Helping America Understand and Adapt to a New Energy Reality

Never put off until tomorrow…

By on May 7, 2009 in Uncategorized

…what you can do the day after tomorrow
— Mark Twain

Oh Lord, make me carbon-neutral, but not yet
— Carl Mortished in the Times Online

Normally staid energy analysts became unglued when Jon Wellinghoff, our new Chairman of the Federal Energy Regulatory Commission (aka. FERC, or “the FERC”), opined that “we may not need any [new nuclear or coal-fired plants], ever” (New York Times, April 22, 2009). The Chairman went further, stating—

“I think baseload capacity is going to become an anachronism,” he said. “Baseload capacity really used to only mean in an economic dispatch, which you dispatch first, what would be the cheapest thing to do. Well, ultimately wind’s going to be the cheapest thing to do, so you’ll dispatch that first.”

Since coal and nuclear supply almost all of America’s baseload electricity generating capacity, and about 70% of overall capacity, this did not sit well with people who are happy with the current arrangement, which has been over 99% reliable for decades. (If you’re wondering, natural gas is usually used in follow-up or peak demand generators.) Geoffrey Styles posted Dangerous Delusions at his blog Energy Outlook after learning of Wellinghoff’s remarks.

If you’ve read this blog for any length of time, you know that it’s not my practice to single out individual officials or politicians for particular praise or criticism, preferring an even-handed and scrupulously non-partisan approach. So it is with some reluctance that I feel compelled to share my considerable alarm about the views expressed by the new Chairman of the Federal Energy Regulatory Commission (FERC), Mr. Wellinghoff. His suggestion that “baseload capacity is going to become an anachronism” and that renewable energy can meet all our future energy needs represents a dangerous delusion, at least for the next several decades. I am not dismissing the vital contribution of renewables in addressing climate change, or the potential of a smarter electricity grid to accommodate a greater share of generation from renewable sources than would be feasible today. However, while I appreciate the benefits of visionary leadership in moving the country towards those goals, that vision must be grounded in reality, and not skewed by wishful thinking or the ingrained habits of a long career spent in advocacy for renewable energy.

My own reaction was far more muted, even amused. I don’t worry too much about visions unless the Evangelical gun owner next door is having one in which I’m the Anti-Christ. We don’t know what the grid will look like in 2040 because we haven’t carried out the necessary experiments with distributed renewables to find out.

I hunted for the text in Wellinghoff’s remarks I knew would be there and found it on page 2 in the Times and at Platts.

But planning for modifying the grid to integrate renewables must take place in the next three to five years, he said. “If we don’t do that, then we miss the boat,”Wellinghoff said. “That planning has to take place so you don’t strand a lot of assets, a lot of supply assets.”

Unlike coal and nuclear, natural gas will continue to play a role in generating electricity, he said “Natural gas is going to be there for awhile, because it’s going to be there to get us through this transition that’s going to take 30 or more years.”

[Wellinghoff noted] that [natural gas] production companies in recent years have discovered that “we have twice as much” gas in the US “than we previously thought.” That, in combination with other factors, figures to keep natural gas relatively inexpensive “for a while,” competing “on the margin with coal” for new generation load

[Note: The last paragraph is from Platts.]

I’ll talk about our unconventional natural gas recoverable reserves another day, but my research says that some gas production companies are not reliable sources. For example, Chesapeake’s mouthpiece Navigant Consulting (via CleanSkies.org) appears to have overstated the recoverable gas in the Marcellus Shale by a factor of 7.

Those in the nuclear industry found Wellinghoff’s remarks worrisome. It is easy to see why, but he doesn’t run nuclear policy—that task falls to Energy Secretary Steven Chu. Those charged with maintaining the grid were miffed at the chairman’s casual dismissal of the importance of baseload capacity.

I’ll talk about the baseload issue, but once again we must confront the difference between talking the talk and walking the walk. Actions speak louder than words. Why do we require 3 to 5 years of planning to modify the grid to integrate renewables? Haven’t the Danes already done this? What’s the hold-up?

The Energy Reality Challenge

Wellinghoff believes that we can replace baseload power with wind eventually, but the FERC chairman also claims that years of planning are required so we “don’t strand a lot of supply assets,” where I assume a supply asset is a wind farm (or some other distributed energy source). Right now there appear to be a number of major impediments to actually doing something, including a welter of red tape, wind farm siting issues and a lack of long-distance high-voltage (765kV) power lines to connect that wind power to the grid. These transmission lines require the permitting approval and coordination of each state they cross.

There is a project on the boards now that could solve many of these problems. The ITC’s Green Power Express has a plan and they’re raring to go (Figure 1).


Figure 1 — High voltage transmission lines planned by the ITC’s Green Power Express. So-called wind supply assets need not be “stranded” in the Upper Midwest. Power can be moved east and south to where it’s needed.

Wellinghoff supports the project.

ITC Holdings Corp.’s “Green Power Express” would cost $10 billion to $12 billion and carry 12,000 megawatts aimed at reducing congestion, improving transmission reliability and strengthening aging electricity infrastructure. But the project has faced regulatory snags (ClimateWire, Feb. 12, 2009)…

The Federal Energy Regulatory Commission approved the transmission-investment incentives for [the Green Power Express], saying it would provide benefits such as improved transfer capability and access to wind power generation…

In granting the approval, FERC Chairman Jon Wellinghoff noted the importance of investing in new transmission infrastructure to meet renewable energy goals, and he said building such projects will require planning beyond the needs of a single utility, state or region.

I don’t know what a “transmission-investment incentive” is and I don’t want to know. Why let red tape stand in the way of progress?  At an estimated $10-12 billion, the Green Power Express is a bargain. That’s nothing considering we’re saving the Earth here—we gave Citigroup $52 billion last year! And they’re still insolvent!

What about those troublesome state approvals? Already taken care of. A letter from the Upper Midwest Transmission Development Initiative advocating such a project has been signed by top utility regulators from Minnesota, Wisconsin, South Dakota, North Dakota and Iowa. A private-public partnership could be put in place almost immediately. If we step on a few toes, construction could start next year.

Talk is cheap, so today I issue the Energy Reality Challenge—take the “F” out of FERC, rhymes wit irk, meaning to “to be irritating, wearisome, or vexing”—to Mr. Wellinghoff.

I believe there are reasons deeper than red tape, the need for coordination, or “stranded assets” that explain our foot dragging in implementing wind power on large scales to achieve some cost savings from efficiency (maybe) and reduce our carbon footprint. Perhaps we’re afraid of what we’re going to find out if we actually build the Green Power Express. And in the last section, I’ll touch on some even deeper reasons why I think procrastination has been our strategy of choice.

Usually critics of wind talk about its intermittent nature and the resulting 30% capacity factor—sometimes the wind doesn’t blow. Wind advocates respond that if you distribute enough wind farms over a wide enough area, you will get the power you need—the wind is always blowing somewhere. I will take a different tack today. Let’s look at some lessons learned about transforming the grid from those industrious Danes.

Lessons From Denmark

This section presents a lot of data and analysis, so I apologize if it is hard to follow. I’ll begin with data from the Danish Energy Agency’s 2007 statistical summary.


Figure 2 — Danish wind power capacity (left scale) and share of domestic electricity supply (right scale) in the period 1980-2007.


Figure 3 — Total Danish CO2 emissions 1990-2007, with emissions by fuel type (right).

Denmark got 19.7% of its domestic electricity from wind in 2007 as shown in Figure 2. Looking at the decrease in overall carbon dioxide emissions since 1990 shown in Figure 3, and particularly those from coal, one could easily jump to the conclusion that wind is fulfilling the promise of carbon-free power generation. That’s partly true, but now look at Figure 4.


Figure 4 — Danish electricity production by fuel-type from 1994-2007 (left), with the overall share coming from Combined Heat & Power generation (CHP, right).

Former Clinton energy official and climate activist Joe Romm explains what CHP is at his blog Climate Progress.

Probably the least understood major climate solution is the simultaneous generation of electricity and heat, called cogeneration, combined heat and power (CHP) or recyled energy. You can read the basics here.

I have proposed one “stabilization wedge” [for mitigating climate] of CHP (here). Some people, like my friend Tom Casten of Recycled Energy, think it could be multiple wedges. He is probably right — when you consider that the energy now lost as waste heat just from U.S. power generation exceeds the energy used by Japan for all purposes.


Figure 5 — Greater efficiency achieved through CHP (cogeneration). Almost all CHP uses natural gas or coal as the input fuel, but it is also possible to use biomass or waste on smaller scales. Natural gas is the fuel of choice for smaller, distributed cogeneration. Denmark converted existing coal plants to CHP and built a large number of smaller natural gas or biomass cogeneration facilities.

In the period 1997-2007 when coal consumption declined dramatically as shown in Figure 4 (left panel), the Danes were also ramping up cogeneration of heat and power (right panel). Denmark was able to reduce their coal consumption partly through the efficiency gained from combining heat and power generation. Cogeneration in smaller natural gas generators and 3 of Denmark’s 8 baseload coal-fired plants, not the wholesale replacement of coal combustion by wind power, helped Denmark make a large reduction in their CO2 emissions after 1995.

Another factor contributing to Denmark’s reduced CO2 emissions came from burning biomass in cogeneration plants, not coal, to generate electricity (Other in Figure 4, left panel) and for district heating (Figure 6). As with CHP, 3 of Denmark’s 8 baseload central power plants have biomass combustion units.


Figure 6 — Replacement of baseload coal by renewable energy for district heating in Denmark. About 95% of this energy resulted from burning straw, wood and waste.

A fact sheet from the Danish energy authority sums up why their CO2 emissions have been falling.

  • Strong increase in end-use energy efficiency. There has been a strong improvement of energy efficiency of buildings and the energy efficiency of appliances and industrial processes has increased.
  • A more efficient production of electricity and heat, mainly due to a huge expansion of combined heat and power production (CHP — –Cogeneration).
  • A shift in use of fuels — introduction of natural gas and more renewables [wind & biomass], less oil and coal

Even with all their energy busyness, the Danes are still well short of their required 2012 Kyoto Protocol CO2 emissions level.

The deficit between expected Danish emissions of CO2 and the target Denmark is committed to achieving is 13 million tonnes for the period 2008-12. The allocation plan documents how this deficit will be reduced to zero: The EU Commission: Denmark’s allocation plan

[Note: See Figure 3, which shows that 2007 emissions were about 53 million tons of carbon dioxide in 2007. Don't follow this link unless you read Danish.]

To put this in perspective, the Chinese probably replace all of Denmark’s emissions reductions since 1995 each month, but let’s get back to Mr. Wellinghoff.

The key result of this quick & dirty analysis is that there is no question of baseload capacity from coal  becoming obsolete in Denmark even with wind supplying 20% of their electricity as Wellinghoff implied. Perhaps wind would have to supply 30-40% of Denmark’s electricity to replace baseload coal. The FERC Chairman said that “ultimately wind’s going to be the cheapest thing to do, so you’ll dispatch that [as baseload] first.” Maybe so, but that’s not what the lesson from Denmark teaches us so far.

Greater efficiency from cogeneration using coal, natural gas and biomass seems to have been the largest contributing factor to reduced carbon dioxide emissions in Denmark over the last decade. Wind power also played a role in the reduction, as did greater end-use efficiency in electricity consumption. Cost savings from greater energy efficiency are a good thing until Jevons Paradox kicks in. So if wind eventually turns out to be cheaper than coal, so much the better. Otherwise, there is no compelling reason to implement renewables unless your primary goal is reduced CO2, assuming we’ll never run out of exploitable hydrocarbons to burn as the IPCC claims.

Wind supplies only 1.25% of America’s electricity currently, but President Obama wants to boost that share to 20% by 2030. Even if we are successful, how much baseload capacity would that wind actually replace? The Danish example suggests that reductions in our coal consumption and emissions would be relatively small from wind alone without a significant contribution from CHP. Many baseload coal plants in the United States are miles from nowhere, which makes combined heat & power impractical. We would need to build lots of smaller gas- or biomass-fired cogeneration plants close to areas where people actually live.

Wellinghoff no doubt had cogeneration and biomass in mind when he talked about distributed versus centralized power generation, but his enthusiasm for wind power seems misguided. This mistake is understandable when your policy position is identical to Greenpeace’s. The wind power mania in the United States will no doubt persist until we actually implement it on very large scales. Then we will find out the truth about wind like the Danes have before us.

True Confessions

I believe we in the United States are going to talk global warming to death without ever doing much about it. I also suspect many other thoughtful people feel the same way but are reluctant to come out and say it. Passionate statements by Jon Wellinghoff and others on renewables are a lot of “sound and fury signifying nothing” in my view, although these are not necessarily idiots telling the tales.

Humans are comfort-seeking animals—a redundant statement because we are animals after all, although we don’t like to admit it, and all animals maximize their comfort. We like it when the lights come on when you flip a switch or the heat comes on when you turn up the thermostat. Once you’ve tasted the good life fossil fuels offer, there’s no going back until the party ends after the beer runs out.

Global warming is a gradual phenomenon (on human time scales) that will make few dramatic, sustained demands on our attention in the next few decades like the economy does now or the oil shock did last year—and assuming the meltdown in the Arctic doesn’t cause a rapid climate shift. That’s one reason we procrastinate on reducing our carbon emissions by talking about planning for wind instead of actually moving forward quickly to implement it on very-large scales. And once it sinks in that climate change is a Tragedy of the Commons, and thus every large nation on Earth must be equally committed to fixing it, we will have to acknowledge the impossibility of such unprecedented cooperation on a planetary scale. This isn’t Star Trek and the United Federation of Planets, folks.

Some people rationalize inaction by denying that anthropogenic climate change is happening, despite ample warning signs to the contrary, or distorting the climate science while ignoring the generally accepted physics of the greenhouse effect. Lay people who deny we are changing the climate don’t know anything at all about the science. The important thing in all these cases is to continue doing nothing by claiming there is nothing to do.

There is also a problem relating to Joseph Tainter’s diminishing returns on investment in “advanced” societies like ours. Solving problems becomes harder and harder as time goes on. We want to build those wind farms, we really do, but somehow we just can’t get it together. It takes years and years to get around to doing Big Projects—if we ever do. In the 1950s, when we built the interstate highway system, anything seemed possible. In 2009, nothing does. We know how to print money but we no longer know its value or how to spend it.

Therefore I don’t think the Big Earthly Powers (the US, the EU-27, the BRIC countries) which have achieved or desire comfort will ever have the political will to make an 80% carbon dioxide emissions cut by 2050. Of course, the date 2050 is meaningless in 2009, which is the whole point. If such a reduction does occur, it is far more likely to happen because humankind ran short of fossil fuels to burn, not because of voluntary efforts to reduce our carbon footprint.

So I don’t get too bent out of shape about Jon Wellinghoff’s vision of Things To Come, a time when baseload capacity will be an “anachronism.” And I can certainly understand the conservatism and discomfiture of those like Mark Styles who worry that such visions are not “grounded in reality” and “skewed by wishful thinking.”


Contact the author at dave.aspo@gmail.com

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  • Etienne Bayenet

    Hello,

    You forgot an important point in your comments. Denmark doesn’t use much air conditioning which means that the need for electricity and for heat are well correlated. Furthermore, they have very long days during the summer which reduce the need for lightnings during the summer.

    Bye,

    Etienne

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