What Else Besides Russia, is Driving Surging Natural Gas Costs, Mr. Miller? (Hint: Renewables)
What’s driving Maine’s surging electricity costs? Despite campaign rhetoric, not renewable energy
Electricity and energy prices are major issues in Maine's gubernatorial race ahead of what is expected to be a difficult winter for many families. But the political rhetoric often obscures the real reasons electricity rates are rising across New England – and appear poised to go even higher in Maine.
Former Republican Gov. Paul LePage and Democratic Gov. Janet Mills may agree on one key point when it comes to electricity prices – namely, that Maine residents are paying too much. But the two longtime political rivals have very different explanations for why Maine's electricity rates are rising as LePage blames Maine’s renewable energy policies while Mills (along with many energy policy observers and experts) say skyrocketing natural gas prices are the primary factor.
That difference was crystal-clear during a lengthy back-and-forth between the former and current governor.
“In 2010 when I took over, the state of Maine was 10th highest energy costs in the United States,” LePage said during the televised WGME/Bangor Daily News debate. “We got it up to 11. Right now (we’re) No. 4 highest. And it isn’t fossil fuel. It’s net metering and it’s solar energy. That’s what’s causing it.”
"Maine solar policies are not the reason why energy prices have increased,” Mills responded. “Our energy prices have increased because of our dependence on fossil fuels, pure and simple, like natural gas,” Mills said. “We are so dependent on natural gas because Mr. LePage, in my view, failed to diversify our energy sources during his eight years. So if you want to look at the reason why prices are so high, look at my opponent."
Maine and its New England neighbors consistently have among the highest electricity rates in the nation. And that unfortunate distinction isn't likely to change in the near future because of the key cost driver within the New England regional power grid – natural gas.
"We generate about half of our electricity in New England from natural gas,” said Bill Harwood, who heads Maine’s Office of the Public Advocate that is tasked with representing the interests of ratepayers on all things related to utilities. "And there are constraints and limits on the amount of natural gas we can get into New England. And when you constrain the supply and demand remains the same, the prices go up. And we are seeing substantial increases in the price of natural gas, which are affecting prices on the supply side."
The “spot price” for natural gas has nearly tripled in the last two years as global demand has exceeded production. Russia’s invasion of Ukraine then threw already volatile energy markets into all-out turmoil as European nations that relied on Russia for natural gas desperately sought out other sources, including U.S. gas producers. Further complicating factors locally, New England is at the tail end of pipelines that can only carry so much natural gas. As a result, New England also relies on liquified natural gas, or LNG, to supplement its supplies when demand peaks on bitterly cold winter days.
"And that worked pretty well for the last several years until war broke out in Ukraine,” Harwood said. “And now LNG is bought and desired for Europe. So we are competing with Europe for a limited supply of LNG. And as a result, prices go up.”
In Maine, most customers of Central Maine Power and Versant saw the supply portion of their rates increase 83% and 88%, respectively, earlier this year. The two utilities only deliver electricity -- they don't produce it. Instead, the supply rates that account for about half of a household electric bill are set by the Maine Public Utilities Commission based on bids from the companies that actually generate the power.
The PUC will set new so-called "standard offer" rates this month. Commission chairman Phil Bartlett said those bids are still coming in. But based on current natural gas prices – and the recent experiences of his counterparts in other states – Bartlett said he expects prices to be higher again. Both CMP and Versant are also separately seeking to increase their distribution rates.
"Timing matters a lot – these prices are very volatile, they are based on expectations of future prices, which are changing. you know, almost daily,” Bartlett said. “So it's hard to predict with any certainty what it is going to be except to say that we do expect prices to be higher than they were last year."
Under Gov. Mills, Maine has set ambitious renewable energy targets. And last year, more than 70% of the electricity generated within Maine came from renewable sources, with hydropower and wind turbines producing the most megawatts. But because Maine is part of ISO New England, the state’s electricity generation, usage and pricing are all wrapped up in the regional grid.
During a recent campaign event at Colby College, Mills accused LePage of undermining development of renewable energy when he was governor and pointed to his past support for oil exploration off the New England coastline. Meanwhile, Mills says her own policies have lead to a boom in development of rooftop solar as well as larger, grid-level solar projects.
"People are smartening up and saying we don't want to depend on gas for generation of electricity,” Mills told a few dozen students and other attendees. “We want to be a little more self-sustaining and a little more kind to our climate and not burn fossil fuels which emit carbon dioxide and other gases into the atmosphere."
LePage counters that his focus is on the cost to Maine ratepayers.
“Folks, I am agnostic to the technology that is used to create electricity,” LePage said during a News Center Maine debate. “What I am not agnostic to is pricing.”
LePage is correct, however, that one renewable energy policy in particular could drive up electric rates in Maine.
The state's practice of providing electricity bill credits to solar projects could substantially increase costs for all ratepayers in the next year or two as solar farms proliferate across Maine. Both the PUC's Bartlett and Harwood, the state's public advocate, are part of a group that will recommend changes to the "net energy billing" program later this year.
But Dan Sosland, who is president of the nonprofit Acadia Center that works on energy and climate policies, said wind and solar are often now cheaper than natural gas. So Sosland said the data simply don't support LePage’s arguments that renewable energy is behind the recent surge in electricity prices.
"We need more renewables,” Sosland said. “And if we do more renewables, many studies show including ones here in New England show that prices will go down over time, that there will be increased public health benefits, there will be ratepayer benefits. And it all makes sense because we import fossil fuels and we have wind and solar here. And we have efficiency here.”
In fact, Sosland added, efficiency is the cheapest way to reduce energy and electricity bills. And he said there is still "enormous potential" in Maine for reducing electric bills through efficiency.
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Comment by Thinklike A. Mountain on November 6, 2022 at 10:01am
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Americans Compromised By The Chinese Communist Party Shall Be Prosecuted And Impeached For Their Betrayal Of The American People
"The Communist Chinese Party owns the Biden family lock, stock and barrel and this is going to be proved in court".
"The FBI is totally infiltrated by the Chinese Communist Party and we're going to prove it."
"Every traitor, and yes, I use that word specifically, in the FBI, the DOJ and every traitor in the administrative state is going to be tried for, wait for it...... treason. You have sold us out to the Chinese Communist Party. It's an open secret on Wall Street. It's an open secret in corporate America. In the media. In the universities. And that's going to end."
"I use the T word as traitors; the FBI and Justice Department is up to their neck in traitors to this nation."
"We're going to adjudicate this so that your countrymen can see what you've done....your countrymen will sit in judgement of you. That day is dawning".
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Comment by Willem Post on November 5, 2022 at 6:10pm
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It is absolutely necessary to have a highly reliable electricity service, if we are forced by the government to "ELECTRIFY", i.e., have heat pumps, and electric vehicles, and electric ovens.
https://www.windtaskforce.org/profiles/blogs/grid-scale-battery-sys...
In Europe, in 2022, there was hot weather and plenty of sunshine, but little wind and little rain, i.e., a drought.
As a result, there was plenty of solar electricity, but little wind electricity and less hydro electricity
Also, French nuclear plant output had to be curtailed, due to delayed maintenance, strikes for higher wages, and insufficient cooling water.
Thus, Europe, in addition to the scrounging around to replace Russian gas, also had to fire up all of its gas plants, and start up some retired coal plants, and in Germany keep some nuclear plants running, to offset the unreliability of weather-dependent electricity, such as wind, solar, hydro, and even nuclear.
Wind and solar could not be fed to the NE grid, unless the traditional sources were present to counteract their output variations, 24/7/365. That means almost none of the traditional sources, and their fuel supplies, can be shutdown, if wind and solar become high percentages of the annual load onto the NE grid.
It would be very prudent, to have a large capacity, MW, of coal, oil, and gas plants, that are staffed, with adequate fuel supplies and fuel in storage capacity, kept in good working order, to be ready to operate, when needed, especially during:
1) The peak demand hours of late-afternoon/early-evening
2) Wind/solar lulls that could last 5 to 7 days, and could be followed by another multi-day wind/solar lull a few days later, before any battery systems could have been recharged!!
Wind systems generate power when the wind is blowing, but zero power when the air is still
Solar systems generate power when the sun is shining, especially around noontime, but generate less power when the sky is cloudy, and zero power when the sky is dark, or when panels are covered with snow.
As a result, wind and solar cannot function as dispatchable resources - meaning, they cannot be quickly deployed when needed, such as during the peak-demand periods of late-afternoon/early-evening.
This article shows the wind/solar generation shortfall, and turnkey capital cost, due to a one-day wind/solar lull
It also shows the electricity drawn from the high-voltage grid to enable grid-scale battery systems to counteract the one-day shortfall
https://www.windtaskforce.org/profiles/blogs/grid-scale-battery-sys...
All-in Turnkey Capital Costs of Grid-Scale Battery Systems; 2020 pricing
The battery system would need to provide a certain level of power, MW, and energy, MWh, during a one-day wind/solar lull.
At present, the existing power plants, connected to the NE high-voltage grid, augmented with imports, supply the required MW and MWh, during the peak hours of late-afternoon/early-evening
During a wind/solar lull, and a required peak load of 27,500 MW:
- Almost all solar would be near zero during late-afternoon/early-evening
- Wind likely would be 15% of annual average, or less, during late-afternoon/early-evening.
The US all-in turnkey capital costs of complete battery systems (various technologies) in 2020, including land, foundations, fencing, lighting, step-up and step-down transformers was about $550/kWh, delivered as AC at battery voltage, per EIA annual survey reports.
See URL
https://www.windtaskforce.org/profiles/blogs/battery-system-capital...
The US average price/kWh has decreased, because li-ion systems are less expensive and have become a greater part of the storage system mix.
We assume the all-in turnkey cost for li-ion systems at $400/kWh, delivered as AC; 2020 price. See Future Grid-Scale Battery System Turnkey Costs
- Battery systems age at about 1.5%/y; the capacity loss would be about 25% in year 15- Tesla recommends operating battery systems from 20% full to 80% full (i.e., a 0.6 availability factor), for maximum useful service life, about 15 years.
- The battery systems almost always operate well within that range, except duringinfrequentcircumstances, such as randomly occurring wind/solar lulls, in which case, operation can be from 10% full to 90% full, if needed.
- The battery systems likely would not be 80% full at the start of a wind/solar lull
For our analysis, we assume, the batteries are 70% full, at the start of a wind/solar lull, and an infrequentdischarge to 10%, which yields a 0.6 availability factor.
NOTE: After looking at several aerial photos of large-scale battery systems with many Tesla Megapacks, it is clear many other items of equipment are shown, other than the Tesla supply, such as step-down/step-up transformers, connections to the grid, land, foundations, access roads, fencing, security, site lighting, i.e., the cost of the Tesla supply is only one part of the total battery system cost on a site.
NOTE: Proponents of grid-scale battery systems, such as financial advisors Bloomberg, Lazard, etc., have been claiming the cost of grid-scale battery systems would be decreasing to $300/kWh, delivered as AC, at battery voltage, in the near future.
Such claims are similar to the mantra "Nuclear power will be too cheap to meter".
Such claims have been, and will be, off-the-charts ridiculous for at least the next 10 years.
Future Grid-Scale Battery System Turnkey Costs
Recently, Tesla, one of the largest suppliers of grid-scale battery systems in the world, increased its 2021 pricing for a standard module Megapack by 24.5% for 2022. See URL
The Megapack pricing, and the pricing for complete grid-scale battery systems, for 2025, likely will be much higher, due to:
1) Increased inflation rates,
2) Increased interest rates,
3) Costly, project-delaying, supply chain disruptions,
4) Increased energy prices, such as of oil, gas, coal, etc.,
5) Increased materials prices, such as of Tungsten, Cobalt, Lithium, Copper, Manganese, etc. See URLs
6) Increased labor rates
https://cms.zerohedge.com/s3/files/inline-images/2022-03-21_15-28-4...
https://www.zerohedge.com/commodities/tesla-hikes-megapack-prices-c...
Wind: Bigger offshore wind turbines requiring specialized onshore assembly facilities and specialized ships, which are owned mostly by Europe; the wind/solar/battery-20-year spreadsheets, of a few years ago, do no longer make sense.
1) Much greater subsidies per kWh to developers would be required, plus expensive grid expansion and augmentation, plus expensive counteracting by the other generators, of the up/down variations and intermittencies of increased wind and solar
2) Much higher charges to ratepayers and taxpayers, c/kWh, would be required
All that would make the US even less competitive in world markets, and more vulnerable to increased imports and foreign economic control
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Comment by Long Islander on November 5, 2022 at 1:12pm
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Maine Public link:
https://www.mainepublic.org/environment-and-outdoors/2022-11-03/wha...
Maine as Third World Country:
CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
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