Kill the wasteful Gemini solar project near Las Vegas and save $1.5 billion!
The promotion of renewable energy by the state of Nevada is a wasteful and pointless exercise. The Gemini project illustrates the failure of Nevada green energy. Nevada energy policy has been captured by a toxic combination of a profit making industries and environmental fanatics.
The proposed Gemini solar plant north of Las Vegas will generate about 2.2 million megawatt hours of electricity each year at an average cost of $43 per megawatt hour. It will cost NV Energy $95 million dollars each year to buy this electricity. If the plant is ordered by the grid manager to curtail its delivery of electricity, it will still be paid for the electricity it theoretically could have delivered. The plant will prevent emissions of about 800,000 metric tons of carbon dioxide each year that otherwise would be emitted by plants burning natural gas.
Instead of building the Gemini project, we can make the same amount of electricity by burning natural gas in existing natural gas generating plants. That will cost about $55 million per year for the gas, a saving of $40 million from the $95 million annual cost of Gemini electricity.
In order to prevent the same amount of carbon dioxide emissions as prevented by Gemini, NV Energy can buy 800,000 carbon offsets for around $4,000,000 in the carbon offset market. A carbon offset means that you pay someone else to prevent the emission of a metric ton of CO2 or some other global warming gas equivalent in effect to a metric ton of CO2.
By killing the Gemini project and buying carbon offsets, we can save approximately $36 million each year and reduce CO2 emissions by the same amount as the Gemini project would. Over the proposed 25-year contract, Nevada electricity consumers would save about $900 million by not building the Gemini project. Federal taxpayers would save about another $600 million because the Gemini project is heavily subsidized by the federal government.
But, won’t this violate the Nevada’s Renewable Portfolio Standard?
Yes, but the public utility commission is in charge of imposing fines for violations, or excusing violations. In consideration of the vast amount of money saved for the electricity consumers and taxpayers by this alternate method of complying with the spirit of the renewable energy standard, the PUC should excuse the violation. Nevada’s renewable portfolio standard is a political law catering to special interests. The law's main emphasis is on reducing carbon dioxide emissions.
Won’t new natural gas plants have to be built if the Gemini project is not built?
No, if it is cloudy, as it often is, the Gemini plant will be out of commission. On those days the natural gas plants must be available to keep the electrical grid working reliably. The Gemini project would not replace any natural gas plant. It is a supplemental source of electricity that reduces gas consumption in the natural gas plants when the sun happens to be shining. (Gemini will have a battery capable of storing about 2 hours’ worth of sunshine electricity, not enough to change the situation.)
Please give more details about carbon offsets.
Carbon offsets have been bought and sold for many years. Each carbon offset represents a reduction in carbon dioxide emissions by one metric ton (2205 lbs.). Emissions of carbon dioxide or an equivalent quantity of a different global warming gas, are reduced. Examples of projects that create carbon offsets are: planting trees, building a wind or solar generating plant, or destroying methane leaking from landfills, methane being an especially powerful global warming gas. The project has to be a new project, not something that would have been done without environmental motive. There exist established organizations that buy and sell offsets and make sure they are legitimate. Many millions of carbon offsets are exchanged every year.
Why are carbon offsets so cheap?
Because very few people take global warming seriously. Only about half of major airlines offer to sell you a fractional carbon offset with your ticket and less than 1% of passengers buy them, even though the cost for a typical flight is less than $10. One wonders if Nevadans who are reluctant to spend $10 to neutralize their share of airplane emissions are really on board with spending billions to neutralize carbon dioxide emissions from electricity generation. Especially since that can be accomplished for a fraction of the cost by buying carbon offsets.
What is the difference between a Nevada PEC (Portfolio Energy Credit) and a carbon credit?
A PEC represents one kilowatt hour of electricity generated by renewable power. In Nevada renewable energy quotas can be satisfied by generating the renewable energy or by purchasing enough PEC’s associated with renewable power generated someplace. It is possible to transform non-renewable power into renewable power by purchasing PEC’s. This is a legalistic bookkeeping transaction. Nothing is done to the electricity. Both PEC’s and carbon credits reduce emissions causing global warming, but PEC’s are more restrictive allowing only certain methods of reducing emissions. PEC’s cost much more than carbon credits. Both PEC’s and carbon credits are loaded with politics. For example you can’t generate PEC’s or carbon credits with a nuclear power plant. Potentially you could, but the environmental left dislikes nuclear, so they made it illegal to use nuclear to generate PEC’s or carbon credits.
Notes and Sources
For a detailed spreadsheet showing cost of Gemini electricty ($160 / MWh) go here.
Information about the Gemini project is available on the Nevada Public Utilities Commission website:
as 117 pounds per million Btu (MMBtu). One kilowatt hour is 3412 Btu. A million Btu would generate 293 kWh at 100% efficiency. At 50% efficiency, typical of NV plants, it will generate 146 kWh or 0.146 MWh. To generate one megawatt hour requires 1/.146 = 6.85 MMBtu.
The average price of natural gas in Nevada for electricity generation for the last 12 months is approximately $3.73 per 1000 cubic feet: