Stories tagged with "electric grid"

US Energy Tax: How Level Is the Playing Field?

A new study has been issued by the Manhattan Institute, called TAXING ENERGY IN THE UNITED STATES: Which Fuels Does the Tax Code Favor? The study was written by Gilbert Metcalf of Tufts University. I also participated in a conference call with Metcalf regarding the report. A couple of Metcalf's findings:

• The tax code is not at all generous with respect to investments in the electric grid. The effective tax rate on these investments is very close to the unadjusted statutory tax rate of about 39%. If investment is to be encouraged in the electric grid, Dr. Metcalf believes that this tax rate must be lowered.

• The current tax code, especially since enactment of the Energy Policy Act of 2005, strongly encourages investment in nuclear, wind, and solar power, which enjoy tax subsidies ranging from nearly 100 percent, for nuclear, to more than 200 percent, for solar. In other words, tax subsidies for these forms of energy generation are sufficiently generous that investors may use them to offset tax liabilities for capital gains and income derived from non-energy investments. The telephone discussion indicated that these provisions are not currently working as intended for wind and solar, because of lack of "tax appetite".

Upgrading the US Electric Grid - Many pluses but some minuses too

President-Elect Barack Obama talks about upgrading the US electric grid. He talks about making it a "smart grid", so that customers can be charged by their time-of-day use, fluctuations from wind and solar can be more easily handled, and it is easier to sell electricity back to the grid. One presumes that he is also talking about upgrading the physical structure of the grid, so that it has better long distance carrying capability and so that parts that are exceeding their normal lives are replaced.

Doing all these things has obvious advantages. Our current grid has been neglected for years, so that many of its parts are nearing the end of their useful lives. Currently, most customers have no incentive for using appliances and machinery at night, during times of excess capacity. This could reduce fuel usage during the day time. Also, as many have noted, to add more wind and solar capacity to the grid, upgrading the grid is a necessity.

In this post, I will offer a few thoughts on the upsides and downsides of the upgrade.

Will the US Electric Grid Be Our Undoing?

Back in May 2008, I wrote a post on the US Electric Grid. With the Obama administration taking over shortly, I expect there will be more discussion about upgrading the US electric grid, so below the fold is a re-post of the earlier essay.

One obstacle to upgrading the grid not discussed in my earlier post is the issue of the differing costs of electricity around the country, depending on the fuel used to produce the electricity (natural gas tends to produce high-cost electricity; coal and nuclear produce lower cost electricity). As the grid currently operates, the limitations of the grid tend to discourage huge long-distance redistribution of electric power. If the impact of a new electric grid back-bone is to start evening-out electric rates across the country, customers currently in low-cost areas will tend to oppose the change, because their rates may be higher. This could create a significant obstacle to passing legislation to upgrade the grid.

A National Electricity Grid For Australia

This is a guest post from Neil Howes. Neil is an Associate Professor at the University of Sydney. The post describes a response to the “Carbon Pollution Reduction Green Paper” (27 August 2008).

Executive Summary

We are proposing that the Government of Australia facilitates the replacement of 50% of Australia’s base-load coal fired electricity generation by financing the building of a high capacity National Electricity Grid (NEG) by 2020. This will interconnect high value renewable energy sites for wind, solar and geothermal energy to enhanced hydro electricity pumped storage capacity enabling these low CO2e energy sources to provide base-load power to major retail and industry consumers.

The objective of the plan is to :

(1) Link the East Coast and Tasmanian electricity grids (known as the NEM - National Electricity Market) to the Western Australian electricity grid via a 1500Km high voltage DC (HVDC) connection between Norseman, WA and Pt August SA,

(2) Build a new 1000 Km HVDC connection between Leigh Creek SA and Roma, QLD to link the SA and QLG regions within the NEM, in order to access solar and geothermal sites in WA, SA, VIC,NSW and QLD.

This would also require;

(3) A high voltage AC (HVAC) extension and upgrade of the WA grid north of Norseman, via Kalgoorlie, to the proposed Pilbara local grid to access stranded natural gas (NG) power in WA mining communities and solar thermal sites in the NW of WA

(4) A HVAC interconnection from Norseman to Esperance and Albany wind power sites with increased capacity HVAC connections along the SW coast of WA t4 Perth. This infrastructure project will assist the development of all renewable energy resources, starting with developing wind resources along the SW coast of WA, West Coast of Tasmania, and coastal and highland wind sites in SA, VIC, NSW and QLD with an installed capacity of 28GW by 2020.

The U. S. Electric Grid: Will It Be Our Undoing?

Quite a few people believe that if there is a decline in oil production, we can make up much of the difference by increasing our use of electricity--more nuclear, wind, solar voltaic, geothermal or even coal. The problem with this model is that it assumes that our electric grid will be working well enough for this to happen. It seems to me that there is substantial doubt that this will be the case.

From what I have learned in researching this topic, I expect that in the years ahead, we in the United States will have more and more problems with our electric grid. This is likely to result in electrical outages of greater and greater durations.

The primary reason for the likely problems is the fact that in the last few decades, the electric power industry has moved from being a regulated monopoly to an industry following more of a free market, competitive model. With this financing model, electricity is transported over long distances, as electricity is bought and sold by different providers. Furthermore, some of the electricity that is bought and sold is variable in supply, like wind and solar voltaic. A substantial upgrade to the electrical grid is needed to support all of these activities, but our existing financing models make it very difficult to fund such an upgrade.

If frequent electrical outages become common, these problems are likely to spill over into the oil and natural gas sectors. One reason this may happen is because electricity is used to move oil and natural gas through the pipelines. In addition, gas stations use electricity when pumping gasoline, and homeowners often have natural gas water heaters and furnaces with electric ignition. These too are likely to be disrupted by electrical power outages.

Is the World's Biggest Machine Breaking Down?

Jason Godesky at Anthropik offers "The World's Biggest Machine is Breaking Down":

Many of the so-called "alternatives" to fossil fuels rely on the electrical grid. We have seen the problems that nuclear and photovoltaics will face even delivering on their production promises, but even if they were to somehow solve those problems, there is still the problem of the grid itself. Most of the energy sources offered are simply means of generating electricity; this is applied to necessities like transportation through innovations like hydrogen batteries or electric cars. Even so, the electricity itself must be transported from the nuclear power plant, PV cell, or other means by which it is produced, to the car it will power, or the home it will heat, or whatever other task the energy is needed for.

That transportation is provided by the electrical power grid. Sometimes called "the world's biggest machine" by engineers, most of the energy "alternatives" proposed will require it to not only continue supplying us with the energy we use now (and the energy we'd need for economic growth anyway), but additionally to also carry the energy load we will need to replace our fossil fuel usage. This will be an impossible feat, since the current load alone is already breaking down "the world's biggest machine" under the weight of its own complexity.

A few other goodies under the fold as well...