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Sean Casten's Posts

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Duke wins approval for a $3100/kW plant

From E&E News ($ub req'd): Indiana has approved a $2 billion, 630 MW integrated gasificiation/combined cycle coal plant. Two billion divided by 630 MW = $3,174/kW. If we assume that coal equity investors expect to recover their investment over 20 years, with an 11 percent return, that works out to 5.7 cents/kWh just to pay off the capital for the power plant. Add in another 3 cents or so for transmission and distribution, and a couple cents for fuel and operating costs, and this plant will work out to over 10 cents in retail prices. This in a state where …

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Pro-business vs. pro-market

Much of the debate around the big issues of our day -- from energy to healthcare -- hinges on whether one is "pro-market" or "pro-government," with Cato and the Wall Street Journal op-ed page lining up on one side and any number of PIRGs on the other. Unfortunately, neither side appears to understand the pro-market position. Herewith, my attempt to add a bit more rigor to the debate. So what does a market look like? At the most basic level, a market is defined by its characteristics. There are various definitions out there, but they all come down to the …

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RED positioned to fund $1.5 billion of recycled energy projects

While humility makes it awkward for me to be posting this, David said it would be OK. (I swear!) More seriously, this is a day of great pride at RED and I wanted to share a bit with you -- and perhaps explain the lack of time I've had for more insightful posts lately. We've just completed a pretty substantial equity raise, with funds available to invest in recycled energy projects that convert waste heat to power. The target for our investments are places where we can simultaneously generate profits, lower energy costs, and reduce greenhouse-gas emissions - in other …

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Expensive coal + hydrogen = ?

As follow-up to my post yesterday: There is now a bidding war emerging for the FutureGen clean coal plant, targeted to cost $6500/kW. Texas and Illinois are fighting to win this fantastic prize. If they get it, they'll ensure they can keep burning coal, but will do it in a plant that is absurdly expensive. As a fringe benefit, they'll generate hydrogen (aka, a fuel that no one is presently demanding for their vehicles), on the off chance that if a market arises they can sell it. Goodness knows they'll need it if the coal plant is ever going to …

Read more: Climate & Energy

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Expensive coal + hydrogen = ?

As follow-up to my post yesterday: There is now a bidding war emerging for the FutureGen clean coal plant, targeted to cost $6500/kW. Texas and Illinois are fighting to win this fantastic prize. If they get it, they'll ensure they can keep burning coal, but will do it in a plant that is absurdly expensive. As a fringe benefit, they'll generate hydrogen (aka, a fuel that no one is presently demanding for their vehicles), on the off chance that if a market arises they can sell it. Goodness knows they'll need it if the coal plant is ever going to …

Read more: Climate & Energy

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The cost of the FutureGen ‘clean coal’ plant doubles

This from Greenwire today ($ub req'd): "The DOE FutureGen program has announced that their "clean coal" plus carbon sequestration is checking in at $1.8 billion for a 275 MW plant, or $6500/kW." OK, so it's at an early stage, but even if you cut that cost in half, it still doesn't pencil out. How long before we get over the illusion that coal is cheap? Story below the fold. (Note that I have given them the benefit of the doubt that their description of the plant as a "275 watt" facility was a typographical error.) The cost of a federal …

Read more: Climate & Energy

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NY Gov. Spitzer favors 100% auction under RGGI

New York state has announced that they intend to auction 100% of their carbon allowances under RGGI. This is a good thing. There is a 60 day comment period now open. File those comments, NY Gristers!

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Don’t believe the power company hype about coal’s low price

This just in from Restructuring Today ($ub req'd): Sunflower Electric, of the recent Kansas decision not to allow an electric permit because of CO2 concerns, has argued that the decision was a bad idea because it will drive up power prices. But their math is wrong. Here's a partial excerpt from the RT story: A decision by the Kansas Department of Health & Environment to deny a coal power plant permit would mean higher power bills for some. That's "an absolute certainty," Sunflower Electric Power told us Friday. How much higher? At today's prices the firm could pay 1.5¢ for …

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Shellenberger & Nordhaus echo flawed economic assumptions

I just finished reading Shellenberger & Nordhaus' latest, and while I realize I am a bit late to the party, I think they say some fascinating things -- perhaps not for the reasons they intended. S&N manage to succinctly distill an awful lot of the ideas that are core not only to policy debates on carbon, but to policy discussions of any major change to the economy. Understanding these biases is critical to understanding why S&N write what they write, but also why they are so deeply wrong. I recently joked to an economist friend that economics is the only …

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Water limits on power plants

From Greenwire today (sub req'd): water availability may limit new power plants. This is widely appreciated in the power sector, but doesn't get as much attention elsewhere. It's especially acute as our population growth moves south and west where we are especially water-limited. What's under-appreciated is that this is a story about efficiency. When two thirds of the fuel we burn in power plants is wasted as heat, and that heat is rejected in cooling towers (at least in coal and nuke facilities), any gain in energy efficiency is a reduction in water use. Given the huge gains available in …

Read more: Climate & Energy