Energy Security Must Include Reliable Power

By Larry Bell

Unlike populations in most other parts of the world we Americans take vital benefits of dependable electricity for granted. We simply plug into an outlet or flip on a switch and fully expect that our lights will go on, our computers will charge, our coffee will heat up, our air conditioners will function, and yes, our generous taxpayer subsidized plug-in vehicles will run again until tomorrow.

This wonderful, finely balanced round-the-clock empowerment required planning and development which didn’t occur overnight. The same will be true of future efforts to restore adequate capabilities after the Obama EPA’s Clean Power Plan takes an estimated one-third of all U.S. coal-fired plants off the grid over the next five years. This amounts to a loss of generating capacity sufficient to supply residential electricity for about 57 million people.

The North American Electric Reliability Corp, a nonprofit oversight group, emphasizes that the plan constitutes “a significant reliability challenge, given the time required for implementation.” The timeline to convert or replace a coal-fired power plant with natural gas requires years, whereby siting, permitting and development to meet EPA’s interim target would need to be completed by 2017.

Even if a state were able to submit a compliance plan by 2017 or 2018, EPA has admitted that it may take up to another year to approve it. New and upgraded natural gas plants will require additional pipeline infrastructure which may take five years or longer. More expansive transmission lines will also be required to connect that capacity to the grid, with full implementation potentially taking up to 15 years.

EPA’s latest climate alarm-premised war on coal assault calls for states to cut CO2 emissions by 30 percent from 2005 levels by 2030 despite satellite-recorded flat mean global temperatures over the past 18 years and counting. This federal usurpation of state responsibility dating back to the invention of the modern steam engine in the 1880s is unprecedented.

A “finishing rule” expected to be issued in June or July will require states to meet agency carbon-reduction targets by reorganizing their “production, distribution, and use of electricity.” In complying, 39 states must achieve more than 50 percent of EPA’s reduction targets by 2020.

Not only are EPA’s mandates unfeasible, they also demand that states operate “outside the fence line” to force shut-downs of coal (and eventually natural gas), establish minimum quotas for renewables (wind and solar), and impose energy conservation mandates. Never mind here that last year the D.C. Court of Appeals ruled against the Federal Energy Regulatory Commission’s claim of authority over “demand response” of the national energy grid.

Even liberal Harvard constitutional authority Larry Tribe has observed being stunned at this effort to nationalize U.S. electricity generation by coercing states to pass new laws or rush through new compliance rules that exceed EPA’s legal jurisdiction. President Obama is clearly eager for such policy changes to be quickly put into effect which a future Republican president can’t reverse. This will also provide bragging rights for a climate initiative he can announce at the Paris climate conference later this year.

Fortunately, while states are invited to draw up implementation plans for EPA approval, they really have no legal obligation to do so. And while EPA can attempt to commandeer a federal plan if states resist, there are good incentives for them to band together in calling EPA’s bluff — reasons which can otherwise bear dangerous and costly consequences.

An April 7 Washington, D.C., power outage caused by a mechanical failure and fire at a transfer station temporarily disrupted electricity to the White house, Capitol, government agencies (yes, including the Energy Department), businesses/residents, and street lights. While relatively minor, it most likely could have been avoided if a 60-year-old coal-fired plant called the Potomac River Generating Station in Alexandria, Va., which provided backup capacity to balance the grid, hadn’t been shuttered.

It was one of 188 plant closures credited to former New York City Mayor Bloomberg’s activist “Beyond Coal” campaign which he has supported with a $80 million in donations to the anti-fossil Sierra Club.

A far more damaging 2003 Northeast blackout resulted in costs of about $13 billion. Referring to the Clean Power Plan, the New York Independent Systems Operator (NYISO) now reports that EPA’s “inherently unreasonable” reductions “cannot be sustained while maintaining reliable electric service to New York City.” NYISO further projects unacceptable plan consequences which “no amount of flexibility can fix.”

States should collectively heed this reality. Rather than accept EPA’s dirty work, it’s imperative that federal hijacking of state sovereignty be resoundingly rejected.

Larry Bell is an endowed professor of space architecture at the University of Houston where he founded the Sasakawa International Center for Space Architecture (SICSA) and the graduate program in space architecture. He is the author of “Scared Witless: Prophets and Profits of Climate Doom”(2015) and “Climate of Corruption: Politics and Power Behind the Global Warming Hoax” (2012). Read more of his reports — Click Here Now.

A Note on Coal

Steve Hayward

A commenter on the India story posted up this morning wonders why anyone should be “pro-coal,” because “By any standard, coal is horrible for the environment. New Delhi’s air is the most polluted in the WORLD. More coal won’t help. Coal releases mercury in the environment, creates acid rain, etc. Climate change aside, coal is awful and should not be celebrated…”

First, it is not about being “pro-coal” or any other energy source; it’s about being “pro-realism.” The energy hungry developing world is going to use the cheapest form of scalable energy available, and right now that means coal (though natural gas may give it a run for its money—already is in the U.S.). And the complete tradeoffs—even the health tradeoffs—are favorable, even with additional air pollution.

Actually, climate change aside, coal is terrific. It is not clear to me that coal is the chief cause of the bad air in India’s cities. My understanding is that the hundreds of thousands of two-stroke engines on all the scooters they use in India’s cities are much worse (and they plan to replace them over time with much better two-stroke engines).

As another commenter said, in the U.S. we have cleaned up conventional air pollution from coal through a variety of means—“scrubbers,” low-sulfur coal, etc. Just look at the chart below: in the U.S. we have more than doubled coal use since the 1970s, but cut sulfur dioxide emissions by 58%.  I don’t know whether India is building advanced coal power plants with our emissions control technology; I’d be surprised if they aren’t.

But our coal might be even cleaner but for environmentalists. Yes—you read that right. Here’s something to ponder: which nation has more efficiency and lower CO₂ emitting coal-fired power plants: the U.S. or China? The answer is . . . drum roll please . . . China! I just last week came across the astounding chart below in a World Bank report about China:

You need to look closely at this chart to understand how dramatic it is, and what it can tell us. The left axis measures the “thermal efficiency” (or “heat rate”) of coal-fired plants (this is comparable to the gas mileage of your car), and CO₂ emissions in grams per kilowatt-hour{on the right axis}. You can see that the trendlines for the U.Ss. are basically flat, while China’s coal-fired power fleet has become much more efficient than the U.S. fleet over just the last half decade. What explains the difference? The U.S. isn’t building any new coal-fired power plants, because environmentalists have blocked them (last decade enviros celebrated blocking 10 new coal plants in Texas, for example); China is building new ones practically every week, and new ones are always better and more efficient than old ones. If we merely replaced our old coal plants with brand news ones, we’d lower CO₂ emissions.

One feature of the Obama EPA greenhouse gas proposal is to increase the “heat rate” of American coal plants by 6%. I don’t know if that is a lot or not, and I wonder if trying to do so will trip up the whole “New Source Review” regulatory nightmare that has the perverse effect of deterring many coal plants from modernizing.

Second, the impact of coal on mercury levels is less than trivial. The EPA’s pending coal-mercury regulations predict total benefits estimated at . . . $6 million. (That’s the EPA’s own estimate.) Yes—that’s “million” with an M. A rounding error in these kind of calculations; probably less than the EPA’s paper clip budget. It’s almost like Dr. Evil became head of the EPA and said, “Give me a coal regulation that delivers benefits of six million dollars!” The EPA claims total benefits from the regulation of over $30 billion, but not from reducing mercury; rather, all of the benefits come from the co-benefit of reducing particulates. But we already have particulate regulations that are reducing particulates at a constant rate. (And even these benefits are questionable, because they are based on some very old epidemiology.) So the EPA’s mercury rules are just another back door way of trying to kill coal.

Europe Cuts Wind Support

By Bonner Cohen

Europe, once at the vanguard of renewable energy mandates, appears to be having second thoughts about its reliance on giant wind installations erected on land and offshore over the past decade.

The European Wind Energy Association (EWEA) reported in February a sharp drop in new installations in 2014. The EWEA’s annual report shows investments in new wind facilities plummeted last year as a result of “erratic and harsh” changes in renewable energy policies in several countries.

The rate of installations plunged by 90 percent in Denmark, 84 percent in Spain, and 75 percent in Italy.

Spain and Germany Retrenchment

Spain, until recently the global leader in renewable energy, with more wind energy capacity than any other European country except Germany, installed less wind-energy capacity last year than countries outside the EU such as war-torn Ukraine. Facing severe economic problems, Like other economically hard-pressed European countries, Spain has been forced to roll back subsidies it can no longer afford.

In the Financial Times (February 10), Tom Becker, EWEA’s CEO, commented on Europe’s pullback from renewables: “The uncertainty over the regulatory framework for the energy sector is a threat to the continued drive toward sustainable and homegrown energy that will guarantee Europe’s energy security and competitiveness for the long term.” The “regulatory framework” to which he referred is the system of subsidies and mandates that make uneconomical renewable energy profitable for its providers.

Germany, Europe’s strongest economy, provides a snapshot into understanding why wind power is losing support in the EU. In recent years an increasing number of businesses has been leaving Germany, citing high energy costs.

Little Wind Energy, High Costs

The lack of reliability is also a problem. Examining data for 2014, German researcher Rolf Schuster reports, “Wind energy is extremely volatile. During some quarter-hour periods, the roughly 25,000 turbines [in Germany] indeed delivered a lot of power. But at other times they delivered practically nothing.” Schuster concluded on average Germany’s 25,000 wind turbines operated at 14.8 percent of their rated capacity in 2014, averaging less than 6,000 Mw of their nearly 40,000 Mw capacity.

The high costs associated with wind power and the need for redundant electric power plants have caused electricity prices in Germany to rise by 60 percent in the past five years as the government has pushed for more renewable energy. Germans currently pay more than twice as much for electric power as do their American counterparts. As a result, “German industry is going to gradually lose its competitiveness if this course isn’t reversed soon,” Kurt Bock, CEO of chemical giant BASF, told the Wall Street Journal (August 26, 2014).

“High-tech turbines and massive government subsidies cannot overcome the problem humans have had with wind for centuries: Wind is not reliable or stable,” said Dan Simmons, vice president for policy at the Institute for Energy Research. “Adding wind to your electricity-generating system does not actually increase the real capacity of the system, and it does not make the system more reliable. As a result, wind increases the cost of the system without providing real benefits, as the Europeans are beginning to figure out.”

Bonner R. Cohen, Ph. D. (bcohen@nationalcenter.org.), is a senior fellow at the National Center for Public Policy Research in Washington, DC.

What’s the True Cost of Wind Power?

By Randy Simmons, Newsweek

As consumers, we pay for electricity twice: once through our monthly electricity bill and a second time through taxes that finance massive subsidies for inefficient wind and other energy producers.

Most cost estimates for wind power disregard the heavy burden of these subsidies on U.S. taxpayers. But if Americans realized the full cost of generating energy from wind power, they would be less willing to foot the bill—because it’s more than most people think.

Over the past 35 years, wind energy—which supplies just 2 percent of U.S. electricity—has received $30 billion in federal subsidies and grants. These subsidies shield people from the uncomfortable truth of just how much wind power actually costs and transfer money from average taxpayers to wealthy wind farm owners, many of which are units of foreign companies.

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Proponents tend to claim it costs as little as $59 to generate a megawatt-hour of electricity from wind. In reality, the true price tag is more than two and a half times that.

This represents a waste of resources that could be better spent by taxpayers themselves. Even the supposed environmental gains of relying more on wind power are dubious because of its unreliability—it doesn’t always blow—meaning a stable backup power source must always be online to take over during periods of calm.

But at the same time, the subsidies make the U.S. energy infrastructure more tenuous because the artificially cheap electricity prices push more reliable producers—including those needed as backup—out of the market. As we rely more on wind for our power and its inherent unreliability, the risk of blackouts grows. If that happens, the costs will really soar.

Many government agencies are in the wind business these days. GAO

Where the subsidies go

Many people may be familiar with Warren Buffet’s claim that federal policies are the only reason to build wind farms in the U.S., but few realize how many of the companies that benefit most are foreign. The Investigative Reporting Workshop at American University found that, as of 2010, 84 percent of total clean-energy grants awarded by the federal government went to foreign-owned wind companies.

More generally, the beneficiaries of federal renewable energy policies tend to be large companies, not individual taxpayers or small businesses. The top five recipients of federal grants and tax credits since 2000 are: Iberdrola, NextEra Energy, NRG Energy, Southern Company and Summit Power, all of whichhave received more than $1 billion in federal benefits.

Iberdrola Renewables, a unit of a Spanish utility, alone has collected $2.2 billion in federal grants and allocated tax credits over the past 15 years. That’s equivalent to about 6.7 percent of the parent company’s 2014 revenue of $33 billion (in current U.S. dollars).

President Obama’s proposed 2016 budget would permanently extend the biggest federal subsidy for wind power, the Production Tax Credit (PTC), ensuring that large foreign companies continue to reap most of the taxpayer-funded benefits for wind. The PTC is a federal subsidy that pays wind farm owners $23 per megawatt-hour through the first 10 years of a turbine’s operation. The credit expired at the end of 2013, but Congress extended it so that all projects under construction by the end of 2014 are eligible.

In all, Congress has enacted 82 policies, overseen by nine different agencies, to support wind power.

I explained in December why Congress shouldn’t revive the PTC, which expired at the end of 2014. In this article, I’m adding up the true cost of wind power in the U.S., including the impact of the PTC and other subsidies and mandates. It’s part of a study I’m doing of other energy sources including solar, natural gas and coal to determine how much each one actually cost us when all factors are considered.

As Warren Buffett has said, there wouldn’t be a wind industry without the PTC. UCS, DOE, AWEA

Tallying the true costs of wind

Depending on which factors are included, estimates for the cost of wind power vary wildly. On the low end, the financial advisory firm Lazard claims wind costs $59 per megawatt-hour. On the high side, Michael Giberson at the Center for Energy Commerce at Texas Tech University suggests the it’s closerto $149. Our analysis in an upcoming report explores this wide gap in cost estimates, finding that most studies underestimate the genuine cost of wind because they overlook key factors.

All estimates for wind power include the cost of purchasing capital and paying for operations and maintenance (O&M) of wind turbines. For the studies we examined, capital costs ranged from $48 to $88 per megawatt-hour, while O&M costs ranged from $9.80 to $21 per megawatt-hour.

Many estimates, however, don’t include costs related to the inherent unreliability of wind power and government subsidies and mandates. Since we can’t ensure the wind always blows, or how strongly, coal and natural gas plants must be kept on as backup to compensate when it’s calm. This is known as baseload cycling, and its cost ranges from $2 to $23 per megawatt-hour.

This also reduces the environmental friendliness of wind power. Because a coal-fired or natural gas power plant must be kept online in case there’s no wind, two plants are running to do the job of one. These plants create carbon emissions, reducing the environmental benefits of wind. The amount by which emissions reductions are offset by baseload cycling ranges from 20 percent to 50 percent, according to a modeling study by two professors at Carnegie Mellon University.

While the backup plants are necessary to ensure the grid’s reliability, their ability to operate is threatened by wind subsidies. The federal dollars encourage wind farm owners to produce power even when prices are low, flooding the market with cheap electricity. That pushes prices down even further and makes it harder for more reliable producers, such as nuclear plants, that don’t get hefty subsidies to stay in business.

For example, the Kewaunee Nuclear Plant in Wisconsin and the Yankee Nuclear Plant in Vermont both switched off their reactors in 2013. Dominion Energy, which owned both plants, blamed the artificially low prices caused by the PTC as one of the reasons for the shutdown.

As more reliable sources drop off and wind power takes their place, consumers are left with an electrical infrastructure that is less reliable and less capable of meeting demand.

Lost in transmission

Another factor often overlooked is the extra cost of transmission. Many of America’s wind-rich areas are remote and the turbines are often planted in open fields, far from major cities. That means new transmission lines must be built to carry electricity to consumers. The cost of building new transmission lines ranges from $15 to $27 per megawatt-hour.

In 2013, Texas completed its Competitive Renewable Energy Zone project, adding over 3,600 miles of transmission lines to remote wind farms, costing state taxpayers $7 billion.

Although transmission infrastructure may be considered a fixed cost that will reduce future transmission costs for wind power, these costs will likely remain important. Today’s wind farms are built in areas with prime wind resources. If we continue to subsidize wind power, producers will eventually expand to sub-prime locations that may be even further from population centers. This would feed demand for additional transmission projects to transport electricity from remote wind farms to cities.

The final bill comes to…

Finally, federal subsidies and state mandates also add significantly to the cost, even as many estimates claim these incentives actually reduce the cost of wind energy. In fact, they add to it as American taxpayers are forced to foot the bill. According to Giberson, federal and state policies add an average of $23 per megawatt-hour to the cost of wind power.

That includes the impact of state mandates, which end up increasing the cost of electricity on consumer power bills. California is one of the most aggressive in pushing so-called Renewable Portfolio Standards (RPS), requiring the state to consume 33 percent of its electricity from renewables by 2020. Overall electricity prices in states with RPS are 38 percent higher than those without, according to the Institute for Energy Research, a non-profit research group that promotes free markets.

The best estimate available for the total cost of wind power is $149 per megawatt-hour, taken from Giberson’s 2013 report.

It is difficult to quantify some factors of the cost of wind power, such as the cost of state policies. Giberson’s estimate, however, includes the most relevant factors in attempting to measure the true cost of producing electricity from wind power.

In future reports, Strata will explore the true cost of producing electricity from solar, coal, and natural gas. Until those reports are completed, it is difficult to accurately compare the true cost of wind to other technologies, as true cost studies have not yet been completed.

Blowing in the wind

The high costs of federal subsidies and state mandates for wind power have not paid off for the American public. According to the Mercatus Center at George Mason University, wind energy receives a higher percentage of federal subsidies than any other type of energy while generating a very small percentage of the nation’s electricity.

In 2010 the wind energy sector received 42 percent of total federal subsidies while producing only 2 percent of the nation’s total electricity. By comparison, coal receives 10 percent of all subsidies and generates 45 percent and nuclear is about even at about 20 percent.

Wind gobbles up the largest share of subsidies yet produces little power.

But policymakers at the federal and state level, unfortunately, have decided that the American people will have renewable energy, no matter how high the costs. As a result, taxpayers will be stuck paying the cost of subsidies to wealthy wind producers.

Meanwhile, electricity consumers will be forced to purchase the more expensive power that results from state-level mandates for renewable energy production. Although such policies may be well intended, the real results will be limited freedom, reduced prosperity and an increasingly unreliable power supply.

Randy Simmons is professor of political economy at Utah State University.Megan Hansen, a Strata policy analyst, co-authored this article, which first appeared on The Conversation. Full disclosure: Randy Simmons receives funding from the U.S. Department of Energy (grant has been completed and there is no current funding) and Strata, a 501 (c)3 non-profit organization.

The Rise of Eco-Extremism

Excerpts from The Rise of Eco-Extremism

Dr. Patrick Moore, Former co-founder Greenpeace and Director of Greenpeace International

Two profound events triggered the split between those advocating a pragmatic or “liberal” approach to ecology and the new “zero-tolerance” attitude of the extremists. The first event, mentioned previously, was the widespread adoption of the environmental agenda by the mainstream of business and government. This left environmentalists with the choice of either being drawn into collaboration with their former “enemies” or of taking ever more extreme positions. Many environmentalists chose the latter route. They rejected the concept of “sustainable development” and took a strong “anti-development” stance.

Surprisingly enough the second event that caused the environmental movement to veer to the left was the fall of the Berlin Wall. Suddenly the international peace movement had a lot less to do. Pro-Soviet groups in the West were discredited. Many of their members moved into the environmental movement bringing with them their eco-Marxism and pro-Sandinista sentiments.

These factors have contributed to a new variant of the environmental movement that is so extreme that many people, including myself, believe its agenda is a greater threat to the global environment than that posed by mainstream society. Some of the features of eco-extremism are:

• It is anti-human. The human species is characterized as a “cancer” on the face of the earth. The extremists perpetuate the belief that all human activity is negative whereas the rest of nature is good. This results in alienation from nature and subverts the most important lesson of ecology; that we are all part of nature and interdependent with it. This aspect of environmental extremism leads to disdain and disrespect for fellow humans and the belief that it would be “good” if a disease such as AIDS were to wipe out most of the population.

• It is anti-technology and anti-science. Eco-extremists dream of returning to some kind of technologically primitive society. Horse-logging is the only kind of forestry they can fully support. All large machines are seen as inherently destructive and “unnatural’. The Sierra Club’s recent book, “Clearcut: the Tragedy of Industrial Forestry”, is an excellent example of this perspective. “Western industrial society” is rejected in its entirety as is nearly every known forestry system including shelterwood, seed tree and small group selection. The word “Nature” is capitalized every time it is used and we are encouraged to “find our place” in the world through “shamanic journeying” and “swaying with the trees”. Science is invoked only as a means of justifying the adoption of beliefs that have no basis in science to begin with.

• It is anti-organization. Environmental extremists tend to expect the whole world to adopt anarchism as the model for individual behavior. This is expressed in their dislike of national governments, multinational corporations, and large institutions of all kinds. It would seem that this critique applies to all organizations except the environmental movement itself. Corporations are criticized for taking profits made in one country and investing them in other countries, this being proof that they have no “allegiance” to local communities. Where is the international environmental movements allegiance to local communities? How much of the money raised in the name of aboriginal peoples has been distributed to them? How much is dedicated to helping loggers thrown out of work by environmental campaigns? How much to research silvicultural systems that are environmentally and economically superior?

• It is anti-trade. Eco-extremists are not only opposed to “free trade” but to international trade in general. This is based on the belief that each “bioregion” should be self-sufficient in all its material needs. If it’s too cold to grow bananas – – too bad. Certainly anyone who studies ecology comes to realize the importance of natural geographic units such as watersheds, islands, and estuaries. As foolish as it is to ignore ecosystems it is absurd to put fences around them as if they were independent of their neighbours. In its extreme version, bioregionalism is just another form of ultra-nationalism and gives rise to the same excesses of intolerance and xenophobia.

• It is anti-free enterprise. Despite the fact that communism and state socialism has failed, eco-extremists are basically anti-business. They dislike “competition” and are definitely opposed to profits. Anyone engaging in private business, particularly if they are successful, is characterized as greedy and lacking in morality. The extremists do not seem to find it necessary to put forward an alternative system of organization that would prove efficient at meeting the material needs of society. They are content to set themselves up as the critics of international free enterprise while offering nothing but idealistic platitudes in its place.

• It is anti-democratic. This is perhaps the most dangerous aspect of radical environmentalism. The very foundation of our society, liberal representative democracy, is rejected as being too “human-centered”. In the name of “speaking for the trees and other species” we are faced with a movement that would usher in an era of eco-fascism. The “planetary police” would “answer to no one but Mother Earth herself”.

• It is basically anti-civilization. In its essence, eco-extremism rejects virtually everything about modern life. We are told that nothing short of returning to primitive tribal society can save the earth from ecological collapse. No more cities, no more airplanes, no more polyester suits. It is a naive vision of a return to the Garden of Eden.