Sunday funnies: European energy crisis edition
The energy crisis in Europe has put the geopolitical risks of depending on wind and solar power, while banning the domestic development of natural gas, at the forefront of the…
Xcel Energy filed its most recent resource plan on June 30, 2020, for review by the Minnesota Public Utilities Commission (PUC). Since then, thousands of Minnesota residents and Xcel customers have filed comments to the PUC giving their say on Xcel’s plan on whether it should be approved or rejected.
(You can also file a comment to the PUC by signing our petition here).
We oppose Xcel’s resource plan because of the enormous cost burden it would impose onto Xcel ratepayers for decades to come.
If approved by the PUC, Xcel’s resource plan will add over 11,500 megawatts (MW) of new generating capacity on Minnesota’s electricity grid through 2034 – more than the total capacity currently owned by Xcel in Minnesota. These additions would increase electricity costs for ratepayers by $57 billion through 2050, equating to an average annual increase of $1,428 for each Xcel customer (more than the average rent for a one-bedroom apartment in Minneapolis).
After reading several comments filed by others, however, it became clear that while there is plenty of opposition to Xcel’s resource plan, it isn’t for the same reasons.
In fact, much of the opposition to Xcel’s resource plan stems from several misconceptions about the capabilities of renewable energy and the electrical grid, as well as fears over nuclear power. Below I have listed several of the most common misguided oppositions and debunk them thoroughly.
One of the more eyebrow-raising oppositions to Xcel’s resource plan comes from the utility company’s plan to extend the life of the Monticello nuclear plant.
As one comment stated, “money for the nuclear plant would be better invested in clean energy.” Yet another claimed that “every dollar Xcel spends on nuclear is one less spent on clean energy.”
I’ve got some good news for these people: nuclear energy is, in fact, “a zero-emission clean energy source.” And while some people sound the alarm over nuclear waste, the fact is that “All of the used nuclear fuel produced by the U.S. nuclear energy industry over the last 60 years could fit on a football field at a depth of less than 10 yards!”
In addition, the footprint of nuclear energy is far less than that of wind and solar energy sources, which “require up to 360 times as much land area to produce the same amount of electricity as a nuclear energy facility.”
As far as costs are concerned, our report, Doubling Down on Failure, showed that Minnesota could achieve a carbon-free future using nuclear energy at fractions of the cost of using renewables. This is primarily because, despite high capital costs for nuclear power plants, nuclear power does not require backup energy sources like wind and solar, which we will discuss below.
Most of the opposition to Xcel’s resource plan comes from the utility company’s decision to ask for a new natural gas facility at Becker to replace Xcel’s retiring coal power plants – Sherco and AS King.
Many comments suggest that “Xcel should not be allowed to build a fossil gas plant” and that the company should instead “invest in a Just Transition to 100% clean energy by prioritizing energy efficiency, renewables, and energy storage…”
These comments fail to acknowledge a well-known characteristic of renewable energy: wind and solar are not reliable enough to power the grid on their own.
The electrical grid needs to balance the supply of electricity instantaneously with demand – meaning that the second someone plugs in an appliance, a power plant somewhere needs to ramp up electricity production. Since wind and solar depend on the weather to produce electricity, they cannot provide this increase in electricity output at all times of the year.
Imagine your only means of travel was by sailboat but there was no wind. (Think of the ending scene of Tommy Boy). Unless you chose to wait for the wind to start blowing, you would need a built-in motor to get going at that moment. This is what using renewable energy is like on the electrical grid and is one reason why fuel-based energy sources, such as natural gas, coal, or nuclear, need to be on the grid in case the wind isn’t blowing and the sun isn’t shining. That is unless you and I wanted to wait for the wind to pick up to charge our phones and computers or heat up a bagel.
Since Xcel is planning to retire its coal facilities, and nuclear is largely out of the conversation in Minnesota, natural gas must take its place.
Furthermore, calls for energy storage misunderstand the capabilities of storage facilities and what it would take to fully replace fuel-based energy sources.
As stated by Xcel itself, in order to replace fuel-based energy sources with energy storage, “storage would need enough capacity to provide energy for multiple consecutive days and/or during unusual weather conditions when there is not enough excess energy from [renewable] resources to re-charge the storage devices during that period.”
Xcel is referring to the fact that most energy storage facilities have a 4-hour dispatch time. This is problematic because there are times when renewable energy sources produce little to no electricity for 15-hour periods or longer. In order to have enough storage capacity to handle these situations, Xcel would need an astronomical amount of energy storage capacity which would cost hundreds of billions of dollars to implement.
While Xcel and many renewable energy advocates are hopeful for future technological breakthroughs for energy storage, the fact is that Xcel is not waiting for these breakthroughs to dismantle its coal power fleet. If the goal is to get rid of coal facilities now, then Xcel must replace it with an energy source that can power the grid 100 percent of the time and not only when the wind is blowing and the sun is shining.
Another notable misconception is the idea that wind and solar will continue to experience declines in costs.
As one person noted, “investments in fossil fuel will soon become stranded assets as the price of renewables continues to decline dramatically.”
This misconception is two-fold.
One, “renewables” refer to wind and solar energy sources, and it is incredibly misleading to suggest that solar energy would ever be cost-competitive with that of traditional energy sources.
According to power purchase agreements (PPA) from Xcel, the cost of solar energy in 2019 – even with subsidies for solar investments intact – was nearly $110 per megawatt-hour (MWh). The cost of Xcel’s owned natural gas facilities in 2019, for comparison, was $27 per MWh – less than a quarter of the cost of solar energy PPA prices.
Two, the only reason wind energy is cost-competitive with that of traditional energy sources like natural gas is due to very favorable subsidies for wind farms, such as the Production Tax Credit (PTC).
However, without these subsidies – which will likely expire at some point in the near future – Xcel expects the cost of renewable energy sources to increase dramatically. Here are projections from Xcel for the cost of wind and solar in the future:
Another misconception many people had was the idea that low-income communities have the most to lose by the addition of a natural gas plant.
As one comment stated in opposition to a new natural gas facility, “Low income communities and communities of color have the most to lose, since they spend more of their income on energy bills…”
While it is true that low-income communities will suffer the most from increases in electricity prices, an 835 MW natural gas plant is the least of their concerns. The real cost in Xcel’s resource plan stems from the over 8,100 MW of new renewable energy capacity that Xcel wants to build.
For example, the capital cost of Xcel’s new natural gas facility at Becker would be just under $900 million, while Xcel’s plan for 8,100 MW of renewable energy capacity would cost nearly $10 billion – and this doesn’t include additional costs for operating expenses, utility profits, property taxes, and more.
The worst part of this is that Xcel could continue to supply customer’s electricity needs with the addition of this natural gas plant alone, without needing any of the 8,100 MW of wind and solar. This $10 billion premium on Xcel customers – which will negatively impact low-income communities most severely – comes solely out of the need to satisfy renewable energy mandates from the state.
It is incredibly misleading to argue against inexpensive energy sources like natural gas on behalf of low-income communities while simultaneously calling for 100 percent renewable energy – which will increase electricity prices dramatically.
People wouldn’t believe the above misconceptions about energy as widespread as they do if they weren’t so caught up in another misconception about energy: the idea that without a dramatic shift to renewable energy humanity is doomed.
The feeling of imminent destruction is one of the most expressed views in these comments, such as the following:
Continuing to rely on fossil fuel and gas will be the death knell of our country and of our world.
[E]verything about the production and use of natural gas for the generation of power is unsustainable, fully detrimental to the health of the earth and the future of humanity.
Decades from now, our children and their children will thank us for having invested in the health of our planet and communities at the right time.
While these views might have good intentions behind them – i.e. the survival of the planet – they are misplaced for multiple reasons.
First, wind and solar are far from “renewable” energy sources that are better for the planet, as the technology used in these energy sources are sourced from several rare-earth minerals mostly mined in China.
Second, a recent Harvard study shows that wind and solar energy sources contribute to global warming on a significant scale:
Harvard University researchers find that the transition to wind or solar power in the U.S. would require five to 20 times more land than previously thought, and, if such large-scale wind farms were built, would warm average surface temperatures over the continental U.S. by 0.24 degrees Celsius.
In addition, “The Harvard researchers found that the warming effect of wind turbines in the continental U.S. was actually larger than the effect of reduced emissions for the first century of its operation.”
If people were serious about the future of the planet and humanity – both in terms of lowering emissions and making sure people had affordable electricity to depend on – they wouldn’t be advocating for 100 percent renewable energy. They would, indeed, be in favor of carbon-capture technology and nuclear power.