What, Exactly, Will We Learn from Those Experimental Wind Turbines?

Earlier this month, Dominion Energy announced that it had commenced construction of the $300 million Coastal Virginia Offshore Wind (CVOW) project, which entails building two experimental wind turbines and a half-mile electrical conduit to connect them to the electric grid. Construction of the two turbines at such a cost cannot be justified by the paltry amount of electricity they will generate by themselves. Rather, according to Dominion, the demonstration project paves the way for a large-scale exploitation of wind power off Virginia Beach. If Dominion proceeds with commercial-scale development, the $1.1 billion project will generate 2,000 megawatts of zero-carbon energy, enough to power 500,000 homes.

“As the first deployment of commercial-scale offshore wind turbines in federal waters,” said Governor Ralph Northam in a press release at the time, “I am thrilled that Virginia’s project will help determine best practices for future offshore wind construction along the East Coast.”

The question has arisen in this blog: Why the need for the two experimental turbines? Europeans have been extracting wind power from turbines in the North Sea, which is known for its powerful storms. Haven’t they already demonstrated the ability of wind turbines to hold up under extreme weather conditions? What can we learn, and can we learn it in time to inform the construction of the larger project?

I posed several questions to Dominion regarding the necessity of the two experimental turbines. Spokesman Rayhan Daudani responded as follows:

What “best practices” and/or technologies are being tested?

You may want to check with the Governor’s office to see what best practices the Governor was referring to [in his press release]. However, since Dominion Energy is the first, and currently only, permitted wind project in federal waters, it established precedence for future offshore wind projects permitted by the Bureau of Ocean Energy Management. This includes establishment of processes / procedures for the permitting, design installation, and commissioning of the first turbines in federal waters

How long will it take to yield meaningful results that can be applied to future wind turbines off the Virginia coast?

We are learning each day and our results are ongoing. Specific to the wind resource, we expect the turbines to be in operation in 2020. One-to-two years of data will help us confirm expected capacity factors and other variables we can apply to future wind turbines.

Is the building of additional turbines off the Virginia coast contingent upon obtaining positive results from the experimental turbines?

These turbines will provide valuable information for the commercial wind energy lease area in many ways which are expected to be positive, all of which will inform our path forward on future installations. This includes information about the wind resource, permitting process, construction, installation and the operations experience.

Are other states dealing with comparable issues, or are the questions to be answered by the experimental turbines unique to Virginia conditions?

There are unique questions to be answered by these turbines, such as site specific wind data and installation criteria, which varies from location to location. Each state or project deals with these differently. As previously mentioned, the BOEM experience will apply to all projects – and we have a front row seat in helping shape how projects will define and implement the requirements.

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58 responses to “What, Exactly, Will We Learn from Those Experimental Wind Turbines?

  1. I am glad you are raising the question about why Dominion needs to go through an “experimental” phase with offshore wind. All one has to do is buy a plane ticket to the Netherlands or Denmark to find out. I did not find Dominion’s responses very useful. As such, it seems that the utility is using this “experimental” ruse as a way to slow down renewable energy as it would disrupt their plans.

  2. We learned how to spell “boondoggle.”

  3. I seem to recall several years ago when first conceived the project was looking how big 5MW? each turbine could be, given they want the biggest possible turbine, but we do have hurricanes to worry about.

    • TBill – your comment jives completely with my recollection – namely that this off shore Dominion project was truly experimental, indeed revolutionary – the development of a radically new wind turbine far bigger and more advanced than any built before, using radically new composite materials married to highly efficient and flexible blade design, the result of a US government funded research program undertaken by a consortium of universities, including UVa. This information came out several years ago first from UVa., so its currently may be out of date, and UVA’s information (propaganda) department cannot be trusted in any case. But I have never read a retraction, although I have not looked into the matter recently to determine its currency.

      PS – the new turbines, given their new design and composite materials, and flexibility were claimed to withstand hurricanes.

  4. On our trip west, we have seen thousands of giant wind turbines and ironically in the Pacific Northwest where hydro-power has for decades generated a large percent of their power and the thought is that surely at some point, some of them have encountered storms or even tornados.

    so here’s some more info to add to the discussion:

    https://www.energy.gov/eere/articles/how-do-wind-turbines-survive-severe-storms

    the bottom line is that like any other man-built infrastructure from roads, to bridges, to cell towers – all can be – and are damaged/destroyed by storms so why do we feel it’s “different” or should be different with wind turbines?

    it just seems like one excuse after another when it comes to solar and wind to hold them to a different standard……

    • Keep in mind off-shore wind power is whole new ballgame, re: much higher cost and harder structural requirements. Anything to reduce cost would be important.

      Part of the issue is communication from the Liberals. Liberals feel, to promote Green energy, we need to misldead the public by telling a little “white lie” that offshore wind is technical slam dunk and is extremely cheap, when if fact, offshore wind is extremely expensive, probably comparable to nuclear in cost. So cost reduction is important R&D objective – but we cannot explain that to the public for fear the public might start to grasp the high-cost truth about offshore wind.

      • I agree with you and Larry, renewables are held to a different standard for political reasons that should be irrelevant. But as outlined below, offshore wind power has been proven economical in Europe. “Comparable to nuclear costs”? Not even close. More like comparable to nat. gas generation, on a life cycle cost amortization basis.

      • Yet, surprise, surprise, “A majority of lawmakers in the Netherlands want to build more nuclear plants, and Dilan Yesilgoz, the chairperson of the climate and energy committee for the VVD, the second-largest political party in the Netherlands, recently passed legislation that could open the door to more nuclear.”

        Wonder why? More on that tomorrow.

      • For more perspective on what is happening in real world, and how markets are trying to adjust to those realities, if and only if they have the truth and flexibility they need for one example, consider this:

        “Since 2016, pro-nuclear advocates have won major victories saving or expanding nuclear in New York, Illinois, South Korea, Taiwan, New Jersey, Connecticut.

        A majority of lawmakers in the Netherlands want to build more nuclear plants, and Dilan Yesilgoz, the chairperson of the climate and energy committee for the VVD, the second-largest political party in the Netherlands, recently passed legislation that could open the door to more nuclear.

        Voters in Taiwan will likely to elect a new, pro-nuclear president next January, and pass pro-nuclear ballot initiatives, which would re-start closed nuclear power plants.

        In South Korea, a public opinion survey by Gallup found that 70% of voters now oppose the government’s phase-out of nuclear energy, which has increased electricity prices, air pollution, and the country’s use of coal and natural gas.

        Everywhere in the world, the public and lawmakers express growing concern that their nations will become too dependent on natural gas.

        I testified before the Ohio legislature four times since 2016 and each time found lawmakers worried that, with coal plants closing, their state might become wholly dependent on natural gas.

        “Our goal all along has been to save the nuclear plants, save the jobs but also to keep the cost of energy down for the ratepayer,” Ohio’s governor said.

        The worry is more acute in Asia and Europe, where nations must import their natural gas from abroad.

        When I visited Belgium in February, the leadership of the nation’s largest political party forcefully defended the continued operation of its nuclear plants and declared they were open to building new ones.

        Last month, Belgian energy authorities warned that the country will face electricity shortages if nuclear is phased out in 2025.

        In France, President Emanual Macron last year delayed efforts to phase out nuclear from 2025 to 2035, with a priority on closing coal plants first.

        Politicians and the public increasingly recognize that unreliable renewables like solar panels and industrial wind turbines cannot adequately power modern societies.

        Where Germany used to be held up as a model, it is increasingly viewedas having pursued the wrong approach to energy by phasing out nuclear plants and trying to rely on renewables.

        Germany spends nearly twice as much for electricity that produces 10 times more carbon emissions as French electricity.

        As part of the legislation to save nuclear power, lawmakers in Ohio ended renewable energy and energy efficiency mandates, recognizing that the efficiency programs haven’t been cost-effective while renewables increase the price of electricity.

        And lawmakers increasingly are taking note of the severe impact that industrial wind turbines have on wildlife. Industrial wind turbines today threaten several bird and bat species with extinction.

        Conservationists and birders in Ohio have hotly opposed a proposal to build dozens of turbines on Lake Erie, which is home to dozens of threatened, endangered, and high-conservation value bird species.

        Meanwhile, Britain is moving forward with plans to expand nuclear energy, out of the recognition that wind energy is too unreliable

        Thanks to progress being made building a new nuclear plant at Hinkley, Britain may opt to build more French reactors, known as the EPR. Experts anticipate the cost will be significantly less, thanks to standardization and learning.

        While the replacement of coal with natural gas lowered air pollution in many nations over the last decade, increased use of natural gas resulted in higher emissions in the US and other countries in 2018. Emissions rose over 3% in the US.” End Quote.

        See: https://www.forbes.com/sites/michaelshellenberger/2019/07/24/big-pro-nuclear-victory-in-us-gives-momentum-to-global-nuclear-expansion/

        • Don’t say we didn’t warn you to stay away from the rush of fools into the coming renewable disaster.

          For example, Delingpole: Boris Johnson’s Looming Wind Disaster, charles the moderator / 1 hour ago August 14, 2019

          From Breitbart by James Delingpole 12 Aug 2019

          Boris Johnson’s government is shuffling towards a gigantic cliff edge which has nothing to do with Brexit. The looming disaster can be summed up in one word: renewables.

          The clue came in the form of the widespread power cuts that Britain experienced at the end of last week. A million people were affected, with rail services disrupted and passengers stuck on trains for many hours.

          Quickly the Establishment propaganda machine cranked into gear. This was, a National Grid spokesman told us, a “very, very rare event”. Also, he reassured us — classic distraction technique, this — there was “no malicious intent or cyber-attack involved.”

          OK then. So what did cause this blackout which, as Richard North rightly says here, was a national “disgrace” and “the sort of thing we expect in train-wreck economies such as Venezuela”?

          Well the current official answer is “We don’t know, pending an inquiry.”

          Unofficially, though, it’s bleeding obvious. Britain’s National Grid — and by extension the nation’s electricity supply — has been horribly compromised by the dash for renewable energy. The more unreliables — wind turbines, especially — are added to the grid, the more unstable the system will become.

          Friday’s power cuts, far from being a freak event, are merely a taste of worse to come. That’s because brownouts and blackouts aren’t a bug of electricity systems heavily dependent on renewable energy. They’re a feature.

          And it’s not as though wiser heads haven’t been saying this for years.

          Christopher Booker, for example, writing in 2009, described successive governments embrace of wind energy as “the maddest thing that has happened in our lifetime.”

          He wrote: Let us be clear: Britain is facing an unprecedented crisis. Before long, we will lose 40 per cent of our generating capacity. And unless we come up quickly with an alternative, the lights WILL go out.

          Well on Friday the lights did go out. And the big question now is: will the government try to paper over the cracks or will it turn a crisis into an opportunity?

          Perhaps the best thing about those power cuts is that they couldn’t have come at a more inopportune moment for the renewables industry.

          With Boris Johnson’s administration having foolishly committed itself to Theresa May’s Net Zero carbon emissions by 2050 policy, Big Wind — and its many supporters in the mainstream media — had been positioning itself for a bonanza of new contracts.

          Only the Sunday before last, the Mail on Sunday (bizarrely, because it’s normally quite skeptical on environmental issues) ran a massive puff piece in its business section on the “lobbying offensive” being conducted by the wind industry: Energy firms have launched a lobbying offensive that could result in a new generation of wind turbines being built in rural Britain.

          Executives at major power companies are urging the Government to lift the restrictions which currently block the building of onshore wind farms.

          Their demands could trigger the construction of a swathe of giant turbines as the country battles to meet ambitious targets to slash carbon emissions and to provide the power for electric vehicles.

          If it hadn’t been for Friday’s blackout, they might have got away with it too. But now, if she plays her cards right, Energy Secretary Andrea Leadsom might yet be able to nip their nefarious scheme in the bud …

          For more, see:
          https://wattsupwiththat.com/2019/08/14/delingpole-boris-johnsons-looming-wind-disaster/

  5. No “liberals” do not do that. Conservatives who want to rebut green energy – then blame “liberals” for any shortcomings.

    Geeze, can we articulate a more simple-minded ideology on issues these days?

    There are all kinds of folks who lean left – they are NOT a monolithic herd who only thinks one way – no more than the far-right fools are. There is a full range – and yes… shocking as it may seem, there are those who lean right who support wind and solar and whom calling “liberal” because they support wind/solar seems just silly.

    wind/solar is _not_ a “liberal” concept… and when we say we need to “harden” the Chesapeake Bay Bridge against hurricanes and yes it adds to the cost – it does not mean that “liberals” support it even with the additional costs and Conservatives would oppose it because it’s “too costly”.

    We ALREADY KNOW how storms and violent weather affect wind turbines – that have already been in use for more than a decade – so even though we’re still learning – this is NOT a reason to doubt that it’s viable.

    Wind and Solar are VALUABLE resources that we can and should exploit just like any valuable resource – and we do work around limitations associated with such resources – like we work around limitations for coal and gas and nukes. It’s not about finding reasons to oppose – it’s about finding the best path forward.

    That seems to be a difference between liberals and Conservatives. Liberals want to go forward – don’t let things become reasons to stop and Conservatives tend to want the status quo and oppose change because… well.. it’s change.. and that can’t be good, right? 😉

  6. What is happening in other states puts Dominion’s project in the proper light – a project that benefits Dominion at the expense of the citizens of Virginia.

    First, the wind turbines that Dominion is testing are not “revolutionary … radically new” as Reed suggests (although he does qualify that the information is several years old). Dominion’s test turbines are only 6 MW in capacity, already obsolete for offshore wind use. The wind developers that are bidding fixed price contracts at their own risk are using new turbine designs in the 10 MW range (67% larger than those proposed by Dominion).

    This makes sense, especially in deeper water, such as the area proposed by Dominion. Using larger capacity turbines means that much more electricity can be generated per investment in the bases to support them. This optimizes the investment in an expensive and difficult to construct component of the system.

    A telling comparison is the recent announcement of the award of two offshore wind projects in New York. New York has a goal of 9,000 MW of offshore wind by 2035.

    Ørsted, the company developing the Dominion project, has won the bid to develop 880 MW, 30 miles east of Long Island in federal waters.

    Equinor, the other contract winner, has also acquired a lease in federal waters between two traffic separation lanes in and out of New York Harbor. This is an 818 MW project, providing a total of nearly 1,700 MW by 2024. These are high-quality sites with expected capacity factors of nearly 50%. This compares favorably with the 65% capacity factors Dominion projected for its recent combined cycle plants.

    New Jersey recently inked a deal with Ørsted to build 1,100 MW of offshore wind capacity off of Atlantic City.

    These deals are fixed price contracts for wind energy at less than the average price of energy from gas-fired plants, with no exposure to an increase in the price of gas.

    In an interesting contrast, these developers are not charging $300 million for a test of outdated technology before being willing to commit to a fixed price for the output of their facilities. They are relying on the extensive research and development that they and other European developers have undertaken in order to serve the U.S. market.

    Ørsted is also building a new operations and maintenance center in Port Jefferson, NY to include dockage for a 250-foot service operation vessel. Notice that this is not tax-payer funded as are many of the proposals for the development of wind infrastructure in Virginia.

    The Jones Act is a complication for offshore wind development. Dominion Energy is reportedly building an American flagged vessel to lease to Ørsted. But European developers are considering a combination of jack-up vessels and delivery barges. The European-made equipemnt will never go into a U.S. port. The equipment will be transported across the ocean to offshore staging areas. Then transferred to an installation barge.

    There are many lessons and unanswered questions for Virginia. First and foremost – why are all of the other states entering into fixed price contracts where the price of the energy is constant and the the risk is borne by the developers, when Virginia is awarding this development to a utility where cost overruns are the responsibility of ratepayers and a guaranteed profit of about twice the cost of construction is given to the utility?

    Ørsted’s project will require an extremely long transmission cable.European firms have made enormous strides in reducing the cost of these cables. What was once a project-killing circumstance five years ago has now been overcome. Does Dominion want to charge its customers to learn what others already know how to do?

    Offshore wind holds a good deal of promise, unless it is approached as Virginia intends to do.

    • Good overview, Tom. One thing I’d add has to do with the regulatory aspect: why bother with an “experiment” when it’s not all that novel?

      It used to be, a utility would declare something as an experiment so it could (1) file its proposal with the retail commission and get advanced regulatory buy-in, something commissions normally don’t like to do, and (2) thereby reduce the risk that the commission would deny cost recovery after the fact if the experiment turned out to be a economic disaster.

      But this doesn’t make sense today where electric generation is deregulated and handled by separate generation affiliates or independent generating companies. Only Dominion, with its insistence upon placing its new-construction generation costs in its retail rate base, plays that regulatory game today. Only Dominion today would dare shift the risk of an economic failure in generation construction onto its customers. Indeed, because this “experiment” is so overtaken by events elsewhere, the regulators should deny permission for it as an inefficient waste of new-generation construction dollars. If this new generator were really an economic good deal, Dominion should be building it entirely with shareholder funding at its own risk.

    • Because this subject is something I have not focused on and, thus, is all new to me, I find it fascinating and appreciate the explanations. There is an aspect on which I am not clear. (Well, really, more than one, but one step at a time.) I take it that the companies are entering into contracts, not to build wind turbines, but to furnish electricity at a specified price. Who are they contracting with?

      Another question: I seem to remember that the Navy once expressed concern about wind turbines off Virginia’s coast. Is that still a problem?

      • “I take it that the companies are entering into contracts, not to build wind turbines, but to furnish electricity at a specified price. Who are they contracting with?” Not sure exactly who you mean by “the companies” — if you mean the independent generating companies or generation affiliates of the old utilities, here’s how it works: PJM runs a 13-state-wide marketplace, with two key markets: capacity, which the LSEs buy in advance of the current year, and energy, which is real-time.

        The wholesale energy market has three basic principles: (1) generation owners bid into the market one day ahead with an offer price at which they are willing to generate; and then (2) during the day of operation, PJM “dispatches” (calls to run) that generation in economic order, lowest bid price first, as the area demand rises, and drops them in economic order, highest first, as the area demand falls; and (3) generators are actually paid not what they bid but what the marginal generating unit running anywhere in PJM bid — so the price they receive varies throughout the day depending on whatever the marginal price was at the time they delivered (PJM recalculates the marginal price every few seconds). Economists will tell ordinary mortals like us that this system gives the right price signals: the bid price can be anything but in fact the generator won’t be dispatched if it bids too high and it won’t make any money if it bids too low so the sweet spot is to bid at the incremental cost to operate plus a little profit. And paying the marginal rate rather than the bid price rewards the generator for being there in a tight market; this is the appropriate contribution toward capital cost and to investors.

        Now, back to your question: the contract between PJM and those selling into the wholesale energy market is in the form of a tariff filed with the FERC. There is only one such energy market in a given region, as FERC does not allow competing system operators/wholesale market managers. There is no fixed price contract with anybody. All generators (including Dominion) sell their output to the PJM energy market; and all LSEs (including Dominion’s Vepco) buy their requirements from PJM (the bills for each LSE are calculated after the fact based on all the meter readings).

        The capacity market is different: PJM requires all LSEs to have capacity (that is, the exclusive right to call on a unit’s output) owned or under contract equal to their forecast annual peak load (plus a share of reserves) — but how they get it is up to them. Some LSEs own it, or have affiliates that own it. Some buy capacity rights bilaterally directly from generators. Some wait and buy it in PJM’s auction-based capacity market. Or a mix of all three. As a condition of participating in the PJM energy market for the coming year the LSE has to assign these capacity rights to PJM; PJM then dispatches the units economically as described above.

        PJM (like the other ISOs) publishes all its market data and independent generating companies like Calpine study it exhaustively. When they see a tight capacity market, or an energy market running at a high marginal rate in lots of hours, they know that there’s an opportunity there to build a generating unit of a type best suited to run a lot given that region’s demand curve. These days that is probably a gas-fired NGCC unit or solar or wind power (in the right geographic locations for those). There is no guarantee they will get a particular price, but they can read the tea leaves like anybody else and spot the opportunities and try to capture them. There’s enough profit in this to have attracted many $billions to the field of independent generation construction.

        The independent generators do their studies and take their risks with investor dollars in all these regional markets. My beef is that Dominion puts the burden of investing in its new Virginia generation on ratepayers, in the form of additions to their “rate base” or through rate adjustment clauses (RACs) levied on top of base rates. Generation costs are not regulated by FERC or by the SCC except voluntarily; the SCC does not have to do this (they say they are doing it to ensure the reliability of supply to Dominion retail customers, which basically means they don’t trust PJM’s capacity market to work). But by allowing (requiring?) ratebasing, the SCC essentially guarantees Dominion a regulated rate of return for the actuarial life of the plant, and shifts the risk of plant obsolescence to ratepayers. Wall Street loves this; Dominion’s ratepayers should rebel at it. Ironically, Dominion owns generation in other parts of the country which is not in any regulated ratebase and which operates on a competitive basis; so Dominion understands the competitive option full well; it simply chooses to ratebase new generation in Virginia as long as it can get away with it.

        • Wow, thanks for taking the time to educate me.

          My question was prompted by Tom’s statement: “These deals [with Equinor and Orsted] are fixed price contracts for wind energy….” In a later comment, he says, “All of the other east coast offshore wind projects that I have read about are offering a fixed price of generation using a Power Purchase Agreement.”

          So, to whom are the companies offering a fixed price for energy?

          • Oops, misunderstood your question. A fixed price for new generation is a deliverable between the owner and the equipment vendor/builder: typically a vendor power purchase agreement (PPA) says, in effect, “I will finance and build it based on your commitment to buy the output quantity of power from me at X¢/mWh, and it’s up to me to make a profit actually selling that power in the wholesale market for whatever I can get.” The vendor prices the PPA expecting to recover his investment and operating costs and a decent profit.

            PPAs are an attractive way, for example, to market small, homeowner-sized solar panels to consumers. “I will place a solar panel on your roof and wire it up and deliver the power to you for X¢/kWh for x years, which you know is substantially below the retail price you’d otherwise pay; and I’ll sell the output to the grid operator — at my risk whether I make a profit.”

            Win-win, right? Promotes distributed solar, right?
            The conceptual problem with this in most states is, the vendor is, legally, selling electricity at retail, which violates the retail franchise of the incumbent retail utility — of course state law on retail sales varies elsewhere but that’s the situation in Virginia for sure. Moreover there can be complications if the incumbent utility has a “net metering” rate for homeowners with small solar collectors with restrictions on third party involvement. Tom and I have had some discussions about this; it may be possible to structure a PPA in Virginia so that the owner doesn’t receive “electricity at a fixed price” from the vendor but merely a cash payment keyed to the quantity of solar power generated. These problems don’t arise where the owner is merely financing construction of a large wind power plant which will operate as an independent generator selling to the grid with no other retail customer involved.

            The point I was getting at: there is no fixed price offered in the wholesale marketplace. Independent generators build on spec. , at investor risk, based on their assessment of the potential profit and risk in the wholesale markets. Dominion passes this risk up front to its ratepayers, with SCC acquiescence, a practice I think should be prohibited.

    • We need to get to bottom of the cost argument.

      Here is what I suspect the situation is…natural gas cost of electrons is about maybe 3 cents a KWhr, but New yorkers pay 21 cents a KWhr, due to the extra amount paid to ConEd for other transmission costs.

      Offshore wind probably comes in at say 15+ cents per KWhr, just for the electrons. But that is vs. 3 cents for nat gas.

      I think this is what environmentalists are saying, is renewabke is cheap if we allow it to proliferate free of the extra overhead costs currently other generation has to pay.

      • TBill,

        You have the numbers backwards. The cost of gas-fired generation is about 7-8 cents per kWh. What you quoted might be about what the fuel costs.

        Onshore wind is the cheapest source of generation in the U.S. today. New units are coming in at 2-3 cents per kWh.

        The offshore wind bids for the East Coast are coming in around 6 cents per kWh.

        The cost of energy from all types of generation includes capital costs, financing, operating and maintenance expenses and fuel.

        What might be confusing is that the bids for PJM are usually based on the marginal costs of generating the next increment of electricity. For wind and solar this is essentially $0, since their cost is almost entirely capital cost, which must be paid no matter how much is generated. For conventional units such as gas-fired plants, the marginal cost is fuel costs plus O&M expenses.

        It is the ISOs such as PJM and the owners of the generation that make the daily price bids that decide what is the cheapest source of electricity, not environmentalists.

      • TBill, here is the current marginal rate posted in the NYISO energy market in which Con Ed buys all its energy: https://www.nyiso.com/real-time-dashboard Look at it yourself; at 11:35am it was $23.85 per megawatthour — which is a moderately low wholesale energy price. That is approximately the price bid by the most expensive generating unit running anywhere on the grid in New York State. NYISO, like PJM, dispatches in economic order, so that means, if a generator has a fuel cost of 7-8 cents/kilowatthour ($70-80/megawatthour), it probably bid at least that high for today’s energy market and therefore won’t have been dispatched by NYISO or be running at this time. Even if its fuel cost is 3 cents ($30/mWh) it would not be running if the market’s marginal market is $23. These gas-fired units only make money in the energy market above operating cost (i.e., return a decent profit to investors) when the marginal price shoots way up on hot days or cold nights. But in addition, these units sell capacity rights directly to the New York LSEs; their income is the sum of the energy and capacity payments they receive.

        By the way, this has almost nothing to do with ConEd’s transmission costs.

        • I do some R&D and get back. Threads have short half-life here, but we always get another chance. The cost issue is if NYC has a choice of building nat gas or Off-shore Wind, what is cheapest way to make electrons, and get them to the customer, all other things being equal?

          I should not only criticize Liberals, because Dominionm, and Hampton regions sees enormous business potential in the off-shore wind. So basically all the proponents need to worry aboiut me being whistle blower on costs, if I can.

          • Offshore wind is cheap; zero fuel cost, but the sunk cost to build a hurricane-proof base out on the Eastern shelf and the transmisson link to shore, then the expense to maintain the turbine by boat, is a bit uncertain; the “experiment” is to get a handle on those cost variables in a IS setting
            Offshore wind has a proven track record in the North Sea and Baltic, it’s only a question of fine tuning cost estimates based on US costs & regs, and developing some efficiency of scale.

            The other cost issue is, the grid can only absorb so much wind (or solar) power because there has to be enough backup power from cycling units of another kind. PJM has plenty of headroom to absorb more wind power generation at this time — but that headroom will get used up quick if people stop building more natural gas units too – which will happen if gas prices rise much. So as an investor I’d want to build my wind power generator soon while the market is ready to accept its output without delays or conditions.

            So be a whistleblower when it comes to the typical promotional exaggerations — but there really is something worthwhile here.

          • I see the New York projects are holding cost a secret. But construction of offshore turbines is expensive as is the cost of transmission lines from the ocean. Maintenance is higher for the ocean salt-water turbines. Hard to believe we can cost-effectively build 25 miles out. NY has one project only 14 miles out, which I would not oppose. If Congress reduces renewables credits, we should probably at least ask for subsidy help on offshore wind. I probably prefer offshore wind to nuclear.

            Promotional exaggeration is “over-the-top” when it comes to big utility projects.

        • “So be a whistleblower when it comes to the typical promotional exaggerations — but there really is something worthwhile here.”

          Acbar, with regard to offshore wind, I agree that “there really is something worthwhile here.” Same with geothermal, and hydro. Same with solar. Same with gas. Same with nuke. Same even with new scrubbed coal where nothing else works. But each one has limitations. There must balance, perspective, and disciplined execution. Otherwise people will suffer greatly. Even perhaps die.

          “So be a whistle blower when it comes to the typical promotional exaggerations,” you say, Acbar.

          Here is where the meat of the discussion, and major threat arises, that combined with today’s current dysfunctional governance and culture. I will touch on this issue tomorrow.

  7. I agree with much of the above commentary. In addition, I find Dominion’s explanation written into Jim’s post to be highly evasive. Dominion’s explanation is a non explanation, the sort of tactic use to obfuscate, and hide, while pretending to enlighten. Sometime smells here. Or at the least, Dominion is very wary in war here.

  8. “Does Dominion want to charge its customers to learn what others already know how to do?” Of course it does with the massive guaranteed ROE plus an ROE adder for favored environmental sources. The economics of offshore are improving, but remain problematic. Virginia ratepayers should not be bearing the risk. If I’m reading Tom’s comments correctly, where the larger fields are being installed the risk is not entirely with the ratepayers.

    • All of the other east coast offshore wind projects that I have read about are offering a fixed price of generation using a Power Purchase Agreement.

      The ratepayers are the winners in those states because this wind is cheaper than all forms of conventional generation, except perhaps old hydro (and onshore wind). New utility-scale solar is priced at about 3-4 cents per kWh.

      It is only when facilities are put in the ratebase, such as what Dominion is trying to do, that ratepayers are put at risk.

      When the SCC approved this project, they said this was definitely a bad idea from an economic point of view, but they felt the GA tied their hands with the language in the GTSA.

      Remember, this $300 million for 12 MW, will require a stream of payments totaling about $1.2 billion from ratepayers, over the life of the project. The members of the General Assembly should understand how much they sold out their constituents with this deal.

      If the voters paid their legislators a fraction of the amount just this one project is going to cost them, it would dwarf what Dominion is paying in political contributions.

  9. Whoa, Tom – the offshore wind boondoggle is an intersection point and the General Assembly was talked into it by 1) the greedy utility AND AND AND 2) the stupid beyond belief environmental nitwits who have no more understanding of economics than any of the legislators. I’ll say it again (someday the story will get written) – Governor TMac wanted this damn project for his political glory, his run for the White House, and to get it SIGNED OFF ON THE NG PIPELINES! A pure quid pro quo and if put under oath I’d have to tell you who told me…..but I’m not under oath.

    The coming equally stupid investment in a pumped storage facility is the same game, adding in the economic desperation of the SW Virginia localities involved. Pure politics, lousy economics, ratepayers screwed. Best state for business indeed.

  10. ” the stupid beyond belief environmental nitwits who have no more understanding of economics than any of the legislators.”

    I subscribe to Steve’s view. This myopic view of environmentalists (and other Eric Hoffer True Believers) see only one tree in the forest in the forests of the world. It’s common. Whole nations and generations, and collections of people, often live this myopic way.

    So, as stated above, “I agree with much of the above commentary” but only as to that written before 6:39 a.m. yesterday before we fell off the cliff again.

    As to myopic thinking, Wattsupwiththat provides us with yet another example of false 100% renewables claims of those who live in separate universes, fixated on their own self made and generated realities.

    “CNN: “One of America’s oldest power companies is going carbon free” apart from coal and natural gas.

    David Middleton / July 26, 2019

    Guest “you couldn’t make this sort of schist up if you were trying” by David Middleton

    H/T to Chuck Wortman…

    One of America’s oldest power companies is going carbon free

    By Matt Egan, CNN Business
    Updated 6:48 AM ET, Thu July 25, 2019

    New York (CNN Business) PSEG has relied on fossil fuels to keep the lights on for the past 116 years. Now, New Jersey’s largest and oldest power company is pledging to deliver carbon-free electricity to fight climate change.

    […]

    To get there, the power company is shutting down its coal plants, betting big on offshore wind and working hard to keep its existing nuclear plant alive. PSEG said it won’t build or acquire any new fossil-fueled power plants, including those running on dirt-cheap natural gas.

    […]

    Last month, PSEG announced an agreement to sell its stake in a pair of coal plants in western Pennsylvania. The company plans to shut its final coal-powered unit, located in Connecticut, within 18 months.

    […]

    PSEG’s plan not to open new fossil fuels comes just after it recently expanded its footprint in that space, capitalizing on the abundance of natural gas in the United States. The company has finished three natural gas plants over the past year-and-a-half, but now it’s planning to shut down some of the less efficient gas plants.

    PSEG also supplies natural gas to customers in New Jersey, and it will continue that business. The carbon-free goal is for its power business.

    […]
    Darth Vader: This is CNN

    Matt Egan, 2007 BS in journalism.

    It must really suck to live in New Jersey ($0.17/kWh), although not nearly as bad as New England ($0.22/kWh)…” End Quote

    For more of article, please see:

    https://wattsupwiththat.com/2019/07/26/cnn-one-of-americas-oldest-power-companies-is-going-carbon-free-apart-from-coal-and-natural-gas/

    • Now, with Acbar’s fine comment directly below we are starting to get to the crux of this matter, the genesis of the real threat that it presents us all. To carry that thought forward, lets start here.

      ” “A movement is pioneered by men of words, materialized by fanatics and consolidated by men of actions.”[23]

      Hoffer argues that fanatical and extremist cultural movements, whether religious, social, or national, arise when large numbers of frustrated people, believing their own individual lives to be worthless or spoiled, join a movement demanding radical change. But the real attraction for this population is an escape from the self, not a realization of individual hopes: “A mass movement attracts and holds a following not because it can satisfy the desire for self-advancement, but because it can satisfy the passion for self-renunciation.”[24]

      Hoffer consequently argues that the appeal of mass movements is interchangeable: in the Germany of the 1920s and the 1930s, for example, the Communists and National Socialists were ostensibly enemies, but sometimes enlisted each other’s members, since they competed for the same kind of marginalized, angry, frustrated people. For the “true believer,” Hoffer argues that particular beliefs are less important than escaping from the burden of the autonomous self.

      Harvard historian Arthur M. Schlesinger Jr. said of The True Believer: “This brilliant and original inquiry into the nature of mass movements is a genuine contribution to our social thought.”[25]” End of Quote.
      See https://en.wikipedia.org/wiki/Eric_Hoffer.

      More to follow.

  11. You are right, Reed, the bottom line is what average retail price does the consumer pay — e.g., in New Jersey. 17¢/kWh is way higher than Dominion’s retail unit charges on average. But: PSEG may actually be saving money by not building any more fossil-fueled plants for a while, given that they just built three highly efficient natural gas plants. That’s rather disingenuous of them — “no more fossil plants (because we just built all we’ll need for the next decade or more.”

    As we’ve discussed here before, the obvious problem with wind and solar is you have to have backup sources of power when the wind/sun isn’t there. If all PSEG is planning to do is lean on PJM as its backup source, that’s just taking advantage of everyone else’s fossil-fueled and nuclear plants on the grid. In fairness to PSEG, in addition to those Pennsylvania coal plants they provide a substantial amount of baseload nuclear power also — but they have leaned on the grid for years for cycling generation. One reason to have the grid is to share generation diversity — but at some point PJM will have to raise the alarm and say it’s exhausted its ability to absorb more renewables energy. Or, independent generator developers will see the shortage of backup generation coming and start building those units themselves. That’s how the wholesale electricity markets work.

  12. “Offshore wind in the Mid-Atlantic holds more than 60,000 Megawatts of potential energy — that’s 10% of total U.S. offshore potential. … and is located close to major coastal load centers, providing an alternative to long-distance transmission.” BOEM has 15 active commercial leases for offshore wind development that could support more than 21 gigawatts of generating capacity….

    A new McKinsey report predicts a 68 percent drop in offshore wind prices by 2020 and highlights European projects already hitting grid parity. In addition, when we think about costs … Seventy percent of our coal plants and all of our nuclear plants are more than 40 years old. (5 years ago) Retrofitting and/or replacing their output will cost $70+ Billion over the next 10 years regardless of any new pollution rules. So the real question is … Where will those required investment dollars go?

    And don’t forget the $1 Billion in tax expenditures for fossil generated electricity and the offloaded health and environmental costs we all pay, just not in the cost of our electricity. (Oil Change Intl)

    Its complicated …. The Feds got involved 6-7 years ago with wind speed buoys and environmental data and regs for the coastal connections, hoping to simplify the installations. Now there is also The Mid-Atlantic Regional Association Coastal Ocean Observing System (MARACOOS) with maps and resources. The Portal serves as a platform to engage all stakeholders in ocean planning from the five-state Mid-Atlantic region. Data being collected comes from a combination of sources, including key federal providers such as MarineCadastre.gov (a collaboration of NOAA and the Bureau of Ocean Energy Management), the Coast Guard, the U.S. Fish and Wildlife Service, the Department of Defense and the Environmental Protection Agency.

    So is Dominion participating in any of this regional work? What was clear at lease signing … Dominion’s lease allows them not to participate in the underwater transmission system should one be built. Don’t know the status of ocean to shore transmission, but keeping control of the connection ensures Dominion as the owner/developer of the wind farms, not a purchaser of their output. Not so great for VA customers.

  13. Acbar, as you know, I definitely agree with the need for reliable energy, but I see the issue evolving a little bit differently. One of the things that concerns me is that we are still so wedded to the idea of matching variations demand and variations in supply with more supply. This is a concept from the 20th century and ignores the progress we have made in the 21st century.

    Currently, in PJM we have a surplus of generation, mostly gas, coal and nuclear. It is more than adequate to meet our peak demand and variations during the day. We will be adding more renewable generation, utility-scale solar, distributed solar, onshore and offshore wind, because it will be less expensive than our existing sources.

    My premise is that our demand will remain stable or perhaps shrink a bit due to increased efficiency and perhaps an economic slowdown. We are nowhere near the 30% contribution from renewables that PJM says will require some adjustments in the grid, and we won’t be for many years. Renewables will make greater inroads each year because of their cost and environmental advantages.

    With stable demand, what happens then? The gas-fired units will run less because the coal and nuclear units cannot easily start and stop to meet variations in demand and supply. Dominion will be fully paid for their plants in the ratebase, but merchant generators could be hurt. We might end up with higher capacity auction prices that reward dispatchable generation with higher prices, but I don’t foresee a shortage of backup generation. We will still have all of the conventional generation we need to meet the demand in full, just as we do now before renewables make significant inroads into PJM’s territory. All of the output from renewables could cease and we would still have enough capacity.

    But this puts stress on the conventional units that will not operate as much nor obtain as much revenue from the wholesale market. Some units with low capacity factors might retire, or be put in long-term temporary storage (as Dominion is doing) because it is not economic to keep them ready for daily operation.

    We are developing many new technologies related to demand response, either managed by utilities or independent service providers. This will be less expensive than fossil-fired peakers and will level out our demand curve.

    Plus, we will see increasing use of battery storage because they also provide frequency and voltage control, and new battery technologies coming to market in a few years will greatly lower cost, duration of discharge and energy density.

    I think that Electric Vehicles will provide a new source of demand that can be used as a cheap source of storage that will even out the load curve and allow the conventional units to run on a more stable basis. EV batteries will soak up excess renewable output and discharge back to the grid when renewables temporarily decrease their contribution. This will happen much faster than can be done by fossil-fired units.

    None of this requires new conventional generation, even with significant contributions from renewables. Renewables just help keep our costs under control, especially if they are added outside the ratebase in Virginia.

    What is required is an upgraded grid, that allows for two-way flow of energy and information, something that our grid transformation act did not really address.

    • This is a hope, a wish, and a dream.

      The truth on the ground, what is really happening on earth, is that the demand for electric energy is wildly ramping up worldwide.

      Hence, to satisfy the explosive need worldwide, more and more coal, gas, and nuke generators are ramping up in tandem to satisfy the world’s needs.

      Meanwhile, wind and solar generators fall ever further behind worldwide. And when they are deployed, they demand more and more gas, coal and nukes to fill in the massive gaps that they cause in the grid by their own unreliability and intermittency.

  14. For anyone interested in a thorough analysis of the future of global energy demand … check out the new report from McKinsey’s “Global Energy Perspective 2019.” The summary is available free.

    • Remember all those subprime mortgages that blew up the American economy in 2008? They were all wrapped into, and mixed with securitized tranches, all then rated investment grade by the likes of Moody and other rating agencies, all done by black box accounting wizards that put together packages that no one could figure out, including the wizards themselves, who got into very bad habits because Wall Street paid them fortunes to fool the world. That charade took two decades of lies to gestate before blowing up the American economy. Never trust experts paid large sums of money by special interests. They will fail you every time, like the traffic experts in Northern Virginia did for forty years.

    • In above comment, I warned about unreliable rating agencies inflating their ratings for profits. For further analysis, I suggest this Wall Street Journal article written today:

      “Inflated Bond Ratings Helped Spur the Financial Crisis. They’re Back.

      Credit-grading firms are giving out increasingly optimistic appraisals as they fight for market share in booming debt-securities markets …

      Inflated bond ratings were one cause of the financial crisis. A decade later, there is evidence they persist. In the hottest parts of the booming bond market, S&P and its competitors are giving increasingly optimistic ratings as they fight for market share.

      All six main ratings firms have since 2012 changed some criteria for judging the riskiness of bonds in ways that were followed by jumps in market share, at least temporarily, a Wall Street Journal examination found. These firms compete with one another to rate the debt of borrowers, who pay for the ratings and have an incentive to pick rosier ones.

      There are signs some investors are skeptical. Some bonds in markets where ratings criteria have been eased don’t trade at the high bond prices their ratings suggest they should. Investors have also shown skepticism about ratings on some corporate and government bonds.

      “We don’t trust the ratings,” says Greg Michaud, director of real estate at Voya Investment Management, which holds $21 billion in commercial-real-estate debt …”

      For more of this Wall Street Journal please read:

      https://www.wsj.com/articles/inflated-bond-ratings-helped-spur-the-financial-crisis-theyre-back-

  15. Reed,

    It is true that as the developing world is attempting to live the lifestyle of the developed world, energy use is increasing.

    But in the U.S. and Virginia, there is ample evidence that our per capita energy use is decreasing. Even with a growing population and increasing economic activity, the use of electricity in the U.S. and in Virginia has been stable or declining for over a decade.

    I think most would agree that it is a good thing when we learn how to use resources more productively. This concept has been a linchpin in U.S. economic growth for over a century.

    If only one other nation, China, had the same per capita energy usage as the United States, our world could not accommodate it. The greatest gift we could give to ourselves and others is to use our innovation and economic might to pioneer new ways of using energy more effectively. The United States should be leading this effort, but other nations are out in front of us. Look at where the companies are headquartered that are leading the effort for offshore wind in the U.S. The only major U.S. wind turbine manufacturer, GE, built its business in Europe.

    Developing a modern energy system is the next great area for innovation and economic growth. Clinging to an old outmoded system only because we are familiar with it and it maintains the preeminent position of existing companies is not a good reason to continue obsolete policies.

    Using that logic, we would have foregone the computer and telecommunications revolutions of the past several decades that have become a major driver in the U.S. economy.

    It is the greed and manipulation that go on being the scenes that I am advocating we avoid. I have written many times that the money from Wall Street fled the mortgage meltdown and was invested in oil and gas development. That “profit now – forget the customers” mindset is what is causing much of the increase in cost and faulty decision-making that is going on in the energy industry.

  16. Sky high electric energy prices are good for nobody accept the crony capitalists and their ideological allies trying madly to hop aboard this taxpayer funded gravy train to nowhere. These policies have been in failure mode for 50 years now with Valhalla perennially just over the next horizon. It’s time to look at reality.

  17. Here’s what concerns me. We have reached a point where solar and wind are frequently the lowest cost sources of energy for the electric grid. It is perfectly rational from a short-term economic perspective to adopt more solar and wind. But how much more, given the imperative to preserve reliability?

    Market forces, as they are allowed to function in the U.S. regulatory system, favor construction of vast amounts of solar and wind precisely because on a life-cycle basis it is cheaper than coal, nuclear and even natural gas. Solar and wind are so cheap that they are displacing competing energy sources, leading to the shutdown of many coal- and nuclear-fueled units. Insofar as the cost of electricity is lower, everybody benefits when everything is functioning smoothly. The problem with solar and wind, as we all know, is intermittency. Intermittent energy sources cannot be counted upon to deliver electricity when demand surges.

    The circumstance that we need to anticipate and forestall is an extreme weather event (which history says will occur periodically and environmentalists say will occur with increasing frequency) that (a) creates a surge in demand and simultaneously (b) disrupt solar/wind output, thereby shifting the load to non-renewable sources.

    What happens as solar/wind displaces more coal/nuclear? Acbar assures us that PJM capacity markets will ensure that independent generators will add new capacity if the market warrants it. What kind of new capacity? The only alternative at the moment is natural gas, although battery storage may become economical at some point in the future.

    There are two choke points in the natural gas-to-the-rescue scenario. The first is that environmentalists, who have perfected the legal and political art of obstructing new infrastructure projects, will allow new gas-fired units (and related infrastructure such as pipelines) to be built as coal and nuclear are phased out. The second is that electric utilities, which own the transmission grid and own/operate the distribution grid, make the upgrades needed to handle the new flows of electricity.

    Let’s assume for purposes of argument that Tom Hadwin is right, and that electricity demand in Virginia has hit a plateau and may even decline somewhat. Over the next 10-20 years, we still will have to replace coal-burning plants and, depending on the outcome of Dominion Energy’s proposed license renewals for its four nuclear units, will have to replace nuclear as well. If environmentalists nix coal, nix nuclear, nix the Atlantic Coast Pipeline, nix new transmission lines, and throw hurdles in front of new gas-fired capacity, will all regions of Virginia (I’m thinking mainly of the Tidewater region where gas supplies are most constrained) be able to survive more extreme-weather events?

    • Surprise, Surprise. Jane comes up with Portland. Let’s all of us believe, trust and emulate Portland.

    • Jim says:

      “There are two choke points in the natural gas-to-the-rescue scenario. The first is that environmentalists, who have perfected the legal and political art of obstructing new infrastructure projects, will allow new gas-fired units (and related infrastructure such as pipelines) to be built as coal and nuclear are phased out. The second is that electric utilities, which own the transmission grid and own/operate the distribution grid, make the upgrades needed to handle the new flows of electricity. … If environmentalists nix coal, nix nuclear, nix the Atlantic Coast Pipeline, nix new transmission lines, and throw hurdles in front of new gas-fired capacity, will all regions of Virginia (I’m thinking mainly of the Tidewater region where gas supplies are most constrained) be able to survive more extreme-weather events?”

      Here Jim hits the nub of one great problem. But he understates it because the environmentalists have already largely shut down nuclear for the past 35 years using a barrage of cascading memes distorting not only the truth about nuclear but also grievously distorting the marketplace, greatly hindering our ability today to lower carbon with nuke power. And, but for Trump, the environmentalists would have by now shut down coal production altogether. And now, they are doing their level best to shut down gas, and the means to distribute it via pipelines, which makes green power viable in the first place.

      In fact, the environmentalist have been so successful to date that they have captured the entire left wing of the Democratic Party, and MSM, shutting down truth to the point that the California’s electric utility has gone into bankruptcy, and New Jersey electric utility has spend millions of dollars to hide the fact that it has had to build large new gas plants to construct the total fiction that it was and is operating as a 100% green energy generating utility. Why? Because the New Jersey utility is afraid to tell truth given the green terror machine in New Jersey. This fear now spreads to the point that it threatens us all, just like has happened with nuclear over the past 35 years.

      Jim also understates the case when he assumes that the demand for electricity will go down in America. Who would be fool enough to bet the nation on that? Nobody.

      Finally, the truth is that what happens in Virginia, indeed what happens in America, will have no meaningful impact on climate change in the world at all. Positive real change now must be found in the rest of the world, particularly China, India, and the developing world. And here renewable energy is falling woefully behind by the day, and cutting off all chances for alternatives sources, as environmentalist and their allies only make the problems far worse, and real solutions far more difficult to find.

      • “Positive real change” is well underway in the rest of the world. I have been watching China since they invited RMI to go to China years ago and help them put a plan together. India is followinbg too.

        Here is some confirmation from Forbes and Forbes says the leaders will have their global leadership enhanced …

        A new report says that “China has taken a lead in renewable energy and is now the world’s largest producer, exporter and installer of solar panels, wind turbines, batteries and electric vehicles.”

        “China also has a clear lead in terms of the underlying technology, with well over 150,000 renewable energy patents as of 2016, 29% of the global total. The next closest country is the U.S., which had a little over 100,000 patents, with Japan and the E.U. having closer to 75,000 patents each.”

        In addition, “The renewables revolution enhances the global leadership of China, reduces the influence of fossil fuel exporters and brings energy independence to countries around the world,” said Grimsson, speaking at the launch of the report. “The transformation of energy brings big power shifts.”

        “Beyond China, there are a few other groups of countries which stand to gain from the trends now under way. They include countries with high potential for renewable energy generation, such as Australia and Chile, which could become significant exporters of renewable electricity. Mineral-rich countries such as Bolivia, the Democratic Republic of Congo and Mongolia could also tap into rising global demand for their raw materials.”

        “There are great dangers for other countries though. In particular, there is the potential for political instability in oil-exporting countries which find their revenues drying up. “

        • Jane –

          That sounds like an infomercial. The Chinese are in the business of building and exporting whatever products they can with cheap labor, from illicit drugs to solar panels, and everything in between. Hence they have been the largest exporter of solar panels for last decade or two, and also now are getting into new nuclear, and fossil generation plants big time, for domestic use and export.

          Most recently, however, the Chinese have shifted heavily away from new domestic renewable energy projects at home and instead have placed heavy bets on fossil fuel plants built in China, most particularly coal, given the severe limitations and expense that renewable power has encountered in China, and given that China does not want to become dependent on gas imports from other nations for security reasons.

          Another words China has encountered the same problems with renewable energy that most all nations have encountered worldwide – namely renewable power is difficult to build in many places and sites, often cannot replace fossil fuels and nukes, and, when built, often requires more fossil fuel plants (not less), and massive additional infrastructure to counteract the great stress that renewable power puts on the grid, and the unreliability of renewable power alone.

          Hence, China has delayed new domestic renewable power plans by at least ten years, as have many other nations.

          • Jane Twitmyer

            The International Energy Agency (IEA) notes final investment decisions for coal plants have dramatically fallen, from 88 gigawatts (GW) to 22GW between 2015-2018, while in 2018 more coal plant capacity was retired than approved.
            IF COAL PLANT CLOSURES CONTINUE ON THIS PATH, WE WILL SEE A GLOBAL PEAK OF COAL PLANT CAPACITY BY 2021.
            CHINESE COAL-FIRED POWER OPERATORS ARE STRUGGLING FINANCIALLY AS THE GOVERNMENT PROMOTES ALTERNATIVES, including renewable energy. China Datang, one of the nation’s major power utilities, last month applied for bankruptcy and liquida-tion of a second coal power plant, following a similar move in December 2018.
            In China, Carbon Tracker estimates that 40% of its coal operating fleet is cash flow negative which may increase to 60% by 2030.”
            So, do tell where you get this disinformation. The info I just put up comes from an international conference hosted by the Institute for Energy Economics and Financial Analysis (IEEFA) held at Columbia Law School in New York from 17-19 June 2019.

          • Reed Fawell 3rd

            “China Energy to expand ultra-low emission coal-fired power: executive

            SANHE, China (Reuters) – China Energy Group, the country’s biggest power generator, will add more than 6 gigawatts (GW) of new ultra-low emission coal-fired capacity this year as it bids to meet growing electricity demand, a senior official with the firm said on Thursday.

            The company also expected to build another 5 GW of low-emission capacity next year, Xiao Jianying, the head of the state-run firm’s coal-fired power department, told Reuters.

            “China still has quite a big demand for electricity. The government now supports regions with poor wind and solar resources to use coal-fired power … it’s a more practical measure, as gas is still too expensive,” said Xiao.

            China Energy operated coal-fired plants with a total capacity of 175 GW at the end of 2018, 77.4% of its total capacity and about 10% of the entire country’s capacity.

            Xiao said the company would gradually shut down small and polluting coal-fired power units and replace them with efficient ones, noting that total capacity would continue to increase but at a slower rate of growth.

            The firm is also planning to launch another carbon capture and storage (CCS) project in northwest China next year as part of its efforts to reduce the environmental impact of using coal, company officials said. It already runs a CCS plant at its coal-to-oil facility in Erdos in Inner Mongolia.

            China, the world’s biggest greenhouse gas emitter, has vowed to control new coal production and new coal-fired power capacity as part of its commitments to curb pollution and tackle global warming. However, it has shown signs of relaxing restrictions in recent months amid an economic slowdown.

            The National Energy Administration said last month it would encourage regions to choose the most accessible form of energy to guarantee heating during winter. It also offered support for cities to build centralized “clean coal” heating systems.

            This was a big shift from two winters ago when authorities forced millions of northern households to convert from coal to natural gas or electricity in a bid to curb smog.

            China aims to bring greenhouse gas emissions to a peak by “around 2030” and raise the share of non-fossil fuels in its total energy mix to 20% by the end of the next decade, up from 15% in 2020. Those targets could be strengthened next year.

            But it has been under fire for allowing large numbers of new coal-fired power plants. An academic study published in March said China restarted construction on more than 50 GW of suspended coal power plants last year.” End Quote

            See https://www.reuters.com/article/us-china-power-coal/china-energy-to-expand-ultra-low-emission-coal-fired-power-executive

            More articles will follow as time permits. You need to stay up to date.

          • Jane Twitmyer

            Thanks and that’s Ok … Don’t bother spending more time

            You say … “Most recently, however, the Chinese have shifted heavily away from new domestic renewable energy projects at home and instead have placed heavy bets on fossil fuel plants built in China, most particularly coal, given the severe limitations and expense that renewable power has encountered in China, and given that China does not want to become dependent on gas imports from other nations for security reasons.”

            “Shifted heavily away from new domestic renewable energy projects” .. just isn’t what I can conclude from …. “China aims to bring greenhouse gas emissions to a peak by “around 2030” and raise the share of non-fossil fuels in its total energy mix to 20% by the end of the next decade, up from 15% in 2020. Those targets could be strengthened next year.”

            The article was evidently speaking of a particular region’s utility.

          • Reed Fawell 3rd

            No, Jane, I am not going to stop because your arguments and the kinds of studies you rely on, including international studies they are based on, are losing and being exposed big time, and this case is a perfect illustration of why and how. So we are going to continue this conversation. For example this quote from the Reuters article:

            “An academic study published in March said China restarted construction on more than 50 GW of suspended coal power plants last year.”

            This is real story, not international bureaucratic BS your studies create to hide the truth of what is happening in this world.

          • Reed Fawell 3rd

            The Chinese are the world’s largest exporters of solar panels. They are the last nation in the world that is going to admit to the limitations of solar energy, just as are any national or international organization anywhere pushing the solar or wind agenda. Instead many of these proponents have formed massive public relations campaigns to push their own agenda. So we must beware. The reality on the ground is far different from the rhetoric fed to the public by proponents.

            So for example, consider this essay written by Larry Hamlin on July 25:

            “U.S. media conceal 4.5+ billion tons increase of CO2 by developing nations – push meaningless “sustainability” propaganda agenda
            Guest Blogger / 5 days ago July 25, 2019

            Guest essay by Larry Hamlin

            In the politically contrived climate alarmist propaganda campaign by the U.S mainstream media there is no limit to the degree of distortion, deception and dishonesty employed in attempts to conceal from the public the reality of global energy use and resulting emissions that is underway in the world that clearly demonstrates their propaganda war of alarmism is already lost.

            Global energy and emissions data through year 2018 documents that the world’s developing nations have increased CO2 emissions by over 4.5 billion metric tons during the last decade and now account for 64% of the global emissions total.

            China and India accounted for over 67% of the developing nations CO2 emissions growth through the use of increased fossil fuel – predominately coal fuel where China and India accounted for about 88% of developing nations increased coal use during the decade.

            The U.S. decreased its CO2 emissions by about 530 million metric tons during this same period, more than any other nation in the world, largely through substituting lower cost, reliable and more efficient natural gas in place of coal.

            The developing nations increased CO2 emissions were over 8.5 times greater than the size of the significant U.S. reduction.

            China is continuing to increase coal use with plans to build hundreds of new coal plants in the coming decade.

            Perhaps China is emboldened to proceed with its energy fossil fuel growth plans based in part on the results of its latest scientific climate evidence which determined that temperatures measured their are impacted by Urban Heat Island effects and not CO2 driven warming as falsely projected by UN IPCC climate models. China’s climate scientists have concluded that

            “A comparison versus China urbanization records demonstrates that the regions characterized by a large Tmin-Tmax divergence are also the most densely populated ones, such as north-east China, that have experienced a diffused and fast urbanization since the 1940s. The results are significant and may indicate the presence of a substantial uncorrected urbanization bias in the Chinese climate records. Under the hypothesis that Tmax is a better metric for studying climatic changes than Tmean or Tmin, we conclude that about 50% of the recorded warming of China since the 1940s could be due to uncorrected urbanization bias. In addition, we also find that the Tmax record from May to October over China shows the 1940s and the 2000s equally warm, in contrast to the 1 °C warming predicted by the CMIP5 models.”

            Despite the huge increased coal use by the developing nations during the last decade that were led by China (which also dominated global growth in CO2 emissions) which has plans for yet more coal plants in the future the U.S. media continues to conceal these outcomes from the public with an orchestrated propaganda campaign claiming that the U.S. and China are partners in “fighting climate change” as highlighted in the absurd article below.

            The U.S. climate alarmist propaganda campaign is led by high profile political and government officials in concert with the alarmist media that are concealing from the public that the world, led by the developing nations, has significantly increased its use of fossil fuels and announced that it will continue to do so in the future. This propaganda campaign also conceals the unequivocal fact that the developing nations overwhelming dominate global energy use and emissions.

            This propaganda campaign provides no specifics regarding how it will achieve its claims other than to create a bunch of “zero emissions” nonsense built around the trite political slogan of “sustainability.” End Quote.

            Please read the balance of this article at:

            https://wattsupwiththat.com/2019/07/25/u-s-media-conceal-4-5-billion-tons-increase-of-co2-by-developing-nations-push-meaningless-sustainability-propaganda-agenda/

          • Reed Fawell 3rd

            And of course now wind generation is in trouble too. For example:

            “Collapse of Wind Power Threatens Germany’s Green Energy Transition
            charles the moderator / 10 hours ago July 29, 2019

            From Die Welt Via The GWPF — Hardly any new wind turbines were built in Germany in the first half of the year. Turbine makers call it a “punch in the gut of the green energy transition” and blame environmentalists.

            The expansion of wind power in the first half of this year collapsed to its lowest level since the introduction of the Renewable Energy Act (EEG) in 2000. All in all, just 35 wind turbines were build with an output of 231 megawatts. “This corresponds to a decline of 82 percent compared to the already weak period of the previous year”, (says) German Wind Energy Association (BWE) in Berlin.

            “This makes one nearly speechless,” said Matthias Zelinger at the presentation of the data. The managing director of the Power Systems division of the German Engineering Federation (VDMA) spoke of a “blow to the guts of the energy turnaround”. This actual development doesn’t match “at all to the current climate protection debate”.

            “On the one hand the Federal Government speaks of its achievement of ambitious renewable expansion and climate protection goals for the years 2030 and 2050. On the other hand, the perspective is missing,” said Hermann Albers, President of the German Wind Energy Association (BWE): “The discrepancy between claim and reality is growing.”

            The federal government wants to increase the share of renewable energy in the electricity supply from around 40 today to at least 65 percent in 2030. But when in 2021 thousands of wind turbines come to the end of the 20-year subsidy period of the Renewable Energy Act, more wind turbines will be demolished on balance than new ones will be added, the wind industry fears. The government’s green energy and probably also its climate targets would fail.

            The reasons for the slump in new construction figures are manifold. … End Quote.

            For more of this article please see:
            https://wattsupwiththat.com/2019/07/29/collapse-of-wind-power-threatens-germanys-green-energy-transition/

  18. Reliability … Here’s a plan from Portland, OR General Electric (PGE)
    “PGE plans 150 MWs of renewables, 4 MW storage, and finds wind cheaper than gas to meet future capacity. … Along with the new renewables and 157 MW of efficiency, PGE’s plan calls for includes 141 MW of demand response during winter months and 211 MW during summer months.” Lots of demand reduction and shiftiing as well as no fossils.

    And from LA … “Later this month the LA Board of Water and Power Commissioners is expected to approve a 25-year contract that will serve 7 percent of the city’s electricity demand at 1.997¢/kwh for solar energy and 1.3¢ for power from batteries.”
    “It’s half the estimated cost of power from a new natural gas plant.”
    Storage is competitive in LA.

    Then there’s PJM with their coverage of a wide area and their excess capacity. AND finally, if Dominion will let go of being the only generator, our Virginia grid could become decentralized, or networked, with local generation and microgrids serving small specific areas that can maintain service if the central grid goes down. This is the DOD’s plan for their bases all across the US. and is an answer being applied in New England after that hurricane a few years back.

    • I would like to see Virginia move toward a market-based approach for generation (less sure about transmission and distribution), but there are practical problems to consider — the foremost one of which is ensuring reliability.

      You cite Portland as a positive example of a region moving heavily toward renewables. If I understand correctly, Portland is blessed by a large contribution from hydroelectric power. Do you happen to know the extent to which that power can be dialed up and down as needed? Can the local electric utility store water in reservoirs during periods of peak solar/wind output, then release the water as needed? If that’s the case, Portland may be particularly well suited to renewables in a way that other regions are not. Just curious — do you know the answer?

  19. Jim, You are right about hydro in the west … about Portland specifically, I do not know. I was really referencing the fact that there are a lot of techniques being developed elsewhere to meet the reliability and renewables test.

    However, by recommending microgrids I am not suggesting a market based approach to the basic grid. The gird is the remaining natural monopoly. Microgrids are connected to the grid usually, but can disconnect when necessary. As distributed energy generation becomes more prevalent, microgrids make the integration easier and increase the reliability of the whole. It’s everyone in the office on their own computer vs. the old … took up the whole room … central machine.

  20. I am doing my best to understand and not reply to your nasty comments
    Must be in a bad spot in your life

  21. These are all excellent questions and must be taken into account in designing our future grid.

    I must say though, that the questions derive from the same central station, supply-oriented mindset that has dominated our energy planning for decades.

    Heat waves and cold snaps usually occur with relatively clear skies, when solar generation would be at a peak. Storms do limit solar though, but higher winds would increase wind generation. Intermittency is not the issue. We can predict with great accuracy when the output of solar and wind units will change. The challenge is that we cannot turn them on when we need them any time of day.

    To reduce the fear and show that we have time for this to evolve, I pointed out that we have all of the energy supply we need for quite some time if we keep our demand stable (or preferably declining). In the next 10 years we will have rolled out many different ways to manage demand to maintain comfort while reducing energy requirements. We will create more jobs and opportunities for innovative new companies as a result.

    I said we might see higher capacity prices to make up for conventional units running less often, but allowing dispatchable generation to be available when needed.

    Coal and nuclear will phase out, not primarily because of environmentalists, but because they cannot economically compete with other sources of generation. Subsidies for coal and nuclear are being voted for by many of the same politicians that have asked for more market-based forces to inform our decision-making.

    Ask Dominion if they would refurbish Surry and North Anna if they had to do it as a merchant generator. They threatened the Connecticut legislature with closing the Millstone nuclear plant, called by the Wall Street Journal as the most profitable nuclear facility in the U.S., if they did not receive a subsidy. Does Virginia want to offer many billions of dollars in subsidies by putting these nuclear upgrades in the ratebase? This issue should be dealt with soon. Dominion is already spending money for this using funds that should have been returned to the ratepayers.

    To replace the first unit in 2032, we need to begin planning a replacement, preferably with zero cost energy efficiency. But this is an issue for all of us to decide. Not brought in the back door through an obscure regulatory process, when it is too late to develop options.

    Anyone willing to search the literature and the FERC record will discover that more capacity than the ACP will provide has already been approved and installed (mostly in 2018) in existing pipelines that have served Virginia and the Carolinas for decades. All of Virginia’s gas-fired power plants are already well served by these pipelines. Why intelligent citizens and successful business people want Virginian’s to spend at least $6 billion for 20 years of service from an unnecessary pipeline is hard for me to understand.

    What has been characterized as a constraint in gas service in southeastern Virginia has been due to industrial customers (three in 2018) voluntarily curtailing their usage during extreme cold periods so that the gas company can sell more to customers willing to pay more for the gas. Heavy gas users sign up as interruptible customers so they can pay less for gas year-round. They design their operations to reduce their gas supply for a day or two every few years in order to save money.

    How is it that two large gas-fired merchant generating facilities in Charles City County can be served by the same pipeline that is providing some of the gas to southeast Virginia now?

    I know that much of what I talk about seems new. Although, it is mostly based on technology that already exists. Those technologies will rapidly become better and cheaper too. We don’t have to take chances on this. Our regulators and ISOs (PJM) will maintain reliable operation of the grid. But if we keep an open mind about alternatives and give our utilities a way to prosper in a different way. These changes can come to pass in ways that benefit us all.

    I founded a company that provided personal computers and telecommunications technology in the early days when personal computers were first developed. My business was in the town where IBM was founded. I had many discussions with friends who told me that mainframes would be around forever and that PCs were just toys, a short-term fad.

    I feel the same way now as I did then. If we just give these new ideas a chance and don’t artificially obstruct them, it could really turn out well for us. I know many think what I am suggesting sounds pie in the sky but all of the concepts are being used around the U.S. today. Just keep an open mind.

  22. Reed,

    I just wanted to provide readers with some additional information to give them a more complete view of the energy situation in China.

    You said: “the Chinese have shifted heavily away from new domestic renewable energy projects at home . . .”

    It is true that solar PV additions in China were down in 2018 from the year before (43,000 MW compared to 53,000 MW in 2017). This was apparently due to a variety of factors including production setbacks because of restrictions in selling to the U.S and India, the second and third largest solar markets in the world behind China. China also reduced its feed-in tariffs then adjusted them upward again. However, the 43 GW, including 20 GW of distributed solar capacity, was much higher than analysts expected, given the disruptions in the Chinese market. Investment in solar was down in China, but much of that is due to the continued price reductions. Fewer dollars buy more solar capacity each year.

    Despite the short-term turmoil in China, about 100,000 MW of solar was added world-wide in 2018. China is still the clear leader and is expected to add at least 200,000 MW of new solar over the next five years, according to Bloomberg New Energy Finance. Bloomberg projects that the market in China will still be in disarray in 2019, but even in that state the Chinese investment is solar will be at least $300 billion for the sixth year in a row.

    This is a far cry from “ China has delayed new domestic renewable power plans by at least ten years, as have many other nations.” I cannot find any industry articles to substantiate this claim. If you have an industry reference that backs this up, I would be happy to look at it.

    You also said that China has “placed heavy bets on fossil fuel plants built in China, most particularly coal, given the severe limitations and expense that renewable power has encountered in China”

    China has removed more than ten regions from the list of having overcapacity in 2022, freeing them up to develop new coal plants.

    China’s power currently comes mostly from coal-fired power plants, as shown below:

    Coal 60%
    Hydro 19%
    Wind 10%
    Solar 9%
    Nuclear 2%

    “The profitability of coal-fired power plants is so low, there’s no incentive for them to build more,” said Morningstar analyst Jennifer Song. “China as a whole has set consumption targets for renewable energy sources. We can see those large power groups also have quotas to build more renewable projects.”

    Regions still need to prioritize clean energy generation and the policy reflects a governmental effort to curb coal-fired power in a “moderate manner,” said Zheng Dandan, a Shanghai-based analyst from Zheshang Securities Co. New capacity additions will mainly come from renewables, she said.

    Song Qiuyi, a Shanghai-based analyst at Capital Securities Corp., noted the latest assessment from China’s National Energy Administration won’t change the situation. Song said, “Most of the capital expenditure planned by coal-fired power companies will be in renewable energy.”

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