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Should the U.S. Energy Future Depend on Cheap Solar Imports?

The administration’s decision on whether to impose a tariff or other fee on US imports of solar equipment from China raises serious concerns. The right choice in this case is less obvious than suggested by the jobs and free-trade arguments from the main US solar trade association (SEIA) or the Wall St. Journal’s editorial page. Solar power generates less than 2% of US electricity today. However, if it is to grow as experts forecast and advocates claim is essential, then considerations such as long-term energy security can’t be ignored, while near-term job losses from a new tariff would be more than offset by subsequent growth.

Last October the US International Trade Commission issued its recommendations in favor of the complaint by two US manufacturers of solar panel components. I usually favor low tariffs and open access, especially when the markets in question are functioning smoothly and the principal impacts from trade are the result of “comparative advantage” in production or extraction between countries. However, there is little about the market for solar equipment, including the photovoltaic (PV) cells and modules at issue here, that qualifies as free.

The production and deployment of solar energy hardware has depended since its inception, and from one end of its value chain to the other, on significant government interventions. In the case of China-based PV manufacturing, these have included low-interest government loans, preferential access to land, and minimal environmental regulations. China-based PV manufacturers were also able to take advantage of extravagantly generous European solar subsidies in the 2000s to scale up their output, drive down their costs, and ultimately send much of the EU’s solar manufacturing industry into bankruptcy.

On the US end, both solar manufacturing and deployment (installation) have benefited greatly from federal tax credits, cash grants from the US Treasury, and a web of state quotas for aggressively increasing utilization of renewable energy sources. Justified on grounds of energy security, “green jobs”, and climate change mitigation, these measures have strongly promoted solar power and  delivered an extraordinary 68% compound annual growth rate in US solar installations since 2006. On a per-unit-of-energy basis, these supports are also at least an order of magnitude more valuable to the solar industry than the federal tax benefits received by the oil and gas industry.

One of the factors that makes this decision so difficult and politically sensitive is that a whole industry has apparently grown up around cheap solar imports, to the point that the main solar benefit to the US economy today is from installation, not manufacturing. US companies and their employees build solar panel racks and other “balance of system” gear, finance rooftop and other solar projects, and construct these installations.

These companies could be at risk of losing business and shedding jobs, if a large tariff were imposed on imported solar cells, modules and panels. Those impacts might be less than feared, though, because the cost of the actual sunlight-converting PV hardware now makes up less than a third of total solar project costs. In other words, a tariff that doubled effective PV cost would drive up total solar costs to a much smaller degree, and least of all for residential solar, which has the highest total costs per kilowatt.

There’s another important aspect of this debate that hasn’t received much attention. If solar power is as important to our future energy diet as many think, then it should be no more desirable to become heavily reliant on China for our supplies of PV components than it did to depend on growing imports of Middle East oil. That was the main energy security issue for the US for the last 30 years, until the shale revolution unexpectedly reversed that trend. Relying on solar imports from China in the long run will be nothing like depending on Canada for the largest share of the petroleum the US still imports.

It also makes sense to address this situation now, before solar power has grown to 20% or 30% of the US electricity mix, and with the US economy near full employment, when those workers that did lose their jobs would have the best chance to replace them quickly.

From the start, the complaint of unfair competition lodged by Suniva Inc. and Solar World Americas–Chinese- and German-owned, respectively–has been derided as an effort to prop up a couple of marginal players at the expense of the much larger US solar-installation sector. That ignores the position of First Solar (NASDAQ:FSLR), a US-based PV manufacturer with $3 billion in global sales. The company is on record supporting the trade complaint. Of course they aren’t a disinterested party; they stand to benefit from a tariff that would raise the cost of competing PV gear from China and elsewhere.

That’s precisely the point of the complaint: strengthening US solar manufacturers, so that the growth of solar energy in this country doesn’t end up like TV sets and other consumer electronics. There’s more at stake, because PV isn’t TV. If solar power becomes a major part of US energy supplies by mid-century, it will actually matter if we have a robust manufacturing base to drive its deployment, rather than relying on any one country or region for its key building block.

Photo Credit: iamme ubeyou via Fickr

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Content Discussion

Bob Meinetz's picture
Bob Meinetz on January 23, 2018

It also makes sense to address this situation now, before solar power has grown to 20% or 30% of the US electricity mix.

Geoffrey, what’s the basis for your belief solar might be capable of growing to even 10% of the U.S. electricity mix?

Geoffrey Styles's picture
Geoffrey Styles on January 24, 2018

If unsunny Germany can get to 7%–albeit with Herculean effort–then 10% doesn’t seem outrageous here. Whatever the probability of much more than that, plenty of folks who are upset about the tariff appear to believe it’s possible or necessary.

Geoffrey Styles's picture
Geoffrey Styles on January 24, 2018

You raise an important point. Labor costs fall into the category of what I referred to as comparative advantage. As I described in the post, China’s current dominance of the global PV market has little to do with comparative advantage–including labor costs–and instead owes much to a strongly mercantilist approach to trade and industrial policy. That, not low labor costs, is what merits tariffs and other playing-field levelers.

Walter Runte's picture
Walter Runte on January 24, 2018

While I believe this tariff is wrongheaded, its impact is no where near as apocalyptic as some in the industry are claiming – and only half of what the petitioners sought. It only applies to Chinese imports (not the majority source), the first 2.5 GW of imports are exempt, and the 5 year tariff declines each year. GTM’s analysis projects US solar installations over the next 5 years at 61.3 GW, down 11% from the previously projected 68.9 GW. The biggest impact will be on utility scale projects.

Joe Deely's picture
Joe Deely on January 24, 2018

Wind will be the first to pass 10% in a few years – with solar not too far behind.

Joe Deely's picture
Joe Deely on January 24, 2018

The more interesting question is – when will wind/solar pass coal? then when will wind by itself pass coal? and then when will solar by itself pass coal?

Wind will pass coal in ERCOT by 2022 – wind will pass coal nationally in the late 20’s.

Helmut Frik's picture
Helmut Frik on January 25, 2018

German point of view in this area is, that as long as chinese factories operate with machinery built in germany, swizerland, netherlands, there is no real danger, because in very short time new manufacturing lines coming from own production can be built in germany in case there are any problems with supplies from china. The know how to build and operate these production lines is still avaulable. It would be a different case if this changes.

Bob Meinetz's picture
Bob Meinetz on January 25, 2018

Joe, 39 years ago a U.S. president told us energy from the sun could make up 20% of US energy by the year 2000. That prediction and others like it fell flat on their faces, to the incalculable detriment of climate and species diversity. What’s the basis for your undying optimism? Is the sun shining brighter now?

Bob Meinetz's picture
Bob Meinetz on January 25, 2018

Geoffrey, either that, or they believe business will suffer. What are the chances?

Joe Deely's picture
Joe Deely on January 25, 2018

Bob,
I could easily find all kinds of examples of tech predictions which have not come true on a timely basis. It’s usually a matter of over estimating what can be done in a short amount of time or not understanding what market forces are needed in order to make the prediction come true.

For example, when Jimmy Carter made that prediction the semiconductor industry was just getting started, We now have a mature industry, a ton of experience processing silicon, advanced manufacturing equipment, etc…
Things change.

The reason for my optimism about solar growth – it’s already happening. It’s a runaway train. Improvements happening every day, continued cost reductions, projects being installed in a short timeframe, complementary markets developing(storage) etc… I have not seen one credible reason why the solar market will not continue growing over the next 20 years. Is there a maximum share that solar can obtain? maybe – but we are nowhere near that.

By the way, the solar tariff is just a blip. It will probably hurt or delay some projects, particularly in places like TX but in the long run it will barely be noticed.

Speaking of predictions from the late 70s.

“There is no reason anyone would want a computer in their home.”
Ken Olson
CEO – Digital Equipment
1977

Joe Deely's picture
Joe Deely on January 25, 2018

Bob,
The latest EIA monthly report just came out. 44% Y-Y growth for solar.

A couple of years ago you made the following statement abut NC solar.

Of NC’s total 2014 electricity generation of 126,554 GWh, solar contributed a pathetic six-tenths of one percent

How, did NC do with solar in 2017 (thru Nov) ?

Solar = 5,440 GWh
NC Total = 119,192 GWh

Solar Share = 4.56%
Y-Y growth = 66%

What is the basis for your undying pessimism?

Roger Arnold's picture
Roger Arnold on January 25, 2018

If solar power is as important to our future energy diet as many think, then it should be no more desirable to become heavily reliant on China for our supplies of PV components than it did to depend on growing imports of Middle East oil.

That overlooks a very important distinction: oil is a consumable commodity, PV components a capital commodity. A reliable stream of oil was (and still is) critical to the functioning of the economy. A reliable stream of PV components, not.

If the supply were interrupted, the components previously imported and installed would not suddenly stop working. Only the growth of capacity would be temporarily arrested. Outside the solar installation business, the economy wouldn’t be affected.

Roger Arnold's picture
Roger Arnold on January 25, 2018

Bob, “could” is a funny word. It always begs the question “under what set of assumptions?”

Jimmy Carter wasn’t actually wrong; the US could have been getting 20% of its energy from the sun by 2000.Of course It would have been solar thermal rather than solar PV; at that time silicon was very expensive, and the tiny solar PV market was still boxed in by reliance on scrap electronics grade silicon. But 20% of US energy consumption from the sun was quite possible. Especially given that more than 20% of US energy consumption is for low grade heat.

Obviously it didn’t work out that way. Why not? Well, mostly because the nations behind the Arab oil embargo wised up. They realized that the oil prices created by the embargo were unsustainable. If they persisted, alternatives would be developed. The plunge in oil prices after the embargo was called off managed to bankrupt a lot of companies that had been investing in alternatives.

Jesper Antonsson's picture
Jesper Antonsson on January 29, 2018

Exactly my thoughts, except replacements and maintenance would also be affected. But OTOH, if solar penetration is 20% and component life is 25 years, the grid doesn’t risk losing more than 1% per year or so of total generation.

Bob Meinetz's picture
Bob Meinetz on January 29, 2018

Joe, within a year Ken Olson no doubt realized he was wrong. Yet after five decades and tens of $billions in investment, the fanatical devotees still clinging to a technology responsible for less than 2% of U.S. electricity make him look like a genius.

Things change? Yes, marketing, public opinion, what people want to have/don’t want to have in their homes, women’s hemlines – those kinds of things change. Physics doesn’t, and it limits the potential of your chosen technology to terminal irrelevance.

But don’t listen to me, don’t listen to Ken Olson or Jimmy Carter. Listen to an expert – the man credited more than any other with raising awareness of climate change.

Can renewable energies provide all of society’s energy needs in the foreseeable future? It is conceivable in a few places, such as New Zealand and Norway. But suggesting that renewables will let us phase rapidly off fossil fuels in the United States, China, India, or the world as a whole is almost the equivalent of believing in the Easter Bunny and Tooth Fairy.

http://www.columbia.edu/~jeh1/mailings/2011/20110729_BabyLauren.pdf

For important policy decisions about climate change, should we be listening to James Hansen or The Easter Bunny?

Bob Meinetz's picture
Bob Meinetz on January 29, 2018

Joe, any pessimism for which I can take credit is solely based on advocacy which continually cherry-picks data, from one state with limited sunshine, during one period, quoting irrelevant “capacity” figures, to argue for an ideologically-driven agenda.

Not unlike climate denial, is it?

Bob Meinetz's picture
Bob Meinetz on January 29, 2018

Roger, hypothetical assumptions are only funny, in retrospect, when policy based on them doesn’t have tragic consequences.

In the 1970s France also recognized its dangerous dependence on foreign oil and natural gas. But instead charting a course powered on holistic pixie-dust, its leaders recognized it “could” build out nuclear energy – and France now has the lowest per-capita carbon emissions of any nation in the developed world.

Whatever set of assumptions France used, they were obviously the correct ones.

Bob Meinetz's picture
Bob Meinetz on January 29, 2018

Joe, though some might persuaded by an argument which answers its own questions, others would recognize the use of a logical crutch to overcome a deficient basis in logic or fact.

Joe Deely's picture
Joe Deely on January 29, 2018

Bob, what will you say when the state with “limited” sunshine has a solar share of 10% in a few years?

Joe Deely's picture
Joe Deely on January 29, 2018

Yet the US has continually declining CO2 emissions from the power sector. No end in sight.

More coal being shut down, More wind being installed, more solar being installed and NG CC plants shutting down coal in PA, OH , etc…

Runaway train.

Roger Arnold's picture
Roger Arnold on January 29, 2018

I meant “funny” in the sense of “peculiar”, not funny, ha ha. But you make a good point. In a way, it illustrates just what I’m talking about.

There’s “could” as in “possible under the laws of physics”, a “could” as in “feasible in terms of engineering practices and known technology”, and “could” as in “commercially feasible in terms of potential market and capital requirement”. Finally, there’s “could” in the sense of “commercially feasible with sufficient interest and financial backing to make it happen”.

The US and France took different paths in response to the oil crisis of the late 1970s. The US “could” have followed the nuclear buildout path that France took, and we’d arguably be better off today had we done so. But in practice, we couldn’t. The socio-political environment precluded it.

What was different? Well, France never had significant oil and coal resources of its own, and no incumbent fossil fuel interests with enough muscle to support a strong anti-nuclear movement. Decisions about nuclear policy were made by engineers who knew their business, or by legislators and professional bureaucrats who actually listened to engineers.

The US, by contrast, had historically been a strong exporter of coal and oil. Fossil fuel interests here were long established and insinuated into the political system. They had considerable experience and leverage with the PR industry, and the anti-nuclear movement that they quietly nurtured had grown quite strong. So our response to the oil crisis was to focus on efforts to develop western oil shale (as opposed to modern shale oil) and fuel synthesis from coal. There was lip service to wind and solar as well, but that was never more than a sop to the anti-nuclear crusaders within the fossil fuels coalition.

Roger Arnold's picture
Roger Arnold on January 29, 2018

Runaway train.

Hardly that. See my posting about flat global investment levels for the past six years.

Engineer- Poet's picture
Engineer- Poet on January 29, 2018

Yet the US has continually declining CO2 emissions from the power sector. No end in sight.

It will end when it reaches the limits of simple-cycle turbines burning fossil methane, as combined-cycle plants cannot buffer the uncontrollable variations in the output of the mandated wind and PV “renewables”.

Bob Meinetz's picture
Bob Meinetz on January 29, 2018

Joe, I have no idea where you’re getting your data (there’s no reference provided), but according to EIA your numbers are 10% too low. 2016 saw over 2 GT of CO2 generated by U.S. power plants, and that’s not including SO2 and NOx:

https://www.eia.gov/electricity/annual/html/epa_09_01.html

Geoffrey Styles's picture
Geoffrey Styles on January 29, 2018

Roger,
That would be correct at steady state, with imports equal to replacements somewhere well down the road. However, an interruption in imports three or four years from now, when the US solar installation industry would presumably be in a higher gear than today, would be a lot more disruptive to jobs and profitability than a readjustment now.

Jesper Antonsson's picture
Jesper Antonsson on January 29, 2018

There’s always an end in sight. We know that bacteria in a petri dish will stop growing, eventually, and we can reason about when that will happen based on the parameters involved. The same goes for US electricity.

My happy scenario for the US in 2030 is something like 20% wind, 15% solar, 10% hydro/bio/geo, 25% natgas, 13% coal, 17% nuclear (with nuclear slowly being decommissioned making it very difficult to progress with further decarbonization after 2030).

This happy scenario is predicated on new public incentives to decarbonize. With the current ITC/PTC phase-down plan only, there’s a considerable downside.

25% natgas and 13% coal may sound pretty ok, but it’s not. The US has more than twice the electricity consumption of the EU, so if the US has 38% fossils, it’s giving per-capita emissions that the EU would have at 80% fossils.

Jesper Antonsson's picture
Jesper Antonsson on January 29, 2018

So the US total solar increased 22 TWh in 2017. Then it took what, 0.5% market share? I can give you ten European pioneer countries that have had single years with solar grabbing more than 1% market share, some more than 2%. Yet they have all stalled now at pretty disappointing single-digit penetrations.

Joe Deely's picture
Joe Deely on January 29, 2018

FYI.. from this article

.

Joe Deely's picture
Joe Deely on January 29, 2018

Solar data – across states. Good point on the solar data from only a single state. So here is the generation data for all 50. My favorite is MN – just behind FL in the rankings.

State to keep an eye is TX which could easily move up to No 2 in rankings in 2-3 years. Trump’s tariff may hurt installs there in 2019/2020 though.

By the way just an FYI – – these are generation – not capacity.

Joe Deely's picture
Joe Deely on January 30, 2018

Table 12.6 Carbon Dioxide Emissions From Energy Consumption: Electric Power Sector

My data is only electricity.

By the way Bob, interesting data from CAISO for Jan. NG share of total generation looks like it will come in under 27% for the month. Crazy. Down 25% Y-Y. I was expecting a decent pop in NG this year for CAISO and a slight rise in CO2. Now I’m wondering.

Joe Deely's picture
Joe Deely on January 30, 2018

2017 turned out a little better than your article mentions. Let’s see what happens between now and 2025. Learning curve continues. Expect to see further improvements in storage and offshore wind in 2018.

Here is the latest from BNEF.

Solar:

Global solar installations will be at least 107GW in 2018, up from the higher-than-expected 98GW last year, and new countries will become established as significant markets. In the total global forecast for PV this year, China still dominates, with 47-65GW. However, this is the year that Latin America, south-east Asia, the Middle East and Africa will make up a measurable slice of the total. For instance, Mexico is likely to be a 3GW-plus market in 2018, and Egypt, the U.A.E. and Jordan between them at 1.7-2.1GW.

Wind:

Global wind installations – onshore and offshore – were some 56GW in 2017, slightly above 2016’s 54GW but well below the record of 63GW reached the previous year. We expect the slow recovery to continue in 2018, with additions reaching about 59GW, before a new record is established in 2019 at around 67GW, as the U.S. Production Tax Credit nears expiry. China and Latin America are likely to be the two regions seeing growth between 2017 and 2018.

In offshore wind, the main markets will continue to be the U.K., Germany, the Netherlands and China, but with more signs this year that the U.S. and Taiwan are preparing the ground for a string of projects in the 2020s. One of the highlights in 2018 will be the result of the Netherlands zero-subsidy auction for the Hollandse Kust I and II sites, totalling some 700MW. Two bidders (Vattenfall and Statoil) have confirmed their participation, and we expect others to emerge.

Joe Deely's picture
Joe Deely on January 30, 2018

Why would utilities continue to use NG plants to “manage” renewables when more economic resources are available?

As coal continues to close in US – CO2 will continue its steady drop.

Joe Deely's picture
Joe Deely on January 30, 2018

Jesper said:

My happy scenario for the US in 2030 is something like 20% wind, 15% solar, 10% hydro/bio/geo, 25% natgas, 13% coal, 17% nuclear (with nuclear slowly being decommissioned making it very difficult to progress with further decarbonization after 2030).

Pretty close to what I have – except the coal number would be in single digits.

In 2030, overall total will be below 1,000MMT. Still some work to do.

Bob Meinetz's picture
Bob Meinetz on January 30, 2018

Joe, interesting you consider a state in which solar generated 735 GWh out of 52,403 total – 1.4% – your favorite (Minnesota). One that ranks worse than the U.S. average in per-capita carbon emissions, and during the same period burned coal for 39.3% of its electricity.

I was expecting more out of Minnesota solar, but looks like it’s going nowhere fast. Crazy.

https://www.eia.gov/electricity/data/browser/

Bob Meinetz's picture
Bob Meinetz on January 30, 2018

That’s a good analysis, Roger. It seems there are as many versions of “could” as there are opinions about anything, and those which rely on socio-politics or other zeitgeist-based metrics are particularly troublesome for predictive purposes.

The value of hypothesizing what “could” have happened in the past has limits, too. Though I’m sure there are multiple online debates of whether the U.S. could have ended World War II without the atomic bomb at this very moment, I’ve already participated in my last.

When it comes to preservation of our global habitat, I choose to take the optimistic view science will prevail over socio-political biases based in fear, if only because that’s the general trend of civilization’s progress over millennia. But as stockbrokers like to say, “Past performance is not indicative of future results.” There are no guarantees in the short term, and the time we have to take climate change seriously is a geological eyeblink.

Joe Deely's picture
Joe Deely on January 30, 2018

Isn’t that the point Bob? A state with a lot of coal and a lot of CO2. More interesting when renewables are added there versus a cleaner state like CA where they are only replacing NG.

Plenty of wind coming to MN over the next few years.

The projects are part of Xcel’s plan to add 1,850 megawatts of wind energy in the Upper Midwest over the next four years,

Also, project is progressing on improving transmission between MN and Manitoba and importing more hydro from Canada.

Throw in that small and growing amount of solar and perhaps we can accelerate the already announced closure of most of MN’s coal plants.

Let’s see how MN numbers play out over the next couple of years.

Nathan Wilson's picture
Nathan Wilson on January 31, 2018

My happy scenario for the US in 2030 is something like 20% wind, 15% solar … is predicated on new public incentives

Hmm, our build rate for windpower (according to AWEA.org) for the last decade has averaged 7.2W per year (the trends shows no sign of exponential growth: it has declined slightly for the last 2 years). If we maintain that rate, in 2030 we’ll have 175 GW; that’s enough for 12% of supply.

Our solar build rate (GTM/SEIA) was expected to be about 12 GW/year in 2017, growing to 15 GW/year in 5 years. If we maintain that rate, in 2030 we’ll have 230 GW. Assuming a capacity factor of 66% that of wind, that’s 10.4% of supply.

Given that our tax cut has created a huge increase in the budget deficit, it hard to see how we get to new public incentives. It will be more important than ever to maintain our existing “conventional clean energy” (nuclear and hydro), given that wind and solar are growing so slowly (relative to the need).

Joe Deely's picture
Joe Deely on January 31, 2018

Nathan,
Agree.

Inertia is definitely a problem. Will need to get a huge chunk of coal shutdown and its generation replaced to get to these numbers.

For example, there is speculation on SPP grid that utilities are running coal plants “uneconomically” – because their costs get covered by PUCs.

Some sort of carbon charge would obviously help jump-start more of these replacements.

Need to get Coal capacity from its current 262GW down to 50-70GW by 2030.

Mark Heslep's picture
Mark Heslep on January 31, 2018

In 2009 the US deficit was $1400B, and in 2016 the US deficit was ~$600B/yr. The new tax law is calculated to increase the deficit an additional $150B/yr ($1500B/10yr).

Mark Heslep's picture
Mark Heslep on January 31, 2018

…If we maintain that rate, in 2030 we’ll have 175 GW; that’s enough for 12% of supply.

With a PTC of $21/MWh, 175 GW wind at 32% CF has cost $10B a year for the treasury, highly unlikely.

Without the PTC, the US wind industry behaves as follows:
https://uploads.disquscdn.com/images/a0ea69c9b893f7640ebfe767bc245b6b147a80c106197371da161211dcd996d7.jpg

Mark Heslep's picture
Mark Heslep on January 31, 2018

…If we maintain that rate, in 2030 we’ll have 175 GW; that’s enough for 12% of supply.

With a PTC of $21/MWh, 175 GW wind at 32% CF has cost $10B a year for the treasury, highly unlikely.

Without the PTC, the US wind industry behaves as follows:

https://uploads.disquscdn.com/images/a0ea69c9b893f7640ebfe767bc245b6b147a80c106197371da161211dcd996d7.jpg

Mark Heslep's picture
Mark Heslep on January 31, 2018

My favorite is MN

MN went from solar generation at 0.4% of one large coal plant in 2016, to solar generation at 8% of one large coal plant in 2017. And that’s for most of the year. In the winter, call it zero output, nearest GW.

Mark Heslep's picture
Mark Heslep on January 31, 2018

All four of the largest solar countries the EU by share of generation have stalled, and the other large one, Japan, is about to.

https://uploads.disquscdn.com/images/c642254ac63158554e7a743ef38b86bbc9c33b979d9f2829990ca67593ad14dd.jpg

Mark Heslep's picture
Mark Heslep on January 31, 2018

NG has half the emissions of coal (at current thermal efficiency), which is as far as it goes with a 100% switch from coal to gas, which is highly unlikely as the consumption of gas increases.

Mark Heslep's picture
Mark Heslep on January 31, 2018

The reason for my optimism about solar growth – it’s already happening. It’s a runaway train.

As already posted:
https://uploads.disquscdn.com/images/c642254ac63158554e7a743ef38b86bbc9c33b979d9f2829990ca67593ad14dd.jpg

Mark Heslep's picture
Mark Heslep on January 31, 2018

Yet the US has continually declining CO2 emissions from the power sector. No end in sight.

Hansen did not say, “renewables will let us phase rapidly switch to natural gas in the United States, China, India, or the world”

Bob Meinetz's picture
Bob Meinetz on January 31, 2018

Joe, I’ll take your recognition of what Bob has been harping about on TEC for the last four years as a big win, whether it had to come from Sierra Club or not.

The next challenge will be getting Sierra Club and Joe Deely to recognize what’s happening on SPP with coal is exactly the same as what’s happening on CAISO with natural gas. I can’t emphasize it enough, so I’ll emphasize it again: since the repeal of the Public Holding Company Act of 1935, natural gas plants, in Southern California and elsewhere, are paid to “self-commit” – to burn as much fuel as they possibly can:

“All 14 units operated for extended periods of time when, objectively, it would have been less expensive for the electric bills of utility customers for the plants to sit idle,” the group’s report said. “The utilities that own each of the 14 coal units we examined would have saved its customers money if the coal units had operated less often…

Although self-committed units are ineligible to receive make-whole payments from SPP, the Sierra Club says, some units are apparently recovering losses from captive customers through state ratemaking proceedings.”

In California, home of the most expensive electricity in the continental U.S., frugal nuclear plants are being replaced with “emission factories” – not because they waste money, but because they don’t.

Last week, a birdie told me upper management in the country’s biggest environmental orgs is coming around to nuclear…maybe this development has something to do with that.

Joe Deely's picture
Joe Deely on February 1, 2018

Just curious – do you think this chart will hold thru for the next 5-12 years?

As an example it looks like projects are starting to pick up in Spain.

Do you actually believe this is a valid argument? Seems REALLY weak to me.

Joe Deely's picture
Joe Deely on February 1, 2018

And yet MN will have almost zero coal by 2030. Down from the 39% that Bob mentions above.

How is that gonna work?

Joe Deely's picture
Joe Deely on February 1, 2018

Bob,
Would definitely be interested in hearing more detail about how you think this might be happening on CAISO. Which IOUs , which plants, any examples of when you think this happened etc…

Good to hear about the support for nuclear. Also, might be another major coal closure announcement coming up in next couple of weeks. Dropping like flies.

By the way, January data is in for CAISO. Here are the numbers. Kind of a wacky month – not what I expected.

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