California To Close Two-Unit Nuclear Site At Diablo Canyon By 2024/2025 -- June 21, 2016

Updates

August 14, 2016: Dr Hansen sends urgent letter to Governor Moonbeam -- "don't close the nuclear plants." My advice: ask Bill Nye, "the science guy."


Later, 8:00 p.m. Central Time: this is so extremely cool. From Forbes:

Word came today that PG&E PCG +0.10%, the big California electric utility, has reached a deal to mothball its Diablo Canyon nuclear power plant in San Luis Obispo by 2025. 

The environmental fundamentalists at the Natural Resources Defense Council hailed this as a victory for renewable energy, stating that Diablo Canyon’s 2,200 megawatts of baseload power generation would be replaced by “energy efficiency and clean renewable energy from the wind and sun.”

This is preposterous.

As Forbes contributor Rod Adams points out today, the output from Diablo Canyon alone is equal to the electricity generated by about 75% of all the windmills and solar panels in California. What’s more, closing Diablo Canyon will deal a major setback to California’s efforts to reduce carbon dioxide. During the years it takes for the state to build solar and wind capacity to replace the nuke plant, California will have no choice but to rely on more generation from natural gas — which means accepting carbon emissions equivalent to about 1 million cars.

The announcement only gives more urgency to an unusual protest  coming up this Friday, when a bunch of self-described progressive environmentalists promise to march from San Francisco to Sacramento.

The event is called the March for Environmental Hope and it will start at the S.F. headquarters of the Sierra Club, the Natural Resources Defense Council and Greenpeace. Organizer Michael Shellenberger, the president of a group called Environmental Progress, says he and his fellow marchers (including a group called Mothers For Nuclear) will be protesting those green groups for the work that they’ve been doing to shut down nuclear power plants. They’ll be carrying posters saying: Save Diablo Canyon.

ROTFLMAO. 


Later, 3:19 p.m. Central Time: when I look at the EIA California energy data, it appears that the loss of nuclear power for California will be a non-problem. I suppose it could be a regional issue, but overall nuclear energy contributes relatively little to California's energy base. See EIA California energy analysis here; and, EIA California energy data here. 

It will be interesting to watch this play out because the Forbes writer suggests that there is no way renewable energy can replace the lost nuclear energy.


Later, 11:17 a.m. Central Time: as reported by The Los Angeles Time.

The proposal is contingent on a number of regulatory actions, including approvals from the California Public Utilities Commission.

The Diablo Canyon nuclear plant, built against a seaside cliff near Avila Beach, provides electricity for Central and Northern California. It produces about 2,160 megawatts — enough to power some 1.7 million homes.

Tuesday’s announcement comes after a long debate over the fate of the plant, which sits near several earthquake fault lines. The Hosgri Fault, located three miles from Diablo Canyon, was discovered in 1971, three years after construction of the plant began.

I bet the California PUC refuses to let PG&E close it. If not allowed to close it, PG&E is going to have a white elephant on its hands. [After looking at the data, it appears I am wrong. See additional comments, above, under updates.]

The San Onofre plant was shut down for good in 2013 as a result of faulty equipment that led to a small release of radioactive steam and a heated regulatory battle over the plant's license.

The same year, a former inspector called for Diablo Canyon to be closed until risks posed by potential earthquakes there could be evaluated. In documents submitted to the federal Nuclear Regulatory Commission as recently as last year, PG&E said Diablo Canyon can safely withstand earthquakes, tsunamis and flooding. Officials said the safety testing also took into consideration the effect a quake on one fault would have on the other three fault lines in the area.

Solar and wind energy advocates say solar/wind energy is often taken off the grid because Diablo Canyon produces too much electricity. So there you have it. It's what we call a "first world" problem: too much electricity, and it's too cheap.

Original Post

 
Link here.

During the week that California is reporting blackouts due to lack of enough energy to power facilities to produce electricity, we have a press release that says PG&E will not extend Diablo Canyon after license expiration for one unit in 2024, and the other unit in 2025.

Incredibly, the state says that the loss of nuclear energy will be made up through wind, solar, and "energy efficiency."

Good luck.

I won't repeat the entire Forbes article, but it's a good read. This pretty much sums it up:

Even if enough wind, solar and energy efficiency projects are started and come on line in California before 2025 to produce an additional 17-18 billion kilowatt-hours per year over what is already in place and planned, any logical, disinterested observer should wonder why the huge sums and enormous physical effort that would be invested in those new projects will end up being devoted to treading water in terms of CO2 emissions.

But look at the numbers, the reality:

If there is the potential to add that much capacity, why not use it to close dirtier facilities? As of 2014, 45% of California’s electricity came from either burning natural gas in state or from importing coal fired electricity from out of state.

It’s worth noting that as of 2014, all of the wind and solar infrastructure that has been erected in California since the 1970s managed to produce a total of 23 billion kilowatt-hours, which is only 30% more than what the single Diablo Canyon power plant produced during the same year.

This, by the way, explains, exactly what is going on in Germany:

"Giant baseload nuclear power plants like Diablo Canyon cannot easily be taken offline or ramped up and down as system needs change, which obstructs the integration of renewable resources with variable output into the electricity grid. This worsening problem is forcing the California grid operator to shut down low-cost renewable generation that could otherwise be used productively.”

For newbies:

• wind / solar is not dispatchable; it cannot be called up when needed; it's either there or it isn't
• when wind / solar is not there, it is not predictable; it occurs randomly
• when wind / solar is not there, something else needs to come on line
• it takes too long to bring up a nuclear reactor when wind/solar goes off-line without notice
• power plants that are faster than nuclear reactors are also dirtier: coal and natural gas

Bottom line: great, great news for natural gas producers. You know we aren't going back to coal. And this is another nail in the coffin of nuclear reactors. And wind / solar numbers are fantasy.

What's SRE doing today? Oh, up 1%, hitting a new high. Interesting, huh?

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, relationship, or job decisions based on what you read here. This is also not a recipe site. I place recipes on the site so I can access them quickly when needed. I'm not sure what you would call this site; just some daily observations with an emphasis on the Bakken and North Dakota. For the fun of it.

By the way, all that hand-wringing over the net neutrality law that was just passed or ruled upon or whatever, with suggestions that it would hurt ATT and other telecoms. Maybe, maybe not, but ATT is up today and will hit new highs.

What other issues are hitting new highs? Altria; XOM; Oneok; TransCanada. New 52-week highs, 74; new lows, 10. 

Only His Barber Knows For Sure -- Connecting The Dots -- December 14, 2021

Updates

Later, 10:06 p.m. CT: this is simply a coincidence. I posted the note below, then going through my twitter feed one last time for the day, I came across this:

Original Post

In the big scheme of things, I don't know how much electricity, in a relative sense, that a "giga-battery-factory" requires, or how much electricity an auto manufacturer needs, but I assume it's not trivial. 

Hold that thought.

It seems the "big" reason that Elon Musk / Tesla left California had to do with taxes and "politics." 

But one wonders to what extent accessible, dependable, inexpensive, dispatchable electricity played a role. 

I was reminded of that today when a reader mentioned in passing that PG&E's plans to shut down Diablo Canyon nuclear plant beginning in 2024 are still on track. 

• Wiki entry.
• Is California prepared, May 18, 2021?

This nuclear plant is the largest single power station in the state.

It went into operation in 1985 /1986 -- almost forty years ago and had at least another forty years of "life."

The plant produces electricity for about 6 cents per kWh, less than the average cost of 10.1 cents per kWh that PG&E paid for electricity from other suppliers in 2014.

A 2021 report from researchers at MIT and Stanford states that keeping Diablo Canyon running until 2035 would reduce the state's carbon emissions from electricity generation by 11% every year, save the state a cumulative $2.6 billion, and improve the reliability of the grid. 

They state that three factors have changed since the 2018 decision to close the plant: the state passed a new law (sb100) which requires 100% emissions-free electricity generation by 2045, the whole western US region is in a continuing mega-drought (limiting hydroelectric generation), and demand for electricity has outpaced supply, especially during heatwaves. 

They also stated that keeping Diablo operating until 2045 would save the state a cumulative $21 billion.

For more:

• See this post from October 17, 2021.   
• Perhaps the first blog post on this issue, June 21, 2016.

The best comparison I have is ISO New England where nuclear energy still plays a significant role, providing about 25% of electricity demand.

Tale Of Two States: One Bails Out The Nuclear Industry, The Other Keeps On Truckin' -- August 14, 2016

One of my top-visited pages: http://themilliondollarway.blogspot.com/2016/06/california-to-close-two-unit-nuclear.html. It's one of my favorite pages, with the little moving emoji. Whatever.

Now this, from Forbes:

On Thursday,a letter to Governor Jerry Brown of California, about how nuclear energy was essential to fighting global warming, was sent by Dr. James Hansen and the leading climate scientists in the world, plus a long list of environmentalists.

The letter was prompted by a recent announcement by Pacific Gas & Electric Company to close its well-running, low-carbon, low-cost nuclear reactors at Diablo Canyon because of political pressure from the state of California and especially its Lt. Governor.

The widespread claim—that dozens of nuclear plants merit subsidies to protect the earth’s climate—has been borne out by reality. At the same time, tax subsidies for renewables, plus low natural gas prices, are making reactors uneconomic in the short term.

New York addressed this imbalance last week when it passed a true Clean Energy Standard that supports both renewables and nuclear. Passage came after all parties acknowledged carbon emissions would go up if even a single nuclear plant closed.

But, strangely, California doesn’t seem impressed by the threat of global warming, even after the state’s carbon emissions jumped when the San Onofre nuclear plant closed from a combination of technical and political reasons. That carbon-free electricity was replaced by natural gas and costly out-of-state purchases.

I love the way Forbes sees this.

California doesn’t seem impressed by the threat of global warming, even after the state’s carbon emissions jumped when the San Onofre nuclear plant closed from a combination of technical and political reasons. That carbon-free electricity was replaced by natural gas and costly out-of-state purchases. 

Dr Hansen should probably talk to to Bill Nye, "the science guy." They both seem to live in the same universe.

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Next Up: 9,999,999

From Wellington, Australia, #8,888,888:

Wednesday, June 22, 2016: Panama Canal Expansion; Obama Fracking Regulation Overturned; Positive Turn Of Events For Dakota Access Pipeline In Iowa

Maybe it's just me, but it certainly seems that for the dog days of summer -- yes, I know, we've only had one day of summer so far -- there certainly has been a lot of energy news.

Unprepared. Perhaps the biggest story of the day, from The Wall Street Journal: as the expanded Panama Canal prepares to open, New York isn't. Spending too much time worrying about rising sea levels (sea levels, by the way, are falling on the East Coast -- previously reported), they did not get around to raising the Bayonne Bridge. The East Coast's busiest port cannot receive biggest ships. This should have been a huge win for Charleston, South Carolina, but their port is too shallow. The big winners will be the ports on the west coast, and probably along the Gulf Coast.

Jim Newsome, CEO of the South Carolina Ports Authority, recently predicted the East Coast's share would hit 50% within a couple of years. A Boston Consulting Group analysis issued less than a year ago forecast East Coast ports could reach parity with West Coast terminals by 2020. But that looks unlikely now, said Peter Ulrich, one of the authors of that report.

Preparing. research study looks at nine US ports (East Coast and Houston) -- how they have prepared for the Panama Canal expansion.  Port of Savannah is already receiving these ships. The Port of Baltimore is the second East Coast port to be fully prepared for Panama Canal expansion. Port of Houston, ready, but congested. Port of Miami is accessible but infrastructure (intermodal system, waterside improvements) lacking.

Obama fracking regulation overturned. Had it not been for a reader I would have completely missed the story on a federal judge overturning the Obama regulatory ban on fracking on federal land. I didn't even find it over at The Bismarck Tribune. I found the story in The Washington Times which hardly counts. The same federal judge had put an injunction on the Obama regulatory ban on fracking last September, so probably this was something anti-climactic and a foregone conclusion. The federal judge was an Obama appointee. From a reader:

I looked for the text of the court ruling today that overthrew Obama's bid to regulate fracking on federal land, and I found it here:

http://www.wyd.uscourts.gov/pdfforms/orders/15-cv-043-S%20Order.pdf

There is quite a bit of legalese to wade through, but if you read the last  quarter of the ruling, starting on page 20, it is clear that the judge is  emphatically rebuking the administration for distorting legislation and past  court rulings to claim that its regulators can do just about anything in what it construes to be the public interest. Here's a quote: "With Congress "having explicitly removed the only source of specific federal  agency authority over fracking, it defies common sense for the BLM to argue  that Congress intended to allow it to regulate the same activity under a  general statute that says nothing about hydraulic fracturing."

German government, on the other hand, agrees to ban fracking indefinitely. Reuters/Rigzone link here. Bullish for the Bakken! A big whoop.

Dakota Access Pipeline. Also, barely making headline news, was a decision in Iowa in favor of the Dakota Access Pipeline. This is huge.

Work on the Bakken crude oil pipeline in northwestern Iowa tribal lands can proceed — as long as the work takes place underground.

An amendment made Friday to the Dakota Access pipeline’s Sovereign Lands Construction Permit allows work to proceed on that portion of the pipeline in Lyon County’s Big Sioux River Wildlife Management Area.

That amended permit requires pipeline officials to bore through the ground, rather than dig a trench for the pipeline.

Man-camps. Speaking of injunctions, Williston man-camp operators also got a reprieve. A judge dropped a temporary injunction on the city of Williston, allowing man-camps to stay open until the process is "handled appropriately."

Cash strapped. The Tesla-SolarCity story continues to get headlines. The most recent from Bloomberg.

The word of the day: dispatchable. The announcement that PG&E will not apply to extend nuclear certification for its two-unit plant at Diablo Canyon continues to generate headlines also. Dispatchable will be the word du jour, but will have lasting importance as California turns to unreliable, non-dispatchable energy to replace incredibly reliable energy. If PG&E prevails, the natural gas industry and GE are huge winners.

Politics. I thought I heard on the radio that Trump and Hillary are "even" in the polls in the "swing stages" of Ohio and Pennsylvania. I hope those folks remember that Hillary supports efforts to ban fracking. I already know how Hillary will respond to her comments in Detroit, apparently associating fracking with lead contamination in Detroit's public water system: "That was during the silly season, during a campaign."

Fatality. There was another Bakken oil patch fatality -- Monday, near Ross. A 37-y/o worker was struck by a boom/crane. 

Market. After a couple of good days on the market, futures are up again today, and crude oil remains above $50/bbl. Tesla, as expected is slumping: a) down $25/share; b) down almost 12%; and, c) trading below $200/share for the first time in a long time. The market sees this as a bailout for SolarCity: a) shares are up $3/share; b) shares are up 15%; and, c) shares are back trading where they were some months ago.

New record set. India set a new record in space mission by successfully "injecting" 20 satellites into orbit from one rocket/launch.

Friday, March 29, 2019, T+86 -- Part 2

Let's consolidate these three posts for the archives:

1. From earlier today:

Natural gas volatility in the western US: exactly what I was suggesting the other day when I asked the rhetorical question: has anyone really though this through? Link here. 

2. From March 28, 2019 -- Platts analysis here.

3. From March 27, 2019 -- did anyone think this through? We have a glut of natural gas, but like politics, it's a local issue. I'm thinking about these three facts when it comes to California:

• Diablo Canyon 1 and 2 close in 2024/2025
• when it comes to pipelines, California is an island
• California eager to go "green"

4. From October 23, 2018 -- precarious pipeline access from Canada.

5. For much better analysis of the natural gas situation in the US, see this blog. 

Investing In Energy -- An Open-Book Test -- June 21, 2016

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, relationship, or job decisions based on what you read here. If this stuff is important to you, go elsewhere.

Thinking out loud. At the moment, investing in energy seems to be an open-book test. I was thinking about that all day. Just before posting, I thought I would loo at crude oil futures: solidly above $50.

I think the biggest news today was PG&E's decision to kill their two-unit nuclear power plant; the plant will abruptly end by 2025. You know, that's not all that long from now.

California won't be building any new nuclear plants in the next ten years. If ever.

It's funny how things worked out. A couple years ago, utilities were building terminals along the Gulf Coast to import natural gas. There is now such a glut of North American natural gas, those terminals have been "reversed" and the US is now exporting natural gas.

The tea leaves suggest we will see no shortage of natural gas for decades.

Hold that thought.

PG&E says it makes no sense to maintain nuclear power. With all the non-dispatchable, unreliable solar energy and wind energy coming on board, PG&E needs some type of dispatchable, reliable power supply to back up that energy.

It turns out, nuclear power plants are too slow to respond to an unpredicted loss of wind or solar energy. Of course, coal is out.

That leaves one energy source: natural gas. But one needs natural gas plants that can turn on a dime -- as they say. Oh, what have we here? GE has come up with the solution:

Indigenous technology from General Electric enables the turbine plant to reach full power in less than 30 minutes. This saves energy by allowing partners to respond quickly to fluctuations in grid demand, integrate renewable energy onto the grid and adapt quickly to weather changes. Consequently, the plant helps to conserve natural gas and reduce greenhouse gases, allowing France to meet Europe’s climate and energy guidelines.  

This stuff is so good, GE is now in the Guinness Book of World Records. 

PG&E says they will replace the power lost from the Diablo Canyon nuclear power plants with wind and solar energy. That's fine. Every wind power plant / every solar power plant needs back-up; and that back-up is going to come in the form of a) natural gas; and b) GE technology.

Investing in energy? Seems like an open-book test for those with a long horizon, say ten years.

Cramer's First Hour, Part 1 -- November 14, 2024

Locator: 48754CRAMER.

Cramer's first hour: a mix of facts, factoids, opinions from various sources -- often not cited -- while listening to Cramer's first hour on CNBC. 

Morning Joe: Al Sharpton is back! Wow. First word on the bingo card: "guardrail."

Trump's administration: the four-legged stool --

• immigration
• a "real" border czar, air, ground and sea: Tom Homan
  
• the southern surge / deportation: Kristi Noem
  
• sanctuary cities
  
• retribution
• the generals -- Pete Hegseth
• board to purge generals (link to WSJ)
  
• the intel community -- Tulsi Gabbard
  
• the DOJ -- Matt Gaetz; withdraws; new pick: Pam Bondi, former Florida attorney general; in Trump 1.0 administration.
  
• the economy
• the Fed -- issue of independence -- replacing JPow
  
• deregulation -- the President's perogative
  
• anti-trust in context of US economy -- SecCommerce
  
• tariffs -- Robert Lighthizer 
• climate -- Michael Zeldin
• energy -- EPA -- SecEnergy
• California's Diablo Canyon given new lease on life with AI; link to Power Engineering.
  
• US: global leader in oil and natural gas
  
• government efficiency
• Musk and Ramaswamy
• downsizing -- all department secretaries; marginal agencies (think NASA) at greatest risk
  
• elimination -- some department secretaries -- 
• could "Education" be eliminated outright or subsumed by "HHS"?
• DOJ: if Kaetz not confirmed, could DOJ be left to swing / twist in the wind?
  

Personal investing: Sophia will add significantly to her SCHB position today.

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Disclaimer
Brief Reminder 

• I am inappropriately exuberant about the US economy and the US market.
• I am also inappropriately exuberant about all things Apple. 
• See disclaimer. This is not an investment site. 
• Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If something appears wrong, it probably is. Feel free to fact check everything.
  
• If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 
• Reminder: I am inappropriately exuberant about the US economy and the US market.
• I am also inappropriately exuberant about all things Apple. 
• And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia.
• Longer version here.

Elon Musk, Electricity, And Road To California -- October 17, 2021

Elon Musk: I guess because this story posted over the weekend a lot of folks will miss it. It will be interesting if this is covered on CNBC Monday? The Daily Star is reporting that Elon Musk's wealth swelled to an astonishing $230 billion, following a share sale at SpaceX, making Musk richer than Bill Gates and Warren Buffett combined. From the linked article:

Musk’s obscene personal fortune increased following a share sale at SpaceX as well the strong performance of Tesla stock.

Bezos had previously held the title as the world's richest person, with a boom at Amazon over the coronavirus pandemic seeing his net worth climb to $191 billion (£139 billion).

Musk is now richer than Bill Gates and Warren Buffett combined, both of whom have previously held the title as the world's richest person.

Comment: so what's so "obscene" about that?

Road to California: link to The WSJ. This is another must-read story. California scrambles to find electricity to offset plant closures. State to struggle with coming loss of gas-fired power plants and its last remaining nuclear facility to transition to renewable energy.

• the nuclear plant provides nearly 10 percent of all electricity generated in the state
• the California Public Utilities Commission has ordered utilities to buy an unprecedented amount of renewable energy and battery storage as the state phases out four natural-gas-fired power plants and retires Diablo Canyon, the state’s last nuclear plant, starting in 2024;
• from where does one think those batteries will be coming? See previous note: Elon Musk is now the richest man in the world, surpassing Bill Gates and Warren Buffett combined.
• it should be noted there is minimal EV penetration in California;

Not so fast: this story was published three days ago, so it's very current. It appears that ... well, I don't have time for this. If interested, go to the link. This is all I need to know:

It's the latest setback for the project, originally expected to cost $33 billion and be completed last year. Today the vision of shuttling passengers between Los Angeles and San Francisco in less than three hours is a distant dream. The first leg of rideable track, connecting two cities in the Central Valley, won't start until at least 2029, and the project's costs have ballooned to $98 billion.

Little political will seems to exist to either kill the project outright or to give it more resources, leaving construction to continue without a long-term plan.

At the center of the latest dispute is how soon to electrify the line, which rail officials say is a necessity to make the train high speed — the whole idea of the project that voters were sold on. They want to enter into a contract next year for a firm to design and construct an electrified track and system and to maintain it for 30 years, effectively locking in the state for the long haul.

Takeaway: Merced, CA, at center of boondoggle. Might be interesting to track politics in this district.

Bullet train is tracked here.

The original road to California: Route 66, New Mexico.This is a great link sent to me by a reader. One could spend all night on this one. And I did. LOL.