A Sensible Electricity Policy
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Answer to All Problems: More Transmission Lines, MISO Edition, August 20, 2022
After 13 years of analysis, siting, permit approval and construction process, MVP lines, outside of one project, are completed within 20% of the initial cost assumptions (which, of course, was pushed to rate payers). MISO started the second round of MVP lines. The goal seems to be the same as the first one; to help to move renewable energy into other regions, and not to address two immediate problems in MISO; reliability and west to east connectivity. The economic analysis done to justify the $10 billion investment indicates that most of the economic gain seems to be coming from relieving the congestion from the generation that will be added due to these new lines and local generation may do the same work at similar cost. This circular logic to justify a new transmission line also depends on a basic optimization assumption; a cost function optimized over a larger domain will result in lower cost. This ignores the simple fact that once the domain is changed, the cost function may not be the same. In this case, the new cost function should be including the loss of jobs and tax income in the regions where the power lines replace the local generation . There is also the-not-easily-quantifiable aspect of environmental and social impact of those ugly transmission lines. This study also ignores the technological changes that are happening (VPPs, microgrids, battery storages) and cheaper alternatives like demand conservation. Since the completion of this study, the pass of the Inflation Reduction Act made the study already outdated and there are still 12 more years of changes coming.
The problem is not that MISO does not new transmission lines but the current approach. The current approach of top down selection of transmission projects through a central planning process should be replaced by a method similar to natural gas pipeline development process where the power market participants pick the transmission lines through a long term commitment. Then really the necessary one will be constructed, and the demand and supply will equally pay for the line rather than just consumers.
Love of Nuclear Generation July 25, 2022
There is not a day that passes by without seeing an article about how great nuclear power is and how it will solve all of our energy problems from supply issues to clean energy. Nuclear power is a great source of diversification in a system with growing demand and certainly a better alternative to coal plants from a cost, reliability, employment and emission perspective despite what Germany is doing. However, there is a reason why even China has not been building so many of them and US has only two under construction after 40 years.
Nuclear power plants take too long to build: The planning for the new nuclear plant Vogtle 3 and 4 started in 2004 and construction started in 2011. However, the plant is still under construction. This may be due to the incompetence of now bankrupt Westinghouse and/or bad decisions by Southern Company, but this is not the only example of failures and delays of nuclear plants. There is also Sizewell C in England and another example in Finland. As much as WSJ claims that this is the western world's problems, Russian built nuclear plants in Turkey are in year 12 of planning and construction and China is also having their problems.
They are very expensive to built: Although typical cost quotes are around $5+ Billion per 1000 MWs in the eastern world, the delays and problems resulted in $10 billion in the west. In comparison, a natural gas combined cycle plant of the same size costs around $1 billion (and can be finished in two years). A solar plant with similar output, costs around $3 billion (although the output is intermittent, for $10 billion a solar + battery combination can match the output of a nuclear plant).
Hence, they are a very expensive source of power: The cost of electricity in a new nuclear plant can be as high as $140/MWh after the addition of operational costs. This is 3-4 times of wholesale power prices in the US. After the additional cost of T&D, the delivered electricity cost may be as high as $200/MWh which is higher than the average cost of retail electricity ($150/MWh) in the US. Even the existing nuclear power plants required $40/MWh on top of wholesale power market revenue to survive in New Jersey, New York and Illinois (so, all in cost of $70/MWh). Hence, that cost may not come off below wholesale market cost even after 50 years of operation and even if the US manages to bring the cost of nuclear generation to $6 billion per GW range, it is hard to see all-in-cost of nuclear power less than $75/MWh, which is still above any other option and wholesale power prices.
Where is the fuel coming from? 40% of the world's nuclear fuel is coming from Russia. Also, 20% of US nuclear power plant fuel is coming from Russia and for some reason, that has escaped the sanctions.
The spent fuel problem does not ever seem to go away: Since nuclear energy is very efficient per mass, the amount of spent fuel is really not that much: All of it could fit on a single football field at a depth of less than 10 yards. But those do not seem to leave the nuclear plant site for one reason or another.
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