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Some Cautionary Notes on Atlantic Wind Connection

It's a rare occasion when the New York Times leads its daily newspaper with a report on a proposed electric power project. But the Atlantic Wind Connection--a proposed offshore grid to link up offshore wind with onshore grids in Virginia, Delaware, and New Jersey--got that treatment this week. And my fellow Spectrum blogger Dave Levitan rightly picked up on the story immediately and reported it here.

Google is well known for its visionary long-term investment strategy and the dominant search company  has bet especially heavily on green technologies, as Spectrum's Sandra Upson reported several years ago--no doubt in part because of sensitivities arising from its power-hogging server farms. The large investment Google is prepared to make in the so-called Atlantic Wind Connection naturally gives the project a credibility it might otherwise lack.

Nevertheless, some sober-minded words of caution are in order:

--First, and most obviously, this is a long-term project; even if all goes as hoped, it will not begin to yield its full rewards for a decade

--Second, to move at all, it has to get through numerous regulatory hoops involving three states and at least several Federal agencies

--Third, politics will come into play too, of course. Already there's grumbling in Virginia that if the transmission backbone is used initially to transport  the state's relatively inexpensive electricity up to New Jersey, where it's more costly,  local rates will rise. (A similar concern on the part of people in Connecticut prevented the cross-sound cable to Long Island  from being used for years; it was finally activated during the great Northeast-Midwest blackout, when the Federal government invoked emergency powers.)

If this kind of argument about who's gaining and who's losing gets heated enough, skeptics may even start asking whether the right offshore wind resource is being exploited. According to a recent survey, Virginia, Delaware, Maryland, and New Jersey have a combined offshore potential of about 50 GW. But Michigan, to take just one of the Great Lakes states and provinces, has an offshore potential nearly double that.

This skeptic would be willing to bet that if offshore wind ever gets really really big in the United States, it may be in the old industrial heartland on the Great Lakes, not off the two ocean coasts.

Cancellation of Maryland Plant Delivers Double Whammy

Constellation Energy's decision this last week to not build a nuclear reactor after all in Maryland was a big shock to its partner EDF, which had been banking on the alliance to serve as its wedge into the U.S. reactor market, and to the market itself.

Constellation's reason for pulling out was the high fee the Energy Department proposed to charge for extending a Federal loan guarantee to cover the project, estimated at $10 billion. DOE and nuclear regulators had come under fire from influential nuclear critics like former NRC commissioner Peter Bradford for extending loan guarantees on excessively soft terms, at growing risk to U.S. taxpayers.

There's no gainsaying that nuclear construction projects are looking riskier all the time, especially in the United States, where many factors have conspired to spoil dreams of a big nuclear renaissance: declining energy demand since the onset of the global economic crisis (down 4 percent since 2007 in the States); plummeting natural gas prices (down almost half from what they were a few years ago); collapsing prospects for enactment of a U.S. climate bill (which would have raised the costs of fossil-fuel-generated electricity); and soaring reactor construction costs (with EDF's current reactor 40 or 50 percent more expensive than originally billed).

An analysis in the Financial Times deems Constellation's decision "strategically devastating" for EDF--but also potentially helpful in the long run, because France's national utility already was widely believed to have been putting too much money on its losing U.S. bet.

POSTSCRIPT, Oct. 14: It's being reported today that EDF, attempting to keep Calvert Cliffs alive, is offering to either buy out Constellation's stake in the project or assume all project development costs until construction begins. It wants Constellation to drop a contractual option that could force EDF to buy up to $2 billion in conventional generation assets from the U.S. energy company.

Shalegas Is Bigger Business All the Time

Traditionally, extracting shalegas by means of hydraulic fracturing has been dominated by relatively small specialized companies, which keep a low profile. But increasingly big-name players are getting into the business, especially in the United States, as long-term prospects continue to improve. This week China's Cnooc announced it would invest $1-2 billion and take a one-third stake in a Texas project being developed by Chesapeake Energy, the market leader. Almost simultaneously, Norway's Statoil and Canada's Talisman Energy said they would invest $1.3 billion in the same Eagle Ford formation.

Cnooc once tried to obtain the U.S. oil company Unocal but had to drop the bid when it ran into sharp political opposition in the United States. In the deal it's now announced with Chesapeake, it will spend $1.08 billion to buy one third of the U.S. company's Eagle Ford acreage in Texas and may spend up to another $1.08 billion to cover up to three quarters of Chesapeake's drilling and well completion costs. According to a Financial Times report and analysis, Cnooc is eager to acquire technical experience, with an eye on China's shalegas reserves.

Pat Wood, a former Texas energy regulator who chaired the Federal Energy Regulatory Commission during George W. Bush's presidency, has declared that the U.S. gas market is resembling its state in the 1990s, when prices stayed low by historic standards with minor seasonal variation. "Even if half the supply is unavailable for economic or environmental reasons, we could see sub-$6 gas for the rest of the decade," he has said. So promising is the situation, indeed, there's beginning to be serious talk of the United States challenging Russian and Middle Eastern producers in the global LNG export market.

Transmission Backbone: Offshore Cable to Set Stage for Wind

Transmission has always been the elephant in the room when it comes to renewable energy (with apologies to energy storage; let's call that the mildly smaller hippopotamus in the room). Because wind and sun tend to pick and choose their spots to blow strongest, shine brightest and longest, there is usually the need for additional infrastructure capable of bringing all that carbon-free electricity to the load centers.

Offshore wind is no different, and is even more complicated in terms of transmission because it's, you know, off shore. With the offshore wind industry poised to take off -- or at least finally get one foot off the ground -- there is now a proposed project that would theoretically ease the transmission issues of wind farms up and down the Atlantic coast.

A project to be known as the Atlantic Wind Connection will create a huge "transmission backbone," with undersea cables sited miles off the coast aimed at connecting new wind farms to the power grid without the need for piecemeal infrastructure. The project is run by Trans-Elect, with financial backing for its estimated $5 billion price tag from Google and others.

The Atlantic Wind Connection will run for 350 miles along the coasts of Virginia, Maryland, Delaware and New Jersey. A direct-current series of cables, it will be the first undersea cable in the US to actually pick up generated power along the way. And at 15 to 20 miles off the coast, if wind turbines are built around the backbone they will be barely visible from shore.

It has been a banner couple of weeks for the nascent (still) offshore wind industry. A recent National Renewable Energy Laboratory report indicated the massive potential of the wind flying past US shores -- four times that of all the existing electricity generation in the country -- and Secretary of the Interior Ken Salazar finally signed a 28-year lease allowing the 130 Cape Wind turbines to be built.

And at the signing of that lease, last week, Salazar hinted at this week's transmission announcement.

"By identifying high priority areas offshore for potential wind projects, we can explore the development of a transmission backbone in the Atlantic Ocean to serve those areas," he said. "Rather than develop transmission infrastructure plans on a piecemeal basis, we should – in close coordination with the private sector, states, and tribes – lay out a smart transmission system, up front."

(Image via Kim Hansen/Wikimedia Commons)

Smart Grid Obstacle

We all tend to think of the Dutch as pretty relaxed and forward-thinking people. But last year they rebelled against a proposed compulsory rollout of smart meters, on grounds that the equipment could reveal too much personal detail to utility company employees and expose citizens to wrong-doing.

Those kinds of concerns may seem exaggerated but in fact they're serious and will have to be squarely addressed, speaker after speaker emphasized at a smart grid technical conference, sponsored by the IEEE Communications society and held at the National Institute of Standards and Technology (NIST), in Gaithersburg, Md. A conference track featured presentations on "false data injection," malicious data attacks, statistical methods of attack detection (and concealment), and "data anonymization."

In the United States, because of 9/11, when we think of smart grid vulnerabilities, we probably think first of terrorist cyber attacks. But there are other things to worry about too. False data injection, for example, is a tactic not only Al Qaeda could employ but also crooked traders, seeking to create fake market conditions that affect price. Instead of creating congestion in order to make money relieving it, as Enron traders boasted they did, a malicious data injector could just create the appearance of congestion and reap millions.

One clear message from the very cosmopolitan and sophisticated SmartGridComm conference: Every country has its own experiences and obsessions, and all that has to be taken into account if the smart grid is to live up to its billing.

According to press reports, Dutch voters worried that meters relaying information as often as every 15 minutes could tip utility workers off to when houses were empty or expensive new appliances had been bought. Seem paranoid? Well, it just so happens that this summer my family traded houses with a Dutch family living in an affluent suburb of Haarlem, near Amsterdam. Every door to the outside--four in all--and every ground-floor window had three locks that had to be opened with different keys. Evidently the Dutch living in Haarlem--however relaxed and forward looking they may be--don't like to have their belongings stolen. (They seem to worry about that more, in fact, than the yuppies moving these days into New York's Harlem.)

In Germany, because of sensitivities associated with Nazism, the Federal government has repeatedly found it impossible to conduct national censuses. Citizens worry that if the government gets too much personal information, once again some day Gestapo agents may be pounding on the door in the middle of the night. Seem paranoid to you? It doesn't actually matter what you think. What matters is what Germans think--and Siemens, a major player in smart grid technology and a prominent contributor of experts in Gaithersburg, is no doubt acutely aware of that.

In England, the Department of Energy and Climate Change intends to see all households equipped with smart meters by 2020, at a cost of about $13 billion. The anticipated average saving to each household will come to $45/year.

So let's be clear: That's significant--and very big in aggregate--but not huge on a per-person basis. If citizens are to be persuaded the smart grid is a good thing and are to be talked into helping make it work to best advantage, they will have to be convinced of its public benefits and assured its downside can be managed. As a source told the Times of London: "The backlash against smart meters could be aggressive if the message that they will reduce energy consumption and help lower carbon emissions is not made clear. The government also has to address these privacy and security issues. Many people do not like the idea of utility companies having a permanent window on their private lives."

There are ways of engineering around privacy and security concerns, as another post in the space recently detailed, but as it also said, engineering alone will not be able to do the whole job.

NRDC's Tom Cochran Assesses Breeder Prospects

Tom Cochran, a PhD particle physicist and lifelong staff member of the Natural Resources Defense Council in Washington, D.C., wrote a book about breeder reactors in 1974 that had considerable influence. At the time, the U.S. breeder program was the biggest single R&D item in the Federal budget; Cochran’s book, commissioned by Resources for the Future, took a highly critical look at estimated costs and projected engineering performance for fast reactors. In April 1977, newly elected president Jimmy Carter suspended plans to build a demonstration breeder at Clinch River, Tennessee, and along with it plans to introduce commercial reprocessing of spent nuclear fuels.

Despite setbacks in virtually all other breeder development programs, a recent MIT report continues to envision a future in which breeders might play a big part. Cochran comments as follows:

MIT basically got it right when projecting future uranium costs, though they didn't also take into account that enrichment costs will go down. The bottom line is that nuclear fuel costs will not move significantly in the next 100 years from where they are today.

Their conclusion, being from a university heavily engaged in research, is that this leaves lots of time to do all kinds of research on all kinds of things. My conclusion is that we don't need to do more research on alternative fuel cycles at this time. What we need to focus on is bringing down the capital costs of standard light water reactors. Historically, however, the government has boxed itself in by funding primarily research on the back end of the fuel cycle--spent fuel processing and nuclear waste disposal--and technologies relying on alternative fuel cycles, including the fast reactor.

Why has the industry had so little success in the thirty years since Three Mile Island in getting reactor costs down?

Nuclear energy is risky and complicated, and so you have to spend a great deal of money to make it safe and efficient. So, contrary to the industry’s expectations that economies of scale would produce savings, costs have gone up, at least in the United States. The cost trend of nuclear plants built in South Korea appears to be an exception at least in recent years.

You wrote the book on the liquid-meter fast breeder reactor. Can’t one make a case that the technology has proved to be a failure, given that every country that’s seriously pursued it has run into serious problems?

Yes, breeder development efforts were the priority energy research programs in the United States, France and Japan. Yet the programs failed in these countries, as well as in the United Kingdom, Germany, and--arguably--Russia, because they never closed the fuel cycle.

You mean Russia never extracted plutonium from breeders to serve as fresh breeder fuel, to realize the dream of “infinite” nuclear fuel supplies?

Correct. Rather than close the fuel cycle, Russia just fueled its breeders with highly enriched uranium. But that makes no sense. Basically, if you’re going to use uranium as fuel, you should build a thermal reactor [like an LWR], because the fission cross section is highest when the neutrons are moving slowly—at thermal energies. If you’re going to burn plutonium then you want a fast reactor because the plutonium fission cross section is higher when the neutrons are moving fastest. By the way, let’s not forget the nuclear navies of  the United States and the Soviet Union. Admiral Rickover built a prototype breeder for his second nuclear submarine, but decided it wasn’t a good idea even before sea trials began. In 1956 or ‘57 he concluded breeders were expensive to build, complex to operate, susceptible to prolonged shutdown as a result of even minor malfunctions, and difficult and time consuming to repair. That pretty well sums up the subsequent history of liquid metal fast reactor development efforts. The Soviet effort to deploy lead-bismuth cooled fast reactors in alfa-class submarines was also short-lived.

Given that sorry history, is there any real basis for projecting breeder costs 25, 50 or 100 years from now?

I don’t think so. When people engage in  R&D, and it becomes clear that the direction they’re taking isn't working and that it’s time to strike a new course, they often are the last ones to get the message. They always think, “If we just do a little more research, the next  time it will work.”

Deep Under the West Virginia Coal, Geothermal Resource Beckons

West Virginia isn't exactly known as the greenest state in the country, acting as ground zero for the fight over coal and mountaintop removal mining. A recent study shows, though, that the state sits atop a surprisingly bountiful renewable energy resource: heat.

Researchers at Southern Methodist University's Geothermal Laboratory found a potential geothermal energy resource in West Virginia of 18,890 megawatts, up substantially from previous estimates (that number assumes a two percent thermal recovery rate). There is enough heat underground to scale up to commercial-level plants, most likely. In fact, the researchers wrote that "The temperatures are high enough to make this the most attractive area for geothermal energy development in the eastern 1/3 of the country."

Concentrated mainly in the eastern part of West Virginia, the hot spots rise to more than 300 degrees Fahrenheit at depths of 15,000 feet. The discovery that commercial-scale geothermal plants could work in this area of the country comes as some surprise, as the technology more often depends on more tectonically active regions - like, say, Iceland (pictured) - to generate the necessary heat.

The US does already lead the way internationally in geothermal installations, with more than 3,000 MW [PDF] installed capacity. The vast bulk of that, though, is located in California and Nevada, with only a couple of plants anywhere near the eastern seaboard. If West Virginia's newfound resource proves commercially viable, it could bring yet another renewable technology to the table.

The study's authors agree on its potential importance: "The presence of a large, baseload, carbon neutral, and sustainable energy resource in West Virginia could make an important contribution to enhancing the U.S. energy security and for decreasing CO2 emissions."

(Image via Wikimedia Commons)

Quebecers Say 'Non' to Natural Gas

Heckled and booed off the stage at a series of public meetings earlier this month, Quebec's salesman-in-chief for a novel energy development withdrew from the fight this week -- citing the advice of worried doctors but vowing to rejoin the fight. The inspiration for André Caillé's intemperate welcome was not a coal-fired power plant or a pipeline full of heavy oil from Alberta's tarsands, but what until recently was considered the green fossil fuel: methane.

Natural gas -- that clean-burning stuff that delivers megajoules of energy with one-half the carbon content of coal, and which even Californians seem to accept as a transition fuel for a carbon-constrained world. Problem is that Quebec has low-carbon hydropower in abundance, and it's expanding into wind power, so fossil fuel development of any kind feels like a step in the wrong direction. Plus, in the Northeast, natural gas is increasingly lumped in with coal and petroleum as yet another environmental miscreant.

Methane's image has slid with the development of shale gas -- gaz de schiste to the Quebecois -- whereby methane is driven from the rock or schiste with aggressive chemical treatments and high-pressure water blasts. Quebec farmers and environmentalists told M. Caillé that, “We don’t want your gaz de shit!” because they fear that such 'fracking' will bring the groundwater contamination that's fueled controversy in Pennsylvania and inspired shale gas controls in New York.

Methane's image problems could shift westward too, and not only because shale gas development is being applied there too. Western producers of conventional gas deposits are working their way into bottom-of-the-barrel gas deposits that contain large amounts of CO2. A few years ago I interviewed Bill Townsend, CEO for Salt Lake City-based carbon capture project developer Blue Source, who predicted that Americans were due to be "stunned" by the "massive reserves" of high-CO2 natural gas coming onstream.

Townsend saw the relatively easy-to-capture CO2 from gas treatment as low-hanging fruit for carbon sequestration in the West. But he said the problem would be too big for sequestration, leaving plenty of rotting fruit unpicked and thus emissions uncontrolled. "It is going to be a huge problem," Townsend told me.

Given the trend lines, Quebecers may be right to reject natural gas.

Interior Department Authorizes Utility-scale Solar Projects

Yesterday, the head of the U.S. Interior Department authorized two large solar energy projects to serve California--one almost gigawatt scale. The projects are representative of a larger set that have divided environmental communities in the West, and the government's decision comes against a highly charged political backdrop in California, featuring two high-profile political races and a referendum challenge to the state's very ambitious greenhouse-gas-reduction law.

The projects also highlight a dirty little secret about much of what goes under the name of green energy: the renewable low-carbon technologies--solar especially--are typically much more land-hungry than conventional fossil or nuclear energy, and that in turn can imply a wide range of environmental concerns.

The larger of the two projects, slated for the Imperial Valley, is a 709 MW concentrator plant to be built by Tessera Solar. 28,630 reflectors covering 6,360 acres focus energy to power an engine generator. Its operation will require construction of a dedicated transmission line; together, the plant and line are considered threats to animals like the desert tortoise and bighorn sheep, besides being--arguably--big and unsightly.

The considerably smaller 45 MW Lucerne Valley plant, to be built by Chevron Energy, involves similar issues but on a smaller scale, obviously.

Interior Secretary Ken Salazar told the press that the decision to permit construction of the plants on Federal lands was taken in light of President Obama's order to him to "change the game." Yet, as the Washington Post noted, the solar industry has complained that the administration has been slow to clear loan guarantees available for big renewable energy projects.

Still, as the New York Times reported, other major solar projects projects that are poised to gain approval by year end "include BrightSource Energy’s proposed 370-megawatt Ivanpah facility, Tessera’s 850-megawatt Calico project, NextEra’s 250-megawatt Genesis Solar Energy Plant and Solar Millennium’s 1,000-megawatt Blythe Project."

In the case of the Blythe plant , the trough solar collector configuration had to be significantly modified with water conservation in mind, at the cost of overall efficiency.

Why Is This Man Smiling?

Earlier this year we reminded readers that Robert Dudley, the man brought in to salvage BP, once got into such a tiff with Russians, he felt compelled to retreat to a secret location to run the company's joint venture in Russia, TNK-BP. So how is it that Wednesday's New York Times carried a photograph of the supposedly disgraced and deposed Tony Hayward, in Russia, beaming at Russia's top oil official?

"Russian companies are talking to BP about buying billions of dollars in oil fields and other assets to help it pay its gulf cleanup and compensation costs," the Times explained. "Along with a partner, BP is planning to explore the rich oil fields in Russia’s Arctic waters, a region that is off limits in the United States and Canada. And BP’s chief executive, Tony Hayward, who is turning over the reins this Friday to Robert Dudley [the former head of TNK-BP] is being welcomed onto the board of TNK-BP, the company’s 50-50 joint venture in Russia."

So Dudley and Hayward are trading places, in a manner of speaking. The basis of this startling switch, according to the Times, is that Hayward managed to mend fences with the Russians after Dudley's ouster, laying the foundation for future joint work. Now that BP desperately needs to sell assets and develop new projects to cover its huge Gulf oil spill liabilities, the Putin-Medvedev government is offering a helping hand.

When the spill occurred, the Russians resisted the temptation to "kick a man when he's down," as a source put it to the Times, and now are hoping to reap their rewards in terms of bargain acquisitions, technology transfer, and assistance breaking into foreign markets. Particularly valuable to them, reportedly, was a commitment they obtained from Hayward: Under a 2007 memo of understanding negotiated with Hayward, "BP offered to help Gazprom make an acquisition outside of Russia. It was no small undertaking, as at the time Western governments were hesitant to see the already powerful Russian energy giant go global. In exchange for this politically delicate task, BP would get help from Gazprom with its vitally important business inside Russia."

BP and TNK-BP declined to tell the Times how much Hayward will make as a TNK-BP director. Perhaps his compensation will depend on whether he and BP now deliver on that 2007 understanding. As for Dudley, who took the wheel at BP's helm earlier this week, he is moving aggressively to reform the company's safety culture and the way it deals with subcontractors.

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