Nov
19
2014

Earthjustice Misrepresents Florida Energy Realities

Recently, newspapers in Florida ran an op-ed by David Guest of Earthjustice that made various allegations about the state of energy policy in the state. PACE offers the following response, which has been submitted but not yet published to Florida publications.

In a recent commentary, David Guest of Earthjustice argues that power providers in Florida lag behind the times when it comes to energy production. But Mr. Guest’s portrayal makes glaring oversights and only tells part of the story about the realities of energy in Florida.

For starters, while Guest calls the fact that Florida utilities use coal and nuclear energy to generate power “embarrassing,” this is the norm for utilities nationwide. Even states and nations with extremely aggressive records on energy – California and Germany, for example – continue to rely in part on conventional sources such as nuclear and coal-fired energy. Consider, too, that Florida’s reliance on nuclear power (about 12%) and coal-fired power (about 20%) are far below the national average.

The irony of Guest’s portrayal is that, in all important ways, the mix of resources used by Florida utilities looks nothing like the 1950s, as he asserts it does. In fact, Florida’s energy mix today is likely very close to the reality we could see in 2050 across the nation. With more than 60% of the state’s power generated from natural gas, Florida already represents the most likely future for the power industry. As federal regulations continue to shutter coal-fired plants and domestic natural gas supplies continue to increase, more states nationwide will come to resemble Florida.

Guest also leaves out an important part of the story about his organization’s stance on energy resources. Earthjustice has a long history of opposing coal-fired and nuclear power plants across the U.S., a fact to which Guest alludes in his commentary. But he also makes it clear that his organization opposes the construction of new natural gas plants, particularly a new natural gas plant in Citrus County. The simple truth, though, is that these three energy sources account for more than 90% of the nation’s power and are fundamental to keeping the lights on, not just in Florida but across the world. To argue that utilities can simply walk away from such resources is more than just foolish; it poses great danger to a state economy that thrives only with reliable power supplies.

Readers should also consider the official comments Earthjustice made in 2013 to the Public Service Commission, when it argued against new natural gas plants in Florida, asserting that the state needed to preserve diversity of energy sources. One is left to wonder what sort of diversity Mr. Guest’s organization hopes to preserve as it argues against the three major forms of power that keep the lights in Florida’s homes and businesses burning.

Some of Mr. Guest’s points make sense, of course. It is true that utilities should continue helping customers take advantage of energy efficiency programs and solar technologies when those initiatives make sense for everyone. That approach, however, isn’t the cure all. Electricity must come from somewhere, and it can’t always come from the sun, the wind, or from asking customers to cut back their power use. That reality was as true in the 1950s as it is today.

Nov
11
2014

100%? Not So Fast.

When Popular Mechanics wrote yesterday that Denmark could possibly rely solely on renewable power by 2050, PACE took notice. Because of its heavy investment in wind power, Denmark has always been cited as a leader among nations in the renewable energy space. Today, the small, windy nation obtains about two fifths of its power from renewables. But the leap from 40% to 100% is not a small one. Surely there must be more to the story. It turns out there was.

Denmark Flag magnet

The article’s author, William Herkewitz, points out that the Danes – like everyone else – have yet to develop ways to adequately store wind power for when wind supplies are low. But that’s a problem energy planners everywhere are facing. Perhaps the more pressing problem is that Denmark’s relatively cheap wind power has made the operation of fossil-fuel power plants a bad business proposition. The nation doesn’t need fossil generation all of the time, rendering traditional power plants expensive to operate on just a part-time basis.

Why is that a problem? Because Denmark still needs – and will likely always need – fossil fuel power generation for emergency backup. Today, Denmark can import nuclear power from Sweden or hydroelectric power from Norway to meet demand, but that might not always be possible in future years. Sweden is considering phasing out its nuclear fleet and the UK is beginning to use more and more Norwegian hydro. In other words, the security blanket that Denmark enjoys today might not be around in 2050.

Aside from the obvious point that fossil fuels still serve a valuable purpose, even in a place like Denmark that doesn’t want them, there is an embedded, more subtle point in the Popular Mechanics story for American policymakers. On a given day in the future, Denmark might use wind power, solar power, nuclear power, and hydro power to meet its demand for electricity. And the nation would consider that generation mix to be 100% renewable. Unlike policy discussions in the U.S., the debate in Denmark seems to focus on achieving carbon reduction, making little distinction about whether a carbon-free electron comes from wind power or hydro power or nuclear power. Such distinctions are, however, commonplace in U.S. energy debates, with climate change activists often being the staunchest opponents of nuclear power.

The article also omits what PACE considers to be a very important point. Today, electricity in Denmark is the most expensive of any major nation in the world. At 41¢ per kilowatt-hour, power customers in Denmark pay more than three times what the average American customer pays for the same product. And while PACE understands that Popular Mechanics is not an energy policy publication, it always seems an oversight to praise a policy initiative without pointing out the great cost it entails. Is what Denmark is trying to do cool? Many will likely think so. Is it costly? You bet. Readers need to hear both sides of the story.

Nov
05
2014

Climate, Energy Measures Could Doom European Steel

Europe’s steel industry is today one of the continent’s most vital economic drivers, supporting 1.5 million jobs and accounting for 4% of the region’s gross domestic product. But that industry could be in jeopardy as European climate targets increase the price of doing business and, in particular, make energy more expensive. That was the message from Aditya Mittal, CEO of ArcelorMittal, the world’s largest steel and mining company, in a recent opinion in the Wall Street Journal.

steel-worker-sparks

“ArcelorMittal wants to play its part in this lower-carbon economy,” he explains, “But we are concerned that the proposed plans to achieve this goal will not only make the targets impossible to reach but will in fact lead to a significant decline in European industry.”

Mr. Mittal is critical of Europe’s 2030 plan for climate and energy, which focuses on ambitious reductions in the emission of greenhouse gases and aggressive policies to increase the deployment of renewable power. In fact, he calculates that the current framework would cost his company €2 billion annually (about $2.5 billion per year).

“It treats European industry as a monolith, subject to a single set of targets and performance indicators, and that won’t work. What’s needed instead is an industry-by-industry approach that sets ambitious goals for each sector without putting entire industries at risk,” Mittal states. “Decarbonization does not have to mean deindustrialization. But, sadly, this is exactly what the proposed policy risks doing.”

As PACE has highlighted in recent months, energy policies in nations such as Germany are already causing European companies to make investments elsewhere. German power prices already have spiked 60% in the past five years and Almost 75% of Germany’s small- and medium-sized businesses describe climbing power bills as a major risk.

“It’s fair to say that Europe doesn’t need steel made in Europe, but Europe’s leaders have to decide whether they want steelmaking in the EU,” Mittal says. “If the policy is implemented in its current form, it’s very likely that in several decades’ time there won’t be an option to buy European steel.”