Wednesday, June 06, 2012

Improving existing coal plant efficiency is the political sweet spot

UPDATE;  Management strongly encourages readers to look at the bottom of the comments, a very interesting and informative discussion of electrical power distribution and generation has broken out.  Whoda thunk.

Nice post by Brad Plumer about unglamorous low-tech fixes for the climate:

Catherine Wolfram, an economist at UC Berkeley’s Haas School of Business, says that we too often ignore simpler solutions, such as wringing more efficiency out of our existing fossil-fuel and nuclear plants. Many of those power plants, after all, are likely to stick around for decades to come.... 
Wolfram described what happened in the 1990s after some U.S. states began deregulating their electricity sectors. Utilities sold off their nuclear reactors to private operators. And, Wolfram found in a recent paper with Lucas Davis, electricity output at these newly privatized reactors increased 10 percent compared with those that stayed in the hands of tightly regulated utilities.
....Even today, Wolfram notes, many U.S. power plants still don’t have incentives to operate as efficiently as possible. There are many coal plants in the Southeast that are regulated under “cost-of-service” rules, in which power plants can pass their fuel costs onto consumers. That means there’s less reason to operate as efficiently as possible. And a carbon tax wouldn’t necessarily fix this — not if utilities could just pass costs onto consumers. 
Bruce Buckheit, a former EPA official, concurs. He notes that the efficiency of the U.S. coal fired fleet has remained flat since the 1970s. And a variety of research (pdf) suggests that small improvements in operations could boost the overall efficiency of the U.S. coal fleet by as much as 5 percent. (Wolfram, for instance, has found that a coal plant’s efficiency can vary as much as 3 percent depending on the skill of the guy sitting at the controls.) That may not sound like much, says Buchkeit, but spread across hundreds of coal plants, there are real carbon savings to be had here.
A mandate requiring the utilities to get off their lazy butts, improve coal plant efficiency to match the best-in-class levels, and pass the savings on to customers sounds like a political winner to me.  The Republicans will call it a slippery slope, but if you can't fight them on this then the game's over.  Seems like a nice initiative to move forward this fall.

It might be too expensive for the oldest plants to convert and shut them down instead, as if that's a sad story, but overall this should save people money.  I suppose the new investment might be used against an effort to shut the plants down in a few years, but for the vast majority of them, I think Brad is right that they're going to be around for more than a few years.  Anyway, it doesn't sound like it needs much of an investment, just some willingness to hire trained people.


UPDATE:  one possibility would be to exempt coal plants if the owners commit to shut them down or otherwise make them as efficient as natural gas within a certain period, say 5-10 years.  If the grandfathering that's found throughout the Clean Air Act came with time limits, we'd be much better off.

25 comments:

Tom Fiddaman said...

Increasing output 10% doesn't necessarily imply efficiency; it could simply be greater uptime.

A 5% improvement in the coal fleet would certainly help, but it's not nearly enough for a stabilization trajectory. Plus, it would require more investment in dead-end plants, which would bolster the stranded assets argument for keeping them running longer.

Much better to slap a carbon tax on everything and let efficiency sort itself out.

EliRabett said...

That, of course, is the free market solution!

Anonymous said...

Dr. Jay Cadbury, phd.

@John Mashey

you probably haven't heard so I want to direct your attention to a major breaking story.

http://reason.com/archives/2012/06/05/follow-the-pennies

GE has given a staggering $325 to the "Reason" campaign.

by Eli's logic, this $325 is much worse than any amount of money GE has given to pro climate consensus groups.

and this is why you guys keep losing. Its well known GE is extremely pro Obama, why attempt to falsely claim they question global warming?

William Connolley said...

Why is your automatic response a mandate, which you know people will object to? This is a market failure: there are savings to be had, but they aren't being had. If your description is right, that is because the design of the contracts was poor. Assuming that is hard to fix, then the problem is that the people paying the costs (customers) don't care, or don't notice, that they are paying higher bills.

Do you really not have the possibility of people switching from one electricity supplier to another, like we do here? If you had that, then the suppliers have an incentive to buy from the cheaper providers, and customers have an incentive to switch, and a carbon tax helps.

Hank Roberts said...

This was a market failure: http://www.csmonitor.com/2006/0825/p03s03-usgn.html

When suppliers have an incentive to buy less efficient hardware from cheaper providers, that race to the bottom happens because stockholders and customers see the up front cost, not the longterm benefit over the lifetime of the equipment.

The lifetime of the equipment is probably longer than the lifetime of many of the customers.

That's not market failure, that's simply the fact that the future has no value in the long term -- except the value we place on it.

That's why the electric power industry worked so hard to improve the original weak Bush era mandate for transformer efficiency.

Because -- given a mandate setting a high least common denominator -- they could all buy the more initially expensive, and more efficient, transformers.

Those have a 30-40 year life on the poles. The mandate was necessary according to the industry to keep them from cutting each others' throats by providing the cheapest possible power during the time when the transformers all needed to be replaced -- around now.

They got no benefit from installing the more efficient equipment -now- and without the mandate none could afford to spend the money and charge the customers for the more efficient hardware.

With the mandate, they all have been able to install the more efficient transformers because it's not a competitive disadvantage in the short run to do that.

anthrosciguy said...

Increasing output 10% doesn't necessarily imply efficiency; it could simply be greater uptime.



Next you're gonna try to convince me that correlation doesn't mean causation.

Russell said...

Coal is carbon, like charcoal or diamonds, right? Wrong - try burning graphite in your fireplace.

Coal is not a mineral, but a mix organic compounds of highly variable composition. It rarely contains as much as 90% of fixed carbon and such anthracites, make up a very small fraction of the coal trade).

Most commercial coals are bituminous: "bitumen" being the biblical term for asphalt - a very heavy crude oil. Oil and gas are mixtures of hydrocarbons, some are hydrogen rich, and some not - methane has a 4 to 1 hydrogen ratio ,but gaseous acetylene (C2H2) and liquid benzene (C6H6) are only 1 to 1 , or 50% hydrogen.

Coal gets some of its energy of combustion from hydrogen, too. The ratio varies from over 10 to 1 ( anthracite) to under 3 to 1 ( high volatile bitumenous ) Neither carbon content nor CO2 emissions potential can be gauged merely by fuel weight alone because fuels get burned one atom at a time, and a gram of hydrogen contains twelve times as many atoms as a gram of carbon.

It follows that a coal containing 3% hydrogen by weight and, say, 72% carbon (the balance being oxygen, nitrogen, sulfur and ash), contains not one hydrogen atom per 24 carbon atoms, but one for every two. That's half the hydrogen to carbon ratio of liquid benzene or acetylene gas.

Only a factor of 2 separates the heaviest fuel oils from some high volatile bituminous coals. Since both are derived from ancient plant remains, this is not too surprising.

Those considering carbon dioxide sources need to realize that a one percentage point rise in the hydrogen content of the coal used to generate US electrical power would cut CO2 emissions more than eliminating SUV's globally.

There is enough good coal around to drive the bad out of circulation if carbon tax structures made coal quality arbitrage to minimize CO2 emissions a paying proposition,

Anonymous said...

Well color me stoopid, that is why they call me "Hey Stoopid".

Ah, the usual American way of beating around the bush, to avoid that which is inevitable, the "Wildpoldsried Way", is the only way forward..


"You can always count on Americans to do the right thing - after they've tried everything else." Winston Churchill

dhogaza said...

WC:

"Do you really not have the possibility of people switching from one electricity supplier to another, like we do here?"

Not in many parts of the country, no. Maybe even in most. Or all?

Where I live, my provider is Portland General Electric, pure and simple. It's a regulated monopoly, thus the OPs discussion of utilities being run under "cost of service" rules, i.e. regulators approve rates which lead to the utility making its costs plus a (typically modest) fixed rate of gross profit.

One problem is that the regulatory framework typically doesn't allow for environmental factors to be considered, which is one reason why it took federal clean air regulations to force coal plants to implement SO2 scrubbers and the like.

So how does it work in the UK? Do the providers share wires all the way down to the retail customer?

Hank Roberts said...

Purely as an aside, a fusion plant would likely run as hot as the latest supercritical coal plants -- and so we're lucky the metallurgy for handling those temperatures is being done already. Typical PR:
https://www.swepco.com/info/projects/TurkPlant/USCGeneration.aspx

David B. Benson said...

Electricity supply canot be treated as if it was simply an open exchange (such as the Chicago Board of Trade). It requires tight regulation so change the rules. NOt easy to do, I fear.

Brian said...

Yes, increasing output doesn't necessarily mean increased energy efficiency, therefore we should measure increased energy efficiency.

As the OP notes, a carbon tax wouldn't necessarily change utility behavior if the monopoly structure allows them to pass on the cost. I think it would in the long run, but as I've said elsewhere, it's a big mistake to think the regulated utility system responds like Econ 101 class says it'll respond.

As dhogaza notes, every state has its own system, so your state mileage may vary.

As for the suggestion of getting a carbon tax through, someone please show me the political sweet spot that makes it work. I think this suggestion has a shot, and also has a chance of being something Obama could both argue for and win votes by arguing for it.

Anonymous said...

So how does it work in the UK? Do the providers share wires all the way down to the retail customer?

It's quite complicated actually, in the name of separation of the various entities. In a nutshell (IIRC):

The National Grid owns the HV (400/275 kV) transmission network in England and Wales and it operates the HV transmission network in Scotland (but the HV transmission network in Scotland is owned by Scottish Power and Scottish and Southern Energy, which are distributor companies). The National Grid also owns/operates the operating system across Britain (supply balancing) and parts/all of some links to the European grids.

What's a distributor? Distributors own the pylons and cables that connect between the HV transmission network and homes/businesses (my distributor is Aquila Networks (which is mostly US owned).

Then you have the generators (which are now mostly owned by non-UK companies IIRC) which pump the juice into the HV network.

Then you have suppliers (mine's the Co-op, just changed from BG, and I used to be with npower IIRC), who purchase your electricity by bidding for the juice in the wholesale market, add in their costs and then bill you. Each supplier chooses what type of energy to buy, whether that be renewable, nuclear, coal or gas. Then that mix gets pumped into the national grid and mixed up alongside other suppliers’ energy mixes. And the suppliers pay the generators and the transmission and distribution network operators out of what we pay them.

Seems to work, but you need a powerful watchdog, in our case Ofgem. And Ofgem's remit is to protect consumers by promoting competition and regulating where necessary.


Cymraeg llygoden

Jim Eager said...

In Ontario electric power generation is charged separately from transmission and distribution & local delivery. All generated power is pooled and everyone pays for generated power at three different flat time-of-use rates (on-peak, mid-peak, and off-peak), plus a separate delivery charge to your distributor. On top of that is a regulatory charge and a debt retirement charge (to cover the cost of the Candu reactors that didn't last anywhere near as long as advertised). One can elect to pay an additional charge to a supplier such as Bullfrog Power for renewable power, which they purchase at a premium from renewable suppliers that qualify for the feed-in tariff (wind, solar, low-impact hydro).

Of course, unless you live near one of those renewable generators you don't actually get power from them, but power equal to your use is fed into the grid. And since all FIT renewable power is fed into the grid while consumers pay the flat rates, a portion of everyone's power comes from renewables, but those who elect to pay the premium directly are putting their money where their mouth is by paying for the installation of new sources.

J Bowers said...

In England, Marks & Spencer Energy replaces all electricity back into the grid with renewables (primarily Scottish hydro). End prices are highly competitive, and you get financial incentives for reducing your energy use. M&S have also just become the first UK retailer to become fully carbon neutral, which combines with their other initiatives to have now givewn them a net benefit of £105m to their business in the last year.

Jay Alt said...

The Eddystone supercritical steam plant near Philly was finished in 1960. The boiler tubes (superheater actually) experienced too much corrosion when operated at the design temp. So they banked it down slightly to around 34MPa/610C. After this experience, US utilities basically decided fuel was too cheap for them to put much work into running hotter / more efficiently.
IIRC, only 2 US supercritical plants were ever built, both in the 60s. In contrast the Japanese (like the French, blessed with few fuel resources), have built modern supercritical coal plants for best efficiency. They sold several plants and then the technology to China in the last decade.

BW reactors operate a much lower temperatures and pressures than those mentioned above. Thermal efficiency for a BWR is only ~34%, (and that is higher than PWRs).

wrt nuclear efficiency, one thing that helped nuclear plants improve was coupling them to pumped hydro stations. Nukes lose efficiency when the load changes, so running them constant and sending excess power into storage helped them run better, and made money too.

Aaron said...

The real question is, "How much CO2 is emitted to deliver an electron to the consumer?"

It takes a lot of power to push electrons through long power lines. Thus, power generators are able to not only sell you the power to run your refrigerator, they can also sell you the all the power lost in the transmission lines along the way.

The real advantage of local power production is shorter power lines, so the efficiency of the whole system goes up.

Arthur said...

Discussion of 5% or 10% (what you get from possible efficiency improvements at coal plants - or shortening power lines) is exactly what Stephan Lewandowsky said just a few days back:

we need to realize that to stabilize atmospheric concentrations of greenhouse gases, our current emissions have to tend towards zero. Just cutting 5% or 10% as suggested by political leaders (at best) will achieve nothing.

Coal needs to go, period.

Brian said...

Aaron - distributed generation creates problems for systems that were set up with the expectation of one-way demand. Smart grids solve the problem, but it takes some effort.

Arthur - Stephan also says "the longer we wait, the steeper the required emission cuts." Cuts of 5% to 10% take you 5% to 10% of where you need to be, instead of waiting. One of the classic flaws I see in climate debates, although not only there, is the argument "action X only solves part of the problem and therefore shouldn't be done." Someone is skipping a step.

If action X delays a better solution, that's a good argument if someone can make it persuasively.

Hank Roberts said...

"... for many with vested interests in the legacy system, and for states' rights-oriented conservatives, it has been painful to digest the hard conclusion that competition in electricity is not equivalent to deregulation—that at the level of the huge regional transmission grids, at least, restructuring requires tighter and more intrusive regulation than ever."
http://spectrum.ieee.org/energy/the-smarter-grid/toward-a-bettermanaged-grid

Hank Roberts said...

And another angle:

"We engineers have .... unintentionally created a disaster in the making, and it is time we addressed it. As an engineering community, we should realize there are no reprieves from the laws of physics. If we do nothing—if we stand by and wait for politicians to appreciate the risks and act on them—we may witness one of the worst catastrophes of all time."

Can you guess which catastrophe that's about?

Russell said...

From 'A War Against Fire' The National Interest Summer 1990:

"we are entering the 1990s about 15 % worse off in terms of C02 emission per kilowatt-hour than we were a generation ago. This is pretty close to a worst-case scenario whatever one's view on the near-term effect of greenhouse emissions: the largest single term in America's fuel equation-coal-fired electricity-has been running retrograde to progress in materials science and combustion technology for twenty years. Yet both here and in Japan, science has lately begun to deliver the Right Stuff for raising its efficiency-materials able to withstand higher temperatures and stresses for longer times. But they are being applied more to aircraft engines than to power stations.

Together with the realization that energy costs do show a shallow but steady inflationary trend, this suggests ... there may indeed be a solution to the profound uncertainty that engenders reluctance when we are offered insurance against C02 bracket creep-at a trillion-dollar premium...

Rather than mandating reduced consumption of fuel and its Luddite consequences here and in the growing industrial sector of the Third World, let us consider getting more Kilowatt-hours by literally turning up the heat. A policy that promotes raising the minimum thermodynamic efficiency of hotter-running fuel-burning power stations by say 8 percent (to around 44 percent) by the year 2000 might be paid for by the very fuel it saves. Neither we nor our posterity can object to saving ourselves some cash-thrift has as few enemies as prodigality in fuel consumption has friends outside OPEC."

Anonymous said...

Well color me stoopid, that is why they call me "Hey Stoopid".

But then again, how much plant efficiency would be required, if these carbon pollution death traps, are required to pay the hidden annual health and environment costs?

One report, has this annual cost at a mere $345 billion dollars.

Full cost accounting for the life cycle of coal link(pdf) :- http://solar.gwu.edu/index_files/Resources_files/epstein_full%20cost%20of%20coal.pdf

Hmmm, sounds like short term carbon pollution plant efficiencies, have a hidden very fatal long term undocumented cost.

For that kind of loot, one could build quite a few self sustaining carbon pollution free local co-operated owned "Wildpoldsried Power Stations".

Link:- http://green.blorge.com/2011/08/wildpoldsried-germany-now-has-an-energy-surplus-generating-5-7-million-in-revenue/

Note well, the biggest gain was in the towns education facilities.

Or, one could say, caught like a deer in the car headlights, in between a rock and hard place, in the year 2050.

J Bowers said...

Stumbled across this interesting read.

Fossil Fuel Subsidies: A Closer Look at Tax Breaks, Special Accounting, and Societal Costs (PDF)

"The Capital Gains Treatment of Royalties on Coal Credit, introduced in §177(j) and §117(k) of the Revenue Act of 1951 (P.L. 82-183), allows owners of coal mining rights to reclassify income traditionally subject to the income tax as having been received under royalty contracts, thereby allowing owners to pay a reduced tax rate."

David B. Benson said...

Thermal efficiency for a nuclear power plant is not a major issue as the fissionable pins have to be replaced periodically anyway.