Guest essay by Philip Dowd
Here is a simple example that illustrates why current solar technology will be hard-pressed to replace existing carbon-fired power plants.
Let’s suppose that a power company is planning to scrap a coal-fired power plant and wants to replace it with a new plant. Furthermore, let’s assume that the old plant to be scrapped is in Arizona. The options for the new plant are natural gas and solar. The company wants a simple, ball-park analysis of the front-end cost to build each of these options.
The requirements:
1. Electricity demand on this facility is 4,800 MWh/day, about the demand for a community of 160,000 average households[i]
2. The “up time” of both plants must be equal. That is, both must be equally reliable and produce the demand for the same fraction of time over the course of one year.
Assumptions:
1. The solar plant will consist of a Photovoltaic (PV) panel and a battery. The PV panel will generate enough electricity during the day to produce the necessary output and charge the battery. The battery will generate the necessary output at night.
2. Night time demand equals day time demand.
3. The new plant will be built in Arizona, a good spot for a solar plant
The Analysis
The analysis is in the form of an annotated spread sheet, showing the two options and the steps required to derive the solution.
I. Capital Cost to Generate Electricity
II. Capital Cost of Storage for Night Time Demand
The solar option requires a battery that would supply night time demand. For this purpose we will use technology known as “Pumped Storage”. This method stores energy in the form of potential energy of water, pumped from a lower elevation reservoir to a higher elevation reservoir. In our example, about half of the electric power from our solar facility produced during the day would be used to run the pumps and fill the upper reservoir. Then, at night, the stored water would be released through turbines to produce the electricity that would run the night time economy.
For more on this see: https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity
III. Total Capital Cost Including Storage ($millions)
For our exercise let’s consider the Bath County facility, located in the northern corner of Bath County, Virginia[vii]. It was constructed in 1977-85 and is currently the largest pumped storage facility in the world.
Here are its relevant specifications:
So, at this point in the exercise we have the relative costs of the two options to generate electricity over a twenty-four hour period, assuming normal operations for both. The capital cost of the solar option is about 14 times the cost of the gas option.
Conclusion
This back-of-the-envelope analysis suggests that a solar (PV) power plant that could deliver that same results as a gas-fired power plant would cost about 14 times the gas-fired option to build. It is worth noting that the solar option cost excludes any subsidies, investment tax credits, etc, that could narrow the range, but it is obvious from this little exercise that until solar technology improves dramatically, there is little chance that it will replace natural gas as the “go-to” option for new power plants.
Bill Gates, the co-founder of Microsoft, has said that it was “fantastic” that the UN, national governments, and environmental campaigners had raised awareness of climate change and were taking steps to counter it. However, he argued that current technologies could only reduce global CO2 emissions at a “beyond astronomical” cost. “The only way you can get to the very positive scenario is by great innovation,” he said. “Innovation really does bend the curve.”[xiv]
I totally agree. Mr Gates intends to invest $2 billion in renewable energy over the next five years — innovation to bend the curve. Solar energy is going to need lots of it if it is ever to become a viable substitute for carbon-based energy.
References:
[i] Average household in US consumes about 900 kWh/month or about 30 kWh/day
http://insideenergy.org/2014/05/22/using-energy-how-much-electricity-do-you-use-each-month/
[ii] Net Capacity = electricity demand for one day ÷ 24 hrs or x/24
[iii] http://www.eia.gov/forecasts/aeo/electricity_generation.cfm
Scroll down to the table. Capacity factor is found in col 2.
The number for gas is “Conventional Combined Cycle”
The number for solar is ”Solar PV”
[iv] Gross Capacity required = net capacity ÷ capacity factor
[v] http://www.eia.gov/forecasts/aeo/assumptions/pdf/electricity.pdf#page=4
The cost used comes from col 5 in this chart: “Base Overnight Cost in 2014”
The entry for gas is “Conventional Gas/Oil Combined Cycle”
The entry for solar is “Solar PV”. Note that this cost excludes any subsidies.
[vi] Gross Capacity Required x Capital Cost
[vii] http://en.wikipedia.org/wiki/Bath_County_Pumped_Storage_Station
[viii] The equation here is Capital Cost at time of construction x adjustment for inflation
For Bath = $1,600 mil x 2.6 = $4.1 billion (inflation adjustment is for the period 1981 – 2014)
For inflation adjustment use this site: http://www.usinflationcalculator.com/
[ix] The equation here is Capacity x Time to Empty Upper Reservoir
For Bath = 3,000 MW x 14.3 hours = 43.0 GWh
[x] Assume night time demand = day time demand so night time demand on the solar battery = ½ total daily demand
[xi] Cost of Storage = Capital Cost ÷ Stored Energy = $4.1 billion ÷ 43 GWh ≈ $100/kWh
[xii] Capex to store night time demand = $100/kWh x 0.5X kWh = $50X
[xiii] Total here is the “Total Capital Cost” in Sec I plus the “Cost of Storage” in Sec II
[xiv] http://www.ft.com/intl/cms/s/2/4f66ff5c-1a47-11e5-a130-2e7db721f996.html#axzz3kyDZjQxG
Errata and notes: The $4.1 trillion capex for the Bath County facility is a typo; yes, should be $4.1 billion, both in the body of the article and the footnotes. This has been corrected. All of the other numbers in the body of the article are correct and the conclusion that the capex of the solar plant is 14 times the gas plant stands.
The assumption of night time demand = day time is just for convenience. I know its not true, but this is just a ball park analysis and I’m trying to keep it simple.
The analysis deals only with capital cost, not levelized or life cycle, again just to keep it as simple as possible. – Philip Dowd
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The $4.1 trillion for the Bath County storage facility seems high, even adjusted for inflation. According to your footnote viii, shouldn’t that be $4.1 billion?
Agree – that can’t be right.
I think you are right:
Zeroth Law of Climate Science: 1 is approximately equal to 100.
So, even from a climate science perspective, this is off by an order of magnitude.
Yes, I’ve asked the author to fix this.
Yes. It is clearly 4.1 billion, however carrying this forward suggests the storage cost is just $240 thousand, instead of 240 million, which seems very low for such a large plant.
No if the costs of the large 3,000W Bath County storage is 44,100 at today’s prices
Then a 20W storage costs $273.33m
But he’s daft to leave off the cost of the gas and only consider capital costs.
Gas costs might not be large if it is easily obtainable and untaxed.
My typo 200W = $273.33 cost
OK so now we’ve got rid of three order of magnitude type errors…
And where on the planet is that the case? NYC , perhaps?
if you’ve ever spent a summer in Phoenix, then you know that AC is on 24/7 as it only drops to about 85F in the wee hours just before Sunrise. So, at least in the summer, demand doesn’t drop all that much at night.
I placed a thermometer in my car for several days over the summer and the temperature rose to over 156F with the windows up once topping at almost 170F
If you are going to include gas costs, then you have to include maintenance costs for both types of facilities.
http://physics.ucsd.edu/do-the-math/2011/11/pump-up-the-storage/
one more time.
You don’t mention fuel cost over the life of the gas-fired plant. Does this make a significant difference?
I didn’t see land costs for pumped storage; is that included? But running costs weren’t part of what we were offered. All plants need maintenance, insurance, staff, taxes, …
Don’t forget the land cost for solar too. That’s going to be a very large PV array.
Then again. The pumped storage option assumes that you have a convenient mountain with some fairly flat land on top of it, and lots of water. Not always a simple requirement to fulfill.
There also has to be assured sufficient water in it so someone has to buy the water and build and maintain the hardware and pay for replacing evaporation losses, as well.
And hope prosaic multi-year droughts don’t occur like they always do, which requires carrying an expensive overhead of excess water supply, at all times, and its added evaporation loss costs, and this will use (and remove) more of the available rainfall.
And you also need an excess of pumping capacity to provide for redundancy in failures and maintenance periods.
And you’ll need to pay for a feed from a gas or uranium plants for when the unforeseen occurs … like an extreme weather tornado takes out your solar farm … or a solar flare fries it … or a hail storm wipes out 75% of its capacity in minutes.
Not a dumb question, but in Arizona, the land for generation and storage will probably be federal land leased at low or zero cost. There LOTS of Federal land in the mountain West. A more interesting question is where all the water required for storage will come from.
SmartRock. Yes, you are correct suitable sites for pumped storage look to be a problem in the Eastern US. There are some, but not a lot. I wouldn’t be surprised to find that there are not enough to support a large market penetration by intermittent sources. Not so much of a problem in the West, I think. Lots of mountains. Big ones. There, the problem looks to be water. Although in concept one can cycle water between just an upper and lower reservoir and only import enough to make up for evaporation and leakage. The more thoughtful environmentalists may not be big fans of such a concept because the “lakes” would presumably have constantly changing water levels and might not be a friendly environment for many species.
Try to get a new hydro project of any kind through the draconian licensing process.. And you also have to have a public utility commission willing to spend 14X of their customers’ money for the plant. Grandmaw can’t afford it, she,ll have to eat Alpo.
Evaporation wouldn’t be that big of a problem if the entire facility were located underground and not exposed to surface winds and sun. The only additional cost then would be for removing sufficient amounts of subsurface material (there are always those nasty Coal Strip Mines that could use infill) and protecting from loss to ground seepage over a large enough area.
The water could also come from coastal Desalination and transport pipes. With underground reservoirs very little evaporation and easy access to piped water supplies. Since the water isn’t being used for consuming, you could also use reclaimed water and no species concern for Underground reservoirs as it wouldn’t become a habitat.
Some form of floating plastic cover might be less expensive than building a covering for the entire lake.
On the down side, the risk of having someone fall through the plastic cover and drowning might make insurance prohibitive.
I have been trying to educate the local Green activists and politician supporters of renewable energy to understand this normal, very basic, but essential “like for life” total life cycle CAPEX/OPEX cost comparison investment analysis for many years. The same applies to a comparison of Wind Turbines with Gas Turbine Standby’s versus Gas Turbines alone as base load units. You also have to add in the necessary massive additional cost of enhanced and additional Power Transmission lines needed to connect the remote WT’s and SP’s to areas of actual Power Demand.
The result of this proper professional engineering investment analysis is a no brainer: the WT/GT/Power Line system is, and always will be, massively more expensive regardless of how much money is spent on R&D in an attempt to improve on the inbuilt engineering inefficiencies within this Total System.
In addition, in the UK, we now have the ridiculous and obscene situation where WT power is given priority use and subsidies and guaranteed minimum prices are paid to the WT supplier/operator to make their product commercially viable, and then subsidies are then needed by the GT standby supplier operator to cover the increased costs of supplying and operating GT’s to meet every varying shortfall power demands and operating way off optimum efficiency loading.
You just couldn’t dream up a more idiotic and crazy situation. Yet the politicians here still wonder why our steel industry and many other industries are losing the battle with foreign competitors, exports are failing and why our power costs, affecting all our other costs, keep rising.
I despair – we desperately need scientists and professional engineers in Government!
macawber,
I agree with the professional engineers, but scientists (especially “climate scientists”) are what got us into this mess in the first place!
The words ‘front-end cost’ seem to have passed you by just like some others.
So what is the point of only studying “front end costs”?
Like working out the payments to buy a car without working out if you can afford to use it !
“You don’t mention fuel cost over the life of the gas-fired plant.”
Fuel cost depends on local economic conditions; gas isn’t as transportable as oil.
The existence of the plant changes these conditions.
So the answer is: we can’t say what fuel cost is. But such energy plants have significant market impact.
The photo for the gas plant shows two units. There is no reason that the capacity of the two units combined with programed maintenance can not be well over 90%. I had experience of an oil fired rotary furnace operating at just over 98% average over 13 years availability and a second unit averaging over 95% availability.(output of the first was about 200% of original design capacity due to modifications and the other about 150% of original capacity)
For the solar plant 25% capacity is far too high. Maximum capacity only occurs about 2 hrs a day if the sky is clear. Insolation is a bell curve with zero generation at night time. Average capacity over a year is only around 16% after allowing for clouds and low sun angle in winter. Experience with solar plants in Australia show they need a lot of maintenance. It is a myth that they operate at no cost.
Accurate post, c-a-f. And I realize this was a simplified calculation just to give us an idea of the costs. However, the impact of a cloudy day or two (yes, even in Arizona) could easily be factored in, it would significantly increase the PV and the pumped storage costs. I wouldn’t be surprised if it jumped it up to 20 – 25% X.
BTW, I’ve visited the Bath County Pumped Hydro Station, it is amazing to behold.
I suspect that the 25% utilization rate for the solar is too optimistic. What happens if it’s cloudy for an entire week?
http://physics.ucsd.edu/do-the-math/2011/11/pump-up-the-storage/
ignoring reality has its downsides.
…especially the fact that Bill Gates’ $2 billion investment wouldn’t even purchase the example solar plant–he’d have to come up with another $500 million to do that.
Great post….could you do one of those for wind v.s nuclear?
… and for geothermal v/s PV, please!
… and for future fusion reactors?
…and for oxen yoked around giant wooden wheels, please.
[Fergit the oxen. Just hook up one each Conan. .mod]
Well, very nice, but what about the NG to fuel it, say at $3/E6 Btu and a plant efficiency of 60%. Interest? Amortized? And annual O&M expenses? Even still the CCPP should have the edge. If I take the time might back of envelope some more numbers.
solar panels degrade … in AZ even faster …
And they can be covered by dust.
Anyway, there are other types of solar. Somewhere in the article should be mentioned that the comparison is against PHOTOVOLTAIC solar, not simply solar. Appart trom that, I like the article.
This was just a look at the capital costs
If I take the time might back of envelope some more numbers.
Oh well, Nicholas. Plain Do it.
Hans
An annual cost of operation would be useful for this comparison.
at mw per $ overa year I bet solar still loses badly
Oh, and of course you can dispatch the CCPP anyway you want & it doesn’t need back up for several cloudy days. Even AZ has those.
Without disagreeing with the basic point that solar power economics are questionable, the true apples-to-apples comparison is done via a Levelized Cost of Electricity (LCOE) methodology, which incorporates all capital, operating and finance costs over the entire lifespan of the plants in question. Judith Curry’s website has a couple of detailed posts on the point dating back a couple of months.
Would you move to a tropical island with only solar and wind power – NO.ZERO, backup from NG, Battery, PS? Hint,I went on a vacation to northern WA state. Fishing cabin only had solar power. After the third rainy day the four storage batteries were dead and my Cellphone was DEAD and it was two more days before I could recharge it. Caught a lot of fish,but the wife was super PO’d!
Don’t believe the LCOE includes backup power. LCOE is a tool used to determine the compare power plants and is normally used to compare similar types of plants, not the cost of providing reliable power. It is only interested in power delivered tot he grid, not RELIABLE power to the customer. At least none of the equations that I have seen address backup power needs.
The future of power , I’m totally convinced, is molten salt nuclear technology. Nothing else comes close.
Look for it from Transatomic Power (owned by MIT graduates) and Terrestrial Energy(Candadian) and the crash program being financed by the Chinese govt. Commercialization by roughly 2020
Perhaps the best option. Modular, build and ship. We have at least 75 years worth of used fuel. Needs to be refueled every 10 years or so. The half life of wastes is measured in hundreds of years, not thousands (and more), unlike thorium. Why reinvent the wheel. Thorium fuel is difficult and expensive to produce even if raw thorium is cheaper.
Ric, he doesn’t say anything about thorium; why do you bring it up? MSR is not thorium based (if that’s where you got the idea); it doesn’t need thorium to run, though it can – theoretically – use some.
‘even if raw thorium is cheaper.’
Unknown. There is no thorium production industry. None. What little man has wanted has come as by product from other material processing. Should it be used in energy production, the industry will have to be created. Ipso facto, the cost of commercial volume thorium is pure speculation.
Gamecock, I only brought up thorium because some on this site have the thorium bug and I wanted to show some of the disadvantages of thorium. Many think of thorium when they dream about MSR’s. I do wish Retired Kip P would be a little more specific. There are more than 2 companies working on MSR’s worldwide. I believe that the majority of the materials exist and the TSR (Technology Readiness Scale) is making good progress. I think there will be a prototype in 5 or 6 years. NRC approval could take 4 or 5 years with a present rate of something like $439 per hour.
And if it is not Thorium, what element and isotope are you talking about?
Ric, agreed. One of the key characteristics of the Thorium Nuts is their ignorance of nuclear physics.
https://whatisnuclear.com/reactors/msr.html
“There are many different types of MSRs, but the most talked about one is definitely the Liquid Fluoride Thorium Reactor (LFTR). This MSR has Thorium and Uranium dissolved in a fluoride salt and can get planet-scale amounts of energy out of our natural resources of Thorium minerals, much like a fast breeder can get large amounts of energy out of our Uranium minerals. There are also fast breeder fluoride MSRs that don’t use Th at all.”
Mr Frost, ‘Thorium Reactor’ displays ignorance of nuclear physics.
Not going to happen in your life time.
Kit, if I were in my 80’s and these people were using thorium, I would agree. The basic design is well over 40 years old and they are not using thorium. The materials exist and the TRS’s ( Technology Readiness Scale) is coming along quite well. I think we will see a prototype in 5 or 6 years. NRC approval is slow (4-5 years) and expensive (last I saw was $439/hr).
The Chinese have over 20 operating plants commissioned and I believe the US has over 5 either being built or Commissioned where is molten salt storage. But the costs are very high about 40% higher than conventional. The real Holy Grail of solar energy storage as for photovoltaic. They don’t have a financially practical solution yet I believe they’re close. I believe there are some promising Technologies being developed from nanotechnology that would be cost effective.
And you’d better build the gas powered plant as well for when there is a week of cloud and cold weather in Arizona.
But you forgot the handwavium mine to power the unobtanium converter! Or so the apparent response of the greens will be to any such calculation.
Right on, Tom. If the greens smokescreen and propagandize the science, they can achieve “great” carbon reduction “innovation” through involuntary reduction of the population.
Like Gates said: “The only way you can get to the very positive scenario is by great innovation,” … “Innovation really does bend the curve.”
You’re forgetting the key word: ambition ! We have to have “ambitious targets”. We need more ambition.
Demand for electricity is not constant. It’s silly to use that assumption. It’s higher during the day and early evening and lowest from about midnight to 6am.
https://www.eia.gov/todayinenergy/detail.cfm?id=830
Between that bad assumption and the poor math ($4.1 trillion? Seriously?) this article is flawed.
{a request has been made to the author to fix that typo -mod}
More proof reading of this type of posts would be appreciated.
Perhaps you could volunteer?
But nights are longer in the winter!
Heating costs are higher during the winter, and they maximize at night as well.
Yeah, thinking that too, but it only throws off the storage part – 240 / 2740 ~= 0.
Night time usage is bound to be high what with pumping all that water back uphill. Or are you going to use grid power? 🙂
SteveT
Power generated from the solar panels is not a “constant” from sunrise to sunset either. More like a bell curve. This curve is only slightly flattened with Azimuth/Elevation tracking panels. Usually, not worth the added cost of the tracking equipment over the life of the panel.
Still ignored by this calculation is this only gives you power for one night. PERIOD. Search for Pumped Storage on Wikipedia. Look at the size in acres of needed land. The majority of these are only “buffers” and/or peaking units. What happens with three or four “cloudy” days? And these are the cheapest to construct (today). Now, do the calculation of cost for batteries, any type of battery.
For the sake of simplicity, you could assume both plants are ‘base load’ power plants which are kept running at or near capacity. It is other plants on the grid (say, additional gas turbines without a steam cycle) that have their loads varied to meet demand.
And, just where are all of these “other” plants going to get their sunshine from when 50% of the power is from Solar. Or even 33%. or even 20%.,Do the math and you will see that you still need about equal number of fossil plants as “renewable” plants.
Only Nuclear power is the answer, the renewables are a SCAM.
Better not include cloudy days in those availability calculations. Or dust on the PV cells, or reduced tau during Springtime dust storms. They do both happen in AZ.
Solar PV is only a reasonable cost-saving alternative when connecting to the fossil fuel/nuclear-powered grid is not feasible, like powering a remote weather reporting station or a remote night time lighting system (run by a battery charged by daytime sunshine).
I got my Tucson Electric Power bill yesterday for March. On it is a collection of Green Energy Charges, totaling $5.74 of a $75.69 bill. So I’m subsidizing Elon Musk’s multi-billion dollar market cap of Solar City to make him even richer. But at some point in the not too distant future, all those homeowners with his PV installations on their rooftops, the subsidy gravy train will end. Then Solar City will go into liquidation, and there’ll be no one to pay for maintaining those systems except the homeowner. Then they’ll end up in the scrap heap, and we’ll need those nat gas generating plants we didn’t build.
bingo, Musks entire empire is built on rent seeking subsidies or outright blackmail (California) … he’s a great salesman … and that’s all …
C’mon Kaiser. Musk (his companies) has only received about $5 billion in subsidies and loan guarantees. Meanwhile, over this time period his personal fortune has grown to about …… $5 billion. Gosh, what a co-inki-dink.
SunEdison to file for bankruptcy.
Can Solar City be far behind? Maybe the subsidies and business models are different, but the laws of economics can’t be repealed and losses on anything solar in recent years says Solar City is headed eventually to bankruptcy.
I’m not a big fan of Musk, but let’s give the man some credit. Unlike a lot of companies designed to suck up government money, Musk’s operations — Tesla, SpaceX — seem to be well managed and the products work.
Don K,
At > $100K each, the Tesla model S better work damn well. But buyers get a $30K govt rebate. And Who is buying those? The affluent who buy them, that’s who. They buy them as bling, because beyond around town they are not practical highway cars (outside a narrow I-5 corridor in Cal where fast charge/battery swap stations are available). So taxpayer provided welfare for the rich.
Tesla depends on subsidies in its business model. As for Space X, it has yet to make a profit, it may someday, that is far from certain. There is real innovation there, granted.
All 3 of Elon Musk’s businesses, Tesla, Solar City, and Space X are completely dependent on tax dollars and/or rate payer subsidies to “Green Energy” to succeed. And Elon Musk has quite a few Democrat pols (and some Republicans) in his pocket book in a mutualistic symbiosis that parasitize off helpless tax payers.
I disagree with one aspect relating to the Gas-fired solution:
You’ve stated Net Capacity required 200MW, Capacity Factor at 87%, Gross Capacity required 230MW
You’ve forgotten to take into account the efficiency of the plant.
no … that does take that into account … the horsepower rating of a turbine is not the 100% perfect efficiency number its the actual output …
I’m referring to the gas combustion thermal efficiency.
That has not been taken into account.
No, electric power output is used on both cases.
The “efficiency” of the plant isn’t relevant here. (BTW, the “efficiency” of the gas engine is much higher than the one of the solar panel. Of course, you don’t have to buy sun.)
The NG plant is tested and verified that it deliveries 200 MW to a load before the vendor gets paid for it. I have personally run these tests to assure that they deliver the rated output.
duh
“Capacity Factor at 87%”
Joe, not relevant to the discussion. only applies to actual gas usage.
The numbers don’t appear to include land cost. Considering the sizable difference in footprint, the PV cost would be even higher.
at least 5,000 – 10,000 acres …
plus the 24/7 security guards to patrol the site … PV panels are a vandals dream … worth several hundred each …
This is incomplete. Assume a plant life for each type. I dunno the figures, but my guess is t hat the gas plant will last twice as long as photovoltaics. Maintenance on the gas plant might be higher, though. Cost of operations certainly will be influenced by the need to purchase gas while sunshine is free.
Interesting contrast in cap costs, though.
Another thing left out of LCOE. But implied in the L (Lifetime) of “LCOE” but green’s ignore this.
You need to hire a lot of people to keep the solar panels clean. On the other hand that would be low skill minimum wage type employment.
Pumped storage in AZ is inappropriate. If a hill is available, gravity storage using solids (aresnorthamerica.com) is more realistic. If no hill, then you are stuck with CAES (lightsail.com).
EIA estimates for new generation (2020) LCOE $/MWhr shows Solar PV at 125.3 ex subsidy (-11) and Nat. Gas Advanced CC at 72.6. Geothermal is 47.8 ex subsidy of -3.4
OK, here’s what I got with fuel, interest, amortization, fixed and variable O&M. The solar does not include storage or considerations for dispatching or backup. Plus an interesting 2013 EIA study & link that I used for the costs. If somebody can ‘splain how I can insert the Excel sheet you can see all the numbers.
http://www.eia.gov/forecasts/capitalcost/pdf/updated_capcost.pdf
……………………………Coal…….….CCPP………..….Solar
Capacity, MW……………500…………..500……………1,700
Capacity Factor,%……..85%………………85%………………25%
Energy, MWh/y……. 3,723,000……..3,723,000…….3,723,000
Annual Costs, E6 $………………….$154.48………..$132.93………..$191.31
Required Revenue, $/MWh………..$41.49………….$35.70………….$51.38
Required Revenue, cents/kWh……….4.15……………..3.57…………5.14
$2/E6 Btu for coal, $4.50/E6 Btu for NG.
Capital $/kW: coal – $3,246, CCPP – $917, Solar PV – $4,183
Life, yrs: Coal – 30, CCPP – 30, PV – 20
I have worked for utilities with Coal fired power plants that are over 60 years old and still operating today, and selling power to surrounding municipal power systems for less than $0.05 per kWh.
The plant may be 60 years old, but how old are the boilers and the turbines?
The idea of this article is right. An apples-to-apples comparison would be good, but this article falls short of that in at least these three major ways:
1-The cost of fuel to run the NGCC plant is not included in any calculations (solar energy is basically free).
2-A standard LCOE (levelized cost of electricity – cost to provide electricity for 20 years) should be calculated. The author basically only compares up front costs, which is very unfair to solar.
3-There are cheaper options to pumped storage for energy storage for solar, like molten salt.
Solar is outrageously expensive compared to NGCC, for sure, but not as bad as this article says.
Where is anyone actually using molten salt (or hydrogen fuel cells, or batteries, or whatever) in utility-scale (200mw in this example)?
The Crescent Dunes Solar Thermal Plant near Tonopah, Nevada. It’s been operational since 2013.
http://www.solarreserve.com/en/global-projects/csp/crescent-dunes
There are others.
Azleader, is that the one that’s gas-powered for 4 hours – somewhere there – in the mornings because it can’t get going on its own? I take it they all do that?
Azlander, @ur momisugly 4:05 pm. Is that the plant that just recently required an extension on it’s bill payments because it is behind on it’s payments to the electrical companies in California? (oh sorry I see your date April 1st, well you fooled me)
https://en.wikipedia.org/wiki/Ivanpah_Solar_Power_Facility
Gross capacity 392 MW.
Main cons: Need to warm the molten salt in the morning.
It fries birds.
Melbourne Victoria, 5kW system, daily output between 55kW and 300 watts. Great for subsidies, unless in real life.
What is the Property tax on “industrial zoned” property in your state/county? What is the taxes on 1,000 industrial acres compared to less than 20?
The cost of the fuel/energy source used in generating electricity is one of the smallest factors in the major costs affecting the price of delivered electricity. Approximately 50% of the “Pay this Amount” line of your electric bill is TAXES. They consist of Property takes on every square foot of owned land and buildings. Taxes on every power pole and every foot of wire on those power poles. Property taxes on every vehicle owned, and every gallon of gas used in those vehicles, the annual registration, etc. And that is just the State/local/city, you also have the Federal taxes. Then, look carefully at your bill. Just like your phone/cable bill, there are now state and federal fees. And My state then includes the state sales tax on top of that.
Is your state going to tax that 1,000-acre solar farm at its actual value or its subsidized cost?
Yes, paying taxes are relevant for commercial investment decisions, but not for economic cost-benefit analysis.
The methodology should relate to the aims of the analysis. Some readers are assuming the analysis is financial (point of view investors). Others think that it is economic (point of view of the nation), Still others think it is about subsidies (point of view of consumers and taxpayers).
I understood the author had only the limited goal of comparing the level of commitment required on the part of investors by showing the differences In capital costs, a key factor for risk analysis in situations where political factors predominate. I accept that Investors may commit to 20 years for a solar or wind plant, but I wondered, can government commit to 20 years of subsidies and to tariff increases needed for capital recovery?
The return from investment in conventional power has historically been predictable enough to make power utilities a suitable foundation for pension funds. However, national policy has not so far addressed the long-term risks of regulatory energy policies to pension funds, annuities, and endowment policies upon which so many Americans are relying for support after retirement. The US pension sector has long relied on the energy sector, utilities especially, for stability, but we ought now to be asking about future political risks.
For many years, the energy sector has been shifting voluntarily from carbon (coal) to hydrogen (methane as natural gas). Forcing the pace of change by regulation and subsidies will result in scrapping of massive amounts of existing capital before the end of its useful economic life.
Who owns the capital that will be scrapped? The last I reviewed the issue, I found that some institutions are dumping these investments, ostensibly for ideological reasons. But could the reason be that these investments have become too risky relative to return?
The same policies and regulations that destroy capital will require mobilization of massive amounts of new investment capital and will require massive amounts of new capital investments. Where will the funds be found?
These are the questions this article provoked in my mind. There are enormous risks in driving radical change in the energy sector by using regulatory power. Readers should be wondering what is happening and what will happen to money they have put aside and will be putting aside for the future security, whether in private or company pension funds, insurance policies or mutual funds, or other institutions.
Money is not free either
On the hand, you are only including fuel costs, without considering maintenance and replacement costs, which is very unfair to NGCC.
PS, it’s far from proven that molten salt is actually cheaper than pumped storage.
Philip Dowd,
Night time demand equals day time demand
That is never the case: daytime demand is about 20-25% higher than nighttime demand and winter time demand can be 25% higher than summer time demand in my country, but I suppose in the hot desert of Arizona it is probably reverse with all their AC units… That is an advantage for solar which gives its maximum in summer.
That means that storage may be 25% smaller. Not that it makes much change in the difference in capital needed to build the plants…
As said already by Ken Robinson, I do miss the operating costs. Gas still is (relative) cheap – in the US – but you need a lot of gas for such a plant, while sunshine is free. Of course the solar plant needs more cleaning, especially after a dust storm, but even that is not a real high cost and a modern pump/generator plant doesn’t need much personnel either…
actually the size of the energy storage for the PV alternative would need to be significantly higher, to account for couple of cloudy days.
The achieve the same availability and reliability, the storage by my first guesstimate would have to be 5x bigger (60hrs of stored energy, not 12hrs) and perhaps even bigger.
The problem is, cost justification for multiple days is virtually impossible. You might justify the investment for a day’s backup, but as you go further out, the utility approaches zero. Are you really going to get 5 straight days of clouds in Arizona? No one is going to invest in something they may use once every few years.
Unless they are using someone else’s money.
No one is going to tolerate a total blackout until the sun re-emerges when multiple cloudy days do occur.
Are you really going to get 5 cloudy days in a row in Arizona?
Absolutely…the only question is how often.
janus100,
I completely agree that it doesn’t stop with the storage for the dark hours. Not for wind, not for sun or any other intermitting power source. If you take that into account, the only solution is a 100% backup of fossil or nuclear. As the night time pumped storage is already several times more expensive than a gas plant, the installation of a backup gas plant which only needs to turn full speed during 10% of the time, makes it extremely expensive. Something like the necessary (fast!) backup is never mentioned in the price of “green” electricity.
Only if you have already a huge supply from hydro like in Sweden and Norway, that may have merit, as that can act as a buffer when there is no wind and sun (hardly any in winter there). They do that already for the Danish wind power: cheap power export to Sweden and Norway with too much wind and expensive import with no wind. The Swedish and Norwegians are very happy with that, the Danish consumers a lot less, as they pay the highest rates in Europe…
‘the installation of a backup gas plant which only needs to turn full speed during 10% of the time, makes it extremely expensive.’
Exactly. The fixed costs are incurred whether the plant runs or not.
Exactly.
It just shows that if the solar and wind ,if they are supposed to be at least remotely economical, They cannot represent more than 20% of the installed capacity of the System.
From that, the total energy produced from intermittent, non-dispatchable sources will always stay below 10%.
Any higher penetration is obscenely expensive.
Other posters also mentioned the operating costs and fuel cost of Natgas plant, but don’t forget the even solar needs maintenance and upkeep.
I own and operate 400kW rooftop solar array and someone has to go there every 2weeks.
Also, Ontario where I live, has at the best 1300 insolation hours (and that would be a good year), so if one would want to build a system to cover continuous demand, the size of the solar array would have to be 8600/1300 = 6.6x , but more like 7x, and the same with the storage.
(I get nice FIT though. It pays much better the pension for a live long engineering work, that’s for sure…)
‘Any higher penetration is obscenely expensive.’
Or you do without backup. The decision to do without backup can be a political decision, so it is a real threat.
“…cheap power export to Sweden and Norway with too much wind and expensive import with no wind…”
Ontario does the same.
Exports extra renewable power at 10% of the purchase price from the wind/solar developers.
It’s totally insane.
Gamecock, beyond that, maintenance costs go down when the plant is not being run, but they do not go to zero.
It gets very cold at night in the desert during the winter. That’s a lot of heating costs when the nights are at their longest.
We can all nit-pick a few variables but that’s just for sunny Arizona. Gulp!
The idea of pumped water storage for night solar supply has something about it of the paradoxical ‘hare-braininess’ of this wind energy solution for low-wind days:
http://www.wind-watch.org/alerts/wp-content/uploads/2009/05/klossner-125732_m.gif
(The New Yorker)
It’s a goofy idea so I didn’t look at it in detail but in fact, the solar installation has to produce 24hrs. worth of power in approx. 8-10 hours
That’s really just an extension of the ‘motor driving a generator’ idea except that you have a ‘flexible coupling’ in the form of air between them.
A motor driving a generator -which powers the motor- definitely works; you can find hundreds of videos on YouTube demonstrating this point. Only problem is you don’t get a subsidy for it, so nobody bothers.
It will work for a little, slow down, then stop. The generator has an efficiency less than 100%, and so does the motor.
There is a use for such installations. I’ve seen them used as a form of power filtering. Short term power surges or drop outs, less than a second, are handled by the inertia of both the motor and generator.
A good metric of un (un)workability of a scheme is how much costly hypotheses you need to assume in order to say in a “study” that the scheme is virtually doable.
The French ecoloonacies agency (ADEME = “Agence De l’Environnement et de la Maitrise de l’Energie”) made a study showing that France could go 100% “renewable” (they mean: for electric power, apparently oil and gas imports and peak everything don’t matter); they just needed huge decrease of price of mature technologies, increase of efficiency, and the rest of Europe NOT going ecoloonatics.
The amount of hope going into these “studies” is staggering.
Visited Normandy for a couple days and it was very windy. So maybe it is possible. Where will France find the people to get it done?