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Stressing the Grid: From Interventionism to Blackouts

“Coal-fired power plants are closing, unable to meet EPA environmental guidelines. Nuclear plants are aging and beset by mounting losses, driven by negative pricing from subsidized wind systems. Without a return to sensible energy policies, prepare for higher prices and electrical grid failures.”

Americans take electricity for granted. Electricity powers our lights, our computers, our offices, and our industries. But misguided environmental policies are eroding the reliability of our power system.

A Close Call This Winter

Last winter, bitterly cold weather placed massive stress on the U.S. electrical system?and the system almost broke. On January 7 in the midst of the polar vortex, PJM Interconnection, the Regional Transmission Organization serving the heart of America from New Jersey to Illinois, experienced a new all-time peak winter load of almost 142,000 megawatts.

Eight of the top ten of PJM’s all-time winter peaks occurred in January 2014. Heroic efforts by grid operators saved large parts of the nation’s heartland from blackouts during record-cold temperature days. Nicholas Akins, CEO of American Electric Power, stated in Congressional testimony, “This country did not just dodge a bullet? We dodged a cannon ball.”

Supply-Side Destruction

Environmental policies established by Congress and the Environmental Protection Agency (EPA) are moving us toward electrical grid failure. The capacity reserve margin for hot or cold weather events is shrinking in many regions. According to Philip Moeller, Commissioner of the Federal Energy Regulatory Commission, “…the experience of this past winter indicates that the power grid is now already at the limit.”

U.S. Environmental Protection Agency (EPA) policies, such as the Mercury and Air Toxics rule and the Section 316 Cooling Water Rule, are forcing the closure of many coal-fired plants, which provided 39 percent of U.S. electricity last year. American Electric Power, a provider of about ten percent of the electricity to eastern states, will close almost one-quarter of the firm’s coal-fired generating plants in the next fourteen months. Eighty-nine percent of the power scheduled for closure was needed to meet electricity demand in January. Not all of this capacity has replacement plans.

In addition to shrinking reserve margin, electricity prices are becoming less stable. Natural gas-fired plants are replacing many of the closing coal-fired facilities. Gas powered 27 percent of U.S. electricity in 2013, up from 18 percent a decade earlier. When natural gas is plentiful, its price is competitive with that of coal fuel.

But natural gas is not stored on-site at power plants like coal. When electrical and heating demand spiked in January, gas was in short supply. Gas prices soared by a factor of twenty, from $5 per million BTU to over $100 per million BTU. Consumers were subsequently shocked by utility bills several times higher than in previous winters.

On top of existing regulations, the EPA is pushing for carbon dioxide emissions standards for power plants, as part of the “fight” against human-caused climate change. If enacted, these new regulations will force coal-fired plants to either close or add expensive carbon capture and storage technology. This EPA crusade against global warming continues even though last winter was the coldest U.S. winter since 1911/12.

Nuclear generating facilities are also under attack. Many of the 100 nuclear power plants that provided 20 percent of U.S. electricity for decades can no longer be operated profitably. Exelon’s six nuclear power plants in Illinois have operated at a loss for the last six years and are now candidates for closure.

Wind  Power Distortion

What industry pays customers to take its product? The answer is the U.S. wind industry. Wind-generated electricity is typically bid in electrical wholesale markets at negative prices. But how can wind systems operate at negative prices?

The answer is that the vast majority of U.S. wind systems receive a federal production tax credit (PTC) of up to 2.2 cents per kilowatt-hour for produced electricity. Some states add an addition credit, such as Iowa, which provides a corporate tax credit of 1.5 cents per kWh. So wind operators can supply electricity at a pre-tax price of a negative 3 or 4 cents per kWh and still make an after-tax profit from subsidies, courtesy of the taxpayer.

As wind-generated electricity has grown, the frequency of negative electricity pricing has grown. When demand is low, such as in the morning, wholesale electricity prices sometimes move negative. In the past, negative market prices have provided a signal to generating systems to reduce output.

But wind systems ignore the signal and continue to generate electricity to earn the PTC, distorting wholesale electricity markets. Negative pricing by wind operators and low natural gas prices have pushed nuclear plants into operating losses. Yet, Congress is currently considering whether to again extend the destructive PTC subsidy.

Capacity shortages are beginning to appear. A reserve margin deficit of two gigawatts is projected for the summer of 2016 for the Midcontinent Independent System Operator (MISO), serving the Northern Plains states. Reserve shortages are also projected for the Electric Reliability Council of Texas (ERCOT) by as early as this summer.

Conclusion

The United States has the finest electricity system in the world, with prices one-half those of Europe. But this system is under attack from foolish energy policies. Coal-fired power plants are closing, unable to meet EPA environmental guidelines. Nuclear plants are aging and beset by mounting losses, driven by negative pricing from subsidized wind systems. Without a return to sensible energy policies, prepare for higher prices and electrical grid failures.

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Steve Goreham is Executive Director of the Climate Science Coalition of America and author of The Mad, Mad, Mad World of Climatism:  Mankind and Climate Change Mania. This piece was originally published in Communities Digital News.

April 24, 2014   No Comments

California Wineries Don’t Need Pricey ‘Green’ Power (1.6 or 7.1 cent/kWh?)

Bill Roberts, economist for the Bay Area Economic Forum, warned in a 2007 study on the municipalization of local power purchases and generation in California:

If Pacific Gas and Electric (PG&E) operates any retained generation and Sonoma Clean Power purchases 100% of its power supply in the competitive market, Sonoma cannot avoid higher average electricity rates than PG&E unless it subsidizes rates (or someone wins the gamble of ‘beating the market’). [page 13, paraphrased for clarity].

Sonoma Clean Power (SCP) officials and advocates were whooping it up with recent news that some 94 percent of its electricity customers had “chosen” to drop service from investor-owned utility Pacific Gas and Electric. Instead electricity customers would be transferred to its new municipal electric utility beginning in May (see Energy News Data, March 28). But Sonoma County electric ratepayers may want to think a second time about automatically “opting in” to the program.

Background

Sonoma County is located north of San Francisco Bay and enjoys frontage along the Pacific Ocean. Sonoma County is considered part of California’s wine country including Napa and Mendocino Counties.

Sonoma Clean Power is a new municipal electric utility created under the Community Choice Aggregation (CCA) law in California. This allows cities to disconnect from having to buy power from PG&E and purchase their own power, or build their own new clean power plants. All customers are automatically transferred to the new city owned-utility unless they want to choose to opt out. PG&E would continue to handle billings, maintenance, and transmission and distribution of electricity.

The justification for creating Sonoma Clean Power is that it can deliver cheaper, cleaner power to customers than PG&E. [Read more →]

April 23, 2014   1 Comment

“Happy Earth Day” (Julian Simon 25th anniversary essay speaks to us today)

“[It] is very frustrating that after 25 years of the anti-pessimists being proven entirely right, and the doomsayers being proven entirely wrong, their credibility and influence waxes ever greater. That’s the bad news. The good news is that there is every scientific reason to be joyful about the trends in the condition of the Earth, and hopeful for humanity’s future, even if we are falsely told the outlook is grim. So Happy Earth Day.”

[Editor note: This post reprints the Earth Day 1995 essay of Julian Simon, "Earth Day: Spiritually Uplifting, Intellectually Debased." Posts about the ideas of Simon (1932–1997), an inspiration to this blog, can be found here]

April 22 [1995] marks the 25th anniversary of Earth Day. Now as then its message is spiritually uplifting. But all reasonable persons who look at the statistical evidence now available must agree that Earth Day’s scientific premises are entirely wrong.

During the first great Earth Week in 1970 there was panic. The public’s outlook for the planet was unrelievedly gloomy. The doomsaying environmentalists–of whom the dominant figure was Paul Ehrlich–raised the alarm: The oceans and the Great Lakes were dying; impending great famines would be seen on television starting in 1975; the death rate would quickly increase due to pollution; and rising prices of increasingly-scarce raw materials would lead to a reversal in the past centuries’ progress in the standard of living.

The media trumpeted the bad news in headlines and front-page stories. Professor Ehrlich was on the Johnny Carson show for an unprecedented full hour–twice. Classes were given by television to tens of thousands of university students.

It is hard for those who did not experience it to imagine the national excitement then. Even those who never read a newspaper joined in efforts to clean up streams, and the most unrepentant slobs refrained from littering for a few weeks. Population growth was the great bugaboo.

Every ill was the result of too many people in the U. S. and abroad. The remedy doomsayers urged was government-coerced birth control, abroad and even at home. [Read more →]

April 22, 2014   4 Comments

Common Core’s Climate Indoctrination

“Our science programs should stimulate students to have an inquiring mind–the very opposite of the science-is-settled, “consensus science” mindset. Obama’s Common Core is a Trojan Horse mixing propaganda with science for our youth…. [Such] one-size-fits-all learning smacks of collectivism in place of individual initiative.”

At a Chicago fundraiser May 29, 2013, President Obama chillingly stated, “I don’t have much patience for people who deny climate change.”  At his swearing-in ceremony May 21, 2013, Energy Secretary Ernest Moniz declared he is “not interested in debating what is not debatable [in climate science].”  These remarks echo the long-standing assertion of climate alarmists that the “science is settled” in regard to the deleterious effects of fossil-fuel burning on global climate. The oxymoronic ”consensus science” is another political sound bite in this genre.

Would these statements come from true scientists interested in pursuing the truth about whether carbon dioxide from burning fossil fuel is a global threat?  These remarks make very clear the policies of the United States government with regard to education or research on climate science. If proposed education material or research does not support abandoning fossil fuels, go somewhere else for financial support and airing your views. Close the door on the way out.

The shared narrative is that man, not nature, has been the main driver of climate change for most of the last century–and that this cannot be good, only bad. Support for this thesis is a series of Assessment Reports by the United Nations Intergovernmental Panel on Climate Change (UN IPCC) released since 1990. 

NIPCC vs. IPCC

To counteract omissions, half-truths, and false statements in these reports, the Non-governmental International Panel on Climate Change (NIPCC) was formed in 2003.  Since 2009, the NIPCC has released six reports that give authoritative, easily-read information about the vast amount of experimental data showing negligible influence of carbon dioxide from burning fossil fuels on climate, financial losses from mitigation, and proper role of adapting to climate change. [Read more →]

April 21, 2014   4 Comments

California Energy Update: Part V

• Green Power Keeps Shifting Costs to Ratepayers Who Don’t Use It
• What’s Best Way to Save Water and Energy During CA Drought?
• CA Desert Solar Tower Project Zoning Shifts Pollution to Las Vegas
• Appeals Court Rejects Nat Gas Power Plant on Same Day as Power Alert
• State Senate President Call for Carbon Tax on Gasoline
• L.A. Times Undermining of Climate Change Could Affect Court Fights
• Union Hires Pollster on Shifting to Municipal Power in Davis, California

Green Power Shifting Costs onto Ratepayers Who Don’t Use It

“Cost Shifting, a situation where the price of one product or service is higher than it should be in order to pay for losses on another product or service for which the price is too low.’”

– Cambridge Dictionaries Online

California Energy Markets recently reported that three California cities just won agreement from regulators to reclassify solar power transmission costs as distribution. The cities are Pasadena, Riverside and Azusa.

That means the cities reaped a 25 percent reduction in long-term solar power contracts. This seemingly bureaucratic fight over how electricity costs are divvied up provides another example of how the Golden State subsidizes “green” power behind the scenes and shifts its extraordinary costs onto all electric ratepayers. [Read more →]

April 17, 2014   5 Comments

Republicans for Obama Energy (Senate Finance Committee okays PTC/ITC subsidies)

“The April 3rd action by the Senate Finance Committee certainly helps explain why a recent Gallup Survey shows that Congress currently has a 13% favorability rating. If the nation’s ‘Millennials’ understand how the Congress is adding to the debt that they and their children will bear, they may assign an even lower rating!”

The Senate Finance Committee that manages to make life miserable for millions of tax-paying Americans with its manipulation of the U.S. Tax Code. The Committee’s latest aids its friends, punish ordinary taxpayers, and loads another $85 billion in debt on our children and grandchildren.

On April 3, 2014, by “voice” (no fingerprints) vote, the Senate Finance Committee reported out an $85 billion tax break ”extender” bill — which the Committee calls the “EXPIRE Act.” [1] The bill includes billions in unwarranted tax breaks for special interests, including the wind industry.

As long as Congress fails to pass a balanced budget, every dollar provided to special interests in this $85 billion “Extender” bill is a direct addition to the national debt for the future (our future) to worry about. Further, each dollar that Congress adds to the national debt will be DOUBLED in about 15 years due to interest that will accrue on that debt.

An egregious example of an unwarranted special interest tax break in the Finance Committee’s bill is Senator Grassley’s wind and other renewable energy “Production Tax Credit” (PTC) and “Investment Tax Credit” (ITC). Grassley insisted on extending this 20-year old “temporary” tax break for another 2 years at a cost, according to the Joint Tax Committee, of more than $13 billion over the next 10 years (and more thereafter).

When Senator Toomey attempted to eliminate unwarranted energy tax breaks from the bill, Republican Senators Grassley, Cornyn, Thune, Crapo, & Portman[2] joined Finance Committee Democrats in voting to keep the massive energy tax breaks in the bill! [Read more →]

April 16, 2014   1 Comment

AWEA Spins Price Distortions to Save PTC (hit on nuclear clouds CO2 rationale)

“Negative prices are not the goal of any healthy economy, yet the PTC fosters this behavior at the expense of other, reliable generation. Building more infrastructure to correct for this problem is exactly the wrong thing to do.”

The last extension of the federal production tax credit (PTC) [1], its eighth in over twenty years, expired at the end of 2013 and the industry is again clamoring for another extension. But this time, big wind is facing a more sophisticated argument advanced by critics who contend that the PTC is artificially depressing wholesale power prices, disrupting market signals and undercutting more reliable generation including Exelon’s fleet of nuclear power plants.

Wind for nuclear–and in a way that increases greenhouse gas emissions, or certainly fails to reduce it?  The irony for climate policy has been noted by James Hansen who was informed that renewable-energy subsidies were intended to ”kill nuclear.” Wrote Matthew Wald in the New York Times:

To stave off climate change, sources of electricity that do not emit carbon will have to replace the ones that do. But at the moment, two of those largest sources, nuclear and wind power, are trying to kill each other off.

So much for wind power’s climate-change rationale.

Last month, the American Wind Energy Association (AWEA) released a detailed defense of wind arguing that its impact on energy prices is positive, with or without the PTC. But rather than making its case, AWEA’s rebuttal repeatedly misrepresented the rules governing competitive electricity markets and how out-of-market revenues impact energy prices. In this essay, we examine several of the assertions made by AWEA and show how they fall short.

Claim 1: Wind energy displaces the most expensive generation and decreases electricity prices. [Read more →]

April 15, 2014   2 Comments

AWED Energy & Environmental Newsletter: April 14, 2014?

The Alliance for Wise Energy Decisions (AWED) is an informal coalition of individuals and organizations interested in improving national, state, and local energy & environmental policies. Our basic position is that technical matters like these should be addressed by using Real Science. It’s all spelled out at WiseEnergy.org, which is a wealth of energy and environmental resources.

A key element of AWED’s efforts is public education. Towards that end, every 3 weeks we put together a newsletter to balance what is found in the mainstream media about energy and environmental matters. We appreciate MasterResource for their assistance in publishing this information.?

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Greed Energy Economics:

London School of Economics Property Value Study

Senate Committee Passes Bill With Two-Year PTC Extension

Renewal of Wind PTC Will Lead to a Big Boost in Carbon Emissions

Excellent Letter re US Wind Production Tax Credit (PTC)

Shale Gas Boom Leaves Wind Companies Seeking More Subsidy

Obama Administration tries to justify higher wind energy costs

Lomborg: How green policies hurt the poor

Bumpy road for Chinese renewable energy

Informed farmers coalition to educate farmers on wind turbine projects

A good video about renewable (wind) electricity prices

Turbines have an average gearbox life of between 5 and 13 years [Read more →]

April 14, 2014   1 Comment

LEEDCo Lake Erie Wind Project: Joint Letter of Protest

“We ask that you deny any permit to LEEDCo for siting of 6-9 turbines in Lake Erie…. Sadly, it is extremely easy to refute and challenge the environmental guidance this project is putting before you. It is disappointing that this project has progressed even thus far.”

Many groups and individuals from OHIO and Canada and Europe, who care deeply about wildlife, birds, bats and habitat, have been communicating their concerns with the LEEDCo “Incubator” project proposed for 6-9 industrial wind turbines off the shores of Cleveland.

The signatories to this letter represent only a fraction of the sentiment about this proposed improper placement and immature concept of industrializing what is part of 20% of the world’s remaining fresh water reserves.

International Perspective: Ontario, Canada, has in place a precautionary PROVINCIAL offshore moratorium, and four others from Ajax, Pickering, Council of Scarborough, and the largest Conservation body in the province, the Toronto and Region Conservation Authority (TRCA). These moratoria were the result of observations that the fresh waters of the Lakes deserve special caution and study.

To date, there is no information leading to a reversal of those decisions. The Lakes continue to be regarded both sides of the border as unique, having special problems of toxic waste filtered to the lakebed, unique patterns of wildlife and birds/bats, unique basin fragilities, unique intensive bird capital, and unique billions of dollars in birding and boating activities.

Ohio has one of the largest concentrations of birding activities in and around the Great Lakes, tens if not hundreds of millions, and as such deserves to be free of any industrialization that may confound this unique geography, habitat, and economy.

Environmental Testimony

Dr. Paul Kerlinger and Associates has been engaged to comment on any possible effect of the 6-9 incubator turbine proposal, and we are concerned that his testimony is possibly an environmental grounding point for the project. We strongly object to acceptance of any commentary on this project proposal by Dr. Kerlinger, and Associates.

Please see Dr. Paul Kerlinger’s biography here. [Read more →]

April 11, 2014   6 Comments

LEEDCo Wind Project’s Mega-Opposition (Junking Lake Erie at Taxpayers’ Expense)

[Editor note: The Lake Erie Energy Development Corporation (LEEDCo) has proposed to erect between six and nine industrial wind turbines just off the shore of Cleveland. The so-called INCUBATOR project is currently before the Ohio Power Siting Board.]

“We are thrilled to have the strong support of the environmental community in Ohio,” said LEEDCo President Lorry Wagner, citing letters from the Ohio Environmental Council, Nature Conservancy, Environment Ohio, Sierra Club, Mom’s Clean Air Force, Ohio Interfaith Power & Light, and Earth Day Coalition.

Barely were those words spoken, when a damning letter arrived (Part 2 tomorrow) from a much broader, bigger, and sophisticated group of environmentalists and consumerists.

The letter provided brutally clear information and frank talk about one of the wind industry’s leading carnival barkers, Dr. Paul Kerlinger and Associates, whose environmental testimony is universally controversial and corrupted by industry money.

Groups who signed onto the anti-LEEDCo letter are: [Read more →]

April 10, 2014   2 Comments