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.
The solution is quite simple, actually. Every now-CONTROLLABLE electric meter is set to RATION each account to what the system can support. Jacking up the rates to put the poor in the dark while the rich go on using up 20MwH/month at $20/MwH will trigger civil war as they watch their kids freeze to death. So, rationing is the only way the public would stand for it. Every meter gets 200KwH/month with a peak load of 50Kw. Jack up the load and the meter trips out on the peak load. Use too much power on your 24 room mansion, you sit in the dark or run your generator.
Of course, as soon as this were proposed, electric corporations faced with rationing’s crashing revenues would miraculously “find” their calculations were wrong and they were reading the meters at the plant wrong and there’d be a huge surplus to feed any amount you want to pay for, without a political disaster rate increase where the PAYERS remind the corps who actually PAID for that nuke plant they’ve been bleeding all the money from for the last 40 years…..the taxpayers.
America could use a good dose of gasoline, gas, electric, and water rationing that might make them think twice about that new Ford F-250 with the 10-cylinder redneck penis extension purchase for something a little more “Earth Friendly”….smaller home, smaller car, smaller load, smaller guzzlers.
@KevinK.
Six hours of power for $9,000. Well, things will get worse. So, that rate will go down, I suppose.
The sad reality is extensive blackouts will ultimately ensure reliable electricity supply and little or none of that will be green renewables.
Everybody go buy a 20KW charger electric car to “save the planet from CO2”. Then, we can ALL sit in the dark!
Perhaps this is what it will take to wake up the American public to the damage EPA does. Make them freeze for one winter, and I guarantee you even the lefties will support a bill to put our energy needs first and supposed eco-crises second.
Robert Bissett says:
April 23, 2014 at 4:37 pm
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.
_______________________
Workers of the world unite.
I am glad my local electricity comes from a natural gas power plant. If that is overloaded, a nearby nuclear plant can be tapped into to.
I am also glad that my home is heated by natural gas and not by a heat pump. If the electricity goes out, I still keep warm.
I also glad that despite the many anti-fracking ads on TV in my state that clearly show desperation, people are not buying the lies of environmentalists. Even a liberal local news station said those desperation anti-fracking ads were untrue, while continuing to take money to air them.
Steve: excellent, dead-on analysis
Sadly – this will be a passing phase as summer kicks in and other events take center stage. The MSM don’t care and don’t want to know when anything about Obama politics are involved. They even go so far as to downplay issues and problems with the Obama administration. Moreover, there is no interest from the general public, consequently allowing the US energy policy to approach critical failure. Someone has to say it – the US, media, politicians and its own people are at fault here. Everyone was warned a long time ago. And warned once again by utility companies themselves. The greens have won and the price is total failure of the US grid.
Eve says: “In January every province except BC was on rotating or non-rotating blackouts.”
Don’t recall noticing any such blackouts in Manitoba. Think i would have heard about it in Saskatchewan and for sure there would have been a row if they’d occurred in Alberta. Seems unlikely that there were blackouts in Manitoba since that province is wallowing in hydroelectricity from the great socialist make-work projects on the Nelson River. They were supposed to make Manitoba rich from electricity exports but there is only a limited US market that can be accessed from there and those markets seem to be well supplied currently.
Mr. Goreham is confusing two issues, gas and wind. He cannot have it both ways. First, he says natural gas prices were sharply increased due to cold weather and short supply, which drove up electric prices. Customers were shocked, he writes. Then, he says that wind energy drives prices negative – were customers delighted at that? Were their electric bills negative, too? Mr. Goreham grossly distorts the wind energy economics. If the prices go negative by more than the subsidy amount, wind energy receives zero revenue, too. Until grid-scale energy storage is affordable, wind energy does exactly what it is designed to do: it provides power when the wind blows.
Mr. Goreham also glosses over the fundamental problem with nuclear power plants: their design forces them to compete against themselves by refusing to reduce operating rates at night. Nuclear plants operators expect EVERYONE ELSE to cut their load, take the operating losses, produce fewer kWh, so that they can keep right on humming at full rate. Now that wind energy plants are doing the same, running at night when the wind blows, they (nuclear advocates) are calling foul. Nope, no foul, it’s called competition.
As I wrote: ” [here is] truth number one: nuclear power cannot compete. It is not the most economic choice for power generation. In fact, it is a losing proposition. Nuclear power plants almost always run at 100 percent or close to that, meaning they do not reduce output at night when demand for power is lowest. Their cash operating costs, for items such as labor, fuel, and consumables like water and chemicals, are higher than the price the utility will pay them. The fact that they do not reduce output at night forces them to compete with themselves, putting an unwanted and un-needed product into the market, driving down the prices”
see http://sowellslawblog.blogspot.com/2014/03/the-truth-about-nuclear-power-part-one.html
Roger E. Sowell, Esq.
SO GLAD to see the state of the North American grid as a topic of discussion here! I have been advocating a re-tooling of the grid to introduce continent-wide underground HVDC interconnects, and a concentrated effort to develop and deploy the Liquid Fluoride Thorium Reactor — specifically the two fluid design with active reprocessing and a small volume of waste free of long-term actinides, requiring safe storage for a mere ~300 years. These two Big Projects represent survival, and true base load unlimited source of energy to end the era of steam and (ultimately) fossil fuel.
My own letters are tailored to individuals and organizations, here are two of them, I’d be happy to hear comment and criticism.
http://www.scribd.com/doc/181187119/20130519-letterR-pdf
To The Honorable James M. Inhofe (R-OK), United States Senate, on energy
http://www.scribd.com/doc/181188043/20130407-halliburton-thoriumR-pdf
To whom it may concern, Halliburton Corporate
Mentioned in the letters,
Thorium Remix 2011, the two hours that gave me hope: http://www.youtube.com/watch?v=lG1YjDdI_c8
Roger W. Faulkner [2005]: Electric Pipelines for North American Power Grid Efficiency Security:
http://www.scribd.com/doc/181578758/Electric-Pipelines-for-North-American-Power-Grid-Efficiency-Security … the case for high voltage DC.
Finally … this short film offers an apocalyptic vision of what might happen to the grid if negative pricing practices and parasitic no-win infrastructure is permitted to thrive: https://www.youtube.com/watch?v=vqg16z8ehp0
Mike G wrote;
“Six hours of power for $9,000. Well, things will get worse. So, that rate will go down, I suppose.”
That is only how much it has been used in the first 9 months. Given that it should last 10-20 years, and I no longer have to stay up all night during a wind/ice storm to worry about overflowing sump pumps, etc. I thought it wise.
We had an ice storm here about 20 years ago and some folks has NO electricity for 2 weeks until everything was restored. Life without electrons sucks, I have done it for a few days or so, you are really really happy when the electrons reappear, trust me.
It was a bit of a splurge, but I can sleep good knowing that my finished basement (carpeting, drywall, furniture, appliances, etc, worth about $50,000) is not at significant risk.
Whole house backup generators are not for everybody, but at about 5% (or less) of the cost of a home they make a lot of sense for some parts of the country. They are becoming a popular “upgrade” for newly built homes around here, a little planning while building the home and $5k additional in parts and you have very reliable electricity.
I do not sell backup generators, or work for the folks that do, but they have become a surprisingly low cost insurance policy. Several decades ago somebody that had one would likely be considered a “kook”, but with houses worth hundreds of thousands nowadays 10 grand does not seem outrageous.
And you can even get an “APP” for your smart phone to let you know the generator came on in your house while you are away (like in sunny south Florida, in January).
Cheers, Kevin.
If the system looks like overloading, black out Washington, they set the rules, let them take the pain.
@Tom J – I cannot tell if your comment is serious or tongue in cheek, but it is serious none the less. Home generators are a big business in this area. And people are going for the automatically connected whole home. Expensive? Very, even for operation. But people no longer have a confidence of “uninterrupted power”.
And I am one of them. The less I need it the better, but it is peace of mind.
Since I work in the natural gas biz, everytime I read a story like this, all I hear is “Ka-Ching! Ka-Ching!!!”
The simple fact is that nothing can take up the slack in the near term (say, the next 10 years) except nat gas. Not coal (political) not nuclear (too long a lead time) and not “renewables”. (pathetic)
To paraphrase Bob Dylan, you don’t have to be a weatherman to know that demand is going to soar.
I suspect too many people in positions of power learned everything they know about power grids and planning by playing sim city 2000. In that game all power stations blow up after exactly 50 years and cause pollution (which makes your sims riot) and various nasty disasters (fires nuclear meltdowns etc) except for wind turbines and hydro power stations. Wind turbines never cause problems, generate huge amounts of power, and never need replacing. Similarly hydro power is also problem free and extremely efficient, and can be obtained by simply putting a pond on a hillside tile and building a dam on it. Some clever games programmer with green leanings brainwashed a generation into thinking that wind power was the best.
A few dozen well-placed bullets could take the whole grid down, sorry to say…..
http://online.wsj.com/news/articles/SB10001424052702304851104579359141941621778
I would advise putting up a substantial supply of firewood early this spring, to take full advantage of whatever summer heat is available for drying the split wood. And, if you haven’t already, convert that fireplace to a wood stove insert with a heat exchanger jacket and blower fan. The shortages of propane experienced from the east coast to the mid west USA left many rural residences paying much higher propane fuel prices…. or having their delivered fuel limited to insufficient amounts for their needs.
Of course, the EPA can then decide to issue regulations for wood stoves, making the maximum allowed particulate emissions from the stove flue unachievable…….
I guess Ill be an outlaw then…. a warm outlaw.
Alexwade said
I am also glad that my home is heated by natural gas and not by a heat pump. If the electricity goes out, I still keep warm.
Does your heating system not have electronic controls?
Stephen Rasey: ClimateEtc Feb. 17, 2014
Natural Gas is not inexhaustible, nor even temporarily infinite. The national cold snap strained supplies with March deliveries above $5.56 / MCF. I had hopes that a close call on a natural gas shortage would knock some sense into those who what to shut down coal fired power plants.
Next year, with 60 GW of coal plants shut down, there is a greater danger that spare natural gas deliverability will not be available to avoid brown-out and rolling black-outs — Or what I’ll call BARAK-outs.
Coal is a cheap fuel. Used properly in a big stationary electrical generation plant with flue gas scrubbers, it is a clean source of electricity. Use fuels for the purposes they are best suited. Leave Natural Gas for topping plants, home and industrial heating, and process industries. Use Coal for base load electrical generation.
Nicholas K. Akins, CEO, American Electric Power at April 10, 2014 Senate Energy and Natural Resources Committee
“We need to take action now….”
Have you heard anything? From either side of the political isle?
This summer we might experience some inconvenient blackouts on high demand days.
This next winter I think we will find out that blackouts during cold spells are much worse than warm spells.
Exactly the same situation is unfolding in the UK.
@RS says:
April 23, 2014 at 5:33 pm
@KevinK says:
April 23, 2014 at 5:51 pm
Folks should bear in mind that backup generator units are not designed for long continuous use. A couple weeks every year or so is fine. Move up to 8,000 hours per year and you’re probably going to replace it (or at least the engine) every year or so. Primary power gensets are going to be pricey, and not the sort of thing you generally find at Home Depot.
The exact same thing is happening in Germany. After they panicked in the wake of the Tohoku quake in Japan (and even today state-run German media makes highly suggestive comments on March 11 where they hint that the 16,000 deaths came from Fukushima) and decided to turn off all nuclear power plants for no reason at all (other than hysterical screaming from the Greenists of how Fukushima could happen in Germany tomorrow) they eventually realized that they need systems to carry the production they lost.
Of course in typical German “Gutmensch” fashion the solution is: more “renewable”, which is of course heavily funded by the government.
Apart from the grid problems analysis of the price development suggests that, in the not so far future, electricity in Germany will cost between €0.6 and €1.5 per kWh.
As a result investments into the German industry from outside has started to fall and there are already companies saying that, should the price for electricity rise just by a cent or two, they will have to shut down. Industry that needs a lot of power, like aluminum production, is effectively going to be destroyed by this insanity.
But hey, at least they can then say “we are saving the planet!” when they have armies of unemployed and failing grids.
The 14 kw Guardian by Generac I had installed 5 years ago went for about $3,000. installed. Make sure to purchase an automatic switch. Annual synthetic oil changes and load/component testing is important and worth the small fee to keep it in ship shape. Always lean a piece of plywood on the air intake side or else it will suck in drifted snow during it’s weekly auto-runs and result in water in the oil. One downside is the cost of filling a 500 gal LP gas tank.