Long comment, as a former PG&E customer, the rate increases are more nuanced than the hard numbers show. California has a tiered rate system for IOUs, as you use more energy the rate you pay goes up. They also have time of use, so each of the three rate periods had its own set of teirs. So super peak tier 3 you're paying over fifty cents kwh. They massage the energy allowance in each teir every year. You would have to look into other states rate structures to see if there are similar games being played elsewhere.
Another thing to note is PG&E, SCE,& DTE along with having high rates also have among the highest customer outage minutes per year. Not only expensive, but unreliable too. If you want to watch where the Power outages are, go to poweroutage.us.
Ohio is doing things different, they have an open market for energy called Energy Choice Ohio. The utilities get paid for delivery and have a standard offer rate you can take or shop. I do shop, and I can tell you the utility delivery charges are always the larger part of the bill.
Nope, natural gas got very expensive after Putin invaded Ukraine. Now natural gas is cheap again but it was expensive just like it was when electricity rates spiked in the 2000s. Gee, what a strange coincidence. ;)
Natural gas prices spiked in the USA in 2022 largely due to the need to suddenly bail out European Green energy policies that required Russian imports with LNG exports. Except for that brief period Henry Hub prices has been quite stable and cheap for since the Shale gas revolution started almost 20 years ago.
Do you know where the Henry Hub is?? Because if you do then you know weather was a big factor on natural gas production and prices coming out of Covid even without Putin’s asinine invasion. Have you ever seen a perfectly good skyscraper blown up?? That happened in Lake Charles because of the crazy weather in Louisiana the last several years.
Look at natural gas prices since 2008 when shale gas started affecting prices. It is almost always below $5/MBTU (very cheap) and the general trend is downward.
Our last month’s PG&E bill, here in Northern California, was over $500, and that is WITH a subsidy. Rates are going up AGAIN and we will be losing that subsidy due to a small income increase. Our home is around 1,900sq ft and all electric. We are not in a position to purchase an alternative heat source, such as a wood or pellet stove or kerosene heater. I wish we could. The external temperatures haven’t been extremely low, and we are very conservative with our heater usage, but the kids and I are home most of the time. I had the thermostat set at 60 at night/65 during the day, but had to turn it up to 65 night/67 day because we’ve been struggling with sickness cycling through our family for over a month.
PG&E’s electricity prices are insanely high compared to what we paid when we lived in the Sacramento area and had SMUD (Sacramento Municipal Utility District). SMUD is a community owned not for profit company. SMUD is also pursuing “going green”, but they still manage superior service over PG&E.
The fact that cold deaths greatly outnumber heat deaths is a universally applicable empirical observation. In Europe cold deaths outnumber heat deaths by a factor of ten. In India cold deaths outnumber heat deaths by a factor of eight. Another example comes from the World Food Programme. 2022 was the most abundant year for agricultural production on record. Roughly 80% of all food insecurity came from war, as one would expect. Of the remainder, causes were equally split between ecological conditions and economic shock. Sure, the WFP has quickly moved to make the source more climate alarmist than the initial release, but there is no hiding the fact that, despite the moderate increase in food insecurity from ecological conditions, a far greater portion of the world population is vulnerably to food insecurity through economic shock caused by climate policy than is vulnerably to food insecurity from ecological conditions.
After all, an incredibly huge portion of increases in synthetic fertiliser usage since 1962 has been in the least economically developed countries. European usage has declined significantly whilst maintaining production levels. North American usage has stayed almost exactly the same, whilst greatly boosting yields. And what do the dark green nutjobs want to do? Push the world into more organic farming and an agricultural dark age, where the poorest are suddenly vulnerable to famine again.
I remember reading about deaths of elderly people in Europe in recent winters because they couldn’t pay for heating. The choice was down to food or heat.
The renewable price increases have always been predictable. We are adding hundreds of billions of dollars worth of new power plants that we do not need and that will not replace the existing ones.
The current on peak residential rate in San Diego is 66 cents per kWh, 5 times the national average. Equivalent of $5 gas.
California is stuck at about 35% renewables and will be stuck until massive grid upgrades are complete and hundreds of thousands of MWH of storage is installed. Prices will continue to rise rapidly as the bills come due.
The main reason is that in Texas most of the utilities don’t file rate requests because they are in ERCOT and are expected to make their money in the energy only market. The states listed by RRA are more of your classic vertically integrated utilities.
We, truly, need to put the "net" in net zero. 15 years ago I thought if people really believed in a grand future catastrophe they would immediately offer to offset all extra costs for nations building new coal plants so they could build nuclear instead
Now I see that they really do believe in a grand current catastrophe yet they still aren't doing it. Change net zero locally to very low carbon electricity by 2050 with an actual net component of paying India etc to have much cleaner grids by 2050 instead of their 2070 stated goal (yes that's their total energy system goal but I currently consider that to be the electrical grid goal in practical terms)
More benefit, less cost, and electrification might actually be affordable
Ordinary people do not understand overcapitalization due to rate of return regulation … they also don’t understand how they were scared into fake “renewables” with Orwellian language … and that $billions were made at the expense of the ignorance of rate payers
Hi Campbell and thanks for your comment. We don’t address that here but go through it in detail in this report. Pages 20-31 will lay it all out for you. Please feel free to ask more questions if you have them!
Not even close. Without production tax credits (PTC’s) and investment tax credits (ITC’s) and tax equity all funded at the federal level, the out of the money power purchase agreements with the regulated utilities, which are passed straight through to the rate and ergo the tax payer wind and solar projects on a utility scale basis would never even get into an investment banks conference room. Don’t forget that they don’t operate in the dark or when the wind doesn’t blow. On a small scale distributed generation local load basis maybe it works in a community that can afford $30 mwh prices otherwise it is not viable verses coal, natural gas or even woody biomass. Let’s leave hydro out for now, but if you want long life span and cheap look no further than a local river.
The thing that’s the tough rub for me, if these things aren’t potentially better over the long term why is the *famously woke* Modi going for mass investments in solar?
Chinas subsidies are absurd, but they’re also not in it to try and be weirdo green new dealers, they’re doing it for power; china seems to think that in the long term they’re going to win out from the investment, not that they haven’t had dumb as shit policy before but why would they be doing it were it not effective for their purposes?
Granted, I could see that *maybe* the moral *highground* over the west is worth a high dollar cost for the propaganda game, but the econ101 (learning curves) seems to be a distinct advantage for factory made energy generation.
(Though that also applies to SMRs, the same phenomenon tip the scales equally towards nuclear, were SMRs to reach a cost effective point/the govs of the world were to provide massive subsidies)
Anthony Sutton, Rockellers and China or maybe something to do with sparrows. Its a big carrot on a stick and you aren't going to get a bite unless you comply with the biometric passport. Oh, it went red because you are sick not because you are traveling to recoup your stranded real estate assets. Learn the Technocratic Reductionism Nihilistic mantra.. "nothing matters" other than gaslighting "knuckle draggers," getting needles in arms to fast track gene-based cures for the Elite to survive the bottleneck, powering up the digital panopticon and feathering for the Degrowth Agenda aka. managed economic contraction and humane and desirable population reduction (Heinberg, Post-Carbon Institute).
"Going first" pricing. Energy cost of energy. Requires a backup to counter intermittency. Shutting down remaining coal-fire plants in Pennsylvania. Retired military engineer, a client of mine, is working on a new turbine design to "fill the gap." The claim is 30% more efficient and subsidy-free competitor to Siemens.
The other problem is the increasing energy infrastructural costs of intermittency. Basically, it's necessary to build far more resilient grids and energy storage solutions like pumped hydro to offset the variability in supply compared to peak and minimum demand. The threshold for solar is incredibly low- the Germans began to hit a wall around the 8% mark- it's why their energy is twice as expensive as that of France and produces ten times as much carbon dioxide per energy unit, despite the fact that by 2025 they will have spent $580 billion on renewables.
Wind energy has a better profile. It tops out at around 30%. We make a lot of use of it here in the UK- but we're now into the phase where its becoming more costly, wind the largest wind energy supplier telling government strike prices needed to increase by 70% in order to continue to expand. We're already beyond the point where more wind makes any sense. What makes it worse is that they've failed to keep up the energy infrastructure expansion inline with the increases in wind. In 2022, UK consumers spent £215 million turning off offshore wind, equivalent to roughly 6% of total capacity. At the same time, we were forced to spend £717 o natural gas at a time when it wasn't ideally priced- compounded by the fact that the Tories eliminated the budgetary cost of our main gas storage site at Rough. A Labour spokesman put the all costs price of partially reopening the site at around £1.7 billion.
Even the most hopelessly optimistic climate types who are actually familiar with power grids and engineering principles admit that at least 40% of total energy needs to come from baseload sources like big hydro or nuclear. It's much higher than that if one figures in a shift away from most ICE vehicles- purely on the basis of future anticipated demand. It's also unlikely to be shift to EVs given the minerals required to shift to EV at scale. In all probability it will take another 10 years for the government idiots to realise that Toyota is actually right and hydrogen fuel cells are the only feasible option.
Here's the problem. Cracking hydrogen from water is an endothermic reaction- it requires energy inputs. A friend of mine is an energy expert- he has taught geology in a college setting, was reasonably senior in an oil company and has long been an advocate of expanding nuclear. His take on the subject if that one presumes they want to produce hydrogen using the greenest method available, in order to achieve the same type of range and effect of a gallon of petrol/gas today it would cost around $6.11 before all the added costs.
Smart investors, looking for the type of once-in-a-lifetime capital growth and profits which come from normally high risks should look into investing around 5% of their portfolio into companies aiming to create integrated cheap systems for hydrogen production which are also decentralised. Governments are simultaneously constrained by the democratic veto and monomaniacally single-minded in their pursuit of a green future. In a few years they are going to sink tens of billions into green hydrogen projects at scale- as soon as they realise that people are never going to give up their cars and that EVs simply cannot fill the gap.
Cobalt prices remain relatively low, but lithium prices went through a major transition in 2022.
In 2023 tens of the of people lost their electricity because ice down tree branches. A few months later in East Texas/NW Louisiana tens of thousands of people lost electricity because winds uprooted huge 100 year old trees!! I guess nuclear and coal are intermittent because ice and wind impact the reliability by downing power lines?!?
That's a failure to invest in energy infrastructure resilience on the basis of probability and impact. UK roads routinely grind to a halt with only a few centimetres of snow- yet other countries can handle several feet. The reason? The cost to fix is higher than the cost of inconvenience/lost productivity from occasional blackouts.
There is also the issue of deliberate externalisation- private companies pushing costs back into the public sector. A few years back I phoned the UK's largest telecoms company about a tree overhanging a telephone line for an old people's home which services residents with significant medical needs (every moth or so an ambulance whizzes past my house with music and lights). The telecoms company told me to phone the police, because it wasn't their issue. If private companies can push the expenditure onto the taxpayer, then they will. I would be interested to hear whether the politicians in case the case you cite agreed to any form of taxpayer-funded infrastructural spend.
Probability and impact on infrastructure from weather isn't the same as intermittency from wind and solar. Weather and infrastructure is high impact, very low frequency in the situation you describe (although this may change locally with more unpredictable weather systems). Wind and solar intermittency is high impact, very high frequency. How do we know this? From the huge sums of money being deployed to increase energy exports/imports over longer distances, through the deployment of energy storage solutions like pumped hydro (which is a very good idea to some degree, but not deployed at scale, because of costs) and because large numbers of coal or gas-fired power stations are kept idling at significant climate and financial costs to prevent blackouts in the event of drops in energy from wind and solar.
Basically, the powers that be have already agreed to mitigate the probability of intermittency from wind and solar and spend money to prevent the impacts. Taxpayers and consumers are already paying the costs, which is one of several reasons why LCOE's are such a fiction. The same cannot be said for weather extremes.
This doesn't mean that wind and solar aren't useful up to a point. They both have their thresholds. With wind it's about 30% of total energy demand. With solar it was around 8% for Germany, but this figure will obviously vary greatly by region. My point would this- most countries need to adjust to the fact that nuclear and big hydro (wherever possible) are going to play a much greater role in energy transition.
It's a position which most of the world's supranational organisation have belatedly come to agree with. The UN, the EU and the IEA have all agreed that nuclear needs to play a much greater role. The UN now accepts that natural gas is a necessary 'bridging' technology. The EU parliament recently rebranded natural gas as climate-friendly, although at the same time other parts of the EU bureaucracy are in the process of introducing a regulatory reporting mechanism for methane release from coal and gas.
This is the IEA's position on natural gas: 'natural gas, which emits less carbon than most other fossil fuels, has a limited role as a transition fuel from coal to renewable energy sources. Additionally, natural gas power generation may still be needed as back-up for variable wind and solar power.'
Taxpayers and consumers are already paying the costs, which is one of several reasons why LCOE's are such a fiction. The same cannot be said for weather extremes.
This doesn't mean that wind and solar aren't useful up to a point. They both have their thresholds. With wind it's about 30% of total energy demand. With solar it was around 8% for Germany, but this figure will obviously vary greatly by region. My point would this- most countries need to adjust to the fact that nuclear and big hydro (wherever possible) are going to play a much greater role in energy transition.
It's a position which most of the world's supranational organisation have belatedly come to agree with. The UN, the EU and the IEA have all agreed that nuclear needs to play a much greater role. The UN now accepts that natural gas is a necessary 'bridging' technology. The EU parliament recently rebranded natural gas as climate-friendly, although at the same time other parts of the EU bureaucracy are in the process of introducing a regulatory reporting mechanism for methane release from coal and gas.
This is the IEA's position on natural gas: 'natural gas, which emits less carbon than most other fossil fuels, has a limited role as a transition fuel from coal to renewable energy sources. Additionally, natural gas power generation may still be needed as back-up for variable wind and solar power.'
After the last few years I have zero faith in nuclear and coal so long as the grid in which tree branches can render them useless. So we might as well just max out renewables and natural gas and forget about coal and nuclear and hydro at least for residential electricity. In America the only way to guarantee electricity is with either a whole home natural gas generator or EV trucks will be able to power a home for a day or two or Tesla power walls would last maybe a day. I think nuclear should be used to move water to the western states and for peak demand.
All energy sources are just are susceptible to power grid or substation flaws- it really wouldn't matter what the energy source was. However, the Texas blackouts weren't caused by grid or substation problems. The weather did cause wind turbines to freeze, but it also caused natural gas wells to freeze and pipe blockages. The best way to deal with the latter problem is onsite back-up storage. This may sound somewhat expensive, but costs would be at least partially offset by purchasing gas to store in period where the price dips. Although it won't show in year long graphs, natural gas is actually quite a volatile commodity in terms of price- a lack of gas storage is one of the main reasons why the UK was recently stung with some of highest energy prices in Europe.
Onsite gas storage is a good investment, provided the systems of generation and storage are sufficiently isolated. It's also virtually guaranteed that multi-site storage would deliver on cheaper prices and greater reliability, because the multiplicity of individual decisions always outperforms centrally planned systems by a vast degree.
This also naturally leads on to a conversation about natural monopolies. Almost no-one gets this right. Energy provision should be free market. Energy grids should not. However, there is a great opportunity to create a thriving and dynamic market within the setting of publicly owned infrastructure. Create a legislative requirement that all infrastructure built or repaired has to go out to private tender.
There is a huge debate over private or public utilities. The evidence doesn't really point one way or the other, with a few exceptions. A hybrid system would deliver the best of both worlds- in particular a system with mandated private bids for connections would eliminate rent-seeking from either government or monopoly suppliers. This a major problem and it's not just confined to energy- whether the provider is government or a monopoly, utilities have a tendency to demand a 'share of the pie' when it comes to connecting new builds. It's an often ignored aspect of the reason why house prices tend to inflate over time. A bid system would allow end users to select individual connection services by price, delivery schedule proffered and reputational ratings. It would cut both government and energy monopolies out of the process- leading instead to direct commissioning from a market with commodified services.
California and Germany are both examples of renewables maxed out. They are both complete failures. France has energy which is half the price of Germany, and it produces ten times less carbon dioxide per energy unit. The main reason is nuclear. The Swedes are quite clever with their biomass- they burn a huge amount of their household waste. This may sound insane, but it's cheap and efficient and any carbon costs from burning waste are far better than the methane produced in waste sites through anaerobic compression, even with the best recycling systems in the world. Biogas from these sources are an expensive wrong solution. The exceptions are cardboard and paper recycling- suppliers in this area will actually pay commercial companies to cart away their waste.
IF clean AND energy are important then nuclear is the only logical choice. None of these woke states being victimized by green sources are smart enough to figure that federal subsidies are all that floats these inefficient methods of power production. But raiding the pockets of the serfs is all that matters to the rulers and the utilities
Thankfully Biden is incompetent and are we are producing record amounts of oil and gas. So it’s better to have an incompetent Biden than a ultra competent Trump who inexplicably ended up bankrupting a record number of energy companies in 2020…but it’s 4D chess and so maybe we are still waiting to see the results??
In OK GRDA is building a single cycle gas plant that is 30% less efficient than combined cycle just so they can spin up and down due to renewable intermittent electricity. It’s all such A scam
In Europe I can see the same trend. I don't deny global warming is an issue, and I agree we have to deal with it sooner rather than later. But for most people home heating and eating are more urgent matters. I would like to help save the planet while I still have a roof over my head.
One principal reason for the enormous increase in costs in 1978-1982 was the passing and implementation of the PURPA Act of 1978. The Public Utility Regulatory Policy Act of 1978, “designed by genius’s to be run by idiots” (Herman Wouk Caine Mutiny) was meant to force the public utilities mostly located in the lower 48 contiguous states, to compete fairly with Non Utility Generators (NUG’s) and allow Qualifying Facilities (QF’s) to generate and sell electric power to the public utilities for distribution to the electrical grid at a rate that was equal to the new cost of the generation constructed and brought on line by the utilities. The costs that the utilities were using to justify the rate cases that would allow them to build new generation was documented and the QF’s benefited from the higher prices then newly available to them to build, operate and sell electricity to the utility for distribution to the grid and paying consumers. The comment that the QF’s and NUG’s had ruined the free markets (which were not free markets, as they were regulated by the various PSC’s and PUC’s state by state) with “out of the money” contracts belied the fact that the utilities monopolistic practices allowed for huge cost overruns and failure to bring generation online, at budget and on time. Over time the PURPA costs were absorbed and the cost curves here presented demonstrate that period of time when rates were higher. Don’t forget that prime interest rates were in the 15%-18% range at the time. The former nuclear naval officer, who was a peanut farmer and Governor of Georgia, and President of the USA, when not busy scheduling the White House tennis court times and fending off swimming attack rabbits at Camp David did manage to understand enough about the generation, transmission and distribution of electrons to foster PURPA and unlock the potential of unregulated markets. Sadly he was the first and last President, since FDR, to figure it all out and try to do something about it. Until there are some massive fails in cold weather in the northern states wherein thousands freeze to death in their dark homes or in the southern climes where thousands of people succumb to heat stroke in their darkened homes, we are stuck in this rather difficult situation in which massive funds are deployed to no good end and zero public benefit. This was a great post. Please keep them coming.
To make matters worse, these green initiatives don’t take into account the amount of dirty mining required to produce all these wind mills, batteries and solar panels. They all require copious amounts of diesel and other non-green inputs.
Understanding the laws of the United States would have prepare people better. Utilities fall under the category of a natural monopoly-which I don't have to go into has the Energy Bad Boys did a great job of explaining-and the United States has anti-monopoly laws which makes the products they sell illegal to make a profit-they have to sell it at cost to the costumer. As a result, utilities make they money by cost return of capital deployed plus a return, generally in the range of 10%. So the more capital a utility deploys the more it can ask for rate hikes-pass thru cost to rate payers, which is why utilities generally have no problem with spending for regulatory reasons. So you understand this, then all the spending that have been done from the utilities would be paid back because they have a legal claim of cost plus capital return. And given the regressive nature of excise taxes & fees-which I don't really care about-it should have been intuitive that the "poor" would have ended up getting stuck with the bill of climate change and the wealthy, businesses, & well educated would get all the tax benefits and short the bill.
Long comment, as a former PG&E customer, the rate increases are more nuanced than the hard numbers show. California has a tiered rate system for IOUs, as you use more energy the rate you pay goes up. They also have time of use, so each of the three rate periods had its own set of teirs. So super peak tier 3 you're paying over fifty cents kwh. They massage the energy allowance in each teir every year. You would have to look into other states rate structures to see if there are similar games being played elsewhere.
Another thing to note is PG&E, SCE,& DTE along with having high rates also have among the highest customer outage minutes per year. Not only expensive, but unreliable too. If you want to watch where the Power outages are, go to poweroutage.us.
Ohio is doing things different, they have an open market for energy called Energy Choice Ohio. The utilities get paid for delivery and have a standard offer rate you can take or shop. I do shop, and I can tell you the utility delivery charges are always the larger part of the bill.
Thanks for your insight and congrats on escaping California!
One more link with some historical data
https://www.pge.com/en/account/rate-plans/find-your-best-rate-plan.html#tabs-82c92b262d-item-06eb9ee3f7-tab
Here is a link to PG&E rate plans, best read with a large cup of Joe.
https://www.pge.com/en/account/rate-plans/find-your-best-rate-plan.html#tabs-82c92b262d-item-06eb9ee3f7-tab
Worth noting that natural gas prices are much cheaper than they were 15 years ago, so electricity prices could have gone down.
Absolutely. We squandered our cheap gas dividend by building unreliable power plants.
Nope, natural gas got very expensive after Putin invaded Ukraine. Now natural gas is cheap again but it was expensive just like it was when electricity rates spiked in the 2000s. Gee, what a strange coincidence. ;)
Natural gas prices spiked in the USA in 2022 largely due to the need to suddenly bail out European Green energy policies that required Russian imports with LNG exports. Except for that brief period Henry Hub prices has been quite stable and cheap for since the Shale gas revolution started almost 20 years ago.
Do you know where the Henry Hub is?? Because if you do then you know weather was a big factor on natural gas production and prices coming out of Covid even without Putin’s asinine invasion. Have you ever seen a perfectly good skyscraper blown up?? That happened in Lake Charles because of the crazy weather in Louisiana the last several years.
The location does not matter. It is a spot price.
Look at natural gas prices since 2008 when shale gas started affecting prices. It is almost always below $5/MBTU (very cheap) and the general trend is downward.
https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
Uh, hurricanes matter. You should know the record natural gas price and what caused it off the top of your head!
Yes, hurricanes matter, but technological innovation and markets matter far more to natural gas prices.
You are clearly dancing around the Isaac Orr was 100% correct.
Our last month’s PG&E bill, here in Northern California, was over $500, and that is WITH a subsidy. Rates are going up AGAIN and we will be losing that subsidy due to a small income increase. Our home is around 1,900sq ft and all electric. We are not in a position to purchase an alternative heat source, such as a wood or pellet stove or kerosene heater. I wish we could. The external temperatures haven’t been extremely low, and we are very conservative with our heater usage, but the kids and I are home most of the time. I had the thermostat set at 60 at night/65 during the day, but had to turn it up to 65 night/67 day because we’ve been struggling with sickness cycling through our family for over a month.
PG&E’s electricity prices are insanely high compared to what we paid when we lived in the Sacramento area and had SMUD (Sacramento Municipal Utility District). SMUD is a community owned not for profit company. SMUD is also pursuing “going green”, but they still manage superior service over PG&E.
That’s terrible. I’m sorry this is happening Kathleen. Hopefully you all get well soon
Thank you, Isaac.
This is a regressive tax that's made worse by the fact that it's not saving the planet, Kathleen.
And that's just the economic consequence.
The health consequences are shameful. The sick and elderly pay the worse toll when they're forced to keep the thermostat at 60-65 in winter.
The fact that cold deaths greatly outnumber heat deaths is a universally applicable empirical observation. In Europe cold deaths outnumber heat deaths by a factor of ten. In India cold deaths outnumber heat deaths by a factor of eight. Another example comes from the World Food Programme. 2022 was the most abundant year for agricultural production on record. Roughly 80% of all food insecurity came from war, as one would expect. Of the remainder, causes were equally split between ecological conditions and economic shock. Sure, the WFP has quickly moved to make the source more climate alarmist than the initial release, but there is no hiding the fact that, despite the moderate increase in food insecurity from ecological conditions, a far greater portion of the world population is vulnerably to food insecurity through economic shock caused by climate policy than is vulnerably to food insecurity from ecological conditions.
After all, an incredibly huge portion of increases in synthetic fertiliser usage since 1962 has been in the least economically developed countries. European usage has declined significantly whilst maintaining production levels. North American usage has stayed almost exactly the same, whilst greatly boosting yields. And what do the dark green nutjobs want to do? Push the world into more organic farming and an agricultural dark age, where the poorest are suddenly vulnerable to famine again.
Absolutely.
I remember reading about deaths of elderly people in Europe in recent winters because they couldn’t pay for heating. The choice was down to food or heat.
This is an interesting article on the health effects of low indoor temperatures. https://www.ncbi.nlm.nih.gov/books/NBK535294/
LCOE is the green energy Santa Claus.
The renewable price increases have always been predictable. We are adding hundreds of billions of dollars worth of new power plants that we do not need and that will not replace the existing ones.
The current on peak residential rate in San Diego is 66 cents per kWh, 5 times the national average. Equivalent of $5 gas.
California is stuck at about 35% renewables and will be stuck until massive grid upgrades are complete and hundreds of thousands of MWH of storage is installed. Prices will continue to rise rapidly as the bills come due.
Absolutely agree. It’s amazing how many people still deny this basic reality.
Great article, as usual. I noticed that utilities in Texas are absent from this list. Interesting. Not sure why?
The main reason is that in Texas most of the utilities don’t file rate requests because they are in ERCOT and are expected to make their money in the energy only market. The states listed by RRA are more of your classic vertically integrated utilities.
Great question. We know that ran up billions in debt during the freeze a couple of years back.
We, truly, need to put the "net" in net zero. 15 years ago I thought if people really believed in a grand future catastrophe they would immediately offer to offset all extra costs for nations building new coal plants so they could build nuclear instead
Now I see that they really do believe in a grand current catastrophe yet they still aren't doing it. Change net zero locally to very low carbon electricity by 2050 with an actual net component of paying India etc to have much cleaner grids by 2050 instead of their 2070 stated goal (yes that's their total energy system goal but I currently consider that to be the electrical grid goal in practical terms)
More benefit, less cost, and electrification might actually be affordable
Ordinary people do not understand overcapitalization due to rate of return regulation … they also don’t understand how they were scared into fake “renewables” with Orwellian language … and that $billions were made at the expense of the ignorance of rate payers
Hi Allan,
That's exactly right. We do our best to explain it in this article.
https://energybadboys.substack.com/p/green-plating-the-grid-how-utilities
Great post, guys.
We're kinda curious to look at some of these for the details. For example, the GA Power filing, to see if it mentions coal ash landfills/impoundments.
Friends in the business are involved in some of the environmental work on a DTE coal plant decommissioning (something other than coal ash).
Let us know what you find!
Unless i missed it, you don’t really analyze the underlying cost per energy output of each solution.
My understanding is that solar and wind are cheaper than coal.
Hi Campbell and thanks for your comment. We don’t address that here but go through it in detail in this report. Pages 20-31 will lay it all out for you. Please feel free to ask more questions if you have them!
https://files.americanexperiment.org/wp-content/uploads/2022/09/The-High-Cost-of-100-Percent-Carbon-Free-Electricity-by-2040-in-Minnesota.pdf?v=1663000647&_gl=1*18z36e2*_ga*MTQyODQyNDI1LjE3MDM5NDIwNjc.*_ga_03BRYTYNY0*MTcwNDYwMTU2Ny4xMC4xLjE3MDQ2MDE1OTcuMzAuMC4w
Not even close. Without production tax credits (PTC’s) and investment tax credits (ITC’s) and tax equity all funded at the federal level, the out of the money power purchase agreements with the regulated utilities, which are passed straight through to the rate and ergo the tax payer wind and solar projects on a utility scale basis would never even get into an investment banks conference room. Don’t forget that they don’t operate in the dark or when the wind doesn’t blow. On a small scale distributed generation local load basis maybe it works in a community that can afford $30 mwh prices otherwise it is not viable verses coal, natural gas or even woody biomass. Let’s leave hydro out for now, but if you want long life span and cheap look no further than a local river.
The thing that’s the tough rub for me, if these things aren’t potentially better over the long term why is the *famously woke* Modi going for mass investments in solar?
Chinas subsidies are absurd, but they’re also not in it to try and be weirdo green new dealers, they’re doing it for power; china seems to think that in the long term they’re going to win out from the investment, not that they haven’t had dumb as shit policy before but why would they be doing it were it not effective for their purposes?
Granted, I could see that *maybe* the moral *highground* over the west is worth a high dollar cost for the propaganda game, but the econ101 (learning curves) seems to be a distinct advantage for factory made energy generation.
(Though that also applies to SMRs, the same phenomenon tip the scales equally towards nuclear, were SMRs to reach a cost effective point/the govs of the world were to provide massive subsidies)
Anthony Sutton, Rockellers and China or maybe something to do with sparrows. Its a big carrot on a stick and you aren't going to get a bite unless you comply with the biometric passport. Oh, it went red because you are sick not because you are traveling to recoup your stranded real estate assets. Learn the Technocratic Reductionism Nihilistic mantra.. "nothing matters" other than gaslighting "knuckle draggers," getting needles in arms to fast track gene-based cures for the Elite to survive the bottleneck, powering up the digital panopticon and feathering for the Degrowth Agenda aka. managed economic contraction and humane and desirable population reduction (Heinberg, Post-Carbon Institute).
"Going first" pricing. Energy cost of energy. Requires a backup to counter intermittency. Shutting down remaining coal-fire plants in Pennsylvania. Retired military engineer, a client of mine, is working on a new turbine design to "fill the gap." The claim is 30% more efficient and subsidy-free competitor to Siemens.
The other problem is the increasing energy infrastructural costs of intermittency. Basically, it's necessary to build far more resilient grids and energy storage solutions like pumped hydro to offset the variability in supply compared to peak and minimum demand. The threshold for solar is incredibly low- the Germans began to hit a wall around the 8% mark- it's why their energy is twice as expensive as that of France and produces ten times as much carbon dioxide per energy unit, despite the fact that by 2025 they will have spent $580 billion on renewables.
Wind energy has a better profile. It tops out at around 30%. We make a lot of use of it here in the UK- but we're now into the phase where its becoming more costly, wind the largest wind energy supplier telling government strike prices needed to increase by 70% in order to continue to expand. We're already beyond the point where more wind makes any sense. What makes it worse is that they've failed to keep up the energy infrastructure expansion inline with the increases in wind. In 2022, UK consumers spent £215 million turning off offshore wind, equivalent to roughly 6% of total capacity. At the same time, we were forced to spend £717 o natural gas at a time when it wasn't ideally priced- compounded by the fact that the Tories eliminated the budgetary cost of our main gas storage site at Rough. A Labour spokesman put the all costs price of partially reopening the site at around £1.7 billion.
Even the most hopelessly optimistic climate types who are actually familiar with power grids and engineering principles admit that at least 40% of total energy needs to come from baseload sources like big hydro or nuclear. It's much higher than that if one figures in a shift away from most ICE vehicles- purely on the basis of future anticipated demand. It's also unlikely to be shift to EVs given the minerals required to shift to EV at scale. In all probability it will take another 10 years for the government idiots to realise that Toyota is actually right and hydrogen fuel cells are the only feasible option.
Here's the problem. Cracking hydrogen from water is an endothermic reaction- it requires energy inputs. A friend of mine is an energy expert- he has taught geology in a college setting, was reasonably senior in an oil company and has long been an advocate of expanding nuclear. His take on the subject if that one presumes they want to produce hydrogen using the greenest method available, in order to achieve the same type of range and effect of a gallon of petrol/gas today it would cost around $6.11 before all the added costs.
Smart investors, looking for the type of once-in-a-lifetime capital growth and profits which come from normally high risks should look into investing around 5% of their portfolio into companies aiming to create integrated cheap systems for hydrogen production which are also decentralised. Governments are simultaneously constrained by the democratic veto and monomaniacally single-minded in their pursuit of a green future. In a few years they are going to sink tens of billions into green hydrogen projects at scale- as soon as they realise that people are never going to give up their cars and that EVs simply cannot fill the gap.
Cobalt prices remain relatively low, but lithium prices went through a major transition in 2022.
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In 2023 tens of the of people lost their electricity because ice down tree branches. A few months later in East Texas/NW Louisiana tens of thousands of people lost electricity because winds uprooted huge 100 year old trees!! I guess nuclear and coal are intermittent because ice and wind impact the reliability by downing power lines?!?
That's a failure to invest in energy infrastructure resilience on the basis of probability and impact. UK roads routinely grind to a halt with only a few centimetres of snow- yet other countries can handle several feet. The reason? The cost to fix is higher than the cost of inconvenience/lost productivity from occasional blackouts.
There is also the issue of deliberate externalisation- private companies pushing costs back into the public sector. A few years back I phoned the UK's largest telecoms company about a tree overhanging a telephone line for an old people's home which services residents with significant medical needs (every moth or so an ambulance whizzes past my house with music and lights). The telecoms company told me to phone the police, because it wasn't their issue. If private companies can push the expenditure onto the taxpayer, then they will. I would be interested to hear whether the politicians in case the case you cite agreed to any form of taxpayer-funded infrastructural spend.
Probability and impact on infrastructure from weather isn't the same as intermittency from wind and solar. Weather and infrastructure is high impact, very low frequency in the situation you describe (although this may change locally with more unpredictable weather systems). Wind and solar intermittency is high impact, very high frequency. How do we know this? From the huge sums of money being deployed to increase energy exports/imports over longer distances, through the deployment of energy storage solutions like pumped hydro (which is a very good idea to some degree, but not deployed at scale, because of costs) and because large numbers of coal or gas-fired power stations are kept idling at significant climate and financial costs to prevent blackouts in the event of drops in energy from wind and solar.
Basically, the powers that be have already agreed to mitigate the probability of intermittency from wind and solar and spend money to prevent the impacts. Taxpayers and consumers are already paying the costs, which is one of several reasons why LCOE's are such a fiction. The same cannot be said for weather extremes.
This doesn't mean that wind and solar aren't useful up to a point. They both have their thresholds. With wind it's about 30% of total energy demand. With solar it was around 8% for Germany, but this figure will obviously vary greatly by region. My point would this- most countries need to adjust to the fact that nuclear and big hydro (wherever possible) are going to play a much greater role in energy transition.
It's a position which most of the world's supranational organisation have belatedly come to agree with. The UN, the EU and the IEA have all agreed that nuclear needs to play a much greater role. The UN now accepts that natural gas is a necessary 'bridging' technology. The EU parliament recently rebranded natural gas as climate-friendly, although at the same time other parts of the EU bureaucracy are in the process of introducing a regulatory reporting mechanism for methane release from coal and gas.
This is the IEA's position on natural gas: 'natural gas, which emits less carbon than most other fossil fuels, has a limited role as a transition fuel from coal to renewable energy sources. Additionally, natural gas power generation may still be needed as back-up for variable wind and solar power.'
Taxpayers and consumers are already paying the costs, which is one of several reasons why LCOE's are such a fiction. The same cannot be said for weather extremes.
This doesn't mean that wind and solar aren't useful up to a point. They both have their thresholds. With wind it's about 30% of total energy demand. With solar it was around 8% for Germany, but this figure will obviously vary greatly by region. My point would this- most countries need to adjust to the fact that nuclear and big hydro (wherever possible) are going to play a much greater role in energy transition.
It's a position which most of the world's supranational organisation have belatedly come to agree with. The UN, the EU and the IEA have all agreed that nuclear needs to play a much greater role. The UN now accepts that natural gas is a necessary 'bridging' technology. The EU parliament recently rebranded natural gas as climate-friendly, although at the same time other parts of the EU bureaucracy are in the process of introducing a regulatory reporting mechanism for methane release from coal and gas.
This is the IEA's position on natural gas: 'natural gas, which emits less carbon than most other fossil fuels, has a limited role as a transition fuel from coal to renewable energy sources. Additionally, natural gas power generation may still be needed as back-up for variable wind and solar power.'
After the last few years I have zero faith in nuclear and coal so long as the grid in which tree branches can render them useless. So we might as well just max out renewables and natural gas and forget about coal and nuclear and hydro at least for residential electricity. In America the only way to guarantee electricity is with either a whole home natural gas generator or EV trucks will be able to power a home for a day or two or Tesla power walls would last maybe a day. I think nuclear should be used to move water to the western states and for peak demand.
All energy sources are just are susceptible to power grid or substation flaws- it really wouldn't matter what the energy source was. However, the Texas blackouts weren't caused by grid or substation problems. The weather did cause wind turbines to freeze, but it also caused natural gas wells to freeze and pipe blockages. The best way to deal with the latter problem is onsite back-up storage. This may sound somewhat expensive, but costs would be at least partially offset by purchasing gas to store in period where the price dips. Although it won't show in year long graphs, natural gas is actually quite a volatile commodity in terms of price- a lack of gas storage is one of the main reasons why the UK was recently stung with some of highest energy prices in Europe.
Onsite gas storage is a good investment, provided the systems of generation and storage are sufficiently isolated. It's also virtually guaranteed that multi-site storage would deliver on cheaper prices and greater reliability, because the multiplicity of individual decisions always outperforms centrally planned systems by a vast degree.
This also naturally leads on to a conversation about natural monopolies. Almost no-one gets this right. Energy provision should be free market. Energy grids should not. However, there is a great opportunity to create a thriving and dynamic market within the setting of publicly owned infrastructure. Create a legislative requirement that all infrastructure built or repaired has to go out to private tender.
There is a huge debate over private or public utilities. The evidence doesn't really point one way or the other, with a few exceptions. A hybrid system would deliver the best of both worlds- in particular a system with mandated private bids for connections would eliminate rent-seeking from either government or monopoly suppliers. This a major problem and it's not just confined to energy- whether the provider is government or a monopoly, utilities have a tendency to demand a 'share of the pie' when it comes to connecting new builds. It's an often ignored aspect of the reason why house prices tend to inflate over time. A bid system would allow end users to select individual connection services by price, delivery schedule proffered and reputational ratings. It would cut both government and energy monopolies out of the process- leading instead to direct commissioning from a market with commodified services.
California and Germany are both examples of renewables maxed out. They are both complete failures. France has energy which is half the price of Germany, and it produces ten times less carbon dioxide per energy unit. The main reason is nuclear. The Swedes are quite clever with their biomass- they burn a huge amount of their household waste. This may sound insane, but it's cheap and efficient and any carbon costs from burning waste are far better than the methane produced in waste sites through anaerobic compression, even with the best recycling systems in the world. Biogas from these sources are an expensive wrong solution. The exceptions are cardboard and paper recycling- suppliers in this area will actually pay commercial companies to cart away their waste.
They are not cheaper
IF clean AND energy are important then nuclear is the only logical choice. None of these woke states being victimized by green sources are smart enough to figure that federal subsidies are all that floats these inefficient methods of power production. But raiding the pockets of the serfs is all that matters to the rulers and the utilities
LOL, they want chaos. Energy = prosperity, eliminate cheap energy and they'll eliminate prosperity.
Thankfully Biden is incompetent and are we are producing record amounts of oil and gas. So it’s better to have an incompetent Biden than a ultra competent Trump who inexplicably ended up bankrupting a record number of energy companies in 2020…but it’s 4D chess and so maybe we are still waiting to see the results??
What about the "woke" state of Illinois?
In OK GRDA is building a single cycle gas plant that is 30% less efficient than combined cycle just so they can spin up and down due to renewable intermittent electricity. It’s all such A scam
In Europe I can see the same trend. I don't deny global warming is an issue, and I agree we have to deal with it sooner rather than later. But for most people home heating and eating are more urgent matters. I would like to help save the planet while I still have a roof over my head.
One principal reason for the enormous increase in costs in 1978-1982 was the passing and implementation of the PURPA Act of 1978. The Public Utility Regulatory Policy Act of 1978, “designed by genius’s to be run by idiots” (Herman Wouk Caine Mutiny) was meant to force the public utilities mostly located in the lower 48 contiguous states, to compete fairly with Non Utility Generators (NUG’s) and allow Qualifying Facilities (QF’s) to generate and sell electric power to the public utilities for distribution to the electrical grid at a rate that was equal to the new cost of the generation constructed and brought on line by the utilities. The costs that the utilities were using to justify the rate cases that would allow them to build new generation was documented and the QF’s benefited from the higher prices then newly available to them to build, operate and sell electricity to the utility for distribution to the grid and paying consumers. The comment that the QF’s and NUG’s had ruined the free markets (which were not free markets, as they were regulated by the various PSC’s and PUC’s state by state) with “out of the money” contracts belied the fact that the utilities monopolistic practices allowed for huge cost overruns and failure to bring generation online, at budget and on time. Over time the PURPA costs were absorbed and the cost curves here presented demonstrate that period of time when rates were higher. Don’t forget that prime interest rates were in the 15%-18% range at the time. The former nuclear naval officer, who was a peanut farmer and Governor of Georgia, and President of the USA, when not busy scheduling the White House tennis court times and fending off swimming attack rabbits at Camp David did manage to understand enough about the generation, transmission and distribution of electrons to foster PURPA and unlock the potential of unregulated markets. Sadly he was the first and last President, since FDR, to figure it all out and try to do something about it. Until there are some massive fails in cold weather in the northern states wherein thousands freeze to death in their dark homes or in the southern climes where thousands of people succumb to heat stroke in their darkened homes, we are stuck in this rather difficult situation in which massive funds are deployed to no good end and zero public benefit. This was a great post. Please keep them coming.
To make matters worse, these green initiatives don’t take into account the amount of dirty mining required to produce all these wind mills, batteries and solar panels. They all require copious amounts of diesel and other non-green inputs.
Understanding the laws of the United States would have prepare people better. Utilities fall under the category of a natural monopoly-which I don't have to go into has the Energy Bad Boys did a great job of explaining-and the United States has anti-monopoly laws which makes the products they sell illegal to make a profit-they have to sell it at cost to the costumer. As a result, utilities make they money by cost return of capital deployed plus a return, generally in the range of 10%. So the more capital a utility deploys the more it can ask for rate hikes-pass thru cost to rate payers, which is why utilities generally have no problem with spending for regulatory reasons. So you understand this, then all the spending that have been done from the utilities would be paid back because they have a legal claim of cost plus capital return. And given the regressive nature of excise taxes & fees-which I don't really care about-it should have been intuitive that the "poor" would have ended up getting stuck with the bill of climate change and the wealthy, businesses, & well educated would get all the tax benefits and short the bill.