Eugene Preston

Eugene Preston has had a long career as a power system engineer, performing generation planning, transmission planning, and distribution planning for Austin Energy. He is currently doing transmission studies for wind developers.  He wrote all his own modeling software including the current network model used to perform his consulting studies.  His PhD dissertation was in power system reliability, a composite generation and transmission probabilistic model, and is posted on his web page.

by Gene Preston

Concerning the Solar Business Festival in Austin Texas on December 2, 2016 (
Originally I was to talk about: “Calculating How Much Solar Power Can Be Injected Into The Grid” and I prepared my talk on this topic which is posted:  

On the day before I was to give the talk on Dec 2,  I looked at the final program and saw my topic:
had changed to: “Off Grid Technologies and the Replacement of Fossil Fuels”.  

Here are my comments on the off-grid and replacement of fossil fuels topic.

by Eugene G. Preston, PE, PhD.

An annuity is a financial instrument designed to provide a more secure financial future. 
An energy annuity allows electric customers and the electric utilities to work together to provide a more secure and diverse electric system than would otherwise be possible.

Energy Annuity Mechanics:
A generation developer announces interest in building a new power plant such as a centralized solar plant (CSP) or nuclear plant.  An interested electric utility customer sees the offer and wants to purchase “x” kW of the new plant capacity.  The customer signs an agreement with his local provider.  The local provider handles the billings to the customer, which will now include the fact that x kW has been purchased.  The customer makes real time cash flow payments to the plant builder as they occur during plant construction.  When the plant is finished and begins running, power agreements between the customer, service provider, and generator handle all the accounting and generation scheduling. 

Locals usually become a lot more friendly toward nuclear power when they learn how it will reduce their local property taxes.  I recall reading survey results for Duke and Southern Company getting favorable survey results for more nuclear power in their regions.  Also, the mountain top chopping AEP is doing these days looking for coal is generating a lot of opposition from the locals.  Nuclear is looking better all the time when it comes to generating local jobs, local tax incomes, and minimizing environmental damages.  Coal power's days are numbered according to Dr.Tad Patzek, Chair of Petroleum & Geosystems Engineering, The University of Texas, who recently predicted that the annual coal burned world wide would max out in about 5 years and then begin a decline, primarily due to localized environmental problems and a need to have Green House Gas reductions.

It's the same amount as paying for the capital cost of a new nuclear plant. Here are the calculations:

  • A recent French proposed $24.74/ton CO2 tax is equivalent to an additional  electric energy cost of 3.7 cents per kWh.
  • This is determined from knowing that a 1000 MW coal plant produces 3 million lbs of CO2 per hour which is 1500 tons/h. 
  • To produce one ton per hour requires a plant size of (1e6 kW)/1500 = 667 kW. Then 2474 cents/h / 667 kW = 3.7 cents per kWh.
  • The new NRG 2700 MW plant on the Texas coast is estimated to cost $10 billion or $3.7/w. For a base loaded generator, the $/w cost is about equal to the cents/kWh energy cost.
  • Therefore these two costs are similar. However, an existing coal plant will still have to pay for the fuel cost, which will make the new nuclear plant a lower cost option than paying the CO2 tax and continuing to operate the coal plant.

Smart utilities will catch on to this fact eventually.