Wednesday, March 26, 2008

New Dark Age?

Santee Cooper is fond of saying that we in South Carolina are running out of power; if we don't roll over and let them build another one of their coal plants, South Carolina will be plunged back into the "dark ages."

In Santee Cooper's defense (sort of), this is really no different from what utilities trying to build coal plants all over the country are saying to the public. Nothing like a healthy dose of FUD (Fear, Uncertainty, and Doubt) to sway public opinion and get what you want...

Only, it turns out (surprise) that there's not as much to this "sky is falling" scenario as folks would have us believe.

At least, that is what the Department of Energy is saying.

From the Gristmill blog:

Want to kill one coal plant? Use a lawyer.

Want to kill a hundred? Use a spreadsheet.

On March 4, without fanfare, a bureaucrat named Guy Caruso caused 132 coal plants to disappear with a wave of his magic mouse.

Caruso is the head of the Energy Information Administration, the division of the U.S. Department of Energy that, well, comes up with information on energy. Sort of like the CIA, but less glamorous.

A year ago, the EIA projected [PDF] that electricity use would grow at the rate of 1.5 percent per year through 2030. But on March 4, Caruso told Congress [PDF] that the EIA had decided to put a new figure in the "projected growth rate" cell of his forecasting spreadsheet: 1.1 percent.

As we all learned in algebra, a small change in a percentage rate can make a big difference over time. Applied to coal, the new growth rate caused projected electricity generation in 2030 to drop from 3191 terawatt hours (tWh) to 2756 tWh, a decrease of 435 tWh.

What does 435 tWh equate to in terms of coal plants? Assuming a 75 percent capacity factor (the percentage of hours in an average year that a plant is running full-bore), that's the output of 66,200 megawatts (mW) of generating capacity, or 132 new coal plants (500 mW each) that won't have to be built after all between now and 2030.

Of course, a lot of people already knew this was going on, including Wall Street. For years, the Energy Information Administration, which should be leading the way in guiding decision makers, has been out of step with reality. It tends to play the role of cheerleader for an industry that has always wanted to build, build, build.

But at some point reality intrudes -- the cheerleader turns around and actually looks at the game.

And that's why 1.5 percent just became 1.1 percent, and 132 coal plants suddenly went poof.

Of course, it's not really the EIA administrator who decides which power plants are going to be built -- that's done by individual utilities and power authorities, each making its own economic and power growth projections. But EIA projections do set the tone for federal policy at all levels. An aggressive projection sets in motion the policy wheels of regulation, subsidies, and any number of other measures. So even though 132 coal plants weren't directly cancelled by Caruso's scaled back projection, the revision will nonetheless have the effect of curbing the coal boom.

But there's another lesson here as well. Like nuclear plants, coal plants tie up great gobs of capital during their extended construction periods. For the sponsors of such projects, the shifting sands of economic uncertainty can spell financial disaster, as many a utility learned the hard way during nuclear's fiscal meltdown.

In contrast, solar, wind, and conservation all have shorter lead times, a fiscal advantage not sufficiently appreciated, especially in uncertain economic environments like the present. So in addition to loving these options for being "green," planners can also love them for being "just in time."


cool Kim said...

So, according to the "experts" at the gristmill, wind has a shorter lead time than other power generating sources?

The only wind available in SC is offshore. Cape Wind in Mass would be a similar project. They have been working on Cape Wind since 2001 (check out the EIS here for proof):

and have not started construction on a single wind turbine.

If we let you enviro guys set the pace of construction, you all are going to have a lot of trouble charging your Ipods and cell phones. We'll never get the power we need.

Anonymous said...

If "we" let you utility guys set the pace of construction, you'll build before you even get a permit (see Cross), you'll build more capacity than is demanded (see the 1908s a/o current EIA projections), and you'll expose everyone to mercury, ozone and fine particle pollution, not to mention catastrophic climate change -- and you will continue to do nothing to conserve energy.