The Future of Energy
Ever since the EPA’s Cross-State Air Pollution Rule (CSAPR) was announced this past summer, power companies and state regulators all across the country started screaming that 68 coal fired power plants would have to be shut down by 2016. On Dec. 30, 2010, a Federal Appeals court suspended the EPA rules from being implemented. Yet, many consumers have been worriedly asking themselves what is in store for the future of home energy?
The current “fleet” of coal fired plants are old. The DOE’s Energy Information Office says, “about 530 GW, or 51% of all generating capacity, were at least 30 years old at the end of 2010”. A total of 37 date from before 1950 but a few that are still online date from before the Second World War. The US Congress amended the Clean Air Act in 1990 to control industrial emissions of hazardous air pollutants. Coal-fired power plants were exempted from the Act’s requirement for them to install pollution scrubbers for 10 years. The plan assumed that the EPA would be able to implement a set of rules that the power generating industry could live with. In the years since, EPA rules were mostly met with litigation rather than compliance.
Even though the EPA rules were suspended from taking effect, most in the power-plant biz know that they will eventually take effect. With about half of US energy coming from coal-burning plants, what will the electriicity generation sourse look like in the future? More importantly, how much will it cost?
Several dynamics are shaping the future of power. The first is that natural gas and coal are in the midst of a fuel showdown. Natural gas prices have been trending downwards primarily because shale fracking has made the US a natural gas exporter. One of the unforseen consequences of fracking has been the question of what to do with spent fracking fluid. Fracking fluid is composed of water, salts, special crystalline type sand, and other chemicals. Waste fluid lagoons have caused spills that have contaminated ground water. A recent solution to dispose of this toxic solution was to pump it back down undergound thousands of feet. It worked fine until areas that had waste fracking fluid wells started to coincidentally experience earthquakes along the fluid wells. Since then, all waste frack-fluid well pumping in Ohio has ceased. All the same, it hasn’t stopped natural gas prices from falling.
But Coal is still king. Powder River Basin coal is the cheapest sub-bituminsous coal on the market selling for around $11.80 per short ton ( US ton = 2,000 lbs). The average national price for coal was $2.40/mmbtu. Lately, natural gas has been breathing down its neck at about $2.50/mmbtu (Jan. 18, 2012 @ 10:45 EST) —which is making natural gas all the more attractive to utility companies mulling over the costs of switching over to natural gas.
The coal industry has for years championed that “clean coal” was a possibility. Theoretically, all that is needed for pollution control is for the sulfur and nitrous compounds to be scrubbed and the carbon captured and sequestered (called CCS) before it emerged from a powerplant’s smokestacks. But in real day to day practice, the amounts of energy needed to capture and store the enourmous amounts of waste products pose serious problems. James Meigs writing in Popular Mechanics makes the case that a coal-fired power plant would need to burn 25% more coal to produce the energy it would need to sequester the carbon it produces (on top of its electricity generation burden). The other problem would be to transport and bury all the CO2 it produces.
[A] typical 500-megawatt power plant produces about 10,000 tons daily. Collectively, America’s coal-fired power plants generate 1.5 billion tons per year. Capturing that would mean filling 30 million barrels with liquid CO2 every single day…
Burying the stuff also does not mean that it will stay buried even if it is injected thousands of feet into the ground. Quite possibly it could cause the same earthquake problems as injecting spent fracking fluid into disposal wells. Of course, this doesn’t mean that coal-fired powerplants are becoming fossils like…well…coal. But it does suggest that current CCS technology may not offer the best solution.
The other dynamic at work is the re-emergence of nuclear power. While proponents argue that nuclear plants are safer and that costs for construction have decreased, nuclear power still faces the problem that in the public’s mind, there are no such things as “little” nuclear accidents (Three Mile Island, Chernobyl, and Fukushima). In addition, the issue of what to do with nuclear waste has never been resolved. The US Nuclear Regulatory Commisson (NRC) states:
Currently, there are no permanent disposal facilities in the United States for high-level nuclear waste; therefore commercial high-level waste (spent fuel) is in temporary storage, mainly at nuclear power plants.
Consequently, the chief concern facing the industry today is security and oversight. While that is important, it also poses a stumbling block to making nuclear power a competitive alternative.
The final dynamic is the slow but dogged development of green alternatives; wind, solar, and geothermal. While chief among these is the development of large scale windfarms (particularly in Texas), there has been a surge in household-level windturbines that are connected to the grid through net-metering arrangements with local utility companines. The American Wind Association points out that in 2010:
The U.S. market experienced a pronounced shift away from “micro-scale,” off-grid turbines to larger, grid-connected systems. On-grid units comprised more than 90% of small wind capacity for the first time. Nine of the 10 leading small wind turbine models sold in the United States were grid-connected.
Solar power has also followed a similar trend but primarily through the US military which is setting up distributed power systems for its bases.
So, what does the big energy crystal ball foretell? Coal will very likely continue as an energy fuel sources for most of the world for years to come. However, it’s importance in the US is already being eclipsed by natural gas —but only as long as natural gas’ price remains competitive. Nuclear plants could also play a significant role but only if public concerns about safety can be addressed convincingly. Green alternative power has recieved a mighty boost from government incentives and has demonstrated the ability to produce in megawatt capacities. However, green alternatives excel in distributed power systems where each and every building has some mean of energy production built into it —such as wind or solar. How much will all this cost? It’s not secret that power prices are expected to rise. The average household consumption of 958 kWh/month has been stable for the past decade, but there are more households demanding power every year. Perhaps then the most cost effective way to meet the demands of all those households (and businesses) is for them to make their own power via wind or solar and share it over a distributed grid. While price has consistently played the focal role of determining the favorite fuel, it has also steered technical innovation. While the technology to build a green distributed grid might be too expensive right now, it might make more sense 50 years from now.
