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"First they ignore you, then they ridicule you,

then they fight you, then you win."

-- Mohandas Gandhi

New Manufacturer of Grid Scale Storage Coming to NC

October 29, 2014

Here’s the story from Renewable Energy World:

Having worked in stealth mode for the past 10 years, German researchers and serial entrepreneur Jostein Eikeland have developed a new battery chemistry that they claim is non-combustible and highly efficient. The batteries, say Alevo, have at their core a new inorganic electrolyte that eliminates “both the risk of combustion and explosion and massively reduces the debilitating effects of charging cycles.”

Denmark & the US

October 28, 2014

Why are Denmark’s energy policies so much smarter than those of the US?  More important, why are Danes so much better at actually transforming their country?

Some of the answers are cultural and some are geographic.

Let’s start with a list of some of the geographic differences:

  • Denmark is a small country with a population of about 5.6 million, about the same population as Wisconsin or Minnesota.
  • Denmark has almost no fossil fuel resources, except North Sea natural gas which began production only in the 1980s and is now beginning to decline.  There are no new resources coming on line.
  • Denmark is more densely populated than the US at 333 people per square mile, compared with 33 per square mile for the US as a whole.  Wisconsin, the state with about the same population as Denmark has a population density of 104 people per square mile.
  • Denmark has almost ideal wind power conditions.  The country lies right between the North Sea and the Baltic with a long coastline and lots of islands.

Denmark’s small size means that its federal government is able to be much more responsive to political pressure from constituents.  Denmark’s relatively higher population density means that people are closer together physically and can organize themselves somewhat more easily than can people in the US.  Higher population density also means that improvements in energy efficiency, as well as improvements in the electrical generation and transmission system are less expensive.

Denmark is relatively resource-poor.  The initial oil shock in the 1970s, hit the country hard.  Even with their initial goal of shifting from oil to natural gas for heating, Denmark had to rely on imported gas, mainly from the Soviet Union.  The development of Danish North Sea gas production was a very lucky break when it happened.  Generally high costs for imported coal and oil, and now declining domestic gas production, also make it more economically feasible for Denmark to invest in efficiency and renewable power.

Wind power is a no-brainer for Denmark.  In fact, fossil fuel power may have actually sidetracked Denmark and the rest of coastal Northern Europe from a centuries-long development of windmill technological development.  Wind powered much of the milling and early factories of the region in the Netherlands, Germany and Scandinavia beginning in the 1300s.  Advanced technology, mainly developed with the use of fossil fuel power, has now brought Denmark back as one of the world’s leaders in wind turbine research, manufacturing and application.

While geography explains a lot about Denmark’s motivations, it is the Danish people who have made their own success.  Here are some of my random observations concerning the cultural differences between the US and Denmark:

  • In Denmark, I was struck by how easy it was for Danes to work together, whether on a national or local scale.  People were friendly and seemed to genuinely enjoy each other’s company.  Although people were hard working and the country’s basic systems ran well, they always took time to talk and exchange ideas and opinions.  This basic impulse is much more pronounced in Denmark than in the US.
  • If you talk with people who work at the Energy Academy on Samsø, they are much more interested in how they engage people in their renewable power projects than they are in the technical details of machinery and construction.  You can see this just by browsing the Academy’s Web site and reading their publications.  Michael Larsen, the person I spoke with at the Academy, told me that some Japanese visitors had once asked him what Samsø’s secret was.  He replied, “Coffee to keep people going during meetings.”
  • Technical skills and abilities are also important parts of the Danish cultural picture.  Denmark has strong unions and a strong commitment to maintaining excellent technical education.  High wages, strong unemployment benefits and a post-high school education all contribute to high levels of skill among working people in Denmark.  The result is a level of personal business innovation that is not possible in the US with its weak unions and a weak, dysfunctional social welfare system, and an education system focused on expensive degrees without vocational technical training.
  • When Samsø municipality needed to retrain its local heating businesses to provide home efficiency improvements and the new district heating system, the resources were there to actually bring the training to the island.  Danes have a confidence that they can make decisions and make them happen that seems to have fallen by the wayside in the US in the last 30 years.
  • Danes take pride in their accomplishments.  They experience the results of smart planning and innovative thinking and skilled work in their daily lives.  Copenhagen is always pointed to as one of the most livable cities in the world.  The Danes made that happen.  It was no accident.  National pride is strong in Denmark.  Danish flags fly everywhere.  Danes are proud, and they have a right to be.
  • Denmark has a long tradition of economic and social planning.  The fact that this tradition is long and continuous means that Danes have gotten quite good at it.  I am not aware of any comparable development planning process in any US state, and certainly not at the US federal level, where there is largely only corporate control and political chaos.
  • All Danish municipalities participate in a single broad planning process that reaches up to the federal level through county governments.  There is a sense of fairness that arises from this single planning system.  Local governments have a way to make their needs felt in Copenhagen, and they can also communicate with other local governments to assert their interests.  People in Denmark generally trust that planning works, because they can see the results.
  • Danish taxes appear to Americans to be very high, except when you actually look at the facts.  Danes don’t have to pay for health care and education from their own disposable income.  While they pay high fees on their electric bills, because electric use per capita is so much lower, their electric bills equal about the average for bills in the US.  Wages are also higher in Denmark than in the US, including a minimum wage three times the US minimum wage.  Danish wages are higher largely because of the social investment Danes make with their tax money.  So, Danish discretionary income is essentially the same or a little higher than in the US.  The quality of life in Denmark is certainly higher.

All of these factors, geographic and cultural, go a long way toward explaining why Denmark has so many advantages over the US when it comes to embracing innovation in its energy sector.  The US cannot overcome many of Denmark’s geographic advantages, but individual US states can.  Many US states operate on the same scale as Denmark with unique renewable power resources.

Culturally, however, people in the US simply aren’t tuned to the same frequencies as the Danes.  In fact, we seem to be moving farther and farther from the Danish spirit of cooperation and confidence in government to make things happen.

Here is an interesting interview with several US power company managers who just returned from Germany.  While German and Danish power systems are different in many ways, many aspects of the German situation parallel what has happened in Denmark, particularly on the level of national policy and the focus on grassroots involvement in the new energy transformations.

Power Company/Solar Conflict

October 27, 2014

RTO Insider has a good look at how the conflict between dying power companies and the emerging solar power industry is playing out, with a close look at the fight in Wisconsin with WeEnergies’ new push for rate increases.

Get Ready for Life on the Bumpy Plateau

October 27, 2014

This post is a little side trip from the issues facing our electrical system.  Fossil fuel production has a direct bearing on how investment in electrical generation plays out, so questions of resource limits do have a direct bearing on understanding whether the people who run the US electrical system are making good decisions or bad decisions.

One of the main drivers of US electrical generation for the past ten years has been the glut of natural gas that has flooded US markets.  Gas has undercut coal as the preferred fuel for new electrical generation, leading to an increased dependence on natural gas in the US.

The US media has been touting the idea that analysts who claim that world fossil fuel production is at or near peak production have been proved wrong by the recent “shale revolution.”  In fact, what we are seeing is exactly what analysts have predicted from the beginning: that as world production levels off, and prices rise, new drilling technologies will emerge that allow the production of poorer quality “plays,” but the production from these plays will be short lived and not nearly as productive as past discoveries.  The result will be big, short term floods of new production, followed by abrupt shortfalls leading to wide swings in price over shorter and shorter time periods.

None of the new production will contribute much to increasing overall world production.  Peak oil analysts refer to this period at peak production as “the bumpy plateau” before a steady decline trend takes hold.

In a recent discussion of the bumpy peak, energy expert Chris Nelder pointed out:

BP: So back in 2005, plenty of analysts were suggesting that the world would soon hit a ceiling in annual oil production. How has that panned out?

CN: The predictions weren’t monolithic. But what everyone agreed on was that at some point in the near future, maybe five or 10 or 15 years away, the rate of oil production would stop growing. Some said we’d hit an absolute peak in a specific year. Others said we’d reach a “bumpy plateau” that might be five or 10 years long. But everyone agreed that sometime after 2005, within 10 or 15 years, global oil production would stop growing.

CN: Not necessarily. In 2005, we reached 73 million barrels per day. Then, to increase production beyond that, the world had to double spending on oil production. In 2012, we’re now spending $600 billion. The price of oil has tripled. And yet, for all that additional expenditure, we’ve only raised production 3 percent to 75 million barrels per day [since 2005].

The increasing uncertainty about fossil fuel production, particularly oil and gas, are further detailed in a just released study by the Post Carbon Institute called Drilling Deeper: A Reality Check On U.S. Government Forecasts For a Lasting Tight Oil & Shale Gas Boom by David Hughes.  Here are the key findings of this report taken from the executive summary:

The seven tight oil plays and seven shale gas plays analyzed in this report account for 82% of projected tight oil production and 88% of projected shale gas production through 2040 in the EIA’s Annual Energy Outlook 2014 reference case forecast. A detailed analysis of well production data from these plays resulted in these key findings:
1) Tight oil production from major plays will peak before 2020. Barring major new discoveries on the scale of the Bakken or Eagle Ford, production will be far below EIA’s forecast by 2040.
a) Tight oil production from the two top plays, the Bakken and Eagle Ford, will underperform EIA’s reference case oil recovery by 28% from 2013 to 2040, and more of this production will be front-loaded than the EIA estimates.
b) By 2040, production rates from the Bakken and Eagle Ford will be less than a tenth of that projected by EIA.
c) Tight oil production forecast by the EIA from plays other than the Bakken and Eagle Ford is in most cases highly optimistic and unlikely to be realized at the rates projected.
2) Shale gas production from the top seven plays will likely peak before 2020. Barring major new discoveries on the scale of the Marcellus, production will be far below EIA’s forecast by 2040.
a) Shale gas production from the top seven plays will underperform EIA’s reference case forecast by 39% from 2014 to 2040 period, and more of this production will be front-loaded than EIA estimates.
b) By 2040, production rates from these plays will be about one-third that of the EIA forecast.
c) Production from shale gas plays other than the top seven will need to be four times that estimated by EIA in order to meet its reference case forecast.
3) Over the short term, U.S. production of both shale gas and tight oil is projected to be robust—but a thorough review of the production data indicate that this will be unsustainable in the longer term.
These findings have clear implications for current domestic and foreign policy discussions, which generally assume decades of U.S. oil and gas abundance.  Other factors that could limit production are public pushback as a result of health and environmental concerns, and capital constraints that could result from lower oil or gas prices or higher interest rates.  As such factors have not been included in this analysis, the findings of this report represent a “best case” scenario for market, capital, and political conditions.

The prospect of more volatile swings in fuel prices poses significant problems for long term investment in projects like big electric generating plants or natural gas pipelines.  What investors would be willing to invest in a 50 year project when price instability might severely impair the ability of the project to pay for itself over such a long term?

The competition among fuels also illustrates what may really be behind the coal industry’s current push to fight regulation of coal burning in US electric generating plants.  Right now, coal is the big loser in the energy price war.  Given Hughes’ analysis, however, we may see rapid rises in natural gas prices as shale production drops rapidly.  If the US coal industry can block further expansion and enforcement of the Clean Air Act, the industry will be poised for a big boom as gas prices rise and coal becomes more competitive.

Sarah Tincher, the energy reporter at The State Journal, has a good story on the interplay of these forces in the coal industry.  As Ms. Tincher’s story points out, gas prices would have to rise pretty high for Central Appalachian steam coal to become competitive, because the resource in the region is now so degraded and costly to mine, but western and midwestern coal would be much more likely to rebound.

The volatility problem would also be a limiting factor to any coal rebound in electrical generation, however.  Right now, there are almost no new coal-fired power plants being built in the US.  Because of the current gas glut, many high cost, obsolete coal burners have been shut down.  In order for power companies to take advantage of coal’s possible new competitiveness, they would have to make new 50 year investments in building new plants.  Would they do that if they faced the uncertainty of wild swings in coal’s competitiveness?

Even if a fossil fuel gains a price advantage over another fuel, industry may not be able to use that advantage effectively, because it cannot make needed long term investments in an increasingly unstable market environment.  So, all environmental considerations aside, renewable power becomes increasingly attractive, because renewable power needs no fuel.  Once the long term investment is made to build generation, there is no fuel price uncertainty for the future.  Renewable power investments can also be made in very small units, unlike building a coal-fired power plant, so each new investment is inherently less risky.

We could be on the bumpy plateau for twenty years or fifty years, before fossil fuel production establishes its long term decline.  Everyone will have to adjust to wild swings of fuel prices, investment decisions and our economy.  Hold onto your hats.

New Report Shows Change Is Possible, But WV PSC Has Made It Very Expensive

October 23, 2014

Ken Ward had a story in yesterday’s Charleston Gazette titled “West Virginia could meet EPA plant standards, report says.”

West Virginia could meet proposed federal standards to reduce greenhouse gas emissions with a smart mix of energy efficiency programs, ramped up solar- and wind-power generation and moderate improvements at existing coal-fired power plants, according to a new report.

The U.S. Environmental Protection Agency proposal presents “a number of challenges” for West Virginia but also provides states with the ability to design their own plans for meeting the Obama administration’s objective of curbing heat-trapping carbon dioxide pollution.

“Given this flexibility, West Virginia can develop a state plan that puts the state on track to meet its emission limits while at the same time enhancing the social, economic, and environmental benefits of further integrating its energy efficiency, renewable energy, and natural gas resources into the state’s electricity sector,” says the report.

Here is a link to the report, published by the WVU Law School’s Center for Energy and Sustainable Development and Downstream Strategies.  The report is a good one.  It quantifies the impacts of implementing all of the strategies we have covered on The Power Line for years: energy efficiency, combined heat and power, turning WV’s fake standards into a real renewable portfolio standard, creating an energy efficiency standard and requiring real integrated resource planning (not the fake IRP that FirstEnergy pushed through the Legislature last year).  Keep in mind that none of these changes have even gotten out of committee in the WV Legislature over the last six years.

There’s another big problem.  This report (or, better yet, its implementation) is about three years too late for WV.

The WV PSC and the two Ohio-based holding companies that control the WV electric power industry have closed the door to these solutions, because the WV PSC has just made it much more expensive to make the changes we need to make.  In 2013, the PSC approved the dumping of FirstEnergy’s Harrison Power Station on WV rate payers.  In this deal, the PSC locked FirstEnergy customers into paying for much more electric capacity than they need for the next thirty years.

In the more recent AEP case, the parties have reached a settlement involving the same kind of transfer of units of the obsolete coal-fired Amos and Mitchell plants to WV rate payers.  In this case as well, the generating capacity for which AEP’s WV customers are stuck paying is also more than projected demand in our state for the next thirty years.  The PSC has not approved this AEP settlement yet, but Commissioners Albert and McKinney will no doubt approve the essential features of the transfer.  They have already approved the Amos transfer.  If the PSC approves the Mitchell deal, WV rate payers will also be paying for much more capacity than they will need for the next thirty years.

A number of us, including the Gazette’s Ken Ward and the State Journal’s Pam Kasey, warned that the Harrison and Mitchell deals would close the door for real energy change in WV for decades.  WV Citizens Action Group fought the Harrison settlement tooth and nail to block the Harrison boondoggle.  The Sierra Club, however, settled for a few crumbs on energy efficiency, and seemed to overlook the real impact of these power plant deals.

This situation illustrates clearly how many environmentalists miss the real issue.  Too often they isolate themselves on the fringes of the main argument and settle for small, short term victories that leave them powerless to effect real change.  Both AEP and FirstEnergy are masters at publicizing window dressing about renewable power and energy efficiency while operating behind the scenes at state legislatures and PSCs to lock in their corporate control.  FirstEnergy has even gone on the offensive in Ohio to roll back existing renewable power and energy efficiency standards.

Superficial company-run energy efficiency programs are valuable tools for power companies to ghettoize “environmentalists.”  These programs channel activism into advocating for energy efficiency as a painless panacea for carbon emissions and all the other problems associated with coal burning power plants.

Power companies in WV see energy efficiency programs only as a way to sidetrack public discussion.  The companies’ primary goal is PR.  They will never agree to so much reduction in demand that threatens to significantly displace their coal-fired generating plants.  AEP and FirstEnergy will have to be forced to make those kinds of efficiency investments, and, in the recent coal plant cases, the PSC has demonstrated that it is not willing to do that.  Chairman Albert seems to have a serious fetish about “steel in the ground.”

Improvements in energy efficiency have an important place in transforming our electrical system.  They have already proven that.  But there are limits to that impact.  The rebound effect plays some role in reducing efficiency improvements as people use some cost savings to use more electricity.  Also, as the cheap and easy efficiency investments are made, the marginal return of each succeeding improvement becomes a little more expensive to generate.  Some demand reductions attributed to energy efficiency improvements are actually the result of de-industrialization and the transfer of less efficient manufacturing to other countries, reducing the net effect on worldwide impacts.  The US is woefully behind other industrial countries when it comes to building energy efficiency into all of our generation and manufacturing processes, but energy efficiency advocates need to recognize that energy efficiency alone will not get us where we need to go.

That is why we need to go to the heart of the matter – how West Virginia regulates electrical generation capacity.  Unfortunately, that matter is now largely settled for a generation.  The WV PSC has made, or will soon make, in the case of AEP, a legal commitment to WV’s electrical holding companies that WV rate payers will bail out the companies’ obsolete coal burners.  If any alternatives to that generation are implemented, the WV PSC will likely require West Virginians to pay them for the Harrison, Amos and Mitchell plants if those plants are closed.  In its current 17.2% residential rate increase request, FirstEnergy wants rate payers to pay for the stranded capital costs of the Albright, Rivesville and Willow Island plants that it closed in 2012.  What happens in that case will be a good indication of what the PSC would do with stranded costs in the future.

So if, by some miracle, WV implemented a lot of new renewable generation or cut electricity demand further through CHP plants and energy efficiency investments, AEP and FirstEnergy would demand that we pay them for the idling of one or more of their existing coal plants.  It’s a zero sum game now.  Any new generation would have to displace those plants.  WV rate payers would likely be obligated to pay for them if they close.

Any new shift in generation away from coal in WV, as suggested in the new report, could result in WV rate payers paying twice for the same generation capacity: once for the new renewable sources and efficiency investments, and twice because the PSC will probably force them to pay back the Ohio power companies for the Harrison and Mitchell/Amos plants if they are forced to close.  You can bet FirstEnergy and AEP will be quick to blame “environmentalists” and the EPA for any rate increases that end up on West Virginians’ electric bills as a result.

With the recent power plant cases, FirstEnergy, AEP, Chairman Albert and Commissioner McKinney have doubled the costs of WV’s path to renewable power, and most of the state’s media and politicians didn’t even notice.  And now, it’s too late.

 

Vertical Shaft Turbines Popping Up in NY

October 21, 2014

Wind turbines have not worked well as small scale electricity generators.  Complexity and too many moving parts makes their cost of maintenance high at a small scale.  Generally, efficiencies rise dramatically with size.  For years, innovators have been working on simpler, quieter vertical shaft turbines that are efficient in small scale applications.

Vertical shaft turbines are now being deployed at businesses in the New York area.  Here is a story about some new and beautiful turbines at several businesses.  The TV talking heads get a lot of stuff wrong in the story,  (No, new small scale generation is not “energy efficiency.”) but the visuals are great.

Here’s one set of turbines -

Click on the link above to see the turbines in action.

If these kinds of turbines can be produced and operated at costs per kwh as low as solar panels, we will see a real revolution in decentralized power.

Commissioner McKinney Parrots Power Company Propaganda at Shepherdstown Public Hearing

October 20, 2014

On October 6, WV PSC Commissioner Jon McKinney traveled to Shepherdstown to preside over the public hearing about FirstEnergy’s 17.2% rate increase for WV’s residential customers.  A friend of mine, John Christensen, testified at the hearing and asked me to forward him the transcript of the hearing.

When I read John’s testimony, I was astounded to see Commissioner McKinney offering his own testimony on the record on behalf of the holding companies that control WV’s electrical system.  Mr. McKinney acts in the capacity of a judge in PSC cases and should never be testifying on the record pushing the power company agenda.  But push he did.

John Christensen has included in his testimony a description of his home solar power system.  Here is what Mr. McKinney said following John’s testimony:

COMMISSIONER MCKINNEY:
Just a quick comment about your — one of the things. Obviously one of the things we’re very interested in is how the renewable resources come into the system. A big debate obviously occurs to how the distribution system is used and what the fair charge for a distribution system is. And what we don’t want to do is leave the ratepayers paying for distribution system charges that should be paid through other people.  So please put that in your comments the next time you talk, that concept. Thank you.
So here is an commissioner of the WV PSC interjecting his own recommendation that a witness testifying at a public hearing revise his testimony to reflect someone else’s opinion.  Can this really be true?  But it is right there in the transcript.
And the revision Mr. McKinney advocates is straight from the Edison Electric Institute/ALEC playbook.  It is the fake argument about solar power “free riders” that are costing other rate payers money.
Mr. McKinney has just presented evidence that he should disqualify himself from ruling on any cases that involve solar power in WV.  Shame on you, Commissioner.
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