By Steve Goreham
Originally published in Communities Digital News.
Americans take electricity for granted. Electricity powers our lights, our computers, our offices, and our industries. But misguided environmental policies are eroding the reliability of our power system.
Last winter, bitterly cold weather placed massive stress on the US electrical system―and the system almost broke. On January 7 in the midst of the polar vortex, PJM Interconnection, the Regional Transmission Organization serving the heart of America from New Jersey to Illinois, experienced a new all-time peak winter load of almost 142,000 megawatts.
Eight of the top ten of PJM’s all-time winter peaks occurred in January 2014. Heroic efforts by grid operators saved large parts of the nation’s heartland from blackouts during record-cold temperature days. Nicholas Akins, CEO of American Electric Power, stated in Congressional testimony, “This country did not just dodge a bullet―we dodged a cannon ball.”
Environmental policies established by Congress and the Environmental Protection Agency (EPA) are moving us toward electrical grid failure. The capacity reserve margin for hot or cold weather events is shrinking in many regions. According to Philip Moeller, Commissioner of the Federal Energy Regulatory Commission, “…the experience of this past winter indicates that the power grid is now already at the limit.”
EPA policies, such as the Mercury and Air Toxics rule and the Section 316 Cooling Water Rule, are forcing the closure of many coal-fired plants, which provided 39 percent of US electricity last year. American Electric Power, a provider of about ten percent of the electricity to eastern states, will close almost one-quarter of the firm’s coal-fired generating plants in the next fourteen months. Eighty-nine percent of the power scheduled for closure was needed to meet electricity demand in January. Not all of this capacity has replacement plans.
In addition to shrinking reserve margin, electricity prices are becoming less stable. Natural gas-fired plants are replacing many of the closing coal-fired facilities. Gas powered 27 percent of US electricity in 2013, up from 18 percent a decade earlier. When natural gas is plentiful, its price is competitive with that of coal fuel.
But natural gas is not stored on plant sites like coal. When electrical and heating demand spiked in January, gas was in short supply. Gas prices soared by a factor of twenty, from $5 per million BTU to over $100 per million BTU. Consumers were subsequently shocked by utility bills several times higher than in previous winters.
On top of existing regulations, the EPA is pushing for carbon dioxide emissions standards for power plants, as part of the “fight” against human-caused climate change. If enacted, these new regulations will force coal-fired plants to either close or add expensive carbon capture and storage technology. This EPA crusade against global warming continues even though last winter was the coldest US winter since 1911-1912.
Nuclear generating facilities are also under attack. Many of the 100 nuclear power plants that provided 20 percent of US electricity for decades can no longer be operated profitably. Exelon’s six nuclear power plants in Illinois have operated at a loss for the last six years and are now candidates for closure.
What industry pays customers to take its product? The answer is the US wind industry. Wind-generated electricity is typically bid in electrical wholesale markets at negative prices. But how can wind systems operate at negative prices?
The answer is that the vast majority of US wind systems receive a federal production tax credit (PTC) of up to 2.2 cents per kilowatt-hour for produced electricity. Some states add an addition credit, such as Iowa, which provides a corporate tax credit of 1.5 cents per kw-hr. So wind operators can supply electricity at a pre-tax price of a negative 3 or 4 cents per kw-hr and still make an after-tax profit from subsidies, courtesy of the taxpayer.
As wind-generated electricity has grown, the frequency of negative electricity pricing has grown. When demand is low, such as in the morning, wholesale electricity prices sometimes move negative. In the past, negative market prices have provided a signal to generating systems to reduce output.
But wind systems ignore the signal and continue to generate electricity to earn the PTC, distorting wholesale electricity markets. Negative pricing by wind operators and low natural gas prices have pushed nuclear plants into operating losses. Yet, Congress is currently considering whether to again extend the destructive PTC subsidy.
Capacity shortages are beginning to appear. A reserve margin deficit of two gigawatts is projected for the summer of 2016 for the Midcontinent Independent System Operator (MISO), serving the Northern Plains states. Reserve shortages are also projected for the Electric Reliability Council of Texas (ERCOT) by as early as this summer.
The United States has the finest electricity system in the world, with prices one-half those of Europe. But this system is under attack from foolish energy policies. Coal-fired power plants are closing, unable to meet EPA environmental guidelines. Nuclear plants are aging and beset by mounting losses, driven by negative pricing from subsidized wind systems. Without a return to sensible energy policies, prepare for higher prices and electrical grid failures.
Steve Goreham is Executive Director of the Climate Science Coalition of America and author of the book The Mad, Mad, Mad World of Climatism: Mankind and Climate Change Mania.
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With the planned closing of the coal fired power plants, if next winter is like this year it will be UGLY, VERY UGLY.
Every dollar spent on wind and solar brings blackouts closer.
Bit of a kerfuffle in Scotland.
https://www.wind-watch.org/news/2014/04/19/msp-wants-blackout-inquiry/
First read about over at the Bishop’s place.
http://bishophill.squarespace.com/blog/2014/4/17/wind-speculation.html
Everything is backed up by gas/coal/ nuke’s, run by engineers not wishes.
Thankfully.
Dear Leader once said, “Under my plan, electricity rates will necessarily skyrocket.” So, no, he does not lie all the time unlike some would have it.
If the current Global Warming cooling trend continue, which it can’t as the IPCC states, then we are really in deep dodo.
At least he did not say “If you like your electricity you can keep it “…..
Its a good thing that the IPCC AR5 says the current Global Warming cooling trend cant continue or we would be in big doo-doo.
‘Reserve shortages are also projected for the Electric Reliability Council of Texas (ERCOT) by as early as this summer.’
Aw, what the heck, we can solve that problem by resorting to a scandal investigation of some of the ERCOT council members. It’s not like that hasn’t been tried before with the national reliability council here in the US.
Robert Bissett
April 23, 2014 at 4:37 pm
says:
‘Dear Leader once said, “Under my plan, electricity rates will necessarily skyrocket.” So, no, he does not lie all the time unlike some would have it.’
Um, hate to say it but the rates can’t skyrocket if there’s nothing there to pay for.
Investment advice:
Home Generator Futures
20 April: Irish Independent: Nick Webb/Roisin Burke: Windfarm owners were paid €10m not to produce energy
Energy suppliers paid up to €10m last year to wind-farm operators to power down, freedom of information documents supplied to the Sunday Independent reveal…
The cost of broken or shut-off wind turbines was up to €10m in 2013 and could be passed on to Irish consumers in their electricity bills, communications between EirGrid and the Department of Energy suggest. “The suppliers can, of course, pass this cost on to their consumers,” an EirGrid executive said in an email on the subject to a senior civil servant at the Department of Energy…
However, that cost looks set to soar as the power-down rate of 3 per cent for 2013 is estimated to rise to 10 per cent in 2014, according to EirGrid, suggesting a cost to conventional energy companies of over €30m and a knock-on cost to consumer energy bills. An EirGrid graph on wind curtailments shows them rising 50 per cent further by 2016, which would cost utility companies €40m.
Irish wind-farm operators receive payouts from other electricity providers in respect of “constraints” or “curtailments” where a transmission or distribution line is down for maintenance or where there is a local fault, or when there is high wind at a time of low-energy demand (for example, in the middle of the night) and turbines are shut down due to over-capacity. The same policy is applied internationally.
European energy regulators decided last year that wind farms would receive compensation from the energy market for these shutdowns and it is part of government policy as a way to stimulate the wind energy market.
http://www.independent.ie/business/irish/windfarm-owners-were-paid-10m-not-to-produce-energy-30200656.html
I work for AEP but speak only for myself. AEPs CEO provided testimony to the US Senate earlier this month available here:
http://www.energy.senate.gov/public/index.cfm/files/serve?File_id=366e6685-92f5-4878-a90f-253efa4495e8
He does a good job of pointing out the problems facing the industry. It is not just environmental issues but also poorly designed market structure. The written testimony is 21 pages but it is well worth reading.
23 April: KRIS-TV Texas: Andrew Ellison: Bayfront Wind Turbines Will Likely Never Power a Thing
CORPUS CHRISTI – Many of you at home are probably familiar with those four wind turbines right across from the American Bank Center.
You’ll probably also remember a report we did back in November 2012, revealing that those turbines don’t power a single thing.
Now, a year and a half later, the city still has no plan to actually use them, and it turns out, it may never use them.
City Engineering says it hasn’t even looked into the cost of connecting them to the system, because the turbines wouldn’t produce enough power to make a difference anyway.
The four of them cost taxpayers nearly half a million dollars to build, and it looks like all they’ll ever be is something to look at.
The turbines were part of a bayfront improvement project approved by voters in the 2004 bond election…
http://www.kristv.com/news/bayfront-wind-turbines-will-likely-never-power-a-thing/
And special forces of an adversary could shoot up a dozen transformers and bring down the grid.
23 April: UK Telegraph: James Kirkup: No more onshore wind farms if Conservatives win 2015 election
A new Conservative government would grant local residents powers to block all new onshore wind farms within six months of taking office, party pledges
No subsidies will paid to operators of new onshore wind turbines if the Conservatives win a Commons majority next May, they will promise.
The commitment to stop the erection of new onshore turbines – revealed in The Telegraph earlier this month – is the latest hardening of Conservative rhetoric on green energy.
Subsidies for existing onshore wind would remain in place and wind farms currently under construction or given legal consent would still be completed, almost doubling the onshore wind sector’s capacity by 2020.
But no more onshore turbines would be put in place beyond that, Michael Fallon, the energy minister, will say…
(Energy Minister Michael Fallon) “We remain committed to cutting our carbon emissions. And renewable energy, including onshore wind, has a key role in our future energy supply. But we now have enough bill payer-funded onshore wind in the pipeline to meet our renewable energy commitments and there’s no requirement for any more…
http://www.telegraph.co.uk/earth/energy/windpower/10783823/No-more-onshore-wind-farms-if-Conservatives-win-2015-election.html
So I guess this means that they are not going to move any appreciable amount of cars to electric. It would require a massive increase in the grid to do it.
If the grid fails, I’m betting one political party will use the ensuing tragedy (failure of capitalism) to push for a government takeover of our power providers.
So very happy not to have been in Ontario this winter. In January every province except BC was on rotating or non-rotating blackouts. Now that Ontario has closed all their coal plants, which they need only in the summer, it will be interesting to see if there are blackouts in the summer. If so, I should be able to protest being made to live in Ontario for 153 days. I can’t live there if there is no electricity. BTW, electricity is cheaper in the Bahamas than in Ontario.
Buy a diesel whole house or business generator.
It’s what they do in the third world.
from UK Tele article posted earlier: “and wind farms currently under construction or given legal consent would still be completed, almost doubling the onshore wind sector’s capacity by 2020”
here are the numbers:
(paywalled) 23 April: UK Times: Ben Webster/Michael Savage: Plan for 3,000 turbines ‘won’t be blown off course’
The number of onshore wind turbines will almost double over the next five years despite attempts by leading Conservatives to impose a moratorium on new projects, according to the energy secretary.
Ed Davey, a Liberal Democrat, said the Conservatives would not succeed in blocking his department’s plan to increase the total capacity from onshore wind farms from 7 gigawatts to 13GW by 2020.
This would mean an additional 3,000 turbines, bringing the total in the countryside to 7,000…
http://www.thetimes.co.uk/tto/news/politics/article4070152.ece
Cross patch–the people who drive electric cars do not understand that they operate on mostly fossil-fueled electric generation. They do not understand how the electric grid works or how it is fed by generation on demand. This is exactly why the electric grid is in crisis. They don’t understand, and they don’t care.
23 April: UK Daily Mail: Tamara Cohen/Ben Spencer/Matt Chorley: Energy bills will have to rise to pay for new offshore wind farms, Lib Dem minister Ed Davey admits
Energy Secretary unveils deal for eight new renewables schemes
Government to guarantee price paid for power, pushing up bills
Mr Davey insists charges would be higher without going green
A Tory MP criticised the Liberal Democrat Energy Secretary yesterday after he announced new green energy projects that will lead to higher bills.
Ed Davey said the five new offshore wind farms and three wood-burning plants would supply 2million homes, create 8,500 jobs and attract £12billion of private investment.
But he was accused of exploiting the crisis in Ukraine, which he said highlighted the need to develop home-grown power, as a ‘cover’ for expensive projects…
Investors get a guaranteed price for the electricity they produce – around double the wholesale cost – some of which is added on to consumer electricity bills…
In an embarrassment for the Energy Secretary, the Drax power station in North Yorkshire, where one of the new projects is based, has announced plans to sue his department.
Only one of the two plants that it anticipated would be converted from coal to wood-chip was announced, and the firm’s shares fell by 13 per cent.
A spokesman said it would make a legal challenge.
http://www.dailymail.co.uk/news/article-2611215/Energy-bills-rise-pay-new-offshore-wind-farms-Lib-Dem-minister-Ed-Davey-admits.html
RS wrote;
“Buy a diesel whole house or business generator.
It’s what they do in the third world.”
Most whole house units (up to about 20 kW) are NG or LP powered. Diesel units are typically larger (20 kW and up).
I just installed a 14 kW LP unit last summer. Not the third world here (upstate NY), Yet.
We live in a rural area on a dead end street with only 20 houses. When a big wind or ice storm hits we are lowest priority for repair. These outages last 8-48 hours typically and occur every few years.
The whole house unit is very nice, it has already done a stand in role for the utility for about 6 hours in just 9 months since the install. No worries about thawing food in refrigerators, sump pumps, reading with flashlights, etc. Highly recommended if you are in a rural area. A local outfit here will do a complete install for $9,000. Or you can get the parts for about $4,000-$5,000.
Cheers, Kevin
There are two factors at work here:
1. Environmental policies established by Congress and the Environmental Protection Agency (EPA) are moving us toward electrical grid failure.
2. Miscellaneous factors below the nose threshold.