India’s thermal power production continues to forge ahead, growing by 9% last year, from 1190 to 1294 TWh.
Meanwhile there has been barely any increase at all in their much vaunted renewables. Wind and solar only increased by 16 TWh in the 10 months to October (latest data), and still only account for less than 12% of India’s electricity:
Demand peaks at around 240 GW in summer; with wind and solar averaging just 19 GW, it is plainly absurd to suggest that India will be transitioning away from coal any time soon!
[Ed. Note: Part I yesterdayexamined quotations on the primacy of energy for human betterment from friends of conventional energy. Today’s post adds respect from foes of oil, gas, and coal.
Free-market energy proponents gain the high ground when they stress the utilitarian nature of affordable, plentiful, reliable energy. Energy statists must play defense when their opponents stress the need to keep energy affordable for the less financially able and those billion-plus world citizens who do not have access to modern forms of energy.
Increased energy affordability is not bad but good. Yet cheap energy is the enemy to the other side (although the Obama greens will not publicly admit it). Julian Simon noticed as much when he wrote The Cheaper the Energy the Better during the BTU tax debate in 1993:
Some people simply believe that it is ipso facto a good thing to use less energy and have less economic growth. As Paul Ehrlich put it, “Giving society cheap abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun.” Other backers of the [BTU tax] bill seek not only to preserve the supply of energy but also to return to a “simpler life” (for others, of course, not for themselves) because it will make us better human beings. As Amory Lovins puts it, “If nuclear power were clean, safe, economic, assured of ample fuel . . . it would still be unattractive.”
This presents a quandary for the energy interventionists (aka forced energy transformationists) given that prominent voices in moments of candor have expounded on the importance of affordable, plentiful, reliable energy for humankind.
The following sampling of quotations documents this point. We start with John Holdren, President Obama’s science advisor, and continue with Paul Ehrlich, Amory Lovins, and some prominent left-of-center environmental and energy/environmental groups.
James Hansen
“Let’s be clear: the frequent comparison of the fossil fuel and tobacco industries is nonsense. Fossil fuels are a valuable energy source that has done yeomen service for humankind.”
– James Hansen, “Fighting the Battles: Winning the War” (June 1, 2021)
John Holdren on Energy Primacy
“When energy is scarce or expensive, people can suffer material deprivation and economic hardship.”
– John Holdren, “Population and the Energy Problem,” Population and Environment: A Journal of Interdisciplinary Studies, Spring 1991, p. 231.
“A reliable and affordable supply of energy is absolutely critical to maintaining and expanding economic prosperity where such prosperity already exists and to creating it where it does not.”
– John Holdren, “Memorandum to the President: The Energy-Climate Challenge,” in Donald Kennedy and John Riggs, eds., U.S. Policy and the Global Environment: Memos to the President (Washington, D.C.: The Aspen Institute, 2000), p. 21.
“Affordable energy in ample quantities is the lifeblood of the industrial societies and a prerequisite for the economic development of the others.”
– John Holdren, “Meeting the Energy Challenge,” Science, February 9, 2001, p. 945.
“Virtually all of the benefits that now seem necessary to the ‘American way’ have required vast amounts of energy. Energy, in short, has been our ultimate raw material, for our commitment to economic growth has also been a commitment to the use of steadily increasing amounts of energy necessary to the production of goods and services.”
– John Holdren and Philip Herrera, Energy (San Francisco: Sierra Club, 1971), p. 10.
“Energy is an indispensable ingredient of material prosperity. . . . Where and when energy is in short supply or too expensive, people suffer from lack of direct energy services (such as cooking, heating, lighting, and transport) and from inflation, unemployment, and reduced economic output.”
– John Holdren, Population and the Energy Problem,” Population and Environment: A Journal of Interdisciplinary Studies, Spring 1991, p. 232.
“Supplying energy to the economy contributes to the production of a stream of economic goods and services generally supportive of well-being.”
– John Holdren, “Coal in Context: Its Role in the National Energy Future,” University of Houston Law Review, July 1978, p. 1089.
Paul Ehrlich
“Seemingly abundant and cheap sources of energy permitted large-scale replacement of human labor in both manufacturing and agricultural production. . . . The availability of ‘cheap’ energy also made possible the development of powerful farm machinery, and abundant oil and gas allowed development of synthetic fertilizers, pesticides, and other products to boost crop yields (production per acre) considerably above those achieved with traditional methods. Similarly, we can thank fossil energy for facilitating the production of many useful goods and for stimulating unprecedented rapid expansion of economies and of food production. In effect, fossil energy facilitated the population explosion of the twentieth century.”
– Paul and Anne Ehrlich, The Population Explosion (New York: Simon & Schuster, 1990), p. 27.
Amory Lovins
“As medical science, by deferring death, has allowed many more people to live on the earth, so the energy of fossil fuels, by deferring physical scarcity, has kept those people alive.”
– Amory Lovins, World Energy Strategies: Facts, Issues, and Options (New York: Friends of the Earth International, 1975), p. 3.
Worldwatch Institute
“Energy is the lifeblood of the world’s economy, the underlying means by which modern societies function. Oil, coal, natural gas, and electricity are needed for virtually every important function in industrial societies—from growing and cooking food, to manufacturing, heating and cooling buildings, and moving people and goods. The interruption of supplies by storms, earthquakes, wars, or other events quickly demonstrates how totally dependent we have become on the energy-consuming machines.”
– James MacKenzie, “Oil as a Finite Resource: When is Global Production Likely to Peak?” World Resources Institute, March 1996, p. 2.
World Commission on Environment and Development
“Energy is necessary for daily survival. Future development crucially depends on its long-term availability in increasing quantities from sources that are dependable, safe, and environmentally sound.”
– The World Commission on Environment and Development, Our Common Future (New York: Oxford University Press, 1987), p. 168.
Organisation for Economic Co-operation and Development
“Natural resources are the foundation for human life and underpin sustainable development. They provide the raw materials for meeting basic human needs: food and water, clothing and shelter, medicine, tools, energy and communication. They also provide recreational and other non-consumptive services for increasing numbers of people. Beyond these human needs, natural resources play an important role in providing the food, habitat, and reproductive bases for virtually all living resources, and in meeting ecosystem functions like carbon and nitrogen fixation, water catchment and temperature buffering.”
– Organisation for Economic Co-operation and Development, Sustainable Development: Critical Issues (Paris: OECD, 2001), p. 273.
World Energy Council
“Reliable and affordable access to modern energy services is an indicator of sustainable development, for without it basic needs cannot be satisfied.”
– World Energy Council, Living in One World (London: World Energy Council, 2001), p. 74.
Other Quotations
“After 1820 the world’s economy became increasingly based on work done by nonmuscular energy. By 1950 any society that did not deploy copious energy was doomed to poverty.”
– J. R. McNeil, Something New Under the Sun (New York: W. W. Norton & Company, 2000), p. 298.
“The great forward steps of civilization are at least connected in part to breakthroughs on the energy front. The discovery of fire gave primitive man security and comfort on the ground; the domestication of animals added their greater muscle capacity to his. Later on, the waterwheel opened up a new source of energy to exploitation, greatly increasing the power available to his tasks. Then, in the nineteenth century the industrial revolution was fueled by coal.”
– John Fowler, Energy and the Environment (New York: McGraw-Hill, 1975), p. 296.
“Technology and change follow the liberation of energy. The lifestyle of contemporary America was destined by the development of fossil fuels in this seminal era.”
– Wilson Clark, Energy for Survival: The Alternative to Extinction (Garden City, NY: Anchor Books, 1974), p. 45.
Like the “voice crying in the wilderness,” German Finance Minister Christian Lindner this week left Green Party activists and others enamored by the green religion gnashing their teeth.
“Until it is clear,” said Lindner, “that energy is available and affordable, we should end dreams of phasing out electricity from coal in 2030. Now is not the time to shut down power plants.”
Lindner also urged Germans to expand domestic production of natural gas as well as the production of renewable energies. Germany’s cost for electricity has doubled in the past 20 years, such that the nation now pays some of the world’s highest prices to turn on the lights.
Over in London, British purists are set to celebrate the long-anticipated end to all use of coal for electricity by next October, a year ahead of earlier schedules. Already, there is very little coal being delivered to or from Newcastle.
British electricity prices have soared in recent years, with the average net selling value (pence per kilowatt-hour) to all consumers (scaled to 1990 GDP) rising from 2.28 pence in 2000 to 12.43 pence in 2021 and 21.77 pence during the energy crisis in 2022.
Meanwhile, in the U.S., President Biden (or those who may really be in charge) continues to rail against not just coal, but oil and gas, as if generating electricity and fueling motor vehicles were the only uses America has for those “fossil fuels.” Electricity prices in the U.S. vary widely from state to state but overall have risen at rates above the inflation rate during the 21st Century.
Biden’s EPA has threatened to dismantle 60 percent of the U.S. power supply nearly overnight. The U.S. coal fleet is facing six rules designed to work in unison to accelerate plant closures. Biden’s Clean Power Plan 2.0 has even his own Federal Energy Regulatory Commission chairman, Willie Phillips, saying, “I am extremely concerned about the pace of retirements we are seeing of generators which are needed for reliability.”
The Biden Administration is also spending U.S. tax dollars to bribe other nations to cut their use of coal. Last November, Indonesian President Joko Widodo (Jokowi) accepted a $20 billion commitment by the Biden White House via a “just energy transition partnership” toward a goal of capping carbon dioxide releases from its electricity sector at 290 megatons by 2030.
The JETP says it will cost $600 billion to wean Indonesia from coal by 2050 – five years earlier than its previous proposal. Indonesia, with 25 billion tons of coal reserves (11th largest in the world), is today the world’s fifth largest coal producer, using about 100 million tons domestically and sending 400 million tons abroad. Don’t bet on Indonesia to quit coal soon.
In India, by contrast, the coal ministry just announced plans to increase the nation’s coal production to 1.404 billion tonnes by 2027, with an eye to further increase production to 1.577 billion tonnes by 2030. That’s a big jump from current production totals of 1.0 billion tonnes.
Currently, coal-fired power plants in India are using about 821 million tonnes per year, but the ministry is anticipating major growth in coal demand in the coming years. To meet demand, the ministry is planning to open new coal mines, expand existing mine capacities, and better utilize captive and commercial mines.
Chinese President Xi Jinping, with whom the coal-hating President Biden is meeting this week, in April 2021 pledged to “strictly control coal-fired power generation projects” in China – with his fingers crossed. In the real world (not the green fantasy world), the Chinese government continues to grow the nation’s coal industry.
In the two years prior to Xi’s pledge, China approved 127 coal plants with a combined capacity of 54 gigawatts. Since the pledge, that number has risen to 182 plants with 131 gigawatts of coal power. The upshot – China has over-doubled its new coal power capacity while the U.S. and European nations have shrunk theirs.
Irish journalist Thomas O’Reilly predicts that “the growing divide” between the West, China, and the Global South will be a hot topic at the upcoming UN Climate Conference (COP 28) in Dubai, United Arab Emirates.
The self-named “High Ambition Coalition” of European Union member states and the United Kingdom is expected to push for a global commitment to phase out new coal production worldwide despite its being the fuel of choice in much of Asia and the developing world. [Coal is plentiful and affordable, qualities critical for energy development in poor nations.]
The representatives of rich, mostly former colonial, nations want to force other nations to adopt more aggressive climate goals. They flatly oppose the use of carbon capture technologies by developing nations, one way these nations try to appease the ravenous West’s demands for obedience to their diktats.
A more likely outcome at Dubai is that China will lead its own coalition of coal-using and coal-producing nations to tell the Europeans (and Biden Democrats) to pound sand.
China, along with India, Russia (which is also ramping up coal production, even in heavily snow-covered Elga, Siberia), and South Africa (the world’s fifth largest coal producer), are bonded together in the BRICS bloc. Even founding member Brazil is the world’s 25th largest coal user – but its coal reserves are the world’s 15th largest.
BRICS just added six countries – Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE (host to COP 28) to its membership. None of these nations appears eager to kowtow to the EU or U.S. The harder the West stamps its Rumpelstiltskin-like feet, the less likely Net Zero will remain a global vision. The world wants and needs more energy and will not let the decadent West dictate just what energy is “acceptable” and what is not.
But the West, too, would do well to abandon the “impossible dream” of decarbonization of a society comprised of carbon units (humans).
Emeritus British engineering professor Michael Kelly says while, technologically, the West MIGHT achieve Net Zero with a vast fleet of wind farms and a gigantic store of green hydrogen, barring a series of dramatic technological breakthroughs the costs of getting there would make Britain’s recent energy price crisis “look like nothing.”
With China, India, and much of the developing world saying “Nyet to Net Zero,” maybe it is time for the “virtuous” coalition (the West) to put a stop to its own wishful thinking.
Engaging in happy talk about wind energy saving customers money and garnering the approval of the ESG obsessed will never substitute for reliable operation.
Until about a year ago, I thought about public utility regulation as too boring, too far outside my education, and unrelated to my interests and experience to bother with. I was wrong.
Figure 1. The relationships among interest on bonds and dividends to preferred shares (collectively called debt) and return on capital to return to ordinary shareholders (equity)
What prompted my change of view was recognizing that a frontline in the war, if you will, to remake the electric grid will take place not in arguments about the reality of climate change, but when utilities decide to change the way they generate electrical energy and pay for these changes. The permission to make these changes, and how the ratepayer gets hit afterward, are decided in the public service commissions which by law have to make their deliberations substantially transparent to the public. In particular permission for changes are gained in hearings of public necessity and convenience; how the ratepayer gets hit is decided in rate cases. I plan to examine only rate setting in this brief essay.
My principal goal is this. Many of us are pretty certain that pouring more renewable energy into a network makes delivered energy more expensive and less reliable. We often point to a graph that shows costs rising with percent renewable contributions to generating capacity. Yet, our antagonists claim that adding energy from renewables should, and in fact does, reduce utility costs. They have data, too. We strengthen our case by demonstrating specific reasons, or lack thereof, for rising utility bills. The rate setting process ought to make those reasons visible.
I also suspect most people know little about rate setting and are unaware about its complexity. It’s important to understand this bit of the order of battle.
Where I live we are in the middle of a general rate case affecting one-half the state. It calls for substantial rate increases (21.6% or over $140 million) and has become exceptionally contentious. It resembles rate cases that have been decided or are in progress across the U.S.[1] The application for this general rate case includes thousands of pages of exhibits and appendices.
The Essence of Rate Setting
Long ago people recognized that the delivery of utility services was probably best handled by allowing a private firm to have a monopoly over this service. At the same time people also recognized that the inherently bad effects of monopoly power had to be addressed. The response was to create public utility commissions whose decisions regarding utility expenditures and methods of financing those expenditures would have the force of law.
The basis of utility rates are best explained as follows in two equations.
Needed revenue = operating expenses+depreciation+taxes+(rate of return x rate base)
Then; rates = needed revenue / assumed volume of service.
The usefulness of this organization is apparent. Operating expenses, and taxes are aligned pretty well with the immediate delivery of services. Depreciation is how capital expenses are eventually recovered as assets wear out. Rate of return is necessary to provide access to capital markets where the resources are garnered for construction of assets to provide service.
There is some overlap. For example, some maintenance could be a capital expenditure and depreciated. Nonetheless, this is a pretty clear summary of revenues required to operate.
Equation 2) appears far more simple than the actual situation. What we call rates is actually a large set of tariffs each of which involves many components and which apply to various customers. The tariffs are structured to prevent one group of customers, such as residential consumers, from subsidizing another, say industrial consumers; while at the same time supplying the needed revenue of Equation 1). The “assumed volume of service” category is actually a guess at the volume of sales. It occasionally happens that the utility over-estimates its sales volume and cannot reach its proposed revenue requirements – a case of volumetric risk.
The goal is to arrive at revenues allowed by the Commission and a structure of tariffs that are “just and reasonable”. The standard of “just and reasonable” became a governing standard through a couple of Supreme Court cases in the 1920s to 1940s.[2] It means, in effect, that customers are truly paying for the value of the service they receive while the utility can earn enough money to stay in business and maintain access to capital markets; all the while the service that results being affordable and reliable. The most contentious aspect of any rate case is justifying and ordering the rate of return on equity.
There is another standard which serves as a worthy goal but which is rarely mentioned in my experience of reading documents and attending meetings. This is “used and useful” which is where the value of a net-zero grid becomes doubtful. It is allowed through Wyoming Statute (Wyo. 37-2-119) but which might be missing in the enabling statutes of other states. The idea is that prudent planning and expenditures should be useful to the delivery of service and actually used in the delivery of service. Stuff falling outside this domain, such as excessive compensation or excess labor or poorly justified projects are the very definition of unnecessary and unjust, unreasonable expense. Dispatchable versus non-dispatchable generation without dedicated backup cannot be viewed as equally “used and useful”. The standard of “just and reasonable” has trouble weighing the differences.
Two other things are important. First, there is dreadful asymmetry with regard to knowledge between the utility and practically all other parties to the rate case. The president of the utility verified this when he said that there are no parties who know more about the topic or the rate case than the utility company itself. This standpoint is entirely reasonable, but it unwittingly also makes the point that since parties are biased toward their self-interest, the greater knowledge of the utility must come with skepticism about their claims.
Second, proof of the reasonableness of the proposed costs, revenues and tariff adjustments is made by applying them to a test year to show how they would work in practice. Traditionally the test year was a historical year for which almost all the data involved, except the new tariff structure, were known quantities. About 15 years ago the utilities began making a case that a future test year (FTY) was more appropriate because it would reduce the regulatory lag between identifying shortfalls in revenue and new tariff structure. Wall Street endorsed this view also. However, having utilities and Wall Street, who both stand to gain by shifting their risks, endorse this new model should raise a flag of caution.
The FTY contains unknown quantities; inflation, capital markets, economic activity, volume of service, demographics changes, and so forth have to be guessed at. Combined with the asymmetry of knowledge, the uncertainties in using a FTY serve not only to make expenses obscure,[3] but potentially reduce market discipline. Regulatory lag aided market discipline by making the utility responsible for costs during their “naked” interval. Lack of market discipline leads to overcapitalization and bloated O&M.
A Current Rate Case
How the simple picture painted above of utility regulation departs from practice is well explained by our rate case. The rate case in question was born on March 1, 2023 when the utility sent its application and all supporting appendices, which amounted to thousands of pages, to the Public Service Commission. A historical year running from mid-2021 to mid-2022 provided a data gathering period to project into the FTY which is 2024. The order resulting from this hearing must be rendered by January 1, 2024 when the new tariffs become effective.
The utility makes its case for rate increases in the application thusly:
(1) continued capital investments including, the Gateway South, Gateway West Segment D.1 transmission lines and the Rock Creek I wind project, along with the Foote Creek II-IV and Rock River I wind repowering projects, which are required in order for the Company to meet its obligation to serve its customers and includes an associated rate of return of 7.60 percent on all capital investments; and (2) NPC.
So, there are three categories of costs; (1) capital expenditures which are recaptured through depreciation, (2) cost of capital which involves the debt involved (bonds and preferred stock), and return to common stock (see Figure 1), and, (3) net power cost (NPC) which catches the rest of Equation 1).
The first two categories are, in my view, relatively clear in their cost of power implications. New capital expenditures will enter a depreciation schedule and the rate structure will directly reflect those depreciation charges. What has to be determined is, on a per kW capacity basis, do renewable energy assets cause larger depreciation charges than the thermal assets they replace? I think the answer is yes for two reasons. First because the average capacity factor for renewables is far lower than thermal assets, the capital cost to replace thermal assets is going to lead to a larger book value to depreciate. I’d say at least 50% larger first cost for equivalent capacity.
Second, renewable assets have shorter depreciation schedules (20 years is widely quoted) than thermal assets (40-50 years is widely quoted). Treated as a perpetuity of sorts, renewables are decommissioned and replaced twice as often. A complication in this instance is that while coal assets are being abandoned (early in some instances), there are some new gas-fired assets that are needed largely as backup for non-dispatchable assets. These will have useful lives much shorter than typical thermal assets (15 years if the schedules in the typical integrated resource plans (IRP) are followed). Even if these plants have utility left in them by the time they are decommissioned, the remaining value will enter some sort of account that will be amortized on an accelerated schedule.
The impact on cost of capital follows similar thinking. There is a differential cost on an equal capacity basis which the rate structure will deliver a return on capital, dependent on the utility’s capital structure and interest rates on debt, but which is typically 7-8%. Let’s just take a wind plant as an example. For wind with an annual capacity factor of one-third to deliver energy like a coal-fired plant with annual capacity factor of 0.85 would require building 2.55 times as much wind plant (0.85/0.33). A quick estimate of the differential first cost would be $825 per kW of nameplate. The impact across rates would be around $100 per kW per annum of additional depreciation and return on capital. In fact, the overbuilding might be much larger. Xcel Energy advertises net dependable power of non-dispatchable sources as needing an overbuild relative to dispatchable coal being three to six.[4]
One could analyze many other new assets the same way. For example, some new transmission lines would not be built if not for the need to gather widely dispersed wind or solar energy. There may be some offsetting savings in debt because of an ESG preference for valued assets versus thermal derived energy, but considering the planned investments in renewables and the enabling transmission lines there cannot be but growth of rates from depreciation and return on capital.
Keep in mind that people might confuse depreciation with return on capital, but they are very separate and additive – one provides for recovery of capital expenditures the other affords access to capital markets.
The complications of NPC
Now we come to that place where the story becomes hazy – net power cost (NPC). The term NPC isn’t clearly related to any single item in Equation (1). The legal definition I have placed in the notes.[5] Its definition seems to open the door to all sorts of things.
Moreover, NPC is not directly determined from accounting entries which is what Equation (1) implies. Instead, in our rate case, it results from modeling. In our case, a sophisticated modeling and optimization program, “Aurora”, has input to it all the assumptions and projections (and uncertainties) of the FTY plus the known characteristics of generating, transmission and distribution assets. In working to find a least-cost solution to the problem of delivering specified power to all customers, it also produces a detailed projection of the components of NPC for the test year. I won’t remind readers of WUWT about the pitfalls of modeling future outcomes vis-a-vis desires.
In our rate case one witness produced a detailed picture of NPC factors affecting policy and operations. Examples are:
Taxes; including a direct $1/MWhr wind tax in Wyoming to an indirect $24.75/MWhr carbon tax (the CCA) in Washington State levied against a natural gas plant that probably does a lot of balancing wind and solar.
Abandonment of hydroelectric plants on the Klamath River.
Market purchases of 1) Day Ahead/Real Time (DA/RT) purchases, 2) summer shortages of thermal plant capacity, 3) Coal to gas conversion requiring temporary market purchases. The utility claims these costs of market purchases of power have risen 200%. What causes this market price inflation?
Environmental concerns such as the Ozone Transport Rule (OTR) and NOx emissions.
Thus, many factors that could fall under a category like “environmentalism” have substantial impacts on NPC.[6] Even a small factor like net power purchases or feed-in tariffs from residential wind and solar have the effect, one witness said, of increasing rates across all classes of customers. Perhaps the rising NPC and adoption of wind generations are simply both correlated with the endless stream of environmental demands.
Our utility claimed in multiple instances that wind energy saved customers $85 million because it has no fuel cost. A person would really like to see the cost accounting that substantiates such a claim. However, in absence of such data we could ponder Feynman’s dictum that “if you start a [classical] argument in a certain place and don’t carry it far enough, you can get any answer you want.”[7] Carrying far enough in this case means saving customers even more money by adopting 100% wind energy right now which is what the Sierra Club and a majority of voters apparently want.[8] Figure 2 shows this to be patently impossible.
Figure 2. Generation data from EIA in the PacifiCorp East balancing authority area this past week.
What Figure 2 shows first, is that wind disappears routinely. In fact, October 2023 has delivered four separate wind droughts in the EIA Northwest region; one of which was a full week long. More important, though, is to note the anticorrelation between wind or solar and coal thermal energy in Figure 2. Coal is 70% anticorrelated with solar and 50% anticorrelated with wind. Coal is balancing both with some limited help from natural gas. The amplitude of the total adjustments in coal output are as large as 3,000MW; sometimes more than once a day. It would not be remotely possible to run PacifiCorp East (PACE) on wind energy without coal or its equivalent. Moreover, the indicated capacity factor of coal plants is 51% and wind is 27% in Figure 2.
No one in their right mind designs a coal thermal plant, especially a base-load plant, for 50% capacity factor. Instead coal design should figure 100% at maximum demand and some reserve and running capacity at about 80% or even higher.[9] What has happened to the capacity factor?
Figure 3. Trend of U.S. thermal plant capacity factor. Data from EIA. Figure for 2023 is based on January through August with estimates for the balance of the year.
Figure 3 perhaps supplies an answer by illustrating a trend. The capacity factor of coal plants in the U.S. has been on a long decline commensurate with adoption of more renewables. This same tendency of declining capacity factor is true of all networks worldwide and especially among coal thermal plants but is true of renewables as well.[10] In other words, a universal consequence of adding renewable energy to networks is more costs devoted to delivering less energy per unit of investment.
People try to explain this observation in ways convenient for their worldview but I see a simple explanation.[11]
Renewable generation took the best locations early and as more is added these less capable locations reduce overall capacity factor. The variations in renewables, clearly visible in Figure 2, grow larger with more renewables. Thus, the balancing dispatchable source of energy, typically thermal, has to supply larger power levels for the worst cases of renewable shortfall, but has to be curtailed to accommodate the occasional large contribution from renewables. Thermal plants can only be curtailed so far but any curtailment leads to a reduced capacity factor.[10,12] The limited ability to curtail thermal plants inevitably leads to more curtailment of renewables which lowers their capacity factor further. The two very different generating sources walk one another to lower and lower capacity factors. Eventually capacity factor declines to whatever source dominates the grid.
The utilities and environmentalists might contemplate how forcing thermal plants to accommodate and balance non-dispatchable energy, with its poor capacity factor and wild swings of output, leads to: 1) reduced efficiency of thermal plants, 2) increased maintenance costs, and 3) shortened asset life.[12] Perhaps someone could quantify these factors and apply them to the cost of delivering “free” wind energy just to humor us skeptics. Yet, the answer doesn’t matter. No matter how the costs are accounted for, the consequences demand higher rates.
Conclusions
Engaging in happy talk about wind energy saving customers money and garnering the approval of the ESG obsessed will never substitute for reliable operation. Whining about thermal assets being inflexible and preventing full adoption of wind and solar is simply PR. Someone must admit the realities that Figures 2 and 3 show.
References and notes:
1- Minnesota PUC cut Xcel Energy’s request of 22% to 9.9% in June 2023. The New York State PSC cut rate requests by NYSEG and RG&E by about 50% in October 2023.
2-These are referred to as Bluefield Waterworks (1923) and Hope Natural Gas Co. (1944). However many other early decisions could serve just as well. See for example, Herman Trachsel, Public Utility Regulation, Irwin Publ., 1947. I’m not sure why these two cases seem to have exerted the most influence.
3- One consistent feature of testimony of the utility and the intervenors, both written and oral, is to seemingly forget that the NPC is for a test year which is in the future. There is a tendency for the utility witnesses, when asked to justify some driver of NPC, to immediately begin discussing some event of the recent past or the present rather than their effects in the FTY and especially not into the uncertainties of their projection.
4-American Experiment, June 20, 2023, Minnesota’s energy transition threatened after Xcel’s reduced rate increase. Online at “Minnesota’s energy transition threatened after Xcel’s reduced rate increase.pdf” If a person considers storage to replace dispatchable thermal assets, then the amount of overbuild expands greatly.
5-From Lawinsider.com the definition of NPC:
Net Power Cost means, for any period, the cost during such period of purchases by Power Marketing of Deficit Station Power, increased by (i) the amount of any transmission or other costs incurred by Power Marketing during such period in delivering Deficit Station Power to the point of sale, (ii) the amount of any state or federal Taxes paid or required to be paid by Power Marketing with respect to the purchase of Deficit Station Power or otherwise with respect to the performance of its obligations hereunder, and (iii) the amount of any other costs paid by Power Marketing during such period in connection with the purchase of Deficit Station Power, including an arms-length, commercially reasonable allocation of overhead and administrative expense.
6-As of this morning I received notice of a hearing on continuation of a 0.3% per month surcharge on all billing statements to establish a Carbon Capture Use and Storage (CCUS) portfolio standard – currently deferred but which the deferred balance accumulates interest at the allowed cost of capital.
7-Feynman’s Lectures on Physics, Vol II, Chapter 34 Section 6.
8-The Sierra Club actually believes PacifiCorp could abandon thermal assets immediately and claim that depending on thermal assets was always a “risky” proposition. A survey indicates that voters in Utah want more solar and wind generation by a majority of 8:1.
9-The factor includes some down-time for turnaround maintenance and additional curtailment because of variations in day/night demand.
10-Natanael Bolson, et al, 2022, Capacity factors for electrical power generation from renewable and nonrenewable sources, PNAS, 119, 52, doi:10.1073/pnas.2205429119
11-Such excuses include the idea that thermal plants were overbuilt through poor projections of energy demand. Some decline might be related to aging of plants with underinvestment in maintenance.
12-The lower limit of curtailment depends on many factors but could be 30-70% of maximum. Generally, the lower the limit on curtailment the worse the efficiency of fuel use and aging of plant.
13-IRENA, 2019, Innovation landscape brief: Flexibility in conventional power plants. International Renewable Energy Agency, Abu Dhabi. Available online at http://www.irena.org/publications
He makes the critical point that fossil fuels are a very high-quality energy source and have produced a very wealthy and high productivity world. Coal was only a seed to that economic growth.
The Universidad de las Hespérides is in the Canary Islands, off the coast of Morocco. The Hespérides are the nymphs of the evening and golden sunsets, so I imagine it is a beautiful location to travel to. Dr. Constable’s talk can be viewed in full here. The beginning is in Spanish, but they turn to English about 4 minutes in.
His talk is about our energy economy and how it has evolved over time. He makes the critical point that fossil fuels are a very high-quality energy source and have produced a very wealthy and high productivity world. As a result, the medieval hold that landowners had over the peasants of a feudal society was broken. Land ownership in the past controlled the food supply, since travel and food transport were prohibitively expensive and time consuming. Controlling food meant the landowners (lords and kings) controlled, and basically enslaved, the general population.
Fossil fuels broke that control and built our modern free societies. Previously, primary occupations, basically farming and mineral extraction, dominated employment. Tertiary occupations, like scientists, medical doctors, shop keepers; and secondary occupations like manufacturing and construction; were very small in 1600 but dominated employment in 1850. Why? Fossil fuels, especially coal.
During the industrial revolution, the use of coal grew rapidly, but the economy grew even faster. Coal was only a seed to that economic growth. Constable found that coal worked to insulate England from catastrophes, like bad harvest years, as it allowed for rapid and cheap transport of food. It created the English middle class between 1840 and 1890, a period when average household wealth quadrupled. Coal was a great equalizer of wealth, it brought it to many, many more people. The population of the English wealthy grew four times faster than population growth as a whole. From 1840 to 1885 crime decreased tremendously (70%).
Fossil fuels are a high-quality fuel. What happens if they are replaced with low quality (much lower density and lower value-add) renewable fuels, like wind and solar? The ratio of the non-energy economy to the energy sector reduces, as shown in the figure below.
Figure 1. Adding lower quality wind and solar fuels and displacing higher quality fossil fuels.
What figure 1 says is that, relative to fossil fuels, the energy gained from wind and solar is much less than the energy required to build and operate the wind and solar facilities. Wind and solar are lower energy gain, and more expensive per unit of energy output. This means the rest of the economy must shrink.
Indeed, Constable mentions that there is a hinge point in the U.S. and other western economies in 2005 when it started to emphasize renewable energy. After 2005 U.S., Spanish, U.K., and EU energy consumption flatlined or has fallen. This is quite alarming because since overall energy consumption has fallen, energy consumption in all private sectors has fallen. Only the less productive public sector energy consumption has increased, think jetting to climate conferences.
In China, industrial energy growth is rapid, feeding their overall growth. In the U.S. it is the opposite, suggesting an overall economic decline. Dr. Constable believes that the West is conducting a very dangerous experiment. What will happen if energy consumption in the West declines and energy becomes much more expensive overall? Energy is the feedstock of wealth and prosperity, if its use declines, so will wealth and prosperity. He believes we are on a very dangerous road to travel.
This is a very thoughtful and important talk. I highly recommend watching it in full.
The peak month of world oil production was back in October 2018 and production has declined slightly from then. The first signs that the oil production decline is accelerating are now apparent with the oil price rising a third from its low midyear. With peak oil now in the rear vision mirror, the decades of declining production are now upon us.
This won’t mean that solar power and wind power become more competitive. Solar and wind facilities are manufactured and installed using energy from coal and oil. In a tight energy market in which different sources of energy are semi-substitutable for each other, the coal price and the natural gas price will rise to the oil price in energy-equivalent terms.
The significance of that for solar power is that most solar panels are currently made in China using power from coal-fired power stations at about $0.05/kWh. Under ideal conditions in the Australian desert, solar panels produce power equivalent to the cost of power from diesel at $0.20/kWh. If you used power from solar panels to produce more solar panels, the cost of the power they produced would be about $1.00/kWh. Furthermore, solar panels aren’t recycled – they are once-through to landfill. They are not a renewable energy source in any sense. Solar panels are artefacts of a millenarian/apocalyptic/pagan cult in which the adherents signal their virtue by the display of their panels.
The economics of wind farms are slightly better than solar panels but still well short of what is required to sustain civilisation. Wind turbines are built to a price to satisfy availability requirements over a contract. The fact that some of the turbine towers end up bent means that they are designed with only a little margin above the failure mode. The current fad of installing them out at sea, because voters don’t want them anywhere near them, simply means higher capital and operating costs and much more expensive electricity, plus some dead whales.
It is also not a choice between wind and solar on one side and coal on the other. As the oil price rises through US$110/barrel, coal liquefaction plants become viable to supply the liquid transport fuels we need. At the moment coal consumpion and oil consumption are close to the same level in energy content terms. To fully replace oil production as it declines with coal liquefaction will require a doubling of the coal consumption rate. It follows that the life of our remaining coal reserves will halve.
So deciding between the so-called renewables and coal for power generation is a false choice. Because coal isn’t a long-term option. There are babies being born now who will see the end of coal. There is not much point agonising about coal-fired power stations. The better use for coal is producing liquid fuels for transport applications. There is only one source of energy that can replace coal for power generation and that is nuclear. The sooner we replace coal with nuclear for power generation, the longer our coal reserves will last and the higher the standard of living our children will have.
Figure 1: Figure 30 from King Hubbert’s 1956 paper Nuclear Energy and the Fossil Fuels showing our civilisational switch from fossil fuels to nuclear. In effect, fossil fuels got civilisation started and U235 is the match that allowed humanity to light the nuclear fire that will maintain civilisation at a high level until the end of time.
The cost of making renewable power sources, wind and solar, will go up in tandem with the coal price because they are made with energy from coal. The solar panels and wind turbines we are installing at the moment will be carted off to landfill at the end of their lives and replaced by nuclear power. This is because the cost of nuclear power should remain at about the price it is currently while the prices of all other forms of energy go up with the oil price. And there will be no point in using power from nuclear reactors to provide the energy to make solar panels and wind turbines as the price of the power produced will be at least five times that produced by the nuclear reactors in the first place.
That said, there are three major problems with nuclear power as we currently practice it. Firstly, at a steady power output, seven percent of the energy from a nuclear reactor comes from delayed fission reactions. That will decline within a day to about one percent but it can take months to decline to a level at which the reactor doesn’t need external power for cooling.
To put that into context, the dominant nuclear technology used around the world at the moment is the U235-burning light water reactor. What might cause the reactor to fail would be an accident which stopped the coolant water from circulating. Then it would be a race to restart the coolant circulation before the system was overwhelmed by the heat from the delayed fission reactions. If that race is lost, the cooling water boils off and the reactor core heats and starts melting. The mass of molten steel and fuel rods becomes a substance called corium which can melt through the floor of the reactor chamber. The French nuclear plant builder Areva has, in its current designs, a subfloor below the reactor chamber to catch the corium.
The fuel rods consist of fuel pellets in a zirconium tube. At 1,250°C the zirconium reacts with water to produce hydrogen. The hydrogen accumulates in the top of the reactor chamber until it eventually explodes. All three of the operating reactors at Fukushima in 2011 had a hydrogen explosion.
To mitigate the risk that ultimately comes from the portion of energy produced by delayed fission, reactor designers responded by adding more concrete and steel to contain the potential release of radioactive material from a reactor excursion. This increased the capital cost per MW produced. This in turn prompted a trend to make the reactors much larger, up to the 1,600 MWe level, in order to gain economies of scale. And because the volume of a container goes up faster than its surface area, this meant that the bigger reactors are more difficult to cool and thus are inherently more dangerous than the designs they replaced.
So to make reactors safer again there is now a trend to what are called small modular reactors with power outputs in the range of 100 to 300 MWe. They will be safer because it will be easier for the reactor core to shed heat but if too small the capital cost per MW rises. There is also the problem of staffing. A fleet of small modular reactors might require three times as many staff as one made up of normally sized reactors.
Delayed fission is the biggest problem with nuclear power and it is a problem that almost nobody is aware of.
The second problem with nuclear power is the production of high level waste. A 1,000 MWe reactor will produce three tonnes of high level waste, basically the used fuel rods, per annum. A reactor’s fuel rods are changed out every three years or so. By the time the rods are pulled about half the energy produced is from plutonium created from irradiated U238. The rods are pulled because of radiation damage to the zirconium cladding which could cause the rods to warp and not be able to be extracted. Current practice is to not process the spent fuel rods but to leave them in long term storage where they will be a radiological hazard for millions of years, literally. The cost of reproccessing spent fuel rods equates to a uranium price of about US$250/lb while the current spot price is US$44/lb. Our civilisation is kicking the can down the road on reprocessing, requiring a future generation to bear part of the cost of generating power now. This is an unsatisfactory state of affairs.
The third problem with light water reactors is that they are extremely wasteful with the planet’s uranium endowment. Uranium as it comes out of the ground is 99.3% U238 and 0.7% U235. To be used in light water reactors, the U235 is enriched five-fold to 3.5% and 80% of the U238 is thrown out. Well some of that U238 is used to make depleted uranium antitank projectiles which in battle ends up as uranium oxide spread to the winds. Depleted uranium antitank rounds contain four kilograms of U238 which would have produced the energy equivalent of 19,000 barrels of oil if processed through a plutonium breeder reactor. And to put that number into context, a car being driven 20,000 km per annum at a fuel consumption rate of 10 km to the litre will burn 34 barrels each year. So the energy inherent in a depleted uranium antitank round is equivalent to powering a car for 558 years.
Problems two and three can be solved, and need to be solved, by fully developing the plutonium breeder technology. Plutonium breeder reactors operate by irradiating U238 with high energy (fast) neutrons to produce Pu239. There have been plutonium breeder reactors that operated happily for decades, all in Russia. France also successfully operated a plutonium breeder reactor, at least until it was shut down as part of a political deal with the French green party. The best existing Western design for a plutonium breeder reactor is considered to be the GE-Hitachi PRISM reactor. This is set up to reprocess the fuel onsite using a pyrometallurgical process in a closed fuel cycle.
Figure 2: GE-Hitachi PRISM reactor cross-section
The first problem is also solved because plutonium breeder reactors operate at atmospheric pressure with no water used in the reactor core ready to react with the fuel rods. They are inherently much safer than U235-burning light water reactors which only use one percent of our uranium endowment. Plutonium breeder reactors will utilise all 100 percent of our uranium endowment and thus will give us 100 times the energy of the technology we are currently using.
Plutonium breeder reactors can produce 30 percent more fuel than they consume. They operate in the fast neutron spectrum and thus need to use sodium as the coolant. Reactors breeding thorium to U233 have an eight percent breeding margin and operate in the thermal (low energy) neutron spectrum. Eight percent is not much margin to play with, the necessary technology is still at the conceptual stage and our civilisation is running out of time. On the other hand there is four times as much thorium as uranium in the Earth’s surface. So if the excess neutrons from plutonium breeding could be applied to getting thorium breeding over the line, this would, in effect, increase the life of our uranium endowment four-fold.
If our civilisation is going to have a future worth having, it will be powered by plutonium breeder reactors. The only alternative to nuclear power is to revert to wood and horses which will result in an 18th century standard of living. It will easier to get that nuclear future while we still have some oil and coal to burn. It will be hard to build nuclear reactors if you are using energy from horses, so the sooner we start down the right path, the safer we will be, and the happier we will be.
It seems that Bill Gates’ nuclear effort has come to the same conclusion. Terrapower was started in 2008 to promote the Travelling Wave Reactor, essentially a sausage-shaped lump of fuel that was lit at one end and burnt to the other. This was an idiotic concept and Terrapower eventually switched to a molten salt design. They are now partnered GE-Hitachi and using a sodium-cooled reactor with heat transfer to a molten salt circuit. Power output will be 345 MWe.
Theoretically it would be possible for Mr Gates to make weapons-grade plutonium in his reactor. Weapons grade plutonium has less than 7% Pu240 with the rest being Pu239. To achieve that would require rapid exchange and reprocessing of the fuel rods. Too high a Pu240 content will make a nuclear weapon detonate prematurely in the implosion and produce a fizzle.
We need to make up for a lot of lost time. The first sodium-cooled breeder reactor in the US, Experimental Breeder Reactor-1 at the Idaho National Laboratory, went critical in 1951. It was followed by EBR-2 in 1964 which sold power into the grid.
Right now, coal and oil and natural gas make all the things we need, either by providing the energy to make them or the materials they are made from. When the fossil fuels run out, how will power from nuclear reactors be transformed into the physical things we use? The five pillars of civilisation are diesel, cement, steel, plastics and ammonia.
The production of diesel (and petrol and aviation fuels) will use the Bergius process to hydrogenate biomass. The process will start with power from nuclear reactors applied to the electrolysis of water to produce hydrogen. Power at $0.05 per kWh produces hydrogen at $7.00 per kg. In energy content terms, this translates to a diesel price of $2.59 per litre which is less than most people around the world are paying at the pump.
The following diagram is from Friedrich Bergius’ speech at his Nobel Prize for Chemistry acceptance in 1931:
Figure 3: Mass balance for the Bergius Processs
What this figure shows is that the addition of only another 5% by weight of hydrogen converts a near-useless solid fuel into a liquid with a high energy density and ideal handling properties. Only a little smaller than the diesel molecule is heptane, C7H16, which is the ideal base for a thermobaric bomb.
Coal comes in from the top left and is combined with hydrogen and recycled oil to make it a liquid. The hydrogen is produced by steam reforming of the light ends of the process. If the power from nuclear reactors was cheap enough then that, via electrolysis, could be the source of the hydrogen with a saving in capital costs and operating complexity.
The conversion takes place at 400°C and 200 bars of pressure. The hydrogen content of diesel is 14% by weight. The hydrogen content of coal can range up to 8%. From that level it only takes another 6% hydrogen to make diesel. The last experiment in converting coal to diesel in Australia was conducted by the Japanese Government in the Latrobe Valley in 1991. As as result of that research it was calculated that the oil price necessary for commercialisation was then US$40 per barrel; equivalent to US$110 today. Australians are currently paying A$349 per barrel for diesel at the pump, equating to US$230 per barrel. So we are already paying a high-enough price to start the coal liquefaction industry.
With the appropriate tax structure, making our own diesel from our own coal is commercial now. When the coal runs out the feedstock will switch to wood.
While there is currently a lot of enthusiasm for the concept of using hydrogen directly as a transport fuel, the physics and chemistry of hydrogen preclude its adoption to that end as it combines a low energy density, transmission losses and leakage with a wide explosive range. To understand the limitations of hydrogen there is nothing better than the experience of playing with it as a child:
After my experience playing with hydrogen as a kid, I have zero doubt that parking 40-50Kg of compressed hydrogen next to anything you care about, or inside anything you care about, would be the definition of insanity.
That said, hydrogen will be a big part of our energy future. Just a little bit of hydrogen added to a near useless, low-value carbon source turns it into a precious liquid fuel with a high energy density and optimum handling characteristics. The future will be short of carbon because its availability will depend upon how fast biomass can be grown.
Diesel is a hydrogen fuel with over one third of its contained energy coming from the 23 hydrogen atoms in each diesel molecule:
Figure 4: Diesel by composition and energy contribution
The relative market share of diesel and electric vehicles in the passenger car market will depend upon the cost of growing biomass for the former and cost of power from nuclear reactors for the electric option. Some sectors of the economy including agriculture, aviation and marine can’t be electrified and will be the first call on the output of the Bergius plants via the price mechanism.
It is likely that at some point recycling of all metals will be required instead of sending them to landfill. Then electric vehicle operators will be paying for their batteries twice – in the making of them and secondly for dissolving them in acid to recover the metals at the end of their 10 year life. Electric vehicles are expensive now but the owners are yet to pay for the full cost of ownership. Recycling of all metals will certainly be the end of solar panels.
Under optimum growing conditions in Brazil, eucalypt plantations produce 40 cubic metres/hectare per annum, which becomes 20 tonnes of dried wood. This in turn converts to 10 tonnes of lignin, which would yield 10,000 litres of liquid fuel. Assuming in Australian conditions that the yield per hectare is 25 cubic metres per hectare, one hectare would produce 39 barrels of diesel per annum. To supply Australia’s requirement of one million barrels per day would require close to 10 million hectares of plantation forests — about 8% of Australia’s forested area – so it is quite achievable.
The second pillar of civilisation, cement, is made using 200 kg of coal to produce one tonne of cement. In the post-coal world, energy for cement-making will come from charcoal produced from plantation eucalypts. The yield from wood to charcoal is 35% so Australian annual consumption of nine million tonnes of cement will be made using charcoal from 5.4 million tonnes of wood produced from 200,000 hectares of plantation eucalypts.
To make steel after metallurgical coal runs out will likely use electric arc furnaces to provide the power for the reduction of iron ore in a liquid iron bath. As long as there is free carbon in liquid iron, it will reduce carbon dioxide to carbon monoxide which in turn reduces the iron oxides. The heat necessary to drive these reactions will come from the electric arc. In essence this is similar to how aluminium is smelted now.
Plastics, the fourth pillar, are mostly a combination of carbon and hydrogen. Industrial chemists can make every type of plastic using carbon monoxide and hydrogen as the initial starting materials. It will just be more expensive than if you started with a larger molecule first such as naptha from oil refining.
Ammonia is the fifth pillar of civilisation. Half of the world’s population is alive due to protein that had its origin in the energy contained in coal and natural gas. That energy is used to combine nitrogen from the atmosphere with hydrogen from steam reforming of natural gas to produce ammonia. Which in turn is used to make urea and ammonium nitrate fertilisers. The whole process is easily converted to be powered by nuclear reactors. It is the cost of nuclear power in the post-fossil fuel era which will determine the cost of food.
Lastly, what is happening in China is instructive. China is the second biggest oil consumer on the planet at 14 million barrels per day, of which 4 million barrels is produced domestically. President Xi wants to have a war and a consequence of that is that 90% of oil imports will be cut off. In preparation for that China has built a strategic stockpile of 1,200 million barrels. China has also encouraged adoption of electric vehicles which are now 29% of cars sold in China. Which may explain why Chinese coal consumption in the last couple of years has jumped from 4.0 billion tonnes per annum to 4.5 billion tonnes, despite a lacklustre economy. Switching to electric vehicles would mean that China will be more likely to survive a maritime blockade. Bear in mind that when Japan faced a similar situation in WW2 they sent boys out into the forests to dig up pine roots to provide the fuel for their fighter aircraft.
The Chinese switch to electric vehicles will deplete their coal reserves faster which in turn will mean that the prices for solar panels and wind turbines for the rest of the world will rise faster as a consequence. Chinese polysilicon production, used for making solar panels, has moved 3,000 km in from the coast to the province of Xinjiang where Disney makes movies and China now has its cheapest coal.
The German Government on Wednesday approved putting coal power plants back online from October until the end of March 2024 to address scarce natural gas this winter and avoid shortages, Reuters reports.
Following Russia’s invasion of Ukraine and a drop in Russian gas imports to Germany, Berlin reactivated coal-fired power plants and extended their lifespans, with a total output of 1.9 gigawatt hours generated last winter.
The Government said it will make proposals by next summer on how to ‘offset’ the increased carbon dioxide emissions the plants will generate this winter.
I wonder when they’ll twig they still need fossil fuels every winter, not just this year.
Some Western nations appear to be waking up to the reality that they are being duped – that Net Zero is a fabrication of their own egos that other nations hardly take seriously. Just don’t count on the world’s two leading English-speaking nations, or the plutocrats in Paris, Geneva, and Davos, to follow suit. They still talk as if they still control the unfolding of world affairs.
Just last year, for example, a German company demolished an aging wind farm to expand a coal mine. To the BBC’s chagrin, Australia, too, continues to rely on its coal industry for much-needed jobs and revenues.
Yet the modern-day utopians in the U.S. and the UK still cling to the myth that emerging superpower nations like China, India, and Russia will bow before the World Economic Forum and United Nations grifters.
The BBC calls Australia “a stark outlier … in a world racing to reduce pollution.” They squawk that China, “along with G7 rich nations,” has made the Net Zero by 2050 pledge – despite watching China and many other nations dramatically increase their reliance on coal energy.
The BBC ignores the fact that global coal consumption has nearly doubled since 1998. Consumption jumped from 94.9 exajoules (3.24 billion tonnes) in 1998 to 150.4 exajoules 5.15 billion tonnes) in 2010 to a record high 8 billion tonnes in 2022.
China has doubled consumption from 1.5 billion tonnes in 2002 to more than 3 billion tonnes in 2022 (officially, but surely higher now). Coal consumption in India has skyrocketed, rising from 240 million tonnes in 2007 to 906 million tonnes in 2021.
China in the first half of 2023 started construction on 37 gigawtts of new coal power capacity, issued permits for another 52 GW, and announced the revival of 49 GW. China now has added 243 GW of new coal power, increasing capacity by up to 33% since January 2022.
India in 2022 reopened more than 100 coal mines to meet growing demand for coal energy. Again this year India stepped up coal production to stop outages caused by lower hydropower output due to an ongoing drought. India has failed to meet its Paris Agreement goals for renewable energy, as coal in August provided three-quarters of the nation’s electricity.
Meanwhile, the U.S. consumed just 495 million tonnes of coal in 2021, down from a record 1,127 million tonnes in 2007. The major decrease began with President Obama’s pledge to bankrupt the U.S. coal industry. As House Natural Resources Committee chair Rep. Doc Hastings (R, WA) said in 2012, Obama “tried at every turn to make that goal a reality.”
As Hastings put it, the Obama Administration rescinded the 2008 Stream Buffer Zone Rule, entered into a consent agreement with environmental groups and spent millions of taxpayer dollars to rewrite the rule, attempted to manipulate data to conceal its economic impact, and hid the final rule from the public until after the 2012 election.
China and India were exempted from having to cut carbon dioxide emissions both under the failed 1997 Kyoto Protocol and the 2016 Paris Agreement. Grist claimed it was only fair for “the fattest man at the table” to be lenient with “hungry” nations “upon realizing that the food is running out.”
While the U.S. Senate rejected the Kyoto Protocol, the Senate never got to vote on the Paris Agreement. President Biden has doubled down on Obama’s pledge to make coal as much a pariah in the U.S. as it is in the UK.
Just a year ago, President Biden claimed coal plants in the U.S. were “too expensive to operate” – though he did not add, “because of President Obama’s egregious regulations.” He promised that “we’re going to be shutting these plants down all across America” and rely on increasingly expensive, intermittent wind and solar electricity.
U.S coal production is also being hindered as Western U.S. ports seek to ban coal exports. Just since 2010, nine proposals that would have added 133 million tonnes of annual coal-handling capacity in the Pacific Northwest have been cancelled. This has dealt major blows to coal mining operations and the economies in states like Utah, Montana, and Wyoming.
Just last year, the city of Oakland blocked a plan to ship low-sulfur Utah coal to Japan via a bulk terminal on the San Francisco Bay. The Utah Legislature had set aside $53 milllion to invest in terminal development. Utah coal is still shipped from three other California ports despite growing local opposition to any handling of coal.
To fill the void, Russia is ramping up coal production, with a goal of 668 million tonnes per year by 2035 – up from 441 million tonnes in 2019. Coal production had already risen 30% from 2011 to 2021.
A significant project upgrading operations at the 2.2 billion tonne deposit of coal in the Siberian town of Elga, which is covered by snow up to 9 months a year. According to Deputy Prime Minister Alexander Novak, “Growth prospects are primarily related to the growing market of the Asia-Pacific region.”
Indonesia, on a pace to be the world’s fourth largest economy by 2045, is building 19 gigawatts of new coal plant capacity, two-thirds of which will power nickel, cobalt, and aluminum smelters. The Jakarta government plans to turn Indonesia into a manufacturing hub for electric vehicles and batteries.
Coal today accounts for 43% of Indonesia’s grid electricity, but Indonesia is also one of the world’s leading coal exporters. The new plants will bump national capacity by a third to nearly 60 GW over a short time frame.
U.S. policy, by contrast, is aimed at shuttering coal plants, banning natural gas even for home appliances, and heavily subsidizing wind and solar projects to meet Net Zero decarbonization goals that Congress has never approved. As a result, the nationwide average electricity price rose 11% from 2021 to 2022. Electricity bills in 2023 are rising as much as 40%.
Similarly, household electricity prices in the UK doubled in the past decade despite the government setting a tariff cap to protect consumers. Last summer, electricity prices peaked at £363.7 per megawatt-hour.
A century ago, the British lion was the world’s leading economy. The Suez Crisis of 1956, it is said, confirmed Britain’s decline as a global power, and the transfer of Hong Kong to China in 1997 literally buried the British Empire.
The U.S. secured its position as the world leader after World War II but began a long decline just 15 years later with the Vietnam war. Today, the inheritors of U.S. policy – many from the Vietnam era – are making the withdrawal from Afghanistan (despite the pretenses of power in the Russia-Ukraine war) the sign of the end of the American empire.
How long will it be before the (likely) fall of Taiwan buries the remnants of American power?
How quickly can an empire collapse from its own rot?
Why have the U.S. and the UK backed away from fossil fuels even as other nations double down to upgrade their own economies with coal? One might believe that Western leaders just want to transfer their guilt for mismanaging their power by punishing the citizens who let them do it?
Duggan Flanakin is a senior policy analyst for the Committee for a Constructive Tomorrow and a frequent writer on public policy issues.
German energy giant RWE has begun dismantling a wind farm to make way for a further expansion of an open-pit lignite coal mine in the western region of North Rhine Westphalia.
One wind turbine has already been dismantled, with a further seven scheduled for removal to excavate an additional 15m to 20m tonnes of so-called ‘brown’ coal, the most polluting energy source.
The demolitions are part of a deal brokered last year between Robert Habeck, the Green party’s minister for economy and climate action and Mona Neubaur, who is the economy minister for North Rhine Westphalia, to allow the expansion of the mine.
In return, RWE had to agree to phase out coal in 2030, eight years before the previous deadline. “It’s a good day for climate protection,” Habeck said at the time.
But this week’s move has sparked sharp criticism from activists.
“The current climate emergency requires urgent and concerted efforts to accelerate the deployment of every single wind turbine, solar panel and heat pump that we can muster,” said Fabian Hübner, a senior campaigner at Beyond Fossil Fuels, a German-based coalition of climate activists.
“Anything that diverts from this critical endeavour, especially the dismantling of renewable energy sources to extract more fossil fuels, must be unequivocally prohibited,” he added.
But RWE and Germany’s government have persistently justified the expansion of the so-called Garzweiler coal fields by pointing to the Russian invasion of Ukraine and the ensuing energy crisis.
According to RWE, the expansion is necessary “due to the energy crisis.” The government in Berlin follows this logic. Indeed, some of the leading advocates of RWE’s coal expansion plans come from the Green Party, one of three ruling parties in Germany’s current ‘traffic light’ coalition with centre-left SPD and business-friendly FPD-party.
Habeck has defended the expansion as the “right decision.” Green party politician Oliver Krischer has described the expansion and earlier phase-out as “one of the greatest advances we’ve made in recent years,”
But energy consultation firm Aurora has found that expanding the Garzweiler open-pit mine would cause the country to overshoot its climate pledges. Researchers also said lignite coal is likely to end in 2030 anyway because it is rapidly becoming uneconomical compared to other cheaper energy sources such as solar and wind.
clean energy concept. solar panel with wind turbine and blue sky
The energy content of gasoline and other fuels is usually measured in Btu, or kilojoules if you are metric. But it can also be done in kilowatt or megawatt hours. Fuel energy and electric energy are both energy, after all.
Given the Biden rush to electrify all fuel use, this way of measuring helps make clear the fantasy of that policy. The amount of electricity required to replace ordinary fuel uses is enormous.
In fact, this conversion issue is staring us in the face. A recent CFACT article points out that EPA proposes to regulate at cross purposes. They want to force us to switch to electric cars while at the same time shutting down fossil-fueled power production.
As my regular readers know, I am focused on Virginia, so let’s take it as our example. The reality is complex, but we will keep it simple enough to see the stark general picture.
According to EIA, Virginia’s estimated 2021 gasoline consumption is around 440 trillion Btu. The conversion is 3,412,000 btu = 1 MWh. So that is about 130 million MWh in gasoline energy. Also, in 2021 Virginia’s electric power generation is 93.5 million MWh.
So the gasoline energy is 1.4 times the total power generation. That’s a lot, right? If it takes this much energy to power our cars and light trucks, then we need to build generation capacity that is almost one and a half times our present generation to make the transition. We also need to build the costly transmission, distribution, and charging capacity to deliver all that juice to the EVs.
I have yet to see the cost estimate for all of this, but clearly, it is huge. And if we are also supposed to shut down most of our existing generating capacity because it is fossil-fueled, that is surely impossible. I have seen no plan that even begins to seriously address this issue, just a lot of empty arm-waving.
Mind you, a real analysis would get pretty technical pretty fast. For example, car engines are only around 40% efficient. So one might argue that only 40% of that 130 million MWh, or 52 million, is needed to run the electric version. That is still well over half of the present generation.
But the electric power and electric car system is also far from 100% efficient. There are line losses, storage losses, motor losses, etc. So if 52 million MWh has to be used, then a lot more has to be generated. Plus EVs are a lot heavier, so take more energy.
Then too, there is the unanswered question of where all this new juice is going to come from if fossil-fueled generation is not allowed, or only allowed with energy-intensive carbon capture bolted on. This absurd target is a separate issue that megawatt hours of gasoline clearly raises.
And this is just gasoline. The Biden goal is to electrify as much fossil fuel use as possible, including that used to generate electricity.
Natural gas is a real whopper. EIA says Virginia’s 2021 consumption was about 700 trillion Btu, or getting toward twice as much as gasoline. And many gas uses are efficient. Distillate oil, including diesel and heating oil, is another 200 trillion Btu or so. Even coal is around 70 trillion Btu.
Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
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Privacy & Cookies policy
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Wer wir sind
Textvorschlag: Die Adresse unserer Website ist: https://climate-science.press.
Kommentare
Textvorschlag: Wenn Besucher Kommentare auf der Website schreiben, sammeln wir die Daten, die im Kommentar-Formular angezeigt werden, außerdem die IP-Adresse des Besuchers und den User-Agent-String (damit wird der Browser identifiziert), um die Erkennung von Spam zu unterstützen.
Aus deiner E-Mail-Adresse kann eine anonymisierte Zeichenfolge erstellt (auch Hash genannt) und dem Gravatar-Dienst übergeben werden, um zu prüfen, ob du diesen benutzt. Die Datenschutzerklärung des Gravatar-Dienstes findest du hier: https://automattic.com/privacy/. Nachdem dein Kommentar freigegeben wurde, ist dein Profilbild öffentlich im Kontext deines Kommentars sichtbar.
Medien
Textvorschlag: Wenn du ein registrierter Benutzer bist und Fotos auf diese Website lädst, solltest du vermeiden, Fotos mit einem EXIF-GPS-Standort hochzuladen. Besucher dieser Website könnten Fotos, die auf dieser Website gespeichert sind, herunterladen und deren Standort-Informationen extrahieren.
Cookies
Textvorschlag: Wenn du einen Kommentar auf unserer Website schreibst, kann das eine Einwilligung sein, deinen Namen, E-Mail-Adresse und Website in Cookies zu speichern. Dies ist eine Komfortfunktion, damit du nicht, wenn du einen weiteren Kommentar schreibst, all diese Daten erneut eingeben musst. Diese Cookies werden ein Jahr lang gespeichert.
Falls du ein Konto hast und dich auf dieser Website anmeldest, werden wir ein temporäres Cookie setzen, um festzustellen, ob dein Browser Cookies akzeptiert. Dieses Cookie enthält keine personenbezogenen Daten und wird verworfen, wenn du deinen Browser schließt.
Wenn du dich anmeldest, werden wir einige Cookies einrichten, um deine Anmeldeinformationen und Anzeigeoptionen zu speichern. Anmelde-Cookies verfallen nach zwei Tagen und Cookies für die Anzeigeoptionen nach einem Jahr. Falls du bei der Anmeldung „Angemeldet bleiben“ auswählst, wird deine Anmeldung zwei Wochen lang aufrechterhalten. Mit der Abmeldung aus deinem Konto werden die Anmelde-Cookies gelöscht.
Wenn du einen Artikel bearbeitest oder veröffentlichst, wird ein zusätzlicher Cookie in deinem Browser gespeichert. Dieser Cookie enthält keine personenbezogenen Daten und verweist nur auf die Beitrags-ID des Artikels, den du gerade bearbeitet hast. Der Cookie verfällt nach einem Tag.
Eingebettete Inhalte von anderen Websites
Textvorschlag: Beiträge auf dieser Website können eingebettete Inhalte beinhalten (z. B. Videos, Bilder, Beiträge etc.). Eingebettete Inhalte von anderen Websites verhalten sich exakt so, als ob der Besucher die andere Website besucht hätte.
Diese Websites können Daten über dich sammeln, Cookies benutzen, zusätzliche Tracking-Dienste von Dritten einbetten und deine Interaktion mit diesem eingebetteten Inhalt aufzeichnen, inklusive deiner Interaktion mit dem eingebetteten Inhalt, falls du ein Konto hast und auf dieser Website angemeldet bist.
Mit wem wir deine Daten teilen
Textvorschlag: Wenn du eine Zurücksetzung des Passworts beantragst, wird deine IP-Adresse in der E-Mail zur Zurücksetzung enthalten sein.
Wie lange wir deine Daten speichern
Textvorschlag: Wenn du einen Kommentar schreibst, wird dieser inklusive Metadaten zeitlich unbegrenzt gespeichert. Auf diese Art können wir Folgekommentare automatisch erkennen und freigeben, anstatt sie in einer Moderations-Warteschlange festzuhalten.
Für Benutzer, die sich auf unserer Website registrieren, speichern wir zusätzlich die persönlichen Informationen, die sie in ihren Benutzerprofilen angeben. Alle Benutzer können jederzeit ihre persönlichen Informationen einsehen, verändern oder löschen (der Benutzername kann nicht verändert werden). Administratoren der Website können diese Informationen ebenfalls einsehen und verändern.
Welche Rechte du an deinen Daten hast
Textvorschlag: Wenn du ein Konto auf dieser Website besitzt oder Kommentare geschrieben hast, kannst du einen Export deiner personenbezogenen Daten bei uns anfordern, inklusive aller Daten, die du uns mitgeteilt hast. Darüber hinaus kannst du die Löschung aller personenbezogenen Daten, die wir von dir gespeichert haben, anfordern. Dies umfasst nicht die Daten, die wir aufgrund administrativer, rechtlicher oder sicherheitsrelevanter Notwendigkeiten aufbewahren müssen.
Wohin deine Daten gesendet werden
Textvorschlag: Besucher-Kommentare könnten von einem automatisierten Dienst zur Spam-Erkennung untersucht werden.
