Texas: Coal Did Not Get Blown Away By Wind

Guest “I told you so” by David Middleton

Jan 13, 2020, 10:33am
Texas Power Generation: Did Coal Get Blown Away By Wind?

University of Houston Energy Fellows Contributor Group
We are thought leaders in energy from the University of Houston
.

Ramanan Krishnamoorti, Chief Energy Officer and Ed Hirs, Lecturer, Department of Economics

The precipitous drop in coal-based power generation in Texas, from 32% of consumption in 2017 to 20% in 2019, has been hailed as the most significant step in decarbonizing electricity production in Texas. The narrative in the media has suggested that the rapid demise of coal has resulted from the growth of wind power.  

The data suggest a more complex narrative. While wind has grown considerably, especially early in the last decade, the decline of coal has largely been due to a resurgent natural gas industry.

The data for Texas’ power production over the last three years indicates that coal has instead been replaced largely through the growth of natural gas and only to a small extent due to wind. Specifically, the growth of high efficiency combined cycle natural gas production has driven most of the surge to replace aging coal assets. Coal-based power generation is expected to continue to slide as more coal-fired power plants are retired in favor of renewables (wind and solar) and, more frequently, natural gas-based power generation.

[…]

Understanding the transformation of the electrical mix is important: Natural gas derived from hydraulically fractured shale reservoirs has been a primary driver. Further, coupled with the oversupply of  cheap natural gas, the displacement of many aging, low-efficiency single turbine natural gas plants by high-efficiency combined cycle plants has built the resurgence of natural gas based power by substantially lowering the cost of the electricity being produced. 

[…]

Forbes

Since 2017, gas has kicked @$$, while wind broke even in the Lone Star State…

“Annual Distribution of Sources for Texas Electricity Production (percentage): Trends over the last three years. ERCOT” Forbes
“Annual Distribution of Sources for Texas Electricity Production (percentage) over 2007-2019 RAMANAN KRISHNAMOORTI BASED ON INFORMATION FROM ERCOT” Forbes

Wind power basically grew from nothing to a consistent ±20% of Texas’ generating capacity for two (2) reasons:

  1. Physical geography
  2. A $7 billion “investment” in Competitive Renewable Energy Zones

Physical Geography: The Llano Estacado

LLANO ESTACADO

Art Leatherwood

The Llano Estacado, commonly known as the Staked Plains but perhaps more accurately interpreted as the “palisaded” plains in geological terms, is the southern extension of the High Plains of North America and lies south of the Canadian River in northwest Texas and northeast New Mexico. A high mesa sloping at a rate of approximately ten feet per mile toward the southeast, it is one of the largest tablelands on the continent. This high flat land is located approximately between 101° and 104° west longitude and 31° and 35° north latitude. It is distinctly bounded on the north by the southern escarpment of the Canadian River valley and on the east by the irregular and deeply incised Caprock escarpment. The western boundary is the Mescalero Escarpment east of the Pecos River valley of New Mexico. The southern end of the plateau lacks a distinct physical boundary; it blends into the Edwards Plateau, and the Johnson Creek branch of the Colorado River, east of Big Spring, is probably best considered its boundary. The Llano Estacado comprises all or part of thirty-three Texas and four New Mexico counties and covers approximately 32,000 square miles, a larger area than all of New England. It is part of what was known to early explorers and settlers as the Great American Desert, a semiarid region with average annual precipitation of eighteen to twenty inches. The soils are almost universally dark-brown to reddish brown sands, sandy loams, and clay loams.

[…]

Texas State Historical Association

Note the correlation of the Llano Estacado to Texas’ wind resource.

Llano Estacado (Journeys)
Texas 80-Meter Wind Resource Map (NREL)

The Llano Estacado and rest of the Lower Plains have the most consistent onshore wind resource in these tangentially United States.

Wind generation seasonal patterns vary across the United States (EIA)

Competitive Renewable Energy Zones

Moreover, the sharp decrease in the cost of installed wind capacity, along with the on-again off-again production tax credits (PTC) for wind, has been instrumental in the rise of wind power. In Texas, the foresight to authorize and pay almost $7 billion for the Competitive Renewable Energy Zones (CREZ) by state leaders and the Electric Reliability Council of Texas, or ERCOT, has been unprecedented. (ERCOT operates the majority of the Texas grid). Between 2006 and 2013, CREZ has enabled the construction of 2,400 miles of transmission lines to carry 18,500 megawatts of West Texas wind generation to major load centers in Dallas, San Antonio and Austin.

[…]

Forbes

Irrespective of whether or not it was a good idea to make this “investment,” it was made and it enabled the exploitation of Texas’ vast wind resource. In the current era of cheap, abundant natural gas due to the “shale” revolution, it’s easy to “Monday morning quarterback” this decision. However, at the time the Texas State Legislature approved the funding of CREZ (2005), natural gas was neither cheap, nor abundant. In 2005, we were building LNG import facilities.

U.S. Natural Gas Prices (EIA)

Despite incurring a $3-5/month additional fee, Texas residential electricity rates were not impacted by this “investment.” Electricity was actually less expensive in July 2017 than it was in July 2005. Would our electricity be even less expensive today, if we didn’t build out the wind power infrastructure and relied more heavily on natural gas and coal? Maybe… But you can’t re-rack history. In Texas, gas kicks @$$ and wind breaks even.

Then the wheel came off…

The University of Houston professors were doing just fine and then the wheel came off

So with substantial growth in natural gas and wind over the past decade, what’s the most likely source to fill this increased electricity demand in the future?  

Natural gas seems like an obvious answer, but despite its rapid growth over the past decade, continued growth is likely to slow, both because of public resistance to building new pipelines to bring gas from the state’s shale drilling fields to its population centers and because of growing environmental concerns about damaging methane released by flaring. Additionally, the underlying technology of hydraulic fracturing that has enabled the shale revolution is under increased scrutiny.

[…]

Forbes
Aeuhhh????

How can a paragraph be so totally wrong? Well, start off with a run-on sentence filled with non sequitur fallacies:

Natural gas seems like an obvious answer, but despite its rapid growth over the past decade, continued growth is likely to slow, both because of public resistance to building new pipelines to bring gas from the state’s shale drilling fields to its population centers and because of growing environmental concerns about damaging methane released by flaring.

Natural gas does seem like the obvious answer because it is the answer. Growth will only slow because supply is exceeding demand. Public resistance to building new pipelines, to the extent it exists in Texas, is one of the reasons that so much gas is flared from Permian Basin oil fields… And methane isn’t released by flaring. Flaring burns methane, making carbon dioxide.

Furthermore, pipeline construction is booming…

January 2019 Vol. 74 No. 1
FEATURES
North America Pipeline Construction Outlook

Jeff Awalt | Executive Editor

[…]

The latest survey by sister publication Pipeline & Gas Journal, based on Energy Web Atlas data, indicates 145,353 miles of pipelines were planned or under construction worldwide at the start of the new year – and North America accounted for 36,087 miles of that total. The survey indicated that 9,542 miles of pipeline are under construction in North America and 26,545 are planned.

United States

While pipeline construction has increased throughout North America, the heaviest activity has been concentrated around major U.S. shale plays with takeaway capacity constraints – most notably, the Permian Basin of West Texas and New Mexico and the Marcellus/Utica basins of Appalachia.

[…]

In the Permian Basin, more than 2 MMbpd of pipeline capacity has been proposed, and several of those projects have moved forward following successful open seasons that revealed strong customer interest. Production in the hottest U.S. shale oil play began pushing against takeaway capacity in 2017, causing tariffs to rise, and surpassed it during 2018.

A number of major Permian projects are scheduled for completion during 2019, including the 730-mile Epic crude oil pipeline to Corpus Christi, Texas, which is developing into a major crude and NGL export hub. The Epic crude line will add 590,000 bpd of takeaway capacity, following the path the Epic NGL pipeline which also is under construction.

Plains All American expects first flow on its Cactus II project in the second half of this year. Cactus II was proposed as a 585,000 bpd project linking Permian production to Corpus Christi/Ingleside via existing and two new pipelines. Due to customer interest, Plains conducted a successful second open season for expanded capacity. Cactus II is expected to start partial service in the third quarter of 2019, Plains is targeting full service on the 670,000 bpd line in April 2020.

Other notable Permian crude oil projects include the Phillips 66/Enbridge Gray Oak Pipeline to Corpus Christi, Freeport and Houston. Gray Oak, which is scheduled to begin service in the second half of this year, will have an initial capacity of 385,000 bpd.

Most recently, Houston-based Jupiter Energy Group commenced an open season in December for a 650-mile, 36-inch crude oil pipeline with expected completion by the fourth quarter of 2020. The pipeline would have capacity up to 1 MMbpd with origination points near Crane and Gardendale/Three Rivers in West Texas and an offtake point in Brownsville, Texas. Privately held Jupiter said it also is constructing a crude upgrading, processing and export terminal capable of loading VLCCs in the Port of Brownsville.

The Permian pipeline shortage is not limited to crude oil production, however. With associated gas accounting for about a third of the Permian output and regulations limiting the amount of gas that can be flared, natural gas pipeline constraints have also put a ceiling on oil production while pushing gas prices in West Texas down to the lowest of any major U.S. hub.

Fortunately, Mexico is providing a growing export market for piped gas from Texas, as its southern neighbor has been aggressively expanding its natural gas infrastructure.

Mexico

In 2012, according to Sener, the Mexican ministry of energy, there were 7,050 miles (11,347 km) of gas pipelines in Mexico, of which 5,665 miles (9,118 km) were operated by Pemex. Since then, 1,496 miles (2,410 km) of gas pipelines have been added to the national grid, and that total is expected to reach 5,420 miles (8,722 km) by the end of 2019.

The 13 existing natural gas interconnections from the United States have an import capacity of about 4.2 Bcf/d, according to the International Energy Agency (EIA), with four of them interconnected to the Integrated National Transportation and Storage System: El Hueco, Cuidad Mier, Reynosa and Argüelles. By the end of this year, five additional interconnections are expected to start operations.

A number of important gas pipelines from Texas and within Mexico have come on line over the past two years, including Enbridge’s Valley Crossing Pipeline, a 168-mile system that added 2.6 Bcf/d of capacity when it entered service in October, and TransCanada’s 348-mile, 670 MMcf/d El Encino-Topolobampo Pipeline, which began service in June.

TransCanada has two more pipelines with expected completion this year: the 178-mile (287 km) Tuxpan-Tula, a $700 million project with a capacity of 886 MMcf/d, and the Tula-Villa de Reyes, a 36-inch, 260-mile (420 km) pipeline, supported by a 25-year service contract with the Comisión Federal de Electricidad (CFE), Mexico’s state-owned power company. [For an in-depth review of projects in Mexico, see the Energy Web Atlas white paper, “Mexico’s Infrastructure Expansion and Five-year Plan.”]

[…]

Underground Construction

The non sequitur train was followed by this…

Additionally, the underlying technology of hydraulic fracturing that has enabled the shale revolution is under increased scrutiny.

Unmitigated horst schist! Texas isn’t New York, New England or California.

Then the other three wheels came off…

After dismissing offshore wind, even though they don’t seem to understand why it doesn’t work…

[…]

Offshore wind production from the Gulf of Mexico, on the other hand, is a slow work-in-progress and unlikely to compete with other sources of electricity for at least the next decade, as the cost of offshore wind remains substantially higher than onshore wind, solar and natural gas in Texas. This is in spite of significant expansions of offshore wind occurring in Europe, China and along the East Coast, and the favorable climate for offshore wind in Texas originating from excellent wind resources, a shallow shelf and existing infrastructure from ongoing oil and gas operations.

[…]

Forbes

They decided that the answer must be solar…

[…]

The bet seems to be on solar power: utility-scale solar power, close to population centers and coupled with modest energy storage options.

Solar power today accounts for less than 1% of Texas’ energy mix, but the amount of installed solar power in the state is expected to almost triple by 2021.

With strong overlap between peak production and peak demand, especially in the summer, utility-scale solar is especially well-suited from a grid integration perspective. Moreover, with significantly lower soft costs as compared to rooftop and distributed solar, utility-scale solar combined with modest storage seems an attractive solution.

[…]

Forbes

With solar power accounting for less than “1% of Texas’ energy mix,” tripling the installed capacity will very likely not move it above “1% of Texas’ energy mix.”

Jan-Jun 2019 Demand and Energy Report (ERCOT)

Texas solar resource isn’t actually that good and where it is pretty good, it’s where most of the wind farms are. The CREZ transmission lines are already congested with excess electricity and the little bit of solar power already operating out there has made the congestion worse.

Photovoltaic solar resource map (NREL)

About the authors of the Forbes article…

Dr. Ramanan Krishnamoorti is the chief energy officer at the University of Houston. Prior to his current position, Krishnamoorti served as interim vice president for research and technology transfer for UH and the UHSystem. During his tenure at the university, he has served as chair of the UH Cullen College of Engineering’s chemical and biomolecular engineering department, associate dean of research for engineering, professor of chemical and biomolecular engineering with affiliated appointments as professor of petroleum engineering and professor of chemistry. Dr. Krishnamoorti obtained his bachelor’s degree in chemical engineering from the Indian Institute of Technology Madras and doctoral degree in chemical engineering from Princeton University in 1994.

Ed Hirs is BDO Fellow for Natural Resources and a UH Energy Fellow at the University of Houston, where he teaches energy economics. to undergraduate and graduate students. 

UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.

Forbes

About the author of this WUWT post…

I have been a geologist/geophysicist in the “climate wrecking industry” (oil & gas) since 1981, primarily working the Gulf of Mexico, the second most prolific oil play in these tangentially United States.

As a proud member of the “climate wrecking industry”, I am proud of our industry’s accomplishments. I recently attended a salt tectonics conference at the University of Texas at Austin. The opening remarks were by Texas State Geologist and Director of the Bureau of Economic Geology, Scott Tinker. His remarks mostly focused on how oil & gas are integral components of lifting people out of energy poverty and he closed with, “When someone asks you what you do, reply with ‘I work in the oil & gas industry, I lift people out of poverty. What do you do?’” The “Moral Case for Fossil Fuels” is undeniable.

I have a BS in Earth Science, with a geology concentration and minor in math, along with 38+ years of “OJT”. I am a member of the Society of Exploration Geophysicists (SEG), American Association of Petroleum Geologists (AAPG) and Houston Geological Society (HGS). I live in Dallas with my wife (also a geo) and 11 dogs (9 rescues, mostly Pomeranians, & 2 Corgis, who we love almost as much as the rescues) and I work in Houston… My commute has a YUGE carbon footprint. MAGA!!!

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142 thoughts on “Texas: Coal Did Not Get Blown Away By Wind

  1. Not a surprise for those that have read “Power Hungry” by Robert Bryce. The author does not make that assertion, but the numbers he exposes do. The entire “Green Energy” and “Renewable” scam is part and parcel support for all facets of the natural gas industry. Natural gas plants must be built and added to the electric grid so as to smooth out the irregularities introduced by the various “renewable” scams being placed on the grid.

    I recommend Robert Bryce’s book as a great introduction to the numbers surrounding energy production and consumption. It will make one much more informed and less likely to fall for the emotional chicanery of the “Green” scam.

    • Here is proof.

      In July 2010, Robert F. Kennedy Jr. gave a lunchtime speech to the Colorado Oil and Gas Association, proposing a strengthened alignment between his advocacy groups and the natural gas industry in a battle against the use of domestic coal and foreign oil. In this clip, he describes how BrightSource solar thermal plants and other utility scale “renewable” energy sources like wind are actually gas plants.

  2. Irrespective of whether or not it was a good idea to make this “investment,” it was made

    Actually you can “re-rack history” by putting those persons who made the windy decisions in prison.

    • The State legislature made those decisions and it was within their lawful authority to do so. The decisions were made when natural gas was expensive and not abundant. We were building LNG import facilities in 2005 and natural gas was 3-4 times as expensive as it is today.

    • ” rack ”

      When David used the word the thought of round balls and a green table came to mind.
      Geoff uses the word and wood frames and ropes come to mind.

      So, here’s to a honey glazed rack of pork ribs.
      Then there’s . . . never mind.

    • A bunch of Bush-era Republicans, that’s who. The same kind of Republicans who ran Georgetown into the dust. It’s crazy to think that was the decade that Republicans won control of the Texas legislature for the first time ever and like good little H.W. or W. Bushes, they squandered their control. When Oklahoma Republicans can’t even get it right, do you expect Texas Republicans to? What amazes me about solar and especially wind is that they’re fretting about storage. When they’re talking about trying to store wind a few decades after they put up a bunch of wind turbines, it was probably a half-baked pie in the sky in the first place.

  3. “Coal Did Not Get Blown Away By Wind”
    Looking at the second table, not so affected by year to year fluctuations, we see that from 2007 to 2019:
    Gas rose by 2% (of Texas total)
    Wind rose by 17%
    Coal fell by 17%

    Sure looks like it was wind.

    • Please see the comment I made below. If you look at the actual graphs available at EIA there is no way wind did any such thing. We are not speaking of an individual year, but rather the entire span from year 2000 or so.

      • What’s your counter-argument? I’ve shown the numbers. You seem to just say that it’s not fair because wind was subsidised. Even if true it doesn’t alter the fact that wind went up as coal went down.

        • The counter-argument is in the article. Almost all of the growth in wind occurred before the sharp drop in coal.

          • The end result was that wind went up and coal went down. You could say that for a while, wind displaced primarily gas, and then gas displaced coal. It comes to the same thing. Wind just kept going up, and something had to give.

          • Wind has barely increased since 2017… Most of the coal decline occurred since 2017. To the extent that anything has “blown away” coal, it’s the collapse of natural gas prices due to the “shale” revolution and the rapid advances in combined cycle natural gas generation efficiency.

            Wind doesn’t suck in Texas… That’s as good as it gets.

            Wind’s growth in Texas is pretty well maxed out.

          • You know… The “end result” of taking your dog to the vet or to the taxidermist is the same… In both cases, you get your dog back. (H/T Joe Lieberman)… 😆

        • Wind rose from 3% to 17% from 2007-2017, +14%. Over the same period, coal, gas and nuclear fell by 5%, 6% and 2% respectively… -13% total. The explosive growth of wind power displaced a little bit of everything. From 2017-2019, coal dropped by 12%, natural gas grew by 8% and wind only grew by 3%.

          • To add to the complexity of whether wind or gas has displaced coal power, I looked at EIA data available through 2018.

            Wind generation (MWhrs) has been increasing in nearly a straight line since 2007 all while coal generation has been flat from 2007 until 2014. Gas generation has been up when coal is down and vice versa from 2014 to 2018.

            It appears that gas generation is inverse to coal and wind is being generated without regard to coal power generation.

            Makes since to me since wind is hard to turn off. I also note that the total electric power generation is rising steadily.

            I would conclude the reduction in coal use would be made up by gas even without wind. Conversely, since wind is intermittent, the reduction in coal use can not be made up with wind without gas backup.

            So can’t Nick and David both be “right”?

          • I don’t believe for a second, that wind contributed 20% of electricity. Government departments are now all so corrupt that you can not believe any information that comes from them. They are either outright lying, or fudging the numbers – eg. the wind turbines theoretical maximum output used in computer models. What I do know is that wind did not supply 20% of Texas’s electricity.

          • Wind is capable of yielding a 30-40% capacity factor West Texas throughout most of the year. It’s just physics and math.

          • Does the “Generation Sources” graph refer to installed capacity or actual electricity produced?

          • re: “Does the “Generation Sources” graph refer to installed capacity ”

            Paul, prowl around on this page titled: Resource Adequacy and see the many documents related to this subject: http://www.ercot.com/gridinfo/resource

            In particular, this section:
            Monthly Generator Interconnection Status Reports
            View the latest public interconnection information on generation resources in the ERCOT region.

            GIS Report http://mis.ercot.com/misapp/GetReports.do?reportTypeId=15933&reportTitle=GIS%20Report&showHTMLView=&mimicKey

            ——–

            The link just above is to a page with an Excel spreadsheet detailing generation assets / projects in Texas.

        • You simply make-up that I am saying “unfair”. Nowhere did I use that expression. Please be fair in your criticisms, sir. You cannot possibly have seen the numbers and still pretend not to understand the counter argument.

          1)Demand is flat
          2)Nuclear is flat
          3)coal declines substantially
          4)Gas grows substantially (Northwest power said in 2002 that 87% of its projects were CCGT)
          5)Wind grows by a puny amount (I am speaking of totality of production, not just texas)

          Conclusion: gas replaces coal.

    • Once again Nick demonstrates his world class abilities in lying via statistics.

      What matters is not percentages, but how much energy is being created.
      Wind may have had a relatively large percentage increase, but it’s from a tiny, tiny base.

      As David’s charts demonstrate, it was gas that replaced coal, not wind.

        • Once again, rather than admitting that he’s been caught in a lie, Nick decides to dig himself in deeper.

          It’s no where close to the same amount of power. It’s the same percentage, but a “scientist” such as Nick claims to be should know the difference between a percentage and an absolute amount.

          17% of a small number is much smaller than 17% of a very big number.

          The only question left is, will Nick admit that he’s wrong, or will he attempt to change the subject?
          If past is prologue, he’ll attempt to change the subject.

          • The difference between 17% of 1% vs 17% of 30%.

            Surely a world class scientist such as yourself knows the difference between percentages and absolutes numbers?

          • The only way the two numbers could be equal would be if wind was creating just as much electricity as coal was. I’d be surprised to find out that even you are delusional enough to believe that.

          • For heaven’s sake, can’t you just look at the table:

            In 2007 wind made up 3% of total Texas source. In 2019 it made up 20%.
            In 2007 coal made up 37% of total Texas source. In 2019 it made up 20%.

          • Nick, MarkW… Here are the MWH numbers for the 2007-2019 Change in the totals.
            in 2012, they broke out Gas and Gas-CC into separate amounts, and did the same with Solar and Biomass from the ‘Other’ category. I totaled the Gas for this table, and left off biomass, ‘Other’ and solar, as they sum to only 1.27% of total 2019 generation.

            The values come from the two Fuel Mix Settlement spreadsheets at
            http://www.ercot.com/gridinfo/generation

            ERCOT Absolute Generation Change 2007 – 2019 in MWH
            Coal -36,055,070.77
            Gas Total 46,114,506.94
            Hydro -333,152.52
            Nuclear 401,446.54
            Wind 67,883,478.78
            TOTAL 78,869,589.54 (includes Biomass, Solar and ‘other)

            In MWH, ERCOT delivery MHW, these items stick out…

            1) 2019 total generation was 383,428,681.39 MWH, or 383.4 TWH
            2) Total delivery grew 78.8 TWH over the period, 25.90% over the 2007 values
            3) The 36.0 TWH decline in Coal and 25% decline in hydro + Growth in demand was met by the 67.8 TWH increase in wind, the 46.1 TWH increase in Gas, and the small in Nuclear from 40.9 TWH to 41.3 TWH.
            4) At 4.4 TWH, Solar is 1.15% of the 2019 generation.

            I hope this is helps the discussion.

          • The point is that almost all of the growth in wind occurred before 2017, while the steep decline in coal and rise in natural gas occurred after 2017.

          • Thanks Steven
            Summarising:
            Coal decreased by 36 TwH
            Wind increased by 67.9 TwH.
            Totah TwH increased, so components had to increase to maintain matket share.

          • Summary is still wrong. Most of the increase in wind occured from 2003-2017. Most of the decline in coal and all of the increase in gas occured from 2017-2019, while wind only increased slightly. The decline in natural gas from 2003-2017 is the key factor.

        • Excuse what the hell do you do when the wind does not blow. Do you not understand that the time most the wind does not blow is it when it either damn hot or damn cold.

        • Not during the same time frame, Nick. And David and others have repeatedly pointed out to you Wind’s rise didn’t happen at the same time as Coal’s fall. Coal *barely moved* when wind was rising and Wind *barely moved* when Coal was falling – to claim otherwise as you are trying to do is to lie with statistics.

          • Yep The cross plots of gas to coal and wind to total generation are a total QED. Gas pushed coal out. Wind more or less covered the increase in total generation.

    • Nick,

      Texas has the following sources of electricity, %
      https://wattsupwiththat.com/2020/01/14/texas-coal-did-not-get-blown-away-by-wind/

      As more wind is generated, Texas relies more and more on its gas turbines plants to balance variable wind generation, and relies less and less on coal plants for that service.

      Texas needs to have about 10% more generating capacity, MW, in excess of peak demand to cover scheduled and unscheduled outages of traditional generators.

      WIND AND SOLAR

      Germany, Denmark, and Ireland, with high wind electricity percentages, have strong connections to nearby grids.

      Germany, Denmark, and Ireland borrow generating capacity from nearby grids, when their wind and solar generation is minimal.

      Texas cannot borrow generating capacity from nearby grids when its wind and solar generation is minimal, because it has weak connections to nearby grids.

      Texas needs about 15 to 20 percent more generating capacity in excess of peak demand to cover the hours of a year when insufficient wind and solar electricity is generated.

      NEW ENGLAND

      New England, with about 50% of its generation from gas, and weak connections to nearby grids, would have to rely more and more on its gas turbine plants to balance more and more wind generation in future years.

  4. Some numbers specific to Texas, wind, and CCGT. A couple of years ago a senior utility executive and I and a senior utility exec did an analysis of the EIA LCOE wind, coal, and CCGT numbers over at Climate Etc, post titled True Cost of Wind. We corrected all the apparently deliberate EIA errors, and used the Texas ERCOT grid for the transmission portion of the analysis. True LCOE of CCGT about $57/MWh. True LCOE of wind about $146/MWh. So claiming wind is causing the demise of old coal (LCOE about $59/MWh) is nonsense.

    Some CCGT numbers compared to supercritical coal. Capital cost of CCGT about $1500/KW, SCCoal about $4000 based on Turk in Arkansas. Construction time of CCGT about 2 years compared to SCC about 4 years. Thermal efficiency of CCGT 61% versus SCC 41-45% depending on unit size. Proverbial no brainer.

    • Wind and solar “steal” revenue from traditional electrical generation plants. Plant maintenance and reaction times will eventually become issues. Texas’ population continues to increase. Eventually a prolonged emergency situation will arise (snow/ice or just a summer heat wave) and consumers will be desperate for electricity. Traditional generation will be insufficient to meet the need. At that point no one will give a damn about CO2.
      Law of unintended consequences and a reason do-good reactionary politicians are dangerous.

  5. I didn’t know one could simply claim to be a “thought leader.”

    Stating that in the first sentence immediately disqualifies the paper in my opinion.
    “Listen to me, I’m smarter than you. Don’t doubt me either.”

  6. If we look beyond Texas, the current troubles of coal are related to three things. First, electrical energy demand has flattened substantially since about year 2000. You can see this is so also for the totality of energy consuption in the graph from the 2018 Annual Energy Review you provided in your article of some days ago.

    Second, natural gas, because it is so economical, has increased its market share. Third, a couple of “renewable” sources have been subsidized through taxes and dispatch rules to hurt coal, but have contributed little to the effort except at the margin.

    • The biggest issue with coal is the age of the installed base with an average thermal efficiency of only 34%. Since 2000, the average age at retirement is 44 years. By that metric, over 25% of the presently operating installed base will be retired by 2025. And it will all be replaced by CCGT for economic reasons stated in a comment above.

  7. GETTING off Lignite (‘brown’) coal (vs Anthracite) was a sea change in Texas, so much so that a plant (or two?) built around Lignite coal fields were deep-sixed … too expensive (apparently) in a merchant market to retrofit exhaust stacks to deal with dirty Lignite coal.

  8. We actually don’t know if the coal generation decreased. The percentage of power generated by coal decreased – that’s all we can say. Absolute numbers are sorely needed.

    • It’s not a flat line. MWhs generated by coal have gone up, and they have gone down over the last couple of years.

      In 2017 Coal produced ~115,141,221 MWhs in ERCOT. Likely its swan song year. That was 32% of the total.

      In 2019 Coal produced ~ 77,857,179 MWhs in ERCOT. A number of old plants were retired. That was 20% of the total.

      I use the ~ because ERCOT adjusts these numbers a bit, and likely the ‘final’ numbers won’t be out until February. They don’t move by much when restated.

  9. Activist efforts to “close” coal in Texas:

    https://www.sourcewatch.org/index.php/Texas_and_coal

    Example: Luminant agreement “In 2007, environmental groups reached a milestone agreement with Luminant (formerly TXU), one of the state’s largest power companies. As part of an estimated $45 billion buyout by a group of private equity firms, Luminant settled a series of lawsuits with Environmental Defense and the Natural Resources Defense Council. On Feb. 26, 2007, the company agreed to cancel 8 of its planned 11 new Texas coal-fired power plants

  10. 20% of power produced by wind surprises me. Does that mean the generated power was actually used? Coal and gas fired plants can be managed up or down within limits to meet known requirements but not wind and if you can’t store it so what? Point being was standby energy wasted when wind was providing its’ 20%?

      • I’m curious how that was measured. I’m guessing wind output is measured by generation only and ALL the numbers we see for wind are based on that same criteria. If the wind generation exceeds fossil fuel generation for a period which takes precedent? You can’t throttle the fossil fuel generation to match the wind power so how do you do that? I believe wind power fuel saving is exaggerated.

  11. The biggest driver of coal plant decommissioning: Environmental pressures.

    “The Creature of Martin Creek Lake Won’t Die”
    The Martin Lake coal plant in East Texas is the biggest sulfur dioxide polluter in the nation. And unlike other regional super-polluters, this one is still chugging along.
    by Christopher Collins Sep 23, 2019, 10:53 am CST

    https://www.texasobserver.org/martin-lake-coal-plant-super-polluter/

    The coal-fired power plant is also a reliable polluter, releasing 25,400 tons of sulfur dioxide into the air each year, more than any other coal plant in the United States.

    Environmental activists have been after the plant for years, with movement on the matter as recently as last month, when the Sierra Club said it would file a new lawsuit over the plant’s pollution.

    • Yep. Those environmental pressures have made the construction of new coal-fired plants cost prohibitive and made it uneconomic to retrofit many existing power plants.

      • Those ‘environmental pressures’ are the industries own fault. It has been documented by numerous NGO’s that are centrist that coal ash is bluntly hazardous waste. Full of mercury and other dangerous metals and chemicals.

        The coal industry needs to clean up its act if it wants to stay open and we should perhaps ban non-centralized coal usage, i.e. ban coal usage in homes and businesses in favor of natural gas.

        Yes, it is picking ‘winners and losers’ but for damned good reasons.

        • The coal industry did clean up its act. Pollution regulations passed in the 1970’s and 1980’s deeply reduced the actual pollution at a manageable cost. Since then, the regulations have only marginally reduced pollution at costs that have become prohibitive.

  12. Texas Landowners Opposing Wind
    An Organization of Concerned Brown and Coleman County Landowners and Residents

    TLOW.org is set to put a stop to more wind farm stupidity in Central Texas.

    • If there is anything rural Texas is about it is telling other land owners what they can and cannot do with their property.
      Rancher 1: You should be able to do anything you want with your property.
      Rancher 2: I’m going to lease out some acreage to a power company to put wind turbines up.
      Rancher 1: You can’t do that.
      Rancher 2: Why not
      Rancher 1: It messes up my view.
      Rancher 2: But you just said I should be able to do anything I want with my property.
      Rancher 1: Yeah, except wind farms. Anything except that.

  13. Actually, this is not correct.

    Coal is a dirty technology. Full stop. It needed strict emissions controls on it to stop mercury and other pollutants known to be in coal emissions from getting into the environment in general.

    Add into this that natural gas, wind power, solar power, etc. were competing with it and beating it on a neutral landscape and it is not a surprise that coal is disappearing except in countries where wind and solar are not feasible like mountainous Germany.

    • And yet, the Germans have banned both nuclear power and fracking. At least they will cut consumption due to prohibitive cost. Goodbye industry, jobs, VW, BMW, Mercedes, etc…

    • Wind and solar will never be able to compete with coal until they become dispatchable. And that is not going to happen anytime soon.

    • Mr. Kidwell: Actually, two can play this game.
      Wind and Solar are dirty technologies. Full stop. They need waivers from feds or bird kills would shut them down yesterday, bankrupted by fines.
      Add into this that electric generation was working fine without solar and wind that were by definition NOT competitive (there was zero demand for grid-level wind or solar until the neutral landscape was tilted by subsidies), it is not a surprise that an eco-nut who thinks coal is “dirty” is perfectly happy to destroy coal by a lie re: CO2 or any means.
      You will need to up your game if you intend to keep posting without getting mocked.

  14. The information that is being ignored in this post is what portion of the renewable power is being sold because it is legislatively mandated? I can’t speak to Texas, but in Colorado a portion of the power generated has to be from renewable sources; no matter what the cost.

    The same is true in South Australia where renewable power is mandated and the cost of residential power is the highest in the world.

    So it doesn’t matter what power comes from renewables in Texas; unless it is competing head to head with the cost of coal and gas generated power without subsidies. And since wind and solar are more expensive and cannot compete, the defense of wind and solar by anyone is a based on fraud.

    • Wind would not be where it is in Texas without the transmission line “investment”, the production tax credit, high natural gas prices of 2005-2008 and the war on coal. But the fact is… That wind is what it is in Texas: A significant component of our electricity generation mix.

      • How much of that wind generated power is sold to Colorado, or any other mandated state, to meet its renewable requirements? A question that I have with no idea what the answer is, but wind is not economic, even with subsidies. No one wants it. It destabilizes the grid, is not dispatchable, kills birds and bats in great numbers, blights the landscape, expensive to produce etc. So how can it be online without mandates?

        • Wind is now marginally economic in Texas, even without the production tax credit.

          It wouldn’t have become economic without the PTC, CREZ and favorable treatment by ERCOT.

          Texas generates and consumes more electricity than any other State, generating more than twice as much as second place Florida. All of the electricity from all sources goes into the 3 grids covering Texas, with ERCOT (Texas Interconnection) being the largest. It’s impossible to segregate Texas electricity exports by source.

        • re: “How much of that wind generated power is sold to Colorado,”

          None, if they are interconnected with Texas ERCOT system.

          If they were to connect to another system (‘grid’) outside Texas it would subject the Texas grid to Federal (intestate) rules and regs, and the Texas operators have fought that.

          There a few “DC Ties” (incl a Tie or two with Mexico) to the ERCOT system, but they repay “in kind” (no money transfer) IIRC, avoiding certain fed regs.

          • Yep. Good point. 90% of Texas is covered by ERCOT. Only the area around El Paso is in the Western Interconnection.

            Almost all of the wind generation is within ERCOT.

        • As of the end of 2019, installed ERCOT capacity is 23,860 Mw/hr. For the entire year, the average installed capacity was 22,289 MW/hr.

          For 2019, on average, it produced just under 40% of what it theoretically could deliver.

          • Be obtuse. The world probably needs more tuses anyway …

            (ERRORS not pointed out run the chance of being ERRORS repeated into the future. I don’t want that, no one does. Ever hear the Men’s Wearhouse commercial with Sy Syms: “An Educated Consumer Is Our Best Customer.” Take that to heart, Dave.)

          • There are fights worth picking and fights not worth picking. When my wife complains about how much we pay per “kilowatt”, I don’t point out the obvious. 😎

          • George Zimmer was Men’s Wearhouse. Sy Syms was Syms Suits. They used to have a location near Love Field… Worst TV commercials ever.

          • One seemed to have inspired (stole from) the other. Doing a search on that key phrase brought up Sy Syms and his history, with no mention of the other guy. I thought Sy had simply reinvented himself for the DFW market. Its been known to happen.

          • Syms was a New York City company. Back when I was in high school and college in Connecticut, almost all of the commercials on the late night movies were Sy Syms droning on about his stores…😴

          • It hasn’t averaged over 50% for an entire month as long as I have been tracking it, but yeah, 4-5 months a year (Feb-May and occasionally a fall month) it will average over 40%.

            In 2017 it got as high as 47.6% in both March and April.

    • Here’s a comment that may address your question:

      ‘The Public Utility Commission of Texas first adopted rules for the state’s renewable energy mandate in 1999 and amended them in 2005 to require that 5,880 megawatts, or about 5% of the state’s electricity generating capacity, come from renewable sources by 2015 and 10,000 megawatts of renewable capacity by 2025, including 500 megawatts from resources other than wind. Texas surpassed the 2025 goal in 2009, predominantly with wind generating capacity.’

    • SMS: I live in Texas, and there are dozens of electric plans that can be purchased… its a competitive market. Right now, plans range from 6.7cents/kw to 15cents/kw, depending on the consumer preferences.

      • Thank you for that information. But I think it goes to show that the power market in Texas, like Colorado and South Australia, is not competitive but captured. IF Texas and Colorado did away with their mandates and wind and solar were forced to compete, even with subsidies, would they even be allowed on the grid?

          • I don’t think it is competitive. The price you are seeing may reflect the higher price of renewables and not the lower price of coal and gas. Power providers are always going to try to get the best price for their stockholders. If renewables are selling at 13 cents/kwhr, so are the coal plants; even if they can produce it for less. In Colorado Xcel charges 13 cents. Residential customers should be paying 7 to 9 cents. Residents get charged more because the commissions have to provide a higher price to let the renewables in.

            In South Australia, residents pay 54 cents. Whatever the highest price charged for power entering the grid, that is what energy providers are allowed to also charge. It is a bidding process where all the energy producers providing power cannot lose. They all get to move up to the higher price of the last kwhr provided to the grid. When there isn’t much demand, that price is low but when the demand is high the price can skyrocket.

          • It’s highly competitive from generation to delivery. Power plant operators bid against one another on a daily basis. This is from 2010…

            Every evening, grid operator Ercot forecasts how much electricity Texans will need the next day. Wind farms, as well as nuclear, coal and natural-gas-fired plants, report how much power they expect to provide, and their price. Ercot then orders up generation, beginning with the least expensive type—typically wind. Then come nuclear and coal plants, neither of which have been affected much by wind’s growth.

            The most expensive generators are typically older gas plants, and they are only dispatched in periods of peak demand. If the forecast is windy, more gas plants are left idle.

            One grievance: Coal, nuclear and gas operators must pay for their own backup if an operational or maintenance problem prevents them from delivering power as promised. But if wind generators fail to deliver promised power because the wind doesn’t blow, the cost of backing up wind power companies is spread among all the generators, state officials say. This puts an unfair burden on nonwind generators, says the gas faction.

            “My philosophy is that whoever causes the problem should be responsible for fixing the problem,” says Kevin Howell, president of Texas operations with NRG Energy Inc., NRG 1.57% the state’s second-largest power provider. “Wind shouldn’t cause problems that other people have to fix.”

            The wind industry says wind power is inherently different from fossil-fuel generation and shouldn’t be held to the same rules. Wind is a variable, uncontrollable fuel, while coal and gas generators have ready access to their fuel and can control when their plants are generating power, wind advocates say. They also say they are being unfairly attacked in Ercot committees where traditional generators have more votes and more power.

            https://www.wsj.com/articles/SB10001424052748704188104575083982637451248

            Back when wind was first expanding, natural gas was expensive and most of the power plants were older, less efficient combustion turbines. Wind was given an advantage in not being penalized if to couldn’t deliver – I don’t know if that’s still the case today. However, EROCT picks the least expensive mix of electricity to match daily demand expectations. And, once built and up & running, wind is cheapest… when the wind blows.

          • _Jim,
            That is a very indicative pricing map. Can you tell me why the panhandle of Texas, where all the windmills are, is getting negative pricing?

            Your price of 1.44 cents is where I’ve been led to believe coal pricing for power should be. Wind and solar come in about 15 and 20 cents respectivily. Though they could be less now as that pricing is several years old. It is only through taxes on coal and subsidies on renewables that coal and renewables approach equal pricing.

            Thanks for the link

          • re: “Can you tell me why the panhandle of Texas, where all the windmills are, is getting negative pricing?”

            I think that has to do with “transport restriction” (not the proper term; I don’t recall right now the exact term) or lack of ability to ‘backhaul’ the power produced to a load center (big city) that can consume said power. Such constriction/restriction could be due to transmission facilities being out or limited for where power at the moment is going, is being routed. The financials behind this I don’t recall w/o going back ‘down the rabbit hole’ at the ERCOT website.

            Dave may have a better answer, mine’s the short answer.

          • LMP is the real-time spot market price. Most electricity is purchased by ERCOT a day ahead of time. This map represents what it would cost to purchase additional electricity today, if demand outstripped what was purchased yesterday. This map indicates that EROCT’s purchases yesterday will easily cover the demand today. If it was August and it was 110 F outside most of the map would be yellow, as afternoon rolled around, there would be a lot of reds popping up, particularly around Dallas and Houston.

            http://www.ercot.com/content/cdr/contours/rtmLmp.html

      • Who has 6.7¢/kWh? I’d pay Reliant the cancellation fee for that deal. I think our base rate is about 9¢/kWh. With the Oncor and other fees, it’s close to 12¢/kWh.

  15. The world’s largest hedge fund with an incredible $7 trillion (!) in assets under managemen, BlackRock head Larry Fink announced “a significant reallocation of capital” away from the carbon-economy into so-called green investments”, reported AP.
    In his regular letter to CEOs on Tuesday, Fink wrote that BlackRock is taking immediate action, exiting investments in coal used to generate power, and it will begin asking clients to disclose their climate-related risks.
    “Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself,” Fink wrote in the letter.
    “In the near future — and sooner than most anticipate — there will be a significant reallocation of capital.” He added that “we are on the edge of a fundamental reshaping of finance.”

    Now just imagine the pressure being brought to bear on Coal from finance.
    BlackRock already seconded Bank-of-England’s Mark Carney’s call for a global green credit system at the FED confab at Jackson Hole last August.
    EU Commissioner van der Leyen just presented the EU version of this – so the FED, the EU and BlackRock are dancing to the same tune.

    You could not make this stuff up.

    • The AP reporting, as usual, got it wrong. Fink said that as governments impose carbon regulations over the coming decades, BlackRock would help their clients navigate through the investment risks.

      In a letter to our clients today, BlackRock announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities.

      Over the next few years, one of the most important questions we will face is the scale and scope of government action on climate change, which will generally define the speed with which we move to a low-carbon economy. This challenge cannot be solved without a coordinated, international response from governments, aligned with the goals of the Paris Agreement.

      Under any scenario, the energy transition will still take decades. Despite recent rapid advances, the technology does not yet exist to cost-effectively replace many of today’s essential uses of hydrocarbons. We need to be mindful of the economic, scientific, social and political realities of the energy transition. Governments and the private sector must work together to pursue a transition that is both fair and just – we cannot leave behind parts of society, or entire countries in developing markets, as we pursue the path to a low-carbon world.

      While government must lead the way in this transition, companies and investors also have a meaningful role to play. As part of this responsibility, BlackRock was a founding member of the Task Force on Climate-related Financial Disclosures (TCFD). We are a signatory to the UN’s Principles for Responsible Investment, and we signed the Vatican’s 2019 statement advocating carbon pricing regimes, which we believe are essential to combating climate change.

      https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter

      • AP got this : “exiting investments that present a high sustainability-related risk, such as thermal coal producers;”

        That’s not the worst of it though –
        BlackRock was a founding member of the Task Force on Climate-related Financial Disclosures (TCFD). We are a signatory to the UN 2019 Principles for Responsible Investment, and we signed the Vatican 2019 statement advocating carbon pricing regimes, which we believe are essential to combating climate change.

        OMG they have the Pope on their side. Strange bedfellows, indeed!

        As I said, you could not make this stuff up!

        Coal faces a major financial headwind – the problem is not just some “green progressives”.
        Not sure if any 2020 candidate wants to take this on, the lucre must be a tsunami! That’s how Gov’t “must lead the way”.

        • re: “Not sure if any 2020 candidate wants to take this on”

          I think we have … one.

          He’s campaigned in the heart of “coal country” too.

          • Of course he has, but BlackRock is another fish entirely.
            In other words WallStreet could be Coal’s worst enemy.

            Not to be blindsided by colateral damage from the usual suspects….

      • David and bonbon: I’m sorry, but both of those statements are as scary as any I have ever read from an investment company – “While government must lead the way in this transition”…Gad!

  16. Dave,
    Thank you for being able to discuss this matter sanely. So very few can…
    I agree with all of you numbers (how could I not, data are data, right?) but I have a slightly different interpretation. Notice the drop in gas share from 2007-2017 followed by the spike over the last two years. Also that gas prices dropped not in 2017, but way back in 2009. If it was cheap gas then the collapse of coal should have started in 09, not 17. My alternate reading would be something along the following…
    As wind grew to 17% of power generated in ERCOT the share was taken roughly equally from both gas and coal. However, the finances of coal plants requires that they be run near full capacity. The lower capacity factor and slightly depressed wholesale prices moved coal plants into an unprofitable region. These plants might have mothballed earlier, but possibly long term coal contracts made the prospect of closing worse than the prospect of staying open. In 2017-2019 many of these contracts came up for renewal, but were not renewed allowing unprofitable coal plants to close. Natural Gas plants had been operating at a lower capacity factor, but their economics are driven much less by capacity factor and so were not forced to close. As the coal plants closed down existing Natural Gas plants were able to rapidly ramp up simply by increasing capacity factors.
    You can add in “significant maintenance” as a coal plant requiring a major investment is likely to just close instead of paying for the upgrade.
    What this misses: During summer coal plants run flat out, and much of the gas does as well. It could not be gas simply filling its capacity factor, the overall capacity must have also grown to meet peak demand. Additionally with a growing population the peak demand has grown in ERCOT even while it has declined in other markets.
    What I ignored: Cost of CREZ and subsidies. Kind of irrelevant to the discussion of “what replaced coal.” Super relevant to the discussion of “why so much wind?” However, that is a different discussion.
    Takeaway and other thoughts: I do think that over the longer period it has been wind suppressing wholesale prices that has pushed coal off the grid. Gas was able to retake share, but only because coal was pushed off by wind. Near the end of last year there was something like 14GW of wind in development, and almost 20GW of solar. If those were built out then wind should grow to something like 30% of electric energy produced, and solar would grow to 7-10%. Not sure if it will happen, but if it does that will be a full 20% of current production. I guess we will find out in ~3 years.

    • The other factor with gas has been the retirement of older, less efficient, power plants and the rapid build-out of highly efficient advanced combined cycle power plants.

      If coal was pushed off by wind, it would have declined the most, while wind was increasing the most. When wind grew from nothing to 17%, it cut into coal, natural gas and nuclear. However, as recently as 2010, wind was mostly knocking out gas. The nose dive in coal was coincident with the skyrocketing of natural gas due to cheap prices and the rapid build out of advanced combined cycle power plants.

      The growth potential of wind and solar are generally limited by delivery capacity from West Texas. On the other hand, Texas has abundant natural gas production and distribution throughout the State. Since the power plants can be built almost anywhere and are relatively inexpensive, natural gas will unfortunately probably continue to knock out coal generation.

  17. Does the breakout of the generation sources include fuel burned as ‘spinning reserve’ to buffer wind generation for when the wind stops blowing?

    If the breakout doesn’t include this, the actual wind numbers are much worse

    • That has no bearing on what the wind numbers are. ERCOT only pays for electricity it delivers. Wholesale prices in Texas average $36/MWh. ERCOT has a statutory price limit of $9,000/MWh. When demand is high and wind fails to deliver, operators of natural gas peaker plants live to take advantage of price spikes.

      On Aug. 12, Texans demanded a record 74,500 megawatts of electricity. Generators had less than 2,300 to spare, triggering an Energy Emergency Alert. The market then worked as intended.

      The price of electricity, which averages $36 a megawatt-hour, hit the statutory limit of $9,000, inducing every available generator to put power on the grid. ERCOT and the Public Utility Commission alerted customers to the spike, encouraging them to conserve energy and their money.

      Power supply and demand balanced within 30 minutes. ERCOT kept everyone’s lights on, the price of electricity dropped, and the sun went down.

      https://www.houstonchronicle.com/business/columnists/tomlinson/article/The-competitive-Texas-electric-grid-proves-14482970.php

      • The article you quote is the exact reason why I think solar will be built in ERCOT at a fairly massive scale. During those peaks (the hundred hottest hours) you almost always have two conditions going on:
        1) Sunny
        2) Not Windy
        If you consider the return on capital all you need is 100 hours of $9/kWh. You are basically guaranteed (on the current grid) that every time the price spikes that high your solar farm will be producing flat out and the CREZ lines will not be congested. Two problems though 1) some degradation in solar output at high temperatures 2) after 5~10GW of solar goes in those spikes will be pushed to later in the day and will be less severe. However, that said I strongly suspect that 10GW can go in along the CREZ lines and cause very little congestion. The congestion that does happen will be when spot prices are low or negative so it doesn’t harm ratepayers.

        • re: “I think solar will be built in ERCOT at a fairly massive scale. ”

          I wonder if anybody has looked at the numbers to see if grid-tied solar (i.e., feeding energy ‘back’ into the grid via local inverter synced to the incoming line) at the residential level/scale could sufficiently supply any of this? Just a little bit ago was an ad pitched (on a Salem radio affiliate by S. Hannity) for a residential solar system …

          • Residential solar costs ~4x what commercial solar does. However, residential electricity costs ~4x what wholesale electricity does, so I really think it might be a wash. I suspect that in Texas the regulations will eventually end up along the lines of
            1) when you buy electricity you buy it at the agreed upon rate
            2) when you sell electricity you sell it at the local (substation) spot price
            While that seems like an overall fair strategy it will make residential solar a little less attractive. 4GW commercial solar is already installed in ERCOT with another 10GW in the pipeline. I suspect that at the local level there will probably be more commercial rooftop (i.e. Wal-Mart and Kroger) than residential. I personally doubt that residential systems have less than a 15 year break even cost. I also suspect that if wholesale solar does go in like currently planned then the residential cost of electricity is going to drop by at least 20% in ERCOT (remove the price spikes during daytime and that is the amount you shave off). If that happens the 15 year payback time would extend a whole lot more.

  18. Dave,
    One more time, thank you for talking about this sanely. There are many times that people will point to South Australia or Germany and say “see, wind just drives up prices and gives instability.” I always cringe and think “yeah, but ERCOT.” Then I read articles other places that project 20-40% of US electricity coming from wind and again I cringe and think “yeah, but Florida.” Wind is cost competitive, even when compared with ultra cheap natural gas, but only in certain places. Wind and solar can be added onto the grid without driving price spikes or instability, but only if you manage your market well. Given that wind & solar are just barely cost competitive there is no flippin way that they can be viably paired with storage in less than 5 years. However, we need to be cautious about announcing to the world what technologies will exist (much less what they will cost) in 5-10 years. Nobody predicted the impact of fracking back in 2007.
    You seem to be one of the few authors that can acknowledge the successes (ERCOT) and failures (SA) of wind integration without making ridiculous claims about its potential or lack thereof.
    Thank you.

    • Wind works OK where and when it works. The same can be said for solar. ERCOT has done an OK job of managing the grid. They are actually adding some solar capacity in West Texas… On hot, summer days, the winds are less reliable. It’s thought that a little bit of solar might enhance the electricity reserve for peak demand summer days.

      Would Texas be better off without wind and solar? I can’t definitively say one way or the other. Natural gas was expensive when the decision was made to develop the wind resource. As you pointed out, no one saw the “shale” revolution coming… Not even Chesapeake’s Aburey McClendon.

      Aubrey McClendon on August 1, 2008…

      We think gas prices will stay in this $9 to $11 range, there’ll be times like in July when they’re above it, there’ll be times when they’re below it and of course the weather will matter a lot as well. But we’re pretty confident that much below $9 you’d see a drop off in drilling activity particularly among the conventional drilling and then those pretty aggressive 35% to 40% first year declines are going to kick in and rebalance the market.

      I saw something the other day where some analysts had come up with production in 2010 was going to be up by something like 8 to 10 BCF a day and gas prices were going to be $6.25. That kind of analysis I think can only come at the dangerous intersection of Excel and PowerPoint, it can’t happen in reality.

      https://seekingalpha.com/article/88789-chesapeake-energy-corp-q2-2008-earnings-call-transcript?page=-1

      Natural gas prices have been below $6/mcf since December 2008 and below $4/mcf since August 2011… https://www.eia.gov/dnav/ng/hist/n9190us3m.htm

      • David, you say that wind and solar are cost competitive just because they can sell on the grid at a competitive price. Not mentioned is the LCOE for wind and solar that shows they are not competitive. And I’m talking about the LCOE that includes the lines, switch gear, backup etc. (What makes renewables operational.)

        Get rid of the subsidies, tax breaks and mandates and wind and solar disappear.

        I think _Jim mentioned it, but your ERCOT has not dealt with a renewable penetration as deep as seen in South Australia. IF they are wise they will install plenty of OCGT and CCGT units to compensate for the loss of wind/solar power when the next swarm of tornadoes hits the panhandle of Texas, ripping off solar panels and knocking down wind turbines. Or maybe a Texas sized hail storm.

        It used to be that in South Australia the grid provider was legislated to compensate the solar customer for any power generated back to the grid at 45 cents per kwhr. That worked to generate a lot of solar construction for those who could afford it. But as the penetration of solar power payments back to customers increased, so did the bills. For in South Australia, the rebate back to the solar customer was added to the general billing, it was not hidden in tax breaks and back door subsidies. Those who took the greatest hit were the poor.

        The poor could not afford to install solar but were forced to pay larger and larger power bills. And here we are now paying 54 cents/kwhr.

        The grid is so rickety in South Australia that hospitals are asked to use their diesel generators on very hot days. Power prices shoot through the roof. The potential for blackouts is always high No one wants to build manufacturing plants in South Australia because of the power costs.

        This is the future for Texas and the rest of the US as they transition to renewables.

        • They’re already built, hooked up and producing. If you get rid of the subsidies, they’d still be producing. The subsidies enabled the build out of the infrastructure. The plan in Texas is not to transition to renewables. The plan is to economically exploit as much of the renwable resources as we can, while maintaining grid stability. I don’t expect renewables penetration to approach foolish levels.

          • Unfortunately that is not the case in Colorado where they plan on moving entirely to non-CO2 based energy production. Tri-State has just recently announced the closing of several more power plants and a coal mine over the next decade.

            Heating your home with electricity was always a bad idea, now it is a really bad idea.

    • re: “Wind is cost competitive,”

      Yeah, but, this is when you consider (1) the requirements to make coal acceptable to the eco-warriors WRT emissions (and I’m not saying emission should be disregarded) AND (2) the fact that nat gas has come down in price (WHO saw that coming? It used to be expensive to use to make electricity) AND (3) considering the commitments a utility (non-existent in a merchant power market like Texas) has to make to have Nuclear pay off over the long term, sure. Long story short: Costs rose in some sectors, came down in others. And some ‘costs’ require a steel or stern ‘backbone’ (like nuclear) to engage.

      Economics of Nuclear Reactor – jump right into the economic comparison of nuclear station to a nat gas power plant from start to finish. Do the year-by-year cost and then the payback/PROFIT after the loan is paid back .. fuel costs included:
      https://youtu.be/cbeJIwF1pVY?t=97

      From the beginning:

  19. According to David Middleton’s graph, most of the decline in coal generation occurred between 2017 and 2019, when there was a sharp increase in power generation using natural gas, despite the fact that natural gas prices declined sharply in 2009. Since 2017, most power generation using coal was replaced by natural gas, not wind power.

    Christopher Kidwell is correct that coal is essentially a dirty technology when compared to natural gas. Coal releases less heat when burned than natural gas (on a mass basis), and produces much more particulate and sulfur dioxide pollution, while the only real pollutants from burning natural gas are carbon monoxide and nitrous oxides (NOx), both of which can be easily controlled.

    The generation of electricity from coal has endured increasingly strict environmental regulations since the 1970’s, mandating the use of baghouses to filter out particulates, and scrubbers to remove sulfur oxides. Coal-fired power plants remained operational despite these regulations due to the relatively low cost of the fuel, but (particularly in Texas), natural gas has become cost-competitive while requiring far less investment in pollution-control equipment, so that natural gas has recently tended to displace coal as a source for electric power based on market forces alone, without subsidies.

    Power generation using coal is inherently inefficient, because the heat from burning coal in a furnace is used to generate high-pressure steam, which is then used to drive a turbine to generate power. High-pressure steam (usually at 600 psi or more) requires a heating medium at more than 500 F, meaning that much of the remaining heat energy from the coal is lost out the stack. Also, there are inefficiencies from handling steam, including the energy input to drive boiler feedwater pumps, inefficiencies in the turbines, and heat losses from blowdown (warm condensate that is purged from the steam loop to prevent impurities from scaling on boiler tubes).

    Power generation using natural gas uses the heat from burning natural gas to increase the pressure of the combustion gases, and these high-pressure gases are used to drive a gas turbine. In a combined-cycle process. the hot low-pressure gases leaving the gas turbine are heat-exchanged with water to generate steam, which can generate additional power. A combined-cycle natural gas generator can convert about 60 to 65% of the heat content of natural gas to electric power, while a well-designed coal-fired plant would max out at about 40% efficiency.

    From the point of view of both pollution and efficiency, natural gas is inherently a better source of electric power than coal, and as long as natural gas remains abundant and cheap, it will probably displace coal-fired power generation, regardless of whatever is done to subsidize solar and wind power.

    However, it is not known how long the sources of fracked natural gas will last, compared to coal reserves. If, some decades from now, production of natural gas declines, coal-fired power may become the low-cost alternative, unless the global-warming scaremongers get their way.

    The concerns by the University of Houston writers about flaring are definitely misplaced. Natural gas is only flared in an oil-production facility when there are no facilities available to process high-pressure gas. In order to produce pipeline-quality natural gas, it must be processed to remove water, hydrogen sulfide, and carbon dioxide, then cryogenically distilled to remove ethane, propane, and butanes (which are then sold separately as Liquefied Petroleum Gas, or LPG).

    Any oil-production facility that produces significant rates of gas will likely invest in gas-processing facilities, in order to turn flared (wasted) gas into saleable products such as pipeline-quality natural gas and LPG, if there is a strong economic incentive to do so. Gas is only flared when the amount produced is too low to economically justify investment in gas processing equipment.

    • What are you smoking? You are comparing a coal fired steam plant to a OCGT. An OCGT is about 30% efficient compared to 90 to 95% for the coal plant.

      You have opened up another can of worms for renewable power. How do you justify having OGCT backup to renewable power when the total efficiency loss means introducing more CO2 into the atmosphere than if a coal fired plant were maintained in operation?

  20. Not seen in the above discussions are the impact of the many changes to regulations had on the cost of using Coal over the years from 2000 to 2016. Part of the changed regulations were the changes regarding implementation of these regulations. These changes not only required lower levels of emissions but, worse, also changed the rules as to when they had to be installed. Previously, a plant could avoid installing the equipment to meet these new regulations by not making changes to the plant. The rule changes eliminated these exemptions thus all plants had to either make the extremely expensive changes or shut down. The changes needed to meet these regulations cost two to four times as much as the plant original cost. Also, along with reducing the output power the modifications added significant cost to operation and maintenance of the plant.

    • The regulations promulgated late in the Bush Administration and throughout the Obama Maladministration drove the cost of coal through the roof. MATS and CSAPR were particularly bad. Obama’s Clean Power Plan (CPP) would have eventually killed coal in the US.

  21. I drove through West Texas a couple of years back. The number of windmills they have put up is mind boggling. Hour after hour there were windmills to the horizon. I would like to know the capital expenditure and maintain costs of these expansive wind farms.

    • re: “I would like to know the capital expenditure and maintain costs of these expansive wind farms.”

      Look at the bottom line financials of the companies (and/or their divisions) that manufacture, install and maintain these devices (under contract to whomever)? A shareholder should have access to that info.

  22. If I may, a few more personal observations from a long term (1964) Texan. I mentioned up thread that there are still a number of western coal trains crossing the state every day. In addition to that, along the US Highway that parallels those rail tracks, there is a constant truck traffic moving wind generator parts west, and I suppose north as well. On a trip to Denver last August, the number of wind generators up on those staked plains, and even more eastward down on the grand prairie was just over whelming. At night the horizon is a massive blinking red light. Did not see very much solar on the trip, but no doubt it is being built out also. There is a new solar installation along US 183 a bit north of Liberty Hill–my old Texas abode. Not real big, 30 acres or so, but highly noticeable as you drive by.

    An aside about those lignite plants _Jim mentioned. My lady friend of many years worked at Big Brown, along with several others. She was an OSHA compliance officer for Flure -Daniels the company that went in and did major maintenance during spring shut downs. The work included removing and replacing the Stainless Steel lining in the scrubbers. Must have been an extremely corrosive environment in those scrubbers to need the linings replaced every year or two. The fly ash is always a constant “annoyance” to the surrounding areas, not to mention there is evidence of negative health effects.

    Someone mentioned grid tied residential–seems to be a push here in god’s country. My Daughter and SiL just had a system installed on their roof. I cautioned her to do her homework, and since she’s a pretty sharp cookie, I supposed she checked out the different options. Her house is in the no man’s land between Georgetown and RoundRock just east of I35, where it is possible to pick a power provider. Apparently the one they use buys excess production from the home owner for the same price they sell to the home owner. Most buy from the owner at wholesale and sell at retail, so I guess she is getting a “good deal” for now. How long that will last ???

    Personally, I’ve used co-op electricity both down in LH and now up here in Brown county–don’t think one can do better than that.

  23. David Middleton – a lighter note. Still enjoying Press & Seiver a few pages at a time. Also able to listen to a bunch of geology talks on youtube and actually understand. even pick up an error in one about the permian extinction. After 40 years in neuroscience, the vocabulary is second nature. Geology is a whole new vocabulary.

    Thanks again

    • It definitely is a whole new vocabulary… Physical Geology was the first geology course, Press & Seiver was the textbook. On the first day, Dr. Drobnyk listed all of the various branches of geology… Sedimentology – Sedimentary processes – Correct!… Mineralogy – Minerals! Correct… Petrology – Oil! WRONG! – It’s rocks. Most people think of “petro” was being synonymous with oil – Petrodollars, petrostates, etc. Petro means rock. Petroleum means rock liquid.

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