Thursday, October 31, 2013

Ontario Wind Capacity Growing Many Times Faster than USA's

A couple of stories from today point to the absurd claims surrounding wind energy - from a couple of sides.
Let's start with a claim that subsidies should be removed (in the United States) because the generation is a mature, viable option:

 AEA Study: Removing Big Wind’s ‘Training Wheels’ | American Energy Alliance
WASHINGTON D.C. – A new report released today by the American Energy Alliance (AEA) concludes that wind energy is a mature industry whose growth has rendered the federal wind Production Tax Credit (PTC) an obsolete government hand-out that should be allowed to expire.

The AEA-commissioned study, “Removing Big Wind’s Training Wheels: The Case for Ending the Federal Production Tax Credit,” documents the explosive growth of wind generation as well as the favorable outlook for future wind generation development as a result of Renewable Portfolio Standards (RPS) – not the PTC.
But on the same day as the release of the study that the "Training Wheels" can come off, The American Wind Industry Association was announcing that over the first 9 months of 2013, after the near death experience of a tax credit at the end of 2012, little capacity has been added

Wallfall/How to reduce emissions fast enough?

"if your policy is repeatedly outperformed by lack of policy, it might be a time to consider alternatives."

I enjoyed this post from J.M. Korhonen, which includes a couple of points I think we should remember:
  • KYOTO was negotiated in 1997, with the retroactive 1990 base year providing a negotiated reduction in emissions for Germany, and it's eastern neighbours
  • Sustained periods of significant emissions reduction are very rare
Graphic of the Week: How to reduce emissions fast enough? | The unpublished notebooks of J. M. Korhonen:
Graphic from
...much of Germany’s vaunted achievements are due to so-called “wallfall” effect. In 1990, Germany had just been unified, and former East Germany still operated a number of awesomely ineffective and polluting coal plants and factories whose emissions counted towards the German 1990 totals. These were for the most part closed or extensively modernized in the five years following the unification. A study by the respected Fraunhofer Institute in Germany put the impact of these wallfall reductions to around 50% of all emission reductions achieved between 1990 and 2000, and 60% of energy-related emissions.
While I welcome any emission reductions irrespective of how they’re achieved (well, almost), there are no valid reasons to ascribe wallfall reductions to any climate policy. Therefore, there are no valid reasons to use Germany’s performance as a proof of its climate policy, without removing the substantial wallfall effect.

read the entire post at "The unpublished notebooks of J. M. Korhonen"

Tuesday, October 29, 2013

Blame solar for sky-high Ontario power bills

Bruce Sharp has written an article on the costs of electricity generated with solar panels in the province.
I noted a recent report from the Auditor General of Ontario would communicate more about the new Auditor as Sharp had already laid out the facts on the gas plant costing ... and it did (while basically supporting Sharp's points in costing the plant relocation)

Blame solar for sky-high Ontario power bills | The Financial Post

On October 17, the Ontario Energy Board announced an increase in the Regulated Price Plan rates that apply to most residential and many small business consumers. The 0.5 cent/kWh rate increase will cost a typical Ontario homeowner an extra $57 per year.

If they’re wondering what’s driving this, they should look up into the sky or at their neighbour’s roof.

Solar energy – one of the key pillars of the Green Energy and Economy Act (GEEA) – is casting a dark cloud over Ontario electricity bills and is a big factor in recent and future bill increases. In 2013, solar projects caused electricity bills to be about $550-million higher than they would otherwise have been. For a typical homeowner, this works out to $47 per year. Ontario will have an estimated 1,100 MW of solar installed by year-end and roughly 900 MW will be added in 2014. This addition will cause 2014 electricity bills to increase by another $435-million – equal to a typical homeowner increase of $37 per year. By the end of 2014, solar will be costing Ontarians $1.25-billion per year – while generating a paltry 2% of Ontario’s total electricity requirement.

How did Ontario get here?    (continue at The Financial Post (subscription)

Saturday, October 26, 2013

Authorities comment on Electricity Planning in Ontario/ Parkinson's Laws exemplified

An opinion piece in the Toronto Star caught my attention yesterday, and while it is rarely worthy of nitpicking on details, my sometimes collaborator Parker Gallant also posted a piece; one which will correct some of the misinformation presented in the Star.

Did Ontario make the right decision on nuclear power? | Toronto Star | Opinion (R. Michael Warren)
The Ontario Power Authority (OPA) plans the power system, generates the power and promotes conservation. It predicts gross energy demand will rise 9 per cent by 2022.
The Independent Electricity System Operator (IESO) balances the daily supply and demand of power, and directs its flow around the province. It disagrees with OPA, predicting Ontario’s grid electricity demand will drop to 1992 levels by 2022.Who to believe? The Wynne government is betting heavily that the IESO forecast is more realistic. The premier and her team are acutely aware that the province’s energy planner, OPA, has consistently overestimated the long-term demand for electricity and underestimated the cost of new nuclear power.
A month before Energy Minister Chiarelli’s announcement, the Pembina Institute and Greenpeace released a joint report. They used a freedom of information request to unearth the IESO’s prediction of dropping demand — data that was likely already available to the minister. It supports his decision to halt any further investments in new nuclear plants.
Continue reading at the Toronto Star

The Star has changed the original post.  A note currently explains, "This article was edited from a previous version that mistakenly referred to the Ontario Power Authority as the OPG."

Which is nice but the updated wrong version states the OPA "generates the power."
They don't.

Ontario Power Generation (OPG) generates power ... in Ontario

The OPA generates coupons and other paper.

Parker Gallant's latest provides information on the latest from the OPA universe - which is doing what universes and bureaucracies do.

Friday, October 25, 2013

Germany Utility Plans to move "beyond being 'tolerated'"

from German utility RWE:

"we believe we can move beyond being ‘tolerated’.”

The story features the themes of capacity payments and market dysfunction, with an added emphasis of maintaining existing assets over investing in developing new assets. 

Exclusive report: RWE sheds old business model, embraces energy transition - Energy Post | Energy Post:
...The main function of this “existing conventional fleet” will be to provide backup capacity. The strategy paper says that “the prospects for RWE’s generation business are driven by the following convictions”.
First, “although we see a huge build-up of a renewable generation infrastructure ( … ) the demand for reliable capacity will not decline significantly any time soon. The system requires roughly 260 GW of reliable capacity in Central-Western Europe in 2013 and will not require much less in 2030.”
“The second conviction, which partly breaks with the targets of the present strategy, is that portfolio churn is not an option any more. We have to live with our assets and make the best of them.”
Last but not least: Currently, backup capacity is needed but not adequately remunerated. This is the result of an ultimate and irreversible distortion of the present market design.
Continue reading at Energy Post

Sunday, October 20, 2013

Ontairo's Engineers on The Real Cost of Electrical Energy

The Real Cost of Electrical Energy is a presentation prepared by the Ontario Society of Professional Engineers.

Summary of figures in OSPE presentation
I've always felt delighted when I see some of the themes I've developed in my work reflected back.

I've often linked capacity factors and levelized unit pricing, quite noticeably in The High Costs of Ontario's very provincial electricity debacle.

I had constructed a spreadsheet calculator that I posted thinking it might help some people commenting on the province's long-term energy plans.

I just tried my calculator out for the fictitious all gas scenario [1], and I got $63 (with gas at $4/MMBtu).

Saturday, October 19, 2013

European utilities urge policy reform to avert black-outs

The story of large European utilities grouping together to lobby of changes to electricity sector design ran in Reuters over a week ago, and I've been writing on the themes for years.
Rod Adams has written on it, as has the Nuclear Energy Institute, so it's likely worth noting again here.

European utilities urge policy reform to avert black-outs | Reuters:
BRUSSELS, Oct 11 (Reuters) - Bosses from 10 utilities representing half of Europe's power-generating capacity urged the European Union on Friday to adopt reforms to prevent black-outs and help the indebted sector adapt to future demand.

The CEOs, who call themselves the Magritte Group after an initial meeting in an art gallery, said EU energy and environment policy was failing in its objectives and had raised the risk of the lights going out.

Rising electricity bills that are damaging Europe's international competitiveness were the fault of political charges and misguided subsidies for solar and wind, rather than the fault of the energy companies, they said.

"We cannot have a renewables society without security of supply," said Peter Terium, chief executive of Germany's RWE .

Friday, October 18, 2013

Coal-fired power plants face extinction in New England

Ontario may not be the only jurisdiction ending coal-fired generation

New owners to shutter outmoded Brayton Point Power Station in 2017 | The Providence Journal:
SOMERSET — Brayton Point Power Station, the coal-fired workhorse of the New England power grid for a half-century and one of the region’s biggest polluters, is set to close, its new owners announced this week.
Energy Capital Partners, a private equity firm that purchased the 1,500-megawatt power plant this month, said it will shut down the facility by 2017 because it failed to secure a new agreement with ISO-New England, the operator of the regional power grid.
The New Jersey-based energy firm cited a host of issues in announcing its decision to close the plant, including low electricity prices because of the surplus of natural gas and the cost of meeting stricter environmental rules. The move comes just five weeks after it closed on the purchase of the facility from the Virginia-based energy conglomerate Dominion Resources. 
New England has six coal-fired power plants, but two in Massachusetts — the Mount Tom plant in Holyoke and the Salem Harbor facility — have filed plans to close. Jonathan Peress, vice president of the Conservation Law Foundation, said that if Brayton Point, seen as the newest and most efficient of the remaining coal-fired generators, cannot survive, it does not bode well for the others.
“That in essence shows that all of the coal-fired power plants are no longer economically viable in New England,” he said.

How to lose half a trillion euros/ Electricity Costs raise alarms across Europe

"Renewable energy has grabbed a growing share of the market, pushed wholesale prices down and succeeded in its goal of driving down the price of new technologies. But the subsidy cost also has been large, the environmental gains non-existent so far and the damage done to today’s utilities much greater than expected."  -the Economist

Reports of discontent with European electricity policies from both the perspective of consumers saddled with ever-increasing bills for no more consumption, and utilities whose profitability has declined, along with their share value.
Higher Electricity Costs Raise Alarm Across Europe | IEEE Spectrum
Image from IEEE Spectrum page
British government predictions of sharply increased electricity prices in the next decades are getting renewed attention these days, as the country's opposition leader Ed MIlliband promised to freeze rates if elected prime minister. A March report from the Department of Energy and Climate Change found that with current policies subsidizing green power, electricity costs will rise 33 percent by 2020 and 41 percent by 2030.
In Germany, according to reports issued this month by IHS Inc. in Denver, Colo., green energy developers received $19 billion in subsidies last year, six times the comparable figure for the UK. Germany has pushed low-carbon and renewable energy technology harder than any other European country, with impressive results: Last year it produced 22 percent of its energy from "green" sources, five times as much as twenty years before. But the costs of those green advances have proven to be unsustainably high, from a political point of view.

Without Nuclear Power, Japan CO2 Emissions Rise

Without Nuclear Power, Japan CO2 Emissions Rise - Japan Real Time - WSJ:
Japan’s greenhouse-gas emissions climbed to their second-highest level on record in the last fiscal year, mainly because the country used more fossil fuels to make up for the loss of power produced by nuclear plants, all of which are now offline."
Japan produced the equivalent of 1.207 billion metric tons of carbon dioxide in the year ended March 2013, the Ministry of Economy, Trade and Industry said Wednesday. That was up 2.8% from the previous year, 7.4% higher than the year right before the Fukushima nuclear accident, and 14% more than fiscal 1990-1991, the benchmark year for the Kyoto Protocol, which calls for cuts in CO2 emissions.

Tuesday, October 15, 2013

German Renewables Surcharge Increases by 19%

Germany's "renewables surcharge" will go up almost 20% for 2014, despite the combined output from wind and solar generators reportedly being lower over the first 9 months of the year.

German Renewables Surcharge Increases by 19% to 6.24 ct/kWh in 2014 | German Energy Blog:
The renewables surcharge will amount to 6.24 ct/kWh in 2014. This is an increase of 19.38% from the 5.227 ct/kWh in 2013.
With the renewables surcharge pursuant to the Renewable Energy Sources Act (EEG), the so-called EEG surcharge, consumers pay for the difference between the fixed feed-in tariffs paid pursuant to EEG for renewable energy fed into the grids and the sale of the renewable energy at the EEX energy exchange by the TSOs. According to data by the TSOs renewable energy renewable energy fetched on average 32.99 EUR/MWh in September.
Continue reading at the German Energy Blog

Wind is down, but solar is up - partly explaining the rise.  Elsewhere some of the blame for the latest increase is being placed on the growing number of electricity consumers exempt from paying the surcharge, and the simple fact that wholesale market pricing is down (much of the EEG being the difference between contracted rates with suppliers and the sale price on the market)

Thursday, October 10, 2013

Central's Radwanski reports Ontario scrapping new build plans for nuclear

Queens' Park Columnist Adam Radwanski has moved from the obscure inside articles to the front page of the Globe and Mail with a story on the Liberal government abandoning plans for new nuclear.

Ontario backs away from plans to buy new nuclear reactors | The Globe and Mail
Ontario’s government will shelve plans for a major new investment in nuclear power, according to industry and government sources.
Kathleen Wynne’s Liberals have decided against spending upwards of $10-billion to buy two new nuclear reactors as had been planned when Dalton McGuinty was premier, and will commit only to refurbishing existing ones, the sources told The Globe and Mail.
Meanwhile, over at the Toronto Star, John Spears (I'll suggest the only professional energy reporter in Ontario's mainstream media - despite my frequent criticisms of his articles) looks more than a step behind with, Nuclear industry faces "critical decade": OPG chief | The Toronto Star:

Wednesday, October 9, 2013

The Case for Combating Climate Change with Nuclear Power and Fracking

I should not have put off reading this because of the title (connecting nuclear power and fracking); it's a very interesting article

"...each energy source—oil, natural gas, wind, nuclear, solar, etc.—should have a market price based not only on its production costs, but also, in part, on its unique public costs reflected by revenue-neutral taxes: a carbon emissions tax, a security-of-supply tax, a catastrophe insurance tax, and even a local emissions abatement tax," he says. "While people hate the thought of paying more taxes, we are in truth paying most of these 'taxes' today. Unfortunately, the political process allows these taxes—or subsidies—to be hidden in rules, regulations, and foreign policy decisions."
...Lassiter is concerned that the massive carbon emissions from today's coal plants and transportation sector pose a major danger to mankind through the effects of rapid climate change. Less typically, he's more bullish on nuclear power and hydraulic fracturing, or "fracking," than he is on solar energy or wind power for addressing the worldwide carbon emissions problem. It's not that he has anything against renewable energy. It's that he hasn't seen evidence that renewable energy sources will get cheap enough, fast enough to slow global carbon emissions, particularly those from coal-fired power plants in China and India.
"The Chinese and Indians are going to clean up their local pollution problem—particulates and sulfur emissions—from coal plants, but the carbon emissions are an entirely different matter. To have a dramatic impact on those carbon emissions, you need to find something that beats a traditional coal plant in their countries on straightforward energy economics, and that's really, really hard to do," he says.
Continue Reading at Harvard Business School

Tuesday, October 8, 2013

Regressive Energy policies

Parker Gallant recently asked"Has our electricity system turned into nothing more than a form of wealth transfer or, perhaps, a regressive tax?"

Ontario isn't the only jurisdiction where the wisdom of programs that transfer wealth from the poorer to the wealthier are being questioned

CA rooftop solar will cost other customers $1 billion per year |
Wealthy rooftop solar homeowners will shift $1.1 billion per year in extra costs onto other electric ratepayers by the year 2020, according to a new study just released by the California Public Utilities Commission...
Net-metered electric customers had 78 percent higher median income than the median California household income.
The CPUC study, “California Net Energy Metering (NEM) Draft Cost Effectiveness Evaluation,” was released Sept. 26.   Net metering is where excess electricity from rooftop solar panels result in rolling a customer’s electric meter backwards. In this case, “net” means what remains after deductions. In a net metering system, property owners received a credit on their electric bill for all the electricity they generate. If they produce more electricity than they consume, they get a credit for excess production.
The CPUC study reports about two-thirds of the transfer of costs onto other customers comes from residential solar customers
The referenced study also notes that residential solar customers in California were, prior to solar panels on Net Energy Metering (NEM) plans, much larger than average users of electricity - California's utilities feature steeply tiered rates by consumption levels

Monday, October 7, 2013

Luftmess: checking up on air and carbon pollution

I was recently informed that the government of Ontario is now claiming in quasi-legal tribunals that industrial wind turbines (IWTs) are necessary for clean air.
I went looking for reports I'd read of declining air quality in Germany, Ontario's model for it's ill-fated feed-in tariff program attached to the equally questionable Green Energy Act.

One of the things that popped out at me during the seach was the German word "luftmess", which Google translates as "air measured"; I've taken that as a sign to comment further (being both a Luft and a ....).

A couple of themes deserve comment.
The first is the idea of economic choice (opportunity costs, etc).  At it's simplest, there might be a choice between constructing IWT's to displace pollution from coal plants and cleaning up the smokestack of the coal plants.  As wind produces little much of the time (in Ontario 80% of all IWT generation occurs in ~50% of all hours), it's unlikely to reduce traditional pollutants as much as installing selective catalytic reduction (SCR) and scrubber devices at the coal plants.

German air pollution rises despite green zones | DW (Germany)

Friday, October 4, 2013

Integration success leads to easy curtailment

An industry magazine puts a negative spin on a lot of positive developments in Spain as its newer government moves to control spiralling electricity costs that had been largely hidden in a tariff deficit.

Integration success leads to easy curtailment | Windpower Monthly:
... the control centre gives wind production more room for manoeuvre. Previously, the grid operator could order wind farms to stay offline hours ahead of its electricity schedule. During low demand periods, allowing all predicted wind power online could sometimes push flexible rapid-response gas offline, which would present a supply threat if wind finally fell short of expectations, as gas would be unable to bridge the gap. With the control centre, REE can now allow much larger amounts of wind to operate closer to the critical moment, temporarily reducing production if necessary rather than shutting down entire plants.
Being singled out for easy curtailment is only half of AEE's gripe. The other is that Spain - unlike Denmark and Germany — does not compensate generators for curtailed wind, despite wind having to pay for backup power from other technologies that enable nuclear, CHP, hydro and rapid-response gas to stay online. Cena says AEE is happy to help out the system, providing responsibilities and remuneration are spread evenly.
AEE admits that it is, of course, the centralised control that has enabled wind capacity and penetration to snowball over the years, a growth that is demanded by the EU's binding renewables objectives to 2020, by which date Spain is committed to reaching at least 35GW.
Continue reading at Windpower Monthly

Thursday, October 3, 2013

Exporting LNG/Extolling Carbon Taxes

These two stories are connected as both are likely to increase the price of natural gas in North America.
Exporting should, I think properly, move North American prices up towards global commodity prices for natural gas.  I quote the Sierra Club's advocacy of cheap local supply of carbon (bizarre), as well as Dow's ignoble advocacy of protectionism for their supply so they can freely export their product.

Of course just taxing carbon is another way to move up price; one that's about as likely to be globally implemented as ...

U.S. Gears Up to Be a Prime Gas Exporter -
Cove Point, Maryland — Deep in a narrow underwater tunnel, workers wearing hard hats pedal bicycles towards a terminal, an island of gray pipes and pilings a mile off the Western Shore of Maryland on the Chesapeake Bay. When it originally opened in 1978, the chilly passageway was intended to bring liquefied natural gas from large tankers onshore to the Dominion Cove Point facility, where it was warmed, turned back into gas and sent on to customers.
But Cove Point has had a sporadic history and has not been visited by a tanker for delivery since 2011 thanks to reduced U.S. demand for natural gas. 
Now, Dominion Transmission wants to reverse the flow...

Wednesday, October 2, 2013

Capacity, Smart Grids, and DSM

A couple of articles, on securing appropriate generating capacity to meet demand at all times, caught my attention - in part due to some past comments I've encountered connecting capacity to demand management, and therefore the infrastructure and technical tools required to increase conservation and demand management (CDM) capabilities.

Federal Court Blocks Maryland Order to Build New CCPP | POWER Magazine
A federal court on Monday shot down Maryland’s drive to spur construction of a new combined cycle power plant outside of PJM’s capacity auctions.
Ruling in favor of various entities that had sued to block the plan, the U.S. District Court for the District of Maryland found that the state’s order last year for three Maryland utilities to enter into power purchase agreements with Commercial Power Ventures (CPV), which has been seeking to build a 661-MW plant near Washington, D.C., impermissibly invaded the Federal Energy Regulatory Commission’s (FERC’s) authority over wholesale power prices.
The case grew out of Maryland’s concern with meeting its future power needs, and with PJM’s ability to incentivize construction of new capacity within the state. Last April, after several years of study and hearings, the Public Service Commission (PSC) of Maryland ordered Baltimore Gas and Electric, Potomac Electric Power, and Delmarva Power & Light to execute contracts with CPV that would provide a guaranteed revenue stream to support construction of the plant.
The state has argued for several years that PJM’s Reliability Pricing Model (RPM) has failed to attract sufficient new generation capacity to Maryland and, as a result, the state is at risk of running short of power over the next few years. (continue reading)
 I'm a fan of PJM, so from my perspective this is a jurisdiction not trusting markets to provide capacity (which is, I think, an issue in Ontario regarding summer demand requirements).

Meanwhile, in the tight supply, "energy-only" market of Texas, talk of a capacity market will not go away