T. Boone Pickens, famed oilman, has launched a media blitz touting his Pickens Plan (http://www.pickensplan.com/theplan) as the way for the future in energy and a way to break our dependence on foreign oil. So I decided to give it a look. Considering almost no oil is used for electricity production, how will adding wind turbines effect dependence on oil? Pickens envisions that up to 20% of electricity can come from wind. This would offset an equal amount of gas fired generation. Then the natural gas that would have gone into electricity generation could be used to power cars, which offsets demand in oil.
Before we go into the analysis let’s discuss how electric generation operates. People’s usage of electricity changes dramatically over the course of a day and from season to season. From 2am to 2pm, the usage of electricity will increase by about 60-80%. As the day comes and people go to their jobs, the demand for electricity increases. So in order to meet that rise in demand, some power plants that are operating at a lower capacity will be “turned up” and others must be turned on. Of the power plants that must be turned on, only some certain types can start rather quickly….and these are mostly natural gas. The power plants that don’t shut off during the night are your coal and nuclear plants.
The Problems
Pickens wants to take $1.2 trillion and replace natural gas power plants with wind. The wind is fickle and often blows the most at night. Adding wind generation may not displace much gas generation, but the nuclear and coal plants that are operating at night.
The plan would still need to have combustion turbines to back up the wind generation or Americans must change their views about reliability. Texas only considers 8.7% of wind capacity, dependable. That means that if an area has 1000 megawatts (MW) of demand, you would need at least 11,500 MW of wind turbine capacity in order for you be confident your lights turn on when you flick the switch.
Another consideration is, why not nuclear? If you are trying to displace the gas generation that is operating around the clock, why try to displace that with wind, but rather than nuclear? Nuclear is much more dependable, fuel costs are minimal, and the emission are zero.
There are a couple of other temporary problems such as the fact that turbine manufacturers are at capacity and that there is a poor distribution for natural gas for cars. Now if a government is committed to spending over 1 trillion, then manufacturers could add capacity at a price and you would see natural gas stations spring up. One might also be able to tap into the supply at home if you have natural gas heating.
What I liked
He “got the white off the paper.” He also presented his plan with detail and a degree of logic.
T Boone was rather realistic about costs. A 3 MW turbine will cost about $6-7 million. The $1.2 trillion included $200 billion in costs for transmission. When electricity is generated in the middle of nowhere, it must be transmitted to the cities. This can be expensive! He did, however, ignore the cost of backup capacity or the cost escalation that would be seen if demand for turbines skyrocketed.
The idea of displacing gas generation, even if it is not quite as ambitious, isn’t awful. If 10% of gas generation per year could be displaced somehow (combination of wind & nuclear) that could be used to fuel about 10 million cars.
The Gore Plan -
Not to be outdone, Al Gore released a statement saying the US electric generation should be completely Earth-friendly by 2018. He estimated the cost between $1.5 trillion and $3 trillion. That’s about all the information that he gives. So Pickens estimates it costs $1.2 trillion for 20% generation to be by wind, and Gore will do 100% for $3 trillion. Essentially Al Gore is just blowing hot air to get attention.
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