Clean Power

Published on December 5th, 2014 | by Tina Casey

As Coal Crashes, US Governors Push Wind Energy

December 5th, 2014 by Tina Casey

Forget the annual war on Christmas, things are really cooking up over the war on wind energy. The fight over wind energy has become something of a new American holiday ritual around this time of year, and now the stakes are higher than ever.

In the latest twist, a coalition of US Governors has waded into the fray with a letter to House leadership, citing a drop — yes, a drop — in electricity prices over the past five years, in states that have been producing more wind energy.

The ripple effect of PTC for wind energy: manufacturing jobs (courtesy of AWEA).

What’s All This About A Tax Break For Wind Energy?

For those of you new to the topic, the big wind energy blowup is all over a tax break called the production tax credit (PTC) for wind energy.

As a matter of sound public policy, namely, for economic development and national defense, Congress routinely exercises its ability to support domestic energy production through various subsidies, including tax breaks. For generations, that kind of nanny-state coddling was pretty much exclusively directed at fossil fuels and nuclear energy.

In 1992, Congress passed the first PTC for wind energy as a temporary kickstart to help get the nascent industry on a level footing with other energy sectors. The credit was routinely extended, along with virtually every other energy subsidy, with support from red and blue lawmakers alike.

The initial champion of the PTC for wind was (and still is) Iowa Republican Senator Chuck Grassley. Here he is explaining the legislative intent in an interview with The Toledo Chronicle a couple of years ago:

… [A]s much energy as possible, both traditional and renewable, should be produced at home to create jobs and strengthen national security. Wind energy is a free resource, and it’s abundant in many places around the country … [A] clean renewable source like wind is not dependent on far-away countries with leaders who are hostile to the United States even as they take our energy dollars.

Who could hate it? Nevertheless, as with all things Obama, support for what was in essence a good, solid Republican idea (Affordable Care Act, much?) withered to the point of extinction among Republican leadership in Congress after the President took office in 2009.

So now, every time the PTC for wind energy comes up for renewal, there is a huge knock ‘em down, drag ‘em out fight.

Republican Governors For Wind Power!

Despite some ham-handed attempts at monkey-wrenching the wind energy sector by our friends over at Koch Industries, there’s no arguing with the economic track record of wind energy now that the technology has matured.

That’s why you’ll find a much more bipartisan effort at the state level, in the form of the Governor’s Wind Energy Coalition.

The current membership is a healthy purple, including Arkansas, Kansas, New Mexico, South Dakota, California, Kentucky, New York, Washington, Colorado, Maryland, North Dakota, Delaware, Massachusetts, Oklahoma, Hawaii, Michigan, Oregon, Illinois, Minnesota, Pennsylvania, Iowa, Montana, and Rhode Island.

Check out this interactive map from the American Wind Energy Association and you’ll get the a similar red+blue= purple picture in terms of job creation and economic activity.

Not for nothing, but as a counterbalance to the Koch brothers the Governors Wind Energy Coalition’s smallish group of corporate affiliate members also includes MidAmerican Energy. Yes, that MidAmerican Energy.

In a letter to House and Senate leaders dated December 2, the Coalition urged another extension for the PTC for wind energy, citing these highlights as “directly attributable to the PTC” (breaks added for readability):

Today, 26 percent of South Dakota’s power generation comes from wind. In Washington State, developers added 2,800 megawatts of wind energy between 2001-2012…

Oregon generates over 12 percent of its electricity from wind…

In Iowa, where 27 percent of the state’s electricity generation comes from wind, MidAmerican Energy made the largest capital investment in the state’s history — building a wind farm that will add over $2 billion to Iowa’s economy.

The Coalition also hints at the ripple effect of all this activity on other economic sectors, which could get a boost from lower energy costs. According to their figures, states that produce seven percent or more of their electricity from wind have seen the price of electricity drop over the past five years. Meanwhile, prices have gone up in other states.

Death Blow For Coal

No, we didn’t forget about coal. Domestic consumption of coal has stalled out and is on the verge of dropping off the cliff. Although wind energy and other renewable sources have been blamed in some quarters, natural gas has actually been the biggest headache for coal producers.

We’re waiting for the other shoe to drop, as today’s glut-fired cheap natural gas heads into the inevitable cycle of falling production and rising prices. All else being equal, that would be good news for coal, but that’s where the game-changing aspect of renewable energy comes in: you’re not going to see that same kind of boom and bust cycle, since the source is free.

Meanwhile, coal has sunk into the doldrums. According to the latest Federal Energy Regulatory Commission report, no new coal powered generating plants have been put in service or expanded this year, through October. Yes, that would be zero.

Natural gas weighed in at 45 units for an installed capacity of 5,373 megawatts during the same period.

Renewables have also fared well so far in 2014. Solar and biomass have been leading the pack in terms of units, but FERC toted up 2,189 megawatts for wind energy, beating the other two by a wide margin and looking pretty good against natural gas.

As for coal facing more competition from wind energy, you ain’t seen nothing yet. The wind industry has been expanding exponentially without even beginning to tap into the country’s vast offshore wind energy resources, so hold onto your hats.

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Tags: AWEA, Chuck Grassley, FERC, Governors' Wind Energy Coalition, Midamerican energy, production tax credit for wind enery

About the Author

Tina Casey Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

eveee

Governors Wind Energy Coalition is a good reference. They have some info on the Energy Imbalance Market just set up by the FERC. This is a big deal. Provides more power cooperation between Western states.
eveee

Zach – The letter to house and senate is not working.
- http://zacharyshahan.com/ Zachary Shahan
  
  Ha, I almost went and checked every link. Fixing now…
  - eveee
    
    Yes. I really…. really,… am a nerd.
    - http://zacharyshahan.com/ Zachary Shahan
      
      If you need a reference, I will vouch for that.
eveee

Tina, the Governor Wind Energy Coalition link appears broken.
- http://zacharyshahan.com/ Zachary Shahan
  
  http:// got deleted. I fixed it. Thanks.
  - eveee
    
    If you wanted proof that everyone does not read references, there it is. I am an exception, a nerd. Guilty as charged.
    - http://zacharyshahan.com/ Zachary Shahan
      
      Believe me, I have plenty of proof! Almost nobody clicks through on links… But the ones who do are better informed.
eveee

There was an NGO Governors Coucil on Climate Change, organized by Gov Schwarzenegger and some of the Western State governors. That was several years ago. This trend is continuing. Now pressure will be on from the Republican governors. Activitsts have recognized that governments are slow wheels to turn, so have turned to NGOs instead. That will start to change as momentum builds. Central government will be the last to acknowledge change. The US-China carbon agreement is evidence that matters are about to change. In the beginning change is resisted. Once it appears inevitable, there will be a race to avoid being the last one.
- Will E
  
  and the race is on. Solar and Wind have proven to be big money makers.
Bruce Morgan Williams

It’s nice to come here and preach to the choir once in a while, but we should also be posting at the mainstream news sites if we want to make a difference. The amount of anti-science anti-environment lies out there is stupendous. Someone should respond to every one.
- Bob_Wallace
  
  Some of us do. Feel free to join the effort. ;o)
  
  I’d suggest that if you are most interested/best informed about a particular issue or two that you set alerts for articles on those topics. I use Google Alerts and use the articles that pop up on a daily basis to jump into conversations where I think I can bring some facts which aren’t being covered.
  
  Also realize that this site reaches a lot of eyeballs. Many times more than most newspapers.
  - David in Bushwick
    
    What is the daily count? They say they are #1 but what are the numbers, out of curiosity.
    - Bob_Wallace
      
      Here’s the sites Alexa page. Lots of people with graduate degrees. And a higher percentage of females than I would have expected based on comments.
      
      http://www.alexa.com/siteinfo/cleantechnica.com
      
      Comments are running above 10,000 per three months according to Disqus.
      
      Here’s a couple other ranking sites that Zach uses (About – top of page). I am just taking my first look at them so I can’t say anything about them yet.
      
      https://www.quantcast.com/cleantechnica.com?country=GLOBAL
      
      https://siteanalytics.compete.com/cleantechnica.com/#.VIIBXzHF_fI
      
      307,000 unique visitors in Oct 2014.
      - Bob_Wallace
        
        I put up the Zach signal. I’ll bet he jumps into his Zachmobile and rushes to answer our question before long.
      - eveee
        
        Not to mention references by commenters on other sites and references in articles. There is a healthy exchange between such sites across the globe. Its a bit of a community.
      - http://zacharyshahan.com/ Zachary Shahan
        
        Indeed. It’s a wonderful cleantech community.
    - http://zacharyshahan.com/ Zachary Shahan
      
      To compare with other sites, I’ve used Quantcast and Compete, but for more regular use on a daily or monthly basis, we have other services. In recent months, we’ve passed 1 million visitors a month.
      
      We do try to influence major media, and this is part of the reason for our existence. CleanTechnica has been referenced by the NYTimes, Washington Post, Forbes, Slate, MSNBC, and many others, so we are making somewhat of an impact. But, basically, the more viewers and social media shares we get, the more journalists at these outlets will find us and reference us. So, share as much as you feel inspired to!
- David in Bushwick
  
  I’m sure many of us do as I do and the replies can be quite interesting.
- http://zacharyshahan.com/ Zachary Shahan
  
  Thanks. And when you do, reference CleanTechnica, so more people know where to go for news and analysis on this subject.
  - Bob_Wallace
    
    Honestly, I tend to not link to CT when I’m commenting on some sites. The ones with large concentrations of nutters.
    
    I’m afraid that they will show up here and then I’ll have to deal with them…. ;o)
    - http://zacharyshahan.com/ Zachary Shahan
      
      Haha. I understand that.
harisA

Coal is ‘crashing’ because of cheap natural gas and not wind.
- Bob_Wallace
  
  Both, actually. And solar will soon be helping coal to its hospice bed.
  
  Renewables are killing coal in Germany. They have no cheap natural gas.
  - David in Bushwick
    
    No cheap NG is Germany’s big hole to dig out of. And they burn soft, dirty coal too. Solar is much more limited given the latitudes and Germany is running out of space for turbines unlike the US. Offshore will boom but their territory is limited too.
    The wealthy Germans have played a big part in bringing down renewable energy cost with new technology and raw purchase power.
    - Bob_Wallace
      
      Germany has a lot of lower performance older onshore turbines that are in the process of being swapped out. At those sites performance is likely to move from ~15% CFs to ~40% CFs. Plus the new turbines are likely to be a lot larger, multiple MW replacing <1MW.
      
      With the new offshore monsters I suspect Germany will have plenty electricity coming in from the wet. Germany is going to have to build more transmission to move some of that power southward.
  - harisA
    
    For future I do agree, however, I believe, the article implies a direct correlation to what has already happened.
    
    Environmental regulation Energy efficiency, renewable and storage do not bode well for the future of coal, but it has a very strong and effective political backing.
    
    Also, as US oil production increases, fuel oil, which is a by product of Gasoline/diesel production mix may also creep into energy production mix.
    - Bob_Wallace
      
      As the coal industry shrinks, so does its political power. And at the same time the wind and solar industries are growing and starting to swing more political weight.
      
      I really doubt that we’ll see fuel oil get used for new generation in the US. I suspect any plant license applications would be turned down by the EPA. Besides the cost of petroleum generated electricity is quite high.
      - harisA
        
        Probably will be cracked and sold as distillates and lighter fuels.
    - David in Bushwick
      
      NYC is, thankfully, replacing the fuel oil boilers a few thousand buildings have but contribute to 70% of the winter air pollution. NG is the replacement.
      But demand for oil for other uses won’t go down as fast as coal is dropping. Eventually, coal will become expensive due to its very limited market. Those days can’t come soon enough.
      - Will E
        
        oil will go as fast as coal. as divestment explode on oil.
        with no money no oil.
        prices high, cannot compete
        prices low, cannot produce.
      - David in Bushwick
        
        We need to convince the fundamentalists that fossil fuel is the Third Anti-Christ.
- eveee
  
  As Tina pointed out, natural gas has an impact, but it is volatile. Renewables keep steady pressure.
- http://zacharyshahan.com/ Zachary Shahan
  
  It’s a combination of natural gas, solar, and wind. See our monthly capacity addition reports that show those are the big three that have been growing in the past couple of years. The trend will continue.
  
  http://cleantechnica.com/2014/11/24/two-thirds-of-us-installations-were-from-the-wind-sector/
- Steven F
  
  Coal is ‘crashing’ because of cheap natural gas and not wind.
  
  The biggest cause of coal plant closures is now probably EPA regulations on Sulfur and mercury. The new regulations will require in installation of scrubbers on most coal power plants. If coal plant is profitable that will probably happen.
  
  However if the plants profits are under pressure do to competition from natural gas and renewables then yes the plant will probably be shut down.. If you then factor in the rapid growth in home solar installations and the switch to more efficient LED lighting ,even profitable coal plants will start to look like a bad investment.
  
  In 2011 it was projected that 28 GW of coal would be shut down due to EPA regulations. The most recent projections indicate 72 G W of coal will be shut down. According to the article in the link below that is about 1/5 US coal generation. Every year the numbers keep getting worse for coal.
  
  http://instituteforenergyresearch.org/topics/policy/power-plant-closures/
  - Bob_Wallace
    
    Stephen, the Institute for Energy Research is a right wing disinformation site. Please do not link to it here.
    
    http://en.wikipedia.org/wiki/Institute_for_Energy_Research
    
    Now, if you have some reliable information that wind has played no role in coal plants losing money I’d like to see it.
Michael G

One over-looked but very positive aspect of wind and PV solar is that it is incremental. If a consumer adds one light bulb’s worth of electric consumption than the existing capactiy allows for, you can either build an entire new thermal plant at the cost of many $millions with much unused capacity, or you can add one windmill, or sq. meter of PV at considerably less cost.

Setting up the wind or solar farm is the biggest expense with all the roads, cables etc. Adding one more windmill or improving the efficency of each one a tad now and again is minor. As thermal plants age, there will be an ever increasing $ advantage to replacing them with RE.

As this steady increase in capacity continues we will see more and more “special interests” see where their economic future lies and get on board. For most people here it is about preserving an inhabitable planet. For most people in power it is the next election or the next qtrly earnings report (and bonus time).
- Larmion
  
  Most thermal plants do allow for limited uprates and/or the addition of new boilers at fairly minimal cost. They can’t be upgraded nearly as incrementally as PV plants, but they’re not as bad as you make them sound.
  
  And of course, a thermal plant typically has room on site for an extra boiler or two, while wind farms don’t. And getting planning permission for extensions to wind farms is a horribly slow process in many jurisdictions.
Bob_Wallace

The House passed a one year (all the way to the end of this month) extension of the wind PTC. In other words, a joke. No wind farms will get ‘underway’ in less than a month in order to qualify.

But there may be more to it. The Senate has asked for an extension through the end of 2015. Now the two bills will go behind closed doors for ‘reconciliation’. The final product could be the Senate’s version.

Behind closed door horse trading and maneuvering is a way for one body of Congress to publicly vote one way but allow things to go another. It’s kind of a “wink, wink, nod, nod” system for allowing something to happen while maintaining the ability to deny that you supported it when you get back home.

By approving a short term extension and giving its representatives permission to negotiate with representatives from the Senate they leave room for a bill to go forward with wind subsidies through 2015.

Lots of the dances in Congress are carefully choreographed and rehearsed prior to the performance.
Mike333

Why did E.ON of germany divest itself of all old energy generation? Land based Wind Power now cheaper then all old carbon solutions.

What’s coming down the pike is Wind Turbine generation without gears, new turbine system will use what maglev uses.
- Larmion
  
  They didn’t ‘divest’. They split up into two seperate companies, simply because having two radically different and competing businesses in a single entity is a management nightmare and leads a massive conglomerate discount on the stockmarket.
  
  Don’t expect ‘New Company’ to disappear overnight; it’s not designed as a ‘bad bank’, but as a viable, rival business (it includes assets like hydro power whose commercial prospects improve as power generation becomes more variable for example).
  - Bob_Wallace
    
    “simply because having two radically different and competing businesses in a single entity is a management nightmare”
    
    There are many, many corporations that successfully manage quite divergent divisions. It’s simply a matter of creating the right management structure.
    
    ” leads a massive conglomerate discount on the stockmarket.”
    
    Or the market is now recognizing that coal is dying and could easily clean out the corporate coffers while on its deathbed.
    
    Separate coal from the part of the corporation that will continue to have value and protect that value from the bankruptcy court. That separation has to be done early enough and for a “legitimate” reason to keep the court from reaching back through the separation and seizing assets of the successful part.
    
    If “New Company” disappears too quickly then the ruse fails.
    - Larmion
      
      Those succesful businesses pay a price in the form of a conglomerate discount though. Not a single company owning multiple disparate businesses currently has a valuation as high as the sum of its parts.
      
      And while many companies maintain divisions doing different things, very few indeed have divisions that are directly in competition with one another. It’s utter madness.
      
      New Company is more than a coal company (although the recent energy laws passed in Germany make coal much more profitable as some excess capacity is shed). It’s also a significant operator of hydroelectric plants and natural gas plants, both categories that gain from more renewables.
      - JamesWimberley
        
        I suppose the greener half keeping the brand name will be the one that has retail customers, Sootco GMBH can hide in the wholesale market. It’s a clever but cynical move.
    - Will E
      
      this is a strange conversation.
      Eon going clean and will make money. New Company will take over old steam technic. and go bust. State Pensionfunds Taxpayer pay the fossil nuke losses.
Larmion

The EIA, and most other forecasters, certainly don’t predict a ‘coal crash’. Stagnation and then gentle decline after 2020, yes. A big cliff? Nope.

source: http://www.eia.gov/analysis/projection-data.cfm#annualproj

And most of that limited decline in coal is due to natural gas. An improvement, but still a far cry from what we need.
- onesecond
  
  The EIA massively understimated the development of renewable energy deployment consistently for the last two decades. I wouldn’t bet on them being right this time after years and years of being wrong.
  - Larmion
    
    True. However, there are good reasons to assume their last reports are more reliable. For a start, the technology side of energy is now much more predictable than it used to be. Wind is a mature technology where most innovation now comes from steady process improvements rather than fundamental design and materials engineering work. The price decline in solar too has slowed markedly.
    
    And of course, there’s the simply fact that announced or expected plant closures of coal plants are rather few in number. Extrapolating from that, we’ll see coal go into decline sooner than the EIA predicts, but nothing like the sudden, massive decline this article predicts.
    
    We musn’t be complacent. Renewables are still far away from ‘winning’, despite what renewable optimists suggest. Geothermal is still going nowhere, solar remains marginal for the forseeable future, hydro has been largely stagnant for decades. Wind is beginning to have an impact, but just look at the recent installation figures: even with tax incentives, it’s still far slower than in its heyday.
    
    Change is slow, too slow to achieve any of the goals the IPCC recommended. Perhaps not surprisingly, scientific research in the areas most affected by climate change (crop science, storm and flood protection,…) has long ceased to live in hope and is focusing on adaptation strategies.
    - Matt
      
      Yes “coal crash” is another example that this site has gone to the internet approach of extreme headlines to get click counts. Sad but true. The story has very little content on coal at all. Except to say none are being built, nothing to back up a claim of “crash” or “falling of a cliff”.
      - Bob_Wallace
        
        There’s the price of coal stocks which have fallen significantly over the last two years.
        
        There’s the fact that we are in the process of closing about 25% of our coal plants in the US and we have essentially quit building new ones.
        
        There’s the fact that several coal companies have gone bankrupt recently.
        
        Some of that is mentioned in the last section of the paper.
      - eveee
        
        Don’t forget EONS coal divestment and recent 20% price decline.
        
        http://climatecrocks.com/2014/12/04/last-lunge-for-black-lungs-coal-struggling-to-breath/#more-21428
        
        FF divestment is now an open topic and the “Carbon Bubble” is making it open season on FF.
        
        http://climatecrocks.com/2014/12/03/finance-community-waking-up-to-the-carbon-bubble/
        
        We are not talking the party is over and it happens yesterday. What I am saying is that there is a change going on. BAU was growth in FF. Not so much anymore. Thats a change. Growth is stagnant. Funds will begin to flow where they are more useful. FF economic payback is starting to lag. We now see the drag showing up as open admissions by China and the US governments, and form major industrial cos like EON. Its a matter of time. As funds flow out of declining FF opportunities, some will flow toward new opportunities. Solar, wind, EVs, and so on. The single most relevant and important factor in all of this is that as a whole, the changes are so fast that many are simply unable to keep up. Despite the present low levels of renewables, the pace is rapid, quickening, and have deep impacts on infrastructure and society. With all the backwash, its easy for even astute renewable industry watchers to be surprised by such events as the announcement by EON to divest from centralized FF PP. But the evidence was there and talk of utility death spiral predated events. EON just does not want to become a victim of the death spiral.
        IMO, If I may say, the article is about coal and wind energy and the governors. It has enough factual references to coal decline. It might be good to add more text about coal decline in the body next time. Not everyone clicks the references. Other than that, its a great article.
        Thanks, Tina.
      - http://zacharyshahan.com/ Zachary Shahan
        
        Indeed. Am preparing to publish our monthly report on electricity generation and coal is still worlds ahead of renewables. And the situation on this sector doesn’t change very fast. Coal is certainly not crashing yet. More of a slow decline, sadly.
    - Will E
      
      renewables have reached tipping point ant fossil capsize point. as nobody cares for climate change, they go where the big money is made.
      renewables. divest in fossil invest in renewables. that is happening now. see Eon biggest European utility company
    - JamesWimberley
      
      “The price decline in solar too has slowed markedly.” The decline in module prices over the last few years was much faster than the learning-curve trend, and a temporary plateau is consistent with it. Have you any evidence that the learning curve itself – around 11% price decline per year, with volume doubling over 2 years – has flattened? The technology reports we read here and elsewhere don’t suggest any slowing in the pace of innovation. For instance, following JA Solar’s recent announcement of a 20% efficient poly cell made in their lab but on industrial equipment, Jinko have announced a less dramatic 18% panel – but it’s going into production next year. GCL-Poly are selling off much of their silicon wafer business to concentrate on their promising pebble-bed metallurgical silicon venture. Etc etc.
      
      While system prices are flat in Germany thanks to the engineered slump in demand and the protectionist EU-China “anti-dumping” deal, my impression is that system prices in the USA continue to fall as installers catch up with German BOS costs. US utility solar is now as cheap as anywhere.
      
      There’s little sign that the EIA understands renewables in any deep way, and their record of being wrong on them does not justify giving their forecasts credence as against the consistently more optimistic and accurate NREL, Solarbuzz or IHS.
      - Ronald Brakels
        
        Without subsidy or tax the average cost of rooftop solar for a median sized installation is now about $1.67 US a watt in Australia. At that price, with a 5% discount rate, it would produce electricity for around 10 cents a kilowatt-hour or less in the sunnier half of the United States. The recent fall in the Australian dollar has actually increased the cost of components here, but we’re waving our hands in the air like we just don’t care.
  - Bob_Wallace
    
    I wonder if our letter writing might have helped the EIA reconsider their predictions?
- Matt
  
  I think this is the first year in the last 20 the EIA doesn’t claim that wind and PV installing will stop the next year and total capacity will be flat. That is only additions are to replace broken ones. So while they are turning they are still way off on RE predictions. Yes coal will not drop to zero over night. But as coal plants age they will not be replace by new coal. There are a lot of old coal plant up for closing in then next 5-20 years. Now what can drive that even faster is that as PV and wind grow, they eat ways at the peaks where coal/nuke make their money. This will cause closing or at least mothballing addition plants before they reach end of life. This whole dance is because coal/gas/oil have their support hard coded in law, so changing them is “raising” taxes. While PV/solar are short lived so renewing them is “give money away” or “picking winners”.
  - eveee
    
    Matt – Yes. Same with IEA. They have suddenly changed from almost no solar by 2050, to solar being the largest source of electricity by 2050. IMO, they are still short. EIA and IEA are not taking into account events unfolding with EVs, for one.
    - http://zacharyshahan.com/ Zachary Shahan
      
      IEA had a change in leadership that resulted in big changes, thankfully. But, yes, it’s apparently hard for such forecasters to not be overly conservative, and they thus get the story wrong.
      - eveee
        
        One wonders where they are positioned now. With all the very bad IEA forecasting of the past, where does one turn to for more accurate forecasts? Greenpeace has had accurate forecasts for wind until now. EIA has been extremely bad, just like EIA. I think IEA may still be off.
      - http://zacharyshahan.com/ Zachary Shahan
        
        Yeah, I think IEA is still off. I think a mix of IEA & Greenpeace is going to get you the most accurate future. IRENA is sort of that.
- Bob_Wallace
  
  One probably doesn’t want to look to the EIA for good predictions. The EIA predicts some very strange futures. Here’s their prediction of solar installation.
  
  The EIA is predicting that the cost of onshore wind and PV solar will be significantly higher five years from now.
- JamesWimberley
  
  Agreed, it’s not a crash. More a straitjacket; the deteriorating economics of coal generation, and the prospect of the EPA regulations, mean that no new coal plants will be built in the USA, ever, and the old ones shuttered for pollution or simply age will not be replaced or refitted.
  
  But I don’t share the “stagnation to 2020″ story. Look at Germany: because wind and solar are higher up the merit order, they are creaming off more and more of the profitable daytime peak. German utilities want to close 28 unprofitable coal plants. It’s unlikely the government will let them, to preserve security of supply, but it will have to devise a bailout. Americans are much more free-market than Germans and averse to bailouts, so the death spiral could take a more dramatic form.
  
  BTW, the induced solar crisis in Germany doesn’t extend to wind, which is keeping nicely to the government’s 2.5GW a year target for new capacity (link). That excludes a growing volume of repowering. New turbines have much higher capacity factors than old ones, leveraging the effect of the installation – including the gravedigging of coal.
  - Bob_Wallace
    
    It’s not a bailout, but more of a capacity payment. We need deep backup for extended low wind and solar periods, rare as they are. Or if a couple of very large thermal plants go down as happened in SoCal a couple years back.
    
    The question will be whether it’s cheaper to pay CCNG or coal plants to furnish that deep backup. To sit idle 95%, 99% or 100% of the time, but to be there if needed.
    
    Coal may be the answer in Germany because they already have the coal plants and no cheap NG.
    - Bruce Morgan Williams
      
      Peak Shaving through Demand Response and real time market pricing will remove much of the need for peaking capacity. Distributed storage will eliminate the rest, it’s just a question of time, and cost cutting.
      - Bob_Wallace
        
        That’s very likely for peak shaving. EVs can be an excellent mechanism if we allow grid managers to determine actual time of charging. A perfect dispatchable load.
        
        But peak shaving and deep backup are different. Grid managers first job is to keep the lights on 24/365 and right now we have no affordable long term storage (other than pump-up hydro). The cheap option is to keep some fossil fuel generation on hold and fire it up for a few hours a year.
        
        When the two SoCal reactors (SONGs) went down the utility dusted off an old gas turbine that hadn’t been run in years to help fill the void.
        
        The thing we want to do, IMO, is not dismantle our fossil fuel plants as quickly as possible, but to idle them ASAP. Then use them for extreme situations and emergencies until we develop better options.
      - eveee
        
        Yep. All the stops should be pulled out to reduce the need for long term in the first place. RE sources are not yet well matched to annual load everywhere. And we should change the utility structure to place a value on each type of response. Some utilities are breaking the fast response out to seconds or minutes, to reflect the greater value of instant response. Likewise, seasonal storage should be properly market incentivized. Its all part of a somewhat bumpy transition to an entirely different utility market. Evidence in the utility death spiral and EONs response to the new reality base load PP face. The future is going to need more horizontal structure and cooperation, less vertical top down structure and concentration.
      - eveee
        
        Yes. Demand Response needs much more attention. Its low hanging fruit. There has to be improvements in renewable planning and infrastructure. So far, its just been additions to the existing grid with no other changes to BAU. A lot of improvement can come from dispersing RE and selecting RE with greatest natural load matching. That reduces the need for short and long term storage. Another is grid infrastructure and planning. Part of the reason IEA revised its estimates of renewables upwards is that they realized if the grid and infrastructure was changed to accommodate renewables, a lot more renewables could be added successfully.
        
        Some regulatory agencies are changing.
        
        http://www.greentechmedia.com/articles/read/new-york-launches-major-regulatory-reform-for-utilities
    - Ronald Brakels
      
      In Australia the price cap on wholesale electricity is about $12 US a kilowatt-hour. As a result we do have generating capacity that sits idle for 99% of the time or 99.9% of the time and only gets switched on during critical peaks in the summer. And if these critical peak generators decide they aren’t making enough money then as soon as one shuts down it restores profitability to the others.
      
      Now if during a critical peak not enough power is provided and rolling blackouts result, one could consider raising the wholesale price cap to encourage more critical peak generating capacity, but I wouldn’t. Rolling blackouts appear to have become a thing of the past here. Increasing solar capacity is eliminating critcal peaks from the day which is when they generaly happen and we appear to be on the cusp of widespread home and business energy storage. Perhaps we should consider decreasing the price cap?
      
      Allowing the wholesale price to rise to $12 US dollars a kilowatt-hour or so allows market forces to operate and means consumers get the best possible price for electricity. Hahaha! Of course it doesn’t. Maybe it works that way for ball bearings but not electricity. Having a high cap means you get ripped off. It gives large generators an incentive to withhold production to force prices up such as what South Australia’s largest power station, Torrens Island, did a while back during a heatwave. One solution is not to have any large generators, but generators will still have an incentive to become large and so will attempt to buy politicians dinner until they have permission to become large. A good solution is to have plenty of wind and solar capacity on the grid as they are price takers and reduce the ability of price setters to manipulate the market. I suggest some of the first and a lot of the second.
      - Joseph Dubeau
        
        How much coal do they burn while they are sitting idle?
      - Bob_Wallace
        
        In the US we turn off coal plants for months at a time. In the spring in the NW for example. Between hydro and wind along with lower demand there’s just no need for coal.
        
        And I saw data of coal plants in the upper Midwest being cycled on and off every day for days on end. They’d shut down as the evening peak dropped and fire back up some hours later to help with daytime demand.
      - Ronald Brakels
        
        None. Our peak generators are gas and hydro, and the ones that we almost never switch on and only use in critical peaks are often oil fired in some form, either diesel, kerosense, or I guess what would be called heating oil in the US. Most of them are very old, but the kerosene powered 414 megawatt Mount Stuart Power Station in Townsville Queensland was only built in 1998. (Sometimes we’re not very bright.) That one may not have been switched on for over a year thanks to a total decline in electricity use and the spread of rooftop solar.
  - Bob_Wallace
    
    “New turbines have much higher capacity factors than old ones, leveraging the effect of (replacement).”
    
    Plus it’s likely that the old <1 MW turbines will be replaced by multiple MW units. Moving from a 500 kW turbine to a 3 MW is a 6x increase.
    
    We're seeing that right now at Altamont Pass. The refurbished wind farm will have fewer turbines but produce more electricity.
  - Larmion
    
    Germany is closing a few spare plants (8 are planned), enough to crank up capacity factors in the remaining ones back into the profitable zone. The German government expects little or no decrease in coal generation in the coming years, though that generation will come from a smaller number of more recent plants.
    - Bob_Wallace
      
      Little or no decrease in coal generation but a decrease in coal consumption. The replacement plants are much more efficient.
      
      And we should remember that Germany burns a lot of coal on behalf of other European countries.
    - Will E
      
      read energiewende nachrichten and find out how wrong you are.
- Will E
  
  when you take EIA for granted you live under the cliff coal dropps off. Hold your hat on.

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As Coal Crashes, US Governors Push Wind Energy