A version of the following commentary appeared in the Columbia Missourian.

As technology companies try to meet the skyrocketing demand for AI-specialized computing capacity, they are dotting the country with data centers to the dismay of some and the delight of others. As is all too often the case in Missouri, many of these companies are being offered taxpayer-supported subsidies or tax exemptions.

For example, Independence, Missouri, is giving Nebius more than $6 billion in tax breaks over the next 20 years for a “hyper-scale” data center, and Montgomery County has offered Amazon hundreds of millions in tax abatements to build a data center near New Florence. But why would subsidies be needed when it seems like data-center developers have money to burn and are desperate for suitable building locations?

Recent actions of data-center developers suggest that it is not the cost of building and operating those facilities that is the barrier; the main problems appear to be finding pathways to secure reliable energy generation and getting their centers online smoothly and quickly (speed-to-operation).

These two obstacles are so serious that the major technology companies (Amazon, Google, Meta, Microsoft, etc.) recently met with President Trump and signed the “Ratepayer Protection Pledge” to supply and pay for their own power for their AI data centers.

Why would these companies agree to take on this expense? Because their constraint is not cash. For these firms, time is money. The costs of delays in permitting and interconnection outweigh the value of a local tax incentive.

The negative effects of economic development subsidies and tax breaks are well known. When local officials offer these incentives, they diminish positive benefits that could come from a new data-center development: increased property-tax revenue to fill in the gaps for local services or be used to lower the overall tax rate of the community.

With all of this in mind, rather than just doing what most other states do (handing out checks or tax exemptions) Missouri should work on policies that actually deliver what these companies need most: pathways to secure and reliable energy generation, regulatory certainty, and speed-to-operation.

For local communities, this means they should not offer taxpayer dollars. Even with big tech agreeing to pay for their own power, many municipalities will still try to lure projects with incentives. No doubt the companies will take whatever money is offered to them, but subsidies are unlikely to significantly drive their decisions about where to locate.

Instead, local communities should offer a stable, predictable permitting environment and a suitable location to build. That would help address the greater desire for certainty and speed-to-operation.

And at the state level we should think even bigger. Policies like consumer-regulated electricity (CRE) could help make Missouri a true hub for data center development—without using unnecessary subsidies.

CRE would enable private electricity providers to serve large, energy-intensive customers independent of the existing, permission-heavy grid structure by allowing them to build their own power plants. Rather than spreading the costs for this infrastructure, CRE would create a “parallel path to energy abundance” —one financed by the large customers who demand the power.

CRE would allow these data centers to work with a private partner to meet their own energy needs, with less red tape, more certainty, more control, and more freedom to innovate. These benefits are likely to be more appealing than subsidies.

Unfortunately, offering subsidies seems to be a reflexive reaction in Missouri when there is an opportunity to attract a new business. But especially in this case, Missouri would be better off focusing on what the data center sector really needs. Efficient regulatory and permitting policies (like CRE), a predictable and stable environment in which to construct, and abundant energy would be far better suited to attracting and improving data center development than taxpayer dollars.

The post Why Hand Out Subsidies to Data-Center Developers? appeared first on Show-Me Institute.

I remember when Game of Thrones was at the height of its popularity and its catchphrase seemed to be plastered everywhere I looked: “Winter is coming.” Today a similarly ominous refrain is echoing across the energy sector: Data centers are coming.

A data center is a physical location that houses servers and related hardware that process, store, and transmit digital information. As artificial intelligence use expands, demand for computing power is also rising at a feverish pace, driving the need for more and more energy-intensive data centers.

As in Game of Thrones, there is a certain mystery surrounding how dire the situation truly is.

In April 2024, Goldman Sachs forecast that data centers would rise from 2.5% to 8% of all U.S. electricity usage by 2030. However, Google recently reported a 33-fold reduction in their energy usage for AI text prompts in a single year. It is difficult to predict how much more energy will be needed in the coming years.

Current Missouri law protects average ratepayers from “any unjust or unreasonable costs from service to such customers [such as data centers].” However, this does not mean none of the burden of building new generation capacity will fall on ratepayers, and an overbuild based on overly aggressive demand projections could leave them paying for unused assets.

On the other hand, failure to build sufficient power supply (whether due to demand miscalculation or delays in constructing multiple plants) could cause Missouri to miss out on significant investment in the state. Worse, an underbuild could create real reliability concerns. There is real tension here, and a great deal of pressure to predict and build effectively.

Fortunately, there is a policy that could help alleviate some of this pressure: consumer regulated electricity (CRE).

The premise of CRE is fairly straightforward: allow consumer-regulated electricity utilities (CREUs) that are disconnected from the ratepayer-supported grid to create “private energy islands” for the largest new customers (such as data centers). This approach makes sense for two reasons:

1. The anticipated surge in demand is expected to be fueled by a small number of users. By isolating the electricity supply of these customers from the ratepayer-supported grid, CRE can help shield everyday customers from spikes in energy prices.
2. The increase in demand is predicted, but it isn’t certain. CRE ties both the risk and the possible rewards of building new power plants to the companies that will use the resulting energy.

This year, New Hampshire passed a law to allow CREUs to generate, transmit, distribute, and sell electricity as long as they operate independently from existing utilities and do not serve the general public (CREUs are still subject to appropriate oversight, such as the Nuclear Regulatory Commission for nuclear plants). Missouri could do something similar, and there are many reasons to do so.

#1: Protecting Ratepayers from Risk

If the projected surge in electricity demand materializes, CRE could help lessen the severity of rate increases by allowing some large customers to be served by independent CREUs. Because these facilities are privately financed and serve only their customers, their costs would not be spread across all ratepayers. If electricity demand falls short of projections, then the excess capacity will have been a poor investment.

#2: Accelerating Capacity Buildout and Investment

 Missouri needs to build new generation capacity. In a permission-first, regulated environment, that process can be slow. Letting CREUs build and operate their own generation facilities could help keep economic development from being constrained by red tape.

Further, CREUs could offer more tailored payment structures and allow companies to align their energy sources with their own environmental or strategic goals—without forcing all ratepayers to work toward those same goals.

#3: Alleviating Pressure

Not only does Missouri face new demand growth, but our two largest electric utilities are dealing with coal-plant retirements. This transition would be challenging even without a new surge in demand. CREUs would allow utilities to focus more on serving their current customers.

CRE could be an ideal response to an abrupt surge in energy demand driven by a narrow set of customers. It would provide price security to everyday ratepayers, give data centers control over their power supply, and decrease the need for governments to predict future energy demand. Data centers are coming, and CRE is worth exploring as a way for Missouri to prepare for them.

The post Data Centers Will Require Innovation in Missouri’s Energy Sector appeared first on Show-Me Institute.

-A tribute to the late Joe Forshaw
-Lessons from Robert Caro’s books about LBJ
-Springfield voters declining to subsidize a convention center
-Traditional public schools signing on to MOScholars
-An update on Medicaid’s out-of-control growth in Missouri
-How Missouri could use consumer-regulated electricity to power data centers

Click here to find the newsletter.

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Rising electricity demand and retiring coal plants put Missouri at risk of higher prices and unreliable power.

The Solution

Create a nuclear advisory council and explore consumer-regulated electricity (CRE) to position Missouri for next-generation nuclear power.

Key Facts

• Nuclear energy is reliable, powerful, and clean.
• 71% of Americans agree that the United States should “definitely build more nuclear power plants in the future,” up from 47% in 1998.
• Businesses rank energy availability among their top priorities in site-selection decisions.

The Growing Demand for Nuclear Energy

Nuclear power has played a pivotal role in meeting historical energy needs. Today, electricity demand is growing and the primary drivers are well known: data centers, artificial intelligence, and industrial manufacturing.

Amid rising demand, nuclear energy has emerged as a rare point of political agreement, as both the Biden and Trump administrations have endorsed more nuclear power—with the latter issuing pivotal executive orders to bring long-needed reform. Outside the Oval Office, the ADVANCE Act (for nuclear energy) flew through the Senate (88-2) and the House (393-13) before being signed by President Biden.

Missouri has long possessed unique strengths to lead in nuclear energy, but now, national-level momentum and reform have created new opportunities.

A Missouri Nuclear Advisory Council

Tennessee’s nuclear advisory council has seen tremendous success since its creation by executive order in 2023.

Missouri could form a similar council to unite the state’s brightest minds in the energy sector to identify regulatory, workforce, and educational challenges and strengths while highlighting opportunities such as coal-to-nuclear transitions—at no cost to taxpayers.

The council could reduce risk and uncertainty for both international and domestic developers by providing centralized and accessible information, as well as clearly signaling the state’s resolve and intentions to be a dedicated partner in nuclear development.

Bringing the Free Market into Energy

Consumer-regulated electricity (CRE) is an emerging policy that would allow off-grid electricity providers to build their own power plants and transmission lines to serve new customers faster and with less red tape. To be free from Missouri Public Service Commission (MPSC) regulations, CRE providers would need to be unconnected to the regular grid and only serve new, large industrial and commercial customers. These providers would still be subject to federal regulation from the Nuclear Regulatory Commission and other federal agencies.

CRE could help Missouri meet demand growth, attract investment by companies quickly seeking stable energy, lower costs for utilities and ratepayers, and spur innovation.

To allow CRE, Missouri would need to modify state statute such that new off-grid electricity providers are not subject to monopoly regulation (assuming they are unconnected to existing infrastructure, do not cross state lines, and only serve large customers). New Hampshire moved forward with CRE in 2025. Missouri could do so as well.

Policy Recommendations

• Establish a Missouri Nuclear Advisory Council.
• Through CRE, inject market forces into the energy sector by exempting off-grid electricity providers from MPSC monopoly regulation.

The post Nuclear Energy appeared first on Show-Me Institute.

While no site has yet been selected for a TerraPower reactor, lessons from Wyoming and recent federal reforms offer clues about what might come next. As I have written before, the federal government has put extensive emphasis on converting retired coal plants into advanced nuclear reactors. These conversions, according to the U.S. Department of Energy, can save up to 35% on construction costs and retain much of the existing workforce. In Wyoming, TerraPower is currently building a reactor on a former coal site, and it would not be a surprise to see Kansas follow suit. This model could highlight a potential path forward for nuclear adoption in the historically coal-dominant Missouri.

Federal Reform and Cost Savings for Coal-to-Nuclear Transitions

The concept of coal-to-nuclear has drawn bipartisan attention in Washington, D.C., and has been codified in the recent ADVANCE Act, which directs the Nuclear Regulatory Commission to develop and implement strategies to enable more efficient licensing reviews for converting former coal plants and other former industry infrastructure into nuclear reactor sites.

A report prepared by experts at the Idaho, Oak Ridge, and Argonne National Laboratories found that these projects can achieve significant savings by repurposing existing infrastructure, such as steam-cycle components, since both nuclear and coal are thermal power plants that rely on generating steam to turn a turbine.

Missouri’s Long History with Coal and Transitioning Our Workforce

Coal has long been king in Missouri. Despite recent closures, Missouri remains the fourth most reliant state on coal, with coal supplying 57% of electricity generation in 2024. That legacy presents both a challenge and an opportunity.

Missouri has several coal plant sites that could be strong candidates for advanced nuclear conversion. A study from Oak Ridge National Laboratory identified three Missouri coal power plant sites (retired or slated for retirement between 2020 and 2040) as suitable for hosting a number of reactors.

Not only is there an opportunity to make use of our physical infrastructure, but Missouri can also use our existing workforce. The U.S. Department of Energy notes that many coal-plant and nuclear-plant jobs share identical or similar occupation codes, meaning a large portion of the existing workforce could transition with minimal retraining.

A Nuclear Advisory Council Could Help Identify Steps for Missouri

Another way to better identify potential nuclear sites is by creating a nuclear advisory council. If Missouri brought together the best and brightest minds in nuclear energy to discuss our unique opportunities, analyze trends in federal regulation, and address our state’s weaknesses, the Show-Me State could become a significant player in nuclear development.

Kansas is moving along in its process. Let’s hope the Show-Me State doesn’t let this same opportunity pass it by.

Interested in Nuclear Energy in Missouri?

Read my recent report, Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future, here.

The post Considering Coal-to-Nuclear Transitions in Missouri appeared first on Show-Me Institute.

Click here to read the full report.

The post Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future appeared first on Show-Me Institute.

Click here to read the full report.

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Managing this problem in the current system that is dominated by monopolies is difficult. But what if market forces could be infused into our current system to help address new demand?

An Introduction to Consumer Regulated Electricity (CRE)

One potential policy solution that could complement Missouri’s current system is consumer regulated electricity (CRE). While still a developing idea, CRE is worth considering as Missouri navigates an uncertain and potentially very costly energy future.

In theory, CRE would allow private investors to create new, independent electric power systems (both generation and transmission) using their own capital. These private grids would be scaled to specifically meet new demand growth from large consumers. In order for a CRE entity to operate appropriately, it would need to be free from restrictions placed by the Missouri Public Service Commission (MPSC). That means CREs would need to be unconnected to the regular grid and only serve new industrial and large commercial customers.

It should be noted that these CRE entities would still be subject to federal regulations, such as the Nuclear Regulatory Commission for nuclear projects. These entities would still need to meet federal safety standards.

Considering the Benefits of CRE in Missouri

Travis Fisher of the CATO Institute argues that these private grids—partly free of the massive regulatory red tape for utilities—could be developed more quickly, infusing needed competition and innovation into the energy sector. As “private energy islands” for new, large energy consumers, CREs could potentially relieve strain on the primary grid and ratepayers. Rather than relying on ratepayers to fund new power plants to accommodate rising industrial demand, the market could provide that solution.

This idea aligns with growing momentum in the private sector to pair small modular reactors with corporations (Google, Microsoft, Meta) urgently seeking energy sources tailored to their needs. CRE could allow the free market to guide this practice, and potentially, more quickly match demand with supply as companies would not be subject to current MPSC regulations that limit competition. This could be a boon for economic development in Missouri.

In theory, CRE would not tear down Missouri’s existing framework, but rather, complement it and allow private developers to target growing energy demand from the largest consumers, which are causing the most concern about reliability.

How Could We Potentially Bring this to Missouri?

Bringing CRE to the Show-Me State would likely require a modification of state statute to declare that CRE entities—if they are not connected to existing infrastructure and only serve large, industrial customers—are not subject to state regulation. New Hampshire is one state considering this concept. While further study is needed, CRE is a compelling idea that our lawmakers ought to consider.

The post Weighing Consumer Regulated Electricity to Meet Energy Demand Growth appeared first on Show-Me Institute.

Rush Island is not the first coal plant to be shuttered, and it will not be the last. At the end of 2022, the 827-megawatt Meramec Power Plant was shut down, and according to Ameren, it plans to phase coal out completely by 2045.

Below is a summary of Ameren’s 2023 Integrated Resource Plan:

Note: “Other Zero Carbon” is expected to include a combination of renewables, energy storage, nuclear energy, and new technologies.

The continued shuttering of reliable coal plants presents concerns for energy reliability and affordability.

Is there reason to be concerned with affordability?

North Carolina is another state on the path of shutting down all coal plants and inserting renewables largely in their place. In response to these state plans, the John Locke Foundation and Center of the American Experiment released an in-depth analysis of the state’s proposed paths forward. The analysis finds that North Carolina’s proposed plan would cost more than a more nuclear-focused one. This is largely attributed to the “build and rebuild” treadmill that wind and solar assets need due to their short lifespan (roughly 20 years), whereas nuclear plans have a lifespan of 80 years (and maybe more).

Utilities, like Ameren, are allowed to charge enough for electricity to cover the cost of providing the service to everyone in their territory, plus a government-approved profit, often set at 5–-10 percent, on their capital investments. As long as the expenses are approved by the regulator in their state, utilities make a profit on every dollar they spend on new builds such as wind turbines, solar panels, natural gas plants, or even renovating corporate offices. The more money utilities spend, the more money they make.

A Missouri-specific study of Ameren’s energy plans could be beneficial to future policy research. Nevertheless, there is some reason to be skeptical of the affordability of such a massive energy transition and continued research will be needed as technology changes.

What concerns are there with reliability?

Some sources of energy are more reliable than others, and there are numerous ways to measure this: accredited capacity, unforced capacity (UCAP), or capacity value. All three measure the general reliability value to the grid. The figure below displays capacity values for the two main regional energy organizations in Missouri—Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP):

Solar and wind, which are projected to replace much of the energy that retiring coal plants have produced, are intermittent and do not provide consistent streams of electricity, nor are they available at all times of day (although battery storage is improving). As shown in the table above, MISO rates the reliability of solar and wind far lower than coal and other replacement options. Relying so heavily on them may be dangerous.

There is also the task of building out a vast amount of advanced transmission infrastructure. The New York Times reports: “Already, a lack of transmission capacity means that thousands of proposed wind and solar projects are facing multiyear delays and rising costs to connect to the grid.” We should not bank on the ability to break this trend.

Will Ameren be able to replace 66% of its current generation while also meeting the needs of rapidly rising electricity demand? There is reason for concern. In my next post, I will discuss one policy that could help maintain and strengthen the reliability of our grid.

*Note: This post was updated on October 23 to more accurately reflect the circumstances of Rush Island’s closure.

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HB 1753 mandates that prior to the closure of an existing power plant, there must be:

• A new “replacement” power plant secured and placed on the electric grid (which can be in another state) with an equal or greater amount of “reliable electric generation”
• “Adequate” transmission lines in place and ready to operate immediately or shortly after (depending on the interconnectedness of the plant being shut down).

What does “reliable electric generation mean?” This is calculated by taking the average of the summer and winter accredited capacity (the most a plant could produce in each peak season) of the plant being shut down and comparing it to the plant(s) replacing it. For example, let’s say a Solar Plant Alpha could produce a maximum of 600 MW in the summer, but only 200 megawatts (MW) in the winter. The amount of “reliable electric generation” would then be 400 MW. This is an improvement from using nameplate capacity, which is how much a plant could produce if it produced at full power 100% of the time.

HB 1753 also mandates that the new plants replacing a closing power plant must be also comprised of at least 80% dispatchable energy (dispatchable energy is from a source that is available for use on demand and can have its power output adjusted to market needs). The bill defines dispatchable as: natural gas, nuclear, hydroelectric, biomass, petroleum, geothermal, and coal.

While the 80% rule may sound like a strong protection ensuring that most of our energy is dispatchable, I am concerned that the provision isn’t strong enough.

Let’s say Missouri has coal plants that produce 800 MW of dispatchable energy and solar farms that produce 200 MW of intermittent, non-dispatchable energy, for a total capacity of 1,000 MW. In this scenario, dispatchable energy comprises 80% of total energy capacity.

If you shut down a 100 MW coal plant (which is dispatchable) and replace it with 80 MW of new natural gas (dispatchable) and 20 MW of new solar (non-dispatchable), the total capacity now would be 780 MW of dispatchable energy (800 – 100 + 80) and 220 MW of intermittent, non-dispatchable energy (200 + 20).

Then let’s say you shut down seven more 100 MW coal plants and replace them with seven new 80 MW natural gas plants and seven new 20 MW solar farms. Now after these closures, you would have 640 MW of dispatchable natural gas plants (780 – 700 + 560) and 360 MW of non-dispatchable solar farms (220 + 140). Now, in this new scenario, dispatchable energy comprises 64% of total energy capacity—a gradual erosion.

California, in which non-dispatchable energy makes up around 40% of its portfolio, has had significant issues with energy reliability. During particularly hot summers in recent years, Californians have been urged to ration energy usage:

Officials are urging Californians to run their air conditioning earlier in the day, when more power is available, and to turn up the thermostat starting at 4 p.m. They’re also asking people not to use large appliances, like washing machines, dishwashers and dryers, between 4 p.m. and 9 p.m., which are peak hours for electricity use.

HB 1753 is a step in the right direction and would help provide energy stability for Missourians, but it could be strengthened by changing the 80% dispatchable rule to a 100% rule. There are other concerns that are outside the scope of this bill—in particular, how to account for the growing energy demand in Missouri—but I will address that in a later post. For now, policymakers should consider tweaking HB 1753 to ensure energy reliability in Missouri.

The post Could HB 1753 Help Protect Missourians During a Future Energy Transition? appeared first on Show-Me Institute.

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If you clicked on this post without reading Part 1, I encourage you to go back and read Part 1. In that post, I defined some of the energy jargon used in this debate. This post will focus on the provisions of SB 757.

Does SB 757 address capacity factor and dispatchability?

The bill does not explicitly mention capacity factor or dispatchability. Here is a passage from the bill text:

The new replacement reliable electric generation shall be equal to or greater than the full nameplate capacity of any existing electric generating power plant and shall be certified as an equal or greater amount of reliable electric generation by the Missouri public service commission and the regional reliability organization in which the electric utility company operates. (emphasis added)

Unless the public service commission comes up with its own system of power accreditation, it seems this bill will hinge on the actions of our regional reliability organizations.

While I will not go into all of the specific details, the two main regional energy organizations in Missouri—Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP)—have outlined their resource accreditation process for rating power sources and individual power plants (you can read MISO’s method here). MISO’s plan “informs long-term investment and retirement decisions by accurately representing the capacity value of a resource in the prompt year.”

What a statement like that means is that MISO (and SPP also) account for capacity factor and value on the grid by examining different yearly, monthly, and daily variables—all with declared intentions to “maintain reliability.”

However, we should still be cautious, as utilities also can miscalculate or serve other agendas. For example, California has dramatically increased its amount of renewable energy sources in the past 10 years, which now account for up to 42% of its net electricity generation. In the same timeframe, California has cut its nuclear supply by over half, down to 8%. As a result, the dispatchability problem has reared its ugly head in recent years, as in 2020 California had power outages due to insufficient energy for the first time in over 20 years. Sadly, 2020 wasn’t the end of California’s power struggles, as problems have continued. California’s regional reliability organization, California Independent System Operator (CAISO), has even at times called for residents to “use less power between 4 and 9 p.m.” Whether it was due to miscalculation or prioritizing other agendas, Californians are struggling because of a lack of dispatchability and reliability.

That brings me to my main questions concerning SB 787. Can Missouri citizens confidently rely on these regional reliability organizations (MISO, SPP) to protect their energy needs? Will these organizations continue to prioritize both capacity and dispatchability? Is there a way to ensure that other agendas are not prioritized over our energy needs?

On its face, this bill appears to add protection for Missourians, but these questions are worth answering. If there is any possible room for interpretation, shouldn’t it be made clear that both nameplate capacity and dispatchability must be taken into account?

The post Show-Me Energy: Decommissioning Power Plants Part 2 appeared first on Show-Me Institute.

In light of Ameren’s recent declaration that all coal plants will be decommissioned by 2045, this bill seems to add a level of accountability and protection, and could help prevent officials from undertaking actions that would compromise the energy needs of Missourians.

To make an energy grid truly reliable; we need both sufficient capacity and dispatchability.

Prior to examining SB 757, let me explain what these terms actually mean. I will examine the provisions of the bill in my next post.

First, what is nameplate capacity?

In simple terms, nameplate capacity is the amount of energy a power plant can produce if it is operating at 100 percent power all the time. So, if a coal plant is “rated” at a nameplate capacity of 1,000 megawatts (mw), that means 1,000 mw is the maximum the plant could produce—but that is not what it actually generates.

If the nameplate capacity isn’t what the plant generates, how much electricity do plants actually generate?

That answer depends on the type of energy source, the weather, the time of year, and the strategies used to generate energy. I wrote an earlier piece on all the types of energy sources in the United States that you can read here.

Another key variable that determines how much electricity is actually generated is something called “capacity factor.”

Capacity factor, in simple terms, is the percentage of time that a power plant is operating at maximum power (its nameplate capacity).

The capacity factor is not the same among different energy sources. For example, nuclear power plants operated at maximum power 92.7% of the time in 2021—meaning nuclear power had a capacity factor of 92.7%. Coal plants had a capacity factor of 49.3% in 2021, natural gas was 54.4%, wind was 34.6%, and solar photovoltaic (solar panels) was at 24.6%.

Let’s say five different types of plants have a nameplate capacity of 1,000 mw (enough to power around 565,000 homes). Here’s how the capacity factor would affect rates of electricity generation:

Now that we better understand capacity, what is dispatchability?

Dispatchability is essentially an energy source’s ability to be “dispatched” to the grid’s consumers whenever they need it. Energy is neither created nor destroyed, meaning that when we “use” energy, that energy has to be coming from somewhere.

There are a few main “baseload resources” that have ample dispatchability: nuclear, coal, hydroelectric, and natural gas. On the other hand, intermittent resources such as solar and wind have times of day and certain weather conditions where they lack production, meaning they have less dispatchability.

How does dispatchability come into play in decommissioning power plants?

The reason we produce energy is to power things society needs and wants—and we are living in a world where we want and need electricity 24/7. In an internet-driven society, we want to stream movies at night, meet on Zoom for work meetings, play video games, mine bitcoins, or potentially even have a “metaverse.” The growing number of data centers that power these activities devour large swaths of energy, and they have to be operating constantly. If electric vehicles become more popular, we will have millions and millions of individuals using an immense amount of energy overnight to charge them.

This is where some of the dilemma lies. The energy demand market is trending towards 24/7 energy, while many proposed replacement plants are intermittent and don’t produce energy at night, when it is cloudy, or when there is no wind.

Here is a table taken from the Midcontinent Independent System Operator (MISO), which shows the dispatchability of solar and wind and where loss of load occurs. The numbers 1–24 on the x-axis represent the hours of the day, and the y-axis represents the months of the year.

The top “loss of load” graph shows the times where both renewables struggle to be dispatchable when paired together. Some states like California have experienced this dispatchability problem and have tried to mitigate it with the vast expansion of battery infrastructure. This is a fine enough idea and does help with improving reliability. However, there is no realistic path to mass expansion for the needed battery infrastructure to maintain reliability if renewables continue to be scaled. The battery technology also still has problems that need to be ironed out. We should not bet our energy future on battery technology given all the existing issues.

That bet would be too risky, as it could potentially lead to utilities or the government dictating when individuals and businesses may use electricity— such electricity rationing.

In order to achieve dispatchability and maintain reliability, the replacements for coal cannot just be renewables—we need nuclear and other baseload energy sources. Even if you believe that renewables should be the primary energy source, there should be a highly dispatchable and reliable source backing them up.

Now that we understand the two legs that grid reliability needs to stand on, we can turn back to SB 757 in my next blog post.

The post Show-Me Energy: Decommissioning Power Plants Part 1 appeared first on Show-Me Institute.

The United States is known for its diversity: from our landscapes, to our immigrants, and to the different states across the nation—the United States truly has a wide range of interests, individuals, and industries. Our energy sources are no different, and as shown below, we use a diverse assortment of energy sources to power our nation.

Created with mapchart.net; Source: Nuclear Energy Institute (NEI)

In order to better understand energy policy for Missouri, it is important to know some background about each energy source.

Natural Gas

According to 2022 preliminary data from the U.S. Energy Information Administration (EIA), natural gas generated 39.8 percent of electricity in the United States—the largest generator in our country. Natural gas is a fossil fuel, meaning it is formed from decomposing plants and animals. Companies use seismic surveys to determine where to drill for natural gas, similar to the process used for oil. The captured natural gas is then processed, and a chemical called Mercaptan is added. Mercaptan adds the smell that makes natural gas smell like rotten eggs so leaks can be detected. This now smelly natural gas is then used for combustion turbines or steam turbines to generate electricity. In recent times, combined-cycle natural gas plants have greatly increased efficiency by using both processes together. Natural gas is burned to power combustion turbines, and the heat byproduct from the combustion turbine (think of how a car engine releases heat) is used to heat water, create steam, and turn a steam turbine.

Coal

At 19.5 percent of electricity generation, coal is the second-largest energy source in the United States. Once used primarily to power locomotives and heat homes, coal is now mostly used to generate electricity by heating water to turn steam turbines. Coal, like natural gas, emerged as an electricity generator in the 1950s and grew quickly in the 1970s and 80s. However, coal emits much higher emissions than natural gas, and thus its usage is shrinking in modern times as natural gas continues to capture more market share.

Hydroelectric

Speaking of old energy sources, hydroelectric (or hydropower) is one of the oldest forms of electricity generation—with 1880 marking its first year of industrial use. President Franklin D. Roosevelt was a big proponent of hydropower, which uses moving water to spin turbines. By 1940, it generated 40 percent of our nation’s electricity. However, in 2022, it only generated 6.3 percent. American hydropower has largely fallen out of favor due to safety and environmental regulations, legal obligations to Native American tribes, and the economic costs associated with them. For example, two hydroelectric dams on the Elwha River came under attack due to environmental and legal concerns over the salmon population. The owners would have been forced to add expensive fish ladders, and continued legal pressure from the tribes persisted until they decided the dam was not worth the cost.

Nuclear Energy

Making up 18.2 percent of electricity generation, nuclear is the largest clean energy source in the United States. The first commercial reactor was built in Shippingport, Pennsylvania in 1958, and the nuclear industry grew rapidly in the 1970s, 80s, and 90s. With nuclear fission, uranium atoms are split, which causes a chain-reaction and generates an immense amount of heat—which boils water and creates steam that turns a turbine. As time has passed, stringent regulations have slowed down the construction of nuclear power plants; the average age of a reactor for the remaining 93 reactors in the United States is 42 years old. Currently, the industry is regaining momentum as it transitions from large plants built during the Cold War to safer and cheaper small-modular reactors.

Wind

Wind energy makes up 10.2 percent of electricity generation. The mechanics of wind energy are relatively straightforward. The cycle of wind is used to turn turbines which generate electricity without creating greenhouse gas. In the olden days, windmills were used to cut wood, pump water, and grind grain—but now wind turbines are used to generate electricity. Financial incentives and requirements to use renewable energy in the 1990s spurred the development of wind power, with similar incentives continuing today. These wind turbines can also be located offshore in the ocean—such as ones taller than the Statue of Liberty in Rhode Island.

Solar

Enough energy from the sun hits the planet every hour to power the entire world for a year. Comprising 3.4 percent of our electricity generation, solar energy is a relatively small source of energy in the United States. Solar energy can be harnessed in two ways—through solar thermal or solar photovoltaic. Solar thermal technology is like the hot metal slide on the playground that would make you pay for foolishly venturing down it during recess. The sun heats up metal, which heats water—creating steam and turning a turbine. Solar photovoltaic is what most people think of when they think of solar energy—panels made up of a great number of cells turned towards the sun and capturing light energy to charge up like a battery. America’s largest solar photovoltaic farm is the Solar Star Farm in California.

Petroleum

Oil is typically used in transportation, but it can also be used in electricity generation—although it makes up only a tiny 0.9 percent of generation in the United States. The process to create electricity from petroleum is similar to the process for natural gas, as it can be used in steam, combustion engines, or in a combined-cycle power plant.

Biomass

Biomass is a fancy term for burning wood or using biofuels created with corn, soybeans, etc., to turn turbines. Although it is a large U.S. export commodity, our nation only relies on biomass energy for 1.3 percent of electricity generation. Developments are in the works for converting municipal solid waste (paper, shirts, furniture), animal manure, and human sewage into electricity sources.

Geothermal

Accounting for only 0.4 percent of electricity generation, geothermal is the smallest energy source in our nation. Since the earth has an inner core, outer core, mantle, and crust (where we live), heat from pressure and magma in the outer core and mantle produce heat that we can harness for electricity. Wells are drilled into the earth’s surface (some going 2 miles deep) and the heat is used to boil water and turn a steam turbine.

Now that we have a foundation on all of America’s top energy sources, we can further explore how energy is produced and transmitted and consider what would be the best energy policies for our nation and Missouri.

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Independence has struggled to maintain its own power generation as the environmental and financial costs of coal plants has [sic] pushed many other energy firms into renewables. While many say IPL provides exceptional service and reliability, city officials note that their customers pay higher electricity rates than those served by for-profit companies in other parts of the region.

The utility is also facing financial headwinds: Its cash reserves will drop below the utility’s target of $25 million by 2025, officials said. And those reserves will drop to a negative $97 million by June 2032 as the costs to maintain the utility’s infrastructure mount.

“The problem we have, as we sit here today is that IPL is on a course to a financial train wreck, due to what I believe to be questionable decisions in the past,” said Councilman Jared Fears. “So clearly something has to change.”

It bears repeating that Independence utility customers pay more than those using for-profit utilities in the region. This is despite the advantages in taxation and regulation that municipal utilities have over private utilities. There have been several water utility privatizations in Missouri in recent years, but not many electrical utility privatizations. The case for electrical privatization is probably even stronger, as one does not have to deal with the typical “how do you privatize something that falls from the sky?” argument. Unless you make extensive use of your home lightning rod, someone is artificially generating the electricity you use. Eureka and Arnold are just two of the larger cities that have privatized their water or sewer systems in recent years. From the Post-Dispatch story:

Arnold sold its sewer system to Missouri American in 2015 for $21 million. “The system was not in good shape. It was not well maintained,” said City Administrator Bryan Richison. “And city council members were running on not raising rates, so it put us in a bad position.”

As electric vehicles ramp up the electrical power needs of our communities, it is time for Independence, Columbia, Kirkwood, and (most of all) Springfield to get out of the utility business. Private, regulated utilities are much better positioned to provide the necessary services to these communities. These cities should privatize their assets via an open, transparent process and use both the sale price and the future tax revenues to provide better overall public services for their communities.

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But as happens with proposals like this, there is a tradeoff: other electricity users would ultimately pay more so that these plants could pay less. And it’s that tradeoff that promises to be hotly debated next week when the bill comes up for reconsideration.  Here is the 64-dollar question: rather than carving out exceptions to rules as they go along, why don’t policymakers first consider whether the rules themselves need to be changed for everyone? Such a reanalysis seems exceedingly appropriate as the Legislature focuses its energy on Missouri’s public utilities.  

As a general matter, utility customers across the state do not have a choice in who provides their power, and that impacts us all. If you could only subscribe to one cell phone company, the incentive for that company to compete for your business with better service and lower prices would be drastically reduced. The same is true of utility companies.  Why does Missouri allow the default electricity arrangement to be basically choiceless for the average Missouri customer? 

The state is part of a dwindling subset of utility regulators that still substantively curb utility choice in the United States. I would be more open to the notion that an energy customer is uniquely situated to require a break on its energy costs if Missouri was already operating in a market environment for utilities—one in which market forces could drive down the prices everyone pays. Whatever the eventual disposition of the smelter legislation in this special session, legislators need to have that serious reform discussion sooner, not later. And chances are good that discussion will begin in earnest next week.   

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If you like paying more for your water, wait until you learn about what the EPA wants to do to energy costs. According to the Associated Industries of Missouri, the impact of new regulations on coal “will require the reduction of emissions of toxic air pollutants from power plants in the U.S. The cost, estimated by the EPA, is expected to be $9.6 billion in 2015, and nearly that amount in 2016 and beyond.” For those of us in Kansas City, the news is especially bad [emphasis added]:

The EPA estimates rates will rise by an average of 3.1% nationally as a result of this rule alone.  Because Missouri generates a major portion of its electricity from plants that will be affected by the rule, the impact to your rates are estimated to rise by 6.3% in the far western part of Missouri, 2.8% in Eastern and Central Missouri, and 3.1% in Southeast Missouri.

The city is already struggling to pay the hundreds of millions of dollars  for the construction of a streetcar system that was adopted with a vote of about 300 people.  Now we learn that once built, thanks to the EPA, the costs of operating it are apparently going to be about 6 percent higher.

The EPA is conducting “Clean Air Act listening sessions” across the country, and one of them is scheduled for Nov. 4 just across the border in Lenexa, Kan. In order to attend and tell them what you think, you have to register in advance (no surprise there). Proponents of the streetcar are already wringing their hands about a proposed Jackson County tax — they may want to take a good look at an EPA rule that effectively taxes their pet project and would make non-electric transit even more attractive.

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Of course, if you want clean and remewable baseload power generation for Missouri, there is really only one way to go. …

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