Use all the electricity you want; we’ll make more

While participating in a discussion thread associated with my recent appearance on Dot Net Rocks, I remembered I’ve been meaning to write a post recommending that the the electricity production industry change its attitude about electricity conservation.

For many complex reasons, the power business is one of the only industries I can think of where the supply companies pay real money to run advertisements to convince people to stop buying so much of the product that they sell. Not only do the power companies buy ad time, they even provide subsidy payments to customers so that they can purchase new appliances that use less electricity.

During one of my previous lives, I ran a small injection molding factory. We worked really hard to figure out ways to persuade more customers to buy more of our product. Success in those efforts meant more work, more employees, and bigger paychecks, all of which were enabled by the increased revenues. Because of the amount effort we put into increasing sales, I have never understood why power companies spend so much effort to keep a lid on their growth.

It has not always been this way. In the 1990s, I met a very nice lady who had been laid off from Florida Power Corporation after more than 25 years of employment. Her undergraduate degree was in home economics; she had been hired by the power company in the 1960s to run classes that helped people understand the benefits of products like powerful vacuum cleaners, large ranges, heat pumps, large screen televisions and other useful devices that all used more electricity than the ones they were replacing.

That sales effort had been shelved under pressure from the Public Utility Commission, which had decided that power companies should feel guilty about selling power and instead should be helping customers find ways to use less and pay lower monthly bills. As a regulated utility, FPC did not fight back; the PUC set it up so that they made as much profit from the conservation program investments as they did from selling electricity.

Slow growth in electricity demand is one of the reasons that the wholesale generating business has not been kind to companies like Exelon and Entergy, both of which are trading for a substantial discount compared to their 2008 stock price. It is also one of the reasons that nearly every one of the 30 new nuclear reactor projects that was started after the Energy Policy Act of 2005 has been put on the slow road to development.

The emission free power that those reactors could provide does not carry a high enough price in the market to make the economic models work. That is especially true given the uncertainty associated with licensing and constructing a new nuclear power plant after more than three decades of inactivity in the nuclear plant construction business.

Since it is clear that slow growth discourages new capital investment and construction of modern facilities, I am pretty certain that the sustained effort to discourage electricity consumption is related to the sustained effort to discourage new nuclear power plant construction. The people in the business know that it is easier to just keep operating existing facilities, even if they are inefficient, dirtier and less reliable than new nuclear plants would be.

What most people do not fully grasp is that the lion’s share of the revenue produced by selling electricity ends up in the revenue lines of the fuel suppliers. With coal fired power plants, about 50 or 60% of the total cost of generation is the cost of supplying the fuel. For many natural gas fired plants, which are far more automated and have much lower capital costs, the fuel supplier can pocket as much as 85% of the total revenues that come from selling power.

In other words, there is a substantial motive for the established fuel suppliers to invest in efforts that slow demand growth. They have an incentive to push conservation programs because that increases the longevity of their locked in business arrangements.

Nukes need to rise up and spread the words that Jay Leno once used in a series of successful ads for Doritos snack chips – consumers should use all the power they need or want, we can always make more.


PS – I swear that I only noticed this piece in The Hill after I wrote the above – Sen. Murkowski: ‘Energy is good’. Wonder if President Obama wants to add a little bipartisan flavor to his cabinet. Senator Murkowski would my top pick for Secretary of Energy!

Here is the video of her energy policy news conference from C-Span.

About Rod Adams

41 Responses to “Use all the electricity you want; we’ll make more”

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  1. Atomikrabbit says:

    The early 1990′s – wasn’t that around the time the corporate suits killed off Reddy Kilowatt? I worked for FPL at the time, and one of my coworkers initiated a tongue-in-cheek wake for the little fella.

    http://www.reddykilowatt.org/

  2. Atomikrabbit says:

    There could be an Emory Lovins-inspired symbol for the unreliables – Sleazy Negawatt.

    He would be shown dressed in fancy new clothes (or maybe bellbottems and a headband), lounging in a hammock sipping a cocktail of government subsidies and feedin tariffs, waiting for the weather to be just right so he could spring into action for a few hours a day.

    Surrounding him are a few whacked raptors, a steaming pile of silicon tetrachloride, and in the background a lump of lignite coal mows his lawn for him.

  3. SteveK9 says:

    Murkowski? Be careful what you wish for. She is a ‘drill baby drill’ oil fan. Which makes sense coming from Alaska.

    • Rod Adams says:

      I’ve got little to nothing against drilling in the US when compared to paying oligarchs and tyrants a tribute so we can burn their oil.

  4. James Greenidge says:

    Conservation outside of managing forests always was a wuss term for me. Going the energy sip-sip route has shackled our architectural and entertainment options and creativity and safety, in the form of cardboard-class cars that’d crumple up on interstate accidents. (out here on Long Island traffic jammed in the snow storm last night because new LED stop lights can’t melt snow that completely blinds them unlike the “old fashioned” ones!) Every house and building doesn’t have to be designed like a bland thermos bottle or do we have to put up feeling guilty for buying cars bigger than a shoebox to cram families in. It can be done without mowing down mountains and deserts and spoiling shorelines in the name of the God “Green” and “renewables”. This is a second type of ad campaign the nuclear industry ought be plying. I mean, as I mentioned before, this conservation fanaticism warps reason in the worst places, like a solar-cell driven pinwheel on the window sill of an elementary school that has a teacher added on-off switch with a tape reading “When fun’s done turn off to save energy.”

    James Greenidge
    Queens NY

    • Twominds says:

      “added on-off switch with a tape reading “When fun’s done turn off to save energy.”

      That’s hilarious, fit for a stand-up comedian to use. Even better would be: “When fun’s done turn of sun to save energy”.

      Would she really think that, or would she want to give a ‘good’ example always to conserve instead of explaining that once you got the solar cell the energy is more or less free?

      It should be left on for another reason: then the children would see very directly the connection between a sun shining or behind clouds and a toy working or not!

  5. William Vaughn says:

    Speaking of the Northeast snow storm last night, Reuters had a headline that said that the Pilgrim plant in Plymouth, Mass. lost power and automatically shutdown Friday night. Would somebody explain to me how a nuclear power plant loses power due to a snowstorm so that it has to shutdown? Doesn’t it supply its own power to itself? Did it have to shutdown because so many lines were down that it’s load went to zero? What’s going on here?

    • Atomikrabbit says:

      Looks like a loss of offsite power, probably due, as you said, to HV lines downed or faulted from the blizzard.

      If the turbine generator has no place to send its power it automatically trips, which at full power also generates a simultaneous reactor trip. The emergency diesels are designed to automatically start and pick up essential plant loads. I don’t know the specifics at Pilgrim, but they probably have at least a weeks worth of diesel fuel on site.

      I just checked the NRC staus report, said this morning they were back at 83% power.

      http://www.nrc.gov/reading-rm/doc-collections/news/2013/13-003.i.pdf

      • Atomikrabbit says:

        NRC website info must have been stale.

        Just got tweet from @PligrimNuclear that offsite power was only restored this (Sunday) morning. With testing, reactor startup, etc may be another day before online.

    • Rod Adams says:

      @William

      Most nuclear plants are designed with a need for off site power in order to continue operating. They need to prove that they have redundant supplies for cooling down. The on-site diesels count as just one source; off site is the other.

      The assumption is that if off site power is lost, the plant is no longer needed to supply the grid anyway.

      Of course, we operate hundreds of nuclear plants that have no connection to the grid. We’ve been engaged in that activity for nearly six decades.

  6. Jeff S says:

    I think there’s an important distinction to be made between efficiency and “conservation”. In my mind, those are two completely different concepts.

    As a consumer, I *like* efficiency. Efficiency is doing the same thing with less power – lighting up my room with CFLs or LEDs, which use 1/10 the power of an incandescent bulb. Heating my house and keeping it warmer, longer, with good insulation and windows which prevent rapid heat loss, etc. I still get all the benefit, but can do so at a reduced price.

    But, “conservation”, in my mind, is basically, “energy poverty”. It’s not about being less wasteful. It’s about reducing the benefits you get from energy – living in a chilly house or apartment because you keep the thermostat lower than you’d actually like to in the winter, or making other changes which are necessary because you just can’t afford to use as much power as you’d like to.

    Nuclear power, if we had enough plants, would be a great way to fight “energy poverty”, and I’m convinced by arguments Rod, and others, have made, that with time, if we had a vibrant nuclear industry (instead of one which is almost comatose, as we do now), the capital costs of nuclear plants would come down pretty significantly. Once we get to the point where nuclear plants cost like 1/2 of what they do today (once inflation is factored, of course), the real cost of electricity to consumers would start to come down quite a lot, and then “we’ll make more” would be a great slogan.

    BUT, right now, today, since only 20% of our energy comes from nuclear, and because I really am worried about climate change, I can’t accept a message of “use all the energy you want, we’ll make more”, because I know that in southern Ohio, almost all my electricity comes from coal and/or gas (there are two nuclear plants in northern OH, but they represent a pretty small percentage of overall generation in the State).

    I’d like to see more nuclear built in Ohio, so I can worry less about the impact my energy use may be having on the climate.

    • Rod Adams says:

      Efficiency is doing the same thing with less power – lighting up my room with CFLs or LEDs, which use 1/10 the power of an incandescent bulb. Heating my house and keeping it warmer, longer, with good insulation and windows which prevent rapid heat loss, etc.

      I like incandescent light bulbs. If I am heating my home anyway, they are not inefficient; their “waste” is also contributing to heating up the house.

      In a free, rational country, I should be able to make the decision for myself. If I want to use cheap, pure white incandescent light bulbs for certain purposes and in certain seasons, I should be able to do so. Instead, the push for imposed efficiency programs is turning the incandescent light bulb into an officially illegal product.

      I am a cynic when it comes to the motives of certain kinds of politically active corporations that invest as much in lobbying as in R&D or marketing. I believe a portion of the push has come from companies that wanted a government-provided forcing function to require people to purchase their expensive and inferior (in certain measures of effectiveness) light bulbs.

    • Rod Adams says:

      BUT, right now, today, since only 20% of our energy comes from nuclear, and because I really am worried about climate change, I can’t accept a message of “use all the energy you want, we’ll make more”, because I know that in southern Ohio, almost all my electricity comes from coal and/or gas (there are two nuclear plants in northern OH, but they represent a pretty small percentage of overall generation in the State).

      My point is that conservation today locks in that situation. With no growth in electrical power demand, there is little or no reason for anyone to invest in new nuclear power plants that can eventually replace the coal. Many power companies do not pay for the coal; they get to pass fuel costs directly to customers.

  7. jaagu says:

    Efficiency and conservation are both important to consumers. Efficiency allows a consumer to do the same job with less electricity and pay less money.

    Conservation is desirable for the consumer. For example, he turns off his house lights when they are not needed. He does not want to waste his money to pay for useless electricity.

    Pretty simple to understand the benefits of efficiency and conservation for consumers. The same can be said for commercial and industrial businesses. They all have major programs at these businesses because they want to reduce their energy costs.

    • Rod Adams says:

      @jaagu

      Do you efficiently conserve bits? I remember learning to program computers when there was a huge reward for efficiency and writing tight code that did not “waste” expensive storage space or precious computer cycles. Of course, the tight code often could not be deciphered by anyone else. The effort to save storage space resulted in user interfaces that provided little to no clue to the people who actually had to operate the computer. Most normal people were completely turned off by the nearly blank screens and long lists of esoteric commands that they needed to learn for systems like DOS or UNIX. (http://en.wikipedia.org/wiki/List_of_MS-DOS_commands)

      Now look what has happened. The suppliers of bits have figured out ways to make their products ever cheaper, allowing users to stop worrying about conserving and start worrying about more uses of the product.

      Users will pay less money if power gets cheaper. If they then choose to work to reduce their power consumption, they will save even more money, but will be able to do less with the smaller amount of power. After all, the technical definition of “energy” is “the ability to do work”.

  8. James Greenidge says:

    Eh! I remember in the ’80s an NPR show gleefully stating that you couldn’t “get away with” big muscle cars or building an airy and spacious glass-walled Frank Lloyd home today. Hey, I have the right to like and have inefficient beautiful things! Where we living — Vulcan??

    James Greenidge

  9. Gunnar Littmarck says:

    First we have to reach out with the fact that energy cant be created or destroyed. Therefore we cant run out of energy.

    We can only transform energy such as from chemical potential thermal electrical or nuclear.

    The best way to build an opinion for nuclear is maybe to promote wast burner, then the energy becomes as a by product in an environment work, and the antinukes will loose theres waste argument?

    A petition to The White House is one way:

    https://petitions.whitehouse.gov/petition/save-planet-studying-efficacy-converting-all-coal-fire-plants-safe-lftr-reactors-can-not-go-boom/jzXL7bXw

    To converting all 572 existing USA coal fire plants to the Super Safe LFTR Nuclear Reactors are maybe a good way to start?

    I guess that MSR-burner are better to start with, and other smr The thorium cycle can wait until the hole world are ready get rid of coal, but just look at Germany who increase even there dirtiest brown coal, as a consequence of “risking a tsunami”, that shut down 8 reactors.

    I think that nuclear power promoters can learn from the protest”industry”, use similar methods to reach the politicians.

    Petitions and articles in main media.

  10. Robert Margolis says:

    My favorite from my college days was a professor (NOT Engineering) who claimed that if we used too much energy we would run out of… ENTROPY! (i.e., too much disorder would be created by the low temperature waste heat we would create and speed up the “energy death of the universe”). Somehow, I cannot see the impoverished of the world needing to starve a little more to preserve some distant universal thermodynamic harmony. ;-)

    • James Greenidge says:

      Wasn’t that the premise of a golden-oldie sci-fi film called “Kronus?” Loved that flick as a kid! Stomp Stomp STOMP!!!

      James Greenidge
      Queens NY

  11. jaagu says:

    “First we have to reach out with the fact that energy cant be created or destroyed.”

    Energy can not be destroyed, but it can be dissipated to become useless. The natural gas furnace in your home can heat the air in your house – but the heat energy has now become useless for anything else.

    “We can only transform energy such as from chemical potential thermal electrical or nuclear.”

    I would add hydro, wind, solar and geothermal to your list.

    “The best way to build an opinion for nuclear is maybe to promote wast burner …”

    There is no such thing as a complete waste burner. You will always have left over U, Pu and fission products as waste.

    “To converting all 572 existing USA coal fire plants to the Super Safe LFTR Nuclear Reactors are maybe a good way to start?”

    There are no large LFTR nuclear plants generating electricity anywhere in the world. Coal fired power plants use a different steam system and turbines than a nuclear power plant.

    “… just look at Germany who increase even there dirtiest brown coal, as a consequence of “risking a tsunami”, that shut down 8 reactors.”

    Tsunami concerns is not why Germany shutdown some of their reactors. There are many other ways to have a core melt accident. An extended loss of all AC power to any operating German or US nuclear plant can result in core melt accident. You could learn more from the NRC website or the NEI website about nuclear accidents and their initiators.

    • Rod Adams says:

      Coal fired power plants use a different steam system and turbines than a nuclear power plant.

      Why do you say that?

      As a matter of fact, there are several plants in the US that started out as nuclear heated power plants where the reactor was replaced by a fossil fuel burner.

      Steam is steam. Granted that some very modern coal plants use supercritical steam to improve efficiency, but some modern nuclear plants (like the HTR-PM) can achieve temperatures that are nearly as high.

      I agree that tsunami concerns are not the reasons that politicians in Germany decided to shutdown nuclear plants. I contend that some “German” politicians are beholden to Russian natural gas producers as well as lignite miners.

      Hydrocarbon competitors were really the drivers behind the decision to shut down emission free, fossil fuel free nuclear plants.

      • George Carty says:

        I thought Angela Merkel was forced to renew the phase-out policy by the German public’s hysterical reaction to Fukushima. What makes you think that it was fossil-fuel-funded corruption rather than a panic? (I draw a parallel with the panic after the Dunblane school massacre which resulted in Britain’s total ban on handguns.)

        • Rod Adams says:

          @George Carty

          Perhaps I am just a complete cynic when it comes to the role of money in politics. I believe it trumps public reactions to news events that happen in distant lands. Sure, the ad supported media might have played a role in pumping up the public fury, but if German TV is anything like American TV, I’m pretty sure there is a good deal of hydrocarbon money flowing into those networks.

      • jaagu says:

        @ Rod

        Steam turbines are built to match the steam generation system.

        Nuclear power plant steam is saturated low temperature (~ 500 – 550 F) and low pressure (~ 1000 psi).

        Fossil fired power plant generate dryer steam at higher temperatures (>1000 F) and higher pressures (>2000 psi).

        The turbines used for electric power generation are most often directly coupled to their generators. As the generators must rotate at constant synchronous speeds according to the frequency of the electric power system, the most common speeds are 3,000 RPM for 50 Hz systems, and 3,600 RPM for 60 Hz systems. Since nuclear reactors have lower temperature limits than fossil-fired plants, with lower steam quality, the turbine generator sets may be arranged to operate at half these speeds, but with four-pole generators, to reduce erosion of turbine blades.

  12. Jerry says:

    The thing about “energy conservation” is it has no limitations. Once you have conserved 30% of what you consumed previously, they’re going to demand a further 30% and so on. The people like Amory Lovins can not tell you how many “negawatts” they want to “produce” – the degree of conservation is arbitrary. The ultimate goal is Zero energy consumption. It’s an outrageous concept. As long as we pay for it, we should be free to consume as much as we please.

  13. Cal Abel says:

    Rod,
    There are two issues here that are conflated. First is energy efficiency. The purpose of the conflation I think is intentional or a convenient linguistic legerdemain. It is to take something that is common sense, use energy more efficiently and increase output with something that is a flat out lie, reducing energy input will make us better off. This allows those who hold the later position attack those who do not hold the later on the former.

    In researching energy efficiency, energy efficiency measures that affect the degree heating and cooling decouple electricity consumption from environmental effects. This reduces the entropy of the system allowing utilities to achieve higher capital utilization with a smaller reserve margin. This acts to lower their marginal cost of production. By relying upon government incentives either through subsidy or through forced measures (building codes), utilities receive a benefit of more predictable electricity demand at no cost to them. This is fundamentally a wealth transfer from the individual to the electric utilities.

    Efficiency does have value under one condition is that if it increases the availability of useful work. Electric utilities produce useful work, exergy,
    http://en.wikipedia.org/wiki/Exergy
    If we can find ways of producing more exergy we will increase our standard of living. 80% of our GDP is due to exergy input into the economy. Those who advocate the linguistic legerdemain from the previous paragraph fundamentally want to reduce the economic activity of our country. Wether that is their ultimate goal or not that is the consequence of their position. We need to consistently point out this fallacy and to talk from this point.

  14. William Vaughn says:

    @Rod

    “Most nuclear plants are designed with a need for off site power in order to continue operating. They need to prove that they have redundant supplies for cooling down. The on-site diesels count as just one source; off site is the other.
    The assumption is that if off site power is lost, the plant is no longer needed to supply the grid anyway.”

    Do NRC regulations allow for two independent sources of on-site power? Then there would be no need for an off-site power connection. What if a nuclear site added a carbon-fibre flywheel as an on-site power source? Would our friends at the NRC be satisfied with that? I’m just thinking that an investment in a second on-site power source would save a lot of shutdown/startup cost over the life of the plant.

    And that assumption you mentioned: You ARE kidding me, right?

    • John Tucker says:

      Its kinda ridiculous to shut reactors down in a snow storm. Even with their backup requirements and the cheapness of small natural gas systems it seems a better solution could be reached.

      Another argument for larger centralized systems in there I think.

    • David Andersen says:

      I’m afraid I’m missing something. If there’s no offsite power there is no load so why keep the plant running. Is the additional on-site power supply for “Black Start” if so realize that you are talking about 15 Mw to get a reactor started up. Since the plants recently have a capacity factor of 90%, the additional cost for additional on-site power supplies is probably not justified.

  15. William Vaughn says:

    @John

    “Its kinda ridiculous to shut reactors down in a snow storm. Even with their backup requirements and the cheapness of small natural gas systems it seems a better solution could be reached.”

    I agree.
    Just checked the NRC status page and found that Pilgrim was at 83% Feb. 7 and 8, was
    shutdown late Friday night and has been shutdown since then. All due to a snowstorm knocking out feed-in power lines. The report makes no mention of any automatic reactor trip due to load loss.
    All of this may seem sensible to NRC bureaucrats but it makes no sense to me. After all the plant has diesel generators and a nuclear reactor which supply electricity. Why is that not enough?

    See above mentioned report at:
    http://www.nrc.gov/reading-rm/doc-collections/event-status/reactor-status/2013/

    • David Andersen says:

      @William Vaughn
      Read the first event report #48736(fourth from the bottom) plant reactor scram due to loss of off-site power.
      Second report #48739 was loss of off-site power due to fault on startup transformer.
      You can’t start the reactor on diesel power because they don’t have enough capacity.

  16. William Vaughn says:

    @David

    “Read the first event report #48736(fourth from the bottom) plant reactor scram due to loss of off-site power.
    Second report #48739 was loss of off-site power due to fault on startup transformer.”

    But why does loss of off-site power scram the reactor? Why can’t the electrical needs of a nuclear plant be supplied by its own reactor? Or by natural gas or diesel generators? Or by batteries that the reactor keeps charged? Or by magnetic-bearing carbon-fibre flywheels that the reactor keep spinning? There are so many options that one has to wonder who is forcing the worst one to be adopted, that is, shutdown. The NRC?

  17. Cal Abel says:

    Here is an excellent video from Has Rosling:

    http://www.ted.com/talks/hans_rosling_and_the_magic_washing_machine.html

    One disagreement I have with him is that I doubt people will voluntarily reduce standard of living by consuming less energy (exergy). Add 4 more units to his final number by 2050 should be 22. I also doubt the “green energy” but that is a minor quibble for his excellent argument for industrialization.

  18. EL says:

    Cal Abel wrote: “Here is an excellent video from Has Rosling.”

    If you wish your clothes to last longer (minimizing your consumption and maximizing your savings from long hours at the factory), washing by hand is the way to go. With the money you will save in equipment costs, replacement clothes, and electricity consumption, you will be able to spend more time at the library, buy more books, spend more time with your family (perhaps making washing clothes a favorite community activity), and even put some of your second language skills to work getting caught up on some of the local gossip. If the alternative is sitting home and getting fat on processed food and watching TV, I’d say it may even have some health benefits too. And in case you don’t have a parent or grand parent to teach you (since many of these traditional skills are dying out), technology provides us with a video.

    http://www.videojug.com/film/how-to-hand-wash-your-laundry

    She looks plenty modern to me (and even appears to enjoy the activity). The slow food movement seems to be catching on. How about the “slow” laundry movement. Labor saving and social differentiation seem to go hand in hand. I’m not sure we end up with greater equality at the end of the day. As Hans Rosling’s graph seems to suggest, we end up with something different. A lot of social differentiation, and the desire or aspiration to one day be equal (a world of haves and have nots).

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