Tony Anderson : My reality is that the biggest bill I pay is to my wholesale power supplier who has to deal with wholesale energy at the generator. So, my reality is: “Where is that coming from in the future and at what cost?”

The coal fleet in Michigan is old. We haven’t built a coal plant in Michigan in fifty some years. So it’s old, aging and getting older all the time and we have to clean it up. No one is arguing the fact that it needs to be cleaned up. It does. But we have to get started on that. For some plants it will be too costly to clean up, they will shut down. For other plants it will cost millions to clean them up and we’ll get that done.

My concern is what are we doing today to get ready for my power bill four, five and ten years from now. If we have to shut down some of these plants because they don’t met the clean air standards, fine. But what is going to replace them? Do we have enough generation in Michigan that we can clean-up and keep on? Or do we go out of state and take the jobs and that money and send it to other states where there is generation that’s been built? Michigan is kind of behind. Indiana and Illinois have built plants while we have done nothing. The concern is what happens when you shut one down? Where do you replace that from? The EPA in December 2011 made it almost impossible to build a new coal plant. We were looking at a plant in Rogers City and the EPA emissions requirements are so restrictive that the technology isn’t available too meet them. The vendors can’t guarantee they can meet the emission requirements under the new EPA regulations. So, that takes us to look at how do we retrofit the old stuff, how do we clean that up? There are different regulations for the old and the new. Existing plants have one set of numbers and new plants have a more restrictive set of numbers. You can argue if that’s good, bad or indifferent but that’s the fact today. Today we feel that new is out and we have to look at what is existing and how do we clean it up. It seems like that is where the vendors and manufacturers are focused as well. They’re not spending time on building new boilers and improved boilers for coal fire plants. They’re spending their time on scrubbing systems and how to clean up the old plants. When all of that works is done then maybe they’ll get around to the new plants and that technology.

energy-101.org : If coal is under challenge, what other options are there?

Tony : The other options beside coal are nuclear and natural gas. If you want 24/7 base-load those are your three options in my book: coal, nuclear and natural gas. If you take coal off the table then you have to do nuclear. There is some work being done on small-scale nuclear, 100 megawatt and 200-megawatt units. That’s ten to twenty years down the road. So, the most viable today would have to be natural gas. Our power supplier owns a good-sized peaking plant down by the Wayne County Airport with four different jet engines that produces over 340megawatts of power on peak at peak times. We could take one of two of those and move them somewhere and have a 24/7 base-load natural gas plant. That could happen in our future. Natural gas is definitely in our future…it’s just at what level and what price? Natural gas is viable below four dollars and I’m told it may viable below five dollars and fifty cents but above that it gets to be a problem.

When you look back at history natural gas doesn’t have a good history to make you want to build a 24/7 base-load natural gas plant. We’ve seen it as low as $2.80 and as high as $14 in the last ten years. That’s tough. There’s just not a steady fuel supply price is what history tells us. Maybe with all the fracking and the development we have going on in the country right now maybe that will be different in the future but I have to look back at the history and I’m pretty nervous about building natural gas base-load.

The renewables are problematic in the fact that you still need to have the big three behind them and the big three being coal, nuclear and natural gas. Certainly the renewables like solar and wind are forms of energy but obviously the sun only shines part of the day so that’s only a part time solution. During the winter months in Michigan the output isn’t great because the sun doesn’t come out that often. So, you always have to have something to back up the solar. When the solar panels are not producing you have to have something behind it that something is coal, nuclear or natural gas. Wind is the same way. The wind can blow 24 hours a day but the wind is not going to blow everyday so you need something to back that up.

energy-101.org : If you had to evaluate which directions do you think this is going to go?

Tony : I think we’re going to clean up our old coal plants. Our emissions are going to vastly improve over the next ten years because some coal plants will shut down. That’s going to lower your emissions, clean up your air and the coal plants that stay on are going to be cleaner. So, I think overall there’s going to be some general improvement. I think there could be more improvement if the EPA would lighten up a little bit and we could build some new plants because I feel like the new plants would be better then anything we’re going to retrofit but we’re just not able to do that right now.

I think we’re going to clean up our old coal plants. Our emissions are going to vastly improve over the next ten years because some coal plants will shut down. That’s going to lower your emissions, clean up your air and the coal plants that stay on are going to be cleaner. So, I think overall there’s going to be some general improvement. I think there could be more improvement if the EPA would lighten up a little bit and we could build some new plants because I feel like the new plants would be better then anything we’re going to retrofit but we’re just not able to do that right now.

energy-101.org : If the fleet of power plants is aging, then what are the barriers to just building new?

Tony : Regulatory barriers. Are the regulators going to restrict the clean up or the retrofit in any fashion? Community barriers. Does this community still want that in their area? Economic barriers. Does the utility want to borrow the money to clean it up? A lot of big utilities have several coal plants in their fleet or maybe even dozens. If they have one that needs to be cleaned up, they may have some others that they have improved before that. They may just say we’ve got enough, we don’t need that one, we’re going to moth ball it. And not clean it up because we don’t want to borrow the two to three hundred million it takes to clean it up. It is always supply and demand business, too. If the demand is not there … like some utilities have seen the demand drop off with the recession. I think it’s coming back now but demand is an issue and the balance sheet is an issue. Everybody wants to look good to their investors and their rate payers. And can you afford to borrow two or three hundred million put that in your rate base and still be competitive?

energy-101.org : Let’s go to the other extreme and say so we go out of the power business, Indiana and other states have got it we can just buy it, is that on the table?

Tony : Sure we can shut down coal plants and we can buy from somewhere else but I always go back to simple economics, supply and demand. The country continues to get bigger. The last seven years, I think our energy sales have gone up 1.7%. In the last fifteen years it’s 2.5%. We’ve seen almost a percent of growth go away in the recession but if you believe that the country is going to come out of the recession, that’s going to come back. So you’re sitting on two or three percent growth in a few years when the recession goes away. Do you want to be dependent on the market? Do you want to go out of state for your power when you could have those jobs and have that generation here and not be as dependent on the market? As you take away the supply while demand is going up, well that’s eighth grade economics. The price is going to go up because you’ll have a greater demand. Then you have supply which drives up the market price and that’s not going to be good for the ratepayer, there’s a fine balance there of keeping the supply up with demand.

energy-101.org : As you make these decisions and as you think about where you are going to source your power, what the influence of ratepayers or what’s their response of the complexity of the issue you are dealing with?

Tony : The average ratepayer, their response is what am I going to pay? They want their lights on 99.9% of the time and they want an affordable price. They have jobs, kids and families and we don’t hear from them. At an electrical cooperative like Cherryland they’re members. They’re member owners. So we take it upon ourselves to try to get them the best power we can and that’s reliable power at an affordable price. You’re going to always have a vocal minority who want everything green. And energy conservation will solve all of our problems. But you can’t let the vocal minority control what’s good for the majority. The majority of our people we don’t hear from until their power goes out or their rate go up. So for us it’s reliability and price. And how do we do that as clean as we can? We’re not fighting the fact that we need to clean stuff up. But we are fighting the fact that it needs to be affordable and reasonable.

energy-101.org : What role does conservation have to play in this discussion?

Tony : Conservation’s always going to be a factor. I like to think of it more as let’s not waste our product. Let’s not use it needlessly. Conservation is a factor … it can help. But can it avoid a power plant? Over millions of people you can probably do the math that says,
“Yes if you save a bunch of energy you can avoid one new coal plant.” But what we are seeing at our electrical cooperative is that growth still continues. We’re 1.7% growth in the last seven years and that’s in a time when we’ve had an energy conservation mandate in the state of Michigan for three years. I think we are in year four now. We still see growth going up. We are handing out CFL bulbs and refrigerator rebates. We’re changing out a lot of equipment with new lights in manufacturing plants and growth is still going up. So, are we reducing growth with conservation? Yes. Do we still need to build new plants or retrofit old plants to prepare for the future? Yes.

Again it goes back to not having all your eggs in one basket. I talked about the big three being coal, nuclear and natural gas. Well, certainly somewhere down the list is energy conservation. We can’t let it go. We have to continue. We might not need a state mandate but it’s a player.

But we still have a future of growth we have to prepare for.

Jim MacInnes

#1 – Energy, Money and the Economy

#2 – The Second Half of the Age of Oil

#3 – Energy Return on Energy Invested and Net Energy

#4 – Energy Conservation and the First Law of Thermodynamics

#5 – Energy, Entropy and the Second Law of Thermodynamics

#6 – Energy – Prosperity, Security and the Environment

#7 – Is Oil Based Economic Growth Really Sustainable

#8 – Greening the electric power supply 9 21 11 doc

#9 – A Case for Large Wind in Michigan

#2 – The Second Half of the Age of Oil

#3 – Energy Return on Energy Invested and Net Energy

#4 – Energy Conservation and the First Law of Thermodynamics

#5 – Energy, Entropy and the Second Law of Thermodynamics

#6 – Energy – Prosperity, Security and the Environment

#7 – Is Oil Based Economic Growth Really Sustainable

#8 – Greening the electric power supply 9 21 11 doc

#9 – A Case for Large Wind in Michigan

Designed for the student who wishes to explore renewable and alternative energy sources, this class uses technology by including Internet research for current, cutting edge information. Alternative Energies for the Future (AEF) also requires a technology based project. The student will propose, design and present a device that my impact the economy of Michigan and the state of our global natural resources. This device will be shared at an energy fair and the student may receive a cash prize for his or her ingenuity. This class incorporates site-based experiences (out of class, field trips) and visits by and with professionals in the field. AEF is a trimester long class which approaches the science systematically. Following a unit of introductory (& review) science, we examine the main areas of energy and test their viability for our market and use today. These include but are not limited to; solar, wind, green building and geothermal energy. We assess personal and school energy use and evaluate ways to improve it. Alternative energies for the future is recommended for students who might be considering a career in energy, the environment, policy or who may be interested in the future of technology in Michigan.

The course content

Textbook:

• Much work will use online resources weekly in the media center (Thursdays,) and readings will be taken from Economicology, by Peter Wege.

Semester Grading is made up of:

• Weekly quizzes
• Online research
• Tests
• Final project

When I looked at energy-101, I was amazed at how sophisticated some of the discussions were and it struck me that having a primer where I looked at WORK and ENERGY and POWER again might just be the ticket.

Well let’s start with work. Physicists define work as a force applied over a distance. If you take an object, say a toolbox and apply a force, 22 pounds of force and you move it two feet, you’ve done 44 foot pounds of work. In metric those units convert to 100 newtons of force, and let’s say we moved it 0.60 of a meter. So we’ve done 60 newton-meters of work. In the metric system that’s referred to as a joule, 1 newton-meter is 1 joule.

Again, work is a force acting over a distance and energy is the capacity to do that work. Or another way to look at it, in a perfect world, the amount of work done is equal to the amount of energy expended. As it turns out work and energy are measured in the same units. And in the metric system that’s a joule.

Energy as it turns out is an inherent property of any object. It’s the stored capacity to do work. When it comes to electrical energy the battery is a great example. There are other forms of energy generally connected with producing heat, like a chord of wood, a ton of coal, maybe a gallon of gasoline or our sun. We’ve got energy and work down now lets see how power relates to them.

Power is the rate at which work is performed so let’s take a look at that toolbox again. If we put a stopwatch to it and we do 60 joules of work in 3 seconds and divide it, we’ve done 20 joules per second that’s the rate at which power has been applied in order to accomplish that work. The basic unit of power, joules per second is a watt and the power that was applied to accomplish that work turns out to be 20 watts.

Watts are pretty common units of measure it’s what we use when we buy a light bulb, we see it on our toasters, or it was that 20 watts that I used to move that toolbox.

Many hands make for light work. Or another way to say that is the power that’s supplied the less work each individual device ends up doing or the quicker the work gets done. Power is also the rate at which stored energy gets converted. For example, you are driving along and you want to get around that slow car in front of you. You push the peddle to the metal. In essence what you are doing is increasing the amount of power that the engine delivers to the wheels and also you are converting the stored energy of the gasoline at a lot faster rate.

So to recap. Work is a force applied across a distance also, that relates to the energy consumed in accomplishing that work and they are measured in the same units. Power is the rate at which that work is produced or the rate at which we expend energy to accomplish it. This interrelationship between WORK and ENERGY and POWER are things once you are aware of it we see all the time in everything we do.

When you look at the discussions in ENERGY-101 you realize that an understanding of the fundamentals of what electricity is all about really is helpful and may even give you some insights as to what it’s all about.

Well the history of electricity starts with discoveries that were made in the 18th and 19th centuries. One form of electricity that was most apparent to everybody was static electricity, which, is an inherent property of nearly every object. The lose electrons, atoms and molecules tend to migrate to the surface and collect. Often times they’ll be found on a point such as your finger or Harry Potters wand
if you will.

We build those charges up when we pull our sweater off and our hair goes sprong. But inherently it was very difficult to capture and put to use that static electricity. Lightning is probably the most spectacular form of static electricity. We probably all have that image of Ben Franklin with his kite standing in a thunderstorm trying to capture that energy. The truth of the matter is he and most of the other scientist at that point were struggling with that. He fortunately developed the lightning rod which got it to ground…saved a lot of barns and church steeples from destruction but it wasn’t until two Italian’s developed the first battery.

A battery is generally dissimilar metals, let’s say copper and zinc that a separated with an electrolyte. The earliest ones used a brine or pickle juice. The ions migrated; they naturally want to migrate from one metal to the other, from the copper to the zinc. When you put them together in a battery then you have two poles at either end. If you interconnect those with a light bulb in between it, you have the first flow or direct current.

Once we have the battery hooked into a circuit we can look at how we measure what’s going on.

Two primary components are voltage and amperage. Voltage is how exited those electrons are that want to get through the circuit. Amperage is a measure of the flow of those electrons past any given point per unit of time.

One way to think about it is the number of electrons that are flowing down the wire. This is analogous to the way they looked at it back in the days when water was a significant source of power, the waterfall is a great example. The height of the waterfall is analogous to the voltage, how excited are the electrons? The amount of water going over the edge is equivalent to the amperage, the number of electrons that go past a point at any given unit of time. The product of those two, the voltage times the amperage, is power and the unit of measure is a watt.

A watt is a very small unit of power and when we use it in our house we generally measure it in thousands of watts or kilowatt. That particular watt or kilowatt, that power, is the same that we get when we perform work at a given rate or when we consume energy at a given rate. There is a connection not only between the electricity but also to what going on in production and consumption of energy and other mechanical items such as your car or even physically what you are doing.

In recap, voltage is the charge and its desire to get to and balance out with an other charge or an other body. So from this battery, what is the likelihood that the electrons want to go from post to post? Amperage, if you put this in a circuit with like a light bulb or a motor, is want is the rate those electrons are moving across there. And the product of those two, how excited they are and how many are moving at a given rate of time is power and again that’s measured in watts.

Typically, when we buy for our house and plug it into the wall we measure in kilowatts which is just a thousand watts. That same production of power, that use of energy is the same units and concepts that we have when we use mechanical equipment such as our lawnmower, drive our cars or even eat food curiously enough.

energy-101.org : Before we even relate it to energy, do people in groups always act in their own best self interest, and why not?

Jim : Well, I think a lot of people don’t act in their own best interest, and they think too short term. They don’t consider the long-term consequences. And they get themselves involved in what are called social traps. Basically a social trap is a negative situation where people and organizations, or even societies, get caught in a direction or a relationship that may later prove to be unpleasant or lethal. And they really see no way to get out or avoid it.

energy-101.org : What’s the basic setup here? Why don’t they? You’ve defined it. What are some of the ways they act otherwise?

Jim : Well, here’s an example: smoking. I mean I think there’s an awful lot of information out there that smoking causes death over time and causes a lot of pain to your body, and it gets expensive and all that. But yet some people still choose to smoke because they enjoy the short term benefits of smoking, and also there’s an addiction factor. But they keep doing it still knowing that in the long run, it could take years off their life.

energy-101.org : Give me an example of, you know, let’s relate this to energy. Let’s try to relate to this whole idea of long term versus short term.

Jim : I think a good example, as it relates to energy, is our country’s addiction to oil. We have, for many years, tried to wean ourselves off of oil and switch to other energy sources, but we’ve been unable to do that. We keep focusing on the short-term lower cost of oil, recognizing to switch to other energy sources is going to be a bit more expensive but better for us in the long run. We’re unwilling to spend the extra money now to make us better off in the future and less dependent on foreign oil.

energy-101.org : You, as a business person, how do you try to avoid this trap of short term versus long term thing?

Jim : Yes, as a business person, I always try to avoid that trap of short-term and long term thinking, short term versus long-term thinking. One way we’ve done that is we recognize that we have finite resources of land here at Crystal Mountain. As we’ve developed that land, we’ve taken the profits from that land development and put it into our operations to help fund an annuity stream of operational profits that will last us over time and be sustainable. When you think about energy and oil, we have finite fossil fuel resources that we ought to be taking the profits of those and investing those in renewable resources so that as we burn through the fossil fuels, we’ll have a sustainable energy supply.

energy-101.org : What is full cost accounting?

Jim : Full cost accounting is really a total accounting, much more than the actual outlays that one might make. It’s the hidden cost. It would be the externalities. It could be overhead and indirect costs. It could be past and future costs. And really what I would call a life cycle cost of a project or a product.

energy-101.org : Is my electric bill an accurate reflection of the cost of energy?

Jim : Well, all the costs of electricity are not really included in the electric bill because there are a lot of social costs, health costs, lost work-day costs. We have costs relating to climate change, which can be increased insurance costs or damage to property costs. And then you have the costs of all the subsidies for fossil fuels that power a lot of our energy production. So those costs are really spread throughout society through our taxes. So you don’t see those costs in our day-to-day electric bill.

energy-101.org : Tell me a little bit more about this idea of not accounting for the idea of carbon in the transaction.

Jim : Well, as I think most people know, when you burn carbon, you put that carbon into the atmosphere and into the carbon cycle, and it stays there for hundreds of years. So that actually helps to make global climate change even worse. The result of that is that the atmosphere contains a lot more energy, a lot more heat, and the heat causes a lot more volatility in the climate. For example, you’ll have more snow events and heavy rain and severe weather events, which can cause a lot of damage to buildings and that sort of thing. So the insurance industry is watching this very closely, because they’re the ones that have to pay for damage due to weather. They’re going to have to actually increase their rates over time to be able to pay for these damages.

The other problem with climate change and warming the atmosphere is it’s causing the glaciers to melt and raising the level of the water of the ocean. Over time that’s going to cause a lot of problems because we have a lot of buildings and commercial structures and residential structures on the coasts, and those are going to become unusable basically. So there’s going to be a tremendous loss, economic loss there.

So really climate change has several severe economic penalties that we’ll all be paying.

energy-101.org : What’s a subsidy, and how are they used for the energy industry?

Jim : The fossil fuel industry is very heavily subsidized as identified by the International Energy Agency. And this is a result of tax breaks that the fossil fuel industry gets for drilling for oil or for natural gas, exploration, taking coal out of the ground. And really those subsidies are funded by all of us as tax payers.