Engaging articles of the Week
AESO, the Alberta Electric System Operator, released their 2024 annual report in March, full of interesting statistics. No really. Particularly if you recall getting stung by sky high power bills such as December 2022, when power prices averaged $330/MWh ($0.33/KWh, in electricity bill speak). What’s happened to power prices since then is pretty incredible, in an inflationary world – power prices have crashed. In 2022, the annual daily average pool price was $162/MWh; in 2024 it was $63. Even more fascinating: in 2022, there were almost no hours in the year where the power price was below $25/MWh – roughly 1 percent of the time. In 2024, about 37% of the year’s hours were below $25/MWh. That’s thanks to renewables, in large part, which bid in at $0 and produce happily for nothing when the sun is shining or wind is blowing. That’s the good news; the bad news is that we still need a power system capable of meeting maximum demand 24/7/365, which means that in order to have such a system it has to be profitable to build/maintain, which AESO reflects in typically mild-mannered corp-speak: “High prices tend to drive investments in new generation, while low prices prompt generator retirements, underscoring the cyclical nature of supply and demand.” The situation deserves a little more arm waving, because we don’t really want generator retirements, do we…always remember: the only point that is relevant when referring to a system’s ability to keep everything running is how it performs on the coldest, darkest, calmest day of the year. If it fails on that one, everyone dies. Balancing today’s intermittent power grids, with long stretches of low prices, is a task from hell. Thank you AESO on your otherwise thankless job. Full report here.
On that same topic, and in the same spirit of boring-stuff-you-need-to-care-about, An article at Semfaor points out that, in North and South America, natural gas turbine manufacturers are now sold out for years, with new orders not being delivered until at least 2028. “Between 2023 and 2024, orders in North and South America increased five-fold; if there had been sufficient manufacturing capacity, they could have easily expanded seven-fold,” the article states. Naturally prices have gone up significantly as well. And of course, tariffs are going to make this problem worse. Semafor article here. The repercussions are already being felt; an article in Power Engineering describes how ENGIE Flexible Generation told Texas regulators that it was withdrawing two proposed peaking plants because they can’t procure the equipment. The largest turbine manufactures now say “you should be talking to your OEMs as long as seven or eight years out.” GE Vernova provided a startling statistic: In the first 9 months of 2023, the company booked 7.4 GW of new turbine orders. A few months ago, GE Vernova booked 9 GW of gas turbine orders in a single month. It’s like when a new iPhone comes out. Kind of. Article here.
These guys ordered early: Some of those soon-to-be-built turbines are going to Homer City, Pennsylvania, a town which presumably deserves a break after 30 years of Simpsons jokes. They don’t have a nuclear plant, but they did have a huge coal plant, so the Homer/Mr. Burns dynamic probably existed there too (…and who can talk about the Simpsons without a few nuggets – Homer: “Oh, I have three kids and no money. Why can’t I have no kids and three money?” Mr. Burns: “Men, there’s a little crippled boy sitting in a hospital who wants you to win this game. I know because I crippled him myself to inspire you.”), which is coming down to build the country’s largest gas-fired power plant. The plant will be up to 4.6 gigawatts, enough to almost power Manhattan, and will use something like 0.7 BCF/d of natural gas – a significant number in a 105 BCF/d market. For a single plant. Homer City is 50 miles east of Pittsburgh, very close to the heart of the mighty Marcellus field, so it all makes sense. The project is slated to cost $10 billion, which is a staggering number unless you’re someone like Meta, which has $78 billion in it’s bank account, or Amazon with $82 billion, or Alphabet with $138 billion…story here.
Tesla. Model LOL. That was some ride hey, and not talking about the acceleration. The cars became a symbol of ‘how rapidly fossil fuels would disappear’ – an image promoted by Musk himself and everyone that wanted hydrocarbons to disappear. The cars were amazing if for no other reason than the company created what the industry told everyone was impossible (autos using lithium-ion batteries – the tech was cool, the acceleration impressive, the design revolutionary, and people could buy one because of all those good qualities, and some did. Or, they could buy one…to make a statement, which apparently was the default. The poster child of virtue signalling. Every movie star needed one. To not own one caused gasps in certain circles. Publications like InsideEVs raved about them like a 12-year-old Taylor Swift ticket holder (one 2020 (peak climate concern) Model Y review of a review: “So, why can’t Neil bring himself to go all the way, and declare Model Y the GOAT? ..Mr. Neil’s review is not only a rave, but a highly eloquent one. He may not be able to bring himself to call Model Y “the best car in the world” just yet, but if it isn’t the best, what is?”) Every review of the era is just dumbfounded by a Tesla’s sheer perfection. And how can we tell that the infatuation was shallow and virtue-signally? Check out current reviews from the same publication, now that Musk has gone MAGA. A current story : “I don’t think they’re a good buy… the vast majority of Teslas failed to reach their EPA estimated range, even though the vast majority of EVs from other brands that Edmunds tested exceeded their EPA estimates… Tesla also has a less-than-stellar safety history… Additionally, the lack of easily accessible physical door linkages on most Teslas has been implicated in a variety of high-profile fatalities… Teslas are involved in fatal accidents more often than any other brand…” The article rips their 400-volt charging underpinnings, which they raved about 5 years ago. All because Elon went MAGA. What, didn’t you buy them to save the planet? Were you not sincere? Is fire bombing new Teslas the new climate emergency solution? Does carving a swastika on one reduce emissions? Curious minds want to know.
Did anyone notice during “Liberation Day” ceremonies that Trump slapped a 10 percent tariff on something called the “Heard and Macdonald Islands”? Had to Wiki-learn about that one…but give Mr. T credit, he left no stone unturned. The H&M Islands are a group of volcanic islands halfway between Madagascar and Antarctic, 4,100 kilometers southwest of Perth, Australia. The islands can only be reached by boat, which takes two weeks from Australia, and – they are uninhabited. But don’t get any cute trade ideas. You have been warned. Tariffs by country here.
Hey look everyone loves pipelines now. Find out why that was inevitable in The End of Fossil Fuel Insanity – the energy story for those that don’t live in the energy world, but want to find out. And laugh. Available at Amazon.ca, Indigo.ca, or Amazon.com.
Read more insightful analysis from Terry Etam here, or email Terry here.