Why I see energy supplies as I do. I remember gasoline rationing.

Tags: Solar, Wind, Grid

Image Source: Grok

I was in the commenting section on a blog and I was challenged on several points of my view of energy, one point at a time. I wrote out this response. It includes some of my personal history starting with the oil embargo of 1973.

I wrote:

Here is my view of things.
- I was on the receiving end of an embargo in 1973. It hurt me personally. I was a healthy college student. There were vulnerable people who were hurt worse.
- We all in the US are now on the receiving end of an embargo of rare earths. It hurts. We are trying to be independent in rare earths. I see a direct analogy to being independent of energy suppliers. The sun and wind have no suppliers who can cause us a shortage.
- Depending on suppliers makes you dependent. You give up freedom. Their actual shortages are your shortages. Their imposed shortages on you are your shortages.
- There are things you can do to mitigate the damage.
- I think we should do them.
- When it comes to energy, I have been doing calculations on solar photovoltaics every once in while for over 30 years. Rarely would a customer say the package of hard savings and soft benefits were worthwhile. The prices changed but the decision was always the same. I agreed - in fact that was my advice, just buy electricity from the utility company and buy a diesel backup generator for outages. The return on your investment is below your hurdle rate so far that it would be irresponsible to invest that way as a financial decision.
- One day in 2017, about 10 years ago, I was working in my company's Salt Lake City office and someone who was watching the wholesale price of electricity saw it go negative. He said, "Hey California is paying us to take their electricity!" Wow. My world changed. Energy was now abundant, not scarce. The Energy Crisis was over. It started in the 1970s and ended in the 2010s, about 40 years later. Fuel-cost-free solar power pushed the price negative. Fuel-fed power plants have never done that.
- One day in 2025 at my house in Houston I accepted the offer of a door-to-door solar salesman to calculate a preliminary pro forma financial analysis. I got my utility bills, he ran them through his program, and I found I could break even. My roof was competitive with the entire ERCOT grid. Wow. That meant we were at a turning point. It was possible for me to be a competitor to the utility company. I did not buy any solar panels. My bills are low with Texas' below-average rates and I think 8 years is the upper limit for me to stay in this house.
- I am in touch with a man younger than me whose house is about 20 miles from mine, in ERCOT, who has solar panels on his roof, a battery in his garage, a bigger battery in his car, a contract with a Retail Electricity Provider to buy his excess kWh and a contract with a Virtual Power Plant to buy kW from him at their request. It is all automated but it was a lot of work to get the controls from different manufacturers to communicate with one another. He spent about $40,000 on the solar panels and garage battery. He can afford it, he paid cash, and he sees it as buying several years worth of electricity in advance. He leased the car when it was time to move on from his oldest car. He has not paid a utility bill in over a year since he got this all set up. His motivation is in soft benefits. It was for outage protection after the 2021 freeze and multi-day outage. His neighbors bought gas generators for probably $15,000 and they just sit there earning nothing.
- Solar and wind power are fuel savers that do their thing in generating electricity when the input energy of sunshine and wind are available. They are not dispatchable for use at peak demand, but in places like Texas where the peak demand is on summer afternoons they help in the multi-source solution to meeting the aggregate load.
- A grid needs dispatchable resources; usually natural gas is used. ERCOT does that.
- The biggest energy source in ERCOT, summing up over time, is natural gas. Second is wind. Third and fourth are pretty much a tie between coal and solar. Nuclear is last. This works day after day, for 20 years now.
- ERCOT has five main sources where not too many years ago it had only three. Batteries are dispatchable sources where the energy source is the other sources, but at a different time. They are the sixth source used at peak times. Deep-well geothermal for electricity generation may become the seventh. The character of the grid is changing.
- I watch the ERCOT.com dashboard showing the fuel mix. Can large loads like steel mills be run on solar and wind? Well if they can be run on electricity we often have 20 GW or more of solar and wind power at the same high transmission voltages as every other source. For perspective, the Vogtle nuclear plants in Georgia are 1 GW each. Every day we run Houston, Dallas, Fort Worth, San Antonio, Austin and lots of smaller towns on one-third to two-thirds solar and wind power. My judgement is that large loads are being served now. If steel mills work better on coke, coal, or natural gas they should keep doing it.
- I don't say a grid can be run completely on solar and wind. But that day is coming, at least in certain places. In both the UAE and Saudi Arabia they are building 1 GW power plants with solar as the only energy source. They have a lot of sunshine. Why let it go to waste? The setup is roughly 1 GW of solar panels, the nameplate rating standard in the industry, and 19 GWh of battery capacity. The design is to provide 1 GW constantly, 24/7/365. The cost is $6 per watt, competitive with the cost of other new power plants. I am watching to see if it works.
- Nuclear is great, safe, and produces large quantities of power for a small amount of fuel. The footprint is smaller than solar panels, but also off limits for any concurrent use. I am using 10% nuclear power at my house right now. I am not complaining. The nuclear people are saying Small Nuclear Reactors will be ready in the 2030s. The fusion people say the 2040s. People are building $80 billion in new construction nuclear plants using the Westinghouse design already in service many places. This is a result of an Executive Order. These people are just getting started on new plants of old, proven design. I haven't seen that they have stuck their necks out and predicted a date for their first kWh. Grid operators will blend in their energy when it comes to pass they can produce it. Go ahead, nuclear people. Build some plants and I will be your customer.