Some of us have been pushing for the past few years to get feed-in tariffs that make capital infrastructure investments moot (as in, basically free for consumers).  The only reason to build out massive, wilderness-killin power plants in this era is to re-entrench that Robber Baron supply and pricing manipulation we are seeing with Big Oil.

And contrary to your "baseload" assertion, the biggest increases in consumption have been in Peaker Power, which is also, BY FAR the most expensive to build and operate.  Why are you so ready to build the enormous costs of power plants, power lines, eminent domain, EIRs and court battles into our energy bills, but not to build in decent incentives and tariff rates for small producers?

Local, point of use PV and wind - oversized wherever possible - with strong incentives and feed-in tariffs will not only empower, free and modestly enrich individuals who do the right thing, but will save millions of acres of wilderness, billions of gallons of groundwater a year, and thousands of homes from eminent domain.

Why don't you promote this as the crucial first step to any new energy infrastructure?  As you say, WE taxpayers and ratepayers have to eat 100% of Big Energy's capital expenditures, so why on earth should we open a(nother) vein to build out their monopolies in an era when we could do most of this ourselves and build a buffer against the Enrons and Chevrons of the world.

In my opinion, those who want to extend Big Energy monopolies in an era where the fuel is ubiquitous (no mining, drilling, etc.) are the ones who should be fired.  They are totally ripping us off.

the greenest energy is that which you needn't ever produce.

This is not to say that all publicly owned utilities are environmentally friendly.  The Tennessee Valley Authority tried to violate the Endangered Species Act by building a dam(n) and was stopped temporarily by the U.S. Supreme Court (T.V.A. v. Hill) until Congress made an exception for the dam(n).  But at least a public utility has other considerations aside from profits, which is all the private ones care about.

"...and are now entering a build-cycle where we must factor much more expensive capital amortization into our power rates. Even if fuel got cheap again, we'd still be facing heavy upward pressure as we built new generation, transmission, and distribution."

and

"On the downside, this slows the rate at which clean energy can come online, since it must compete -- at least in the near term -- with a price that is, essentially, fabricated."

without even mentioning that there is an alternative which would be much faster to scale up, much better for the environment and politically fantastic - assuming a constituency is voters/ratepayers, not lobbyists.  but that's the problem, isn't it?  

These lobbyists have framed the debate, even within this blog, into either "Big Coal" or "Big Renewables" and either way there are massive public/environmental costs all geared towards increased Big Energy monopolies, which are exactly what make it politically unpalatable to raise prices.  

Give people what they want - the price points for personal energy independence - using these same principles of tax breaks, subsidies and amortization of costs across ratepayers and people will go for it much more than saying "you are now going to pay $10 a month more to build someone else's business who will then hijack you and continue raising your rates forever."

As long as we are paying more for "infrastructure," why don't ratepayer-producers get equal consideration as an option in your blog and in our legislation as Big Wind and Big Solar do?  Especially since you seem to agree with me, at least in part?  It would seem the ideal solution to the political, environmental and pricing pressures to give back to the people...  

We don't have a giant lobby and propaganda machine out there and we need more public mention about this as a solution, instead of continuing to frame the issues as massive power plants vs. massive power plants.  this post would have been a perfect place to throw it out there...

the greenest energy is that which you needn't ever produce.

As I understand it, we are on the cusp of needing to build out a lot more capacity, but have not yet started to do so in a significant way.  My understanding is that the price increases associated with the need to add capacity are largely in the future, while the current price increases (e.g. PG&E hiking rates by 6% over the next six months) are driven by the rising cost of fuel (at with with respect to CA, which is so dependent on natural gas).  While I agree that the need to add capacity (whether fossil based, renewable, or grid upgrades to utilize more distributed generation) will drive up costs, I am curious to know whether or not this is currently impacting prices.  Given the fundamentally slow nature of this process, and the political disincentive to respond to cost increases with price increases, I would not expect that these capital-related costs would yet have been integrated into the utility price structure.  Am I wrong?

The public will sacrifice more without this energy revolution, the quicker it gets going, the faster the sacrifices will end.  As lower energy prices and full employment from manufacturing renewable/conservation devices takes hold.

High gas prices, food prices, now soaring electric rates?  Good job bushie.


http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

But in the immediate term, it creates a conundrum for the clean energy community, because:

1. On the one hand, the inherent price of new generation that is now being built (within that old, antiquated model) is higher than many cleaner alternatives, BUT;

2. Those alternatives - unlike the new generation bulit within the status quo - do not get guaranteed equity returns, and must compete against a retail cost of electricity that is artifically low.  

Let's look at a specific example.  Suppose you have a zero carbon technology that is cost-effective at a displaced power cost of 10 cents/kWh.  Now suppose that you currently have a retail electric rate of 8 cents.  That clean technology doesn't make economic sense under those circumstances. (Note that I'm not making any judgment about externalities here - simply pointing out that at the level of the individual considering the investment on purely economic merits, it doesn't pencil.)  But in the meantime, the regulatory paradigm is approving big, central plants that are going to require 12 - 13 cents/kwh  to pay off.  We don't see that in retail rates immediately, in part because of politics, and in part because of the averaging of that new plant in with all the old generation.  

But the net result is that we build the stupid in lieu of the smart... and all in the name of societal protection.  And what's worse, it's a really hard political issue.  Do you stand for higher rates, or for irrational capital allocation?  In today's electric sector, you cannot be opposed to both.  Therein lies the problem.

Meanwhile, the historically cheap sources (hydro, nuke, coal) are either tapped out (hydro), politically problematic, and can't be built fast enough to matter anyway (nuke) or climatically irresponsible (coal).  The latter two are also really expensive if you factor in capital amortization - which you don't have to do when they are already built and willing to run for marginal costs, but do have to do when investors are trying to figure out whether the power plant is a good investment.  A modern coal plant, at current fuel costs is essentially the same as a modern natural gas plant at utility capital amortization rates.  The former has expensive capital and cheap fuel, while the latter has (comparatively) cheap capital and expensive fuel.  But both need something like ~12+ cent/kWh retail rates to deliver crummy, utility-esque returns.

As a result, the whole country is gravitating towards a fundamental power cost that is on a par with that in the historically gas-dominated regions (New England, CA, TX).  For the historic gas regions, this isn't a big change on a percentage basis.  But it is a massive shock in the coal belt, not least because those regions have attracted an industrial base that is contingent on cheap power.  

These fundamentals are absolutely affecting current prices - look at power pricing right now in the PJM region and you find that wholesale rates are 30 - 50% above the retail rates in many areas, for precisely these reasons.  And they are set to rise farther.  They are slower to affect retail than wholesale (for the reasons noted above), but they're all pushing price up.

Clear as mud, I hope?

And while Bush's energy policy leaves much to be desired, the blame in this case really doesn't lie at his feet.  The dry up in new power plant construction is a result of 30-year old chickens coming home to roost, and the regulatory paradigms that have presented us from doing something better - like SGP has suggested - are 100 years old.  So while Bush perhaps deserves blame for not reforming the system on his watch, that blame could be equally applied to any of the last 15 presidents.

We are agreed that rates are gonna essentially skyrocket in the next 10 years for any number of reasons.  Mainly because the externalization of the GHG portion of the environmental harm done by Big Coal will no longer be politically palatable.  If the rapid decline in SUV purchases is any indication, rate hikes can steer people into making better choices about conservation and since something like 80% of Americans believe Global Warming is man-made, they are essentially prepared to pay more to stop global death.  What is a real burn, of course, is when we have to pay more to KEEP CONTRIBUTING to global death, as in Big Oil, which is why the RIGHT kind of renewables need to get out in front here...

We are also agreed that current electricity prices are also artificially low, mostly because of the enormous socialization of costs, but as long as we will have to subsidize another form of power to get grid parity, why on earth would we choose another form of Big Energy?  Why can't those huge production credits, RECs, tax breaks, equity returns (which ARE guaranteed for Big Renewables in CA, btw), amortization of costs, and cheap capital flow to you and me instead of people who want to kill our beautiful open spaces?

I guess my point is/was that I think that most people resent Big Energy right now, that sun and wind are ubiquitous, and we have a RARE opportunity to break out of the old paradigm and get REAL energy independence.  You are such a respected voice, I just would like to see local, point of use systems clearly indicated as a VIABLE, POLITICALLY PALATABLE solution to what is constantly framed as Big Energy v. Big Energy.

As long as price hikes are inevitable, who in America (besides T. Boone Pickens) would not want the lion's share of our socialized costs going towards themselves and their neighbors who do the right thing, install systems at their homes and businesses and exercise conservation, especially when it will spare millions of acres of our wilderness?

thanks!

the greenest energy is that which you needn't ever produce.

Pickens' speaks well for wind, even if one dissagrees with his natural gas/motor fuel plan.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

Note also that coal never becomes backup.  A coal plant is so thermally-intensive that it does not like to startup and shutdown with any kind of frequency.  (Coal plants have what are known as "must run" hours during the year, when the operate in spite of the fact that they are losing money during every one of those hours, getting less for power than they spend on fuel.  But they'd lose more if they shut down and missed a window to earn money later, so they stay on line.)  As a result, one shouldn't assert that coal will become backup.  It will either run, or it won't - but it's never going to become peak load.

And given the intermittency of solar and wind, you've got to have something out there - coal, nuke, gas, biomass, CHP, etc. - that can run 24/7 and fill in the troughs.

I don't necessarily agree that solar/wind intermittency means that combustion-based generation must provide all of the baseload.  There seem to be substantially promising options for addressing that issue using HVDC infrastructure (though I agree that it's unlikely that that, plus storage, will be sufficient for the entire baseload).  But it's really going to be hard to say until we have more practical experience.  Though the "virtual distributed power plant" project in Germany seems promising along those lines.  What's your opinion of that.

Lastly, you say:
As a result, one shouldn't assert that coal will become backup.  It will either run, or it won't - but it's never going to become peak load.

That is certainly true for traditional coal plants.  It seems like it would be true for any system that relies on steam and large boilers, rather than turbines, for it's primary generation.  (Is that correct?)  However, what about coal gasification plants?  My understanding is that these system produce a gas from pyrolysis that is then burned for power.  Could this gas not be used in a turbine, giving coal gasification plants the same flexibility as that possessed by natural gas plants?

The problems we face have been caused, in no small part by the socialization of our electric system, and guaranteed equity returns.  The last thing we want is more of that.  There's a wonderfully insightful old saying about monopolies that the greatest monopoly "rent" (that is, the additional $ earned by the monopolist solely by virtue of his/her monopoly) is a good night's sleep.  In other words, as socially detrimental as it is for people to pay more than they ought to for goods & services from monopoly businesses, the bigger social loss is that the monopolist is under no pressure to innovate and otherwise constantly strive to deliver a better, more competitive product.  Ma Bell was never going to invent the cell phone.

And whatever the benefits of socialized energy, their great cost is that they make energy executives sleepy - regardless of technology.  Socialized renewables will squash innovation in the renewable sector just as surely as they have squashed innovation - and a love of the status quo - in the "big electric" sector.  We need more competition, not less.  More incentive for those who do great things, and more pain to those who do the wrong thing.  (In no other industry I am aware of do you see 50 year old, uncompetitive assets still running - a rational, competitive market would shut those down as they are steadily and inexorably replaced by lower-cost generators.  But in a socialized industry like the one we have, they keep on running, keep on polluting and keep on standing in the way of our economic and environmental progress.)

Re: your coal question, I think you still end up being baseloaded.  A gas turbine can turn on and off quickly, but a gasifier can't - and it's problematic to store all that gas for very long.  Moreover - and notwithstanding the current GT fleet - gas turbines really like to run on/off.  As compared to reciprocating engines that can follow load.  So if you're going to put up the massive amounts of capital for a coal gasificiation + GT plant, you'll only do so under the expectation that it runs at a pretty high annual capacity factor.

And other than being massively expensive and hugely inefficient, there's no technical barrier.  But as the two examples above show, the only practical experience where coal-to-liquids made sense was in those countries that were under international trade embargoes.

Although now that I think about it, there has to be a better way.  How do the existing natural gas plants regulate their gas flow?  Do they store the fuel on-site, or do they pipe it in from the gas distribution system?  It seems like you ought to be able to gasify some kind of feedstock (whether biomass or coal) in a separate plant and feed the resulting gas into the distribution system, then tap it as required at the power plant.  Using the distribution system as a buffer should allow you to decouple the turbine use (which ramps quickly) from the gas production process (which ramps slowly).

Where we differ, perhaps is about how and when to stop the socialization and start the "free market."  Big Coal has enjoyed 100+ years of government and ratepayer subsidies, not to mention being allowed to destroy wilderness, kill people, and cause global warming and massive particulate pollution, water poisoning/waste, etc.  Big Nukes, ditto.

Big Renewables currently enjoy nearly the same levels of ratepayer and government subsidies (sans some of the bigger pollution elements, but including killing publicly owned wilderness for profit).  

So why on earth should we, the small fry, who have enjoyed virtually NO subsidies or tax breaks, who must purchase, maintain and pay taxes on our properties at great personal expense (no cheapo BLM land for us!), who must come up with ALL the investment capital (at high interest rates), who get NO buyback or equity guarantees, and who are providing the cleanest, most conservation-promoting, smallest footprint and least wasteful energy product be the ONLY players to have to operate as though it's a "free market."

that is an absolute guarantee of failure for small, local producers, and is inherently anti-competitive and unfair.  the fact that our government is enabling these monopolies is repulsive, and we need champions out there getting the word out that it needs to change.  but that change can't only apply to the smallest underdogs.

so, in my opinion, what is needed for rooftop and micro-wind to compete on equal ground is for all Big Energy subsidies to be phased out quickly (Big Renewables have tons of VC now), and for the kinds of subsidies, incentives, guarantees, loan programs, etc. that Big Energy have been enjoying (preferably in the form of loans and high feed-in tariffs, which are performance-based, after all) be applied to US, until a point of heavy market penetration, at which point, subsidies disappear and may the best tech win.  

this was the point of the (mostly failed for cheapness) CSI and the wildly successful programs in Germany and Spain.  give the super-clean, ratepayer friendly tech, which has been badmouthed to death (even by environmentalists with an agenda), a fair shot.  Factor in steep costs of polluting, GHGs, water waste, ecosystem losses, transmission waste/losses to Big Energy pricing, and local, point of use will come out on top for pricing, independence and environmental health nearly every time, now and as it improves...

the greenest energy is that which you needn't ever produce.

The Danish, the Spanish, the Germans, the Japanese...they all have better renewable sectors than we do.  And that socialist bastion, San Francisco, has contracted with a private electricity service provider to put 100 MW of PV on the roofs of buildings.

Local control could mean that rational electric systems can be planned, in a participatory way, by the people of the locality.  And you don't have to worry about profit margins and executive benefits.

Even though the status quo design is set on GHG intensive base load power from coal.  According to this paradigm, no other baseload power other than nuclear, with prohibitive cost and safety issues, is available.

And coal is killing our human friendly climate.

This would seem to be an unsolvable dilemna.  How to think outside this box?

Dump the grid we have and the whole notion behind it of 100% dispatchability?  

Would we end up with a grid that shuts on and off with no warning, running a few hours per day as in many developing regions?  Necessitating battery storage or backup generation in each home or building in order to have power when we need it?

If every load had to be met with battery storage or backup generation, why even connect to the grid?  Just put up solar panels, a wind machine, and operate a generator on biogas from waste.

This would create excess capacity in many homes and buildings.  And a reason to connect to the grid.  To sell your excess power.  

Once connected why not use some grid power to reduce your need for battery storage?

This change needs to start from the individual home/building then move on to neighborhoods, local areas, and on to regions and so forth.  The central power system we now have won't cede ot's control, dependent on the base load power design willingly.

They will have to be dragged kicking and screaming all the way, into the future.  Once they stop fighting change, they will reorganize to try and monopolize this new distributed renewable grid.  So it goes.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

So the big challenge is to redesign the grid we have, into a 100% renewable net zero GHG grid.

I'm not sure I'd put it this way, anymore than I'd say that the challenge of our education system is to turn every student into Einstein.  We absolutely need to lower the GHG emissions as quickly as possible, but we also need to be economically responsible about it.  Deploying a technology just because it has zero carbon without any concern for economics runs the risk of raising energy costs so rapidly that industries shut down and we create mass unemployment.  

Please don't take this as an argument for inaction - simply one for being economically responsible about next steps.  Just as our education program has to balance educational resources against costs and other social priorities, so too must our energy policy.

As this relates to baseload, I don't think this necessarily argues for coal or nuclear.  Yes, these are our current baseload sources, but neither of them are particularly economic as new sources.  

But a good baseload source ultimately needs to have (a) low variable operating costs and (b) a consistent supply of fuel.  Intermittent renewables pass the first test, but not the second without a lot of built-in storage.  But there are plenty of other clean sources: landfill gas, digester gas, industrial waste heat recovery, biomass, traditional cogen.  Some of these are zero carbon, and some are low carbon - but all are an advance on the current model, getting us in the right direction.  

The big challenge though is simply one of scale.  Coal's got a lot of flaws, but one of it's virtues is that we've got a lot of coal and have a lot of big plants.  This is why we get 50% of our power from coal, and it sets a tall bar for any baseload displacement.  Landfill gas is wonderful, but tapping 100% of the LFG opportunities would not replace any significant fraction of the coal fleet.  CHP/waste heat opportunities are bigger, but are still not a silver bullet.  But if we add all those together and throw in a dash of conservation, we've got enough silver BBs to get there in a way that is both environmentally and economically responsible.

I guess we just disagree on which technologies can get us there over the next 20 years.  And how to kick start the right ones and discourage the GHG intensive ones.

Can we agree on how to re-regulate utilities to allow access for renewable/conservation technology with a reasonable payment to utilities to maintain the transmission system?  Say a few cents per kwh?

Maybe they should just be taken out of the power generation business altogether and become contract electricians?   The trouble is that monopoly players would gobble up all the generation assets.  


http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

My frustration is with fake GHG saving stuff, like ethanol and biodiesel fuel farming, clean coal, and nuclear.  They soak up all the subsidy cash.

While the best, ground source heat pumps systems, solar PV/heat cogeneration, smart grid distributed storage, plugin hybrids, and distributed biogas generation and organic fertilizer go begging.

Regulation that verifies GHG savings would be helpfull.  Of course that will be problematic, but NREL seems to be doing a good job at defining the characteristics and GHG cutting performance of new technology.

Real aggressive action to identify the best products and let the public know about it, that would be government leadership similar to the WW 2 war production effort.  Is that picking technology?  I don't know.  If it's based on scientific testing, like NREL does, I think it's ok.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin