Energy Policy

Broken Window Economics: an event that seems to be beneficial for those immediately involved can have negative economic consequences for many others.

The US and most countries have energy economies based on fossil fuels, plus contributions from nuclear, hydro, geothermal and biomass. The US and the other OECD (Organisation for Economic Co-operation and Development) countries have announced goals to replace the fossil fuel uses in their economies with renewable generated electricity across the entire spectrum of energy uses. These goals have been accompanied by mandates to eliminate specific fossil fuel end uses for electric generation, to halt the production of internal combustion engine (ICE) vehicles and to replace all fossil fuel end uses by dates certain.

These mandates require the retirement of existing electric generation, vehicle production and appliance production facilities, many before the end of their useful lives and the construction and outfitting of new, replacement facilities. The Biden Administration has argued that these efforts would result in the creation of millions of new, high paying union jobs, though they would also likely result in the elimination of a similar number of similar jobs.

The US currently has a fleet of 200 GW of coal generation capacity, 50 GW of which is scheduled to be retired by the 2030 mandated retirement goal for coal generation. The remaining 150 GW has been scheduled to be retired over the period from 2030 – 2048. Early retirement of these coal plants would strand approximately $35-40 billion of undepreciated private generation assets. It would also strand approximately $30 trillion of coal resources. It is uncertain how the owners of these assets would be compensated for their forced abandonment. Those costs would represent a societal cost of the mandate to close the generating facilities and the resulting abandonment of the coal resources.

The US currently has a fleet of 500 GW of natural gas generation capacity. Approximately 400 GW of that capacity is less than 30 years old, which is a common mid-life for natural gas generators. This suggests that more than 200 GW of natural gas generating capacity would be forced out of service by the 2035 mandated retirement goal for gas generation. Early retirement of these plants would strand another $35-40 billion of undepreciated private generation assets. Again, it is uncertain how the owners of these assets would be compensated for their forced abandonment. These costs would also represent a societal cost of the mandate to close the generating facilities and the resulting abandonment of billions of dollars of natural gas resources and underutilization of natural gas pipeline capacity.

The US also has tens of billions of dollars of automotive manufacturing facilities which the owners would be forced to retire and replace with facilities designed to manufacture EVs and EV batteries, at the same time stranding several billion of dollars of oil resources and oil refining capacity.

Investments in ICE vehicles and natural gas appliances and equipment would be unlikely to be affected by the mandates, since they would likely have outlived their usefulness by 2050.

From: Institute for Energy Research

By: Thomas J. Pyle

Date: May 23, 2023

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

President Biden and the Democrats in Congress have a plan for American energy: make it harder to produce and more expensive to purchase. Since Mr. Biden took office, his administration and its allies have taken over 150 actions deliberately designed to make it harder to produce energy here in America. A list of those actions, which includes a few high-profile actions taken in states like New York and California, appears below. A list of those actions appears below. A PDF of the full list is available to download here.

___________________________

On January 20, 2021,

1. Besides canceling the Keystone XL pipeline,
2. President Biden restricted domestic production by issuing a moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge.
3. He also restored and expanded the use of the government-created social cost of carbon metric to artificially increase the regulatory costs of energy production of fossil fuels when performing analyses, as well as artificially increase the so-called “benefits” of decreasing production.
4. Biden continued to revoke Trump administration executive orders, including those related to the Waters of the United States rule and the Antiquities Act. The Trump-era actions decreased regulations on Federal land and expanded the ability to produce energy domestically.

On January 27, 2021, (continue reading)

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

Subsidy: a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public.

The US federal government, several state governments and numerous local governments offer subsidies to assist various aspects of the energy system transition being undertaken in response to climate change. These subsidies are offered for wind and solar generation, electricity storage, electric vehicles, electric vehicle charging stations, and electric appliances and equipment. These subsidies reduce the individual transaction costs for the purchasers of the various devices. However, they also increase the societal cost of the transition.

Wind and solar generation facilities, whether for grid-scale applications or site-specific applications, displace some portion of the output of the existing electric power generation fleet during periods when the wind is blowing and/or the sun is shining. The existing power generation fleet provides the remainder of the grid demand when wind and solar generation are operating and all of the grid demand when wind and solar generation are not operating. Therefore, the subsidies provided for wind and solar generation facilities incentivize the installation of redundant generation facilities, increasing the total cost of the electric generation fleet and thus, the societal cost of electricity.

The cost of wind and solar facilities includes both equipment and installation costs, which are borne by the owners of the facilities. The subsidies available reduce the owners' transaction costs, but not the real cost of the facilities. The subsidies provided by government add to the societal costs of the facilities. These subsidies must be funded either by offsetting reductions in other government programs, increased taxation or incremental government borrowing.

The available subsidies for electric vehicles (EVs) function similarly. The vehicle manufacturer offers the EV to the market at a price which includes its costs and profit. The subsidies reduce the purchasers’ transaction costs, but not the cost and price of the vehicle. The subsidies add to the societal cost of the transaction. For example, an EV with a MSRP of $60,000 is sold to the purchaser at that price. The purchaser then receives a tax credit of $7,500. This reduces the purchaser’s net transaction price to $52,500,  but increases the societal cost of the transaction to $67,500. Again, these subsidies must be funded either by offsetting reductions in other government programs, increased taxation or incremental government borrowing. The same is the case for the subsidization of EV charging infrastructure.

The recent subsidies offered for the purchase of electric appliances and equipment under the “Inflation Reduction Act” are intended to incentivize the purchase of electric heat pumps, water heaters, ranges, laundry dryers and similar residential and commercial equipment. These subsidies are intended to “kick-start” the transition to “all-electric everything” intended by 2050.

Most of the government funding for subsidies to support the transition to renewable electricity generation and “all-electric everything” is coming from incremental borrowing, adding to the existing federal deficit. This borrowing injects additional money into the economy, likely increasing rather than reducing inflation.

“A goal without a plan is just a wish.”, Antoine de St.Exupery

“I love it when a plan comes together.”, John (Hannibal) Smith

The Biden Administration has announced a series of goals, leading to an overall goal of a Net Zero US economy by 2050. The intermediate goals include eliminating coal-fired electric generation by 2030, eliminating gas-fired electric generation by 2035, ceasing production of internal combustion engine vehicles by 2035 and moving to an “all-electric everything” energy economy by 2050. These goals are to be accomplished through a combination of executive fiat and regulatory restriction. One key planning element in support of these goals involves starving the oil and gas industries of supply through cessation of drilling and production permits and blocking of new pipeline construction, thus destroying legal industries and their participants and depriving their customers of future supply. Another key planning element in support of these goals involves incentivizing and subsidizing wind and solar generation, electricity storage and electric vehicles.

What is lacking in this picture is a comprehensive plan. For example, the goals of eliminating coal generation by 2030 and gas generation by 2035 are not accompanied by a plan element intended to assure that adequate wind and solar generation, electricity storage and transmission infrastructure are in place to maintain grid reliability and resilience as the conventional generators are removed from service.

There is also no plan element intended to assure that, as natural gas supplies deplete as the result of production constraints, sufficient natural gas remains available to supply the expected increased natural gas demand for power generation as coal generation capacity is removed from service. There is also no plan element intended to assure that sufficient natural gas remains available to meet residential, commercial and industrial customer demand during the transition to the “all-electric everything” energy economy.

There is no plan element intended to assure that electric generation, transmission and distribution capacity increase timely to accommodate the growth of electric demand and consumption resulting from economic and population growth and the transition to the “all-electric everything” energy economy by 2050.

There is also no plan element intended to assure that sufficient gasoline and diesel fuel remain available to supply the needs of the range of ICE vehicles remaining in service post 2035, when the goal is to terminate ICE vehicle production.

These missing plan elements appear crucial to the successful accomplishment of the Administration’s goals. It appears that the Administration plans to rely on the function of a regulated and constrained energy market to deal with these missing elements of the plan as the market rapidly transitions from a multi-fuel market with regulated competition to a renewable generation plus storage regulated monopoly.

The schedule for this transition appears to assume that the currently non-existent technology required for the Administration’s goals to be achieved will become available timely. This technology includes medium-duration and long-durations electricity storage and what are referred to a Distributed Emission-Free Resources (DEFRs) for electric generation, as well as fossil-free technologies for iron, steel and cement production.

If there is no Plan “A”, is there likely to be a Plan “B”?

“No battle plan survives contact with the enemy.”, Helmuth von Moltke

From: Climate Etc.

By: Russ Schussler

Date: May 8, 2023

Fauci, Fear, Balance and the Grid

Reflecting on the U.S. response to the covid pandemic, Dr. Fauci provides some important insights on managing complex risks – with relevance to climate change and the electric grid transition.

Dr. Fauci discussing past covid measures was recently quoted as saying,

“(W)e looked at it from a purely public-health standpoint. It was for other people to make broader assessments—people whose positions include but aren’t exclusively about public health. Those people have to make the decisions about the balance between the potential negative consequences of something versus the benefits of something.”

I was surprised to hear that Dr. Fauci did not think that public health should have been in total control of the pandemic response.  But he is right. We needed diverse experts providing input and impacting policy choices – some who worry about public health, others who worry about individual health, others who worry about children, and others well versed on the economic impacts of it all.  Doing everything possible to stop the spread of covid, all other costs and consideration be damned, should have been expected to reduce the overall well-being of society and provide grossly suboptimal outcomes.  Focusing solely on covid risks was likely counterproductive even for those most at risk from covid.

In the U.S., the balanced path Dr. Fauci is now advocating was not seriously pursued during the pandemic. With the Covid panic, it seemed public health took over with one over-riding goal.  Advocates for individual health and individual health care found few available forums and inroads to appeal to and  impact policy makers. Appearing to be against the central narrative of those in power may have had severe consequences for individuals and organizations. In hindsight, many see that balancing competing views and values would have better served us all. In focusing so exclusively on the threat of covid, we increased our risk from so many other threats.  Many now understand that our “best” scientific understandings should be subject to challenges.  It certainly seems we needed “other people” to speak up, but those voices did not find the platforms they would need to influence policy and direction. (continue reading)

Fauci, Fear, Balance and the Grid

From: Climate Etc.

By: Russ Schussler

Date: May 3, 2023

Silence of the Grid Experts

There are many reasons why grid experts within the electric utility industry have not spoken out when unrealistic “green” goals were being developed and promoted over the last 20 years or so. A more open debate during this period might have helped provide a  more realistic foundation for future development.  This posting describes some reasons as to why at the corporate level electric utilities did not speak out more in defense of grid reliability.  Collectively these factors tended to eliminate grid experts from playing any role in the development of policies impacting the grid.

Speaking Out Risked Negative Consequences

Utilities have many stakeholders with varying degrees of power.  Utilities depend on good relations with Public Service Commissions, other regulators, consumers and policy makers. The stereotype of electric utilities as uncaring, selfish, greedy destroyers of the environment tends to make utilities very cautious and careful in critiquing anything perceived as “green”.  The media and press attention from any such statements would likely not be favorable.

Utilities need support to acquire right-of-way, for financing, for cost-recovery and to avoid adverse legislation. Poor press and the associated public disapproval loomed as strong disincentives for speaking out.  Furthermore, as will be discussed later, expressing concerns over emerging reliability issues, could be interpreted by some as implying that perhaps you were not as capable as others appear to be. (continue reading)

Silence of the Grid Experts

From: Climate Etc.

By: Russ Schussler

Date: April 17, 2023

Renewable Experts: Undeterred and Unmoved by Failed Ideas

“Green” ideas and their proponents can create problems.  Like the antagonist in Terminator 2, green arguments and proponents don’t go down easily.  With serious challenges, they retreat, hibernate sometimes, morph, transform and come back.  It’s hard to argue with many “green” energy ideas.  They are often huge in scope but severely limited in details.  Focusing on a couple key factors and ignoring  or leaving so much to be worked out later.  Painfully naïve or unaware of so many factors associated with the provision of energy, feedback and often even human behavior.   They see the flaws in current efforts, but are blind to the drawbacks which will necessarily emerge from their proposals.  The offer conjectures with a lot of dots to still be connected. They speak of things that may be possible, without any handle on the probabilities.

Usually, “green” ideas are packaged with threats of doom, promises of superior technology or both.   The media are drawn to both those themes and many policy makers are attracted as well.   Attention is a great thing for new ideas.  The themes of urgency and the scope of change,  gives these ideas more weight and seeming gravitas.  Unfortunately, the needed incentives to dig down and look critically as these ideas are generally lacking. Woefully, those promulgating “green” ideas don’t have much incentive for engaging with their critics or broadening their understandings. They generate the feeling that we need to move forward with the big, new important thing – no time for distractions. (continue reading)

Renewable Experts: Undeterred and Unmoved by Failed Ideas

Numerous potential paths to net zero annual CO2 emissions have been identified and discussed, including:

• Renewables plus storage
• Massively overbuilt renewables and transmission
• Renewables plus Dispatchable Emission-Free Resources (DEFR)

Each of these paths faces massive technological hurdles.

The renewables plus storage path requires short, medium and long duration storage. Short duration storage (~4 hours) is available with lithium batteries, but at very high cost. Medium duration storage (~8-16 hours) is under development, but is not yet commercially available and its cost is unknown. Long duration storage (weeks) is currently available only with pumped hydro, but its availability is very limited and there has been strong resistance to expanding it.

The cost and availability issues with storage have led some to propose a path based on massive overbuilding of renewable generation combined with massive additional transmission capacity. This approach assumes that there would always be excess renewable electricity available somewhere which could be moved to areas with inadequate renewable generation output resulting from adverse weather conditions or equipment failure. Ultimately, this approach would require development of a massively interconnected national grid with the ability to move power multi-directionally over far longer distances than is common today.

The renewables plus DEFR path relies on the availability of generation technology which is as yet undefined, no less developed and commercialized. There is no indication of when this technology would become available, not is there any information regarding its cost.

The US Administration is currently focused on renewables and has only recently placed any focus on storage. The Administration’s approach combines incentives for renewable generation, storage and transmission infrastructure with mandates to terminate operation of fossil-fueled generation. The Administration has also taken steps to progressively deprive the market of access to oil and natural gas, causing their prices to increase. The Administration also provides incentives for electric vehicles, combined with a ban on new fossil-fueled vehicle sales after 2035. There are also incentives for purchase of electric appliances and equipment, which are made more attractive by the increasing prices of oil and natural gas resulting from the Administration’s actions.

The Administration approach involves substantial risks, created primarily by the hard deadlines for elimination of coal generation (2030) and natural gas generation (2035). There is no assurance that sufficient renewable generation, electricity storage and transmission infrastructure will be operational by these hard deadlines to replace this dispatchable capacity, as well as to provide the additional capacity required to meet normal market growth and the approximate tripling of current demand by 2050 resulting from electrification of current fossil fueled end uses.

The Administration, while it has not carefully planned this transition to all-renewable “all-electric everything”, has carefully positioned itself to blame any failure to achieve its goals, as well as electricity price increases and loss of grid reliability on others, since it has established timelines and provided generous incentives.

There has not yet been a comprehensive demonstration of an energy system such as the Administration demands, though there have been several notable failures of partially implemented systems in Germany, UK, California and Texas.

Don’t begin vast programs with half-vast ideas.

The US Department of Energy, Energy Information Administration chart below is arguably accurate but inarguably misleading.

The capacity factors shown for both wind and solar, while they are the actual percentage of rating plate capacity delivered to the grid in 2020, are also approximately equal to the limiting capacity factors of the generators as installed, since the output of both wind and solar generation have priority access to the grid.

The nuclear generation capacity factor shown above is the rating plate capacity of the nuclear generators less an allowance for downtime for maintenance and refueling. Otherwise, nuclear generators typically operate base loaded at rating plate capacity because of their low operating costs.

Geothermal generation provides a constant source of energy as required and is typically dispatched when available, with a downtime allowance of approximately 25% for maintenance and repair.

Hydroelectric generation capacity factor is largely dependent on water availability behind the dams as well as water demand downstream of the dams. A portion of the hydroelectric generation capacity is reliable, while the remainder is “source of opportunity” capacity based on water availability.

Coal and natural gas generators are typically operated in load-following mode, providing the difference between renewable and nuclear generation output and grid demand. They also typically represent the utilities’ capacity reserve margin on peak, available in the event of a failure of the utilities’ largest single generation resource. The capacity factors shown in the chart above are the actual percentage of rating plate capacity delivered to the grid in 2020. However, those generators have real capacity factors of approximately 85% for coal generation and 90% for natural gas combined cycle generation.

Of the generation sources shown in the graphic, only wind and solar are not dispatchable. Their availability is dependent upon wind and sun conditions. When they are available, they displace the output of dispatchable generators. However, the capacity of the dispatchable generators must still remain available to meet grid demand during periods of low/no wind and solar availability.

As the fraction of wind and solar generation increases, the percentage utilization of the generating capacity of coal and natural gas generators would decline, to the extent the decline is not offset by increasing grid demand or the permanent closure of these generators as a function of age, operating cost or government edict. Grid demand is expected to increase at a more rapid pace, driven by the Administration’s focus on “all-electric everything”, which would ultimately approximately triple grid demand by 2050.

The assumption is that increasing grid demand would be served by increased wind and solar generation. However, the intermittency of these generators means they would continue to require support during periods of low/no wind and solar availability. This support is now provided primarily by dispatchable fossil-fueled generators, but might also be provided by electricity storage capacity in the form of batteries or pumped storage. These storage resources would have to be in place and operating before the scheduled closure of the remaining coal generating capacity in 2030 and the remaining natural gas generating capacity by 2035.

From: Institute for Energy Research

By: Thomas Whackman

Date: April 2023

Energy Security is National Security

Introduction

Energy security is national security. One cannot exist without the other, and a lack of either can have serious ramifications. For evidence of this, look no further than Europe, where Germany is reeling from the twin blows of ill-conceived domestic energy policies and wholesale energy dependence on its chief geopolitical adversary: Russia.

The German case is but one example of the many pitfalls a nation faces when it fails to secure its energy supply. American policymakers would do well to take this cautionary tale to heart – and soon – as the Biden administration’s plans to force a complete energy transition away from fossil fuels may lead America down the long and painful road of energy dependency.

Due in large part to government intervention, the United States is becoming progressively more reliant on electric vehicles (EVs) and nonnuclear renewable energy sources for its transportation and energy needs. These technologies rely on a large input of rare earth metals and other mined elements, particularly lithium and cobalt, the supply of which is dominated almost entirely by the People’s Republic of China (PRC). These same minerals are also key inputs in the production of many advanced weapons systems, like fighter jets and ballistic missile defenses, that are critical for a robust national defense.

This, along with the current administration’s ongoing war against domestic hydrocarbon production, puts America’s energy security, and its national security, in real jeopardy. It is therefore incumbent to unpack just what energy security means, its relationship to national security, what that means for the United States, and the consequences that can occur when leaders attempt to ignore the fundamental physical realities that create the context in which statecraft resides. (continue reading)

Energy Security is National Security

Electricity demand fluctuates continuously, over a range of 2.5-3 to one. Electric utility operators control the output of numerous generation resources over their acceptable range of operation to match the contemporaneous demand of the grid. Current grid generation resources include nuclear, natural gas, coal, hydroelectric, geothermal, biomass, wind and solar. With the exception of wind and solar, these generation resources are dispatchable, meaning that they can be brought into service, as required, to meet grid demand. Wind and solar availability are controlled by time of day and weather conditions. Regulation typically requires that their output be used whenever available in preference to other resources and that the output of other generating resources be adjusted to accommodate their output.

Electric utilities will continue to require the ability to dispatch generating resources as required to match grid demand as the electricity generating fleet transitions from primarily fossil fueled generation to predominantly intermittent renewable generation. Nuclear generation is typically base loaded, while hydro, geothermal and biomass generation can be modulated to follow load. However, these generation sources would represent less than 10% of the generation required to meet peak demand in the “All-Electric Everything” future beyond 2050. Therefore, wind and solar generation must be rendered dispatchable to maintain grid reliability and stability.

Current US wind generation has capacity factors ranging from approximately 24-46%, with the lower capacity factors in July, August and September. Therefore, 1 GW of dispatchable wind capacity would require up to 4 GW of wind generator rating plate capacity, plus storage capacity of approximately 3 GW to store electricity for use during the periods of low capacity. Additional storage capacity would be required to compensate for daily generation fluctuations around the monthly average. Additional storage capacity would also be required to provide dispatchable output through days of low/no wind generation availability.

Current US solar generation has capacity factors ranging from approximately 17-33%, with lower capacity factors in November, December, January and February. Therefore, 1 GW of dispatchable solar capacity would require up to 6 GW of solar generator rating plate capacity, plus storage capacity of approximately 5 GW to store electricity for use at night and during periods of low capacity. Additional storage capacity would be required to compensate for daily generation fluctuations around the monthly average. Additional storage capacity would also be required to provide dispatchable output through days of low/no solar availability.

The Administration’s goal would result in a grid in which approximately 90% of the electricity generated would be generated by intermittent renewable generation, supplemented by nuclear, hydro geothermal and biomass generation. The rating plate capacity of the intermittent renewable generators would be 4-6 times the expected average capacity and the intermittent renewable generation capacity would require at least equal rating plate storage capacity and perhaps several times that capacity, depending on the number of consecutive days of low/no generation which might be experienced.

Such a system would require a significant factor of safety in its design, since if storage were discharged during a generation outage, recovery would be a long term process.

The US Energy Information Administration Annual Energy Outlook 2022 does not reflect the Administration’s Net Zero by 2050 goal, as shown in the graph below. It also does not reflect the Administration’s “All-Electric Everything” by 2050 goal.

The Net Zero goal would require that both coal and natural gas be replaced as electricity generation fuels, coal by 2030 and natural gas by 2035. The “All-Electric Everything” goal would require increasing US electricity generation from approximately 5,400 billion kilowatthours to approximately 17,000 billion kilowatthours, to replace the current end uses of coal, oil and natural gas with renewable generated electricity and possibly some nuclear generated electricity.  A rough approximation of the transition over the period 2021-2050 is shown in the graph below.

The electricity generation in 2050 would average approximately 2 billion kilowatthours per hour, but the peak hourly generation requirement would be approximately 5 billion kilowatthours per hour. The EIA AEO 2022 estimates that the renewable generation in 2050 would be approximately 60% solar and 40% wind, which is a significant shift from the 2021 ratio of 70% wind to 30% solar.

Current utility renewable generation capacities vary seasonally, with wind experiencing a capacity factor range of approximately 24 - 43% and solar a capacity factor range of approximately 18 - 33%. Therefore, based on the EIA projection of a 60% solar, 40% wind share of intermittent renewable generation, the average capacity factor of the solar and wind generator fleet would be approximately 28%. Therefore, generation of 17,000 billion kilowatthours annually would require intermittent renewable generating capacity of approximately 7 billion kilowatts. However, peak hour generation of approximately 5 billion kilowatthours per hour would require approximately 18 billion kilowatts of generation, or a combination of generation and long-duration storage. Storage or generation oversizing would be essential since solar experiences its minimum capacity factor during the winter peak period, while wind experiences its minimum capacity factor during the summer peak.

Solar generating capacity of approximately 11 billion kilowatts at 0.3 kilowatts per panel would require installation of approximately 35 billion solar panels over an area of 17 million acres, or 27,000 square miles. This area is slightly larger than the state of West Virginia. Wind generation capacity of approximately 7 billion kilowatts would require installation of approximately 3 million 2.5 MW onshore wind turbines, or some combination of onshore and offshore wind turbines. The administration has a goal of installing 30 GW of offshore wind capacity by 2030, which would represent approximately 0.4% of the projected 2050 wind generation fleet capacity requirement.

The US currently has approximately 136 GW of solar capacity and 140 GW of wind capacity installed, or approximately 1.5% of the generating capacity required to meet peak demand in the “all-electric everything” scenario. The bulk of this existing capacity has been installed over the past 30 years with the assistance of generous federal and state incentives. Installing the remaining approximately 98.5% of the required capacity over the next 28 years appears to be a daunting task.

The Biden Administration has set a goal of achieving Net Zero US annual CO2 emissions by 2050. To accomplish this goal, the Administration has decreed that all coal-fired electric generation would cease by 2030; and, that all natural gas fueled electric generation would cease by 2035. The Administration has also decreed that all new vehicles sold in the US after 2035 would be electric vehicles. There is also an effort underway to end the use of natural gas for applications other than electric generation, including virtually all residential, commercial and industrial end uses. Incentives have been put in place for EVs and electric appliances and equipment, as well as for wind and solar generation and electricity storage.

Achieving the Administration’s goals would result in a US energy economy based solely on electricity, generated by a mixture of renewable generation sources including hydro, biomass, geothermal, wind, solar and possibly some nuclear generation.

However, the US Energy Information Administration, an agency of the US Department of Energy, in its Annual energy Outlook 2022 (AEO  2022) projects a very different US energy future, as shown in the graphs below.

EIA projects that US electricity generation will increase by approximately 32% through 2050, or approximately 1% per year. Natural gas electricity generation would increase to approximately 1,800 billion kilowatthours, or by approximately 20%. Coal generation would decrease to approximately 530 billion kilowatt hours. Renewable generation would increase to approximately 2,400 billion kilowatthours, or nearly 500%.

Virtually all the growth in renewable generation would consist of wind and solar. Wind generation would increase from approximately 344 to approximately 750 billion kilowatthours, though its share of generation would decrease from 43% of renewable generation to approximately 31%. Solar generation would increase from approximately 450 billion kilowatthours to approximately 1,200 billion kilowatthours and its share of renewable generation would increase to approximately 51%. EIA projects virtually no growth for geothermal, hydroelectric and biomass generation.

These EIA projections are fundamentally inconsistent with the Administration’s goals of Net Zero CO2 emissions and an all-electric energy economy by 2050. Coal generation decreases, but not to zero. Natural gas generation increases, rather than decreasing to zero. The projected 1% per year growth in US electricity production is consistent with historical electricity demand growth, driven by increasing population and GDP, but not with a major transition to an all-electric energy economy.

EIA’s projections regarding natural gas show an approximate 20% increase in consumption in the Reference case, and approximately 50% in the High Supply case, as shown in the graphs below.

The EIA projections do not contemplate the effects of the Administration’s push for all-electric everything, which would require expansion of electricity generation from the projected 5,400 billion kilowatthours in 2050 to approximately 17,000 billion kilowatthours. Growth of this magnitude would require not only increases in generation, but also massive increases in and expansion of transmission infrastructure and major upgrades to existing distribution infrastructure to accommodate the increases in individual customer demand and consumption.

From: Climate Etc.

By: Michael J. Kelly

Date: March 4, 2023

Feasibility for achieving a net zero economy for the U.S. by 2050

I imagine that I have been appointed the first CEO of a new agency set up by the Federal Government of the United States of America with the explicit goal of actually delivering a Net Zero CO2 Emissions Economy by 2050. My first task is to scope the project and to estimate the assets required to succeed. This is the result of that exercise, and includes a discussion of some consequences that flow from the scale and timescale for meeting the target.

Executive summary

The cost to 2050 will comfortably exceed $12T (trillion) for electrification projects and $35T for improving the energy efficiency of buildings, a work-force comparable in size to the health sector will be required for 30 years, including a doubling of the present number of electrical engineers, and the bill of specialist materials is of a size that for the USA alone is several times the global annual production of many key minerals. On the manpower front one will have to rely on the domestic workforce, as everywhere else in the world is working towards the same target. If they were not so working, the value of the USA-specific target is moot. The scale of this project suggests that a war footing and a command economy will be essential, as major cuts to other favoured forms of expenditure, such as health, education and defence, will be needed. Without a detailed roadmap, as exemplified by the International Technology Roadmap for Semiconductors that drove the electronics revolution after 1980, the target is simply unattainable. (continue reading)

Feasibility for achieving a net zero economy for the U.S. by 2050

The past two years have provided unpleasant lessons for several electric utilities and their customers. The challenge remains for those utilities and the utility industry to learn from those lessons and take actions to prevent their recurrence. Because of the nature of the electric utility industry, these lessons must also be learned by state and federal utility regulators who largely control the utilities' actions.

California utilities are dealing with aggressive state efforts to transition the state utility grid from fossil and nuclear generation to wind and solar generation with energy storage. However, the state has pushed for rapid shutdown of natural gas and nuclear generators before storage was available to replace the output of those generators during periods when wind and/or solar generator output was reduced. The result has been insufficient conventional capacity to replace the output of wind and solar generators, particularly during periods of peak demand.

Texas utilities experienced a very cold period in early 2022. The cold caused freezing of water in gas lines supplying gas turbine generators, freezing of coal piles at coal generating stations and icing on the blades of a significant portion of the state’s wind generation capacity. The combination of these effects resulted in a significant grid failure which took several days to resolve. The issues with the gas and coal plants are relatively easily resolvable with improved maintenance and insulation, but preventing icing of the wind turbine blades would require a major refitting with blades which could be heated.

The US Southeast experienced extremely cold weather on Christmas Eve, 2022. Duke Power in North Carolina was forced to institute rolling blackouts to keep the grid from failure. The shortage of generating capacity was the result of control failures at two natural gas plants and one coal plant, aggravated by the fact that the coldest period occurred in the very early morning, before sunrise, so no solar generator output was available. Again, the issues at the fossil fuel plants are relatively easily resolvable. However, dealing with the solar issue would require significant storage. Duke’s problem was exacerbated by the failure of neighboring utilities to provide power for which Duke had contracted, since those utilities were also affected by the extreme cold.

TVA also experienced problems during that very cold period with both coal and natural gas generators. TVA experienced demand approximately 35% higher than on a typical winter day, its highest demand ever. This forced rolling blackouts by some of the utilities TVA serves at wholesale. Again, the issues with the fossil fuel plants are relatively easily resolvable with improved maintenance and insulation.

Each of these situations highlights the necessity for high level maintenance of utility infrastructure, particularly during periods of expected peak demand. The California, Texas and North Carolina experiences also highlight the importance of backup generation during periods of low/no wind and solar generation availability. As intermittent renewable generation capacity increases, it will be necessary to develop new contract arrangements to assure that natural gas is available in sufficient quantities for the natural gas generators.