Governor cautious on build-out of energy delivery infrastructures

STOWE — Gov. Peter Shumlin tapped the brakes on a fast moving initiative to build out new electrical transmission and natural gas pipeline infrastructure in order to bring much needed power into New England.

Speaking at the New England Conference of Public Utilities Commissioners’ annual conference on energy policy in Stowe on Monday, Shumlin said the proposed massive energy infrastructure build-out could leave states stranded with avoidable costs.

Gov. Peter Shumlin addresses the Senate Health and Welfare and House Health Care committees during a  joint meeting Tuesday at the Statehouse. Photo by Roger Crowley/for VTDigger

Gov. Peter Shumlin at the Statehouse in January. Photo by Roger Crowley/for VTDigger

“I’m not sure that we really know with the evolutions of technology and the local, distributed generation of power that we are not going to be paying for huge stranded costs if we build tons and tons of delivery,” Shumlin told a gathering of energy regulators, investors and businesses.

The New England Conference of Public Utilities Commissioners is a nonprofit corporation, composed of utility regulators, designed to address energy challenges in the region. Vermont Public Service Board Chair James Volz is the president of the organization.

The event brings together key players in the energy industry to set the course for New England’s energy future. This year’s focus was how to balance an urgent need for electricity in the region with emerging technologies.

The region is considering importing Canadian hydropower and building new natural gas pipeline infrastructure to drive down electricity prices, fill in for looming supply shortages, and cut greenhouse gas emissions. Last year, all six New England governors agreed to attract the necessary infrastructure investments by sharing the costs among all the region’s electricity ratepayers.

But Shumlin, the governor of a state considered to be a possible “energy corridor” for transmitting some of this power, said these multi-billion dollar projects may be obsolete in the coming decades.

“What we don’t know is what technology might do to the assumptions we make right now,” he said.

He said cellphones now have the same computing power as computers that were once the size of homes. Likewise, new technologies could soon lessen the need to transmit large amounts of power from faraway areas, he said.

“I would ask us to think broadly and creatively about how we get it right so that we have enough, so that no one is left behind, so that the price is right … but also so that we don’t end up 10 to 20 years down the road with lots of stranded costs,” he said.

Vermont would not likely purchase any of the additional power the region is seeking to import and is partly isolated from the price spikes that caused record high electricity prices for much of the region last winter.

But several generating stations, including Vermont Yankee, are set to retire in the next few years. This poses “serious reliability risk to the region,” according to ISO New England, the region’s grid operator. Massachusetts is considering legislation that would require utilities to purchase long-term contracts for renewable power in order to meet new carbon reduction goals.

Marcy Reed is president of National Grid in Massachusetts, one of the region’s largest electricity utilities serving Massachusetts and Rhode Island. The company supports an initiative.

“We really do have to act regionally whether it’s on clean energy resources from the north or gas from the west,” she said in an interview. “Everyone has a stake in this. Everyone has a dog in this fight.”

John Herrick

Comments

  1. “He said cellphones now have the same computing power as computers that were once the size of homes. Likewise, new technologies could soon lessen the need to transmit large amounts of power from faraway areas, he said.”

    To compare cell phones with energy generation is an entirely improper, it is pure nonsense and shows a deep lack of understanding of technologies.

    Shumlin said, before he was elected, Germany was getting 30% of its electricity from PV solar, whereas, at that time, it was about 2.5%. Yikes!!

    “NEW technologies COULD SOON lessen the need to transmit …….”

    What new technologies?
    How soon?

    Shumlin’s RE aficionados are afraid low-cost hydro will crowd out expensive SPEED energy, so they talk about nirvana being just around the corner. Here are the production results for the SPEED Program, 2.2 MW or less:

    Year……….Production………Cost…………..$/kWh…..% VT Use
    Units…………kWh………………$

    2010…….5,980,779……..829,832.88……0.1387………0.11
    2011……20,172,973……3,329,269.05…..0.1644……..0.36
    2012…..29,666,592…….5,093,237.71……0.1716……..0.53
    2013…..44,822,813…….8,692,749.09…..0.1919……..0.81

    http://vermontspeed.com/speed-monthly-production/
    http://vermontspeed.squarespace.com/project-status/

    The above “Cost” column shows the amount paid mostly to the risk-free tax shelters of in-state and out-of-state multi-millionaires, who own the larger PV solar systems.

    Based on a NE annual average grid price of $0.054/kWh at which GMP, et al, could have bought the energy, the excess payments were:

    2010…………..$506,871
    2011………..$2,226,120
    2012………..$3,488,193
    2013………..$6,183,290

    These excess payments were rolled into the electric rates of already-struggling households and businesses. These payments will increase to about $60 million by 2017, because the PV solar feed-in tariff, set by the PSB, is an excessively high 25.7 c/kWh (based on “avoided cost-based prices”, what ever that means), and because of VT’s unrealistic SPEED goals.

    HYDRO FROM CANADA:

    – The hydro plants in Quebec, New Brunswick, and Labrador are already built. The environmental damage was done. Why do more of it in New England?
    – The excess capacity is already there.
    – The Canadians have no need for the excess capacity.
    – They would like to better utilize their hydro plants by selling more low-cost, near-CO2-free, steady (not variable, not intermittent), renewable hydro energy to New England.
    – If Germany had such a nearby energy source, it would jump on it, instead of fooling around with PV solar panels.

    • John Greenberg :

      Willem,

      You say: “To compare cell phones with energy generation is an entirely improper, it is pure nonsense and shows a deep lack of understanding of technologies.”

      I disagree. The governor’s point is actually quite well taken: namely, that the capability of computers changed at an exceedingly fast pace, which is reflected in substantial drops in price over time, and that exactly the same thing is now happening in the energy field, though at a rapid (though admittedly less dizzying) pace.

      Thus: “… the cost of an average solar panel in 1980 was $21 per watt (eg: a 15 watt panel would cost $315.00). Today, the average cost is about $1.03 per watt (low =$0.81/watt, high=$1.24). In 25 years, that’s a cost reduction of 90%. Power output capacities have also improved. In 1980, a typical solar panel might put out 22 watts. Now, 100 watt panels are common, if not plentiful. That’s a 450% increase in output. Add to this new enhancements through tracking (a motorized mount tracks the sun through the day to improve efficiency) and concentrating sunlight to extract up to 75% of the sun’s rays that increases efficiency by 1000 times over regular flat panels.” http://www.bounceenergy.com/articles/green-energy/residential-solar-and-wind-systems

      During the same time frame (1980-2014) just described, the average price of goods and services more than doubled (as reflected in the CPI), which helps provide further perspective on the accomplishment here. Presumably, the CPI includes retail electricity rates.

  2. Sam Lincoln :

    As a layperson, with no expertise other than writing a check for electricity each month, my concern with all of this is that elected officials said we could close down Vermont Yankee as there was 2-3 times the supply of power in New England to meet the current demand and we didn’t need VY. VY hasn’t even shut down yet and the articles regarding the new transmission lines have an underlying tone that the region is going to be short of power in the coming years. Are our elected and appointed officials that short sighted or am I missing the point? If we are going to be short of electric generation capacity, why aren’t we being thoughtful enough to encourage hydroelectric generation in Vermont and keep the cash flow local? The wood burning biomass plant proposed for Springfield was turned down partly because there wasn’t a need for the power. I guess I’m too simple minded but I think if we can buy power that’s generated by these means from other regions, why can’t we generate it the same way here to advance our own economy?

    • John Greenberg :

      Sam,

      Perhaps you can cite someone who actually said: “we could close down Vermont Yankee as there was 2-3 times the supply of power in New England to meet the current demand and we didn’t need VY,” but I never heard anyone make such a statement.

      Instead, during the years that VY’s CPG was being debated (2008-2012), I for one said that the ISO-NE auctions showed is that there were roughly 8,000 MW of excess capacity in New England. Since VY generates about 640 MW, I argued, that showed that VY could be shut down safely. It is worth adding – because it is so often forgotten – that VY is being shut down because its owner, not its opponents or the State, decided it is no longer economic to operate.

      Now, the ISO-NE auctions are showing a VERY small shortage, starting, if memory serves me, in 2017. That INCLUDES the loss of VY.

      “Are our elected and appointed officials that short sighted or am I missing the point?” I’m afraid that you ARE missing the point.

      Electricity markets are dynamic and power plants are designed and built for decades, not a year or two. New England is no exception to that generalization: older coal and nuclear plants are shutting down in the region, but new resources (and energy efficiency, which lowers demand) are being brought on line at the same time. Prices are extremely volatile (they always have been), and both state and federal government policies keep changing as well, favoring now one industry, then others.

      There is a complexity and dynamism to this process that – from my perspective – is almost entirely absent from most of the comments which appear on Vermont Digger, and frankly, that’s too bad. But it’s hardly surprising that someone “with no expertise other than writing a check for electricity each month” would “miss the point.” The point has too seldom been made in the public arena.

      • There is no complexity with, and to the point, zeropoint distribution, because a primitive, archaic (ie any) grid is never of use.

  3. Richard Ratico :

    YIKES. Willem recommends putting all the eggs in one basket. Smart, but not wise, AGAIN! Vermont already has enough mega hydro in it’s energy mix.

    Local distributed energy from PV reduces the load on our distribution systems, reduces the need for expensive, controversial transmission upgrades, provides good local jobs and provides energy security.

    Battery storage solutions are being developed. They are cost effective in parts of California already. Tesla sells an amazing vehicle with a 260 mile range.

    Vermont leads the nation in the deployment of smart meters.
    SCADA systems will and are being adapted to allow the grid to be more flexible and robust.

    19th century solutions are not the only ones available.

    • Richard,

      All eggs in one basket? Your statement is pure nonsense.

      NE annual consumption is about 130,000 GWh.

      Canadian excess HYDRO capacity available to NE, already built, would be at most about 6000 MW, or 6 GW, and that capacity would have a capacity factor of about 0.5, and annual production of 6 x 8760 x 0.5 = 26,280 GWh

      If ALL Canadian excess capacity were used in NE, it would be about 26,280/130,000 = 20.2% of NE consumption.

      This would leave plenty of room for much more expensive, variable, intermittent PV solar energy, etc. that is minimal or zero about 65% of the hours of the year, whereas hydro would be STEADY and 24/7/365.

      • Richard Ratico :

        Willem,

        My comment was in regard to Vermont’s energy mix. You are speaking about NE, while attacking Vermont’s PV.

        More Canadian hydro may be appropriate for southern NE. We have enough of it in VT already.

        • John,

          The Governor should not be making speeches on energy, because his knowledge of the subject is shallow, as is the case for most people.

          There is more to a PV solar system than the cost of PV panels.

          Current roof-mounted SYSTEM costs, 10 kW or less, are about $4000/kW, less with subsidies.

          They last about 25 years, whereas power plants range from about 35 years (for CCGT gas turbines) to about 100 years (for hydro).

          On average, the DC to AC inverter needs to be replaced about every 8 years.

          For larger capacity systems the cost is less.

          David Hallquist calculates the energy costs of systems 1000 kW and up is about 17 c/kWh. I would like to see the assumptions in his spreadsheet.

          PV energy is variable and intermittent, i.e., minimal or zero about 65% of the hours of the year.

          Economically viable, utility-scale storage has not yet been invented.

          That is the reason for PV systems being grid-tied, as few PV system-owning households would also want to buy sufficient high-cost energy storage to live “off the grid”. The storage system cost would be about the same as the PV system cost.

          Instead, this “storage” service is provided to them free of charge by others, making PV solar LOOK low cost, because a chunk of its costs are “socialized’.

          • Richard Ratico :

            Willem,

            The governor depends on the advice of a team. That team includes experts in many disciplines, including energy.

            They do much more than the “Googling” that you engage in to make their policy decisions. You have declared yourself an expert, but the evidence in your posts belies that.

            Many of the critical issues we face as a nation and as individuals on an increasingly connected planet can and should be “socialized”. Pure capitalism has failed as an economic system.

            Google Thomas Piketty. Here’ the link:
            http://en.wikipedia.org/wiki/Thomas_Piketty

        • Richard,

          “We have enough of it in VT already.”

          Says who?

          Norway gets 98% of its energy from hydro.

          Vermont should get at least 50% of its energy from hydro, and so should the rest of New England, to replace aging coal and nuclear plants, and to replace some older, less efficient gas plants.

          • Richard Ratico :

            Say’s the people who make energy policy in Vermont apparently.

            The last time we had this conversation, you insisted Vermont should get 98% of it’s energy from hydro.
            I see you’re now down to 50%.

            Norway has control of it’s hydro. They own and operate it. Canada controls most of the hydro Vermont has access to.

            A diversified mix of energy sources makes sense. Maintaining control of our energy sources makes sense. Vermont could have purchased hydro on the Connecticut, but the last REPUBLICAN governor, Douglas, nixed it. Not wise.

            Peter Shumlin appears to be doing a much better job than Douglas.

          • Richard,

            “The last time we had this conversation, you insisted Vermont should get 98% of it’s energy from hydro.”

            Please show me where I made that statement.

            Canada, acting through GMP, has 70% of Vermont’s energy customers.

            Vermont already has a mix of energy sources.

          • John Greenberg :

            Willem,

            Richard was off by 8%. In a June 6@ 4:54 comment you said: “That is a long way off from the unrealistic, starry-eyed, 2011 Comprehensive Energy Plan goal of 90% of ALL annual energy consumed by Vermont from renewable sources by 2050 … It would be wise to buy most of that renewable energy from Hydro-Quebec at about 6 c/kWh under long-term contracts. ” http://vtdigger.org/2014/06/05/willem-post-vermonts-speed-program-costly/

          • John,

            It appears you and Richard are attributing statements to me I did not make.

            I stated: “It would be wise to buy most of that renewable energy from Hydro-Quebec at about 6 c/kWh under long-term contracts.”

            Most COULD be 98%, COULD be 90%, but for sure it is greater than 50%.

          • John Greenberg :

            Willem,

            Now quoting what you said is “ttributing statements to me I did not make?”

            Wow!

  4. Jane Palmer :

    We have turned the corner…the election is now less than six months away…and the campaign has started. NOW Shumlin starts “tapping the brakes” Oh my goodness…polititians suck.

    • Mary Martin :

      Jane, I don’t care what his motives are. He is finally getting what we’ve been saying. No Pipeline.

      • Kathy Nelson :

        Mary, Jane Palmer is correct. Our ethically challenged governor will do anything to keep his finger on the button. After November he would be right back to his crony games. Keep your eye toward getting a new governor who WILL hear you.

  5. I agree with the Governors position. We really need to be cautious and slow with these billion dollar plus investments.

    I question the proposition that these projects would save money. 1.1 Billion dollars for 1000 megawatts results in 15 Cents per kilowatt hour just for the transmission alone, then you have to add the electricity price. The result will be power costs somewhere above 22 cents per kilowatt-hour, based on today’s market price for forward contracts.

    Hydro Quebec is not offering any fixed price contracts and they are not regulated by FERC. I suspect Quebec residents are going to want to get as much as they can for this power.

    • David,

      You 15 c/kWh calculation may be off by a decimal.

      Transmission lines typically have capacity factors of about 70%. The line will last at least 50 years.

      Annual energy transmission = 1,000,000 kW x 8760 x 0.7 = 6,132 million kWh/yr

      If we assume the project gross revenue is a reasonable $110 million per year, then $110 million/6,132 million kWh = 0.017 $/kWh, or 1.7 c/kWh for transmission.

    • Does the “go slow” mode also apply to industrial wind and solar?

      • John Greenberg :

        Peter,

        A week ago, you wrote: “Here’s an early warning from the electrical industry to proceed with caution, lets hope that the pols in Montpelier are listening this time.” http://vtdigger.org/2014/06/08/special-report-vermont-smack-middle-crucial-electricity-supply-demand/#comments

        When I asked you “Peter, what does ““We are all reserving our right to walk away from this,” Recchia said.” mean to you?,” you answered: “I have no idea of what Commissioner Recchia means.”

        You then changed the subject to cost/benefit analysis.

        Are you getting any clearer now that Shumlin is basically reiterating (and elaborating) Recchia’s point?

        Or are we going to get another lecture on “Ready, fire, aim?”

        • John:

          I absolutely believe that the Governor should exercise caution when dealing with matters that impact the entire state for years into the future and cost billions of dollars.

          My comment from 6/8 you cited above supports this thinking. I have been for caution all along when it comes to energy policy, all apparently to your chagrin.

          One has to wonder why the Governor didn’t exercise more caution with the development of industrial wind and solar. When it comes to energy policy, it seems as if the Governor is a day late and a dollar short with his sermon preaching caution. He should have been more careful before pushing ahead so aggressively with industrial wind and solar, both of which seem to have produced mixed results all while riling up folks across the state.

          As far as a lecture on “Ready, Fire, Aim”, I would say the aggressive push on industrial wind and solar would definitely qualify as a major misfiring. Thanks for bringing the subject up.

          As far as the meaning of Commissioner Recchia’s comments, you’ll have to ask him. Give him a call he’s a very nice man.

          • John Greenberg :

            Peter,

            There’s little novel about Shumlin’s policies towards wind and solar. Vermont has been moving in that direction for decades, and governors from Dean on have supported it. The SPEED law, for example dates from 2005.

            Just because you came to the party late, doesn’t mean the festivities only began when you walked in.

            Obviously, 20 years isn’t cautious enough for you, but then 200 years wouldn’t be either. You don’t like wind or solar and you refuse to tell us how you would replace them. That’s not an energy policy, Peter. That’s a dodge.

        • John:

          The governor is now expressing his concern with energy costs that could affect the people of Vermont well into the future. This is a good stance for the Governor to take and a required stance for any responsible CEO, whether in the private or public sector.

          The problem is he should have taken this stance long ago before his energy policy began its aggressive no holds barred roll out of industrial wind and solar, which has tremendous cost and other negative implications. As previously stated, he’s a day late and a dollar short with his remarks.

          In his speech before the energy regulators, the Governor used a cell phone analogy to make his point on changing technology. Here’s another analogy to match the Governors.

          Present industrial wind and solar technology is equivalent to the giant radios that sat on the living room floor in the 1930s and 1940s delivering a static ridden Jack Benny show to the folks. With the wind and solar technological advancements expected and the need to store power, Gov. Shumlin has promoted the equivalent of the 1930s radio technology of use in the 21st century. Not good.

          Undoubtedly there will be changes in technology going forward and they need to be factored into decisions made today and tomorrow. On the other hand, billions have already been spent on industrial wind and solar with apparently sparse attention paid to how these systems would work today and no consideration to what may be coming tomorrow.

          Today the Associate Press (AP) reported that Elon Musk the founder of SolarCity and Tesla Motors would be making a giant investment in solar panel manufacturing. This would compliment his Tesla car and storage battery operations.

          Musk’s vision is to have solar panels on the every roof to generate enough power to charge up a Tesla in the garage while having a battery to store power for use at night.

          The AP describes this as: ” a far-off vision- solar power is still much more expensive than conventional power, even before the enormous cost of a battery backup.”

          So, I say, its good the Governor is now interested in future technology and cost, but he has already missed the boat. His concern should have been raised before dynamiting the tops off of mountains and lining our roadways with solar panels.

          • John Greenberg :

            Peter:

            1) “his energy policy … has tremendous cost and other negative implications.”

            As I pointed out to Willem Post, who regularly tells us how much SPEED is costing in extra rates, the VY contract which many blame the State for nixing, would have cost far more than 4000 times as much in its first year of excess charges than the SPEED program. The calculations are here: http://vtdigger.org/2014/06/05/biomass-plant-considered-vermont-yankee-site/#comments (my comment of June 14 @9:52).

            Please provide some documentation for the “tremendous cost” you refer to.

            2) “Present industrial wind and solar technology is equivalent to the giant radios that sat on the living room floor in the 1930s and 1940s delivering a static ridden Jack Benny show to the folks.” Says who?? Just because you can make it up, Peter, doesn’t make it true. The first photovoltaic solar cell dates from 1954 (http://www1.eere.energy.gov/solar/pdfs/solar_timeline.pdf) and was 4% efficient and God knows how costly. Since then, and especially since the late 1970s, researchers have been hard at work, which is why today’s solar cells and more than 3 times as efficient at a tiny fraction of the cost. If your point is that this progress will continue, that’s absolutely correct, just as it is of computers. The governor’s analogy is well-founded; yours is without foundation.

            3) “Undoubtedly there will be changes in technology going forward and they need to be factored into decisions made today and tomorrow.” And, in fact, they have been. That’s precisely why the SPEED program, the CEP and other State documents call for renewables to be PHASED into the system. The much-maligned CEP goal of 90% is 36 years off, and there’s a reason for that.

            4) Yet again, as always, you remain completely silent about actual alternatives. If we are not “dynamiting the tops off of mountains and lining our roadways with solar panels,” we ARE buying power generated somehow and somewhere. Is that power cleaner? Better? Environmentally friendlier? Since you avoid ever saying what that source SHOULD be, there is no way to answer those (and many other) questions.

            Various Vermont administrations and legislators HAVE looked at those questions for decades and HAVE answered them: it’s better to begin now to build out renewable technologies (even though they will get better and cheaper as time goes on) than to continue to rely indefinitely on polluting fossil fuels and decaying nuclear plants.

            5) Finally, there’s one last consideration. By promoting and yes, subsidizing, clean energy sources, governments in Vermont, in the US as a whole and around the world have promoted a virtuous cycle which has enabled the solar and wind industries to become the fastest growing energy industries in the world with steeply declining prices thanks, in significant part, to more far more efficient production. While the costs of these technologies are in sharp decline, the costs of competing technologies continue to mount, despite the ongoing subsidies they receive from the federal government.

          • John:

            Of course, I’m not going to respond to your usual lengthy litany of questions and homework assignments.

            All sorts of information are presented on the vtdigger on a regular basis addressing the high cost and technical issues of industrial wind and solar. Its been repeatedly presented by very knowledgeable people. We’ve all seen it, you’ve seen it, but you just don’t want to accept it.

            Even the folks at the Associated Press(AP) get the cost and technical issues. As the AP said: “…..solar power is much more expensive than conventional power, even before the enormous cost of a battery backup.” You may be better served by sending your list of questions and homework assignment to the AP.

            My assignment for you: Study and comprehend the concept of “Net Present Value”. Then compare on a net present value basis the cost of the 20 year wind or solar contract executed today against the cost of conventional power alternatives.

          • Richard Ratico :

            Peter,

            Unlike you and the AP, Elon Musk doesn’t chatter. He produces results and is transforming the world.

            He’s already produced two remarkable all electric vehicles. He has resupplied the International Space Station with a commercial rocket. He WILL mass produce state of the art batteries.

            Tesla and SolarCity have customers for those battery systems NOW. There is a market for these. In contrast, there is no U.S. market for new nukes.

            AP wrote:
            ““…..solar power is much more expensive than conventional power, even before the enormous cost of a battery backup.”

            AP apparently did not get the memo that when all costs of conventional power are considered, solar and wind look like a bargain. That is why they are challenging conventional power the world over.

          • John Greenberg :

            Peter,

            “Of course, I’m not going to respond to your usual lengthy litany of questions and homework assignments.” Of course not, Peter. You can’t.

            You’re exactly right: “All sorts of information are presented on the vtdigger on a regular basis addressing the high cost and technical issues of industrial wind and solar.” And a very high percentage of it is demonstrably wrong, as I tried hard to point out.

            “We’ve all seen it, you’ve seen it, but you just don’t want to accept it.” I don’t accept it because, quite often, it’s false. When I know how, I show, in detail, WHY it’s false and document my case (e.g. http://vtdigger.org/2014/06/05/biomass-plant-considered-vermont-yankee-site/#comments (my comment of June 14 @9:52). There are MANY other examples.

            All this said, you seem to imply that I don’t realize that solar power is priced higher than power from old fossil fuel and nuclear power plants, but I do. What I’ve tried to point out more than once is at least some of WHY that it is so: specifically, the fact that the environmental costs of competing power sources have been kept external and that the historical benefits of a “cheap energy policy,” which the US has pursued for its entire history (http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf ), are not included in the prices of the competition.

            Still, cost is NOT the only element to be considered in energy policy. We’re destroying our planet, not just through global warming, but through a variety of engrained habits that must come to an end: treating our air, water, and other “commons” as sewers, risking the health and well-being of other species, depleting finite resources, etc. These things are hard to measure, but that doesn’t make them unimportant.

            Governors (and their DPS), the legislature, and the PSB from both political parties – all the folks you love to rail against – realized all this decades ago, and have tried to formulate energy policies that include ALL the consequences, not just the market costs. You, on the other hand, simply refuse to undertake the real work of energy policy: namely, making choices between the actual possibilities.

            As to your gratuitous last paragraph, follow your own advice. Check out the cost of a new nuclear power plant. Assume – as you will have to – that company estimates of construction costs are accurate (though history suggests that they are too low by something in the ballpark of at least 100%). Assume – as you will have to – the cost of the fuel, the labor, etc. And then measure it against the net present value of a solar contract. Mark Cooper of Vermont Law School, among others, has been publishing such comparative studies for several years now. The results are obviously NOT what you think.

          • John:

            So what we’ve learned from your comments over the couple of weeks is quite amazing. Lets take a look at some of the major points you have made:

            1. A cost benefit analysis of industrial wind and solar cannot be done because the issue is too complicated and too costly to complete.
            2. The senators who called for such a study in S. 30 had no idea of what they were doing when proposing such an analysis. Anyone, beyond those in the Senate, who suggests such an analysis is simply ill informed on energy economics.
            3. Even if such an analysis were to be done, most members of the legislature wouldn’t even read it.
            4. Conducting a “Net Present Value” analysis comparing the cost of industrial wind and solar to traditional energy sources cannot be done because it’s too complicated.
            5. Most of the information provided on the vtdigger by individuals knowledgeable in the energy sector is wrong. So we throw out what we hear from Willem Post, David Hallquist, Dr. Hans Ohanian, executives from ISO New England and a host of others as being mostly wrong because you say so.
            6. Despite the fact that you say the complexity of energy costs and related factors makes them effectively impossible to comparatively analyze, you some how have divined all the answers to the energy challenges to such a point that you routinely pronounce anyone disagreeing with you as ignorant, lazy or a charlatan.
            7. You write incredibly long and detailed comments that lead nowhere and clarify nothing. As a matter of fact, here’s what David Dempsey had to say: “John,
I agree completely with Peter….. a simple question deserves a straight forward answer, not the 17 paragraph diatribe in your reply to Peter that left me dazed and confused.”


            8. You continually want to return to nuclear power when it’s off the table in Vermont and no longer a factor in energy equation.
            9. And of course, you make it abundantly clear that you believe I have no idea of what I’m taking about. (Note: I’ll readily admit that I’m not an expert and do not have a deep understanding of the energy industry and economics. On the other hand one doesn’t have to be a farmer to recognize BS.)

            So what are we to conclude from the points you’ve made?

            It seems that based on your unabashed support for industrial wind and solar, you believe that development should continue notwithstanding all the arguments to the contrary. Covering our mountains with wind turbines and roadways with solar farms is prudent in your mind even though, by your own words, analysis to prove that these technologies make economic, environmental and social sense for Vermont is not possible.

          • John Greenberg :

            Peter:

            Some corrections to what you say “we’ve learned” (using your numbers):

            1) “A cost benefit analysis of industrial wind and solar cannot be done because the issue is too complicated and too costly to complete.” What I’ve really said is that, in the detail you (and S 30 require), it SHOULD not be done because it would be too costly, entail too many complications and assumptions, and hence be no more accurate than the testimony and reports already taken.

            2) “The senators who called for such a study in S. 30 had no idea of what they were doing when proposing such an analysis.” Since the bill didn’t pass, the same reasoning dictates that you must be suggesting that the majority of the senate “had no idea of what they were doing when [opposing] such an analysis,” and that the majorities of legislatures and the governors in the decades preceding this session were similarly ignorant when they passed legislation in this area without such analyses.

            4) “Conducting a “Net Present Value” analysis comparing the cost of industrial wind and solar to traditional energy sources cannot be done because it’s too complicated.” No (see #1 above). I said 1) the number of unverifiable assumptions would assure that it would be inaccurate, and 2) less detailed, comparative net present value analyses HAVE been done. My earlier comments already cited Mark Cooper and CEA. There are others as well.

            5) “Most of the information provided on the vtdigger by individuals knowledgeable in the energy sector is wrong. So we throw out what we hear from Willem Post, David Hallquist, Dr. Hans Ohanian, executives from ISO New England and a host of others as being mostly wrong because you say so.”

            First, I don’t believe I have seen ANY comments here from executives of ISO-NE, and therefore have no recollection of having agreed or disagreed with them, but you can refresh my memory if I’m wrong.

            Second, I have disagreed – one dialogue each – with David Hallquist and Hans Ohanian. Neither is a frequent contributor in VT Digger (as far as I remember, Ohanian has only recently written one commentary and has not otherwise participated). But in both of those cases, as well as in the case of Willem Post with whom I disagree frequently, I have NEVER suggested that they’re wrong “because I say so.” I make a considerable effort to explain WHY I think they’re wrong and provide links to materials which would allow others to verify the point for themselves (when applicable). Unlike some, I never expect ANYONE to believe me “because I say so.”

            I assume this remark is your response to this statement, I made above: “You’re exactly right: “All sorts of information are presented on the vtdigger on a regular basis addressing the high cost and technical issues of industrial wind and solar.” And a very high percentage of it is demonstrably wrong, as I tried hard to point out.” Nothing in my comment says anything about experts. I used the word “demonstrably” with full intent and provided you an example of just such a demonstration.

            6) “Despite the fact that you say the complexity of energy costs and related factors makes them effectively impossible to comparatively analyze ….” This is a complete mischaracterization of my position. I have argued that it would be impossible to produce the kind of study you asked for (or more precisely for it to have any value after the millions in costs), because of the complexity and necessary assumptions involved in doing so, but I also noted that the comparisons have been done informally for decades, and that they have governed Vermont’s energy policies during that time. Indeed, since you disagree with these analyses, I’ve asked you to produce your own INFORMAL analysis, but you consistently refuse to do so.

            6a) “…you routinely pronounce anyone disagreeing with you as ignorant, lazy or a charlatan.” I confess that, in a fit of anger, I once pronounced Willem Post a liar, because after I quoted chapter and verse to show that his supposedly factual statement was false for the 3rd or 4th time, and after he finally acknowledged that to be so, he went on to continue repeating the same false statement. I regret having done so.

            If I have made ANY other ad hominem attacks on anyone, you’ll need to provide me some evidence.

            On the other hand, I am NOT shy about telling anyone that his or her ARGUMENTS or FACTS are wrong, or even silly. The Western intellectual tradition is replete with just such arguments, starting with the ancient Greeks. I am not ashamed to join a long line of my betters by engaging in vigorous debate.

            8) “You continually want to return to nuclear power when it’s off the table in Vermont and no longer a factor in energy equation.” Natural gas and nuclear power are still by far the 2 largest sources of electricity in New England, so nuclear is very much a factor in the Vermont energy equation. And there is no dearth of regular commenters in Vermont Digger columns arguing for building new nuclear power plants, including Hans Ohanian, whose expertise you just cited. Quite a number of them have commented on this very article. In addition, I usually “return to nuclear power” because I know it best and it’s therefore the easiest example for me to use. I confess that I’m far less familiar with fossil fuels.

            As to your parting shot, I’ve repeatedly suggested that most of the arguments marshaled in VT Digger against wind and solar are either factually without foundation, or unconvincing when put in comparative perspective. The majority of the Vermont legislature and all of our governors for the last several decades agree with me, because the overwhelming majority of Vermonters agree with me, which is why the State is pursuing the course it’s on. It’s an election year, so yet again, you’ll have the opportunity to prove I’m wrong.

          • John:

            We all know that you’re against splitting atoms, so here we see you split hairs.

            That’s alright, I admire your perseverance.

          • John,

            If SPEED RE is built out to 20% of 5,600, 000 MWh/yr = 1,120,000 MWh by 2017, and, at the end of 2013, SPEED solar was about 46,603 MWh and SPEED wind was about 218,106 MWh, and with these minute energy quantities SPEED paid $8,692,749 (DPS numbers) to mostly in-state and out-of state multi-millionaires with risk-free tax shelters, in excess of the grid prices at which that energy could have been bought, then, by the end of 2017, it will be about $60 million, mostly to these tax shelters.

            The $8.7 million of 2013 and $60 million of 2017 are rolled mostly into HOUSEHOLD electric rates, as well as the about $50 million Efficiency Vermont budget of 2017.

            No wonder Vermont has the 4th highest household electric rates in the US, and will likely have the 3rd highest rates in 2017.

            SPEED is another expensive economic imposition on already-struggling households and businesses:

            – Trying to make ends meet/hold their own, most of them with declining or stagnant real household incomes since about 2000,

            – In a near-zero-growth Vermont economy,
            – With a cost of living index 20% greater than the US COL,

            – With a government and quasi-government sector growing at a greater rate than the increasingly-hollowed-out private sector, and

            – With the fourth highest electric rates in the US, right after Hawaii, Alaska, and Connecticut, partially due to having to subsidize and finance expensive, ineffective wind energy and solar energy SPEED programs that produce variable, intermittent, i.e., junk, energy at 3-4 times NE grid prices. See URLs.

            Increased energy efficiency of buildings and vehicles would be soooooo much better and less costly.

            http://theenergycollective.com/willem-post/310631/more-realistic-cost-wind-energy
            http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy
            http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses
            http://theenergycollective.com/willem-post/71771/energy-efficiency-first-renewables-later

          • John Greenberg :

            A fitting conclusion from a guy who professes to hate ad hominem attacks.

          • John Greenberg :

            Willem,

            I took one shot at this here: http://vtdigger.org/2014/06/05/biomass-plant-considered-vermont-yankee-site/#comment-124919, in a comment that I finally managed to get posted today. It fleshes out some of the details I’m relying on below.

            But given the context in this comment stream, your comment constitutes an excellent lesson about the kind of analysis that Peter and I have been discussing.

            First, let’s revise your statement to make all the assumptions explicit: “If SPEED RE is built out to 20%” AND IF total retail sales are equal to 5,600, 000 MWH/yr AND IF the proportion of solar to other forms of SPEED remains the same AND IF the price paid to SPEED projects remains constant for the next 3 years, AND IF the price of grid power equals whatever you’ve assumed (you don’t say), THEN “by the end of 2017, it will be about $60 million.” So your conclusion is based on five assumptions.

            Some are more probable than others; none of them will actually be knowable until 2017:

            1) The law requires 20% SPEED resources, but laws have been known to be disobeyed.
            2) Retail sales could decline, depending on efficiency efforts, home generated power (i.e. power no longer being purchased from the grid), economic conditions, the fate of IBM’s VT plant (= 25% of electricity sales), etc. (They could also climb for similar reasons: e.g. sales of heat pumps offsetting other efficiency efforts; a substantial shift to electric vehicles, etc.)
            3) SPEED allows for a variety of resources. I don’t know which ones will actually get built between now and 2017. As far as I know, no one does. So it’s impossible to say what the proportions will be between the most expensive (solar) and the others (less than ½ the price of solar currently).
            4) The price of SPEED HAS changed over time, and is likely to decline between now and 2017 for at least solar and perhaps other resources. It’s possible, but unlikely, that SPEED prices will remain the same in 3 years for any or all of the resources in question. (It’s conceivable too, though highly improbable, that they would actually go up).
            5) I don’t know what you assumed for a grid price, but no one knows the price of grid power a year from now, let alone 3.

            Second, you provide no context. As I mentioned above when you brought up SPEED the last time, the VY contract that you fault the State for blocking would have cost ratepayers $87+ Million for 115 MW of power priced 20% above the market. This is not hypothetical: we know the contract price and the grid price for that year. In addition, it would have cost $17.8 million in lost Revenue Sharing Agreement funds for the following year, because part of the deal called for the VT utilities to give up their RSA shares in order to get the price offered by Entergy. So we have known combined losses of right around $105 million for VY for the power sales for the first year of the contract, and the RSA for the next year.

            In short, you’ve calculated a hypothetical cost of $60 million for 3 years of SPEED which ends up being a bit more than half of the known, real cost that the VY contract would have cost ratepayers in the first 2 years. Yet you hate SPEED and love the VY contract.

            Calculating the following years would require us to make assumptions about:

            1) the price of grid power and
            2) The amount of the escalator in the VY contract, that is to say:
            a) the escalation in a labor index,
            b) the escalation in an index for uranium, and
            c) the escalation in a general price index.

            These are all specified in the 2002 MOU.

            From these 4 assumptions, we could calculate the value, if any of the RSA which would no longer pertain as well as the over/under grid value of the 115MW of power. Since both the price of the contract and the RSA value depend on the previous year’s value to set the so-called “strike price,” being wrong about earlier years virtually guarantees that one would be wrong about later years.

            So here’s where all this leads us. To make a comparison between just these 2 energy sources requires knowledge of 8 separate assumptions (the grid price would presumably be assumed to be the same in both cases), none of which is knowable today. We’ve taken only the next 3 years, but for policy purposes, we’d need to take at least a decade or 2: utilities plan in decades, not years.

            The point I’ve tried to make in the discussion with Peter above is this. Sure, we can go ahead and do all these calculations with great precision, BASED on 8 unknown and highly unpredictable conditions. The results will LOOK very precise, since they’ll be expressed in numbers. But their real value will depend entirely on the assumptions we’ve made (assuming we can agree on them) about exceedingly volatile numbers, which is another way of saying that the precision implied by the numbers will be entirely chimerical. And this is one of the EASIER comparisons he’s called for since ALL of the assumptions here are about things which are a great deal easier to value in the first place than things like “ecological services,” illness and or lost life, and many of the other things which would go into a detailed cost/benefit analysis.

        • John:

          A play on words (splitting atoms- splitting hairs) followed by what was meant to be a compliment. You’re a tough competitor and I admire that. Even though we never seem to agree, I’m still hopeful.

  6. Annette Smith :

    Sometimes I wonder if anyone else reads energy news. John Dillon did some in depth reporting about H-Q’s new dams but otherwise these transmission projects seem to be discussed in a vacuum.

    H-Q is building new dams, and the power is going to cost more. Earlier this year, a panel recommended shelving the destructive Romaine River dam: http://www.montrealgazette.com/technology/Shelve+Romaine+hydro+project+panel+recommends/9570193/story.html

    Here is a documentary about the Romaine River dams http://www.seekingthecurrent.com/

    There have been protests against its construction http://www.mcgilldaily.com/2012/10/two-consecutive-days-of-action-against-plan-nord/

    A couple of excerpts from this article are below, and the whole article is worth reading. The power coming from new H-Q dams is going to be MUCH more expensive, and it is environmentally devastating and socially disruptive. http://www.internationalrivers.org/resources/dam-threatens-heart-of-canada%E2%80%99s-wilderness-3494

    “Many North Shore Innu (aboriginals) would be severely affected by the loss of salmon, moose and caribou habitat in the areas slated to be flooded – one of which forms the backbone of traditional Innu territory. The Ekuanitshit community, located only several kilometres from the Romaine, would be particularly hard hit because the salmon is a vital source of food and revenue for them. Another band, the Innu of Uashat Mani-Utenam in Sept Iles which recently filed for a permanent injunction against the dam project, reiterated the Ekuanitshits’concerns about flooding traditional territory.”
    —-
    “As Hydro-Québec projects average 25% in cost overruns, this one could spill over into the $8 billion dollar range. Add on the approximately $2 billion for transmission lines and this province could have yet another exhorbitantly costly tarnished monument to its 1970s hydro-think.
    Something else to keep in mind is the back-scratching arrangement between the provincial government – the sole shareholder in Hydro-Québec – and the utility, which pours more cash into government coffers than any other provincial revenue source. The third player in this power set-up is the smelting industry. Giant aluminum smelters Alcan and Alcoa have been long term beneficiaries of Hydro-Québec’s stranglehold on electrical production in the province, paying an average of only 4.57 cents/kilowatt-hour. This is less than half Hydro-Québec’s estimated cost of 9.2 cents/kilowatt hour for electricity produced by the four planned dams on the Romaine River. Recent agreements between the Québec government and the aluminum titans include hundreds more cut-rate megawatts in exchange for the industry investing in their existing Québec facilities, and maintaining jobs.”

  7. Willem,
    You are correct, I am off a decimal point. Thank you.

    I still support the Governor’s position in that we should not be making long term investments in transmission without carefully considering the risks of stranding the costs.

    I also will remain skeptical that buy HQ power will save Vermonter’s money since HQ is going to sell at market.

    • David,

      “I also will remain skeptical that buy(ing) HQ power will save Vermonter’s money since HQ is going to sell at market.”

      HQ energy may well be sold at market, but Vermont-generated RE energy will be sold at 2-3 times wholesale market, such as PV solar energy, for systems 1000 kW and up, being about 17 c/kWh (your calculation) and being 25.7 c/kWh, if subsidized by SPEED.

      In NE, wind energy is typically sold at 10 – 11 c/kWh per PPA, such as Georgia Mountain to Burlington Electric Department, but the RECs, worth about 5 to 6 c/kWh, provide additional income, as does the 2.3 c/kWh production tax credit.

      RE energy costs APPEAR lower than they really are, as a big chunk of the cost is “socialized”.

      More in this article:
      http://theenergycollective.com/willem-post/310631/more-realistic-cost-wind-energy

      • John Greenberg :

        Willem,

        “RE energy costs APPEAR lower than they really are, as a big chunk of the cost is “socialized”.'”

        Name one energy source to which this statement does NOT apply.

        • Lance Hagen :

          John,

          You are correct. All energy sources have been “socialized”. But for wind and PV solar we are NOT seeing much ‘bang for our “socialized” buck’. Considering the amount of subsidies $ they received their power output sucks.

          (kWh/$)
          Coal = 1,557
          Natural Gas = 1,575
          Nuclear =323
          Wind = 37
          Solar = 2.4

          (And just so you don’t claim wind and solar are in their infancy. The $ were from 2010, but the power outputs (kWh) were from 2013, for which the so called “socialized” $ should have been producing power)

          • John Greenberg :

            Lance,

            Here we go again. You provide figures with no source and no documentation, so there is no way to see what is or is not included in the “subsidies” or even whether you’ve transcribed and calculated the figures correctly. The last time you did this, the figures came from the EIA, which was very explicit in enumerating all kinds of subsidies which were NOT included. But there’s no way of knowing that without a source and some documentation (a link), which is why I’ve repeatedly asked you to supply them.

            Your figures are quoted in kWh/$ which has the effect of making subsidies granted to new industries seem far less productive than those to existing, mature industries already generating a lot of kWh. But we already knew that far more kWh are generated from fossil fuels and nuclear than from wind or solar; indeed, that’s precisely why they don’t need subsidies!

            Citing figures this way also ignores the one valid purpose of providing subsidies in the first place: namely, to promote industries with great social and environmental potential so that they grow faster than they would without the subsidies. There’s no such case to be made for fossil fuels or nuclear (at least not for new “generations” of old nuclear technology), but there is a sound case to be made for both wind and solar, as well as for technologies like algae which are currently generating NO energy, but may have great potential down the road.

            Finally, you appear to be suggesting that the subsidies to wind and solar aren’t working. But they are. Solar and wind were the fastest growing energy sources in the US during the years you’re talking about, while, e.g. nuclear power is in decline.

          • Lance,

            Please provide URLs.

            Below is URL with graphs that show the tremendous strides RE has made in the world during the past 20 years.

            http://euanmearns.com/global-energy-trends-bp-statistical-review-2014/

          • John Greenberg :

            Here’s another set of charts: http://www.whitehouse.gov/blog/2014/01/06/clean-energy-economy-three-charts, which shows the strides made since 2008.

            But if Willem’s point is there’s a long way to go, he’s absolutely right. No argument whatsoever there.

        • Lance Hagen :

          John, it is from the same source as the last time, being EIA. But you seem to take issue with it, so here it is again.

          http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf
          http://www.eia.gov/electricity/data.cfm#summary

          Also, I am not arguing on behalf of subsidies for nuclear, fossil fuels, wind or solar. My point is that the subsidies for wind and solar are just NOT productive. Three years after receiving subsidies neither wind nor solar are producing much power. For wind with only 3.3% of the subsidy $ are going for research & development, which may take longer to bear fruit, 3 years should be sufficient to see fruit from the other subsidy $ poured into wind and solar.

          As for your last paragraph, thought wind and solar maybe growing fast and in the future, may have more capacity (kW), they are not projected to exceed nuclear capacity until 2036, but still produce less power (kWh) than nuclear. Even out to 2040 wind and solar combined will only produce 35% of what nuclear is generating for electric power and only 7% of the total electric power generated (and this is from your referenced source, but instead of just Table 9, also look at tables 16 and 2)

          • John Greenberg :

            Lance,

            Thanks for providing the link. You say that I “seem to take issue with it,” but that isn’t quite right: I take issue with the use you’re trying to make of it.

            You’ve repeatedly suggested that these ARE the subsidies provided to various energy sources, but the report is quite clear that this is NOT the case.

            Specifically, in the report’s own words: “this report … is limited to subsidies that are provided by the federal government, provide a financial benefit with an identifiable federal budget impact, and are specifically targeted at energy markets. … These criteria do exclude some subsidies beneficial to energy sector activities (see box entitled “Not All Subsidies Impacting the Energy Sector Are Included in this Report”) and this should be kept in mind when comparing this report to other studies that may use narrower or more expansive inclusion criteria.” (p viii)

            The box just referred to then specifies this as an example of one exclusion: “For example, Section 199 of the American Jobs Creation Act of 2004, referred to as the domestic manufacturing deduction, provides reductions in taxable income for American manufacturers, including domestic oil and gas producers and refiners. The value of the Section 199 deduction in FY 2010 is estimated at $13 billion and approximately 25 percent is energy-related.” Since the report finds a TOTAL of $37+ billion, this is not a small exclusion.

            Here’s are 3 others: “This report includes the impacts of accelerated depreciation schedules identified as specific to the energy sector, but excludes schedules with applicability beyond the energy sector. Subsidized credit for energy infrastructure projects is frequently provided by export credit agencies and multilateral development banks. However, entities such as the Export-Import Bank of the United States also provide support …. Tax-exempt municipal bonds allow publicly-owned utilities to obtain lower interest rates than those available from either private borrowers or the U.S. Treasury.”

            Several more are mentioned and then, as I’ve noted more than once: “This report also does not attempt to quantify the potential subsidy resulting from limits to liability in case of a nuclear accident provided by Section 170 of the Atomic Energy Act of 1954, the Price-Anderson Act.“ (pp. ix-x)

            The list I’ve quoted is far from complete, yet its exclusions are in the tens of billions of dollars and may well total more than what is actually included.

            (For a detailed analysis, please see: “EIA Energy Subsidy Estimates: A Review of Assumptions and Omissions” by Doug Kaplow: http://www.earthtrack.net/files/uploaded_files/EIA%20subsidy%20review%20final_17Mar10.pdf)

            In other words, the report is quite explicit about BILLIONS of dollars of exclusions, yet you never seem to think it relevant to point that out. Kaplow’s analysis, which I haven’t read in detail, suggests that, beyond the STATED exclusions, there are many others as well. Accordingly, I do not consider the EIA study to be useful in a discussion which attempts to compare ALL subsidies, which is what we’ve been discussing in these columns. That’s not to cast any aspersions on EIA (though Kaplow does)

            In sum, Lance, you are putting this report to a use for which it was not designed; it is not and should therefore not be used as an attempt to comprehensively compare subsidies.

            And that’s EXACTLY why I’ve repeatedly demanded the link.

          • John Greenberg :

            I can’t pass this one up: “3 years should be sufficient to see fruit from the other subsidy $ poured into wind and solar.” If 3 years of subsidies were enough, nuclear power subsidies should have ended in the 1940s.

          • Lance Hagen :

            John, your reference was very informative, though I am little suspicious of the author motives when on the opening page the following is stated “Earth Track focuses on improving transparency for government subsidies that harm environmental quality and impede market access for cleaner technologies”. But what is pointed out, is what he believe is a short fall in the information provided by EIA concerning subsidies (which you refer to indirect subsidies). The only figures or numbers that are provided are in very general terms (like billions), but lack specifics or even ranges by generation source.

            All that being said, let me again try to explain my position in 2 ways (though I am not sure you really care).

            First, I will use nuclear as an example since it has the lowest kWh/subsidy $ as compared to coal or natural gas. According to EIA, in 2010, nuclear received $2,499 million in direct subsidies and, in that same year, generated 807 billion kWh of power. Thus

            Power/$ = 807 * 10^9 kWh/ 2,499 *10^6 $ = 323 kWh/$

            Now, wind received $4,986 million in direct subsidies, in 2010, and by year 2013 generated 184 billion kWh of power. Using the same calculation as for nuclear

            Power/$ = 36.9 kWh/$

            Now let’s assume that the denominator of this equation should really consist of

            (direct subsidies) + (indirect subsidies)

            And not just direct subsidies.

            In order for nuclear to have a Power/$ number of 36.9, like wind, the indirect subsidies would need to be a staggering $19,371 million/yr. The indirect subsidy would need to be 7.8 times larger than the direct subsidy to nuclear. This analysis would only be worst if I had done the same comparison to coal or natural gas. Though your referenced article convinced me that there are indirect subsidies that the EIA failed to account for in their analysis, I find it to be quite unbelievable that they are 7.8 times larger than direct subsidies (for nuclear).

            Now look at this a second way. Using table 16 from the EIA Annual Energy Outlook 2014, the total amount of projected power generated by wind from 2011 to 2040 is 6,398 billion kWh. If they continue to fund wind subsidies, at $4,986/yr from 2011 to 2040, the Power/$ = 42.8 kWh/$. Which is still significantly lower than the 323 kWh/$ of nuclear.

            Even if wind subsidies were reduced by 10%, year to year, through 2019 and no subsidies were provided to wind from 2020 to 2040, the Power/$ = 209.5 kWh/$. Again, wind does not produce enough power to warrant the level of subsidies it receives.

          • John Greenberg :

            Lance,

            The problem here is that you are either overlooking or willfully ignoring an obvious point: the EIA list of subsidies is not just a little incomplete; it’s VERY incomplete and INTENTIONALLY so. Most (not all) of the ways that is incomplete would add massive amounts (tens of billions of dollars) to older industries, but not new ones.

            I already quoted the report itself on the value ($13 billion) of the domestic manufacturing deduction. But look at the other exclusions specified, and ask yourself how many of them would add more than a pittance to the subsidies for wind or solar: accelerated depreciation (in general, impacts OLDER industries with more to depreciate), tax-free bonding (plenty of “pollution control” bonds for nukes, few, if any for wind or solar projects), Export-Import Bank, etc. But these sources too would add tens of billions of dollars to older industries.

            It’s also worth pointing out that this is NOT just a question of “indirect” vs. “direct” subsidies, unless you’re using those terms entirely differently than I would. Many of the subsidies that EIA explicitly excludes ARE direct, BUT, since they are available to non-energy industries as well, not counted. Indeed, that’s the case of all of the subsidies just mentioned.

            And, of course, then there’s the biggee for nukes (Price-Anderson), without which the industry would never have existed and, if eliminated, would simply shut down. It IS an indirect subsidy, and its value is surely in the billions.

            Before you conclude that all of these – and the OTHER subsidies Kaplow comes up with – are NOT 8 times greater than those included by EIA, you should read some of the OTHER literature on this subject. Here are a couple more links for you:

            http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_report.pdf
            and one that I’ve provided previously:
            http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf

            All of these studies also have extensive bibliographies if you want still more.

            One last point before moving on: by choosing recent years, you’ve chosen years in which the federal government HAS put some real money into renewables (finally). But as I’ve pointed out many times, the government has been subsidizing energy industries for centuries (SEE the 2nd link for some fascinating examples) and the ONLY real money for renewables has come in the last few years. Those historic subsidies allowed so-called “conventional” sources to BECOME conventional in the first place and should not simply be ignored by looking at figures for one year.

            That makes a nice segue to my next point.

            The nuclear industry received subsidies which, in today’s dollars would total hundreds of billions of dollars during the 15 years or so between the Manhattan Project and the moment the first kilowatt of energy was generated by commercial nuclear power. It’s no exaggeration to say that the whole commercial nuclear industry is the stepchild of the federal government’s massive R&D (and other) subsidization. So, if they showed up on your list at all, it would show as zero kwh/billions $, dwarfing every other figure on your list.

            Even when the first reactors went on line – Shippingport (60 MW), Rowe (185 MW), etc., they were quite small and there were few of them for another 10 years or so. Until VY and a number of nukes designed and built in the late 60s and early 70s, nuclear power actually generated very small amounts of commercial power in the US.

            According to you apparently, it’s reasonable to ignore, e.g,, the roughly 25+ years of massive subsidization that preceded VY’s going online, then omit any subsidies VY received while being designed, built and operated on a cost plus basis, and finally consider only those EIA included subsides which happen to be available NOW, when comparing, e.g., VY’s subsidization to that of renewables. If that seems reasonable to you, fine. Godspeed. To me, it looks intellectually untenable, which is precisely why I’ve objected to including kWh generated in this discussion.

            I’ll close by repeating a point I’ve made previously. Once an industry is fully capable of competing in domestic and international energy markets without subsidies, I can’t fathom any reason to provide a subsidy AT ALL other than the obvious one: influence groups for well-established industries make potent lobbies (far more so, by the way, than those for nascent industries which, by definition, don’t have decades of retained earnings behind them).

            Modeling subsidies per amount generated puts all this exactly backwards: the industries which actually NEED subsidies to BECOME competitive in the market don’t get them because the subsidies are made to APPEAR to be out of line with those (which have no reasonable rationale other than influence) for their competitors in the marketplace. That’s practically a textbook example of competition on an unlevel playing field. It’s really pretty obvious that granting subsidies to competitors which do NOT need them makes it that much MORE difficult for new entrants to compete in existing markets.

            In sum, providing a set of numbers which excludes major sources of funding, and then attempting to compare those numbers on a basis which clearly favors older industries makes no sense to me at all, yet that’s what you keep trying to justify.

          • Lance Hagen :

            Another interest article about subsidies for wind and the lack of production.

            http://theenergycollective.com/geoffrey-styles/384041/expensive-subsidy-twisting-wind

            “If all US wind-generated electricity received the PTC at the rate offered in the current extenders bill, the annual cost would approach the oil and gas “subsidy”, at $3.9 B/yr based on last year’s actual US wind generation of 168 billion kWh, which equates to less than 3% of US oil and gas production in 2013.”
            So we subsidies wind at the same level as oil and gas and only get 3% of production of power!

            “As for arguments that wind power is not yet mature, other mature industries have exhibited similarly impressive growth and cost reductions in recent years. Natural gas production comes readily to mind. The fact that wind developers assert they still need this subsidy at this level speaks more to the competitiveness of the technology than to its maturity.”

            Again, wind does not produce enough power to warrant the level of subsidies it receives.

          • Lance Hagen :

            John, again you are barking up the wrong tree. Unless you can come up with either specific numbers or ranges for these unaccounted subsides for various energy sources, you have absolutely no idea how they compare to the subsidies used by EIA. Table ES-1, in your reference does NOT give specifics on the ‘scale of impact’ or how this ‘scale’ is distributed to the various energy sources.

            Also you keep trying to make the argument that wind is an immature technology to justify exorbitant subsidies. But it isn’t. Turbine technology has been around for many years. They may benefit from ‘economy of scale’ in manufacturing turbine components, but it isn’t going to be a dramatic gain in productivity that was seen in such things, like computers, which had many innovations in semiconductor technology. The EIA is still assuming capacity factor, at 33%, for wind turbines all the way out to 2040. According to EIA numbers, in 2012, the best average capacity factor was 46.1% (HI), whereas Vermont was only 23.1%

            These wind subsidies only exist to make wind look cost competitive and not to cover for an immature technology. If you want to make the same argument for nuclear, OK. But let’s not make the same mistake twice.

          • John Greenberg :

            Lance,

            1) We appear to disagree about which technologies deserve subsidies and why. I’ve made my case: subsidizing mature technologies helps keep newer technologies out of the marketplace by adding to their cost advantage. In addition, in this field, it actually provides a financial incentive to pollute, which in my view at least, is clearly counterproductive.

            From everything I read, wind power is essentially as cheap as or cheaper than other technologies in the marketplace, so I’m not particularly arguing FOR wind subsidies. I AM suggesting, however, that to remove wind subsidies and maintain those for other industries is a policy mistake of significant proportions.

            Put differently, assuming I’m right about the cost of wind at present, I would have no problem at all eliminating the wind production credits as long as, at the same time, all the subsidies for fossil fuels and nuclear were also eliminated. Indeed, I’d favor that. BUT, the political odds of that happening are zero. The lobbies are far too strong for that.

            Solar, however, is another matter. Photovoltaic technology clearly IS (relatively) new and constantly changing, as reflected in the price curve of solar panels. While grid parity has been reached in a few very high-priced markets, solar remains above market in most places. It is my expectation that – with or without subsidies – the price of solar-generated electricity will be comparable to or cheaper than other kinds of generation within, say, the next decade (very possibly, much sooner). But clearly, government subsidies (in the US and elsewhere) are helping to push the curve and accelerate its downward thrust. So, for environmental as well as economic reasons, it makes sense to me to maintain government subsidies at least until full parity has been achieved without them. At that point, it may well make good sense to eliminate the solar subsidy as well, but again, I would condition that on the elimination of all the OTHER subsidies.

            In short, a level playing field would be far superior for quite a number of reasons than what we have now, but it is also simply not in the cards politically.

            If you disagree with these arguments, please explain why it makes good policy sense to provide subsidies for industries which a) clearly no longer need them (put differently, are competitive without them) and which b) are causing and have already caused massive environmental and health problems.

            2) “So we subsidies wind at the same level as oil and gas and only get 3% of production of power! … Again, wind does not produce enough power to warrant the level of subsidies it receives.” That statement simply ignores the century or more of oil and gas subsidies that preceded the ones you mention; convenient, perhaps, but totally misleading. Moreover, your statement is no doubt true today; but it could very well be false tomorrow. Wind and solar are the fastest two electricity generating technologies right now, so tomorrow’s production is clearly going to be larger than today’s. Beyond that, I’ve already discussed this point at great length; so surely, there’s no point in repeating what I’ve already said.

            3) “Unless you can come up with either specific numbers or ranges for these unaccounted subsides for various energy sources, you have absolutely no idea how they compare to the subsidies used by EIA.” Right, Lance, that’s precisely the point I’ve been making. And neither do you or anyone else!

            We actually DO know, as I pointed out above that the value of just ONE excluded subsidy is $13 Billion (according to EIA), which is roughly 30% of ALL the subsidies for the year. Some of the other numbers are probably known and could be tallied.

            But it’s also clear to me that we will never get a credible value for quite a number of the subsidies. Any number put on Price-Anderson, for example would be highly debatable, at the very best. There have been efforts to value it; and they range all over the place. The NRC stopped trying to put a number on the likelihood of the kind of nuclear accident which would trigger Price-Anderson about 3 decades ago. But without a solid figure for that probability, there’s NO way to calculate premiums, which is why the law was passed in the first place (and why the estimates vary so widely).

            Similarly, the government subsidizes fossil fuels by allowing taxpayers or ordinary citizens to bear the burdens of deaths and illnesses (not to mention the general environmental damage) caused by the fossil fuel cycle. That’s also true of the front end of the uranium fuel cycle: uranium mining and enrichment have caused much disease and death. Putting a number on these subsidies is difficult, controversial, and frankly not very useful. In a similar vein, if atmospheric carbon dioxide is promoting climate change, how does one decide what number to assign to the absence of a price on carbon?

            It’s also difficult to know exactly HOW to value historical subsidies in a discussion like this one. You appear perfectly happy to discount them entirely, which frankly makes a mockery of the numbers you present for reasons I’ve already explained. But exactly how one SHOULD introduce them is far from clear. The 2nd link I provided DOES attempt to put the subsidies in perspective in charts. (What would Jefferson ….)

            The uncertainties I’ve enumerated in the last 3 paragraphs are enough to keep me from even trying to achieve any numerical estimates and certainly enough to insure that ANY estimate will be highly debatable because it will be based on assumptions which are not generally shared.

            I’ll leave it at this: you seem to think that providing a bogus, highly misleading, and inaccurate set of numbers is better than no numbers at all.

            I profoundly disagree. It leads you to ignore a whole series of clearly relevant variables – which I’ve enumerated in various places here at various times. Numbers are exceedingly useful when they actually provide precise presentations of accurate information. But they can also present the illusion of precision when none is available, and that’s what you’ve done here, and what you’re now demanding of me. Illusory numbers can NOT be the basis for any sound reasoning or policies.

          • John Greenberg :

            Lance,

            I woke up this morning with the realization that the subsidies that the EIA allocated to nuclear power are probably ALL for NEW nuclear plants. Since no nuke has come on line in about 20 years, that means that, using you methodology, there have been zero kilowatt hours generated thanks to these subsidies. The same may well apply to coal (for 2010).

            It is worth noting that wind and solar are the fastest growing energy resources in the US and have been for the last several years now. There are 6 nuclear plants under construction, but none of them is near completion Indeed, wind production increased by 10 times during the period from 2000-2010, while coal and nuclear both shrank. (p. xx) Yet coal and nuclear got 31% of the subsidies. (p. xviii)

            In short, your methodology – which I still think is fundamentally mistaken in the first place – should be adjusted, at the very minimum, to relate the subsidies to plants actually receiving them. Since you have taken one-year subsidies, the only production to which they should be applied is to those plants which were constructed with the help of the subsidies. Otherwise, you’re comparing the production of plants built years ago without THESE PARTICULAR subsidies to plants which have been built with them. Surely, there’s NO basis for doing that; in fact, it makes no sense at all.

            A final point. As I understand the wind subsidies in particular, the vast bulk of them is allocated to “tax expenditures,” (p. xiv) and, in 2010, those were available ONLY when a wind project is up and running. It could well be the case that the ONLY subsidies actually producing any power at all are those!

          • Lance Hagen :

            John,

            The historical numbers do not support your early morning epiphany. According to the Taxpayers for Commonsense (who are advocating for ending subsidies for nuclear energy), from 1947 to 2015, nuclear energy will have received $1.10E+11 in subsidies. This amounts to an average $1.6 billion in subsidies per year.

            http://www.taxpayer.net/library/article/nuclear-subsidies-past-and-present

            According to Nuclear Energy Institute, from 1971 to 2013, 2.26E+13 kWh of power has been generated by nuclear. This is an average of 5.3E+11 kWh/yr.

            http://www.nei.org/Knowledge-Center/Nuclear-Statistics/US-Nuclear-Power-Plants/US-Nuclear-Generating-Statistics

            Based on this historical data, the amount of power generated per subsidy $ is

            kWh/$ = 2.26E+13/1.10E+11 = 205 kWh/$

            And the above number does not include any nuclear power generated prior to 1971, which would only make the kWh/$ number larger.

            Remember the numbers for Wind and Solar are:

            Wind = 36.9 kWh/$
            Solar = 2.37 kWh/$

            I repeat (since you seem to forget this), I am NOT supporting subsidies for nuclear. I just used them as a comparative example. My point is let’s not make the same mistake twice, especially if it is 5 times worse then made before.

          • John Greenberg :

            Lance,

            Thanks for your reply.

            You obviously missed the point of my “epiphany.” The subsidies referred to in the EIA report you cite are for NEW nuclear power plants. Collectively, they have generated a total of zero kilowatts, since they’re still under construction (and it’s not even certain they’ll be completed). The power being generated by OLD plants, not subject to those particular subsidies, can’t change that, although you’re trying to “average it out.” And again, you’re conveniently ignoring the subsidies which have been excluded for the old plants as you do this.

            It’s interesting to note that Taxpayers for Common Sense makes the basic point I made quite some time ago, to which you’ve consistently objected: “When it comes to Research and Development the US has also invested far more funds in nuclear power than any other energy source.”

            That said, several caveats need to be applied to your use of this material:

            First, federal nuclear subsidies did not begin in 1947, although the numbers they cite begin in that year. Indeed, the major R&D project was the Manhattan Project during WWII and the research which preceded it. According to Wikipedia — http://en.wikipedia.org/wiki/Manhattan_Project — that would add $25 billion for 1942-1945 PLUS whatever accrued in the years preceding the Manhattan Project plus whatever was spent in 1946.

            Second, as is usual with these things, Price-Anderson is excluded. We’ve been over that point many times. Suffice it to say that the proper number to include is NOT zero.

            Third, I’m not sure exactly how a 2008 report is able to calculate costs through 2015. The report says it used the 2005 energy bill, but I’m pretty sure that there have been changes since then.

            Fourth, the estimates on Table 2 exclude R&D: “This estimate does not include expenditures for research and development.”

            Fifth, this list of subsidies excludes many of the same subsidies excluded by EIA: municipal financing, accelerated depreciation, investment tax credits, Export-Import Bank, etc.

            So what you have here is, AT BEST, a highly incomplete list of SOME of the subsidies the industry has received,- basically exactly the same problem discussed in detail above for EIA.

            But that doesn’t stop you from adding up the figures as though they meant something and averaging them as though THAT meant something.

            The fact is, Lance, your comparison is totally worthless for a variety of reasons. As I tried to point out here and in my “epiphany,” you’re comparing generation by OLD nuclear plants not receiving current the current subsidies listed (but receiving others, NOT listed) to the production of NEW wind projects which ARE being subsidized directly. You’re effectively including MOST of the subsidies given to wind and solar, while excluding tens of billions of dollars in subsidies to nuclear power. Over a period of 60 years, these exclusions add up to real money.

            Finally, your attempts to average nuclear subsidies over 60+ years allows you to group together years in which the industry received billions in subsidies and produced NO power with years in which it produced a great deal of power, but you’re comparing this to a wind industry which has existed commercially for only about 10 years or less. If your point is that wind power has only recently BEGUN to contribute significantly to US electricity production, and that conversely nukes have been contributing significantly for around 40 years now, you don’t need all these bogus calculations to make it.

            If you really want to compare the values of the subsidies given to these 2 industries, you’ll need to wait 40-50 years and then see how much the wind industry received over that whole period of time in subsidies (my guess is that it will end up being VERY little) versus how much power it will have generated (again, my guess: a whole lot). THEN, you can compare that to the massive subsidization of nuclear power and its current status as an industry in apparent decline in the US. Finally, don’t forget to add in not only all of the uncounted subsidies, but also the externalized costs (waste removal, cleaning up old nuclear mines and enrichment facilities, etc.).

          • Lance Hagen :

            John,

            You can keep bringing up points on minutia. Who cares about all those ‘caveats’?

            The simple fact is wind and solar DO NOT produce significant power for every subsidy $ that is spent. And compared to over subsidized nuclear, wind and solar are much, much worse!

            And as for Price-Anderson, quit trying to make this mole hill into a mountain. The Congressional Budget Office values this subsidy at only $0.60 M/yr/reactor. Based on the amount of subsidies in 2010 to nuclear, adding Price-Anderson raises the subsidy by 2.5%

          • John Greenberg :

            Lance,

            The caveats aren’t “minutia.” They add up to at least 10s, and far more likely hundreds of billions of dollars. We already established – because EIA values it – that just ONE of these “minutia” is worth up to a third of all the subsidies in their report (See above).

            I also noted that the pre-1947 subsidies for nuclear are AT LEAST $25 billion.

            I would note, by the way, that according to YOUR source, we’re already well over $1 trillion in nuclear subsidies, STILL OMITTING many. By any measure, that’s REAL money, and wind and solar aren’t even close to that ballpark.

            ************

            If you’re going to cite someone like CBO, please provide a link if you want anyone to take you seriously.

            I’m guessing, from your figures, that you’ve misread the report. Price Anderson requires operators to pool resources and pay for accidents costing less than $14 billion (the figure changes with inflation and re-authorizations). To accomplish this nuclear operators carry insurance of $600,000 per year to cover their liabilities UP TO the $14 billion limit, after which the feds step in. That’s NOT the subsidy value of P-A, which is what the premiums WOULD be for amounts OVER the $14 billion limit.

            If I’m wrong, I’m sure you’ll correct me. Meanwhile, please provide the link.

  8. Moshe Braner :

    So NOW Shumlin is “cautious”? After pushing for the natural gas pipeline in Addison County?

    Regarding “new technology”, yes, with the recent advances in solar and wind power, and low-loss high-voltage DC transmission lines, it is all the more possible and necessary to balance intermittent solar and wind power with hydro power which can be ramped up and down at will. That is how Denmark, for example, absorbs so much wind power into their grid: they have transmission lines delivering hydro power from Sweden.

    Yes HQ will sell at market, but so will everybody else. In particular, the current low price (already rising) of natural gas is the result of a financial bubble that is now popping. So expect electricity prices to double, at least, in the coming years, no matter what. The only thing we COULD have done better, regarding electricity sources, would have been to buy the hydro power dams in E.VT, nixed by Howard Dean (or was it Jim Douglas?).

    Other than that, what we have to do, for our own sake and not just to “save the world”, is: use less energy! Insulate, wear a sweater in winter – and a T-shirt in the summer, and turn off the lights when you leave a room. Combine trips, or stay home. It really is easy to cut your energy use in half if you pay attention.

    Instead, we have a so-called “net metering” scheme that essentially subsidizes air conditioning, and we’ve spent a lot of money on “smart meters” but have yet to use them for any good purpose. When will we charge for electricity based on the momentary cost? That would make people think twice about excessive air conditioning. For now, we still have some businesses propping open their doors, letting the air conditioned air spill out onto the street.

    • John Greenberg :

      It was Jim Douglas who nixed the dams.

  9. Paul Lutz :

    The Gov. showing caution on this??? What. We MIGHT have a different energy profile in 25 years that MIGHT replace MAYBE 50% of our current usage; yet single payer healthcare… full steam ahead.

    How corrupt is this guy?

  10. Guy Page :

    In concept the governor is right: we don’t want to invest heavily in obsolescence. It’s his understanding of the details that worry me. Is he really ready to hold VT hostage to the possibility that solar/wind battery technology will become market affordable? To call that “uncertain” is understatement. By our own choices, Vermont is caught between unaffordable, unreliable intermittent renewable power, and reliable but volatile (in price) and high-carbon fossil fuel power. Getting more Canadian hydro – or at least getting well-paid to carry it and applying that money to energy costs – would be a low-carbon solution to the region’s power needs. But then so would building a more competitive market, so that some of the more affordable low-carbon alternatives (big hydro, nuclear) can survive and thrive. And need I say, but I will as a cautionary reminder – when VY was selling power to VT, we had a winning combination of price, carbon and reliability. Having discarded the bird in the hand, we are beating the bushes and finding….not much.

    • Richard Ratico :

      Regarding VY, we did not discard a bird in the hand. The bird is being slaughtered by it’s owner, Entergy, because it is NOT affordable.

    • John Greenberg :

      Guy,

      Here’s a different perspective on “the possibility that solar/wind battery technology will become market affordable? To call that “uncertain” is understatement.”

      “Time to Swap Power Plants for Giant Batteries? Almost” http://spectrum.ieee.org/energywise/energy/the-smarter-grid/time-to-swap-power-plants-for-giant-batteries

      • John,

        The 40 MW project is providing fast-response frequency regulation services to PJM Interconnection to stabilize the grid that serves more than 60 million people.

        This is an ancillary service (frequency regulation) usually provided by open cycle gas turbine-generators, OCGTs.

        GMP is using a $10.5 million synchronous condenser system to reduce the Lowell disturbances of the grid.

        It has nothing to do with storing wind energy generated during windy periods and using the energy later when there is no wind.

        Say 1000 MW of wind turbines generate 1000 MW x 10 hours x 0.40 capacity factor = 4000 MWh during a windy 10 hours, but only 2000 MWh can be used, then 2000 MWh would be stored for later use when there is no wind.

        A Chevy Volt has a 16 kWh battery that costs about $10,000, or 625/kWh, but only about 60% of its capacity is usable; one cannot draw it down to zero (controls allow 25%), nor fill it to 100% (controls allow 85%)

        The cost of storing 2000 MWh = 2,000,000 kWh would enormous, even if the cost per kWh would be 1/3 of $625.

        • Addition to my comment to John

          The 4000 MWh is at the wind turbines, after gathering from several wind turbine facilities and T&D losses, at least 8%, about 2000 – 160 = 1840 would arrive at the users’ meters.

          The other 2000 MWh, after gathering, conversion from AC to DC, and charging into the battery losses, at least 15%, about 2000 – 300 = 1700 MWh would arrive into the battery, and after discharging, conversion from DC to AC, and T&D losses, at least 15%, about 1700 – 225 = 1475 MWh would arrive at the users’ meters.

          ACTIVE battery capacity would have to be 1700/0.60 = 2833 MWh.

          The capital cost, at a very optimistic $250/kWh, would be about 2,833,000 x $250 = $708 million.

          In NE, the ridge line wind turbine facilities would have cost 1000 MW x $2,800,000/MW = $2.8 billion, plus grid modifications of about 15 – 20 percent.

          To a layperson, your referenced article appears the cat’s meow, to an energy systems engineer, it is a PR fluff piece not based on reality.

          You do not have to take my word for it. Just check it out with one of the experienced energy systems engineers at the VT-DPS, or GMP.

          I am sure improvements will be made over time and costs will be further reduced, but that is a slow process taking decades to implement.

          • Richard Ratico :

            To a certain, self described, “energy systems engineer” who failed at designing his own “energy efficient home” it may seem a PR fluff piece. It is worth noting this same individual is incapable of recognizing an article describing nuclear vaporware as a “fluff piece”.

            To consider wind energy in isolation is to fail to see the forest for the trees. A blizzard of numbers is worthless if the assumptions that generate them are false.

            It will not be necessary to store all the energy generated by a wind farm. The wind is free. The wind farm will be complimented by other renewable sources. The system loads will be actively managed.

            Certain “energy systems engineers” with little imagination, closed minds and financial support from fossil fuel and nuclear corporations have little incentive to recognize the need to modernize our energy delivery systems.

          • Richard,

            “It will not be necessary to store all the energy generated by a wind farm.”

            My example shows 50%.

            “The wind farm will be complimented by other renewable sources.”

            PV solar energy, without storage, is minimal or zero about 65% of the hours of the year, and wind energy in New England is minimal or zero about 30% of the hours of the year. Many of these hours overlap. That means almost ALL conventional generating units are required almost ALL hours of the year to provide energy when solar and wind energy are insufficient.

            It is called having “capacity adequacy” and it is NOT free, because all these generators would need to be:

            – Staffed
            – Fueled
            – Kept in good working order
            – Replaced on a scheduled basis with new ones,

            to be ready to serve on a moment’s notice.

            Capacity adequacy, and its operation, adds at least 5 c/kWh to the cost of delivering the sum of “fill-in” conventional energy + wind and solar energy to users, a significant “externality”, in addition to the “externality” of extensive redesign and augmentation of existing grids to connect the distributed energy sources and control their variable, intermittent energy with the less-efficiently-operated conventional generators.

            “The system loads will be actively managed.”

            Demand control has been practiced by grid operators for decades.

            Cost and time to implement WIDESPREAD system loads, a.k.a., demand control?

          • Lance Hagen :

            Mr. Ratico,

            So you can’t argue the merits of Mr. Post comments, so you resort to personal attack remarks. Why he either bothered to reply to your juvenile behavior, is a mystery to me.

          • Lance Hagen :

            should be

            Why he even bothered

        • John Greenberg :

          Willem:

          Apparently, you need a lesson in reading comprehension. You write: “It has nothing to do with storing wind energy generated during windy periods and using the energy later when there is no wind.”

          The article I linked to states: “Earlier this month, for example, flow battery company EnerVault said it expects to sell a battery at a cost of $250 per kilowatt-hour that can work for four or more hours. That makes it a possible alternative to peaker plants or a way for wind and solar farms to supply the grid at peak hours when power is most expensive, the company says.”

          Moreover, a bit further down, it adds: ““We are quite certain it will feed into utility-scale energy storage,” Padmanabhan said. “As the costs curves go down—and I think they will go down more rapidly than we’ve seen in solar—it opens up more applications for storage.””

          Enough said.

          • Kathy Nelson :

            To Richard, “the wind is free”, the wind may be free but wind turbines are not. Your limited view of this issue is very apparent.
            To Greenberg, Willem is right. There is no efficient energy storage that can be used by intermittent generators. Your link is to fluff and nonsense, read the comments to that article.

          • Lance Hagen :

            “Earlier this month, for example, flow battery company EnerVault said it expects to sell a battery at a cost of $250 per kilowatt-hour”

            The key word in the above statement is “EXPECTED”. Many companies make ‘expected’ claims.

            Also Mr. Post, in his analysis, used $250/kWh, but stated it was “very optimistic”. So what is your point?

          • John,

            This white paper surveys the storage filed.
            http://www.iec.ch/whitepaper/pdf/iecWP-energystorage-LR-en.pdf

            Here is another paper surveying the storage field.
            http://www.iitmicrogrid.net/microgrid/pdf/papers/battery/battery.pdf

            Here is an article describing how a flow battery is used to smooth wind energy variations in Japan.
            https://www.asme.org/engineering-topics/articles/renewable-energy/flow-batteries-augment-wind-power

            Some energy storage systems could store variable wind energy for much later use, such as storing some excess night-time wind energy and use it during the peak demand hours of the following afternoon/evening to avoid having to start up a peaking plant.

            If the economics of that approach was so compelling, utilities would have jumped on at least 10 years ago, if not in the somewhat poor US, certainly in rich Germany.

  11. “What we don’t know is what technology might do to the assumptions we make right now,” he said.

    Assumptions not required. Many DO KNOW what technologies are available right now, and a grid is never required.
    Is the governor playing the voter or has he seen the light? Either way it is a progressive opening.

    Retired Lieutenant Colonel Thomas Bearden, US Army, PhD

    website: http://www.cheniere.org

    http://www.youtube.com/watch?v=eNU3MLqyzPk

  12. Richard Ratico:
    “Certain “energy systems engineers” with little imagination, closed minds and financial support from fossil fuel and nuclear corporations have little incentive to recognize the need to modernize our energy delivery systems.”

    The “same” can be alleged to you. You have an RE business that provides little incentive to fundamentally modernize our energy delivery systems.

    • Richard Ratico :

      If my small electrical contracting business is in any way successful at helping to keep quacks out of the conversation about our energy future, I will die a happy man.

      Thanks for your comment. I’m flattered.

      • LOL

      • More quacks,

        Capt Robert Salas, USAF. Thermonuclear warhead ICBM launch officer.

        John Callahan, Division Chief of the Accidents and Investigations Branch of the FAA

        SSGT James Penniston, senior security officer in charge of base security at RAF Woodbridge, UK. Held Top Secret U.S. and NATO security clearances

        Hon. Paul Hellyer, Canada’s Former minister of National Defence

        • hundreds more government/military witness`

          • Richard Ratico :

            If it walks like a duck…..

  13. Chuck Lacy :

    Could someone explain the pumped storage systems in New England and the potential to address the short term storage requirements inherent in solar/wind/nuclear systems? My understanding is that nuclear has some of the storage issues of wind and solar and that they have been addressed, in part, by pumped storage. Why aren’t these systems mentioned in the solar/wind debates? How does this fit together?

  14. Howard Shaffer :

    Thank you Mr. Greenberg for your description of how the grid manages generation. With no battery equivalent, the grid must be able to handle the instantaneous loss of the largest generation source, as you describe.
    Many solar panels, and many wind turbines, make a large source. So if the sun goes behind clouds over a large area, or the wind dies down over a large area, that is a loss of the source.
    Until there are batteries or storage in place, the deployment of wind and solar power will be limited. The “smart grid” can help a lot, by being able to instantly shut off intermittent loads, such as all “refrigeration” (including air conditioning and heat pumps), and cars being charged.
    Three pumped storage plants in New England. Google it and see the FERC map.
    A policy question is “What do we do while the number of solar panels and wind turbines are being deployed, and how long will it take?

    • Howard,

      “A policy question is “What do we do while the number of solar panels and wind turbines are being deployed, and how long will it take?”

      Because Germany lacks grid adequacy to deal with increasing variable RE generation during an increasing number of hours of the year, Germany’s answer has been, is, and will be, to increasingly use foreign grids to balance its variable RE energy, but ends up selling this excess energy at near zero prices after subsidizing it at about 20 eurocent/kWh.

      RE aficionados crowing about Germany exporting energy sounds rather hollow to me, especially when increased coal use causes Germany’s annual CO2 emissions to INCREASE.

      However, because of increasing expensive RE generation from its too expensive ENERGIEWENDE, it is starting to bump up against the capacity, MW, of transmission connections with foreign grids (congestion anyone?), which will require Germany to finally make many billions of dollars of investments in grid expansions that should have been made at least 10 years ago.

      The excuse for not doing it was the fable, it would not be necessary, because of smart grid, supply and demand management, electric cars acting as storage, economically-viable, utility-scale storage being just around the corner, etc., all of which turned out to be much slower and more expensive to implement, even by rich Germany, never mind poor states, such as Vermont.

      Basically, Germany ran out the door to fight global warming, without being fully equipped for the battle, and deluding itself regarding the cost, etc., somewhat similar they way they rushed into Russia in WW II.

      http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy
      http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

      PS. My wife just called to help her in the garden, so of I go.

      • Richard Ratico :

        Willem,

        Why has Germany increased it’s use of coal?

        • Richard,

          Mainly a cost issue.

          By end 2022, if all goes according to plan, Germany will have shut down all its near-CO2-free nuclear plants.

          Germany has reduced its use of high-cost, low-CO2 gas and increased its use of low-cost, high-CO2 domestic coal, and even imports coal from the US.

          The net effect is increased annual CO2 emissions, even with increased RE generation. Also, much of Germany’s RE is from biomass and its CO2 and other polluting emissions are about a bad as coal.

          • Richard Ratico :

            Willem,

            In other words, is it correct to say Germany’s increased use of coal has nothing to do with it’s build out of RE and everything to do with it’s decision to phase out it’s nukes?

            Is it also correct to say, without RE, Germany’s increased use of coal would have to be much greater?

            The wisdom of the nuke decision is hotly debated, of course. One can only hope the owners of the more than 400 nuclear power reactors worldwide are exercising MUCH greater attention to safety than private industry typically does.

            We can argue over the safety record of the nuclear industry until the cows come home, indeed we have. The fact remains, infrequently, there is an accident of such enormous scale and consequence, the entire world holds it’s breath.

    • John Greenberg :

      Howard,
      Thanks for the correction about pumped power plants in New England. I looked at a Wikipedia list and then managed to mis-locate the other 2 outside of New England. My bad.

  15. John,

    “Yet you hate SPEED and love the VY contract.”

    My analysis of SPEED goes out to 2017. Surely one can make reasonable, conservative assumptions for the years 2015, 2016, 2017, as I have done, to come up with the $60 million in excess of grid prices for these three years.

    Remember, we have 3.5 years of accurate SPEED performance data for the years 2010, 2011, 2012, 2013, from the DPS website, to extrapolate from. Any engineer would love to have 3.5 years of good data and extrapolate another 3 years.

    During these 3.5 years SPEED PV solar has become the fastest growing component, because of the excessive 25.7 c/kWh feed-in tariff, which makes investments in 2.2 MW systems in meadows a risk-free no brainer.

    This will drive up the cost/kWh for the entire SPEED program for projects 2.2 MW and less, as already shown by the 3.5 years of data.

    The excessive solar feed-in tariff is why multi-millionaires with risk-free tax shelters invest in Vermont’s solar projects. It is too good a deal to pass up.

    Klein, et al, like it that way, want to make no changes, so they can crow how successful SPEED is, and Vermont being the solar leader in the US.

    In your comment regarding the VY contract, I have to admit rather little knowledge of the contract, except what I read in the papers.

    At that time utilities thought 6 c/kWh was too high (compared, as the utilities said, to the really good deal that had expired), and that the 115 MW was too little (compared to the prior MW {I do not know how much that was}).

    The increased energy cost over the old contract would have been: 115,ooo kW x 8,760 hr/yr x 0.90 CF x (6c/kWh, offered – 5 c/kWh, annual average NE grid price) = 906,660,000 cent/yr, or about $9 million/yr

    Added to that would be the rescinding of $17.8 million of revenue sharing, as that would no longer being part of the contract, as you said.

    You stated $87+ million. Is that per year, or for up to 20 years? Any back-up for that number?

    On hindsight rather a good deal, especially compared with the high capital cost and energy cost of SPEED.

    BTW. I do not hate SPEED, and do not love the VY contract. Your wording is ill-chosen and beneath your intelligence.

    I analyzed the published SPEED data and stated the results. That does not qualify as hating.

    I knew rather little of the VY contract, certainly less than you. That does not qualify as loving.

    • John Greenberg :

      Willem,

      The VY contract was for $61/MWH for the year beginning on March 21, 2012 with the escalator I’ve described. Because ISO data is by the month, I’ve “rounded” that to April 1 to March 31. During that period, ISO’s average VT price was $48.60 per MW. So the difference was $61 -48.60 = $12.40 per MWH.

      I didn’t figure in the CF @ 90% because that figure in general, comes from cycles which are closer to 100% for the 18 months of operation plus the planned outage, so if you wanted to figure in outages, you’d have to match the outage schedule to the contract years. I made no attempt to do that. Going by memory, however, I don’t think there was an outage during the year from April, 2012 to the end of March 2013. (I believe the outage was a bit later in the spring of 2013). And in any case, there was no contract, so it’s not clear how it would have handled planned outages (or even unplanned ones, for that matter).

      All that said, however, my $87+ million figure is off by a multiple of 7, since I factored in BOTH 7 days a week AND 365 days a year. The correct figure would be a little less than $12.5 million factor for the power from April 1, 2012 to March 31, 2013, making the total for the 2 items a little over $30 million rather than the $105 million I stated.

      I sincerely apologize to all for having thus batched my calculation.

      ***************

      On other points:

      — “Any engineer would love to have 3.5 years of good data and extrapolate another 3 years.” An engineer might, but this is not an engineering question.

      Economists have roughly 70 years of good data (dating back to WWII) and can’t tell you what the economy is doing NOW, much less 3.5 years from now. Statisticians have to revise estimates for the 3 PRECEDING months 3 times and even then, the “final” figure is subject to revision.

      The same goes for utility market analysis. If you look at the avoided cost estimates for a given year, you can watch them move up and down with the markets. The 2005 estimate for 2012 power was, if memory serves me around 6 cents in 2005. By 2008, the same estimate was 9 cents. The reality, as just mentioned, was 4.86 cents. VY’s testimony about the value of the RSA went from $500 million to $1 billion to roughly 0 in the 3 years during which the CPG case was first heard and then re-heard, based on the very estimates we’re talking about for VY and grid prices. And a year later, the 0 estimate turned out to be off by $17.8 million. That’s one difference between economics and engineering.

      — “Klein, et al, like it that way, want to make no changes, so they can crow how successful SPEED is, and Vermont being the solar leader in the US.” But Klein et al don’t set the SPEED rates; the PSB does. The Board explains the basis for its here: http://vermontspeed.com/storage/board-orders/Prices%20and%20Program%20Changes%203-1-13.pdf, pp. 8-16. Given how often you like to write about this Willem, you really ought to read it.

      — “At that time utilities thought 6 c/kWh was too high … and that the 115 MW was too little (compared to the prior MW {I do not know how much that was}).” The first half is correct. The second half is not. Both CVPS and GMP said publicly they wanted to buy LESS VY power to diversify their portfolios (the exact same argument I’ve made in Digger comments about HQ power). They were buying, depending on whose figures you believe, 165-180 MW.

      As to the first half of your statement, it turns out that the utilities were quite right: 6.1c/kWh WAS too high,- significantly so.

      — I don’t want to put words in your mouth, but you’ve attacked the SPEED excesses multiple times, and have attacked the State for blocking the VY contract as well. If you don’t like “loving” and “hating,” chose your own words and I’ll use them going forward.

      • John,

        Thank you for your response.

        Based on my assumptions of 0.90 CF and 1 c/kWh difference, my number is about $9 million.

        Based on your assumptions of 1.00 CF and 1.24 c/kWh difference, your number is about a little less than $12.5 million.

        “Given how often you like to write about this Willem, you really ought to read it.”

        You originally assumed I had not read it, whereas I had, and I responded David Hallquist did not think much of the PSB approach. HAD HE USED it, his number would not have been 17 c/kWh, but closer to 25.7 c/kWh.

        I think , and likely David and others do too, that the PSB has been looking for reasons to justify the excessive 25.7 c/kWh to make the PV solar part of SPEED attractive to multi-millionaires with risk-free tax shelters, and thus achieve a “success” for Shumlin, Klein, Sanders, et al.

        “Any engineer…..”

        John, I have an MSME and MBA, plus about 30 years of professional experience, once considered becoming an economist, but decide against it. I am well aware of variables influencing outcomes in engineering and in business. That is the reason, I immediately saw your numbers were off. One has to know what is reasonable. Some people are better at it than others.

        ” 6.1c/kWh WAS too high,- significantly so.”

        That was largely due to the multi-year DECLINING gas prices, and multi-year DECLINING consumption, which in turn was due to the multi-year, low-growth, NE (and US) economy, and due to US average real household incomes DECLINING since about 2000, which the Great Recession of 2007/2008 did nothing to alleviate.

        The Federal Reserve had to create about $3 TRILLION out of thin air, a.k.a. “quantitative easing”, just to keep the economy afloat and prevent it from spiraling into depression.

        Europe and Japan had to do the same, and both are still not growing! Yikes.

        • John Greenberg :

          Willem,

          You say: “You originally assumed I had not read it, whereas I had ….” If that is the case, then why have you written (more than once): “based on “avoided cost-based prices,” whatever that means”? http://vtdigger.org/2014/06/05/willem-post-vermonts-speed-program-costly/#comments (in the body of your commentary)

          I would have no difficulty with your STATING what the Board means and why you disagree with that. To my knowledge, at least in VT Digger comments, you’ve never done so.

          Your further comment, however, makes this even more open to question:” I think , and likely David and others do too, that the PSB has been looking for reasons to justify the excessive 25.7 c/kWh to make the PV solar part of SPEED attractive to multi-millionaires with risk-free tax shelters, and thus achieve a “success” for Shumlin, Klein, Sanders, et al.”

          As the Board explains, these are open dockets with a variety of parties participating and expressing different points of view. Moreover, the Board (as I understand it with the consent of all parties), hired an independent expert to actually generate these calculations. Specifically, the Board’s decision states: “In those cases, and in this one, the Board contracted for an independent expert. All parties were free to contact the independent expert at any time to discuss the issues on which he was providing input. The cash flow model employed to set avoided costs in this proceeding was the product of such collaboration during Docket 7533. The Board did not provide specific direction to the independent expert, except in the context of determinations during workshops or hearings at which other docket participants had an opportunity to propose alternatives and suggest different work tasks. In this case, the design of the market-based mechanism changed over time based upon the very useful suggestions of the participants. In this Order, the independent expert is referred to as “Power Advisory.” However, except for the broad tasks defined in the contract for services and the specific directions provided during workshops and hearings or in orders or memoranda, the Board has not attempted to direct Power Advisory’s work.” (Footnote 6, p. 6: http://vermontspeed.com/storage/board-orders/Prices%20and%20Program%20Changes%203-1-13.pdf#page=6&zoom=auto,-13,422 )

          The Board further explicitly states that the actual figure arrived at, 25.7 cents per kwh was the rate which the independent expert’s model came up with: “Power Advisory recommends that the standard-offer prices for solar photovoltaic (“PV”) be revised. Power Advisory contends that solar PV costs have continued to decline and the prices should be revised to ensure that the standard-offer pricing reflects the underlying costs to
          build and operate a project. Power Advisory recommends that the solar PV price be updated from the previous price determination in Docket 7780, to reflect changes in capital costs and the treatment of property taxes. Power Advisory provided evidence that prices for PV modules have declined by 25 to 34 percent in 2012. Solar PV modules are forecasted to be $0.67 per watt in the first quarter of 2013, with a further reduction to $0.55 per watt forecasted for the fourth quarter of 2013.12 A solar module cost of $0.55 per watt represents a total capital cost of $3.06 per watt for solar projects. Power Advisory also recommends that the property tax payments in the cash flow model be escalated by inflation, rather than the payments declining as assumed in the previous price determination.
          “Using the updated capital-cost and the property-tax-payment assumptions, the financial
          model calculates an avoided cost for solar PV standard-offer projects of $0.257 per kWh.” (p. 10, footnotes deleted)

          Finally, on page 15, the Board adds: “Parties were provided an opportunity to submit comments on those issues or recommended changes to prices.” VEC was a party to this docket and there is no evidence that it submitted any comments or recommended changes. In other words, if David Hallquist really disagrees, it seems odd that VEC never said so. Perhaps he can explain his position in his own words.

          In sum, unless I’m missing something, you’re saying that all of the parties to the rate case, including VEC as well as the independent expert hired by the Board are in cahoots “to make the PV solar part of SPEED attractive to multi-millionaires with risk-free tax shelters,” implying that the process I’ve just described in the Board’s own words is a complete deception. That’s quite a conspiracy you’ve conjured up. Any evidence for it?

          • John,

            I think the “independent expert” should talk with David Hallquist, another expert in the energy business who intimately knows his costs, to determine why there is such a big difference; 25.7 c/kWh and 17 c/kWh.

            If the difference was 1 or 2 cent, fine, but 25.7/17 = 51%? Either one or the other resides on a different planet.

            The up to 2.2 MW, SPEED solar projects DO attract multi-millionaires with tax shelters from all over the US, including Vermont and other Northeast states, as is revealed by DPS data. Their advisors smell a good deal and flock to it.

            The end results are hard-earned money going out of state for fattening tax shelters and impoverishing already-struggling Vermont households and businesses, all so Klein, et al, can crow about SPEED being so “successful”.

            Here is another Vermont example to promote wind energy on ridge lines.

            VERMONT’S WIND ENERGY SCAM

            Vermonters are the victims of a grand, fraudulent charade to promote heavily subsidized, expensive wind energy on ridgelines, primarily to schlep as much federal subsidies to Vermont as possible. Reports were written about the abundance of wind on ridgelines, and it being a great renewable energy source for Vermont, and leading to energy independence, and creating jobs. No more reliance on those dirty fossil fuels and that dangerous Vermont Yankee.

            The CEA report was written for Vermont utilities to guide them towards renewables. CEA based its analyses on CFs = 0.33, quoting “Vermont sources”. Page 23.
            http://www.leg.state.vt.us/jfo/envy/7440%20CEA%20report.pdf

            After the CEA report was issued, Blittersdorf, a Vermont wind guru, owner of 10 MW Georgia Mountain, helped James Moore write the VPIRG “Repowering Vermont” report, which used wind turbine capacity factors of 0.33, quoting the CEA report, which quoted “Vermont sources”. Yikes!

            And Vermont legislators were fed this garbage, believed it, and enacted laws accordingly, even though evidence of poor CFs of Northeast wind turbine plants already existed in government reports, and were likely known to the DPS and PSB.

            http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy

          • John Greenberg :

            “Any evidence for it?”

            Apparently not.

  16. Rich Cowan :

    Someone posted some information that solar power inverters needed to be replaced every 8 to 10 years. That is nonsense… the industry has been putting out inverters with a warranty of 25 years for several years now, to match the warranty of solar panels. Anything written about the economics of solar in 2010 is no longer relevant, due to massive advances in this technology!

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