Coal per Energy Outlook 2016 by ExxonMobil

Subtitle:  Coal Consumption Not Clear - Figures Don't Match

A new Energy Outlook for the next 25 years (2016-2040) from ExxonMobil, EM, (see link) has quite a bit to say about one of the major global fuels, coal.   This article discusses EM's points, and offers a few perspectives consistent with other articles here on SLB.  In short, coal use will decline over the next few decades, on that both SLB and EM agree.   The reasons for the decline are different.  EM states countries' desire to reduce CO2 emissions, in an effort to save the planet from global warming.   SLB contends there is no man-made global warming, only man-made false measurements.  However, SLB contends that there is a limited supply of coal, extractable at economic prices, and that supply will be exhausted within 50 to 60 years.   The time frame to coal exhaustion can be much shorter, if developing countries burn more and more coal relative to current use.  

The EM statements:

"Global demand for (total) energy rises by 25 percent 2014-2040" –EM Energy Outlook 2016, p. 15. 

“The most striking development in power generation is expected to be the shift away from coal – the dominant energy source in this sector – and the rise in cleaner fuels such as natural gas and renewables."  (Ibid, p. 44).  

"Coal provides about 30 percent of world’s electricity in 2040, vs. 40 percent in 2014."   (Ibid, p. 46)


“Coal, currently the world’s second-largest fuel, is expected to see global demand peak around 2025 and then begin to decline. This decline will be led by the industrial and power generation sectors, as businesses improve energy efficiency and switch to fuels with lower CO2 emissions. By 2040, coal will account for 20 percent of global energy demand, down from about 25 percent in 2014.”  (Ibid, p. 56)

Electricity

Analyzing the EM statements, and numbers, it can be seen that tons of coal used for electricity increases almost 24 percent  (assuming that each ton of coal has consistent heating value).  This is from the EM projected increase in electricity production of 65 percent from 2014 to 2040.   Yet, the EM statement on coal providing 30 percent in 2040 vs 40 percent in 2014 of the world's electricity appears to state that coal use will decline.   In fact, the two statements, read together, show that coal use increases 24 percent: as 0.4 x 100 = 40, but 0.3 x 165 = 49.5; then 49.5 divided by 40 is 1.24.    This is a simple calculation where 2014 electricity production is set to 100, and the 2014 production is then 65 percent greater or 165.  

Yet, the EM Outlook has a far different result in the Data table on p. 72 of the Outlook, for coal use in power generation.  There, the number for 2014 is about the same as for 2040: 97 Quads in 2014, and 95 Quads in 2040.   (Quad is quadrillion Btus)   If the Outlook were consistent, then 2040 should have 97 x 1.24 or 120 Quads.    

Global Energy

Next, the global energy statements.  Here, EM states that coal will decline from 25 percent of global energy demand in 2014, to 20 percent in 2040.  However, given the projected increase in global energy demand of 25 percent, the amount of coal used remains constant.  This can be seen by 0.25 x 100 = 25, while 0.2 x 125 = 25.  Again, using simple values, the 100 is global energy demand in 2014, while 125 is the global energy demand in 2040.  

Note, the summary Data table on p. 72 of the Outlook shows 148 Quads in 2014 vs 142 Quads in 2040 for coal world-wide.    148 is close enough to 142 for these purposes, to be essentially no change in coal use.  

Industrial Energy

Where, then, is the decline?  Electrical demand for coal increases, but global energy demand remains constant, per EM.  Therefore, some category must have a decline in coal use.  EM's Outlook has several categories for energy use, electricity, industrial, transportation, and residential plus commercial.   One assumes that agriculture consumes zero energy.   Coal use in transportation is close to zero, or perhaps is included in the catch-all category of "other."    In any event, coal is named in electricity, industrial, and residential plus commercial categories.    The residential plus commercial use is very small to begin with, and declines a bit by 2040.  

The EM Outlook states that coal for industrial purposes will decrease from a bit more than 20 percent in 2014 to approximately 15 percent by 2040, while overall industrial energy grows by 30 percent.   This does, then, show a decline in coal use as 0.22 x 100 = 22, while 0.15 x 130 = 19.5, again where 100 is the 2014 use and 130 is the 2040 use. 

The Data table on p. 72 shows a slight decline from 46 to 44 Quads, 2014 and 2040.   

Commentary by Sowell

It is important to note that ExxonMobil is an oil and gas company, primarily.  They also are active in derivatives from oil such as petrochemicals and lubricating products.   They have a vested interest in selling oil and derivatives, plus selling natural gas.   The Energy Outlook is a convenient way to show all interested stakeholders that the future looks bright for their company, because the demand for their products remains robust.   The company also has a bit of coal mining in the corporate portfolio as ExxonMobil Coal and Minerals Company.  EM conducted some research over the years into coal-to-liquids plants, and coal gasification.   However, it is very clear that oil and gas are more than abundant, while coal is being rapidly exhausted world-wide.  

The Outlook repeatedly describes future activities as moving away from coal, to natural gas because the greenhouse gas emissions are far less.  The above discussion shows where that is likely to occur, in the industrial sector.   EM would be more than happy to provide the natural gas for replacing the coal.  

Earlier on SLB, the stark facts of coal resources, coal consumption, were discussed.  see link.    In summary, there is only approximately 50 years of coal supply remaining, if the present consumption rate continues.  However, developing countries are increasing their annual coal consumption in their efforts to increase electricity production.    

From a power planner's perspective, a coal-fired power plant will last only 40 years, and at most 50 years.   If all countries continue their coal consumption, it would make no sense to build new coal-powered plants at any time after 2025.  However, the US has already passed some forms of regulation on coal (mostly by EPA edicts, not laws passed by Congress and signed by the President).   These coal regulations essentially halted new coal-powered plants, and will very likely result in many coal-powered plants shutting down.   In theory, that would make more coal available to other countries since it will not be burned in the US.  In reality, the US would need major infrastructure to export coal overseas.    

The EM Outlook discusses none of this, not delving into reserves, resources, costs of extraction, and costs of transportation of the various fuels to meet demands in different countries.   Perhaps in future editions those issues will be discussed. 

Roger E. Sowell, Esq.
Marina del Rey, California
copyright (c) 2016 by Roger Sowell, all rights reserved

Energy Supply in Post-Coal America

Subtitle: What Will Replace Coal in 20 Years

(Note, see Update below)
One of the several themes on SLB is energy supply, as at times articles on the Grand Game appear in which various aspects of US national and international energy are discussed.   As time permits, I conduct personal research into those various aspects.  In general, energy supply is categorized as coal, natural gas, petroleum, hydroelectric, nuclear, wind, solar, geothermal, tidal, wave, river and ocean currents, and bio-fuels such as ethanol, bio-gas, and bio-diesel.  There are a few others, too, such as municipal solid waste (MSW), waste fuel as cogeneration feed, waste treatment plant sludge conversion to methane, ocean thermal electric conversion (OTEC), and direct osmosis using fresh river water and the saline gradient into ocean water.  (Update: and algae-to-oil as another bio-fuel.  )

Many of these have several variations, so that the 20 categories listed above easily have 50 or more distinct types.  Each has advantages, disadvantages, environmental impacts, economics, resource and land-use requirements, grid impacts, and other aspects.  As an example of different grid-scale electric generating power plants, a recent study (cited in several SLB articles) by the California Energy Commission in 2009 lists 21 different technologies including baseload, peaking, and intermittent sources. ( see link. ) 

An earlier article on SLB (May, 2014) had the following, with respect to the world running out of coal in the 50 to 60 year time-frame:  (see link to "Coal Exhaustion Looms - Renewable Energy to the Rescue")

". . . coal, that mainstay of electric power generation world-wide, is in shorter supply than I had remembered.  In fact, several reputable sources now state that world reserves of coal will be exhausted in roughly 60 to 70 years - and that is if no increase in current consumption occurs.  Yet, growing economies in several countries are increasing their coal consumption year-over-year.  China and India are on that list.   It is entirely conceivable that coal will run out in less than 50 to 60 years."  

That statement is a bit vague on what reserves of coal are included, it should be improved by stating the "world economic recoverable reserves" of coal will be exhausted in roughly 60 to 70 years.  

However, the US coal domestic supply and demand picture is quite a bit gloomier: the coal will run out in approximately 20 years.  (see link to USGS' 2009 National Coal Resource Assessment Overview) That is, by 2035, every coal-fired power plant in the US will be out of fuel.  With coal-fired power plants providing approximately 40 percent of the US electricity today, see pie-chart at right, and only 20 years in which to identify and build replacement power supplies, perhaps it is no wonder that the current federal administration is pushing coal to the sidelines and assisting renewables.  The USGS shows economical recoverable reserves to be a bit more than 28 billion tons in 2009, and 1.1 billion tons annual production.  Today, six years later, the reserves are at approximately 21 billion tons, and production has declined to just under 1 billion tons per year, leaving 21 divided by 1 for approximately 20 years of coal remaining.  

Replacing the domestic coal-power can be via several alternatives: importing coal from overseas, increasing construction of natural gas-fired plants, building 200 nuclear plants, or increasing renewable production.  Of course, a crash program to reduce electricity use would also play a role, but not a very large role.   Any increased efficiencies would be offset by increased economic growth.   Another possibility is by in-situ coal gasification, gas collection, cleanup, and distribution to power plants. 

Importing Coal

Other countries are also running out of coal and are importing coal to run their power plants.  India, China, Korea, and Japan are a few examples.   Importing coal requires port and rail infrastructure to unload the ships, store the coal on shore, then load the coal into rail cars for delivery to the power plants.  A major concern is security of energy supply with coal ships shuttling over the oceans.  

Build Natural Gas Power Plants

The US has abundant natural gas due to advances in precision directional drilling and hydraulic fracturing in gas-bearing rock formations.  Gas price is low at approximately $4 per million Btu.  Combined cycle gas turbine power plants are very efficient at approximately 60 percent, and use very little water for cooling compared to coal and especially compared to nuclear plants.  CCGT can also be built rapidly and are mature technology with predictable startup dates and finished costs.   CCGT plants also have desirable operating characteristics of load-following or baseload operation.  

Build 200 Nuclear Plants

Another option to replace coal power is to build approximately 200 nuclear power plants using the Pressurized Water Reactor design at 1,000 MW each.  However, with the plants running at less than 100 percent, it is likely that at least 220 nuclear plants would be required.   But, getting 220 nuclear plants through the regulatory approval process, licenses to construct issued, and building the plants so that all start up within the 20 year deadline is essentially impossible.  Recent experience in the US with the Vogtle and Sumner nuclear plant expansions indicates that a new reactor requires 8 to 10 years to construct.  

Finding locations for the plants, and finding adequate cooling water for that many plants would also be essentially impossible.  Nuclear plants consume approximately 4 times as much water per kWh generated compared to a CCGT plant described above  (see link to "Nuclear plants use far more fresh water than other power plants").  

In addition, if the country were to "go nuclear" to replace coal, it is necessary to replace the existing fleet of approximately 100 aging, operating nuclear plants as they will (almost) all be beyond their service lives of 40 to 60 year with the passage of another 20 years time.  Therefore, the build requirement is then 320 new PWR nuclear power plants.  

Finally, the price impact on consumers, whether residential, commercial, or industrial would be catastrophic from building that many nuclear power plants, as described in some detail (see link) in "Preposterous Power Pricing."      Replacing coal power with nuclear power is simply not an option. 

In-Situ Coal Gasification

 A potential option, but one that has not shown any hope of economic practicality, is to convert the residual coal left in the existing mines into a viable form of synthesis-gas that can be brought to the surface and burned in power plants.  The basis for this is that approximately one-half of a coal deposit remains in the ground after all the economically mine-able coal is produced.   That figure varies from mine to mine.  The concept is not new and has been the subject of some research over the decades.    Even if gasification can be accomplished, a substantial hurdle exists to convey the low-Btu synthesis gas via pipeline to the power plants.   New power plants would be required, or substantial modification to existing plants to accommodate the heating characteristics of the synthesis-gas.  

Increase Renewables With Storage

After exhausting the other avenues as impractical or hopelessly expensive (other than building CCGT plants), what is left is the renewable energy systems.  Noting that 15 of the 20 generating technologies listed above are renewable, there is substantial opportunity for competition between technologies.   It is very likely that solar will be deployed where the resource is adequate, and some form of storage will accompany the solar plants.  

Wind, however, will likely be the major player in replacing coal, along with CCGT.  Wind plants require some form of storage to make the energy reliable.  Off-shore wind systems can use the submerged spheres hydroelectric technology.  There is plenty of wind offshore, with the US' Minerals and Mining Service estimating in 2009 that 900 GigaWatts of energy can be economically produced offshore the US coasts.  Half of that is along the Atlantic seaboard.  (900 GWatts is almost 10 times the installed capacity of all the nuclear power plants in the US) 

Conclusion

Unless some way to produce more coal from existing mines is discovered in the very near future, the US is headed to a fundamental change in the way the electric power grids are supplied.   Coal, which has powered much of the country for more than 100 years, is about to run out.  It appears that the current presidential administration is not emphasizing this fact, but has chosen the theme of Climate Change and Man-Made Global Warming due to Carbon Pollution as the vehicle to phase out coal-power and encourage renewable energy systems.  

The most likely outcome will be a combination of natural gas-fired CCGT plants with wind turbines both onshore and offshore, and suitable ocean-based storage, to meet the electricity demands.   It is little wonder, then, that Congress continues to renew the small incentives and subsidies for renewable energy systems.   The time has come for the power in the sunshine, and the wind, to step up and be counted.   

Meanwhile, the age of the nuclear power plant is essentially over.  As described in many Truth About Nuclear Power articles on SLB and in many other places, the nuclear plants are far too expensive, take far too long to build, and have unacceptable risks of radiation releases, meltdowns, and catastrophic health hazards and environmental destruction.

The next 20 years will indeed be interesting to observe.  The Grand Game in the US, as it relates to the electrical power grid, will be a fine subject to watch as all this plays out.  

UPDATE: 1 -  Extending the 20 year deadline:  Some calculations show that we have a bit more than 20 years, perhaps 40 years, if two things occur.  One, no more coal-fired power plants are built and we simply retire aging plants as scheduled over the next 20 years.   Approximately one-half of all the coal-fired plants would normally be retired and shut down in a 20-year period, given a 40 year normal service life.   That, alone, will extend the life-time of the coal reserves as less coal is produced each year.   Two, in addition to not building new plants and retiring aging plants on schedule, a reasonable fraction of the remaining least-efficient plants are shut down and their output replaced as discussed above: CCGT plants and wind with storage. 

That, then, is the key parameter to watch:  No new coal-fired plants to be built in the next 20 years, and aging existing plants are retired on-schedule or a bit earlier.  -- end update 1 )

Roger E. Sowell, Esq.
Marina del Rey, California
copyright (c) 2015 by Roger Sowell, all rights reserved

  

Forecasting the Future - Hubris or Honesty

Subtitle:  Coal Exhaustion Looms - Renewable Energy to the Rescue

"It's hard to make predictions, especially about the future," - attributed to Yogi Berra.

In any event, a few articles on SLB have alluded to the future, if not outright predicted the future.  One article made the case for Peak Oil as non-existent, and argued that the US should build several coal-to-liquids plants to help reduce the world price of crude oil see link. Another described future energy supplies, with renewables and regenerables as the primary supplies see link.  Still another described the near-impossibility of having nuclear power plants as the long-term supply of energy  see link.  Another described the outrageous power prices that would result from an all-nuclear-powered grid see link.  

For another quasi-quote:  "A foolish man maintains his opinion no matter what the facts are.  A wise man considers new facts, and modifies his opinions accordingly."  - paraphrased.  

A new fact presented itself to me a few days ago, and after giving it some thought, it is time to modify an opinion.  The new fact is that coal, that mainstay of electric power generation world-wide, is in shorter supply than I had remembered.  In fact, several reputable sources now state that world reserves of coal will be exhausted in roughly 60 to 70 years - and that is if no increase in current consumption occurs.  Yet, growing economies in several countries are increasing their coal consumption year-over-year.  China and India are on that list.   It is entirely conceivable that coal will run out in less than 50 to 60 years.  

What then, are the alternatives?   From Yogi's quote above, it may be futile to make predictions.   It was only 135 years ago when no one had electricity, because the first generators connected to a grid were started in approximately 1880.   Only 70 years ago, the first atomic energy was created - and that was a bomb, not a power plant.   How, then, can one predict the future of energy supplies 100 or 200 years into the future? 

One thing we can do is examine the existing energy mix, and see what will be available in 100 years.  We note that power is generated today by hydroelectricity from water flowing from dams, by burning natural gas in power plants, by burning coal in power plants, a small amount by burning oil in power plants, by nuclear fission in power plants, and a small amount by renewables such as geothermal, wind, and solar.   There are also some very small experimental plants for ocean waves and tides, and river currents.  

However the greatest source of modern electricity is burning coal, at 41 percent of the total in 2011 (source, IEA).  Next is natural gas at 21 percent.   The people who drill for gas are quite good at finding more as the need arises, drilling in new areas or deeper in old areas.  In addition, we know that great stores of methane exist in the cold, deep ocean as methane hydrates.    The same is not true for coal, however.  

Coal is only economic if it can be mined and brought to the surface at fairly low cost.  Indeed, coal must exist in a seam at least 2 feet thick, and at less than 4000 feet depth, or it is stranded, left in place.  CalTech's Professor Rutledge gives an excellent overview of world coal reserves in his 2011 paper.  ("Estimating long-term world coal production with logit and probit transforms,"  International Journal of Coal Geology, 85 (2011) 23-33 ).  He paints a grim picture.  Roughly, there are 500 billion tonnes of mine-able coal left in the world, and the existing consumption rate is 7.8 billion tonnes per year.  This provides approximately 60 to 70 years of coal remaining.   However, a slight positive note is that Rutledge did not include coal deposits near the Arctic, in Alaska North Slope, and Siberia's Lena and Tungus fields.   Whether those fields in the harsh, cold far north can be produced economically is an open question. 

As stated earlier, nuclear fission is not a candidate due to resource limitations, outrageous cost, and serious safety concerns.  The world is in great need, then, dire need actually, of a replacement energy source for coal and nuclear.  Together, that is nearly 55 percent of today's energy production.  

Knowing this, it makes sense to turn to the renewables: wind, solar, and ocean current.  It may also be possible to make the ocean-temperature-difference technology (OTEC) work.  If the technologies still need a subsidy to advance so they can stand alone and provide electricity at reasonable rates, then prudence dictates the subsidies be made.   

Advances in grid-scale energy storage have been made, with underwater storage in the shallow oceans an excellent candidate.  Similar systems can be deployed around the deeper Great Lakes in the US.  

Is this hubris?  Will engineers and planners of the year 2100 read this or similar articles, and get a good laugh?  It could happen.   Until some major technology improvement or discovery occurs, though, this is about the best we can do.  We can alter our grids so that power can flow from onshore turbines in windy areas to storage facilities.  We can install large, economic wind turbines offshore and store the power underwater in hollow spheres for later use.  We can maintain the improvements in solar photo-voltaics, primarily efficiency and cost reduction.  A recent announcement showed that 40 percent efficiency has been achieved in PV (2014).   We can install and test slow-speed ocean current turbines, and tap into the incredible amounts of energy in the ocean currents.   

The problem is made much, much more acute when one considers the effect of population growth, and the increase in energy-per-capita.  A growth rate in electricity consumption of only 2 percent per year will triple electricity demand in only 55 years.  (the STEM majors will run that calculation and verify it as 2.97, close enough to 3.0)   Even more sobering is that number will again triple in another 55 years.  That puts the world needing 9 times the present energy in only 110 years.   That puts Professor Rutledge's 60 to 70 years for coal-exhaustion as an optimistic figure.  We may well run out of coal long before that.  

When various governments decide to continue subsidies for wind, or solar, or fund research into alternative energies, and some decry these as a waste of money, I hope someone points this article to them.   What would the nay-sayers do?  There will be a grim day of reckoning when the coal runs out.   It would be far, far better to have proven, economic means to provide grid-scale electricity at least a decade before the coal-runs-out-day. 

It may be possible, someday, to gasify coal in-situ and collect the gasified product at the surface and do all this economically.  There is research into this.  The practical challenges are, however, enormous.  One must essentially start a fire in the coal-bed, deep underground, with sufficient oxygen to maintain the burning.  The economics of oxygen injection make the entire thing questionable.   Also, a patent from 1980 describes injecting methanol and steam into a coal bed to produce methane.  

Roger E. Sowell, Esq. 
Marina del Rey, California

Electrical Grids - Coal-fired Baseload and Batteries

Subtitle: Can Coal-Fired Power Exist with Grid-Scale Batteries

There is an increasing interest in what the electrical grids of the near future will have as generating assets and loads, as evidenced by a short memo from Secretary of  Energy Rick Perry this past week.  see memo below. 

This 4-14 Memo is quite interesting for what it says, and what it does not say.  Others have reacted (apoplectically and hysterically, in some cases) to the absence of the word "environment" or derivatives thereof.   

The Secretary did use the words reliable and resilient, affordability and fuel assurance, technologically advanced, affect the economy and national security, diminishing diversity of generation mix, changing nature of electricity fuel mix, previous policies to decrease coal-fired power generation, market-distorting effects of federal subsidies, regulatory burdens, but no mention of environment. 

First, the overview of what the Secretary is doing here.  This is entirely my judgment and not based on any insider information.   This 4-14 memo is part of the President's policy and campaign promises to revive the US coal industry.  Most of the coal production has provided electric power in conventional, Rankine-cycle steam power plants.  Recent regulatory changes by the Obama administration resulted in many coal-fired power plants closing.  Essentially, the coal-fired plants closed because they are now required to remove various pollutants from their stack gases, but cannot afford to retrofit the plants with the pollution control equipment.   This is a part of the "regulatory burden" the Secretary referred to. 

The balance of the intent is to study grid reliability as baseload power is reduced, primarily from coal-fired plant closures.   For background, in recent years the overall US grid has had nuclear and coal-fired plants retired, with natural gas-fired plants, solar, and wind power plants installed.  

So, there is the intent: can the policies of former administrations that brought abrupt closure of so many coal-fired power plants have an adverse affect on grid reliability, resiliency, and electricity affordability?  Next, how can the Trump administration justify bringing back coal-fired power?

Second, a brief analysis of each of the terms featured above, with emphasis on coal-fired plants and renewable power plants..

Reliable and Resilient

Electrical power grids are required, by law, to provide safe, reliable, affordable electricity to consumers of all types, be they residential, commercial, industrial, transportation, or other.   It is interesting that the 4-14 memo does not mention safety.   Perhaps that is simply assumed.  Some states also require an environmental aspect of generating plants, based on pollutants such as sulfur oxides, nitrogen oxides, particulate matter, and in California's case, carbon dioxide emissions. 

Reliability on a grid means that the power is available when the consumer wants to use the power, or on demand.   The electricity must meet certain quality standards, such as but certainly not limited to frequency and voltage.  Interested readers are encouraged to read the IEEE publications on grid reliability. 

Resilient means the grid supplies power as required under any scenario, planned shutdowns, emergency shutdowns, long-term drought, but not necessarily severe weather events such as ice storms, tornadoes, and hurricanes.   Generating assets are expected to stay online during severe weather, but transmission and especially distribution lines will likely be disrupted for a short time.  As an aside, the NRC safety regulations require that a nuclear plant be shut down in advance of a predicted hurricane that could or will put hurricane-force winds at the nuclear plant.   The grid must take all this into account. 

Coal-fired plants historically have good reliability and resiliency, that is, if they have sufficient fuel on hand.  That topic is addressed next. 

Affordability and Fuel Assurance

Affordability is not only a goal for electrical power grids, but is required by law.  The agencies that oversee electric utilities typically allow the electricity rates to provide the utility a modest return on investment, such as 10 percent.   The idea is that the electric utility should not get rich by having an exorbitant return on investment, such as for example alcoholic beverage companies enjoy.   At the same time, a utility cannot just break even else the bonds that finance spending would go unsold.  

The crux of the matter is that different generating technologies have different wholesale costs for the power produced, if all are to obtain the same 10 percent return on capital employed.  Many studies of actual investments, and projected investments have been performed and typically conclude as follows: lowest-cost generating assets are natural gas-fired combined cycle plants (CCGT), natural gas-fired steam plants, large high-pressure coal-fired plants, and hydroelectric plants.   The most expensive, or highest-cost are nuclear, simple cycle gas peaker plants, solar thermal, and offshore wind.    The others are somewhere in the middle, solar PV, onshore wind, geothermal, and a few others.   Nuclear plant advocates will dispute this, of course, but they cannot rationally defend their position. 

However, as stated above, coal-fired plants are shutting down in record numbers because they cannot afford to install the required pollution abatement equipment.  

Fuel assurance is a topic that has several aspects, most notably the variability of wind and solar power.  This is no surprise, wind has always varied, and the sun's intensity at the ground is affected by many factors including season, and clouds.   In fact, a notable event will occur in California's solar plants this year as a total eclipse of the sun occurs in August. 

Coal-fired plants are touted as having substantial fuel assurance with 60 days or more fuel supply stockpiled at the plant.   This is not always true, as coal deliveries are affected by rail shortages, shipping delays due to ice on lakes, and other reasons.  see link to a recent SLB article on coal fuel supply problems. 

Technologically Advanced

A grid that is technologically advanced could mean any number of things.  Recently, the term "smart grid" has been advanced.   More on that in a bit.   Coal-fired power is one of the oldest and not-advanced forms of power generation.  Coal-fired power certainly predates nuclear power, modern solar PV, modern wind turbine power, and CCGT.   There are and have been some advances in coal-fired power, however, such as pulverized coal, high-pressure designs, and more recently, coal gasification with gas turbines.   It is not entirely clear if the 4-14 memo intends to investigate all the various forms of coal-fired power plants.  Clearly, if any of the coal technologies were economic, they would have great market share.  The fact is, they do not have much market share.  

The smart grid concept has many aspects, however one aspect worth noting is the consumer has a display in his home or business that indicates the cost if more load is added to the grid.  The consumer can then decide to flip the switch right then, or postpone the power consumption to a later time when price are cheaper.  

A smart grid from the generation aspect can provide reliable power when intermittent generation is providing power, such as wind turbines and solar PV.   One key aspect of the smart grid is grid-scale storage by batteries or other means.   More on that below. 


Affect the economy and National security

Economic effects due to grid reliability are well-known, where blackouts disrupt commerce.   The argument for coal-fired plants is that they have been highly reliable (again, when fuel is available) and it's not their fault that blackouts sometimes occur. 

What the Secretary means by including national security is a bit obscure.  Certainly, military installations are grid-supplied.  However, they also have more than adequate back-up plans for self-sufficiency when needed.  

Diminishing diversity of generation mix

As stated above, coal-fired plants are closing in record numbers.  The grid is stable, though, because more than enough wind, solar, and natural gas-fired plants are installed.   On a state-wide basis, the generating mix in California has also changed.  Specifically, half of the nuclear plants were shut down almost 5 years ago, and substantial solar power has been installed.   The state has transitioned from 4 GW of nuclear and almost zero solar, to 2 GW of nuclear and 10 GW of grid-scale solar production.   It is noteworthy that grid stability remains, and power prices have not skyrocketed.  

The Secretary is more concerned with the national mix, and primarily the coal-fired plants located east of the Rockies.  Those states do not have superb solar resources, but they do have outstanding wind resources in many areas.  

Changing nature of electricity fuel mix

This is essentially the same as the previous topic, diversity of generation mix. 

Previous policies to decrease coal-fired power generation

This is a direct reference to the various environmental laws that the Obama administration placed on coal-fired power plants.   The result is clear, as above, with coal-fired plants closed or closing in record numbers.    This is a tangential reference to environmental aspects. 

Market-distorting effects of federal subsidies

The issue of federal subsidies for power generation has a long history and much debate.  Various camps shout that the "other guys" are being subsidized, but their favored technology is not.   Accusations abound, but a rational, fact-based analysis shows that almost every form of electric power generation has grants, loan guarantees, tax credits on investments, direct subsidies, regulations that favor that technology, and many more.  SLB has extensive articles on this.   Nuclear power, for example, has subsidies in the form of direct payments for new nuclear plants of 2.3 cents per kWh generated for the first ten years, complete indemnity under the Price-Anderson Act for harm caused by a radiation release (above a modest insured amount), changes to safety regulations to allow continued operation, new plant construction loan guarantees, direct subsidies for existing plants to keep operating as a jobs-protection program, and others.    Nuclear power itself resulted from government research, and was promoted by Eisenhower as a way to show the world that atomic power has peaceful uses, not just the terrible destruction from atomic and hydrogen bombs. 

Coal-fired plants enjoyed a long, many decades period of exemption from the Clean Air Act laws under the "grandfather" clause.  

Solar, wind, and other forms of renewable energy have various forms of subsidy, including investment tax credits, direct subsidy of 2.3 cents per kWh, and in some cases, construction loan guarantees.   Renewables also have a priority in the generation mix, however curtailment certainly occurs under some conditions.  

Finally, almost all of the hydroelectric power in the US was built by federal funds.   The Hoover Dam and its power plants on the Nevada-Arizona border is but one example. 

Regulatory burdens

This is a reference to much of what is already written above, the various regulations on subsidies, environmental exemptions, but also state-mandates for Renewable Portfolio Standards (RPS).   RPS typically requires utilities to obtain a stated percentage of all power sold from renewable forms.  Such renewables include wind power, solar PV power, solar thermal power, geothermal, biogas, biomass, and small hydroelectric.    Many states have RPS or a functional equivalent; California's RPS requires 20 percent renewables by 2010, 33 percent by 2020, and 50 percent by 2030.  The state easily met the 20 percent requirement, achieved 27 percent in 2015, and has contracts for 43 percent by 2030.    Hawaii has one of the most ambitious RPS, with 70 percent by 2040 and 100 percent by 2045.    see link

The concern, clearly, is what will become of coal-fired baseload generating plants when RPS standards are implemented.  It is notable that California has no problems with its substantial renewables, primarily due to the lack of exactly such intractable baseload coal and nuclear-powered plants.   Flexible natural gas-fired CCGT provides California with more than adequate ability to meet power loads with approximately 10 GW of grid-scale solar, 4 GW of wind on a good day, and 2 GW of steady geothermal and other renewables.  

No mention of environment

Memo 4-14 does not explicitly mention the environment, but as above, makes passing reference to such in regulatory burdens and previous Administration policies.   This was very likely by design, as there is substantial pressure to re-open the pollution debate over coal-fired power plants. 

Grids and Batteries

The major unknown at present is the technology for grid-scale batteries.  SLB has several articles on grid-scale storage and batteries.  The fact is, such batteries already exist and are operating in many locations.   The problem today is their cost to install.  That cost is steadily declining, however.  Also, new battery technologies are in research and development.  Great advances are being made.   

The coal-fired power industry, and all those involved from mining, transportation, power plant design and construction, pollution control systems supply, plant operation, all are keenly aware of the dramatic transformation that awaits when, not if, such batteries do achieve reduced costs for installation.  

Such batteries then allow wind and solar power to be stored as that power is produced, then fed back into the grid on demand for load-following or even baseload power.    

An application already under construction in Los Angeles, California for Southern California Edison is to use solar-powered batteries to replace a costly gas-fired peaker power plant.   Also in California, batteries are used on Santa Catalina Island to allow diesel-powered generators to run at a steady pace.  The batteries are charged at night, then discharge to meet demand each day.   Grid-stabilizing electronics already exist, the only issue is cost of the battery systems.  

As with many technological advances, the early systems have a high cost and will supplant only the highest-cost production.  This is the case today in Los Angeles, with the batteries replacing the high-cost peaker power plant.    As more batteries are installed, as technology improves, costs will be less.  As those cost reductions occur, less-costly power generation can be replaced.  

There may actually be a need for a small amount of baseload, rotating-generator power generation such as coal-fired steam plants produce.  (In California, coal is not allowed so that would be from natural gas-fired baseload power).   Presently in California, where the grid peaks at approximately 50 GW, the baseload is approximately 30 percent of that at 15 GW.   These issues are different for each state.  Some of the key factors are the amount of industrial load and building cooling load.  California, of course, has very little of either.   Illinois, on the other hand, has the industries in Chicago and a great number of nuclear plants and coal-fired plants. 

Conclusion

The results from the 4-14 memo from Secretary of Energy Perry will be quite interesting.  The memo requires the study to be delivered in 60 days, so on June 18, 2017. 

It will be interesting to see the arguments, and based on what facts, to keep existing coal-fired power plants open.  

Roger E. Sowell, Esq.

Marina del Rey, California
copyright (c) 2017 by Roger Sowell - all rights reserved

Topics and general links:

Nuclear Power Plants.......here
Climate Change................here  and here
Fresh Water......................here
Engineering......................here  and here
Free Speech.................... here

Renewable Energy...........here  

Coal, Wind, And US Energy

Subtitle:  Coal Falters as Wind Excels

Data from Energy Information Agency
Black line highlights 50 percent point - not a trend line

The long history of electric power production, and the pollution caused by that production, has always been a story of coal and all the others.    The abundant statistics show that coal provided more than 50 percent of US power for decades, from the mid-1950s until 2005 (see chart at right).  The decade of the 1970s had a bit less than 50 percent due to the ill-timed start-up of dozens of oil-fired power plants.   By mid-decade in the 1970s, nuclear power plants were producing approximately 10 percent of all US power, and oil-fired plants were shutting down after OPEC increased the price of oil in the early part and again at the end of 1979.  Coal was again on the rise, reaching the peak in the late 1980s of production as a percent of all US electricity. 

Meanwhile, an ominous warning came from some who (misguidedly) believed that oil and natural gas were in short supply and would soon be exhausted.  There were two opposing camps holding that belief, those who wanted nuclear power to provide the planet's electricity, and those opposed to nuclear and in favor of wind and solar power.  

A notable member of the believers of an oil and gas shortage was President Jimmy Carter, who infamously took to the TV in April, 1977 and warned us about the need to conserve energy.  He wore a sweater in the White House to emphasize the point.   He was, of course, very wrong.  There is more than abundant oil and natural gas world-wide, in fact, there is a glut that has driven prices down to a fraction of what they were in the Jimmy Carter days.  Improved oil and gas exploration and production methods, including precision directional drilling (PDD) and hydraulic fracturing have opened up oil and gas fields world-wide. 

The nuclear power industry of course came to an abrupt halt after the true dangers of meltdowns and explosions became obvious, first with the Three Mile Island meltdown, then the Chernobyl explosion.  Even with almost 100 percent government subsidy and indemnity from public nuclear radiation, the costs to make the plants nominally safe gave utilities pause. 

Meanwhile in all of this, the US environment became an issue and the Clean Air Act was passed in 1970.  However, coal-fired power plants were exempted from most of the provisions of the CAA by various means.  In practice, while other industries such as smelters, chemical plants, and refineries were required to install air pollution abatement systems, the coal-fired power plants did not.   This, as it turned out, was a mistake. 

Coal-fired power plants, and nuclear power plants enjoyed substantial profits while their chief rival, natural gas, was at a high price during the decades after passage of the CAA.  That was the time to spend some of the profits to install pollution reduction systems.  Now, when natural gas prices are low, coal-fired plants cannot afford the pollution reduction systems.   Also, the US EPA has finally closed the loopholes on coal-fired power plants and required them to reduce their air pollution. see link to "The Tragic Flaw of the Clean Air Act."   The response, predictably, is for the owners of the coal-fired power plants to close the plants.  (Note the rapid decline in coal percentage in the graph above, from 2005-2015; from 50 percent to 38 percent)  see link to  SLB article "Coal Power Plant Shutdowns Ahead of Pace in 2015: Gas and Renewables Replace the Coal Power."

The growth in wind power is also a key to the coal industry's woes.  Wind power also impacts the nuclear power industry, and not to nuclear's advantage.  It has always been known that windmills, and later wind turbines, can spin in the wind and do useful work.  Millions of windmill water pumps existed across the US, bringing water from wells to the surface so that cattle could drink.   Some of the first wind-turbines to produce electricity were installed in California's Altamont Pass near San Francisco.   The wind-turbines were expensive, however, and Altamont Pass is not a particularly good location, but it was one of the best in California.  

The next few decades show that wind-turbines were developed, tested, and improved.  These efforts were supported by modest government subsidies, typically 1.5 cents for every kWh produced, with the value adjusted for inflation.  Surveys of US wind potential revealed that there is enormous untapped wind energy, both onshore and offshore.  see link  to SLB article "Renewables in Outer Continental Shelf."  

 If a low-cost means to capture that wind energy could be found, and a means to store the energy then release it when needed, there would be no need to ever burn dirty coal or build dangerous nuclear plants again.  

Which brings us to today, where almost all of the requirements are in place.   The wind industry has developed larger and more economic turbines, so that it is now common to see 3 MW turbines onshore.  The first US offshore wind power project is installing 6 MW turbines, which are on schedule to start up in fourth quarter 2016.  There is an 8 MW turbine operating offshore in Europe.   Onshore wind economics are such that 5.3 cents per kWh is sufficient to entice owners to build.  Of that, 3 cents is from the utility and 2.3 cents is from government tax credits.   With additional cost reductions occurring annually, the tax credits are reduced to zero over the next five years.   Offshore economics are not as good as onshore, due to much higher costs to install the turbines in shallow ocean water.  However, the offshore wind is stronger and more steady so each turbine is more productive.  

The storage problem is also solved.  Many will scoff at that statement, but the reality is that technology has improved dramatically.  The four leading technologies for grid-scale energy storage are high-speed flywheels, pumped storage hydroelectric, advanced batteries, and rail gravity storage.  The first three are already installed in grid-scale service.  Pumped storage hydroelectric has been used for decades.  Batteries are in use on Santa Catalina Island offshore California.  There are better batteries forth-coming, an example of which is the halogenated polyacetylene battery from BioSolar Inc.   Finally, the low-tech gravity storage by ARES is under construction in Nevada.  There, electricity is drawn from the grid during periods of excess, such as with wind power at night, to send heavy electric trains up an incline of several miles length.   The electricity is produced when needed by sending the heavy trains down the incline with the brakes on, where the brakes are wheel-motor/generators operating in generator mode.  The efficiency is high, at better than 80 percent.  

Finally, pumped storage hydroelectric is no longer limited to those few locations with an elevated lake and a low-level lake within a few miles of each other.  Instead, engineers at MIT developed underwater hollow spheres to be positioned in the shallow ocean and near wind-turbine projects.  Electricity is used to pump sea water out of the spheres during night-time excess electricity production.  During the day when demand increases, water from the ocean flows through conventional hydroelectric systems into the spheres, producing power on-demand and in load-following mode.  

The result, for now, is what we see happening today.  Nuclear plants are shutting down due to the inability to compete in the wholesale electricity markets.  Very efficient natural gas power plants that use combined cycle gas turbines (CCGT), and low-cost wind power production have driven the price of electricity down below the point where nuclear power is profitable.  Several nuclear plants have announced closures due to this.  

Coal-fired plants are shutting down because they cannot afford the costs of air pollution control systems, again with low wholesale prices.  Coal also has the problem of limited resources, where low prices for coal have limited the economically recoverable reserves to less than 50 years worldwide, and approximately 25 years in the US.    One might wonder if this is a false shortage, as was the prediction related to oil and gas in the 1970s.  There are significant differences between coal reserves, and oil and gas reserves.   The primary difference is the cost to extract.   If a huge oil reserve is discovered, perhaps thousands of feet deep and offshore a few miles, it will be economic to drill and produce the oil.  ExxonMobil is doing exactly that with their huge oil field offshore Russia's east coast, the Sakhalin Island field.   This oil field required drilling more than 7 miles deep and with the drilling rig located on the island, more than 7 miles horizontally under the seabed.  

Coal cannot be economically mined under such conditions.  Per USGS experts, deep coal mines are uneconomic at more than 4000 feet from the surface.  Also, for surface mines, or near-surface mines, no more than 10 tons of overburden can be removed for each ton of coal mined. This limits coal production to far less than the known amount of coal in the world.  

Coal miners world-wide have a serious problem.  If they use efficient means of mass production, they mine through their reserves quickly.   Also, the efficient production reduces the cost of the coal, which reduces the amount of coal they can recover.   The best thing that could happen to coal miners is for natural gas to run short and its price skyrocket.   That may have seemed likely before the oil and gas industry perfected precision directional drilling and hydraulic fracturing.   From now on, the era of natural gas with low prices is here.  Coal mines are shutting down.  

Even more importantly, wind power reduces the amount of natural gas required in the gas-fired power plants.  As the saying goes, When the wind blows the power flows.   This reduces the demand for natural gas and reduces the demand-driven price.   Wind power also extends the lifetime of natural gas reserves.  

In a perverse way, the same holds true for nuclear power plants.   The more nuclear power that is installed, the less natural gas is burned in gas-fired power plants.  This, like wind power, reduces the demand for, and price of natural gas.  Nuclear power plants simply cannot compete with low-price natural gas.  

Even worse for nuclear power, there are now technologies to produce synthetic natural gas from carbonaceous waste products, such as the process developed and patented by Professor Chan Park of University of California at Riverside.  see link

Over the next few years, one can expect most of the nuclear power plants in the US to shut down due to unprofitable operations.  Also, more and more coal-fired power plants will close as they refuse to install costly pollution controls while knowing that their coal supply is limited to a few years.   CCGT power plants will be installed in great numbers, along with larger and more efficient wind-power projects across the great heartland of America where the wind is strong and free, from north Texas to the Canadian border.   

Offshore wind power projects will also increase, as the Block Island project offshore Rhode Island is but the first of many.  The success of the ARES gravity rail storage system in Nevada will open that technology to every place that has a suitable slope.  Surely the planners in UK will be pondering how to capture the wind there, store it in heavy trains on suitable slopes, and re-capture the power on-demand.   

A brief excursion on the OPEC moves over the decades, but this is a topic for its own article.  What better way for the Saudis to find out once and for all where the world's oil reserves are, than by temporarily increasing the price of oil so their competitors explored and drilled all over the world.  Even better, if the competition produced those new reserves to exhaustion, leaving OPEC firmly in control of oil.  That worked very well for oil in the North Sea and Alaska.  Alas, it will be a very long time before the oil in shale deposits is exhausted.  

Roger E. Sowell, Esq.
Marina del Rey, California

copyright © 2016 by Roger Sowell, all rights reserved

Coal Stockpiles and Natural Gas Pipelines

Subtitle: Coal, Natural gas, and Clean Power Plan in the courts.   

The president of a pro-coal industry group, the American Coalition for Clean Coal Electricity, argues that coal is more reliable than natural gas for power generation, because 80 days of coal can be stockpiled onsite at coal power plants, whereas natural gas must be transported via (unreliable?) pipelines.  The conclusion (he says) is that the Clean Power Plan should not be made into law, nor enforced.  see link to Washington Examiner story of 5/9/2017. 

Somebody bring a screwdriver, because there are more than a few screws loose in this one. 

It is fine for the president of a coal-industry coalition to argue for more use for coal.  That's what he is paid to do.  However, it is laughable to bring that particular argument.  

For instance, how many remember the recent near-miss in coal-powered generation near Chicago, when more ice than usual on the Great Lakes (and much later in the year) prevented coal-carrying ships from delivering their cargo?  see link to April, 2013 article 

And this, the lack of adequate rail capacity, from oilprice.com in October, 2014:  "Part of the reason (for power plants having below-average coal stockpiles) is the country’s oil boom. Moving oil by rail has become so widespread that train backups are making it hard for utilities to receive shipments of coal, which in some cases is leaving power plants critically low on fuel supplies.  . . Coal stocks were inordinately depleted during the unusually long, cold snowy winter in the U.S., which saw an elevated level of electricity demand. Months later, coal-fired power plants are still struggling to replace their coal supplies."

So much for coal being ultra-reliable.  

Now, as to natural gas-fired power plants having their gas supplies curtailed due to pipeline problems.  Yes, that did occur in California when El Paso Corporation (the gas supplier at the time) reduced pipeline flows that resulted in a few power plants not running.  That resulted in a great many lawsuits and Federal investigation, and a huge fine was assessed. 

As I wrote in February, 2016 on SLB, see link "A few years ago, an artificial shortage of natural gas was created in the El Paso Natural Gas Company fiasco, and California experienced electrical shortages, rolling blackouts, and outrageously high electricity prices.   Part of that fiasco was due to the untimely shutdown of a natural gas pipeline that brings natural gas to California from Texas. ( see link to a copy of the settlement agreement between El Paso Corp and various parties.  This describes some, but not all, of the activities that created the electricity shortage.)"

And, there was a time decades ago when a widespread cold period created a natural gas shortage across Texas because the infamous Coastal Corporation of Oscar Wyatt, had over-sold the available natural gas.  Colleges and businesses were shut down so that power plants would have enough gas to keep the grid running.  See 1973 winter gas shortage in Texas. 

But, it is clear that natural gas-fired power plants enjoy a clear advantage in reliability of fuel supply.  Pipelines are not affected by ice on Great Lakes, nor on overcrowding on rail lines.  

Roger E. Sowell, Esq.

Marina del Rey, California
copyright (c) 2017 by Roger Sowell - all rights reserved

Topics and general links:

Nuclear Power Plants.......here
Climate Change................here  and here
Fresh Water......................here
Engineering......................here  and here
Free Speech.................... here

Renewable Energy...........here