Trumpy flunky says replacing coal-based energy with renewables and natgas threatens grid stability


Cathy

❝ Department of Energy Secretary Rick Perry ordered a review of electricity markets and reliability late last week, saying that “certain policies” have hindered the development and use of baseload energy sources like coal. Although Perry never mentions renewable energy explicitly in his letter, he references “significant changes within the electrical system.” That seems to be a direct allusion to the record amount of renewable capacity that has been added to the grid in recent years.

❝ The Obama administration had supported initiatives to increase renewable energy on the US grid given the urgency of climate change and with a mind to mitigate the health problems that come with pollution related to coal burning and mining. Although wind and solar power are intermittent resources…government agencies including the DOE have funded research to improve renewable energy efficiency and energy storage. The idea has been that adding renewable energy to the grid makes it more resilient, because power generation doesn’t rely on shipments of natural gas, coal, or oil. It also decreases the grid’s reliance on large fossil fuel-burning facilities and allows more distributed energy generation.

The Trump administration, on the other hand…lies about climate change science, with the president even falsely claiming that climate change is a hoax made up by China. In March, the president killed the Clean Power Plan and ordered agencies to ignore climate change. Perry, too, spent most of his early career rejecting climate change science, but during his January Senate confirmation hearing the former Texas governor said he now accepts science showing that the Earth is warming…

❝ Of course, Perry’s history isn’t purely boosting fossil fuels. He also led a massive expansion of renewable wind power during his time as governor of Texas. But the Trump administration that Perry works for has promised to bring back coal jobs, something that industry analysts and even coal industry executives have been skeptical of due to the fact that coal’s struggles stem from competition with the low price of natural gas…

❝ Perry said that the results of the review would help to establish policies from the Trump administration, with a focus on “reliability, resiliency, affordability, and fuel assurance.”

Believe that one and you deserve the long-term increase in your energy bill…and the shortened lifespan you’re gifting your children and grandkids.

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Foreign Energy Giants Flee Canada’s Tar Sands

❝ When ConocoPhillips signed a $13.3 billion deal last month to shed many of its Canadian assets, it became the latest in a growing list of foreign firms to sell tar sands holdings to a Canadian company…

All told, five American and European companies have sold nearly $25 billion worth of Canadian oil and gas projects over the past 12 months, the vast majority of them in the tar sands. This week, Reuters reported that Chevron is exploring a sale of its major oil sands stake.

❝ Tar sands projects are among the most expensive sources of oil, and the extraction produces more greenhouse gas emissions than most conventional drilling. With oil prices remaining low, multinationals are shifting investment to higher-return projects like shale in the United States. When Marathon Oil announced the sale of its tar sands projects for $2.5 billion in March, for example, it also highlighted a $1.1 billion purchase in the Permian Basin of New Mexico and Texas. While economics is the leading factor in the sales, some advocates argue that climate change is playing a role, too…

There is one notable exception to the trend: ExxonMobil. The company has been a leader in exploiting the tar sands for half a century, largely through its Canadian affiliate Imperial Oil. Even before the sales, it pumped more oil from Alberta than any foreign company. And despite Exxon’s recent announcement that it had wiped off its books all 3.5 billion barrels of reserves at one of its tar sands projects — a move forced by financial reporting rules — the company has said it remains committed to the resource. That position is now looking increasingly isolated.

I’m really not certain why anyone is carrying tar sands projects forward. It will always require producers to expend more energy per BTU-capability of product and natural gas just keeps getting cheaper to produce. Even our so-called President with his plans to cut environmental requirements for coal can’t beat the lower cost of natgas and renewables like solar.

I guess Canadian companies figure they can always get bailed out by the Canadian government if and when the projects flop. Conservative government or otherwise.

California cranked out so much solar power this spring that wholesale electricity ran negative$

❝ The extraordinary success of solar power in some pockets of the world that combine sunshine with high investment in the technology mean that governments and energy companies are having radically to rethink the way they manage—and charge for—electricity.

California is one such a place.

❝ On March 11, it passed a milestone on the route to powering the whole state sustainably. For the first time, more than half the power needs of the entire state came from solar power for a few hours that day…

The power came from utility-scale solar photovoltaic farms, solar thermal plants, and the panels installed on private homes. Based on the data it collects, the EIA estimated that in each hour of peak times, that total capacity produced 4 million kWh of electricity on March 11…

❝ The spikes also have a big effect on wholesale energy prices, which dipped to zero or even to negative territory this spring during certain hours in California…That’s in sharp contrast to the same hours (8am to 2pm) in the month of March between 2013 and 2015, when average hourly wholesale prices ranged from $14-45 MWh.

Negative prices usually happen because there’s a glut of renewable energy, but non-renewable generators are also producing. They don’t shut them off completely because of the high costs of restarting.

California now accounts for a sizable chunk of the US market, having the highest energy demand of any state after Texas. It also has almost half of all the solar power in the US.

❝ This doesn’t mean, however, that Californians are paying nothing for their power because wholesale prices don’t translate directly into retail prices, which are based on averages, not single days. But it will mean energy companies start to rethink how they deliver and charge for electricity as the mix of renewables increases.

Unless, of course, you’re a public utility, fossil fuel producer or dimwit politician who hopes and prays that renewable power sources just disappear.

A German coal mine might be primed to become a pumped storage electricity generation station

❝ In the German state of North Rhine-Westphalia, a coal mine will close in 2018. Aging coal infrastructure, low wholesale power prices, and a move away from the highly polluting power source all make renewable energy the political darling of the day.

But that doesn’t mean the Prosper-Haniel coal mine will be shutting down completely. According to Bloomberg, North Rhine-Westphalia State Governor Hannelore Kraft recently confirmed that a project to turn the coal mine into pumped storage will move forward after mining activities have stopped.

❝ Pumped storage has been used for decades, but placing a pumped storage scheme at a retired mine is somewhat new. Here’s how it works: when electricity is plentiful and cheap — say, on a windy day when the Sun is shining and solar panels and wind turbines are working at their maximum—a pumped storage facility pumps water from a lower reservoir up to an upper reservoir. When electricity is scarce, the facility can release the water back down to the lower reservoir through a turbine, creating renewable hydroelectric power.

❝ Traditionally, pumped storage has required fairly specific terrain. But a used coal mine can offer the right environment for pumped storage without natural elevation differences and reservoir capabilities, although mines do require extensive analysis to make sure they’re geologically fit for pumped storage. The University of Duisburg-Essen (UDE) is working with mine owner RAG AG to complete the project, and…UDE professor André Niemann said the mine site is “suitable for the infrastructure to implement an underground pumped-storage power station as a closed system.”…

❝ …Support seems to be growing for such projects. Renewable Energy World reported last week that Virginia’s legislative bodies have passed bills this year to spur development of pumped storage facilities, which could be situated at abandoned coal mines. A combined bill now awaits the signature of Governor Terry McAuliffe.

So perhaps pumped storage using a retired mine has some maturing to do, but with the right political will and some good investment, maybe this kind of creative reuse could be possible in the future.

Of course, if Virginia had a Trumpublican governor unemployed miners would be put to work painting stones black in hope of somehow fooling coal-burning plants into producing electricity.

Coal Industry has a pulse — Someone tell Trump job prospects still suck


Click to enlargeLuke Sharrett/Bloomberg News

❝ The battered U.S. coal industry is showing flickering signs of life. Yet the prognosis for Big Coal remains dim.

Coal prices are about double what they were a year ago. Rail car deliveries of coal are up 16 percent this year. The more than 50 coal mining companies that went bankrupt over the past couple of years have unloaded billions of dollars of debt. And President Trump has vowed to roll back environmental regulations that the industry says are part of a “war on coal.”

❝ But the obstacles on the other side of the ledger remain daunting: Coal-fired power plants continue to shut their doors. Bountiful supplies of U.S. shale gas are keeping natural gas prices low and competitive, and renewable sources of power generation are growing rapidly. Though most experts expect U.S. coal sales and output to top last year’s levels, they also expect the decline to resume in 2018.

“The coal industry is saying it’s back. It’s not back,” said Tom Sanzillo, director of finance at the Institute for Energy Economics & Financial Analysis. “This is a fool’s errand.”

…Metallurgical coal will be needed to make steel in India and China and in the United States, especially if there is a boost in infrastructure spending. And thermal coal will still be used to generate electricity for years, even if at lower rates.

But to show profits, coal operators will have to trim output from the oldest, least-efficient mines in Appalachia (where Trump garnered crucial votes in the election) and shift their focus to the Illinois Basin and the Powder River Basin in Wyoming.

Those big open-pit mines need fewer workers — doing nothing to help Trump bring back jobs for “our great miners.”

And if you’re shipping open-pit coal to China and India, there are operations in existence – and/or getting ready to come onstream in Australia – that will have a lot less freight added into costs than the black stuff from North America.

Wind Overtakes Coal Power in Europe — Turbines Increase Offshore


Dong Energy

❝ Wind farm developers installed more power than any other form of energy last year in Europe, helping turbines to overtake coal in terms of capacity…

European wind power grew 8 percent, to 153.7 gigawatts, comprising 16.7 percent of installed capacity and overtaking coal as the continent’s second-biggest potential source of energy, according to figures published Thursday by the WindEurope trade group. Gas-fired generation retained the largest share of installed capacity.

❝ With countries seeking to curb greenhouse gas emissions that causes climate change by replacing fossil fuel plants with new forms of renewable energy, investment in wind grew to a record $29.3 billion in 2016, WindEurope’s annual European Statistics report showed.

Wind and coal are on two ends of the spectrum,” said Oliver Joy, a spokesman for WindEurope, in an e-mail. “Wind is steadily adding new capacity while coal is decommissioning far more than any technology in Europe.”

❝ The group underscored that wind, which only produces power intermittently, hasn’t yet overtaken coal share in total power generation.

And, so, good sense marches hand-in-hand with a positive commitment to better living.

1 out of 50 new jobs in the United States came from the solar industry last year

❝ The number of jobs created to make, sell and install solar panels in the U.S. grew at a record pace last year, and grew much faster than the overall American economy, which is welcome news for the solar industry in the face of policy uncertainty.

❝ The new figures were issued recently courtesy of a new report from The Solar Foundation. The report — the seventh annual edition to come from the nonprofit — found that there were 260,077 solar workers as of November 2016, which represents nearly 25 percent growth from the amount of solar jobs recorded the year prior. In comparison, jobs in the overall U.S. economy grew at a rate of 1.45 percent.

❝ Last year’s solar market performance made 2016 the fourth consecutive year that U.S. solar jobs grew by 20 percent or more, the report found. It also made for some eye-popping figures, like how 1 out of every 50 new jobs, or 2 percent of new jobs, created in the U.S. in 2016 came from the solar industry…

The solar industry is an American success story,” said Andrea Luecke, executive director of The Solar Foundation, and these numbers “are proof positive” of that. “Despite partisanship and the election, people really do love solar. Every poll says so. Even conservative Republicans favor solar,” added Luecke.

❝ While Trump has said he’s in favor of job creation from any energy sector, he emphasized the fossil fuel industries during his campaign.

Like his peers in all factions in the Republican Party and the US Chamber of Commerce, the fossil fuel barons own his testicles.

❝ Forty-one percent of the current solar jobs in the U.S. are in residential solar installations, and workers get paid on average $26 per hour, the report found. In 2017, residential solar jobs are expected to see the biggest growth in comparison to other solar sectors, which will likely continue for years to come.

Electricity has only come to full use in economies offering providers the same grants and discounts common to oil and gas providers for decades. Our government still provides billion$ in tax dollar to fossil fuel corporate giants – in every administration. Subsidies for electric cars and solar home installations are building on an even playing ground…for the first time.

New Yorkers get a nuclear New Year’s present

❝ Entergy Corp. has reached an agreement with New York officials to close the Indian Point nuclear power plant in 2021, bringing an end to a long-running dispute over the future of the reactors located just 25 miles north of New York City.

New York Governor Andrew Cuomo had pushed for years to close Indian Point because of what he says are radioactive risks it poses to the city. The company agreed to the shutdown as the plant struggled to compete with lower-cost energy sources, including natural gas and renewable energy. The closure completes Entergy’s exit from its merchant power business…

❝ Five nuclear plants have shut in the U.S. in the past five years with about 20 gigawatts of capacity expected to retire by 2040, according to the U.S. Energy Department. Cuomo has supported measures that would keep reactors in upstate New York operating despite lower power prices. Workers will get access to retraining, according to the statement…

Entergy will take a non-cash impairment charge of $1.5 billion after tax in the fourth quarter of 2016. In addition, the company said it will record additional charges of about $180 million related to severance and other employee expenses through 2021…

❝ Meanwhile, environmental groups praised the landmark deal led by Riverkeeper, which has filed legal challenges to Indian Point and was part of the negotiations with the state and Entergy.

Ordinary folks keeping to their principles, willing to commit to the long fight against one of the most entrenched segments of American capitalism – get themselves a victory.

You know, living in a society generally governed by ideologues maintained in office by an ignorant electorate, it’s easy to let cynicism overwhelm the optimism derived from science, a liberal knowledge base and confidence in history’s advances. Best to get the word out and about when a long hard struggle heads into a win.

Milestone: In 2016, wind generated more power than coal in the UK

❝ During most years since the industrial revolution, the UK has relied on coal to produce the lion’s share of its energy (in the past 10, gas has been top some years, and coal others). But in just three years the dominance of the most polluting energy source has declined to such an extent that full-year figures for 2016 show it was overtaken by wind power for total power generation…

❝ The change is momentous, and by no means accidental. European policy has mandated for the closing or retrofitting of many coal plants, with the UK recently announcing all its plants would close by 2025. Some plants, like the UK’s Drax, the biggest coal power station in Europe, have responded by moving to the burning of wood — which has its own issues. The replacement of coal with cleaner ways of generating power is a key part of the global effort to fight climate change.

❝ In most countries with large populations, renewables still can’t provide enough constant “baseload” power to allow them to replace older technologies. Many countries, the UK included, are therefore moving heavily from coal to gas. Gas is still a fossil fuel, but it’s much less damaging to the environment than coal, so planners hoping to deploy more renewables can use it as a “bridge” to an even cleaner future. Other countries, like France, have invested heavily in nuclear as a means to move away from emissions-heavy power…

❝ And for its part, China is investing massively in renewable energy. It’s still heavily reliant on coal power, but it overtook all other countries to become the biggest spender on renewable technology in 2014, and recently pledged to spend $361 billion on the technologies by 2020.

Advancing such progress in the United States will come to a halt for the next four years – as far as federal projects and the Trumpublicans are concerned. That doesn’t mean a halt to progress. Cities, states and individuals will continue to demonstrate good sense – both in terms of environment and common $ense.

You should understand the Energy Department – even if Trump doesn’t

❝ When you hear the name “Rick Perry,” you might recall that time during the 2012 Republican presidential primary race where he forgot the name of a government agency he wanted to eliminate. After saying he wanted to ax the Department of Commerce and the Department of Education, he blanked on the third. Later in the debate, he said that his forgotten target for destruction was the Department of Energy.

A responsible leader doesn’t forget the name of a government agency that he wants to shut down. A responsible leader studies the department in detail, learning all of the things that it does, and thinks about how things would change if the department were abolished. And so for Perry, that “oops” moment was enough to persuade voters that he lacked the firm grasp of the facts needed in a presidential candidate. He soon abandoned the race…

❝ In reality, the department was created in an effort to increase government efficiency by combining of a bunch of existing agencies. One of these was the Energy Research and Development Administration, the successor to the Atomic Energy Commission, which itself grew out of the Manhattan Project. That agency managed the U.S.’s nuclear weapons programs. This is still one of the Energy Department’s jobs — it includes the National Nuclear Security Administration, which oversees the safety of the U.S. nuclear stockpile.

Let that sink in a moment…

The Energy Department’s roots in nuclear energy also show that it wasn’t simply a response to high oil prices. Government support for nuclear power boomed in the 1950s, when oil was cheap. The goal wasn’t to avert a fossil-fuel crunch, but to give humanity even cheaper sources of power.

❝ That’s still the department’s goal. As Bloomberg New Energy Finance reports, solar energy is now cheaper than coal power in many places, even without government subsidies, and is getting cheaper still. As a partial result of this technological improvement, coal is on the wane, while solar is booming. Scaling plays a huge part in this process.

Solar’s rise hasn’t come because of a fundamental technological leap, but because of learning curves. As production rises, prices tend to fall…

That means the Energy Department’s subsidy programs, which encouraged solar growth back before the economics made sense, probably had a hand in jump-starting the era of abundant energy that we now see stretching before us.

❝ More to the point, we should just stop rewarding intellectuals and politicians for casually calling for the abolition of government agencies in the absence of understanding what they actually do.

No doubt, my call is likely to fall on deaf ears, at least while the Trump administration is in power: Perry has…been nominated to head the Energy Department.

Noah Smith is one of the best and brightest of today’s young American economists. He is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion. He’s definitely worth following on Twitter @Noahpinion.