More details on the new, really-really-expensive AEP coal plant in West Virginia.
It seems like just yesterday that I wrote that the 17 percent rate increase announced by AEP would not be the last one, given the cost of this plant. Two days later, here they come.
Specifically, "Customers could start paying as early as next year with rate hikes starting at $1 per month in 2009 and eventually climbing to $7.70 per month. AEP customers could pay nearly $160 million during construction and $116.23 million per year after that to fund the new plant."
And why do we need those rates? Because this plant will be "the single most expensive utility project in the state's history."
And why do we need the coal plant? Because ... [drum roll] ... coal is cheap!
Full story from Greenwire ($ub. req'd) below the fold.
State officials in West Virginia signed off on plans for a $2.2 billion coal-fired plant late last week, angering environmentalists and consumer advocates who say the plant should incorporate carbon-capture technology.
The American Electric Power plant, the single most expensive utility project in the state's history, was approved by the Public Service Commission. In an 85-page decision, the PSC gave AEP a stream of cash -- through customer rate hikes -- to pay off debt incurred from building the plant.
Customers could start paying as early as next year with rate hikes starting at $1 per month in 2009 and eventually climbing to $7.70 per month. AEP customers could pay nearly $160 million during construction and $116.23 million per year after that to fund the new plant.
The PSC rejected calls that would force AEP subsidiary Appalachian Power Co. to add plant equipment to capture carbon dioxide emissions and "sequester" them underground.
"Uncertainties regarding CO2 legislation and regulation make it more reasonable to wait until such requirements are certain," the PSC said. "By the time CO2 regulation is effective, the advances may change the specific design of the preferred CO2 capture retrofit."
The PSC also made its support for increasing coal-generated power clear.
"While coal has recently become the whipping boy for environmental ills (and there are clearly some problems in that regard), the fact is that coal reserves are estimated at 250 years, and rail and river transportation systems in this state make coal a reliable and stable source of energy for generating capacity for the project," the PSC ruling said (Ken Ward Jr., Charleston Gazette, March 9).
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Comments
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Alison Wiley Posted 3:37 am
11 Mar 2008
best regards,
Alison
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Jay Alt Posted 5:27 am
11 Mar 2008
http://www.reuters.com/article/idUSN1339129420080214?page ...
Nuclear power construction costs -- mostly materials, labor and engineering -- have gone up 185 percent as shown by the index, followed by wind power costs up 95 percent, natural gas plants up 90 percent and coal-fired plants up 70 percent.
I'm not surprised AEP won't be sequestering CO2 as yet. They are probably running a corporation, not a charity. More informative articles mention AEP will run a CO2 separation process at the plant on a pilot scale.
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Sean Casten Posted 5:37 am
11 Mar 2008
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amazingdrx Posted 2:57 am
12 Mar 2008
With coal, gas, and nuclear fuel prices all spiking, this has got to be looking even better for wind now. Not to mention the artificially low cost of nuclear power construction now rising to reflect current construction cost realities.
http://amazngdrx.blogharbor.com/blog
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Sean Casten Posted 4:37 am
12 Mar 2008
Bottom line though is that there are a whole slew of power generation technologies now that all check in at 10 - 11 cents/kWh delivered - coal, nat gas and wind are all about the same. They all get there for different reasons though. All three have to pay for transmission costs, which aren't insignificant (by comparison with solar or cogen that typically serves behind-the-meter loads and doesn't need all the wires to connect up with.) Beyond that, the reasons they're expensive differ though. For coal, it's because of all the capex, especially for pollution control. For gas, it's because of the high cost of natural gas (which means that it's variable costs are much higher, but capital costs are lower - oddly enough making natural gas a lower risk option from an equity perspective, which is why it's the only option anyone's building right now of any significance.) For wind, it is really about capacity factor, since it's hard to get wind sites that are going to run at full load for more than 30 - 40% of the year. Which means that you've got capital out there not working the majority of the time. (Solar obviously has similar challenges.) All else equal, this means that wind has to be 1/3rd of the cost of other techs to break even.
But to your point, it is about even - and that's without factoring in the externalities - which means that in a rational world, we'd be deploying a lot of wind before we built any more coal.
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amazingdrx Posted 6:48 am
12 Mar 2008
And where conservation with different systems compares in this cost picture. Cogeneration, geo heat exchange, heat pump industrial heat recovery, plugin hybrids, and so forth.
Payback periods for renewables and conservation would be good too.
Maybe a logo for this and other enviro websites that would track cost comparisons as daily energy price fluctuations and trends come in from markets? A simple graph with bars that represent the present time, then ghost bars that show the present trend projected into the future.
http://amazngdrx.blogharbor.com/blog
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Sean Casten Posted 11:03 pm
12 Mar 2008
That said, it would be fairly easy for someone with halfway decent HTML skills to build a website that lets you input the current #s and update in real-time... volunteers? I'll build the spreadsheet if someone else can figure out how to post it.
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Sean Casten Posted 11:12 pm
12 Mar 2008
To see a report about their model, click here, and scroll down to the report labeled "The Wade Economic Model". (You'll have to enter some info about yourself to get the PDF.) Unfortunately, this is just a report about the model though - to actually get the model and run it, they want some $ for their efforts. But it is pretty robust - and a big part of the reason for their work was because they wanted to have a model out there that forced people to ask the right questions. Specifically, they wanted to counter the incessant apples:oranges comparisons that get made (like when a coal advocate says that wind should be burdened with T&D costs and capital recovery, but his costs are only fuel). Thus, their basic message was "we'll give you the model, and we'll let you specify values for all the inputs - but we specify the inputs. Don't tell us that wires are free in your country."
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amazingdrx Posted 12:32 am
13 Mar 2008
I thought of one more factor that favors renewables and conservation, mass production manufacturing and installation cost reduction. that would be a trend, just as higher fuel prices are a trend.
And as we know, successful investors, from homeonwers all the way up to the Oracle of Omaha himself, depend on the trend.
I think some internet savvy grist writer like Ashley should do the hard work, we can criticize and kibbutz! Hehehey.
Then we can all put links to it on our blogs.
http://amazngdrx.blogharbor.com/blog
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Sean Casten Posted 1:40 am
13 Mar 2008
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mwildfire Posted 2:25 am
19 Mar 2008
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