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NCAC – USAEE Newsletter – July 2018

10 Jul 2018 2:34 PM | Anonymous member

36th Annual USAEE / IAEE North American Conference Comes to D.C. September 23-26, 2018

The title of the conference is “Evolving Energy Realities: Adapting to What’s Next.” The location is the Hilton Crystal City. Here’s how the organizers of the conference describe it:

The Trump Administration and changing geopolitical situations are redefining energy directions, layering additional change over ongoing technological and market changes.

Removal or revision of regulations, withdrawal from the Paris climate accord, and shifting geopolitical relations add complexity to an energy portfolio still bracing for cyberattacks and weather impacts against vulnerable grids.

The 36th USAEE/IAEE Conference provides a forum for informed and collegial discussion of how the emerging realities will impact all stakeholders - from populations to companies to governments-in North America and around the world.

Nowhere calls out this urgency more clearly than the mid-Atlantic region. The energy mix includes offshore wind, coal mines, nuclear power, solar, and natural gas. Conference attendees will benefit from access to tour some of these facilities as well as tours of federal energy institutions in Washington, D.C.

Offshore Wind Takes Off in The US – Is That Good?

By: Robert Borlick, Energy Economist, Borlick Energy Consultancy

The article published in last month’s newsletter, “Offshore Wind Takes Off in the U.S.” implied that offshore wind development off the Atlantic shore is a good thing. I challenge that conclusion. Let’s consider some hard facts using the two Maryland projects the author referenced and which I have researched.

Maryland has agreed to purchase the projects’ expected full outputs at a levelized real cost of $131.9 per MWh (as stated in the article) but these are in 2012 dollars – not in today’s dollars (which the article failed to state). However, the state could have purchased the same amount of energy, offering equal or better environmental benefits, from onshore wind farms located in Western PJM at prices in the range of $40 to $50 per MWh. These offshore wind projects are not “…relatively more expensive…” - they are exorbitantly more expensive!

These Maryland projects are only feasible because they will be subsidized through higher electricity bills for Maryland’s residential and small C&I customers. The present value of these monthly subsidy payments will total about $2 billion dollars (expressed in today’s dollars). Clearly, these are not pilot projects meant to jumpstart the industry; $2 billion is not chump change.

But the story gets even worse. Levitan & Associates, the consulting firm hired by the Maryland Public Service Commission (MPSC), forecasted that the offshore wind projects would actually increase greenhouse gas emissions across the PJM footprint. This is because the offshore wind energy will displace generation from gas-fired plants in Eastern PJM while simultaneously increasing generation from coal-fired plants in Western PJM. Levitan pointed out that the RECs produced by the offshore wind generation will displace equal amounts of RECs from onshore wind energy that would have been produced by wind farms in Western PJM, thereby discouraging development of those onshore wind projects.

Now let’s address the job creation benefits of offshore wind, as mentioned in the article.

In approving the projects the MPSC gave great weight to the fact that they are projected to create 2,900 full time equivalent (i.e., one-year) jobs. But wait; simple arithmetic reveals that the state will be paying out almost $700,000 per job! These will be well paying jobs offering, on average about $100,000 per year (plus fringe benefits). Even so, wouldn’t everyone, other than the project developers, be better off it Maryland simply mailed out $100,000 checks to 2,900 randomly selected unemployed construction workers?

Lastly, I am sure the cost of offshore wind will come down but so will the cost of competing onshore renewables. Considering the harsher environment in which offshore wind operates it is highly unlikely to ever achieve cost parity with onshore renewables. So, does it make sense to pay three times as much for energy that is no more desirable from an environmental perspective? The answer is no – at least not in the foreseeable future.

LNG Market Update

By: David Givens, Argus Media

I traveled a lot in the second quarter, giving speeches and going to conferences. I found out that the market for LNG is deep and broad, not just in the resource-poor but economically powerful Asian countries, but in small nations throughout the world. They want to minimize the use of resid and diesel in their power generation stacks. They don't want to be captive price-takers. They want leverage with gas suppliers.

The world is becoming flush with LNG supply, but there will be obstacles for small countries. Their economies are too small to support much demand. Cargo reloadings may be economical sometimes, but not always. Some are not connected to larger regional pipeline networks that make landed resales attractive to marketing companies. The learning curve for finance may be steep. The threat of stranded assets looms. But ingenious firms will find a way.

This New (Green Energy) House

By: Ben Schlesinger, Benjamin Schlesinger and Associates, LLC (BSA)

June was a major solar energy month for our new home construction project in St. Michaels, Maryland – Sunrise Solar of Chestertown, MD installed 50 SunPower 360-watt panels on the roof. Solar energy is becoming fairly common in today’s markets, but we had a slight twist. We had hoped to have a Tesla solar roof on our house so you’d never know there’s a power plant up there - but it became clear that Tesla’s solar shingles wouldn’t be available when the time came to put a roof on our new house. So instead, we found another way: our architect, Charles Goebel of Easton, MD, designed two flat sections of the roof for the 50 panels, and so now you hardly notice the rack unless you’re really looking for it, as the picture shows.

Present status: we’re expecting this week to have our local utility, Choptank Electric Cooperative’s final sign-off, then we’ll be solar-powering our construction site and a maybe a neighbor as well on the same transformer during the days! We realize our flat-to-the-sky solar panel orientation isn’t as optimal as tilting them would have been, but we’re still hoping our system will produce enough electricity to run at least the kitchen and one of our geothermal ground-source heat pump systems.

Next month, we hope to turn on the HVAC system and report on how all this plays out. More to follow!

The Transmission Grid: A Thing of Beauty

By: Maryanne Hatch, Edison Electric Institute

Every morning I look out my kitchen window and see a shining, gleaming, high-voltage transmission line strung along a popular bike path. What is an eyesore for many, is a thing of beauty for me. I see a dynamic, ever-changing organism.

Electric transmission infrastructure is the backbone of the energy grid, often called the world’s most complex machine. Leveraging economies of scale, the transmission grid cost-effectively delivers safe, affordable, and reliable power to millions of Americans each day. No matter how you slice it, we all benefit from transmission. It leverages network efficiencies to deliver economic and environmental benefits, and adapts to meet changing customer needs.

For example, transmission infrastructure is necessary to deliver renewable energy from wind resources located in the middle of the country over long distances to large populations centers, typically located on the coasts. As another example, as the transmission grid becomes more networked, customers benefit from increased resilience and flexibility, as well as an ever-diversifying generation portfolio based on technology, geography, time, and season. The transmission grid is a modern marvel.

The next time you see a transmission line, I hope you take a minute to think about all the benefits it delivers.

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