Electricity – MetaSD

Ask a model a stupid question …

TLDR; you can use a mature model with lots of detail and vetted data to produce garbage output by feeding it a dumb scenario and willfully misinterpreting the answers.

I’m a little late to the party, but DOE’s 2025 ‘Resource Adequacy Report’ for the electric power system just came across my desk. Key findings in the executive summary point the finger at for future reliability problems at renewables:

Retirements Plus Load Growth Increase Risk of Power Outages by 100x in 2030.
The retirement of firm power capacity is exacerbating the resource adequacy problem.
104 GW of firm capacity are set for retirement by 2030. This capacity is not being replaced
on a one-to-one basis and losing this generation could lead to significant outages when
weather conditions do not accommodate wind and solar generation. In the “plant closures”
scenario of this analysis, annual loss of load hours (LOLH) increased by a factor of a
hundred.

Planned Supply Falls Short, Reliability is at Risk. The 104 GW of retirements are
projected to be replaced by 209 GW of new generation by 2030; however, only 22 GW
would come from firm baseload generation sources. Even assuming no retirements, the
model found increased risk of outages in 2030 by a factor of 34.

On the report’s topic page, this is restated as:

Retirements plus projected load growth increases the risk of power outages by 100 times. At present, 104 GW of firm generation is slated to retire by 2030. Without corresponding replacement, the risk of annual outages could increase from single digits today to more than 800 hours per year. Such a surge would leave millions of households and businesses vulnerable during stressful grid conditions. New supply planned is insufficient. Of the 154 GW of capacity in advanced stages of development, only 19 GW can regularly operate around the clock. Even in scenarios with no additional retirements, that imbalance leaves a significant shortfall in dependable power. 

Notice right away that the numbers don’t match – is the replacement pipeline 154GW or 209GW? That’s really the least of the problems though.

First, any statement about the effect of renewables on reliability is pure speculation, unsupported by the actual analysis, because they didn’t run any scenarios that test retirements and replacements with renewables separately. They ran 3 scenarios (on top of a current-conditions base case):

This analysis developed three separate cases for 2030. The “Plant Closures” case assumes all
announced retirements occur plus mature generation additions based on NERC’s Tier 1
resources category, which encompasses completed and under-construction power generation
projects, as well as those with firm-signed and approved interconnection service or power
purchase agreements. The “No Plant Closures” case assumes no retirements plus mature
additions. A “Required Build” case further compares the impacts of retirements on perfect
capacity additions needed to return 2030 to the current system level of reliability.

Again, there’s no experimental design that factors closures and replacements into separate renewable and fossil/nuclear buckets, so attribution to a particular cause is simply magical thinking.

Worse, the “closures” scenario doesn’t make some important corrections for differences in sources, so you don’t know what’s an apple and what’s an orange:

There’s no correction from nameplate capacity to derated capacity, adjusting for wind and solar availability, so you can’t tell whether aggregate capacity in the closure scenario is sufficient or short.
There’s no translation of capacity to cost, or of operating mix to marginal cost.
There’s no recognition that the planning leadtimes for sources differ a lot (and specifically, that they’re shorter for wind and solar). This may mean that the pipeline of renewables to be installed before 2030 is understated.
There’s no reporting of volatility sources. Historically, coordinated outages of fossil fuels are possible, as in the big Texas freeze..

Implicitly, the closure scenario assumes that managers in each ISO are stupid and don’t have access to capacity planning tools. It also assumes no price feedback. Yet in the real world, if capacity is short and loss of load is high, power market prices would go through the roof, creating a financial incentive that would prevent the scenario’s postulated retirements.

Other bathtubs – capital

China is rapidly eliminating old coal generating capacity, according to Technology Review.

Coal still meets 70 percent of China’s energy needs, but the country claims to have shut down 60 gigawatts’ worth of inefficient coal-fired plants since 2005. Among them is the one shown above, which was demolished in Henan province last year. China is also poised to take the lead in deploying carbon capture and storage (CCS) technology on a large scale. The gasifiers that China uses to turn coal into chemicals and fuel emit a pure stream of carbon dioxide that is cheap to capture, providing “an excellent opportunity to move CCS forward globally,” says Sarah Forbes of the World Resources Institute in Washington, DC.

That’s laudable. However, the inflow of new coal capacity must be even greater. Here’s the latest on China’s coal output:

ChinaCoalOutput

China Statistical Yearbook 2009 & 2009 main statistical data update

That’s just a hair short of 3 billion tons in 2009, with 8%/yr growth from ’07-’09, in spite of the recession. On a per capita basis, US output and consumption is still higher, but at those staggering growth rates, it won’t take China long to catch up.

A simple model of capital turnover involves two parallel bathtubs, a “coflow” in SD lingo:

Every time you build some capital, you also commit to the energy needed to run it (unless you don’t run it, in which case why build it?). If you get fancy, you can consider 3rd order vintaging and retrofits, as here:

To get fancier still, see the structure in John Sterman’s thesis, which provides for limited retrofit potential (that Gremlin just isn’t going to be a Prius, no matter what you do to the carburetor).

The basic challenge is that, while it helps to retire old dirty capital quickly (increasing the outflow from the energy requirements bathtub), energy requirements will go up as long as the inflow of new requirements is larger, which is likely when capital itself is growing and the energy intensity of new capital is well above zero. In addition, when capital is growing rapidly, there just isn’t much old stuff around (proportionally) to throw away, because the age structure of capital will be biased toward new vintages.

Hat tip: Travis Franck

Idle wind in China?

Via ClimateProgress:

China finds itself awash in wind turbine factories

China’s massive investment in wind turbines, fueled by its government’s renewable energy goals, has caused the value of the turbines to tumble more than 30 percent from 2004 levels, the vice president of Shanghai Electric Group Corp. said yesterday.

There are now “too many plants,” Lu Yachen said, noting that China is idling as much as 40 percent of its turbine factories.

The surge in turbine investments came in response to China’s goal to increase its power production capacity from wind fivefold in 2020.

The problem is that there are power grid constraints, said Dave Dai, an analyst with CLSA Asia-Pacific Markets, noting that construction is slowed because of that obstacle. Currently, only part of China’s power grid is able to accept delivery of electricity produced by renewable energy. “The issues with the grid aren’t expected to ease in the near term,” he said. Still, they “should improve with the development of smart-grid investment over time.”

The constraints may leave as much as 4 gigawatts of windpower generation capacity lying idle, Sunil Gupta, managing director for Asia and head of clean energy at Morgan Stanley, concluded in November.

China has the third-largest windpower market by generating capacity, Shanghai Electric’s Yachen said.

It’s tempting to say that the grid capacity is a typical coordination failure of centrally planned economies. Maybe so, but there are certainly similar failures in market economies – Montana gas producers are currently pipeline-constrained, and the rush to gas in California in the deregulation/Enron days was hardly a model of coordination. (Then again, electric power is hardly a free market.)

The real problem, of course, is that coal gets a free ride in China – as in most of the world – so that the incentives to solve the transmission problem for wind just aren’t there.