The transition to renewables is unstoppable.
By George Harvey
It’s always darkest before the dawn. But the bad news is being dispelled in the light of day.
Diablo Canyon and the grid paradigm
On June 21, 2016, Pacific Gas and Electric (PG&E) announced that it would cease generating power with the nuclear reactors at the Diablo Canyon plant as the license term ends. This was an important announcement for several reasons.
Diablo Canyon has the only two nuclear reactors in California generating power for the grid. They are of environmental concern for a number of reasons, one of which was that they are sited near a number of geological faults. On the other hand, both reactors are rated at over 1,000 megawatts (MW), and they supply 8.6% of the electrical power for the state, an important consideration for any plan to close the plant down.
While anti-nuclear activists cheered the decision to close the plant, many missed a more important issue. The decision to close the plant is not simply one more step toward weening the United States off nuclear power. We should go further than noticing that these reactors are joining seven others whose closing dates have been announced. When we do, we can see that they speak to a complete shift in the electric supply paradigm, the underlying strategy of how energy is produced.
Old thinking would dictate that Diablo Canyon be replaced by a base-load power plant. That, however, is not what was announced. The plant will be replaced by sources often derided as “intermittent” by aging proponents of a system of electric distribution designed before the beginning of the nuclear era. The power will ultimately come from the sun and the wind with storage to level the load. Centralized base-load power is being replaced by distributed intermittent sources.
As unexpected as this is to some old-timers, it is not a surprise to some people who have looked past the propaganda of renewable energy naysayers. Two German states produce 100% to 130% of the amount of power they use from renewable sources, giving their grid operators a lot of experience with the issue. The official word of one of their grid operators, 50Herz, is that they could get up to 70% of their power from just wind and sun without any need of battery backup.
Indeed, in the United States, we have seen changes underway, not just closing down coal plants, but all other base-load power plants as well. The city of Los Angeles made two interesting, nearly simultaneous announcements in July. One is that it is no longer buying power from the Navajo Generating Station, a large coal-burning plant in Arizona. The other is that they are giving up getting power from a California “peaker” plant, powered by natural gas and replacing it with a 100 megawatt, 400 megawatt-hour battery. A central issue for both decisions is the efficient use of money.
The fixed costs of operating a nuclear power plant that is already operating are reckoned at 5¢/kWh to 7¢/kWh. The price of fuel and variable operating costs are added to this. At the same time, the total cost of wind power, including subsidies, may come in at about 3.5¢/kWh, and the cost of fuel is fixed at zero.
A proponent of base-load power might point out that wind power requires backup, but in truth, base-load power does too, on a constant basis. That is why we have expensive peaking plants all over the country. It is why the 1080-MW Northfield Mountain pumped storage station was built at the same time as the Vermont Yankee nuclear plant, with its original rating of 540-MW.
Other signs of the coming of this time, also largely economic, include the fact that the new power plants coming online in this country have been increasingly powered by renewable power. This is not because of the Clean Power Plan; it started before that plan was announced. The coming of this time can be seen in the decline of costs of solar and wind power, which has been ongoing for decades. And at the same time those costs were decreasing, the costs of base-load power plants have only been going up. Though renewable power was once costly, sooner or later, its costs had to fall below those of base-load plants. And that is what is happening.
Critics of the Diablo Canyon shutdown have decried the cost of going to solar and wind with backup, which is estimated at $15 billion. What they need to address is that PG&E calculates that this cost is well below the cost of keeping an aging nuclear plant open.
ExxonMobil, squeezed by the passing of its age
Another thing that surprised many people recently was that ExxonMobil has not only declared itself in favor of a carbon tax but is advocating its position by lobbying other oil giants. Though the initial response of some environmentalists bordered on being giddy, it is well to take a look at the facts.
This is not the first time ExxonMobil has stated a position in favor of a carbon tax. That started in 2009. Stepping up action on the position might be philanthropic but given statements by Rex Tillerson, the company’s CEO, we might easily come to the conclusion that support of a carbon tax came about for more pragmatic reasons.
Tillerson proclaimed at this year’s stockholder meeting that the company would not have any stranded assets. Given that Citigroup has taken the position that the fossil fuel industry would lose about $100 trillion in stranded assets, an amount about five times the United States’ national debt, or about 1.3 times the gross world product, this came as a surprise. ExxonMobil, however, has told its stockholders that it is taking the baselines provided by the Energy Information Administration (which historically has been grossly wrong, 100% of the time) as a predictive tool.
We might also note that ExxonMobil is being brought to court by the attorneys general of a number of states over allegations that they discovered climate change was happening over forty years ago, then systematically tried to persuade people it was not happening while they prepared to be ready to drill in the best spots in the Arctic when the permafrost melted. The combination produces an appearance of ongoing fraud.
ExxonMobil clearly wants to distance itself from misdeeds that may have been committed thirty or forty years ago and wants to point to a more truthful present. It also would doubtless like to be able to take an active part in determining how a carbon tax is formulated. Perhaps, like Entergy, the company will begin to experiment with solar and wind power.
One way or the other, we look forward, without anticipation of any outflow of goodness, to seeing how the oil industry in general reacts to any possible carbon tax.
The age of centralized, fossilized power is rapidly drawing to an end, and that of decentralized, renewable power is emerging. Considering the damage done by fossil fuels to our health, our finances, and our environment, the change is coming none too soon.