The Weekend Wonk: Utilities Ignore Renewables at Own Risk

February 16, 2014


Last Fall the Economist published a cover story detailing the tumbling fortunes of European electric utilities as Renewable energies continue to eat away at the 100 year old fossil fuel business model.
Amory Lovins weighed in with a response. The two pieces are a great primer in understanding how the current revolution in power production is moving along.
Have excepted liberally here, but for a good read, go to the links and check out the two back to back.


ON JUNE 16th something very peculiar happened in Germany’s electricity market. The wholesale price of electricity fell to minus €100 per megawatt hour (MWh). That is, generating companies were having to pay the managers of the grid to take their electricity. It was a bright, breezy Sunday. Demand was low. Between 2pm and 3pm, solar and wind generators produced 28.9 gigawatts (GW) of power, more than half the total. The grid at that time could not cope with more than 45GW without becoming unstable. At the peak, total generation was over 51GW; so prices went negative to encourage cutbacks and protect the grid from overloading.

The trouble is that power plants using nuclear fuel or brown coal are designed to run full blast and cannot easily reduce production, whereas the extra energy from solar and wind power is free. So the burden of adjustment fell on gas-fired and hard-coal power plants, whose output plummeted to only about 10% of capacity.

The decline of Europe’s utilities has certainly been startling. At their peak in 2008, the top 20 energy utilities were worth roughly €1 trillion ($1.3 trillion). Now they are worth less than half that (see chart 1). Since September 2008, utilities have been the worst-performing sector in the Morgan Stanley index of global share prices. In 2008 the top ten European utilities all had credit ratings of A or better. Now only five do.

The rot has gone furthest in Germany, where electricity from renewable sources has grown fastest. The country’s biggest utility, E.ON, has seen its share price fall by three-quarters from the peak and its income from conventional power generation (fossil fuels and nuclear) fall by more than a third since 2010. At the second-largest utility, RWE, recurrent net income has also fallen by a third since 2010. As the company’s chief financial officer laments, “Conventional power generation, quite frankly, as a business unit, is fighting for its economic survival.”

The companies would have been in trouble anyway, whatever happened to renewables. During the 2000s, European utilities overinvested in generating capacity from fossil fuels, boosting it by 16% in Europe as a whole and by more in some countries (up 91% in Spain, for example). The market for electricity did not grow by nearly that amount, even in good times; then the financial crisis hit demand. According to the International Energy Agency, total energy demand in Europe will decline by 2% between 2010 and 2015.

Two influences from outside Europe added to the problems. The first was the Fukushima nuclear disaster in Japan. This panicked the government of Angela Merkel into ordering the immediate closure of eight of Germany’s nuclear-power plants and a phase-out of the other nine by 2022. The abruptness of the change added to the utilities’ woes, though many of the plants were scheduled for closure anyway.

The other influence was the shale-gas bonanza in America. This displaced to Europe coal that had previously been burned in America, pushing European coal prices down relative to gas prices. At the same time, carbon prices crashed because there were too many permits to emit carbon in Europe’s emissions-trading system and the recession cut demand for them. This has reduced the penalties for burning coal, kept profit margins at coal-fired power plants healthy and slashed them for gas-fired plants. Gérard Mestrallet, chief executive of GDF Suez, the world’s largest electricity producer, says 30GW of gas-fired capacity has been mothballed in Europe since the peak, including brand-new plants. The increase in coal-burning pushed German carbon emissions up in 2012-13, the opposite of what was supposed to happen.

So the gas and nuclear bits of the utilities’ business were heading for trouble even before the renewables bonanza, making the growth of solar and wind all the more disruptive.

Under the old system, electricity prices spiked during peak hours (the middle of the day and early evening), falling at night as demand ebbed. Companies made all their money during peak periods. But the middle of the day is when solar generation is strongest. Thanks to grid priority, solar grabs a big chunk of that peak demand and has competed away the price spike. In Germany in 2008, according to the Fraunhofer Institute for Solar Energy Systems, peak-hour prices were €14 per MWh above baseload prices. In the first six months of 2013, the premium was €3. So not only have average electricity prices fallen by half since 2008, but the peak premium has also fallen by almost four-fifths. No wonder utilities are in such a mess.

It will get worse. The combination of European demand and Chinese investment has slashed the cost of solar panels by about two-thirds since 2006 (see chart 3). In Germany, the cost of generating a megawatt hour of electricity with solar panels has fallen to €150, above wholesale prices but below the fixed price that renewables receive and below residential prices. This means solar generation may rise even if Germany’s new government cuts subsidies to renewables. Their challenge to the old utilities will increase.

Moreover, in the past few years utilities have been hedging, selling two-thirds of their power one to three years ahead (ie, they are receiving 2010 prices for energy delivered today). This has insulated them from the full impact of recent price falls. Those contracts expire in 2014-15. As the chief executive of E.ON said recently, “For 2013 and 2014, no recovery [is] in sight.”

Amory Lovins at RMI Blog:

Laments for Europe’s money-losing electric utilities were featured in an October 2013 cover story in theEconomist. It said Europe’s top 20 energy utilities have lost over half their 2008 value, or a half-trillion Euros—more than Europe’s banks lost. Many utilities therefore want renewable competition slowed or stopped. Indeed, some European giants, like Germany’s E.ON and RWE, are in real trouble, and five of Europe’s top ten utilities have suffered credit downgrades. So have some U.S. utilities—most recently Jersey Central Power & Lightand Potomac Electric Power Co.—from the likes of Fitch, Moody’s, Standard & Poor’s, Credit Suisse, and others.

Should old, long- and often still-subsidized oligopolies be bailed out or shielded from competition when they bet against innovation and lose? Those big European utilities were supposed, but failed, to prepare for renewables by reinvesting their hundreds of billions of Euros’ windfall from billing customers for the first decade’s tradable carbon emission credits they’d been given for free. Now they’re griping that disruptive technologies are upending their old models—just as innovators had warned them for the past few decades.

Disruptive technologies are meant to upset the status quo to bring worthwhile change. Should we have rejected mobile phones because they threatened to displace landline phones? Didn’t digital cameras make film cameras largely obsolete? Shouldn’t print newspapers have to invent new business models to confront the rise of the Internet?

As the Economist acknowledges, those utilities’ financial crisis is due not only to renewables, which are often scapegoated for trends they reinforced but didn’t cause. Overinvestment in fossil-fueled generation would have weakened utilities’ finances anyway as the global economic slowdown damped electricity demand growth and the efficiency revolution began to reverse it—on both sides of the Atlantic. U.S. weather-adjusted electricity use per dollar of GDP fell 3.4 percent in 2012 alone. In many regions, efficiency is outpacing service growth, shrinking utilities’ revenues.

U.S. shale gas has also displaced much coal-fired generation (though efficiency displaced nearly twice as much in 2012). Unsold American coal flooded European markets, temporarily displacing higher-priced gas. Meanwhile, solar power took the utilities’ profitable afternoon-peak market and slashed its price premium. And since Germany, among others, gave renewables both full grid access and dispatch priority (logically, because they’re cheaper to run than any fueled generator), low loads coinciding with high renewable supplies sometimes make wholesale markets clear at negative prices. This further distresses utilities that must pay to keep their inflexible old plants running—much as they’d prefer to shift all the costs of adaptation to their new competitors. Their distress will rise as renewables keep getting cheaper and as old contracts to sell electricity at well above today’s prices expire.

Well-stoked fears of grid instability and unreliability due to renewable power are as widespread as evidence for them is unfindable. In the Central European grid, where pervasive electricity trading helps operators choreograph the ever-shifting mix of renewable and nonrenewable supplies, German electricity (23 percent renewable in 2012) and Denmark (41 percent) are the most reliable in Europe—about ten times better than in the United States (whose 2012 electricity was 6.6 percent hydro and 5.3 percent other renewables). Even on the edge of the European grid, Spain (48 percent in the first half of 2013) and Portugal (70 percent) kept their lights on just fine. This experience might help the puzzled Economist writer who claimed, “No one really knows what will happen when renewables reach 35 percent of the [German] market, as government policy requires in 2020.” Answer: probably nothing except lower emissions and lower prices.

The “much more expensive” claim, too, evaporates on scrutiny. In the U.S., new Midwestern windpower now sells at a 25-year fixed nominal price (thus a declining real price) as low as $22/MWh, and new Western solar power at below $70, both net of subsidies generally less than nonrenewables get. In many states, wind and solar beat efficient new gas-fired power plants. In countries like Brazil and Chile, unsubsidized wind and solar power routinely win power auctions. In Europe too, they have a strong business case; cloudy Germany has installed 35 GW of photovoltaics but hasn’t subsidized them since 2004. The Economist agrees that German solar power now costs less than residential tariffs (which are half taxes), and less than the feed-in tariff it still receives (because it still costs more than wholesale prices)—so solar power could keep growing even without the tariff.

“Much more expensive” is a more apt description for much nonrenewable generation, especially as the misdesigned European carbon market gets repaired so emissions are no longer nearly free. Exhibit A is the Hinkley Point nuclear plant that the British government wants 84-percent-state-owned Électricité de France to build, supposedly with part-Chinese financing, to generate 7 percent of U.K. electricity. To get ÉDF to agree, the British government had to offer a 35-year inflation-adjusted fixed power price twice today’s wholesale market level, plus a 65-percent loan guarantee, plus other concessions, many still secret.

Even if this extravagance survives EU scrutiny as “illegal state aid,” the project may not win private construction financing. Investors may reason that nuclear electricity costing seven times the unsubsidized Midwestern-U.S. windpower price (the U.K. has Europe’s best wind resources) or 3–4 times the unsubsidized western-U.S. solar price, both falling, is so ridiculous that a subsequent U.K. government could wriggle out of the deal, putting private capital at risk—or simply that forcing the market to absorb so much extraordinarily costly electricity could prove unworkable. If the British government let all options compete at transparent prices, it could find such cheap efficiency, demand response, renewables, and cogeneration that this year alone in America, five old operating nuclear plants have been terminated as uneconomic just to run, even though their high capital cost was paid off long ago. New reactors’ capital costs are so prohibitive that eight years of 100-plus-percent construction subsidies have failed to make them privately financeable, and nine proposed new units were also terminated this year.

Calls for more nuclear power have largely abated in Europe, where flagship nuclear projects in Finland and France are at least twofold over their budgeted cost and time. Nuclear diehards still pull most policy levers in France, but its national utility isn’t charging enough to cover its nuclear repair costs, is about a trillion Euros underfunded for decommissioning its aging reactor fleet, can’t afford to replace it, and needs to consider what to do instead. Hint: renewables leader Germany, moving off nuclear and beyond coal, is the only consistent net exporter of electricity to three-fourths-nuclear-powered France.


Utilities’ dwindling profitability is the flip side of renewables’ benefits to customers. As renewables burgeoned, Germany’s wholesale electricity prices fell nearly 60 percent in the past five years. This enriched many German industries—thousands of which also shifted billions of Euros’ annual costs to German households via tripled exemptions from paying grid fees and renewable surcharges. (Only 15 percent of the German renewables surcharge is actually households’ share of premium prices for renewables, mostly for old contracts at higher prices; the other 85 percent reflects falling wholesale prices and industrial exemptions.) But the wholesale price drops are reaching most German households too in 2014, stabilizing their bills.

Moreover, German citizens can choose to microinvest as little as $600 in renewables, locking in a stable and attractive return for 20 years. Most German renewable capacity—investments largely spurned by big utilities—was bought instead by citizens, communities, or cooperatives. And Germany’s 382,000+ new renewable jobs, welfare relief, corporate and export earnings, tax revenues, and wholesale price drops yield not just long-term but current macroeconomic net benefits to the national economy.


Rather than lament that traditional utilities aren’t the low-risk investments they once seemed, and asking how we can protect their profits, we should be seeking to help progressive utilities and disruptive upstarts shape a new electricity system powered increasingly by clean, distributed renewables, doing exactly what they were meant to do: provide reliable, resilient, safe, clean power at moderate prices. That is the way the world market is trending.

Not only Germany but also in two more of the world’s top four economies—China and Japan, as well as India—non-hydro renewables now outproduce nuclear power. In 2012, China’s windfarms outproduced its nuclear plants (the world’s most aggressive program), and coal plants were run less: China added more generation from non-hydro renewables than from nuclear plus fossil sources. In the first ten months of 2013, 54 percent of China’s capacity additions were renewable (a third of those non-hydro). The coal-fired fraction of China’s electricity could drop by two percentage points in 2013 alone. Globally, in each of the years 2011, 2012, and probably 2013, renewables won a quarter-trillion dollars of private investment and added over 80 billion watts of capacity. Solar additions are now overtaking windpower’s, scaling even faster than cellphones.

To adapt to these epochal shifts in both supply and demand, electricity providers everywhere, not just in Europe, need new business, revenue, and regulatory models, being developed in efforts like RMI’s e-Lab industry forum. For example, buildings using zero net electricity (an increasingly widespread practice) pay zero net revenue to utilities selling electricity by the kWh. That requires a different revenue model—perhaps like the Fort Collins (Colorado) municipal utilities’ proposed new approach, where the utility can provide a range of services and investments on the customer side of the meter, helping the customer navigate efficiency and distributed generation investments while providing low-cost finance and on-bill repayment. This e-Lab-aided innovation may offer a sound and scalable path beyond net metering, which breaks at scale.

An 80-percent-renewable, half-distributed, nearly decarbonized, highly resilient U.S. grid could cost virtually the same as business as usual, but could best manage its risks—security, technology, finance, climate, health, fuel, and water—and, uniquely, prevent cascading blackouts. Such transformative benefits justify transitional growing pains—not protection for incumbents already paid to accept the known competitive risks they got wrong.

Clinging to and investing in antiquated business models should be neither rewarded nor celebrated. After all, it’s not as if their authors didn’t know big changes were coming. Ordering new coal plants in the face of renewable mandates and emerging carbon trading is akin to buying up carriage-makers just as automobiles began to relieve London’s horse-manure crisis.

63 Responses to “The Weekend Wonk: Utilities Ignore Renewables at Own Risk”

  1. Groc – Trigger Happy Tonto? Hold your horses.
    “* France net imports from Germany rise,”
    Germany’s power export surplus with France widened to 9.8 terawatt-hour (TWh) in 2013 from 8.7 TWh in 2012, when the German surplus first appeared.
    Germany’s large and growing renewable power output, which has priority access to the electricity grid, spills over into France through power interconnections, which RTE said were increasingly pushed to their capacity limits.

    Even from your source I found a net annual export from Germany. You must have gotten the report from the tool backward. I hear your waitress. She’s saying something. Here it is. She’s offering something. “Confirmation bias anyone?” I think she said they are serving crow. Like that with your hat for dessert?

  2. Groc – do you know why France imported so much electricity from Germany, besides the fact that it is cheaper? It’s because France has so much nuclear for baseload, but it has to use something that can be throttled for demand peaks. Guess what. They use hydro and wind and solar from Germany. Waddya know. Renewables again. Just can’t stop them.

  3. ON JUNE 16th something very peculiar happened in Germany’s electricity market. The wholesale price of electricity fell to minus €100 per megawatt hour (MWh). That is, generating companies were having to pay the managers of the grid to take their electricity.

    Obviously, not all generators were paying to put power on the grid.  This flood of power came from “renewables”.  The “renewables” could have curtailed their output to maintain prices in positive territory, but they didn’t care; they were receiving a feed-in tariff that is totally disconnected from the wholesale price.  While their un-needed power was being lavishly compensated, the must-run generators required to keep the grid operating were made to pay for the privilege.

    This is the epitome of an unsustainable practice.  The utilities are objecting, and the government will have to bend with some system of capacity credits or other compensation to offset the artificial unprofitability created by the market-rigging renewables law.  They’ll also need a system of curtailment or dispatchable dump loads to absorb the RE peaks when demand isn’t there.  This is part of the “welfare cost” of renewables, detailed in Falko Ueckerdt’s presentation on system levelized cost of energy (SLCOE).

    The trouble is that power plants using nuclear fuel or brown coal are designed to run full blast and cannot easily reduce production, whereas the extra energy from solar and wind power is free. So the burden of adjustment fell on gas-fired and hard-coal power plants, whose output plummeted to only about 10% of capacity.

    This is part of the soon-to-be-infamous “duck belly” curve that requires vastly higher ramp rates from other generation, because the renewables neither incorporate storage nor compensate other generators for the variability they are forced to make up.

    The Energiewende has all these costs and complications… yet reducing CO2 emissions is a (distant) FOURTH on its list of priorities.  Is that how it’s being sold to the public?  I think they’ve got a right to complain.

    Many utilities therefore want renewable competition slowed or stopped.

    They’re not competitors.  Competitors would take market prices and fight for share, while shouldering their part of the common burdens of capacity provision, VAR support and the rest.  The current crop of renewables are not competitors, they are parasites.

  4. Just whom are cheap renewables a problem for? One minute renewables are causing poor people to go broke, the next minute renewables are free? Cheap and expensive simultaneously?
    “Germany’s Energiewende represents a national commitment to meet aggressive economy-wide decarbonization targets and to transform the German power sector from a reliance on nuclear and coal to renewable resources within the next four decades.”
    Sounds like they are interested in carbon. I don’t hear any numbering system.
    Sounds like E Pot continuing exaggeration and RE bashing wind over VAR despite being corrected before. at.pdf
    GE Wind Energy’s WindVAR system is provided through the same power electronics employed in achieving variable speed operation. Our full line of wind turbines, from our 900 to 3600 kW models, employ the company’s variable speed technology to both reduce torque transients and increase the blades’ ability to capture more of the kinetic energy available in the wind.
    Google wind power manufacturers reactive

    • andrewfez Says:

      Second link is broken, but here’s what you’re probably after:

      More power to you.
      Today, through GE Wind Energy’s unique Wind Volt-Amp-Reactive
      (“WindVAR”) electronics, voltage is controlled and regulated in
      real-time. Similar to conventional utility generators, WindVAR
      supplies reactive power to the grid at the time its needed,
      in a fraction of a second, regulating system voltage and
      stabilizing weak grids. With the ability to supply reactive
      power to the grid, WindVAR opens the door to new
      opportunities in areas where weak rural distribution
      systems had discouraged new wind power applications.
      The addition of a wind project equipped with WindVAR
      electronics can actually strengthen a weak grid. This
      system also has the potential to provide emergency
      back-up support, and support to weak grids in need
      of transmission and distribution capital improvements.
      The turbine’s power electronics also reduces the
      inrush current to about 75% of full load current
      during the wind turbine’s start-up, and provides ride-
      through capability

      Click to access windvar.pdf

    • Just whom are cheap renewables a problem for?

      The problem is that they don’t exist.  What exists are renewables with sky-high feed-in tariffs and other schemes to make it appear that they are “economic”.  In practice it’s the rich being paid by everyone else.

      the next minute renewables are free?

      It’s not free.  Someone’s paying, and they’re not even getting the cheap wholesale rates that their subsidies allow.

      Sounds like they are interested in carbon. I don’t hear any numbering system.

      Here is the list of priorities, straight from the horse’s mouth:

      A – Nuclear phaseout
      B – Renewable Energy Act with feed-in tariffs
      C – Emissions trading
      D – Environmental taxation

      In practice, (A) kills the most effective carbon-free generation currently running, (B) uses gas- and lignite-burning backup, (C) is useless in practice because of loopholes and loose limits, and only when you hit (D) do you actually get directly at reducing GHGs.  This is more or less the priority order claimed by Bas Gresnigt over at YesVY (though “affordable costs” are conspicuously absent).

      Sounds like E Pot continuing exaggeration

      Sounds like you don’t know what the program is actually doing, or even what its stated goals are.

      Sounds like E Pot continuing exaggeration and RE bashing wind over VAR despite being corrected before.

      Vermont’s Lowell wind farm had no VAR support, and required a 100 MVar synchronous condenser to fix the resulting problems.  Look up the article on

      None of this hardware is going to be counted in the cost of wind power.  That’s another transferred (subsidized) cost.  It doesn’t go away, it just gets picked out of someone else’s pocket instead of being paid by the people who made the cost necessary.

      • Prove any factual statement you made here with links. The litany of bogus BS is a mile long. And no acknowledgement of past mistakes. Solar VAR, BN-600… An endless boring stream of banal error and intentional closed minded distortion. But don’t expect a reply. They were watching me deal with you – nobody else seems interested in interacting with you anymore. Based on your last blatant mistake, VAR, I am not interested either. You are not serious. Just another hack with an axe to grind that nobody believes unless they share your peculiar impediment. Just another troll. Nothing special. It’s getting too easy. Candy from a baby. Nobody believes pinnocchio anymore. Your nuclear vacuum cleaner sales pitch is losing zest.

        • Prove any factual statement you made here with links.

          Green Mountain power installed a synchronous condenser to remedy VAR deficiencies which were forcing curtailment of generation at the Lowell Mountain wind farm.

          I’m going to ignore your lies, such as me not admitting that I erred about the BN-800 (I did and a trivial search will prove it).  I’m going to ask you the one question that’s relevant to the subject of this blog:

          Show me where any fossil-based electric grid on earth has been essentially de-carbonized through the addition of “renewables”, specifically wind and solar.  If you assert that other sources can fill the gaps left by W&S without emitting carbon, specify how much capacity (GW) and how much generation (GWh) they can supply and how this compares to need.  If you refer me to another source for this, use a public source and either quote the specific claim or cite the page number.  No paywalls, no “it’s in this mass, go look for it”.

          I already know the answer to that question:  it hasn’t been done anywhere.  It especially has not been done in Denmark, for all the lofty praises it receives for its green-ness.  There ARE examples of mostly de-carbonized grids, existence proofs which are the ONLY things we can copy and be certain will work… but the likes of you misdirect, deny and stonewall to make certain it doesn’t happen.

          People are starting to talk about holding anti-nukes responsible for destroying the climate.  Watch out.

          • dumboldguy Says:

            “People are starting to talk about holding anti-nukes responsible for destroying the climate. Watch out”, says Ewwwww-Pot.

            Good one. Right after the people “hold responsible” the fossil fuel interests and the run-amok capitalists that support them for doing the same destruction but earlier and bigger. I will indeed “watch out”—should I decide to end my life, I will merely hold my breath waiting for that to happen and self-asphyxiate (a billion times over).

  5. E Pot, proving he is a concern troll, is out to “get” renewables for competing with his beloved nuclear. He cites a reference to VARs hoping no one will notice. Immediately shot down, having only listened to his internal conversation and an echo chamber of sources like “Inquistr” and Atomic Insites, believes he has found the hidden flaw to all renewables, the magical VAR. He already has been corrected that solar has VAR correction and improves grid stability. Now he proudly displays his ignorance in an act of glorious vanity, claiming wind does not have reactive control or VAR correction. Drats sez EP Moriarty. Fling something else on the wall and hope it sticks, he mutters to himself. So he surfs and finds.. The dreaded duck! He immediately seizes the headline and proudly displays his ” proof” of slaying the enemy of his nuclear love. (A love with a strangely striking resemblance to Tony Perkins’ in “Psycho”.) Alas upon reading (do I have to?) the whole article we find, “this is one of those “good problems to have.” Oh no, not again. Curse you Holmes, and he runs away, scheming of further diabolical ness.
    Taming the duck
    Thankfully, this is a solvable problem, as others such as the Clean Coalition have been pointing out. In fact, this is one of those “good problems to have.” California is among the world leaders in clean energy development, and has the opportunity to consider a host of innovative ways to enhance system flexibility to ensure the electricity needs of consumers can continue to be met in an affordable and reliable manner, even in the face of a growing installed base of solar and wind energy projects.

    • E Pot, proving he is a concern troll, is out to “get” renewables for competing with his beloved nuclear.

      Who said they were competition?  I said they were parasites, existing on mandates and subsidies.  You’ve never called for those mandates and subsidies to be repealed and the playing field levelled, implicitly admitting I’m right.

      He already has been corrected that solar has VAR correction and improves grid stability.

      You have asserted it, but that does not make it true.  Solar inverters may have unity power factor or even produce VARs, but the home-sized, “distributed” systems in vogue have no communications channel to the system operator.  Even if they can vary their VAR output, they cannot support the grid’s needs because there is no way to request VARs from them.

      claiming wind does not have reactive control or VAR correction.

      Reactive power control is an OPTION on the GE 1.5, which is what’s installed on the Lowell Mountain wind farm in VT.  GE touts reactive power control much more highly in the brochure for the 1.6, proving that it was a significant deficiency in earlier models.  Let us not forget the 100 MVAR synchronous condenser required at Lowell Mountain to avoid curtailments when grid load demanded VARs go elsewhere.

      Alas upon reading (do I have to?) the whole article we find, “this is one of those “good problems to have.”

      Good for what?  Good for the climate?  Anything that requires fossil burners to be on standby leaves us heading full steam for climate catastrophe.  Good for shutting down “evil, nasty nuclear power”?  Who’s out to get whom again?  “Greens” have had nuclear energy in their sights since the 1960’s, before “Green” was a political label.  As always, when a leftist makes an accusation, it’s projection:  they’re not only doing it, they did it first.


    • Speaking of reasons why this might be “a good problem to have”, the article says this:

      • Storage: Storage holds a great deal of promise, although the amount installed so far has been small. California, in an effort to create a market for storage, has set a new goal for storage of 1.3 GW. Storage can come in all shapes and sizes. It could be pumped hydro, compressed air, large batteries or electric vehicles. From a technical perspective, we are able to bring on more storage now. The biggest challenge so far has been cost of these resources…

      I’ve been watching CAES in particular since I started The Ergosphere, and it’s been one disappointment after another.  Air is the epitome of natural abundance, but even what looked like sure things like the storage in the limestone mine in Ohio have gone nowhere.  The Iowa Stored Energy Park tested sandstone aquifers as air reservoirs, with results that apparently did not merit a follow-up.  Iowa has a lot of wind, is very big on wind energy… they would move to build on any success.  Most CAES schemes require fuel (carbon-based) for reheat anyway, so they are far from carbon-free.

      And batteries!  Batteries are just on the edge of breakeven economics against gasoline.  Stationary uses can get away with liabilities that vehicles cannot (bulk, weight, temperature) but uses beyond carrying loads across brief line outages are currently not economic.  California utilities will install them because they have been mandated to… and the cost will be borne by other generators and consumers, not the “renewables” which require them.

      Speaking of California, re-working the grid to compensate for the loss of San Onofre may cost $2.3 billion.  It would have cost far less to repair the station, and California would have immediately gotten 2.2 GW of carbon-free electricity out of it.

      • Natural gas: This often has been the common answer for integrating renewables. There’s a long list of reasons people point to natural gas as the solution.

      The most important for Climate Crocks is that burning natural gas emits CO2.  There is a strictly limited amount of this we can endure and still get GHGs under control.  If PV’s “duck belly” curve requires too much NG burning to keep the grid operational, then PV is not a solution by definition.

      That is the point you always go to great lengths to avoid:  how much CO2?  Your answer is “renewables!” even though it fails to address the question.  Meanwhile, France de-carbonized its electric grid roughly 20 years ago and ought to be praised as a rousing success by all climate-conscious people worldwide… yet it is denigrated because it’s “doing it wrong”.  There’s only one explanation for this:  the real goal of the “Greens” is not protecting the climate.  It’s something else, something that would never get support if stated plainly.  It’s illegitimate.  It’s despicable.

      • MorinMoss Says:

        There’s more than one way to decarbonize a grid; you praise Ontario & France but I don’t see any love for Quebec, whose per-kWh are 10x lower then either.

        Why is that?

        • EP just does not seem to be able to stop himself.
          “Vermont’s Lowell wind farm had no VAR support,”

          Click to access Estey_PFT.pdf

          “4MVAR dynamic var compensator and associated 4 MVA transformer”
          no VAR support?
          Caught exaggerating again. Does it ever end?
          There is a consistent and reliable trend of exaggeration. Also, a consistent trend of speaking first, then researching and providing references. Not impressive. This is a complex case, not a good place to make grandiloquent over generalizations and sweeping statements. The need for grid reliability is acknowledged and dealt with in the industry. Attempts to paint the situation as some kind of huge bogey are bogus and EP knows it. He sources another wind bagger, that I have seen dogged by a persistent blogger who punctured a whole series of wind bagger nonsense from the same source. Suffice to say, nothing unusual about that. I predict loud squawking coming from his direction in response.

      • MorinMoss Says:

        CAES has a new girl on the block, a German lass named ADELE.

        Since both heat & air are stored, there’s no need to burn natgas to warm up the decompressing air.

        And there’s the SustainX project that was posted here last September which you’ve commented on before.

        What I would like to see are more trials using underwater bags such as the HydroStor project – not everyone has an abandoned salt cavern to use for storage.

  6. It’s always nice to hear from Amory Lovins.
    “Well-stoked fears of grid instability and unreliability due to renewable power are as widespread as evidence for them is unfindable”
    Lo and behold Denmark did not disappear into the North Sea. Yawn. Getting to be old hat.

  7. Peter – how about an article on solar for process heat. Google shows a bunch of companies doing it. It’s a great match. There’s a laundry list of processes, including water pumping, that match wind and solar. Another topic, grid stability. Nowadays, wind and solar stabilize the grid above and beyond what it does without their help. Just a few more denier canards to put to rest. The world of denierdom is an infinite source of material.

  8. jlgh49 Says:

    Solar rocks – no moving parts, long life, unobtrusive, no noise, generated just where grid distribution is best.

    Wind power stinks – ghastly structures littering up the landscape, lots of moving parts, huge structures (especially offshore), comparatively noisy, and grid distribution is often a problem because no one built a GW distribution network in remote areas of the Scottish Highlands.

    But sometimes the wind doesn’t blow anywhere in Europe and whilst the sun still shines at midnight, it doesn’t shine here. So we need either grid storage or conventional capacity that can handle our needs or the electric ovens will go cold one dark and still winters night

  9. […] sector in the Morgan Stanley index of global share prices. Only utilities nimble enough to adopt new revenue models providing a range of services and service levels, including efficiency and self-generation, will […]

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