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Coal and the Future

Coal and the Future

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Published by jfallows1957

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Published by: jfallows1957 on Nov 15, 2010
Copyright:Attribution Non-commercial


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Quick background which, BTW, does not make me right about any of my opinions. But you have to admit, I have seen a pretty stretch of the electric utility industry, covering 75 years. I fell into the power industry as a law firm associate, then moved into being a hybrid legal/ technology consultant, working in the industry for over 2 decadesduring the nuclear build-out, rate cases (covering much else, thatdefines the time frame). In that time I spent a over a year (with somefellow attorneys) dredging up, studying and writing analytical paperson corporate decision-making going back to the 1930's, worked onrate and anti-trust cases which involved study (and some directcontact with executives), and worked closelly with (and in manycases socialized with) a generation of persons now dominant in thepower business here in NC include the current CEO of ProgressEnergy, one of Jim Rogers's chief lieutenants at Duke Energy (also alaw school classmate), the current and 2 past chairs of the utilitiescommission (current was also a law school classmate), the head of the utilities public staff, etc., etc. Between the mid-1970s and 1990, Iconsulted for Texas Utilities, CP&L (now Progress) and Duke here inNC, SCE&G and Virginia Power, on plant and rate issues. Don't getme wrong, I was not a big shot, I was a functionary, first a law firmassociate, then a technology consultant. I was Zelig. But I saw all of it up close, and I know how they think.
My apologies for the length as well, but I think you'll see why. This isobviously pretty much off the top of my head; I have cited stats andother references from memory, rather than checking as if I'd writtenan article. I'm pretty sure that they are correct, or close.
I believe that the coal article misses a major probable developmentthat will greatly alter the medium term future of power consumption,and thus the demand for central station generation, and thus, coal.The article takes the central station, baseload model of power requirements, and thus generation, as a given. I believe that will notbe the case.
The fundamental question relates to whether the central station /baseload model, where power is generated in bulk at central stationplants, and transported out to millions of customers over 1,000s of miles of lines is the desired growth mode. Big plant generation will
play a huge role for decades, no matter what direction we take, but isit where we want to go?
 An anecdote and simplistic example. A neighbor was in the autoresale business and so required a simple car lot. He rented the land,set up a basic modular structure, lights, etc. The facility was open for maybe 20-25 hours / week. At some point, he became frustratedwith dealing with the local power company, and did the following:
- obtained several partly damaged but usable solar panels surplusfrom the state
- took a pile of car batteries (which he has, because of this line of work)
- linked the two together.
- plugged in his junction box.
 And voila, an off the grid power solution. It wasn't pretty. He (of course) had to turn everything off each day when he leaves. He hadno backup through link to the grid or otherwise. Most people couldn'tcobble such a system together, and most people don't have 25 car batteries lying around. Which are ridiculously inefficient for thispurpose to begin with. And yet, it worked. Tweaked with better 'stuff'at a few points? It represents at least a major part of the future, andan exemplar of switching away from sole reliance on central stationpower.
First, a comparison with the central station model. Let's look at asimplified version of the central station model, coal-fired variety. Let'salso leave aside all the necessary precursors (dig giant holes, buyvery expensive equipment, train a bunch of guys, go through veryexpensive licensing, build railroads) and get to the day to day.
1 - dig coal
2 - bring coal to surface
3 - put coal on train
4 ± deliver coal to power plant
5 - stuff coal into generating facility
± burn coal
7 - do all that sequestering stuff, usually not locally
8 - transport power through lines
9 - switch in neighborhood of use
10 - divert to house or business
11 - turn on electric-powered device and use
12 - user pays utility at the end of the month
Now look at the 'eccentric man's car lot' model, again, leaving asidethe startup items.
1 - turn on electric-powered device and use
Puts the car lot model in perspective, doesn't it? Who wouldn't favor that approach, all other things being equal?
Let me be clear where I'm going with this. At some point in the notridiculously long future (certainly well before 2050), the notion thatelectricity generated 200 miles away is the preferred power sourcewill be thought absurd for most usages. Sure, the burn and ship (or nuke and ship) method will be with us for a long time; there are someapplications for which the critical mass of power is simply too large for current technologies other than large central station (the steel plant,say). Even those will, however, diminish on any number of fronts.
The downward slope of demand for central station will also beenabled by continued efficiency gains of the average appliance,computer, machine, etc., as well as serious emphasis on basics likeinsulation (both technical and just plain old technique). Thatdownward draw will also have further enabled the distributed,generate it near where you use it, model, and in turn have provided apositive loop incentive for it.
I know that, as you say, many of the computing analogies don't apply;power generation is subject to no Moore's law, turbines will only getincrementally more efficient, all that. But the basic model (central vs.distributed, mainframe vs. PC)? That analogy applies in spades.The certainty that central station baseload (certainly focusing on coal,but including nukes and large hydro) will continue to dominate isclosely analogous to the attitude held by all the smart people in

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