The Importance of Doing the Math

Posted on April 8, 2009. Filed under: Energy Finance, Generation Plants |


From a commentary by Michael Vickerman, RENEW Wisconsin’s executive director:

The average American adult exhibits some proficiency with basic arithmetic–the adding, subtracting, multiplying and dividing of numbers. With these tools we are able to calculate a baseball player’s batting average, the amount of interest income earned on a three-month certificate of deposit, the service tip on a $50 dinner, and the duration of a driving trip from Madison to Minneapolis. Very few motorists need a calculator to figure out the total cost of a fill-up when the per-gallon price of gasoline goes up by a dime.

Yet, when the subject turns to America’s energy future, a subject where some facility with number-crunching is essential for understanding the issues at stake, our native competence seems to desert us. How else to explain the preponderance of newspaper articles, radio and television programs and Internet sites that either fumble the numbers that represent reality, or simply ignore them altogether.

If, as participants in a democratic process, we believe in the concept of informed consent, it is incumbent on ourselves to acquire some familiarity with the numbers that matter. Absent a grounding in the realm of quantities, durations and physical properties, public discussions on energy cannot help but devolve into exercises in magical thinking.

Consider a recent article in The New York Times titled “Cost Works Against Alternative and Renewable Energy Sources in Time of Recession.” In that article, reporter Matthew Wald states that solar and wind electric generating capacity sources are more expensive than new coal, natural gas or nuclear power plants. The yardstick Wald uses to compare the cost-effectiveness of different energy sources is their estimated kilowatt-hour cost, which is the same measure used to calculate the monthly electric bill.

However, Wald makes no mention of the size of the generating stations that are being compared, a critical omission. Coal and gas are relatively inexpensive fuels if an electric utility is looking to build one large power plant, say, 500 megawatts (MW). But what if the utility only needs 100 MW of additional capacity? In those situations, the large size of a typical coal plant becomes an economic liability, unlike a wind power plant, which can be easily adjusted to fill any gap up to 200 MW.

This isn’t rocket science, just simple math.

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If you are going to rely on wind power to fill any gaps in generation be prepared to be siting in the dark most of the time. The odds of wind power being available at peak load times is less than 5%.


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