Building Unnecessary Power Plants

Building Unnecessary Power Plants

Why are we building power plants that aren’t needed?

The growth in demand for electricity has been less than 1% for nearly fifteen years.

Chart from Statista showing Electricity consumption 1975 -2017.Bars are 5 years apart between 1975 and 2010

It’s clear from the chart that most of the investment in new power plants since around 2005 has been unnecessary.

Total consumption has been roughly within the limits of installed capacity which includes provision for unexpected peaks in demand.

Since demand has not been increasing, construction would only be needed to replace units being retired because they could not be upgraded to meet new EPA regulations, primarily for mercury capture.

Any such replacement units could have been built at the lowest possible cost by using natural gas combined cycle units.

The accompanying chart shows additions and retirements of the US power generation fleet.

While demand has barely budged, total new renewable, i.e., wind and solar, capacity has increased by around 90 GW. (The builders of wind and solar plants could earn money from tax credits and from an increased rate base.)

These additions were not necessary to meet demand because there was little to no growth in demand and because demand could already be met with existing traditional power generation sources.

Meanwhile, the cost of electricity has increased.

Existing coal-fired power plants that were needlessly retired could produce electricity at around 3 cents per kWh, while natural gas combined cycle power plants produce electricity for around 6 cents per kWh. On the other hand, wind and solar produce electricity from around 10 to 23 cents per kWh.

If low-cost coal-fired plants have been replaced with high-cost wind and solar power plants, it’s obvious the cost of electricity to consumers will increase. 

This is confirmed by EIA tables showing the cost of electricity in all 50 states, where states with large amounts of renewables have high costs for electricity, while states relying most heavily on coal and natural gas have the lowest cost for electricity. See, Obfuscation

Conclusions

Building additional capacity that’s not needed should, theoretically, result in excess supply and lower costs for electricity.

But the cost of electricity to consumers is increasing … and increasing dramatically in percentage terms. In California, residential rates have already increased as much as 25% in a few short years, and some consumers are scheduled to see their rates increase by as much as an additional 80%.

In California, consumers are faced with draconian increases because of policies to increase the use of wind and solar and eliminate the use of fossil fuels. The same is essentially true in other states where wind and solar have been increased with consumers paying more for their electricity than the average American.

There is no need to quibble over technical terms, such as capacity factor and LCOEs to determine that wind and solar are more expensive than coal or natural gas. It’s obvious from the data that wind and solar are causing substantial increases in the cost of electricity.

And this is solely because AGW enthusiasts are demanding CO2 emissions be cut.

. . .

20 Replies to “Building Unnecessary Power Plants”

    • Thanks for pointing out that the graph is confusing. The years noted as 2005 through 2017 accurately reflect the data but the bars are not evenly spaced. I made a mistake in not making it clear the bars are unevenly spaced. Between 1975 and 2010 they are spaced 5 years apart. Then they are one year apart.
      My apologies.

  1. Another issue is that population growth is not evenly dispersed. Transmission is hugely expensive and made even more complex today by the renewables.
    Many of our reliable nuclear and coal generators are very old and nearing retirement age. Transmission grids are “senior citizens”, too. No easy answers!

    • Thanks. Excellent points. Renewables make the transmision problem worse. That’s a subject in its own right.
      Aging infrastructure is a problrm everywhere. No question that existing coal-fired and nuclear plants are getting long in the tooth. They need to be replaced. Unfortunately nuclear is probably not an option because too many people have been made afraid of radiation. And that’s thanks to China Syndrome and repetitive misinformation from people like the Uniion of Concerned Scoentists.
      New coal-fired HELE plants can’t be built because of the past administration’s ruling limiting CO2 emissions. HELE plants generate electricity at considerably less cost than wind or solar and are 45% more efficient than traditional coal-fired power plants. Natural gas combined cycle power plants are the least costly to build ($1,100 per KW) and generate electricity at far less cost than wind or solar, even without taking into consideration that wind and solar also require expensive storage. The first step to solving the problem is to stop subsidizing wind and solar … but that’s not going to happen anytime soon inspite of existing plans to do so.

    • I’m not sure that any of our existing nuclear fleet, including those units recently retired prematurely, have to be taken out of service for technical reasons. Almost all have been trashed because of economic pressures. The subsidies for “renewable” generators have so distorted the market, along with lack of penalties for environmental damage caused by gas-fired plants (CO2 emissions, fracking), that they have forced nuclear to the brink of extinction (and I’m coming around to the viewpoint that this is by design, not happenstance). Since the market was distorted by artificial intervention (government-mandated subsidies), government must take the initiative to correct those inequities. But the industry must also do its part to reduce O&M costs. Many plant staffs are seriously bloated in size, especially on the security staff end.

      • Thanks for your comments.
        I can’t address the cost of security, whether it’s bloated or not, but there is no question that only a few nuclear power plants were shutdown for technical problems. The Crystal River plant is one that comes to mind, and it had to do with the containment structure not the nuclear plant.
        The subsidies and the RTO/ISO so-clalled competitive auctiuons have forced the nuclear power plants to close. The low cost of NG is a factor in day ahead auctions, but subsidized wind and solar are the problem with real-time auctions.
        I’m certain that CO2 emissions have not been a significant problem and that fracking has not caused environmental damage.
        Nuclear is a safe method for generating electricity, and does so without emissions. Long term storage is a problem that can be solved with YUCA mountain. Realistcally two things are true: People are unnecessarily fearful of radiation and the high construction costs at Vogtle and SCANA will preclude building any new nuclear plants without a breaktrough in small modular reactors.
        I’m interested in your benchmark for the size of nuclear power plant staffing.

        • I’m not sure about the absence of environmental damage from hydraulic well fracking. In my state there has been extensive development of fracked wells in the Utica shale formations. Some wells use thousands to tens of thousands of gallons of petroleum distillates, surfactants, and gelling agent. I was part of a consulting group that did a study for the state EPA and while I can’t divulge specific information in the study, I can say that there is a very real concern for both intrusion into the aquifer and also surface contamination from fracking fluid ejected from the wells.

          I don’t have a benchmark for plant staff but I note that often plant staff size bears a weak or no correlation with plant size (installed capacity). So I am afraid that even if SRMs are deployed there will have to be some kind of initiative to reduce plant staff size, otherwise any costs savings from SMR technology may be swallowed up by O&M costs.

          IIRC the NEI published a note about an industry initiative to reduce O&M costs by something like 30%. If most of that is from plant staff salaries then maybe a 20-30% reduction may be a target. I know you can’t do without certain things, like operators and some reasonable level of security staff. But the industry is going to have to take a hard look at ways to cut costs if we even have a prayer of being competitive.

          I’m not against Yucca Mountain, since it may be the best we can do right now, but it is my belief that an alternate approach would be to embrace both waste partitioning and actinide recycle. That addresses two key issues: volume and heat load. If politics ends up taking Yucca Mountain out of play, then doing those two things would allow a facility more like WIPP to be used. West Texas and NM both have better rock types at depth anyway, so if we reduce volume and heat load a smaller facility in a different place might work. Maybe WIPP’s mission can be expanded to accommodate the material.

        • Crystal River was a sad case of a company trying to do a complicated job on the cheap and ended up losing the whole ball of wax when things went sour. Another example is SONGS. SCE never should have gone the ASLB route for dealing with the issue they had with Mitshubishi jobbing them with those lemons of steam generators. They should have handled the issue in-house and made Mitshubishi own up to their mistake and make things right. Even after the SHTF the company should have fought for the plant because all it needed really was either a SG repair or to sue Mitshubishi to cover the cost of a new set of SGs. But they threw in the towel and I am convinced that this set the pattern for PGE to trash Diablo Canyon for 30 pieces of silver, again for no justifiable technical reason since that plant has plenty of useful life left.

  2. Politicians have loaded the debate heavily on the CO2 side of the issue. The UN IPCC has been at it for over 30 years, with very little scientific balance. The very crux of the argument is that atmospheric CO2 drives up atmospheric temps, thereby identifying the CO2 as the culprit to be addressed. In my mind, this causation has never been fully explained and all of our money and effort being deployed toward reducing atmospheric CO2 has had no impact whatsoever. Do we just keep spending money in that effort, or do we slow down and re-evaluate? The answer directly impacts the national grid and all electricity production.

    • The smart move would be to pause and reevaluate, but climate change is now part of the socialist narative where climate change was caused by captalism.

      • And, to add even more irony, most of the additional CO2 emissions today are coming from non-capitalist countries (e.g., China). We are thrashing around with unreliable, expensive, intermittent power sources while developing countries are plowing ahead with baseload plants, often coal-burning.

  3. We already have designs for small modular nuclear reactors. I believe China is building some, advantage being some can be refueled while others are producing power. Also, what has happened with the 30 year old technology for breeder reactors which recycle spent fuel, producing more fuel and much reducing need for storage? My understanding is that France and other countries with nuclear plants have been recycling for decades.

    • Right now with the glut of uranium on the world markets the economics favor once-through fuel use. Recycled fuel costs more than freshly-mined uranium. But that may not always be the case, and we’d be wise to plan ahead.

      Jimmy Carter effectively killed the commercial reprocessing business in this country when he issued an Executive Order stating that it would be our national policy to forego reprocessing ostensibly because of proliferation concerns, even though plutonium extracted from used fuel is not weapons-grade plutonium because of the presence of neutron poisons in the suite of non-fissile plutonium isotopes in used fuel. Supposedly Ronald Reagan rescinded the Carter EO but I can find no Reagan EO that states this in so many words.

      But, no matter, the die was cast. No company in this country was going to risk investing billions developing reprocessing plants once the word was out that you could be put out of business with an EO, and you run the risk of that every four or eight years with the roll of the dice Presidential election. You’d need an Act of Congress to specifically shield companies from punitive EOs that decided to try the recycling business. Either that or have a national lab do it. Either way, being that maybe 50 people on Capitol Hill really care about nuclear energy, there likely won’t be much enthusiasm for either.

      • Thanks for your comments.
        Excellent summary of the hstory of reprocessing in the US.
        I suspect you are right about the current state of affairs.

    • SMRs are possible and a few designs are actively seeking NRC review.
      As mentioned elsewhere, reprocessing is technically possible with France already having done it. Politically it won’t get off the ground in the US for the reasons cited.

  4. “And this is solely because AGW enthusiasts are demanding CO2 emissions be cut.”

    Yes but you missed the key mistake — that many believe renewables plus fossil fill-in can accomplish that. Germany proves that such isn’t possible. That’s why ubiquitous, clean, reliable power delivered by nuclear is essential!

    • It’s true that Nuclear power, by itself, is virtually the only source that can provide power without CO2 emissions.
      Unfortunately, nuclear is being abandoned out of irrational fear of radiation from nuclear accidents.

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