for existing infrastructure and population densities. “

        I agree the balance for Africa will not look anything like what we might expect for rich industrial nations and tried to be clear about that. I hope that no one took me to imply that since renewables are a very questionable choice for Africa at this time that they are an equally poor choice for other regions as well. I think recognizing the balance of economics, reliability and public responsibility will help us talk both about apples as well as Tang. Some of the references I provided concerning energizing Africa seem naively optimistic and if not founded in overly simplistic hopes, are appealing to such. The last article is the good grappling. As for Africa there are overly simplistic naively optimistic plans/calls for “solutions” in industrial nations that do not involve an understanding of the complexity. Our post is a caution against answers/appeals/arguments that consider just one or two legs of the triangle.

        I hope Africa is not screwed forever. I don’t expect the solution to come from outside Africa as part of some grand plan. I don’t expect Africa to pull themselves up by their own bootstraps. I hope that sophisticated/balanced/ judicious aid in development might help foster solutions and approaches that can be copied and emulated as Africa “muddles” through to develop solutions that are appropriate for the local environs.

      • charlieskeptic

        You people do realize, I hope, that China is investing big time in conventional power supply in Africa? Liberal Western angst will have no impact on future electric power supply development in Africa, unless it is to disrupt such development. Progressive thought has shown to retard betterment of poor peoples around the globe.

        Africa will develop economical conventional electrical and other resources because they must. In the meantime, most all of us will die off and the future will take care of itself. Get a grip. Mental masturbation about the energy future of Africa is just that.

        The grand experiment is on! No matter the CO2 policies of developed Western nations, CO2 concentrations in the atmosphere will grow. If the unfalsifiable models are correct, adapt or …. what? Build seawalls or move inland? Move crop-growing North? Mankind will be OK. It’s just that you won’t be here to affect it.

        Geese, people. If CO2 is a problem, it is a slowly creeping one. If our children’s children can’t adapt they deserve to suffer. [Oh, boo hoo. I’m not sensitive to the needs of the unborn.]

    • Comment is awaiting moderation. Good link in the meantime – http://www.worldfinancialreview.com/?p=899

      • I found the Greening of Africa article by WFR very enlightening and informative. A thoughtful attempt to identify the myriad pieces of the questions faced by the countries there. A summary of the unique situations, the resources, the challenges and, something seldom seen in these considerations, raising the question of what options are of practical application.

  8. Having just traveled the Eastern shore of Lake Huron, from Tobermory to Sarnia in the Province of Ontario Canada, wind turbines are growing in number and dominate the pastoral landscape. Tucked along the shore near Tiverton is Bruce Nuclear, its physical structure no where to be seen, its only evidence is the massive grid power lines, a legion composed of power stanchions marching from the shore to some distant place called Toronto.

    Toronto had a heat wave recently, 30+ C and, predictably, sometimes the turbines were turning and sometimes they weren’t. Bruce Nuclear just kept trudging along.

    At some point the 1000 turbines will produce sufficient electricity at night, when the wind blows steadily off of Lake Huron, the winds having started somewhere near the Arctic Circle, and that windy electricity will be regularly sold down South; i.e. the US power grid at a financial loss. The financial loss will be so great because the grid has to be stable at every millisecond, that the steep rising electricity rate for rate payers of Ontario subsidizing solar and wind energy, the cost of electricity will be such a burden to the assembly and manufacturing businesses like the Ford Oakville Ontario assembly plant and its suppliers, that, to remain competitive, Ford may relocate a little further south to the USA, or, transfer assembly to Mexico under NAFTA.

    Ontario Canadians will pay heavily in their electricity rates and job loss for having the HIGHEST electricity rates in North America, that they may see the wisdom of withdrawing 20 year leases and subsidy of their green “alternative energy” sources. Bruce nuclear has been under political attack and various Ontario and Federal governments have tried to close the plant still believing in Name Plate electricity production from wind turbines and solar cells and ignoring when the wind blows and when the sun shines. Peak energy is calculated upon an idealistic environmental and weather pattern, that, strangely, never seems to happen.

    The Ontario electricity rates that I pay include the cost of solar (56 cents/KWh), wind at 22 cent/ KWh currently at a small portion of electricity generation. If the greens succeed, then I will pay for all of the peoples’s extra cost of ever increasing in numbers “renewables” and these costs will escalate when Bruce Nuclear is forced off line.

    As a seasonal foreign resident, I have no clout to help change the system. Only the effected parties will make changes to the electricity sources that will effect the amount of electricity available to the above the tree line electricity sources.Too many variables to base a business plan upon.

    I can only hope that the green energy advocating practitioners encounter their mistakes early in this process, and not at the very end when all becomes clear that renewable energy is an alternative name for failure of impact; failure of achieving even a modicum of rationale.

    • When will they ever learn? When will they evvvvvvvvvver learn?

      • The left doesn’t have to learn, because it is never held accountable.

        It merely accuses its critics, as Clinton did last week, of being “racist, sexist, homophobic, xenophobic, Islamaphobic, you name it.”

        Having so painted the enemy with the face of evil, it avoids any discussion of its policy errors.

  9. This post appears to be about tactical responses to grid reliability challenges. What about long term strategy? There appears to be a conflict between renewables (wind and solar) and nuclear. Right now, the government is clearly siding with renewables. Then there is this wild card of fracked natural gas that is helping renewables (at least in the US).

    Can the government make good strategic energy decisions? I do see two examples. Under Jimmy Carter the US moved away from using oil to generate electricity and moved to coal. France moved to nuclear electricity. These were both in response to decreased oil supplies and not to reduce greenhouse gases. France’s move appears to have been a stunning success on both counts. In contrast, Germany’s Energiewende is shaping up to be a dismal failure.

    • I would argue that long term strategic energy decisions should be grounded by understandings of economics, reliability and public responsibility. Long term strategic decisions around energy are very challenging. The wild cards (fracking for example as you mention) play havoc on projections and plans. You are fortunate if the strategic initiatives leave you robust enough that you are position to respond as the world changes. From your examples, it does appear that the nuclear direction undertaken by France proved robust and would have provided significant benefits across a range of unfolding scenarios. The other, not so much.

  10. There is a simple reality that supporters of wind and solar consistently overlook or willfully ignore – that is, wind and solar cannot provide baseload or dispatchable energy and will always be a cost plus “solution” because they will always require some form of back-up for times with the sun does not shine and the wind does not blow.

    I’d be interested in comments re: the following 2 links:

    http://www.freerepublic.com/focus/news/3416644/posts

    http://fusion4freedom.us/going-solar/

    • A pair of tendentious, straw-man arguments.

      • A pair of tendentious, straw-man arguments.

        1. SmartGrid is 1/2 trillion dollars. SmartGrid is mostly all the backbone and end user upgrades to support renewable energy (we now power down users instead of turning up power plants).

        2. There are still subsidies and mandates for renewable energy.

        3. SmartGrid doesn’t fold in all the link costs for renewable energy and these remaining costs have been hidden to some extent by other programs and methods.

        There is no reason that we don’t have a spot on a government website that lists the fully loaded costs of these renewable energy projects and the cost of supporting hot backup to them. Trump should have Congress by law force the DOE/EIA to provide this information.

        Further the DOE/EIA could be forced by law to provide estimates of the total grid support cost for renewables at each level of renewable penetration including all the hidden costs such as using fossil assets less efficiently.

        The argument against renewable energy is that all renewable is expensive and more renewable is more expensive. The diligence of renewable advocates in burying costs and doing apples and grapefruit comparisons leads me to believe renewable energy is undesirably expensive.

        As Segrest regularly argues, if you throw enough money and technology at renewable energy you make it work. But why? Why make energy more expensive, punish the poor, and reduce American competitiveness, for no reason?

      • More straw-man arguments.

        Just not worth wasting time pointing out what I’ve pointed out so many times before.

      • AK – tendentious and strawman how? I am simply pointing out that neither wind or solar can stand on their own to provide either baseload or dispatchable energy without some type of back-up. You appear to prefer CCGT and pumped storage – which may work very well, but they are both cost PLUS and the costs as this point are not well understood. What is clear is that attempting to move to a 100% solar/wind energy source (and I am not saying you are suggesting that, but there are others like the Sierra Club that think we can) at best expensive and impractical.

      • Also, another consideration that does not appear to be addressed in your discussions on integrating wind and solar is the amount of excess capacity required to charge the batteries, be they Musk utility scale Powerwalls or pumped storage, in addition to providing for normal daily energy requirements. What PE is simply saying is that we need to have a better understanding of all the factors and remove the agenda driven nonsense that pervades the discussion. My personal desire is to have an abundant, reliable, and affordable energy source with as little environmental impact as possible. Right now, we have that with fossil fuels. The evils of fossil fuels have been greatly exaggerated and fabricated, while the evils of “green” energy have been understated to say the least.

        As to exponential growth in solar or wind technology, I have to wonder if, like battery technology, there will be certain physical limitations that will prevent the kind of growth you envision.

      • @Barnes…

        AK – tendentious and strawman how?

        The arguments in your links are cherry-picking their comparisons. For instance, a comparison of CCGT to solar is a straw man.

        There are all sorts of possible plans including CCGT and solar, Cherry-picking all of one vs all of the other potentially leaves out all sorts of combinations that could be more cost-effective.

        For instance, assume a market with an anticipated max-ever demand of a gigawatt, usually later summer afternoons.

        A gigawatt of CCGT capacity will cost around 1/4-1/5 of the total levelized cost of energy to capitalize. Most of the rest is fuel and variable O&M.

        Now, add half a gigawatt of solar at 20% capacity (supply-driven). Assume that almost all of that capacity will replace CCGT (when available), meaning savings of a little under 4/5 of the fuel/O&M costs. (Under because you have to amortize the CCGT capitalization against a 20% smaller output.)

        This would represent about 10% penetration. Would it be more economical? Depends on capital cost of solar (decreasing exponentially) and current cost of fuel. At today’s prices it doesn’t quite make it, but if you assume solar has dropped 50% five years from now, and gas is 60% higher than today, it might.

        Point is, all of the capital costs, especially for solar (and wind) are moving targets. Any comparison that doesn’t take account of that, and the differences in capitalization vs fuel and variable O&M is a straw man.

        I am simply pointing out that neither wind or solar can stand on their own to provide either baseload or dispatchable energy without some type of back-up.

        The moment you use the term “back-up” your argument turns into a straw man. You’re building in an assumption about capacity relative to cost that is unwarranted (see above).

        You appear to prefer CCGT and pumped storage – which may work very well, but they are both cost PLUS and the costs as this point are not well understood.

        NO!

        I’m suggesting a mix of solar and CCGT for now. I’m also suggesting pumped hydro short term for filling in the minute-scale fluctuations in solar, and while CCGT is firing up/shutting down. Depending on how costs evolve, it might be cost-effective later to add more reservoir storage.

        What is clear is that attempting to move to a 100% solar/wind energy source (and I am not saying you are suggesting that, but there are others like the Sierra Club that think we can) at best expensive and impractical.

        Another straw man. You aren’t distinguishing between time-scales, nor allowing for transition plans. (I agree folks like the Sierra Club don’t either.)

        The point is that the cost of installed utility-grade solar power has dropped by over 50% in the last 5 years, even faster than the (average) exponential decrease in PV panel costs. There’s good reason to suppose it could be made to continue that rate. So the costs of transitioning to solar (and/or wind) for 100% of the original energy depend on what time-scale you use for your transition, and what types of storage is used for the 60-80% of the time it’s not directly available.

        My point is that long-term, the optimum approach is to use power→gas/liquid fuel, which will be the most economical approach once the costs of solar/wind power, electrolysis, ambient CO2 extraction, and conversion to hydrocarbons comes down far enough. (Despite the projected ~30% round-trip energy efficiency.)

        Sure, it would be expensive today. But not necessarily in 30-40 years. And you have to keep in mind the transition, not try to analyze in terms of a single approach locked in forever.

      • AK – thanks for the response. I don’t disagree with your assessment given proper timescales for transition, and learning since there are a lot of assumptions that may or may not prove out. My issue is that we may be heading down a road where we transition too quickly away from what we know to be reliable, abundant and affordable energy sources before workable alternatives are ready for prime time. I am also concerned that we are disproportionately investing heavily on technologies that are not yet proven while ignoring or regulating to death what is likely the best alternative – nuclear.

      • AK:
        After some initial reluctance to some of your points about PV solar, I am starting to come around. We have CCGTs. They are agile. Just what is needed. They are modular. They might possibly be one of the least regulated forms of electricity production or they should be. What would solar/wind turbine/CCGT look like? A hybrid auto. Its battery makes wild demands. Changing the charging engine speed frequently. The battery is like intermittent renewables and the engine is like a CCGT. The auto battery by itself doesn’t work well. It is backed up by an agile supplier.
        A difficult problem is costing this all out. Who pays for the CCGTs? While the first inclination is to put it all onto renewables, it’s a changing situation even if there were significantly fewer renewable generation. CCGTs benefit all types of generation.

      • Geoff Sherrington

        It is instructive to observe how infrequently the express regional case of France, with its nuclear, is used in cost comparisons.
        In stead, some seem to take solace in inventing all sorts of nuclear horrors, past and present, instead of looking at the simple, actual record of quiet, very safe, reliable performance.
        To me, the lack of French examples is a good indicator of arguments from a position of weakness, or trying to hide it because it runs rings around renewables, actual and envisaged.
        And it makes no special demands on distribution networks.
        Geoff

      • @Ragnaar…

        I’m glad I’m beginning to communicate what I’m trying to say. It is a fairly complex set of interactions.

        A difficult problem is costing this all out.

        Well, yes.

        IMO the place to start is by categorizing generation technology in terms of capital costs, fuel/O&M, and dispatchabiity.

        Coal has high capital costs, and somewhat low fuel/O&M. Nuclear has higher capital costs (today, but stay tuned) and lower fuel/O&M. Both are poor in dispatchabiity for legacy technology, although AFAIK there are innovations on the drawing board to address that issue.

        CCGT has very low capital costs and is highly dispatchable. Fuel and O&M costs tend to be high, relative to coal. Solar and wind have low (and exponentially decreasing) capital costs. They both have what we might call negative dispatchabiity: they vary widely but more or less independently of demand, the exact opposite of load following.

        There’s a good synergy, then, between CCGT and solar/wind. CCGT can vary to follow both load and fluctuations in solar/wind, while the high fuel costs can be alleviated by solar and/or wind when they’re available. This synergy is one of the major advantages of CCGT: Adding solar and/or wind at low penetration levels can be cost-effective, or close to it.

        This can provide a large and growing market for utility-grade solar, driving cost reductions as predicted by Wright’s “Law”. Without, I might add, having a serious impact on energy prices, and with massive subsidies.

        Cost estimates can be made, AFAIK, by using current prices, or near-term projected prices, for CCGT as base capacity. Assumptions can be made regarding future capitalization costs for utility-grade solar, ranging from the recently experienced 13%/year reduction down to level (no price reductions with time).

        From this, the marginal cost or benefit of adding solar to existing CCGT can be calculated for a range of both penetration levels and assumptions regarding cost of capital and evolution of demand.

        Who pays for the CCGTs?

        That would depend on the financial model involved. IMO the best way to break it down is among ratepayers, who should pay for the energy they use, and governments or other representatives of “society” who should pay the premiums needed to drive the early technology markets while Wright’s “Law” drives the price down.

        CCGT is mature technology, and the cheapest (AFAIK) to capitalize in terms of its product (fully dispatchable energy as well as good frequency support from rotating inertia). So that cost should be borne by the ratepayers.

        In the near term, while CCGT is burning fossil fuel, which adds a negative externality, it would seem fair that the ratepayers should also pay a small premium in terms of capitalizing solar and/or wind. A few percent higher electric bill for the sake of addressing climate risks would probably be acceptable to a fair majority.

        At this point, AFAIK, that small premium would be sufficient to fund early penetration of duplicate capacity in solar/wind. As the price of that technology comes down farther, more capacity can be added without impacting the premium, allowing the penetration to rise to something like 10-20%, with a capacity rising closer to the max expected demand.

        Meanwhile, newer technologies such as storage, rapid-response electrolysis (for voltage support), and power→gas/liquid fuel should, IMO, be more heavily subsidized, as the early costs would be high, and the ultimate benefit of early acquisition at that cost would accrue to society in general, in terms of lower future costs via Wright’s “Law”/learning curve.

        A similar approach could be taken to sequestration: technology to effectively sequester ambient carbon could be paid for with subsidies, or through some sort of fractional carbon-credit system, until the price comes down far enough that all fossil carbon burning can be balanced by sequestration without serious impact to the cost of energy.

        The important thing, IMO, is to plan for exponential growth of technology that isn’t already mature, rather than demanding linear growth curves for “emissions reduction” or sequestration. Final target dates for full fossil-free energy could be somewhere in the 2050-2080 range.

      • To me, the lack of French examples is a good indicator of arguments from a position of weakness, or trying to hide it because it runs rings around renewables, actual and envisaged.

        The problem, as I see it, is the impact of political issues on the cost levels. For new nuclear technology to achieve costs competitive with gas CCGT (via Wright’s “Law”) a very large amount of capacity would have to be deployed. Early deployment will be expensive and risky, and will be up against very strong opposition eager to magnify the perceived risk.

        This deployment, and consequent cost reductions, could certainly happen, but it’s my guess that solar power→gas/liquid fuel will outrun nuclear. PV has too much of a head start today, given the political handicap nuclear is under.

        IMO. But I wouldn’t mind being wrong, as long as it’s due to faster development of nuclear rather than handicapping of solar PV.

      • Take your best shot, clown. The contrast is accurate. You really need to take remedial courses on basic financial analysis.
        The reason renewables are not cost effective is because they do not run that often and have relatively high capital costs. That creates a massive problem with covering fixed costs, unless you force everyone to heavily subsidize your product. Erratically providing power is unhelpful as well.
        A more logical use of renewables is to augment peaking needs. Using renewables to replace lower cost production is just plain dumb.

      • My response is here, in the proper thread.

      • Try analyzing the financials yourself using a common model and avoid using contrasting LCOEs from different sources, otherwise you end up with poor/invalid comparisons.

        When you do as I suggest, the price of power from a new CCGT is around $80/MWh with a capacity factor of 50%. At 90% capacity, price is around $50/mWh. Both scenarios use low-cost gas, 35% owners equity with 10% return on investment and a 15 year note at 8% on borrowed money. The analysis does not take into account that if you back a CCGT down to 50% load, the efficiency drops about 10%.

        Using same methodology, the price of power from renewables is north of $150/MWh with a capital cost of somewhere between $2500-$3000/kW. The problem lies directly with the capacity factor for the renewables, which is around a dismal 30% under the best of circumstances.

        Please note the idea here is to establish fundamental considerations. Clearly, power prices will vary depending on where you are, the price of fuels, and the equipment you are using. But, it does allow drawing some fundamental observations.

        If you want to use renewables, contrast prices and stop trying to justify the product based on CO2 reductions. Such reductions are simply irrelevant on a global scale. Further, the entire basis for reducing CO2 remains conjecture and is not a logical rationale for the current hysteria gripping the “green” movement.

        We should be concentrating on reasonably clean and reasonably priced energy.

      • Try analyzing the financials yourself using a common model and avoid using contrasting LCOEs from different sources, otherwise you end up with poor/invalid comparisons.

        All my LCoE’s were from the same source. Granted, it’s aggregated, but AFAIK much of the original data is unpublished.

        When you do as I suggest, the price of power from a new CCGT is around $80/MWh with a capacity factor of 50%. At 90% capacity, price is around $50/mWh.

        No link to the original data? I linked to mine.

        Both scenarios use low-cost gas, […]

        Oops! What makes you think that assumption is warranted?

        AFAIK right now there are general complaints that the price is too low to support extraction. OTOH I suspect that the original LCoE’s aggregated in the USEIA report were intended to sell the CCGT they applied to, so they also used the lowest-cost gas they could justify.

        If you’re using lower, how do you justify that?

        The analysis does not take into account that if you back a CCGT down to 50% load, the efficiency drops about 10%.

        As well it shouldn’t. A more realistic scenario is that any “particular” turbine is transitioning between full power and idle.

        Note also that the same efficiency issues apply to stand-alone CCGT, when they’re load-following. For back-of-the-envelope calculations I made the assumption that efficiency issues involved in following demand (load-following) were equivalent to those in following demand+fluctuations (in solar/wind). Are you saying that assumption is unwarranted? Why?

        Using same methodology, the price of power from renewables is north of $150/MWh with a capital cost of somewhere between $2500-$3000/kW.

        Your numbers are way obsolete. For 2016 installed utility PV, prices are around $1000-$1330 for early 2016. See here and here for example.

        The problem lies directly with the capacity factor for the renewables, which is around a dismal 30% under the best of circumstances.

        Well, yes. I usually assume 20% (for back-of-the-envelope) for solar. (I don’t follow wind as much, since I doubt it’s scalable.)

        The key to making cost-effective use of solar, IMO, is to add it on at low penetrations in locations where it will add the most value. At least to start. As the cost comes down (assuming it does), increasing penetrations can remain cost-effective.

        I’d like to see the data you’re basing your CCGT estimates on; given your assumptions WRT solar pricing, I find them highly questionable compared to the data I used.

      • AK
        Am having a bit of a problem lining up replays to your line of questions. In any case, the analysis I used is based on a simple financial model, as can be extracted from the information I have provided. I do not rely on LCOE calculations found in the literature for a variety of reasons, including (1) lack of transparency on assumptions, which can really skew results and (2) belief that making forecasts into the distant future is meaningless, – too many variables/events that can quickly upend the forecast.

        The model calculates the price of power needed to make a profit of 10% from the equity investment ( or any % one would like to input) with key inputs of capital construction cost ($/kW), Owner’s Indirect Costs (25% for CCGT, 20% for renewables, $/kW), capacity factor, debt repayment, Owners equity (35%) and fuel costs. I do not assume magical cost reductions or increases that may or may not transpire in the future. The forecast is basically short range.

        The model can caclulate the LCOE – simple brute force run from year one to end of project life with calculation of the average power price. We did do that and results follow: CCGT at 90% capacity ~1.1 versus 3.0 for wind and 3.8 for solar (natural gas @$5/mmBTU). These are normalized values. CCGT @ 50% capacity ~1.0 versus 2.9 for wind and 3.4 for solar. Case #1 LCOE about $45/MWh for CCGT, Case#2 LCOE for CCGT $60/MWh.

        The gas turbine used was a GE 7H with a 2% degradation; “new and clean” heat rate per GE specifications on their web site

        Quite clearly, the capital cost of wind and solar has a very big impact on the results. That being said, at this point in time there is no financial reason to displace CCGT production with renewables. IMO, same position from greenhouse gas standpoint. Rather, renewables should be used in the context of economically dealing with peaking situations (provided the renewable is a low-cost option, which is not currently the case just about anywhere in the US).

      • @kellermfk…

        In any case, the analysis I used is based on a simple financial model, as can be extracted from the information I have provided.

        But you don’t have a link to it? I doubt I could do a clean-room replication of your model from the description you’ve provided. Too many open questions.

        I’ve been playing around with creating just this sort of model in a spreadsheet, and it’s not a slam-dunk. Before I accept results like the ones you’ve quoted I’d have to take a look at your model’s innards. I have a feeling there’s some built-in assumption contrary to those used in the USEIA report.

        Quite clearly, the capital cost of wind and solar has a very big impact on the results.

        Of course. And that capital cost is coming down every year. My focus is on planning within that changing context.

        That being said, at this point in time there is no financial reason to displace CCGT production with renewables.

        Perhaps not today. The question is how much could be done with what (small) impacts to overall energy costs.

        IMO, same position from greenhouse gas standpoint.

        Well, here’s a point we disagree on. Adding fossil carbon to the system represents a risk, and dealing with that risk is more or less attractive depending on the cost.

        With progressively lower costs, more people will (presumably) be agreeable to those costs being paid.

        Rather, renewables should be used in the context of economically dealing with peaking situations ([…]).

        Here, again, I have to disagree. Proper economic development will require reliable energy, which means fully dispatchable capacity must be available to meet the highest anticipated demand, even if the day is hot, cloudy, and windless.

        If you’re talking about dual capacity solar/wind and open cycle turbine or IC, I have my doubts that would be any more economical. If you’re talking about relying on solar/wind alone for part of the peak total capacity, that would be a very bad thing, IMO.

    • From a financial standpoint, why bother with solar, just use CCGT. Is the lowest cost option.
      More directly, anytime you back off power production from a CCGT, production costs invariably go up because fixed costs (e.g. Debt repayment and the return on the original investment) must be spread over a smaller amount of energy production. For instance if we back-off from says 90% capacity to say 50%, the price of power from the plant ends up going up by very roughly 50%. This all occurs to accommodate renewable energy which is already exceptionally expensive and heavily subsidized. The loser in this game is the consumer.
      On a broader front, the aledged benifits (presumably lower CO2 discharges) claimed for renewables are simply not worth the cost.

      • For instance if we back-off from says 90% capacity to say 50%, the price of power from the plant ends up going up by very roughly 50%.

        I’m busy, so I’ll give you a chance to check the numbers and back off from that statement before I nail your hide to the wall.

      • My post of Sept 14 is in response to AK’s childish reply of Sept.14 @ 4:04 pm.

      • In response to your ad hominem response misplaced above I’ll “[t]ake [my] best shot”by extending my analysis here based on this recent document from the USEIA.

        I have often railed against LCoE (Levelized Cost of Energy), partly because it’s so often misused, and partly due to the number of questionable assumptions needed for any such calculation. In this case however, I believe my use is proper, but please note the caveats on page 1, and in this case especially the assumptions (not documented, AFAIK) regarding future fuel costs.

        I’m going to use their projections for 2018 service, since AFAIK both CCGT and solar could be installed with a 1-year turnaround, except for delays (and added costs) introduced by permitting issues. The chart I’m using is the one on page 12.

        The given LCOE for advanced CCGT at an assumed 87% capacity factor is 4.8¢/KWh (48.0 2015 $/MWh). The levelized capital cost is 1.39¢/KWh, fixed O&M is 0.13¢/KWh, yielding a fixed sum of 1.52¢/KWh.

        Multiplying that by 87% yields a nominal 1.3224¢/KWh for 100% capacity utilization. Now, I’m going to divide that nominal value by 90% and 50% to get the values for your “contrast”:

        •     1.3224¢/KWh ÷ 90% = 1.469333333333333¢/KWh

        •     1.3224¢/KWh ÷ 50% = 2.6448¢/KWh

        Now, if we subtract their stated 1.52¢/KWh from the total 4.8¢/KWh we get 3.28¢/KWh. Adding in the (rounded) values for capital/fixed O&M we get total LCOE’s:

        •     For 90%: 3.28¢/KWh + 1.4693¢/KWh = 4.7493¢/KWh

        •     For 50%: 3.28¢/KWh + 2.6448¢/KWh = 5.9248¢/KWh

        Dividing the latter by the former yields ~125% (1.24751015939191).

        So as you can see, dropping CCGT utilization from 90% to 50% will produce something much more like a 25% increase in cost/KWh than 50%. (Granted, these are all back-of-the-envelope calculations.)

        And this doesn’t even account for your straw man involving replacing 40% of capacity with intermittents. Anybody familiar with their parameters knows that a penetration of 15-20% for either would probably max out their weather-dependent supply-limited capacity.

        What makes it even more of a straw man is that you introduced your invalid calculation in response to my suggestion involving 5-10% penetration, where solar would have the greatest likelihood of almost never having to be curtailed or dumped into storage.

  11. India Takes Renewable Energy Complaint Against US to WTO
    http://thewire.in/65523/india-us-wto/

    Taking its renewable energy dispute with the US to the World Trade Organisation, India has said that eight US states illegally support their renewable energy sectors, a Reuters report said.

    India’s complaint alleges the states of Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota support their renewables sector with subsidies and domestic content requirements (an obligation to buy local goods rather than imports).

    After this complaint, the US has 60 days to settle the dispute. If that doesn’t happen, India can ask the WTO to adjudicate.

  12. Obviously, America needs a Chevy Bolt in every garage.

  13. When outside entities seek to limit the expansion of fossil fueled resources into third world countries, they may unintentionally be increasing damage to the environment as well as limiting the quality of life and potential for economic development.

    By ‘outside entities’ we mean, environmentalists, right? Like the Leftists’ ban on DDT, it is difficult to measure the success of limiting the expansion of fossil fuel if the real but unstated fear is overpopulation, in which case the ban that has causes genocide… is a success!

  14. Note that renewable power sources have no influence on electricity rates in California. Rates were higher long before renewables were a factor.

    Mild climate and large population with rare demands for peak power are responsible for high electricity prices in California.

    Overall residential electric bills are only 80 percent of the US average, at $91 per month vs $114 per month in year 2014.

    See http://sowellslawblog.blogspot.com/2016/07/why-california-electricity-costs-more.html

    • Roger,
      Last week my barber let me know she just got a HUGE electric bill ($770.00) from Pacific Gas and Electric (PG&E) that put her into rate shock.

      I have been keeping track of PG&E’s rate structure and cost allocations since 2005. My wife and I had a bit of a bill/rate shock- a $500.00 bill- with our August, 2005 electric bill. Hence I was able to explain some of the nuances of PG&E’s rate structure for the residential market to my barber.

      I had recently finished trying to make sense of our 2016 True Up bill from PG&E. Our 2016 bill allocation for “generation” went up by over $300.00 compared to the previous year from PG&E (for close to the same total kWh used from the grid- 7000). We have a TOU net meter rate schedule as we went solar in 2006. In case you are interested the net metering program with PG&E changed a bit for my wife and I earlier this year. Herman Trabish covered some of the specifics on the CPUC decision(s): http://www.utilitydive.com/news/inside-the-decision-california-regulators-preserve-retail-rate-net-meterin/413019/

      I take that you do not have PG&E as your electrical energy service provider. If you did you would likely be aware that Most non Care customers with PG&E are paying a marginal price of $.24/ kWh or more for power http://www.pge.com/nots/rates/tariffs/rateinfo.shtml

      Given the high temperatures in the state last month most E-1 rate schedule customers with PG&E will have experienced rate shocks (if they have air conditioners that is) as their marginal costs will have hit Tier 3 prices. My barber paid $.399 kWh for a lot of power last month.

      Your “Note that renewable power sources have no influence on electricity rates in California.” comment is not supported by PG&E’s statements during a rate design review a few years back: https://thepointman.wordpress.com/2012/04/13/the-sun-is-setting-on-solar-power-the-moneys-gone-and-nobodys-asking-any-questions/#comment-2842

    • Try looking at the price of the power, on a $/kWh basis. The folks in California are paying exorbitant rates. Couple that with the high cost of gasoline and housing and you end up with the average Californian being not very well-off financially. Of course the elitist Democrats do not care because they are rich. However, as Californians keep voting in the crooks, I have virtually no sympathy. They are getting what they voted for.

      • PG&E’s rates look like this for E-1 residential customers:
        Tier 1 usage level- $.182/kWh
        Tier 2 usage level- $.241/kWh
        Tier 3 usage level- $.399/kWh

        My longer comment is under moderation it appears. The web links support my claim that the RES in CA has caused electric rates to increase.

    • Roger,

      An associate is in the process of evaluating the Oregon RES on prices for power. I suggested leveraging CA’s models that had this to say:
      https://ethree.com/documents/Advisory_Panel_Report_on_the_CA_RPS_Study_FINAL_1-2014.pdf

      ….”Importantly, the RPS Study suggests three general conclusions related to adoption of a renewables portfolio standard at the 40-percent or 50-percent level:
      
      1) Maintaining electric reliability is technically achievable, assuming a substantial set of assumptions are realized concurrent with the expanded use of renewable resources, given what was studied.8

      2) Higher RPS requirements at the 50-percent level would likely additionally increase electricity rates in 2030 by a wide range, compared to the expected rates based roughly on current policies and plans: the estimated increases were from 9 percent to 23 percent, depending upon the scenario under base case assumptions. The range was 3 percent to 36 percent under different sensitivity analyses, depending upon scenarios that changed combinations of variables. These estimated rate increases in 2030 were above and beyond the already-higher rates assumed to occur by then in the base case (which are estimated to be 47-percent higher than today’s rates).
      
      3) Although less thoroughly evaluated than the two conclusions above, carbon-dioxide (CO2) emissions would be substantially reduced in all scenarios (with the cost per unit of reduction being significant in each scenario) owing to the substantial reduction in fossil fuel consumption in power plants……”

  15. Peak Oil is upon us. Either we find alternatives to fossil fuels or we are toasted. That intermittent renewables are not a significant part of the solution is unfortunate.

    • That intermittent renewables are not a significant part of the solution is unfortunate.

      Unfortunate but the reality. What is really unfortunate is that the RE advocates deny the reality. In so doing, they are doing enormous damage.
      – 54 years delay in the nuclear deployment rate
      – 4.5 – 9 million deaths as a result
      – 75 – 170 Gt extra CO2 emitted
      – cost of electricity much higher than it could have been by now
      – Global GDP much less than it could have been
      – Very large cumulative GDP loss since 1976

      But, all these benefits forgone are ignored by the ideologues who worship the RE dream.

      • Peter, first off just want to say that your comments are always a worthy read…(☺) The biggest threat to world wide economic development is the u.s. federal reserve policy. The fed deliberately holds the u.s. unemployment rate high at no less than 4%. (this to curb inflation and foster the stability of slower growth) AND, of course, where the u.s. economy goes the rest of the world inevitably follows. If energy prices were not a drag on economic growth, the fed would have stepped in with it’s own drag (higher interest rates) in its stead. So, i don’t think that anything has been lost given that fed policy is what it is…

      • Affonzarelli.

        Thank you.

        … AND, of course, where the u.s. economy goes the rest of the world inevitably follows.

        Yes, and not just the economy, but also on technology (after Britain lead the way in the industrial Revolution).

        Look at the 1 page article “The Miraculous 1880’s” to set the scene on significance and long term benefits of successful technology transitions http://www.vaclavsmil.com/wp-content/uploads/7.1880s.pdf.

        Next notice how when the Nuclear Rejection Commissions was established approvals for new reactors came to a grinding halt; How the NRC stopped the U.S. nuclear power industry. http://nukespp.blogspot.com.au/2016/02/how-nrc-stopped-us-nuclear-power.html

        (H/T Mark4asp)

        Then notice how the world followed: Slide 11 “History of NPP Construction Startshttps://ansn.iaea.org/Common/topics/OpenTopic.aspx?ID=8545. Construction starts fell off a cliff in 1976 and have never recovered. Global deployment rate of nuclear power plants is below waht it was in 1966 – i.e. a 54 year delay to progress – thank to the anti-nukes who like to call themselves “Progressives” :(

        Figure 2 here: https://judithcurry.com/2016/03/13/nuclear-power-learning-rates-policy-implications/ shows how nuclear progress was disrupted, starting in the US around 1968 and followed by other countries a few years later: Figures 5 and 6 show how the global deployment was disrupted.

        Conclusion: the US has been responsible for the massive disruption to the progress of nuclear development.

      • This is going to be some “inside baseball” analysis, so some folks might want to tune out.
        Peter, I think the root cause of the NRC molasses pit lies in seemingly innocuous wording in the Code of Federal regulations, namely “Important to safety”. That term is actually not defined, although “Safety Related” is.
        With the advent of Three Mile Island, the bureaucrats in the NRC went off the deep end and promulgated all manner of regulations that were well outside the domain of Safety Related, but ostensibly part of Important to Safety. That caused all manner of cost increases and delays, which remain with us to this day.

        In order for nuclear to be reborn, the NRC needs to stay within the domain of Safety Related. That approach is perfectly logical for advanced reactors as these machines are inherently fail-safe (passive cooling, containments, and nuclear fuel not prone to catastrophic failure). The NRC is well aware of this proposal, which I suspect will be embodied in a future General Design Criteria (10CFR50 New appendix for Advanced Reactors).
        Best Regards,
        Mike

      • kellermfk,

        All the regulatory ratcheting and masses of legal and other impediments to nuclear that exist in the OECD countries are secondary causes, not the root cause.

        The root cause is the public’s concern a about nuclear safety and their paranoia about radiation. The public was stongly supportive of ‘atomic energy’ through the 1950’s and early 1960s. In the mid to late 1960’s that changed in the US and Germany and soon after in other countries (recall movies ‘On the Beach’ and later The ‘China Syndrome’). The change from strong public support to deep concern was faned by the anti nuclear power protest movement (as distinct from the anti weapons protest movement). For some excellent background on this read this RAND report (or at least the introduction and go as far as you are interested): https://www.rand.org/content/dam/rand/pubs/notes/2005/N2192.pdf
        Or e-book: http://www.rand.org/pubs/notes/N2192.html

      • You greatly underestimate the impact of excessive regulation and the subsequent financial impacts.

        The majority of the population is more or less supportive of nuclear energy or ambivalent. That however, does not restrain excessive regulation which drives up costs so high that the product is no longer even close to being competitive.

        Take a look at the time to build a nuclear plant in the US & Europe versus say China. Why does it take nearly twice as long in the US & Europe? Basically over regulation and having to deal with legions of bureaucrats.

        The EPA demonstrates this type of heavy-handed government interference that inevitably drives up costs. In this case, the underlying theme is to drive coal plants out of business.

      • kellermfk,

        You greatly underestimate the impact of excessive regulation and the subsequent financial impacts.

        That is a baseless assumption and wrong. When you start guessing what other people know and don’t know, you are on quicksand. I said nothing about underestimating the enormous impediments that are cuaed by masses of secondary impacts. However, mucking around with fixes to them gets us nowhere, as has been demonstrated by 50 years of delay. If we want to fix the problem we first have to recognise and understand the root cause of the problem and rectify it.

  16. This is an excellent post, as have been all PE’s previous posts. Could I suggest Planning Engineer and/or Jill Tietjen do a follow up post to explain the most important considerations in system reliabilty.

    In recent years, high-impact, low-frequency events including […] coordinated attacks and pandemics have garnered a lot of attention and exposed the challenges in providing certainty for high levels of reliability. However cost-reliability tradeoffs occur at multiple levels on all grids – for each of generation, transmission and distribution.

    I would especially like to know more about the risks of cyber attack as we move to more central control and smart grids

    If the electricity system is disrupted for an extended period, e.g. 2 weeks or more, 50% of the population of major cities would probably die. Think about the consequences of no electricity for an extended period (an example of an extremely high impact event):
    1. no water supply
    2. no transport fuel supply – when your tank is empty, you can’t go anywhere
    3. no ATMs – no money
    4. no food supplies – no shops open for business – all food will quickly be stolen.

    • I should also have added: no communications, no radio, not TV, no telephones. No way of knowing what is being done to fix it and how long it will take. Just wait till you die. This should rank as a high impact event! Certainly a higher impact than “catastrophic” climate change; and, i’d suggest, higher likelihood in any given year.

    • Peter – that’s a good topic. I don’t know if it’s one I want to step into. There are a variety of opinions around these topics and while some may be better than others, I don’t know how you can judge among them. Here’s just a couple thoughts, that I won’t argue are any better than anyone else’s.

      External extreme events, particularly in “perfect storm” internal conditions can/could certainly have staggeringly harsh consequences. The degree to which we can prepare for such will always be somewhat limited.

      My personal observation – One saving grace is that there is “usually” some distance between internal “perfect storm” conditions and external extreme events. We tend to see blackouts and serious system problems under conditions that more so approximate “perfect storms” of internal vulnerabilities. Under extreme external events we usually find that the underlying system has a greater deal of robustness and flexibility than we were counting on. Why do we tend to see the internal “perfect storms” at times that are not conjoint with external threats? Because external threats occur during very small short duration time periods. Of course Cyber is another matter, particularly if those are coordinated to be concurrent with other extreme events.

  17. Would either of the authors like to comment on this paper and/or the papers that cite it?:

    Using Probabilistic Analysis to Value Power Generation Investments Under Uncertainty by Fabien A. Roques, William J. Nuttall, and David M. Newbery EPRG Working Paper

    Abstract

    This paper reviews the limits of the traditional ‘levelised cost’ approach to properly take into account risks and uncertainties when valuing different power generation technologies. We introduce a probabilistic valuation model of investment in three base-load technologies (combined cycle gas turbine, coal plant, and nuclear power plant), and demonstrate using three case studies how such a probabilistic approach provides investors with a much richer analytical framework to assess power investments in liberalised markets. We successively analyse the combined impact of multiple uncertainties on the value of alternative technologies, the value of the operating flexibility of power plant managers to mothball and de-mothball plants, and the value of mixed portfolios of different production technologies that present complementary risk-return
    profiles.

  18. Not clear at all what you are seeking or why. (Which suggests I should let it pass.). If there is any controversy here, from my cursory review I am missing it completely. Investors should look beyond levelized cost. Monte Carlo simulations are well accepted within the industry.

  19. Michael Shellenberger has a new Ted talk:

  20. David L. Hagen

    Planning Engineer and Jan
    Recommend South Australia as the poster child for massive renewable energy without adequate backup or storage. Prices spiking up 100X!
    Poor winds, outage blamed for South Australia’s energy crisis

    “The AER report, released yesterday, found prices spiked above $10,000 several times on July 7, with the spot price reaching $8898 a megawatt hour for the 7.30pm period.

    Along with the planned Heywood Interconnector outages, the report also blamed the state’s ­increasing reliance on gas and at times unreliable wind, following the closure of the coal-fuelled Northern Power station in May.

    “While there is in the order of 1200MW of semi-scheduled wind installed in South Australia, on the day it was generating below 20MW, as forecast,” the ­report says.

    “Gas-fired generators were faced with limited gas and transport capacity making scheduling of the limited fuel problematic.”

    The report found energy ­demand had been similar on previous days but the lack of wind and interconnector shutdowns limited availability.

    AGL’s Torrens Island B3 unit had also been unavailable for the week before the spikes so the company could complete mandatory safety and compliance work.”

    Government must jump-start energy reform before lights go out!
    “Last month during a still, cold snap in South Australia, spot electricity prices spiked leaving many industrial customers exposed. South Australia sources around 41 per cent of its generation from wind and solar. This is extremely high by global standards, particularly for a small, relatively isolated network.”

  21. KISS: Bury all electrical lines. Power outages are most often caused by windy conditions knocking down things that knock down powerlines. However, the KISS principle, at work here, is a non-sexy, ill-elegant solution that no one with flowers in their hair will ever propose.

    Note about the KISS principle: Because it is aimed at the stupid, it is never applied.

    • Distribution. Lines can be buried and that can improve distribution reliability. At the higher transmission voltages it goes from difficult to near impossible for long lines.

    • Why most cities don’t bury power lines

      Why don’t we bury power lines in the U.S.?

      Electric users ask: Why not put power lines underground?

      As often, IMO, nobody’s actually looked at ways to do it cheaply and economically. Especially, they don’t think about “leading the target” in technology/cost terms. They just use their routing cost estimating procedures on existing technology.

      Rather than looking at burying electric cables, our communities might try looking at creating underground utility channels that can work for electric cables, last-mile internet, water mains, gas mains, local sewer pipes, etc.

      In urban (and perhaps suburban) areas, these could be located under sidewalks, with a permanent-style channel and top plates that serve as covers as well as sidewalks. It might also be feasible to combine them with storm drains, which would probably allow leaks in water/sewer to drain without impacting wires.

      Inspection and perhaps most maintenance could be done using robotics, while human intervention would probably be cheaper than with either stuff buried in soil or overhead lines.

      Obviously, alternate solutions would probably be required for more open areas, They could, however, probably be designed around some sort of buried channel in which most routine maintenance could be done robotically.

      Note that if such channels are made out of reinforced concrete, this also helps reduce the problem of underground lines being cut by inappropriate digging.

      • Good links for hitting at the distribution levels. At the high voltages its kind of like why an elephant can’t be designed like an ant, some factors: The cables are so thick you can’t get a lot of distance on a spool, so you end up with a lot of splices. High voltages have disproportionate problems dissipating all that heat. Trenching and encasements become more problematic with the the size/temperature etc. Must dig deeper, more environmental impacts. Difficulty finding and repairing faults can increase outage times. When curren flows though under groundi transmission line it build up capacitance which as flows change can lead to big voltage swings. From memory without checking /updating, 115kV Generally costly bit not unusual to find some applications where that works well. 230 kV – much rarer. High density areas with little alternatives. Los Angeles Departement of Water and Power does some at a very high cost under highways I believe, They put fiber optics in to help fine faults. They were having a lot of trouble with related explosions sending the necessary manhole covers flying, 500kv and above- not really possible in most case-maybe some applications that go though a mountain (Swiss?) in huge conduits.

      • At the high voltages its kind of like why an elephant can’t be designed like an ant, some factors: […]

        Yes, I was addressing primarily local distribution.

        One difference for high-voltage: trees and other overgrowth are usually kept trimmed back so as to eliminate the risk of toppling obstacles. (Tornado-blown objects, including limbs from nearby trees, are another matter.)

        I found what looks like a good partial primer on underground transmission, including “345 kV or greaterhere. Seems to date from 2011.

        What I notice, even here, is that there doesn’t seem to be much discussion of how future technological developments might lower cost. Obviously, robotics, with proper design, would have the potential to dramatically lower inspection/(some)maintenance costs once more of the learning curve has taken place. Could such designs be used today with reliable predictions of what inspection and maintenance robots will be capable of in 5-10 years?

      • Another thought:

        The vast majority of this grid seems to be at voltages where we already have technology, and experience, for underground cabling. If, rather than building very large power plants, smaller (e.g. 100-200MW) distributed CCGT gets plugged into the open spots, I’d guess the actual building of extra transmission could be minimized.

        And another: is it really an either/or choice between overhead and buried cable for high-voltage? Or might it be possible to build “on the ground” utility duct, eliminating the trenching cost while also eliminating the huge right-of-ways and towers/air space of traditional overhead lines?

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  23. I’m a bit late to the party, but since this is my specialist subject!

    This all seems very US centric. However I’m from the UK. What does the team think of the “cost effectiveness” of the recently (probably) finally approved Hinkley Point C nuclear power station, which is (by US standards) just up the road from me:

    https://www.edfenergy.com/energy/nuclear-new-build-projects/hinkley-point-c

    “Securing the UK’s energy future?”

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