CleanTechnica is the #1 cleantech-focused
website
 in the world. Subscribe today!


Clean Power ge logo yellow

Published on June 19th, 2011 | by Guest Contributor

4

General Electric Wants to Sell You Everything

Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

June 19th, 2011 by  

ge logo yellow

Another totally superb guest post from Chris Varrone, Founder & President of Riverview Consulting and former Chief Strategist, Technology R&D at Vestas Wind Systems.

Paul Browning, Vice President at General Electric, came out this past week saying that a move to natural gas and renewable energy will be the global long-term trend.

At one level, this is a rather uncontroversial statement. The major options for electricity generation include coal, natural gas, nuclear and renewable energy options like wind, solar, hydro and biomass.

Dirty Coal: Given that coal’s impact on human health and the environment costs many times the value of the electricity, its future is dim indeed. In fact, very little new coal capacity has come on line in Europe or the United States in the past decade. AEP, one of the biggest US utilities, announced last week that it would shut down 25% of its coal fleet (about 6,000 MW) EARLY due to environmental challenges.

Unpopular Nuclear: Given that the last nuclear power plant that actually got built was permitted in 1973, the nuclear business in the US has been stagnant for generations. But it was set for a self-proclaimed renaissance until the Fukushima disaster earlier this year. Now few are betting on any renaissance in the US — and European countries like Germany, Switzerland and Italy are shutting down their fleet and/or banning the construction of any new nukes.

So, saying that gas and renewable energy will squeeze out coal and nuclear is in one sense stating the obvious.

The controversy comes in that Mr. Browning is the Vice President of Thermal Products for GE’s Power and Water Division. So, by touting Natural Gas, he is implicitly promoting his own product — possibly at the expense of his colleagues.

You see, GE makes nuclear reactors; they have a solar business; they make hydroelectric equipment; they are deeply involved with the coal industry, both “clean” and “dirty” kinds; and they are the largest American manufacturer of wind turbines as well.

The fact is that GE makes just about everything, so it makes it very difficult for a GE executive to say anything without causing some kind of rift internally. For example, Browning cites data on Levelized Cost of Energy (LCOE) of wind power:

“’The levelized cost (LCOE) of onshore wind was around 9-10 U.S. cents per kilowatt hour (kWh),’ said Browning, ‘or about double the cost of the cheapest form of coal-fired power generation at 5 cents, and also above 6 cents for U.S. natural gas and 7-8 cents for nuclear.’”

While Browning did not cite a source for these numbers, LCOE of 9 to 10 c/kWh would come as a surprise to people in the wind business, where prices have fallen steeply in the past two years. For example, in 2011, several Power Purchase Agreements in the Midwest have been signed at 3.0 to 3.5 c/kWh. Even if one adds back the Federal subsidy of 2.2 c/kWh, this still leaves a true LCOE of 5.2 to 5.7 c/kWh.

This is about half the figure quoted by Browning.

One wonders what equipment was used to produce these highly efficient results? Perhaps the projects in the Midwest are using cut-rate, Chinese turbines?

The equipment used is the 1.6MW turbine from GE Wind.

Meanwhile, Browning also “disses” his colleagues at GE Nuclear, leaving them out of his “global megatrend.” But not everyone at GE would likely agree. The GE Nuclear website argues strongly that nuclear energy is “clean,” and should be included in a National Clean Energy Standard, just like wind, solar and the others. So, it’s part of the megatrend, too!

One wonders, Isn’t nuclear energy clean — after all, it does not emit carbon dioxide or other greenhouse gases?

Perhaps someday nuclear will be clean, but let’s be clear: nuclear is NOT clean today. “Clean” is not the same thing as “non-carbon-emitting.” The nuclear industry would have a huge task to “clean up” its supply chain from mining through waste disposal, and by the time one gets done with that task, it is not credible to think that 7-8 cents per kWh would cover it.

In fact, that figure seems far from public sources: the EIA (normally a pro-nuclear bunch) in its Annual Energy Outlook 2011 gives a figure of 11.7 c/kWh for nuclear (excluding transmission cost; for plants entering service in 2016). If one were to include all the externalities for nuclear — waste disposal, financing, insurance, risk mitigation by local communities — the costs would be much higher.

For example, nuclear cannot afford its own insurance: the cost of such insurance in private markets would alone make this form of energy uneconomic.

Given costly bailouts of banks and profligate neighboring countries, the citizens of the US and Europe are not in the mood to bailout electric utilities who are enamored with the cheap-nuclear dreams of the 1960s. Quite the opposite.

Maybe nuclear is not part of the clean mega-trend after all.

So, there may be some flame mail flying about the halls of GE this week, arguing over who said what, and who opened what can of worms.

I am told that the GE energy-related businesses get together several times a year, as families do at holidays. No doubt there will be the occasional awkward pause across the corporate equivalent of the Thanksgiving Dinner table this year. But it’s not the fault of any one executive: this is just the natural result of GE wanting to sell you everything.

More post from Chris Varrone on CleanTechnica:

  1. Why Wind Intermittency is NOT a Big Deal
  2. Natural Gas Complements Wind & Solar — Or Does It?

Photo via mag3737

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.



Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

Tags: , , , , , , , , ,


About the Author



  • Pingback: GE & JP Morgan Invest $225 Million in 662.5-MW Capricorn Ridge Wind Farm - CleanTechnica

  • Bob Wallace

    The price of wind already installed is around a nickel, but the LCOE of wind yet uninstalled is likely to be higher.  The first wind farms were generally installed close to existing transmission lines.  The good wind sites close to transmission lines are sort of used up and new wind farms are going to require more expensive transmission costs (part of the LCOE formula).

    That said, seems to me that the LCOE calculation typically made is flawed.  It’s common to use a twenty year lifetime for turbines/towers when, in fact, we should expect far longer energy outputs.  The fixed costs should be spread over more years, at least 30.

    The 20 year expected lifetime seems to have come from engineering estimates that in some soil types towers and foundations could reach their useful lifetime in about 20 years.  Stress fracturing would become a problem.  But that’s likely for only a few towers/location.  Currently 30 year old turbines at Altamont Pass are being replaced.  The 30 year old turbines are still working fine, but they are being replaced by taller, larger swept area towers/turbines which will reach up into stronger winds.

    Since turbines manufactured 30 years ago are still functioning one would expect new tech turbines to last that long or longer.

    So somewhere between a nickle and a dime would be my guess.  Still cheaper than coal, gas or nuclear if one adds in all subsidies and hidden costs.

    • Ed_B

      Please produce your data to show 5 cents per kw-hr delivered.

    • Anonymous

      “The fixed costs should be spread over more years, at least 30.”

      Thanks for this. This is something that drives me crazy. Should definitely be more than 20 years, at least 30..

Back to Top ↑