Saturday, April 20, 2019

The nuclear reactor decommissioning business

One of the most prominent nuclear generating stations in the United States is changing owners after it ceases generating electricity.
Tuesday 16th April 2019 [SNC Lavalin]
Comprehensive Decommissioning International, LLC (CDI), a joint venture company of SNC-Lavalin (TSX: SNC) and Holtec International, has agreed to enter into a Decommissioning General Contractor Agreement for another US nuclear decommissioning contract, expected to exceed CAD $1 billion.
Entergy Corp. (NYSE: ETR) has agreed to sell the subsidiaries that own Indian Point Units 1, 2, and 3, located in Buchanan, N.Y., to a Holtec International subsidiary for decommissioning.
CDI, the joint venture, may be the best news for SNC Lavalin in some time. The pending purchase of Entergy's Indian Point reactors follows within a year of its agreement to purchase Exelon's Oyster Creek nuclear power plant and Entergy's Pilgrim and Palisades sites (once the reactors are shutdown permanently).

Most articles on the sales note CDI intends on decommissioning the sites much quicker than expected, but I thought it worth following up on the size of the decommissioning funds - which are part of the purchase. There are references in many articles to the size of the funds, but I'll use only one source: the U.S. Nuclear Regulatory Commission (NRC) 2017 Fund Status Reports.

Keep in mind the funds are as at the end of 2016 and the NRC's cost estimate is in 2016 dollars.


Monday, April 15, 2019

Strange wind, and nuclear goes to solar for new leadership

Sometimes my time served battling the enormous waste on wind in Ontario comes flooding back - such as this weekend reading an article on the promise of renewables in Canada's most tell-you-what-to-think publication It's paywalled, boring and one-sided so I'm not going to link to it, but it did incent me to pull some figures, from the Canadian Wind Industry Association.

I tried to colour Quebec and Ontario as silver and gold in graphing the increase in annual installed capacity through 2014, and subsequent decline, for reasons I hope become clear during a short review of the current situation for industrial wind in provinces across the country.

Sunday, April 14, 2019

Higher ROE and lower debt ratings: California's "precarious state"

Articles from this past week on California's utilities include one on utilities seeking rate hikes with rather large Return-on-Equity (ROE) figures, one on a bond agency downgrading the same utilities, and another on the rookie governor's effort to address the issues driving these actions.

Southern California Edison requests higher ROE, citing wildfire risks (Utility Dive)

  • ...Southern California Edison (SCE) on Thursday asked the Federal Energy Regulatory Commission to significantly raise its return on equity (ROE) due to "dramatic, material changes" to its regulatory and financial conditions.
  • SCE is requesting an overall ROE of 17.12%, plus incentives...
...
"We do not believe a higher return on equity is a long-term solution to the urgent situation utilities in California are facing," Caroline Choi, senior vice president of corporate affairs for SCE and Edison International, said in a statement. "However, this is what is needed in the near term in order to attract the capital required to provide safe, reliable electricity."
 The request come following months of warnings from debt rating agencies.

Tuesday, September 11, 2018

how to sell an industrial wind turbine

The lovely thing about policies such as 60% renewables by 2030, and 100% carbon-free by 2045, is they provide easy messages to broadcast.

In my previous post I quoted David Roberts', "in what is effectively a climate Dark Ages in the US, California is carrying a torch." I've argued the state hasn't accomplished much to date, its additions of variable renewable energy resources (vRES) had been chunky and the rapid addition of solar over the past 5 years is unlikely to be sustained. My intent with the post was to show the path to 60% is not clear, but it's a lot narrower without broadening the connections with other states. Cost concerns are better addressed in this twitter thread, within which Cody Hill neatly summarizes the looming issues:
1. In-state wind is essentially built out already, leaving practically nothing but solar to build locally, which leads to major value deflation 
2. The fossil fleet is already struggling to stay solvent, and it is unclear what the best option is to maintain resource adequacy
California's goal is simple, but problematic.

Australia's former Prime Minister tried to sell a National Energy Guarantee (NEG) that was not simple - and that was a problem for him. I liked it a lot more than policies like 60% renewable, but The Australian noted, "Malcolm Turnbull risks all with NEG policy"

And then he was gone. Replaced by Scott Morrison (seen in "This is Coal").
New Prime Minister Morrison appointed Angus Taylor as energy minister (seen here addressing a sparse crowd at a 2013 National Wind Power Fraud Rally).

I find this astounding. I've been raising the alarm on the impact of industrial wind policy on Ontario rates for many years (ie.), and ran a blog for Wind Concerns Ontario for about 18 months. I understood the general population's support for renewables which appeared in poll after pool, but it appears that support may be a mile wide but less than an inch deep.

Thursday, September 6, 2018

wishing winds: California's SB 100

I wanted to tie together some articles of interest I've read in a single post - but I instead I'll deliver two blog posts and spare myself the effort of convincing the reader of the connections between:
For those not closely following the electricity scene, Stop These Things and VOX are dissimilar in the extreme. Those that are following are likely lined up with one or the other may have already abandoned reading this post - but don't worry VOX followers, this one only deals with California.
SB 100, the bill sponsored by state Sen. Kevin de León, would set a target of 100 percent carbon-free electricity by 2045. It passed the California Senate last year, passed the state Assembly on Tuesday, and was reconciled by the Senate on Thursday...
...there’s enormous power and symbolism in “100 percent.”
But it’s also important to understand that SB 100 is not some big leap for California...California’s transition to clean energy has been careful and deliberate.
SB 100 is a big deal, in my opinion, specifically because 2045 is not far away in planning electricity generation - and therefore it won't be just another symbolic step. According the Energy Information Administration (EIA), "The capacity-weighted average age of U.S. natural gas power plants is 22 years, which is less than hydro (64 years), coal (39), and nuclear (36)." A building boom in natural gas power plants for 6 years at the start of the century drops that average age to 22 years, otherwise it would similarly show 2045 would be early years for a traditional power plant just being planned today. SB 100 is not binding, but I think it clearly increases the risk for any investor that would plan a generating source with significant greenhouse gas emissions in that state.

Roberts alludes to a possibility the bill won't be signed into law; "Gov. Brown is threatening to veto SB 100 if legislators don’t also pass AB 813, a bill that would set California on the path to joining a larger regional Western power market." He doesn't take the possibility seriously, perhaps because of his belief that, "in what is effectively a climate Dark Ages in the US, California is carrying a torch."

I'm in Ontario - if Americans are looking for a torch, they should look up here.



Saturday, April 21, 2018

Bad books: whither professional behaviour

Today's Globe and Mail has an article by Mattew McClearn I hope those who follow me will read - but it is work and if you're not that invested in the Sousification of Ontario's accounting at least take a couple of minutes to watch the video embedded in Bad books: How Ontario’s new hydro accounting could cost taxpayers billions.
The IESO changed its accounting policies in March 2017 and said the shortfall was an "asset".
The government said this "asset" represented the IESO's right to recover the shortfall -plus interest charges and other expenses -  from future ratepayers years from now.
The Auditor-General says this "asset" does not exist.

Image from Globe and Mail showing Bay Street's seals of approval
I don't wish to dwell on the article beyond recommending you read it, but I will expand on some topics I've touched on before to demonstrate why the article should be read as illustrative of a greater rot.

Saturday, October 28, 2017

base load to base cost - and back again?

This week the government of my province, Ontario, released its latest Long-Term Energy Plan. There's not much in it that I haven't commented on before, rather specifically, so in this post I'll discuss some international energy events of the past month to try and put Ontario's decisions in a broader context - not for the benefit on Ontario, but for the jurisdictions copying mistakes made in the past decade around the world.

The Cost of Energy Review produced by Dieter Helm notes the 2008 CCA "commits the UK to reduce emissions by at least 80% by 2050."
The review will provide recommendations as to how best to minimise the costs of energy consistent with the overarching objectives, taking account of the costs and benefits of the recommendations. It will set out options for developing and enhancing energy policy.
The very meaty meat of the lengthy report's digestible Executive Summary:
The measures necessary to reduce the costs include: the unification of the capacity and FiTs [feed-in tariffs] and CfDs [contract for difference] auctions on the basis of equivalent firm power (EFP); the gradual reforms of the structure of FiTs and CfDs in the transition to their eventual abolition; and further enhancements to competition in the wholesale and balancing markets. There should be significant reforms of the regulation of transmission and distribution focused on the role of system operators at the national and local levels, and the replacement of the specific licences for distribution, supply and decentralised generation with a general licence. A default supply tariff should be required and the margins published. Finally, carbon prices and energy taxes should be harmonised. 
19. This package of measures is a major shift from the original market design and regulation model at privatisation, and moves on from EMR. It would create a simpler, more competitive structure fit for the new purposes. Instead of low-carbon technologies being grafted onto the fossil fuel-based system, the new world is radically different, backed up by new smart technologies, data and smart energy networks and services. A common carbon price would significantly lower the cost of decarbonisation and greatly enhance incentives.
The bombshell there is "equivalent firm power" being valued.

Wednesday, October 25, 2017

Transcanada sell-off of Ontario solar assets an ugly reminder of FIT debacle

TransCanada had issues a press release announcing it's disposal of solar generation assets in Ontario:
TransCanada Corporation (TSX:TRP)(NYSE:TRP) (TransCanada) today announced that it has entered into an agreement to sell its Ontario solar portfolio comprised of eight facilities with a total generating capacity of 76 megawatts to Axium Infinity Solar LP, a subsidiary of Axium Infrastructure Canada II Limited Partnership, for approximately $540 million. The transaction is expected to close by the end of 2017 subject to certain regulatory and other approvals as well as customary closing adjustments.
It's not uncommon to read of really low prices for solar somewhere in the world (an example), so I thought maybe displaying the price for specific projects in Ontario might be an interesting contrast.

The 76 megawatts of solar capacity being sold are:



Wednesday, August 2, 2017

regarding flexibility

There is a lot being written electricity storage these days, and capacity markets, and the integration of variable renewable energy resources. Most of the material originates with lawyers, philosophers, sales people, consultants, politicians and other economists. I invite you to listen to a professional engineer and system operator, very carefully, for 10 minutes.

The system operator is Leonard Kula P. Eng.,Vice-President, Market & System Operations and Chief Operating Officer of Ontario's IESO. If low greenhouse gas emissions are a genuine goal, the messages are pertinent far beyond Ontario. Over the first 7 months of 2017 the IESO shows ~2.8 terawatt-hours (TWh) generated by natural gas-fueled suppliers, which is only about 3.5% of all generation. The output from gas is down over 60% from the same period in 2016, which should push the greenhouse gas intensity of IESO grid generation down to around 15 kilograms CO2e per megawatt-hour - superb for grids that aren't entirely in jurisdictions blessed with plentiful hydro-electric generation sites. From a low emissions standpoint Ontario's system operator might be considered THE system operator.

Lower gas use is one characteristic of Ontario's electricity system of late.


A less positive characteristic is rising curtailment of contracted supply - notably from wind.

While most curtailment looks to be due to surplus generation, either globally or in particular regions of the grid, there is another operational aspect of curtailment closely linked to the decline in gas generation.

Earlier this year I ended a post, Can Wind and Solar be significant contributors to a low emission electricity system, with:
...many commentators...have been skeptical about the ability to operate the grid with little of the gas generation (and previously coal) online, and ready for ramping. I believe Ontario's actual operators of the system - the ones who do it on a daily basis - have a story to tell. That story would likely include improved forecasting, revised wind turbine (and perhaps solar panel) regulation to provide a programmed reactive power element, and rationalized market bid rules forcing the curtailment of wind and solar output prior to impacting nuclear units.
It is variable renewable energy systems that need to be flexible.
Kula indicates the way to make variable renewable energy systems flexible is by curtailing their output.
We added the ability to dispatch the variable generation facilities that are connected to the grid in 2013, and they are very fast acting resources. At times we have to reduce the output of these facilities to go ahead and manage congestions and/or surplus conditions, and once they dispatched down they are very quick and flexible to be dispatched back up.
The IESO's Kula spoke at the 2017 Stakeholder Summit. The IESO requires you register before viewing the recordings (it's a painless process). The section I am addressing is the panel on "Building Flexibility into the Electricity System". While I highly recommend the 10 minutes at the start of the panel in which Kula delivers his presentation , Rob Coulbeck is also worth listening to, as is the Q & A session.

Thursday, May 11, 2017

Diesel and coal; standards and bans

Alberta's coal-fired power plant operators are planning to cheaply convert plants to burn natural gas. National emissions standards should not be relaxed to extend the life of what will still be high-emission power plants.

Europe votes for stricter pollution laws on power plants | Power Engineering
Power plants in the EU will have to cut the amount of toxic pollutants such as nitrogen oxides they emit under new rules approved by a majority of member states.
Friday’s decision imposes stricter limits on emissions of pollutants such as nitrogen oxide, sulphur dioxide, mercury and particulate matter from large combustion plants in Europe.
The European Power Plant Suppliers Association (EPPSA) said they welcomed the move by the Industrial Emissions Directive (IED) Article 75 Committee members on the Best Available Techniques Reference Document for Large Combustion Plants (LCP BREF).
...
Several countries which are heavily reliant on coal, such as Poland, Bulgaria, Germany and the Czech Republic, were opposed to the changes.
...
National authorities will be able to use a derogation, or form of exemption, when costs would be disproportionate compared with the environmental benefits, while respecting environmental safeguards
...EPPSA also said it believes that for most of the existing LCPs, the implementation of the conclusions are economically and technically feasible through the state-of-the-art technologies currently available in the market.
Some history from the United States indicates the saving of some emissions reductions, such as mercury, may not justify the costs, whereas the reduction of others do - often in conjunction with reducing mercury. Courts ruled the Environmental Protection Agency (EPA) had not properly considered compliance costs, in 2015, but did not require the rule rescinded and subsequently rejected attempts to nullify the standard. Meanwhile, most plants had complied with the rule - or closed.

The new EU power plant emissions regulations appear to borrow wisely from the American experience.
For an example of negative outcome due to policies designed solely to encourage one fuel/outcome, one might look to Europe's experience with diesel in automobiles - as Maximilian Auffhammer has done in Save the California Waiver! How a “little” California vehicle standard prevented an urban “airmaggedon”: