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 UK is heading the same way too, and we are dependent on a host of foreign countries, including Russia, for our supplies. For once, we just might beat you Yanks in this race!
For those interested in engaging in debate with Mr Sowell, you may wish to note the following.
I asked him a question. He’s been asked this question five times* that I know of, going back to March. As far as I can tell, he’s yet to even acknowledge the question, although he’s entered into lively debates with both earlier and later correspondents in one article here at WUWT. Be warned, it seems he only responds to questions for which he feels he has a prepared answer, and I believe his input here should be weighed accordingly.
This arose from a comment Mr Sowell made in response to another correspondent on a WUWT posting**: Mr Sowell’s comment is reproduced here:
“That talking point is full of misdirection. France nationalized the entire power industry. Then charged whatever price they wanted to. It makes sense, too, because one of the few things that France exports is, well, nuclear power plants. It would make for very bad PR if the home country had realistic power prices, not FULLY SUBSIDIZED BY THE GOVERNMENT.” (my capitals for emphasis)
He’s simply been asked to back up what he’s said with evidence. Five times.
I can see four possibilities going forward:
1. He has or can find the evidence to back up what he said, and he’ll promptly put the links up here – if he does, he’ll have my thanks, and my understanding of the nuclear power debate will have been improved.
2. He doesn’t have/cannot find the evidence to back up what he said and, being an officer of the Court and a man of integrity, he’ll ‘fess up. I’m sure he remembers deontological ethics, and that they don’t stop at the Courthouse door.
3. He can start ad hominem attacks on me, and/or sophistic arguments in an attempt to say he didn’t say what he said.
4. He can continue to behave as though the question doesn’t wasn’t asked. Five times.
Anyone who’ll only answer or acknowledge the questions that suit them would appear to be either ill-prepared or ill-informed. I acknowledge that there may be other explanations that don’t immediately spring to mind.
Mr Sowell, if you did publish links to supporting evidence for your position in either of the two relevant WUWT blogs, please provide a link and a time stamp (pre-dating this one), and I’ll post my apologies in this article – but I can’t find it.
p.s. Completely OT, I know, but he signs off articles on his blog as “Roger E. Sowell, Esq.” (http://sowellslawblog.blogspot.com).
What does “Esq.” even mean, in a modern context? Is he apprenticed to a knight? If it’s a title of respect, who conferred it on him? what are we to infer about the man if he bestowed it upon himself?
p.p.s. I don’t have a dog in this fight. I do not have and never have had a law office. I’ve never represented or advised clients on climate change, process safety, environmental regulations, engineering malpractice and other matters. Before not opening that law office, I have never worked for 20 years in more than 75 refineries and petrochemical plants in a dozen countries on four continents.
Wow. Just stop and think about that for a moment. More than 75 plants in 20 years. Arranged consecutively – which it would have to be, if a person is working “in” them, rather than “for”, or “with” – that averages out at less than 98 days “in” each place of employment. I’m really not sure what to make of that.
* The five times the question has been put to Mr Sowell can be seen at the following links, with date stamps provided:
1. http://wattsupwiththat.com/2014/03/31/a-conversation-with-dr-james-hansen-on-nuclear-power – asked by Tsk Tsk at March 31 2014, 9:49pm
2. http://wattsupwiththat.com/2014/03/31/a-conversation-with-dr-james-hansen-on-nuclear-power – asked by me at April 2 2014, 4:50 & 4:53pm
3. http://wattsupwiththat.com/2014/03/31/a-conversation-with-dr-james-hansen-on-nuclear-power – asked by me at April 4 2014, 3:44pm
4. http://wattsupwiththat.com/2014/04/14/ipcc-wgiii-throwing-the-greens-under-the-bus/ – asked by me April 16 2014, 7:21am
5. http://wattsupwiththat.com/2014/04/14/ipcc-wgiii-throwing-the-greens-under-the-bus/ – asked by me at April 17 2014, 12:10am
**http://wattsupwiththat.com/2014/03/31/a-conversation-with-dr-james-hansen-on-nuclear-power, March 31 2014, at 6:22pm
GreggB says:
What does “Esq.” even mean, in a modern context? Is he apprenticed to a knight? If it’s a title of respect, who conferred it on him? what are we to infer about the man if he bestowed it upon himself?
If I’m not misteaken, ‘esq.’ indicates a lawyer. They all do it. ☺
The problems with our electrical grid are an example of what happens when an all-powerful government is driven by ideology. When the system fails, the answer will be that they need more power to regulate, and that they didn’t enact their ideology driven laws soon enough.
Living in Idaho, with cheap, reliable power, has spoiled me. When I was in upstate NY, and in NC, power was interrupted when it was needed the most, during winter storms. I used a portable generator several times year, sometimes for 3 or more days at time. Electric was cheap, and no nat gas available, so gasoline generator was the only option to save the frozen food and keep the fan running on the fireplace insert.
Micro CHP is worth considering (installed cost about $25,000) in cold climates with high power costs, and in areas that typically experience lengthy power outages. They claim payback of a few years, and time between maintenance of up to 9,000 hours (oil change, spark plug), if electric rates are $.14/KWH or higher. No estimate of life of the unit that I could find, but nat gas engines can last many years. At this time, micro CHP probably only makes sense in a few states, like New York and Alaska, although local rates can vary dramatically depending on the power source. If Dear Leader gets his way, micro CHP may be viable everywhere.
James at 48 says:
April 23, 2014 at 5:02 pm
“And special forces of an adversary could shoot up a dozen transformers and bring down the grid.”
———————
That very thing occurred via a “drive-by shooting” like 4 years ago here where I live. Some “yahoo” shot a high power rifle slug into the sub-station transformer that feeds the homes and businesses in the surrounding area and we were all without power for like seven (7) days while AEP was finding a replacement transformer and getting it installed.
The power companies don’t keep very many of those BIG transformers “on-hand” so iffen an adversary group decided to “shoot” a hole in dozens of them ….. then power would be out for a long, long time and the culprits would probably never caught.
It seems like we’re back to “Back to the Future”….
Doc: “How could I have been so careless? 142 gigawatts!
Tom, how am I gonna generate that kind of power?”
Here in Germany businesses have threatened to cut down investement or downright leave if something isn’t done. The Greens (as usual) are ticked off at the SPD for possibly knuckling under…add to this the potential instability/cutoff of the natural gas supply coming from Russia via the Ukraine, and it looks like the politicians will actually have to work for a living (at least for a while)…
I think it’s been a really, really long time since we’ve had a Tsunami here…:) So I’m hoping nuclear gets another chance…
“Samuel C Cogar says:
April 24, 2014 at 9:27 am”
I saw an article the other day about what happened in San Jose – what’s really disturbing is some of the transformers are IMPORTED, which not only is a pain for electricity users, but seems to be a strategic and/or military point of weakness as well….
Larry Butler says:
April 23, 2014 at 6:13 pm
If you like poverty .. you can keep it.
Rationing resources is sooo immoral.
Samuel C Cogar says:
April 24, 2014 at 9:27 am
James at 48 says:
April 23, 2014 at 5:02 pm
“And special forces of an adversary could shoot up a dozen transformers and bring down the grid.”
———————
Don’t even need a gun. Just get a RC Plane and dangle a cable of the rear end and then fly the cable into a set of high voltage lines….
A crude form of what we did in Iraq with cruise missiles..
NYC’s de Blasio seeks to ban wood-burning fireplaces
http://www.washingtontimes.com/news/2014/apr/24/nycs-de-blasio-seeks-ban-wood-burning-fireplaces/
@ur momisugly GreggB on April 24, 2014 at 8:24 am
Re France and subsidized power industry, I refer you to my recent article at
http://sowellslawblog.blogspot.com/2014/04/the-truth-about-nuclear-power-part.html
You can refuse to believe EDF, France’s national power company when they state the industry was fully nationalized, and only recently partially privatized. You can refuse to believe the EU investigation for subsidized prices. Your choice.
By the way, US power prices are lower now compared to France, even with the French subsidies. Nuclear power at 85 percent of the grid over there is doing a bang-up job, right?
Well, in South-Africa we had power black out in 2008 and in this year, not to long ago, another black out for a week long due to wet coal being delivered to the power stations.
” Ian W says: April 24, 2014 at 7:16 am ”
I like the way you think!! 🙂
@roger Sowell says at April 24, 2014 at 10:35 am:
Mr Sowell, thank you for acknowledging that I asked a question; at least the debate is now moving forward.
For the record, what I choose to believe is that you referred to French “PRICES, not fully subsidized by the government” (my capitals for emphasis). Your comments regarding the INDUSTRY being nationalized, and an EU investigation (for which you provide no links), provides exactly zero evidence for your words. For clarity’s sake, please provide a quote and a link for your apparent assertion that the EU investigation stated that France fully subsidized energy PRICES – with the obvious result of a “zero” on the bills of French consumers.
So far, it’s starting to look like you’re going with option three (sophistic arguments to try and say you didn’t say what you said), which is rather disappointing. I hope I’m mistaken.
Really, it’s a straightforward question, and should be easy to either substantiate or withdraw.
For the seventh time (I think; I’m losing count), back to you, Mr Sowell.
@ur momisugly GreggB on April 24, 2014 at 11:35 am
I am not sure if you cannot read, or refuse to read. I refer you to my linked article, in my previous comment.
For your information, a fully nationalized industry is considered fully subsidized.
It is always amusing to see the extent to which nuclear advocates defend the French model.
This discussion with you is closed.
There are significant economies of scale in having centralized generation of electricity. Governments’ assault on the centralized generators of electricity is leading us to where we will revert to decentralized generation, with its higher cost.
Roger Sowell says: April 24, 2014 at 12:04 pm
For your information, a fully nationalized industry is considered fully subsidized.
_____________________________________
What utter bollo. You do come out with some tripe sometimes, Rog.
Would you consider a fully nationalised car plant, selling family saloons at $50,000 each, as being a ‘fully subsidised’ price?
French power costs are only subsidised if they fall bellow the reasonable cost of production and a small margin of profit.
ralph
“Samuel C Cogar says:
“The power companies don’t keep very many of those BIG transformers ‘on-hand’…”
But they don’t (necessarily) need to retain them for every install.
I’m surprised at the seven day outage due to a power transformer failure, during presumably blue sky (i.e., non-storm) conditions…? If an extended outage is anticipated, industry practice is to bring in portable generation and/or a mobile substation to supply the impacted customers, minimize the outage, and improve feeder reliability. Investor-owned utilities (IOUs) like AEP maintain emergency response plans (ERPs), which detail response actions to such scenarios and include a logistics section for material supply (e.g., the section identifies proactively purchase orders with portable generation vendors). Although the affected power transformer may take some time to repair/replace, power is usually restored (with most incidents) in 24-72 hours. Again, this assumes blue sky day conditions; a major storm restoration is another animal with its own stripes.
“Box of Rocks says:
“…Just get a RC Plane and dangle a cable of the rear end and then fly the cable into a set of high voltage lines…”
True enough, but that’s a one and done approach. Once the cable (or even the iron-coated film of an old cassette or eight-track tape – lighter weight for the RC plane) makes contact phase to phase, the cable and RC plane are ash. More than likely, the breaker on the affected circuit would open (trip) due to the fault. After a visual patrol of the circuit and inspection of the breaker/associated power transformer, the breaker would be closed and transformer energized. At most, there would be be 1-3 hours of interruption based mostly on the circuit length requiring patrol.
But… drop thousands of three to six-foot long conductive fibers across the entire footprint of a substation, and a number of asymmetric faults occur concurrently alongside minor, physical damage. Although this impact would require a longer repair time (a few days to find and remove all the fibers and repair the damage), the installation would not be damaged permanently. And thus, we have the BLU-114/B “Soft Bomb” – http://en.wikipedia.org/wiki/BLU-114/B_%22Soft-Bomb%22 .
Reblogged this on Power To The People and commented:
Even though temperatures have not risen in years (despite the rise in CO2), the EPA appears to be on a suicide mission to impair America’s ability to secure her energy future by imposing the use of renewable energy that:
Provides a fraction of the energy fossil fuel does;
Is weather dependent and will not work in severe weather
Is intermittent and unreliable;
Causes great harm to the environment;
“Skyrockets” fuel prices that harms poor people the most and
Does nothing to mitigate Climate Change.
I late again. It’s probably already been brought up.
Those going to home generators when the grid goes down illustrate in microcosm the problems imposed on the grid by the push for solar and wind to power it and the “war on coal”. (They are even going after the mining itself now. The latest salvo in the US has to do with “air quality” in the mines.)
A home generator is a backup when the grid goes down. The grid will, if the “war on coal” succeeds, have no backup.
Roger Sowell says:
April 23, 2014 at 7:11 pm
++++++++++
Your post is pure selective obfuscation.
Wind turbine get tax credits so they can undercut baseload – paid for by people who are forced to pay taxes. This is anti capitalistic.
Baseload (such as coal and nuclear) is under threat because Wind turbines are being paid tax money for often doing nothing at all.
Wind power also requires 100% baseload backup for when they do not produce. Else the grid goes down.
Wind turbines make baseload more expensive, because much of the baseload has to throttle back to
accept wind power when it blows. They are forced to run inefficiently, driving up costs.
Because of supporters of wind power, plants are closing, and those plant closings remove baseload which is required to back up wind power.
Can you understand how to string slightly complex thoughts together?
Please stop obfuscating, you’re just making yourself look dull.
Mr Sowell says just enough to support his argument while leaving out important facts. Wind has essentially zero variable operating costs, they cost no more to operate than to not operate without subsidies. With subsidies they actually have negative operating costs. Of course, their capital cost, a fixed cost, is very high, and no one would build them absent those cash subsidies. They beat nearly every source of power on cost after they are built. Most are not selling into the market though they are selling at above market rates on contract to meet renewable mandates. They are subsidized by both taxpayers via direct cash subsidies and consumers via regulated rates…..what a racket. In short, they can’t compete with anything without subsidies and nothing can compete with them with subsidies.
‘something a little more “Earth Friendly”’
Earth is a dirt ball. You want us to be friendly to a dirt ball?
@ur momisugly Mario Lento on April 24, 2014 at 4:17 pm
A primer for you, on wind and other renewable financing available from government. This is from USBank, a reputable and large bank in the US. Essentially, one can choose one or the other, but not both, an investment tax credit for a portion (30 percent) of the cost of the (usually solar-based) asset, or a production tax credit for any energy including wind energy that is produced but only for the first 10 years of operation. Note that, if no power is produced, no revenue is produced either. Therefore, your statement that “Wind turbines are being paid tax money for often doing nothing at all” looks pretty silly. Can you string slightly complex thoughts together? If not, let me know and I will make the words smaller and simpler. Are you intentionally making yourself look dull?
“RETC Overview [Renewable Energy Tax Credits]
There are two primary types of RETCs: Investment Tax Credits (ITCs) and Production Tax Credits (PTCs).
Investment Tax Credits, which are utilized primarily for solar facilities, provide a tax credit equal to 30 percent of the eligible costs to the owners of certain renewable energy facilities that have been placed in service. This tax credit is available through 2016, at which point it is reduced to a permanent 10 percent credit.
1603 Grants for Solar: In 2008, Congress passed the American Recovery and Reinvestment Act (ARRA), which gives owners of certain renewable energy facilities the option to receive a 30 percent, tax exempt grant in lieu of the ITC. Due to the program’s 2011 sunset, 1603 grants are currently only available for energy projects that have met specific safe-harbor rules (i.e. more than five percent of eligible project costs had been incurred in 2011) and only if such projects will be operational by the end of 2016.
Production Tax Credits, which are primarily available for wind, biomass, geothermal, and landfill gas facilities, provide a tax credit based on the amount of energy produced by renewable energy projects and are generally available to the owners of such projects. The PTC provides an inflation-adjusted cent per kilowatt-hour tax credit for the first 10 years of a renewable energy facility’s operation and is available for projects that have “begun construction” before January 1, 2014.
ITC in lieu of PTC: Along with the creation of the 1603 grant, ARRA also permitted PTC-eligible projects to elect to receive the ITC in lieu of the PTC. Following the American Tax Relief Act of 2012, the election will be available for projects that have begun construction before January 1, 2014.”
source: https://www.usbank.com/commercial-business/tax-credit-financing/renewable-energy-tax-credits-basics.html
Nuclear plants have been receiving government handouts, subsidies, and other benefits for decades. Now that wind energy projects are also receiving some small assistance, the nuclear advocates such as yourself, are squawking like you have been murdered. Nuclear plants receive, among other things, 1) huge loan guarantees from government, 2) government relief from radiation liability and lawsuits, 3) regulation that no lawsuits during construction are allowed (with a minor exception), 4) regulation to raise prices during construction to avoid interest costs on loan, and 5) operating regulations are routinely relaxed to allow plants to not spend money to comply. The US EPA did not pass a carbon tax (yet) , but effectively got the same result by regulating CO2 emissions from power plants so that coal plants must shut down. Nuclear vendors are hopeful that the baseload from shut down coal plants will be replaced with nuclear. Nice subsidies, those. And all for nuclear power plants.
Roger Sowell says:
…your statement that “Wind turbines are being paid tax money for often doing nothing at all” looks pretty silly.
Give Mario some leeway, Roger. The way I read that is that much of the time, no power is being generated by windmills. And if I recall, English is Mario’s second language.
That said, what are your thoughts about nuclear power?
☺