GregLocock
Automotive
- Apr 10, 2001
- 23,764
So, various politicians, teenagers, scientists and others have persuaded the rich countries in the world that they must get to Net Zero by 2050, and roughly half way there by 2030-2035.
This transition, meaningless in itself since most of it is achieved by transferring CO2 emissions to developing countries, has not really been planned, it has just sort of been encouraged to happen via subsidies and the like. So I thought I'd start a thread encapsulating this 'market failure' as applied to the electrical grid (it is nothing of the sort, it is Sovereign risk driving investors elsewhere).
First up, the USA
FERC Commissioner Christie: “I think we’re heading for potentially very dire consequences, potentially catastrophic consequences in the United States in terms of the reliability of our grid, and I think that the basic reason is that we’re facing a shortfall of power supply. You know the term we use is resource adequacy, but what we’re really talking about is potentially a shortfall in power supply. You have to remember about the grid. The grid has to have power being fed into it every second of every minute of every hour of every day to keep the lights on. You can’t store it up and bring it out the next day. Because of that you have to have a power supply that is feeding into the grid on a continuous basis. We can’t tolerate shortages because shortages mean the lights go out. So what’s going on now and what’s the threat to reliability? In summary, what the threat is is this. We are facing cascading retirements of dispatchable resources, specifically coal and to a lesser extent gas. And, the problem with losing that many dispatchable resources is you’re losing the supply that is going to keep the lights on. The problem is not the addition of wind and solar. The problem is the subtraction of coal and gas and other dispatchable resources which are the ones we need during this transition to keep the lights on. That’s the fundamental problem.”
Apparently transcribed from
US Senate Committee on Energy and Natural Resources
Hearing to Conduct Oversight of FERC
May 4, 2023
FERC Commissioner Christie: “The one issue I want to focus on today, I think is reliability, and I’m really afraid to say that I think the United States is heading for a very catastrophic situation in terms of reliability — hope it doesn’t happen, but I think were heading for potentially catastrophic consequences. And, the core of the problem is actually very simple. We are retiring dispatchable generating resources at a pace and in an amount that is far too fast and far too great and it is threatening our ability to keep the lights on. Now the problem is not the addition of wind and solar and other renewable resources, the problem is the subtraction of dispatchable resources such as coal and gas. And, of course, Mr. Chairman as you know when a dispatchable coal unit is prematurely retired in West Virginia it’s still in rate base and consumers still have to pay for it if it’s prematurely retired. This is going on all over the country in both RTO and non-RTO states — this almost cascading number of early retirements. And, when I mean early retirements, I mean retirements when there is still many years of useful life left on these generating units.”
I'm not picking on the USA in particular, the story is similar and worse for Germany, UK, Australia and no doubt others.
In the case of Australia we don't have a plan. We have a vibe that says coal is bad, so the owners of the coal generating plants don't bother with maintenance, and retire them long before their natural lives. No skin off their nose, they are also operating subsidised solar and wind, and make money out of the ensuing erratic prices.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376
This transition, meaningless in itself since most of it is achieved by transferring CO2 emissions to developing countries, has not really been planned, it has just sort of been encouraged to happen via subsidies and the like. So I thought I'd start a thread encapsulating this 'market failure' as applied to the electrical grid (it is nothing of the sort, it is Sovereign risk driving investors elsewhere).
First up, the USA
FERC Commissioner Christie: “I think we’re heading for potentially very dire consequences, potentially catastrophic consequences in the United States in terms of the reliability of our grid, and I think that the basic reason is that we’re facing a shortfall of power supply. You know the term we use is resource adequacy, but what we’re really talking about is potentially a shortfall in power supply. You have to remember about the grid. The grid has to have power being fed into it every second of every minute of every hour of every day to keep the lights on. You can’t store it up and bring it out the next day. Because of that you have to have a power supply that is feeding into the grid on a continuous basis. We can’t tolerate shortages because shortages mean the lights go out. So what’s going on now and what’s the threat to reliability? In summary, what the threat is is this. We are facing cascading retirements of dispatchable resources, specifically coal and to a lesser extent gas. And, the problem with losing that many dispatchable resources is you’re losing the supply that is going to keep the lights on. The problem is not the addition of wind and solar. The problem is the subtraction of coal and gas and other dispatchable resources which are the ones we need during this transition to keep the lights on. That’s the fundamental problem.”
Apparently transcribed from
US Senate Committee on Energy and Natural Resources
Hearing to Conduct Oversight of FERC
May 4, 2023
FERC Commissioner Christie: “The one issue I want to focus on today, I think is reliability, and I’m really afraid to say that I think the United States is heading for a very catastrophic situation in terms of reliability — hope it doesn’t happen, but I think were heading for potentially catastrophic consequences. And, the core of the problem is actually very simple. We are retiring dispatchable generating resources at a pace and in an amount that is far too fast and far too great and it is threatening our ability to keep the lights on. Now the problem is not the addition of wind and solar and other renewable resources, the problem is the subtraction of dispatchable resources such as coal and gas. And, of course, Mr. Chairman as you know when a dispatchable coal unit is prematurely retired in West Virginia it’s still in rate base and consumers still have to pay for it if it’s prematurely retired. This is going on all over the country in both RTO and non-RTO states — this almost cascading number of early retirements. And, when I mean early retirements, I mean retirements when there is still many years of useful life left on these generating units.”
I'm not picking on the USA in particular, the story is similar and worse for Germany, UK, Australia and no doubt others.
In the case of Australia we don't have a plan. We have a vibe that says coal is bad, so the owners of the coal generating plants don't bother with maintenance, and retire them long before their natural lives. No skin off their nose, they are also operating subsidised solar and wind, and make money out of the ensuing erratic prices.
Cheers
Greg Locock
New here? Try reading these, they might help FAQ731-376
