Category Archives: Forecasts

Latest DOE LED Report
 Illustrates Transition
 In Electric Power Sector

Environment, Forecasts, Solar, Utilities, Wind, , ,

I was at Home Depot this weekend (so many tools, so little time) and they had a special on LED lights that caught my attention—a four pack of dimmable 60-watt replacement LEDs was selling for $9.88, or just under $2.50 a bulb. I’m not the type to track day-to-day pricing for much of anything, but the display caught my attention because I had just finished reading the Energy Department’s latest report on the status of the LED market—which found that the typical dimmable 60W replacement bulb in 2016 cost roughly $8 apiece.

This is important for two reasons. First, DOE assumes that LEDs are steadily going to account for an ever-larger percentage of the installed lighting stock in the United States, estimating that by 2035 86 percent of all the lighting in the country will be LEDs of one type or another and that these vastly more efficient lights will cut primary energy use by 3.7 quadrillion British thermal units (Btus)—that’s a lot of electricity that will no longer be needed, about 10 percent from the 2016 level, in fact, when roughly 37.5 quads were used to generate electricity in the U.S. (Paying attention out there in utility land?) But those DOE forecasts rely heavily on pricing assumptions, and if the current price of the most commonly used LED has already tumbled below $2.50, down roughly 70 percent from just a year ago, that means the nationwide take-up of LEDs almost certainly will be faster than DOE currently estimates.

Second, the sharply declining price of this lowly light bulb is a symbol of the massive changes under way in the energy industry, such as the steep declines in solar and windpower costs, the surge in corporate interest in cleaner energy and the plateauing of electricity demand. These changes are largely market-driven and, thankfully from my perspective, outside the reach of politicians on either side of the aisle.

Continue reading Latest DOE LED Report
 Illustrates Transition
 In Electric Power Sector →

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Storage Puts Utilities
 In A Big Bind
 On Demand Charges

Distributed Generation, Forecasts, Ratemaking, Solar, Utilities, , , ,

Electric utility executives already fretting about slow/no growth in their service territories have another item to add to their growing list of worries: the prospect that many of their commercial customers could begin installing behind-the-meter storage to lower their demand charges.

A recent white paper from DOE’s National Renewable Energy Laboratory and the Clean Energy Group, a nonprofit advocacy organization, shows that it could be economic for almost 28 percent of commercial customers across the country to install batteries at their business sites to cut their electricity consumption during specific periods of the day, thereby reducing their exposure to utility-imposed demand charges. This would amount to a one-two punch for utilities: electricity sales would drop if the batteries were linked with solar and the amount of revenue collected from these charges would fall, not a pretty picture for the utility industry.

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 In A Big Bind
 On Demand Charges →

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

Coal, Forecasts, Solar, Utilities, Wind, , , , , , ,

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.)

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 Not Trump Coal Crusade
 Is Real Issue For Utilities →

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

Environment, Forecasts, Global Warming, Nuclear, Utilities, , ,

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 →

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EIA 2017 Outlook
 Shows Energy Transition
 Will Trump Trump

Coal, Environment, Forecasts, Nuclear, Politics, Utilities, , , ,

The Energy Information Administration’s Annual Energy Outlook is always chock full of interesting data, and the 2017 version, released uncommonly early last week, is certainly no exception. For its part, EIA highlighted the prospect of the U.S. becoming a net energy exporter in the near future, a far cry from the import-dependent years that drove policymakers crazy in the late 1900s and early 2000s. But from my perspective, the key takeaways can be found in EIA’s analysis of electric sector market shares in a reference case including the outgoing Obama administration’s climate change-fighting Clean Power Plan and a second case assuming the CPP is withdrawn, as the incoming president and his team have said they intend to do.

For starters, regardless of its assumptions, EIA sees no growth going forward for the nuclear power industry. In both its reference case, which incorporates the CPP and should, as a result, favor the construction of non-carbon emitting generation resources, and its no-CPP case, EIA comes up with the same results. Nuclear generation is expected to decline slowly from now through 2040—falling from 797 billion kilowatt-hours in 2016 to 701 billion kwh in 2040 as units are retired (either due to economic or age-related reasons) and no new reactors (save the four currently under construction in Georgia and South Carolina) are brought online.  [Charts showing the generation outlook in both cases are included below; the complete EIA Outlook can be found here.]

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 Shows Energy Transition
 Will Trump Trump →

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