Reserve Margin

You may have heard that the EPA is planning to shut down roughly 20% of coal generated electrical capacity by 2015.

Francois Broquin, a co-author of reports on coal by Bernstein Research, said the combined rules could push as much as 20 percent of U.S. coal-fired electric generation capacity to retire by 2015. "Obviously that will have an impact," he said.

What kind of impact? Let us get technical (not too) and see.

Electrical power grids must be able to supply the power demanded or else they will not supply any power at all. But. You know in the real world the SCHTF. Things like electrical storms and high winds can break power lines. A bad bearing can trip a generator off line. A tsunami can flood a plant. S*** Happens. So you have reserve margin. Generators either in hot idle or cold idle that can be brought on line for peak demand or to make up for failures in part of the system. So how much margin is enough? Around 10% is sorta adequate and 20% is too much (it costs money to carry the idle equipment on the books).

We are running at the low end of that range and possibly below. But for this case knowing roughly is good enough. Let me add another roughly: coal supplies 40% of the electrical power in America. It may be more. Never mind. So what is 40% of 20%? (coal generation times % shut down) . That would be about 8% of grid capacity. Or almost all of the margin that makes the electrical supply reliable.

Nationwide blackouts and certainly local black outs are in our future if this is not stopped or scaled way back.

Cross Posted at Classical Values