Avoid Carbon Dioxide, Keep Vermont Yankee; Dr. Carlos Pinkham Guest Post

Dr. Carlos Pinkham
Professor Emeritus
Biology and Ecology 

By Carlos Pinkham, Professor Emeritus, Norwich University

On the evening of November 7, I spoke before the Vermont Public Service Board in Vernon in support of the continued operation of Vermont Yankee. What appears below is quite similar to the testimony I submitted in written form to the board, and from which I drew my remarks.

In the ‘70’s, I was one of the U.S. Army’s first environmental scientists working National Environmental Policy Act issues with Project Managers.  I found that progress could be made if both parties would adopt four ground rules:

• Agree that both sides had legitimate concerns. 
• Agree to listen seriously to these concerns and see the problem from the other side’s perspective. 
• Agree to think outside the box. 
• Agree to be willing to compromise. 

Employing these four ground rules, we were able to ensure completion of the mission and mitigation of environmental impacts in each of the hundred plus projects I worked on. I sense that some of these rules are not being followed in the VY controversy.

As Vermonters, we have always taken pride in being environmentally conscious. We keep our streets clean, we protect our parks and lands, we recycle, and we have some of the country’s highest air quality ratings. These are the same sources of pride that motivate both sides of the Vermont Yankee debate.

Following, are some sources of pride that should be considered rationally from the pro Vermont Yankee side. Since coming online in 1972, Vermont Yankee has generated over 150 million megawatts of electricity and prevented more than 69 million tons of carbon dioxide from entering our air. Vermont Yankee’s clean operation avoids 2.8 million tons of carbon dioxide emissions annually, as well as emissions of sulfur dioxide and nitrogen oxides.  Avoidance of these harmful greenhouse gases while producing almost three-quarters of the electricity generated in state has helped Vermont achieve its second-place nationwide ranking for lowest electric power-related carbon footprint.

In addition, Vermont Yankee has contributed significantly to Vermont’s number one ranking for “green” jobs per capita, according to a March, 2012 report by the U.S. Bureau of Labor Statistics. Nuclear power jobs, including hundreds at Vermont Yankee, are clearly defined in the report as green jobs.

We would lose these sources of pride with a Vermont Yankee shutdown. MIT Professor and head of the Dept. of Nuclear Science Dr. Richard Lester notes that Vermont Yankee’s closure would lead to significant increases in carbon emissions. If the 620 MW of power provided by the plant is replaced by natural gas-fired plants on the New England grid, the increase would be equivalent to 30% of the state’s total current emissions.

Vermont has always been an environmental leader. If we choose to close down Vermont Yankee, our leadership could suffer, as closing Vermont Yankee will lead to heightened use of fossil fuels to meet electricity demand.

Carlos F. A. Pinkham, PhD
Active Professor Emeritus

Co-Director, Vermont State Science and Mathematics Fair
Chair, Vermont ESTEEM Network
Researcher, Vermont EPSCoR Streams Project
Faculty Advisor, Norwich Christian Fellowship

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Norwich University is the oldest senior military college in the United States, founded in 1819.

This is the tenth in a series of posts which share statements made in favor of Vermont Yankee at the Public Service Board hearing on November 7, 2012.

Green Jobs and Taxes: A Guest Post by Guy Page of VTEP

Though the plant helps make Vermont first in the nation in “green jobs,” the state government is still trying to punish Vermont Yankee.

A guest post by Guy Page of Vermont Energy Partnership: VTEP.

By Guy Page

The U.S. Bureau of Labor Statistics (BLS) recently released a study showing that nearly 3.1 million Americans now hold “green” jobs, a nearly one percent increase since 2010. But the state of Vermont could set a dangerous precedent that would affect these jobs across the country.

The BLS report found that nuclear power generation topped the list of energy industries in terms of “green goods and services (GGS)” employment, with 35,800 jobs. A well-run nuclear plant is an environmentally low-impact power producer; instead of emitting spent fuel into the atmosphere, as occurs in the production of fossil-fuel power, nuclear plants' emissions are safely stored, and the public is protected from contamination.

The BLS report ranks the Green Mountain State first among U.S. states for “green jobs” per capita, with just under 13,000. Vermont’s top ranking is in part due to the approximately 600 jobs at the Vermont Yankee nuclear power plant. Located in Vernon, it is the state’s largest producer of clean, green energy. Also, about 500 contractors or other workers derive most or all of their income from the plant.

The Legislature and Vermont Yankee

Unfortunately, the state legislature and the administration of Gov. Peter Shumlin are doing everything in their power to prevent Vermont from continuing this positive trend in green jobs. The State has spent most of the last year trying to shut down Vermont Yankee. Having lost in federal court, the state is moving forward with an expensive, and probably fruitless, appeal. The administration and well-entrenched "environmental" groups - many of whom also seem to prefer gas and coal power over green nuclear - are now pushing hard for the plant’s closure before the Vermont Public Service Board.

Meanwhile, the Vermont Legislature is moving forward with a measure that would increase the plant's generation tax from $5 million to about $11 million. That's how much Vermont Yankee would be required to pay the State of Vermont just to continue operating and creating green jobs in state. Generation taxes are nothing new – almost every power generating industry has them, but a 120% increase is steep, to say the least.

Business and Government

When any industry is targeted for punishment by state government, other industries notice. Across the country, and indeed across the globe, boards of directors are deciding where they want to do business. By making a public spectacle of itself as ferociously anti-business, the State of Vermont is doing itself no favors.

If legislators succeed in their attempt to shut down this generator of clean power and green jobs, it could have a cascading effect throughout the country. It would send a message to legislators in other states that they can put their political and personal agendas ahead of what’s best for the people who live and pay taxes there.

The number of green jobs would undoubtedly decline and the U.S. would have less to boast about regarding increases in what is considered the workforce of the future.

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(To view the BLS study, go to http://www.bls.gov/news.release/pdf/ggqcew.pdf. The information about nuclear power's inclusion as "green" is on page 11 of the study.)

This post is by Guy Page, of Cambridge Vermont. He is communications director of the Vermont Energy Partnership (www.vtep.org), a 90-member not-for-profit organization based in Montpelier and advocating for a clean, safe, reliable, affordable Vermont energy future. Entergy, owner of Vermont Yankee, is a VTEP member.

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Photovoltaic Feed In Tariffs in Germany and this country

Today we have a guest blog by Willem Post, on the economic dangers of uncontrolled Feed In Tariffs. Willem is a strong advocate of efficiency and warm, tight houses, rather than Feed In Tariffs for photovoltaic.

Willem Post, Bob Hargraves, Howard Shaffer, Peter Roth, Steve Fox and I are all members of the local group, Coalition for Energy Solutions. Willem has both an MS in Mechanical Engineering and an MBA. He has many years of experience in financial estimation and oversight of large energy projects. The Coalition For Energy Solutions Research and Reports page includes links to many of Willem's reports, including the complete, longer version of this current post on Feed In Tariffs. This is his second guest post for Yes Vermont Yankee. His first guest post was Solar and Nuclear, Economics and Land Use.

Update October 27:

This guest blog by Willem Post is also featured at Energy Collective

Energy Collective also features a recent post by Geoffrey Styles: German Solar: Too Much of a Good Thing?

Impact of Photovoltaic (PV) Solar Feed In Tariffs in Germany

by Willem Post; 19 October, 2010

Introduction The purpose of this study is to show the impact of the PV Solar feed-in-tariffs, (FITs) in Germany. Germany has the largest installed base of grid-connected PV solar systems in the world about which much data is available. For that reason, Germany was chosen for this study.

Development of the Photovoltaic Industry in Germany

Top Ten Countries Using Solar Power

Prior to 2000, PV solar FITs did not exist and there were almost no PV solar systems in Germany. Germany’s annual PV solar capacity factor for true-south-facing, fixed-tilt, correctly-angled systems is about 0.115, which makes it a very poor candidate for unsubsidized PV solar power.

By 31 August, 2010, German households and businesses had installed about 525,000 grid-connected PV solar systems with a total capacity of 14,680 MW. These were installed due to the subsidies and generous FITs that started in 2000.

The FITs are lucrative for the households and businesses with grid-connected PV solar systems. They can sell all of their PV solar power to the utilities at generous FIT rates for 20 years from date of installation. The average FIT rate was $0.54/kWh in 2009. These same homes and businesses buy power for their own consumption from the utilities at about $0.22/kWh, for a gain of $0.32/kWh.

German utilities are allowed to include the additional costs of the FIT regime into their rate base. In effect, the few more wealthy households and businesses with PV are being subsidized by the many less wealthy households and businesses. At present, the renewables FITs add a few euros per month to household electric bills, more to business electric bills.

In Germany the generous FITs are available to all PV solar system owners, not just to a few lottery winners, as with Vermont’s FIT program for 50 MW of renewables. Germany’s lucrative FIT regime appears more democratic and inclusionary than Vermont’s.

Study Summary

The main results of the subsidies and generous FITs have been huge investments in PV solar systems and huge FIT subsidies paid to the owners of PV solar systems that produce just a very small quantity of variable, intermittent and expensive power and avoid the emission of a miniscule quantity of CO2.

• During the 2000-2009 period that FITs were in effect, Germany installed 9,830 MW of PV solar systems by the end of 2009 at a cost of about 9,830,000 kW x $7,000/kWh = $68.8 billion. The $/kW is somewhat lower at present.
• For the systems installed during the 2000-2009 period, the FIT amount that has been paid by utilities for the PV solar power fed into the grid from the start of 2000 and that will be paid until the end of 2029 has been estimated at $73.2 billion (2009$).

Ruhr Economic Papers Study

• Germany’s installed power plant capacity is about 135,000 MW and its peak power demand is about 100,000 MW. Its power production was 594,100 GWh in 2009, of which PV solar power was 6,578 GWh, or about 1.1% of Germany’s production.
• In 2009, 2.48 billion euros, or $3.54 billion, was paid by German utilities for the 6,578 GWh PV solar power produced by an effective installed capacity of 5,950 MW (start 2009) + 1/2 x 3,880 MW (added in 2009) = 7,890 MW. The 2009 average FIT was about $3.54 billion/6,578 GWh = $0.54/kWh. In 2009, the average wholesale rates at which German utilities buy and sell were about $0.058/kWh for base load power and about $0.075/kWh for peaking power.

Solar Energy presentation by German PV firm

Germany electricity prices by leading German energy firm

In 2009, Germany’s PV solar capacity factor was 6,578 GWh/(7,890 MW x 8,760 hr/yr) = 0.095. The low capacity factor may indicate the PV solar panels are aging, dusty, partially shaded by trees, partially snow-covered, etc., and, as about 80% of the PV solar systems are roof-mounted, many roofs may not be true-south-facing and the panels may not be correctly angled.

If we assume PV solar power is produced from 7 AM to 5 PM, then the average level during these ten hours was 6,578 GWh/yr x 1,000 MW/GW x 1 yr/(10 hr x 365 days) = 1,802 MW, an insignificant level compared to Germany’s peak demand of about 100,000 MW.

Study Analysis

Variation of PV Solar Power

The sma.de website displays a graph of the real-time PV solar power production in Germany during each day of the year. The methodology of determining the display is explained in the website.

http://www.sma.de/en/news-information/pv-electricity-produced-in-germany.html

Meanwhile, the Alliance for Renewable Energy shows 14,680 MW of PV solar was installed as of 31 August 2010, which means 14,680 MW - 9,830 MW (end of 2009) = 4,850 MW was installed during the first 8 months of 2010, or about 606 MW/month.

This rate of installation is more than twice as high as the rate in 2009, because the FITs will be significantly reduced in 2011 making it less lucrative to own a PV solar system. Installations planned for 2011 are being shifted to 2010 to beat the FIT reduction deadline. For comparison: US total installed PV solar was 1,256 MW pus 397 MW of concentrated solar power at the end of 2009. In contrast, 600 MW of solar are being installed in Germany each month. (U S. solar numbers from Willem Post spreadsheet.)

The sma.de website linked above shows the PV solar power production from the 14,680 MW of PV solar systems reached a maximum level of about 5.3 MW (36% of installed PV solar capacity), 3.6 MW (24%) and 7.0 MW (48%) at about 12 noon on October 6, 7 and 8, respectively.

The website shows that maximum outputs at 12 noon vary from about 20% (2,936 MW) to about 60% (8,808 MW) of installed capacity during the summer and from about 10% (1,468 MW) to about 30% (4,400 MW) of installed capacity during the winter.

Daily Power Demand

The Tagesgang website displays a typical power demand curve for Germany. The curve shown below will vary somewhat during the year, but, to simplify the analysis, we will assume the curve is valid for all days of the year, which will not affect the conclusions of the study.

http://en.wikipedia.org/wiki/File:Tagesgang_engl.png

The website shows peaking unit operation from about 10 AM to about 2 PM which coincides with high levels of PV solar production. This means German utilities have less need for peaking units.

PV Solar Impact on Peaking Unit Operation

Peaking units usually are gas-fired, simple-cycle, gas-turbine generators. Their efficiency at full load is about 30%, or about 10,000 Btu/kWh, and at part load about 20%, or about 15,000 Btu/kWh. Peaking units usually operate at about 50% load otherwise they cannot modulate as needed by demand.

For this study, utility long-term gas contract prices are assumed at $4/million Btus.

As we know the total FIT subsidy paid in 2009, we can allocate a part of it to the 10 AM to 2 PM period and the rest to all other hours of of PV solar power production.

If we assume the average PV power output during the 10 AM and 2 PM period of each day of 2009 at about 2,500 MW and all of it is fed into the grid, then German utilities save about 2,500 MW x 1,000 kW/MW x 4 hrs/day x 15,000 Btu/kWh x $4/million Btu = $0.6 million/day in fuel expenses.

There are very little additional savings, because the peaking units are in service during other peak periods of the day (see Tagesgang website) when PV solar power is much less. The operating personnel are present whether the peaking units are operating or not.

In 2009, German utilities credited, as required by the FIT scheme, the monthly bills of the owners of PV solar systems on average about 2,500 MW x 1,000 kW/MW x 4 hrs/day x $0.54/kWh = $5.4 million/day for this 10 AM to 2 PM power, or 365 days/yr x $5.4 million/day = $1.97 billion for all of 2009.

The FIT amount credited for all other hours of PV solar power production was about $3.54 billion - $1.97 billion = $1.57 billion.

In other words, German utilities could have bought the PV solar part of the 10 PM to 2 PM peaking power for $0.075/$0.54 x $5.4 million = $0.75 million/day from the grid, instead of buying it from PV solar system owners for $5.4 million/day.

A drawback of the PV solar power during the 10 AM to 2 PM period is that it is variable from day to day due to cloud cover changes, which means the peaking power purchases by utilities will vary from day to day more so than if the peaking power had been bought only from the grid.

This average level of PV solar power will increase as more PV solar systems are installed. It will have an increasing effect on the costs of owning and operating spinning reserve power plants and on the costs of standby power plants and transmission and distribution systems.

PV Solar Job Creation

By the end of 2009, the German PV solar sector employed, directly and indirectly, about 65,000 people and the thermal solar sector about 15,000 people in production, distribution, installation and maintenance. Employment is higher in 2010, because the rate of installing PV solar systems has increased to beat FIT reduction deadlines. The sector would employ even more people, but because China is the low-cost PV solar panel producer in the world, most of the panels, at least 50% of the systems’ cost, are imported which creates jobs in China, not in Germany.

There are several German studies and at least one Vermont study that conclude jobs created in the PV solar sector reduce about an equal number of jobs in other sectors, because resources, due to subsidies, are shifted to the PV solar sector away from other sectors; i.e., there is no free lunch.

Vermont Renewable Jobs Study

According the Vermont Department of Public Service, VT-DPS, report The Economic Impacts of Vermont Feed in Tariffs, about $228.5 million will be required to implement 50 MW of FIT subsidized renewables for Vermont. (The renewables chosen by the lottery mentioned above). About 35% of that amount would be supplied by Vermont sources, the rest, mostly equipment, by non-Vermont sources. For example: PV panels from China and inverters from Germany are about 70% of a PV system’s materials cost.

The VT-DPS report states: “There would be a spike of about 550 short-term jobs during the 1-3 year construction stage which would flatten to a permanent net gain of 13 long-term full-time jobs during the operation and maintenance stage. In essence jobs are created in one sector (renewables) of the Vermont economy at the expense other sectors”.

It appears using scarce ratepayer/taxpayer funds for a government-subsidized, capital-intensive renewables program that produces just a little of expensive power and reduces CO2 at a high cost per dollar invested is NOT the jobs creation panacea so much talked about by proponents of renewables. If the legislature were to bless Vermont with more such ineffective programs Vermont would be in even deeper financial trouble than it is now. See below website.

Willen's earlier report on renewables, analyzing the Vermont FIT and lottery

http://www.coalitionforenergysolutions.org/renewables_are_expensive_an.pdf

A report on German Renewables by the German ministry of the environment.

Note: This post is a shortened version of Willem's complete report on Germany and feed-in tariffs. The complete report, posted on the Coalition for Energy Solutions website, includes a comparison with nuclear investment.

Conclusions

The study indicates the political decision of “going solar” in Germany is beyond reason with regard to economics, air pollution and global warming. It is an extremely expensive way to subsidize an industrial sector, create jobs and reduce CO2.

Because of the large gap between the FIT rates and utility electric rates, it is a no-brainer for German households and businesses to “go solar”, much to the delight of PV solar vendors, financiers and developers who call this (for them) a success. Spain is having a similar disastrous experience with its PV solar FITs.

If we are to slow down climate change at a reasonable cost, we must use technologies that provide the greatest reduction in CO2 per dollar invested. As a renewable, PV solar is among the highest in capital cost per installed kW and the lowest in power production and CO2 reduction per dollar invested.

Capital-intensive investments in inefficient PV solar systems that, without subsidies, have simple paybacks of 20-40 years divert resources from less capital-intensive measures, such as energy efficiency that, without subsidies, has simple paybacks of 1-5 years AND reduces CO2 more effectively AND requires no changes to the grid AND is INVISIBLE. Doing energy efficiency first and renewables later is a no-brainer. There is no money to do both at the same time.

The German government had budgeted a certain amount for PV solar subsidies for 2010. Because of the rapid rate of installation of PV solar systems this amount is depleted.

The German government, already under budget pressures, is finding it politically difficult to rein in the inefficient PV solar sector which will become more harmful to the overall efficiency of the economy as it gets bigger.

The German government, over much opposition, has decreased the FITs at a faster pace than originally planned, and is planning still faster FIT decreases, to slow the growth of the sector to a more affordable rate. There were FIT reductions of 10% on 1 January, 2010 and another reduction of 15% on 1 October, 2010. Additional reductions are planned for 2011. These reductions are on top of the scheduled reductions.

Supplementary Websites

http://uvdiv.blogspot.com/2010/02/german-solar-industry-protesting.html

http://www.renewableenergyworld.com/era/news/article/2010/05/germanys-solar-pv-industry-a-victim-of-its-own-success

http://www.coalitionforenergysolutions.org/power_capacity_and_producti.pdf

"Solar Tree" image from Wikimedia. Photo taken by Anna Regelsberger in Austria.