Bloomberg’s got some pretty good news for the power generation industry in America, at least. Total power-plant energy output was 89.8 million megawatt-hours last week, up 3.8% from the previous year. The numbers come from Genscape, an energy information company. They create their power generation numbers by measuring output at 280 monitored power plants, and have a margin of error less than 2%.
Green power generation in the New England area is getting a big, green boost. A six state area covered by Cape Wind, a $2.5 billion project to build 130 wind turbines, will see an increase in its green energy very soon.
Recently, National Grid signed a 15 year agreement locking in 50% of Cape Wind’s power at 18.7¢/kWh. Once the Cape Wind project is completed, it is expected to supply about 75% of the energy needs of residents in Cape Code, Nantucket, and Martha’s Vineyard.
Even though the Cape Wind project seems like a great boost to the green power generation industry, it has seen some opposition from local residents and politicians. One prominent group, the Alliance to Protect Nantucket Sound, includes John Kerry and Mitt Romney. Despite that, Cape Wind is optimistic. Its CEO, Jim Gordon noted they’d been at it for more than ten years, and they’ve been victorious against opposition groups every time. They have a perfect 15-0 record, and it seems like Cape Wind will be right at the forefront of supplying the US northeast with wind generated power for years to come.
The Financial Post has seen some holes in Ontario Power Generation’s financial numbers.
On the surface, they look good. The state-owned power generation company generated $10.5 billion in revenue and $1.2 billion in net income. And while revenue rose only 1% from last year, its net income enjoyed a 13.4% increase. That seems good, right?OPG was profitable because its nuclear decommissioning fund had a market gain of $668-million. OPG, with hundreds of millions in unfunded pension and benefit liabilities, doesn’t make money on what it actually produces -electricity.
Some of OPG’s largest projects—two large hydro power generation projects and several nuclear power-related projects—have all come in over budget.
And, as seen in its American neighbor, Canada’s OPG is also seeing some tension with its workforce, 90% of which has a collective bargaining agreement. Overall, OPG looks to be likely to increase its power rates during the year in order to keep up with its budgeting needs.
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.
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.