Autonomous Vehicle Consultant

From 2001 until present time, wind turbine installation in Massachusetts (MA) has proceeded at a glacial pace. This fact raises serious issues for public and private policy analysts in MA. For example:

• During this 10 year period, only 38 MW of wind turbines has been installed with a potential of 1000 MW. (See Additional Wind Potential Tables in this link). At that rate, 1000 MW of installed wind power will be reached in about 250 years.
• Assuming maximum wind power is available, the resulting energy production is 3 kWh/person/day compared with retail consumption of 20 kWh/person/day in MA. This wind energy generation would be only 15 percent of the requirements of more than 2,600,000 retail electric energy customers in MA. (Please see backup calculations below)
• Installed wind power of 1000 MW would occupy nearly 51,000 acres. In contrast, a gas fired power plant would be confined within 30 acres. 
•  Two gas fired power plants would generate over 1000 MW at 60 acres, nearly the same as 1000 MW of wind turbines occupying 51,000 acres
•  Capital cost of on shore wind turbines is approximately $2400/kW. Compare with capital costs of combustion turbines ranging from $700/kW to $900/kW.

A Path Forward 

Given these wind energy results from the past ten years, does it make sense to continue with Renewable Energy Credits (REC), Renewable Portfolio Standards (RPS) and a host of tax incentives in MA? Where is the business case for wind energy in MA? Although wind energy generation in MA is not promising, it is possible for MA-based industries and universities to import electricity from other states. For example, Harvard University concluded an arrangement with First Wind in Maine to become the largest institutional buyer of wind energy from a renewable source in New England. First Wind will supply more than 10 percent of Harvard’s electricity. Implicit in this arrangement is the fact that Maine has nearly 10 times more available land area (556,000 acres) for wind, as well as 10 times greater potential wind capacity (11,251 MW) than Massachusetts. Encouraging technical advancements in wind turbine design  may increase the viability of wind energy technologies so that they can be competitive with their fossil fuel counterparts and not require government subsidies.

Backup Calculations:

MA On Shore Electricity Production from Wind

On shore wind = 1000MW > 1000MW [(1kWh/d)/40W]/2,647,529p ~ 9 kWh/day*persons

Capacity factor ~ 0.33  > on shore wind electricity production = 0.33 x 9 kWh/d*p = 3 kWh/d*p

MA Retail Electric Consumption

MA electric consumers (residential) = 2,647,529;    618 kWh/month, average

(618 kWh/mo*p) (12 mo/365d) ~  20 kWh/d*p

The use of the conversion factor, 1 kilowatt hour/day/40 watts (1kWh/d/40W), stems from a fellow physicist, David JC MacKay, who wrote, Sustainable Energy — without the hot air (2009). This conversion factor is intuitively reasonable because it is expressed in kWh, which most folks recognize from their electric bills. For example, the average retail electric bill in MA is 618 kWh/month.

Thirty percent of New England’s electricity generation is from nuclear plants (ISO Regional System Plan 2011). Three out of five of these five plants are past their design life time. All use mostly imported uranium, and exercise questionable safety by storing greater numbers of densely packed, spent fuel rods at the plants. Nuclear power plants have a finite life time. Replacing a decommissioned plant with another will be extremely expensive and time consuming. For example, an AP1000 nuclear power plant (Generation III+) built by Westinghouse will cost between $5B to $7B per reactor and be operational 60 months from receipt of order.

New England Nuclear Plants: This region has 5 nuclear reactors, one each at Vermont Yankee, Seabrook, Pilgrim and 2 reactors at Millstone (units 2 and 3). The reactors at Vermont Yankee, Pilgrim and Millstone (unit 2) were commissioned in the 1970s. Commissioning dates for Millstone (unit 3) and Seabrook were 1986 and 1990, respectively. Operating license renewals have been granted by the Nuclear Regulatory Commission: Vermont Yankee (2032), Millstone (unit 2, 2035; unit 3, 2045), and Seabrook (2026). The license for Pilgrim is schedule to expire in 2012.

Lifespan: The design lifespan is usually 30 to 40 years. Although most elements in a nuclear power plant can be replaced, the reactor vessel cannot be replaced after it is no longer neutron leak proof. That lifespan limitation applies to 3 of the 5 reactors in New England. Government and industry experts are now considering the possibility of operating lifetimes of 80 years.

Uranium Imports: In my blog post of March 24, 2011, I wrote that the United States imports more than 90 percent of its uranium needs, where 23 percent comes from Russia and 15 percent from Kazakhstan. These statistics do not inspire confidence about reliable, secure fuel access to power New England nuclear plants.

Storage of Spent Fuel Rods: Congress passed a law in 1982 authorizing the creation of a national storage facility for spent fuel rods. The execution of that law ceased when the Obama administration canceled plans for storage at Yucca Mountain in Nevada. “New England plants…have already generated over 4200 tons of spent fuel…but the plants have no clear financial plan on how to pay for long-term storage. The spent fuel sits at or near…regional reactors in either pools of water or dry cement fortifications known as ‘dry casks,’ which cost between $6 to 8 million annually per plant to secure.”  “If water is lost from a densely packed pool as the result of an attack or an accident, cooling by ambient air would likely be insufficient to prevent a fire, resulting in the release of large quantities of radioactivity to the environment.”

Decommissioning: There is considerable cost pressure to extend nuclear plant operating lifetimes due to expense and time of decommissioning these installations, as well as cost and time to construct new nuclear plants. For example, three such decommissioning occurred in New England: Yankee Rowe ($608M, 1991), Maine Yankee ($635M, 1996) and Connecticut Yankee ($820M, 1996). The decommissioning process can take decades.

On October 19, 2011, I attended a forum on “Doing Business with the Department of Defense” that was held at the Middlesex Community College in Lowell, Massachusetts. This event was hosted by Congresswoman Niki Tsongas in partnership with the New England Clean Energy Council (NECEC). Seasoned business executives and DOD officials explained the most recent green acquisition mandates, details about green procurement and suggestions on locating contracting opportunities. Panelists included:

• Rick Hess, VP at American Superconductors

• Stephen Lasher, Director of Business Development for R&D, Satcon

• Sandra Ledbetter, Central Mass Procurement Technical Assistance Center

• Andrew (AJ) Raiber, Contracting, Army Corps of Engineers Contracting

• Bill Donaldson, Electronic Systems Wing Small Business Office

The Small Business Innovation Research (SBIR) program was discussed as an excellent opportunity to be considered by entrepreneurs as a means of commercializing a product or process. For more information, please contact me (jeff@jheversonconsulting.com).

Attendees will receive slide presentations. Others can download a document entitled, “From Barracks to the Battlefield, Clean Energy Innovation and America’s Armed Forces.” This report, prepared by the PEW Charitable Trusts, provides an excellent overview of the military clean energy requirements in terms of vehicles, biofuels, as well as energy efficiency, renewables and storage at bases.

Paul Merrion of the Chicago Business called me recently to discuss solar photovoltaic (PV) technology and its commercial viability. We talked about the declining cost of solar PV panels and the fact that they are still not  cost competitive with their fossil fuel counterparts. Moreover, I stressed that “Solar… has not been able to stand on its own feet in the market place.”

The key metric in this case is the levelized cost of electricity (LCOE), a subject of my recent blog post. Until the LCOE of solar PV is equal to or less than that of fossil fuel generators, then the need for government subsidies will continue. Currently, the federal cash grant subsidy is set to expire on December 31, 2011.

Regarding federal cash grants, Paul Merrion noted in his article that “New solar installations next year could see ‘up towards a 50% drop off, given the lack of the grant program and the tightening up of other programs at the federal level,’ says Dan Simmons, director of regulatory and state affairs at the Institute for Energy Research, a non-profit arm of the American Energy Alliance, a Washington, D.C., lobbying group that supports the use of fossil and nuclear fuels.”

Paul’s article can be read in its entirety. Accessing it may involve setting up a free trial subscription.

The Energy Information Administration (EIA) “projects residential heating oil prices to average $3.71 per gallon during the winter season, 33 cents per gallon more than last winter, and the highest average winter price on record (although lower than the record heating oil prices realized during the summer of 2008 when crude oil and all petroleum product prices hit their peak).” Heating oil is a middle distillate fuel and includes diesel, kerosene and jet fuels.

Home heating oil prices are climbing due to export demands. “World need for distillate is expected to grow faster than that for gasoline, which can present continuing opportunities for U.S. middle distillate fuel exports for some time.”

The figure below illustrates the increase in distillate exports from June 2006 until July 2011.

While middle distillate exports have increased, oil companies have received approximately $41B per year in subsidies. “That amounts to more than half – 52 percent – of total benefits distributed to energy sectors by the federal government.”

Meanwhile, “Senator Charles Schumer says the state (New York) could lose 85 million dollars in funding for The Low Income Home Energy Assistance Program if a new proposal from the House of Representatives benefiting warmer states is passed…Schumer says the price per gallon for home heating oil has risen more than 23 percent in the city… The program helps more than 700,000 city households pay utility bills.”

Recommendation: Oil companies are making profits from exported distillate fuels and federal subsidies, while state and city government are vainly attempting to provide heating oil assistance to financially stressed families. Although oil companies are free to sell products to whomever, nevertheless they are not entitled to totally unnecessary subsidies. Some portion of those subsidies could be diverted to poor families for home heating oil payment assistance, while the remaining subsidies could support renewable energy R&D, especially to decrease the levelized cost of electricity (LCOE) generated from solar PV and off shore wind. Please see my previous post on LCOE.