The Bottom Line on the New Energy Economy
Jul -Sep 2009

San Antonio: New Economy Leader or Nuclear Guinea Pig?

Photo: Mural at Construction site in beautiful downtown San Antonio, TX

September 19, 2009
by Craig Severance

SAN ANTONIO, TX -- San Antonio's new Mayor Julian Castro, in office just three months, has inherited a dilemma.  The nation's 7th largest city is suffering from almost 8% unemployment. With limited resources, the Mayor and City Council are searching for ways to create local jobs.  At the same time, the City, through its municipal utility City Public Service (CPS), is burning through hundreds of millions of dollars on just paperwork, to prepare to spend billions on a new nuclear power plant project some 200 miles away at Bay City, TX. 

Should the Mayor and the City Council question the wisdom of rushing ahead with the nuclear project, or approve CPS continuing to spend hundreds of thousands of dollars a day to prepare applications for CPS to buy a 40% share of two new reactors proposed for the South Texas Project?  CPS says the two new reactors, to be co-owned with NRG Inc., would help the utility meet power demands projected for 2020 and beyond -- over 10 years away.     

$400 Million Bond Issue.  The issue comes to a head next month, when the City Council must approve or disapprove CPS issuing $400 million in bonds to continue its spending on the project.  The monies will not be used to actually begin construction --- that would be years away -- but to prepare the enormously complex engineering, design, and environmental applications required for a new nuclear power project. 

Local citizen groups, however, say a far better use
of such monies would be to help CPS fund aggressive energy conservation, Smart Grid, and solar energy programs to help citizens cut utility bills.  Such programs would immediately create local jobs -- and cut electric growth so the nuclear projects would not be needed.  

"First in U.S."  CPS and NRG, Inc. are rushing the proposal, as they say the South Texas Project expansion will be the first new nuclear plants to be built in the U.S. in over 30 years.  They hope to be first in line to receive Federal Nuclear Loan Guarantees under an $18.5 Billion program authorized by Congress. 

Many San Antonions question the wisdom of rushing to be the guinea pig for the nuclear industry, which has a history of  massive cost overruns.   They challenge whether it is even a good idea to be first.  Why not let someone else find out whether the nuclear industry has learned how to build plants on-budget?

Nuclear Debate Held Wednesday, September 16th.  With so much at stake, San Antonio civic leaders have taken extraordinary measures to open up the process to public scrutiny.  The San Antonio News Express , led by Editor Robert Rivard, has for months run
articles on the nuclear proposal.  Open meetings have been sponsored by the utility in many neighborhoods.

As a peak event in this public discussion, The San Antonio Clean Technology Forum, led by civic leader Michael Burke, organized a sold-out  luncheon debate this past Wednesday, attended by 400 of San Antonio's leading citizens.  Tables were sold to major companies and organizations, and all news media were invited.   

The Clean Technology Forum invited myself and Dr. Arjun Makhijani, President of the Institute for Energy and Environmental Research, to debate the wisdom of the new nuclear project.    Supporting the project were Steve Bartley, CPS Interim General Manager, and Patrick Moore, who is a paid spokesperson for the nuclear power industry.    Mayor Julian Castro keynoted the event,  which was gracefully moderated by Bob Rivard, Express-News Editor.

View the Actual Debate.  The video of the full debate can be viewed here:

Click HERE to go to TexasVox site with Videos of Debate.

I encourage readers to view the full debate to hear the exchange for themselves, as it was quite lively.  Each speaker had only 12 minutes, followed by audience Q&A and a 2 minute close, so it's not too long.

Click here to read entire article.

Enabling Wind, Sun To Be Our Main Power Supplies
Quest for Storage -- "Holy Grail" of New Energy Economy -- Nears Goal
August 29, 2009
By Craig Severance

As the world meets this December to set plans to halt global warming, it is expected America and other industrial nations will commit to a daunting task: reduce CO2 emissions 80% by 2050.  In just 40 years, a complete revolution in how we use and supply our power must happen, or the world will face catastrophic effects of runaway climate changes.  

As a new power plant typically lasts 40-50 years, many scientists are now arguing we must simply stop building new power systems that use significant amounts of fossil fuels.  They argue we must move to a high reliance on the wind and the sun for our electricity.

Abundant Power.  The U.S. has enormous wind resources, capable of generating over 20% of U.S. electricity from wind by 2030, according to the U.S. Department of Energy.   

The sunlight  falling on our deserts, parking lots, and rooftops has even more power  -- enough to supply 69% of U.S. electricity by 2050 according to published studies.

Other renewable power sources -- such as geothermal energy, municipal waste-to-energy, and biomass -- will also play a role, but they pale in size compared to the gargantuan resources of wind and sunlight. 

How We Use Energy vs. How Nature Provides.  Though nature provides all the energy we may need, there is a problem.  We demand power literally "at the flick of a switch", not just when the wind is blowing or the sun is shining. 

This basic fact about how we use power versus how nature supplies clean energy has caused many to discount the idea that wind or solar power can ever supply more than a small fraction of our electricity.  Critics of renewable electricity call it "intermittent" and "unreliable".  They say we can't "catch the wind", nor can we command the sun to always shine.

These critics see two possible choices for the future. We can develop more stable supplies of renewable energy by coupling wind and solar projects with storage.  Failing that, they argue we should give up on renewables as a primary source of electricity, and instead build more nuclear power. 

The flaw in the nuclear path, beyond its tremendous cost, long lead times, and imported fuel, is that nuclear is not actually "dispatchable" power.  Nuclear plants are designed to run all the time at fairly steady output -- meaning nuclear power cannot provide the "peaking power" now provided by gas turbines.  Thus, a nuclear path would still rely heavily on fossil fuel power plants to "ramp up" on a daily basis to provide the power needed during these daily swings. 

A truly dispatchable system providing over 80% reductions in carbon emissions, therefore, must rely on some form of energy storage.  The energy storage can allow us to fully utilize wind and sunlight as our main power sources -- supplying both "base load" power and dispatchable daily peaking power with energy from these inexhaustible supplies. 

Click here to read entire article.

Solar You Can Count On 
Hybrid Solar/Natural Gas Plants Provide Power When Needed

Source: Skyfuel                                                       Source: BrightSource Energy

August 18, 2009
by Craig Severance

By far the largest source of safe, clean energy that will never run out  (i.e. renewable energy) available in the United States is the sunlight falling on the unused deserts of the Southwest.  This attractive source of energy produces no nuclear waste, no carbon dioxide or mercury emissions, and none is imported from foreign countries.

According to the 
U.S. Department of Energy enough sunlght falls in just the unused, nonsensitive areas of our SW deserts to generate over twice the total kWh's now consumed in the entire U.S..

SW Solar Now.   In June, Interior Secretary Ken Salazar opened up 24 of  the SW's sunniest areas on Bureau of Land Management lands in six  states to begin leasing for installation of up to 100,000 MW of solar power plants. (See 
here for article on the Interior Department announcement).  The first plants could be operating within 3 to 4 years in these ideal locations, which were chosen for maximum clear sunny days and minimal impact on the environment or other land uses.

Sun Doesn't Shine All the Time.  Although the SW sunshine resource is enormous and largely untapped, critics of solar energy routinely note the sun does not shine all the time.  The implication is that power is needed all the time, and since the sun is not always available, solar opponents say it would be foolish to invest in generating electricity from the sun. 

Grid Can Use Solar.  Utilizing solar electricity when the sun does shine is not really a major problem for the electric grid, until the percentage of power generated by solar reaches high percentages.  This is because roughly 50% of the 
electrical capacity on the grid consists of load-following power plants (chiefly natural gas and hydroelectric), which can quickly reduce power output when a renewable resource such as solar or wind is available, and increase output when needed.  The ability of the grid to absorb a high percentage of  power from renewables has been documented by the U.S. Department of Energy and was discussed in my article "The Wind does NOT Blow Only 1/3 of the Time" here.

The output from a solar power plant also fits very well with the times when  power is most needed.  Most utilities see increased demand for electricity during daylight hours, with peak demands occurring on hot sunny days when a solar power plant produces well.  By the same token, less power is needed at night.

It is generally agreed, however, that extending the percentage of  our electricity generated by renewable power sources above 20-30% will require means to better regulate the grid (see "Smart Grid" article
here),  more efficiently supplement renewable power, or store it for later use. 

Solar Thermal Offers More Choices.  
Solar photovoltaics (PV) require storage of their electrical energy output to extend their use into evening and cloudy hours.  Methods the electric grid can use to store electrical energy include batteries, flywheels, pumped hydro or compressed air energy storage.  

The "other" kind of solar power -- Solar Thermal power -- offers more choices to integrate with the grid to provide reliable power. 

Instead of directly converting the sun's rays into electricity, Solar Thermal plants use mirrored surfaces to concentrate sunlight to produce high temperatures.  This is why they are also called Concentrating Solar Power (CSP) Plants.

The high temperatures are used to boil water to produce superheated steam to generate electricity.   This different technology means there are now three different ways that Solar Thermal power plants can provide power when the sun is not shining:

1.   Integrate a back-up source of heat (e.g. natural gas) to produce steam.
2.   Produce excess solar heat during the day, and store that heat.
3.   Grid storage of electrical energy (as with PV or wind).

This expansion of choices means that a Solar Thermal plant can function as a reliable source of "24/7" power to the electrical grid.

here to read entire article.

Nuclear Costs -- Who Has "Better Numbers"?
Who Pays if Things Go Wrong?

July 31, 2009
by Craig Severance

On July 10th I debated the Nuclear Energy Institute (NEI) in a head-to-head discussion in Washington.  (See
here for article on the "lively discussion".)

This week NEI published on its blog site NEI Nuclear Notes a very spirited critique (
here) of my debate presentation. (My presentation was based upon my detailed study "Business RIsks and Costs of New Nuclear Power", published in January 2009 here.) 

Now We're Talking.  The NEI fight-back response is welcome in that we are blowing open the "Black Box" of hidden assumptions about the costs of new nuclear power.  It is NOT a cordial discussion when one side won't disclose its numbers.  I wrote about this in January:

It has unfortunately been the case over the last couple of years that some utilities have begun to claim that even rudimentary basics of their nuclear cost estimates must be hidden from the public as 'trade secrets".  For instance, in the South Carolina Electric & Gas proposal to build two reactors now under consideration by the South Carolina PSC, there is literally a large "box" obscuring the bulk of the calculations....In a different case, Duke Energy claimed that it does not even have to disclose its new cost estimates for a proposed nuclear facility in Cherokee County, S.C.  In the Duke case, C.Dukes Scott, South Carolina's consumer advocate... noted, "If the cost wasn't confidential in February," Scott said, "how is it confidential in April?"

We've come a long way since then, as we are now "duking it out" in a much healthier fashion.

here to read full Article.

Boiling The Frog Slowly:
Nuclear Optimism Hides True Costs Till It's Too Late

July 24, 2009
by Craig Severance

There is a well-known story about how to boil a frog.  If you try to throw a frog into a pot already boiling, he'll jump out.  However, put a frog into a pot and slowly raise the temperature -- and you get frog legs for dinner.

The nuclear power industry seems to be pursuing this strategy, slowly releasing ever higher cost estimates for new nuclear power plants.  If the public does not realize the true costs of a new nuclear plant,  the industry can obtain political support for the Federal loan guarantees it needs.   After the taxpayers are on the hook and a nuclear project is already underway, the full costs will become clear.  

At that point, however, it may be too late for taxpayers and utility ratepayers to jump out.

The Frog Jumps: The Ontario Story.  Last week the Ontario government put plans to build 2 new next-generation reactors on hold, after it received bids "more than three times higher than what the Province expected to pay", according to a 
story in the Toronto Star.   The only "compliant" bid -- one where the supplier would  be sufficiently at risk if costs exceeded the amount quoted -- was reportedly a $26 billion quote  from Atomic Energy of Canada, Ltd,  equal to roughly $10,800 per kW.  (If this sounds familiar, recall my January 2009 study estimated a new nuclear project would most likely cost approximately $10,500/kW).

"It's shockingly high," the Star quoted Wesley Stevens, an energy analyst at Navigant Consulting in Toronto regarding the nuclear bid.

The Province had originally thought the two reactors would cost a total of only about $7 billion, which works out to about $2,900 per kW, according to 2007 estimates.  The Star reports "During Ontario Energy Board hearings last summer, the power authority indicated that anything higher than $3,600 per kilowatt would be uneconomical compared to alternatives, primarily natural gas."

Rather than blindly accepting these estimates, however, Ontario authorities were wise enough to require nuclear vendors to submit bids accepting the risk of cost overruns.  Once the suppliers were on the hook -- rather than ratepayers and taxpayers -- the true costs of new nuclear power became apparent.

here to read full story.

"Lively Discussion" with Nuclear Energy Institute
July 23, 2009
by Craig Severance

On July 10th, I participated in a "Lively Discussion" with the Nuclear Energy Institute, represented by Leslie Kass, NEI Director of Business Policy and Program. 

The Event, sponsored by the Foundation for Nuclear Studies, was structured as a luncheon in the House Rayburn Office Building, with the primary audience being Congressional staff members.  The room was full, with perhaps 70-80 attendees. 

It was a very cordial discussion and afterward we all shook hands and posed for pictures.  Yet, the differences were sharp. 

Is New Nuclear Power Competitive?  The Foundation called me to Washington, to discuss the Question of the Day -- Is New Nuclear Power Competitive?

My full Power Point Presentation is 
here.   Some highlights:

Not Competitive if Begging for Subsidies from Taxpayers

The reason we were before Congressional staff in the first place is that the nuclear industry is asking for even more subsidies from taxpayers, in the form of hundreds of billions of dollars of Federal Loan Guarantees.  

Wall Street rejected any thought of financing new nuclear power plants in 2007, when investment banks wrote the Department of Energy they will not fund any nuclear plants without full Federal Loan Guarantees.  The private sector simply regards nuclear power as too expensive and hence too risky.

Four Choices if Your Industry is Not Competitive.   The U.S. nuclear industry hasn't had a new order in over 30 years, because utilities have had more economical choices. There are four choices if your industry is not competitive:

1.    Go Out of Business (which the new nuclear industry effectively did)
2.    Change So You Are More Competitive
3.    Become the Only Choice (Monopoly); OR
4.    Ask for Taxpayer Dollars for Support

here to read full article.

BLM Opens Doors for SW Solar Grand Plan

Map of SW Solar Resources on BLM Lands.  Source: BLM.

July 2, 2009
by Craig Severance

Just a year and a half after a breakthrough 
Solar Grand Plan study was published in the January 2008 Scientific American, the U.S. government has begun plans to implement major elements of such a Plan.

Measures announced Monday by the U.S. Department of the Interior identified initial solar project areas for the extremely sunny desert areas of the U.S. Southwest.  These Solar Energy Study Areas could site utility-scale solar projects totaling 100,000 MegaWatts (MW) capacity. By comparison, the extremely successful U.S. wind energy industry had total installed capacity by the end of
1st Qtr 2009 equaling 28,206 MW, and "new nuclear power" Generation III+ nuclear plants installed worldwide to date equals zero MW. 

Salazar Announces BLM Plans to "Fast-Track" Solar.  On Monday, U.S. Interior Secretary Ken Salazar, appearing in Las Vegas with Senate Majority leader Harry Reid (D-NV), announced Bureau of Land Management 
(BLM) plans to move quickly on solar projects in the desert Southwest.  Plans to "Fast-Track" solar include:

  • Identification of 24 "Solar Study Areas" in 6 Western States, on land administered by the BLM. (Click here for detailed state-by-state maps of the Solar Study Areas.)
  • In-depth evaluation of these 24 areas will begin immediately for their suitability for "large-scale solar energy production".
  • The 24 areas will be segregated from new mining claims and other actions initiated by third parties under public land laws.  Existing claims will be honored. This segregation will allow solar resource plans to be evaluated and authorized first before conflicting new resource claims would be considered.  The BLM noted that "most of the solar energy study areas are located in alluvial valleys are unlikely to contain significant mineral values".
  • 4 new BLM Renewable Energy Coordination Offices -- in Nevada, California, Arizona, and Wyoming (which has major wind resources) will be opened to expedite processing of renewable project applications  The NV office opened Monday.
  • The BLM has already received applications for 158 SW solar projects.   The new processes are expected to complete study area evaluations by the end of 2010, with construction of approved projects to begin thereafter.  

Optimum Areas Selected.  The announcement by Interior follows exactly two weeks after release on June 15th of the Western Governor's Association "Western Renewable Energy Zones - Phase 1 Report", a collaborative effort of the Western Governors, the U.S. Dept. of Energy, the Interior Department, and the Federal Energy Regulatory Commission.  BLM's "Solar Energy Study Areas" were clearly developed in concert with the Western Governor's Association project.

Click here to read full Article.







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