Wednesday, July 31, 2013

Status Quo Coal vs. Distributed Wind and Solar

If you’re a proponent of distributed scale wind and solar, you frequently hear fossil fuel pundits repeat claims that distributed renewables are not cost effective and heavily subsidized.  With that in mind, let’s spend a little more time on my last post on the government incentives afforded to coal. I didn’t dwell much on the fact that the government and tax payers pick up the health and pollution costs of coal.  However, David Roberts has been thoroughly covering this issue.  A quote - The standards that govern combustion waste from coal plants are 31 years old; EPA has said repeatedly that they are no longer sufficient to protect public health. And even those standards are barely enforced. Of the 386 coal plants these groups investigated, 70 percent “are allowed to dump unlimited amounts of arsenic, boron, cadmium, mercury, and selenium into public waters, in violation of the Clean Water Act.” Only 63 percent are required to even track how much they are dumping. And almost half the plants are operating with expired Clean Water Act permits.
This is a textbook case of pollution externalities: The coal plants are saving money by polluting public water and degrading public health. The public pays the health and environmental costs and the plant owners sell “cheap power.”
I was going to also mention rail subsidies for coal transportation, and several other items, but Roberts has it covered. Another quote - Electricity from coal imposes more damages on the U.S. economy than the electricity is worth.  Individuals with an unquenchable thirst for more info on this subject will find plenty to read here.

Despite all this help from the U.S. tax payers, utilities seem to be having a lot of problems staying within their budgets on new coal plant construction.  

Things aren’t much better for the nuclear folks. These plants also receive heavy direct federal subsidies, in addition to the fact that our government (tax payers) handles the cost of storing nuclear waste and liability in case of an accident at nuke plants.
Anyway, it looks as though the verdict is in that established(entrenched) energy companies receive more federal help than renewables, but that fact will continue to be drowned out for the foreseeable future by well-funded industry lobbyists and their PR firms. 

What’s that? You say you don’t like cost over runs and would like to reward companies that innovate, offer choice, and keep costs in line?   A lot of utility customers in this country are served by franchised monopolies, so those folks are limited on their options, including generating their own electricity. A company called NRG, one of the largest electric providers in the U.S. wants to help. Their CEO has been touting an “end run” strategy as this blog post at RMI covers. As I mentioned in an earlier post, NRG wants to shake things up. A quote from the RMI post -  NRG’s plan hinges on a belief that if a utility can’t prove that it offers more value to its customers, those customers will leave.

So, our utility friends probably feel like they’re living out their version of the Chinese curse “may he live in interesting times”. However, it seems like the only strategy they have currently is to delay change as long as possible (PDF, also linked in the RMI post).  It looks like the utility industry will start to undergo some of the same changes we have seen in the telecom industry.   While there have been bumps in the road for sure in that industry transition, Stephen Lacey correctly points out that the telecom industry offers lessons for utilities and policy makers as we start to reshape the utility industry. Ironically, where rural folks have sometimes fared poorly under the telecom digital divide, they may have much more options with distributed generation. As Smart Grid News observes, electric customers will expect more choices from their electric providers.” They've also been bombarded by overwhelming choice in almost all other aspect of their lives – including areas such as television and telephones, which only 30 years ago were almost as restricted as electric power.”  Though not mentioned, a lot of those customers are also going to want to generate their own electricity. 

So, in closing, we have started an interesting journey. I think electric customers and climate hawks alike are really going to like the changes coming.  Some of the vested interests will fight it with everything they have, though that only seems like a temporary option.  A quote I found at this link comes to mind -   
“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
1876, Western Union internal memo    
Or as James Sherwood mentions in the RMI post – “Expect more innovation, and enjoy the footrace—the last one to innovate will be extinct.”

Monday, July 22, 2013

The Summer Vacation Anomaly

It’s been quite a while since the last post. A combination of improved weather to catch up on farming activities, taking some time off, and a couple repair projects are to blame. Before rolling up our sleeves on the MidAmerican property tax issue, let’s try to get back into the swing of things…

Since the blog is taking its summer vacation, tonight we start off with beer. My interweb surfing found an article by Deena Shanker about how sustainable the liquor you enjoy is, including the generated co2 estimate of your favorite beverage. Since I am enjoying an ale from my solar powered fridge, I’ll include a link to the brewer, Sierra Nevada.  I have been a fan of their product line for years( free endorsement) , but was very pleased when a friend related to me 2 years back that the brewery generates their own electricity onsite (more free endorsement).  As you can see from their sustainability page, the brewery is powered by a massive solar array, along with 4 fuel cells that also capture heat for onsite use. The webpage has nifty real time output meters of the fuel cells and solar array. The system is grid tied, but the brewery evidently is also able to “island”, and operate independent of the grid. My friend tells me that a winter storm caused most of Chico CA to lose electricity, while the brewery continued making their great domestic beer. Kind of makes you actually want to say - Merica!     

In the world of coal, I have long ago stopped keeping track of people with ties to that industry claiming renewable energy receives market distorting subsidies. This summer, a number of articles have surfaced that makes me wonder when king coal will give up their long embedded tax payer funded incentives to lead by example. Enviros always point out that coal price doesn’t reflect the environmental and health impacts the fuel causes, In short, the tax payer picks up the tab.  Since that point hasn’t moved public opinion to support stable renewable energy policy in the U.S. , lets continue with some items I found recently. The first -   Coal companies routinely win ‘competitive bids’ against no competition - prompted a review by the GAO since the government controls a lot of land with coal under it. A quote from the first link “The government’s longtime practice of auctioning coal mining rights to a single bidder may have cost taxpayers as much as $28.9 billion over the past 30 years.”   
 Also , the article links to  David Roberts @Grist, who also “wrote about a similarly sweet deal in March, in which Peabody — the sole bidder on a large seam — paid the government $1.11 per ton for coal they could sell to China at $123 a ton.   
A lot of my electric provider’s generation comes from the Powder River basin. Their power is some of the highest priced electricity in Iowa, I wonder what they would charge if they were paying full market value. Since economic logic seems to be suspended when we jump on the king coal crazy train , why don’t our elected officials and policy advocates head us in a better direction?  David Roberts also has advice for climate hawks and renewable energy backers in   Why coal has a hit on “America’s Got Talent”.  The environmental community hasn’t moved public opinon enough for decent renewable energy policy in “merica”, and David offers quotes like the following to stimulate some thought -   “Democrats promise the working class policies that will help them adapt to change — education and job training and a safety net. Republicans promise to stand athwart history and prevent further losses. It’s not about the policies, it’s about the stories, stories of a nobler past and the interlopers degrading or destroying it. Such stories have always had great power.
Democrats, or at least liberals, and especially climate hawks, are fated to forever be pushing the new, promising the future, projecting what could be. It’s an intrinsically weaker position and highlights the great need for creativity and storytelling.” 

I’ve tried to tell the Iowa and Midwest climate hawks that encouraging widespread local ownership in wind and solar is the way to build support for climate policy, so far, with little success. As Marty McFly said in BACK TO THE FUTURE – “I guess you guys aren’t ready for that yet, but your kids are gonna love it!”

Roberts also finishes by quoting Machiavelli , who offered advice for us all. 

“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”