Energy Policy

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.

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?

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.

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.

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.

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.

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.

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.

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.

By: Clear Energy Alliance

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.

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.

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.

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.

Energy independence has been an aspirational goal of the US for decades. However, the US actually achieved that goal in the period from 2017-2020 as the result of the application of US ingenuity and the encouragement of a supportive federal government. Energy was readily available at reasonable cost and the economy experienced robust growth.

Regrettably, a change in the federal Administration has ended both the recent energy independence and the robust economic growth. The US has now rejoined the Paris Accords and the Administration has committed to the destruction of the US fossil fuel industry and the restructuring of the US electricity sector and the entire US energy economy in an attempt to achieve net-zero CO2 emissions by 2050. Rapidly increasing energy costs and looming energy shortages are the result.

The Administration has halted oil and gas lease sales, slow-walked the issuance of drilling permits in existing oil and gas leases, slow-walked approvals for increases in oil refinery capacity, actively discouraged investment in new oil and gas projects and claims it can’t understand why oil prices have increased and oil supplies are declining. The Administration has been quick to blame rising prices and energy supply problems on the industry. Elements of the industry have adopted a posture of “orderly liquidation” of their businesses in the face of forced liquidation by government fiat.

Meanwhile, the Administration is incentivizing investments in wind and solar electric generation and subsidizing the purchase of electric vehicles and the construction of EV charging station infrastructure. Goals have been set for the end of coal-fired electric generation, the end of all fossil fuel electric generation, and the termination of the sale of vehicles with internal combustion engines. These federal goals are both market and technology forcing. They rely on the timely installation and operation of technologies which have not been invented or introduced into the commercial market.

Fabrication of wind and solar generation equipment, electricity storage and electric vehicles require large quantities of rare earth minerals, largely available from China and other non-friendly countries. These requirements render the US energy economy dependent upon unfriendly foreign governments for the maintenance and expansion of US energy infrastructure. Recent Russian actions to reduce energy deliveries to European nations provide a warning regarding potential future Chinese actions regarding the supply of rare earth minerals for wind, solar, storage, and EV applications.

Should the US allow itself to become totally dependent on wind, solar and storage for its electricity needs, it would be at great strategic risk when it came time to replace the first tranche of this equipment in approximately 20 years. The same would be true for dependence on EVs for our transportation system.

Perhaps the greatest risk, in the short term, is that the current energy and electric generation infrastructure will be driven from or retired from the market before the necessary replacement infrastructure is in place and operational. The current haphazard approach to infrastructure replacement has resulted in several failed demonstrations of a renewable intense generation infrastructure which would be disastrous if repeated at national scale.

Wind and solar are intermittent resources, so both wind and solar generation are intermittent and require backup. This backup is currently provided by conventional generation. However, with the evolution of a fossil-free grid, storage capacity would be required to provide backup. Additional wind and solar generating capacity would also be required to recharge storage when wind and solar again become available.

Storage must be capable of functioning under several different conditions. Some storage is currently being used with both wind and solar installations to smooth the output of the generators when the wind is fluctuating or when the sun is partially obscured by clouds. This storage has relatively limited capacity and responds quickly to fluctuations.

Storage is now beginning to be installed with solar arrays to deal with the typical increase in demand and consumption at the end of the day, when solar output has decreased or ceased. This “four-hour storage” has approximately half the capacity of the solar array during a normal day. This storage must be recharged the next day during periods when grid demand is less than solar array capacity, or must be recharged overnight or during the next day from other generation sources. This storage has a current cost of approximately $350 per kWh and is projected to decline in cost to between $150 and $100 per kWh by 2050 according to the National Renewable Energy Laboratory (NREL).

As the transition to a fossil-free grid progresses, there will be a growing need for long-duration storage capable of storing the output of wind and solar generators in sufficient quantities to power the grid for multiple hours to multiple days when either wind or solar, or both, are unavailable or significantly diminished. The “wind drought” which affected the United Kingdom and parts of Western Europe in the fall of 2021 is an example of a situation requiring such long-term storage. In that event, storage capable of powering the grid for 10 days would have been required, had conventional generation not been available.

Another situation requiring long-term storage is those periods when wind and solar output are diminished seasonally. EIA reports that, in 2021, solar photovoltaic system output was below 25% of rating plate capacity in the period from October through February, while (onshore) wind capacity was below 35% in the period June through October and in January and February. The January through February period is of particular concern because both wind and solar capacity are diminished. Long-duration storage would be required to make up the generation deficit for a period of several months.

Clearly, additional wind and solar generating capacity would be required to charge long-duration storage to supplement both wind and solar generation through the Fall and Winter, as well as to support the grid through a “drought” period. This long-duration storage is not currently commercially available. Technology capable of approximately 150 hours is currently under development, but would be insufficient to support the grid through a 10-day “drought” or through a multi-month period of insufficient generation.

The cost of such long-duration storage is currently unknown, but the storage capacity required to support a fossil-free grid would be very large and very expensive. However, the cost of not having long-duration storage in sufficient quantities would be substantially greater.

The expected service life of current grid-scale batteries is approximately 10 years, compared to the expected 40 year service life of utility assets. This difference dramatically increases depreciation expense and system ownership costs.

From: Friends of Science Calgary

By: Ken Gregory, P.Eng.

Date: December 21, 2021

The Cost of Net Zero Electrification of the U.S.A.

Executive Summary

Many governments have made promises to reduce greenhouse gas emissions by replacing fossil fuels with solar and wind generated electricity and to electrify the economy. A report by Thomas Tanton estimates a capital cost of US$36.4 trillion for the U.S.A. economy to meet net zero emissions using wind and solar power. This study identifies several errors in the Tanton report and provides new capital cost estimates using 2019 and 2020 hourly electricity generation data rather than using annual average conditions as was done in the Tanton report. This study finds that the battery costs for replacing all current fossil fuel fired electricity with wind and solar generated electricity, using 2020 electricity data, is 109 times that estimated by the Tanton report. The total capital cost of electrification is herein estimated, using 2020 data, at US$433 trillion, or 20 times the U.S.A. 2019 gross domestic product. Overbuilding the solar plus wind capacity by 21% reduces overall costs by 18% by reducing battery storage costs. Allowing fossil fuels with carbon capture and storage to provide 50% of the electricity demand dramatically reduces the total costs from US$433 trillion to US$24 trillion, which is a reduction of 94.6%. Battery storage costs are highly dependent on the year’s weather and the seasonal shape of electricity demand.

Introduction

The U.S.A. government has set a target to reduce greenhouse gas emissions from fossil fuel use and cement manufacturing to net zero economy-wide by no later than 2050. Some believe we could achieved this by replacing most fossil fuel use with non-emitting energy sources and sequestering carbon dioxide (CO2) emissions from the remaining fossil fuel use by carbon capture and storage (CCS).

This article provides an estimate of capital costs to achieve net zero emissions in the U.S.A. based largely on an analysis by Thomas Tanton in his report “Cost of Electrification: A State-by-State Analysis and Results”. [1] Estimating the increased operating costs is beyond the scope of this study. (continue reading)

The Cost of Net Zero Electrification of the U.S.A.