Streetwise Professor

June 29, 2021

Betting on Time Inconsistency: Glencore Will Profit When Reality Intrudes on Renewables Reveries

Filed under: Climate Change,Economics,Energy,Politics,Regulation — cpirrong @ 6:01 pm

In his swan song at Glencore, the soon to retire Ivan Glasenberg doubled down on coal:

In what’s likely to be the final deal announced by outgoing Chief Executive Officer Ivan Glasenberg, Glencore agreed to buy stakes owned by BHP Group and Anglo American Plc in the Cerrejon thermal coal mine for about $588 million, subject to purchase price adjustments.

Glencore is filling a void left by two mining giants:

The sale completes Anglo’s retreat from thermal coal and extends similar efforts by BHP, amid investor pressure. However, Glencore has committed to run its coal mines for another 30 years, potentially allowing it to profit as rivals retreat. It’s already the biggest shipper of the fuel, and gaining full control of Cerrejon gives the company even more exposure just as prices trade at the highest level in years, buoyed by strong demand as the global economy rebounds.

In my opinion, this is a very canny contrarian bet. The panicked flight from coal by the Anglos and BHPs and others of the world is directly attributable to political and policy pressure. Hydrocarbons bad. Renewables good. Hydrocarbon companies are evil. You will be punished you carbon spewing bastards! Your CEOs will be snubbed by righteous people. Oh Noes!

But these policies are predicated on a collective delusion about renewables. Bloomberg can preach all it wants about how renewables are as efficient as conventional generation, but the fact is and will remain that dispatchable, reliable, continuous conventional generation, producing power from cheaply stored chemical energy, will remain much cheaper that non-dispatchable, intermittent, unreliable renewables that will have to rely on expensive battery storage. Bloomberg’s “levelized cost” metric is total bullshit because it leaves out all of the costs associated with reliability, transmission, and intermittency–details, details!

Renewables will never be able to handle current electricity demand at reasonable cost, but policymakers in the grip of the delusion are adding to electricity demand by forcing the electrification of other energy consumption, including transportation and home heating and cooking.

And it is almost certain that Glasenberg recognizes these delusions for what they are, and knows that in five to ten years time reality will rear its ugly head–recognition of reality can be postponed, but not forever. And Glasenberg recognizes when that reckoning comes, and electricity costs spike and reliability plunges, countries around the world will come begging for dependable electricity sources. And thus, they will come begging to Glencore for its coal.

The payoff will be all the bigger because Anglo, BHP, and others will not invest, leaving a capacity void. Price will rise to ration the limited supply.

Current government energy policies around the world are not time consistent. Political coercion to achieve a utopian outcome will result in more costly and less reliable energy that will not be politically sustainable. Ivan Glasenberg recognizes that time inconsistency, and as his parting gift to Glencore’s shareholders–and the world, frankly, when it comes to his senses–is an investment that will pay off handsomely when reality intrudes on renewables reveries.

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27 Comments »

  1. I’ve learned to ignore any mention of levelised cost of energy – I don’t think that a truly objective assessment is even possible. Everybody seems to have an agenda when they calculate it.

    Comment by HibernoFrog — June 30, 2021 @ 3:43 am

  2. Prof is conveniently leaving out Glencore re-opening the Mutanda mine, the world’s largest mine for cobalt. A huge bet on batteries and electrification of transport.

    Comment by [email protected] — June 30, 2021 @ 4:32 am

  3. It’s not renewables that have killed coal generation – it’s natural gas.

    Natural gas is more dispatchable, cleaner and cheaper – way way cheaper. Coal has been in relative decline globally for 10 or 15 years which coincides with the explosion of NG generation.

    Nobody would willingly build a coal fired electricity plant these days – the only reason it survives at all is because of central planning (China). In competitive markets, coal is dead.

    It’s just economics and is nothing new – a bit like the way coal effectively took over from nuclear in the late 80s on the basis of price.

    And in practice you don’t need huge banks of batteries to support significant amount of renewables – nearly 25% of the electricity generated in the US (and nearly 50% in some European countries) comes from renewables and yet the amount of deployed battery storage remains minuscule. The big enabler of renewables isn’t batteries but natural gas and more grid interconnects and electricity trading.

    90% of the global new electricity generation capacity added in 2020 was renewables. They’re not winning because of hippies and the like – they’re winning because they’re so cheap. Once things become cheap enough (wind turbines and PV panels are about one tenth the price they were 10 years ago and this price decline is continuing) – it’s amazing how engineering can work around limitations. Wind turbines are now so cheap, you can build 3 times the capacity of coal and simply use derating – idling the turbines – when wholesale prices are low with little effect on investment return – as turbine life span is a function of the work they do, not their age.

    Comment by derriz — June 30, 2021 @ 11:28 am

  4. Glencore has read the Energy Information Administration’s outlook for energy demand to 2050 and this is what is projects for coal:

    “Coal use is projected to decline until the 2030s as regions replace coal with natural gas and renewables in electricity generation as a result of both cost and policy drivers. In the 2040s, coal use increases as a
    result of increased industrial usage and rising use in electric power generation in non-OECD Asia excluding China.”

    Whether, given the huge build in coal powered electricity generation in parts of the world is a moot point, but it definitely not expected to shrink by 2050 if you look at the graph. It’s percentage contribution will fall, maybe, but in volume terms, nah. Coal demand will be just as strong in 2050, even higher, than in 2021. I also noted an interesting article about just how coal intensive cement making is. I’d no idea. And renewable infrastructure such as wind farms require huge quantities of cement, not to mention steel and other energy intensive materials.

    Coal dead? Well maybe in those jurisdictions which ban it. But elsewhere, no. Will Australia ban coal exports? Well, that is proving politically difficult so far. If anything, the country wants to ramp up output to meet current surging demand.

    Hence, Glencore’s bargain buying strategy where it can simply ignore or get around climate change led finance and the rest is smart. For commentators such as the FT’s John Dizard, the follies of energy policy provide ample opportunity to make a mint.

    Comment by Peter Moles — June 30, 2021 @ 11:38 am

  5. Long HNRG

    Comment by Joe Walker — June 30, 2021 @ 8:07 pm

  6. Maybe Glencore is also betting on CCS and the hydrogen economy saving their asses, along with much of the oil & coal industry?

    @derriz. Much good work is also being done in the field of electrofuels, another potentially game changing string to the renewables bow. No need for derating or curtailment when this is rolled out.

    PS I’d have thought Pat would have chipped in on this, his most favourite of pet subjects. Maybe the most definitely not anthropogenically-induced heatwave in NorCal and beyond has melted his tinfoil helmet?

    Comment by David Mercer — July 1, 2021 @ 3:13 am

  7. What trade journals (or information sources) does everybody read to know what is really going on with energy?

    90% of what is written about energy on the web is flat our wrong.

    Comment by Tom Henderson — July 1, 2021 @ 8:15 am

  8. @3 derriz — “The big enabler of renewables isn’t batteries but natural gas…

    And so what’s cheaper — solar/wind plus the necessary 24/7 spinning natural gas back-up, or a natural gas plant alone supplying power 24/7? Think hard, now.

    @6 David Mercer Electrofuels: “Electrofuels bypass photosynthesis altogether by utilizing microorganisms that are self-reliant and don’t need solar energy to grow or produce biofuels. These microorganisms can directly use energy from electricity and chemical compounds like hydrogen to produce liquid fuels from carbon dioxide (CO2). (my bold)”

    So says ARPA: https://www.arpa-e.energy.gov/technologies/programs/electrofuels

    I can forgive you for knowing nothing of the 2nd Law of Thermodynamics. But those guys? Never.

    Where do you think the electricity and hydrogen come from, David? Take a wild guess.

    God, it’s incredible. And you accuse me of wearing a tinfoil helmet. Too fucking funny.

    Comment by Pat Frank — July 1, 2021 @ 11:03 am

  9. @Pat You do know a quick, half-assed Google search doesn’t make you an expert all of sudden, right? Why don’t you widen your search to include the likes of solar fuels, P2X, artificial photosynthesis, DAC etc and see the depth and breadth of research underway across the globe. A whole world of possibilities which you apparently are unaware of – astonishing, given your background (although I guess your helmet’s integral blinkers don’t permit you much of a sideview).

    Comment by David Mercer — July 1, 2021 @ 1:29 pm

  10. @9 David — they all require energy to make fuels, David.

    Entropy requires that the energy out is always less than the energy in. QED for your side, where “D” in your case also means disaster.

    These people are all subsidy farmers. None of their “solutions” are economically sound as stand-alone.

    Unless you want to struggle in an impoverished economy, which I doubt. Like your masters, you likely want to live in comfort while your inferiors (the robotniki, remember?) live in soul-saving poverty. Their poverty, your soul-salvation. Admirable ethics, that.

    Answer the question, David. Where do the hydrogen and electricity come from?

    Suppose you wanted to use photosynthesis to produce the 123 billion gallons of gasoline (petrol, to you) that Americans use per year. The US hasn’t the land area to get that from bio-fuel farms.

    So, how many gazillion square miles of the south Pacific would you have to cover with engineered algae to get that yield? How will you collect and transport the crude product? What happens to marine ecology if the sea surface is covered with bio-fuel algae?

    Put on the tinfoil helmet you know so much about, David. Maybe space-aliens are broadcasting the solution right now!

    And the frosting on the idiocy is that it’s all for nothing!

    Comment by Pat Frank — July 1, 2021 @ 2:32 pm

  11. @Pat: If you’d bothered to check you’d have realised that the systems and technologies I’m referring too are primarily inorganic in nature (e.g. many and varied photochemical systems, amongst others). Algal biofuels are something else completely. A schoolboy error.

    As for the technology you referred to and your daft question, well duh!, I guess the hydrogen comes from that well known and rather abundant source, water, and electricity from otherwise curtailed renewables, which is kind of the point. These techs offer another form of storage, above and beyond batteries or whatever, but instead providing high utility, “drop-in” synthetic chemical fuels. Its really not that hard a concept to grasp, even for a molecular chemist or whatever.

    You really ought to get up to speed on this stuff – it must be one of the hottest areas of research (along with batteries). Lots of opportunities and luvverly funding, who knows, maybe even a Nobel Prize for whoever cracks it…

    Comment by David Mercer — July 1, 2021 @ 4:13 pm

  12. @Pat Frank.

    Renewables are cheaper even when they require support in the form of NG peaker plants and grid interconnects. And of course thermal plants also require redundancy and backup for scheduled maintenance, refurb, etc. and unsheduled downtime. If you watch any electricity market, you’d be surprised how much down time thermal electricity plants experience.

    The calculation (“value” or LACE divided by LCOE) that proves this is too convoluted to get into here. LCOE is fairly trivial to calculate or model but the LACE component is highly dependent on local conditions – requiring data like like the current generation mix, the state of the grid, the availability of storage and a model of spot wholesale prices.

    Easiest to just accept what the markets are saying. And here the message is clear; 90% of the global electricity generation capacity added last year was renewables and it looks like it’s going to continue like this for quite a few years. It’s happening everywhere – from Texas to Sweden, the oil states of the ME to China. This won’t continue indefinitely – as the intermittent renewables share increase, LACE falls making further renewables less economic but this isn’t an issue until you get to 60%+ renewables.

    It reminds me somewhat of the scoffing articles of how limited micro-computers were compared to mainframes from the 70s and 80s. In fact they were 100% right – micros were a joke and couldn’t scratch the capabilities of big iron at the time. The authors’ blind spot was the most fundament feature – price. It’s amazing how technical limitations become irrelevant once price drops low enough.

    That price drop has happened for onshore wind and solar. The inflection point occurred about 3 or 4 years ago. And the price drops are continuing – 5% a year for wind turbines, 10% for solar PV panels. I’m particularly bullish on solar, given we’re talking about silicon based electronics – a tech with 70 years of history of continual price declines. Electrical energy isn’t currently cheap to store but if renewables make it so cheap to generate, it doesn’t really matter that much.

    Comment by derriz — July 1, 2021 @ 4:41 pm

  13. @11 David any inorganic artificial photosynthesis used for national power will require an enormous surface area for exposure to the sun. It solves no problem for you. The south Pacific provides the only space large enough.

    Here is Stanford’s current diagnosis of the state of the art: “While current artificial photosynthesis methods are far less efficient than the natural process, there has been continual progress in the field.

    No inorganic system has left the lab.

    Engineered algae are under development, are more efficient than inorganic systems and are likely to remain so for the foreseeable future, and aren’t so school boy after all, are they.

    Electricity from intermittent unreliable wind and solar is it? And hydrogen from water splitting that remains highly inefficient (~10% efficiency) even after 40 years of research? Suppose you test life at that level for us and report back. If you survive. None of which solves your conflict with entropy.

    @12 derriz, “Renewables are cheaper even when they require support in the form of NG peaker plants and grid interconnects. … It reminds me somewhat of the scoffing articles …

    And on it goes, all unsourced. I’ll stop scoffing, derriz, when your renewables deliver 24/7/365 power cheaply and unsubsidized. Until then, it’s all just blah, blah, blah.

    And here’s a prediction: it’ll remain blah, blah, blah, and if your renewables (sic) are forced into large-scale installation they will produce a train wreck.

    Comment by Pat Frank — July 1, 2021 @ 5:35 pm

  14. @Pat Frank,

    I’m not sure what sources you want me to provide?

    You’re surely not contesting the fact that the renewables share of global new generation capacity was over 80% in 2020? That the trend is almost a straight line up starting in 2000 (15%)?

    Or that this aggregate decision making process, across countries, cultures, political outlooks (Texas – the early adapter of renewables?), climates, geographies, etc. indicates that a massive shift in purchasing preferences in favour of wind and solar has occurred and is getting more pronounced?

    Or that countries have managed to incorporate significant amounts of intermittent generation capacity into their grids without producing “train wrecks”?

    Or that PV panel prices and wind turbine prices have dropped by 90% and 80% respectively in the last decade?

    These are simple facts that are so easy to source (a few seconds of googling), I’m not sure why you want me to provide links.

    And you dismiss my unsourced claims but your contribution is a completely unsourced and unfalsiable prediction. Why make a prediction when there are numerous countries which could be used to provide the empirical evidence of what happens wholesale prices and grid reliability when you add considerable intermittent sources? Luckily this is a very data rich area so if you’re “impending train wreck” theory had any validity, you should have no problem showing any evidence for it.

    But if you want to stick to your prediction and ignore existing empirical evidence, I suggest we set up a “long bet” on one of those escrow prediction websites. My prediction would be something along the lines that in 10 years time, the developed world will derive more than 50% of its electricity from renewable sources (solar, wind or hydro) and that inflation adjusted average wholesale electricity prices (ex. tax) will be no higher than they are today and that there will be no increase in load shedding incidents. A couple of thousand bucks?

    On the other hand you could look at actual data and what has happened to grids when this tech has been deployed at scale. And update your beliefs based on empirical evidence. That’s what I did and why I’m now no longer a renewables skeptic.

    @David Mercer, I’m actually pretty bearish on electofuels – they fill a niche where energy density is critical which is more or less just aviation at this stage. Outside of that I don’t see a big win. They offer something to help with the storage problem but are very inefficient in that role and really there’s nothing particularly simple about storing and transporting “green” hydrogen for example. I believe hydrogen vehicles are a technological cul-de-sac.

    Meanwhile the energy density, charge time and price of batteries continue to move in the right direction – albeit in fits and starts wrt energy density and charge time – while there’s been 95% drop in price for grid scale li-ion in a decade. In all other regards, electricity is superior – a direct connection to every home in the developed world, energy transportation literally at the speed of light and you can use the energy without air intakes and exhausts, it’s usable for everything that demands energy from phones to cars to domestic heating/cooling, etc.

    Electrofuels can’t hurt of course but I don’t see their development as a necessary condition for the rising domination of renewable/intermittents in electricity generation.

    I think what will happen is much simpler and more boring. Basically just more of the same – a massive expansion of PV solar and wind, more grid interconnects and some grid mergers, most coal and nuclear replaced/displaced by natural gas. A bit more grid-scale battery but mainly for stabilization and intra-day stuff instead of long term storage.

    You mention derating as if it were a bad thing somehow? If I finance the construction of a 1MW capacity wind turbine, I expect to extract roughly 80GWh from it over its lifetime – this number is largely independent of how frequently it’s in operation. There is enough variability in wholesale electricity prices, that I can make a better return by deciding to stretch out its life by turning it off when prices are low without the present value calculation killing the value of these future profits. This is a win for me (energy investor – better RoI) and a win for the grid (reducing the mismatch between supply and demand).

    If wind turbine and PV panels continue to drop in price at even half the rate they’ve fallen in the last decade, the battle is over – conventional thermal generation (whether fossil fuel or electrofuel) will become a tiny niche – given the choice of 15GW of wind versus 1GW of coal for the same investment, who is going to pick coal? The intermittency problem will just become irrelevant at these prices.

    I got a big surprise when I read that where I live, last year more than 40% of electricity consumed in 2020 came from renewables. I assumed without grid-scale batteries this would be impossible. And this is in a country with no real environmental credentials or political movement and occurred after liberalisation of the generation markets.

    The ironic thing is that this is happening because of: the liberalization of electricity markets, private investment, wholesale electricity auctions, technological advances and falling prices. As a free-marketeer I’m loving it. I think the prof. should also love it but unfortunately hating renewables has become part of an ideology/political identity in the US, it seems.

    Comment by derriz — July 2, 2021 @ 2:58 am

  15. @derriz: my comment was aimed more at curtailment than derating, TBH. Why simply dump the output when there’s no demand? Makes sense to try and do something useful with it (much discussion about demand incentives too).

    As for electrofuels, there is much to do and much being done. The Stanford review Pat linked actually paints quite an upbeat picture IMO. Shame he feels so ideologically hidebound not to admit this and allied fields of research could be useful.

    As you noted, the one sector which is betting big on electrofuels is aviation, as an eventual successor to the various SAF initiatives underway. United recently made an announcement on their ambitions.

    Your comment about adding generation capacity to overcome the storage issue was also made at a lecture I attended in Oxford (who have bet heavily on the next generation of PV – they still haven’t sold anything in quantity though – those cheeky Chinese just keep making stuff better and cheaper..).

    Comment by David Mercer — July 2, 2021 @ 3:56 am

  16. @David Mercer

    Regarding derating: since liberalization, most developed-world grids hold multiple auctions during the day where suppliers bid for capacity on the basis of price. It seems counter-intuitive to just “dump” the “free wind energy” but actually the it’s more stopping generation completely, which extends the life of the turbine. If I’m a private investor in a wind farm and I have the option of selling the output in a low demand period for $3/MWh, or stopping generation entirely, which avoids aging my turbines, and waiting to bid for a period when I can earn $15/MWh then I’ll chose the latter assuming the cost of my capital isn’t so high that waiting 35 years to collect all my income instead of 25 years is going to kill my RoI. It’s a peculiarity of wind turbines – the same reasoning doesn’t apply with PV panels as far as I know.

    Comment by derriz — July 2, 2021 @ 10:33 am

  17. @14 derriz, all the “renewables” installations you tout are subsidized by diverting tax monies from the productive economy. If the trend continues, the economy will become ever less productive and the tax money will eventually run out.

    All your costs of energy (LCOE, LACE and whatever else you like) rely on the expense of materials delivered by a fossil-fuel economy. An honest accounting is cost of energy using materials delivered by a wind-and-solar energy economy. Good luck with that.

    None of your pricings include an estimate of the ecological cost of the gigantic footprint imposed by your wind and solar installations, were they to supply 100% of energy.

    All of your proposed solutions rely on low-density energy sources. They’ll never be as efficient as fossil fuels. Your economics are built on a fantasy narrative.

    And, as there is no evidence whatever that CO2 emissions are impacting the climate, the entire ‘renewables’ effort is pointless. More than pointless — an enormous waste of money and resources.

    @15 David, you clearly do not understand the difference between experimental lab work and even an engineering model. I can’t tell you how many reports I’ve read of a ‘promising laboratory breakthrough,’ that ends up going nowhere. Pie-in-the-sky wide-eyed golly-gee will not warm homes or put bread on the table.

    Your “cheeky Chinese” employ slave labor. Does that figure into your appraisal?

    Comment by Pat Frank — July 2, 2021 @ 11:24 am

  18. Uh oh. When faith runs into reality. Everything is fine until peak demand… or those pesky fires in CA.

    https://www.newsweek.com/california-facing-power-crisis-frets-over-electric-car-charging-routines-1602755

    What is a good Tesla owner to do? How do you amortize the purchase subsidy?

    Comment by Vlad — July 2, 2021 @ 11:25 pm

  19. @Pat – you sound like the naysayers back in the day who said catalytic converters would never work on automobiles, said it could never be done, that they were unnecessary, that air quality was “just fine” blah blah. Yet here we are. And countless other developments ever since which have come to the fore, presumably miraculously to you. ​Honestly, you should have more faith in your profession and colleagues. PS I know all about the commercialization of lab tech.

    And you took the China bait! Quel surprise. The fact they have just so happen to have cornered the market in PV is at the heart of your opposition to this technology. It has nothing to do with the technology itself, and all to do with whose ball it is.

    I wouldn’t worry yourself too much about the tax Dollars running out. Successive administrations of both colours seem to have no problem adding to their supply to bail out banks, fight madly expensive and unnecessary wars, stop an economy from tanking as the result of a virus etc (not to mention propping up or seed funding all manner of industries). A few tens of billion for renewables is neither here nor there.

    Comment by David Mercer — July 3, 2021 @ 4:37 am

  20. @Pat Frank

    I’ve written nothing that suggests I care anything about dead birds, atmospheric CO2, electric vehicles or rare grass species suffering under the shadows of PV panels.

    My contention is simple – coal is dead for electricity generation given that natural gas capacity is half the price, much more flexible and far more reliable. And that wind turbines and solar PV panels are NOW so cheap that they are displacing conventional thermal generation facilities. And this process is happening because of prices and competition and not hippy activism or misplaced government intervention. And this process will not result in higher wholesale prices or less reliable grids.

    A grid electrical engineer told me recently that as far as he was concerned all sources of electricity are intermittent – they are just intermittent in different ways. A US coal plant on average experiences 1 hour downtime for every 6 hours of operation – most of it unscheduled. So to accommodate 1GW peak demand, 1GW of coal generation capacity is not enough, you also need to dedicate idling backup generation capacity unless you want guaranteed blackouts. Grid engineers have been dealing with this sort of intermittency forever – the same tools used to handle unscheduled thermal plant failure are used to handle the intermittent nature of solar and wind – specifically idling back-up (gas) plants, grid interconnections and hydro-storage. Thermal plant failure is almost purely random and in some way is more difficult to plan for – at least Solar is highly seasonal at different timescales, and wind is predictable up to the scale of weeks – so that you know well in advance that you’re screwed.

    Comment by derriz — July 3, 2021 @ 11:23 am

  21. @19 David, “you sound like the naysayers…

    Remember cold fusion, David? Sometimes naysayers are correct.

    You still have the problem of gigantic installation footprint and low energy density. Nothing, no technological improvement in efficiency, will change those realities. It’s a losing cause.

    The fact they have just so happen to have cornered the market in PV is at the heart of your opposition to this technology.

    No, it’s not. The technology itself is fine. The heart of my opposition is the destruction of reliable energy, the theft of tax monies, the willful depauperation of the middle class and poor, and the corruption of science and politics. None of which seems to bother you.

    Including, apparently, Chinese slave labor.

    Of course, the UK’s Muslim rape gangs don’t bother you either. Another example of the ‘skin-determines-culpability’ ethics of the left, apparently.

    It has nothing to do with the technology itself,…

    Yes, it does. The problem is the wholesale impositional misapplication of it.

    What do you know about commercialization of lab tech?

    Your litany of foolish expenses were paid by an energy-rich economy, David. With your ‘renewables,’ even that will be removed.

    And it’s all for nothing.

    Comment by Pat Frank — July 3, 2021 @ 11:41 am

  22. @20 derriz A little research …

    ++++++++++++++
    Hidden costs of ‘renewables:’ Operating ratio and cost of coal power generation

    Page 36, “Mills (2011) noted the growing capacity of renewable energy plants around the world and the effects of their intermittent and highly variable output on the operation of coal-fired plants. In the absence of sufficient large-scale electricity storage capability, coal (and gas) fired units … are required to deliver greatly varying output to enable the grid system to meet demand at all times. Henderson (2014) found that flexible operation adds thermal and mechanical fatigue stresses to the creep damage that occurs anyway with time in the pressure parts of a pulverised-coal-fired power plant. (my bold)”

    Page 42, “According to EPRI (2016), operating in these [ramping and load-following] modes can cause damage and incur costs, as such cycling duty can accelerate thermal fatigue, thermal expansion, fireside corrosion, and rotor bore cracking. Cycling units not designed for such operating modes can lead to more component failures, unplanned outages, increased heat rate, decreased revenue, and staff scheduling and training challenges. (my bold)”

    Page 46, “Operating a plant below its rated capacity typically reduces the efficiency of the entire process which is expressed by the part load efficiency. The decrease in efficiency increases the fuel usage and as such generation costs.

    According to Power magazine, the efficiency of coal-fired power plants is being negatively impacted by their use in load-following — that is, ramping up and down to meed the sudden shortfalls and spikes of wind and solar.

    Page 48: subsidies
    Table 6 Share of federal energy subsidies for the different electricity sources in the USA, 2013 (Yonk, 2016)
    Electricity_source___Subsidies_%____Generation_%___Subsidy Normalized to % Generation
    Coal________________6______________39__________________1
    Natural gas__________4______________28__________________0.9
    Nuclear____________10_____________19.4_________________3.4
    Solar______________27______________0.4_______________438.8
    Wind______________37_____________4.1_________________56.7
    Other*____________16______________9__________________11.6
    Total_____________100____________100
    *includes renewable and non-renewable sources

    New Coal-Fired Power Plant Performance and Cost Estimates (pdf)

    New supercritical coal fired plant: rated at 7880 full load hours per year. Equates to 10% downtime for maintenance and repair.
    ++++++++++++++
    Let’s summarize: wind and solar are intermittent and unreliable. They require 24/7 spinning mostly-coal fossil fuel load-following back-up.

    Power ramping decreases the efficiency of fossil-fuel plants increasing the CO2 and fly-ash (coal) per BTU generated.

    Load-following operation causes increased wear to fossil fuel plants, increasing operating expense, decreasing life-time, and increasing unscheduled downtime.

    Solar and wind are enormously subsidized; likely accounting for their entire profit-margin. Let’s see, that would be misplaced government intervention, wouldn’t it.

    Bottom line: renewables (so-called) are parasitic.

    Comment by Pat Frank — July 3, 2021 @ 5:01 pm

  23. Also, let’s not forget, it’s all for nothing.

    Comment by Pat Frank — July 3, 2021 @ 5:02 pm

  24. Speaking – far from dispassionately and even further from impartially – as a Glencore shareholder, I ain’t complaining.
    Ivan’s timing hasn’t always been perfect but he’s a very shrewd fellow. I voted with my modest pile of pounds (and pence).

    See, Prof and y’all, I ain’t so simple after all 🙂

    Comment by Simple Simon — July 4, 2021 @ 10:08 am

  25. @Pat. Wow, a whole 2 citations, one of which doesn’t seem totally relevant. Big league or what? Sounds to me like this went down like the proverbial fart in a spacesuit. Gotta love Francess Thomas’s comment: “Then from that day, our relationship was stronger than as it were before, by the help of a spell caster. He also cures Herpes.” LMAO. You must be so proud.

    All for nothing indeed.

    Comment by David Mercer — July 4, 2021 @ 10:32 am

  26. @25 David — three citations, all relevant, their sum demonstrating your factual vacuity.

    And your reply: argument from the sneer. Your standard fall-back when all else fails.

    Comment by Pat Frank — July 4, 2021 @ 11:12 am

  27. This just in from Reuters.

    https://www.bloomberg.com/news/articles/2021-07-08/coal-output-in-u-s-seen-rising-most-since-1990-on-global-demand

    Seems Glencore got their timing perfect 🙂

    Comment by Peter Moles — July 9, 2021 @ 2:41 am

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