MIT tries to resurrect nuclear power

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I received a notice of a new MIT study entitled “The Future of Nuclear Energy in a Carbon-Constrained World” which looks at the technological, regulatory and economic changes required to make nuclear power viable again. A summary states

The findings are that new policy models and cost-cutting technologies would help nuclear play vital role in climate solutions. Progress in reducing carbon emissions requires a broad range of actions to effectively leverage nuclear energy.

However, nothing in the summary reveals the paradigm-shattering innovation that will be required to make nuclear power competitive with a diverse fleet of renewables plus storage that would achieve the same goals. The cost of a solar plant plus storage with today’s technology still costs less than a current technology nuclear plant. That alternative fleet would also provide better reliability by diversifying the generation sources through smaller plants and avoid any radiation contamination risk.

The nuclear industry must clearly demonstrate that it can get past the many hurdles that led to the recent cancellation of two projects in the southeast U.S. Reviving nuclear power will require more than fantasies about what might be.

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Dunning gets it wrong again on VCE

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Valley Clean Energy Alliance (VCE) was in the Davis opinion columns this weekend again. First, Bob Dunning wrote another column in the Davis Enterprise that mischaracterizes the switch to VCE from PG&E as “mandated” and implies that local government didn’t trust Davis citizens to make the right choice. Then, David Greenwald wrote a column in the Davis Vanguard on how Dunning had ignored the authorization of the development and formation of VCE and is late to the game.

In both cases, the distinction between the choice to form VCE made by city councils and the Board of Supervisors after substantial study  is not distinguished from the choice that electricity ratepayers now have as to which entity will serve them. Previously, Yolo County ratepapers had no choice as to who should serve them–it took the formation of VCE to create that choice. If Dunning has a problem with that even offering that choice in the first place, then that’s a much more fundamental problem. But he is not being so transparent in his opposition, with is either disingenuous or ignorant.

I wrote the following email to Bob Dunning (I had an earlier letter to the editor already published in the Enterprise, that I also posted on this blog and the Davis Vanguard.)

You complain that somehow you’ve been “mandated” to sign up with Valley Clean Energy Authority. Yet you fail to ask the question “why was I mandated to sign up with PG&E all of those years?” Why does PG&E get a free pass from your scrutiny?

Instead now, you actually have a choice. We trust that you will make the right choice, whereas before you had NO choice. And you are not “mandated” to join VCE. You can act to switch to PG&E if you so choose. What has changed is the starting point of your choice. The default is no longer PG&E—it’s VCE. There’s nothing wrong with changing the default choice, but we have to start with a default since everyone wants to continue to receive electricity. (The other option is like they did with long distance service in the late 1980s with random assignment as the starting point, but that seems too much bother.)

 Send me your answers in your next column.

As to the Vanguard, I posted:

I think your column misses the fundamental point–contrary to everything that Dunning writes, we DO have a choice–it’s just that the starting point (default) isn’t what he wants. He prefers that the big corporations get the favored pole position.

 

Fixing college admissions

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Harvard is being sued by a group of Asian-American students for discriminating against them through affirmative action admission standards. The Trump Administration is joining on their side. I have been troubled by the reliance on standardized tests and inflated GPAs as appropriate metrics for college admission. I propose two solutions to both of these problems:

  1. Colleges and universities should create mission statements about what the university wants to accomplish through educating students. These statements should go well beyond just saying “a well-rounded individual who is prepared for a career.” It should state that it wants a set of alumni that positively impact their communities in a number of dimensions (some not easily quantified) in a manner that improves social well being in a manner chosen by the university’s policy makers. This will require developing a consensus among those policy makers (e.g., the Board of Regents), but it will prompt a larger debate about the purpose of a college education that is badly needed right now.
  2. The colleges and universities should then conduct at least two statistical/econometric studies to determine the mix of traits that it wants in its student body to accomplish its objectives:
    • The first one would establish what preparation will lead to the most likely academic success in that college. This would completely eliminate the need for standardized tests. The key is that most colleges have an extensive set of data on the GPAs of their students, the high schools that they went to and their GPAs in high school (along with other academic data). The study (a regression)  would regress the college GPA on the high school GPA weighted by the high school (this adjusts for differences between high schools) plus a specific set of other academic / extracurricular data. This would be socio-economic blind. But most importantly, these results would NOT be the singular admission standard. It would be just a measure of likely academic success that could help identify how to deploy resources for those students once they enroll.
    • The second would evaluate how alumni impact their communities. This would rely on data about alumni on occupations, income, community activities, rate of return to certain communities based on socio-economic status, and community well-being. Alumni characteristics would include incoming socio-economics traits, study major, college GPA, extracurricular activities, and other factors thought to be important. This study (again, likely econometric) would measure the relative impact on community well-being (or other chosen objectives) of admitting students with certain characteristics and likelihood of certain majors and academic performance. For example, it might show admitting a student from Watts with a lower predicted GPA has a bigger community impact than admitting another from Beverly Hills with a higher GPA.
    • The desirable traits found in the second study would be used with the results of the first study to set admission policies in a fairly transparent way. A third study might assess what mix of student body traits is most likely to achieve the mission statement objectives. That could further help make the admission process more transparent.

Another finding of the obvious from academics…

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This study published in the American Journal of Agricultural Economics seems to have a surprising finding, at least to academic economists, that farmers with riskier water supplies rely less on irrigation! What? If you’re uncertain about whether you will get water every year, you are less likely to count on that water to irrigate your crops? Who possibly would think that way?

One CEQA reform

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Yet another housing development in Davis is being threatened with a lawsuit under CEQA. Almost every project in town has been sued by a small cadre of citizens, with Susan Rainier the most recent stalking horse. This group was first encouraged by a suit in the 1990s that was settled for more than $100,000 that went to two individuals. (Part of those funds went to start the “Flatlander.”) That pattern has been the modus operandi ever since.

The problem is that these individuals and organizations have rarely been meaningful participants in the planning and permitting process for these projects. A valuable CEQA reform would be to require that any litigant to participate in a meaningful way in the preparation of the EIR, and that the litigant include any document or discussion in the suit that is filed. The intent of litigation in CEQA was to act on a check on failing to address any concerns raised during the deliberative process–let’s make that the case.

The legitimate environmental concerns are to be addressed during the deliberative process. The potential litigants need to develop a record during the deliberative process that fully raises their concerns. A suit should be limited to the issues raised during that process, and the required evidence clearly specified during the process. The litigants can then more fully develop counter evidence in a suit if that is the final outcome.

Another bad legislative idea: Pushing RPS purchase

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The California Legislature is considering a bill (AB 893) that would require the state’s regulated utilities (including CCAs as well as investor-owned) to buy at least 4,250 megawatts of renewables before federal tax credits expire in 2022.

Unfortunately, this will not create the cost savings that seem so obvious. This argument was made by the renewable energy plant owners in the Diablo Canyon Power Plant retirement case (A.16-08-006) and rejected by the CPUC in its decision. While the tax credits lower current costs, these are more than offset by waiting for technology costs to fall even further, as shown by the solar power forecast above. Combined with the time value of money (discounting), the value of waiting far outweighs prematurely buying renewables.

The legislature already passed a bill (SB 1090) that requires the CPUC to ensure that GHG emissions will not rise when Diablo Canyon retires in 2024 and 2025 when approving integrated resource plans. (Whether the governor signs this overly directive law is another question.) And SB 100 requires reaching 100% carbon free by 2045. A study just released by the Energy Institute at Haas indicates that renewables to date have depressed energy market prices, discouraging further investment. And the CAISO is “managing oversupply” created by the current renewable generation.

And there’s a further problem–with a large number of customers moving from the IOUs to CCAs across all three utilities, the question is “who should be responsible for buying this power?” The CCAs will have their own preferences (often locally and community-scale) that will conflict with any choices made by the IOUs. The CCAs are already saddled with poor procurement and portfolio management decisions by the IOUs through exit fees. (PG&E has an embedded risk premium of $33 per megawatt-hour in its RPS portfolio costs.) Why would we want the IOUs to continue to mismanage our power resources?

One bad legislative idea: Bail out PG&E

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The California Legislature is still struggling with whether and how it should protect PG&E from a $17 billion liability from the Sonoma wildfires that could push the utility into bankruptcy. The latest proposal would have the CPUC conduct a “stress test” on PG&E’s finances if it faced a large liability, and then PG&E could raise rates sufficiently to cover the difference between the total liability and exposure deemed sufficient to maintain financial solvency. We don’t have enough details to understand how well the stress threshold is defined and how it would differ from the current cost of capital evaluations, but this is a bad idea regardless.

Firms need the threat of bankruptcy to perform efficiently and effectively. We’ve already seen how PG&E manages and performs sloppily, whether its maintaining vegetation (which has been a problem since the early 1990s), tracking its pipeline maintenance (which led to the San Bruno accident), or managing risk in its renewable power portfolio (which has added a $33 per megawatt-hour premium to its cost.) Clearly CPUC oversight alone is not doing the job. Outside litigation may be the only way to get PG&E’s attention, especially if it creates an existential threat.

Policymakers have taken the wrong lesson from PG&E’s previous bankruptcy, filed in 2001 during the California energy crisis. The issue there that lead to the final resolution was whether PG&E was required to provide power to its customers at whatever cost. This situation is not about PG&E’s obligations but rather about its management practices, and a bankruptcy court is much less likely to require a cost pass through.

Instead, the state could simply step in buy PG&E for $1 if the utility declares bankruptcy (an option that Governor Gray Davis was too much of a coward to consider in March 2001.) The state could then directly manage the utility, or better yet, parse it  down to eight or ten smaller utilities. (Two studies in PG&E’s 1999 General Rate Case, and the subsequent decision, found that the most efficient utility size is about 500,000 customers. PG&E now has over four million.) Customers would find the utilities more accessible and responsive, and by creating municipal utilities, rates could be much lower with cheaper financing cost. It’s time to rethink where we should head.