The new “apartheid” – not based on race, but user type – household v big tech
I apologize in advance for the somewhat rambling nature of this article. I am trying to tease out the price gouging in the natural gas market and the alternatives being pursued in “renewables”. Corporations are grappling with the problem of ever-increasing demand for and rising prices of electricity – some are going nuclear, some buying modular nuclear reactors, some are tapping into solar – as this article features.
The place I am trying to get to is – even though governments from the Federal level down to the local level - why aren’t ALL energy supplying/generating authorities at any level making the same decisions as big companies for the benefit of local communities - and what should those decisions be,
It seems to me that big companies are doing the things that should be done at the local, collective society/community, level.
By not doing so, these quasi government “authorities” are enabling “energy apartheid” in pricing terms. There is massive price gouging in existing natural gas supply markets and even more in “renewables”.
Regular readers will recall my view that “renewable energy” should be free to users – barring maintenance and transmission costs. The onshore and offshore forests of wind turbines (they are not “windmills”) and plantations of solar panels have been paid for with money borrowed at the Federal, State, city or local level and continue to be paid for at the household level by exorbitantly high household energy charges. These household energy bills should – at the very least - be reduced by the amount of the “free” renewable anergy generated by the huge sums borrowed to erect “renewable” devices.
The concept of inflating household bills to pay for these monstrous devices is bass ackwards.
We have seen how large companies are rushing to secure energy supplies that are reliable and cost effective – e, g, the buying of nuclear plants:
Google to buy power for AI needs from small modular nuclear reactor company Kairos | Reuters
It’s not just the use of nuclear to provide reliable electricity to power the fast-growing demand for AI.
From here:
Enbridge breaks ground on 815 MW Sequoia Solar project in Texas – pv magazine USA
“Sequoia Solar has two major off-takers, Toyota and AT&T, that have signed long-term, fixed-price virtual power purchase agreements for most of the electricity generated.”
“The 815 MW Sequoia Solar project located about 150 miles west of Dallas, Texas is shaping up as one of the largest photovoltaic power facilities in North America.
Under development by Calgary, Alberta-based energy provider Enbridge, the $1.1 billion project is scheduled to come online in two phases, with the first 400 MW installment entering commercial operation at the end of 2025 and the rest in 2026.”
The site is 8,000 acres in size – 12.5 square miles. The panels are supplied by “Runergy” which Brave AI describes thus:
“Based on the provided search results, Runergy is a global company with multiple production bases and partnerships around the world. However, its headquarters and main production facilities are located in China.”
Uh huh.
“The project will use Runergy solar panels. Those for the first phase of the project are in the U.S. having cleared customs this past summer. The panels for the second 415 MW phase will come from Runergy USA’s factory in Huntsville, Alabama.”
I wonder of the Alabama plant is the equivalent of an assembly plant, where all the bits are made elsewhere and are just assembled there.
No doubt this makes perfect sense to the industry professionals.
“Conspicuous by its absence, perhaps, is any provision for long-term energy storage. Carbone said storage has not been a requirement because the majority of the energy produced is under virtual PPAs. While off-takers Toyota and AT&T have business operations in Texas, they won’t be consuming the actual electrons from Sequoia Solar.”
All abut storage or something.
So, here’s the beef.
There is no mention of price for the supply of these “virtual” electrons.
The average price paid per kilowatt hour in Texas is somewhere around 11 cents to 14 cents.
The 815 MWH plantation costs 1.1 billion dollars – when the sun shines and the plantation is not pummelled with hailstorms the size d grapefruit or the odd tornado. – which works out at 135 million bucks per MWH to construct.
It costs around 500 bucks per kWh – half a million per MWH for a natural gas fired, combined-cycle, power station – so around 400 million bucks for the same size 815 MWH “always on” natural gas power station.
I have previously shown that a single natural gas futures contract has 10,000 mmBTU (10 billion BTU) with 3,000 MWH of electricity content that degrades to 1,000 MWH when processed - and costs under 3 dollars.
3 bucks for 1,000 MWH.
How much does it cost to convert solar to electricity, adjusting for non-delivery at night and during the winter?
According to Brave AI:
“Cost After Federal Tax Credit: After applying the 30% federal tax credit, the average cost of solar panels in Texas is reduced to around $14,056 for an 8 kW system.”
Multiply that by 101,875 (851 MWH/8 kw) to get to the 815 MWH new plant = 1.432 billon dollars and the numbers are broadly consistent with the 1.1 billion dollars construction costs for the above referenced solar plant.
A bit of a sidetrack, but it shows some of the arithmetic involved in the electricity power supply conundrum.
The construction cost of an erratic supply (30% of the 815MWH claimed output?) from solar that covers 12.5 square miles is more than three times the cost of an equivalent natural gas-powered solution.
There is a 30% Federal tax credit for solar whilst no such tax credit exists for natural gas.
1,000 MWH of electricity sourced from natural gas costs under 3 dollars.
How much does a MWH of solar cost o a annual average daily basis, before and after Federal subsidies?
Instead of a dollar per MWH for electricity sourced from natural gas, Tezas households pay around 110-140 dollars per MWH (11-14 cents per kWh).
Given all these numbers I would guesstimate that Toyota and AT&T are paying at least 50 bucks per MWH for the “virtual” electricity from the new solar plantation. The latest UK offshore wind contracts are around 100 bucks per MWH.
So, two questions.
Firstly, why are Texas households paying a markup of more than a 100 times for natural gas?
Second, why are Texas households not able to access solar power for the same price as Toyota and AT&T?
This is the developing world of energy apartheid. The lines are developing and unclear so far, but they are just below the surface and starting to break through.
I suggest Trump investigate the apparent price gouging in energy supplies, such as natural gas and then investigate the price gouging of Big Tech and Big Pharma (and PBM’s) – where margins are between 25% and 60% with high barriers to entry and protected contracts – many with the Federal government.
Onwards!!!
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