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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BTW…
The White House, DOE and EPA and the yellow-bellied enviro’s preaching Green know fully that their policies and Rube Goldberg tech are ruining the electrical grid stability. Obama promised energy costs to skyrocket. Thanks for nothing watermelons. One plus is many melons live in the DC area and when the grid goes down there, being totally unprepared for winters like our last one….lol. Sorry, but it serves them right.
” Nuclear plants are aging and beset by mounting losses, driven by negative pricing from subsidized wind systems. ”
Funny , we’re usually told that total wind production is a drop in the ocean, so small it’s not worth paying for. Now it is the root cause of lack of profitability of “aging” nuclear plant.
“Aging” plant always has increasing maintenance costs and this probably hits nuclear harder than other industrial plant because of the stringent safety issues. Many of these reactors are already operating well beyond their initial design life-time. The only thing making continued operation feasible is fear of the enormous cost of decommissioning.
Nuclear reactors have evolved little in last 50 years and were installed for military reasons which made them ‘feasible’, not civil needs.
If nuclear is have a future it needs a quantum leap towards more inherently safe processes that do not produce mountains of unmanageable toxic waste.
Roger Sowell says: …” 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. ”
Exactly. Nuclear has always been a special case and has always been heavily subsidised in one way or another. It gets special treatment for very powerful reasons which one may or may not agree with but cannot ignore.
Mr Goreham , like most nuclear proponents, manages to overlook this and pretend that the nuclear industry competes in a simple economic way with other energy sources.
This is about as honest the IPCC’s calculations that start out with a conclusions drawn on a political conviction, then select the facts and figures to suit.
KevinK
I grew up in rural Scotland without electricity, many of our neighbours had small (2-3 KW) generators but not us. As you say life without electricity sucks. I suppose the price of these generators will drop as demand is going to rise in the near future If we’d had the money we would have had a generator too.
Recently Scotland had a blackout that lasted several hours. cause Unknown. But those in the know claim that FF producers were ramped down because the wind was forecast to start to blow and enable wind turbines to work. This did not happen as forecast.
Another reason not to rely on wind.
Blacking out Washington D.C. would be a logical first resort power saving emergency step, as it would not injure productive capacity and would deliver a clear message.
I view the grid as the distribution system. Shutting down coal fired plants does not create a distribution problem; it creates a supply problem.
Stablility of the energy grid and constraints on production seem to be two separate issues. With more production, wouldn’t the grid be more unstable? Or, is the production not meeting demand that causes the instability?
Blackouts are good for sceptics. It seems that high energy prices and / or blackouts are the only things that will focus minds away from a beneficial trace gas and onto life and death issue, literally.
About infrastructure unable to support electric cars, good observation. About private generating capabilities, be careful, the regulators are already taking notice. I recommend, instead, move household infrastructure away from all robust infrastructure/power source, and to antifragile systems able to use what is available.
We heat with mains electricity for its subsidy and efficiency. We keep propane for back-up and ability to perform during extended electrical outages. At winter’s end, our propane capacity is at 80% of full. NOTE that our insurance company demanded removal of a freestanding wood burning heater. Where cordwood is cheap, the regulations are weighty.
The next big thing for colder areas is micro cogen. Instead of a $10k emergency generator, you have a $25k 10kw 100% duty cycle system running on gas that gives you 90% of your electricity and 100% of your heat. Basically, as lunatic energy policies push up rates past $0.14 /kWh you get all your heat free, while also saving on power. This is using gas at residential rates.
Businesses with 10+ employees and lots of energy requirements are even better to change over.
Large mining and others are already unplugged.
Every time someone unplugs the remaining people on the grid have to pay more to keep it running. So grid rates rise.
Tom Andersen says: April 24, 2014 at 4:58 am “The next big thing for colder areas is micro cogen. Instead of a $10k emergency generator, you have a $25k 10kw 100% duty cycle system running on gas that gives you 90% of your electricity and 100% of your heat.”
Can you provide a recommendation or suggested provider, please?
I’ve seen the economics of local generation at first hand. After a dispute with a neighbour our 3phase to the farm was cut off. Rather than renegotiate the supply we went with a generator powered from the tractor PTO. Allowed us to run the feed mills and other farm machinery and charge the electric fence batteries and reduced the cost massively. We even charged a few extra leisure batteries for the neighbours who had emergency 12v lighting circuits and inverters for freezer UPS. In the end it was the best thing that could have happened, should have looked at it sooner.
I know domestic usage doesn’t follow the pattern we had, where an intermittent but reliable supply was acceptable, but if Ed Davey gets his way and goes for windmills with no storage or backup plans I’m pretty sure a lot of people will look to personal/local fill-in solutions which are ecologically much less sound than a central generating capacity. Law of Unintended Consequences and all that.
On another topic. I wonder if anyone in the US has done a retrospective analysis of what would have happened last winter if full on mitigation had started in the mid/late 20th century. I’m sure there are plenty of alarmist horror stories in there that could get media attention….
Larry Butler says:
April 23, 2014 at 6:13 pm
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.
__________________________
Did it ever occur to you that big trucks are needed to pull big loads? Your attitude is so typical of those who would control the lives of others and do so through authoritarian/totalitarian government power at the point of a gun. Get back in your Prius and go away,
I’ve sent an enquiry to Trenergi of Hopkinton, Mass.
Mr. Sowell-
I keep reading about the negatives of nuclear power from your post above, and I guess I am gaving trouble with my reading comprehension again. You say:
“…putting an unwanted and un-needed product into the market, driving down the prices…”
Could you expand on “unwanted” power and the negative aspects of “driving down prices” , please?
I keep thinking that if electrical power became very cheap (at night if I understand you at all) and that power intensive industries would shift their production schedules to take advantage of that.
As for “unneeded” I keep thinking that if electrical home heating ( grabbing at an easy example) suddenly became cheaper than gas, a lot of people would convert to the cheaper alternative, increasing demand. I am fairly sure that there are multitudes of other cases where cheaper electricity would increase demand.
So, please tell me where I’m wrong. I hate running around basing my arguments on false assumptions because of lack of facts.
In October of 2003 Hurricane Isabel darkened areas of North Carolina and Virginia, including Hampton Roads, Norfolk, and Virginia Beach, for a full month, and that wasn’t even a peak-use period. Literally millions of people lost electrical power.
In October 2012 about 6 – 10 million people lost power, some for several weeks, to the tropical storm remnants of Hurricane Sandy.
The grid is even less resilient today, thanks to the closure of coal-power stations by bureaucrats kowtowing to elected officials who in turn are pandering to environmentalists and anti-capitalists, hoping to get re-elected.
So our feckless leader OBozo not only promised to put coal out of business, he meant nuclear too. Gas, eventually, one has to presume.
Another issue worried about in the electric industry is the regulatory move toward installing distributed generation (DG). While the notion of having multiple, “clean” power generation assets spread across the grid has appeal – especially during a long-term restoration effort, the reality is that DG destabilizes a historically-proven approach to electric transmission/distribution. However, the DG asset deliberately supplies a minority of people without concern for the majority, as a principle of resiliency.
The historic, centralized approach supplied relatively cheap, reliable electricity for an overwhelming majority of time (98% of a typical year) to the great majority of people. The supply exceptions were mostly storm-related impacts and less frequent equipment failures. With the increased reliance on all things electronic AND internet-based, ratepayer INTOLERANCE for outages during that 2% has increased – dramatically over just the past decade, which coincides with the timing of broadband market penetration. The alleged 21st century solution to this 19th century grid is to keep a “backbone” but break its supply into multiple, DG assets. Each break point, though, requires real-time monitoring and protective equipment to ensure the stability of the backbone; thus, each new, break point becomes another point of failure on what was once a decidedly stable system.
While the installations of most DG assets in the U.S. are subsidized currently by the taxpayer, similar funding is NOT provided for their subsequent maintenance. So, when these units fail – as all things mechanical eventually do, the question of “who” pays for the repairs is raised. The response from the affected ratepayers is that the electric utility should pay, but (more often than not) the DG asset was neither owned nor operated by the utility. Therefore, the minority of people who benefited from the DG asset are the responsible parties for the repair. When the price tag on the repair is revealed, a small but increasing number of DG owners are quietly forgoing the repair (e.g., the idle wind turbine on an obviously windy day). Instead, they agree to accept power solely from the backbone – the regulatory default provider. But come the next, major storm, which results in widespread power outages, these former DG owners seemingly have no reservations about voicing their frustration about 19th century service.
The electric industry is (correctly) concerned that it’ll be saddled with maintaining these DG assets, resulting in yet another increase to electric rates. Trying to educate the ratepayer as to why the cost of electricity has increased because of DG is already a lost cause because of its inherent complexity. You likely won’t read a utility executive voicing such concern over DG because it’s politically verboten in such a heavily-regulated industry, but that doesn’t change the reality of the issue.
This could be simple to fix using the new ‘smart meters’. Every EPA office and residence of anyone working for EPA, together with the Capitol and associated offices, the Whitehouse and associated offices and all congress and senate members offices and private houses should have their power cut whenever there is a power cut anywhere in the country due to insufficient generation. The power to remain off until the power cut is restored. They are the ones that caused the problem they should be made aware that it is not ‘someone else’s problem’ it is their problem too. I am sure that some thought might be put to the problem by these politicians and bureaucrats if they were always in receipt of the problems caused.
To both of you: You do understand that, in the event of an electric blackout, your home gas-fired heater “might” be available (if the local natural gas system keeps the pressure up through in-line gas-burning turbines to keep their pipelines pressurized!) … Or if your off-grid propane tank is filled.
But ANY gas-burning furnaces will trip off immediately if your electric-powered house distribution fan is not ALSO running! You MUST have a lasting 120 VAC (220 in Europe and South America) independent electric power source that you can power your house fan. I have both a small welder-generator, and a solar-powered battery+ inverter system. Either can run the heater fan, and both have been tested running that fan.)
My propane gas log functions fine as a convection heater – tested long, tested strong. Distribution is not needed in a one room ‘cabin’, convection is nice for efficiency.
Further, my diesel powered Welsbach mantle lantern provides 60/100 Watts equivalent light and lots of cozy ‘waste’ heat.
If Svensmark’s hypothesis is correct, we are headed for a “perfect storm” Time to buy a generator
sumdood,
Right. I’ve got ten 5-gallon gasoline containers filled and treated with gas preservative. Now I’m shopping for a generator in the 8 – 14 kw range. Consumer Reports lists two that they recommend. If anyone is interreested in which ones I’ll go look them up. And there is always the ultra-low priced Harbor Freight.
You need something to at least keep your refrigerator running, plus some extra power for your TV, computer &etc. for a couple of days if necessary. Probably 4 kw would be enough, but just. They cost about $10/Watt, +/-.
Of course you can spend a lot and get a Cadillac. I just want something to weather a temporary crisis. If it’s more than that, the biggest and best won’t be enough.
Sounds like the NE needs to create several large geologic gas storage facilities soon, like yesterday.