Top Electric Grid Regulator Will Make Keeping Coal Plants Online One Of His Main Goals

Energy

rsz_shutterstock_104737748-e1497299526328
A dirty coalminer displays a lump of coal as a power and energy source. Shutterstock/Joe Belange

From The Daily Caller

Michael Bastasch

3:06 PM 08/14/2017

Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee said he would look for ways to “properly compensate” coal plants for providing reliable electricity during his time as a top energy regulator.

“These are essential to national security. And to that end, I believe baseload power should be recognized as an essential part of the fuel mix,” Chatterjee said in a video interview FERC officials posted online Monday.

“I believe that generation, including our existing coal and nuclear fleet, need to be properly compensated to recognize the value they provide to the system,” Chatterjee said.

Chatterjee’s comments are a nod to power plant operators and Republican lawmakers who worry that too much baseload power is being taken offline, in part, due to Obama administration energy regulations.

Sixty gigawatts of coal-fired power has come offline since 2010, according to industry data. While most energy experts blame low natural gas prices, federal environmental regulations and subsidies for green energy likely played a big role in closures as well.

Wholesale electricity prices vary from day to day and reflect a power plant’s marginal cost of generating energy. That means wind and solar power have a distinct advantage over fossil fuels, since it costs them virtually nothing to produce an extra unit of power.

Coal supporters say zero marginal cost electricity, which is sometimes negative thanks to subsidies, want electricity rates to incorporate the benefits of providing 24/7 electricity.

“As a nation we need to ensure that coal, along with gas and renewables, continue to be part of our diverse fuel mix,” said Chatterjee, who served as Senate Majority Leader Mitch McConnell’s energy adviser.

The Senate confirmed Chatterjee to head the FERC in early August. Chatterjee will serve as chairman until David McIntyre is confirmed by Congress, which is slated to happen in November.

FERC is an independent regulatory commission that oversees the electric grid, natural gas pipeline siting, approval of natural gas export terminals and other energy infrastructure projects.

Chatterjee mentioned infrastructure as another major priority for the Republican-controlled FERC. He hopes approving backlogged energy projects will create jobs and help the Trump administration meet its goals.

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Tom Halla
August 15, 2017 2:19 pm

Perhaps negotiate all new contracts for power to reflect dispatchablity? Wind and solar now get mandated purchase rules at a premium price, while the market should discount the pricing on their unreliability.

4 Eyes
Reply to  Tom Halla
August 15, 2017 2:38 pm

Exactly. Power, i.e. kW, is what everyone wants when they flick a switch. kWh is irrelevant.

Hanrahan
Reply to  4 Eyes
August 15, 2017 6:53 pm

Not all watts are born equal.

rocketscientist
Reply to  4 Eyes
August 16, 2017 8:09 am

kWh’s are not unimportant if you want your lights to remain on for a reliable period of time.

Reply to  Tom Halla
August 15, 2017 2:56 pm

Agree, any source that cannot reliably delivery when needed should be considered a lower value source rather than being priced at a premium because of the religious belief in environmental observances. The idea that wind and solar are free, have zero CO2 footprint and are friendly to the environment is only possible if one lives in a fantasy world and ignores the full life cycle impacts. Try building and installing them without fossil fuels to do all the “dirty” work.

Paul Penrose
Reply to  andrewpattullo
August 16, 2017 6:24 am

Not only that, but the supply (generation) needs to match demand (load) in order to regulate the voltage and keep in within acceptable margins. If the voltage at the consumer end goes too far out of spec, equipment and infrastructure can be damaged.

Pop Piasa
Reply to  Tom Halla
August 15, 2017 3:02 pm

I say they’ve had enough time (decades) to develop wind and solar on taxpayer money. It should be really cheap by now, be just as reliable and ready to force the obsolescence of previous energy sources in the affluent world.
Once the $upport from the public (which might have better spent on cleaner coal methods) terminates, the so called renewables industry will shrink to match its practical market.

Editor
Reply to  Tom Halla
August 15, 2017 10:35 pm

the market should …“. Exactly. No subsidies, no mandates, no green/regulatory obstacles, just a level-playing-field market.

Stephen Richards
Reply to  Mike Jonas
August 16, 2017 2:20 am

absolutely. Free and open market with the usual company tax breaks for bone fide research and development

MarkW
Reply to  Tom Halla
August 16, 2017 7:26 am

Immediately following, people who know what they are talking about refute Roger’s claim.

Tom Halla
Reply to  MarkW
August 16, 2017 7:27 pm

Oh, I was following Roger Sowell being a green lawyer, and acting like a stereotype of both.

rubberduck
August 15, 2017 2:21 pm

Boy, we really need someone like this to run Australia’s energy market.

Reply to  rubberduck
August 16, 2017 7:38 am

And can we have them come to Ontario after they are done fixing up Australia?

Roger Sowell
August 15, 2017 2:41 pm

Premium price for wind? Hardly.
Utilities, as national average level-through price of wind PPAs is 2 cents per kWh for wind-produced energy. These are an average of the Great Plains area.
See Dept of Energy 2015 Wind Technologies Market Report, page ix.
That’s 2 cents, even when the utility has marginal costs from nuclear, coal, and natural gas at much higher rates.

Roger Sowell
Reply to  Roger Sowell
August 15, 2017 2:43 pm

The same statement appears in the 2016 report: 2 cents per kWh is what utilities pay.

Taylor Ponlman
Reply to  Roger Sowell
August 15, 2017 2:58 pm

Is cost of capital factored into fossil energy pricing, or just nominal cost of an extra KW? If so, not a level playing field.

D. J. Hawkins
Reply to  Roger Sowell
August 15, 2017 3:00 pm

Including the production tax credit of approximately 2 cents per kW-hr. Which would make wind actually 4 cents per kW-hr. The same report also indicates that state RPS requirements are essential to keeping wind competitive.

Roger Sowell
Reply to  Roger Sowell
August 15, 2017 3:37 pm

I have often wondered why wind energy gets singled out for having subsidies, with detractors insisting wind is not economic once the subsidies are included.
Ok, lets do that. And to be fair, let’s include all the subsidies for each power generating technology:
nuclear
Gas
Coal
Hydroelectric
Oil
Geothermal
Solar
Wind
Anybody brave enough to play this game?

George Daddis
Reply to  Roger Sowell
August 15, 2017 4:42 pm

Roger re your 3:37 post:
Ask that question again when you understand the difference between “subsidies” and legitimate tax deductions that ALL industries (including wind and solar) get for depreciation and depletion allowances.

Greg F
Reply to  Roger Sowell
August 15, 2017 5:12 pm

The 2 cents is a bit of cherry picking.
https://energy.gov/sites/prod/files/2017/08/f35/2016_Wind_Technologies_Market_Report_0.pdf

Wind power purchase agreement (PPA) prices remain very low. After topping out at $70/MWh for PPAs executed in 2009, the national average levelized price of wind PPAs within the Berkeley Lab sample has dropped to around the $20/MWh level—though this latest nationwide average is admittedly focused on a sample of projects that largely hail from the lowest-priced Interior region of the country, where most of the new capacity built in recent years is located. Focusing only on the Interior region, the PPA price decline has been more modest, from ~$55/MWh among contracts executed in 2009 to ~$20/MWh today.

Reply to  Roger Sowell
August 15, 2017 5:31 pm

George,
“understanding the difference” & “being honest about the difference” is 2 completely differently things.

Reply to  Roger Sowell
August 15, 2017 8:09 pm

Roger Sowell,
This is no game, you smug fool!
It is the energy which powers our homes, our workplaces, our economy…our very lives!
Fossil fuels are not subsidized, they are heavily taxed.
Wind and solar have been massively subsidized for years and years, to the tune of hundreds of billions of dollars…much of it enriching the political cronies of the people apportioning our tax dollars, and just about all of it wasted.
Pretty funny to hear a warmista ask about bravery, or at least it would be if it was not so incredibly idiotic.

Bryan A
Reply to  Roger Sowell
August 15, 2017 9:03 pm

Roger,
According to WIKI the great and powerful, energy subsidies are as such
https://en.m.wikipedia.org/wiki/Energy_subsidies

A 2010 study by Global Subsidies Initiative compared global relative subsidies of different energy sources. Results show that fossil fuels receive 0.8 US cents per kWh of energy they produce (although it should be noted that the estimate of fossil fuel subsidies applies only to consumer subsidies and only within non-OECD countries), nuclear energy receives 1.7 cents / kWh, renewable energy (excluding hydroelectricity) receives 5.0 cents / kWh and bio-fuels receive 5.1 cents / kWh in subsidies

Fossil fuels receive subsidies at the rate of 8/10 of a cent per KWh of energy while Renewables receive subsidies of 5 cents per KWh, about 625% more subsidized $$ per KWh of energy produced.
Gasoline has a KWh energy density of 33.41 KWh/gal about 26 cents per gallon.
Renewables, like wind, are subsidized at $1.67 for the equivalent 33.41 KWh produced
The only way that renewables can claim that fossil fuels are greater subsidized is by playing the same game China does

Fossil-fuel consumption subsidies were $409 billion in 2010, oil products being half of it. Renewable-energy subsidies were $66 billion in 2010 and will reach $250 billion by 2035, according to IEA

Renewables simply don’t have the same current market share as fossil fuels do

Ted
Reply to  Roger Sowell
August 15, 2017 10:48 pm

“I have often wondered why wind energy gets singled out for having subsidies,…”
To expand on to what George Daddis stated for any neutral observer:
2013 Federal Direct expenditures – coal: $74M wind $4,274M
2010 Federal Direct Expenditures – coal: $46M wind $4,063M
Percent of Utility Power supply in the US 2106 – Coal = 30.4% ,Wind = 5.6%
300 times the disbursement of subsidies per kWh is pretty significant.
But even if you count the normal tax deductions as subsidies, wind still received more than 30 times the subsidy advantage per kWh.
2013 Federal Total expenditures – coal: $1,075M wind $5,936M
2010 Federal Total Expenditures – coal: $937M wind $5,453M
https://www.eia.gov/analysis/requests/subsidy/
https://www.eia.gov/tools/faqs/faq.php?id=427&t=3

Reply to  Roger Sowell
August 16, 2017 12:39 am

Roger
You need to define “subsidy” before playing your game.
A relief from an existing impost is not a subsidy unless you define it so for your game.
Geoff

Reply to  Roger Sowell
August 16, 2017 3:14 am

Roger Sowell on August 15, 2017 at 3:37 pm
I have often wondered why wind energy gets singled out for having subsidies, with detractors insisting wind is not economic once the subsidies are included.
Ok, lets do that. And to be fair, let’s include all the subsidies for each power generating technology:
nuclear
Gas
Coal
Hydroelectric
Oil
Geothermal
Solar
Wind
Anybody brave enough to play this game?

“I’m your huckleberry”…
https://www.eia.gov/analysis/requests/subsidy/comment imagecomment imagecomment imagecomment imagecomment image
Most of the “subsidies” for fossil fuels and nuclear are in the tax treatment of expenses and asset depreciation. If those “subsidies” were eliminated, the expenses would still be written off and the assets still depreciated, just in a different manner.
Even if you include fake subsidies that have no budgetary impact, like Price-Anderson, the total is still trivial on a per mmBTU or kWh basis. One study put the value of Price-Anderson at $237 million/yr. That works out to $0.029 per million btu. So, even if you added in a mythical Price-Anderson subsidy of $237 million/yr, it would only elevate the total subsidy from $0.23/mmbtu to $0.26/mmbtu… a fraction of the wind and solar subsidies per unit of energy.

David A
Reply to  Roger Sowell
August 16, 2017 3:30 am

Dave M and others, good posts on Rogers “game.”
Another angle would be to net out the difference on TAXES paid per unit production of power after tax write offs and subsidies. Then include the additional cost base production must endure, ( loss of revenue and increased operation costs) to spin up and down to enable all solar and wind production to be sold. ( This last hidden subsidy is large and rarely quantified.)

Reply to  Roger Sowell
August 16, 2017 5:53 am

$0.02 per Kwh for wind energy? Not in my area. I live in Ontario and I pay $0.56 per Kwh

MarkW
Reply to  Roger Sowell
August 16, 2017 7:24 am

I love it when acolytes try to claim that any tax less than 100% is a subsidy.

MarkW
Reply to  Roger Sowell
August 16, 2017 7:25 am

Roger, as always you ignore the fact that utilities are required to buy the power generated by renewables, whether they need it or not. That is the biggest subsidy of all.

Sheri
Reply to  Roger Sowell
August 15, 2017 2:58 pm

The contracts usually increase year after year over the twenty years.

Reply to  Roger Sowell
August 15, 2017 3:08 pm

2-2.5 cents per kWh is the average wholesale price. At that price, nobody makes money… not even natural gas plant operators. If they generate an annual profit, it’s on a few bellwether events, when demand and prices spike.
Power plant operators are a bit like department stores… The lose money all year, but make up for it on the utility-equivalent of Black Friday.

Roger Sowell
Reply to  Roger Sowell
August 15, 2017 3:23 pm

If we must include the federal subsidy for wind energy, then please include the 30 years of federal subsidies for coal power plants. The coal power plants were given a pass on air pollution regulations of the Clean Air Act.
It will be interesting to see how the FERC chair dismisses the toxic air pollution from coal, in the interests of coal jobs. Maybe everyone needs to breathe bad air so a few coal miners have jobs?
Clean up the air. If it costs coal power plants more to clean the air, I am not sorry.
My refineries and chemical plants had to comply every single year.
No sympathy here.

Tsk Tsk
Reply to  Roger Sowell
August 15, 2017 3:32 pm

You mean like wind is given a pass on the tailings from rare earth mining? What about their exemption from raptor deaths? If wind can’t compete without a subsidy, then no sympathy here.

Gary Pearse
Reply to  Roger Sowell
August 15, 2017 3:52 pm

At least the coal mines, companies, employees and power companies paid a load of taxes to fund social programs and state and federal expenditures and supported local communities. Now, not only do Windmills get big subsidies, government grants, mandated customers, and pay no taxes, but they cost society for welfare paid to idle coal workers and families.
The health BS these days is Иеомагкsбготнегs sledge hammer policies. A permit to circumvent such laws created to destroy an industry is adding insult to injury. The living environment is under worse threat from sprawling, land eating, licenced to kill, rob the poor to the pay the rich windmills.

AKSurveyor
Reply to  Roger Sowell
August 15, 2017 4:06 pm

Roger,
I realize you have a lot of time and $$$ locked up in wind generation, and to lose those subsidies is gonna hurt. But seriously if you want to live a subsistance life on wind power, do so on your own. Do not drag the rest us into the stone age with you. Wind does not supply 24/7 power on a yearly basis.

Latitude
Reply to  Roger Sowell
August 15, 2017 5:26 pm

“then please include the 30 years of federal subsidies for coal power plants.”…
now where have I heard that before…..oh yeah….reparations

Reply to  Roger Sowell
August 15, 2017 8:38 pm

Abundant wind vs dirty coal?
Anyone who thinks so has the head jammed so far up their own @$$ it is pathetic:
https://youtu.be/AGmJ8Q2oijc
https://youtu.be/gCO9N3efxOM

Ted
Reply to  Roger Sowell
August 15, 2017 10:45 pm

“Clean up the air. If it costs coal power plants more to clean the air, I am not sorry. ”
It’s been 27 years since the Clean Air Act was amended to include coal. They already have cleaned up the air, and the costs have already been incurred by the coal industry.
https://www3.epa.gov/airmarkets/progress/reports/emissions_reductions_nox.html#figure1
http://maps.who.int/airpollution/
http://apps.who.int/gho/data/node.sdg.11-6-viz?lang=en

Samuel C Cogar
Reply to  Roger Sowell
August 16, 2017 4:46 am

Gary Pearse – August 15, 2017 at 3:52 pm

At least the coal mines, companies, employees and power companies paid a load of taxes to fund social programs and state and federal expenditures and supported local communities

Right you are, Gary Pearse, …… to wit:

WEST VIRGINIA COAL & THE ECONOMY
•Taxes paid by the coal industry and by utility companies that make electricity using West Virginia coal account for two-thirds, or over 60% of business taxes paid in our state.
•The coal industry pays approximately $70 million in property taxes annually.
•The Coal Severance Tax adds approximately $214 million into West Virginia’s economy.
Twenty-four million dollars of coal severance taxes collected each year goes directly into the Infrastructure Bond Fund.
•All 55 counties, even the non-coal producing counties receive Coal Severance Tax funds.
•The coal industry payroll is nearly $2 billion per year.
•Coal is responsible for more than $3.5 billion annually in the gross state product.

Read more @ http://www.wvminesafety.org/wvcoalfacts.htm

MarkW
Reply to  Roger Sowell
August 16, 2017 7:29 am

How about the pass windmills get for killing endangered birds and bats?

Bryan A
Reply to  Roger Sowell
August 16, 2017 10:09 am

STILL around 1 bird and 2-3 bats per year per turbine

Pop Piasa
Reply to  Roger Sowell
August 15, 2017 4:38 pm

Guess I have to ask how many of these wind units produce enough KWHs to replace themselves?

Pop Piasa
Reply to  Pop Piasa
August 15, 2017 4:52 pm

What I’m saying is we’ll need lots of supplemental power. Not only to produce enough (I hate this term) “renewables” to supply power needs, but to supply baseload until this dream becomes fabric.
After the initial goal is accomplished, we need more supplemental fossil fuels to replace the ageing devices and recycle the into new environmentally dependant sources of energy (a la antiquity).

Pop Piasa
Reply to  Pop Piasa
August 15, 2017 4:55 pm

Crap. Should have written weather dependant.

Mark Silbert
Reply to  Roger Sowell
August 15, 2017 6:03 pm

Roger,
I am starting to question your objectivity. I’ll play the subsidy game with you. Let’s start with this:
https://www.wsj.com/articles/no-headline-available-1384194144?tesla=y

commieBob
August 15, 2017 2:59 pm

These are essential to national security.

We used to take national security seriously. We made sure we had the manufacturing necessary to keep the armed forces running in case of war.
What would happen if we had a trade war with China? There are probably some materials, rare earths come to mind, that we don’t mine and process any more because it’s cheaper to get them from China. The OPEC oil crisis is an example of the kind of trouble we’d be in because we are too dependent on stuff from outside our borders.

markl
Reply to  commieBob
August 15, 2017 3:18 pm

Destroy industry and you destroy the capability to defend in the time of war. Control energy and you control the populace. No secrets here.

Nick Stokes
August 15, 2017 3:18 pm

“That means wind and solar power have a distinct advantage over fossil fuels, since it costs them virtually nothing to produce an extra unit of power.
Coal supporters say zero marginal cost electricity, which is sometimes negative thanks to subsidies, want electricity rates to incorporate the benefits of providing 24/7 electricity.”

Sounds a bit central-planning-ish. It’s not the way markets are meant to work. Someone steps in to say, no, you can’t use the cheapest electricity available at this point in time. Overriding the market.
Now I’m sure people will point out that wind/solar are subsidized. But that isn’t an issue with running the market. There is a legitimate case for saying that baseload power has to be maintained. But that should be done through subsidy too. The market can do its proper job of allocating by price and bids, and off-market, the government can attend to corporate viability, as they did to get wind/solar started.

Tom Halla
Reply to  Nick Stokes
August 15, 2017 6:03 pm

Nick, part of the advantage “renewables” have are rules requiring utilities to buy what they produce, an advanage not given dispatchable sources.

David A
Reply to  Tom Halla
August 16, 2017 3:46 am

Tom, those rules add considerably to the cost of base load providers also. It increases their operation costs to spin up and down, and it robs revenue, in affect stealing their customers.
Nick has a point but the wrong solution. First they are already compensated by allowed rate increases. If both subsidies were removed from wind and solar, and base load producers were allowed to sell to whatever real demand exists, then wind and solar would wither to their rightful free market place. Elect prices would drop. Tax revenue and profits would increase. Government expenditures would drop. Middle Class citizens would no longer subsidise the wealthy.. Crops would grow more on the same land and water. Elon Musk would be sad.

Bryan A
Reply to  Tom Halla
August 16, 2017 10:12 am

Chute David, Musk would need one of those “Will Work for Food” signs (not that he really ever did)

Greg F
Reply to  Nick Stokes
August 15, 2017 7:25 pm

Sounds a bit central-planning-ish. It’s not the way markets are meant to work. Someone steps in to say, no, you can’t use the cheapest electricity available at this point in time. Overriding the market.

That would be true if the markets had not been so severely distorted by government edict. If markets were allowed to operate freely non-dispatchable power would be deeply discounted. From the buyers perspective the price would include the cost of the intermittent source as well as required backup (and any other external costs attributable to the intermittent nature of renewables). The $20 per MWh cited previously is just the cost from the wind generators, it is not the total cost of wind generated power as it fails to account for the hidden costs of using an intermittent supplier.

Nick Stokes
Reply to  Greg F
August 15, 2017 8:14 pm

“From the buyers perspective the price would include the cost of the intermittent source as well”
Collectively, maybe. But individually, the buyer sees only the offer price at a point in time. That is how markets provide efficient allocation. Maintenance of base load does not relate to individual transactions, and should be supported by other off-market means, as is the push towards renewables.

Tsk Tsk
Reply to  Greg F
August 15, 2017 8:25 pm

Not to mention wind and solar get priority dispatch regardless of their cost and the thermal/gas plant has to account for all of the variability. Nothing says free market like compelled purchases.

Greg F
Reply to  Greg F
August 16, 2017 4:22 am

Collectively, maybe. But individually, the buyer sees only the offer price at a point in time.

Not true Nick. The grid operator is responsible for insuring the grid is stable and has enough reserves (backup) available. Those reserves, even though they are not providing power, still have to be financially compensated. That is a cost that clearly evident to the operator of the grid.

Tsk Tsk
Reply to  Nick Stokes
August 15, 2017 8:21 pm

Now I’m sure people will point out that wind/solar are subsidized. But that isn’t an issue with running the market.

WHAT?!?! Yes, subsidies are an issue with “running” the market (hint: free markets aren’t “run” by anyone or arguably run by everyone with every transaction). They distort the market away from its natural equilibrium. For someone so convinced that humanity is disturbing the climate to not understand that subsidies disturb the market is incredibly hilarious.

Nick Stokes
Reply to  Tsk Tsk
August 15, 2017 11:26 pm

“They distort the market away from its natural equilibrium.”
No, the market itself here is a forum for transactions. Each supplier comes with a different set of cost structures (and subsidies), but the market doesn’t need to care about that. It just facilitates transactions between buyers and sellers. That is an important and independent role.

Reply to  Tsk Tsk
August 16, 2017 1:23 am

Nick,
Do try to unleash your imagination. Here is hypothetical with elements of reality.
I go out from my home near yours to help manage a brand new coal mine with an electrical generation plant attached. Like I did in the 1970s.
Today, I cannot start to supply the public with the electricity they and I know is demanded. I face huge amounts of acts and rules and regs. I am told I cannot sell direct to public because that denies them the choice of buying alternative renewables – though nobody ever asked them for if they want coal or renewables. I am told that others on the grid have to buy renewables before they buy straight coal. I am told about certificates that we have to buy, then give away to faceless people about whom I know nought and do not want to know. I might one day be told that if I am going to shut down my business, I have to give three years of notice to some faceless authority, or be punished.
And that little rant is just the start of the problem list.
I have been there when electricity was cheap, reliable and not befuddled by truckloads of acts and regs. Fairly close to a free market was operating. I understand from primary experience that a true free market is the best way we can expect. It is far preferable to slavish adherence to ideologies from foreign countries, from massive government intervention with imposts that could hardly be made more harmful than if they tried for maximum harm. And now I see a proposal for Victoria of a tripartite committee of government, unions and people to oversee the lot.
In your wildest imagination could you think of anything worse for cheap, reliable electricity?
Why do you defend the that side of the battle?
Geoff

Nick Stokes
Reply to  Tsk Tsk
August 16, 2017 2:51 am

Geoff
“Today, I cannot start to supply the public with the electricity they and I know is demanded”
The reason you can’t do that is because you can’t set up wires leading direct to your customers. You can only feed into a grid, and they take from it. The grid manager has to set some rules; they collect from the customers and pay you, and each needs to know how much. That is why they have the system of bidding. And it is basically price only. That is why wind/solar have the advantage that the head post complains of. With no marginal cost when the wind blows, they can underbid coal. That is just the market working properly, and much trouble will follow from trying to interfere.
It isn’t true that others have to buy renewables; they don’t have that choice. They just get electrons. What does happen is that your coal plant has to purchase RET credits depending on the total amount sold. That is an off-market transfer from you to wind. It doesn’t affect bidding for market slots^*. Of course, it adds to your overall costs and boosts wind firms. All I’m saying here is that if you want to prioritise baseload, you have to do it the same way. The market can’t do it.
^* Well, it does slightly, in that RET cost is proportional to total sales, and so has a marginal effect. But that is a small part of the cost difference that allows wind to underbid you when the wind bloaws.
“It is far preferable to slavish adherence to ideologies from foreign countries, from massive government intervention”
When you were managing in the 70s, the generators and often fuel sources were owned and operated entirely by state governments. That’s intervention! And it was local.
“Why do you defend the that side of the battle?”
I’m not. I do think that governments should do what is necessary to keep baseload suppliers in business, including subsidy. I’m just saying that you can’t look to the grid market to do that.

David A
Reply to  Tsk Tsk
August 16, 2017 3:51 am

Nick, just yo be understated, economics is not your strong suit.

Tsk Tsk
Reply to  Tsk Tsk
August 16, 2017 4:42 pm

“No, the market itself here is a forum for transactions. Each supplier comes with a different set of cost structures (and subsidies), but the market doesn’t need to care about that. It just facilitates transactions between buyers and sellers. That is an important and independent role.”
That is ridiculous. The subsidies distort the market. This isn’t a choice of color. This is the kind of thinking that leads to price controls and then lots of head scratching when there’s no more toilet paper.

Paul Penrose
Reply to  Nick Stokes
August 16, 2017 6:53 am

Nick,
How disingenuous. You know better. There is only a single integrated electrical grid. The grid voltage is regulated by matching generation to load (demand) on a continual basis. Correct voltage regulation is critical, so a certain amount of central planning and control is necessary in order to maintain a stable grid now and into the foreseeable future. This is all a matter of the physical laws of nature, not market economics. We need reliable, dispatchable baseload generation and such should be valued higher than intermittent unreliable sources. All of the subsidy an feed-in regulations for “renewables” distort the market in a way that hinders this requirement.

I Came I Saw I Left
August 15, 2017 3:33 pm

Coal really should be made a national security issue. It makes the US much more resilient to disruptive forces. Which would you rather have as a utility when an antifa terrorist commits a terrorist act against the supply chain: a coal plant with a 30-day supply of feedstock, or a natural gas plant that goes offline immediately when its pipeline supply gets cut?

Robert
Reply to  I Came I Saw I Left
August 15, 2017 4:20 pm

Plus a nuke with two years worth of fuel in the pot!

Barbara
Reply to  I Came I Saw I Left
August 15, 2017 8:04 pm

A ground mounted solar project was taken out by strong winds off from Lake Ontario in New York.
Call this energy security? Just wait until mother nature deals with wind and solar projects.
Electricity supply is a national security issue.
Problem is that nothing can be proven until something happens to disprove something.
Wind and solar project developers know this and take advantage of this.

Leonard Lane
August 15, 2017 5:46 pm

You cannot convince a person who makes money from subsidies (whether it be alcohol from corn, grants, subsidies, and tax rebates or cuts or environmental law exemptions from wind and solar, or great grants, tax breaks, and subsidies for electric cars and their batteries) that what is being subsidized is less efficient, uneconomic, or morally wrong. I could argue efficiency or economic reasons but most here could make, and have made, better posts and comments.
But, when subsidies (and related terms that indicate taking money from the poor and middle class for the rich) are discussed they are always immoral. The only proper time or place for subsidies, so long as they are temporary, is in case of national emergency or local/regional disasters where the greater good can shown to outmatch the temporary harm to the poor and middle class. Real and true examples are rare, at least in my experience.

August 15, 2017 6:23 pm

Hello, something seldom mentiioned is that a pile of coall is really natures storage battery. I It does not cost anything,to store it on site unlike other fuels, , yet it is available for use any time.. Nature created it from green vegitation , and when we burn it, it, it returns that wonderful gas CO2 and that with the energy from the Sun, it again works its magic by Greening the Earth.
Michael

Reply to  Michael Elliott
August 16, 2017 6:00 am

Michael you hit the nail on the head. + 1000

TheGoat
August 15, 2017 6:27 pm

“Ok, lets do that. And to be fair, let’s include all the subsidies for each power generating technology:
nuclear
Gas
Coal
Hydroelectric
Oil
Geothermal
Solar
Wind
Anybody brave enough to play this game?”
Sure. Let’s make sure we include special tax deals, loan guarantees, etc as well.
Now, I argue that *none* of them should be subsidized in any way. I

August 15, 2017 10:17 pm

An important aspect of overall grid configuration is that of frequency stability. This cannot be provided by wind or solar, as they ‘follow’ rather than ‘lead’. Large (high-inertia) spinning synchronous generation is the key to frequency stability and only the big-iron quartet of nuclear, hydro, coal or gas has plants of this nature.
The other aspect to bear in mind is that solar and wind cannot currently (sorry) be used for a ‘black system start’. That’s why the UK has Dinorwig: a pumped-hydro storage and associated hydro generation unit. Specs here: http://www.fhc.co.uk/dinorwig.htm Australia is following (after the numerous SA disasters including black systems) with ‘Snowy River 2.0″. http://www.snowyhydro.com.au/our-scheme/snowy20/snowy-2-0-faqs/
Note that Dinorwig, as is usual with schemes of this sort, has spinning reserve already synchronised to the grid, and can power up fast: “Synchronised and spinning-in-air emergency load pick-up rate from standby 0 to 1,320 MW in 12 seconds”. That’s because the static water head is there, waiting to be turned into the turbines, and the turbine is air-spun so is already rotating and synchronised.
[Synchronising generators is no small feat (see out-of-step here: https://cdn.selinc.com/assets/Literature/Publications/Technical%20Papers/6163.pdf?v=20151125-111441 ) and mistakes can cause mechanical damage, surges, and sudden loss of existing, hitherto-stable generation sources as they island themselves for protection.]
This near-instant dispatch at any hour as required is simply not possible with wind or solar. So the notion of a spinning reserve of dispatchable power is central to grid delivery. And as black-system events proliferate as the percentage of unreliables in the generation mix rises (SA is the crash-test-dummy here – see http://www.Joannenova.com.au ), securing black-start capability is vital to – er – re-start things.

Griff
Reply to  Wayne Findley
August 16, 2017 12:34 am

which is why the UK National Grid is rolling out a very large ‘enhanced frequency response’ tender to provide frequency stability with grid scale batteries. These respond quicker than online fossil fuel plants…

Reply to  Griff
August 16, 2017 3:47 pm

Agreed, batteries and pumped storage can contribute inertia – but they need to be Charged first….from something, somewhere.
There’s perhaps more scope in frequency-detecting load-shedding (e.g. smart boxes feeding resistive loads such as water heaters, which shed load cycle by cycle until the frequency comes back up). But ‘load shedding’ means, by definition, ‘less power’……
But neat rhetorical trick, wedging in ‘online fossil fuel plants’ to a discussion primarily about a Hydro station….

Griff
Reply to  Wayne Findley
August 16, 2017 12:36 am

Oh – here’s a test of battery power for black start on a German grid:
https://cleantechnica.com/2017/08/15/first-black-start-germanys-grid/

Reply to  Griff
August 16, 2017 3:36 pm

“We tested the system on a disconnected, isolated grid”
“It shows that batteries can be used to restore the grid — this time we used a CCGT, but the next phase will use renewable energy.”
CCGT = Combined Cycle Gas Turbine
Disconnected, isolated grid was small and already islanded. It was connected back to a state-wide, frequency-stable grid. That’s not a black start of a ‘grid’, it’s re-connection of an islanded (and very small ) portion.
Cherry-picking is dangerous stuff….

Reply to  Wayne Findley
August 16, 2017 4:38 am

Emerson wind energy convertors WECs do not use neodimium magnets, the rotation rate is not locked to grid frequency. Solid state electronics enable grid connection. This has many advantages:
http://www.enercon.de/en/technology/grid-technology/
ENERCON WECs are capable of remaining in fully operational and connected to the grid for 5s in case of overvoltages or undervoltages caused by grid faults. Furthermore the Fault Ride Through (FRT) option enables an adjustable current to be fed in during the fault in order to dynamically support the grid voltage.
Inertia Emulation
ENERCON WECs equipped with the Inertia Emulation option can increase their active power output in the event of frequency drops without setting aside reserve power. For a certain period of time, a power greater than that contained in the wind is fed into the grid.
Reactive power capability
Reactive power is needed in order to keep the grid’s voltage within the required limits and compensate for electrical equipment connected to the grid. Due to the full-scale converter concept, ENERCON WECs can provide reactive power flexibly. The Q+ option and the STATCOM option can be configured project specifically onto meet the requirements of certain grid codes. Both options are installed in the WEC
· Power-frequency control
For any electric power system, generation and consumption of power have to be balanced at all times. If this balance is disturbed, the grid’s frequency will deviate from its nominal value. In case a grid fault leads to temporary over frequency, ENERCON WECs will reduce their power infeed according to certain set parameters. In addition, reserve power can be retained during normal operation in order to compensate for an event of under frequency.

Reply to  ghalfrunt
August 16, 2017 3:39 pm

The link describes solid-state converters (“generator, rectifier, several inverters”) all within a wind turbine.
The problem is obvious: try calling on this generation source when the breezes die. Despite it’s electronic wizardry, the dispatchability just ain’t there.

Griff
August 16, 2017 12:33 am

What can I say?
The rest of the world is moving towards the end of baseload power and of coal.
This is flying in the face of an irresistable change and can only damage the US.

David A
Reply to  Griff
August 16, 2017 4:00 am

Griff, by the time the EU increases their solar and wind percentage, builds and pays for their batteries and other energy storage, and pays for their new distribution, their industry will die, not fit for purpose, unable to compete with China, Russia, Asia.and hopefully the US.

David A
Reply to  David A
August 16, 2017 4:08 am

Oh and Griff, the ROW is building hundreds of coal fired plants.
Your irresistible force is DOA without large leaps in technology.

Griff
Reply to  David A
August 16, 2017 4:45 am

Well, the Germans and UK have been building wind and solar and new HVDC lines for more than a decade now – and industry has not suffered from that.
Seven UK car plants have solar power, which has reduced their power costs…

Patrick MJD
Reply to  David A
August 16, 2017 5:02 am

“Griff August 16, 2017 at 4:45 am
Seven UK car plants have solar power, which has reduced their power costs…”
Yes, you have mentioned this before. They are not interested in emissions reductions, just a reduction in business expense, ie, energy. Once the cost outweighs benefits, they will leave. It’s happened in the green energy capital of the world, Adelaide, South Australia.

Paul Penrose
Reply to  Griff
August 16, 2017 7:00 am

Griff,
Fine. Just let us go our own way. Why must you insist on trying to get us to follow the other lemmings? In the long run, we will see who was correct and who was misguided.

Griff
Reply to  Paul Penrose
August 16, 2017 8:02 am

It isn’t just the US affected by climate change and it isn’t just the US affected by US CO2 outputs… but if you don’t choose to accept that, not a lot I can do about it.
If you don’t mind the loss of influence in the world and loss of reputation US climate inaction brings, fine – but I don’t think many US citizens take much note of what is happening outside US boundaries, so I’m offering you information on that with the best of intent: I sincerely wish the US well.
I don’t think many posters here have really grasped the situation as regards renewable energy in places like the UK and Germany. This is well established, mainstream, working stuff, being actively and rapidly developed. Hence I think many of the points raised by posters here are based on incomplete information and their arguments must fail. If you do want to contest points on renewables, I’d like you to have the best and most accurate basis against which to make your arguments.

D. J. Hawkins
Reply to  Paul Penrose
August 17, 2017 9:46 am

Griff,
If you’re worried about CO2 outputs follow the engineer’s decision tree. If I want to affect something what do I do? Where do I start? You start with the item that gives you the biggest bang for the buck. In this case, make your complaints to India and China, and stop badgering the only major economy that has, in fact decreased it’s CO2 output over the last 10 years.

MarkW
Reply to  Griff
August 16, 2017 7:38 am

As always, Griff takes press releases from politicians as superseding mere reality.

Griff
Reply to  MarkW
August 16, 2017 10:16 am

I can’t tell where you take your apparently better information from as you never quote any to contradict me…

Barbara
Reply to  MarkW
August 16, 2017 12:54 pm

The U.S. must have reliable sources of electricity for national security reasons.
So who cares what the rest of the world thinks about the U.S.
Canada is connected to the U.S. power grid.

climanrecon
August 16, 2017 3:13 am

“That means wind and solar power have a distinct advantage over fossil fuels, since it costs them virtually nothing to produce an extra unit of power”
That is very sloppy language, it is that wind and solar can never produce an EXTRA unit of power that is their major weakness, and sources that can produce extra when required should be paid extra for that key characteristic.

Griff
Reply to  climanrecon
August 16, 2017 4:47 am

Very advanced and accurate forecasting means the UK knows exactly when wind and solar will and won’t produce, so the fossil fuel is turned up or down in good time. But then pumped storage, hydro and demand management and batteries are used for small variations/frequency response…

Reply to  Griff
August 16, 2017 6:06 am

Griff that is a complete load of crap. There is no way to predict when the wind will blow and how hard or when a cloud will block the sun.

Snarling Dolphin
Reply to  Griff
August 16, 2017 7:02 am

Can wind and solar providers forecast in a very accurate and advanced way how many kilowatt hours they’ll be able to produce in a year? If so, they should be required to do so. If not, we’re all being forced to gamble for their benefit. I’d sooner take my chances of winning in Vegas. Better odds.

David A
Reply to  Griff
August 16, 2017 7:29 am

They do not know exactly. Sheesh!
Beyond that this dramatically raises the cost of base load providers!!!!

MarkW
Reply to  Griff
August 16, 2017 7:40 am

Griff, as always, you are lying.
The idea that we can tell, 24 hours in advance, exactly what the wind speed at any location will be is nonsense.
The idea that we can tell 24 hours in advance exactly where every cloud in the country will be located is nonsense.

Griff
Reply to  Griff
August 16, 2017 7:41 am

Matt
https://www.theguardian.com/environment/2013/dec/20/strictly-come-dancing-bbc-national-grid
This is a quote from the head of K’s National Grid
“”When we first got wind on the grid we had a few choppy days, but we are managing it very well now,” he says. “Our forecasting is very good.”
The grid gets useful wind forecasts 10 days ahead, and 24 hours ahead can predict the amount of electricity that will be generated to within 4%. Earlier in December, a wind power record was set of 6GW – equivalent to six big power stations and 14% of all electricity at the time – and the grid then managed a 2.5GW dropoff over a few hours as winds surpassed safety limits in many places.
“I don’t see an upper limit to how much wind we can accommodate [on the grid]”, says Williams, who also notes that 86% of payments to companies to stop generating when the grid is getting overloaded go to coal and gas, not wind. National Grid, whose charges make up about 4% of electricity bills, has also seen the traditional evening lighting peak lowered by the widespread use of low energy bulbs.”
I believe that forecasting has improved since the article was published in 2013.

Reply to  Griff
August 17, 2017 4:15 pm

“demand management” … he he he
Hey Norbert, we won’t be able to ramp up in time … enact that demand management strategy that we talked about at the last operations management meeting.

Reply to  Griff
August 17, 2017 4:17 pm

One of my grandfather’s jobs in the rural he lived in was to help out with demand management.
He shut down the power plant at 10:00 every night.

MarkW
August 16, 2017 7:22 am

First we subsidize and make mandatory a highly variable source of power, the existence of which makes existing power plants unprofitable. Then we subsidize the now unprofitable generators because without them the entire electric grid will collapse.
IE, the solution to any problem caused by government, will always be more government.

Robert of Texas
August 16, 2017 10:26 am

STOP THE SUBSIDIES TO ALL POWER GENERATION. Let the market sort it out.
There, problem solved.

dlwatib
August 23, 2017 9:35 am

This will come back to haunt the coal industry if they insist on this. It will spur the installation of large battery farms in conjunction with solar and wind, thus turning them from intermittent sources to on-demand sources. Coal is screwed either way.