90% renewables in the grid by 2035

[Dan Clemmensen + 1,011]

A new study asserts that the old 2050 target date for 90% renewables in the grid is out of date because it is based on old cost models for wind and solar. Using newer real-world cost numbers, these guys claim that we could get there by 2035. Basically, the entire existing inventory of NG CCGT plants would provide the remaining 10% of the energy, operating only when there is not enough wind, solar, and batteries. (I'm oversimplifying: read the article.)

Actual study report is at:   https://www.2035report.com/

an article on the report is at:

https://www.forbes.com/sites/energyinnovation/2020/06/09/plunging-renewable-energy-prices-mean-us-can-hit-90-clean-electricity-by-2035at-no-extra-cost/#631e9e0c2f9b

The article does not mention power-to-CH4. It's clear however that the wind and solar needed for their 90% scenario will have lots of idle capacity on a yearly basis. If , as is likely, E==>CH4 convertor technology matures quickly enough we can get to 100% renewables in this same timeframe by replacing fossil CH4 (i.e., NG) with renewable CH4, and also take a big chunk out of non-electric fossil CH4 use.

Edited June 9, 2020 by Dan Clemmensen

[notsonice + 1,255]

3 hours ago, Dan Clemmensen said:

A new study asserts that the old 2050 target date for 90% renewables in the grid is out of date because it is based on old cost models for wind and solar. Using newer real-world cost numbers, these guys claim that we could get there by 2035. Basically, the entire existing inventory of NG CCGT plants would provide the remaining 10% of the energy, operating only when there is not enough wind, solar, and batteries. (I'm oversimplifying: read the article.)

Actual study report is at:   https://www.2035report.com/

an article on the report is at:

https://www.forbes.com/sites/energyinnovation/2020/06/09/plunging-renewable-energy-prices-mean-us-can-hit-90-clean-electricity-by-2035at-no-extra-cost/#631e9e0c2f9b

The article does not mention power-to-CH4. It's clear however that the wind and solar needed for their 90% scenario will have lots of idle capacity on a yearly basis. If , as is likely, E==>CH4 convertor technology matures quickly enough we can get to 100% renewables in this same timeframe by replacing fossil CH4 (i.e., NG) with renewable CH4, and also take a big chunk out of non-electric fossil CH4 use.

2035 will not happen. The sunk  cost for all existing infrastructure is capitalized typically for the life of the plant IE 25 to 50 years. All the new gas plants built in the last 5 to 10 years that replaced aged coal plants will be allowed to run until 2040 to 2050. The PUC's insure that the new plants will not be retired early in order to recover their capital investments. If they are allowed to recoup their investments on an accelerated basis it would be an added cost in the renewable cost equation. IE if renewables are added faster than the normal planned retirement of existing plants the cost increases to the retail public will outstrip inflation. The PUC's always factor in end cost and the ability of retail customers to adsorb cost increases. Coal is being phased out on a retirement basis not on a lets just replace it because gas or renewables is cheaper

 

Please read this article

https://www.niskanencenter.org/managing-the-energy-transition-securitization-to-accelerate-early-coal-plant-retirements/

 

By Nader Sobhani

June 9, 2020

The economic woes of the U.S. coal industry precede COVID-19. Coal plants were already shutting down at near-unprecedented levels, and almost half of the operating fleet was selling power at a loss. As the coronavirus-triggered shutdown rattles the U.S. economy, declining electricity demand and lower electricity prices make it even more likely that utility companies will have to retire uneconomic coal plants before the end of their useful lives. This will lead to billions of dollars of unrecovered plant capital investment. 

In states with deregulated electricity markets, an uneconomic coal plant usually becomes a “stranded asset”–meaning, that it shuts down before the end of its useful life (which for accounting purposes is roughly 46 years), and companies must write off the plant’s remaining value. Investors may not be pleased about absorbing the capital losses from retiring an uneconomic coal plant.Still, it is better than absorbing both operational and capital losses from continuing to operate the plant. 

However, in rate-regulated markets, where utilities receive regulatory assurances of cost recovery, the costs of retiring uneconomic coal plants are passed onto ratepayers. One way to do this is to pay off the debt on the plant ahead of schedule, and raise rates to cover the change. Another approach is to idle the plant but let rates, and debt payments, continue as if it is still operating (in the jargon, the plant then becomes a “regulatory asset,” rather than a real asset). Sometimes, the two are combined. To avoid the conversation about any unrecovered capital, uneconomic coal plants continue to be operated, a practice that is estimated to have cost ratepayers in regulated markets $3.5 billion between 2015 and 2017. Putting customers on the hook to pay the outstanding balance on these uneconomic assets is hampering the shift to cleaner energy because customers would have to pay for both shutting down the older generation and replacing it with new, cleaner plants. With a recession looming, environmental and consumer advocates, utilities, and state legislatures must think of innovative ways to allow for the retirement of coal plants before the end of their useful lives without forcing ratepayers to shoulder  the cost of these stranded assets.

 

then the go onto securitization  and essentially a federal bailout using stimulus

[Dan Clemmensen + 1,011]

8 minutes ago, notsonice said:

2035 will not happen. The sunk  cost for all existing infrastructure is capitalized typically for the life of the plant IE 25 to 50 years. All the new gas plants built in the last 5 to 10 years that replaced aged coal plants will be allowed to run until 2040 to 2050. The PUC's insure that the new plants will not be retired early in order to recover their capital investments. If they are allowed to recoup their investments on an accelerated basis it would be an added cost in the renewable cost equation. IE if renewables are added faster than the normal planned retirement of existing plants the cost increases to the retail public will outstrip inflation. The PUC's always factor in end cost and the ability of retail customers to adsorb cost increases. Coal is being phased out on a retirement basis not on a lets just replace it because gas or renewables is cheaper

 

The study's authors cover this extensively. The CCGTs will stay in service until they are fully amortized, but will run at low capacity factors, and in fact they are required because renewables+batteries cannot meet the worst-case demand for electricity. This is why the paper is pushing for 90% renewables, not 100% renewables. Those plants will still be running in 2050 or beyond (unless nuclear fusion is rolled out, which will always happen in 20 years from the current date 🙂 )

The ratepayers will not need to eat any early retirement costs for the CCGTs. They just pay less because the utility companies pay less for NG.

[Jay McKinsey + 1,490]

1 hour ago, Dan Clemmensen said:

The study's authors cover this extensively. The CCGTs will stay in service until they are fully amortized, but will run at low capacity factors, and in fact they are required because renewables+batteries cannot meet the worst-case demand for electricity. This is why the paper is pushing for 90% renewables, not 100% renewables. Those plants will still be running in 2050 or beyond (unless nuclear fusion is rolled out, which will always happen in 20 years from the current date 🙂 )

The ratepayers will not need to eat any early retirement costs for the CCGTs. They just pay less because the utility companies pay less for NG.

and of course they'll be running green CH4  😁

[Dan Clemmensen + 1,011]

25 minutes ago, Jay McKinsey said:

and of course they'll be running green CH4  😁

🙂 Not according to the paper. That's only my personal hobbyhorse. But if you look at their numbers, you see that to get to 90% renewables (i.e., the rest is NG), They must overbuild the renewables and 14% of the wind and solar over the course of a year gets curtailed. If you just use only that much for E==>CH4, you cover more than half of the NG. Their model even assumes the current "negative pricing" occurs, and E==>CH4 would keep that from happening. The E==>CH4 technology has 15 years to mature, and by then replacing the remaining NG with E==>CH4 may be cheaper than the NG, allowing 100% renewable.

But that's not enough for my grandiose scheme. We need to go further and replace all of the non-electricity use of NG also. But that would mean even more wind and solar, which would mean the percentage of the time the CCGTs are needed would drop even further. (It never drops to 0 and the total max power from CCGT does not go down much at all). You also don't need as much battery, because when using the CCGTs you are no longer using fossil fuel. The batteries are not needed to "save renewable energy". They are only needed to provide peaking.

[notsonice + 1,255]

3 hours ago, Dan Clemmensen said:

The study's authors cover this extensively. The CCGTs will stay in service until they are fully amortized, but will run at low capacity factors, and in fact they are required because renewables+batteries cannot meet the worst-case demand for electricity. This is why the paper is pushing for 90% renewables, not 100% renewables. Those plants will still be running in 2050 or beyond (unless nuclear fusion is rolled out, which will always happen in 20 years from the current date 🙂 )

The ratepayers will not need to eat any early retirement costs for the CCGTs. They just pay less because the utility companies pay less for NG.

the study states Federal and state policymakers should help refinance bad coal debt to reduce the costs of a coal-to-clean transition.... This will not happen and the also call out that  While adding about 70 GW per year is more than twice the current national installation rate ....This has to start already to meet the 2035 goal.....The study also calls for giant shifts in policy at every level right now which is not happening.  This is on top of the cost issues of who will pay to sideline all if the new gas plants that have just been built. So right off the bat the study is unrealistic. Reality is 2035 is a professors pipedream

[markslawson + 1,057]

8 hours ago, Dan Clemmensen said:

A new study asserts that the old 2050 target date for 90% renewables in the grid is out of date because it is based on old cost models for wind and solar.

Dan and others - how many times do studies like these have to be debunked before it finally sinks in that green nirvana will be neither cheap nor easy, and that even 40 per cent on most grids is probably unobtainable, let alone 90 per cent. As far as I know the best that has ever been obtained on any grid anywhere that does not have access to a lot of hydro power (Norway, Sweden, Denmark, New Zealand) is 70 per cent. That is the micro-grid servicing Coober Pedy in the Australian desert where it is so hot all houses are basically underground. The grid is sufficiently small for  batteries to make a difference but even then the grid operators cannot avoid having expensive diesel back up generators to makeup shortfalls from the cheap solar panels and expensive batteries. It is impossible to imagine any future grid without hydro that does not have a lot of conventional back up plant. The grid operators would be mad if they opted not to have them. The PVs, wind generators and batteries are basically additional expenses.

Although I don't have access to the full study cited I suspect the authors have looked at evident, recent declines in the cost of battery storage and simply assumed that that decline would continue until costs reach a point where battery storage for whole grids is possible. Never mind that batteries are still a niche part of the energy market, they have waved a magic wand and assumed that the market will overcome all resource constraints to produce batteries by the billion (literally - several orders of magnitude more than now) for grids world wide. And they probably wonder why no one takes them seriously. 

Notsonice has pointed to other, major problems.    

[0R0 + 6,251]

2 hours ago, notsonice said:

The economic woes of the U.S. coal industry precede COVID-19. Coal plants were already shutting down at near-unprecedented levels, and almost half of the operating fleet was selling power at a loss. As the coronavirus-triggered shutdown rattles the U.S. economy, declining electricity demand and lower electricity prices make it even more likely that utility companies will have to retire uneconomic coal plants before the end of their useful lives. This will lead to billions of dollars of unrecovered plant capital investment. 

I don't think we know where the migration of the Millennials out of the cities will put them. The existing suburban and small town housing stock close to the big cities they are leaving is far to small and many of them want out of the high income tax state where their old city apartment was, so that will force the migration further out. The work from home movement has only started on its Schumpeterian "S" curve. The general idea as it impacts energy demand is that the private homes these are moving to are going to be consuming more electricity than the apartments they were in, and they will all be driving when they do need to move about. No buses or subways. So we will see a large construction surge, a significant large industrial installation surge and thus a strain on existing grids. We don't know exactly where as yet. Things are still in flux as we are only at the first stage and the first wave moving out.

 

It may be possible to economically go to a 90% renewable grid. The question is why would you till it costs substantially LESS to add the PV or wind than keeping the current operations. The PUC has to consider that introducing the extremely high capital cost of PV and Wind, also raises the capital recuperation bill on the remaining baseload capacity that needs to stay in place for the overnight and dead time load despite losing the bulk of their revenue from peak operations hours when solar would be taking over.

[Dan Clemmensen + 1,011]

47 minutes ago, 0R0 said:

It may be possible to economically go to a 90% renewable grid. The question is why would you till it costs substantially LESS to add the PV or wind than keeping the current operations. The PUC has to consider that introducing the extremely high capital cost of PV and Wind, also raises the capital recuperation bill on the remaining baseload capacity that needs to stay in place for the overnight and dead time load despite losing the bulk of their revenue from peak operations hours when solar would be taking over.

Sunk costs are sunk. When the cost of building new wind and PV is less than the cost of NG, then build the wind/PV. The CCGT is already there, and will not be stranded and written off because it is still in use, albeit rarely. This is in contrast to the current meltdown in old coal plants, which are (apparently) much more expensive to keep up and idle. This entire argument behind this study is that we will continue to need those CCGTs, but they will no longer be baseload 100% of the time. The economics don't work from the point of view of an individual CCGT trying to sell its electricity, so the economic model must change. The ratepayers must pay for the CCGT to remain operational so it will be there when needed. The PUC will have to figure out how to make this happen. The economics work just fine for a utility that owns both the CCGT and the solar/PV.

[ronwagn + 6,290]

7 hours ago, notsonice said:

2035 will not happen. The sunk  cost for all existing infrastructure is capitalized typically for the life of the plant IE 25 to 50 years. All the new gas plants built in the last 5 to 10 years that replaced aged coal plants will be allowed to run until 2040 to 2050. The PUC's insure that the new plants will not be retired early in order to recover their capital investments. If they are allowed to recoup their investments on an accelerated basis it would be an added cost in the renewable cost equation. IE if renewables are added faster than the normal planned retirement of existing plants the cost increases to the retail public will outstrip inflation. The PUC's always factor in end cost and the ability of retail customers to adsorb cost increases. Coal is being phased out on a retirement basis not on a lets just replace it because gas or renewables is cheaper

 

Please read this article

https://www.niskanencenter.org/managing-the-energy-transition-securitization-to-accelerate-early-coal-plant-retirements/

 

By Nader Sobhani

June 9, 2020

The economic woes of the U.S. coal industry precede COVID-19. Coal plants were already shutting down at near-unprecedented levels, and almost half of the operating fleet was selling power at a loss. As the coronavirus-triggered shutdown rattles the U.S. economy, declining electricity demand and lower electricity prices make it even more likely that utility companies will have to retire uneconomic coal plants before the end of their useful lives. This will lead to billions of dollars of unrecovered plant capital investment. 

In states with deregulated electricity markets, an uneconomic coal plant usually becomes a “stranded asset”–meaning, that it shuts down before the end of its useful life (which for accounting purposes is roughly 46 years), and companies must write off the plant’s remaining value. Investors may not be pleased about absorbing the capital losses from retiring an uneconomic coal plant.Still, it is better than absorbing both operational and capital losses from continuing to operate the plant. 

However, in rate-regulated markets, where utilities receive regulatory assurances of cost recovery, the costs of retiring uneconomic coal plants are passed onto ratepayers. One way to do this is to pay off the debt on the plant ahead of schedule, and raise rates to cover the change. Another approach is to idle the plant but let rates, and debt payments, continue as if it is still operating (in the jargon, the plant then becomes a “regulatory asset,” rather than a real asset). Sometimes, the two are combined. To avoid the conversation about any unrecovered capital, uneconomic coal plants continue to be operated, a practice that is estimated to have cost ratepayers in regulated markets $3.5 billion between 2015 and 2017. Putting customers on the hook to pay the outstanding balance on these uneconomic assets is hampering the shift to cleaner energy because customers would have to pay for both shutting down the older generation and replacing it with new, cleaner plants. With a recession looming, environmental and consumer advocates, utilities, and state legislatures must think of innovative ways to allow for the retirement of coal plants before the end of their useful lives without forcing ratepayers to shoulder  the cost of these stranded assets.

 

then the go onto securitization  and essentially a federal bailout using stimulus

Springfield, Illinois (The State Capitol) owns its municipal coal plant. It is pretty old but was upgraded with scrubbers years ago. This is what is going on in Illinois. Apparently they will be bringing in electricity from Texas or wherever. 

https://www.wglt.org/post/springfield-officials-residents-discuss-timeline-coal-plant-closures#stream/0

https://www.sj-r.com/news/20190826/data-indicates-4-remaining-illinois-coal-plants-among-worst-polluters

[Douglas Buckland + 6,308]

11 hours ago, Dan Clemmensen said:

A new study asserts that the old 2050 target date for 90% renewables in the grid is out of date because it is based on old cost models for wind and solar. Using newer real-world cost numbers, these guys claim that we could get there by 2035. Basically, the entire existing inventory of NG CCGT plants would provide the remaining 10% of the energy, operating only when there is not enough wind, solar, and batteries. (I'm oversimplifying: read the article.)

Actual study report is at:   https://www.2035report.com/

an article on the report is at:

https://www.forbes.com/sites/energyinnovation/2020/06/09/plunging-renewable-energy-prices-mean-us-can-hit-90-clean-electricity-by-2035at-no-extra-cost/#631e9e0c2f9b

The article does not mention power-to-CH4. It's clear however that the wind and solar needed for their 90% scenario will have lots of idle capacity on a yearly basis. If , as is likely, E==>CH4 convertor technology matures quickly enough we can get to 100% renewables in this same timeframe by replacing fossil CH4 (i.e., NG) with renewable CH4, and also take a big chunk out of non-electric fossil CH4 use.

Did the again ‘new’ study take into account cheap oil...as we now have?

[Dan Clemmensen + 1,011]

6 minutes ago, Douglas Buckland said:

Did the again ‘new’ study take into account cheap oil...as we now have?

This particular study was strictly about the electrical grid and did not mention oil or liquid fuels at all. It barely mentioned coal except to note that it is already being replaced by NG purely based on economics.

BTW it really is a new study, not just a rehash. One of its main points is that older studies had all grossly underestimated the rates at which solar and wind costs are dropping. It uses much finer-grained data on actual electricity production on an hourly basis from a great many generators.

Current oil prices are crazy, so I don't have any idea how they can be projected out to 2035 and 2050. It looks to me like the Permian will continue to impose an upper bound on price until it runs dry, and that associated NG production in the Permian will continue to hold down the NG price as long as Permian oil is being produced. Do you have a guesstimate on how long that will be? I keep seeing "between 2025 and 2030", but doomsayers have been predicting the "death of the Permian in 5 years!" since about 2010. It looks to me like the Permian's NG price cap is really what killed coal.

[BradleyPNW + 282]

16 hours ago, 0R0 said:

I don't think we know where the migration of the Millennials out of the cities will put them.

This is an overlooked issue of future of energy structure -- 2035 in this case.

We know US populations migrate toward skill clustering (cities) to chase higher wages. We also know US populations migrate away from cities toward lower cost of living (lower population density geography.)

If you decouple wages from urban geography populations will migrate toward lower cost of living. That means new construction, which means solar PV installations, decent insulation/air sealing, and powerwalls. Energy demand migrates out of large cities but carries a smaller level of grid demand to new resort town geography. 

[0R0 + 6,251]

34 minutes ago, BradleyPNW said:

This is an overlooked issue of future of energy structure -- 2035 in this case.

We know US populations migrate toward skill clustering (cities) to chase higher wages. We also know US populations migrate away from cities toward lower cost of living (lower population density geography.)

If you decouple wages from urban geography populations will migrate toward lower cost of living. That means new construction, which means solar PV installations, decent insulation/air sealing, and powerwalls. Energy demand migrates out of large cities but carries a smaller level of grid demand to new resort town geography. 

Perhaps that new construction will make a difference in electric and other energy consumption, but it is hard to overcome the extra roof and double the wall area and double to quadruple the floor space. Then all the gadgets in multiple rooms rather than all in one space.

Solar roofs are only mandated in CA, all others are looking to see how that ends up working. The cost is very high compared to solar farms on the grid and cost shifts the grid costs to remaining users without rooftop solar. So far it is not looking great.