Saturday, April 27, 2013

How to Ruin an Electric Grid — Germany Shows Us How

William Tucker's article comes to a similar conclusion as my recent Electricity Sector Lessons from Ontario and Germany

Nuclear Townhall » Blog Archive » WILLIAM TUCKER: How to Ruin an Electric Grid — Germany Shows Us How:
Germany's coal and gas plants are losing money hand over fist while pampered renewables are collecting "feed-in tariffs” and all kinds of subsidies – and are still more expensive. As a result, their utilities are talking about putting some of fossil fuel burners in mothballs.

Now Germany certainly can't allow that because there wouldn’t be anything left to run the grid. So Chancellor Angela Merkel has come up with another idea. She wants to pay the coal and gas plants a "capacity fee" that will pay the just for standing by to generate electricity even when it’s not needed. She said yesterday:
“We have to think about how to slow down the dynamics so that we get a sensible expansion of renewable energies but not a situation in which no gas-fired power plant can be operated profitably anymore and each gas plant has to be subsidized so it provides baseload capacity.”
So that means Germans will be paying twice for their electricity – once when it is generated by renewables and again when it isn’t generated by something else. Renewables already added a 47 percent surcharge to electric bills at the beginning of this year. Now we’re going to see something worse. The big, power-consuming manufacturers have been exempted from these charges so they can stay competitive with the rest of the world, but everyone else is going to bear the brunt.
The interesting thing is that, because of high natural gas prices in Europe, all this is creating a return to coal. Cheap coal is proving more capable of weathering the price pressures than gas and so the utilities are expanding their coal output. The same thing is starting to happen in the United States. Natural gas prices have suddenly started rising again – a 33 percent year-over-year increase in the last month. So many utilities are now switching back to coal, quickly undoing some of the "progress" that has been made in recent years in cleaning up utility emissions. This week the Energy Information Administration reported a 12 percent decrease in gas consumption by utilities, matched by a 7 percent increase in coal so far this year.
All this tells us that the "bridge" of natural gas we are supposedly constructing across some unnamed chasm into a Renewable Future is nothing but a Bailey Bridge that can be taken away next week. As soon as natural gas prices firm up again, probably driven by world demand, all the progress we have supposedly made in transitioning away from coal and toward cleaner sources of energy will disappear.

What that means is this. No one is going to make any progress in transitioning away from coal or reducing carbon emissions until we start taking another serious look at nuclear power.
The entire article may be read at Nuclear Townhall:

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