Guest Post by David Middleton
My apologies to the memories of the late Richard Llewellyn and late John Ford; but I just had to borrow their title for this post. This paragraph from a 2010 Telegraph article really says it all…
Its 500,000 photovoltaic panels will generate 30 megawatts of electricity, enough, in the popular measurement, to power 9,000 homes. It is costing about $250 million to build, significantly less than a gas, coal or nuclear power station, which can easily exceed $1 billion. And it represents a sea-change in America’s energy business.
America has been notoriously devoted to hydrocarbon fuels. Big Oil, Big Coal and big Texan hats in the White House were seen by the rest of the world to be keeping it so, whatever the global interest. Oil barons funnelled money to scientists ready to pour doubt on the science of climate change, and conservative Republicans led the charge to pour scorn on those such as the former Democrat vice-president Al Gore who were urging Americans to rethink where their energy was coming from.
The power plant described in the preceding passage is the Cimarron Solar Facility, built on Ted Turner’s 590,823 acre ranch in northern New Mexico. It is indeed true that most natural gas- and coal-fired power plants cost a lot more than $250 million to build. However, it’s also true that most natural gas- and coal-fired power plants have nameplate generating capacities a bit larger than 30 MW…
TVA to build natural gas power plant
By DUNCAN MANSFIELD, Associated Press
Posted June 4, 2009
KNOXVILLE — The Tennessee Valley Authority on Thursday decided to build an $820 million natural gas power plant in northeastern Tennessee to comply with a North Carolina lawsuit over air quality.
The 880-megawatt combined-cycle gas plant would be as large as the 1950s-era, coal-fired John Sevier plant in Rogersville that a federal judge has targeted for new pollution controls on North Carolina’s behalf.
[…]
- $820 million divided by 880 MW works out to $931,818 per MW.
- $250 million divided by 30 MW works out to $8,333,333 per MW.
Assuming that the gas-fired plant managed an 85% capacity factor and a 30-yr plant lifetime, the initial capital expenditure would work out to $0.004/kWh… A bit less than half-a-cent per kilowatt-hour. Assuming a 25% capacity factor and a 30-yr plant lifetime for the Cimarron Solar Facility, the initial capital expenditure works out to $0.127/kWh… Almost 13 cents per kilowatt-hour! The average residential electricity rate in the US is currently around 12 cents per kWh… That’s the retail price. As a consumer of electricity, I know which plan I would pick. I’m currently paying about 9 cents per kWh. I sure as heck wouldn’t seek out a provider who would have to raise my current rate by about 50% just to cover their plant construction costs.
Solar photovoltaic electricity is bankruptcy the green way writ large. Here in Texas, Austin Energy has agreed to a long-term purchase agreement to pay $10 million a year for 25 years, for the electricity generated by the Webberville Solar Farm. That works out to more than 15 cents per kWh.
In concert with his efforts to drive up the cost of coal- and natural gas-fired power plants, President Obama has aggressively pursued an agenda of financing expensive power plants with taxpayer dollars. Many of these taxpayer-guaranteed loans have gone to financially strapped companies, lacking the means to repay those loans. In most cases local utilities were coerced or enticed into signing long-term purchase agreements to buy electricity at nearly double the cost of coal- and natural gas-generated electricity. The sole justification for this “green” centralized industrial policy is the Lysenko-like junk science of catastrophic anthropogenic global warming.
The economics of this “green” centralized industrial policy are mind numbingly horrible.
The capex for solar power plants averages between $6- and $7-million per MW of installed capacity. Coal-fired plants generally run less than $2-million per MW and natural gas plants currently run less than $1-million per MW. The average retail residential electricity rate in the U.S. is currently less than 12¢ per kWh. The levelized generation cost for the plants being financed by the Obama administration is more than 20¢ per kWh. His “green” centralized industrial policy will drive the wholesale cost of electricity to nearly double the current retail rate.
One need not literally seize the assets of businesses and install gov’t bureaucrats into management position to effectively nationalize those businesses. All it takes is to make them dependent on gov’t and/or direct their activities through regulatory constraints.
In the USA when costs are measured in units of cents most consumers don’t care or understand if something is .03 higher than something else if that something else is better. The key to changing the discussion is to use a measurement that has a larger impact to it. Maybe a comparison of the cooling cost of a 2500 sqft home for ten years contrasting fossil vs green would bring to light the utter foolishness and consequences of idiotic policy and dishonest pols.
It is odd that there are no public sources that summarize the engineering facts and economics of ‘green energy’. The obvious first question is how much will total carbon dioxide emissions be reduced if trillions of deficit dollars were used to subsidize ‘green’ energy projects? Space tourism to the moon is a good idea except for the costs and practical issues such as the risk of death.
Oddly enough spending trillions of dollars on ‘green’ energy does not significant reduce the amount of carbon dioxide emissions unless the ‘green’ energy source is nuclear.
Photovoltaic systems that scaled up to power a city are not economically and if constructed and installed will not significantly reduce the amount of carbon dioxide emitted to power the city.
Comment:
‘Green’ energy advocates are either part of the scam or are ignorant of the facts and support ‘green’ expenditures because it makes them ‘feel good’. We have already had the example of the conversion of food to biofuel. The cost of biofuel from corn is twice the cost of fossil fuel and the carbon dioxide emissions if one includes all energy inputs to grow the corn, transport the corn, and triple distill the ethanol is 7% higher than fossil fuel. (Not including the residue energy value of the processed corn which can be fed to cattle as the cows are not used to pull cars. The economic value of feeding the processed corn to cows is included.)
The cost of a battery storage unit per MW is four times the cost of a single cycle natural gas power plant. The batteries have a limited life and need to be replaced. Batteries are not economical or practical based on the amounts energy storage required. Also significant amount of energy is required to fabricate and install the battery system.
The cost estimated for a photovoltaic power system needs to include the cost for a single cycle natural gas plant to provide backup power for the times when the sun does not shine (i.e. night) or cloudy days.
The problem is a single cycle natural gas plant is roughly 30% efficient. A combined cycle natural gas power plant is 60% efficient but costs roughly 4 times more.
If one uses a single cycle natural gas plant to provide backup as compared to a combined cycle natural gas power plant there is minimal reduction in CO2 emissions over a combined cycle natural gas plant.
Also the calculations above do not include the energy input required to produce the photovoltaic system and to install the photovoltaic system. As noted above one must construct a combine cycle gas plant complete with a pipeline system to provide gas in addition to the photovoltaic system. The costs are not ‘or’ but rather ‘and’.
Oddly enough spending trillions of dollars on ‘green’ energy does not significant reduce the amount of carbon dioxide emissions unless the ‘green’ energy source is nuclear.
Isn’t extra CO2 one of the greenest things we could do for the biosphere? It blows my mind that the CO2 = pollutant meme could have ever gotten off the ground as it has, but I suppose that’s the power of propaganda, especially when it becomes removed 1 degree from the initial source and becomes self propagating.
Proponents would tell you that solar and wind power is cost effective when compared to other “new” conventional sources of power. There goes that theory.
In Ontario (or “Ontari-owe” for the financially inclined) distributors must purchase electricity generated by wind and solar ahead of other sources. We have surplus power, so we pay 13.5 to 80 cents per kWh for wind and solar power that we don’t need, and spill “free” water over hydro dams, especially this time of year. We sometimes have to pay other jurisdictions to take this expensive “green” surplus power off our hands. The local power company installed smart meters ($500 a shot?) on my home AND seasonal cottage, along with everyone else’s. The cost is added to the pool of expenditures that will eventually show up on our bills. They are spending hundreds of millions to build transmission lines to tie widely distributed wind and solar projects into the grid. New technology (likely another financial black hole) will be required to manage and stabilize the grid because of the variable nature of wind and solar. All for power we don’t need. How’s that for perverse economics?
…And at night..?
Is the developer going to follow the inventive Spanish developers, who installed diesel generators so that they got the same (ridiculous) price for their electricity during the hours of darkness..?
George says:
May 5, 2012 at 4:19 am
“Given the degradation of the cells with time-in-service, I guestimate that the pay-back of the “carbon debt” of manufacturing the cells is approximately equal to the service live. ”
The energy payback time for a complete solar installation with German insolation (800 sun hours per year) is about 7 years according to
http://festkoerper-kernphysik.de/erntefaktor
(German, but with schmatics explaining the EROEI concept).
Minimum lifetime is usually assumed to be 20 years.
So basically you get 3 calories out for one calory in.
In Australia, where the Greens have had perhaps more influence at state government level, we are paying about 22 cents per kWhr (23 cents US). Energy is regulated by the states in Australia. We are told to expect about 30% price increase on that too over the next few years. The MSM in Australia thinks that is a great idea. And that is with one particular state having about 1000 years supply of brown coal.
‘crosspatch says:
May 4, 2012 at 9:26
You also have to consider degradation of that solar farm of about 10% capacity per year. ‘
This is pure bologna based on your own references. Panel manufacturers provide 20 to 25 year 80% performance warranties. The data from your references:
Pg 12: Conclusions
There is no statistically significant difference in the performance of the
modules with monocrystalline and polycrystalline cells
(average degradation rate 0.7% per year)
Furthermore two thirds of modules have the final maximum power verified
to be more than 90% of the initial power value after >20 years of outdoor
exposure.
Pg 18:
Conclusions for the 10kW TISO Plant
Not good looking, but perfectly functioning plant
Good expectation for at least 30 year lifetime?
Pg 19:
Average weighted degradation of 5.2%, over the 19 years of operation
(0.4% per annum including initial degradation)
Pg 23:
Conclusions from the operation of a-Si thin film facade
Altogether the system has had an uptime > 99%
It does no good to exaggerate your arguments. I have a solar system that was heavily subsidized by the local municipality. I agree that the ROI simply does not work without subsidies. There are a lot of considerations that go into the costs that are often not considered or are glossed over. The main culprit is installation costs. This is often about 50% of the overall system cost. There is technology that will hopefully significantly reduce the costs such as micro-inverters.
What is the goal of US federal government’s energy policy? According to the Dept. of Energy’s (DOE) web site (http://energy.gov/about-us):
“The mission of the Energy Department is to ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.”
Notice that their mission statement says nothing explicitly about abundant or inexpensive energy, but is instead technology focused. The phrase “ensure America’s security and prosperity” implies abundant and inexpensive energy.
Simple math reveals that solar and wind power are not even transitional solutions, and certainly not the “transformative” solutions sought by the DOE.
The DOE website promotes the DOE-backed transformative solutions currently in progress. None of these will “ensure America’s security and prosperity” unless the outcome is abundant and inexpensive energy.
David, you have omitted the most valuable output from these projects – that of warm, fuzzy feelings. WFFs are essential to the mental well being of those who are alarmed by everything. We live in a terrified society, where every shadow, could be a Earth ending event. WFFs will rescue us from mental breakdown, and any cost is gladly paid. WFF is what makes our world go round. MW(e) output is irrelevant to MWFF(emo) output. GK
@ur momisuglyDirk H,
EROEI is the perfect example of Lysenko-style accounting to go along with the Lysenko-style science of CAGW. I don’t spend energy to fill my tank. I don’t give energy back to the gas & electric companies in exchange for them being nice enough to heat and light my home. My company doesn’t drill for oil & gas to make energy.
I spend money to fill my tank. My company drills wells for oil & gas to make money. My gas & electric bills are paid for with money. My pay check, ExxonMobil & Shell credit card statements and checks to the gas & electric companies aren’t denominated in joules, kilowatts or btu – They are denominated in $.
I don’t give a rat’s @ur momisugly$$ if 1 barrel of amoeba farts uses less energy to produce than 1 barrel of crude oil… Because the barrel of amoeba farts costs $800 and can’t be produced in sufficient quantities to be waiting for me at the Exxon or Shell station when I need it.
If oil companies (or any businesses) used EROEI to guide their investment decisions, they would go out of business (unless the gov’t was footing the bill).
I have been experimenting with a small solar setup here in central NM. During the winter with the shorter daylight hours, power generation is nearly equivalent with summer due to the colder cell temperatures. I adjust the panel orientation monthly to the optimum point (elevation angle changes) to maximize the power generated. Using the latest generation of inverter technology, I average 20% of rated panel capacity. For example, 1kW of panels would produce on average 200 Watt/hours of power. The article states “500,000” panels. Assuming these are the larger 260W panels (5×10^5*260*20%= 26MW). Close enough to the stated capacity, but no compensation for panel aging (as well as the other degradation issues mentioned).
Panel prices have dropped to below $1/Watt, with the extra costs of inverters and assorted support hardware, a self -installed system (read as free labor), in my area the payback time is around 10 years assuming nothing breaks…..
Gen4 energy formerly hyperion will be selling self contained nuclear 25mw for under 100 million, good for ten years 24/7.Seems as if they will be rebuildable but no current exchange value.
David Middleton says:
May 5, 2012 at 6:40 am
“EROEI is the perfect example of Lysenko-style accounting to go along with the Lysenko-style science of CAGW. I don’t spend energy to fill my tank. I don’t give energy back to the gas & electric […]
If oil companies (or any businesses) used EROEI to guide their investment decisions, they would go out of business (unless the gov’t was footing the bill).”
Of course they do. Energy and money are interchangeable as long as there is a market price for energy. When you say a decision (e.g. to drill in the Gulf of Mexico) makes sense financially, you also imply that it makes sense energetically. Ignoring political distortions for the moment.
Yes, I know the argument that some forms of energy are more valuable than others, I have ignored that as well. Liquid fuels are more valuable (but conversion methods do exist; and the losses are significant but often only in the order of 15% or so, so that would not be an absolute showstopper. If you absolutely need it liquid, go turn something into a liquid and lose a liitle bit in the conversion).
Anyhow, I just wanted to point to a in my view fair assessment of the energy expenditure for PV. You get some far more glowing assessments from the PV industry; they’ll tell you that the energy payback time is months. They ignore all the contributing factors like the energy cost of the inverters, the installation etc.
I find 7 years not that glorious at all. This is the table from where I found the document.
http://de.wikipedia.org/wiki/Energier%C3%BCcklaufzeit#Energetische_Amortisationszeit
It is surprisingly informative for a wikipedia page. Notice that a nuclear reactor has to run for just 2 months to pay back the invested energy.
The English wikipedia has other numbers, but also interesting.
http://en.wikipedia.org/wiki/Energy_returned_on_energy_invested
Historically, high cultures vanished when their EROEI dropped under 3; there was no more enough surplus to maintain a bureaucratic caste. The current EROEI of PV is in that range. I expect it to improve in the future. The subsidy regimes you criticize are the exact symptom of the fact that the current state of PV is best described as uncompetitive. The moment it becomes competitive the subsidies will not be necessary anymore (well, duh).
Few people seem to point out that solar panels cause man-made global warming. Obviously they decrease the albedo, and all of that energy not being reflected back into space is warming up the globe. Solar panels are intrinsically inefficient, and most of the energy received isn’t even producing electricity; it is simply warming up the air around the collector array.
Anthony, I would like to point out that using flat rates for kwhr usage is not necessarily a fair comparison. As you know I’m not a greenie econut but if we are going to criticize the solar industry for it’s costs we need to put this in perspective.
Firstly, there is an apples to oranges comparison on useful life expectancy of PV solar to any of the standard means of electrical generation. 25 years is the tops for PV where as coal, gas and oil fired units have been know to last up to 100 years. The typical industrial life of these fired units is around 50 years with good maintenance and timely upgrades as technology progresses. As for gas turbines 25 years is not unreasonable but coaxing 50 years out of one might be possible. Steam systems can be run indefinitely due to their ability to replace components. So a careful analysis is required of maintenance cost must be considered, after all when utility companies are shutting down coal plants (steam systems) in favor of gas turbines there must be something to the lifecycle analysis that indicates retrofitting such plants is not cost effective. This means replacing whole sections of PVs in the future may be cost effective.
Secondly, solar is a load following technology, that is during the 4 hours per day (10 a.m. to 2 p.m.) when electrical generation is practical it coincides at the same time peak usage occurs in the business community (as opposed to residential which is after 5 p.m.) Having said that businesses pay time of use rates with retail Kw demand charges of $10 and more during the same period in which solar generated electricity is available. So IF you are going to do a cost comparison then to do so you are comparing the peaking generation of electricity Kw demand and NOT THE BASE LOAD kwhr cost structure. Both the proponents and critics of solar PV have over sold their positions by including solar for residential use. Which means that 13 kwhr cost is NOT accurate as it should be (13 x (24/4)) 78 cents/kwhr that is unless this figure has already been computed in that fashion. So IF solar is only for business electric use and not residential then current time of use rates adequately cover the cost of solar IMO.
Thirdly, if you have ever done a residential cost comparison of off grid power generation, you will see while the first cost of solar PV is twice as high as a conventional gasoline/diesel/propane/natural gas fired unit, the operational costs are WAY cheaper for solar. IF you had to power your house off the grid for a month (say after a hurricane) or indefinitely, the cost for conventional runs from $5000 per month to $3000 per month respectively using those fuels. (gasoline->diesel->propane->natural gas) Whereas solar PV operating cost is virtually zero with a battery storage system. Virtually since you obviously have to amortize the replacement/maintenance costs of the batteries and PV as things wear out over the 25 year life of the system. BUT if you compare the amortized off grid cost of PV residential generation to on grid conventional fuel then conventional is cheaper.
What’s Wrong with Big Green Tech
http://theautomaticearth.org/Energy/beyond-zero-emissions-whats-wrong-with-big-green-tech.html
So let me get this straight. How many endangered plants, butterflies, and lizards were displaced by this government-subsidized solar array built on private land? Were they as worried about what WAS under the panels as they always are about the flora and fauna when the same size track of renewable trees are harvested?
Which group of greenies sued to keep this array from scaring the land? [crickets are so shocked even THEY aren’t making a sound]
jabre says:
Pg 23:
Conclusions from the operation of a-Si thin film facade
Altogether the system has had an uptime > 99%
A solar system that works at night? That is so cool!
Play hard but play fair. Capex isn’t the whole analysis. I see no mention of fuel cost in this article. I’d like to see an analysis of what makes solar capex expensive, and a discussion of likely areas of improvement. Remember that James Watt invented the condenser in 1765. There’s a lot of improvement that happened for traditional means of generation between 1765 and today. Let’s also not forget that the basic problem with fossil fuels is the fossil part. It would be interesting to do a comparison where increased demand for fossil fuel was projected out in light of growing demand in China and other places. Don’t get me wrong. I wouldn’t invest any of my savings in a solar power plant, but then again there was a time when I refused to invest in anything but IBM because I didn’t see a future in the personal computer. Ultimately you have to trust that the operation of Adam Smith’s “invisible hand” will sort things out and believe that schemes coming from Washington DC will interfere with that. We like to celebrate success in business, but the operation of the “invisible hand” also involves things that are tried but don’t work out. The future is coal and natural gas. Solar is just business adventurism – but where would progress come from if there were no adventures?
David, I remember when urban sprawl (habitat destruction by human expansion) was one of the environmentalist causes and during a trip across Iowa, Nebraska and Colorado I noted a significant amount of normally productive acreage is now being used for wind harvesting. These were actually beautiful structures at first but after a couple hours on I70 they became simple eye soars but at least I didn’t see any deer along the highway. After the dazzle of the technology wears off, will not the eco-sprawl find itself in the vernacular of “evil energy” along with coal and gas? In the Cimarron example the density of the panels would be significantly more intrusive on the natural habitat than the wind farms but the result is the same impact to wildlife. Once these energy farms become recognized as eco-sprawl what will be the disposal costs for these technologies? It’s my understanding that especially the solar cell employ hazardous materials in production and with their relatively short effective life cycle there will be significant maintenance and replacement work, so wouldn’t it follow that disposal will be a costly endeavor and that with the current trends, that disposal will be at public expense?
Here in W MD I’m paying $.0625/kWhr (6.25 cents) — minus all the rent-seeker tax/tariff add-ons. I guess that’s what I get for using those coal/gas-powered sources…
Anyone ever notice how all public utility services get more & more “add-ons” as the yrs go by? Your government (local/state/federal) rent-seekers slowly but surely at work….
@HankHenry,
Figure 1 includes fuel costs.
@DirkH,
Money and energy are not interchangeable (fungible). If energy was fungible, natural gas would be trading at about $17/mcf all over the world… Or oil would be trading at about $15/bbl.
jabre: Panel manufacturers provide 20 to 25 year 80% performance warranties.
That’s good until the manufacturer goes bankrupt. I have a 2 KW Sunpower installation that is performing very well and producing almost all of our power. Their product appears good and I hope their warranty will never be invoked. But if I ever need it, I want them to still be in business.