Arkansans could be in for a rude awakening in coming years with planned efforts by the incoming Biden administration to push for “clean energy” and move away from the state’s current, affordable mix of power sources including coal, natural gas, nuclear power and hydroelectric energy, Robert Bryce, a journalist and author of several books on the energy industry, told participants during a recent webinar hosted by the State Chamber/AIA and presented by the Electric Cooperatives of Arkansas.
During the webinar, titled “Power Plays: The Arkansas Electric Grid, Trends, Prices, and Generation Mix,” Bryce said that Arkansas is currently similar to the U.S. as a whole in terms of its power generation mix thanks to how natural gas has been integrated into the U.S. economy.
“The U.S. is by far the biggest gas producer in the world and the biggest gas consumer,” Bryce said. “The fact that gas consumption is down only marginally is reflective of how gas has become such a key fuel in the electric generation sector.”
In just the past 15 years, the U.S. has doubled its gas output and nearly doubled its oil output, Bryce said, the biggest increase in energy production in world history: “The shale revolution has been just that, a revolution in the U.S. in terms of energy availability, energy pricing and energy exports. So, we are really talking about a fundamental shift in geopolitics and energy availability.”
Another advantage of the increased emphasis on natural gas has been the reduction in carbon dioxide emissions, Bryce said, largely due to gas supplanting coal in the power supply sector. He hastened to add that is not the only factor – wind and solar energy have had some effect on those emissions, but natural gas is responsible for the vast majority of the reduction in the U.S. And the reduction in carbon dioxide emissions in the U.S. has been greater on an absolute basis that any other country in the world.
“What’s even more interesting is that this has happened regardless of the Paris Climate Agreement,” Bryce said. “That growth in natural gas use has been almost triple that of renewable forms of energy – wind and solar. This is a trend that is going to continue because natural gas is so abundant.”
Electricity is the world’s most important and fastest-growing form of energy, Bryce said. It is also the single biggest source of CO2 emissions: “But what we’re seeing is that electricity consumption all over the world is soaring. It’s up 48 percent since 2005. We’re seeing a doubling of global electric energy consumption every 20-30 years now. Forecasters are expecting this to continue rising because we still have a world that is divided between the electricity haves and the electricity have-nots.”
Many think that increase is solely due to India and China, Bryce said, but it’s not: “China accounts for less than 10 percent of that and India the same.” But other countries like Vietnam, Bangladesh, Pakistan and Sub Saharan Africa are also seeing increases: “These are places where you’re seeing more and more people coming out of poverty and into the modern world. And what do they want? They want what we have. They want air conditioning and refrigeration, and they are getting it.”
Sources of energy in many countries are not all with wind or solar, Bryce added: “A lot of it is with small oil-fired generators and coal-fired generators as well.”
Compared to the rest of the world, the U.S. has seen no growth in electricity generation and consumption for the last 15 years, Bryce said: “Why does this matter? It matters because you have a lot of players in the electricity market who are competing for market share in a market that isn’t growing. It’s flatter than a tabletop. This is a remarkable statistic that we are not seeing growth in consumption even though the population in the U.S. continues to grow.” That’s due in large part to efficiency in new appliances, he added.
In looking at the current energy mix in the U.S. for electricity versus the energy mix moving forward, Bryce said that coal is declining and that decline will continue: “In many ways that is unfortunate because I worry we are becoming too dependent upon natural gas,” which utilizes just-in-time delivery. Meanwhile, nuclear energy use is flat, a source of energy that Bryce strongly supports: “If you are anti-carbon dioxide and anti-nuclear, then you are pro-blackout. Blackouts are bad. They are disruptive and very costly.
“I’m hopeful for nuclear, but the reality is that it isn’t growing. It’s not growing in the U.S. and unfortunately, it’s not capturing much in terms of primary energy share globally, either. So that leaves us for the next couple of decades at least before we have new nuclear reactors that are licensed today to get them built and into commercial operation. It’s going to be at least a decade and probably more than that before we are going to see anything significant added to the U.S. nuclear fleet at a time when today the U.S. nuclear fleet is shrinking pretty dramatically.”
With a new administration poised to take power Jan. 20, Bryce said there’s a possibility that we’re going to see significant changes in the grid: By 2035, President-elect Biden “wants to completely decarbonize the U.S. electric grid. That’s just 14-15 years from now. We would need to replace the 2,700 terrawatt hours we are getting from coal and gas today with 27 times the U.S. solar output. We would need nine times the existing U.S. wind output. We would need roughly all global nuclear capacity in order to meet that goal.
“Am I skeptical that goal will be achieved? You bet I am because energy transitions happen very slowly, and they are costly. And the idea that we’re simply going to shift gears and install a lot of wind and solar at a time where nuclear isn’t growing, there isn’t a way to decarbonize the grid. We don’t have new nuclear plants going online. We’re shutting them down generally.
“Entergy is a big provider in Arkansas. They are shuttering two of their reactors. They have already shuttered one in New York, Indian Point Unit 2, and they’re going to shut down Unit 3 in April. So, I think that it’s easy for politicians to propose things, but I don’t see it happening. We can see a gradual change, yes. But the idea that we’re simply going to find another 2,700 terrawatt hours of carbon-free electricity I think is easy to say, difficult to do.”
Other factors are also complicating a move from the current mix of energy for electricity and the planned mix, including land-use conflicts over renewable energy like the building of wind farms and transmission lines, i.e., the one that Clean Line Energy proposed to stretch across northern Arkansas that was ultimately rebuffed, Bryce said: “People everywhere care about their neighborhoods. We are seeing growing resistance not just in America but all over the world. We are also seeing increasing friction over solar projects. The idea that there is a lot of land out there in the middle of the country is just not true.”
In Arkansas, energy prices are very favorable currently, Bryce said: “Arkansas ranks 46th among 50 states in terms of price, which is 22 percent below the national average. Those are pretty remarkable numbers. Be glad you don’t live in California where the average price is close to 20 cents per kilowatt hour, more than double what Arkansans pay.”
In Arkansas like the rest of the country, electricity use is flat in terms of consumption despite about a 7 percent increase in population over the past 15 years, Bryce said. “In 2019, coal provided 45 percent of electricity generation capacity, natural gas provided 27 percent, nuclear provided 25 percent and hydroelectric provided 3 percent. So, when it comes to reliability, Arkansas has a pretty remarkable profile.”
But the picture becomes murkier down the road with coal declining in favor, natural gas becoming questionable in terms of CO2 emissions and nuclear not being able to fully shoulder the load if the former two sources are removed from the mix, Bryce said: “I am worried that we’re losing sight of the reliability issue.”
What would it mean if Arkansas has to comply with the clean energy and efficiency standards that President-elect Biden has proposed? Bryce said that Arkansas’s total generation last year was about 64 terrawatt hours and in-state consumption was about 47-48 terrawatt hours: “If you back out Nuclear One, that’s about 13 terrawatt hours and you have roughly about 35 terrawatt hours of in-state consumption of electricity that is based on coal and natural gas. So, if Arkansas must comply then with this de-carbonization mandate, you would need seven times as much solar as we are getting here in Texas. You would also need almost three times the output of Nuclear One. You would need more than twice as much wind as is being produced in California and about 1.5 times what is being produced in Iowa.”
“These are big numbers and so I think it’s clear just looking at this very simple chart that if Arkansas is forced to decarbonize its grid and do so quickly, it could be extraordinarily costly and I don’t know how the state would do it, give the fact it has relatively poor wind resources. You are building some solar, but how would that be achieved?”
Bryce also said that the states that have had big increments of renewables into their capacity mix have seen some of the biggest increases in prices.
The net metering rule that the Arkansas Public Service Commission imposed this past summer upon utilities regarding solar energy has stirred up opposition, Bryce said, likening it to the issue of social equity and cost shifting, i.e., “Robin Hood in reverse.” By paying less into the system for the watt hours that solar users do, others have to pay more, effectively shifting some of the cost of the grid onto someone else because there are few watt hours where the utility is allowed to spread its cost. This has been a topic for a lot of states, not just Arkansas, including Illinois and California.
“I think this battle is just one of many that is going to happen not just in Arkansas but all across the country,” Bryce said, “and the issue of equity is one that is very difficult and it’s one that deserves more attention. But solar is very politically popular. Winning this kind of battle to have appropriate cost-sharing is going to be difficult because the companies installing it (solar panels) have political clout. People will vote for it without understanding some of the regressive nature of the policy.”
Bryce closed his presentation by focusing on the future of the Arkansas grid: “There are likely policy battles coming in the Biden administration involving carbon taxes, grid decarbonization mandates and subsidies, and electric vehicle charging rules. Coal will remain vulnerable. It’s important to keep Nuclear One operating as reliability and affordability go hand-in-hand. Solar and wind have very powerful lobbies in Washington, and they have been getting very lucrative subsidies that are vastly greater than treatments being given to hydrocarbons. So those are going to be the key battles and could potentially have a very big effect on Arkansas.
“Finally, regarding the Biden administration’s electrical vehicle charging stations, utilities are happy to build as many EVCS as are wanted, just tell them how many. This is an issue of social equity. Tradesmen like plumbers and others are driving pick-ups, not Tesla’s. Yet their electric rates are going to be subsidizing the Tesla drivers. To me, that’s just wrong.”
To see the video of the webinar, click https://vimeo.com/490784288. To see the slide deck, click https://files.constantcontact.com/ac59fcc9001/924596b2-09fb-4451-8285-f23cdc1a0f6e.pdf.