The Power Generation Blog: 2009

Often Overlooked Cost of Power Generation

We came across this article concerning the poor conditions surrounding power generation in Africa. Entire families are perishing from the noxious fumes of power generators throughout the developing areas of Africa. In Lagos, Nigeria, the phenomenon is especially terrible.

Observers said that there are thousands of people dying from similar ailments days or months after they had inhaled the poisonous fumes without detecting them especially from industrial generators. With these and many cases of poisonous fumes from generators decimating especially the country's productive population, many residential quarters, especially in Lagos metropolis now live in fear. If the trend is not checked, death tolls could rise to an unimaginable proportion.

Large manufacturers leak toxins and pollutants into the environment, and the effect is multiplied by the pollution let loose by power generation that's needed to fuel them. This predicament is made even more dire given the fact that Nigeria is undergoing an energy crisis. With an aging infrastructure, pollution increases and inefficiency abounds. But without outside capital investment, there is little hope for the power generation situation to improve.

Laramie River Station Rewind Video

Check out this video about the Laramie River Station, which sports a new power generation turbine. There's some good information about industrial generator rewind, which the turbines featured can undergo to improve the longevity of the power generation plant.

The blades are manufactured in England, the rotor is forged in Poland, and the fixed blades and fit-up assembly is done in Mexico. Each upgrade costs about $8 million. Once all three units have a new turbine, LRS will put out an extra 36 megawatts. Another project during this plant outage is the generator rewind. All these bars, or windings, are sawed off and pulled out. Maintenance planner and scheduler Myron Mattern says these are basically copper pipes, made to allow water through for cooling. Once all the windings are out, the generator is cleaned down to the bare steel. Then, two rows of new windings are fitted in -- 84 bars in all. Hence, a rewind. [...]

The reason this rewind had to be done was because General Electric found that this model of generator was having water leakage problems. Mattern says fixing this problem now is cheaper in the long run.

Power Generation Seeing Frenzied Growth in China

We've written about how alternate energy's growth has been waxing and waning in China. Well, there's a recent story from BusinessWeek about China's economy, which has been growing (perhaps too) quickly, lately. This growth includes gains made in the power generation industry, which has seen its fastest rise in over five years. The only downside to all this growth is the threat of an economic bubble (which can see an ensuing burst), and inflation.

In related news, China's largest wind power producer, China Longyuan Power Group Corp., raised more than $2 billion in its initial public offering, yesterday. Wind power production companies have more than tripled in Hong Kong trading this year, and China expects more than twenty percent of its electrical power to be generated from wind by 2020.

Solar Power: 'It's like watching the Internet mature in 1995'

There's a great post by the Scientific American about the growth potential of solar power generation in the U.S. It quotes Harry Fleming, CEO of Acro Energy Technologies, who says memorably,

"It's like watching the Internet mature in 1995."

The post goes on to elaborate, saying that the cost of solar panels is dropping dramatically; the installation cost for solar panels is dropping--not as dramatically--but enough to decrease the pain in the pocketbook that causes most consumers and businesses to balk at entering the solar grid.

George Musser, the author of the post, plans on updating it as he installs solar panels on his house. It looks like a good page to bookmark. Have a good weekend, everyone!

Nuclear, Thermal Power Generation Projected To Rise For Latin America's Largest Power Producer

There is news from Mexico that by 2013 the country will account for more than 20% of Latin America’s regional power generation. In 2008, Latin America produced about 1,130 terawatt hours of power, annually. With pressing global environmental concerns, renewable energy sources such as hydro-electricity, thermal generation, and nuclear power are set to rise.

Presently, oil is the dominant energy fuel for Mexican power; it accounts for 52.8% of 2008 energy production, but increases in renewables are expected. Thermal power is expected to comprise 46.20% of regional power production by 2013, and nuclear power generation is expected to rise 30%.

There are a lot more interesting statistics and projections in this Nuclear Street post.

Slow Progress in Greenhouse Gas Reduction

There is more progress being made on the climate change problem facing the United States. The Obama administration is promoting measures to reduce greenhouse emissions, and the President appeared at a solar energy installation in Florida earlier this week. The New York Times reports that the Energy Secretary, Steven Chu, told a Senate panel,

“When the starting gun sounded on the clean energy race, the United States stumbled, but I remain confident that we can make up the ground... When we gear up our research and production of clean energy technologies, we can still surpass any other country.”

This optimism is heartening for supporters of green energy, but the American Clean Energy and Security Act still languishes in the wake of the healthcare bill. The development of clean energy should add jobs to the economy and help modernize the power grid, but consumers, I suspect, will be skeptical of rising energy costs being passed along to them from power generation companies. Only time will tell if the Obama administration can come up with a real plan to reduce greenhouse emissions while keeping price increases to consumers low.

British Prime Minister Sounds the Alarm Bell

Secret Carbon Tax Revealed in the UK

There is news from the United Kingdom today of a so-called ‘secret plan’ by the British government to tax electricity consumption from carbon-burning power generation plants. This tax is meant to fund the construction of the United Kingdom’s first new nuclear reactors in more than twenty years. This tax is expected to increase an annual household’s energy bill by about £44 per year. Many people are upset since the government ministers have made repeated promises that the nuclear industry would no longer benefit from public subsidies.

The new construction of nuclear power plants and this tax are being carried out because there are growing concerns about the UK’s aging nuclear infrastructure. There is a growing peak energy gap caused by the retirement of old nuclear plants and the long lead time to opening new ones. Adding to this energy gap is public enmity towards plans for the construction of new coal plants. Power companies such as E.ON and EDF Energy are hesitant to build new nuclear power plants because of rising construction costs and falling energy prices. The cost to construct new nuclear plants is in the multi-billions of pounds.

A European energy executive has told the Guardian,

New nuclear will not happen without sorting out the carbon price,

which is bad news for consumers and government ministers, alike. According to the government, the only way to bridge the energy gap and commence swift construction of new nuclear plants is by artificially raising the price of electricity with a carbon tax. The Office of Nuclear Development, a new government unit created to facilitate building new nuclear plants, has promised nuclear companies that the price of carbon under the European Union emissions trading scheme will be disallowed to fall below €30 to €40 per ton. Currently, the price is €13 per ton. Consumers have made clear their desire for cheap, clean energy. Unfortunately, the only way for the government oftentimes to push through such measures is by raising taxes. As the old saying goes, “Cheap, good, and fast: pick two.” The rest of the world should be chastened by these developments in the UK. The power-generation infrastructure of many leading nations is aging at what seems a fast pace. As new, cleaner power generation technologies are created and their costs become reasonable, consumers are going to want to take advantage. However, lower prices means less incentive for energy companies to deliver on substantial improvements to the power grid. The only way to bridge the enthusiasm gap between consumers and power generation companies may be government intervention in the form of higher taxes or incentives.

The Nation's Largest Solar Photovoltaic Plant To Open This Week

In one week, the nation’s largest solar photovoltaic plant will commence operations in Arcadia, Florida. It is called the DeSoto Next Generation Solar Energy Center. The Next Generation Solar Energy Center is opening weeks ahead of schedule and about $22.2 million under budget.

The Solar Energy Center uses more than 90,000 photovoltaic panels to turn solar energy into electricity that can support the electricity needs of more than 3,000 homes. Plant officials are working with local officials to expand the Center to increase its capacity to at least 150 megawatts. Presently, the plant has a 75 megawatt capacity. Combined with other ongoing solar energy projects that have recently launched in Florida, the solar energy center in Martin County and the one at NASA’s Kennedy Space Center, Florida has increased its solar energy capacity to 110 megawatts.

In addition to its solar capacity, the Solar Energy Center is the world’s first hybrid solar thermal plant. Besides the more than 100 workers the plant will employ during its operations, it has employed more than 600 construction workers, who are all on site right now.

Lockheed Martin to tap ocean waves for electricity generation

Good News For Nature?

The Energy Information Administration (EIA), the official energy statistic bureau of the United States government, released its latest outlook report recently, and it contains some good news for opponents of fossil fuels.

Carbon dioxide emissions from coal, oil, and natural gas are expected to drop by 5.9% this year due in large part to the economic downturn and a groundswell of support for green energy and renewable energy sources, which has started to reduce fossil fuels consumption. The EIA outlook report says that reduced coal consumption accounts for 63% of the CO2 emissions decrease. A decrease in petroleum consumption and natural gas account for 30% and 7% of the reduction, respectively.

The EIA outlook report also says that there is an expected rise in power generation from hydroelectric dams and wind farms: 5.4% and 19%, respectively. Power generation from nuclear power plants is expected to remain steady, while solar and renewable biomass power are on a decline relative to last year.

Ups and Downs for China's Wind-Power Program

There is some mixed news out of China for renewable energy supporters. Recently, China has expressed its intention to have renewable energy meet 15% of its energy needs by 2020, which would double its 2005 percentage. However, due to its massive size and creaking infrastructure, many environmental benefits may be lost.

Last year, up to 30% of China’s wind-power capacity was unconnected to the energy grid. Additionally, due to wind energy’s natural unreliability, the country is producing more new coal power plants that can meet and uncovered demand left by failure in the energy grid or wind-power generation. Therefore, if the grid is functioning poorly or if there is simply little or no wind-power being generated, then coal power will still fulfill China’s energy needs. Since coal power plants have a length start-up time, it seems inefficient to use them as a backup source of power for wind-power turbines, though.

Another hurdle facing China’s widespread adoption of renewable energy is its seemingly ancient power grid. If it wants to utilize fully renewable energy sources, it will have to reinvent its power grid utilizing smart grid technology (which we’ve gone over here). By having precise power allocation and management, China’s power distributors can manage the existing energy more efficiently thereby reducing the overall cost and strain on the nation’s energy production.

China’s seeming difficulty with implementing renewable energy highlights troubles that other nations are facing with renewable energy. Besides necessitating redundant power production facilities, there is a high cost for constructing the new renewable energy plants. In addition, many people perceive renewable energy projects as costing jobs by closing down existing plants only to replace them with more efficient plants. However, the opposite is the case. Many plans to increase renewable energy production have deadlines well into the future. Within a few years, we will all have a much clearer picture of how the renewable energy movement will play out.

Another Sayano-Shushenskaya Update

After news broke of possible corruption that lead to the tragedy at Sayano-Shushenskaya, Prime Minister Putin has ordered a thorough investigation of the accident. On 17 September, Deputy Prime Minister Igor Sechin accused current and former managers at the power plant of committing "fraudulent schemes" to gain money for the plant. The Deputy PM said that higher-ups at Sayano-Shushenskaya created fake companies that then gained money to do work on the plant. Of course, this accusation--even if proven true--does not positively link the corruption with the failure of the plant, but it does provide a particularly troubling view of the state of the Russian power industry.

Prime Minister Putin has now proposed, besides a thorough investigation of the Sayano-Shushenskaya tragedy, the installation of so-called "black boxes," which can monitor power plants and provide critical data concerning their viability and safety.

The Governator Agrees With Us

We made a post yesterday about how green energy creates jobs (and creates more jobs than fossil fuel energy). Well, in an executive order yesterday, California Gov. Arnold Schwarzenegger made a parallel point about protectionism. Responding to the legislature's wanting to require a large part of its renewable energy to come from in-state, he said,

I am totally against protectionist policies because it never works.

Schwarzenegger offered as support the observation that California gets other resources and products such as water and automobiles from outside California--so why not energy? Protectionist policies do have a historically poor track record dating from the recent banking meltdown to China's and North Korea's historically heavily protectionist policies. It makes sense for a free market conservative such as Schwarzenegger to advocate against protectionism, and we have to agree with him with regard to renewable energy.

Will Green Energy Create or Cut Jobs?

A recent report, which was based partly on research by the Institute for Sustainable Futures at the University of Technology Sydney, was just released by Greenpeace and the European Renewable Energy Council (EREC). It states that a shift toward renewable energies and away from fossil fuels could create more than 2.7 million (extra) jobs. Besides the increase over fossil fuels in job growth, a shift toward renewable energies could help combat global climate change.

The report says, in part, “A switch from coal to renewable electricity generation will not just avoid 10 billion tons of carbon dioxide emissions, but will create 2.7 million more jobs by 2030 than if we continue business as usual.” Rather than eliminating jobs--as some commentators believe the ramping down of fossil fuel power generation--the report concludes that jobs will actually increase. By investing money and development in solar, wind, tidal, and biomass, two grave problems can be addressed simultaneously. For instance, after the automobile industry, the wind turbine industry is currently the second-largest steel consumer in Germany. The study projects that jobs in power generation will rise from about 9 million today to more than 11 million by 2030; it projects renewables jobs will rise from 1.9 million to 6.9 million. On a related note, it projects that if things continue as they have been, that jobs in coal power generation will fall by about half a million, to 8.6 million by 2030.

The report goes on to say that in 2008, for the first time, both the United States and the European Union added more power generating capacity from renewable energy than from conventional sources such as gas, coal, oil, and nuclear power. The report adds ammunition to supporters of sustainable energy and helps to deflate opponents of sustainable energy who criticize the movement on the grounds that it will stifle job growth.

Sayano-Shushenskaya: The Final Report is Coming

We haven’t touched upon the Sayano-Shushenskaya disaster in a few weeks for lack of new news coming out of Russia. Yesterday, there was an interesting story that touched upon what authorities think may have caused the tragedy at the hydroelectric plant.

Nikolai Kutin, head of Rostekhnadzor, the Russian state technical standards oversight body, said that the cause of the disaster at Sayano-Shushenskaya were technological in nature. The automatic systems failed that were supposed to assist in operating the plant. These operational shortcomings combined with the safety mechanisms’ failure to activate resulted in the disaster. The hydrogenerating unit that failed was modernized this past March, yet it did not have a back-up power system. The reason why a back-up was not included in the plan is “unclear,” says Kutin.

Rostekhnadzor is still making its investigation and it expects to give safety recommendations very soon for both existing plants and those that are under construction. Later this week, the commission’s signed report will have a more full litany of reasons for the plant disaster and the (apparently long list of) names of those it considers responsible. Kutin has said he hopes for new staff to be implemented at Sayano-Shushenskaya.

It is expected for the restoration and redesign of the Sayano-Shushenskaya plant to cost much more than 40 billion rubles ($1.3 billion).

It’s still unclear to us how exactly the plant disaster occurred. We’re looking forward to the more detailed report. Hopefully it won’t be comprised of fingerpointing and obfuscation, which is a quagmire you can get sunk in easily when you’re dealing with such a large bureaucratic body.

Friday Links

Argus, an international pricing agency, has launched its weekly coverage of Russia's electricity and power generation fuel markets.
China's August power generation is its fastest-growing in 15 months.
Tampa, FL has completed five new 60 megawatt natural gas power units.
USEC, the United States' only provider of enriched uranium for nuclear power, signed a $1.2 billion deal with Exelon Generation.
Exxon to build a 500 megawatt plant in Nigeria.

How are we going to get safe, fissionable material for nuclear power?

In news related a previous story we wrote about concerning Russia’s growing acquisition of uranium, there’s a new article out of Washington from the State Department’s Bureau of International Information Programs. The United States and Russia have reaffirmed their commitment to disposing of at least 34 metric tons of surplus weapons-grade plutonium. This quantity is enough, says the International Atomic Energy Agency, to create over 4,000 nuclear weapons. This reaffirmation comes on the heels of this last July’s Moscow Summit at which Presidents Obama and Medvedev reached an agreement to continue forward with the 2000 Plutonium Management and Disposition Agreement (PMDA).

The PMDA calls for--among other things--the United States to assist Russia with its plutonium disposal efforts. Both countries plan on using a strategy that calls for converting weapons-grade plutonium into a form of plutonium that is similar to that found in commercial nuclear power generation waste. This plan has a double benefit in that it both disposes of potentially dangerous nuclear material while at the same time creating a fuel source for domestic power generation. The National Nuclear Security Administration’ (NNSA) Fissile Materials Disposition Program is assisting the effort in both the United States and Russia.

In the United States, the disposal and conversion efforts will take place at the newly proposed Mixed Oxide (MOX) Fuel Fabrication Facility at the Savannah River Site in Aiken, South Carolina. Construction of the MOX facility is set to begin in 2016 and it is expected to remain operational into the 2030s. The plan is based on European MOX facilities, which have functioned at a high level for the last 30 years. The process at MOX will have three primary steps:

To disassemble the cores of nuclear weapons
To turn fissile material into MOX reactor fuel
To dispose of the liquid waste created during the process

The NNSA Administrator, Thomas D’Agostino, has been quoted as saying that he will focus the agency’s efforts on “secur[ing] all vulnerable nuclear materials around the world within four years, expand[ing] our cooperation with Russia, [and] pursu[ing] new partnerships to lock down these sensitive materials,” which is a truly pragmatic goal that goes a long way toward establishing a more secure and safe world, both with regard to energy production and nuclear weapons. D’Agostino is working off of President Obama’s four-year plan for reducing the threat of nuclear warfare, which includes

Expanding nuclear security cooperation with Russia and other key partners;
Securing nuclear material at the most vulnerable sites worldwide;
Removing and eliminating weapons-usable nuclear materials where possible;
Strengthening international nuclear security standards, practices and safeguards;
Improving international capacity to stop smuggling of nuclear materials, and preventing terrorists and proliferators from using the international market to access dual-use and nuclear weapons-related equipment and technologies.

Ontario Making Strides In Green Energy Initiative

Ontario, Canada is gearing up to make a dent in negative climate change in the province by planning the closure of four coal-burning Ontario Power Generation (OPG) power plants. The plan, part of Ontario’s Green Energy Act of 2009, is taking off four years ahead of its 2014 target. These four coal plant closings are the first in a ten-step transition to Ontario’s generating all of its electricity from green energy.

The four plants are located two each in Nanticoke and Lambton. These plants generate about 2,000 megawatts of OPG’s power capacity. These closings and a previous 2005 closing represent a 40% reduction since 2003 of Ontario’s coal power capacity. Since 2003, Ontario has added more than 4,900 megawatts of natural gas and renewable energy power generation plants. Thus far, the province has converted, refurbished, and built new plants to make progress in the effort.

The OPG is assessing its remaining coal power plants to see if they can be feasibly converted to using fuel sources such as biomass. Its Atikokan Generating Station will be the initial focus of its biomass conversion efforts. OPG hopes to have it converted by 2012.

Ontario has touted its efforts, saying that the closure of the coal plants has resulted in a reduction of carbon dioxide emissions equal to the annual emissions of 7 million automobiles. During the first of this year, the province’s coal production dropped more than 51% and its wind generation rose more than 80% compared to the same period in 2008.

Sayano-Shushenskaya Update

The death toll at Sayano-Shushenskaya, Russia's largest hydro-electric power plant, has reached 69 people. There are over 2,000 workers involved in sorting through the wreckage, looking for survivors, and cleaning up the ruined plant, which failed due to causes unknown, thus far.

Russian Prime Minister Vladimir Putin on Saturday signed a special decree giving 1 million rubles ($32,000) to the family of each worker killed in the tragedy.

The situation in Cheryomushki, the town where Sayano-Shushenskaya is, is so dire that a local official has said the town has banned the sale of hard alcohol due to great levels of binge drinking. He said,

"It was decided so to make people stop drinking. Yes, there was a tragedy, funerals are being held, but the uncontrollable consumption of alcohol will cause a greater damage."

The Nuclear Option

With all the recent focus on so-called green technologies--wind, solar, and other alternative energy sources--we sometimes lose sight of one of the older non-fossil fuel technologies: nuclear power. There are a lot of complicated issues surrounding nuclear power, not the least of which is its being weaponizable. There was an interesting article that was kind of buried in the Friday New York Times that explores some of the issues.

The article is ostensibly about Russia diversifying its uranium sources by securing mining rights in Mongolia. Russia's state-owned power industry formed a joint-venture with Mongolia called Rosatom. The deal is part of a so-called land grab by Russia to ensure it has enough fuel to power its burgeoning nuclear power industry, including enrichment programs. Currently Russia provides about 50% of the fuel for the United States' nuclear plants. Russia is looking to expand its nuclear fuel exports to other nations looking to build up nuclear power, including China, India, and Iran.

Of course, any efforts to supply enriched uranium to countries such as Iran should be met by opposition from the United States and other nations. The US opposes Russia helping Iran build nuclear power plants, but it does not exactly oppose Russia sending Iran fuel. This stance, as the author suggests, seems to leave open the possibility of Iran and other countries working on their own enrichment programs. However, with Russia supplying the US with so much fuel, it is in a difficult position from which to negotiate.

After the scary events of Chernobyl and Three Mile Island, Americans seem skeptical of the safety of nuclear power generation. A 1998 paper published the American Nuclear Society concludes that

Nuclear energy is safe, clean, and cheap, and it provides the answers to our energy problems. We must not allow misinformation and scare tactics to influence those making the important energy decisions.

It seems as if the threat of another nuclear meltdown is somewhat outweighed by the positive benefits of nuclear power: It doesn't release the high level of carbon emissions of power plants that rely on fossil fuels. Nuclear power does, however, produce its own uniquely dangerous waste product in the for of spent fuel rods. The US Congress passed the Nuclear Waste Policy Act in 1982. A later amendment to the act designated Yucca Mountain, Nevada as the permanent repository for nuclear waste products. However, one of the first energy-related actions of the Obama administration was to reject the use of Yucca Mountain for storing nuclear waste.

It's important to be cognizant of the rational pros and cons of nuclear power. However, as our energy needs grow more dire, I'm sure it will seem a more and more desirable option.

Plot of a James Bond film or real news story?

I read a fascinating story in today's New York Times. It sounds like it's ripped straight from the plot of a James Bond film!

An idea, proposed by the Club of Rome (which is billed as "an international group of experts that suggests solutions to global problems") is an idea to power much of northern Africa and Europe. The idea, basically, is to place large mirrors across the Sahara Desert. The mirrors--which are not photovoltaic cells--would collect the sun's energy, which energy would then boil water, which would produce steam to turn turbines thereby generating energy.

The mirrors would be placed in northern Africa, in the embattled Maghreb region. Critics of the plan say that local politics and resource scarcity could negatively impact--or even tank--the plan. However, the story cites the more common bureaucratic red tape as the most likely reason the plan would fail.

This plan is being executed by an entity called Desertec, and it's set to cost a minimum of $573 billion. The plan is being supported mainly by German finance firms, who have an interest in supporting sustainable energy: For such firms, the climate change poses a fiscal threat since insuring weather-related catastrophes accounts for a large part of their expenses.

Organizations and politicians who support localized, small-scale photovoltaic power generation also oppose the plan.

“Sahara power for northern Europe is a mirage,” said Hermann Scheer, a member of the German Parliament and the head of the European Association for Renewable Energy. “Those behind the project know themselves that nothing will ever come out of this.”

However, the tantalizing potential of the Desertec plan is tangible. The news story cites the fact that "more energy falls on the world’s deserts in six hours than the world consumes in a year." That's certainly impressive.

Some Progress at Sayano-Shushenskaya

A new story out of Sibera has some shed some light on the progress in recovering from the Sayano-Shushenskaya hydro-electric plant tragedy. (The Sayano-Shushenskaya is the world's fifth-largest hydro-electric power plant.)

The overall water flood level has decreased by about six feet.
30 thousand (of about 250 thousand) cubic meters of water have been pumped out.
4,650 cubic meters of cement structures have been removed from the ruined plant.

Still, sixty-four workers are missing, most of whom are presumed dead.

A Great Photo from the Sayano-Shushenskaya Tragedey

A boat drives through the oil polluted waters of the Yenisei river downstream from the Sayano-Shushenskaya hydroelectric power dam in Cheryomushky in the Russian Federation. The death toll from the catastrophic flood that engulfed Russia's biggest hydroelectric power station rose to 17, but 58 people are still missing, officials said.

Alexander Nemenov-AFP/Getty Images (via WaPo)

Disaster at Russian Power Plant

An explosion at Russia's largest hydroelectric plant, the Sayano-Shushenskaya hydroelectric plant in Siberia, has left a confirmed twelve people dead and at least fourteen more confirmed injured. Additionally, at least sixty-four people are missing. The Sayano-Shushenskaya plant produces 10% of Siberia's energy needs, and this disaster has wreaked havoc across Russia's industrial sectors.

It's not entirely clear what the exact cause of the disaster was. Our hearts and prayers go out to the affected and their families.

Interesting Piece on Smart Grid

The gist of so-called "smart grid" technologies is that it is a way of delivering electricity from power generation companies to consumers using a sort of digital technology to regulate better the way the electricity is delivered. It's a kind of more intelligent, self-regulating way of delivering power. The power deliverer and the power receiver are each equipped with a "smart meter" that gives more information, such as how much electricity is being drawn and how much electricity each appliance draws.

Shidan Gouran has a recent article at Smart-Grid.tmcnet.com in which he expresses some reservations about smart grid technology.

Grid authorization, authentication and accounting mechanisms, together with a security infrastructure, would be needed to ensure a device’s proper identity, the networks integrity and proper accountability. The accounting process would also have to include sophisticated and decentralized clearing-house services so consumers could charge their PEVs with roaming utilities. Of course all these requirements would extend to every mobile/portable electric device including laptops and other consumer electronics. Turning power consumption into an individualized experience should, in my opinion, be an important goal of the Smart Grid.

The idea, basically, is that smart grid is a generally good idea, but it will call for an increasingly Byzantine communications network in order to be effective. The article isn't entirely negative, however, and it sends by saying, "the Smart Grid will look very similar to the most sophisticated IP-based networks of the communications industry," which, despite some snags, has worked out fairly well for the world.

Ups and Downs in China's Coal-Fired Power Industry

There’s some interesting news out of China; the country’s largest electricity provider, Huaneng Power International, Inc., reported a profitable first half of 2009. The company reported a profit of $273.6 million, which is notable since it reported a loss the for the first half of 2008—its first since listing in Hong Kong in 1998—of $79.5 million.

It’s not all smooth sailing, however. Huaneng issued a statement saying, “there are still risks of tight coal supply.” It added, “the coal market is still fraught with uncertainty and instability,” and warned that coal supply and its rising price could create some difficulties in the power generation industry. Some of these difficulties have arisen because of intense negotiations between China’s top power generation companies and coal miners over price caps and coal production. Coal-based power plants produce nearly 80% of China’s electricity.

How Will H.R.2454 (AKA the American Clean Energy and Security Act) Affect the Power Generation Industry?

Lately, there’s been a lot of talk about the American Clean Energy and Security Act. The cornerstone of the bill is its implementation of a so-called “cap and trade” system to limit carbon emissions. Cap and trade calls for limiting environmentally-damaging pollution from factories, refineries, and power plants. The manner in which cap and trade limits such pollution is by imposing a government-mandated limit on heat-trapping pollutants. This limit decreases over time, thereby lowering the overall amount of emissions. Then, the system allows for the sale and trade of permits that allow the creation of such pollutants. Ideally, the cap and trade system would discourage the creation carbon emissions by putting a price on creating them. President Obama has expressed an intention of reducing U.S. emissions by 83% by 2050.

On 26 June 2009, the House of Representatives narrowly passed the American Clean Energy and Security Act thereby setting off a flurry of questions and debate. However, we are interested in the cap and trade system as it relates to the industrial power generation industry, a point of focus that has been unusually underrepresented in the national media. Rather, it seems like cap and trade is going to affect the power generation industry foremost among U.S. industries. While the United States Chamber of Commerce and the National Association of Manufacturers oppose the bill for fairly obvious reasons, its effect on U.S. energy producers is more ambivalent.

Under the wording of the House bill, in order to ease the transition into the cap and trade system, of the total $91.4 billion worth of carbon permits that would be provided by the government, many will be provided as free to regulated industries. This freebie period is expected to last until the end of the transition period, which is expected to occur between 2025 and 2030. The manner in which these allowances will be distributed is interesting. Whereas oil producers will receive 2.25% of their necessary permits in the form of allowances, the power generation industry is slated to receive approximately 85% of its permits as allowances. Ostensibly, this manner of distribution is to meant to avoid steep rate increases for power consumers. However, some power generation organizations feel that this amount is still not enough. It is clear, however, that this provision in the cap and trade system will save power companies from absolute ruin; they will have to make radical adjustments, though.

It is expected by many that the cap and trade system will force the energy industry to become more efficient. Whereas the expected cost increase for electricity is expected to be about 7% nationally, those who receive electricity from coal-dependent states can expect substantially greater increases. Against this notion, proponents of the cap and trade system say that the plan will return much of the money spent on permits to consumers in the form of lower taxes.

There are recent stories that suggest the impending cap and trade system is exercising its effect in another way on the power generation industry. On 29 July 2009, New Jersey regulators approved more than $515 million to spend on doubling the state’s solar power-generated energy. Included in the plan is for Petra Solar, Inc. to produce more than 200,000 smart solar systems for installation across the state, which is expected to create more than 100 green jobs. The federal government recently awarded Portland General Electric $3 million to augment the power generation capabilities of its Bigelow Canyon Wind Farm, which has been overtaxed during the summer months. The American Wind Energy Association recently released a market report citing Texas as the new leading wind power-generating state with a total of 8,000 megawatts capacity. It added 454 megawatts of that power during the second quarter of 2009. What these and other, similar stories seem to indicate is that power generation companies are looking to be proactive in the face of a cap and trade system. Rather than lobbying against change, they are rushing to meet it head-on with new alternate energy projects, many of which create new green jobs that can help combat the 9.5% unemployment rate that besieges our country. The power generating industry can look at this uncertain period in its history as a clarifying moment, an grand opportunity to update and rebuild a decaying, inefficient power grid to usher the country into the 21st century.

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