Sneaky Trump Scheme Guarantees Profits of Coal and Nuclear Power Plant Owners

This is Naked Capitalism fundraising week. 889 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, or PayPal. Read about why we’re doing this fundraiser, what we’ve accomplished in the last year and our current goal, funding our guest bloggers.

By Robert Ayres, a Professor Emeritus at INSEAD, and Michael Olenick, a research fellow at INSEAD. Originally published at Olen on Economics

The libertarian bible is Ayn Rand’s Atlas Shrugged. There are two groups of villains in Rand’s dystopia, looters and moochers. Heroes are producers, who create products and services.

I’ll reserve judgment on my own feelings on the book other than to say it’s a perennial  favorite for conservatives. The Library of Congress ranks it as the most influential American book ever written.

Rand’s looters are government officials who rig markets to favor various constituent groups, chief among them existing industries faced with disruptive technology. For example, one of her heroes builds a new type of steel and sells it to the heroine, who runs a railroad. Existing steel companies successfully pressure the government to nationalize the processes and patents “for the common good.”

Rick Perry is Trump’s appointee to the Department of Energy, an agency Perry once vowed to eliminate. Given the excitement in Trump-land many have forgotten about Perry. Sure, Perry is a bona fide idiot but in an administration where somebody called “The Mooch,” discussed, on-the-record, being “cock-blocked” by Trump’s now former Chief of Staff, Perry begins to look almost normal.

But make no mistake, Perry is the typical parasite we’ve come to expect from Trump.

Perry has started a pre-ordained process to subsidize coal and nuclear plant operators, taxing people through artificially high electricity rates to subsidize costly coal and nuclear plants.

What’s the problem with coal and nuclear plants, besides that they’re expensive? Coal pollutes. Badly. Nuclear, when it works well, leaves radioactive waste behind that has a half-life of 24,000 years. When it does not work well, like it didn’t at Three Mile Island, Chernobyl, and Fukushima, it tends to create ecological disasters.

Besides that the two sources of power have serious environmental problems they’re more expensive than alternative energy sources that do not. The US Energy Information Administration released a report on the various costs of energy, here. Spoiler alert: nuclear power costs a fortune to generate. Coal comes next. Then solar. Then wind. Then natural gas. Hydroelectric is marked “N/A” in 2015 but, in 2013, it was cheaper than coal.

The price of wind declined 25% from 2013 to 2016 and the price of solar declined 67%. Assuming those price declines continue — and with the newfound Chinese enthusiasm for renewables that seems a given — it won’t be long before renewables cost less than any fossil fuel.

For Perry, the former Governor of Texas — who works for a guy that promised to Make Coal Great Again — this is a meltdown (I couldn’t resist).

Perry’s still-in-existence Department of Energy has asked the Federal Energy Regulatory Commission (FERC) to begin the rule-making process to subsidize both the cost and profitsof coal and nuclear plants.

Perry’s puppet-master’s constituents, with their aging nuclear and coal plants, argue that renewable energy from wind and solar is variable so that backup generators are sometimes needed for days with calm winds or cloudy skies.

For now, let’s ignore the rapid pace of battery progress (which I’ll get to later) and take this assumption as true. There is an easy solution: turn on the inexpensive natural gas plants to make up the difference. In fact, right now, that is exactly how things work: energy companies constantly sell backup energy capacity to one another.

But, under Perry’s scheme, companies would be required to purchase a certain amount of this backup energy from fuel plants that store 90-days or more of fuel on-site. Why 90-days? Because it’s completely impractical to store 90-days of natural gas on-site but easy enough to store that much coal and nuclear fuel.

This is an old-school Rand-style looter giveaway from a bunch of self-described “conservatives” trying to rescue a dinosaur industry that’s choking the world.

Just to clarify: Republicans, through Rick Perry, are working to increase electric bills to subsidize and protect coal and nuclear plant owners. Trump and Perry specifically require people to pay not only for plants but guaranteed profits to the owners of filthy old generation technology. Knock knock to objectvists Rand Paul and Paul Ryan, you’ll both be introducing veto-proof legislation to block this, right?

Now let’s return to the subject of standby electrical power generation. Of course it is needed and natural gas works just fine. End of argument. But even natural gas won’t be needed indefinitely.

There is plenty of capacity that either exists or is in the works and renewables are rapidly dropping in price and being installed. Germany, on average, produces 35% of overall electricity from renewables. But much of the remaining 65% is for factories so on weekends, where fewer factories operate, the percentage is even higher. On Sunday, April 30, 2017, Germany produced 85% of electricity used from renewables.

Longer-term, the solution might come from cars. The price of electric cars is dropping quickly. Electric cars are simpler than internal combustion engines and experts agree will last far longer. More to the point, they already have enormous batteries. So cars can be charged from solar, during daylight hours, then used to power houses during evening hours, then be recharged, from wind power, during sleeping hours. Plus, the economies of scale will make batteries, for battery farms and in-home storage, both cheaper and more efficient over time.

There are other systems to store renewable power and one or more will eventually be perfected.

So the US already has plenty of back-up generation from low-cost natural gas and new technologies are likely to add more as they evolve. Perry’s alleged problem isn’t even real and his solution, subsidizing coal and nuclear plants, is a form of pure theft, a transfer from the most deserving, clean renewable and safe plants, to the least deserving, filthy and dangerous ones.

Trump and his cronies cabinet are on-track to go down in history as the worst in US history, both individually and as a group. Thanks to Congressional dysfunction much of what they’ve done is by decree and can be expeditiously undone once sanity is returned to the White House. Until then be prepared for higher electric bills to pad the pockets of people who built filthy coal plants decades ago.

This isn’t to say the original engineers were bad — they used the technology they had — but it’s been disrupted and that’s how disruptive innovation works. Low-cost alternative technology that is not ideal is invented. It matures and eventually replaces the existing tech. This is almost always a good thing.

Channeling Gandhi, first they ignored the new tech. They they laughed. Now they’ve enlisted Rick Perry. But the fight is hopeless; it is only a question of when renewables will dominate, not if.

By the way, for anybody interested here is how Rick Perry signs his name to official correspondence.

Print Friendly
Tweet about this on TwitterDigg thisShare on Reddit32Share on StumbleUpon0Share on Facebook0Share on LinkedIn0Share on Google+0Buffer this pageEmail this to someone

62 comments

  1. Louis Fyne

    Look, i know this is a touchy subject.

    For the near term, nuclear fission power should be subsidized and part of a multi-source portfolio as it’s zero CO2 (but obviously not to the extent overruns that many US projects).

    Solar, Wind, natural gas, nuclear all have their positives and negatives. Positives for nuclear being zero CO2 and its efficiency as a “baseload” electricity provider. What do you think helps charge all those Teslas between 11pm and 5am?

    feel free to disagree, but admit that wind and solar are not panaceas (yet). Keyword being yet….as hopefully tech breakthroughs will render this question moot in 2050.

    Reply
      1. Grumpy Engineer

        And don’t forget about those radioactive Brazil nuts: https://en.wikipedia.org/wiki/Brazil_nut. Up to 260 becquerels per kilogram. A 150-gram banana typically clocks in at a mere 15 becquerels.

        On a more serious note, we’ll never make it solely on renewable power. The intermittency is an absolute killer, and Robert Ayer’s statements about “the rapid pace of battery progress” ignore some of the very real material constraints that we’d see if we tried to ramp up battery production by a factor of five hundred or so: https://www.nakedcapitalism.com/2017/07/cobalt-production-as-the-hidden-choke-point-on-mass-conversion-to-electric-vehicles.html.

        And yes, it might be a factor of 500. From https://www.greentechmedia.com/articles/read/10-battery-gigafactories-are-now-in-progress-and-musk-may-add-4-more#gs.8oG4i1M.

        Overall, Bloomberg reports that global battery-making capacity is set to more than double by 2021, topping 278 gigawatt-hours a year compared to 103 gigawatt-hours at present.

        To run the US electrical grid only solely renewable power, we’d need about 100 terawatt-hours of electrical energy storage that that we could make it through a few straight days of cloudy and calm weather during winter. That’s 970 years of today’s global battery production. To cover all of the other countries in the world, and to do it all in less than 20 years, growing things by a factor of 2.5 is wildly inadequate. We need a factor of 250. And then double it again for the batteries in EV cars and trucks.

        And don’t forget that the batteries will typically wear about after 10 years. The amount of cost and effort we’d dedicate to battery recycling would be enormous.

        People don’t like it, but nuclear power is the only low-carbon technology that will keep heat pumps running on a cold and calm winter night. The only “tech breakthrough” that would truly provide an alternative would be fusion.

        Reply
      2. Ned

        OK, you move your family onto the grounds, or just outside of the gate of a nuclear power plant, and I’ll keep on eating bananas. How about the “you get more radiation from flying to Europe claim?” Ask the people of the Ukraine or Japan if they’d rather take the risk of flying to living, breathing and eating nuclear contamination?

        Fortunately, there is no danger in exposure to pro-nuclear propaganda in a free society.
        There is however, no safe level of exposure to radiation.

        Reply
        1. Reece Milner

          Although I am not a fan of nuclear power and don’t regard it as safe, it appears that in reality radiation is not nearly as dangerous as we all pretend. In both cities we bombed in Japan everyone rebuilt directly on the site with some but not a large increase in cancers. Same with the recent meltdown at Fukushima which is the worst possible accident, no significant number of deaths. Actual experience indicates exposure at moderate levels of radiation do not produce significant deaths. We need a serious study of just how risky radiation exposure is based on the case histories of a number of different accidents.

          Reply
          1. Ned

            “Actual experience indicates exposure at moderate levels of radiation do not produce significant deaths.” Got a peer reviewed study to show that?
            Or, is this just more spam from people with stranded degrees in nuclear power generation and big student loans to pay off?

            It takes years for cancers to develop. Why don’t you publicly expose yourself to “moderate levels” of radiation to put your hiney where your mouth is?

            Reply
    1. Michael O

      Yes, wind and solar aren’t there yet.

      This subsidy is about existing coal and nuclear plants, not new one’s. I suspect the bulk will go towards coal subsidies because there are many more coal plants. In any event, generating electricity from nuclear power is extremely expensive: the most expensive option, by far.

      To encourage a faster wind and solar build-out allow disruptive technology to, quoting Mel Brooks, do that voodoo that you do so well. Just stay out of it. Subsidizing coal and existing nuclear, which is what this proposal does, is the opposite.

      Reply
    2. Vatch

      Positives for nuclear being zero CO2

      I’m going to be a little pedantic about the carbon dioxide. Emergency diesel generators (EDG) are required for nuclear power plants, to continue ciruculating coolant in case of a failure of the nuclear generator. The EDG must be tested periodically, so that releases carbon dioxide.

      Nuclear power plants have huge amounts of concrete. The production of cement used in concrete typically involves heating calcium carbonate (limestone) to release carbon dioxide and produce calcium oxide for the cement. Of course, this is a one time process, but a great deal of CO2 is released in the construction of a nuclear power plant.

      Aside from concerns about CO2, nuclear power plants can’t be used in tectonically active areas, because an earthquake can cause catastrophic problems. Yes, of course they really are used in tectonically active areas, such as Fukushima, but every one of those reactors needs to be decommissioned immediately, to prevent further disasters. And yes, I know, they won’t be decommissioned.

      Reply
      1. Grumpy Engineer

        To be fair, you should be pedantic about solar and wind as well. Their production and installation also involves significant amounts of energy consumption and CO2 release. No energy source out there is truly 100% carbon-free.

        Formal studies have been done to evaluate “total lifecycle greenhouse gas emissions” for various energy sources: https://en.wikipedia.org/wiki/Life-cycle_greenhouse-gas_emissions_of_energy_sources

        Nuclear, wind, and hydro typically do best. Solar is significantly worse. And, as you’d expect, gas- and coal-fired are terrible.

        Reply
        1. a different chris

          I’m a grumpy engineer, too. Did you use the word “typically” in hopes that would get people to avoid reading the Wiki? Because I did, and it is way less definite than you let on.

          Meanwhile, even if it was inagurably true, this is like saying Stephen Paddock is a great landlord. If you wish to spend your vacation at Fukashima beach, you will have to sneak past the authorities. If you wish to make money on your Westinghouse stock, well good luck.

          It just doesn’t work for a number of reasons. I was in the industry a long time ago — my favorite quote was from a field engineer I worked with:

          “I use to think that nuclear power made a lot of sense. Now after a year of working in various plants… My God!! Shut them Down! Shut them All Down!”.

          Between the wide gap between science and engineering, between the wider gap between sense and people that have money.. sorry, but this goose need to have laid its last poisoned egg.

          Reply
          1. Michael O

            I should clarify that my co-author, Robert Ayres, is a world subject matter in this field. His PhD, from the University of Chicago, is in theoretical physics. He worked for top US think tanks ages ago on the question of whether nuclear wars are survivable and how radiation moves. He taught at the Carnegie Mellon robotics lab then at INSEAD. He’s been retired but refuses to stop working entirely and I’m fortunate that he teaches me, though I’m not young either. Bob a top-tier grumpy engineer and says nuclear power plants, even fission plants once they’re developed, will eventually break and cause damage. We once had an argument about that because I thought the benefits must outweigh the risk with enough safeguards but he was adamant I didn’t know what I was talking about and, in that context, he was right (told you, he’s the grumpiest, and also the smartest). Like a different chris wrote those in the industry — a group that doesn’t include me but definitely includes Bob — seem to think those plants are inherently dangerous. I’ll see if I can get him to add his thoughts: he’s not into comments sections.

            Reply
    3. kimyo

      nuclear fission power should be subsidized and part of a multi-source portfolio as it’s zero CO2

      Nuclear Is NOT a Low-Carbon Source of Energy

      Nuclear power is “low carbon electricity” … is the propaganda line commonly used by the nuclear industry which conveniently leaves out every phase of the nuclear fuel chain other than electricity generation. It ignores the significant carbon emissions caused by uranium mining, milling, processing and enrichment; the transport of fuel; the construction of nuclear plants; and the still inadequate permanent management of waste.

      Reply
      1. Synoia

        nuclear fission power should be subsidized and part of a multi-source portfolio as it’s zero CO2

        If anyone (except the stars) could get it to work. As I understand it no-one has one producing energy. There are some fusion reactors which consume more energy than they generate, which misses the point somehow.

        I’ve been hearing stories about fission being just around the corner since the 1957 ZETA project in the UK.

        Reply
        1. Michael O

          There’s a fission plant in France that’s nowhere close to being finished. They’ve spent $14B USD building it so far. It’s financed mainly by the EU but the US, and other big countries, have also kicked in some funding. They say construction should be finished in 2021 and it will start to run 2025 but won’t run as a full-scale fission plant until 2035.

          https://en.wikipedia.org/wiki/ITER

          Reply
          1. PlutoniumKun

            I think you mean ‘fusion’ plant not fission.

            As Synoia says, commercial fusion has been around the corner for 60 years at least, and the are still working on it.

            Fusion may well be viable and the future, but even by the most optimistic projections it will arrive far too late to make any substantive impact on climate change. Climate change is an emergency and needs urgent action right now. If we haven’t substantially reduced CO2 outputs by 2050 the world will simply not be habitable for humans in any number by the end of the century.

            The only commercially viable available way to take a big chunk out of CO2 outputs within window open to us over the next 20-30 years is wind and solar. Everything else is just too expensive or is unproven. The latest fission reactors are in all sorts of trouble from rapidly rising costs (including the AP1000, and the European EPR). The Indian and Chinese reactor programmes are hitting all sorts of cost and technical issues. Even discounting the risk and environmental arguments, you have to be both an incurable optimist and ignorant of the technical obstacles to think that fusion reactors can be built at the speed and scale necessary to do what needs to be done in the timescale and budget available.

            Reply
            1. Michael O

              I do indeed mean fusion, not fission. Bob’s the expert in this area but says exactly the same thing that you do. I work in the field of innovation and believe that even some of the more extreme numbers being kicked for batteries, solar panels, and windmills sound from a historic vantage point in scaling technology. While people should care about CO2 many don’t. But they do care about energy cost and renewables are rapidly becoming less expensive. Republican majority Georgetown, TX is 100% renewable not because of ideology, not because of environmental concerns, but just because renewables cost less. And they’ll continually cost less and less as tech evolves and production scales larger.

              Reply
      2. P Fitzsimon

        But if the energy to do all the mining, processing, waste management, etc ultimately comes from nuclear or renewables wouldn’t that achieve zero CO2.

        Reply
  2. Steve

    Sounds like another example of the “selective” belief in the power of free market forces usually in favor of private capital (in this instance two industries which already benefited from “semi guaranteed” profits as members of a public utility sector), at the expense of the consumer?

    Reply
  3. Vatch

    The Library of Congress ranks it [Atlas Shrugged] as the most influential American book ever written.

    According to the link, in 2012 it was the public that chose Atlas Shrugged as the most influential American book ever written. I suspect there was plenty of ballot box stuffing by Ayn Rand enthusiasts. Some of the other books on the 2012 list, such as Common Sense, The Federalist, and Uncle Tom’s Cabin, all have had a huge influence on history. Atlas Shrugged is too recent to be considered the most influential American book. Sure, it influenced Alan Greenspan and the Koch brothers, and they have done severe damage to the country, but their influence is still minor compared to the Revolutionary War, the Constitution, and the Civil War.

    Reply
    1. jrs

      Who does it influence? Politics, ok maybe some with the Koches and so on, so it probably really has influenced right wing trends (but as for right wing VOTERS I have my doubts that’s what motivates them, when even social conservativism is probably a bigger influence, and I think the environment they find themselves in is also – easy to turn blue on the coasts and red in the south etc.).

      Teenagers, eh, it’s really not primarily about politics then, though it might influence some in that direction more often temporarily than permanently. Teenagers probably relate to the stuff about carving out individuality and breaking away from the environment, uh because they re in a stage of life that actually requires them to do so and sometimes requires them to do so without much subtlety either. And if they don’t get a lot of support for that they might relate to those heroes as annoying as they might be to an older more sophisticated reader.

      Reply
      1. Biph

        It’s time for this quote.
        “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.” – John Rogers

        Reply
    1. Louis Fyne

      +1. That font is intriguing for some reason. Maybe cuz of who it’s from.

      I’d like to think handwriting analysis is complete bunk. Then I see that font….can’t help draw assumptions.

      Reply
      1. rps

        That’s no joke. Returned to University in 2011 after a 30 year absence and the majority of students were unfamiliar with cursive here in the USA. In fact a professor was looking for someone – moi, who could read archival 19th century handwritten cursive letters.

        Reply
  4. Ben

    “So the US already has plenty of back-up generation”

    No – not yet it doesn’t. We need more renewables before we can consider backing down nuclear plants. We will get there, but we’re not there yet.

    And natural gas has its challenges, due to gas pipelines and bottlenecks. It’s only recently that gas supply has become an issue in electric generation – as the winter 2011 Texas rolling blackouts demonstrated. And the Aliso Canyon leak has constrained the California gas plant output to the point where gas flow and storage is now calculated in forecasting capacity – especially in winter.

    Until we build more wind and solar, we still rely heavily upon nuclear and coal. Even when California (or Germany) declares 100% renewable energy generation, it will still import nuclear from Arizona. And Germany continues to import nuclear energy from France.

    Reply
    1. Michael O

      Looks like that was one day of blackouts due to the failure of coal plants and a lack of natural gas for generation. Subsidizing coal won’t help with the former: those are the plants that failed. Re-allocating natural gas in emergencies to power generation seems reasonable. In any event, since then, Texas has substantially upped it’s wind generation capabilities.

      https://www.texastribune.org/2011/02/03/the-rolling-chain-of-events-behind-texas-blackouts/

      https://www.scientificamerican.com/article/the-rise-of-wind-power-in-texas/

      Reply
  5. Enquiring Mind

    Oil and gas will continue to have primary roles in American energy policy as part of a largely undeclared foreign policy initiative that has been a bug or feature of several past administrations. Securing global economic stability through oil flow to OECD, G-25 and similar often overlapping country groupings will keep most of them more stable and more likely to remain aligned with American interests. (Russia and China have their own interests that only partly align on occasion with ours, for example).

    Given the ongoing international unrest, particularly in the middle east, and potential or actual disruption to oil supplies and deliveries, it is no surprise that American policy includes some hedging of bets through support of all-out fracking exploration and Keystone XL pipeline activity. Would you want the future health and well-being of your citizens to be dependent on seemingly random hostile acts half a world away? Or would you influence those events toward your own ends such as happened with Mossadegh in 1953 Iran and others. Add in some offshore looting, er, investment opportunities and you have a tough non-public audience to acknowledge.

    There are many domestic reasons to switch from petro (and nuke) sources although those are only part of the calculus playing out in DC, Houston, Tulsa and other places.

    Reply
    1. MichaelSF

      Would you want the future health and well-being of your citizens to be dependent on seemingly random hostile acts half a world away?

      If that is an actual concern should the USA consider cutting back on committing “seemingly random hostile acts half a world away”? Reducing the non-random acts might also not be a bad idea.

      Reply
  6. Arizona Slim

    In a few hours, a locally owned and operated solar installer is coming to the Arizona Slim Ranch for an estimate. Thanks for this article. I’m about to make a printout so I can share it with him.

    Reply
    1. Ignacio

      Well done! I would like to know whether you are considering PV, hybrid, solar thermal or both. And I will be interested on your experience and opinion.

      Reply
  7. Synoia

    Second law of Thermodynamics applies to batteries.

    Every use of energy, include battery storage, has a theoretical maximum efficiency of 50%. (Electrical version of 2nd law is the Maximum Power Theorem).

    With Coal, Oil and Natural Gas, we do not pay the 50% consumed to make the fuel. That budget was spent in the past.

    With Batteries we do pay the 50%. With fossil fuels we do not.

    Natural Gas can be stored:

    1. It is already stored in the ground ready for use, and there is slightly more than 90 days NG supply stored underground.
    2. It can be stored on site, that’s what NG liquification plants do.

    Reply
    1. Michael O

      If we’re paying it anyway for a car it doesn’t much matter.

      I’m not following where the cost for fossil fuels is already paid: companies still have to harvest, purify, and transport them.

      Reply
      1. Synoia

        Creating the fuel underground is natures’ “sunk cost”.

        It is that free step which helps make then so profitable.

        Reply
    2. Ignacio

      Nuclear fuel is by far the most energy-dense and these facilities would be most favoured by the measure. Ntl Gas plants can benefit from the externalities of a NG grid where available. Otherwise NG liquefaction is expensive.

      Reply
    3. Angie Neer

      Every use of energy, include battery storage, has a theoretical maximum efficiency of 50%.
      (Electrical version of 2nd law is the Maximum Power Theorem)

      Um, no. The maximum power theorem says nothing about energy. Even a seemingly crude energy storage system like pumping water into an elevated reservoir achieves energy efficiency of 70-80%, and I can assure you from direct observation that Lithium-Ion batteries are better than that.

      Reply
      1. Synoia

        The losses in Battery charging happen at the generator. Some heating at the battery.

        More energy is lost in generation (and some more in transmission) to charge a battery, than the battery can store.

        You are examining just the battery. Not the system.

        Reply
        1. Angie Neer

          Nope. This is end-to-end system efficiency. Energy in to energy out. 2nd law only says it will be less than 100%, but 99.999% is still legal.

          Reply
        2. P Fitzsimon

          That’s true now because most electrical power including that used to charge my lithium-ion batteries comes from generators driven by fossil fuel powered heat engines that are 30 to 50% efficient.

          Reply
      2. Synoia

        ” pumping water into an elevated reservoir achieves energy efficiency of 70-80%”

        Not from the point of view of the energy put into the generator to produce the electricity.

        Reply
        1. Synoia

          Power and Energy are related.

          Energy 10 kW
          Power 10 kWh

          The difference is time, both source and sink see the same time, so energy stored and power produced are related by charge or discharge time.

          Reply
          1. a different chris

            I want to put this as nicely as possible – you are wrong, Angie is correct. Please review your, um, “sources” — their efficiency of quality information transfer *is* very, very low.

            Reply
  8. Ignacio

    Coal and conventional nuclear plants are anything but flexible while natural gas turbines, on the contrary are very flexible for power generation. Natural gas is an excellent complement for variations in demand and renewable production. There are energy experts that anticipate that utility companies are to (mostly) disappear as renewable power generation develops. They are scared. What Perry is trying is to put a brake in this inevitable process. At the same time, many other countries will go on the opposite direction. Another preocupation is that a couple of US solar panel makers are trying to ban imports, and that would definitely put another brake in renewables in the US. I don’t think these developments are mere coincidences. It is a concerted attack against renewables in the US.

    This is scary and bad news, not only for the US. There are several lines of attack against these measures that OUGTH TO be employed for a much better outcome. There are many risks the US faces with these developments.

    – Health risks, adressed in this article. The elderly and the newborn would be the most vulnerable to very unhealthy emissions from carbon plants. Defend them! As economists like to put it, increasing health care costs. (Human suffering is more important but…)
    – Technolology/opportunity risks: by abandoning renewables US migth be caugth well behind the curve. This is not good in the mid and long term for the US.
    – Reliability risks: those plants are not flexible and problems could result in large energy shutdowns
    – Environmental risks, by far the most important, but those to which the administration seems most prepared to combat.
    – Higher costs also mentioned in the article.
    – Worsening perception abroad on US politics.
    – Jobs losses in renewables.

    I just cannot believe Trump can do this without facing fierce opposition.

    If I remember correctly there are already several judicial initiatives in the US against polluting policies. Are they progressing?

    Reply
  9. user12312312

    Since we are subsidizing renewables, and non-renewables are required during the downtimes, it is inevitable that we will also subsidize non-renewables. This may mean natgas (by every conceivable measure, more sensible than coal). It may mean nuclear, I’ll refrain from chiming in on the CO2 vs radiatioactive waste debate. But when you subsidize one, it’s hard not to subsidize another.

    Yes batteries will eventually fill the gap. That’s a decade or more away at a minimum.

    Cheap renewables, bootstrapped in no small part by subsidies and loan guarantees (worth even more from the point of view of project economics and investment viability) – those in combination with ultra cheap NG, have essentially deep sixed the nuclear industry. If the natgas “revolution” fizzles, the US energy infrastructure will be in deep trouble. Having a living nuclear industry is a strategic consideration for US government planners. It will in all likelyhood be subsidized.

    Reply
    1. Michael O

      Natural gas doesn’t need a subsidy: it’s already the cheapest. Renewables won’t need a subsidy soon enough if price trends continue, which seems likely. Nuclear is so expensive the subsidy would need to be enormous to keep it cost competitive. So, as a major potential energy source, that only leaves coal. But, with natural gas, there’s no economic justification to subsidize coal and many public policy reasons not to.

      Reply
      1. Grumpy Engineer

        Natural gas is only the cheapest because of fracking. If Donald Trump loses the 2020 election to somebody like Bernie Sanders (who in 2016 said that “fracking presents a profound danger to our climate“) and we see a major crackdown on fracking in 2021, these cost considerations could get all flipped around.

        Before fracking, natural gas was the most expensive fuel source and was only used as a last resort.

        Reply
      2. user12312312

        Whether a fuel source, such as NG, continues to be the “cheapest” depends very much on capacity utilization.

        In the long run, solar and especially wind will bid down peak electricity. Down to basically their fuel cost (zero), plus their interest rate cost (which, with the benefit of loan guarantees, is a scratch above the 30 year treasury rate). This in turn depresses the capacity utilization for all other generation sources.

        Of the conventionals, NG will hold out the longest — NG benefits from by far the lowest upfront cost, besides the very competitive fuel cost. (assuming fracking economics holds up and the waste disposal cost can continue to be swept under the rug).

        Nevertheless, if the utilization of a good NGCC plant drops from the high 80%’s now, to when wind/solar is built out to saturation — then lets say NGCC drops down to the 40%’s. Then the per-generation cost of NG will basically double.

        Similarly, without subsidies, wind/solar projects commissioned today will end up competing with not just conventionals, but with FUTURE wind/solar projects which will presumably have the benefit of lower cap costs long before today’s projects are anywhere near paid off. In the event of a gold-rush type overbuild, everyone’s profit margin will disappear as prices will be bid to near zero whenever wind/solar becomes available. If battery tech gets as good as is hoped, it will only make the situation more competitive. That is why loan guarantees are required to pull the trigger on developing a high-upfront-cost renewable project. (And the same is even more true for nuclear).

        It’s a difficult situation and some clever and honest pricing mechanisms (regulation) are needed to make the right things happen… obviously the players are self-dealing here, which compounds the difficulty many times over.

        Reply
  10. HotFlash

    Here’s a word not mentioned so far in this, and many other, discussions on energy: conservation.

    It drives me nuts to get my weekly flyer from the hardware big-box and it’s full of solar yard lights, bird baths, patio strings, and other useless tsotchkes. Also, electric carving knives, screwdrivers, doorbells, rototillers, lawnmowers, humidifiers/dehumidifiers, dehydrators and hedgetrimmers. Later there will be the snowblowers — sorry, all jobs that can be done by people with hand tools, should be done by people with hand tools. It’s not like we have enough energy or too many jobs.

    Reply
    1. Grumpy Engineer

      Oy, you’re killing me here… You make a very legitimate point about energy conservation, but then list of bunch of devices that consume very little energy to begin with. A door bell? I’d be surprised if that pulled even a single watt-hour over the course of an entire year. Same with the electric carving knife. Put together, they’d account for one gram of annual CO2 production, which is what a single human being exhales in 3 minutes.

      Even the higher-powered devices that you listed, like lawnmowers and snowblowers, are typically only operated for a few hours per year. These might add up to a hundred pounds of CO2, which is still less than you exhale in three months.

      If you really want to save energy, you have to focus on high-power devices that get operated very frequently. Like your car or your heat pump. Buying a more fuel-efficient car or adding insulation to your attic can literally reduce your annual CO2 emissions by tons.

      Reply
      1. rps

        Perhaps hotflash is referring to the energy consumed in the production of these gadgets (including packaging) such as: materials, environmental resources, waste pollution, manufacturing energy use, etc…. From there onto transporting gadgets to market generating fossil fuel waste from cargo ships (most products are produced overseas), onto trains and trucks into the stores that require heating, cooling, lighting, etc… And eventually after a couple of years into a landfill- Whew. Now as to the comment about the minuscule amount of energy and output of CO2 it takes to operate a seasonal snowblower is notably outweighed in the manufacturing, transportation, and pre and post environmental landfill waste occurrence.

        On the other hand as hotflash noted, a hand tool such as a old fashioned snow shovel can last much longer with less impact to the environment plus the benefits of exercise since the human is the source of non pollutant energy

        Reply
    2. Louis Fyne

      ya, for many households the most green thing they do is spend $5k on insulation and windows to lower heating bills…..versus buying some gizmo from Elon

      Reply
      1. Grumpy Engineer

        Thank you, Louis, for reminding me about insulating windows. My dad added storm windows to his house a few years ago and cut his wintertime electric bill by 30%. That easily added up to a half-ton per year reduction in his carbon footprint. Not to mention the savings to his wallet. [He was kicking himself for not having done it sooner.] The newer double-pane windows that I have in my house also seem to work well.

        Reply
  11. Louis Fyne

    if one considers themselves green, praising nat gas while criticizing nukes, is nuts. both are bad, but in different ways.

    and #proving# one is better than the other depends on the assumptions made and externalities considered in a life cycle analysis

    Reply
  12. Louis Fyne

    And this is getting way off-topic. But…..moving to wind and solar = more volatility in the production of electricity. The US is 100%-wholesale market-driven spot pricing. (example: https://www.misoenergy.org/LMPContourApp/ContourMapAlternativeImage.aspx?region=jcm )

    Even the best weather forecasts can be off when used to plan electricity generation 24 hours ahead of time. And firing up a natural gas/peaker powerplant isn’t like turning on your gas grill.

    So if you’re cynical, guess what…. The added volatility of electricity production costs is going to used as an excuse to cram rate hikes to your monthly bill via state lobbying. So buy utility stocks?

    Reply
    1. a different chris

      Well you are mixing uses here – not saying you’re wrong about the outcome!

      Housing can deal with volatility. Insulation, batteries, people not being there most of the day or snug in bed. The people that have power volatility concerns are manufacturing plant operators. Yes they will find a way to dump the costs on us if they can make enough noise about “renewables” to scare the sheeple. But it’s not a real problem for us. Did I mention that we’ve been running civilization for 8K years? Yes, I believe I did.

      Reply
  13. Synoia

    Even the best weather forecasts can be off

    Inaccurate predictions of the Future? Say it ain’t so, Sam.

    My only accurate predictions of the future come when my wife says “I told you so” in hindsight.

    Reply
  14. Tyronius

    Aside from electricity production, one of the major uses of fossil fuels is heat. Even the best current technology power plants convert fossil fuel energy to electricity at maybe 60% efficiency- and that’s with the use of enormous amounts of water for part of the heat recovery cycle. Without the massive use of water, they’re close to 30-35%. The rest is heat.

    Huge gains can be made just by moving the electrical generation unit to the home, where it can spin a generator and an AC compressor- and the heat can be captured and reused to provide heat for the home. This concept of cogeneration can substantially reduce the consumption of the home or business.

    As the technology of fuel cells improves, these will also become a viable alternative for homes and micro grids, again with the opportunity to utilize the ‘waste’ heat.

    Greenhouses are even now taking this one step further; not only do they use natural gas electrical generation plants to generate power for supplemental lighting and environmental control systems like pumps and fans, but they use the heat to warm the facilities… And the piece de resistance is the use of the very CO2 waste product we’re concerned about by pumping it into the bays and feeding it to the plants inside!

    Reply

Leave a Reply

  • Keep it constructive and courteous
  • Criticize ideas, not people
  • Flag bad behavior
  • Follow the rules

Please read our Comments Policies here.

Your email address will not be published. Required fields are marked *