By Robert Bradley Jr. — June 8, 2022
“Government does not solve problems. It subsidizes them.” (Ronald Reagan)
“The purpose of the social sciences is to impart reliable information to both understand reality and avoid problems before they occur. But here we are with a faulty shared narrative. And the public is catching on with electricity, as they already have with transportation.” (RLB, below)
E&E News is the media center for the cause of (government-driven) energy transformation. Its many reporters assume but do not debate climate alarmism, the necessary but not sufficient premise behind the wind/solar/battery cause. Still, E&E reporters are looking for interesting stories and report on some of the problems of the “transition.” That gets to energy reality.
This Monday’s article, “California Dilemma,” mainstreams the fact that politically correct renewables are expensive, unreliable, and problematic at scale. And unreliability means price spikes and supply/demand turmoil. The subject is California, but Texas deserves the same analysis. But by summer-end, other states might be in the power emergency room.
The E&E article follows with my subtitles.
‘Shared Narrative’ Dilemma
California sees itself as a global leader in the fight against climate change. But keeping on the lights over the next five summers is likely to increase the state’s greenhouse gas emissions, energy experts said.
The nation’s most populous state faces an electricity supply crunch, with projections showing that peak demand could exceed available supplies by as much as 3,500 megawatts. That would leave as many as 3.5 million homes without power.
Comment: And who was warning about this years and even decades ago? The “magical thinking” has turned into a crisis that cannot be blamed on Russia.
The purpose of the social sciences is to impart reliable information to both understand reality and to avoid problems before they occur. But here we are with a faulty shared narrative. And the public is catching on with electricity, as they already have with transportation.
To address the problem, [California] Gov. Gavin Newsom wants to spend $5.2 billion to boost reliability. Initial plans include keeping open natural gas plants that were due to retire.
Comment: More government intervention in the attempt to rescue the problems created by prior. In the political economy literature, this is called the Mises Intervention Thesis (see yesterday’s post). And its corollary is gapism, where new regulation tries to increase supply or decrease demand in the attempt to alleviate the (government-created) shortage.
For now, state leaders should prioritize preventing blackouts over concerns about greenhouse gas emissions, said several experts. Doing so would help maintain support for long-term climate goals.
“If the public sees this year after year — shortages and blackouts and curtailment — I think there will be a lot of setback for the long-term green energy plan that everyone hopes will come to pass,” said Ahmad Faruqui, energy economist formerly with the Brattle Group consulting firm. “We live in the short run. Unless we make it through the short run, we are not going to get the long run.”
Comment: Political reality is the voter’s expectation (demand) for affordable, reliable energy. America has had such for many decades. This is why many climate alarmists and forced energy transformationists find themselves at odds with humankind and even democracy. The nuts (I profiled one last week) are out in a final desperate attempt at drawing attention to a futile, misplaced cause.
California aims to make its grid carbon-free by 2045. Additionally, state law mandates California must generate 60 percent of its electricity from renewable sources in less than eight years. But supply chain disruptions have stalled generation projects.
Comment: Blame Game One. If the state had not tried to reengineer–really duplicate the grid–supply chain issues would not have been such a problem.
Meanwhile, extreme heat, wildfires and drought threaten to cut supplies and drive up electricity demand. Rolling blackouts hit the state for two evenings in August 2020 during a West-wide heat wave.
Comment: Blame Game Two. Climate change is the problem, not our energy policy. Yet the state’s planners allegedly knew about the problem from the same shared narrative. And renewables failed coming and going.
As a result, energy planners want a 22.5 percent buffer of available electricity supplies over projected peak demand. Right now, they lack that buffer for the next five summers (Climatewire, May 23).
Comment: The extraordinarily high reserve factor at the peak (15 percent used to be the benchmark with reliables) indicates the inability of wind and solar and batteries to compete on a reliable basis. Basically, planners are double making the grid, one politically correct and the other of life-or-death necessity.
This summer, the potential gap between energy demand and supply [in the state] could hit 3,500 megawatts. In California, 1 MW powers between 750 and 1,000 homes.
Comment: Crisis time in the not-so-Golden State?
Starting next summer, the state should have sufficient electricity supply under normal circumstances. But extreme events could create a demand surge and electricity supply shortage, planners said. In 2023, the power supply gap in those cases is 600 MW. In 2024, it rises to 2,700 MW. A year later, in 2025, the potential shortfall is 3,300 MW.
Comment: Yes, and …. Will they blame it on climate change?
Compounding the issue is that power plant retirements are expected to take away about 6,300 MW of supply by 2025. Those includes the planned retirement of the Diablo Canyon nuclear plant’s two generators in 2024 and 2025. The Newsom administration has asked the Department of Energy for help in getting federal funding that could delay the plant’s closure (Energywire, May 25).
Comment: What planned power plant retirements are premature? Are they not making money and if so, why? They are built with sunk costs, and every kilowatt hour of their capacity is needed.
Why federal (national taxpayer) funding to keep a needed supply source on line? Tell us about how wind and solar have ruined margins to make a sunk-cost asset such as Diablo Canyon uneconomic.
California Energy Commission spokesperson Lindsay Buckley said in an email that the agency recognizes “reliability challenges may lead to a short-term increase in greenhouse emissions in the electricity sector.”
“This is also occurring as a record-breaking amount of clean energy is planned to come online, lowering the net increase in emissions,” she said in an email.
Comment: That “clean energy” is causing shortages that requires dense, reliable mineral energies to get back into the picture in a big way.
Since the August 2020 rolling blackouts, the state has ordered utilities to procure 11,500 MW of power and accelerate generation projects, Buckley said. Battery storage capacity grew twentyfold in 2.5 years. State officials also installed emergency generators and delayed planned retirement dates for existing power plants.
Comment: And it was not enough. Can’t blame the Russians….
Even with those actions, she said, “climate impacts are outpacing our efforts and continuing to cause unprecedented stress on California’s energy system, threatening reliability and [putting] Californians at risk of additional outages.”
Comment: So California thinks it can affect the global parts per million of CO2 with its climate plan? Do the climate math. Are there laws against public policy fraud?
State Sen. Bob Wieckowski (D), chair of the senate budget subcommittee on environmental issues, said he fears what an electricity supply crunch would mean for a California mandate to shrink its greenhouse gas emissions 40 percent below 1990 levels by 2030.
To meet that requirement, the state needs to cut emissions about 4.3 percent annually — about 2.5 times its 2019 reduction level (Climatewire, Dec. 15, 2021).
Comment: No kidding. The aspirational goal will not happen. But just trying to meet the goals will cause waste and distortion that every citizen and business will shoulder.
Continuing to operate natural gas plants that were due to close compounds the climate challenge, he said in an interview. “We calculated that we would meet part of these [greenhouse gas emissions reduction goals] based on those things coming offline,” Wieckowski said.
He added that he’s asked the Newsom administration for more specifics on what electricity generation sources it would include in the reliability project, as well as options to offset emissions increases.
Lost Summer Ahead
Siva Gunda, vice chair at the California Energy Commission, said that the bulk of Newsom’s proposed funding would go toward securing electricity supply sources. That includes extending the lives of plants that were scheduled to retire, as well as ramping up new generation and storage projects, new clean energy backup generation projects, and diesel and natural gas backup generation units with emission controls.
In terms of this summer, however, there’s not much that can be done, said Jan Smutny-Jones, CEO of the Independent Energy Producers Association, a trade group. “If we’re talking about next year,” he said, “there may be some opportunity” to add resources.
The $5.2 billion, if it’s approved, is needed in part to pay natural gas-fired plants to stay online, because many lose money during the day, he said. Their power is more expensive than solar electricity that’s abundant in the Golden State.
Comment: Please explain. If explained, the root distortion of California’s power problem becomes clear.
“If you need the gas fleet, and you’re only operating, say, 10 percent of the time, how do you keep them around economically?” Smutny-Jones said.
More Demand Regulation Ahead
Several energy experts suggested that California needs to change how it prices electricity and the incentives it offers to businesses and residents to cut their power consumption.
Comment: It is central planning time with the ‘experts’ and ‘models’ trying to plan for millions who just want their power and not be bothered with much more than a monthly power bill.
California needs more “dynamic pricing,” where electricity consumers get a price that varies based on supply and demand conditions, said energy economist Faruqui.
Only about 2 percent of California electricity ratepayers have dynamic pricing, Faruqui said. Some customers have “time of use” rates, but those rates don’t vary based on supply and demand.
Comment: Demand-side intervention to address the problems created by supply-side intervention. The Mises Intervention Thesis and gapism are at work.
via Watts Up With That?
June 9, 2022 at 09:00AM