Recent background on dirty energy

Here are a couple of reference points that some of you might find useful.

https://www.lazard.com/research-insights/2023-levelized-cost-of-energyplus/

This is the 2023 edition of the Lazard report on the cost of new generation resources. This is VERY much better than previous year reports and was issued less than three weeks ago (today is April 28th).

The report includes the cost of power from fully depreciated coal, nuclear and natural gas plants, so you can prove to skeptics that the cost of a new utility scale wind or solar farm is so low that it can produce power for less money than an old nuclear plant. The bottom limits are $23/MWh for new wind and solar and $31 for old nuclear plants. Coal is more expensive. The report suggests that natural gas is $39, but if you read carefully they are using a higher price for natural gas than the current glut price. That extremely low price is still higher than new wind and solar generation from farms. I know of cheaper wind and solar plants, but this is the industry gold standard for global prices, and it sets the stage for more specific local information.

https://apnews.com/article/business-environment-united-states-georgia-atlanta-7555f8d73c46f0e5513c15d391409aa3

Vogtle is now over $30 billion ($34 billion if you read the article about the Westinghouse refund) and well down the path to being the most expensive nuclear plant ever built in history or in the future. I believe that the Lazard estimate of $131/MWh for new nuclear plants is based on this cost, although they may have used a prior cost estimate. That's 13.1 cents per KWh for people who don't wallow in this stuff all day long, and that's compared to the U.S. average wholesale price of about 3.5 cents per KWh. It cannot be recovered without a rate increase that will cause Georgia electricity consumption to drop. I can't be more precise because I don't know the exact shares of ownership of Vogtle or the necessary details about each of the five to seven utilities, but if you know any Georgia Power customers you probably want to advise them to buy rooftop solar right about the last three years ago.

https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm

I mentioned the natural gas glut. The U.S. gets 70% of its petroleum from fracking and about the same fraction of its natural gas from the same holes in the ground. Fracking wells produce both natural gas and petroleum from the same holes. There is a tendency, with some exceptions, for high petroleum prices to cause a natural gas glut. This year is not an exception, although the previous periods with lower price for natural gas are associated with economic crises.

What this means for coal is that we will see a continued erosion of coal generation by new wind, new solar and increased use of natural gas at existing plants. The U.S. combined cycle plants were only used about 56% of the time in 2020 and 2021. There are a few new natural gas plants being built, but not a lot. 2022 was expected to be a record year for solar farm construction, but only about half of the expected plants were completed. That's still more than $10 billion worth of new solar farms. Together wind and solar added in 2022 were sufficient to shut down a little more than 8% of the remaining coal. Coal will fare worse in 2023 because of the cheap natural gas.

Last but not least, I spend a lot of time on various aspects of greenhouse gases. 2023 is a unique time because CO2 emission rates are falling while methane rates are increasing. I won't put my calculations into this message, because I want to live with them for a while, but I finally did something I have been wanting to do for a long time - figured out how much human emission of methane is compared to global natural gas use. It is a shocking 23.25%. In other words, the natural gas industry probably wastes more than 20% of all the natural gas they produce. This isn't a straightforward calculation which is probably why no one has publicly presented this conclusion yet, but it is possible to do it very reliably. I think I have done so, but I want to get some feedback from others who work with this data.

Global data is available here: https://gml.noaa.gov/ccgg/trends/ You can click the tab near the top to see the methane trend.

The plain English interpretation of these trends is that global fossil fuel use is faltering enough to make 2023's rise less than the steady rise for the previous two decades. You can see a similar dip two times in the 1990's both times associated with global economic hiccups. This time could be attributed to a similar hiccup - post-COVID issues plus Putin's War have been hard on global economics. But there is a massive difference for fossil fuels, because since 2017 utility scale wind and utility scale solar have been cheaper than all fossil and nuclear power. 2022 was the year that electric car sales became large enough to impact petroleum consumption, but that was lost in the noise of post-COVID stuff and Putin's War. It will begin to be apparent to people. It is already apparent to the oil industry. U.S. producers stopped increasing petroleum production last August and have only increased production a little since then, probably in response to the OPEC-plus decision to halt production increases in October and thereafter. Both industries are doing so because consumption has not returned to pre-COVID levels. The U.S. is exporting more petroleum and natural gas than ever before in history. The U.S. is producing more natural gas than ever before in history, but it is still experiencing a glut and the wasting of natural gas into the atmosphere is probably due to U.S. fracking. The long term methane trend clearly supports that conclusion, although I don't want to lay out all the details here. If anyone is curious feel free to ask.

Back to my always theme: Energy in the U.S. and the world are economic decisions, not pollution, greenhouse or moral ones. The U.S. has no clean energy policy although Biden is trying to change that. U.S. coal generation is 40% of what it was in 2005 due to economics, mostly the low cost of natural gas from high efficiency combined cycle plants and low cost gas. Either high efficiency plants or low cost gas are not sufficient to make natural gas generation cheap alone. Together they do the trick.

We could talk about the European issues too. The U.S. natural gas spike which echoed the European one, at about one fifth of the price, was due to amateur commodities traders who thought they would get rich selling U.S. natural gas to Europe. They didn't know enough to know that the U.S. capacity to deliver natural gas to Europe was at full capacity in January of 2022, if not before then.

Europe is building wind and solar farms much faster than the U.S. is relative to their energy industries. The French nuclear fleet was 54% out of service during the Summer when the natural gas prices spiked. By Winter, 25% of the nuclear plants were still out of service. U.S. media is saturated with Republican lies about energy, so most U.S. observers don't understand that Germany closed its last three out of 17 nuclear plants early because they are insanely expensive to operate, not because the Germans are stupid or controlled by environmentalists.

All of these points are points I often use trying to inject a little factual information into the public dialogue.

The 2017 drop in the cost of utility scale wind and utility scale solar is nothing less than the largest economic shift in human history. It will give affordable power to two thirds of humanity which never could afford fossil or nuclear power.

There's a lot more, and we need a lot more people to be making these points everywhere that we can. Global wind and solar construction is about a third of the maximum feasible rate, and we need to achieve that rate. The U.S. lags far behind the world at large for wind and solar construction, and is missing out on its share of the biggest economic growth spurt in history. We could be selling wind and solar equipment to a lot of those other countries. As it is we are handing that market to Asia and Europe.