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.
DirkH: We see the first bankruptcies now so that falling trend will end quickly.
You might be right, but other reviews (like the McKinsey review that I linked) have noted the dramatic declines in the costs of manufacture in the last few years.
A last note on natural gas pricing. Some private investors and some municipalities are planning and constructing new pipelines and liquified natural gas terminals to sell more US natural gas to the rest of the world. Once those are completed, US natural gas prices, like US petroleum prices, will be subject to bidding by foreign purchasers. That’s likely to raise the price of US natural gas above what it is now. But, that’s the future, and we won’t know for sure for a few years yet.
The following data is the total energy produced each month in 2011 by PV power sources connected to the national grid of Spain. The source is the annual report of Red Electrica, Spain’s only transmission and electrical system operator. The report stated that the sources are a mixture of fixed and tracking arrays. Spain began 2011 with 3647 MWs (name plate) of installed PV power and the year ended with 3903 MWs, a difference of just 7%. About ¾ of the PV power sources are located in southern Spain, at about the same latitude as northern New Mexico. For 2011, Jan. produced about 36% of July. Regardless of the year to year variations it’s clear that winter months produce substantially lower energy outputs than the summer months. Solar thermal (parabolic mirrors…I don’t know what the solar towers will do) does even worse with winter months at about 20% the output of summer months.
2011 Mwh
Jan 340 *
Feb 462
March 526
Apr 691
May 771
June 829
July 901 *
Aug 827
Sept 757
Oct 655
Nov 387
Dec 423
2012
Jan 495
Feb 641
March 789
Apr 684
As others have aptly pointed out, the fuel costs for electricity generation are a relatively small proportion of the overall costs of generating and transmitting adequate electricity supplies on demand. The apostles of ethanol like to point out that there’s only about 5 cents worth of corn in a box of cornflakes. Of course there’s much more than that in a pound of beef or pork and they miss the broader point. But the basic premise is valid (within certain constraints), that a tripling of corn prices will do little to affect the cost of a box of corn flakes. In terms of generating electricity, most of the cost exists in the form of facilities, equipment, infrastructure and manpower. Fuel is indeed a factor but it pales relative to the cost of regulatory burdens. Other industries are more sensitive to fuel costs (e.g. shipping, airlines).
A friend of mine is a mechanical engineer and a motorhead. He likes to restore classic muscle cars to showroom quality. Most of these cars get maybe 18 mpg at best. Several years ago we discussed this with reference to the mileage of modern vehicles. He provided me with this example. Suppose he spends $15,000 (and his own time as a hobby) restoring a vintage 1969 Pontiac Firebird and it gets 18 mph. Now compare this to a new $30,000 vehicle that gets unlimited mileage. This was back when gasoline was about $1.75/gal. He would have to drive his restored vehicle over 154,000 miles before he hit the break even point on fuel costs relative to the greater acquisition cost of the modern vehicle. Assuming fuel prices remained the same and that he drove an average of 11,000 miles/year, it would take him 14 years to break even. I encourage everyone looking to dump a paid-for 5 year vehicle for a much more expensive but more fuel efficient vehicle in the name of fuel economy. Plug in whatever numbers you want, assume a best case/worst case scenario and see how many years it is likely to take to break even.
The same analogy can be extrapolated to solar power. Even if PV panels magically became “free”, the necessary real estate, regulatory burdens, infrastructure, transmission lines, maintenance and manpower would still exist. So too would the reality that solar only makes electricity when the sun is shining and requires spinning backup. Like wind power it also places unnecessary burdens on the grid. If PV panels were free we could all cover our roofs and backyards with panels, buy expensive charge controllers, inverters and (very expensive) deep cycle batteries and live “off the grid”. That still would not obviate the need to maintain and replace the batteries and panels when they fail (and they will) nor will it do much for that stretch of 4 or 5 cloudy days that even the best sited installations encounter.
The sun and the wind may be “free”, but harvesting them for something useful is very expensive. Until that changes solar and wind power will remain non-viable for the purposes of generating utility electricity. Even when something appears to be “free”…it almost never is.
Bingo!
Avfuktare vind says:
May 4, 2012 at 10:35 pm
One of the main benefits of solar energy is that it can be produced at the place of consumption. If you cut out the need for (extra) transmission lines and compare to the energy retail price its almost comparable to conventional energy. Add a decade of further development and I think we will see a lot of solar panels complementing other energy sources, especially photovoltaic and heat producing version.
Big solar farm with todays technology doesnt seem a good idea though.
Slightly off current thread:
PostShow – http://wattsupwiththat.com/2012/04/26/getting-your-mind-right-in-australia-round-2/ which many of you remember from 26th April; it runs until end-May, and I guess many who are concerned about Australia – her future, her sanity – have already voted.
Latest [2148 Z – 6th May ’12]
Dismissive 50%
Alarmed 23%
Concerned 13%
Doubtful 9%
Cautious 4%
Disengaged 1%
5003 votes counted
Don’t forget – Australian postcode needed;
one site – not alwys 100% reliable – http://en.wikipedia.org/wiki/Postcodes_in_Australia
Not to mention the wind farms based on a latest report (rolls eyes)
Robert of Ottawa says:
May 5, 2012 at 4:10 am
And another point, or question. Don’t solar panels decrease the albedo, i.e. absorb more incoming short wave energy than the desert? Wouldn’t this increase global warming?
The paradigm of centralized, photovoltaic generating stations that then transmit power to high density urban areas is severely flawed. If PVs has any chance of becoming economically viable, it is as rooftop installations to provide supplementary power, peak off set power in areas where peak loads are caused by the demand for air conditioning, and back up generation when there are power outages. With a homeowner owned installation in a low density suburb, PVs benefits from being installed on an existing structure rather than a purpose built facility and the homeowner will take care of cleaning dust and snow off of the panels.
Of course the best backup power for PV or wind is hydroelectric. A hydro plant can be brought on line very quickly.
Garacka says:
May 5, 2012 at 6:02 am
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.
******
That’s why they always refer to it as “carbon emissions” or “carbon tax”, it sounds more ominous that way.
It’s akin to saying that clouds are Hydrogen. Hydrogen is evil because it can explode like the Hindenburg. Therefore we must do everything we can to eliminate dangerous clouds and control evaporation. Big Dry is against this of course, hence the need for subsidies and the Hydrogen Tax.
James Crawford says:
May 6, 2012 at 3:23 pm
The paradigm of centralized, photovoltaic generating stations that then transmit power to high density urban areas is severely flawed. If PVs has any chance of becoming economically viable, it is as rooftop installations to provide supplementary power, peak off set power in areas where peak loads are caused by the demand for air conditioning, and back up generation when there are power outages.
Your first one is not a good example. Other power sources can do this cheaper, more efficiently and in the long run with less CO2 emissions (see nuclear power).
There is zero advantage of using anything hooked into the national grid that isn’t competitive with the national grid as far as cost goes or is not superior in some form. Solar and wind are inferior sources of power compared to any other source of power hooked into the national grid. They are not on demand power sources and therefore inferior. Why spend more money on solar power and hook it into the national grid? There is zero reason.
As far as temporary sources of power during power outages, that is one usage for solar that makes sense. Or even wind for that matter perhaps if you can set-up a portable system (doubtful) but perhaps that is just solar’s domain. Something that can be hooked up to make a temporary power grid while the real grid is fixed is something that makes sense, can be inferior in that some power is better then none…and there you go.
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@DirkH, the experience curve will not work with solar power or anything driven with subsidies. There is no incentive to drive down costs in manufacturing because if they drive down costs, the subsidies get cut. So why would these companies spend more money to increase efficiency when they would end up saving nothing and probably in the end manage to just lose subsidy money? The subsidies are simply determined to make sure that companies that manufacture these products can make X profit and stay in business so that the better solar companies keep going and the ones that are managed by morons go out of business. It seems like capitalism on the surface, but you can not apply the theories and practices of capitalism economics to this at all.
In essence, the experience curve and build-up of factories will just produce what is called a “standardized” company and process that every company uses. There is no reason to be in competition all that much except to make sure no one new pops up, you just want to be efficient enough to make sure the top dogs stay at the top, so you keep anyone new from coming into the market. You do this by making yourselves just slightly more efficient and hide the earnings by investing in inventory or something of that nature. So the various companies talk to each other and instead of competing, they share just enough insights to stay on par with each other and in the end these companies just become copies of each other and what does this end with eventually?
I will let you figure it out, but this system produces not innovation but standardization and lack of competition to the point that the companies simply cooperate together to lobby congress for subsidies and other stuff like that. That is what happens when Government picks the winners not based on whether the product is good or bad, but on whether people “like the technology” and instead of letting the industry either succeed or fail in the real world, we let delusions run wild.
I hope this explains why the experiences of the software industry and elsewhere will never be seen with solar. And if you do want to see these experiences, you have to eliminate every competitive edge these companies have and force them to play on an even playing field as every other company. Eliminate subsidies, tax breaks, FITS, and everything. Make it a truly level playing field and if the technology can survive, it will, otherwise bust….
Here in California, where we have a ‘green mandate’, the lowest lifeline tier on my bill is about 14 cents / kW-hr and it rapidly jumps to about 23 cents / kW-hr if you use enough to live comfortably in a 1000 square foot home (about 100 sq m ).
If you pay less than that, we are your future.
BTW, our rates will ‘necessarily skyrocket’ as we’re committed to much more “green” in the future. (Or, IMHO, we ought to be committed for our commitment…).
At those prices, I can make my own electricity at parity. On my “to do” list is to replace my electric stove with a gas stove and make a wood chip ‘gasogen’ and feed the gas to my generator so I can turn yard waste into electricity cheep. Yeah, it will put a fair amount of crap in the air, but at least I’ll be able to run the lights and heater. I’d rather buy cheap clean natural gas or nuclear power, but hey, you do what you must…
http://chiefio.wordpress.com/2011/02/23/diy-gasoline-and-diesel-from-wood-and-trash/
Welcome to a “DIY 3rd World approach to life” here in The Peoples Republic of Kalifornia…
Well, not entirely. You can fire up some diesel generators at night and shine powerful floodlights on the solar panels. As I recall, some company in Spain tried this. As long as you are getting a government subsidy for the electricity you supply from your ‘solar’ cells, does it matter how efficient they are?
Spain is doing really well, now, aren’t they?—leading the path to our ‘green’ future.
/Mr Lynn
Well I’m hoping to see a substantial off the grid push for PV solar. The big solar farms make no sense to me; but re-use of existing roofs (residential makes a lot of sense.
Two reasons for staying off the grid. It costs real money and efficiency loss to convert DC from solar cells to 120 AC locked to the grid; and that means both phase locked and power factor corrected. The second reason to stay off the grid is LED solid state lighting.
CFLs are going to be a flash in the pan, and then they too will be gone to the ash bin of history. LED lighting is far more efficient, and the basic flux source is far more tractable for optical system design for illumination.
And it costs a lot of money and further efficiency loss to convert LEDs which are current fed DC deices to AC Voltage feed at 120 Volts.
The people who make LED AC drivers, think 80% conversion efficiency is acceptible; it’s not. The cost of recovery of 25% more photons from LED chips is astronomical. The best LEDs now are quite close to 100% internal quantum efficiency, and some reach close to 60% (58%) in external QE.
The circuit guys need to get their rear ends in gear. A minimum of 90% ACV-DC current conversion efficiency, is required, or better yet eliminate the AC.
OK for residential lighting; but it requires battery storage. I could easily run every single LED lamp in my house off an ordinary car battery, with daylight PV charging. And I don’t have any Edison incandescents; nor do I have any mercury filled fluorescents; 100% LED, including inside the refrigerator. Still dunno if it goes out when I close the door; but now I don’t even care.
The solid state lighting scene is about as bleak as is the PV solar industry. Lots of people in it, and many credible giants; but still too many who have no idea what they are into; they think they do, but they don’t even know how much they don’t know. But the leading companies in solid state lighting are very good; just like some of the top PV solar cell people. A quick look at Fry’s solid state lighting offerings will show you how bad it can get.
benfrommo: I hope this explains why the experiences of the software industry and elsewhere will never be seen with solar.
Beware of sentences containing the word “never”.
No, and no. By the time you factor in the mfr. of the panels and substrate, and build and use the additional fast-response gas plants needed for passing clouds and most of the 24 day, the “pollution” benefit is probably negative. IAC, wealthier, cleaner societies are the real key to non-abuse of “environmental resources”. The “dollars and cents” bleeding of the economy at the level of energy generation is just about the most destructive attack on both humans and environment that could be devised. Which is why it’s so favoured by Greens such as yourself.
For those not familiar with Brit terminology, this refers to the notorious de-population of the Scottish Highlands by new English landlords to make room for large sheep farms after the defeat of the Scots armies. Lots of things now associated with Scotland, like the usually seen styles of arms-to-the side dancing, were actually introduced (from France in that instance) and modified (no touching, arms still, etc.) to suit the Calvinist tastes of the new landlords. Scots fled across the world, notably to North America.
Used efficiently and appropriately (often in conjunction with a solar panel for charging) in 3rd world environments, where it even has health benefits, as it substitutes for smokey indoor flame-lighting. See the Light Up The World project, at lutw.org . They also sell kits, if you want to try it out for yourself.
Ian of Fremantle says:
May 4, 2012 at 9:54 pm
Whether or not you believe in CAGW and on this blog most are sceptical as indeed am I, the development of non polluting forms of energy production surely is a plus for the environment. Isn’t it? Everything isn’t always down to the dollars and cents. Is it?
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Ian….. I don’t wish to pile on, so forgive me……… but, I don’t believe you understand what the function of “dollars and cents” is.
The question isn’t what “pollutes” more or less. Pollution is stupid expression. Everything pollutes. With or without mankind. Everything.
The question is always, “What works for the greatest good of mankind?”.
I firmly believe windmills and solar panels work against the greater good. It is silly to think otherwise. We’ve shown the utiliization of our fuels have increased our quality and quanity of life. It has also been shown that we can increase our quanity and quality of life and still increase quality and quanity of the flora and fauna of the earth.
Sustainable is a chatch word with alarmists/leftists. But, consider the American bison. They would be extinct if not for us being able to utilize other resources. In fact, their numbers have increased to the will of the American people. Why? Because they serve no utility to nature any further. They would have died out save for our efforts……. only accomplished by our utilization of various sources of fuel, food, and energy. Polar bears….. the same answer. Certain species of trees…. again, the same. A hungry person will eat the last of anything to save themselves. As all living things would do so.
Our use of energy and fuels saves us from being reduced to animals. It pisses me off for anyone to suggest we should return to such an existance. Anyone believing we should are either evil or stupid. Either way, if we left it to Darwin…….
Steve P says:
May 6, 2012 at 10:45 am
@ur momisugly me, May 6, 2012 at 10:15 am
Funny – ain’t it? – when we get to the crux of the issue, it’s more important to be funny than relevant.
If the CO2 scare is a scam, then we can freely burn all the coal we need.
That is the issue.
Gail was talking about advancing thorium reactors and your response was coal-fired generators, which I thought an interesting disconnect. BTW, I *like* coal — it’s plentiful, economical, helps keep the railroads running, and provides jobs in some pretty depressed areas..
Matthew R Marler says:
May 6, 2012 at 8:26 pm
benfrommo: I hope this explains why the experiences of the software industry and elsewhere will never be seen with solar.
Beware of sentences containing the word “never”.
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I always say never to economic systems that require subsidies for survival. They are depended on said subsidies and in the end they will eventually die out when the host decides to just get rid of the leech.
Mark my words, one way or another, the entire solar energy boondangle will fall along with wind because the US as it is has almost no money and it is just plain nuts to think that a country that is going bankrupt has the money to spend on “novelty” power sources.
Projects like these are doomed to failure because they will eventually run out of other people’s money to spend. And then what happens? Do they magically become efficient or just go bankrupt? Any takers on what will happen to solar and wind companies when the subsidies dry up completely?
Heck, this article above shows the costs in a comparison so that should show what will happen if the subsidies and “attempt at leveling the playing field for these novelties” stops when our out of touch leaders in Washington really do realize that you can not spend money you do not have forever on novelty projects like this.
They are already spending 100 billion a year on this in the US (wind + solar) so not sure this entire economic system can survive once the real cuts start coming to the budget. The first things to go when times are tough are the novelty stuff like this.
“”””” Brian H says:
May 6, 2012 at 9:38 pm
George E. Smith says:
May 6, 2012 at 6:49 pm
…
OK for residential lighting; but it requires battery storage. I could easily run every single LED lamp in my house off an ordinary car battery, with daylight PV charging.
Used efficiently and appropriately (often in conjunction with a solar panel for charging) in 3rd world environments, where it even has health benefits, as it substitutes for smokey indoor flame-lighting. See the Light Up The World project, at lutw.org . They also sell kits, if you want to try it out for yourself. “””””
Gee ! I could have sworn that I wrote that I HAVE already done it myself.
I’m typing this sitting in my 12th floor room in the Aria Hote ln Las vegas where tomorrow, I will be attending Light Fair at the Convention Center right here in this Hotel. It is the largest Lighting Industry convention in the World. And solid state lighting will feature prominently in the technical papers, and in the product exhibits; including some that I may have had something to do with.
benfrommo says:
May 6, 2012 at 4:30 pm
“@DirkH, the experience curve will not work with solar power or anything driven with subsidies.”
The 18% cost per unit reduction on doubling of volume was not a prognosis; it is what is observed with the price curve in the past. The subsidies are – at least in Germany – not given to the companies Solyndra-style. The subsidy is the FIT. So the user of the PV panel will shop for the cheapest panels. That is competition in my book. Even though the end user will get a subsidy.
“I hope this explains why the experiences of the software industry and elsewhere will never be seen with solar. ”
Of course you cannot expect to see the 50% reduction per unit cost in PV due to the need for physical manufacture, shipping and handling. I used software as the example for the extreme end of experience curves. Different products show different experience curves. For PV cells, it was 18% per doubling in the past. You cannot prove that it can’t happen; history has already refuted your argument.
I am against subsidies just like you. But I won’t deny that scale effects exist.
I was actually thinking in terms of DC direct to LED (from battery or panel) rather than using AC/DC conversion. Don’t know how complex it would be to wire up and control, but it seems that solar that stores in a battery bank, then is inverted to AC, which goes to a lamp rectifier return it to DC for the LED, — all very lossy, as you point out — could be “short-circuited”. 😉
Bill Tuttle says:
May 6, 2012 at 10:33 pm
Bill, thanks for the partial clarification, but if you read again, I think it’s pretty clear I was challenging Gail’s assertion that “thorium…is the only reasonable source of energy I have seen so far”
Gail Combs says:
May 6, 2012 at 5:34 am
….and, I did specify burning the coal, so there was no disconnect, at least in my comment.
Steve P says:
May 6, 2012 at 9:50 am
That’s the point.
Bill Tuttle says:
May 6, 2012 at 10:33 pm
Bill, thanks for the partial clarification, but if you read again, I think it’s pretty clear I was challenging Gail’s assertion that thorium is the only reasonable source of energy she has seen so far:
Gail Combs says:
May 6, 2012 at 5:34 am
Further, in response to Gail, I did specify burning the coal, so there was no disconnect, as least in my comments.
Steve P says:
May 6, 2012 at 9:50 am
That’s the point, and it still stands.