What happens when your utility is 68 percent dependent on coal?
American Electric Power said Thursday it must raise electricity rates 45 percent for its nearly 1.5 million customers in Ohio over the next three years, to cover soaring coal prices and the cost of modernizing its systems to keep them reliable ...
AEP executives acknowledge that the increases will be tough on consumers already facing high gas and food prices during a slumping economy.
"The fact is that coal has doubled in cost in the last year alone, dramatically affecting AEP Ohio's costs," Joe Hamrock, AEP Ohio president and chief operating officer, said in a statement. "The tools given to us by the State's new energy plan allow us to phase in those fuel price increases over time so that unlike the spikes Ohioans see in so many products, AEP Ohio's rate increases are spread out to be made more affordable."
Note to AEP Ohio -- other than gasoline, what are the "so many products" that Ohio consumers ever see rise 45 percent in three years? Answer -- not bloody many.
Now it is inescapable that under McCain's energy and climate plans, the entire country's electricity rates and bills will soar for several reasons:
- First, McCain supports a cap-and-trade system. That raises coal prices significantly, and coal generates 50 percent of US electricity.
[Yes, McCain and his advisors have been running away from a mandatory cap as fast as possible to appease conservatives while hoping the media and independents don't notice, but I naïvely believe that McCain as president would flip-flop-flip back to his original position.]
- McCain's energy and climate plans include no substantial energy efficiency efforts. Indeed McCain now repeatedly mocks energy efficiency. Energy efficiency is the only strategy that can keep energy bills from rising in the face of rising rates. Efficiency is the only major source of 24/7 power that is far cheaper than current electricity prices -- and five times cheaper than new nuclear, coal, and natural gas plants.
- McCain's climate plan relies heavily on shoving 45 new nuclear plants down the throat of the American public by 2030. Yet even AEP's CEO Michael Morris announced last August that the company was not planning on building any new nuclear plants because they are too expensive and take too long to build: "I'm not convinced we'll see a new nuclear station before probably the 2020 timeline." Indeed, new nuclear plants are so expensive they are likely to provide electricity at some 15 cents per kilowatt hour -- or 50 percent higher than average retail electricity prices in this country. Progress Energy said earlier this year that the twin 1,100-megawatt plants it intends to build in Florida would cost $14 billion, which "triples estimates the utility offered little more than a year ago." And that doesn't even count the 200-mile $3 billion transmission system the utility needs, which brings the price up to a staggering $7,700 a kilowatt. Under Florida law, to pay for these nukes, Progress Energy can raise the rates of its customers a $100 a year for years and years and years before they even get one kilowatt-hour from these plants. Something all Americans can look forward to under president McCain.
- But won't McCain's support for next-generation coal with carbon capture and storage save us? Well, if existing, already-paid-for coal plants are forcing a 45 percent rate hike, you can imagine how much the price of new, traditional coal plants must be soaring. What about next-generation coal? One very good source of apples-to-apples comparisons of different types of low-carbon electricity generation is the modeling work done for the California Public Utility Commission on how to comply with the California's Global Warming Solutions Act, online here. The research for the CPUC puts the cost of power from coal gasification with carbon capture and storage at 16.9 cents per kWh -- almost double current electricity prices.
- McCain, like virtually all conservatives, has consistently voted against efforts to advance renewable electricity. Wind power may be the only form of new generation with large-scale near-term potential whose cost is comparable to existing national electricity rates and thus much cheaper than new coal or new nuclear. The Bush Administration itself believes 300,000 MW of wind is possible by 2030 for about 6 to 8.5 cents per kilowatt hour, unsubsidized (i.e. no federal tax credit) and including the cost of transmission to access existing power lines within 500 miles of wind resource. Oilman T. Boone Pickens told me we could have 200,000 MW in 10 years. Solar baseload (also known as concentrated solar thermal power) is probably going to be the lowest-cost carbon-free new generation available 24/7. Utilities in the Southwest are already contracting for power at 14 to 15 cents per kWh. The modeling for the CPUC puts California solar thermal at 12.7 to 13.6 cents/kWh (including six hours of storage capacity) -- and at similar or lower costs in the rest of the West. Again, too bad that, contrary to all of his TV ads and public statements where he claims to support "all of the above," McCain in fact has been a strong opponent of renewable energy.
The bottom line is that McCain's policies would ensure soaring electricity rates and bills for Ohio and the entire country.
This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.
Ask Umbra on ditching dirty things
Comments
View as Flat
GreyFlcn Posted 3:59 am
10 Aug 2008
Yeah, but thats curved mirrors, 12-20 foot tall mirrors, using an expensive thermal heat transfer fluid. ;D
http://www.energy.ca.gov/2007_energypolicy/documents/2007 ...
A bunch of the upcoming solar thermal companies are cutting costs by going with flat mirrors, human sized mirrors for easier construction/logistics, and heating the water directly.
And of course there's multiple types of solar thermal than just troughs. There's Compact Fresnel Reflectors, Towers, and Multi-Towers. (Even Dishes, and Micro-Dishes, and Micro-Troughs if you don't care about storage)
All I'm saying is that that CPUC price estimate is probably off by atleast a factor of 2.
Especially when they start getting into the Gigawatts range, and the economies of scale start kicking in. Since the mirrors and support structure account for nearly half of the plant construction cost.
-David Ahlport
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madrad Posted 5:14 am
10 Aug 2008
If however, I go along with your assumption that he would support a Cap+Trade, then the renewables that McCain "doesn't support" would economically be the better option than the coal. By raising the price of the coal, the effect would obviously be the acceleration of renewable energy development.
Worst case scenario of course would be that McCain doesn't support cap and trade and then does support renewables.
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madrad Posted 5:15 am
10 Aug 2008
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ids Posted 7:57 am
10 Aug 2008
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Jason D Scorse Posted 12:31 pm
10 Aug 2008
We need to focus on the root causes of problems. http://www.voicesofreason.info.
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ids Posted 1:13 pm
10 Aug 2008
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theBike45 Posted 1:14 pm
10 Aug 2008
I maintain that the utilities are the proper judges of which technology will be the best for its customers.
The claim that conservation can solve the "energy crisis" (whatever that means) is pretty naiive. The world will always need more and more energy and conservation is an obsolete concept from another age - when fossil fuels were just about the only game in town and were understood as finite. When one moves into renewable energy sources, there are no limits to the amount of energy one can collect and then use.
The anti-nuclear arguments of this writer are fallacious. He is cherry-picking his facts when he claims that rated capacity costs of nuclear power plants are $7700 per kilowatt, or $7.7
million per megawatt. I've seen many estimates in the past year and a half of nuclear plant costs estimates (over 34 plants have been proposed - the writer oddly picks one estimate for his argument, the highest estimate I've ever seen). Most estimates range from $2200 to around $4500 per kilowatt of rated capacity. Unfortunately for Mr Hoexter's argument, rated capacity is a meaningless characteristic when comparing
power generation costs. Rated capacity is simply the max amount of power that a given power generator is capable of producing, not the amount
that it will in fact produce over its lifespan. A wind farm (or wavefarm or PV farm), for example, can have a rated capacity of 100 Megawatts. Seldom does a windmill (etc.)
average over 30% of its rated capacity. We don't care about rated capacity - we care about how much electricity the power generator can
produce over its lifespan. The lifespan of a nuclear plant is typically 60 years, while a windmill or a photovoltaic solar panel will last less than half that long. A nuclear plant typically averages well over 94% of its rated capacity,while a windmill produces roughly a third of that.
This means that a windmill that costs $2800 per rated kilowatt capacity, requires building 3 generators to produce the same output as
one single nuclear generator, and must replace each of those those at least once in order to have an equal lifespan. To compare the two
power generation technologies, one must therefore multiple the windmill's rated capacity by 6, which equals $16,800 per kilowatt for the windmill.
But that's not all - the windmills will require more transmission line costs than the nuclear plant, which is situated in a single location, while windmills are located over very large geographic areas, usually
well away from any concentrated customer locales.
There are also the seldom acknowledge side effect costs of using an unreliable power generator such as wind (or wave or PV solar) It cannot be counted on to meet ANY peak demand. This means that no matter how many windmills you errect, next year when power demand increases (as it will by 2% for each of the next 20 years), new (reliable and controllable) power generators must be added to the system. Wind (or wave, or PV solar, or any unreliable generator technology) does not have the ability to replace ANY
of the existing or future dispatchable generation capacity.
I have read some anti-nuclear arguments that claim that, since nuclear plants must shut down for about a month every two years or so for refueling, that means that they, too, are unreliable. But this is a spurious argument -
those shutdowns are scheduled to occur during the months of minimal energy demand, such as the Spring and Fall, and have zero effect on the reliability of the grid. Nuclear plants are so reliable that over the past decade, there
has been only one unscheduled shutdown of a reactor.
The fuel costs for a nuclear plant are a bit less than one half a cent per kilowatt hour (the average retail price for 1 kilowatt hour in the
U.S. is around 10 cents). I have heard some ant-nuclear folks argue that the price of uranium ore will double or increase 5 fold. Aside from the suspican that estimates this far apart can have any credibility, even a doubling of price would have virtually no effect on retail electricity prices. A fivefold increase would still position nuclear way below other, inferior, technologies.
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MAD MAC Posted 2:03 pm
10 Aug 2008
Here we go again - only the Democrats or the Green party can save us.............
Conservatives will destroy the planet..... I can hear it all yet again.
Victory in Pattani
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amazingdrx Posted 2:50 pm
10 Aug 2008
It would seem that this is the time to invest in a storage and energy use timing system to lower electric bills by getting off peak power rates. Add that to ground source heat pump heating and the extra costs would dissapear.
Shorter payback could be obtained with conservation subsidies to homeowners. This kind of system leads right into a futher investment in roof mounted solar PV/heat cogeneration. Since the heating and battery storage system would work even better with this addition.
These systems ought to be targeted with a 5 to 10 cent per kwh subsidy payed right to homeoners.
http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
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Delay And Deny Posted 3:27 pm
10 Aug 2008
First its real estate, then oil, now coal...
Isn't this the same old game of taking hold of a resource that almost everyone needs and jacking up the price until the curtain falls away and the game is up?
This isn't about "peak oil" and "global warming" or any of the other ruses....those are cloaks that are being used to hoodwink people and put a lock on a market.
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GreyFlcn Posted 10:23 pm
10 Aug 2008
(Aka Total Costs, and Overnight Costs)
http://www.nirs.org/images/fplturkeypointcostchart.jpg
Considering the massive time difference between permitting+construction of these two technologies, that makes a HUGE difference.
-David Ahlport
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