Archive for Coal

What to do about Peak Coal

April 15, 2007 at 10:50 pm · Filed under AES, Coal, investing, Investing information

With Energy Watch Group’s recent release of a study which predicts Peak Coal by 2025, I thought I’d get in on the action.

Maybe you think it’s too soon to start worrying about Peak Coal… after all, most people haven’t even adjusted to the reality of Peak Oil (let alone Peak Gas, Peak Uranium, or Coal.) Yet all these finite resources will reach peak production, and some may already have.

So peak coal will happen, and it will either happen sooner than most investors think, or later. If you think it’s going to be sooner, my AltEnergyStocks column on Peak Coal gives some suggestions on what to do about it.

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TXU goes Nuclear- (rant)

April 10, 2007 at 12:45 pm · Filed under Carbon Dioxide Emissions, Coal, Concentrating Solar Power, Energy efficiency, Global Warming, Nuclear Power

A Wall Street Journal article today reports that TXU is planning on using nuclear power to replace the coal plants which they shelved recently.

This drives me batty. I do think that nuclear power is better than coal, and even better than IGCC, but basically substituting nuclear power for coal power is just replacing one nasty externality (CO2 emissions) with another: adding to the risk of nuclear terrorism and waste disposal problems.

When expected costs of CO2 are factored in, the price of nuclear power does looks good. But I ask the same question people are finally asking about global warming: “What’s the business case for destroying the planet?”

Here’s what we should be thinking for our baseload energy needs:

  • Energy Efficiency…. 1-3 cents per kWh
  • Concentrating Solar Power with thermal storage…. 10-15 cents per kWh (and dropping)
  • Wind power, combined with pricing mechanisms to shift demand…. 4-6 cents per kWh

    • And for peaking power:

  • Demand Response
  • Time of Day Pricing
  • Concentrating Solar Power with large scale thermal storage and an oversized turbine

    • Eight steps forward… six steps back. Do we really need to dig up mountains for uranium instead of decapitating them for coal?

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    How Your Money Made the TXU deal happen

    March 8, 2007 at 4:17 pm · Filed under Carbon Dioxide Emissions, Coal, Global Warming, investing

    Most of the readers of this blog are not investors in the Texas Pacific Group or KKR, but you did have a role in making the private equity deal that has everyone in the environmental community (not to mention the private equity world) talking.

    Here’s what you did: You didn’t invest in TXU Corporation (NYSE:TXU). As any regular reader of this blog knows, I’m a big proponent of putting your money where your mouth is, especially when it comes to staying away from companies whose operations would increase the severity of climate change. And, until a couple weeks ago, TXU with their 11 planned pulverized coal plants was public enemy #1 when it came to future carbon emissions.

    My readers, socially responsible mutual funds, other like minded people, and other investors who were worried about carbon risk stayed away from TXU in droves, and because of that, the stock was lower (how much we’ll never know,) which made it easier for Texas Pacific and KKR to offer a 25% premium, which in turn should be enough to entice current TXU investors to give up their stock in the buyout.

    It’s easy to see this deal is a back room affair between a bunch of filthy rich folks, TXU management, and the leaders of a couple national environmental groups, with the little guys (like the New York Times, who originally saw the merger as a private equity endorsement of TXU’s high-carbon generation strategy left in the dark.

    The greatest risk for those of us fighting climate change is despair. Climate change is a giant problem, but we can make big changes if we all pitch in to help. To all of you who did your little part to make the deal happen (even if there are still some doubts as to the final results), I want to say,

    “Thanks, and keep up the good work.”

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    Visual Comparison of Electricity Generation Technologies

    February 22, 2007 at 9:08 pm · Filed under Coal, Concentrating Solar Power, csp, Economics, electric grid, Energy, Energy efficiency, Geothermal energy, IGCC, Nuclear Power, photovoltaics, PV, Renewable Energy, solar energy, solar thermal, Technology, wave power, wind, Wind power

    I just put together a couple graphs for a talk I’m giving on Monday to give people a visual feel of the various technologies for generating electricity.  These come with a gigantic caveat: the numbers are far from precise.

    With changing technologies, it’s impossible to represent any of this with a single number anyway.  I’m trying to show how the technologies compare to each other, and I used four parameters:

    • Cost ($/MWh),
    • Availability (better the closer the profile of the technology matches a normal demand curve (wind is bad, baseload is okay, dispatchable is best, solar),
    • Emissions (and I count waste storage when it comes to nuclear),
    • Bubble sizes represent the size and durability of the resource (I’ve tried to combine in one number how much power we can get from the resource, but also how long supplies of fuel will last.) 

    In both charts, the “best” technologies are in the upper left (low cost, low emissions, and available when we need them.)

    I know that I’m going to upset a lot of people because I was too harsh with their favorite technology, so feel free and comment on the numbers I’m using, but also please provide references for where you get your numbers.  Most of these are off the top of my head, so their accuracy is admittedly questionable.   Here are the numbers I used to make the graphs.

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    Seminar: Taking a Hard Look at IGCC. Denver Feb 12

    February 5, 2007 at 11:32 pm · Filed under Coal, Denver Metro, Events, IGCC

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    Xcel Fighting Merchant Coal Plant

    January 20, 2007 at 3:01 pm · Filed under Coal, Colorado, Denver Metro, electric grid, Events

    On January 18, Xcel Energy filed a motion with the Colorado Public Utilites Commission to reject a merchant coal power plant bid for 2014.   Xcel has been under intense pressure from the Colorado Commission to sign a contract with the project.   The Company also filed a motion for extraordinary protection  for critical parts of the bid report, which means we can’t see the underlying bid info or economic analysis.  While this is unfortunate but expected, the parts of the motion we can see make very interesting reading.

     This docket is a continuation of the competitive bidding process from the company’s 2003 resource plan and the settlement agreement.   

    Xcel’s main ground to reject this bid is because it is “not economic.”  Unfortunately, we do not have access to the specific numbers, so we should not use this to say that coal plants are never economic.  I simply want to highlight the fact that this coal plant, according to Xcel, is uneconomic.  If the true cost of externalities of pollution and CO2 emissions were taken into account, the case for any coal plant’s economics becomes much worse.

    Some arguments Xcel uses:

    • Electricity demand has not kept up with the demand they assumed in the 2003 LCP.  (Most likely due to increasing prices of fossil-fuel generated power, and a heightened awareness of the problems associated with global warming, both of which spur efforts for conservation.   It is also worth pointing out that our personal efforts to conserve electricity have contributed to the drop in demand, and that drop in demand makes this coal plant less likely to be built.  In this way, everyone can make a difference when it comes to fighting global warming.)
    • Xcel has successfully negotiated with bidders to provide natural gas fired power to lower their prices (p.5), while the coal bidders want to modify the terms of the contracts in a way that may shift environmental risks to Xcel (p.6) (which would then try to shift the environmental risks to ratepayers.).  
    • Coal is very capital intensive, so in order to make coal economically effective, the plant must be running as near constantly as possible.   (The inflexibility of coal and the need to keep the plants running all the time make coal as difficult to integrate into a system faced with variable demand.  In my mind, there is a certain irony in this, because the main argument against wind power is similar: the power supply is not well matched to demand.)
    • (p.27) “Far and away the most influential factor contributing to the reduced value of coal bid is the fact that the bidders increased their bid prices from what they initially offered in May 2005.”  (These increased bids are probably due to higher estimated construction costs, which coal plants are particularly vulnerable to due to the large amount of steel and concrete used in construction, as well as much higher prices for coal.  One of the best arguments for solar and wind generation is the fact that they are immune to escalating fuel costs.)
    • While Coal plants require years to construct, Demand Side Management (DSM aka Energy Efficiency), gas and wind can all be on-line in less than 16 months, making it much easier to match supply with demand.
    • (p.27) The PUC told Xcel to use their 2006 gas forecast prices in this analysis, at the same time as they were told to use their 2005 coal price forecasts.  Even though this artificial imbalance skews the results in favor of coal, it is not sufficient to make the coal bids seem economic.
    • There are substantial costs of added transmission to incorporate these coal bids.  (pp.47-50)  I point this out because wind naysayers often point to the transmission costs of new wind facilities, without taking into account the transmission costs for coal.  I infer from the text that this bid may be a mine mouth coal plant in Wyoming, which would require upgrades along transmission lines from Wyoming to Colorado.  Considering the Wyoming/Colorado border is an area with excellent wind resource, many sites for extensive wind generation would require the upgrades to the same or shorter sections of transmission lines.

    I have uploaded Xcel’s filing here.   It will eventually be avialable on the Colorado PUC’s website, under Docket No. 05A-543E.
    I’m happy that environmental advocates have this opportunity to build a more constructive relationship with Xcel by joining them in this. 

    I also believe that these same arguments that Xcel is using here might be effectively used against some of the 150-odd other coal plants currently being planned in the US by utilites which are less progressive than Xcel (and there are many… TXU in Texas and many Rural Electric Co-ops come to mind.)

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