4 ms·

>One of the factors in Peabody's problems is that in the Southwest of the USA, where some of their major customers are, continuing to operate already built coal

by EricE 6y ago

>One of the factors in Peabody's problems is that in the Southwest of the USA, where some of their major customers are, continuing to operate already built coal power plants like the San Juan Generating Plant and the now-defunct Navajo Generating Station is no longer economic; solar energy has driven down prices (averaging US$26.58/MWh at the Palo Verde trading hub in 02019 according to this article) well below the coal plants' operating expenses (for example, US$44.90/MWh at the San Juan Generating Plant). And thank you for providing the context for CA's rolling blackouts. Drive base load generation off the market for the current darling "renewables", then when the renewables that ARE NOT predictable or consistent do the inevitable and fluctuate, the base load plants are no longer available to fill the gap. I'd be right there with you celebrating the solar win if solar was able to 100% replace the functionality of those plants. But it can't! Eliminate the plants but don't replace the functionality and what do you get? Rolling blackouts. A common occurrence in CA. Why visit the 3rd wold when you can just bring it home?!?

kragen 6y ago
I don't think this is the full context for CA's rolling blackouts, although it's true that the Navajo Generating Station did sell to California. The California rolling blackouts were back in the summer, when solar energy production is highest. If reliance on solar were the whole story, those blackouts would have gotten worse and worse from summer through fall and winter. Instead, they only lasted a total of about three hours over two days. https://www.latimes.com/environment/story/2020-10-06/california-rolling-blackouts-climate-change-poor-planning https://www.latimes.com/environment/story/2020-10-06/califor... > Officials have consistently said that intermittent power sources such as solar panels and wind turbines didn’t cause the rolling blackouts. > Energy providers collectively under-scheduled the amount of electricity they expected to need. That allowed power plant operators to sell their juice to customers in other states, resulting in thousands of megawatts being exported even as the Independent System Operator warned that rolling blackouts were imminent. But "officials" turned out to be wrong. Intermittent power sources did cause the rolling blackouts — though they weren't alone. https://www.utilitydive.com/news/california-releases-final-root-cause-analysis-of-august-rolling-blackouts/593436/ https://www.utilitydive.com/news/california-releases-final-r... http://www.caiso.com/Documents/Final-Root-Cause-Analysis-Mid-August-2020-Extreme-Heat-Wave.pdf http://www.caiso.com/Documents/Final-Root-Cause-Analysis-Mid... > the three major causal factors contributing to the August outages were related to extreme weather conditions, resource adequacy and planning processes, and market practices. In summary, these factors were the following: > 1. The climate change-induced extreme heat wave across the western United States resulted in demand for electricity exceeding existing electricity resource adequacy (RA) and planning targets. > 2. In transitioning to a reliable, clean, and affordable resource mix, resource planning targets have not kept pace to ensure sufficient resources that can be relied upon to meet demand in the early evening hours. This made balancing demand and supply more challenging during the extreme heat wave. > 3. Some practices in the day-ahead energy market exacerbated the supply challenges under highly stressed conditions. If I'm reading this report right, the immediately precipitating event was that the Blythe Energy Center, a gas plant, went down, so when solar generation had declined enough at 18:38 on August 14, there wasn't enough reserve power, so they started rolling blackouts on half a million people until 20:38, when solar generation was just about at 0. Then, the next day, storm clouds and lowered winds reduced the power generation available throughout the peak-usage afternoon hours, until the CAISO scheduling coordinator erroneously ordered the Panoche Energy Center (another gas plant) to ramp down generation. So at 18:28 they started rolling blackouts, which lasted 20 minutes until 18:48. The Governor appealing to people to conserve electric power, and no more big gas generating stations failing, allowed them to avoid rolling blackouts in the following days. So it sounds like they need more batteries. Two more hours of batteries would have been sufficient in this case (for about 5% of their 45 GW load, about 2500 MW: 5000 MWh, or 16 TJ in SI units), but ultimately you'll need a few days of batteries, over a million MWh for California, about 3 or 4 PJ. (Pessimistically assuming there's no demand response or other storage.) At the US$111/kWh cost for lithium-ion batteries cited in https://dercuano.github.io/notes/energy-storage-efficiency.html https://dercuano.github.io/notes/energy-storage-efficiency.h... this means about they would have needed US$555M in batteries in this case, or probably about a billion dollars for the whole facility, and a million MWh of batteries to move California entirely to solar would of course be US$111B of batteries, which could be invested US$11B per year over the next ten years. This is a significant investment, but hardly unaffordable — PG&E, for example, has about US$17B in yearly revenues, and Southern California Edison US$12M, so even the financial savings from switching to cheaper solar energy are likely enough to pay for storage. Presumably as battery prices come down these numbers will shrink further, and there will probably be substantial demand response due to the residential TOU migration described at greater length below. Part of the problem is that their planning process was structured around peak demand, which is the hardest thing to handle with baseload-type plants like coal and nuclear; but, in this case they handled peak demand fine, even in the face of higher-than-usual loads! The problem was after the peak-demand hour: demand declined, but solar generation declined even faster, which was a thing they hadn't taken into account in capacity planning! Another aspect of the problem was that the gas plants they were relying on for peaking couldn't operate at their normal capacity at such high outdoor temperatures, so the very heat wave they were struggling to survive in was also impairing their generation capacity. With respect to the potential impact of things like the Navajo Generating Station and the San Juan Generating Plant, they California's imports were limited not by available generation capacity but by available transmission capacity: > The imports category includes both non-resource-specific resources as well as resource- specific imports like those from Hoover Dam and Palo Verde Nuclear Generating Station. Total import bids received in the day-ahead market were between 2,600 MW and 3,400 MW (40-50%) higher than the August shown RA requirements from imports. Despite this robust level of import bids, transmission constraints ultimately limited the amount of physical transfer capability into the CAISO footprint. So, for the reduction in coal generation in New Mexico or Arizona specifically to be a causative factor in California's blackouts, someone would have had to build more transmission lines from Arizona. But the transition to renewables in general, that was a causative factor. (However, it's not entirely clear to me that all the transmission lines were operating at capacity — they emphasize the California–Oregon lines.) One of the big things they're doing in response is moving residential customers to time-of-use rates, which means that they'll be able to save money on your electrical bill by using energy during the day instead of at night. That should make it possible to sell appliances that save money by, for example, freezing ice during the day and using it for cooling in the afternoon and at night. It's hard to tell through the insane level of CYA bureaucratese in this report but it looks like they're also installing more battery capacity.
- snowwindwaves 6y ago
  Thanks for the great posts. Have you seen any numbers for the life expectancy of grid connected batteries? I heard A solar project in Hawaii expects to replace the batteries every 5 years with daily cycles. So for California it would be $111 million /yr in battery costs. Manageable, but not a trivial amount to be factoring in to the cost of firming up the capacity of wind/solar.
  - kragen 6y ago
    You're welcome! The life expectancy is a really important point, and one I hadn't taken into account in my calculations! The thread at https://news.ycombinator.com/item?id=26231021 https://news.ycombinator.com/item?id=26231021 talks a bit about this. Laptop Li-ion batteries typically last only a few hundred cycles, but presumably you can do better than that if that's what you're optimizing for; Sir Bearington claims 1500 to 2000 discharge cycles, which sounds vaguely plausible and matches the 5 years you're suggesting, but I'd be interested in a deeper dive. Do you know the name of the Hawai‘i project? I think US$111 billion over 5 years works out to US$22 billion per year, not US$111 million per year, which is probably just past the "manageable but not trivial" level. I mean, suppose California needs 45 GW of power at the worst moments, as the CAISO report linked above suggests, and you want to provide that with nuclear power at a ballpark 01970s figure of US$1.50/watt (rather than the current contentious figures of around US$7/watt). Further, let's suppose that USA nuclear power's typical 90% capacity factor https://en.wikipedia.org/wiki/Capacity_factor#Nuclear_power_plant https://en.wikipedia.org/wiki/Capacity_factor#Nuclear_power_... is not something you can control (for example by scheduling refuelings to not coincide with summer) and that opex is zero. So you need 50 GWe of nameplate capacity, which hypothetically costs US$75B using 01970s practices and wages. If we simply divide by 30 years (rather than using debt financing and calculating an IRR) we get US$2.5 billion per year. At modern USA nuclear construction costs of US$7 per peak electric watt we end up with US$17.5 billion per year, which would still be less than the US$22 billion cost of replacing US$111 billion of batteries every 5 years. Debt financing makes these numbers a little better, but not a lot, and it reduces the cost of short-term projects like 5-year batteries a lot more than it reduces the cost of medium-term projects like 30-year nuclear plants. (Does that seem backwards? At 5% interest, an infinite-lifetime annuity can be purchased for 21 years of its yearly earnings. If the annuity expires after 30 years, like a nuclear plant, the NPV is reduced to 16 years' worth of earnings, and if it expires after 5 years, like a battery, it's worth 4.5 years of earnings. So if you debt-finance your nuclear plants you end up paying 46% of your money to the bank and only 54% to GE or whoever builds the plants, while if you debt-finance your 5-year-lifetime batteries you pay 91% of your money to Panasonic and only 9% to the bank. So a 5% yearly discount rate drops the value of nuclear-plant joules by about 40% because most of them are so far in the future.) Right now, batteries and other storage are only used a couple of hours a day at most, rather than the 22 hours or so that add up to my "million MWh" figure, so the battery price is actually an order of magnitude lower. (And we can expect that when we're just paying the cost of recycling old batteries into new batteries, rather than the cost of mining all that lithium, the price will go down.) So, right now, Li-ion batteries are far more economical than nuclear plants, but to bear the base load over days of low sun, either: · Li-ion batteries will have to get substantially cheaper; · wind, other forms of generation, or other storage technologies like lead-acid and compressed-air storage would have to be able to supply most of the load, as gas and coal do at present; · some of the batteries would have to be borrowed from other uses (such as electric vehicles) that pay for most of their cost; · demand response and efficiency improvements will have to be able to cut demand by a factor of two or three; or · some combination of these. For example, you could very plausibly imagine a conjunction of Li-ion batteries getting 25% cheaper than the US$111/kWh (US$31/MJ) price cited above, down to US$83/kWh (US$23/MJ); wind supplying 25% of power demand when the sun is down or clouded; drawing on an additional 30% "spinning reserve" of parked Teslas feeding energy back to the grid; and demand response reducing off-peak power usage by 25%. So our 45 GW of power demand drops to 33.8 GW from demand response; parked Teslas supply 23% of that, and wind supplies another 25% of it; and so the demand on the utility-scale storage plants is only 18 GW. 24 hours at 18 GW is 430 GWh, which costs only US$36 billion rather than the US$111 billion cited above. We can hope to do a lot better than that, but it seems like an eminently achievable set of improvements.

by EricE 6y ago

kragen 6y ago

I don't think this is the full context for CA's rolling blackouts, although it's true that the Navajo Generating Station did sell to California. The California rolling blackouts were back in the summer, when solar energy production is highest. If reliance on solar were the whole story, those blackouts would have gotten worse and worse from summer through fall and winter. Instead, they only lasted a total of about three hours over two days. https://www.latimes.com/environment/story/2020-10-06/california-rolling-blackouts-climate-change-poor-planning https://www.latimes.com/environment/story/2020-10-06/califor... > Officials have consistently said that intermittent power sources such as solar panels and wind turbines didn’t cause the rolling blackouts. > Energy providers collectively under-scheduled the amount of electricity they expected to need. That allowed power plant operators to sell their juice to customers in other states, resulting in thousands of megawatts being exported even as the Independent System Operator warned that rolling blackouts were imminent. But "officials" turned out to be wrong. Intermittent power sources did cause the rolling blackouts — though they weren't alone. https://www.utilitydive.com/news/california-releases-final-root-cause-analysis-of-august-rolling-blackouts/593436/ https://www.utilitydive.com/news/california-releases-final-r... http://www.caiso.com/Documents/Final-Root-Cause-Analysis-Mid-August-2020-Extreme-Heat-Wave.pdf http://www.caiso.com/Documents/Final-Root-Cause-Analysis-Mid... > the three major causal factors contributing to the August outages were related to extreme weather conditions, resource adequacy and planning processes, and market practices. In summary, these factors were the following: > 1. The climate change-induced extreme heat wave across the western United States resulted in demand for electricity exceeding existing electricity resource adequacy (RA) and planning targets. > 2. In transitioning to a reliable, clean, and affordable resource mix, resource planning targets have not kept pace to ensure sufficient resources that can be relied upon to meet demand in the early evening hours. This made balancing demand and supply more challenging during the extreme heat wave. > 3. Some practices in the day-ahead energy market exacerbated the supply challenges under highly stressed conditions. If I'm reading this report right, the immediately precipitating event was that the Blythe Energy Center, a gas plant, went down, so when solar generation had declined enough at 18:38 on August 14, there wasn't enough reserve power, so they started rolling blackouts on half a million people until 20:38, when solar generation was just about at 0. Then, the next day, storm clouds and lowered winds reduced the power generation available throughout the peak-usage afternoon hours, until the CAISO scheduling coordinator erroneously ordered the Panoche Energy Center (another gas plant) to ramp down generation. So at 18:28 they started rolling blackouts, which lasted 20 minutes until 18:48. The Governor appealing to people to conserve electric power, and no more big gas generating stations failing, allowed them to avoid rolling blackouts in the following days. So it sounds like they need more batteries. Two more hours of batteries would have been sufficient in this case (for about 5% of their 45 GW load, about 2500 MW: 5000 MWh, or 16 TJ in SI units), but ultimately you'll need a few days of batteries, over a million MWh for California, about 3 or 4 PJ. (Pessimistically assuming there's no demand response or other storage.) At the US$111/kWh cost for lithium-ion batteries cited in https://dercuano.github.io/notes/energy-storage-efficiency.html https://dercuano.github.io/notes/energy-storage-efficiency.h... this means about they would have needed US$555M in batteries in this case, or probably about a billion dollars for the whole facility, and a million MWh of batteries to move California entirely to solar would of course be US$111B of batteries, which could be invested US$11B per year over the next ten years. This is a significant investment, but hardly unaffordable — PG&E, for example, has about US$17B in yearly revenues, and Southern California Edison US$12M, so even the financial savings from switching to cheaper solar energy are likely enough to pay for storage. Presumably as battery prices come down these numbers will shrink further, and there will probably be substantial demand response due to the residential TOU migration described at greater length below. Part of the problem is that their planning process was structured around peak demand, which is the hardest thing to handle with baseload-type plants like coal and nuclear; but, in this case they handled peak demand fine, even in the face of higher-than-usual loads! The problem was after the peak-demand hour: demand declined, but solar generation declined even faster, which was a thing they hadn't taken into account in capacity planning! Another aspect of the problem was that the gas plants they were relying on for peaking couldn't operate at their normal capacity at such high outdoor temperatures, so the very heat wave they were struggling to survive in was also impairing their generation capacity. With respect to the potential impact of things like the Navajo Generating Station and the San Juan Generating Plant, they California's imports were limited not by available generation capacity but by available transmission capacity: > The imports category includes both non-resource-specific resources as well as resource- specific imports like those from Hoover Dam and Palo Verde Nuclear Generating Station. Total import bids received in the day-ahead market were between 2,600 MW and 3,400 MW (40-50%) higher than the August shown RA requirements from imports. Despite this robust level of import bids, transmission constraints ultimately limited the amount of physical transfer capability into the CAISO footprint. So, for the reduction in coal generation in New Mexico or Arizona specifically to be a causative factor in California's blackouts, someone would have had to build more transmission lines from Arizona. But the transition to renewables in general, that was a causative factor. (However, it's not entirely clear to me that all the transmission lines were operating at capacity — they emphasize the California–Oregon lines.) One of the big things they're doing in response is moving residential customers to time-of-use rates, which means that they'll be able to save money on your electrical bill by using energy during the day instead of at night. That should make it possible to sell appliances that save money by, for example, freezing ice during the day and using it for cooling in the afternoon and at night. It's hard to tell through the insane level of CYA bureaucratese in this report but it looks like they're also installing more battery capacity.

snowwindwaves 6y ago
Thanks for the great posts. Have you seen any numbers for the life expectancy of grid connected batteries? I heard A solar project in Hawaii expects to replace the batteries every 5 years with daily cycles. So for California it would be $111 million /yr in battery costs. Manageable, but not a trivial amount to be factoring in to the cost of firming up the capacity of wind/solar.
- kragen 6y ago
  You're welcome! The life expectancy is a really important point, and one I hadn't taken into account in my calculations! The thread at https://news.ycombinator.com/item?id=26231021 https://news.ycombinator.com/item?id=26231021 talks a bit about this. Laptop Li-ion batteries typically last only a few hundred cycles, but presumably you can do better than that if that's what you're optimizing for; Sir Bearington claims 1500 to 2000 discharge cycles, which sounds vaguely plausible and matches the 5 years you're suggesting, but I'd be interested in a deeper dive. Do you know the name of the Hawai‘i project? I think US$111 billion over 5 years works out to US$22 billion per year, not US$111 million per year, which is probably just past the "manageable but not trivial" level. I mean, suppose California needs 45 GW of power at the worst moments, as the CAISO report linked above suggests, and you want to provide that with nuclear power at a ballpark 01970s figure of US$1.50/watt (rather than the current contentious figures of around US$7/watt). Further, let's suppose that USA nuclear power's typical 90% capacity factor https://en.wikipedia.org/wiki/Capacity_factor#Nuclear_power_plant https://en.wikipedia.org/wiki/Capacity_factor#Nuclear_power_... is not something you can control (for example by scheduling refuelings to not coincide with summer) and that opex is zero. So you need 50 GWe of nameplate capacity, which hypothetically costs US$75B using 01970s practices and wages. If we simply divide by 30 years (rather than using debt financing and calculating an IRR) we get US$2.5 billion per year. At modern USA nuclear construction costs of US$7 per peak electric watt we end up with US$17.5 billion per year, which would still be less than the US$22 billion cost of replacing US$111 billion of batteries every 5 years. Debt financing makes these numbers a little better, but not a lot, and it reduces the cost of short-term projects like 5-year batteries a lot more than it reduces the cost of medium-term projects like 30-year nuclear plants. (Does that seem backwards? At 5% interest, an infinite-lifetime annuity can be purchased for 21 years of its yearly earnings. If the annuity expires after 30 years, like a nuclear plant, the NPV is reduced to 16 years' worth of earnings, and if it expires after 5 years, like a battery, it's worth 4.5 years of earnings. So if you debt-finance your nuclear plants you end up paying 46% of your money to the bank and only 54% to GE or whoever builds the plants, while if you debt-finance your 5-year-lifetime batteries you pay 91% of your money to Panasonic and only 9% to the bank. So a 5% yearly discount rate drops the value of nuclear-plant joules by about 40% because most of them are so far in the future.) Right now, batteries and other storage are only used a couple of hours a day at most, rather than the 22 hours or so that add up to my "million MWh" figure, so the battery price is actually an order of magnitude lower. (And we can expect that when we're just paying the cost of recycling old batteries into new batteries, rather than the cost of mining all that lithium, the price will go down.) So, right now, Li-ion batteries are far more economical than nuclear plants, but to bear the base load over days of low sun, either: · Li-ion batteries will have to get substantially cheaper; · wind, other forms of generation, or other storage technologies like lead-acid and compressed-air storage would have to be able to supply most of the load, as gas and coal do at present; · some of the batteries would have to be borrowed from other uses (such as electric vehicles) that pay for most of their cost; · demand response and efficiency improvements will have to be able to cut demand by a factor of two or three; or · some combination of these. For example, you could very plausibly imagine a conjunction of Li-ion batteries getting 25% cheaper than the US$111/kWh (US$31/MJ) price cited above, down to US$83/kWh (US$23/MJ); wind supplying 25% of power demand when the sun is down or clouded; drawing on an additional 30% "spinning reserve" of parked Teslas feeding energy back to the grid; and demand response reducing off-peak power usage by 25%. So our 45 GW of power demand drops to 33.8 GW from demand response; parked Teslas supply 23% of that, and wind supplies another 25% of it; and so the demand on the utility-scale storage plants is only 18 GW. 24 hours at 18 GW is 430 GWh, which costs only US$36 billion rather than the US$111 billion cited above. We can hope to do a lot better than that, but it seems like an eminently achievable set of improvements.