Coal Is Going Away, and It’s Not Coming Back
Here’s an article (with great graphics) that helps us understand the limits to the power of the Trump administration in the outcome of our civilization. Can he slow down the integration of renewables into the grid-mix? Yes, at a certain level. Can he make it easier for oil companies to drill in ocean waters all around the U.S.? Yes, at least temporarily.
Can he bring back the coal industry and the mining jobs he promised? No. The forces of pure market economics (as discussed in Bullish on Renewable Energy) have made travel in excess of the speed of light just as feasible.
It would be wonderful if our government had any level of concern for the health of the people it serves. The bad news: It doesn’t. The good news: Thay really doesn’t matter much.
Craig it will be interesting to see what our Mate from the Carbon export nation of Aussie land has to say to rebuke these GLOBAL Statistics .
Very nice it confirms what most of us know and support.
We have the carbon heads on the run , they see the flat lining of demand , the economic substitution under way with only More to come.
A Greener Future indeed – So much for emotions and movements being temporary its called Economic Substitution and its Structural.
It may be slowed some what – a pause may give time to only improve the Green Technology’s more…. and lower cost Even more.
The reason as Lawrence Coomber asked in a different post as why prices ( assume he meant grid system costs) have not come down yet from the impact of R E penetration are many , here are some:
1. We have not quite reached the Tipping Points in many Nations
2. The burden of stranded un depreciated assets ( Investments) that will never earn a pay off return are huge out there. Under used so LCOE goes up. Coal plants lose money at below 40 % capacity factors if it is constant , they cant earn enough to pay them off.
So that economic burden must be dealt with and that costs money.
3. The below the water line danger real economic danger of trumperian follies in energy is that some how we build more fossil fuel plants that are un needed ( like coal) and will prolong the Investment Horizons that we have to bear their unneeded costs. Or we jettison sound environmental policy to allow oil extraction in (sensitive areas at higher marginal costs) and call it progress. That is the RUB of Folly going on here.
Our economies will pay higher rates for the Capacity Redundancy that trying to revive a terminally ill coal sector.
4. One other cost that transitioning to more green Variable power sources that is legitimate and is inherent to the technology limitations is the need for Grid Upgrades and some degree of lower cost gas back up units to balance out and firm up the power grid supplies . There are needed to handle beyond the tipping point of RE saturations. The challenge to utilties is to upgrade their planning process so they can minimize un needed grid enhancements , use DERs ( distributed energy resources ) more optimally and deploy more modualr ICE Internal combustion Generation in smaller increments like 9.9 megs and put them in series deployments like 5 at a site or more. they can be Cycled only as needed to meet sharp peak demands –
ramped up and down as needed. These options are cheap, efficiency and emissions curves match larger turbines but their CAPITAL COSTS are much less.
so you invest less Capital the Name of the game. Low capacity factors need lower capital costs for the numbers to work and be in the money. Large Base load is passe ! cost wise.
utilities are learning the hard way due to decades of Ingrained Habits that installing a 100 megawatt (nominal) LM 100 by GE fast ramp turbine, load tracking etc. rated at capacity factor of 42 % .
They tend to get 20 % in AZ due to changing load demands and the LCOE is close to $ .19 cents per kwhr. this is not good.
The small GE and Wartsilla ICE engines can deliver the needed 20 % capacity factor load at a lower LCOE and use minimal water as well if none.
so Lawrence hope that explains some of the over head costs that keep energy prices up even though we are getting more R E.
California is on the Brink of this now and will need 5,000 megawatts of battery storage in like REL near Term like NOW! they are over generating up to 8,000 megs of solar a day now. they are ahead of schedule.
The needed Grid upgrades in California are estimated by the Utilities to be close to $ 16 billion. That is not acceptable so revisions and closer cooperation of All Stake Holders is needed and is ongoing.
Other wise the rates for power even though Green energy is cheaper to produce it can have higher distribution ( absorption costs) caused by variability and time of day and season to boot!
However they have Good public policy and Planning there, California thank fully ignores the trumperian ignorance is good model and will not allow the Folly to take hold in their State. California will manage the excess and Oregon and Nevada will benefit and it will work out.
So cost control over time will arrive. But Grid Integration costs must be reduced.
Given the projected Boom in EV cars it makes sense to leave some of this expensive and environmental destructive oil resources in the ground. That is the take home.
Now my mate in Aussie land may argue the Folly and emotional appeal of such actions and counter that it is all good and needs to be developed. tax revenues and export to PRC etc – I say make finished products and make more money. I think the market forces at work are much greater than Slogans or Investment Holdings in maturing industries whose future is flat lining out. Due to marginal cost more than anything else couple with alternative technologies that are more Cost Effective.
The charts show that the Nuclear Genie is flat lined and stuck in place as well. So my repeated suggestion to that sector is you are running low on response time to be relevant. Get in gear and get in the game – the Variable generation could benefit from your firm power but at much reduced levels.
Timing is everything in life so
The SMR crowd need to get to market and demonstrate high performance BEFORE 2030 2035 time period.
The reason why – the Massive Decommissioning Costs for closing our nations first generation nuclear fleet begins in large numbers.This could become a Black Swan Event – The utility rate increases this will require or subsidy’s to bail out utilities for investments made 60 to 70 years ago Will not Suit Well with the Public. $$$ Blow back !!
So hints of anything nuclear will not be a real Marketable Brand. Due to Cost shock.
Solar and Wind , batteries and small hydro , marine wave power, EV’s , etc. will all be established Brands by then.
So the SMR crowd better get into HIGH GEAR and stop their Snails pace time is not on their side. No protesters are stopping them only their technology limits or what ever seems to ail them 14 plus years for Nu Scale –
in less than 14 years look at the charts the Deployed Gigawatts of R E Craigs post shared with us.
What is there to say …..
The transition to Green Energy – Its Written in the Stars for sure BUT now its being Written into the Balance Sheets of the Investment Community globally.
Liars like to figure but Figures like these expose the Lie – they tell the TALE !
We need some Cheers during these dark times of america s version of the Round-heads in Power.
send these charts to trumpet Craig I am sure they would call it alternative facts of fake news !