The economics of large-scale solar projects still don't work without massive subsidies and mandates that consumers pay above-market rates for solar power.
Archive for the ‘Energy’ Category.
So after spending billions to subsidize the construction and operation of wind farms, Britain has discovered that their output variability is a problem and that they produce too much of their power at night (issues many of us predicted long before they were built). So now England is facing the policy choice of either a) paying wind farm owners to NOT product power or b) paying factory owners to switch their operations to night time. Seriously. For most areas, wind is among the worst possible electricity source.
In a realistic appraisal of the CVSR we should note the following:
· An investment of $1.6 billion 250 MW breaks down to an extravagant $6,400,000 per megawatt.
· The Solar Ranch covers 1,500 acres.
· The CVSR is projected to produce 482,000 MWh per year, implying an operating capacity factor of around 22%.
· Given a reasonable appraisal of the value of 482,000 MWh per year, it is not possible that the solar panels will be able to provide a return sufficient to pay back the $1.6 billion investment within their functional life (not even close), even when ignoring annual operating and maintenance costs. Hundreds of millions of dollars will be lost (see Updated CSVR Cash Flow).
A much more viable alternative to a solar generation facility, although not the only one, is a plant using natural gas. A natural gas combined cycle gas turbine (CCGT) facility capable of 250 MW would have required less than one-fourth the capital investment, would be capable of making four times the electricity per year at 88% capacity factor, and would fit on a single acre.
Also, a CCGT facility could have been located closer to the point(s) of actual use of the electricity, and could provide dispatchable energy which could be increased or decreased as demand fluctuates; something the solar facility is incapable of providing.
So why is this project even happening? Because most of the project was funded by a taxpayer-gauranteed loan. And then many of the players got direct subsidies and tax breaks. And finally the electricity from the project gets bought at an above-market subsidized rate.
California regulators have launched an investigation into offshore hydraulic fracturing after revelations that the practice had quietly occurred off the coast for the past two decades.
The California Coastal Commission promised to look into the extent of so-called fracking in federal and state waters and any potential risks.
Hydraulic fracturing has been a standard tool for reinvigorating oil and gas wells for over 60 years. While it gets headlines as something new, it decidedly is not. What is new is its use in combination with horizontal drilling as a part of the initial well design, rather than as as a rework tool for an aging field.
What California regulators are really saying is that they have known about and been comfortable with this process for decades**, but what has changed is not the technology but public opinion. A small group of environmentalists have tried to, without much scientific basis, demonize this procedure not because they oppose it per se but because they are opposed to an expansion of hydrocarbon availability, which they variously blame for either CO2 and global warming or more generally the over-industrialization of the world.
So given this new body of public opinion, rather than saying that "sure, fracking has existed for decades and we have always been comfortable with it", the regulators instead act astonished and surprised -- "we are shocked, shocked that fracking is going on in this establishment" -- and run around in circles demonstrating their care and concern. Next step is their inevitable trip to the capital to tell legislators that they desperately need more money and people to deal with their new responsibility to carefully scrutinize this decades-old process.
**Postscript: If regulators are not familiar with basic oil-field processes, then one has to wonder what the hell they are going with their time. It's not like anyone in the oil business had any reason to hide fracking activity -- only a handful of people in the country would have known what it was or cared until about 5 years ago.
After my post the other day on how new award-winning supposedly environmentally sustainable parks are far more resource intensive than the old parks they were replacing, I have gotten a lot of feedback -- this is obviously a topic that strikes a chord with folks. In particular, a reader (I always forget to ask if I can use their names) sent me this article on the new LEED Platinum-certified building in New York
When the Bank of America Tower opened in 2010, the press praised it as one of the world’s “most environmentally responsible high-rise office building[s].” It wasn’t just the waterless urinals, daylight dimming controls, and rainwater harvesting. And it wasn’t only the Leadership in Energy and Environmental Design (LEED) Platinum certification—the first ever for a skyscraper—and the $947,583 in incentives from the New York State Energy Research and Development Authority. It also had as a tenant the environmental movement’s biggest celebrity. The Bank of America Tower had Al Gore.
The former vice president wanted an office for his company, Generation Investment Management, that “represents the kind of innovation the firm is trying to advance,” his real-estate agent said at the time. The Bank of America Tower, a billion-dollar, 55-story crystal skyscraper on the northwest corner of Manhattan’s Bryant Park, seemed to fit the bill. It would be “the most sustainable in the country,” according to its developer Douglas Durst. At the Tower’s ribbon-cutting ceremony, Gore powwowed with Mayor Michael Bloomberg and praised the building as a model for fighting climate change. “I applaud the leadership of the mayor and all of those who helped make this possible,” he said.
Gore’s applause, however, was premature. According to data released by New York City last fall, the Bank of America Tower produces more greenhouse gases and uses more energy per square foot than any comparably sized office building in Manhattan. It uses more than twice as much energy per square foot as the 80-year-old Empire State Building. It also performs worse than the Goldman Sachs headquarters, maybe the most similar building in New York—and one with a lower LEED rating. It’s not just an embarrassment; it symbolizes a flaw at the heart of the effort to combat climate change...
“What LEED designers deliver is what most LEED building owners want—namely, green publicity, not energy savings,” John Scofield, a professor of physics at Oberlin, testified before the House last year.
I will go out and get a picture today of our local Bank of America branch. It is LEED certified at some level, proudly displaying the certificate in the lobby. Out front it has two parking spaces near the door for electric cars - it does not have a charger for them, just reserved preferred parking. I am sure they got their LEED points this way.
Postscript: I am not religious but am fascinated by the comparisons at times between religion and environmentalism. Here is the LEED process applied to religion:
- 1 point: Buy indulgence for $25
- 1 point: Say 10 Our Fathers
- 1 point: Light candle in church
- 3 points: Behave well all the time, act charitably, never lie, etc.
It takes 3 points to get to heaven. Which path do you chose?
It is interesting that the buck just never stops at this President's desk. Apparently, the reason for the delay in approval of the Keystone Pipeline is the Republicans.
The approval process for the Keystone XL pipeline has been delayed by Republicans playing “political games,” Treasury Secretary Jack Lew says.
Lew said that the economy is “strong” and more resilient after 40 months of growth but the economic recovery is not fast enough, which led Chris Wallace on “Fox News Sunday” to ask whether approving the pipeline would help speed up job growth.
“If you’re so interested in creating more jobs, why not approve the Keystone pipeline, which will create tens of thousands of jobs?” Wallace asked of the pipeline under review.
“There were some political games that were played, that took it off the trail and path to completion, where Republicans put it out there as something that was put on a timetable that it could not be resolved. It caused a delay,” Lew said. “Playing political games with something like this was a mistake.”
Uses huge greenhouses combined with a very tall column to generate convection currents that drive turbines. Apparently can still generate power at night taking advantage of the difference between soil and ambient air temperatures. I have no idea if this makes a lick of sense financially (without subsidies).
The wireless electric vehicle charger. Sure it's cool. And convenient. But as I understand it, the main selling point of electric vehicles is their energy efficiency (I personally like the driving feel of a torque-y electric motor, but that does not seem to be the advertised selling point). If this is the case, then why the hell would one accept a 30% energy loss (wireless charging is generally considered to be about 70% efficient) because they were too lazy to plug in a cable?
This is against the backdrop of most electric vehicle owners having no freaking clue if they are actually saving energy and money or not (all they know is that they see the costs to fill their gas tank but don't see little numbers spinning when they fill their electric car). As I have written before, they likely are not saving energy vs. a similar size gasoline engine car but may be saving some money due to the lower cost of fuels like natural gas and coal (vs. gasoline) used in electricity production.
The confrontation may be coming soon in the environmental community over wind power -- it certainly would have occurred already had the President promoting wind been Republican rather than Democrat. I might have categorized this as "all energy production has environmental tradeoffs", but wind power is so stupid a source to be promoting that this is less of a tradeoff and more of another nail in the coffin. As a minimum, the equal protection issues vis a vis how the law is enforced for wind companies vs. oil companies are pretty staggering.
“It happens about once a month here, on the barren foothills of one of America’s green-energy boomtowns: A soaring golden eagle slams into a wind farm’s spinning turbine and falls, mangled and lifeless, to the ground.
Killing these iconic birds is not just an irreplaceable loss for a vulnerable species. It’s also a federal crime, a charge that the Obama administration has used to prosecute oil companies when birds drown in their waste pits, and power companies when birds are electrocuted by their power lines.”
“[The Obama] administration has never fined or prosecuted a wind-energy company, even those that flout the law repeatedly. Instead, the government is shielding the industry from liability and helping keep the scope of the deaths secret.”
“Wind power, a pollution-free energy intended to ease global warming, is a cornerstone of President Barack Obama’s energy plan. His administration has championed a $1 billion-a-year tax break to the industry that has nearly doubled the amount of wind power in his first term. But like the oil industry under President George W. Bush, lobbyists and executives have used their favored status to help steer U.S. energy policy.”
“The result [of Obama energy policy] is a green industry that’s allowed to do not-so-green things. It kills protected species with impunity and conceals the environmental consequences of sprawling wind farms.”
“More than 573,000 birds are killed by the country’s wind farms each year, including 83,000 hunting birds such as hawks, falcons and eagles, according to an estimate published in March in the peer-reviewed Wildlife Society Bulletin.
Frequent readers of this blog will know that I am enormously skeptical of most fuel and efficiency numbers for electric vehicles. Electric vehicles can be quite efficient, and I personally really enjoy the driving feel of an electric car, but most of the numbers published for them, including by the government, are garbage. I have previously written a series of articles challenging the EPA's MPGe methodology for electric cars.
In just a bit, I am going to challenge some numbers in a recent WSJ article on electric vehicles, but first let me give you an idea of why I don't trust many people on this topic. Below is a statement from Fueleconomy.gov, which bills itself as the official government source for fuel economy information (this is a public information, not a marketing site). In reference to electric vehicles, it writes this:
Energy efficient. Electric vehicles convert about 59–62% of the electrical energy from the grid to power at the wheels—conventional gasoline vehicles only convert about 17–21% of the energy stored in gasoline to power at the wheels
The implication, then, is that electric vehicles are 3x more energy efficient than cars with gasoline engines. I hope engineers and scientists can see immediately why this statement is total crap, but for the rest, here is the problem in short: Electricity has to be produced, often from a fossil fuel. That step, of converting the potential energy in the fuel to use-able work, is the least efficient step of the entire fuel to work process. Even in the most modern of plants it runs less than a 50% conversion efficiency. So the numbers for the gasoline cars include this inefficient step, but for the electric vehicle it has been shuffled off stage, back to the power plant which is left out of the calculation.
Today I want to investigate this statement, which startled me:
Factor in the $200 a month he reckons he isn't paying for gasoline to fill up his hulking SUV, and Mr. Beisel says "suddenly the [Nissan Leaf] puts $2,000 in my pocket."
Yes, he pays for electricity to charge the Leaf's 24-kilowatt-hour battery—but not much. "In March, I spent $14.94 to charge the car" and a bit less than that in April, he says.
This implies that on a cost-per-mile basis, the EV is over 13x more efficient than gasoline cars. Is this a fair comparison? For those who do not want to read a lot of math, I will preview the answer: the difference in fuel cost per mile is at best 2x, and is driven not by using less fossil fuel (the electric car likely uses a bit more, when you go all the way back to the power plant) but achieves its savings by using lower cost, less-refined fossil fuels (e.g. natural gas in a large power plant instead of gasoline in a car).
Let's start with his estimate of $14.94. Assuming that is the purchased power into his vehicle charger, that the charger efficiency is 90%, and the cost per KwH in Atlanta is around $0.11, this implies that 122.24 use-able KwH are going into the car. Using an estimate of 3.3 miles per KwH for the Leaf, we get 403 miles driven per month or 3.7 cents per mile in electricity costs. This is very good, and nothing I write should imply that the Leaf is not an efficient vehicle. But its efficiency advantage is over-hyped.
Now let's take his $200 a month for his Ford Expedition, which has an MPG around 15. Based on fuel prices in Atlanta of $3.50 a gallon, this implies 57 gallons per month and 857 miles driven. The cost is 23.3 cents per mile.
Already we see one difference -- the miles driven assumptions are different. Either he, like a lot of people, don't have a reliable memory for how much he spent on gas, or he has changed his driving habits with the electric car (not unlikely given the shorter range). Either way, the total dollar costs he quotes are apples and oranges. The better comparison is 23.3 cents per mile for the Expedition vs. 3.7 cents a mile for the Leaf, a difference of about 6x. Still substantial, but already less than half the 13x difference implied by the article.
But we can go further, because in a Nissan Leaf, he has a very different car from the Ford Expedition. It is much smaller, can carry fewer passengers and less cargo, cannot tow anything, and has only 25% of the Expedition's range. With an electric motor, it offers a very different driving experience. A better comparison would be to a Toyota Prius, the c version of which gets 50MPG. It is similar in most of these categories except that it has a much longer range, but we can't fix that comparison, so just keep that difference in mind.
Let's look at the Prius for the same distances we calculated with his Leaf, about 403 miles. That would require 8.1 gallons in a Prius at $3.50, which would be $28.20 in total or 7 cents a mile. Note that while the Leaf still is better, the difference has been reduced to just under 2x. Perhaps more importantly, the annual fuel savings has been reduced from over $2200 vs. the Expedition that drove twice as many miles to $159 a year vs. the Prius driving the same number of miles. So the tradeoff is $159 a year savings but with much limited range (forgetting for a moment all the government crony-candy that comes with the electric car).
$159 is likely a real savings but could be swamped by differences in long-term operating costs. The Prius has a gasoline engine to maintain which the Leaf does not, though Toyota has gotten those things pretty reliable. On the other hand the Leaf has a far larger battery pack than the Prius, and there are real concerns that this pack (which costs about $15,000 to manufacture) may have to be replaced long before the rest of the car is at end of life. Replacing a full battery pack after even 10 years would add about $1200 (based on discounted values at 8%) a year to operating costs, swamping the fuel cost advantage.
Also note that a 2x difference in fuel costs per mile does not imply a 2x difference in fuel efficiency. Gasoline is very expensive vs. other fuels on a cost per BTU basis, due to taxes that are especially high for gasoline, blending requirements, refining intensity, etc.) Gasoline, as one person once said to me way back when I worked at a refinery, is the Filet Mignon of the barrel of oil -- if you can find a car that will feed on rump steak instead, you will save a lot of money even if it eats the same amount of meat. A lot of marginal electric production (and it is the margin we care about for new loads like electric cars) is natural gas, which is perhaps a third (or less) the cost of gasoline per BTU. My guess is that the key driver of this 2x cost per mile difference is not using less fuel per se, but the ability to use a less expensive, less-refined fuel.
Taking a different approach to the same problem, based on the wells-to-wheels methodology described in my Forbes article (which in turn was taken directly from the DOE), the Nissan Leaf has a real eMPG of about 42 (36.5% of the published 115), less than the Prius's at 50. This confirms the findings above, that for fossil fuel generated electricity, the Leaf uses a bit more fossil fuels than the Prius but likely uses much less expensive fuels, so is cheaper to drive. If the marginal electrical fuel is natural gas, the Leaf also likely generates a bit less CO2.
Bronson Beisel, 46, says he was looking last fall for an alternative to driving his gas-guzzling Ford Expedition sport utility around suburban Atlanta, when he saw a discounted lease offer for an all-electric Nissan Leaf. With $1,000 down, Mr. Beisel says he got a two-year lease for total out-of-pocket payments of $7,009, a deal that reflects a $7,500 federal tax credit.
As a resident of Georgia, Mr. Beisel is also eligible for a $5,000 subsidy from the state government. Now, he says, his out-of-pocket costs for 24 months in the Leaf are just over $2,000. Factor in the $200 a month he reckons he isn't paying for gasoline to fill up his hulking SUV, and Mr. Beisel says "suddenly the car puts $2,000 in my pocket."
Yes, he pays for electricity to charge the Leaf's 24-kilowatt-hour battery—but not much. "In March, I spent $14.94 to charge the car" and a bit less than that in April, he says. He also got an electric car-charging station installed at his house for no upfront cost.
"It's like a two-year test drive, free," he says.
I hope you all enjoy Mr. Beisel's smug pride a driving a car using your money.
In my next post, I am going to dive deeper in the operating cost numbers here. By the article, Mr. Beisel has cut his monthly fuel costs from $200 to $14.94, a savings of over 90%. If these numbers are real, why the hell do we have to subsidize these cars? Well, while it turns out that while the Leaf is a nice efficient vehicle, these numbers are way off. Stay tuned.
On the right, both climate change and questions about global limits on oil production have exited the realm of empirical debate and become full-blown fronts in the culture wars. You're required to mock them regardless of whether it makes any sense. And it's weird as hell. I mean, why would you disparage development of renewable energy? If humans are the ultimate creators, why not create innovative new sources of renewable energy instead of digging up every last fluid ounce of oil on the planet?
I am sure it is perfectly true that there are Conservatives who knee-jerk oppose every government renewable energy and recycling and green jobs idea that comes along without reference to the science. But you know what, there are plenty of Liberals who knee-jerk support all these same things, again without any understanding of the underlying science. Mr. Drum, for example, only recently came around to opposing corn ethanol, despite the fact that the weight of the science was against ethanol being any kind of environmental positive years and years ago. In fact, not until it was no longer cool and caring to support ethanol (a moment I would set at when Rolling Stone wrote a fabulous ethanol expose) did Drum finally turn against it. Is this science, or social signalling? How many folks still run around touting electric cars without understanding what the marginal fuels are in the electricity grid, or without understanding the true well-to-wheels efficiency? How many folks still run around touting wind power without understanding the huge percentage of this power that must be backed up with hot backup power fueled by fossil fuels?
Why is his almost blind support of renewable energy without any reference to science or the specifics of the technologies involved any saner than blind opposition? If anything, blind opposition at least has the numbers on their side, given past performance of investments in all sorts of wonder-solutions to future energy production.
The reason there is a disconnect is because statists like Drum equate supporting government subsidies and interventions with supporting renewables. Few people, even Conservatives, oppose renewables per se. This is a straw man. What they oppose are subsidies and government mandates for renewables. Drum says he has almost limitless confidence in man's ability to innovate. I agree -- but I, unlike he apparently, have limitless confidence in man's ability to innovate absent government coercion. It was not a government program that replaced whale oil as an illuminant right when we were approaching peak whale, it was the genius of John D. Rockefeller. As fossil fuels get short, prices rise, and people naturally innovate on substitutes. If Drum believes that private individuals are missing an opportunity, rather than root for government coercion, he should go take up the challenge. He can be the Rockefeller of renewable energy.
Postscript: By the way, it is absurd and disingenuous to equate opposition to what have been a series of boneheaded government investments in questionable ventures and technologies with some sort of a-scientific hatred of fossil fuel alternatives. I have written for a decade that I long for the day, and expect it to be here within 20 years, that sheets of solar cells are cranked from factories like carpet out of Dalton, Georgia.
Via Mark Perry. This issue came up in the debates, when Obama claimed that he tried to take credit for the recent oil and gas boom, when in fact all of the boom is occuring on public lands (oil and gas production on federal lands is actually falling during this boom). Here is one reason whyL
Hardcore Keynesian theory says that even paying someone to dig a hole one day and fill it in the next is stimulative. This has always seemed insane to me -- how could it possibly be a net gain in growth and wealth to shift resources from productive activities to unproductive ones? But in line with this theory, the Keynesians in the Obama Administration have hit on the perfect stimulus:
A cargo train filled with biofuels crossed the border between the US and Canada 24 times between the 15th of June and the 28th of June 2010; not once did it unload its cargo, yet it still earned millions of dollars... The companies “made several million dollars importing and exporting the fuel to exploit a loophole in a U.S. green energy program.” Each time the loaded train crossed the border the cargo earned its owner a certain amount of Renewable Identification Numbers (RINs), which were awarded by the US EPA to “promote and track production and importation of renewable fuels such as ethanol and biodiesel.”
It is interesting to me that the government has chosen to subsidize the least desirable actions
via Zero Hedge
I saw this at Flowing Data -- this is apparently a chart prepared by some sustainability group at MIT to map solar potential of different sites in Cambridge, MA
Look at all the sites marked "excellent". I have news for the brilliant folks at MIT. Even the best, flattest roof facing south in Cambridge, MA still rates a "sucks" for solar potential. (source)
Even with massive state and Federal subsidies, those of us who live in the bright red areas find that roof-top solar PV is still an - at best - marginal investment with very long payback times. We all hope to change this in the future, but there is no way a city like Cambridge with approximately half the solar insolation we get in AZ is going to have "excellent" roof top solar PV sites.
Quick - in your last fill up, how much did you pay for gas? About how many gallons did you use?
If you are like most people, you can probably come pretty close to this. I paid somewhere just north of $4.00 for about 18 gallons.
OK, second set of questions: On your last electric bill, how much did you pay per KwH? How many KwH did it take to run your dishwasher last night?
Don't know? I don't think you are alone. I don't know the answers to the last questions. Part of the reason is that gas prices are posted on every corner, and we stare at a dial showing us fuel used every time we fill up. There is nothing comparable for electricity -- particularly for an electric car.
I understand some inherent appeals to electric cars. They are fun to drive, kind of quiet and stealthy like KIT from Knight Rider. They are really torquy and have nice acceleration. There is no transmission and gear changing. All cool and awesome reasons to buy an electric car.
However, my sense is that the main appeal of electric cars is that because we don't see the fuel price on the corner, and because we don't stare at a spinning dial as electrons are flowed into the car, we pretend it is not costing us anything to fill up. Out of sight is out of mind. Heck, even experienced car guys who should know better take this attitude. Popular Mechanics editor Jim Meigs wrote to Glenn Reynolds, re: the Volt:
Others might like the notion of going a month or two without filling the tank
This drives me crazy. Of COURSE you are filling the freaking tank. You are just filling the lead-acid (or lithium-ion) one with electrons rather than filling the hollow steel one with hydrocarbon molecules. The only difference is that you don't stand there watching the meter spin. But that should not mean that we pretend we are not filling the car and paying a cost to do so.
By the way, if you have read me before, you know I also have a problem with the EPA equivalent mileage standards for electric cars, which basically inflate the numbers by a factor of three by ignoring the second law of thermodynamics. This fraudulent mileage number, combined with the EPA's crazy-high new mileage standards, represents an implicit subsidy, almost a mandate, for electric cars that gets little attention. And that will have zero effect on energy usage because the numbers are gamed.
...you will love this too. Solyndra used cylindrical solar cells nested inside a u-shaped mirror to concentrate sunlight to get more power per square inch of solar cell. The problem is that all that extra shaping and mirrors added cost, and only made sense if solar cells were expensive. After all, if solar cells are cheap, if one wants 20% more output, it's easier to just increase the solar cell area by 20% than to add all the concentrator rigmarole.
Well, dreams die hard, and here is the latest idea -- spherical concentrators. These things have huge spheres and tracking motors, all for a 35% increase in efficiency. Methinks that just adding 35% more PV cell area is going to be cheaper, but this could well be yet another flytrap for Obama Administration officials, who are to sexy-looking new technologies like a degenerate wagerer at the track is to a hot tip.
Just days after the Export-Import Bank approved a multi-million dollar federal loan guarantee to benefit a mostly foreign-based wind-energy outfit, the company pink-slipped more than 200 American workers.
The Export-Import Bank, a federal agency that promotes and finances sales of U.S. exports to foreign buyers, approved a $32 million loan guarantee on Aug. 2 for a Brazilian firm to purchase wind turbines from LM Wind Power. According to itswebsite, LM Wind Power is headquartered in Denmark.
“Ex-Im Bank’s financing, which guarantees a Bank of America loan, will support approximately 250 permanent American jobs at the company’s Little Rock, Ark., and Grand Forks, N.D., manufacturing facilities,” the bank said in a release.
The company maintains a manufacturing presence in Arkansas and North Dakota—but the company laid off 234 of the Arkansas plant’s roughly 300 workers just two days after its loan was approved.
“We have this week told our workforce that we are re-sizing our workforce and business to fit our plans for 2013,” Adam Ruple, human resources director for LM Wind Power, told the City Wire of Arkansas.
A spokesman for LM Wind Power referred the Free Beacon to the company’s website.
When LM Wind Power came to Little Rock, Arkansas, in 2007, it said it would employ 1,000 people by 2012. But the global economic crunch led to diminishing demand. Three months before its loan guarantee was finalized, LM Wind Power announced its profits had fallen 41 percent last year.
It really takes some amazing stones to grab a $32 million subsidized government loan on the promise to add 250 jobs just days before a planned 234-person layoff.
Every single time that wind power installations are evaluated based on their actual performance, they turn out to make no economic sense. Consumer Reports comes to the same conclusion for their wind power trial (and this does not even include the issues of standby power that make even small wind power savings irrelevant to CO2 production).
But if you're considering a wind turbine to supplement your home's power, consider our experience with one product, the Honeywell WT6500 Wind Turbine, a cautionary tale....
A tool on Windtronics' website had calculated we'd get 1,155 kWh per year at the 12-mph average it predicted for our area of Yonkers, New York. And the authorized installer, during his initial visit, didn't say the roof of our headquarters might generate any less, but that rating is at a height of 164 feet, not the 33 feet WindTronics requires for rooftop installations.
In the 15 months since the turbine was installed, though, it has delivered less than 4 kWh—enough only to power a 12,000 btu window air conditioner for one afternoon. A company representative in charge of installations worldwide recently visited our offices and confirmed that our test model was correctly installed. What's more, he told us that while the WT6500 should start generating power at about 3 mph, the initial juice goes just to power the system's inverter, which must be running before it supplies any AC power elsewhere. The true wind speed needed to start producing AC while the inverter is on is 6 mph, not far from the 7.5 mph needed by a traditional gearbox wind turbine....
At the rate the WT6500 is delivering power at our test site, it would take several millennia for the product to pay for itself in savings—not the 56 years it would take even with the 1,155 kWh quote we received.
In the past I have been critical of First Solar, like I have most solar companies, for having business models that were almost entirely dependent on huge government subsidies, particularly in Europe. When these go away, the businesses start to crash.
I have not had time to dig into their financials to look for shenanigans, and to parse out how much is still dependent in some way on either direct subsidies of solar projects or incentives that cause utilities to buy solar electricity at above market rates, but First Solar reversed their large losses to a profit in the last quarter. I am not sure if this is BS or not, but I like this attitude if true:
The company's cost per watt is the lowest in the industry, but it increased slightly during the quarter, to 72 cents per watt, because of the under utilization of its factories. If the factories had run more, the cost would have gone down, officials said.
Hughes said First Solar is making headway on its plan to target regions of the world with ample sunshine and a need for electricity, where solar power can compete without subsidies that make it cost-effective when compared with traditional energy sources.
Those places include Australia, India, the Middle East and other regions, he said.
That would be terrific. I would love to see a solar boom driven by real economics and not taxpayer largess.
The Environmental Protection Agency has slapped a $6.8 million penalty on oil refiners for not blending cellulosic ethanol into gasoline, jet fuel and other products. These dastardly petroleum mongers are being so intransigent because cellulosic ethanol does not exist. It remains a fantasy fuel. The EPA might as well mandate that Exxon hire Leprechauns.
As a screen shot of EPA’s renewable fuels website confirms, so far this year - just as in 2011 - the supply of cellulosic biofuel in gallons totals zero.
“EPA’s decision is arbitrary and capricious. We fail to understand how EPA can maintain a requirement to purchase a type of fuel that simply doesn’t exist,” stated Charles Drevna, president of American Fuel & Petrochemical Manufacturers (AFPM), the Washington-based trade association that represents the oil refining and petrochemicals industries.
I will remind Republicans thought that ethanol is a bipartisan turd, this particular requirement having been signed into law by President Bush.
For years, one of the problems I have had with the way CO2 cap and trade systems were structured was a fear that these systems would devolve into cronyism, with the companies best able to lobby the government getting allocations while less connected companies had to pay. It seems this is already occuring in California:
The California Air Resources Board (ARB), the regulator of the forthcoming program, held a workshop in Sacramento on Monday where it discussed plans to give away more free permits to prevent leakage in “trade-exposed” industries like cement production, oil refining and food processing.
Over the first three allowance auctions, which begin in November, the state will sell 48.9 million allowances and give away 53.8 million allowances, according to ARB.
Any company deemed to have either a high, medium or low risk of leaving the state will receive all the allowances they need to comply with the program during the first two-year compliance period, from 2013-2014, rather than have to buy the permits at regular auctions.
But those in the low and medium risk groups are currently scheduled to see their allotment of free allowances start to decline in 2015 by as much as half.
ARB officials on Monday said they are conducting studies examining the leakage risk of companies based on their historical energy costs and trade flows.
Don't be fooled by the quasi-scientific-sounding language here about categories of "trade exposure." The reality will be that companies with political clout will get the permits, and companies without such clout will not. This is a system that will favor large manufacturers over smaller companies. It will also, oddly, apparently shift the burden of compliance from large manufacturers to service companies (since service companies are the least likely to be "trade exposed.") Of course, any manufacturer still operating plants in California is crazy anyway.
In a report from the DOE Inspector General, which said that $500,000 of equipment bought with stimulus money was missing at a battery company:
“It would not be appropriate to release the name of stimulus-money recipient where the $500,000 worth of equipment could not be located.”
But it is A-OK to excoriate by name any number of corporations that create value legally if doing so advances this Administration's re-election prospects.
So, why do we have all these "dirty" coal plants? Market failure? Industry greed? Nope -- Carter-era government policy. For you younger folks, here is a law you may have never heard of:
The Powerplant and Industrial Fuel Use Act (FUA) was passed in 1978 in response to concerns over national energy security. The 1973 oil crisis and the natural gas curtailments of the mid 1970s contributed to concerns about U.S. supplies of oil and natural gas. The FUA restricted construction of power plants using oil or natural gas as a primary fuel and encouraged the use of coal, nuclear energy and other alternative fuels. It also restricted the industrial use of oil and natural gas in large boilers.**
In other words, all new fossil fuel-powered boilers had to be coal-fired (which in a year or so, after Three Mile Island, translated to all new boilers since nuclear was essentially eliminated as an option). Yes, this may seem odd to us in an era of so much environmental concern over coal, but something coal opponents don't tell you is that many of the exact same left-liberal-government-top-down-energy-policy types that oppose coal today lobbied hard for the above law several decades ago. Here is a simplified timeline:
1. Government energy policy sets price controls that create artificial shortages of oil and gas
2. Government-created shortages of oil and gas lead to this law, with government demanding that all new fossil fuel-powered electric plants and boilers be coal powered.
3. Government mandates on coal use create environmental concerns, which lead to proposals for taxes and bans on coal power.
4. The need for government action against coal is obviated by a resurgence of oil and gas supply once government controls were removed. However, in response, government beings to consider strong controls on expansion in oil and gas production (e.g. fracking limits).
** I got involved with this because I worked in an oil refinery in the 1980's. We had to get special exemptions to run our new boilers on various petroleum products (basically byproducts and waste products of the refining process). Without these, the law would have required we bring in coal to run our oil refinery furnaces.