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  • Wind, Water, Electricity, and Bureaucracy

    Posted by David Foster on December 11th, 2011 (All posts by )

    The Federal Energy Regulatory Commission has ruled against the Bonneville Power Administration, which is itself a creature of the Federal Government. The case provides an interesting microcosm of the difficulties encountered in doing any kind of large-scale productive work in the increasingly rule-driven environment of contemporary America.

    BPA’s mission is to provide electrical generation and transmission services in the Pacific Northwest. In May-July of this year, the agency suffered from an embarrassment of riches: owing to weather conditions, vast amounts of both water power and wind power were available. Storing large amounts of electricity, though, is not a very practical proposition: in most cases, supply and demand needs to be balanced on an instant-by-instant basis. Hence BPA needed to cut either its hydroelectric generation or its wind generation, the latter of which comes in substantial part from independent businesses which sell their output to the BPA. The only alternative was to engage in “negative pricing”–ie, paying various entities–either customers or other power providers–to take its excess electricity.

    The agency did not believe it could legally cut the hydropower generation below a certain level: routing excess water over spillways causes it to pick up nitrogen, which is believed to be harmful to salmon, and hence in BPA’s interpretation would be in violation of the Clean Water Act and the Endangered Species Act. What BPA did instead was to tell the the wind operators that during this time period it didn’t need or want all of their output–100,000 megawatt-hours of potential generation was turned away. The wind operators, unsurprisingly, filed a complaint, and FERC sided with the operators. So next time there is an oversupply situation in the Pacific Northwest, BPA will be paying to give its power away–ultimately resulting, of course, in higher electricity bills for its customers.

    Various technical fixes for problems of this kind are being discussed, such as the remote control of water-heater thermostats in homes and businesses (which would allow excess electricity to be stored in the form of heat) and the interconnection of power grids across wider geographies. But basically, operating a power grid reliably and economically is already a difficult problem. Adding substantial amounts of relatively-unpredictable capacity such as wind makes it harder still, and each additional regulatory constraint makes it even more so.

    The continuing proliferation of rules, many of them adopted without any deep consideration of their implications, makes increasingly difficult the running of productive activities of any kind.

    Related: Frankly, my dear, I do need a dam


    14 Responses to “Wind, Water, Electricity, and Bureaucracy”

    1. Michael Kennedy Says:

      The regulators are likely incompetent in the subject they are regulating.

    2. Andrew_M_Garland Says:

      Does water diverted around a dam pick up more nitrogen than it would from a natural river?

      In other words, is the use of water through the hydro-electric dam artificially reducing the nitrogen level in the water? This may be beneficial to the salmon. But, does it restrict returning to the higher, more natural nitrogen level?

    3. Shannon Love Says:

      Michael Kennedy,

      The regulators are likely incompetent in the subject they are regulating.

      Actually, the worse case scenario is that they are perfectly competent in the area they are regulating and that they following both the letter and spirit of the controlling laws.

      The problems is that little thought is (and probably can be) given to the synergistic effects of how regulations in differing domains will interact in the real world. The spillway regulations are environmental and the regulations governing who buys and sells power are part of utility law. Do you think the biologist who lobbied for the spillway law understood the dynamics of balancing the electrical grid or that the people who understood the grid understood the biology of riverine nitrogen? When each group was writing the regulations for their domain of expertise, do you think that were even aware of the possible consequences for other domains?

      It’s something akin to how we study individual medications to the extreme documenting even the most rare side effects… and then we combine those well understood individual drugs in a functionally infinite number of variations in the clinical setting.

      The mythology of an all wise, benevolent regulatory state flounders on human limitations. The modern world is simply to complex and has far to many surprising interactions for us to create vast interlocking rules and regulations to manage everything. Recognizing and trying to regulate al the permutations of interactions just makes things worse by slowing the decision cycles to a crawl.

      Decentralized decision making isn’t just a moral of political necessity, it’s a pragmatic one. Centralized systems just can handle the information load.

    4. David Foster Says:

      Shannon..”The mythology of an all wise, benevolent regulatory state flounders on human limitations. The modern world is simply to complex and has far to many surprising interactions for us to create vast interlocking rules and regulations to manage everything.”

      I recently became acquainted with the work of Rose Wilder Lane. The following is from her 1943 book The Discovery of Freedom:

      “Nobody can plan the actions of even a thousand living persons, separately. Anyone attempting to control millions must divide them into classes, and make a plan applying to these classes.
      But these classes do not exist. No two persons are alike. No two are in the same circumstances; no two have the same abilities; beyond getting the barest necessities of life, no two have the same desires.
      Therefore the men who try to enforce, in real life, a planned economy that is their theory, come up against the infinite di- versity of human beings. The most slavish multitude of men that was ever called “demos” or “labor” or “capital” or “agri- culture” or “the masses,” actually are men; they are not sheep.
      Naturally, by their human nature, they escape in all directions from regulations applying to non-existent classes. It is necessary to increase the number of men who supervise their actions. Then (for officials are human, too) it is necessary that more men supervise the supervisors. Still, individuals will con- tinue to act individually, in ways that they plan. These ways do not fit into Authority’s plan. So still more men are needed, imperatively needed, to stop or to supervise these new ways of acting; and more men to supervise these supervisors; and more men to co-ordinate the constantly increasing complexity of all this supervision.”

    5. gad-fly Says:

      Warren Meyer at Coyote Blog commented on this issue at Bonneville Power some two years and rightly placed the blame with the wind farms that can never play nice on a power grid.

      Warren had this to say:

      The article is about the difficulty for grid operators in integrating and managing wind in the grid. But here is the part that slides by — despite the electricity it is putting in the grid, wind is contributing…nothing. Note that when wind production is surging, the utility is sending water around the turbines of the dam. That lost potential energy is gone forever. All the wind power did in this case is substitute for clean hydro power. It has not value in this particular case (beyond the ability of the utility to put wind on its annual report and seek subsidies from the Obama administration).

      Apparently the costs of trying to integrate wind into the grid is so high the utility tried to charge wind producers a higher integration charge than they do for other sources. This attempt to set pricing equal to actual costs was apparently killed by pressure from the Obama administration, making sure that wind will continue to get preferential treatment and I presume substitute for dirty hydro power in the future.

      Postscript: I just don’t see how wind is ever going to work on the grid. In this case, wind is backed up by hydro, but in others it has to be backed up by spinning, fuel-burning fossil fuel plants. Wind makes more sense to me linked to some type of flexible local process. Using wind to make hydrogen from water may make sense. Wind could store its energy by pumping water backwards back up a dam to be recovered as electricity through hydro power later. Or it could run a local process, such as water desalinization (a good potential candidate as sea breezes tend to be more constant).

    6. David Foster Says:

      AMG…”Does water diverted around a dam pick up more nitrogen than it would from a natural river?”

      I make no claim to any expertise in this area, but would guess that the more turbulent the flow, the more nitrogen the water would pick up….hence, the relatively smooth flow down a 500-foot-wide natural river would be less nitrogen-absorbing than the same amount of water falling abruptly through a 50-foot-wide spillway.

      I don’t think that Warren is entirely correct when he says ” when wind production is surging, the utility is sending water around the turbines of the dam. That lost potential energy is gone forever.” This is true under high-water conditions, as in the recent Bonneville case, where the reservoir cannot be allowed to rise to the point where it overtops the dam. But in lower-water conditions, the wind power will allow the water turbines to be throttled down and the potential energy will not be wasted but will be stored in the form of a higher reservoir water level, for later use.

    7. Robert Schwartz Says:

      Why assume that anyone is incompetent? After Solyndra we now know that “renewable energy” money is a payoff to the regime’s supporters. FERC said to BPA: shut up and pay the man.

      Theorizing about regulatory competence in Obama’s America is a waste of brain power. The correct solution to the problem is to get rid of Obama, stop giving money to the “renewable energy” bandits, drill for shale gas and oil, and build the Keystone Pipeline.

      As for the existing wind farms, BPA should pay to have them torn down so they can stop decimating the bird populations.

    8. Michael Kennedy Says:

      I believe it was Caligula, or perhaps Nero, who wished that the world had but one neck so he could cut it at one blow. Our political situation is coming down to a somewhat similar solution. Most, if not all, solutions to these problems require only the defeat of one man and the recovery will follow. That may be too simplistic but it is becoming a more tempting thought.

    9. Robert Schwartz Says:

      Michael, It is not just Obama, although he symbolizes the entire rotten structure. It is about half the bureaucrats in Washington and the entire legal system. As I have previously said: “when the last environmentalist is strangled with the entrails of the last lawyer”.

    10. David Foster Says:

      RobertS….getting rid of Obama, and of the ideas of which he is the avatar, will require getting more people to understand why these ideas are harmful. This in turn requires clear demonstrations of cause and effect, and I don’t think the Republican candidates are currently doing this very well. It’s one thing to assert “regulation costs jobs”, it’s another to provide specific examples of regulatory overreach the harm done.

      Romney is particularly bad at this; I think Gingrich is better at making intellectually-coherent and emotionally-impactful arguments.

    11. Anonymous Says:

      David – it drives me nuts to think – just pulling one example out of my hat – no candidates are mentioning the bureaucratic stalling (with Obama’s blessing) the Keystone pipeline. Here we have people suffering over gas prices that have doubled – a solution (at least a partial solution) and none of these “conservatives” even deem it worth mentioning.

      Bill (incognito)

    12. David Foster Says:

      Anon…good selling requires adding a bit of tangibility. Obama did this when he hyped high-speed rail and talked about how nice it would be to travel without having to take your shoes off: it created a very tangible, sensory reference.

      The Keystone pipeline is one of many things that a Republican candidate could focus on. Romney, in particular, often reminds me of the kind of PR person who writes press releases focusing around word strings like “cutting edge,” “world class,” and “state of the art.” Good selling doesn’t work this way. (In fairness, Romney seems better than he was last time around, but he’s still not anywhere near great at this stuff.)

    13. Robert Schwartz Says:

      “no candidates are mentioning the bureaucratic stalling (with Obama’s blessing) the Keystone pipeline”

      But it is the centerpiece of the House Republicans’ December strategy. And it has been successful in changing the focus from taxes to jobs.

    14. Whitehall Says:

      Bonneville has had the problem of excess hydroelectric production, even before wind mills. In the late 80s I was working at a nuke in California. BPA had excess power and was offering it for free (in the middle of the night.)

      I’ve long said that the REAL value of wind and solar power was for the fuel NOT consumed in other power plants. With BPA and hydropower, that “fuel” is also free. Ergo, wind power under such conditions should also be free.

      But since there is a federal porduction subsidies, it can pay the wind producers to pay someone to take their output. I’m told it happens at times in Texas.

      At the best, one can say this is trickle-down green.