Friday, February 24, 2017

Campaigning for Clean Air featured on Neutron Bytes

Neutron Bytes banner

Recently, my  book Campaigning for Clean Air was featured on Dan Yurman’s Neutron Bytes blog. Here is a taste of what they had to say:

“In her book, Campaigning for Clean Air, Meredith Angwin presents clear and well-referenced reasons for supporting nuclear energy. These sections of the book are based on her years of experience in energy research and on-site problem solving.”

Read the entire post

Thursday, February 9, 2017

Now Available: Campaigning for Clean Air: Updated

Front Cover of Campaigning for Clean Air

Campaigning for Clean Air: The book is available!

My book,  Campaigning for Clean Air: Strategies for Pro-Nuclear Advocacy, is now available on Amazon!  You can buy it as a Kindle, or you can buy it as a paperback.   It should also be available for order in most bookstores (Ingram-Spark distributor).  Here's my summary:

Pro-nuclear people can make important contributions to the energy debate. This book will help you make your voice heard.  Advocates appreciate the importance of nuclear power for clean air and for our planet’s future.

In this book, award-winning author Meredith Angwin guides you in your advocacy:
• Support nuclear energy while simply sitting at your computer
• Support nuclear energy in public, using the same techniques as professional speakers and communicators
• Speak at a public hearing or be invited to speak to a legislative committee
• Learn how to deal with your own emotions in a world saturated with anti-nuclear messages
• Find other nuclear supporters and have fun together.
Campaigning for Clean Air features anecdotes, examples and insights from many pro-nuclear advocates. This book will inspire your work for a clean energy future.

Update: A wonderful announcement of the book at Dan Yurman's Neutron Bytes blog! Campaigning for Clean Air & Nuclear Energy.   Thank you, Dan!

Why this book?

Happily, more and more books are appearing to describe the advantages of nuclear power.  Power to Save the World, Climate Gamble, The Non-Solutions Project, Thorium, Energy Cheaper than Coal, and After Fukushima: What We Now Know.  Buy all of them! (I did.)  And this is far from a complete list of excellent pro-nuclear books.

But whichever of these books you buy, please also buy my book.  It's a little different.  It's about getting the pro-nuclear word out to the world.   My fear is that with all the pro-nuclear books, pro-nuclear people will read the books and enjoy the books and then....Then what?

We pro-nuclear people have to raise our voices to support nuclear power. That is why I wrote Campaigning for Clean Air.  This book is about how to support nuclear energy, with some discussion (of course) about why to support it.

As one of my friends said: "Your book is a guidebook, a sort of how-to."  Exactly right.  How to write a letter to the editor.  How to organize a rally.  And everything in between.  Campaigning for Clean Air has the subtitle: Strategies for Pro-Nuclear Advocacy.  I  might have subtitled it: Advocacy the Easy Way, or maybe Activism for the Shy. 

More on this later but meanwhile: Buy the book!
 P.S. If you want to read what others are saying about the book: 

Some wonderful endorsements are scrolling on this page of my new website:

Monday, February 6, 2017

A Perfect Storm for Natural Gas Prices. Nick Escu Guest Post

Recreated Rembrandt: Christ in the Storm
Art by Ankur Patar: Original was stolen

The  Three Storms 

The movie  The Perfect Storm was about two monstrous storms which come together, out in the ocean, and destroy a very solid fishing vessel.

Today, three storms have come together as a Perfect Storm for nuclear energy.

The Westinghouse Storm.

Toshiba’s $4 billion dollar purchase of Westinghouse, in 2006, was hit with
  • the March, 2011 tsumani in Japan.  
  • the  2012/2013 Toshiba accounting problems, and 
  • the merger of Westinghouse with CB&I, while building 4 new AP1000s in the US and 4 new AP1000s in China.  
This perfect storm is forcing Toshiba to possibly auction off Westinghouse.

The Areva Storm

AREVA's headaches as the step child of EDF were initially looked at as a “Begging Session.” Areva wanted to keep operating under French direction. However, French leadership wants to reduce nuclear power by 50%. This is very strange since almost 80% of all France’s power comes from nuclear energy.

But unquestionably, AREVA Nuclear Fuel is now being used by more and more operating companies.  So the stepchild is doing better than expected.

The Henry Hub Storm

Finally, the Henry Hub natural gas price in February, 2016, went from $1.71/MMBTU to $3.44/MMBTU yesterday. That is just over 100% increase in 11 months. But why? Because the Cheniere Liquid Natural Gas plant came on line and exported the first LNG ship overseas. But Cheniere is only the first of the 17 Approved LNG Permits. The others will be coming online this year, next year, and thru 2020.

The world prices at $20/MMBTU clearly show the profits to be made. So what does this have to do with nuclear energy? When nat gas reaches $4.75/MMBTU, nuclear power becomes standalone profitable. AND when nat gas reaches $6.10/MMBTU, even coal power becomes profitable.

My two previous posts on the subject were:
Nuclear vs Gas Economics, a Three Year Projection
Nuclear vs Gas Economics Part 2

After the Storm?

So here we are. With the ability to buy or merge Westinghouse and AREVA, at rock bottom merger prices, while the world hasn’t woken up yet to the natural gas prices climbing to new heights.

But the opposite is also possible.

Westinghouse could be broken up into saleable divisions. Same for AREVA, and then only GE would have their ESBWR or their ABWR to sell throughout the world.

For American nuclear exports, many 123 Agreements are in place, but the  Ex-Im Bank also needs to be funded for foreign sales to increase.

This year will decide the fate of many companies, as well as determining whether existing US plants have a lifeline.

Nick Escu is the pen name of a person with long experience in the power industry.  He is a frequent guest blogger at this blog.

Friday, February 3, 2017

Vermont Renewable Mandate (video)

The "90% renewables" solution

Vermont has an energy policy that requires that 90% of Vermont's energy come from renewables by 2050. This policy includes all of Vermont's energy, including heating and transportation.  Such a change can most generously be described as "unlikely."  I have at least two blog posts on this subject:  What 90% renewables would look like in Vermont,  and Vermont's renewable plan is wishful thinking   These posts are from 2013.

The renewable policy might become a law

So far, this renewable policy is not law, but it might become law.  The legislature is in session, and, as Mark Twain said: "No man's life, liberty or property are safe while the legislature is in session."  Bills are being introduced to make this policy into an actual law.

The Ethan Allen Institute recently made a video on the folly of 90% renewables for Vermont.  I appear briefly in the video.  I hope you enjoy it.

Saturday, January 7, 2017

Ending the Fear of Nuclear Energy (video)

My friend Michael Shellenberger delivered a TEDxCalPoly talk: How Fear of Nuclear Ends.

This is a terrific talk, tracing opinions on nuclear energy from the days when the Sierra Club policy "Atoms not Dams, (because of the huge ecological impact of hydro plants).  Then he describes  the controversy and confrontation within the Sierra Club as subgroups pushed against nuclear power. The quotes from the early anti-nuclear people are very telling: these people are basically against clean power because it would lead to population growth or economic growth or both.

Shellenberger talks about how anti-nuclear fears were nurtured by a small group of people, and how anti-nuclear fears will end.  One reason they will end is because everyone wants---a better world for our children.

Wednesday, January 4, 2017

Pay for Performance on the U.S. Grid: No help to nuclear

Happy New Year to everyone, and especially to readers of this blog!  

 I plan some posts on nuclear power and grid policies.

This post shows how instituting  Pay for Performance does not help nuclear plants. The post is an expanded version of my article, Pay for Performance on the U.S. Grid, at Nuclear Engineering International, February 2016.   I am grateful to Nuclear Engineering International for permission to use their graphics.

No Help to Nuclear: Pay for Performance on the U.S. Grid

The United States electric system contains both traditional (vertically integrated) and “liberalized” markets.  In the “liberalized” markets, RTOs (Regional Transmission Organizations) and ISOs (Independent System Operators) operate the grid, using free-market auctions.  The RTO areas are the most challenging for the American nuclear fleet. All the nuclear power plants that are in danger of shutting for economic reasons are in RTO areas.
RTO Areas, from FERC

Neither RTOs nor vertical integration are perfect systems for pricing electricity. RTOs are relatively new (started in the 1990s) and are still evolving their policies.  In particular, some RTOs are planning to reward more-reliable plants by instituting “Pay for Performance,” starting in 2018.  Unfortunately, despite the hopeful name, this change is not likely to help nuclear plants.

The RTOs were designed to lower costs for consumers by giving them the benefit of free-market pricing: electricity is bought in an auction. When the ISO needs power, plants “bid in.” ISO chooses the lowest price power first, moving up the bids until all the power needs are met.   Power plants and utilities can also negotiate Power Purchase Agreements (PPAs) at mutually agreeable prices, and a great deal of electricity is sold in this manner. However, in many markets, investor-owned utilities are prohibited from entering into long term PPAs with conventional generation sources. At any event, PPA electricity prices tend to follow grid pricing, though sometimes with a major lag time.

The Missing Money

Actually, there are two auctions: the energy auction (electricity) and the capacity auction (power plant availability).  (See Sidebar below.)

Search for the Missing Money
James Bride, Energy Tariff Experts
Unfortunately for the energy auction theory, the real-time energy auction plan immediately ran into the first “missing money” problem.  Why should owners of higher-priced plants maintain their plants? Their plants are not guaranteed a price (while on the grid) nor are they guaranteed a number of hours that the grid is sure to call on them, and for which they will be paid.

It became clear that paying only for energy (kWh) might not provide enough money to maintain all the plants that are needed for reliable grid operation.

At a recent meeting of the Consumer Liaison Group for ISO-NE, James Bride of Energy Tariff Experts provided excellent graphics on this subject. (See slides 9 and 10 of presentation below, one of which is included above.)

The Second Auction and the Capacity Payments

To pay plants to be available, plants now bid into a second auction, an availability auction called the Forward Capacity Auction.    As you can see in the following chart (prepared from ISO-NE data by Entergy, and used with their permission), the Capacity Auction made it possible for gas turbines and peaking plants to make up enough money to keep operating.  The capacity auction found the missing money for some of the plants.

As you can also see, nuclear plants get most of their money from energy payments, not capacity payments.  That is because nuclear plants make so many kWh, compared to other types of plants with the same nameplate capacity rating.  Ultimately, of course, the grid is all about kWh delivered.

(See the sidebar below for sample calculations.)
Revenue streams for different types of plants
Courtesy Entergy and Nuclear Engineering International

Problems with Capacity Auctions

Capacity auctions did not completely solve the reliability problem. They find some missing money, for some types of plants. But what happens when the plant receives the capacity money, but then---later---when called upon to run by ISO, the plant doesn’t run?

ISO-NE and other ISOs were aware of this potential problem, and began designing Pay for Performance incentives. These incentives were to start in 2018.  However, meanwhile, the shale gas boom happened, and the grid became more and more dependent on natural gas. The ISOs needed something for winter reliability, something they could put in place more rapidly then Pay for Performance.

Capacity Auctions Mislead the Grid

Prices during a Polar Vortex
In many ways, the capacity auction results misled ISO about the amount of electricity that would be available to the grid in crisis situations.  During cold snaps, much less electricity was available than had been bid into the capacity auction. Natural gas power plants rarely have firm gas transportation contracts with pipelines.

The gas plants made firm capacity commitments to the grid but did not  have firm delivery commitments for natural gas supply. The Polar Vortex laid bare this problem.

In winter, the ISOs needed a quicker winter fix than Pay For Performance, so they started “winter reliability programs.”  These programs were started just in time. During cold snaps, gas plants not coming on-line was driving the grid closer to the situation where it would have to “shed load” in a cold snap.

The Winter Reliability programs were complex, including new types of auctions.  Basically, however, they supported plants to keep oil, CNG and LNG onsite to burn when gas was not available.  ISO paid for oil, or paid storage costs for unburned oil. FERC (the Federal Energy Regulatory Commission) approved the Winter Reliability programs on a temporary basis. But FERC disapproved of the fact that the reliability programs were not fuel-neutral, and ISOs are supposed to be fuel-neutral.  Therefore, FERC and ISO look forward to 2018, and PFP.

Pay for Performance

Pay for Performance (PFP), which will start in 2018, is supposed to be fuel-neutral. PFP is supposed to find yet another kind of “missing money.”  It is supposed to provide the economic incentive that would encourage power plants to come on-line when dispatched during tight situations on the grid.

Sadly, PFP isn’t actually market-based.  It is a complex regulatory system, basically jury-rigged, that satisfies FERC requirements by supposedly being fuel-neutral.

 PFP is a transfer mechanism from poor-performing plants to high-performing plants.  If a plant bids in capacity, but then does not provide energy (electricity) when called upon, it will have to forgo part (or maybe all) of its capacity payment for that month.  The loss of this money is a sort of penalty for the plant. This lost-money will be added to the capacity payments of plants that do perform during a high-load period, as a sort of bonus.

With PFP, a plant might well lose its entire capacity payment for a month if it doesn’t go on-line when it is needed. It might even owe ISO-NE money beyond its capacity payment. This would be quite a blow for a plant that depends on capacity payments, such as a natural gas plant. An ISO-NE hypothetical example shows a 100 MW plant losing or gaining $50,000, $150,000, and $350,000 dollars in a month, under various scenarios.

Nuclear plants may get some extra payments from PFP, but these payments would be part of their capacity payments.  For nuclear plants, capacity payments are a small portion of their revenue stream, and PFP will not make much of a difference to their pay stream.

The major effect that PFP seems to have had is to encourage all new gas-fired plants to be dual-fired, so they can keep oil on-site and keep their capacity payments.

As ISO-NE in their statement about Pilgrim closing: “Most of this new gas-fired generation is seeking to become dual-fuel capable, meaning they will be able to switch to use oil if natural gas is not available, or if the cost of oil is lower than that of natural gas.”

PFP Problems for Steam Plants

Steam turbine
With PFP, there’s a lot of devil in the details.  One issue is that it does not distinguish between various types of plants, and could penalize plants that raise steam.  PFP depends upon a complex formula which is the result of many debates on how to structure incentives for plants to be online.  The amount of the penalty/transfer payment depends on this formula, and the formula partly depends on the situation on the grid.

There is considerable concern that some of the PFP transfers will be random--power plants will be penalized or rewarded for situations they can do very little about. A representative from NEPOOL had harsh testimony against PFP. (NEPOOL is a voluntary association of New England energy market participants. It was founded about twenty years before ISO-NE.)

To quote Elin S. Katz, office of Consumer Counsel in Connecticut, testifying behalf of NEPOOL:  (Katz testimony, available only by download.)
PI (PFP) creates excessive investment risk because.... PI’s substantial penalties would impact capacity suppliers that are not operating during particular five- minute intervals regardless of the reason why they were not operating. PI would ignore the actual operating characteristics of a power plant when levying penalties. 

Katz gives an example in which a steam power plant bids into the day-ahead market, is not selected for that market, but then it turns out that ISO-NE does need its power.  Steam plants cannot come on-line very quickly, and ISO-NE PFP assesses penalties on a five-minute basis. The problem in this case is actually the result of ISO’s imperfect prediction capabilities, but the fines will be paid by the steam power plant.

 PFP and Burning Oil

Well, PFP is messy, and PFP may be unfair.  Let’s ask another important question, though. Will PFP help nuclear power?  Will PFP finally reward nuclear plants for their reliability?

The answer is No.  PFP will not help nuclear plants. The main result of PFP has been for natural gas plants to commission or recommission dual fuel capabilities so that they can burn oil.

Nuclear plants get most of their revenue from energy payments, not capacity payments.  Nuclear plants may get some higher capacity payments through pay-for-performance, but this will not make a big difference to them. The pay-for-performance transfer will make a difference to the peaker plants, which will have more of an incentive (however oddly arranged) to become dual-fuel or make other arrangements to be able to come on line when called.

Are RTOs really a market?

The whole RTO situation is getting pretty far from “a market,” as markets are usually considered.  Nuclear power plants in RTO areas of the United States are not well valued for their steady performance and PFP will not change that.  Meanwhile, the RTO market-solution is becoming an increasing series of tweaks and attempts to keep the grid operating smoothly. The tweaking in RTO areas (including PFP) is interesting and complex, and it becomes more complex all the time.

Complex markets become complex as they are regulated to achieve certain goals.  In general, RTO markets favor plants with low capital costs, high fuel costs and low utilization compared to plants with high capital costs, low fuel costs, and high utilization.  This is the outcome of the current market design.

 In other words, RTO markets are unfavorable to nuclear power. Whether this outcome was a goal of the design (a feature) or an unintended consequence (a bug) is not clear.  At any rate, despite all the tweaks, RTO markets allow local grids to move to heavily to natural gas, despite problems with gas delivery. Except for dual-fueled plants, Pay for Performance will make little difference.

RTO auction sidebar: Doing the math for capacity payments

RTOs generally run two types of auctions: a real-time energy auction, and a Forward Capacity Market auction.  Both auctions work basically the same way: Plants bid in to supply either kWh right now (energy auction) or capacity availability some years in the future (Forward Capacity Auction). The auction requirements fill from the bottom--the least-cost plants are selected first.  In both auctions, plants usually bid the lowest price they can bid, to be sure they are chosen.  The RTO has to fill its needs, however, so it cannot just choose a few low-price plants.  At some point, with higher-priced plants, the RTO requirements are filled. In both auctions, all the bidders get the payment for the highest price plant that is accepted into the queue.  The auctions are meant to move prices in synch with demand, and always provide the lowest price that meets the demand.

Where do different plants get their revenue under this system?

Let’s look at an overly simplified example:

Let us assume that we have a price on the grid of 4 cents per kWh, and a capacity price of $3 per kWmonth. (This is a very rough approximation to the situation on the New England grid recently.)

We imagine a 500 MW nuclear plant and a 500 MW combined cycle gas plant.

  • They will both get the same capacity payment of $1,500,000 per month, because they have the same capacity.  
  • The nuclear plant has a 90% capacity factor, and earns approximately $13 million for energy payments. 
  • The combined cycle gas plant capacity factor is about half of that of the nuclear plant (around 40-50% capacity factor, according to EAI, I am assuming 45%), so it makes half the electricity as the nuclear plant. It earns approximately $6 million in energy payments. 

In this highly simplistic case, the capacity payment for the nuclear plant is about 10% of its revenue stream, but it is 20% of the revenue stream for the gas plant.  If the gas plant were a “peaker,” running about 10% of the time, it would receive the same capacity payment as the other two plants. However, it would earn only $1.5 million in energy payments. For a "peaker" plant,  capacity payments could be about half of its revenue.

One way in which this analysis is overly simplistic is that the gas-fired plants are likely to only be on the grid when the grid prices are running higher than average.  Nevertheless, this gives a high-level overview of capacity and energy payments for various types of plants on the grid.

For a nuclear plant, even a small decrease in energy prices can override a modest increase in capacity payments. This is the main reason why PFP will not affect nuclear economics very much.

Friday, December 30, 2016

Hello Governor Scott, and Goodbye Shumlin!

Governor Shumlin's Christmas Greetings

Governor Shumlin (soon to be ex-Governor Shumlin) has been a fierce and unremitting foe of Vermont Yankee.

Yeah, yeah, we know that.  But I was still surprised to see a story by Mike Faher breaking on Christmas Day this year. Here's the article in VTDigger December 26,  Shumlin: Vermont Better Off Without Nuclear Plant.  Two years after the plant closed, and Shumlin is still crowing about closing it?  This is what Shumlin wants to say, just before he exits from being Governor?

 From the article above, some quotes from Shumlin.
Windham County has an advantage for economic development because "We can do cash." (Cash from the Entergy settlement fund for economic development of Windham County.) 
Furthermore, Vermont is "an example of how to reduce your carbon footprint and do electric generation right." 
Here's my opinion of the real meaning of his statements:
  • First, Shumlin is  the "we" in the first statement. Entergy's $10 million in cash for Windham Country redevelopment will not make up for the loss of Vermont Yankee's payroll of 600 people.  However, Vermont Yankee controlled its payroll, while the Governor of Vermont (Shumlin) makes the final decision on how the Entergy economic development funds will be spent.   Indeed, Shumlin has controlled more cash after Vermont Yankee closed than he controlled when it was operating.  Shumlin could "do cash." That was his version of "we."  
  • Second, Vermont Yankee made 70% of the power made in Vermont.  Now, we import this power from the grid....adding some solar and some wind turbines in-state haven't exactly given us this power back. For Shumlin, "doing electric generation right" means that someone else generates the electricity, and they generate it somewhere else.
A Sad Anniversary

Yesterday was the second anniversary of the day that the plant went off-line forever,  December 29 2014.  My Facebook news feed includes many people sharing unhappy memories of the day. I did not enjoy reading Shumlin's cheerful words on Christmas Day as the anniversary approached.

I also encourage people to read my article about the consequences of the closing: Circles of Pain around Vermont Yankee Closing. 

Photo from the Phil Scott gubernatorial transition website
Goodbye to the Old Year

Some of my friends send me New Year Cards with the old Jewish saying:
Goodbye to the old year with all its curses: hello to the New Year with all its blessings.

A major blessing of the New Year is that Vermont's new Governor will be Governor Phil Scott.  I first heard of Phil Scott in 2010.  When Shumlin led the charge against Vermont Yankee in the Vermont Senate in 2010, then-Senator Scott was one of the four senators that voted to support the plant.  Twenty-six senators voted against, four voted for the plant.  Scott's vote was a profile in courage.  He urged the Senate to gather more information, and not just blindly charge to close the plant.

Here's the video of his remarks.

Governor Scott and A Party

And now, Scott will be Governor of Vermont!  Assuming the roads are clear, my husband and I are going to Governor Scott's inaugural ball next weekend. I don't  go to balls  and galas on a regular basis. However, until yesterday's deadline, anyone could buy a ticket.

In fairness to soon-to-be ex-Governor Shumlin, you could also buy a ticket to Shumlin's inaugural ball at the Sugarbush Ski Resort. Mary Powell, CEO of Green Mountain Power, was a major fundraiser for that ball.  I believe the ball was rather lavish.  Here's an older article that I wrote about the close ties between Shumlin and Green Mountain Power.  And here's an article in which Shay Totten wonders if it was just coincidence that Mary Powell raised $190,000 for the Governor's ball just before a Vermont agency needed to rule about a proposed Green Mountain Power wind farm. (Again in fairness, Shumlin's ball was a fundraiser for Vermont National Guard Charitable Foundation.)

Governor Scott's ball will be at a more modest venue: the Army Aviation Facility at the Burlington Airport.  Scott's ball will be a fundraiser for charities that support those who serve or have served in the military.  I plan to be there.

Vermont is not "better off without Vermont Yankee."  But Vermont will be better off without Peter Shumlin as Governor.  Hello, Governor Scott!