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US Energy Policy

US Energy Policy

Energy Policy

The incandescent lightbulb is now outlawed.[1]  This fact is a perfect metaphor for “energy policy.”  Should it be illegal in the United States to manufacture, sell, buy, and use a traditional incandescent light bulb?  Your informed answer to that question will provide deep insight into your views on hundreds of other energy policy questions.   (BTW, my answer is no, but I bet you guessed that.)

Energy is the lifeblood of our economy; it touches your life in a hundred ways each day.  Yet energy policy--the set of government rules and regulations that prescribe how energy is produced, delivered, and consumed--is a complex and even a chaotic subject.

Energy was an uninteresting subject for the average person prior to the OPEC Oil Embargo in 1973.  Oil prices had been stable at about $20 a barrel in real terms for nearly a century and electricity prices had declined from about 22 cents per kilowatt to about 13 cents from 1960 to 1973, even as consumption of electricity quadrupled from 1950 to 1973, as more and more homes and appliances used electricity and utilities became better at building large coal and nuclear plants.

But the OPEC Embargo changed everything about energy and energy policy.  Four points will illustrate this importance. 

  • President Jimmy Carter’s presidency (1976 to 1980) was dominated by energy issues which he characterized as the “moral equivalent of war.” 
  • A little more than two decades later a California governor was recalled because he botched an electricity crisis in California and Arnold Schwarzenegger was elected Governor. 
  • There is a widespread perception that the US has gone to war in the Middle East over oil issues.
  • The Pope of all people has recently declared war on climate change, most of which is laid at the feet of fossil energy.

Part of the complication in energy policy is that it must be addressed on many fronts; international, national, State, and local governments all have a role in stirring the pot. 

Many books and articles are written on very specific aspects of energy policy but most are written for other experts.  Surprisingly, few are written that cover the broad landscape of energy policy.  Even fewer of these writings take a strong market-oriented perspective; the vast majority take an interventionist approach largely for environmental and oil import reasons.  And none that I have found are addressed to the pro-market political activist who has a real job during the day and then tries to save the country in his or her spare time.  This discussion is for that heroic citizen, The Forgotten Man.

So what’s the bottom line on energy policy? 

  • First, we make energy policy much more difficult than it has to be.  Energy is a commodity just like wheat or cars or hamburgers.  Mostly, we rely on competitive markets in each of these other commodity industries to make sure that we have an adequate supply to meet the consumers’ needs at reasonable prices.  But we treat energy differently.  I venture to guess that there are only a few industries more affected by government intervention than energy.  Why is that?  Does that mean we benefit from that intervention?  Is there a better way?  The article explores these questions.
  • Second, right now energy policy is being driven by climate change.  Even if one is sympathetic to some of the claims made about climate change, many stupid actions are being taken in its name that has profoundly negative effects on energy markets. 
  • Third, oil issues get the most attention but we do not face any real danger in oil markets.  Oil trades in global markets and while there may be price fluctuations (as I write, oil is about $35 a barrel, having been over $100 in the recent past), we will never face a situation where we run out of oil.  Most countries with plentiful oil have built their economies on oil revenue and the recent drop in oil prices has created serious political problems for these countries.  They simply can’t afford not to produce oil.  But problems in oil markets can result in unnecessarily higher prices and thus we need to pay some attention to them in order to promote prosperity. 
  • Fourth and most important, electricity faces real problems that could result in catastrophic failure of the system, thus threatening not only prosperity but human life.  The major framework for electric policy was set in 1935.  That framework worked fine up to the OPEC Embargo.  Electricity can compete against oil and natural gas in many applications.  Thus adjustments were necessary to the historical framework after the Embargo.  But policymakers have only nibbled at the edges of electricity policy and have not fundamentally changed the 1935 framework.  Yet little more than additional tinkering is being done to promote an electricity industry for the 21st Century.  Many special interests are pushing and pulling on the antiquated framework for personal gain but few are fundamentally committed to a complete rethinking of the role of the electric system of the future, especially given the increasing digitalization of our economy.  And as noted above, unsound policies on climate change make electric issues even more difficult.


[1] This is a good place to make a point.  Some pointy headed academics will disagree with even this first sentence.  Technically, Congress did not “ban” incandescent bulbs in the Energy Independence and Security Act of 2007.  Rather, they set a standard that most, if not all, traditional incandescent bulbs could not achieve and established a schedule for light bulbs of different wattages to meet this standard.  So it is fair to say that Congress outlawed incandescent bulbs.  But since the accompanying Article is a synthesis of the broad topic of “energy policy” it would needlessly clutter and complicate the text to be “technically” accurate in every instance.  The size of the document would need to double and the reader would understand less of the essence of energy policy if I did not make some broad generalizations.  Nonetheless, I am sure I will receive some criticism that many of my statements are not “technically correct.”  I hope that making this point early in the article will allow for a better understanding of the content of the Article.

 

Standby Generator Issues - ORIGINAL CONTENT

Intermittent renewable generation displaces a portion of the output of conventional coal and natural gas generators, but does not replace those generators. However, depending on intermittent renewable market penetration, the annual output of the conventional generators is reduced and the operation of some generators might be suspended, particularly during the shoulder months.

The reduced operation of these conventional generators increases the unit cost of their output because the fixed costs of the plants and the labor costs of operating and maintaining the plants remain relatively unchanged, but must be allocated to lower generation output. Unit fuel costs also increase slightly as modulated or intermittent operation reduce generator efficiency.

Uncertainty regarding required generator output creates fuel supply issues for the conventional generators. Coal plants maintain a coal pile on the generation site, from which coal is moved to the steam boiler. The coal in the pile represents an unrecovered expense for the generator. Therefore, the pile must remain large enough to meet demand without burdening the generator with excessive unrecovered expense throughout the year. While coal generators can load-follow over a wide range of output, restarting a coal generator from a “cold start” can take 10 or more hours. A decision to shut down a coal plant must take this restart time into account.

Natural gas generators do not maintain on-site fuel supply, but rely on contemporaneous pipeline fuel delivery. This typically has not been an issue when adequate pipeline capacity and adequate gas quantities are available. However, with variable or interruptible generator operation, the generator cannot enter into firm, fixed-price contracts for natural gas delivery and is reluctant to contract for firm pipeline capacity. Therefore, natural gas generators typically rely on interruptible pipeline capacity and purchase their natural gas in the spot market as required.

However, changes in the market are having an impact on this gas supply scenario. Numerous utilities with significant coal generation capacity will be required to retire those generators by 2030 to meet the Administration’s emission reduction goals. Several of these utilities are considering adding natural gas generators to replace the coal generating capacity. However, the Administration’s actions limiting oil and gas exploration and production will limit future gas availability, while its resistance to new natural gas pipeline construction will limit access to natural gas for future natural gas generators.

As natural gas production declines, the quantity of natural gas available in the spot market will also decline, increasing the spot market price and reducing generator access to fuel when required. This situation manifested in Texas in 2021, when high gas demand for heating in very cold weather dramatically reduced spot market gas availability and restricted gas plant generation. This problem was compounded by difficulties in restarting inoperative gas generators which had not been winterized.

This issue will become more critical as the market penetration of intermittent renewables increases and as the US energy market transitions to ‘all-electric everything” until grid-scale storage is available to support the intermittent generation. There remains a risk that storage capacity additions lag behind the loss of conventional generation capacity.

 

Tags: Electric Power Generation, Electric Power Reliability, Energy Storage / Batteries, Backup Power

100 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas - Highlighted Article

  • 9/22/22 at 07:00 AM

 

From: American Energy Alliance

By: Thomas Pyle

Date: May 26, 2022

 

100 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas

 

Joe Biden and the leadership of the Democratic party have a plan for American energy: make it harder to produce and more expensive to purchase. Since Biden took office, his administration and Congressional Democrats have taken over 100 actions deliberately designed to make it harder to produce energy here in America.

32 of these anti-energy proclamations were enacted after the Russian invasion of Ukraine, which Biden regularly touts as an excuse for rising gas prices.

This is exactly what the Green New Deal agenda is, making the sources of energy needed every day for families around the country too expensive to afford.

The Democratic plan for lower gas prices is simple: blame everyone else, buy an electric vehicle, and don’t be poor. The Biden administration has made it clear they value the support of the radical environmental lobby more than lowering prices at the pump.

Below is a list of 100 explicitly anti-energy actions taken by the administration since Biden took office last January. (continue reading)

 

100 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas

 

Tags: Highlighted Article

Grid Reliability - ORIGINAL CONTENT

The reliability of the electric utility grid depends upon the availability of generation output equal to grid demand at all times. Historically, this has been accomplished by operating numerous generators at somewhat below full capacity, so that the output of those plants could be rapidly increased in the event of a significant increase in grid demand or the loss of a generator due to equipment failure. The reliability issue is most critical during periods of peak demand. Electric utilities typically have maintained a capacity reserve margin of approximately 15-20% relative to their peak demand to assure that grid demand could be met in the event of the loss of a generator.

Nuclear generators are typically base-loaded because of their low operating costs and their limited suitability for load following. Coal generators have typically been used for both base load and intermediate load applications. Natural gas combined-cycle generators offer flexible response to load changes and are the first to be adjusted to match changing demand. Natural gas simple-cycle turbines offer even faster response, but are rarely operated except during periods of peak demand because of their lower efficiency and thus higher operating costs.

The introduction of intermittent renewable generation to the existing electric utility grid requires several changes in the historical approaches to grid management. Unlike conventional generation systems, the output of intermittent renewable generators such as wind turbines and solar collectors can change frequently and uncontrollably throughout the day, requiring more rapid and somewhat less predictable response from conventional generation assets. Intermittent renewable generation can also be unavailable for periods of hours or days as the result of weather conditions.

Conventional generation assets must be available to meet grid demand during periods when either solar or wind output is unavailable or significantly reduced by weather conditions. At current levels of solar generation market penetration, the predictable unavailability of solar generation from late afternoon until morning is only an issue in the late afternoon / early evening period when the grid experiences what is referred to as the ”duck curve”, when solar generator output drops as residential and small commercial demand increases. This issue is beginning to be addressed with the introduction of 4-hour battery storage systems. Otherwise, grid demand is low when solar generation is unavailable.

Most electric utilities experience peak demand in summer, though many are now developing somewhat smaller winter peaks. Solar is generally available during the summer peak, though it is less available during winter peaks due to reduced insolation resulting from lower sun angles, shortened daylight hours, increased cloudiness and snow accumulation on the collectors. Wind may become unavailable for periods of days when the weather is hot and still. Wind turbines may also become unavailable in winter due to icing of the blades, unless they are equipped with blade heating capability.

Utility regulation currently requires renewable generator output to be used when available, but utilities must be prepared to meet grid demand regardless of renewable generation availability. This issue becomes more critical as the market penetration of intermittent renewable generation increases.

 

Tags: Electric Power Generation, Electric Power Reliability

Incentives / Disincentives - ORIGINAL CONTENT


Society employs incentives and disincentives in numerous ways to influence the actions of various members of society. Sometimes these incentives and disincentives are soft and subtle, while at other times they are brutal and explicit.

The US federal government’s effort to force the transition of the US energy economy from a mixed-fuel economy to an “all-electric everything” energy economy based on renewable electricity generation and storage is becoming a brutal and explicit combination of incentives and disincentives.

Developers of renewable electricity generation projects are provided a variety of federal and state incentives which accelerate their development, reduce their installation costs, offset a portion of their operating costs; and, provide generation priority when renewable generation is available. Government also touts that these renewable generators produce lower cost energy and will result in reduced energy costs, to encourage the public to support the transition to renewables. Similar incentives are available for the purchase of electric vehicles; and, the federal government has begun supporting development of the public fueling infrastructure for electric vehicles.

While these various incentives have encouraged the adoption of renewable generation and electric vehicles, the Administration has determined that the process is not proceeding as rapidly as necessary to support the US “commitments” under the Paris Accords. Therefore, government has imposed numerous disincentives to coal production, consumption and export; and, taken numerous steps to limit exploration for and production of domestic oil and natural gas.

The federal government has established a schedule for the elimination of coal-fired electric generation, as well as a schedule for the elimination of all fossil-fueled electric generation. It has also established a schedule for elimination of all fossil fuel consumption in the US. These schedules would ultimately result in the elimination of the coal, oil and natural gas industries, with the questionable exception of oil and gas for use as chemical feedstocks. These schedules would also end production of vehicles powered by internal combustion engines (ICE), requiring full conversion to electric vehicle production by 2035.

Significant questions remain regarding the practicality of heavy-duty electric vehicles, including over-the-road tractors, construction equipment, farm equipment, railroad engines, ships and aircraft. There are suggestions that these applications could be fueled with renewable fuels such as bio-diesel, ethanol or hydrogen.

The federal government is also currently proposing incentives for the installation of electric heat pumps and for the replacement of gas appliances with electric appliances, to achieve an “all-electric everything” energy economy by 2050. These replacements would impose significant costs over and above the cost of the replacement appliances and equipment, including building electric service upgrades, building electric wiring modifications and utility grid capacity expansion. The “all-electric everything” grid conversion combined with expected energy demand and consumption growth through 2050 would require the electric grid to expand by a factor of approximately four by 2050.

Growing public resistance to industrial wind farms, industrial solar collector arrays and electric transmission infrastructure might require more aggressive federal and state government involvement in siting approvals, including eminent domain actions.

        Beatings will continue until morale improves.

 

Tags: Electric Power Generation, Electric Power Reliability, Electric Vehicles, Fossil Fuel Elimination / Reduction

Are fossil-fuel CO2 emissions good or bad? - Highlighted Article

  • 9/8/22 at 07:00 AM

 

From: Watts Up With That

By: Andy May

Date: August 30, 2022

 

Are fossil-fuel CO2 emissions good or bad?


This is the transcript, with minor edits to get it into blog post format, of my keynote speech to the Division of Professional Affairs, at the second International Meeting for Applied Geoscience and Energy Convention in the George R. Brown Convention Center in Houston on August 30, 2022.

In the great climate change debate between Princeton Professor, emeritus, William Happer and University of Melbourne Professor David Karoly, they were asked the following question by the moderator, James Barham:

“The IPCC’s official position may be summarized as making four claims: global warming is a well-established fact; it is anthropogenic; it is a major problem for humanity; and concerted global governmental action is required to combat it.”

James Barham and TheBestSchools.org


In this talk we will only cover a portion of the second and third parts of the question, which we rephrase as “Is burning fossil fuels and emitting CO2 and other greenhouse gases to the atmosphere a good thing, or a bad thing for humanity.” The other facets of the question are well covered in my latest book. Much of this talk is from Chapter 10.

In answer to the question, Professor Happer wrote:

“There is no scientific evidence that global greenhouse gas emissions will have a harmful effect on climate. Quite the contrary, there is very good evidence that the modest increase in atmospheric CO2 since the start of the Industrial age has already been good for the Earth and that more will be better.” (continue reading)

 

Are fossil-fuel CO2 emissions good or bad?

 

Tags: Highlighted Article

China’s “Long Game” - ORIGINAL CONTENT

China is aggressively pursuing economic development, including construction of numerous coal generating stations, steelmaking facilities and cement kilns. These actions, while inconsistent with the goal of the Paris Accords, are consistent with China’s Intended Nationally Determined Contributions (INDCs). China proposed to achieve maximum carbon intensity by about 2030 and to achieve carbon neutrality by 2060. The current construction programs are intended to massively increase carbon intensity by 2030, while the developed economies are aggressively reducing carbon intensity. China would thus become the globe’s primary producer of steel and cement.

China has also positioned itself as the primary supplier of many of the rare earth minerals required for the fabrication of the renewable generation and battery storage equipment essential to the development of a renewable plus storage electric grid. They are also enhancing this position through their “Belt and Road” initiative, funding and building infrastructure projects across Asia and Africa, including countries which also possess large deposits of the same rare earth minerals.

China would likely continue to be a willing supplier of critical raw materials, processed materials and finished renewable energy generation and storage equipment as the developed nations expand their dependence on these systems as they pursue Net Zero CO2 emissions by 2050. However, after about 2040, the developed nations will begin to face the necessity to replace wind turbines, solar collectors and electric storage batteries to keep their electric grids functioning. The greatly reduced availability of conventional electric generation capacity and the increased dependence on renewables and storage in the developed economies would provide China with substantial geopolitical leverage. (The approaches followed by Russia in dealing with energy supplies to Europe and the UK provide some indication of potential Chinese approaches to dealing with the renewable generation and storage materials and equipment needs of the developed nations.)

The developed nations of Europe and the UK have played into the hands of Russia by closing coal and nuclear generation facilities and becoming dependent on renewables and Russian natural gas, rather than developing their own natural gas reserves. They are currently paying the price for those decisions. Those nations, plus the US, Canada and Australia are playing into the hands of China by allowing themselves to become dependent on Chinese materials and equipment, rather than developing their own domestic resources and materials processing and equipment manufacturing capabilities.

The availability of lower-cost steel, glass and cement from China discourages investment in competing facilities in the developed nations. That availability, combined with energy shortages in Europe and the UK, is already leading to closures of heavy industry facilities in numerous European countries. Tightened CO2 emissions regulations in the developed nations will also discourage heavy industry continuation and expansion in those nations, leading to further dependence on China and other developing nations which are continuing to rely upon and expand coal consumption.

The US is currently playing into China’s hands by limiting domestic oil and gas exploration and production opportunities, thus squandering its energy independence.

China, meanwhile, can pursue its “long game”, developing geopolitical leverage to be used at its convenience. With sufficient leverage, it could simply choose to ignore its INDCs and assume global governance.

 

Tags: China, CO2 Emissions, Energy Storage / Batteries

Timing is Everything - ORIGINAL CONTENT

Timing is not a particular issue in market-driven product, process or service transitions. The existing technology applications remain in the market and the new technology applications enter the market and replace them over time. The new technology applications might experience supply constraints early, depending on the consumer demand for the new technology, but the existing technology remains available if required.

However, in the case of non-market driven product, process or service transitions, timing can become a critical issue. This is currently the case with the government-driven transition to “net-zero” CO2 emissions and an “all-electric everything” energy market. The federal government has established hard goals for elimination of coal-fired electric generation (2030), elimination of all fossil-fueled electric generation (2035) and elimination of all fossil-fueled energy end uses (2050). Meeting these hard goals without major economic disruption requires that the new products, processes and services that would replace the existing fossil-fueled applications be fit for their intended uses and available in sufficient quantities to replace existing applications and satisfy the demands of new applications.

Replacing coal-fired generation over the next 8 years would require installation of renewable generation with at least twice to more than 3 times the rating plate capacity of the coal-fired generators, depending on the renewable generators selected for the application, plus the long-duration storage infrastructure necessary to make the renewable generation capacity dispatchable. That long-duration storage is not currently commercially available, and it is not certain that it would be available in sufficient quantities to support renewable plus storage replacement of all of the existing coal-fired generation by 2030. In the absence of such storage, the coal-fired powerplants cannot be shut down without causing major economic disruption due to grid unreliability.

Replacing natural gas generating plants by 2035 faces the same challenges regarding the availability of long-duration storage; and, those challenges would be even greater if current nuclear generation stations are not permitted to continue operating or are not replaced.

The economy will face additional challenges, beginning immediately but growing most rapidly in the period from 2035 to 2050 as all remaining fossil-fueled end uses are transitioned to electric end uses. This process has already begun with the introduction and incentivization of electric vehicles, but would accelerate rapidly after 2035 due to federal prohibitions on the manufacture of vehicles with internal combustion engines. The process has also already begun with local prohibitions on the use of natural gas in new buildings, which then requires all-electric construction.

Finally, the renewable plus storage grid must also grow to match the energy demands of a growing population and economy and, must do so economically.

There are current fossil-fueled industrial processes for which there are currently no electric alternatives, including iron and steel production and the calcining of limestone to produce cement. These processes, in particular, are essential to the production and installation of renewable generators, so acceptable alternative processes must be developed and tested. Offshoring the current processes would accomplish nothing from a climate change standpoint, since the CO2 emissions would still occur.

 

Tags:

Alternative Approaches - ORIGINAL CONTENT

There are fundamentally two approaches to the adoption of new technology. The more common approach has been to introduce and market the product, process, or service embodying the new technology and allow the market to adopt the new technology based on its functional and/or economic advantages. The speed of the adoption process is a function of the relative importance and cost of the equipment or process and/or its relative desirability. The rise of air travel and the decline of rail travel is an example of this approach, as is the growth of air freight relative to rail freight. The rapid growth of package delivery services at the expense of the US. Postal Service is another example, as is the transition from snail-mail to e-mail.

The second approach combines law and/or regulation, government incentives, building codes and other non-market drivers. This approach is used by government to drive the adoption of new technology which is not perceived by the intended customers to offer sufficient functional and/or economic advantages to achieve market acceptance. DOE Appliance Efficiency Standards, DOT Corporate Average Fuel Economy Standards, vehicle emission standards are examples of this approach. In some cases this approach has been used to remove existing technology from the market before the replacement technology is “ready for prime time”, frequently referred to as technology-forcing requirements or standards.

A more aggressive version of the second approach is being pursued to transition the US energy economy from reliance on oil for transportation, natural gas and coal for power generation, natural gas and electricity for residential, commercial space heating, water heating, food preparation and coal, natural gas and electricity for industrial process heating. The federal government has established timelines for the elimination of coal and later natural gas use for electric power generation, and for the elimination of fossil fuel for all other uses.

The government is pursuing a goal of “all-electric everything” by 2050 to achieve net-zero CO2 emissions. In the process, government is forcing the installation of redundant intermittent renewable generation, which displaces a portion of the output of the remaining fossil-fueled generation without replacing that generation capacity, since it is needed to support the grid when the intermittent generation is not functioning or is operating below rated capacity. This addition of redundant capacity increases overall generation investment and thus increases electricity cost, as does the management of the intermittent redundant capacity.

The ”all-electric everything” energy economy would require an electric grid with 3-4 times the capacity of the current grid, and with storage capacity sufficient to replace the conventional generation which currently supports the renewable portion of the generation fleet as well as to provide support for the additional renewable generation serving the greatly expanded “all-electric everything” grid. This approach is technology-forcing, in that the storage technology necessary to replace conventional generation as support for renewable generation is not currently commercially available. It is also technology-forcing since a reliable renewable plus storage grid without conventional generation support has not been demonstrated.

 

Tags: Net Zero Emissions, Regulation, Efficiency Standards, Electric Power Generation

“Orderly Liquidation” - ORIGINAL CONTENT

President Biden spoke about his approach to destroying the US oil industry during a primary campaign debate in 2020. The approach focused on depriving the industry of supply through a combination of banning new exploration and drilling on federal lands and the application of new laws and regulations making industry operations more difficult and more expensive.

The Biden Administration has aggressively pursued this approach over the past 18 months, as documented here. The actions taken by the Administration have had a predictable effect on both gasoline and Diesel prices and availability. It is ludicrous to assume that a commitment by the federal government to destroy an industry would not create turmoil within the industry and among its customers.

The Administration has reacted to the resulting price increases and supply shortages by blaming the US oil industry and accusing it of price gouging; and, seeking production increases from OPEC. The Administration has even approached Venezuela and Iran about supplying additional oil. Only after these approaches to foreign suppliers has the Administration begun encouraging the US industry to increase production, while still maintaining the intent to put the industry out of business.

The US oil industry has modestly increased production from existing fields, but has been reluctant to invest in new E&P activity in the face of the Administration’s actions and threats of future actions. The Wall Street Journal recently described the industry’s approach as an “orderly liquidation” of current assets, including using increased revenues resulting from higher demand and prices to fund share buybacks and distributions to stockholders. This approach by the industry appears to be a reasonable exercise of fiduciary responsibility to its shareholders.

It seems likely that this “orderly liquidation” approach will spread to other energy industry participants under similar Administration threats to their futures. The owners and operators of coal mines and coal-fired power plants are faced with termination of their operation by 2030 and are unlikely to make any significant investments in their facilities in the interim. They would also likely terminate operations if faced with the necessity of major facility repairs or deteriorating market conditions. It is also unlikely that state utility commissions would approve incremental investments in coal facilities owned by utilities under their jurisdiction.

It also seems unlikely that either utility or non-utility generators would invest in new natural gas combined-cycle gas turbine (CCGT) generators, since their operations would be required to cease by 2035 to comply with the Administration’s goals. New CCGT generator facilities would have to be fully depreciated over 10 – 12 years, or 25-30% of their useful lives. Such rapid depreciation would further increase the cost of the electricity they generated.

There is no indication that such orderly liquidations would be offset by orderly installation of replacement facilities, particularly since the long-duration electricity storage technology necessary to render renewable generation facilities dispatchable is not currently commercially available, nor is there any schedule for its commercial availability of any indication of its likely cost and performance.

 

Tags: Electric Power Generation, Fossil Fuel Elimination / Reduction, Net Zero Emissions

Existential Threat - ORIGINAL CONTENT

The United Nations and several national governments have begun referring to climate change as an existential threat, meaning a threat to the future existence of life on earth. This is a political position intended to draw attention to the issue and incite fear in the population. Several national polls suggest that the effort has not been particularly successful, as the general population rates climate change as a relatively low-level concern, despite a coordinated government and media campaign.

You would think that, if global governments actually believed that climate change driven by CO2 emissions represented an existential threat, they would be united in aggressive efforts to eliminate CO2 emissions. However, numerous nations, led by China and India, are embarked on concerted efforts to build new coal-fired generating stations, which would increase their CO2 emissions and global CO2 emissions as well. Indonesia, Japan and Vietnam are also pursuing new coal power plant construction, as are Botswana, Malawi, Mozambique, South Africa and Zimbabwe. Clearly, these countries believe that failure to develop their economies is a greater threat than climate change.

The EU and the UK, which have been at the forefront of the “global” CO2 emissions reduction efforts, are reviewing their plans to close coal-fired generators and are considering reopening some closed coal-fired generators. Several of these nations are also reconsidering their plans to close nuclear generating facilities in the face of growing energy shortages and rapidly rising energy prices.

The US is still pursuing an effort to eliminate coal-fired generation by 2030 and to eliminate all fossil-fueled generation by 2035. However, there is growing concern in the US that fossil-fueled generating capacity is being eliminated far faster than it is being replaced with renewable generation and storage. This issue is projected to result in increased rolling blackouts in the US this summer, as cooling demand increases. This issue will only become of greater concern as electricity demand increases as a result of the effort to electrify the entire economy and completely eliminate the burning of fossil fuels for any purpose.

The efforts in the developed nations to eliminate fossil fuel use in favor of renewables plus storage is an existential threat to industries in those nations, which are already faced with rising energy prices and reduced energy availability. Many industrial plants in the UK and the EU have closed or significantly reduced production as the result of increased energy costs and restricted energy availability. This issue is likely to expand to the US, Canada and Australia if current national policies remain unchanged.

Meanwhile, China is investing heavily in the metals and cement industries, which are major fossil fuel users and CO2 emitters. The increased availability of low-cost coal-generated electricity to power the metals industries in China and the availability of coal for cement production would render those industries in nations reducing CO2 emissions uncompetitive in global markets with lower-cost Chinese metals and cement.

These developments would leave the US, the UK, the EU, Canada and Australia heavily dependent on China for metals and cement, as well as for the rare earth minerals necessary for wind generators and solar cells. Arguably, this growing dependence on China is a greater existential threat than climate change.

 

Tags: Climate Change Debate, Climate Policy, CO2 Emissions, Developing Nations Power, Electric Power Generation

Intermediate Replacement - ORIGINAL CONTENT

Replacement of conventional intermediate load generators with renewable generation plus storage is similar to, but not identical to, replacement of baseload generation. Intermediate load generators must be able to deliver their full capacity to the grid during periods of high demand, at or near the system peak. Therefore, they require sufficient storage capacity to deliver full capacity in the absence of active wind or solar generation. However, the full capacity requirement exists for only a portion of the day, so the storage capacity required is less than that required when replacing a baseload generator.

However, like the baseload generators, the intermediate load generators must be able to perform their function over the maximum number of days for which wind and solar generation might not be available. The long duration storage capacity required would be a function of the expected load duration for that intermediate load generator on a day when demand was at or near the system peak. For wind generation, this situation might occur near the summer peak, during a period of hot, still days. For solar generation, the situation might occur near the winter peak, during a period of overcast skies, or during and after a snowstorm.

Like baseload generators, intermediate load generators must have sufficient capacity to recharge storage used during a period of low/no wind or solar generation while still meeting the contemporaneous demand of the grid. The required capacity would be determined by the number of low/no wind and solar days and the likelihood of these days occurring at or near grid system peak demand.

It has been common for electric utilities to maintain a capacity reserve margin of approximately 20% relative to peak demand to allow for the possible unavailability of one or more conventional generators. Conventional intermediate load power plants are capable of operating at design capacity for extended periods in the event of a generator failure, though they typically operate in load-following mode. Some portion of the intermediate load renewable plus storage generation would likely also be designed to be capable of baseload operation. However, the percentage of intermediate load renewable generation designed for this purpose might be reduced significantly, since the generating capacity of renewable plus storage generators is typically far lower than the capacity of a single conventional generator, so the loss of a single generator would have less effect on system capacity.

Short “needle peak” demand events would likely be served primarily from additional storage capacity at some portion of the intermediate load renewable generators, since storage would likely be capable of very rapid response to changes in grid demand. This storage capacity would likely not be kept fully charged for most of the year, but would be charged in anticipation of high demand on the grid.

The uncontrolled variability of the output of wind and solar generators will present growing grid management challenges as the renewable fraction of grid generation increases and the dispatchable fraction of grid generating capacity decreases.

 

Tags: Energy Storage / Batteries, Electric Power Generation, Electric Power Reliability

Baseload Replacement - ORIGINAL CONTENT

Baseload powerplants operate continuously at, or close to, their rated capacity to meet the continuous demand on the electric grid. Nuclear power plants are typically operated as baseload plants. Some coal power plants are also operated as baseload plants, as are geothermal plants and hydroelectric plants, depending on local availability.

The transition to a renewable plus storage grid would require replacement of baseload coal generation and perhaps nuclear generation as well. Replacing reliable, continuous generation resources with discontinuous generation sources is a complex challenge. US EIA uses 40% as the capacity factor for new onshore wind generation and 30% for solar photovoltaic generation. The IEA uses 50% as the capacity factor for offshore wind generation. Clearly, these discontinuous generation sources are unsuitable for application as baseload generation without support.

At a minimum, replacing 1 GW of baseload generation would require installation of 2 GW of offshore wind capacity, 2.5 GW of onshore wind capacity or 3.3 GW of solar photovoltaic capacity, assuming each type of renewable generator operated at its average capacity every day throughout the year. However, that is not the case, as hourly, daily and seasonal variations in wind and solar conditions affect generator output.
 
Assuming that the renewable generators which constitute the 1 GW (24 GWh/day)of baseload generation are colocated and thus experience the same wind or solar conditions, 50% of the output of the offshore wind generators (12 GWh), 60% of the output of the onshore wind generators (14 GWh) and 67% of the output of the solar collectors (16 GWh) would need to be stored for use when the wind and sun are unavailable, on average.

As baseload generation, the renewable generators must reliably generate 24 GWh of power each day. Therefore, a day with no wind or no sun would require an additional 24 GWh of energy storage, or 27 GWh of storage capacity assuming a 90% round trip storage efficiency. Each additional possible day of no wind or no sun would require an additional 27GWh of storage capacity. This storage capacity would have to be charged before it was available for use.

Of course, once the stored energy is used to replace non-functioning generation, storage must be recharged. This could be accomplished by diverting a portion of the baseload generator output and increasing the output of intermediate load generators to replace the diverted baseload capacity. Diverting 25% of the baseload generator capacity for recharging would require 4 days to recharge storage for each day (24 GWh) of storage capacity used, assuming average renewable generation.

While some storage has been installed to smooth out brief fluctuations in renewable generator output and grid demand, the four-hour storage required to carry solar generation through the evening peak is only beginning to be installed, and the twelve to sixteen-hour storage required to time shift renewable output to provide baseload operation and the multi-day storage required to operate through low/no wind and solar days are not commercially available, nor is there any schedule for their availability.

Therefore, it is essential that conventional generation be retained to support renewable generation until these storage technologies are available and installed.

 

Tags: Energy Storage / Batteries, Electric Power Generation, Renewable Energy, Power Grid

Climate Change Playbook - ORIGINAL CONTENT

It appears that the White House and at least two of the Executive Branch Agencies are not on the same page of the climate change “playbook”. The Administration has clearly enunciated goals of eliminating coal use by 2030, achieving fossil-free electric generation by 2035 and achieving Net Zero CO2 emissions by 2050.

The US Energy Information Administration (EIA) Annual Energy Outlook 2022 projects that petroleum and natural gas will remain the most-used fuels in the United States through 2050, based on consumer preferences, as shown in the graph below.

 

Energy consumption by fuel


This projection is inconsistent with the Administration’s Net Zero goal. EIA projects total energy consumption of approximately 108 Quads, of which approximately 75 Quads is petroleum, other liquids and natural gas in 2050. Other renewable energy (predominantly wind and solar) increases from approximately 3 Quads to approximately 18 Quads, far short of the intended transition to a renewable plus storage goal with limited nuclear, hydro and liquid biofuels. Coal decreases from approximately 10 Quads currently to approximately 8 Quads by 2030 and to 6 Quads by 2050, rather than to zero by 2030 as proclaimed by climate czar John Kerry.

Similarly, the US National Renewable Energy Laboratory (NREL)projects that even what is described as “widespread electrification”, the high growth scenario projects electric consumption growth of 67%, mostly in increased consumption in the transportation sector (EVs). Note that this study is now 4 years old and was conducted during the previous Administration, prior to the goals set by the current Administration. The projected growth of electric consumption is far short of that which would result from the implementation of an “all-electric everything” goal to be achieved by 2050.

 

Electricity consumption - NREL

In its June 2018 Electrification Futures Study, the National Renewable Energy Laboratory (NREL) projects that even with “limited impacts” from electrification, U.S. electricity consumption could increase 21% over the 2016–2050 period (using moderate assumptions about technology changes), resulting in a compound growth rate of 0.65% per year. In the medium and high scenarios, which assume “widespread electrification,” electric consumption growth is 45% and 67%, respectively (compound annual growth rates of 1.2% and 1.6%, respectively). Source: NREL

 


This is not to suggest that these projections could not be changed if consumer preference is superseded by government fiat, as now appears likely to occur. However, replacement of three-quarters of projected future energy consumption with renewables plus storage would be a massive and extremely expensive undertaking. It would include abandonment in place of more than $50 trillion of fossil fuels, abandonment of large numbers of coal and natural gas generators before the ends of their useful lives and the installation of more than 1,000 GW of new wind and solar generating capacity (actual, not nameplate) plus storage capacity sufficient to carry the grid through the longest anticipated wind or solar “drought”. The storage technology required by this transition is not currently available.

 

Tags: Electricity Consumption

Full Disclosure - System - ORIGINAL CONTENT

The fossil-free, all-electric everything grid envisioned to avoid catastrophic anthropogenic climate change would be a very different grid from that which serves the US today. The fossil-free grid would still include the non-fossil generation currently in service, including hydroelectric, geothermal and biomass generators; and, possibly, some existing and even new nuclear generation.

The all-electric everything transition would require a grid with approximately four times the capacity of the current grid, upgrading existing transmission and distribution infrastructure to handle the increased demand. The existing transmission infrastructure would also have to be expanded to connect a far larger number of smaller generators, frequently in remote locations at some distance from the existing infrastructure. The transmission infrastructure might also need to be restructured to permit longer distance transmission than is currently common.

The intermittent generators connected to the grid would either be required to be configured to be dispatchable with the addition of storage, or the grid would have to be equipped with sufficient storage at multiple locations to compensate for the intermittency or unavailability of multiple intermittent generation sites.

Configuration of each intermittent generation site to be dispatchable would require installation of equipment to increase the DC voltage output of the generators to the battery storage voltage, batteries to store surplus power, inverters to convert the DC to AC and transformers to increase the AC voltage to transmission voltage. The output of each dispatchable generator site would then be connected to the grid.

Configuration of each intermittent generation site to be non-dispatchable would require installation of equipment to invert the DC output of the generators to AC and transformers to increase the AC voltage to transmission voltage. The output of each non-dispatchable generator would then be connected to the grid.

Numerous locations on the grid would be required to install battery farms or other storage approaches to store power supplied by the intermittent generators in excess of grid demand. These battery farms would require the installation of rectifiers to convert the excess AC power from the grid to DC power at battery storage voltage as well as inverters to convert DC power drawn from the batteries to AC for redelivery to the grid at grid voltage when the current intermittent generator output was insufficient to satisfy the contemporaneous demand of the grid. The long-duration storage required for this grid is not currently commercially available. Other storage approaches, such as pumped hydro or compressed air storage, might use the AC power from the grid directly, but face difficult project approval processes.

The selection of the location for storage in the system has efficiency consequences. Assuming that each inversion and rectification step has an efficiency of 95% and that the batteries have a round-trip efficiency of 90%, the dispatchable generation configuration experiences losses of approximately 19% of the generated electricity, while the intermittent generation with grid storage configuration experiences losses of approximately 27% of the generated electricity.

The selection of the location for storage likely also has system investment consequences. The connection of multiple, independent intermittent generation sites to a common storage location might reduce the storage capacity required per unit of generation capacity because of the diversity of locations and generator types.

The type of intermittent generators would be expected to vary as a function of geography and wind and weather conditions. The northern tier of the US experiences lower solar insolation than the southern states, particularly in winter. The northern tier states also experience more snow and ice in winter, which would coat the solar collectors and reduce collection efficiency, periodically to zero. Wind installation in the northern tier states would experience periodic icing and might require the installation of wind turbines with heated blades to prevent or minimize icing, adding cost and parasitic power consumption. The southwestern US has far greater solar availability, but it is frequently located remotely from the loads it would serve. Offshore wind will likely be a significant factor near the coasts.

The current US electric grid has transmission and distribution losses of approximately 6%, of which transmission losses are approximately 1%. Designing the restructured electric grid to permit longer transmission distances would likely increase these transmission losses.

The design of a primarily intermittent renewable generation plus storage powered grid is a very complex problem. A satisfactory system design has yet to be demonstrated.

 

Tags: Electric Power Generation, Electric Power Reliability, Energy Storage / Batteries
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