All posts by Dennis Wamsted

Energy Secretary Perry
 Badly Misses Mark
 In Grid Study Memo

Energy Secretary Rick Perry clearly has bought into the fact-challenged approach to governing perfected by President Trump and now practiced almost daily by White House spokesman Sean Spicer: In a speech last week to the National Coal Council, Perry told the group that one of key problems from the Obama administration’s energy policies is “that we’re seeing this decreased diversity in our nation’s electric generation mix.”

Unfortunately for Perry, the fact is that the nation’s electric generation mix actually is much more diverse today than it was eight years ago. According to data from EIA, the independent statistics arm of his new agency (the same one, of course, that he forgot he wanted to eliminate back in the 2012 presidential campaign), the U.S. grid is demonstrably, provably and irrefutably more diverse now, as the chart below demonstrates.

Coal’s share of the market, as everyone knows, has fallen, dropping from roughly 50 percent of the total in 2008 to just under a third today. In its place, the amount of gas generation has shot up, and now accounts for about a third of the nation’s generation total as well. The rest of coal’s lost market share has been gobbled up by the wind and solar industries, with nuclear largely unchanged. Objectively, a system where two sources account for roughly 33 percent of the total, a third 20 percent and a fourth 15 percent is significantly more diverse than one with a single resource accounting for almost 50 percent of the total, and the next two at roughly 20 percent each.

Secretary Perry may not like the changes, but to say that something is not what it is, indeed, to say that it is the opposite of what it is, borders on the irresponsible. Worse, the secretary is using this and a number of other questionable assumptions as the basis for a department study looking into issues surrounding the “long-term reliability of the electric grid.”

Continue reading Energy Secretary Perry
 Badly Misses Mark
 In Grid Study Memo

Vanishing Demand,
 Not Trump Coal Crusade
 Is Real Issue For Utilities

It’s planning time in the electric utility industry, and a raft of new reports make two points abundantly clear:

  • Efforts to “save” the coal industry are bound to founder since utilities, as a group coal’s largest customer by far, have moved on and are planning a cleaner future in which the black rock’s current share of the electricity market, in the low 30 percent range, is as high as it’s ever going to get.
  • Vanishingly small increases in demand (and the occasional outlook for declines) will be a major issue for the industry in the next 10 years.

In its latest 10-year power plant siting plan, for example, Florida Power & Light pointed out that it was continuing its efforts “to move away from coal-fired generation.” In total, the utility said it planned to take 1,216 MW of coal-fired generation off its system by the first quarter of 2019. (FPL’s site plan can be found here.)

Similarly, in its recently filed 2017 integrated resource plan (IRP), PacifiCorp, the sprawling utility holding company that serves 1.8 million customers in six western states, said its preferred generation portfolio going forward “reflects a cost-conscious transition to a cleaner energy future.” Through 2028, PacifiCorp said it would be able to meet its system-wide power needs through demand side management (DSM), new renewable (primarily wind) generation and short-term purchases on the wholesale market. Looking longer-term, the company said it planned to shutter 3,650 MW of coal-fired capacity by 2036. (PacfiCorp’s IRP and other backup information can be found here.)

Continue reading Vanishing Demand,
 Not Trump Coal Crusade
 Is Real Issue For Utilities

King Coal Still Rules
 In Trump Team’s
 Alternate Reality

“You’re going back to work.”

With that rhetorical flourish, President Trump signed his much-ballyhooed and loftily-titled executive order “to create energy independence.”

The president’s words—directed to a group of coal miners at the signing ceremony—may have made for great TV (and the president certainly has a knack for that), but that’s about it. The coal mining jobs aren’t coming back, and anyone willing to take a factual look at the current trends in the U.S. electric power sector knows that.

The order, essentially the new administration’s effort  to undo any and all climate change-related plans put forward by the Obama administration (the Clean Power Plan in particular), is chock-full of assertions about the U.S. energy industry that are, at best, little more than wishful thinking. Let’s take a look.

Continue reading King Coal Still Rules
 In Trump Team’s
 Alternate Reality

Looking At The Brackets:
 New Nuclear Plants
 Are Odds-On Favorite
 To Lose In First Round

I just finished filling out my March Madness brackets (for recreational purposes only, I assure you), so I think we also should start a pool on when the next utility will ask its state regulators for permission to build a new, large-scale nuclear power plant? If we did, should ‘never’ be one of the options?

Anyone willing to put their money on Georgia Power? The company actually had gotten state approval to do some preliminary work at a possible site for two new reactors In Stewart County on the border with Alabama. But earlier this month the utility told regulators it was suspending work on the expansion plans at least until its 2019 integrated resource plan is filed.

How about Florida Power & Light? The company’s planned two-unit expansion at Turkey Point has been on the books since 2008, when FPL was optimistically forecasting the new reactors would be up and running by 2018 and 2020, before subsequently pushing the start-up back first to 2022 and 2023 and now to 2027 and 2028. But last year the company told Florida regulators that while it still intended to secure its NRC license for the facility (which is expected sometime this year), it didn’t intend to do anything else until 2020.

Finally, how about Dominion Resources, which has been pushing for years to add a third unit to its North Anna site in Louisa County, Va. The proposed reactor, a 1,470 MW design developed by GE and Hitachi known as the ESBWR (Economic Simplified Boiling Water Reactor), is a first-of-its-kind unit with an estimated capital cost of almost $15 billion and an all-in cost of about $20 billion. Despite its enthusiasm for the project, even Dominion acknowledged in its 2016 IRP that the reactor was only economic in one scenario—full implementation of the former Obama administration’s soon-to-be defunct Clean Power Plan.

The problems for these companies, and any others considering such a step, go well beyond the well-documented, and still far-from-over cost overruns and delays that have plagued the four new reactors currently under construction in Georgia and South Carolina. The real issue is that the technology—one with high capital costs requiring a long time of steady state operation to get into the black—doesn’t mesh with the nation’s rapidly evolving electric power system. Committing to a nuclear plant constrains you for at least 40 years, and perhaps for as long as 80 years; and while you are still committed, everything else is changing.

Continue reading Looking At The Brackets:
 New Nuclear Plants
 Are Odds-On Favorite
 To Lose In First Round

Utility Experience
 Blows Away Concerns
 About Windpower

The Southwest Power Pool said last week that it met 52.1 percent of the electricity demand in the sprawling transmission organization’s service territory with windpower during a portion of the overnight period on Feb. 13, marking the first time SPP had topped the 50 percent mark. What’s even bigger news is that hardly anyone noticed—these records have been falling consistently for the past several years with the steady increase in wind farm construction across the Midwest; SPP set its prior record of 49.2 percent just last year.

The real news, however, wasn’t the percentage itself, but what Bruce Rew, SPP’s vice president of operations, said later in the same press release concerning the changes that have occurred in the past 10 years. Then, the SPP release noted, a goal of 25 percent would have been deemed unrealistic.

Clearly, not anymore.

“Since then,” Rew said, “we’ve gained experience and implemented new policies and procedures. Now we have the ability to reliably manage greater than 50 percent wind penetration. It’s not even our ceiling. We continue to study even higher levels of renewable, variable generation as part of our plans to maintain a reliable and economic grid of the future.”

Continue reading Utility Experience
 Blows Away Concerns
 About Windpower