The True Gating Factor Limiting the Adoption of Renewable Energy
Our public relations ace Annemarie Osbourne just sent me this brilliant article from the New York Times: How Producing Clean Power Turned Out to Be a Messy Business.
This is a terrific piece that offers a great deal of truth of where we are at in the migration toward renewable energy. My impressions:
One important highlight is that Corporate America is not interested in anything except success in the near-term. That the utilities and IPPs (independent power producers) need to focus on the present is actually not “new news.” CEOs who don’t produce quarterly profits are summarily fired; nothing astonishing there.
In my estimation, the article misses the central point of the issue: pricing in the externalities associated with the production and consumption of energy. For example, there are no costs borne by the operators of coal-fired power plants related to the dumping of emissions (CO2, methane, oxides of nitrogen and sulfur, heavy metals, and radioactive isotopes) into our atmosphere. Of course, these costs of repairing long-term environmental damage and lung disease actually do exist, but they will be borne by our children and grandchildren.
As long as this insanity persists, it’s hardly a surprise that solar and wind as well as geothermal, hydro and biomass, have a tough time competing. But, conversely, the moment we make everyone pay his fair share, the math on all this changes immediately and completely.
Btw, the exact same can be said about an even greater challenge to environmental sustainability: the production of red meat. Sure, the price of hamburger is $3/pound, but only because no one (but our children) is capturing the cost of deforestation, loss of biodiversity, methane emissions, etc.
In this sense, I suppose I’m a supporter of free market economics. It goes back to what I told my kids when they would be all upset because they had spilled something: “There’s no problem with making a mess as long as you clean it up.” My problem arises when hugely profitable companies use their vast wealth to manipulate our law-making process so they’re able to skirt their moral obligations.
It is in the nature of business to find the cheaper pathway toward profits. Presently we have no distinction between that path using efficiency and economies of scale or subsistence wages, the commons, externalities, and moving legislation in their favor. We also protect the individuals who make the decisions and the investors who drive those decisions through the form of the corporation.
We do all his in the name of profits for some and call it an incentive regardless that some of this could be a benefit to society while some of it is clearly a method of operating that is harmful to society.
And so while climate change is an overwhelming concern that gathers a great deal of media attention, the root cause is our way of doing business and lack of any moral compass that would prevent or limit social destruction in the name of profit.
I’m sorry, but I saw nothing convincing in the article. We are simply supposed to take its conclusions on faith alone.
About seven years ago, I was directed to a lecture on youtube. It was delivered by a UC Davis professor with a PhD. Before he delivered the lecture, the auditorium audience filled out a questionnaire to determine their viewpoints on wind and solar systems. Although a considerable number of them believed that wind and solar systems could provide reliable power, they were in the minority. After the lecture, they were in the majority.
I carefully listened to the lecture and looked at the visuals. The professor asserted that even in California, interconnecting wind and solar systems over a wide area would result in reliable power. He never once stated how that had been determined; he simply stated it as a fact. Yet, with absolutely no proof, many people in the auditorium had become convinced.
At that time, it was widely believed that interconnecting wind and solar systems over a wide area would result in reliable power. To convince me, it would have been necessary to instal sensors at many of the locations where it would have been reasonable to build wind and solar systems, collect the data, and carefully analyze the data. If such a study had proven that such renewable systems interconnected could provide adequate reliable power at all times, I would have accepted it, but no such study had ever been done. To me, it was nonsense to believe that such a system would work with no proof. It is no longer generally believed that interconnection alone could provide adequate and reliable power.
It is now widely believed that with the addition of energy storage, wind and solar systems could provide reliable power. In theory, that is true. However, there are no quantitative studies which prove that it is possible with existing wind, solar, and storage technologies. Instead, we are expected to accept, without proof, that either it is possible with existing technologies or that it is certain to become possible. In other words, we are being asked to spend, on a global basis, trillions of dollars on something with no proof that it will work even though we have a nuclear technology which is guaranteed to work.
Obviously I require a higher standard of proof than many people require. We know that nuclear systems can provide plenty of reliable power; there is proof of that. Prototype nuclear systems have provided good reason to believe that with more R & D, they can be scaled up and eliminate the problems with nuclear power which concern many people.
Disruptive global warming has become inevitable. It is imperative that we limit it to the extent possible and take steps to enable us to live with it. That requires eliminating the use of fossil fuels as quickly as possible. The only way we can do that as quickly and reliably as possible is by expanding nuclear power as fast as possible. We do not have time to experiment with power systems, i.e., renewables, for which there is no proof that they can do the job, except for niche situations. We do have proof that existing nuclear power technology can do the job. From prototype demonstrations, we also have good reason to believe that nuclear power technology will improve to reduce the problems with existing nuclear technology, i.e., waste, cost, and lack of smaller systems.
If, while expanding nuclear power, we find ways to make renewables practical and can expand their use as fast as we can expand nuclear power, then we can switch to renewables. That is the path of least risk. We must take that path to minimize a disaster that would probably destroy civilization and result in untold millions of deaths by war, famine, and disease.
Two points to consider:
1) The article doesn’t claim wind and solar can replace fossil fuels; in fact, it makes the opposite point, providing the reasons this is staggering along, at least currently.
2) Wind is currently ~5% of the US grid-mix, day in, day out. 31% in Iowa. Wind produced over 190 million megawatt-hours (MWh) in the U.S. last year, enough electricity for about 17.5 million typical U.S. homes. Those who say it can’t happen have an obstacle to making their case: it *is* happening, right in front of their eyes.
This post provides some tangible specific examples of the issues that cause GATING or blocking in the energy marketplace. Trust it provides real world examples that resonate.
@ Breathe on Wind points out the failure embedded in our current energy pricing system. Short Run marginal costs become more important than Long run Marginal costs. Long run would include societal and environmental costs associated with the various forms of energy. Long Run costs for fossil fuel are un affordable in many cases. The opposite is true for Renewable’s.
This would level the playing field from my view. It would change the calculations etc. Better energy supply decisions would be made and new cleaner technologies would have the ability to compete against entrenched legacy fuels that are not paying their true cost to Society in their prices.
But society has to pay for the externalities – so why not make the payment More direct – he who Incurs the cost should Bear the cost. then the financial under writers of the legacy fuels would have a more challenging investment decision to make. They may not like the added risk.
The banking industry and other financing sources have made such decisions in respect to large scale nuclear , it has too much cost uncertainty. There are others but just talking about investment costs versus risk and return. The perception of high and really undetermined higher costs to construct a big nuke has discouraged the funding sources so they assign a higher risk premium on these, so the utilities don’t want to take on the higher perceived risk and cost of money.etc. That is why there is a lack of new builds! Has nothing to do w politics – its investment risks.
Another example of the flaws of the current cost economics involved in power generation is in the case of Pumped Hydro Storage.
In California with a large and growing supply of wind and solar there is a need (yes Frank you are on to something but your conclusions come much too quick and your solution is too singular and is burdened with uncertainty as pointed out above)
There is a need for some storage to balance out supply and demand of wind/solar and over generation and matching or balancing supply to meet statewide need. There is also a need for Ancillary services that don’t burn carbon fuel ( like a typical gas turbine balancing plant) .
Pumped Hydro Storage can do this cleaner than a fossil plant.
Here is where the market pricing conflict enters into the process and this exposes the flaws in current energy pricing paradigm’s. .
Energy from any source is bid into the CASIO marketplace on a day ahead and peak load price ( some real time spot price usually).
Pumped Hydro LCOE for energy will be higher than other sources. So this becomes a barrier to greater development because in a sense we are looking or evaluating the out put of the pumped hydro on a first cost basis and not a full life cycle cost.
This price bias limits and denies society from all the other benefits of the pumped hydro system .
The pumped hydro deserves recognition for the Value to the Grid which it can deliver, the load balancing, the frequency support a combination of ancillary services and if market pricing changes are made it will allow the continued development of additional renewable energy that is intermittent because it perform load firming, etc.
The output is Higher Value BTU’s or KWHRs to Society for many reasons and its time to recognize this.
Everybody WINS and progress is made on many Fronts.
So CASIO is now researching and giving consideration to changing the pricing formula for generation in California so that the Higher quality of the KWHR of a pumped hydro source is recognized by the energy market place for real time value.
This is the type of Progressive -adaptive policy changes that graduates the pricing system to a higher level.
The pumped hydro system can use over generation of Renewable Energy to perform the pumping in many cases . Saves fuel reduces parasitic energy losses. A system of systems integrated together not only maximizes Clean generation sources but it can also Optimize the Transmission system as well.
Triple Bottom Line type of Economics.
The mid west part of US will see many of these pumped hydro and wind/ solar systems. So will some Mtn states.
Bonneville Power Systems is also investigating same for Pacific NW so they can better utilize over generation of wind and use the excess to pump water back behind the existing dams. Also these systems can mitigate the issues caused by intermittency which causes the dams to release more water volumes beyond the limits that protect the salmon runs. Too much water creates too much nitrogen gas which kills the fish.
This negative consequence cascades into the Native American fish economy as well as the tourism economy and food supply etc.
Again the current wholesale pricing model of generation becomes a barrier when first cost LCOE only is used as a criteria for build or no build.
It is obvious the Grid / environmental benefits and LCOE would be a better measurement for Society.
I trust these two examples of market pricing barriers illustrate the flaws in our current energy pricing models and the same applies to the bias towards legacy fossil fuels that has made the energy transformation more difficult.
Frank makes points that nuclear option is the only option. It may be a option that warrants more investment but it is not the only option and it has lots of competition that has a declining cost curve while nuclear cost curve is still trending UPWARDS – with only no emissions as its Trump card but no other large societal benefits and there is the liability of toxic waste at end of life! So the technology has a steep challenge.
But as Craig was pointing out WIND economics make a COMPELLING CASE and will only continue as their LCOE ‘s are now below GAS. Oil & Gas Texas has 14,000 megawatts and is going for 20,000 MORE plus !%,000 to 20,000 megs of Solar over next 10 to 15 years .
Two nukes to be built at the current existing nukes in Texas were both cancelled 5 years ago – too much Investment risk . In fairness the Texas ERCOT grid is a Energy market only w no capacity payments so that makes out to be a Major Barrier to Nukes in Texas.
In Midwest Wind and GAS prices are crowding out legacy nuclear units ( factor in depreciated nukes, that are in mid life but with high maintenance costs because the maintenance costs were UNDER ESTIMATED many many Moons ago in design phase, SWAG estimates coming home to Haunt the Genie !).
result – 3 nukes scheduled to close in Illinois unless they get price subsidies!
Now NY has decided to subsidize 3 nukes and match up nukes with growing Renewable s and save the 3 nukes in NY that were scheduled to close as they are money losers Now due to the more competitive Wind and GAS and Canadian Hydro flowing south into NY.
So the RE energy is bailing out the Nukes!
This subsidy reversal relates to the case I was making for the pumped hydro earlier as the NUKES produce no carbon emissions so they have a high Societal Value. So in the name of being consistent I think the NY decision to subsidize the nukes for a few more years makes good policy and balances things out.
The NY regulatory decision and an enlightened Democratic Governor helps also so Illinois politicians now may rethink their objections to providing market pricing subsidies to the 3 Illinois nukes. so they don’t have to close next year.
These situations are good examples of how our energy pricing is flawed and it takes creative and reasonable points of view coming to balanced decisions so we can address global warming.
We can save investment dollars by better leveraging some of our existing dam and water work facilities. We also can better manage water droughts by integrating technologies and recycle limited water in a closed loop system and adding More Value instead of just looking at a BTU as just a BTU. The clean ones are worth more to society.
So , a carbon tax would level the field and would not hurt the economy it is long over due . In a concession to the fossil fuel co’s I would give a carbon tax reduction for the oil that is used for plastics and industrial products that embeds the carbon into a product. Same for gas for fertilizer and maybe a few other products so food supplies are not impacted. Tax the burning of the fuel where the emissions are !
@ Frank
In respect to the limits of Renewable energy and the claims it can’t keep the Grid up etc. I am sure the serious energy models may make some assertions and some may make this conclusion. Perhaps it is accurate or perhaps it is not. Technology and Innovation can keep improving so I would not hang my hat on fixed limits. I dont think anyone really Knows.
There are Energy Models done by NREL National Renewable Energy Lab , WECC Western Electric Coordinating Council ( all the land area West of El Paso to Cal and all the way straight North from El Paso, Tx. into Canada. A wide vast expansive areas.
Studies have been done on what is the impact of various amounts of solar , wind on the grid , do costs go up , reliability issues, etc.
These studies are around 4 to 5 years old. Also BPA has done some more limited to the Pacific NW.
The major take homes are :
1. The system can handle it I forget the exact megawatt limits but they are higher than once thought. that is good.
2. Reliability is not negatively impacted – though some transmission upgrades are in order to handle increased growth in Western populations etc.
3. The large land mass does create a high level of Diversity in supply and also demand – weather and related are real diverse. Things tend to balance out.
4. Large integration of renewable energy reduces fossil fuel usage and Costs so the economic benefits to the greater public are positive. ( bear in mind these fuel cost savings are under current low cost gas prices . Everyone knows that in the 2030 time frame gas will go up. It was a few billion dollars in fuel savings per memory .
There are some issues but the benefits out weigh additional infrastructure costs were the conclusions of these highly technical Grid studies. NREL studies are free to the public most of the time so go check it out.
Given the dire circumstances of the Globe its long past time to awaken from the mythical virtues and harmful bondage our misplaced Faith in a free fossil fuel market and Correct our Course of actions!. The cost consequences never were free even if we haven’t charged users properly for it. Time to collect.
It would Drive Change increase the transition speed etc.
The energy supply of the future will be a diverse Mix and the scale will be modular as demand is becoming more modular and integrated modular supply systems or technologies are the way Forward for a Cleaner Future if we are to have one?
Totally separate question if Time remains to Correct Course in time?
We may pay dearly for the False Gating Barriers !
Silent,
You obviously researched your post very carefully and made many good points. However, the flaw is in energy storage which with would be necessary to make renewables work without fossil fuel backup.
Pumped storage works very well. The problem is availability. Specific geographic features are necessary for it to be practical. Two huge reservoirs are required at different elevations. The required size of the reservoirs varies inversely with the difference in elevation between the two. In places where enough pumped storage is available, renewables may be practical without their depending on fossil fueled systems for backup. However, there must be due consideration for very unusual circumstances where renewable power is unavailable for long periods of time. That is generally overlooked.
Not long ago, a UK wind system failed to deliver very much power for a few months during the winter when it was most needed. Although wind power generally has a higher availability factor than solar, it is possible to have insufficient wind for weeks in a row. That would make it exceedingly difficult to have enough storage. It looks as though wind may require more storage than solar. But even solar would require enough storage to allow for prolonged periods of cloudiness. That is especially true for concentrated solar systems since even thin clouds will shut them down completely whereas PV systems with no concentration will deliver some power on cloudy days.
As a result of attending public meetings put on by Power New Mexico, I have a greater appreciation for the advantages of small nuclear systems. PNM gets its power from a number of different sources, all of which are far smaller than the Westinghouse AP1000 nuclear plant. It is unlikely that PNM could even consider anything even approaching the size of the AP1000. However, if much smaller nuclear plants were available, under the right circumstances PNM could consider them. However, state law is forcing PNM to continue to increase its percentage of renewables. It would make more sense for law to force power companies to continually reduce CO2 output than to specify how they must do it.
@ Frank
Thank you for recognizing the value in what I presented. I also said that this is not a One Size fits all and it is going to take a MIX of technologies and Integration strategies for a more Sustainable future.
I also said we should change the nature of the pricing of energy and depart from the limitations of btu basis pricing for energy.
We need to privce based on Value. The value of the emission free nukes in NY and maybe in Illinois makes a case for a justifiable subsidy as part of a greater reaching pricing and policy position.
Same for Wind and solar.
I also mentioned specifically using the concept at existing dams to avoid the high capital costs. Also to better manage water flows which will only grow more challenging going forward.
Geographic location has historically influenced the location of many power plants. Like Mine mouth coal plants in Montana, NM and Colorado and Wyoming. That model for coal worked real well.
So we may have to do more of that with Wind and solar strategic location !
As for PNM well I think it speaks volumes of their old fashioned thinking when they dont plan to put 100 to 200 megs of tracking solar at their San Juan Plant.as they close two of the old polluting coal units. They got the damn land the permits and the infrastructure So leverage it be Smart!
The fact that the Over paid Executives keep clinging to the failed model is No Wonder at All – its par for the course!
Buying into a mid life nuke called Palo Verde in Az a plant that they had to sell off some of their original ownership due to money issues back in the day well just speaks to the Emptiness of the Monopolistic Utility Mind Set SILO Warped thinking!
Write your congressman, Governor and Senators and ask them to tell the NRC to pick up the pace on SMR’s Tell PNM to do something other than try to PAD their Rate Base etc etc.
I could go on and on on this – Re think Scale and Power Use Scale .
Oh yeah your last comments on the Mini Split topic were good yes zonal hvac in homes is tricky and not locked in stone design yet. There are shortcomings as you pointed out.,
But Mini splits are spreading into the market place more and more Drive down to Las Cruxes Homes with them use less solar and the homes have HER of 35 or less. Which also means they need less kw whether its solar , wind, gas or nuke . Most of the stock of US housing has HER s of 80 to 125 or worse.
The national average is getting into the 50 to 60 % range now. So DEMAND for any energy is going DOWN.! In Progressive Enlightened States with good Public Policy The HER s ratings are trending to the 35 level or below. The path to Net Zero homes that ae Affordable Sir. So we dont need any more monolithic large AP 1000 white elephants .
We may need some 40 meg modular sized SMR if they can graduate from prancing and show us they can actually DANCE !
It is well written that those who Fail to learn from History are doomed to Repeat it same applies to energy!
You take care understand your concerns
Amen amen
Silent,
It is not surprising that demand for power is declining somewhat. The city of Albuquerque is in the process of replacing all street lights with LEDs. They are somewhat more efficient than the current sodium vapor lights and last far longer so, even though the Na lights are still functioning, it apparently makes sense to scrap them. That principal is one of the things which made Andrew Carnegie the richest person in the U.S. He would scrap a brand new steel mill before it became operational if a more advanced design made it obsolete to the extent that scrapping it made sense. Building codes now require more insulation and more efficient windows. However, there is a limit to what extent older buildings can be retrofitted to make them more efficient.
Mini split A / Cs are often the only type of A / C that makes sense in an existing house which has no ducts. Whether they are the best choice for new homes is less clear. The equipment costs more, but it costs more to instal ducts than to run a few lines for refrigerants. Unless ducts are very well insulated, they can reduce efficiency.
As for large nuclear systems, including the Westinghouse AP1000, whether they are practical would depend on circumstances. If a couple coal burning plants with a total output about the same as the AP1000 were being replaced, the AP1000 could make perfect sense. However, in the grid in which Albuquerque exists, probably it would not make sense. I suspect that small modular system have a bright future. In addition to being the right size in many situations, the ability to manufacture them in a factory and ship them to the site instead of making them on site is a huge advantage. Factory production is more efficient and can have better quality control.
Another consideration is that the reactor vessel for systems the size of the AP1000 can no longer be manufactured in the U.S. The reactor vessel is a huge forging and U.S. manufacturers no longer have the capability of making a forging that big, although Japan does. It may be that the smaller reactor vessels for small modular reactors can be made here in the U.S. That would be a significant advantage.
One of the advantages of the LFTR and other metallic salt reactors is that they operate at atmospheric pressure and do not require a reactor vessel that can withstand high pressures. Also, the containment structure can be far smaller and lighter. They could greatly affect the economics of nuclear power.
Frank good assessment of things you see the end use Efficiency taking hold in all sectors.
The SMR concept fits into the more modular demand world backing up RE and limiting how much gas is burned in the future.
I appreciate that you tell the inconvenient truths re nukes even tho you like them.
Only Japan has the big casting factory that is needed to support the big nukes design. That is sad consequence of the de industrialization of the US. SAD
Talk about a constraint or Choke point ! that is a Achilles Heel that just stands out and in the way to attain greater economies of scale for Big Nukes.
The SMR will be built in a assembly line setting and shipped to site in two trucks. PNM has no need for a big unit but they would be good candidate for SMR s spread around their large geographical service area.
So time will tell if the SMR or the others get off the ground. As stated earlier they will have some serious catch up work to get done , no more Prancing they must start Dancing!
In small lite bulb replacement like 100 watt bulbs LED s reduce electric by 80 % and in in larger replacements it is around 58 % or slightly more. Its real KW reductions. Most cities are doing the upgrading of the street lights and it saves alot of KWHR s alot. Good bye night time load Ergo less need for Big Base load nukes or big units that are gas.
That is the Flow of things.
PNM could close San Juan coal plant and use 6 or 8 SMR’s and have better flexibility etc to serve loads. Provided the Navajo Nation allows the NRC to give PNM nuke permits on their lands??
Legacy issues from the rape and scrape uranium mining on native american lands in the 1950’s thru late 1970’s etc.
So they just build closer to So Albq or off I 40 East of Town .
Now that EPE has pulled out of four Corners coal plant ( a dirty old one) the 345 lines So from Albq to El Paso and West to Lordsburg NM etc well PNM and EPE share that line. So it might be good synergy for them to collaborate on building SMr’s around Truth or consequences NM or by the Space Port as there is lots of no usable land out there right off I 25 and there is adequate road service etc.
They could pool together and get a return off the line that exists.
Think of all the store signs that all the restaurants and stores use. they have down sized to tiny LED s with mini wattage levels amazing progress
Lots of Possibilities Frank for sure.
Silent,
It is not only to save power that Na street lights are being replaced by LED lights. The much longer life of LEDs saves considerable labor. So even if LEDs cost somewhat more than Na lights, that is probably offset by labor saving. LED lights are supposed to have a life of 50,000 or more. That would provide a life of at least 10 years.
It is only recently that LED lighting has become available at an acceptable cost and an efficiency greater than other lighting systems.
Traffic light bulbs are also being replaced by LEDs. Because they are constantly being cycled on and off, only incandescent bulbs and LEDs will work. Some traffic light systems takes around 5 KW to operate. The only problem is that LEDs deliver insufficient heat to melt snow and ice; I don’t know what they do about that.
Obviously improved energy efficiency reduces CO2 emissions, but the total reduction available is less than one might suppose. Even so, in many cases, the reduction in energy costs alone is sufficient to justify improving energy efficiency.
My new house has almost 100% fluorescent lighting. LEDs would be better, but when the house was in the design stages in 2008, LED lighting would have been too expensive to consider. I have plenty of spare fluorescent tubes which will soon be obsolete, but it would make more sense to use them instead of switching to LEDs. So, there is a limit to how quickly we can change to more efficient lighting technologies.