Below are a few letters we received on topics that appeared in the past few weeks. They capture the essence of how many readers say they feel.
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Nuclear Cost Estimates - June 23, 2008
Hi. I am concerned with the comparisons to wind power cost and contribution referenced in your subject article.
As I am sure you know, the "generation cost" of wind reflects a two cent per kWH federal production tax credit, many state RECs, and other allowances that greatly reduce the wholesale price of the product. Can you please share whether these elements of the "price" of the renewables are included in your $0.14 quote in the article, or if that price ignores the public cost of those subsidies? Perhaps a fairer "big picture" comparison would include these costs. Please see the EIA chart from the 2007 report showing fed tax credit for wind compared to nuclear and others on a per MWH basis found here.
Secondly, the article speaks to base load when talking about nuclear, but then ignores demand segments when talking about wind power. Why would you do that? The EON-Netz distribution network for Germany (arguable the closest representation installed today of a fully deployed wind infrastructure in the eastern US), 2005 report (available here) says the contribution to base load is 7% of rated capacity, while average output of the devices is nearly 4 times that. So if you compare price for base load wind to baseload nuclear, now the cost of wind is not $0.14 per kWH, it is $0.56!
Tom Stacy
Heat of Battle - July 02, 2008
Demand response can have many benefits for utilities and their customers in terms of reduced load, more effective use of generation and transmission assets, and lower costs.
The article mentioned the first two steps, real-time rates (often combined with real time energy consumption displays) so customers can reduce their energy use during peak times to save money and second, remote utility control to turn off or turn down devices such as air conditioners to reduce load. Peak power savings with air conditioners are limited by customers' tolerance for higher temperatures.
A further step, not mentioned in the article, is thermal energy storage (TES). Air conditioners, refrigerators, and freezers with TES can make ice late at night or at other times of low grid load. When cooling or refrigeration is needed the ice is melted. As long as ice remains, compressors can run little or not at all. Ice Energy Systems' "Ice Bear" product line uses this method.
Using TES the user experiences no change in room temperature or refrigerator temperature while the utility is able to shave its peak load. Implementation of the smart grid will allow increasingly sophisticated use of demand response, especially when combined with thermal energy storage.
Michael Winkler
Research Engineer
Schatz Energy Research
Humboldt State University
I agree that the imperative for conservation will have an enormous impact on the utility industry, but I have a little different perspective on how that impact will manifest itself.
For 30 years, the regulatory policies for implementing energy efficiency and demand response (today's terms for what we used to call load management or demand-side management) have relied on the utilities as implementation vehicle. Perhaps that's because utility regulators view energy efficiency and demand response through their utility-centric lens but it's also a conflict of interest. Why? Because utilities are in the business of selling more kilowatt-hours rather than fewer kilowatt-hours. Even if executives like Jim Rogers of Duke Power and Peter Darbee of PG&E really do believe their future lies in conservation, it's not clear that message is making its way down to the folks in their respective organizations who work with customers.
Moreover, regulatory policies that put utilities at the center of energy efficiency and demand response initiatives tend to lock out other providers, whether it's because utilities are pursuing a deliberate strategy to maintain control of their customer accounts or because they just don't know how to play well with others or because they really are not committed to energy efficiency and demand response or because they fear any innovations that are not their own.
There is, in fact, no good reason why utilities must be the focal point for energy efficiency and demand response initiatives, and at least one good reason (that pesky conflict of interest) why they should not. If regulators can't bring themselves to relegate utilities to a supporting role, then they should also ensure that competitive providers have an opportunity to compete on a level playing field and that a utility's ability to recover the cost of investments it makes in energy efficiency and demand response is tied to observable, objectively measurable results.
Jack Ellis
LNG Concerns - July 07, 2008
The way we consume natural gas is as if there is endless supply of that good stuff out there somewhere. How long is our supply of 83% sustainable? Note: the Canadian supply is dipping. We need to look at other sources of energy before it is too late. It is just a matter of time.
Darmo Sugeng
Project Manager
Entergy
The environmental and safety issues for LNG that are raised by environmental, consumer and NIMBY groups are overblown. The real problem with LNG was not discussed in the article.
The great majority of the world's remaining natural gas reserves lie in Russia and the Middle East, i.e., in potentially unfriendly and/or unstable countries. The increase in US demand for natural gas, and the resulting need for foreign (LNG) gas imports, is primarily driven by the increased use of gas for power generation. Essentially, we are choosing to use imported gas for much of our power generation, including baseload generation. Under this "enlightened" plan, the US will soon be dependent on Middle East energy sources for power generation, as well as transportation fuels.
This approach is very much against the strategic (geopolitical and economic) interests of this nation. Importing foreign gas just so we can use it for baseload power generation is particularly inexcusable, given all the ample, secure, long-term, domestic alternatives that are available for this application, including nuclear, coal and renewable sources. LNG imports are unnecessary, and they reduce our level of energy independence even further. For these reasons (as opposed to over-hyped environmental and safety issues), LNG imports should be vigorously opposed..
James E. Hopf
Battling Mercury - July 09, 2008
Your piece on the efforts and progress in the field of mercury mitigation at coal fired generating facilities is informative, but I am curious about the lack of any concerns about the marketability of the fly ash following treatment by activated carbon, which this treatment will adversely affect. Your article and several of the links discussed the reduction of the costs associated on the per pound basis, but you need to add back the generator's costs associated with disposal of fly ash, bottom ash, scrubber sludge and any other materials associated with electrical generation including those expenses for new land fill cells. For many utilities disposal is extremely costly if they have to haul these materials to offsite land fills.
Jim Johnson
Headwaters Resources
General Manager
Ken your comments on the Mercury issues are insightful and to the point. We know the players, the size of the field and the issues at hand but nobody is willing to play ball. The following is a broad view of technology concerns in the US and Mercury is just one of the many issue:
As I see it the only way to resolve any perfect storm of technical, environmental and business issues is for people of knowledge and skills, who have the intrinsic capacity to set aside their egos, sit down at the same table at the same time and discuss options and possibilities with the intention of finding a resolution.
The Push-Pull one-ups-man-ship demonstrated thus far by all the parties involved in energy/environmental/supply discussions clearly is not working. The solution to any problem is available to those willing to ask thought provoking questions. The people, the knowledge, the questions and the solutions are available and must be brought together before the US plummets into near term oblivion.
I suggest that after the solutions are vetted then invite in the Politicians. The Politicians of today are not the thinkers and leaders of the past. Today they are professional political partisan pundits, usually from legal backgrounds, that do not have the necessary hands on knowledge-base to ask good questions and recognize reasonable solutions. Politicians need to consult and learn from those who work within the subject technologies and can present reasonable fact based alternatives. Politics and Politicians may be amusing at first glance but their job is to represent the interest of the people which unfortunately in the US has largely degraded to their own self interest above all.
The same statements can be made about the 24/7 press. Technical issues need to be digested and presented by a press engaged in specific issues. The public gets most of their information from the 24/7 news, which is extremely biased either left or right and essentially does a tremendous disservice to the public and the country in general. Publications such as EnergyBiz and other industry specific press organizations should take the lead as qualified technical journalist and feed the main stream press with correct and balanced information. Permitting the News-attainment industry to assess, evaluate and present important information that directly affects people's lives is ludicrous at best and down right dangerous at worst.
If we don't stop trying to deceive each other for political or financial gain as a people we will be diminished and join the ranks of all the other failed societies that came before us. The choice to succeed or fail is ours and the time to make that choice is right now.
Phil D'Angelo
JoDAN Technologies, Ltd
Ken, regarding your article, you thoroughly covered most of the issues.
Some additional issues that played a key role in the rejection of LNG by California are:
" Natural gas has become too expensive, so big plans are being made and implemented to replace it with cheaper renewables and conservation;
" It is difficult to believe that LNG will not be even more expensive than natural gas, due to liquefaction, transportation, and gasification;
" The vast majority of LNG comes from OPEC; we don't want to give them any more money than we unfortunately already do;
" For power generation, we have good alternatives (strong supplies of nuclear, hydroelectric, geothermal, and biomass);
" California voters don't want to use and pay for LNG, and it's our money.
This will play out as a collection of state-by-state decisions, based on local customer demand and local resource availability.
Mike Timlin
Redwood Shores, CA
Drilling Takes Center Stage - June 11, 2008
We'd get another 22 years worth of natural gas from drilling?! That's it?
That is about as short-sighted as someone in government should be allowed to think. We need a long-term plan, not just something that will give Bush and Cheney a job when they get back to the private sector.
All 22 years does is delay the inevitable. We keep using up finite resources without taking the truly firm and tough stance that says we need to make the investments now in renewables, so that in 22 years we have something else in place. We need leaders who can think of the much bigger picture and have clean hands.
Why are the 'liberal democrats' thought of as 'soft', while the 'hard nose' republicans are thought of as 'tough'? Seems to me it's the other way around. The tough choice is to defer immediate gratification in order to preserve long term quality of life. That's what adults do, when they stop being children.
Brian D. Kuhn
Director of Marketing and Sales
Aeronautica Windpower, Inc.
It is a pitiful sight to see the worlds' super power so locked up in self driven politics that it can not move forward for the good of the country. We're rich in the necessary resources yet ham strung to use them. Santa Barbara had a spill which was cleaned up and business went on as usual, hardly missed a beat. If something breaks, fix it. If something spills clean it up. Plan the best you can and get on with the business of life, trying to get better as we go. That doesn't seem so out of touch with life as I've seen it play out. Global warming seems to be the new all encompassing threat that is successfully pinning our rich resource development to the mat and it appears many would let the count go to ten. This warming started 18,000 years ago and has not yet peaked. There are many good reasons to be glad we're not on the cooling side of this natural cycle. Enough whining.
Solutions are needed so here are some unoriginal thoughts. We should declare that energy supply stabilization is our top priority and we'll address that first for the good of our country. We'll open up all of the high potential drilling areas and use our best practices to develop in a responsible manner. We should give government incentives for one coal to liquids plant of at least 100,000 barrels a day in each of the 5 PAD districts. There is a dual purpose in this deployment. These would not only produce needed liquid transportation fuels , they would build experience in this technology which should lead to improved design and operations over time. We should have at least 4 to 6 oil shale operations producing oil and building needed design and operating experience. All of these should have long term government incentives that could weather oil price declines if they come again.
Had we done this in the 1980's we'd be much better off today. The North Dakota lignite to natural gas is the only such plant I'm aware of that survived the tough times of low cost oil. Exxon had a large oil shale operation in the 80's which was closed. Had those and other advanced technologies continued we'd be far more advanced in our knowledge in those applications. There is a role for government to play in building that knowledge base and it failed the last go around so here we are 20 years later being bled like a suck pig and we're helpless to stop the bleeding. All alternative energies should likewise have long term incentives for some base number of facilities that would insure technology and operating experience. All of these facilities would be public/private partnerships which require open information sharing, national experiments for all to watch. Let the private sector choose which technology they then wish to development at their own expense. Hydrogen from off! peak nuclear or wherever it makes sense would be another such effort. In all of these we'd be developing our many options for the long haul. If the US is to remain a strong country we must have energy at affordable prices and that is not what we have right now. Many countries that don't like us have that advantage at the present and they are enjoying the ride. This is not a time to take council of our fears -- let us go forward in a measured deliberate manner and take care of first things first. I see that as a well balanced US improving and moving forward.
Jack Moody, RPG
Office of Asset Development
Natural Resources and State Mineral Lease Program
Mississippi Development Authority
Wind Credit Blown Off Course - July 14, 2008
Congratulations on publishing the most pathetically biased and misleading article about wind power I have seen to date from your trade. Please read the attached paper which shows the true reasons Congress has not and should not renew the Federal renewable PTC in the way it is written. The renewal delay is a matter of what we get for what we pay, not to mention the visual presence being up to 700 times greater per unit of energy delivered than any other source. If it were really so great, the credit would stand on its own for renewal and include a generous carve out for fantastical wind energy. When the wind industry points a finger at our legislature it has three more of its own fingers rightly pointing back at itself.
GE's statement assumes wind power jobs would not be replaced by any other jobs in its statement about a net positive financial effect. Shameful. I contend that energy generation industries exist that would add real value to our infrastructure, potentially hundreds of times more beneficial to our economy than wind power jobs.
I would love to know how you could come to such a point where you pander to the wind power lobby and far left wing tactics like this. Assuming anyone in the generation or transmission business believes a word of your blather, you are doing harm to America when promoting a technology with an almost nonexistent capacity value, and encouraging use of our tax dollars away from the very sobering energy priorities our nation must address.
Tom Stacy
Wind power has one very good business function. When the wind blows, fossil fuel power production can be backed down. This exchange of generation sources will displace megatons of emitted carbon dioxide. This makes business sense to meet the upcoming mandates of carbon dioxide caps. However, because of the low availability of installed wind powered generation capacity; for every kilowatt of wind power capacity, there has to be another kilowatt of "conventional" power production ready to generate.
In other words, for every 1000 megawatts of wind generation that is installed to help cover the nations growing energy needs, another 1000 megawatts of reliable and cost effective generation has to be installed to cover demand when the wind is not blowing. The power industry will have to cover the capital costs for twice the megawatt capacity than a single carbon friendly technology.
A study for deep geothermal power production, recently authored by MIT, quoted a 7 cent/kilowatt cost. The DOE study quoted in your article, stated a 6 cent/kilowatt cost for wind power in the 20% scenario. That number was based on an optimistic assumption that wind capital cost will drop by 10% in the upcoming decades. If you consider that each kilowatt of wind power must be matched by another source, wind comes up short as the renewable energy source of choice.
Bruce Vinnola
Plant Supervisor
DJ plant
When are we going to stop playing word games and tell the truth? In your opening sentence of today's EnergyBiz Insider you mention the issue with the production tax credit for wind power and how it's being blown off course by the senate. Something I can agree with, but then you say "all at a time when the nation is trying to wean itself from fossil fuels."
The truth is that petroleum is such a minor piece of electrical generation capacity you should not even be talking about this. If you are referring to coal please say "coal." I believe the American public, Joe Consumer, is so mixed up with this topic and needs to understand that oil runs our economy for transportation purposes and coal is a big mix for electricity. The weaning of coal and oil have a different makeup; coal weaning is because of the concern about global warming from carbon emissions and oil is about $4.00+ gallon of gasoline which include energy security, terrorism, the deficit, and also emissions.
We can build all of the wind farms we want in this country but this won't help our gasoline consumption, unless you then talk about products such as plug-in hybrids and electric cars.
Jim Meyers
Western Regional Manager
North American Insulation Manufacturers Association (NAIMA)
Your piece on production tax credits was good. I agree with everything you wrote. I'm sure that the PTCs have detractors, and they must have some valid arguments. But let's look again at this paragraph:
'"Tax breaks and subsidies are now so large that their value to wind farm owners -- not the alleged environmental benefits -- is the primary motivation for building a wind farm," says Glenn Schleede, a utility analyst living in Virginia.'
Do you suppose that Mr. Schleede expects developers to be driven by the environmental benefits? No surviving developer would work for such pay! Of course they work for money. Now, where is the money coming from?
Maybe Schleede feels that the tax breaks and subsidies are the bulk of the finances. I doubt that they are, and he doesn't say that.
I think he is just trying to denigrate the wind-farm developers by showing that they are in it for the money, not simply for the good of society. Anyone who thinks that's denigration should look at politics for contrast!
Bill Worthington
Truro, MA
The wind industry has been trying to get off the ground for a long, long time. Check out the 1891 Scientific American picture in the first slide alongside the Enron Wind turbine.
Also remember that renewable energy has had a 100% market share for most of humankind's history. It is very dilute and unreliable compared to the conventional modern energies and may be centuries away from primary use. But that is another story....
I believe that historical perspective can change one's view of wind and solar in particular.
Robert L. Bradley, Jr.
Chairman
Institute for Energy Research
The utility I work at recently signed a contract for the purchase of a new renewable resource with a cost well below the cost of regular "brown" market power, thanks to the Production Tax Incentive (PTI). If the public policy reason for a PTI subsidy was to eliminate the perceived short-term economic penalty for building new renewable resources, that public policy reason is now gone. Furthermore, wind is hardly a new industry in its infancy. Large wind farms were built in California just 30 years ago. Ocean wave power is an example of a resource technology in its infancy.
The problem with government subsidies is that they become entitlements. The PTI should be eliminated for wind power, as well as eliminating the multitudes of subsidies to coal, oil and gas. These subsidies only serve to keep the price artificially low, which encourages consumption.
Eric Hiaasen
Mid-term Trader
This was a great article you wrote about wind blowing off course. However many people do not know what incentives States provide for installing a wind turbine or solar panel. There are so many tax incentives and rebates that states offer its amazing. Check this website out to find out what each state provides.
Mustafa Zaffar
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