Utility Bills are Going to Skyrocket
With no reduction in carbon and increased outages
I want to start by saying I think global warming is an existential crisis for the human race. And I think electrifying everything is both a good idea and should happen. Unfortunately the State of Colorado is going about this totally wrong.
How can all the experts at the CEO, PUC, etc. be wrong? A combination of wishful thinking and others agreeing with them creating an echo chamber that reinforces their opinion. We see that happen way too often on issue after issue.1
A phrase that has always resonated for me - Humans aren’t rational beings, they’re rationalizing beings.
Let’s Look at this Rationally
Ha ha, right. But yes, let’s try. One of the significant parts of your electric bill is a flat fee for the transmission lines, distribution lines, everything up to the meter. If you use zero power you still have this charge for the infrastructure whereby you can get power.
If we electrify everything - heat, water heater, stove, car… then Xcel needs to increase the capacity of those transmission & distribution lines. It’s not doubling capacity,2 but it is significant enough that many lines will need to be replaced with higher capacity lines. This is expensive.
The following is wrong. Heat pumps are 3x as efficient as a gas furnace because they transfer heat, not create it. Sorry. Changed to using the hot water example.
Second, much of this additional electricity will often come from CCGTs.3 A CCGT is 65% efficient so the new energy path of gas => electricity => heat pump instead of gas => gas furnace means a 35% loss of energy in the new path or a 50% increase in costs to the rate payer. So gas drops to 0 and electricity increases by 1.5 times the old gas price.
Second, much of this additional electricity will often come from CCGTs. A CCGT is 65% efficient so the new energy path of gas => electricity => hot water instead of gas => gas hot water means a 35% loss of energy in the new path or a 50% increase in costs to the rate payer. So gas drops to 0 and electricity increases by 1.5 times the old gas price.
Next comes our transition to wind + solar. Now the wind doesn’t always blow and the sun sets each night. So what do we do then? You’ll likely hear the PUC & CEO say batteries. While theoretically that will work, the cost will bankrupt us. Not it’ll be expensive but that it will be so great that many companies & farms will be driven out of business and a giant swath of homeowners will not be able to pay it.
The alternative is use batteries for early evening peak, which are expensive but most will probably be able to handle the increase. And then use SCGT4 as needed when the wind stops or the skies are overcast.
Unfortunately the use of SCGTs instead of CCGTs means wind & solar leads, indirectly, to carbon emissions equal to the emissions of using CCGTs.5 So going with wind & solar in a somewhat affordable approach gains us nothing.
At the same time - it costs us a lot. We need more SCGTs and CCGTs because they are less efficient. So larger CAPEX buying those additional turbines. In addition, every penny spent on wind turbines and solar panels is CAPEX we would avoid if we instead went all CCGT.
And we have to buy a lot of those. For wind turbines, we need to buy turbines generating 3.8GW to get the equivalent of 1GW 24/7. And for solar 4GW of solar for 1GW 24/7 equivalent.
Oh, and wind turbines, solar panels, batteries degrade. So we have constant replacement of all those units.
Do Renewables make Sense?
Solar is great for summer peak usage. Solar + 4 hour batteries is not the best approach but it’s pretty good and people like having solar. So it’s sensible.
Wind makes no sense. Once they remove the subsidies for it you’ll see no new wind farms. Without the subsidies it is not cost effective.
Our most effective battery is pumped hydro and building a couple more likely makes sense. But they don’t hold that much power compared to our existing use.
And real batteries don’t provide a cost effective source for over 4 hours. Their price/performance has leveled off. Someday we should have a much better battery. But not soon.
Reliable?
If we go heavy into wind & solar, we lose grid inertia. Without inertia we will get blackouts like recently in Spain. We could well be seeing this in 2031.
Instead of inexpensive, reliable, & carbon free we’re headed for expensive, unreliable, & a slight reduction in carbon. Now in defense of the present path the PUC appears to be headed down, it will decrease carbon a little, by replacing the coal plants.
But such a small win at such a great cost?
Are we Screwed?
No. If the PUC takes a realistic view of the cost of each alternative. And in addition if the PUC is not willing to force gigantic increases on rate payers in a quest to reduce carbon regardless of cost. If…
Getting rid of coal plants is both a good idea and mandated by legislation. That will increase electric bills some.
Requiring data centers to cover their costs rather than shifting their expenses on to rate payers will stop that accelerant.6
Asking the legislature and the PUC to not provide incentives to electrify everything will reduce increases. We need to build out power sources before increasing demand even more.
With all that, the true measure of the PUC focusing on keeping our electric bills reasonable - that they add CCGTs to replace the coal plants and handle increased demand.7
And they evaluate the true cost of nuclear. Which granted is a very difficult question. But they can start having some entity, preferably including Xcel, Black Hills, & Tri-State, to serious evaluate the costs, subsidies, roadblocks, etc. for nuclear. And to evaluate this for the existing AP-1000/APR-1400 as well as upcoming SMRs.
On the flip side, if you hear Xcel & the PUC discussing additional wind, solar, & batteries, be prepared for accelerating increases and reduced reliability. In this case - call your legislator!8
Remember when COVID first hit every expert was 100% sure it was from the Wuhan wet market? Now many of those same experts are very open to other possibilities.
Peak use at present is air conditioning on a hot summer afternoon. Peak use will become heat on a cold winter night while cooking dinner and taking a shower. And you hopefully don’t charge your car during that peak.
Combined Cycle Gas Turbine
Single Cycle Gas Turbine
There was a bill in the legislature, thankfully tabled, that would have given data centers tax credits. That would have been adding insult to injury for rate payers.
If some entity builds a new wind or solar farm, by all means buy electricity from them when needed for peak usage.
For households, companies, farms that are barely scrapping by, jacking up electric bills will break a lot of them. I worry that the people making these decisions are, like me, well off and having our electric bill double is not a big problem. Do the PUC commissioners understand, truly understand, how crushing an impact this will be on those barely getting by?
> ...A combination of wishful thinking and others agreeing with them creating an echo chamber that reinforces their opinion.
Yes absolutely correct, and theres no better example than this:
" I think global warming is an existential crisis"
Why exactly do you think that? I understand why someone might, given the saturation of that opinion on the left, but its not based in science.
I personally had a conversation with a PhD scientist who told me that she believes experts say that food production will drop if business as usual is the scenario. I asked her where she got that, and she said the IPCC guide.
Naively, I showed her that IPCC says that even the implausible scenarios results only in a reduction in the rate of growthz not an actual decline. I say naively because I assumed she would accept that, but of course she stuck to we're-all-going-to-starve.
Why? Because of the echo chamber, as you said.
The PUC is unlikely to approve a 'special' rate for data centers without looking at all rate spread/design. Which is also unlikely, perhaps even more so. I personally think there should be no policy to electrify everything until we have an thorough, honest conversation about rate spread and rate design.