I’m a huge Wind proponent, a greenie, and a scientist.
In fact, I’m wearing my “IBEW 103 Boston MA” windmill shirt right now.
I support Cape Wind. However, the Cape Wind project — even if it created 5 times the amount of electricity it is slated to produce — couldn’t stave off a single coal or nuclear plant.
Wha? Allow me to explain.
1. Storing large quantities of electricity is incredibly difficult and expensive. In fact, the most efficient way known is to use the electricity to pump water into a lake up a hill, and then open the gates later and use the flowing water to spin turbines. Of course, you’ve got to have the geography to support such a system, and there isn’t much of that in these parts. It’s also not so great for local ecologies most of the time.
You can’t store electricity.
2. The electricity you’re using now is being produced *now*. Since storage is such a difficult thing, we simply produce electricity exactly when we need it.
3. Different amounts of electricity are used depending on time of day, day of week, and time of year. This cycle is pretty dramatic. For example, in NY on August 1, 2005, 4:00 am needed 16,000 Megawatts, 4:30 pm needed 28,000 megawatts. Since we expect to have electricity available 24/7/365, we must have capacity to generate the absolute peak; the worst case in terms of demand.
4. Different generation methods produce along different timelines.
4a. Nuclear: it’s baseline. Whatever it produces, that’s how much it’s producing 24 hours a day. This means that, generally speaking, you don’t want to be producing more electricity than the system ever needs. In the case of number (3) above, NY shouldn’t have more than 16,000 Megawatts of nuclear generating capacity, unless it has a way to sell off the surplus 4:00 am electricity to other regions.
4b. Natural Gas: Natural gas nozzles can be adjusted very quickly, so the amount of electricity generated via natural gas can be adjusted on the order of every few seconds.
4c. Coal: coal changes production rates on the order of every 5 minutes, so it’s not as flexible as gas but far more flexible than nuclear.
4d. Oil: Massachusetts burns oil (#6 oil IIRC) to generate a bunch of electricity. It’s sort of sickening. Because oil isn’t used outside of some New England States, Florida, and Hawaii, there isn’t as much published about it.
4e. Wind: Wind is variable. It is most likely to be blowing well near sundown and sunrise, but there’s no certainty. So, when it is blowing, you can reduce your useage of 4b, 4c, and/or 4d. But, if it’s not blowing at 4:00 PM on August 1, 2005 (peak demand), you’ve got to have capacity to generate all of that electricity elsewhere.
4f. Solar: The sun is out when we use the most electricity — during the day. This means that solar can be used to reduce the peak draw on the system, which helps the most. Unless it’s cloudy out.
Neither solar nor wind can be used to prevent building more power plants, because neither of them can be used “on demand”. There are green alternatives however — landfill gas (behaves like 4b), wood chips (behaves like 4c), geothermal (behaves like 4a), etc.
The bottom line: there must be enough generational capacity to meet peak demand, and neither wind nor solar can be counted. That doesn’t mean that they’re useless — if they result in us firing up the coal plants less often, they’ve done a valuable service. But, they can’t reduce the necessity of building more power plants.
So what should we do?
1. Keep building wind and solar. While they can’t be counted toward capacity used to meet peak demand, they do result in the system relying on coal, natural gas, and oil turbines as much. This means less pollution, and it also means insulating the system against price shocks in natural gas, oil, or (less likely) coal. Furthermore, since the marginal cost of wind and solar is $0.00, they actually do result in lower electricity rates for everyone in the system. Good news.
2. Conservation. Improve building requirements for insulation and materials. Use government programs to make CF bulbs cheaper. Use the home heating assistance fund to insulate the home instead of simply buy more fuel. Increase efficiency standards in appliances. Make improvements to the electrical grid itself so that the system wastes less. It’s merely a question of money and willpower. Personally, I’d rather see the state spend $15,000,000 to increase enough energy efficiency to offset building a $10,000,000 coal plant. Not only would we save on pollution, but the energy efficiency will pay itself back over time; the coal plant is just ugly and polluting.
But while all conservation is good, conservation between 4:00pm – 5:00pm is far more important than conservation at 4:00 am. Why? Because if we can conserve electricity at it’s peak, we lower the peak. Lowering the peak means we lower the generation capacity needed to meet peak. That’s how we can prevent new coal or nuke plants from being built — by maintaining (or lowering!) peak demand.
How do we lower the peak?
3. Time-based-metering. What if you had to pay more for electricity at 4pm than at 10pm, which would be more than at 4am? After all, it costs more to produce electricity at 4pm than at 10pm, which is more expensive than 4am. Shouldn’t you pay more? If our meters were time-based, we might choose to not run the dishwasher until the evening hours or early morning. We might set up timers for our AC/elec heat so that they ran when the price was a bit lower and didn’t run so much when the price was higher. This would serve to take that mountain peak and spread it around, so it wasn’t so high on top but spread out more, like a plateau.
Would people make these kinds of adjustments? Some would. Who else would go for this though? Schools, businesses, and government. After all, their utility bills are orders of magnitude higher than yours, and so an adjustment that saves 2% can be $1000s of dollars per year, or more.
The problem of pollution and energy risk can be mitigated with wind and solar. The problem of having sufficient capacity for peak demand can only be solved by building more fuel-based power plants or by reducing peak demand. I’d prefer we do the latter, and I believe the only way to do it successfully is with time-based metering. I don’t want another coal or nuclear plant in my state.
Don’t forget, that’s the nutshell.
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There are nuances, and my claims aren’t 100% accurate 100% of the time. They are accurate to a first approximation (AFAIK!), and hopefully they’ll help folks understand the story a little bit more.
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Just for kicks, I’m now going to explain how Cape Wind will lower the electricity rates for everyone in the state.
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Because electricity must be generated “on demand” someone must carefully watch demand, every second of every day. To oversimplify, there’s a guy sitting in front of a computer, who notices “exactly” how much electricity will be needed by people over the next 5 minutes. Let’s say it’s 10,000 megawatts.
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He needs to assemble a collection of suppliers who will produce exactly 10,000 megawatts. Not 10,500 MW, and certainly not 9,500 MW. How does he do it?
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He sends a message to all producers, stating that he needs 10,000 MW of electricity for the next 5 minutes. Please Bid.
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Each supplier then places a bid not on the 10,000 MW, but as many as they’d like to produce (generally, their capacity) and the price that they’d have to charge to make this electricity. This price differs between suppliers because they use different fuels, their generational plants aren’t all equally efficient, etc.
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Let’s say the bids look like this, ordered by price:
Power Plant A 2000 MW $0.030/kW
Power Plant B 0500 MW $0.031/kW
Power Plant C 1200 MW $0.033/kW
Power Plant D 3200 MW $0.036/kW
Power Plant E 0050 MW $0.038/kW
Power Plant F 2700 MW $0.041/kW
Power Plant G 3500 MW $0.044/kW
Power Plant H 0200 MW $0.045/kW
Power Plant I 0600 MW $0.052/kW
Power Plant J 1700 MW $0.055/kW
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So, what does the man behind the curtain do? He does what I did… line them up by price. Then, starting with A, he adds the MW until he arrives at 10,000 MW or more. In this case, that is Power Plant G. Plants H-J don’t get a contract; they’ll be not operating for the next 5 minutes in all likelihood. Now, here’s the kicker:
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The bid for Power Plant G is the price that Power Plants A-G will be paid. Even though Power Plant A was willing to sell 2000 MW for three cents per kW, he’ll be paid 4.4 cents per kW. This isn’t some corporate giveaway or quirk; this is standard auction procedure for these type of auctions. Why? Because it gives every Power Plant the incentive to bid as low as possible to make sure they are one of the Power Plants selected. They have no incentive to try to game the system, because the risk of not being selected at all far exceeds the possible gain of fudging their bids.
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So, who produces the electricity? A-F produce as much as they bid on; since Power Plant G was the one who pushed the total over 10,000MW, he only gets to produce enough to get to the total; in this case, a mere 350MW.
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Notice that if Power Plant H had been able to bid $.043, he’d have gotten a spot contract for 200MW of production at a price of $0.044/kW. That’s his incentive to make his Power Plant more efficient.
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Where does Cape Wind fit in? Check this out. Cape Wind (Power Plant W) has no variable cost. Wind is free. Sure, there’s some maintainance cost attributable to the blades spinning, but it is orders of magnitude smaller than the bids we’re talking about — effectively 0. So, let’s say Power Plant W is able to produce 0500 MW. We now have:
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Power Plant W 0500 MW $0.000/kW
Power Plant A 5000 MW $0.015/kW
Power Plant B 0500 MW $0.031/kW
Power Plant C 0200 MW $0.033/kW
Power Plant D 1200 MW $0.036/kW
Power Plant E 0050 MW $0.038/kW
Power Plant F 2700 MW $0.041/kW
Power Plant G 3500 MW $0.044/kW
Power Plant H 0200 MW $0.045/kW
Power Plant I 0600 MW $0.052/kW
Power Plant J 1700 MW $0.055/kW
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And what happens? Now, Plant G isn’t the one to push the system over 10,000 MW… it’s Plant F. So, now only Plant W, A-F get contracts for the next 5 minutes. In addition to H-J, Plant G will also be shut down. But remember how prices are determined. Because Power Plant F pushed the total over 10,000 MW, the going rate will now be $0.041/kW, not $0.044/kW. This means that every consumer is getting their electricity for 10% savings for the next 5 minutes. It also means that Power Plants A-E will get paid 10% less than they would have if Power Plant W didn’t exist, Power Plant F will be making 10% less on a smaller contract, and that Power Plant G won’t be making any money or electricity at all.
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So — a few things.
1. Cape Wind will lower prices for electricity. These savings will be passed on to the consumer (eventually) in the forms of lower rates or rates that climb more slowly than they would have otherwise.
2. Cape Wind will result in less production elsewhere whenever the wind is blowing.
3. That plant shut out (production from G and F in this case) are almost certainly going to be coal, oil, or natural gas. While all three pollute different chemicals at different rates and are imported from different regions, they all pollute and not a single one of those three energy sources is coming from New England.
4. Per megawatt, wind energy requires more local employment than nuclear or fossil fuel-based energy production. More employment to build the infrastructure, more employment to maintain it, and more employment to operate it — and it’s still cheaper per MW to produce!
5. The story for solar is almost identical, except that the cost to build 1 MW of solar cells is far higher than 1 MW of wind turbine, and that it is easier to predict the sun 5, 20, and 500 minutes from now than it is to predict the wind.
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p> * Lower energy prices * Lower pollution * More union jobs * More non-union jobs * More jobs outside of Boston, where we’ve got hurting communities * More techonolgy opportunities * More research/higher ed opportunities * Less money exported to Canada, The Middle East, or elsewhere * Lower electricity price spike should the price of Natural Gas, Oil, or Coal go up suddenly
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Given 1, 2, 3, and 4 and all these bullets, how could anybody be against Wind (or Solar) Energy in Massachusetts?
This is fascinating stuff. Thanks!
…in combination with variable cost of electricity based on demand in the day. For example, home appliances like dishwashers can be programmed to run in the middle of the night when rates and demand is cheaper.
But, until metering is time-based, consumers have no incentive to purchase appliances with these features.
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Hot water heaters are another great example. How often do you use hot water between 10:00 pm or 5:00 am?* I never do. Why should my hot water heater be kicking on at 11:30 pm to re-heat my hot water, only to do it again at 2:00 am and again at 4:00 am? I don’t need hot water until 6:15am, when I shower. Don’t heat it in the middle of the night!
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Our houses are sucking on energy when we’re asleep or at work, and all of this is generally wasted. Time-based appliances will go a long way toward providing incentives to conserve that energy.
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Technology, politics, bureaucrats…all of the above?
There are some time-based meters already. My friend, a homeowner in North Carolina, has one now. AFAIK, the bulk (all!) of them work like this: there are some number of different rates (say, 3) and the meter effectively spins three different dials, one for each category.
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This is OK, but the technology exists for better.
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What it could be:
Think of it like a stock market graph, only 24 hours per day. As your current usage goes up, the chart goes up. When you turn the hair dryer off, it plummets downward. Of course, you’ve got to be taking discrete measurements, every t time units, since computers don’t “do” continuous. That’s fine though, a meaningless detail.
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So, your meter stores your usage in memory, and then either (a) dials home because it’s connected to your phone line, similar to how a TiVo works, or (b) sends out the info using WiFi/RF to the truck passing by the way some communities have now, or (c) uploads the information to a handheld when the utility man plugs it in from outside your house.
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However its done, the difference is between [current] measuring a single number, say 252 kWh, and [future] measuring a long series of numbers (say, once per minute == 60x60x24x30 ~= 2.5 million numbers). Woah! That’s a lot. Well, not really. For one thing, most of the time the number will be the same as the one before and after it, so those can be shurnk down, easily by at least 2 orders of magnitude. Secondly, more complex algorithms to compress the data also exist. Thirdly, it sounds like a lot, but it’s not too big in computer terms to begin with.
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You have to remember that the utilities really don’t care — they don’t get paid for serving customers’ needs or the needs of society; they get paid for selling electricity. Regardless of meter type, if they pay $X for the juice, they’ll be able to charge their customers $X x 107% or somesuch.
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So, it’s a matter of having vision within the legislature or the regulators. Unfortunately, it just isn’t there. There’s also the problem of “selling” it to the public. I mean, right now you know exactly how much electricity costs if you care to. Under a variable system, it’s a bit trickier. Still, the general terms are pretty straightforward, and I suspect people could deal with it.
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Besides, there’s no need to roll this out to homes first. Initially, just do it for the top 1% of the consumers, who consume far more than 1% of the power. Factories, office parks, schools, government buildings, etc. Get these guys thinking about just when they should be firing up their air conditioners and condensers, or if it makes sense to put solar cells on the roof.
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So, to answer your question more succintly:
Technology, politics, bureaucrats…all of the above?
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No, yes, yes. Mostly, it’s because nobody is lobbying for this sort of thing. When explained clearly, it’s a no-brainer.
Your post is essentially correct, with two minor points.
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1) Although it can be characterized as such, the suppliers don’t technically bid every five minutes. Bids are set prior to the day starting. These bids are evaluated every five minutes (roughly). No one is jacking up prices every five minutes — in fact, the bid prices can only change daily.
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2) There’s a bigger disconnect between the prices paid to generators and the costs to suppliers. Smart suppliers have locked in their costs with contracts — they don’t want to buy energy on the volatile spot market. In the long term, you’re right, if the price of energy goes down then the cost to consumers will go down. But there are other factors that could dampen this effect — for example, exporting energy to regions that are willing to pay a higher price.
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I also think that conservation would probably go a lot further than wind turbines.
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Good post though.
1) is absolutely right. I just kept it out for simplicity.
2) is also right, but the long term effects are indeed as I outlined.
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3) In these examples, conserving 500 MW has the exact same impact as producing 500 MW of electricity using Power Plant W (wind). And of course, we don’t need to wait for the wind to start blowing for us to start conserving.
Very interesting stuff. Thanks stomv! I would just like to point out that out here in Western Mass., we do have hydro power. In fact, we have a couple of pumped-storage facilities — the “lake up a hill” you mentioned. One is in Erving and another is in Rowe. As you say, they are like batteries. The utility buys electricity during off periods when it is cheaper, to pump the water up the hill, and then releases the water during peak times to produce electricity when the price is higher. This is quite valuable. When the Northfield Mountain facility in Erving was revalued a number of years ago after deregulation, the little town of Erving (pop. 1,500 or so) suddenly had the second-lowest tax rate in the Commonwealth because of the jump in value. Last I checked, 90 cents on the dollar of their property tax revenue was paid by the utility!
P.S.
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I’m running for Town Meeting in Brookline’s precinct 1. I’ve added a sig saying just that, and now I’m trying it out. In case it doesn’t work well the first time, head over to
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http://www.tommyvitolo.com