Kerry Lieberman American Power Act – Unintended Consequences

Posted on Sun 05/16/2010 by


The Carbon Cap and Trade part of this legislation specifically targets those coal fired power plants, and the Carbon Dioxide (CO2) emissions from them. It also targets those Natural Gas fired plants, because they too emit CO2. However, it also targets renewable power plants as well, and I’m willing to bet that this is an unintended consequence of Cap and Trade. In their rush to get their hands on the vast amounts of money that this will generate for the Government, somebody forgot to do their research.

In this earlier post, I detailed just how this legislation will impose a huge cost on those coal fired power plants by placing a cost on the CO2 they emit. These plants burn huge amounts of coal, and thus emit huge quantities of CO2.

The same will apply to those Natural Gas fired plants as well. They also emit CO2 as a product of burning the Natural Gas. These gas fired plants use a large turbine to drive the generator. Unlike coal fired plants that in the main run for 24 hours of every day, the vast number of these gas fired plants run for short times only to provide power during peak consumption times. They are specifically designed so that they can be up and running at short notice, something large coal fired plants cannot do. These Natural Gas fired plants emit CO2 on a scale around 35% of the rate of coal fired plants on a MW for MW basis. Again, this is a calculation that can be easily worked out. For every Thousand cubic feet (MCF) of gas that they burn, they will emit 122 pounds of CO2. The hourly burn rate of gas is also something that is known, so, from that it can be readily calculated how much CO2 they emit. Across the whole of the U.S. these gas fired plants will emit around 800 Million tons of CO2 each and every year. When compared to coal fired plants this may sound a lot less, but here you need to be aware that they only run for around a third of the time, even though they still provide 21% of all power consumed in the U.S.

That brings us to renewable power plants, and specifically, Concentrating Solar (Solar Thermal) power plants. Unlike Solar Photovoltaic (Solar PV) where the panels themselves generate the electricity, these plants use focused mirrors to direct the heat generated from Sunlight onto a compound that then becomes molten. This molten compound then boils water to steam to drive a turbine which then drives the generator.

The hope is that these types of plants can be used to provide power on a basis similar to those coal fired power plants that provide the Base Load of power that is required absolutely 24/7/365.

Because of the nature of these types of plant, they can only be considerably smaller than for large scale conventional coal fired steam plants, mainly because of the huge weight of the turbine/generator that has to be driven, and I have very carefully explained that in numerous earlier posts.

There are two types of this plant coming into vogue currently, the Solar Tower type and the Solar Trough type of plant. Even though these plants may sound like they can produce large scale amounts of electrical power, they are limited to that amount. The largest is currently around 250 MW. Large scale coal fired plants start at around 2000MW and there are 30 of these in the U.S. larger than this 2000MW level. While there is one large scale Concentrating Solar plant due to come on line in the U.S. in the next few years, this one plant has a capacity of 250MW. There are more than 400 Coal fired plants larger than that in the U.S. and almost as many natural gas fired plants larger than this as well.

That one large scale Solar plant is the Abengoa Solana plant at Gila Bend, near Phoenix, in Arizona. It uses the Solar Trough technology. It is going to have a final cost of around $1 Billion.

The Sunlight is focused  by specially manufactured mirrors onto the compound passing along those lines of mirrors. There are hundreds of thousands of these mirrors, and the size of the plant covers nearly three square miles, almost 2000 acres of land covered with these fragile mirrors.

What is sometimes artfully avoided is the telling of the whole story with respect to this form of power generation. The impression is that the compound in its molten state can generate power for the full 24 hours. However, this is not so.

These plants can provide electrical power after the Sun has set, but as soon as the molten compound cools, it will not be able to generate the huge amounts of steam required to drive the turbine, and effectively the plant stops producing power, as there is now no driving force. This can occur at around 9PM. The compound will not become molten enough to generate the steam until after the Sun has risen the following morning, at around 9AM on a sunny day, so effectively the plant is only providing its power from Solar sources for around 12 hours. This is still significantly better than for Solar PV which is lucky if it can provide its full power for 4 to 5 hours a day at best.

To cover this contingency, these types of plant provide backup for when the molten compound goes off the boil. This backup is in the form of a Natural gas fired turbine which then drives the plant producing electrical power at all times when the compound is not molten enough to generate steam.

In Summer this can be for around 10 to 12 hours every day.

Now, as the burn rate per hour is known for different size Capacity plants, it can quite simply be calculated just how much CO2 is being emitted.

This current Abengoa Solana large scale plant (for Concentrating Solar that is ) of 250 MW will be burning Natural Gas for all non solar periods. The amount of gas being burned here will be emitting around 1,200 tons of CO2 for each and every day the plant is in operation.

So, effectively this amounts to around 450,000 tons of CO2 being emitted from this plant each year. That number is conservative only and based loosely around Summer time, so it is likely to be a lot higher than that. Any periods of long overcast will again directly impact on that because no heat from the Sun means that the compound will not become molten enough.

Basing it on this lower figure, then those emissions of CO2 now become subject to the Cap and Trade legislation.

A cost of (originally) $25 per ton will be levied on those emissions.

This plant will now have to purchase enough credits to cover those emissions. There will be four strictly controlled auctions each year, so they can buy their credits at the auction rate enough to cover their emissions.

However, unlike coal fired plants where they know with almost certainty how much coal they will be burning, and then how much CO2 they will be emitting, this Solar plant will have to work that out on a day to day basis, Summer and Winter and overcast days all having to be taken into account.

If they do not have enough credits to hand back on April 1st each year, then they will have to purchase those missing credits at the rate from the most recent pre April 1 auction, and on top of that pay a penalty of two times the amount for each missing credit. On top of that again, as stated in the legislation, the cap for the following year will be lowered, meaning they will have to emit less CO2, that amount gradually decreasing each and every year for the life of the plant.

At that lower level of 450,000 tons of CO2 and at the base price of $25 a ton, then this is a further impost on a plant of this nature of $11.25 Million. This is a further cost that will have to be passed on to consumers.

This may not sound much in the big scheme of things where large coal fired plants will pay considerably more, what needs to be taken into account is that this is a small producer of electrical power , so that cost will be over a much smaller base than those large coal fired plants.

The same will apply to all plants of this type where the government demand is that for them to be eligible for subsidies, then they have to supply power on that 24 hour basis, necessitating the need for this natural gas fired backup, and making them now come under the Cap and Trade umbrella.

I am absolutely certain that this was not envisioned by those legislators.

Something like this was specifically aimed at coal fired power, and now even renewable power has fallen into the trap.

Sometimes, a blind grab for the cash to be made can have unintended consequences.

This is one of those situations.

I’ll bet this won’t get any coverage from any quarter at all.