How Trump's 'Soviet-style' coal directive would upend power markets

tommcginnis · Jun 5, 2018

Awesome discussion, gentlemen.

I have been 12 years out of the utility biz, and reading these arguments and updates has been a real refresher course. Really solid stuff, touching on all the Point/Counterpoint markers my cobwebbed brain could dredge up. Very nice.

Kudos to all.

Sig · Jun 5, 2018

SpaceTimeMorph said:
A

There is an argument about “reliability” as a point against renewables:
1) They have a lower capacity factor than Nuclear (I will just leave coal out of this one if you please...).
2) Renewables have a lower potential to shape power, namely reactive power. It is a fact that they larger the generator capacity the more capable a generator is at controlling voltage. Wind turbines are small and have limited capacity to do this. Solar has no generator “capability” to speak of. Both of these power sources depend on voltage shaping devices like tap changing transformers and capacitor banks that have reliability issues themselves. A nuclear plant is less dependent on these devices; when transmission demands a change in reactive power from a nuclear plant this can be accomplished completely within the voltage regulating capacity of the generator. There are studies that state pretty clearly that renewables have a high capacity to shape power, however, I would argue that those studies are based on normal grid conditions and not emergency grid conditions.
3) Given a wind or solar farm is more a distributed series of devices, response to PJM or transmission generated alerts or emergencies requires cycling units in and out completely in order to meet grid demand. The spinning and reserve capacities of these units is low (which is one reason they can’t clear a capacity market) as a consequence which further hits renewables ability to provide reliable power. As of right now that cycling is limited based on alternate baseload supply.

And even though there is still a DA market, advanced computer generated economic dispatch is now in play that changes this landscape. One point against nuclear here is the difficulty that nuclear plants have in load following based on these instantaneous (and often erroneous) demands. This is why i still think diversification of power sources... not just in total but also in peaking, intermediate, and baseload capacities is important.

It is a complicated argument regardless.
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Good points on reactive power (and great to have a discussion at this level!)

I'd also throw demand response into the mix here, we've got over 15 gigawatts of it in PJM alone and it responds faster than any generator.

bone · Jun 5, 2018

SpaceTimeMorph said:
This is why i still think diversification of power sources... not just in total but also in peaking, intermediate, and baseload capacities is important.
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Yes, dead nuts on. To a limited extent you can load follow with nuclear - we did it with Byron and Braidwood. The new modular designs can load follow even better, but not as well as NG which is the ultimate.

The naval power reactors load follow really really really well.

bone · Jun 5, 2018

Sig said:
Good points on reactive power.

I'd also throw demand response into the mix here, we've got over 15 gigawatts of it in PJM alone and it responds faster than any generator.
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Which is why I originally stated that political expediency aside, fuck Coal and put that $$$ into a very smart national power grid. But subsidize nuclear; at least enough to keep it a viable alternative. It's a cheap subsidy (compared to other generation subsidies) and IMO it's vital for climate security, national security and economic capacity needs.

Sig · Jun 5, 2018

bone said:
Natural Gas Industry Blasts Nuclear Power With Fake News

https://www.forbes.com/sites/jamesc...ts-nuclear-power-with-fake-news/#72303c62133b

Natural Gas, the darling energy source of the millennia, has decided it needs to take down its biggest competitor – nuclear power.

The American Petroleum Institute has flooded the airwaves in Ohio and Pennsylvania with anti-nuke commercials by pushing fear – fear of higher prices and fear of radiation. Just the opposite of what is true.

This is ironic since the natural gas industry emits more radioactivity than all of nuclear in America combined. And more people die every year from natural gas than any other electricity source except coal.

The Issue

The issue in these states is that warped wholesale electricity markets, renewable subsidies and cheap natural gas from hydraulic fracturing (fracing) have made low-cost nuclear power just not low enough for short-term profitability, putting some nuclear plants at risk of closing. Several have already closed and six more are scheduled to close in the next ten years.

Most climate scientists, like Jim Hansen, and economists say that a small subsidy, much smaller than renewables get, is necessary to keep these plants open and preserve both the low-carbon power and the generation diversity needed to weather changes in the market and in the climate. During the last Polar Vortex, nuclear was the only source unaffected by the extreme cold. And nuclear costs are stable and predictable for decades, unlike natural gas or renewables.

The trend has power regulators worried,with those in New York and Illinois recently approving subsidies to keep their nuclear fleets operating, saving thousands of high-paying jobs and most of the states’ clean energy. The regulators and utility operators know how important energy diversity and baseload power are to the stability of the electric grid. This is an esoteric concept that most people do not understand, yet it rules their daily energy lives.

A new article for Scientific American points to the overwhelming evidence that saving nuclear plants is the most environmentally significant and cost-effective thing that governors can do for their states.

API does not want any help to go to nuclear, which it sees as a competitor, and a hurdle to their plan for natural gas rising to 80% of electricity generation in these markets. They want to capture this monopoly quickly before natural gas prices rise after America links to the global market in the next several years.

The gas industry is frantically building liquefied natural gas (LNG) facilities and coastal terminals in order to enter the global market, which should increase natural gas prices in the United States by between 50% and 100%. They want to stop nuclear since the lead times for nuclear builds or even relicensing are so long, that the nuclear industry may not be able recover after gas prices increase, and consumers will be stuck with higher electricity prices for decades.

Gas is perfectly positioned for this takeover since the wholesale markets in these states were changed in the last twenty years such that natural gas became the most desirable source after 2007.

The natural gas industry actually admitted in court (personal communications from the PA State Legislature) that helping nuclear will rob the gas industry of $600 million in profits per year that would come from consumers. Keeping nuclear open would only cost $200 million per year, a clear benefit to the citizens of Pennsylvania and Ohio.

API is calling this legislative help for nuclear a ‘nuclear bailout’ – which it is not.

These plans do not involve subsidies. Nuclear plants get paid by electric customers at a cost-based rate approved by state public commissions. There is no taxpayer funding. The plan effectively makes them public utilities.

EIA
Map of premature closings of nuclear power plants.

The Details

Electric customers pay a rate that blends the costs from all generation sources, which is the way it was before deregulation and the emergence of non-utility generators, mostly natural gas. For decades, natural gas generation was by far the highest price generation source but consumers never paid its high costs because they were blended with low cost nuclear. That was not a subsidy for gas generation and these new plans to preserve nuclear are not a subsidy or a bailout either.

Unfortunately, the gas industry’s strategy of misinformation seems to be working. Efforts by the utility First Energy to get Ohio legislators to create new regulations enacting zero emission credits (ZECs) for the Davis-Besse and Perry nuclear power plantshave stalled out according to news media reports.

Exelon Vice President Joseph Dominguezsaid in testimony to the Ohio Senate’s Public Utilities Committee on June 1 that six nuclear reactors in five states have shut down and another seven nuclear reactors will shut down prematurely by 2019. This is a result of electricity markets not properly valuing the benefits of baseload electricity.

Nuclear power produces over 68% of America’s low-carbon power. Non-hydro renewables produce less than 10%. If these nuclear power plants are lost, it will wipe out more low-carbon generation than all the power produced by wind, solar and geothermal in America.

Another reason that legislators are gun shy about calling for a vote on this issue is the intensity of the opposition. In addition to industry, consumer groups and interest groups, like theAmerican Association of Retired Persons (AARP), mobilized to stop the proposal.

The overall push to stop nuclear is led by the Citizens Against Nuclear Bailouts, an anti-nuclear group made up of organizations like the Pennsylvania Independent Oil and Gas Association, AARP, the Marcellus Shale Coalition and the Pennsylvania Manufacturers Association. However, the only organization in this group that one would think of as a citizens’ group is AARP.

AARP’s efforts called ZECs a ‘subsidy designed to prop up a failed business model.’ Funny how they don’t mind an even more failed business model for renewables which are more expensive than nuclear, and require both higher subsidies and natural gas plants to back them up, negating much of their low-carbon claim.

But the fear-mongering about radiation and safety is truly fake news at its worst. Whenever radioactive emissions come up in discussions of nuclear power, scientists always point out that the mining, drilling and burning of fossil fuels emit much more radiation in total than nuclear energy does.

And that’s true. Radioactive materials are common in fossil fuel deposits like natural gas, including uranium (both U-238 and U-235), thorium (Th-232), potassium (K-40), radon (Rn-222) and radium (Ra-226). This last one is the hottest and has a 1,600 year half-life. It’s release through fracing has been the subject of many studies and regulations.

But even though these levels from natural gas exploration and development are higher than in the nuclear industry, there is still no reason to be afraid. Just like there’s no reason to be afraid of radiation from nuclear power, there’s no big reason to be afraid of radiation from natural gas.

It’s just the hypocrisy of the gas industry that’s annoying.

But with regard to safety and accidents, that’s a different story. The deathprint of different power sources is fascinating. Coal is far and away the most deadly from a public health perspective, killing over 10,000 Americans a year, and well over 300,000 Chinese a year since China doesn’t have a Clean Air Act like we do. Natural gas only kills about a thousand, so that’s pretty good.

Nuclear kills only one person every decade, and that’s from ordinary things like falling off a ladder. There has never been a death resulting from radiation in the history of the commercial nuclear industry.

Since 2000, there have been over 200 natural gas pipeline and facility explosions, ruptures or leaks that have killed dozens of people, destroyed many facilities and homes, and led to serious population evacuations.

And thanks to fracing for natural gas, earthquake hazards in parts of Oklahoma are now comparable to California. The United States Geological Survey has produced a seismic hazard forecast for the central and eastern United States showing a 5% to 17% chance of significant damage to homes and structures each year for areas of Oklahoma and Kansas where fracking occurs.

There have been no explosions or serious accidents involving nuclear reactors ever in America. Three Mile Island way back in 1979 was a stuck valve that resulted in no environmental or health effects. Radiation was completely contained onsite. Only two people have died in the nuclear industry since 2000, one falling from a height and one killed when a hoist assembly failed and crushed a worker. Since 2000, over 50 people have died from similar falls in the wind industry.

And nuclear power does not cause earthquakes.

Along with fear of death and destruction, API is pushing the economic angle as well, saying that closing nuclear plants would save money for consumers.

But every other study about closing nuclear plants prematurely shows just the opposite. The Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology published a new study which found that saving nuclear would come at a cost of $4-7/MWh on average in these markets, which is much lower than the cost of subsidizing wind power, which is about $23/MWh.

A study from the Brattle Group shows that losing Ohio’s nuclear plants would cost taxpayers $177 in higher electricity bills each year.

Another study showed even more negative impacts from prematurely closing nuclear plants. If Byron, Clinton and Quad Cities nuclear plants in Illinois close prematurely, this analysis found that the initial output losses to Illinois would be $3.6 billion. The output losses would increase annually and, by 2030, would reach $4.8 billion. Losses in revenue and jobs would reverberate for decades after the premature plant closures, and host communities would probably never fully recover.

A Berkeley study evaluated the abrupt closure of the San Onofre Nuclear Generating Station (SONGS) in 2012, showing that the lost generation from SONGS was met largely by increased in-state natural gas generation. In the twelve months following the closure, they found that the SONGS closure increased generation costs at other plants by $350 million, almost all of it from increased natural gas use.

The closure also created binding transmission constraints, causing short-run inefficiencies and allowing manipulations of the market, making it more profitable for certain plants to act non-competitively, again mainly natural gas. The closure also wiped out most of the low-carbon gains from all California’s renewables, not that the oil and gas industry cares much about global warming.

Natural gas results in more carbon dioxide emissions in the U.S. than coal does, so it’s always surprising that the same people who claim to care about the planet want gas over nuclear.

The problem is anyone can just make up stuff to feed to the news agencies and the public since nuclear science is basically unknown to everyone but a few scientists. Who even knows how a nuclear plant works? Or what a picoCurie is? Or that potato chips are the most radioactive food? Or the difference between nuclear weapons and commercial nuclear power?

In the absence of understanding, anything goes. And fear and disaster sells. Because nuclear weapons have figured so important in our history, and looms again in the guise of North Korea, you would think nuclear science would have been basic curricula in high school since WWII.

But it hasn’t. Instead, fear, misunderstanding and outright lies have been the nuclear diet for America over the last 40 years.

And the gas industry is serving it up in heaps.
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I'd be interested in seeing that Brattel study, the link is broken. Keep in mind this is somewhat dated info. For example, the PTC for wind $14/MWH this year and steps down to $9.60 next year, not $23 as cited. And keep in mind we only pay the production tax credit when the electricity is produced, hence the "production" part. Ratepayers are on the hook for nuclear from the time they start it. Forgive everyone's skepticism at the numbers put up by the industry when Santee Cooper comes in at $25B vice the $7B it was originally supposed to cost. And it ends up costing ratepayers $9B and will never produce a MWH. The vast majority of those overruns had nothing to do with opposition to nuclear plants, they were just plain old construction cost overruns, by a utility who actually stood to make more money with those overruns by the perverse incentive of ratebasing. https://www.utilitydive.com/news/sa...don-summer-nuclear-plant-construction/448262/
(I know this supports your modular design argument, btw)

When an IPP is willing to risk their own balance sheet on a nuclear plant like they routinely do on renewables I'll be willing to take their "estimates" at face value. We probably both agree that isn't likely to happen any time soon.

SunTrader · Jun 5, 2018

The face of "Clean" Coal:

bone · Jun 5, 2018

In the 70's, 80's, and 90's Commonwealth Edison and the Illinois Commerce Commission caught holy hell for building 12 reactors. But it worked out. Now the state would rather subsidize the nukes (which is very modest on a per customer basis) than consider the alternatives. You certainly couldn't find the space in Illinois for the renewables and the storage to replace those megawatts. Not much fracking going on in Illinois.

As an aside, it was sheer terror to work the real time desk and have LaSalle Nuclear Unit 1 trip at 1250 MW. Holy fucking shit. Completely different animal than losing a 250 MW coal boiler at Kincaid.

dozu888 · Jun 5, 2018

Sig said:
I couldn't be more clear, I said end all subsidies...ALL renewable and fossil fuel and nuclear and make fossil fuel and nuclear pay for all the costs they incur. The renewable industry is for it, I'm for it, the only people against it are the fossil fuel industry and apparently you! First you're supporting nationalizing power plants, now you're supporting government handouts. Who's the conservative here again?
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ok fine let's end all subsidies. and if you cherish the conservative title so dearly you can take it too.

reality is different though... the carbon scam is deeply entrenched; subsidies are given to renewables.... so what is so bad to keep a few coal plants open.

reality. the key word.

Sig · Jun 5, 2018

dozu888 said:
ok fine let's end all subsidies. and if you cherish the conservative title so dearly you can take it too.

reality is different though... the carbon scam is deeply entrenched; subsidies are given to renewables.... so what is so bad to keep a few coal plants open.

reality. the key word.
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Listen, I'm sure you have some expertise in something. But it's clearly not this. Look around, it's grownups having a grownup conversation on a subject that's obviously way over your head to which you're not only not adding value but destroying it. If you're interested in learning about it rather than parroting simplistic talking points that you heard in your echo chamber, I'm sure we're all happy to help you learn. Otherwise run along back to wherever you came from and let those of us who know what we're talking about continue our conversation.

Sig · Jun 5, 2018

bone said:
In the 70's, 80's, and 90's Commonwealth Edison and the Illinois Commerce Commission caught holy hell for building 12 reactors. But it worked out. Now the state would rather subsidize the nukes (which is very modest on a per customer basis) than consider the alternatives. You certainly couldn't find the space in Illinois for the renewables and the storage to replace those megawatts. Not much fracking going on in Illinois.

As an aside, it was sheer terror to work the real time desk and have LaSalle Nuclear Unit 1 trip at 1250 MW. Holy fucking shit. Completely different animal than losing a 250 MW coal boiler at Kincaid.
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Out of curiosity how did you deal with something like that in the days before DR? Presumably you didn't have that much on reserve, did it take long enough to spin down you could call up what I presume was a good portion of the gas capacity or did we just have more brownouts back then?