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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.


The Retreat from Net Zero - Highlighted Article

  • 3/7/24 at 06:00 AM


From: Net Zero Watch

By: Ross Clark

Date: February 8, 2024

The Retreat from Net Zero



The UN meetings on climate change have become renowned for their platitudes, with national leaders falling over each other to say what desparate straits the world is in, how we must decarbonise ever faster – before returning to their home countries and putting economic development well ahead of their promises to cut emissions. But the president of COP28 in Dubai in December 2023, Sultan Al Jaber, was unusually frank. Al Jaber, who also serves as the chair of Abu Dhabi state oil corporation, ADNOC, which recently announced a $150 billion investment to increase oil production by nearly 50 percent to 5 million barrels a day by 2027, appealed to former Irish President Mary Robinson: ‘show me a road map for the phase out of fossil fuel that allows for social, sustainable development…unless you want to take the world back into caves’.

Al Jaber was eviscerated for his comments, yet they were in tune with a silent majority. An analysis by the website Zero Tracker reveals that even countries with net zero targets are heavily resisting pressure to phase out exploration for and development of fossil fuel resources. There are 93 oil-producing countries that have net zero targets, but only six of them have plans to phase out oil. Only five out of 94 gas-producing countries with a net zero target have plans to phase out gas. As for coal-producing countries, only 65 of those with net zero targets have plans to stop production.

As always with COP meetings, the event ended with a communiqué promising that the world would try to ‘transition away’ from fossil fuels – which is a long way from agreeing to phase them out by a certain date, as many activists demanded. After two weeks and several hundred thousands of tonnes of carbon dioxide spewed out by private jets and the like, the 98,000 delegates who had signed up for COP28 had come up with nothing more than an empty promise.

In fact, the list of countries with plans to phase out fossil fuels is showing few signs of growing. The new government in New Zealand has just reneged on the previous administration‘s pledge to do so. In Germany, Federal Economics Minister Robert Habeck recently announced that he may delay the country’s planned phase-out of coal by 2030 because of the energy crisis provoked by the invasion of Ukraine.(continue reading)


The Retreat from Net Zero


Tags: Highlighted Article

Green New Dangers - ORIGINAL CONTENT

Much has been written regarding the effects of the “energy transition” on energy cost, availability, reliability and the structure and operation of the electric grid. Those are all important issues. All are fraught with degrees of uncertainty, since there has not been a successful demonstration of a renewable plus storage grid anywhere and there are no plans to conduct such a demonstration.

Little has been written about the effects of the “energy transition” on the lives of individuals and families who would be totally dependent on the electric grid for their energy needs. These effects would vary significantly depending on the local climate and also on local population density.

Residents of the northern plains, upper Midwest and New England are regularly subjected to harsh winters during which ambient temperatures can drop to as much as 125°F below body temperature. Residents of the southern tier of the US are regularly subjected to hot summers in which ambient temperatures can reach as much as 25°F above body temperature. This difference in ambient temperature relative to body temperature is the underlying reason why cold temperatures contribute to approximately 10 times more deaths more deaths than hot temperatures.

Residents of areas frequently exposed to very low ambient winter temperatures typically use natural gas, propane or fuel oil for space and water heating since these sources are more reliable than the electric grid in severe weather conditions; and, because electric space and water heating is more expensive than the alternatives. The use of electric heat pump space and water heaters is not common because of the poor low temperature performance of typical heat pumps. However, the fossil fuel space and water heating equipment would no longer be available after the “energy transition”.

Many residents in colder climates rely on gasoline or diesel emergency generators or natural gas, propane or diesel standby generators to supply power in the event of a grid outage. However, these generators would no longer be available after the “energy transition”.

Residents in these colder climates would instead be required to rely on electric heat pumps designed for cold weather operation. These heat pumps are beginning to enter the market but are not yet broadly available. They would also be required to rely on batteries to meet their emergency power needs in the event of a grid outage.

The most common gas furnace capacity is 100,000 Btu/hr. A furnace of this heating capacity would require less than 0.5 kW to power its controls and circulating fan, so the furnace could operate continuously in extremely cold weather for one day on a battery capacity of approximately 12 kWh. The Tesla Powerwall has a rated capacity of 13.5 kWh, so a fully charged Powerwall could support a typical gas furnace for approximately a full day, at an installed cost of approximately $9,000 – 13,000.

An electric heat pump operating at very low ambient temperature, or the strip heaters used to back up the heat pump, would require an input of approximately 30 kW to match the output of the gas furnace, or approximately 60 times the electric input required to operate the gas furnace. The installed cost of the Tesla Powerwalls required to operate the heat pump or strip heaters continuously in extremely cold weather for one day would range from $500,000 – 700,000, well beyond the financial reach of most homeowners.

Clearly, the elimination of fossil fuel space and water heating and the elimination of fossil fuel emergency and standby generators would increase the likelihood of deaths caused by grid outages in extremely cold weather. US EPA estimates the value of a “statistical life” at approximately $10 million, so grid outages in extremely cold weather could have both a major human and a major financial cost, with no discernable benefit.


Tags: Fossil Fuel Elimination / Reduction, Severe Weather, Energy Ratepayers, Green Energy Transition

The Folly Of Climate Leadership - Highlighted Article

  • 2/29/24 at 06:00 AM


From: Forbes

By: Tilak Doshi

Date: January 29, 2024

The Folly Of Climate Leadership

Lessons of UK Energy Policy Failure

Citing an International Energy Agency report, The Daily Telegraph reported on Wednesday that UK electricity prices have risen faster than almost any other developed country since 2019. The price of electricity in the UK rose by 19 percent in 2023 alone, compared to the US where electricity prices have risen by 5 percent annually since 2019. Referencing a separate report from the House of Commons library, the same article finds that the price increases have been driven by taxes and levies linked to the country’s commitment to the “net zero” emissions target which made up almost a fifth of household electricity prices.

Rupert Darwall’s 76-page penetrating analysis of Britain’s energy policy, “The folly of climate leadership: Net Zero and Britain’s disastrous energy policies” with a foreword written by Andy Puzder was published last month by the RealClear Foundation. It provides the context necessary to understand how UK’s political elites practically sleep-walked the country into its binding net zero legislation. The follies of quixotic climate leadership are not Britain’s alone, as the Biden Administration took office three years ago as America’s first “environmental administration”. Mr. Darwall’s analysis provides an excellent assessment of the lessons of Britain’s failing energy policies for those of the Biden administration. Under Democrat leadership, the US government unleashed a tsunami of green subsidies under its misnamed Inflation Reduction Act to achieve its net zero targets.


Lies, Damn Lies and Wind Energy

Not to be outdone in its claims to global “climate leadership”, the UK Labour government under Prime Minister Gordon Brown in 2008 committed the country to a legally binding target of reducing carbon emissions by 80 percent by 2050 below the 1990 level. It was all the more remarkable that this policy target was implemented during the global Great Recession that began with the financial crisis in the United States in late 2007 and which lasted until mid-2009. (continue reading)


The Folly Of Climate Leadership


Tags: Highlighted Article

Energy User Responsibility - ORIGINAL CONTENT

Previous commentaries (Government Responsibility, Renewables Responsibility and Grid Responsibility) dealt with the government, renewables industry and grid operator perceptions of their responsibilities regarding the proposed energy transformation.

Government, at all levels, apparently believes that its responsibility in the proposed energy transition is to establish the goals, set the timeline, pick the winning technologies and incentivize their market adoption. This perception led to Net Zero by 2050, all-electric everything, wind and solar generation, electric vehicles and a variety of incentives, subsidies and mandates.

The renewable energy industry apparently believes that its responsibility in the proposed energy transition is take maximum advantage of federal and state subsidies, incentives, preferences and mandates by installing as much generating capacity as the industry participants can finance and get connected to the grid. The industry also believes that the grid should accept all of its output whenever it is available. The opportunity the industry perceives is the result of Net Zero by 2050, all-electric everything, and the selection of wind and solar as the winning technologies.

The overall responsibility of the utilities, which own and operate the grid and much of the generating capacity which feeds the grid, and the ISOs and RTOs through which they coordinate their generation and transmission operations, is to assure reliable and economical electricity service Their operational and financial performance are overseen by state utility commissions and consumers’ counsels.

Energy users do not escape responsibility during the proposed energy transition. They are already responsible for paying higher electricity rates as a result of the redundant electricity generation investments required by the transition, which would likely continue to grow as the fraction of renewable generation on the grid increases.

Energy users would also be required to replace fossil fueled end use equipment with electric end use equipment as the transition to all-electric everything proceeds. Customers would be responsible not only for the cost of the replacement equipment, but also for the costs of building modifications necessary to accommodate the electric end use equipment. Many customer buildings would likely also require electric service upgrades to support the increased electricity demand. Many sections of the electric distribution grid would also likely require capacity upgrades, which would be reflected in customer bills.

Energy users might also be required to increase the thermal and electrical efficiency of their buildings to reduce energy demand and consumption. Building Green analyzed “The Challenge of Existing Homes: Retrofitting for Dramatic Energy Savings” several years ago. The intent of the energy transition is to accomplish what Building Green refers to as a major energy retrofit, which they estimated would incur an average cost of approximately $50,000 per dwelling unit. No such estimates are available for commercial, institutional and industrial buildings, though the average cost would be substantially greater than for residential dwelling units.

Many industrial fossil fuel energy end uses do not currently have alternative electric replacements. Customers and their equipment suppliers would be responsible for developing and installing electric alternatives. Their transition would require large distribution upgrades and, in some cases, transmission upgrades to serve the increased demand.

Vehicle owners would be required to replace internal combustion engine (ICE) vehicles with electric vehicles, which are currently significantly more expensive than ICE vehicles while offering diminished utility. Battery charging facilities for these electric vehicles would likely require additional customer electric service upgrades as well as distribution grid upgrades which would be reflected in customer electricity bills.

Government is also interested in “herding” individuals, families, businesses and service providers into “15-Minute Cities” to limit the need for personal travel. This would constitute a significant loss of personal freedom for many of those affected.

Much of the cost of the end user changes would likely be offset with government subsidies, which would appear to reduce end user direct costs, but would only transfer that portion of the costs to taxpayers, thus not reducing the societal costs of the changes, but likely increasing them, since the subsidies would be funded with new government interest-bearing debt.  

TANSTAAFL: There ain’t no such thing as a free lunch.


Tags: Green Energy Transition, Net Zero Emissions, Energy Ratepayers

Grid Responsibility - ORIGINAL CONTENT

Previous commentaries (Renewables Responsibility and Government Responsibility) dealt with the government and renewables industry perceptions of their responsibilities regarding the proposed energy transformation.

Government, at all levels, apparently believes that its responsibility in the proposed energy transition is to establish the goals, set the timeline, pick the winning technologies and incentivize their market adoption. This perception led to Net Zero by 2050, all-electric everything, wind and solar generation, electric vehicles and a variety of incentives, subsidies and mandates.

The renewable energy industry apparently believes that its responsibility in the proposed energy transition is take maximum advantage of federal and state subsidies, incentives, preferences and mandates by installing as much generating capacity as the industry participants can finance and get connected to the grid. The industry also believes that the grid should accept all of its output whenever it is available. The opportunity the industry perceives is the result of Net Zero by 2050, all-electric everything, and the selection of wind and solar as the winning technologies.

The overall responsibility of the utilities, which own and operate the grid and much of the generating capacity which feeds the grid, and the ISOs and RTOs through which they coordinate their generation and transmission operations, is to assure reliable and economical electricity service. Their operational and financial performance are overseen by state utility commissions and consumers’ counsels.

The utilities are required to connect non-utility generators to the grid. Conventional non-utility generators have historically been subject to economic dispatch. However, the proposed energy transition has changed this process by requiring that the output of connected renewable generators, which cannot be dispatched at will, be taken whenever it is available and supplemented by electricity dispatched from both utility and non-utility generators to meet the contemporaneous demand on the grid. In situations in which the renewable generator output exceeds demand, the grid operators would be expected to store the excess electricity for later use.

As the fraction of subsidized renewable generation connected to the grid increases, the output of the conventional generation to the grid decreases, reducing the revenues to those generators and increasing the rates they must charge to remain profitable. However, the intermittency of the renewable generation requires that the conventional capacity remain operating, even at zero net output, to supply the grid demand when the renewable generation declines significantly or is unavailable. However, conventional generation is being retired far more rapidly than renewable generation is being added to the grid, reducing the capacity reserve margin available to meet peak demand and threatening grid stability and reliability.

The grid operators, which typically connected a relatively small number of relatively high-capacity dispatchable generators, are now required to connect a relatively large number of relatively low-capacity non-dispatchable generators, spread over a far larger geographic area. As the energy transition proceeds, the number of relatively low-capacity non-dispatchable generators would increase dramatically, rendering the continued operation of conventional generation uneconomical. Fossil fueled conventional generation would also be driven from the grid by government edict.

When the rating plate capacity of the connected renewable generation exceeds the capacity of the conventional generation, the grid operators would be required to add dispatchable electricity storage to the grid to satisfy grid demand when renewable generation is unavailable or inadequate. This storage capacity would be recharged using surplus renewable electricity when available, supplemented by conventional generation while available. However, as the conventional generation is retired, additional grid storage capacity would be required, and additional renewable generation capacity would be required to assure that grid storage capacity is charged and available as required.

The grid scale storage required by the energy transition is currently either extremely expensive (short duration) or unavailable (medium to long duration). This would make the grid operators’ responsibility to ensure reliable and economical electricity service very difficult to fulfill.

Finally, there has not been a successful demonstration of a stable and reliable renewable plus storage grid, so there remain questions about whether the grid operators’ responsibilities could be fulfilled.


Tags: Green Energy Transition, Renewable Energy, Net Zero Emissions, Power Grid

Renewables Responsibility - ORIGINAL CONTENT

The renewable energy industry apparently believes that its responsibility in the proposed energy transition is take maximum advantage of federal and state subsidies, incentives, preferences and mandates by installing as much generating capacity as the industry participants can finance and get connected to the grid. The industry also believes that the grid should accept all of its output whenever it is available. The opportunity the industry perceives is the result of Net Zero by 2050, all-electric everything, and the selection of wind and solar as the winning technologies. Would that life were so simple.

The renewable energy industry believes that it should be free to install its generation facilities at whatever locations and that the operators of the existing electric utility grid should be responsible for extending the grid to their facilities.

The renewable industry is aware that the output of its facilities varies minute-to-minute, hour-to-hour, day-to-day, week-to-week, month-to-month, season-to-season, and year-to-year. The industry believes that it is the responsibility of the grid operator to smooth renewable generation output, to fill in the gaps when the generators are not operating, and to manage the generation of the difference between the available renewable energy and the contemporaneous demand on the grid.

The renewable energy industry is aware that the electricity it generates displaces energy which would otherwise have been generated by the conventional generators which serve the grid. The industry also recognizes that this displacement reduces the cumulative output and the revenues of the conventional generators, including utility owned generation. The renewable energy industry believes that this is not their problem; and, realizes that it actually benefits their industry by increasing the prices the conventional generators must charge to remain profitable, and thus the prices paid for their renewable energy as well.

The renewable energy industry is aware that, as conventional generators leave the grid as renewable generation increases, conventional generators age out or are required to cease operation by government edict or because their operation has become uneconomic, the gaps in renewable generation would have to be filled by withdrawals from electricity storage systems. The industry also realizes that the transition from conventional generation backup to storage backup would create demand for additional renewable generating capacity. The industry accepts no responsibility for the need for electricity storage to provide a stable and reliable grid.

The renewable energy industry understands that the expansion of intermittent generation of the electric utility grid adversely affects grid stability and reliability and complicates the effective management of the grid. However, the industry accepts no responsibility for these issues and places that responsibility solely on the grid operators.

The renewable energy industry also holds the grid operators responsible for the fact the  industry cannot get new renewable generating capacity connected to the grid as rapidly as it would like. Difficulties with receiving regulatory approvals for transmission grid expansion is viewed as not being the renewable energy industry’s responsibility.

FERC, NERC and several ISOs and RTOs have recognized the potential reliability issues facing the grid and have become more vocal regarding the need for caution as the energy transition proceeds.

With apologies to Ronald Reagan:
The renewable energy industry is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.


Tags: Electric Power Dispatchable, Electric Power Generation, Electric Power Reliability, Power Grid

Costing the Green Grid: Current and Future Technology - Highlighted Paper

  • 2/8/24 at 06:00 AM


From: Net Zero Watch

By: Andrew Montford

Date: January 26, 2024

Costing the Green Grid: Current and Future Technology

Executive summary

A recent Royal Society report claimed the electricity grid could be decarbonised without materially raising the cost per unit of electricity delivered (the ‘system cost’). The annual cost would be of the order of £30 billion. However, this conclusion relied on extraordinary input parameters:

  • demand values that are very low, and hardly vary with temperature, apparently through use of an incorrect seasonal demand curve;
  • highly optimistic cost and efficiency assumptions.

These assumptions included:

  • 60% reduction in offshore wind capital cost
  • 70% reduction in offshore wind operating costs
  • 50% increase in offshore wind output • 30% reduction in solar capex
  • 70% reduction in solar opex
  • 90% reduction in electrolyser capex
  • 45% increase in electrolyser efficiency
  • 60% reduction in reciprocating engine capex
  • 55% increase in reciprocating engine efficiency

compared to levels seen today. In order to deliver a decarbonised grid by 2050 at the overall cost stated in the report, these improvements would have to be delivered in the next 2–3 years.

The electricity system model presented in this paper reproduces the Royal Society’s results and then examines the effect of correcting the flaws.

  • Using the correct seasonal demand curve increases costs by around  10%, to £33 billion per year. The latter figure represents around £1000 per household.
  • Introducing interannual variability – that is, allowing for extra demand in cold years – increases annual spend to over £50 billion, or £1700 per household.
  • Using assumptions representing current technology and costs,  but without allowing for interannual variability, increases annual spend to around £160 billion, or £5000 per household.
  • If demand is allowed to vary year by year, then 2023 technology would give an annual spend of around £260 billion (perhaps £8000 per household).

This rate of spend would have to be sustained indefinitely.

Obviously, some reductions in costs should be expected by 2050, so the last scenario only determines the envelope of possible outcomes. However, it is clear that the Royal Society contains a significant error, having apparently used incorrect figures for their seasonal demand curve. The sheer scale of the optimism in its assumptions also means that it is misleading for the policy community.

Together, these flaws mean that the report should be withdrawn. (continue reading)


Costing the Green Grid: Current and Future Technology


Tags: Highlighted Article

Energy Transition Goal - ORIGINAL CONTENT

The Administration’s stated goal for the energy transition is an energy system with “Net Zero” CO2 emissions after conversion of all energy end uses to all-electric systems. I often find, when trying to visualize a situation such as this, that it is helpful to visualize the end point of the transition and then analyze what had to be done to reach that end point. Such visualization and analysis are almost impossible in this situation because the possible paths from the current situation to the end point are dependent upon the development and implementation of several non-existent or non-commercial or non-economical technologies, not all of which are likely to be successfully developed and implemented at scale.

The technologies of concern include: offshore wind (fixed and floating); Carbon Capture Utilization and Storage (CCUS); Direct Air Capture (DAC); medium-duration and long-duration electricity storage; green hydrogen; Distributed Emission-Free Resources (DEFR); and, Small Modular Nuclear Reactors (SMR). Other technologies, less often discussed, include: dry hot rock geothermal; Ocean Thermal Energy conversion (OTEC); and, wave energy. Which of these technologies are successfully and economically developed and the timing of their availability would have a major influence on the end point of the proposed transition.

Offshore wind (fixed to the sea bed) is an established technology in Europe, although a variety of factors have recently increased its costs to prohibitive levels, which has caused the developers to cease proposing new installations until government subsidies and incentives are increased dramatically. The development of offshore wind off the US East Coast has similarly seen costs increase to prohibitive levels, causing several developers to withdraw from existing Power Purchase Agreements (PPAs), while other developers have halted planning for larger proposed projects. These problems have been compounded by excessive maintenance and repair expenses or newer, larger offshore wind turbine installations in Europe. Floating offshore wind projects off the US West Coast await design and testing of floating platforms and mooring systems.

CCUS has been demonstrated in several small-scale installations, all of which have been extremely expensive and have been limited to low percentage carbon capture. Experiments indicate that high percentage carbon capture would require high parasitic power consumption, rendering them uneconomic. DAC is under development in numerous projects. However, the major challenge for DAC is the large amount of atmospheric air that must be processed per unit of CO2 extracted. There is also growing resistance to the construction of the pipelines necessary to transport the CO2 removed by either process to the underground storage facilities. The success of CCUS and DAC would be essential to the continued use of fossil fuels in electric generation.

Existing battery storage technology is limited to an approximate 4-hour discharge cycle, though longer duration could be achieved by staging banks of 4-hour batteries. Medium duration batteries (4 to12-hour duration) are under development. Long-duration batteries would be required to accommodate the seasonal variation in wind and solar capacity factors. The only existing technology suitable for this application is pumped hydro storage, but there is strong resistance to the construction of pumped hydro facilities. Other approaches are in early development stages.

Green hydrogen offers the potential for both power generation and vehicle propulsion applications. However, production of green hydrogen requires both pure water and large quantities of electricity. This would likely require sea water desalination followed by electrolysis. These processes face significant efficiency challenges.

Distributed Emissions-Free Resources (DEFRs) remain undefined, though they might well include small modular nuclear generators (SMRs). Therefore, they can only be considered “placeholders”.

Designing and building a reliable energy system on a tight time schedule based on non-existent, non-commercial and non-economical technologies is a massive and unreasonable challenge.


Tags: Green Energy Transition, Net Zero Emissions

“Green” Weaponization in Missouri: Ameren vs. Ratepayers, Taxpayers - Highlighted Article

  • 1/25/24 at 06:00 AM

From: Master Resource

By: Mark Krebs

Date: January 11, 2024

“Green” Weaponization in Missouri: Ameren vs. Ratepayers, Taxpayers

“Ameren Corporation claims, putting in SO2 scrubbers would cost more than securitizing Rush Island’s ‘stranded assets.’ However, Ameren is avoiding what it would fully cost to replace Rush Island’s critically needed and reliable capacity.”


Thomas Jefferson wrote in Volume 4 of  Notes on Virginia:  “With money we will get men, said Cæsar, and with men we will get money.”[1]

Such threats to keeping our constitutional republic are increasingly evident with the weaponization of many Federal Agencies (e.g., the Department of Justice, FBI, etc.), as well as numerous Biden Executive Orders for federal agencies to fight the “existential” threat of anthropogenic global warming (AGW).

These threats, coupled with the plague of “woke” political agendas promoting “Environmental, Social, and Governance” (ESG) and/or “Diversity, equity, and inclusion” (DEI), are forcibly reaching leading “investment management” firms (e.g., BlackRock, Vanguard, Fidelity, State Street Global Advisors, and J.P. Morgan).

Enter Missouri, where our utility Ameren Corporation drinks the green Kool-Aid as evidenced by their “woke” pitch to J.P. Morgan on June 22, 2023, titled Powering a Smart, Sustainable Tomorrow.  

The ESG/DEI cult has also infiltrated energy utility trade associations.  For example:

(continue reading)


“Green” Weaponization in Missouri: Ameren vs. Ratepayers, Taxpayers


Tags: Highlighted Article

Fraudulent Fantasy - ORIGINAL CONTENT

The UN and numerous national governments are promoting the fantasy that the global energy economy can transition to a fossil-fuel-free, all-electric everything energy economy by 2050. In this fantasy, intermittent renewable generation combined with electricity storage provides a reliable energy system at lower energy cost than the predominantly fossil fueled energy system it would replace.

This fantasy is a complete and utter fraud, since those promoting it know that the generation technology they are promoting is intermittent and that the storage that they suggest would be required to overcome this intermittency and provide a reliable energy grid is inadequate, extremely expensive and unsuitable for the application. They also know that storage batteries suitable for the application are not commercially available and might not be commercially feasible. The only current approach to long-duration storage is pumped hydro, but there are insufficient suitable sites available and there has been strong resistance to pumped hydro storage, especially run-of-river installations.

Further, the technology required to electrify some industrial processes is not commercially available and, if available, would be far more expensive than the current fossil-fueled processes. The calcining of limestone to produce cement, for example, even if it could be performed using electricity as the heat source, would require the application of carbon capture and storage systems capable of capturing 100% of the CO2  released from the limestone, significantly increasing the cost of the process.

Farming and animal husbandry have also been identified as significant sources of CO2 emissions. Some governments have suggested imposing limitations on the use of synthetic fertilizers. Others have suggested destroying large numbers of meat and dairy animals to reduce methane emissions. However, reducing the global food supply and increasing global food costs is hardly consistent with the fantasy. Famine is a cruel approach to population control. Other approaches to population control are also being considered.

The realization that replacing fossil fuels in numerous residential, commercial, industrial and agricultural applications would require new technology and massive investments in facilities has precipitated discussions about approaches to reducing overall demand on the energy system. These have included “herding” large portions of the population into 15-minute cities, which would reduce the need for private transportation. Others have suggested draconian travel restrictions, such as the elimination of airports suggested for the UK. Also included are transitions from eating meat to eating “veggie burgers”, laboratory produced meats and factory-grown insects. Some have even suggested an end to private ownership of anything. Again, hardly consistent with the fantasy.

Other proposals are even less palatable. One US newspaper has suggested that rolling blackouts would be acceptable if they helped reduce climate change. One source has even suggested infecting the population with Lyme disease to encourage the development of Alpha-gal Syndrome, which renders the human system allergic to meat. So far, there has been no suggestion of starting a new pandemic, though there have been suggestions of reinstituting “lockdowns” to reduce energy consumption.

Resistance to the proposed energy transition is beginning to grow as the financial burdens and losses of personal freedom become progressively more obvious.


Tags: CO2 Emissions, Electric Power Dispatchable, Energy Storage / Batteries, Green Energy Transition, Fossil Fuel Elimination / Reduction, Net Zero Emissions, Technology Forcing

Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable - Highlighted Article

  • 1/18/24 at 06:00 AM


From: Energy Bad Boys - Substack

By: Mitch Rolling and Isaac Orr

Date: January 6, 2024

Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable

Rate cases throughout America tell the same story about the high cost of going green

Electricity prices in the United States are skyrocketing, with all-sectors electricity rates reaching new all-time highs in 2022 and 2023, but wind and solar advocates like to pretend that these energy sources are not responsible for the rising electricity costs paid by American families and businesses.

However, recent reports from Regulatory Research Associates (RRA), a division of S&P Global Commodity Insights, evaluating requests from electric companies to raise their prices (known as rate cases) clearly show that rising electricity prices are largely being driven by spending billions of dollars on wind turbines, solar panels, natural gas plants, and new transmission lines in pursuit of the so-called “energy transition.”

Our deeper-dive into the eight largest rate increase requests, as identified by RRA, reaffirms these findings by quoting directly from rate cases filed with state regulators, debunking the idea that wind and solar aren’t causing electricity rates to rise, once and for all.


Rate Making 101


Before we discuss the individual rate cases, it is important to understand that there is no free market for electricity, and there may never be.

In much of the country, electric companies are government-approved monopoly utilities that have the exclusive right to sell electricity in their service territories. Because electric companies are monopolies, it would be unfair to let them charge whatever they wish for electricity, so electricity prices are set by government regulatory bodies that oversee utilities, often called Public Utilities Commissions (PUCs) or Public Service Commissions (PSCs).  

When electric and gas utility companies want to raise prices on customers to pay for additional expenses, they must file rate cases with the PUC or PSC that justify the additional expenses in the company’s request.  

These additional expenses frequently consist of building new power plants, such as wind turbines, solar panels, or natural gas plants, as well as the additional ten percent profit utilities make on virtually every new asset they build and the cost of interest used to finance the construction of the plants. If the additional expenses outlined in the rate case are approved by the PUC or PSC, electricity rates go up for customers.

Rate increase requests have skyrocketed in recent years, according to the RRA reports, and so has the amount of money that electric companies are looking to raise from them. (continue reading)


Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable


Tags: Highlighted Article

Utility Cost Allocation - ORIGINAL CONTENT

One of the most contentious issues in utility ratemaking has been the issue of allocation of both capital and operating costs among customer classes. This allocation has been accomplished through monthly service charges, time of day rates, seasonal rates, demand charges and various demand side management approaches.

However, the proposed transition from the current fossil and nuclear based electricity generation system to a system based largely on intermittent renewable generation presents a very different set of cost allocation issues. The current system costs include fuel supply costs and fuel inventories or supply contracts, depending on the generation technology. The system achieves stable output largely as the result of the large rotating masses of the steam and gas turbines which power the generators.

The system to which we have begun transitioning does not require fuel, but rather is dependent upon the intermittent availability of wind or sun. However, frequent fluctuations in wind availability and wind speed and frequent fluctuations in solar insolation result in generator output fluctuations which must be stabilized. Presently, these fluctuations represent a relatively minor fraction of cumulative generation. Short duration fluctuations (seconds to minutes in duration) can be stabilized with the application of power electronic devices and capacitors. Longer duration fluctuations (minutes to hours to days to weeks) are offset by adjustments to the operation of the fossil generation systems. The costs associated with stabilizing the outputs of intermittent renewable generators would appropriately be allocated to the intermittent generators, though this is not the current situation.

As the proposed transition proceeds, the capacity of intermittent renewable generation would increase and the capacity of existing fossil generation would be reduced. At some point, the remaining fossil generation would be insufficient to meet grid demand during periods of low/no renewable generation and some alternative method of achieving stable generation output would have to be implemented. The current assumption is that storage of some type, such as batteries, pumped hydro or compressed air storage would provide the stabilizing function. Regardless of whether this storage was collocated with each of the intermittent renewable generators or located at a number of strategically located grid hubs, the capital and operating costs of the storage required to stabilize the output of the renewable generators would appropriately be allocated to those generators.

Renewable generation developers have so far been able to claim that they provide electricity at lower cost than existing fossil and nuclear generators, as the utilities have borne the responsibility of adjusting the output of those generators to compensate for the fluctuations in renewable generator output. However, if the current costs of utility-provided output compensation or the costs of storage to provide output compensation were appropriately allocated to the renewable generators, the fallacy of their claim of lower electricity generating cost would become obvious.

Electric utilities earn a return on net physical plant in service (rate base). They are therefore faced with a Hobson’s Choice. Utilities could require that the intermittent renewable generation attached to their grids be dispatchable, in which case the investment in storage would be made by the renewable developers, increasing their delivered electricity costs, while the utilities” rate base and earnings potential declined as fossil generation was removed from service. Alternatively, the utilities could invest in the storage required to stabilize renewable generator output, increasing the utilities’ rate base investment and earnings potential, while accepting responsibility for increasing electricity costs.

Regardless of which approach were chosen, the transition would continue to increase electricity costs as long as the cost of storage capacity exceeds the cost of owning and operating fossil generation. Incentives and subsidies could offset all or a portion of the increase in rates, as they do now, but could only increase the real costs, as they do now.

TANSTAAFL – There ain’t no such thing as a free lunch.


Tags: Electric Utilities, Electric Power Dispatchable, Energy Storage / Batteries

New Report Highlights Green Failure in Europe and Warns America

  • 1/11/24 at 06:00 AM


From: Real Clear Wire

By: Rick Whitbeck

Date: January 4, 2024

New Report Highlights Green Failure in Europe and Warns America

As one digests Rupert Darwall’s latest report for the RealClear Foundation, the well-known quote from Spanish philosopher George Santayana might ring through the mind: “Those who cannot remember the past are condemned to repeat it.”

Anyone looking to combat the activists pushing a ‘net zero’ agenda here in the U.S. would be wise to read Darwall’s piece, entitled “The Folly of Climate Leadership.”

The analysis tells the story of Great Britain heeding the cries for decarbonization, starting when Parliament wrote an 80% decrease in emissions target into law in 2008. They raised it to 100% – or “net zero” – in 2019. The results have clearly been catastrophic.

Since decarbonization efforts commenced, Britain’s economy has grown at half the rate as it did from 1990-2008. According to a research study from noted British economic historian Nicholas Crafts, that’s the second-worst period of British peacetime growth since 1780.

In addition to the economic malaise, British energy prices have skyrocketed, and Britons are now concerned with how to survive the effect of those costs on their wallets, as they look to heat and power their homes and businesses, travel for work and pleasure and live life as best they can.

The differences between British energy costs and those here in the U.S. are staggering: Britons paid an average of $228 per megawatt hour (MWh) for electricity generated from coal in 2022, whereas Americans paid an average of $27 per MWh. For natural gas, 2022 saw Britons paying $251 per MWh, versus American consumers averaging $61 per MWh for their power.

Darwall’s report also highlights the effects of unchecked and anti-market driven government investment in ‘green’ energy on grid reliability, as intermittent production from wind and solar – coupled with a lack of utility-grade energy storage – dropped electricity generated per gigawatt of capacity falling 28% since 2009. (continue reading)


New Report Highlights Green Failure in Europe and Warns America


Tags: Highlighted Article

Offshore Wind Woes - ORIGINAL CONTENT

The year, 2023, was not a good year for the offshore wind industry, which has seemingly been beset by adversity on all sides.

Supply chain disruptions, largely resulting from the COVID pandemic and national efforts to deal with the pandemic, have resulted in material and equipment unavailability and/or delivery delays. Inflation has increased the cost of equipment and the cost of installation. Rising interest rates have increased project financing costs. All of these factors have combined to delay projects and increase the delivered cost of the electricity to be produced by the projects.

Several project developers have cancelled projects or sought to renegotiate existing contracts for both existing and proposed projects. Others are threatening to walk away from project negotiations unless substantially increased subsidies are made available for the projects. While increased subsidies can reduce the delivered cost of the output of the projects to their customers, they do not reduce the societal cost of the project output and might arguably increase the societal cost.

In addition to the issues facing proposed projects, the industry is also dealing with major cost issues associated with existing projects. Several manufacturers and project developers have experienced higher than projected maintenance and repair requirements. This issue is more significant with offshore wind because of the higher cost of performing maintenance and repair work on the high seas.

These issues have been compounded by the rush to increase the capacity of offshore wind turbines. These larger wind turbines have been plagued with rapid gear box wear and blade failures resulting from vibration of the rotating components. These problems reflect inadequate design and insufficient testing prior to commercial installation of the much larger wind turbines. The typical onshore wind turbine has a capacity of approximately 3 MW, while the newer offshore wind turbines have capacities of up to 15 MW. These large wind turbines have blades approximately 380 feet long, which must be able to flex along their length as wind conditions change.

Increased maintenance and repair costs in existing large wind turbine projects has caused 2+ billion dollar financial losses for several wind turbine manufacturers, including Oersted, General Electric and Siemens Gamesa. Others, including Vestas and Iberdrola, have also experienced losses due to increased maintenance and repair costs. It is likely that such losses will increase until the affected components are replaced with improved versions.

Some offshore wind turbines in Northern Europe have been damaged by gusting high winds. However, these winds are far less potentially damaging than the winds generated by hurricanes off the East Coast of the United States. There is no experience with these large offshore wind turbines in a category 4 or 5 hurricane such as hurricane Lee, which moved up off the coast until finally making landfall in Maine and Nova Scotia.

There is also no experience regarding the cost of insuring these large capacity wind turbines in an area prone to hurricane exposure.

Finally, there remain serious questions regarding the effect of these large wind turbine projects on marine life, particularly the endangered Right Whales which migrate up and down the US East Coast.


Tags: Wind Energy, Renewable Energy

Thermodynamics of prime movers: energy from first principles? - Highlighted Article

  • 1/4/24 at 06:00 AM


From: Thunder Said Energy

Date: December 12, 2023


Thermodynamics of prime movers: energy from first principles?

A highlight of 2023 has been going back to first principles, to study the underpinnings of prime movers in the global energy system. Context matters. There is no energy source to rule them all. However, if you understand the thermodynamics of prime movers, you will inevitably conclude that the world is evolving towards solar, semi-conductors, electro-magnetic motors, lithium batteries and high-grade gas turbines.

Muscle power was the original prime mover in the pre-industrial energy system (chart below). But a typical horse outputs 0.75 kW of power, converts only c10-30% of food energy to useful work (depending on how hard you work the horse), can only cover 25-40 miles in a day, must be treated humanely and annoyingly poops everywhere. So we would score horses as a 1 out of 6 on our score of prime movers. It is remarkable that despite these limitations, the total global population of horses remains flat on 1960, with around 60 million horses in the world today, showing how hard it is to disrupt established technologies. (continue reading)


Thermodynamics of prime movers: energy from first principles?


Tags: Highlighted Article
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