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Source link: http://archive.mises.org/10241/rip-pickens-plan/

RIP, Pickens Plan!

July 8, 2009 by

It seems that the great T. Boone Pickens is picking up the pieces of what is left of his “plan” (or should I say Central Plan) to “wean” the USA off oil and replace it with wind power and natural gas. (Earth to Pickens: environmentalists have natural gas, too, as it works. It is is good for humanity, environmentalists will hate it.)

The once-ballyhooed Pickens Plan is being scrapped, as it should be. The notion that we can reaplace coal and oil-fired energy with something as fickle as the wind is something only an environmentalist or a politician could love.

Central planners and their allies are forever laying out Great Plans for the Future. However, those plans always are foolish and dangerous, and “alternative energy” is no exception. If you want to understand the full extent of the real harm that environmentalism and the government central planning it spawns have done to humanity, read the articles of George Reisman.

Last year, one of our political science professors started screaming at me because I told him the Pickens Plan was wrongheaded and would fail. “You mean, you think you know more than T. Boone Pickens?” he screamed. “On this one, I do,” I replied, and he screamed at me all the way down the hall. I guess some of T. Boone’s investors feel like screaming at him.

{ 30 comments }

Core July 8, 2009 at 6:35 am

Wow.. your professor must of been a nut. You’d think someone in the educational field would ask “What do you mean?” or would inquire about your suggestion.

I guess they just like cramming stuff down your throat and not getting anything back?

Florian Kren July 8, 2009 at 7:16 am

“The notion that we can replace coal and oil-fired energy with something as fickle as the wind is something only an environmentalist or a politician could love.”

As i think i already commented in this blog, this statement is incorrect insofar as it implies, that the plan is faulty due to the fickleness of wind.

It is correct, that in small areas wind or solar energy can have prolonged times of low or zero yield.

But if you have wind or solar in a large area(not covering the entire area, but just at different locations) it gets more and more unlikely that all have a zero yield time.

Make the area large enough and the seemingly fickle wind can provide a constant level of energy output with risk of failure comparable to the one one has with nuclear reactors.

The limit for the area size is determined by transport of electricity, distances up to 3000 km are technical and from building costs acceptable.

Therefore powering a region like europe, north africa and east asia entirely by wind and solar is technically feasible, would provide enough and constant energy and would from the pure production cost be acceptable(something like 5-15 cent/kwh).

Its still nonsense is due to political reasons, since private international investment is so regulated, the only way this would be political achievable would be by a company owned and controlled by 40+ states. Since a company controlled by 1 state is already rather inefficient this one is bound to fail or charge ridiculous prices.

Terry Noel July 8, 2009 at 7:17 am

My colleagues, fortunately, are quite civil. Unfortunately, the majority appear to buy wholesale into the climate hysteria. I would not hold my breath waiting for this issue to be treated with the objectivity it deserves, especially in the halls of higher education.

Terry Noel
Associate Professor of Management and Quantitative Methods
Illinois State University

fundamentalist July 8, 2009 at 7:53 am

Florian: “But if you have wind or solar in a large area(not covering the entire area, but just at different locations) it gets more and more unlikely that all have a zero yield time.”

You won’t have complete zero yield time, but you’ll never have the full capacity of all of your generators at any given time. Assuming you have the entire nation covered with wind generators, but only half can produce most of the time, you would need double the capacity to provide reliable power.

In addition, the timing of electric power is extremely critical. The demand at night is very low. It jumps in the morning and peaks from about 5-10 pm, then dies. The wind needs to be blowing hardest during the peak hours because storing large amounts of electricity is very difficult.

Florian Kren July 8, 2009 at 8:15 am

@fundamentalist

“You won’t have complete zero yield time, but you’ll never have the full capacity of all of your generators at any given time. Assuming you have the entire nation covered with wind generators, but only half can produce most of the time, you would need double the capacity to provide reliable power.”

Yes.

Therefore i gave a price range for production cost of 5-15.
A wind generator at a position, where there is always optimal wind produces for 1-2 cents/kwh.

You get to 5-15 because you have build far more generators than the optimal power output implies.

“In addition, the timing of electric power is extremely critical. The demand at night is very low. It jumps in the morning and peaks from about 5-10 pm, then dies. The wind needs to be blowing hardest during the peak hours because storing large amounts of electricity is very difficult.”

This is solved by having the lowest yield higher than the maximum demand, wind generators and solarthermic plants can be switched on and off, with no ill effects. That way one can adjust the output.

One would still need some very quick sources for sudden spikes, but that can be provided by water power and a neglectable(for CO2-output) amount of natural gas.

David Bratton July 8, 2009 at 8:59 am

@Florian

“One would still need some very quick sources for sudden spikes, but that can be provided by water power and a neglectable(for CO2-output) amount of natural gas.”

It will not be a negligible amount of natural gas. In order to stay prepared for a sudden drop in output from the wind farm, which can happen at any time, the fossil fuel generators have to be kept running at operating speed. Only in the fevered imaginations of central planners do public utility generators just flick on and instantly sync up with the power grid.

Rich July 8, 2009 at 9:38 am

It’s wrong because it’s central planning, not because of the specific technologies.

Always a good idea to argue against the economics of a thing, not the physics or chemistry.

fundamentalist July 8, 2009 at 9:40 am

Florian: “This is solved by having the lowest yield higher than the maximum demand…”

Has anyone calculated how many wind generators would be necessary to guarantee peak demand between 5 and 10 pm nationwide, assuming that half of them would be available because the wind would be blowing during that time? That sounds like a lot of wind generators to me.

Are the costs of wind generated power you quoted including the cost of land? Nuclear power is free, once you get the plant built, but the cost of the land and the plant are enormous and make nuclear power very expensive. I think that once you start trying to build enough wind farms to generate the capacity of a nuclear plant, the cost of the land alone will make it prohibitive.

Then you have the cost of transporting the electricity. One of the reasons Pickens needed to raise money to build his own transmission lines is that the most efficient way to transmit power over long distances is via DC lines. But the national power grid is all AC. The loss in power of transmitting it via AC is too high. So you’re going to have to add in the cost of very expensive DC power lines to get the wind power to where it’s needed.

Teresa July 8, 2009 at 11:44 am

Nikola Tesla found a way to provide wireless electricity long ago but his financier, J.P. Morgan, pulled the plug. Since there was no way to make money using technology that would transmit power by wireless.

Imagine – wireless transmission of electrical power! Only the the people who ‘archived’ Tesla’s notes know what could have been ~

S Andrews July 8, 2009 at 12:31 pm

Imagine – wireless transmission of electrical power!

What conductor will be used for such transmission?

Russ July 8, 2009 at 1:03 pm

S Andrews wrote:

“What conductor will be used for such transmission?”

I presume this fantasy power transmission system is based on electromagnetic radiation of some sort. That would mean that no conductor is required, since EM fields can propagate through vacuum.

There’s one problem, though. Any EM field that could power anything substantial, like an electric car, could also fry living beings. The military has such power transmission devices, although that’s not their intended purpose. They’re called radar transmitters, and they cook birds all the time, and ocasionally people.

What will be the next fantasy? Galt Motors’ static-powered cars?

Russ July 8, 2009 at 1:13 pm

fundamentalist wrote:

“One of the reasons Pickens needed to raise money to build his own transmission lines is that the most efficient way to transmit power over long distances is via DC lines. But the national power grid is all AC. The loss in power of transmitting it via AC is too high.”

Umm…. Why would the utility companies use AC to transmit their power, if DC is more efficient? AC is used because AC power can easily be tranformed to high voltage, low current form, which suffers less transmission power loss given practical conductors. This was determined back in the days of Edison, Westinghouse and Tesla.

http://en.wikipedia.org/wiki/Electricity_distribution

S Andrews July 8, 2009 at 1:15 pm

What will be the next fantasy? Galt Motors’ static-powered cars?

personal flying cars running on zero point energy.

Klint July 8, 2009 at 1:29 pm

People for too long have been exhausting themselves and doing nothing but merely flapping their gums about reducing America’s dependence on foreign oil. Give some credit where credit is due. At least Pickens actually put something into action!

We all know energy conservation is futile. The only real solution to this problem lies within a renewable energy source.

Not saying the Pickens Plan was a good idea, but it was an admirable attempt.

Walt D. July 8, 2009 at 1:44 pm

Florian:
I can currently buy electricity in California for 2.5 cents per kwh. (CAISO prices are quoted per Megawatt hour)
http://oasis.caiso.com/mrtu-oasis/?doframe=true&serverurl=http://frptp09.oa.caiso.com:8000&volume=OASIS
Why would anyone want to pay 5 cents or 15 cents?

Russ July 8, 2009 at 1:49 pm

Klint wrote:

“Not saying the Pickens Plan was a good idea, but it was an admirable attempt.”

No, it wasn’t. It was an attempt by an aging tycoon to take advantage of the recession, and use the power of government to transfer money from our pockets to his.

“The only real solution to this problem lies within a renewable energy source.”

“Renewable energy sources” are a joke. They are unreliable and insufficient for our current needs. The answer to our immediate needs are simple. Allow drilling here; don’t enact laws (like cap & tax) that will punish energy production that is done here with our natural resources (i.e. coal); allow more nuclear power. That kind of practical strategy that pointedly ignores the myth of anthropogenic global climate change is the only way we will ever be anywhere close to energy independence. And if we are energy-independent, we no longer have a national interest in the Middle East, and no longer have an excuse for being there. Practical, sensible and economically realistic energy policy is the only way we can extract ourselves from the Middle East’s problems without handing control of all that oil to Muslim fundie whackjobs.

DNA July 8, 2009 at 1:50 pm

Klint,

You’re aware that when you talk about “dependence on foreign oil,” you reveal yourself to be an economic ignoramus, yes?

Walt D. July 8, 2009 at 2:01 pm

Regarding transmission loss, fundamentalist is correct. The (best) 500kv DC lines lose about 1% for every 200 miles. Even the most efficient AC lines lose 1% for every 100 miles. The lower 250kv AC lines lose even more.
The major problem with wind is that it blows hardest at night, and there is no efficient way to store it so that it can be re-delivered during the day. Solar has an even worse problem – you get no power between 6:00pm and 9:00 am. It is also seasonal. (There are days of uninterrupted sunshine in Montreal in the winter. However, the snow does not melt. )
People may believe that Barack Obama can walk on water. However, nobody has yet claimed that he can make the sun shine at night.

fundamentalist July 8, 2009 at 2:05 pm

Russ: “Why would the utility companies use AC to transmit their power, if DC is more efficient?”

I don’t know. I’m not an electrical engineer, although I play one on TV. All I know is what electrical engineers told me at a utility I used to work for. They had considered locating a coal-fired generator at the mine site in Wyoming and transmitting the power to Oklahoma, but that would require DC lines they told me because DC loses less power over long distances. It could be that the loss in heat generation as electricity travels through the lines is less with DC than with AC because the current doesn’t reverse direction 60 times per second as it does with AC.

Texas isn’t tied to the national AC power grid except through DC lines. AC may be more efficient at running things, especially motors, but it doesn’t travel well.

Walt D. July 8, 2009 at 2:26 pm

Russ wrote : “Why would the utility companies use AC to transmit their power, if DC is more efficient?”
I can only speak for California. The two acronyms are
NIMBY “not in my back yard”, and BANANA “build absolutely nothing anywhere near anything”. Utilities are well aware of the transmission losses from antiquated power lines. However, plans to replace them get thwarted by environmental lobbyist. I recall a project in the East Bay 680 corridor. People did not want high voltage pylons – they were convinced that they cause cancer. So PG&E offered to put in underground cables. This was objected to on the grounds that it would disturb the habitat of some indigenous species (of what i can not remember).

As a result there is (I think) only one 500kV DC line in California (running from Sylmar to the Oregon border. It is owned, I think, by LAPWD). This problem is not only confined to transmission lines but to power plants.

Klint July 8, 2009 at 2:30 pm

DNA,

I wasn’t aware. I’m not a student of economics. What am I missing?

Mike D. July 8, 2009 at 2:30 pm

Bill
“You mean, you think you know more than T. Boone Pickens?”
Why not? You certainly know more than Paul Krugman!

Russ July 8, 2009 at 2:52 pm

Well, I did get a degree in electrical engineering once upon a time, but I’m not a power engineer, so I’m not sure. It’s certainly possible that the technology has changed enough since Edison’s day that DC distribution is more feasible than AC now.

At any rate, it doesn’t matter economically. A scheme that requires that we completely rebuild our power distrubution system has a few kinks in it, I would say. Although Keynesians would say that that would stimulate the economy. Broken windows, anyone?

As for high voltage DC lines causing cancer; wow. If I recall correctly, only a change in voltage causes a conductor to generate EM radiation. Since the voltage of DC doesn’t vary (except when turned on and off, and for relatively minor fluctuations in power levels), it wouldn’t produce as much EM radiation as AC lines do. Or so I would think.

Justin P July 8, 2009 at 7:44 pm

The Picken’s Plan failed thanks to competitive markets.

Don’t knock his plan because it was “Central Planning.” Almost all business plans can be labeled “central planning.” It the markets that will dictate whether to not the “plan” will fail or succeed.
Pickens could have very well have worked but thankfully market forces dictate it is epic fail!

That said I’m all for Nuclear.

Jeremy July 8, 2009 at 8:23 pm

Pickens plan was nothing more than an attempt to shift energy subsidies away from oil companies and into his pockets instead. Given the recent “investment” the government has made in securing “our” oil in the Mid-East (via the Iraq War), I doubt Pickens had a chance.

I’m entirely pro-market when it comes to energy. That said, I think the evidence points to a free market ultimately choosing nuclear, but I would not be upset if it did not. The anti-nuclear hysteria is really a childish paranoia and it’s starting to irritate me.

P.M.Lawrence July 8, 2009 at 9:12 pm

There’s been a fair bit of discussion of the technologies at http://nucleargreen.blogspot.com, most recently here and here. Also, http://thoriumenergy.blogspot.com has this.

D Frank Robinson July 8, 2009 at 9:46 pm

Setting aside the rent-seeking of the Picken’s Plan, wind power is not inherently economically unfeasible. Wind is analogous to gold deposits. You can’t find gold digging where it ain’t or wind where it ain’t blowing. However, there are places in North America where the wind blows rather consistently – I happen to live in one such place – Oklahoma.

The problem is that wind supply is not located where electrical power demand is located. Transmission lines carry so much regulatory baggage that they are not economical. If the places where demand is do not relocate to where the wind supply is located there is no (unsubsidized) market.

Otherwise, it would seem that until some technological means of storing energy into a very efficient portable form is found, wind will be a very small niche market.

Much the same can be said for geothermal electric power generation as well.

This may be feasible: http://en.wikipedia.org/wiki/Galena_Nuclear_Power_Plant

David Janello July 9, 2009 at 8:02 am

To contradict all of the previous posts, The Pickens Plan is alive and well.

Whoever buys the surplus wind generators and leases will be buying them at a lower price than Pickens did.

And if the transmission costs are too high, the new lease holders and generator owners have the option of not transmitting the power at all. Google relocates data centers next to hydro-electric plants to cut its electric bill, there is no reason other niche customers won’t relocate their facilities also, if it saves money.

KP July 10, 2009 at 10:13 am

Russ: “Umm…. Why would the utility companies use AC to transmit their power, if DC is more efficient? AC is used because AC power can easily be tranformed to high voltage, low current form, which suffers less transmission power loss given practical conductors. This was determined back in the days of Edison, Westinghouse and Tesla.”

DC transmission is economically feasible in long transmission lengths, the I^2*R loses from AC lines causes great loses comparable to DC lines. The difference is negligible in smaller runs.

In order to use HVDC transmission lines you need to convert the AC out of a generation facility to DC. This technology(converter) was created in the 1930s after Edison and Tesla great feud.

However, this technology is expensive and not used on shorter distances because the cost impact would be too great.

HVDC lines are currently used in multiple areas in this country, such as Niagra Falls and connecting different grids such as connecting to Texas(where Pickens wanted to have his wind farm) since they are not part of the national electric grid.

twarn August 4, 2010 at 5:56 pm

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