The Dark Future of Solar Electricity

Guest Post by Willis Eschenbach

The “Annual Energy Outlook” for 2011 is just out from the US Energy Information Administration. The section called “Levelized Cost of New Generation Resources” looks at what are called the “levelized” costs of electric power from a variety of sources. Their study includes “renewable” sources like solar, although I’ve never found out exactly how they plan to renew the sun once it runs out. The EIA data in Figure 1 shows why solar will not be economically viable any time soon.

Figure 1. Levelized costs of the different ways of generating power, from the EIA. Blue bars show the capital costs for the system, while red bars are fuel, operations, and maintenance costs. Estimates are for power plants which would come on line in five years. Operation costs include fuel costs as appropriate. Background: HR diagram of stars in the star cluster M55 

“Levelized cost” is a way to compare different electrical generation technologies. It is calculated by converting all of the capita costs and ongoing expenses for the project into current dollars, and dividing that by the amount of energy produced over the lifetime of the plant. For the mathematically inclined there’s a discussion of the various inputs and calculations here. Levelized cost is the all-up cost per kilowatt-hour of generated power. The levelized costs in Fig. 1 include transmission costs but not the costs of backup for intermittent sources.

So why is this chart such bad news for solar electricity? It’s bad news because it shows that solar won’t become cheap enough to be competitive in the open market any time in the near future. Here’s why.

Now, please don’t get me wrong about solar. I lived off the grid for three years on a houseboat with solar power in Fiji, collecting sunshine and drinking rainwater. I am a solar enthusiast and advocate, there are lots of places where it is the best option.

But not on the grid. It’s too expensive.

Yes, it’s true that the sunshine fuel is free. And the operations and maintenance is cheap, 2 cents a kilowatt-hour. And as backers are always claiming, it’s the only technology where the capital cost is falling rather than rising, as the price of solar cells drops.

But here’s the problem. Solar cell prices have already fallen so far that only about thirty percent or so of the cost of an industrial-sized solar power plant is solar cells. The rest is inverters, and wiring, and racks to hold the cells, and the control room and controls, and power conditioners, and clearing huge areas of land, and giant circuit breakers, and roads to access the cells, and the site office, and half a cent for the transmission lines from the remote locations, and labor to transport and install and wire up and connect and test all of the above, and …

That means that out of the twenty cents of capital costs for solar, only about six cents is panel costs. Let us suppose that at some future date solar panels become, as they say, “cheap as chips”. Suppose instead of six cents per kWh of produced power, they drop all the way down to the ridiculous price of one US penny, one cent per kilowatt-hour. Very unlikely in the next few decades, but let’s take best case. That would save five cents per kWh.

The problem is that instead of 22¢ per kWh, the whole solar electric system at that point would have a levelized cost of 17¢ per kWh … and that is still two and a half times the price of the least expensive option, an advanced combination cycle gas turbine.

Finally, this doesn’t include the fact that when you add an intermittent source like solar to an electrical grid, you have to add conventional power for backup as well. This is so you will be sure to still have power during the time when the sun doesn’t shine. Even if you never use it, the backup power will increase the cost of the solar installation by at least the capital cost of the gas plant, which is about two cents per kWh. That brings the levelized cost of solar, IF panels dropped to a levelized cost of only one penny per kWh, and IF the backup generation were never used, to 19¢ per kWh … and that’s way more than anything but offshore wind and solar thermal.

However, it gets worse from there. The cost of fuel for the gas advanced cycle power plant is only about 4 cents per kWh. So even if gas prices triple (which is extremely unlikely given the advent of fracking), the gas plant cost will still only be about 14¢ per kWh, which is still well below even the most wildly optimistic solar costs.

And that means that the dream of economically powering the grid with solar in the near future is just that—an unattainable dream. The idea that we are just helping solar get on its feet is not true. The claim that in the future solar electricity will be economical without subsidies is a chimera.

w.

PS—On a totally separate issue, I suspect that the maintenance costs for wind power are underestimated in the report, that in fact they are higher than the EIA folks assume. For example, both wind and water are free, and the EIA claims that wind and hydro have the same operation and maintenance cost of about one cent per kWh.

But with hydro (or almost any other conventional technology) you only need to maintain one really big generator on the ground.

With wind, on the other hand, to get the same amount of power you need to maintain dozens and dozens of still plenty big separate generators, which are stuck way up at the top of really tall separate towers … and also have huge, hundred-foot (30 m) propeller blades whipping around in the sky. You can imagine the trek you’ll have when you forget to bring the size #2 Torx head screwdriver …

Do you really think those two systems, both feeding the same amount of power into the grid, would cost the same to maintain? Check out the windfarms and count how many of the fans are not turning at any given time …

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johnnyrvf

The latest Nuclear power stations are designed for a minimum life of 60 years and in the case of the new generation Thorium Reactors being designed in India, 100 years, what would be the levelized cost in cents of nuclear power if the length of the operating life cycle was taken into account?

Thanks for the cost comparisons, Willis, Your misgivings about the true costs of wind power are most likely justified. I can think of a few things that should be taken into account and possibly were not, Take standby power generation when the wind doesn’t blow (or blows too hard) and the wind turbines are just idling — when conventional generating capacity has to take up the slack, the cost of connecting wind turbines to the grid. Then there is the question of whether the cost estimates for wind power are based on the theoretical maximum capacity rating of the turbines or on the real generating capacity of around 22 – 24 percent of rated generating capacity.

Willis Eschenbach

Walter H. Schneider says:
December 3, 2011 at 1:30 am

… Then there is the question of whether the cost estimates for wind power are based on the theoretical maximum capacity rating of the turbines or on the real generating capacity of around 22 – 24 percent of rated generating capacity.

See the underlying document, which is cited at the top. They have figured a capacity factor for wind of 34%. I think a more realistic figure is 25%, which is close to your numbers of 22-24%.
In addition, you are correct that the cost of standby generation need to be included.
If we adjust the wind figures for those, I get:
1. Adjustment for higher maintenance: + 1¢ per kWh, likely more.
2. Adjustment for backup: + 2¢ per kWh plus fuel, call it maybe 3¢ per hour.
3. Proper capacity factor. They have overestimated the capacity factor by about 50%, which will increase costs by about + 6¢.
Together these bring the cost of wind power up from 11¢ per kWh to 20¢ per kWh. I don’t see those numbers dropping a whole lot. Certain locations and installations might be lower than that, but like solar, wind electricity is a long ways from making economic sense.
w.

coldlynx

Never thought I would disagree with You Willis, but on this I do.
You and US Energy Information Administration compare solar cells with other large scale electricity production alternatives. But solar cell is mainly, as on Your boat, a small scale solution for electrical consumers. Solar Cells have to be seen from small scale consumer perspective not from a large scale production perspective. With solar cell on my house will I get more independent from large companies, energy taxes and grid utility companies. I love that. Then can can I show them my longest finger. That feeling is worth a lot to me.
Price for PV panels is now below USD1 per watt and falling.
That give in Sunny states a annual output of up to 2 kWh electricity. Grid inverters are now also falling in price. It is in many places now a good investment for consumers but not for producers to get solar panels.
I have been in computer business since 1982 and I see a very similar development as the PC went through. Now is large scale computing made by many small PC processors. In the very near future will many small scale PV installations in total be producing larger amount of electricity than large scale production facilities. Just because it is good investment, for consumers.
And of the joy to get independent. A small scale revolution. 😉

Sunspot

Walter H. is correct. Now that alternative power plants have had a few years of running some interesting performance figures have come to light. The best the UK can get is around 17% for wind turbine and have their fair share of maintainence issues, network instability etc.. Here in Australia new subsidised solar panels have been running for more than a year. A 10kW solar unit shows that it can deliver around 40kwh per day averaged over 12months.
Denmark boasts that 50% of their generation capacity comes from wind turbines, however they only manage to deliver around 15% to 20% of their capacity. A typical coal fired generator can deliver around 90% of it’s 660mW name plate rating 24/7. You will need around 300 wind turbines to match that name plate rating only, but will never deliver 24/7.

But you are using logic and facts. That’s not the way the system works. Governments do what is politically in their interest to stay in governemnt. Even in a steadfastly nuclear France, the coming government will be a Socialist/Green combo. To support the Socialist to get enough votes the Greens have demanded that nuclear will be phased out completely. The Socialists have talked that down to downsizing from 80% to 50% by 2050. Totally absurd capital destruction and will cause a tripling of current electricity costs making France even less commercially competitive (if that is even possible )
To counteract this, the current government in the hopes of being reelected has now commissioned a huge offshore windpark. Go figure, your energy is practically 100% clean but lets waste a fortune we don’t have on pointless exercise. All to get reelected. That’s how it works, not if it’s in any way reasonable…

Willis Eschenbach

coldlynx says:
December 3, 2011 at 2:00 am

Never thought I would disagree with You Willis, but on this I do.

Excellent. Good to hear from you.

You and US Energy Information Administration compare solar cells with other large scale electricity production alternatives. But solar cell is mainly, as on Your boat, a small scale solution for electrical consumers.

I wish this were true. But see my post regarding a huge megawatt-scale project in California. The related article said:

Assisted by another state law, which mandates that California utilities buy 33 percent of their power from clean-energy sources by 2020, the project’s developers struck lucrative contracts with the local utility, Pacific Gas & Electric, to buy the plant’s power for 25 years.
P.G.& E., and ultimately its electric customers, will pay NRG $150 to $180 a megawatt-hour, according to a person familiar with the project, who asked not to be identified because the price information was confidential. At the time the contract was awarded, that was about 50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant, state officials said.

Note that that is what PGE is paying, so they will have to sell the power for much more than that.
You go on to say:

Solar Cells have to be seen from small scale consumer perspective not from a large scale production perspective. With solar cell on my house will I get more independent from large companies, energy taxes and grid utility companies. I love that. Then can can I show them my longest finger. That feeling is worth a lot to me.

I have no problem with that provided I’m not asked to subsidize it.

Price for PV panels is now below USD1 per watt and falling.

Generally not true. Here are wholesale prices, $1.36 to $2 per watt. But as I pointed out above, that’s far from the whole cost of the system. Also, there’s a huge oversupply of panels at the moment. The Chinese ramped up big, and then subsidies ran out in lots of countries. So panels are cheap, but not likely to get a lot cheaper in the near future, the market is still correcting. Finally, as I said above, panel costs are a small part of the whole equation.

That give in Sunny states a annual output of up to 2 kWh electricity. Grid inverters are now also falling in price. It is in many places now a good investment for consumers but not for producers to get solar panels.

The “many places” are generally places like California, where prices are artificially inflated. I know of nowhere that solar is a “good investment” where there is no subsidy for solar.

I have been in computer business since 1982 and I see a very similar development as the PC went through. Now is large scale computing made by many small PC processors. In the very near future will many small scale PV installations in total be producing larger amount of electricity than large scale production facilities. Just because it is good investment, for consumers.

I don’t care if it’s large or small PV installations, the economics are not that much different. In fact, small installations are generally less efficient than large institutions, which means that prices are higher.

And of the joy to get independent. A small scale revolution. 😉

I admire and enjoy independence as much as the next man. If a person is getting paid by the grid to produce power, however, you need to watch out for the hidden subsidies. You say it is a “good investment, for consumers”.
Solar is a good investment in California if a residential customer is paying more than about $160.00 per month. But the reason the customer is being billed that much for their power is because PGE power is so expensive.
And why is PGE power so expensive? Because, as the quote above shows, PGE is paying “50 percent more than the expected market cost of electricity in California from a newly built gas-powered plant” for solar generated power. So they have to sell it at a high price … which is what makes solar a “good investment for the consumer” around here.
So solar is a “good investment” for consumers, but only because the consumer is already getting screwed to pay for that investment, with the ratepayer shelling out 50% above market for solar power.
Thanks,
w.

DirkH

Willis, inverters get cheaper, too. Gotta echo coldlynx in that regard. The trend is towards one inverter per module, and through some as yet unforeseen magic, we’ll have modules that we directly connect to the mains in 20 years; the inverter will be integrated into them.

Warwick Payten

I agree with your comments on the maintenance costs for wind. I do research and consulting work in the power industry, coal and gas combined cycle, and based on my experience the distributed nature of the wind turbines will increase the maintenance costs particularly as they age above the EIA assumptions .

Manfred

I think you didn’t consider efficiency improvements. These lower all cost components.

Bernie

Willis:
Great piece. I looked at the utilization rate of Wind in Denmark which has very extensive experience over 30 plus years. The average utilization rateover the last 10 years is approximately 22% – by my calculation, i.e.,
Generated TWh*POWER(10,12)/(Capacity in MW*POWER(10,6)*365*24)
This seems to me to be a better estimate – it includes off shore generation capacity as well. (see http://en.wikipedia.org/wiki/Wind_power_in_Denmark)

Rob L

What it does’t factor in is distribution costs that are typically add $0.07-0.15 per kWh. In Southern California consumers typically pay $0.2 per kWh or more so PV power produced on your own roof can be pretty competitive.

Bloke down the pub

Willis Eschenbach says:
December 3, 2011 at 2:34 am
” I have no problem with that provided I’m not asked to subsidize it.”
I recently had a PV system installed which is planned to pay back in about eight years. That is based on the existing feed in tariff of 43.1p which is soon to drop to 21p for new installations. Even if the FIT is reduced to zero in the future, there will still be a hidden subsidy in that the rest of the suppliers customers are paying for the back-up supply for when the sun don’t shine.
I may not have put that very clearly, but I hope you get the gist.

Espen

Good post, Willis. Just one thing: when you complain about solar subsidies, don’t forget that fossil fuels are subsidized as well!

Edvin

The two obvious errors (or call them bad assumptions if you wish):
* A 34% capacity factor for wind is just wishful thinking
* A 30 year cost-recovery period overestimates the cost of both hydro and nuclear
The 30 year period might also effect other energy sources. However the relation between capital cost and the running cost of fuel and maintenance, and their >30 year life time, makes the choice of a 30 year period effect hydro and nuclear the most.

Philip Bradley

A couple of points.
I live in perhaps the sunniest city in the developed world Perth and have a rooftop solar unit. My unit delivers around 10 times more electricity in mid-summer than mid-winter. Yet I know my electricity consumption is almost the same. Clearly no saving in capital costs.
I heard a few weeks back from someone who maintains one of the biggest wind farms here in WA that they were offline for a month because mice chewed through the control cables. Distributed energy infrastructure and wildlife don’t mix.

Wolfgang Flamme

@coldlynx, Willis
For germany using hourly load and PV production figures over a year’s timespan it turned out that you’d need around 120 average supply-days of battery storage to make use of all your PV generation. Combining wind and PV turned out to be better (half the storage) but still prohibitive.

007

they really do hate nuclear!
11¢<12¢.

Solar power is still the best alternative for off-grid locations and activities, such as your boat, camping, holiday homes etc. I live in cloudy, rainy England but solar panels are appearing on roofs around the UK in increasing numbers.
http://solarpoweradviserz.com

WOW!!
Now that’s something that is worse then we thought !!!!

Wolfgang Flamme

@Bernie
re wind power capacity factors – In Germany, it’s less:
http://www.wind-energie.de/infocenter/statistiken
Turned out to be ~17% in 2009 and ~16% in 2010 (was more close to 20% some years ago). German win power incentives are designed to ‘take the pressure from the coast’ so less efficient inland locations receive some extra compensation.

jjthoms

see this earlier post for cost including backup and load balancing
http://wattsupwiththat.com/2011/11/20/duking-it-out-with-foreign-investors/#comment-804066
The US has very low gas/oil prices – the UK /EU pay up to 4 times the US
http://wattsupwiththat.com/2011/11/20/duking-it-out-with-foreign-investors/#comment-804815
windpower costs: http://wattsupwiththat.com/2011/11/20/duking-it-out-with-foreign-investors/#comment-808678
cost per kwh over 20 yrs £0.060 per kWh
cost per kwh over 15 yrs £0.069 per kWh
cost per kwh over 10 yrs £0.087 per kWh

Peter Hartley

Willis,
Thanks for bringing this article to our attention. I think a potentially more interesting story lurks in the comparison between wind and fossil fuels.
A number of assumptions have been made that make wind look more competitive than it really is. One wonders if this was a deliberate politically motivated directive rather than a series of innocent assumptions…
A number of people have noticed the very high capacity factor they have assumed relative to actual experience with wind.You also pointed out the maintenance costs appear to be low. The assumed 30-year life of all the plants also favors wind. Most experts would estimate the expected life of a wind plant at considerably less than 30 years — probably 20-25 years is more reasonable. On the other hand, most coal-fired plants are likely to be used for 40 or more years. Finally, buried in the fine print is an assumption that the discount rate is set 3 percentage points higher for fossil fuels than for renewables to account for GHG emissions! First off, a tax on CO2 (or its equivalent) would raise fuel costs, not the discount rate. Second, why throw this into a comparison of economic production costs.
When all these corrections are made, one finds, not surprisingly, that the costs of wind exceeds the cost of fossil fuel generation by about the amount that wind has to be subsidized to remain competitive.
As regards adding an amount for “backup capacity” that is, in a way, double counting the low capacity factor of wind, but not entirely. The short run intermittency of wind requires additional backup, not just its low average capacity use. In a sense, a discount should be applied to account for the lower quality of the wind power — or a cost added to make it of equivalent quality like you suggest. At the moment, I don’t think this cost would appear in the subsidies that wind generators need to receive to be competitive since the wind generators do not bear the costs that the low quality of their output imposes on the rest of the system.

Meyer

@coldlynx I see your point in spirit but not in practice.
If the goal is to “get off the grid”, the initial investment of a diesel generator is a fraction of solar. There is still the ongoing cost of fuel, but that’s the sort of thing you can stockpile over time when prices are favorable instead of making a huge commitment up front. You can also make biodiesel pretty cheaply if you buddy up with some restaurant owners. 🙂 Of course, there isn’t enough waste oil for everyone to do that. Generally I’m not a fan of any biomass fuel that requires fertile farm land to produce. High-lipid algae would be perfect if it could be grown in the desert or ocean and processed efficiently, but for now it makes solar look cheap.
But really I have to question the value of getting off the grid (if the grid is available) because the grid is relatively cheap and convenient. I don’t see how completely disconnecting from the grid would make me more “independent”, especially if it means a significantly greater fraction of my 10-hour day must be spent on electricity in order to sustain that independence. I do have a generator and enough fuel to last through a couple of weeks of a power outage, which I consider the worst-case scenario. Any worse scenario (e.g. war), and I’m not going to hang out in my house whether it has solar panels or a backup generator.

old construction worker

“But here’s the problem. Solar cell prices have already fallen so far that only about thirty percent or so of the cost of an industrial-sized solar power plant is solar cells. The rest is inverters, and wiring, and racks to hold the cells, and the control room and controls, and power conditioners, and clearing huge areas of land, and giant circuit breakers, and roads to access the cells, and the site office, and half a cent for the transmission lines from the remote locations, and labor to transport and install and wire up and connect and test all of the above, and …”
This is why the government wants wind and solar. It puts puts more people to work even though it is an inefficient use of capital. How many union workers does it take to change a light bulb? Six: One to get the ladder, two to hold the ladder, two watch and one to change the light bulb.

Bob Koss

Here is a weed covered 20 acre solar installation in green Germany that has only been in operation for about two years. Even with subsidies it apparently it isn’t worthwhile to do proper maintenance.
http://notrickszone.com/2011/07/04/weed-covered-solar-park-20-acres-11-million-only-one-and-half-years-old/

jheath

I have not come across a wind project at less than 13c per kWh excluding back up costs, and that one was in an especially good place and had some hidden tax breaks. 20c is much more typical – if you are lucky.
Most of the rest of the world of course has to pay about 3 times as much for natural gas at the moment compared with North America, so coal is coming in at lower cost for now elsewhere.
Solar PV is fine for the householder who wants it – but please do not continue to expect everyone else to subsidise it and take any excess at ridiculously high prices in the euphemistically named feed-in tariffs – which are subsidies to the rich from the poor.

Espen says:
December 3, 2011 at 3:51 am
Good post, Willis. Just one thing: when you complain about solar subsidies, don’t forget that fossil fuels are subsidized as well!
=====================================================================
Really??
Can you name those “subsidies”??
Don’t confuse the tax code with “subsidies”

RockyRoad

I understand the 25-30 year life on wind installations is a pipe dream–more likely they wear out and self destruct in about 7 years, depending on quality of manufacturing, service utilization and attention to maintenance. It will obviously require some time before the final numbers are in, but from what I’ve seen so far, the service range in years is much closer to 7 than 25-30. In that case, wind power becomes even more prohibitively expensive. I detect a “green” agenda in the numbers put forth by the IEA, as Peter Hartley above suggests.

RockyRoad

Willis Eschenbach says:
December 3, 2011 at 2:34 am


So solar is a “good investment” for consumers, but only because the consumer is already getting screwed to pay for that investment, with the ratepayer shelling out 50% above market for solar power.

Exactly, Willis! That’s consistent with the saying: “Anytime the government gets involved, it creates a surplus in one sector of the economy, a shortage in another, and the taxpayer makes up the difference.”
Obviously, free market, non-governmental investment decisions aren’t hindered with such illogical and destructive utilization of capital ($).

David

Willis – I have nothing but respect for your views – but you do seem to fail to raise the crucial flaw as far as solar is concerned.
For twelve hours a day (averaged), every day of the year, anywhere on the planet – solar panels produce zero – because its dark.

E.On is one of Germany’s biggest operators of land-based wind power generation (6+GW in nameplate capacity); in addition to their other generating facilities. Their areas of operations stretch from the North coast to the Alps; roughly 1000km. In their wind power report of 2005, they published a utilisation of about 16% and a conventional shadow capacity (spinning reserve) requirement of 98%. They state that wind power is limited due to its unpredictable behaviour; which requires a electricity separate grid from the main one, to reap the full potential. In terms of expanding capacity; they (IIRC) also stated that all the premium wind areas are being used, so further expansion would be to sites with poorer returns.
So more wind power means more power stations capable of ramping up and down quickly to fill the holes in demand that wind power cannot supply. Oh, and lots more high-tension power lines.
Still, it’s good for the Austrian economy and investors, who are expanding their pumped storage capacity; “buying” surplus electricity from (e.g.) wind power at a peppercorn to pump up the storage; and then sell back electricity at a premium, peak price when it’s desperately needed. It’s worth billions of Euros a year. They call that electricity “generation”, for some reason only comprehensible to politicians and marketing managers. So they’re all in favour of wind power in Germany. (And extremely peeved at the Czechs for having the temerity to expand their nuclear power capacity.)

Bernie

Wolfgang:
Thanks for the link. There is apparently a lively debate in Denmark over the continued expansion of wind generated electricity with a target of 50%. I am looking to try to nail down the actual costs of wind. The Danes put a huge tax (beyond VAT) on household electricity consumption which turns the estimated generation and distribution costs from about average for the EU15 to the most expensive. It is unclear where that tax money goes.

JC

The one thing you all perhaps realize but are not saying:
According to the greens, cheap, available electricity is bad. Expensive electricity is *good*. It is ther *goal*.

chris y

I agree with Willis’ conclusion that, even if solar panels are free, the system costs will not drop dramatically. The recent plunge in solar PV panel prices is indicative of an industry whose profit margin has imploded. Some estimates predict over 95% of solar PV companies in China will be bankrupt and gone by end of 2012.
Another interesting trend is the large number of planned large solar thermal projects that have switched to solar PV this year.
The DOE Sunshot program has 2020 goals for solar PV of $0.5/W for panels, $0.4/W for balance of system, and $0.1/W for power electronics. This, of course, is based on peak DC power at beginning of life, and it does not include labor. Even if these goals are met, solar PV still requires backup energy storage, be it hydro, nuclear or fossil fuel in tanks or coal sheds.
DirkH- “The trend is towards one inverter per module”
I agree with this. I finally decided to install grid-tied solar PV for my home. The problem with one inverter per module today is that the inverter is now almost as expensive as the module. I just paid $0.80/W for the panels, but I see prices of $1/W for the micro-inverter vs $0.5/W or less for multi-panel inverters.
This will change. It is clear to me that the inverter electronics could easily be integrated into the module envelope without any new engineering breakthroughs. I suspect this will start to appear (at a premium price) in the next few years.
I decided to go DIY for my solar PV project after I received a contractor quote of $10/W for what I wanted to have installed. My DIY total cost (panels, inverters, wiring, support structure, feeder to house) will be about $1.15/W after the federal tax credit. Interestingly, this is already close to DOE’s 2020 goal, since my DIY also does not include the cost of labor 🙂
Our utility offers net metering integrated over one year. Any excess generation is reimbursed at the wholesale cost of bulk electricity, about $0.05/kWhr.
I estimate a break-even time of about 6 years here in Florida. Unless we get bulldozed by a major hurricane, of course.

Bernie

Wolfgang: What is the translation of 37,3 Mrd kWh? I assumed it was a million kWh. Thanks.

you

Will-
You pure speculation about wind power, and small easy to maintain generators is a tactlessly bs argument. Just admit wind works.

Lawrence Poe

Old Construction Worker says, “This is why the government wants wind and solar. It puts puts more people to work even though it is an inefficient use of capital. How many union workers does it take to change a light bulb? Six: One to get the ladder, two to hold the ladder, two watch and one to change the light bulb.”
If you’re an old construction worker, you no doubt know that you grossly underestimate the number of union workers it takes to change a lightbulb. I’ve dealt extensively with unions, and can tell you that it will take at least two journeymen electricians and one apprentice to ensure that the power is off to the line the bulb is on. Then the supervisor, after moving a small stack of 2x4s out of the way, will call a fork lift operator to move a couple of pallets of construction materials that will be in the way of the light-bulb changing operation. He’ll then run around the site to find a laborer to help him carry the ladder to where it is needed. Then the six you describe will proceed to change the light bulb, after which the above-noted two journeymen electricians (and one apprentice) will undertake to restore power to the line feeding the light bulb. The fork lift operator will then return the pallets of materials to their earlier place while the laborer does likewise with the 2x4s. Then the supervisor retires to the office with the union stewart to discuss the grievance the union is filing over the supervisor’s moving of the 2x4s and assisting in carrying of the ladder, instead of having laborers perform all such duties as required by the labor agreement. The grievance will then be heard by the construction superintendent and the union’s district rep, and will go on to a panel of three arbitrators, which will eventually award the most senior laid-off laborer $100,000 in back pay since the company should have had enough laborers on the site to ensure that bargaining unit work was only performed by laborers union members.
You obviously haven’t dealt much with unions if you think only six could possibly change a light bulb.

“Check out the windfarms and count how many of the fans are not turning at any given time …”
I did notice that both wind turbines at East Midland Airport were actually removed from their hubs and brought to the ground for maintenance within a few months of original installation. That is not cheap at all.
The other consideration with wind is we don’t know what figure they are using for how much each actually generates as a proportion of its capacity. Remember real figures have come out not much more than half of manufacturers estimates, so if the latter were used to calculate these you will be close to doubling all costs.

mike g

Contrary to the above, it IS extremely likely that gas prices will triple or quadruple if a large-scale shift away from coal to gas occurs, which is why it is not happening with the present low gas prices. Not to mention the fact that the EPA and states are going after fracking because it is push hydrocarbons and god knows what other chemicals into the water table and biosphere. And, don’t forget the peer-reviewed research covered in the past on WUWT that places a higher carbon footprint on gas than coal due to all the methane that leaks out into the atmosphere from the fracking operations.

Leigh

Willis, I think you are being generous to solar PVs when you assume that gas turbines can provide adequate back-up for when solar PVs can’t generate power (2c/kWh). If you have a look at the generation profile of a solar PV unit you will see that it can switch off and on almost instantaneously when a dark cloud passes overhead, or there is some other shadow. To respond in time you need the OC gas turbines running in stand-by mode (i.e. add the cost of burning gas) and battery/flywheel capacity to fill the gap until the gas turbine comes up to speed. If other sources can’t respond quickly enough then the voltage/frequency will drop and protection systems within the network will start load shedding.
The only way we get away with it at the moment is because solar PV generation is a relatively small fraction of the total generating capacity, and there is enough spinning reserve from existing coal/gas/nuclear power stations to cover. So the idea that costs will come down once we get ‘scale efficiencies’ may actually work in reverse with the cost of back-up escalating.
Also, the 2c/kWh capital cost for an OC gas turbine is probably an amortised cost assuming the turbine generates at a certain level over it’s expected lifetime, say 20% for an OC gas turbine peaking plant. If that now drops to say 10% to run in standby mode, then won’t the capital cost per kWh produced double to 4c/kWh?
But then we have to consider that using gas turbines as back-up is only an interim measure as gas still generates CO2. So to comply with the expectation of people putting solar PVs on their roof (that they are generating no greenhouse gases) backup will need to be purely from battery/flywheel etc. Then we start talking somewhere around 10 times the cost of coal/gas/nuclear for intermittent souces such as solar and wind. For the purists, they may want to do this, but I object when they start increasing the power bills of people on lower incomes through the subsidies.

Espen

Matthew W: it’s not my idea to call it subsidies: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2ygdsSj.KQI

David A

Another facet not fully considered in Willis’s excellent post is how over time and an increasing trend (Govt mandated of course) in the % of total power needs generated by solar and especially wind, the coast of operating traditional fossil fuel generation increases as density (revenue generated per coustomer) of their revenue stream decreases. The greater the percentage of wind and solar, the more expensive traditional sources become,
California citizens, already suffering from this, will be taught again in spades if the current policies are carried out. Energy is the life blood of every economy. If one wishes to reduce the population growth of a third world country, then simply make energy cheap and abundant. Current policies, predicated on fear of large poulations, will also reduce poulation growth, but tragically this will be through famine and war.

Ian W

The leveling fails to take into account the lifetime of the generation system. The life of a wind farm is actually considerably less than the theoretical figures quoted here. There are already over 14,000 abandoned wind farms in the USA (google it). They are becoming an environmental hazard. Willis you alluded to the problem of “the trek you’ll have when you forget to bring the size #2 Torx head screwdriver …” but there will not be a long queue of engineers wanting to work on top of a 400 ft pylon in winter gales in the middle of a rough sea. Unfortunately, the politicians have been listening to salesmen not engineers.

Sal Minella

The problem with small scale local installations of solar panels – i.e. residential installation, is that all other users of the grid pay for it. I live in upstate NY, a place where only a fool would pay the $100K + cost to energize their home with solar or wind yet, many people do. They are told that they can sell excess generation back to the power company.
These numerous sources of small random and intermittent “pops” of feedback to the grid are of no value to the power company by the simple nature of their randomness and intermittancy. The local grid has to supply 100% backup for these users while gaining absolutely no advantage from the electricity that they produce. In addition, NYSERDA a government organization, hands half of the cost of the installation to the individual user.
So, as a regular electric customer, I am paying for both the initial installation subsidy and the increased cost per KWH that results from the mandated buyback of worthless power by the grid operator.
I have no problem with off-grid use of individual windmills and solar panels but the grid connected homes with solar or wind do nothing but waste the materials used to build them and the energy used to back them up all at the cost of evveryone else in the neighborhood.
Ny staste assessments to cover these costs add up to about $.015 /KWH and nearly $.05/therm for gas. Thank you greenies, renewables, and all of you eco-schemers making a buck on the backs of your neighbors.

Some time ago, I downloaded some insolation data from a nearby agricultural research station and plotted the result.
The graph shows total insolation (solar energy) onto a horizontal surface, over a month. Click here if no graph shows
It illustrates the high variability of “supply” over a year. A picture that those selling solar probably don’t want their prospective customers to think or to be able to make a rational judgement.
What the graph doesn’t show is the number of successive the dull days, when there isn’t enough sunshine to generate any worthwhile amount of electricity. To do that, I’d have to pick an arbitrary figure for “dull” like 1 standard deviation below average. And then you get a maximum of 2 weeks of dullness. But I’m not sure if those were the weeks in which the person responsible for cleaning the bird droppings off the heilostat was on vacation. Between 3 and 5 consecutive days of dullness are common. (I really need to get to grips with R because analysing a decade+ of daily weather data in a spreadsheet is a RPITA)

Barry R

I’m a big fan of solar panels for individual consumers. They add a lot of flexibility and resilience to your life-style. Large-scale utility stuff: Never saw the point to it. Among other issues, if you make it really large-scale you come up against real undoubted human-induced warming, though probably not on a huge scale. Cover a huge area in something black and intentionally non-reflective, which converts 15-20% of the incoming solar light to electricity, and what happens to the other 80-85% of the incoming solar energy? Can we say waste heat? The immediate surroundings of a large scale solar plant will be much hotter than they would be naturally.
You can get higher efficiency in solar, but currently at a cost that means it only makes sense to use the cells in concentrator systems, which are okay for large-scale systems, but I wouldn’t want on my roof because of the heat issues.
I wouldn’t write grid-tie solar electricity off completely though. The key is to get the efficiencies up inexpensively and the balance of system costs down. Pure silicon cells are approaching the theoretical max for the technology, but people keep finding ways to squeeze a few more percent out of it, and I suspect that someone will figure out a way to mix materials in an inexpensive way. Hit 30% efficiency and a lot of the balance of system costs go way down because you’re working with smaller panels for unit of electricity and that impacts land used, labor, etc. Barring a breakthrough that won’t happen before 2016, but long term higher efficiency is what you really want in solar.

Don K

Nice article Willis. In general it looks fine. I’m a bit surprised that geothermal is so inexpensive. I assume that the costs are some sort of blend of existing sites which are highly optimized. I wonder if they include the disposal costs of high temperature brines such as those exploited in the Imperial Valley. I also wonder if the costs are lower than those that would actually be encountered if a serious attempt were made to tap geothermal resources on a large scale. I’m dubious that there are that many high grade sites available.
I agree that onshore wind costs seem too low. It seems to me that as a practical matter the costs of any large number of turbines should include the costs of backup generation, pumped storage or some other sort of energy buffer.
I also wonder whether solar costs don’t overestimate capital costs. I have trouble envisioning capital costs that high for PV installations in locations like the Mojave desert playas — no trees to clear, land lease should be cheap?, No need to construct service roads? I prowled around some in the paper and links but couldn’t find much information on exactly how the costs are derived. I imagine it is there somewhere. I suspect that the table that shows minimum and maximum costs is mostly latitude driven.

The very first hydroelectric plant was installed in 1868. It is still operational with the original equipment.
So can the figures be reworked to show say 10 years for a wind turbine and 100 years for a hydro scheme.
The results will show a very different picture to that posted. Indeed the new chart should be publicized and the creators of the first bought to book.

R Barker

Willis, excellent essay. I agree that some of the numbers for “favored” sources seem optimistic.
I used the EIA figures for actual electricity production for 2010 by source and the installed nameplate capacity for that year to arrive at the following capacity factors.
Solar PV & Thermal 1299 Million kwh 987 Mw installed CF 0.15
Wind 94647 Milliom kwh 39516 Mw installed CF 0.27
If the installed nameplate capacity is for the end of the year, the real CF may be higher. I am assuming that these two sources are always feeding the grid when ever they can. In the meanwhile, much less expensive sources are held in standby or spinning reserve.
I was wondering how the windfarms out West handled the high gusty winds earlier in the week. Anyone know. That might have an impact on estimating maintenance costs.