Why Less Coal

I have been assuming that gains in electricity generation by natural gas were the reason for loss in generation by coal. This is not quite true. In 2016 coal generation was down by about 750 million kilowatt-hours (kWh) from its 2006-2008 average, a 38 percent drop. About two-thirds of the drop was due to natural gas and about one-third to renewables.

Source EIA Electric Data Browser, accessed 21 June 2017

Renewable Energy Does Not Harm Stock Performance

There are still office holders who cling to the notion of expensive renewable energy, buttressed by questionable web sites.

There is a line of argument that I have not seen used: companies, such as Google and Amazon, have made major commitments to renewable energy. These are publically-traded firms. If renewable energy was so expensive, Wall Street would be shouting loudly and hammering their stock down. This has not happened.

Price of Conventional Fuels

Revised 31 March 2017

As is well known, natural gas has become cheaper than other conventional fuels. The price estimates below show that gas is less expensive than the competition. However all of the cost estimates are high compared with the actual price, which is given in the bottom row.

Cost/Price of Electricity from Conventional Sources, $/MWh

Coal Natural Gas Nuclear Ref.
60-143 47-78 97-136 (1)
N.A. 45-57 100-108 (2)
80-98 66-73 93-96 (3)
N.A. 50-70 N.A. (4)
N.A. 41-56 (a) N.A. (5)
34 (b) N.A. (6)

Notes:

(a) Increases linearly with gas price. Range shown is for $2.5 to $5 per 1000 cu.ft. Gas price on 16 Dec. 2016 was $3.43, giving a price of  $48 per MWh

(b) Unknown mix of gas and coal; April 2017 future

References:

(1) Lazard’s Levelized Cost of Energy Analysis – Version 10.0, December 2016

(2) EIA, Annual Energy Outlook, August 2016

(3) T.F. Stacy & G. S. Taylor, The Levilized Cost of Electricity from Existing Generation Resources, June 2015 http://instituteforenergyresearch.org/wp-content/uploads/2015/06/ier_lcoe_2015.pdf

(4) ”Solar going big: large-scale installations now outpacing small ones”, Toledo Blade, 22 July 2016

(5) Al Rosenfield, “Natural Gas vs. Wind Background” <alanpeg.blogspot.com>, 30 Jan. 2013

(6) PJM AEP Dayton Hub 5MW Peak Calendar-Month Real-Time LMP Futures Quotes

http://www.cmegroup.com/trading/energy/electricity/pjm-ad-hub-5-mw-peak-real-time-lmp-swap-futures.html, accessed 30 March 2017

 

Converting MW to Homes

A recent article stated that one MW of wind power provides enough electricity to power 1000 homes (1, 2). This claim was later qualified by stating that “sources such as wind and solar are often operating at less than full capacity” (3).

Actually the largest possible value is 800 houses per Megawatt. Last year wind in Ohio produced enough electricity for about 250 homes and solar about 125 homes (See Appendix).

References:

(1) Wind energy poised for growth in Ohio, advocates say, The Columbus Dispatch, October 30, 2016

(2) Tom Stacy offered a correction in the Comments section of Ref. (1). Unfortunately he used faulty logic.

(2) AEP wins profit guarantee sought in coal-fired power case, The Columbus Dispatch, November 3, 2016

Appendix: Calculations

One Megawatt generating electricity for one year (8760 hours) would produce 8760 MWh. Since the average home uses about 11 MWh (= 11,000 kWh) of electricity each year, this is enough electricity for 8760/11 = 796 homes.

Since Ohio generated 1.2 million MWh of electricity from wind in 2015, wind provides enough energy for about 110,000 homes. Ohio has 432 MW of wind power – 110,000/432 is about 250. So one MW of power provides electricity equal to that used by about 250 homes.

Comparable numbers for solar are 162,000 MWh total electricity and 119 MW of power. This translates to 14,700 homes and 14,700/119 = 124 homes per MW.

(Data from Energy Information Administration for 2015, except solar capacity from Columbus Dispatch, Nov. 4, 2016)

LTE to dispatch (Not published)

Electric rates are spiraling out of control. It is not clear why they have been rising at twice the rate of inflation for the past several years. The higher cost does not mean that we are paying for a new and improved product. It is the same electricity that we always have used – only the price is higher.

Since electricity is also a necessity, it is proper that it is subject to state oversight. But, somehow, Ohio has let us down and allowed the inflated prices. For example, our Legislature is addressing the skyrocketing rates by worrying about the less-than-one-percent of our electric bill that is due to renewable energy.

 

Sources:

ELECTRIC RATES: Electricity Data Browser, http://www.eia.gov/electricity/data/browser/ (note: as of July, Rates have decreased one percent in 2016 compared to 2015)

INFLATION: CPI Detailed Report Data for December 2015, Table 24, http://www.bls.gov/cpi/cpid1512.pdf

RENEWABLE ENERGY COST: IEU-Ohio Mandate Cost Calculator, http://www.ieu-ohio.org/mandate-cost-calculator.aspx