Lewis Black will offer today’s opening statement; he’s a bit blunt, so if you, like Mr. Krabs’ Mom, get all distressed when exposed to “sailor talk”, just move right on past his commentary and the rest of us will be with you in just about 30 seconds:
So Lewis is right: we need to build a big thing. Where he and I disagree is that I think the big thing could be distributed all across the country, and I think the big thing should make a profit for the taxpayers who will be making the upfront investment.
So how do you do that?
Franklin Roosevelt delivered a speech in Portland during the 1932 presidential campaign. He promised that the next great federal hydroelectric project would be built on the Columbia River to prevent extortion against the public by the giant electric utility holding companies then dominant in the region.
That speech marks the first day of the history of the Bonneville Power Administration (BPA). Over the many years since, a string of dams were built along the Columbia River; these are operated by the Army Corps of Engineers, and the hydroelectric power they produce is marketed and distributed by the BPA to both public and private utilities.
Since the BPA is selling about 45% of the region’s power for a price not much above the actual cost of production, this “public option” keeps electricity prices in Oregon, Idaho, Montana, and Washington to more or less 50% of the cost of power in California, DC, New Jersey, or every single State on or near the East Coast, from the Delmarva Peninsula north. (The one exception is Pennsylvania: Northwest states pay about 1/3 less than customers in the Keystone State.)
Now what I’m proposing is to duplicate the BPA model, nationwide, with power generation assets owned by Federal agencies sited on Federal land selling that power, cheaply, but at a profit, to consumers.
If my math is correct, we spent about $465,584,000,000 on electricity in 2007 in the US (4,157 million megawatthours [MWh] times the national average of 11.2 cents per kilowatthour [kWh]); if that could be cut by 1/3, that’s $150 billion annually that could be eventually recovered by the larger economy.
Fun Fact: Did you know that Sharron Angle has threatened legal action because she believes that if Harry Reid reposts her actual, but now deleted, Nevada Senate primary campaign website, word for word, it will hurt her chances of being elected…or that she believes that doing such a thing is a “dirty trick”? It’s all…absolutely true.
So here’s what we do:
There’s an enormous amount of Federal land in Nevada, to give just one example, which could be “inhabited” with either windmills or solar generation assets. At this point you need some more “transmission and distribution” assets to get that power to say, Phoenix, or Las Vegas, or California, which the new entity that we create to market this new power will own.
We could also own “distributed” assets (for example, solar panels on major building rooftops), which requires investment in “smart grid”.
The same opportunities exist along the East Coast.
As we bring more of this power online, we can reduce the amount of coal generation we use on any given day, which is going to help reduce costs, both in cash and in the environment.
Now the big risk with wind and solar is that you may not have “near 100% uptime”; the solution is to hold coal and natural gas assets that you’ve taken offline in reserve; natural gas can be fired up quickly if needed, the rest of the time, you’re getting greener.
How much would such a plan cost?
That depends. The lowest costs appear to be achieved by reducing the cost of financing, finding sites with higher average wind speeds, and increasing the size of the generator-and this is especially true with windmills: the taller the tower and the longer the blades, the more power you’ll get, and the increase is more logarithmic than linear.
It’s reported that the cost of connecting to a grid owned by another utility also affects the cost of power; some utilities seem to be discouraging wind generators by imposing various conditions when they want to connect. The distance from the generators to that larger grid also impacts the cost of the power produced.
(“Distributed” assets, such as rooftop solar panels or windmills, may cost more up front and are less efficient, but there is a considerable savings in not having to build power lines to a distant power plant.)
The cost of capital and the cost of access to the grid aren’t big problems for the Federal Government, and that means you could put up a wind plant that produces 150 million KWh annually for about $65 million. If you sold that power for 4 cents per KWh, you’d make about $6 million a year, and about 90% of that would go to debt and the cost of operations.
Such a plant would be paid off in 15 years, and from then on, about 60% of your $6 million in annual revenue…is profit.
Now if you applied that same math to the goal of replacing about 10% of US power generation, you’re looking at about $520,000,000,000 plus the cost of new grid. Let’s add 50% for that cost.
The eventual outcome: if we did it all at once, we’d have it all paid off 22 ½ years after construction is finished…or sooner-and after that, we’d be making a profit of just over $300 billion a year…which, if we did nothing else, would pay off our entire current debt in about another 40 years.
And that’s what I’m proposing, Mr. Obama: I want you to stand up in front of this country and tell us we’re going to do this, that we’re going to concentrate on the areas with the highest costs first, and that paying off our investment is easy and makes us a stronger economy in the bargain.
That this is your “man on the moon in 10 years” moment.
We give preference to US-sourced production, and we lend money to seed that production. We can create all kinds of jobs in the process, both in the manufacture of the generation assets, and in their installation.
If that’s not enough, lowering the cost of power in New England from today’s average of 16.8 cents per kWh by 30% or more is absolutely going to help bring jobs back into the region-particularly in the manufacturing, tech, and communications industries, each of which consume lots of power.
The same in California-and the same in the Upper Midwest, where reducing the cost of power will also help to create badly needed jobs.
So whaddaya think, Mr. President?
You need a damn good idea, especially one that creates lots of American jobs-and this one does that…and it does it by lowering the cost of power, making our environment a better place in which to live…and if all that wasn’t enough, we’re making a profit doing it, so we can pay down the national debt at the same time.
So get out and sell this sucker-and when our Republican friends rise up against this new “socialism”, ask ’em why they’re against jobs, and lower power bills, and why they don’t want the Federal Government paying off its debts…and then just
sit back and enjoy Michael Steele’s and John Boehner’s and Mitch McConnell’s efforts to respond.
…but hey, maybe we could consider this again…
as well as developing a pragmatic energy conservation program.
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p>Having said that, please look at the failure of the “national” solar program in Spain and tread lightly.
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p>PS We are not the same country as we were when the Bonneville Power Administration (BPA) built the dams as enviromentalist put stops and 20 year delays in projects such as the Bonneville Power Administration dams/hydro plants due to concern over anadromous fish… I don’t know all the details but I have heard the Merrimack River dams had to have incredibly expensive “fish dams” installed to allow the fish to get past the dams. AND… I heard the “fish elevators” are not being used and the state is considering either additional multi-million dollar solutions OR destruction of the dams. Environmentalists and NIMBYs (Teddy – Cape wind) have put the stops on progress which would have been “rolled over” when we were more serious about this country.
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…about the fish ladders, so here’s what i can tell you:
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p>the columbia river dams did indeed stop migratory fish cold (it’s not just salmon: there’s also an oceangoing trout called “steelhead” (imagine a 50-pound trout…) that also migrates up and down the rivers.
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p>since the dams had been in place for anywhere from 10 to 30 years by the time we figured out the problem, fish ladders became a “retrofit” item, not just on the columbia, but all across the region…which does make them more expensive.
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p>ever see a fish ladder?
here’s video of one in port hope, ontario:
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p>what happens is that the rushing, colder, water attracts the fish, and they start jumping through the “weirs” until they come out the other side…and all of this is a reasonable imitation of a mountain stream, as far as the fish are concerned.
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p>there is an additional issue: water temperature. salmon require cold water, and dams can create shallow pools of warmer water behind the dam (this because silt accumulates behind dams. without regular dredging the silt fills in the reservoir). if there is no power production from a dam, and it’s creating a warm water problem…there has been a lot of effort to tear those dams down.
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p>with windmills i suspect it’s going to be birds that are impacted, but there is data to suggest this could be a relatively small problem.
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p>the fact that windmills pay money to the person that allows them to be sited on their land has helped to overcome that “nimby” thing, but problems related to the effort to ramp up wind production in mexico suggests caution is appropriate.
as a matter of fact I feel a little bit like these fish, so happy to see some cold facts and a cool idea that might save the economy and get us off fossil fuels I’ll jump at anything.
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p>There are smarter, better informed people than me reading this diary, who will question the facts and the idea, which is good because, like I said, I’m like those dumb but eager fish.
..for the same reasons–but then again, that’s why i like “open source” denmocracy.
Spain’s experience with solar power highlights the bad economics of employing renewable power on a large scale. Spain’s solar power is twelve times the cost of fossil fuel power. The creation of each new green job costs $750,000.
there’s no source there. Not even close. Furthermore, there’s no way to follow the links back to the source.
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p>You’ve added even more mud to the water with your second and third sentences, which are distinctly not what the reason article wrote, which are likely not what climatewire wrote, which is likely not what their source wrote, etc.
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p>In short, I’m not saying you’re claim is wrong, but you’ve provided no evidence that you’re right either.
Here are the quotes…
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p>Climatewire: “Prices charged for solar power were 12 times higher than those for fossil fuel electricity.”
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p>Reason: “Earlier studies found that it cost nearly $750,000 to create each new green job in Spain’s renewable energy sector.”
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p>For the Climatewire numbers, getting the original text now requires a subscription, so I can’t find you the source(sorry).
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p>For the $750,000 number, you had to follow a couple of links at Reason, but the source was there.
“Twelve times the cost” is in fact different than “prices charged were…” Furthermore, without details, it’s impossible to know what the time window considered was, etc. Were the fossil fuel power plants already paid off? Were they grandfathered like those in tUSA, and therefore not required to meet certain environmental considerations? Is this supply, supply+delivery+fees, resulting in a very different ratio? We don’t know — the reason article links to climatewire, who links to another general website but not a particular article.
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p>Cost != price. It’s an easy substitution to make, but it generally doesn’t mean the same thing… and there’s no way for me to figure out what the real story is because climatewire breaks the citation link.
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p>
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p>”nearly” != “”. The quote, furthermore, is that “The study calculates that since 2000 Spain spent e571,138 to create each “green job”, including subsidies of more than e1 million per wind industry job.” Here’s the thing: if the average is under $750k and the wind jobs were over $1000k, that means that the non-wind green jobs were even further under $750k. In fact, page 35 has the results: mini-hydro were about 50% of wind, and solar 70% of wind. So solar, in fact, cost about $500k in Spain.
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p>The footnote on page 35 of the document lists how they came up with the number. The folks doing this study came up with 66,000 jobs, of which 53,000 were permanent. Did they count ’em? Nope. They used an economic model so far as I can tell, and that model has obviously not been robustly tested with data in this sector, since it is so new. The breakdown of jobs within the sector — they used an ISTAS study which, it appears, is not based on this particular program but just has the estimated number of jobs per kW of production capacity or somesuch.
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p>Most importantly, “At this point it has to be stated that it is a usual practice to include the complete productive chain of renewable production of electricity and compare the figures with the jobs created by the energy sector just at the energy companies. For this, see, for example, Asociación Empresarial Eólica, Estudio Macroeconómico del Sector Eólico en España, p. 33, footnote 7.” Did they include the supply chain? Based on this quote, I have no idea. If they didn’t, then they’ve grossly underreported the number of jobs.
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p>All of this though is as if they paid to dig holes and then fill them back up. It ignores that green jobs is a side effect of building an asset which creates positive returns — none of that was included in the table. They simply looked at the price tag of the project, calculated how many jobs, and divided. That’s a dumb way to do it. It doesn’t make any sense. For example, Toyota has a $1.3B factory in Mississippi, with 2000 workers. Under the report’s metric, that means that each job cost $650,000. See how easy and foolish these numbers are?
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p>So this is how the Internet fosters nonsense. You get a few layers of not-quite-exact-quotes, and the end result isn’t the same as the original, because all of the details have been obscured or altered. In the case of the “12 times” quote, the details are entirely obscured, but even the two layers which is transparent suggest different meanings. The price-per-job metric is just a dopey number — not only is it possibly not-even-close to the correct number, but it’s an aggregate which can be broken out, and, most importantly, it doesn’t tell us anything as the Toyota Mississippi plant number shows.*
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p>But this is what happens — it’s easy to almost-correctly-quote from a website with a clear agenda, who is citing from a report which may or may not be publicly available, who’s fine print offers up an error bar range which could be over 100%, and who’s making a comparison between oranges and candy canes that isn’t very useful in the first place. You get to make a pithy quote in 2 minutes which changes the perception of reality if unchecked, and it takes me 30 minutes to do the homework to show that your quotes aren’t really very useful at best, misleading at worst.
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p> * Lets you think I went shopping for that number, I went through Ford’s plants first and couldn’t find any numbers for newer factories, then went through half of Toyota before I found that number.
That one’s gonna leave a mark.
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p>A superb rebuttal, stomv.
…and i have to finish it tonight, so i very much appreciate your working this question…and i appreciate even more that it was done so well.
I think it’s pretty obvious that I didn’t mislead anyone.
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p>The number regarding the cost of electricity is lacking a source – a fact I admitted (and apologized for) in my last post – feel free to disregard it.
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p>Yes, the “nearly $750,000” figure is e571,138.
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p>You’re right, a high price-per-job number is not necessarily a bad thing. In modern high-tech industry, it may simply be an indication of a high degree of automation. In the case of a car plant, the product is a good car made at a good price. But in the case of solar power, the product is very expensive electricity.
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p>Spainish Solar is not the exception. Europe is finding that green energy is generally expensive. This includes Germany, which pioneered public subsidies for green power: “In this article , we argue that German’s principal mechanism of supporting renewable technologies through feed-in tariffs, in fact, imposes high costs without any of the alleged positive impacts on emissions reductions, employment, energy security, or technological innovation.”
it’s because nobody took what you wrote with anything more than a grain of salt.
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p>shows that you don’t even understand the product. The product is not very expensive electricity. The product is nearly-zero-emissions electricity which is almost perfectly positively correlated with the demand curve, is distributable, silent, doesn’t contribute to the costly medical bills related to lungs and heart, nearly-zero-operating cost electricity. Those other bits matter, and are reasons to pay more. Now, did Spain pay the right amount? That’s a good question, and worth discussing. But, to merely call it “very expensive electricity” suggests that you don’t really understand what it is that they bought.
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p>But that’s not the important bit. The big picture is that after calling it out, you admit that the first of two items is effectively sourceless, and the second one is not necessarily a bad thing.
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p>Then why did you post either of them in the first place?!
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p>Look, I downright love it when folks take a position which is contrary to the diary. It fosters dialogue, understanding, study, all the good stuff. I would have never read that Spanish study had you not contributed. But you’ve got to do it in good faith. You’ve backpedaled on both quotes… suggesting that they weren’t really well thought out to begin with. To your credit, you did link reason, which was helpful. I just think that if you’re going to be pithy with an argument against the diary’s thesis, it better either (a) appeal to something other than science or numbers, or (b) be airtight correct. Yours was neither.
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p>The intent wasn’t a “smackdown” and my frustration is venting toward your one post when really it’s the result of an awful lot of posts made by a variety of posters. It’s also probably the result of one more maroon citing a seasonally cool day as evidence that Global Warming is a hoax, or claiming that evolution is “just a theory”. So, I apologize if I’m coming off as harsh — that’s not really my intention.
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p>Ok, because one of my facts can’t be traced to it’s ultimate source, I’m somehow acting in bad faith? Look, I got the fact from a source I trust – it happens that it can’t be traced to the ultimate source. I should have checked this first. I didn’t. It’s embarrassing, but I’ve now addressed it for the third time because it’s a far less egregious offense than the deceit you accuse me of.
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p>If I wanted to play that game, I would have suggested you were a liar when you claimed there was no source for the $750,000 I cited.
just not in good faith. This isn’t picking nits… there’s a huge middle between acting in good faith and acting in bad faith. From my perspective, that’s where you were when you posted pithy quotes which don’t really stand up well to scrutiny. Had you acted in good faith, you wouldn’t have made those quotes without looking deeper yourself.
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p>You’ve backpedaled away from both quotes. Why is that? It’s because, upon further review, you’ve agreed that they just don’t hold up well to scrutiny.
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p>I didn’t accuse you of deceit, or of acting in bad faith.
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p>Furthermore, had you called me a liar, you’d have been wrong… there was no source for one of the two quotes.
You claimed there were no sources for both of my points – you were only right about one. I cited two facts, one of which lacked a traceable source. We were both mistaken on one of two points. By your calculus, neither of us were acting in good faith. Your aspersions are silly.
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p>As to my “backpedaling” on the other point – I still believe that clean energy is not quite the jobs program its cracked up to be. What you’re left with is very expensive (albeit clean) energy. The German study I linked to came to the same conclusion. Your comparison to a car plant was a good point that I was happy to point out and expand upon.
I didn’t write that you were a person of medium faith. I wrote that you didn’t act in good faith. Acting is not the same as being. Why do you continuously change my words?
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p>Erm, no. One person was mistaken on two points. Here’s what I wrote:
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p>Note that the first two words, a link are right on. The link links to reason.
the next four words, to a blog post, refers to the reason blog.
Now, the next six: which links to an aggregator site. The reason blog has multiple links, but this is singluar. Why? Because it refers to one of the links. Not all of ’em. I never write that two or more than one or multiple or plural links are dead, just this singular one.
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p>I claimed that (at least) one link was a dead end. That’s what I meant to claim. It’s also exactly right. You’ve yet again changed my words to mean something else, just like the words you didn’t-quite-quote from reason in the first place. Why do you keep doing that? This isn’t a telephone conversation — the words are right there. If you can’t be bothered to type what you see, just use the copy and paste functions your browser and/or operating system provide.
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p>I’m just teasing you – I’ve never heard of this “huge middle” between good faith and bad faith. It struck me as a novel idea deserving its own term.
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p>Your claims that “there’s no source there” and “you’ve provided no evidence that you’re right” seemed to deny the existence of any source on my part. That’s why I pointed out the source in my response, which you acknowledged in your next post. I think my reading of what you said is pretty commonsense, but I’ll accept your correction.
…but the basic question is whether we can deliver renewables cheaper than what we use now (coal and natural gas), and a lot of the estimates i’ve seen suggest that’s not only a reasonable assumption, but a current reality for a variety of operators.
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p>i live within the bpa service area, and i know for an absolute fact that the concept of providing a “public power option” has been working for more than 75 years, which suggests this model can be applied on a larger scale.
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p>it’s also a fact that the pacific northwest, which is running on lots of renewable power, has retail electricity rates that are 50% of what you’re paying in mass.
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p>so while i will look into spain, i’d encourage you to look into the bpa model, which is working well, and has been for a long, long, time.
better than throwing billions of taxpayer dollars at private sector corporate greed schemes (ex. Cape Wind). If we just subsidize private sector facilites, we will certainly be gouged in pricing. The motivation will always be how much can they suck from consumers. They will always have the advantage to charge more than is necessary because energy is a necessity, not discretionary.
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p>After reviewing as much as I could find about the negotiation between Cape Wind and National Grid on pricing(couldn’t find much) it seems to me that the rationale for pricing was to match it to future fuel costs:
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p>I also read somewhere that the high cost is based on the value of what we will save in externalities. Of course, those savings will now be usurped into corporate profits, instead of being passed on to consumers.
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p>And by the way, the $1.59 per month is based on 500 kwh of usage, which is reportedly the average residential customers usage. I find that really hard to believe. They must mean per person, not per household. It think that is a very misleading statement. I also think that clean energy should be a money saving proposition for consumers, not an opportunity for gouging by powerful suppliers of a product that is as important a basic need as food, housing and healthcare.
…how anyone ends up better off trading “big coal” for “big wind”, and i can tell you from personal experience that having a wholesale “public option” makes a huge difference in pricing for the retail consumer–and for business, too.
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p>to take it even further, i see all kinds of estimates–including the one linked to the word “appear” in the story above–that suggest today’s wind technology, a tall tower and big blades, and a steady wind of about 12 mph or so creates current for about 2 cents per kwh cheaper than coal…and if the cost of generation is going down, why should customers be paying more?
You mean you’re not willing to pay an extra $1.59/month for a cleaner environment?!
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p>I’m kind of a scrooge. But $1.59/month is nothing. I have no problem with big corporations doing work that makes my life better. Maybe government-owned windmills would be better. Actually, they probably would. There are strong arguments for having all utilities be government-owned because they function more efficiently as monopolies. But in the real world, corporate wind is far superior on environmental grounds to corporate coal. Or mom and pop coal. Or government coal. Or any kind of coal. Opposing wind power because it’s corporate owned and costs a slight amount more is insane.
I am willing to pay $1.59 for a cleaner environment. But, I’m not paying $1.59 more for a cleaner environmet. I’m paying $1.59 more to line the pockets of corporate manipulators.
given current pricing of 8.8 cents for generation charges on latest NStar bill (with high point in last couple of years being 12.7 cents). Given that CW pricing starts out @ 21 cents with guaranteed escalators in place, in order for that $1.59 impact to work power purchased is going to have to be a pretty trivial amount of NStar’s total purchase.
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p>Given goal of 15% utilization from clean energy and assuming high point pricing is constant, would get
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p>((15% .21 + 85% 12.7) – .127) * 500 kwh = $6.23
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p>Assuming current level, impact is
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p>((15% .21 + 85% .088) – .088) * 500 kwh = $9.15
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p>Now these are obviously not huge numbers, but that 500 kwh is about half of our average usage. Appears from math that the way you get trivial impact on cost is to assume radically higher regular energy costs as well.
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p>Can recall Gordon being on Finneran’s WRKO show a couple of years ago and him bandying about cost for Cape Wind being comparable to then charges of 12 cents for conventional; things sure as heck have changed on his pricing in a short period of time.
NGrid will be buying about 3% of their total supply from Cape Wind, not 15% as your numbers show.
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p>And frankly, if you’re using 1 MWh a month, you’re using too much. The average is 635 kWh (source: EIA. note: link is an xls file). That’s mean, not median which I’m sure is lower, since this is a one-tailed distribution.
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p>So, to redo your crude but reasonable math:
((3% .21 + 97% .127) – .127) * 500 kWh = $1.24
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p>Assuming current level, impact is
((3% .21 + 97% .088) – .088) * 500 kWh = $1.83
what will be the pricing on the remaining 12% of clean energy that will have to be purchased to meet the 15% goal?
isn’t for another 10 years or so. I have no Earthly idea what the prices for renewable energy will look like in 10 years.
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p>I can say that there are two competing factors:
1. Prices are going down as technology improves
2. The marginal value of the next wind site will generally be lower than the current site. This is not the case for solar, because saturation is so low that all sites remaining are equally optimal to within a few percent.
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p>Now, what will coal do? Depends on cap-and-trade, etc. What will natural gas do? Depends on the price of coal and oil, since much natural gas usage in tUSA is a replacement fuel. If fossil fuel prices go upward, this may result in a lower total price than 10 years from now. Then there’s nuclear… will any nuclear power be built in the NE? Will Vermont’s reactor come off line?
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p>None of this has to do with Cape Wind, per se and the calculations above, which apply explicitly to CW and NGrid. I think National Grid was smart to lock in the CW project for a long term contract, because it gives them RPS compliance for the next few years, locks in a price which won’t fluctuate with fossil fuel prices or regulations, and diversifies their supply portfolio.
…i keep seeing stories like this one that suggest the capital cost of nuke construction is making them unaffordable.
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p>my guess is that a lot of this, in addition to increases in materials and labor costs, is related to how much liability the taxpayer is willing to assume.
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p>i tend to be biased against new nukes based on these costs and subsidies, but i’m curious what other people are thinking about all this.
I’ve seen engineers claim that building multiple identical reactors would lower their cost dramatically. It occurs to me that it also both (a) reduces the chance of a single problem but simultaneously (b) ratchets up the cost if a single problem is found because each reactor would face the same problem.
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p>My understanding is that the Feds have to subsidize an awful lot of nuke operation. The Feds insure against major disaster because, despite no major accidents (though plenty of minor ones) in the last few decades, private insurers won’t touch them. Funny how the free market republicans pushing nuclear think that the Feds should enter the business of insuring the uninsurable.
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p>In addition to the insurance problem, there’s the fuel problem. Nuclear material involves national security considerations, so the Feds have to be involved in procurement, too. That costs money.
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p>Then, of course, there’s the waste. The Feds have spent plenty of money not using Nevada as a waste site. Now, keep in mind that the thing about roads and train tracks is that they’re designed to connect cities. So, transporting the waste would require running it within 100 miles of the vast majority of all Americans. Money and yuck.
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p>Personally, I’m sort of indifferent. Nuclear is so much worse than renewable, but it doesn’t contribute substantially to climate change nor air pollution. If somebody offered to replace entire coal fired power plants with nuclear plants, I’d take the trade. But, because renewable is technically so far superior to nuclear, I’d prefer if we rolled it out hard and heavy a la Spain or Germany first and see how far we get. The key is understanding (as one poster refuses to acknowledge) that the reason for doing it isn’t to generate electricity. The reason for doing it is all of those externalities — eliminating negatives and gaining positives.
Here’s how:
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p>1. Don’t. Start by replacing the generation capacity for the 11 coal fired power plants owned by the TVA*. Six of ’em are among the 86 dirtiest coal fired power plants w.r.t. SOx emissions too: 20th dirtiest: Johnsonville, TN; 68th: John Sevier, TN; 70th: Bull Run, TN; 82th: Kingston, TN; 72th: Paradise, KY; 84th: Colbert, AL.
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p>To replace those 11 or 12 coal fired power plants, you need to come up with 98,919 GWh of power.
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p>There’s a project called Topaz about 100 miles from Los Angeles which will build a 550 MW solar photovoltaic power plant at a cost of over $1 billion. It will generate about 1,100 GWh per year. So even if KY had the sunshine of Los Angeles (it doesn’t, but let’s be optimistic) then Uncle Sam and the TVA could build about 100 of these Topaz projects at a cost of about $100B, all to turn off 12 coal fired power plants. Now the upshot is that the price of sunshine is $0, so the cost to run the plants is lower than a coal plant to be sure. The flip side is that there are folks working in TN, KY, etc mining coal — how many are building PV? Seems to me that if you wanted to do this, the very first thing you do is get a solar cell manufacturing plant located in TN providing mo’ better jobs than what would be lost due to the reduction in demand for coal. That’s not too hard, but it’s really politically necessary.
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p>So, do this project. Replace 100% of TVA coal with TVA solar. It’ll cost about $100B in capital, but will lower their operating costs. It will also reduce the total coal production in tUSA by 5%. 5%. 5%.
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p>Even this is fast and loose; it assumes that Tennessee has a power profile which allows solar to replace coal 1-for-1. That’s unlikely; daytime winter demand may be high enough that the solar replacement may not be able to keep up. In that case, you’re going to need substantial peaking capacity in natural gas, which assumes (a) that the supply is available there, and (b) ain’t free, and (c) ‘clean burning’ natural gas still emits about 65% of the CO_2 that coal does per kWh generated. Combine the reality that TN sun isn’t as productive as that in L.A. and the need for more peaking, and it might even be a $200B project.
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p>The point: this is tougher and more expensive than you’ve suggested. Worth doing in my opinion, but tough. And, you’ve only cut down 5% of the coal fired power plants, potentially replacing at least some of it with not-carbon-neutral natural gas.
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p>P.S. Nuclear is also an option for TVA — in fact, they’re working on a nuclear power plant right now in Scottsboro AL.
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p>2. Make coal more expensive relative to natural gas and renewables. The most direct way to do this is to charge for the carbon, using either a carbon tax or cap-and-trade. There are other methods that would help too though. Crank up mining safety, which will drive up cost a tad. Prohibit mountaintop removal mining. Require superfund-esque contributions from coal mining and coal fired power plants to help pay for future cleanup costs. Take over (eminent domain) some rail lines and use them for transporting people during prime time, forcing coal shipments to be off-peak, thereby driving up the price.
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p>So long as the power plants are grandfatherered and coal is cheaper than gas, it’s going to be a long time before you replace privately owned coal fired power plants by building renewable. You’ll offset natural gas, which is something, but not as desirable as replacing coal.
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p> * It’s 11 or 12; I’ve seen both numbers in multiple places. I suspect that 1 of the 12 is a special legal agreement like a co-ownership or somesuch.
this one idea is never going to replace all coal…but you could start with a more modest number, and still do it profitably, and stimulate jobs in the process…so to me, this is really more of a good start than a complete solution.
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p>could we make components in tennessee or kentucky? oh, yeah…but i would question whether the “industrial goal” should be to replace coal jobs with green jobs.
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p>another view might be that you want to prioritize job creation in the locales with the highest unemployment rates in the usa, which might have you looking to places like michigan or ohio as places that you might want to “seed” job creation most aggressively.
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p>i would not want to give the impression that this is intended to drive out private capital or ownership: in fact, the bpa sells to investor-owned and public utilities equally, which benefits ratepayers in both camps.
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p>i would also suggest that private capital may well be the primary source of “distributed” generation investment, since so many homeowners are likely to see an economic incentive in owning generation capacity on the roof.
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p>finally, this will be tough, and it will take a long view, but it really seems as though we could make stimulus profitable, which is a happy change from much of our economic news.
Maybe you could set up one of these windfarms as a private investment scheme and attract capital that way. If it’s such a great deal you can do it.
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p>Otherwise you just sound like somebody who never had a viable business idea in his life. Maybe similar business failures in government will team up with you to use tax money to finance your scheme.
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p>That’s how a group of people who never proved themselves in business can get the money to try out some ideas so crazy they just might work but probably won’t.
and either you knew that and hope we didn’t, or you’re being particularly obtuse while claiming that the diarist is obtuse.
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p>The public investment goal is not to maximize returns. It is instead to do a variety of things — reduce unemployment, reduce detrimental externalities associated with fossil fuel, reduce long term electricity rates by reducing marginal cost, stimulate manufacturing and green job growth in America, etc etc. All of those things are valuable, but they won’t show up on the T tables for the project.
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p>Just like they didn’t with the TVA.
…there is a lot of benefit here, beyond the directly observable roi.
When you claim it will make a return for the taxpayers then you are making a business claim.
The government is not a business. It doesn’t make business claims. It makes governmental claims. Public goods are part of the returns. An increase in employment drives up tax receipts. Cutting fossil fuel use reduces air pollution — and therefore disease and health costs. Reducing long term electricity rates can show up on the balance sheet, if you extend the returns outward 50 years, something no business would ever do. Stimulating manufacturing and green jobs has long term national security implications. These things all have value to the taxpayers, though they’re not in the form of countable bucks. That doesn’t mean it’s not a return.
…if you look at the bpa you can see both types of “profits”: the bpa and the corps paid off the generation assets long ago and power is today sold for cost, which means lower rates (again, we pay 50% of what you pay for electric power), which is money in your wallet…and you can also measure the impact on business, indirectly.
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p>in this case, since wind power is a profitable business, we could combine profit and these goals, which gives us an “indirect taxation” means of getting after debt and lowering the impact of debt service on the federal budget.
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p>do the feds run businesses?
absolutely.
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p>start with the mms, who brings in a reported $6 billion or so annually and work your way through the national parks and forests and grazing rights and radio spectrum sales all the way down to the bureau of engraving and printing’s money factory store site and the postal service.
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p>are they all run well?
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p>nope…but it’s our job to fix that as best we can.
…already well within the purview of private capital, and they are investing: puget sound energy in the nothwest, florida power and light in iowa…and warren buffet also working to get in the game, just to offer three quick examples.