Guest Post by David Middleton
Great News! Siemens will generate an 18% return on a project that will have a negative return on investment (-9%)… All at the taxpayers’ expense!
At first glance, this looked too good to be true…
White Sands breaks ground on Army’s largest solar array
April 26, 2012
By Ms Miriam U Rodriguez (ATEC)
White Sands Missile Range leaders came out to break ground and to commemorate the start of a renewable energy project at the site of the new Solar Photo Voltaic Array Project, the Army’s largest solar array, April 19 on WSMR.
A 42-acre tract of land located about ¼ mile northeast of the Las Cruces Gate next to main post will be the site where 4.115 MW of single-axis vertical azimuth-tracking ground-mounted solar Photo Voltaic panels will be installed.
[…]
In conjunction with the 4.115 MW project, WSMR will also be installing a 350 kW solar PV Carport at the parking lot for the Headquarters Building 100.
[…]
The total cost of both projects is $16.8M with a cost of $3.77 per Watt.
The solar project is being funded within an Energy Savings Performance Contract (ESPC) utilizing an Energy Services Agreement (ESA) that the Huntsville Army Corp of Engineers (COE) has awarded to Siemens on behalf of WSMR. Under the awarded task order, Siemens will maintain and operate the equipment and will provide the energy to WSMR. This agreement is for a period of 25 years. The simple payback is 18.1 years. The energy being provided will cost the same that WSMR is currently paying the local utility company which is a blended rate of $0.08/kWh.
[…]
$3.77 per Watt is less than $4 million per MW. That’s a big deal. Solar PV usually runs from $5 to $8 million per MW of installed capacity and $0.08/kWh is dirt cheap by solar standards. $0.08/kWh is only 25% more expensive than the levelized generation cost of natural gas-fired electricity generation.
On top of all that, the Army didn’t have to pay any of the $16.8 million construction cost. Siemens would recoup its costs by selling the electricity to the Army at the current market rate. What a deal for the taxpayers! Green energy for the same price as dirty old energy!
It turns out that it actually is too good to be true…
Corps of Engineers completes Army’s largest solar array installation
January 22, 2013
By James W. Campbell, USACE
WHITE SANDS MISSILE RANGE, N.M. (Jan. 22, 2013) — The largest solar power system in the U.S. Army is coming online at White Sands Missile Range, N.M., and officials gathered Jan. 16, to mark the occasion with a ribbon-cutting ceremony.
The Energy Savings Performance Contract, or ESPC, project, awarded and managed by the U.S. Army Engineering and Support Center, Huntsville, provides the sprawling desert base with a new 4.465 megawatt solar photovoltaic system…
[…]
Along with being the largest solar project, there’s another first in how the system at White Sands Missile Range was funded.
“We used an Energy Services Agreement for the photovoltaic equipment along with the ESPC concept which was a first for the Army,” said Will Irby, Huntsville Center ESPC Program Manager.
An ESA is an arrangement whereby a third party owns, operates and maintains the power generation system and provides electricity to the customer. This third-party ownership mechanism allowed for a significant tax grant from that reduced the project cost by $6.1M, Irby said.
[…]
The taxpayers paid 27% of Siemens’ construction costs. The actual cost was $5.13 per Watt, $5.1 million per MW. A natural gas-fired plant costs $700,000 to $900,000 per MW. Since the taxpayers footed 27% of the up-front costs, Siemens can generate about an 18% annual return selling the electricity to the Army for $0.08/kWh…
(My return on investment calculation does not apply a discount rate or any other “time-value of money” measures.)
As if the economics of this weren’t bad enough, the 4.1 MW solar PV array covers 42 acres. That’s a generating density of 0.11 MW per acre. Natural gas-fired plants generate more than 6 MW per acre…
U.S. Army Dedicates 4.1 LCPV Solar Power Array at White Sands
By Renewable Energy World Editors
January 18, 2013
New Hampshire, USA — On Wednesday, January 16th, the U.S. Army dedicated its largest solar photovoltaic system at White Sands Missile Range, in a ceremony led by Brig. Gen. Gwen Bingham, White Sands commander. Bingham was joined by Katherine Hammack, assistant secretary of the Army for Installations, Energy and Environment for the ceremony and Judy Marks, president and CEO of Siemens Government Technologies. (see photo at the end of the article.)
“I came here about four months ago talking about how White Sands is a national treasure and now we can feel proud that we’re really on the environmental edge,” Bingham said. “It takes passion to do something like this. I’m just excited about the journey that will lie ahead.”
[…]
If “White Sands is a national treasure,” wouldn’t you think that the gov’t might want to reduce, rather than expand, the footprint of electricity generation for the facility?
The new solar PV arrays are expected to provide up to 10% of the facility’s electricity demand at a full cost of $22.9 million and will cover 42 acres of “national treasure.” A couple of 7 MW natural-gas fired reciprocating engines could provide 100% of the facility’s electrical needs at a cost of $5.6 million and probably only occupy 2-3 acres of “national treasure.”
Natural gas prices would have to rise to ~$8/mcf (mmBTU) for the natural gas-fired reciprocating engines’ levelized cost to become as expensive as the solar LCVP installation. US natural gas prices are not expected to rise to any where near $8/mcf by 2020.
Unless the Obama Administration finds a way to shut down fracking and kill the shale boom, the real price of natural gas is unlikely to increase very much at all over the next 10-15 years.
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It does tend to shine a lot in the desert. Sunshine days at WSMR: 293 (80%). Edwards: 279 (76%). There are sunnier places in the US, but not very many.
Carbon sequestration in funny money. What an Idea. Is that economic perpetual motion, claiming carbon credits for sequestration in bills, liquidating the credits into more bills?
When we start exporting natural gas and begin to use it in our truck fleet, the price isn’t going to stay as low as it is now. Not that renewables will ever be able to compete, but predicting stable natural gas prices for ten or fifteen years is a bad guess.
The taxpayers have the negative ROI.
Technically the taxpayers will always have a negative ROI when it comes to utility bills for gov’t installations, because these are not investments.
The problem here is that the taxpayers are spending $0.09/kWh for solar PV that only works about 6 hours per day, rather than $0.06/kWh for electricity that works close to 24/7/365.
If I applied a discount rate to the “investment,” the economics for solar PV would become even worse.
Capacity factor for Solar PV in New Mexico: about 25%
Capacity factor for a natural gas powered generating plant: about 90%
That is, 1 MW of install capacity of solar would yield about 6 MWhr / day (1 MW * 24 hr/day * 0.25).
The gas plant would yeild about 22 MW-hours / day (1 MW * 24 hr/day * 0.9).
Lesson: As a rule of thumb, the capacity factor of solar PV is about 20% (I gave solar PV a break for the dessert southwest and said 25%). So when you see that X megawatts of solar have been installed in Podunk, divide by 4 or 5 to get the actual power averaged over time.
and who thinks these things are going to last 25 years…..new technology will make them obsolete before they even have to do maintenance
Latimer: I read you need cooling in a carport in AZ because the electric car batteries are destroyed by heat in the very hot southern states.
I, too, wonder about the dust. Solar panels only work well if they are clean. Not much water available and then to use it to wash the a panels seems a bit crazy. None of this helps the environment, but I guess that’s not the real purpose for it anyway.
I wonder if the White Sands facility will be able to tap into this new DOE effort-
“As the military continues to move away from dependence on fossil fuels, the Defense Department plans to spend $20 million on a fleet of electric vehicles unique in their ability to export their own power and offset their cost.”
http://science.dodlive.mil/2013/01/23/dod-electric-vehicles-will-supply-power-to-local-grids/
I assume Concurrent Technologies Corp, and the DOE will find a creative way to finance the projects. It will be interesting to see how much it costs to put two way charging station in place.
I do the design for a lot of military projects that include PV. It is the standard now that almost all projects generate a min of 30% of electrical needs. 3rd party cost benefit analysis is required at the end of each project and the payback is usually over 60 years.
We all know the saying, payback’s a …….
42 acres down…..
284,958 acres to go.
I’d have to worry about those responsible in the U S Army who think this was a good investment…
‘Ok, guys – we’re planning to use a new supplier of machine gun shells for use in Afghanistan. ony 25% of the shell casings contain real bullets – the rest are blanks. Do you have any problem with that..?’
‘Er – with respect, sir….’
‘Good – no questions then. Supplies – go ahead and order them…’
@kakatoa says:
January 24, 2013 at 7:22 am
So they plan to charge the vehicles when demand is low (and electricity costs less) and then use the vehicles to supply power back to the grid when demand is high. Does nobody need to use these vehicles during peak times?
So we’ll now have military vehicles that will only work, well when? We can’t use them if they’re charging and we can’t use them if they’re being used to put power back into the grid. So what we will end up with is really expensive self-propelled batteries, I guess.
This is your tax dollars at work.
It makes you think that maybe we can cut the defense budget without endangering national security, doesn’t it?
The Solar Constant is ~1350 W·m^-2, equivalent to about 5 kWh·m^-2·day^-1 Who fails to do arithmetic is doomed, not least to failure.
That is the free space number, not at the bottom of the atmosphere. In Colorado at 5000 feet it is probably about 1100 w/m2 and at White Sands at about 2000 feet it is probably about 1040 w/m2.
The biggest problem at White sands will literally be the white sand degrading the arrays. It would be interesting to monitor the long term output. And… That is the peak power number as well the averaged number is much lower.
I do support such initiatives and what the military is not talking about is that this is part of an initiative to make bases energy independent.
Fire danger in that area is kept in check by (over) grazing. Of course cows like to chew on things (like wiring) so chances are they’ll fence in the 42 acres. Problem is the flammable grass will then grow back with a vengeance.
Location wise it is not too bad of a choice, the land in that area has little use other than grazing at a load of about 1 cow per acre or less. They do however regularly shut down the highway that passes nearby when missile tests are fired over the area.
If you know the series resistance of the array and multiply that by the square of the average current you will learn how much waste heat is generated. Then there is the direct conversion of solar rays to IR. What is the contribution to global warming compared to other power plants? Maybe they should paint them white 🙂
Bob Rogers says: “What’s the ROI on a hand grenade or a bullet? Nothing the Army does returns a profit, so why should this?”
Right. So how do we get North Korea to put one in just like it?
Not everyone agrees with the Army’s decision in this case. DOT&E mentions it in his annual report to congress in his summary on page x.
http://www.dote.osd.mil/pub/reports/FY2012/
I haven’t read the report in its entirety, there may be more details later in the report.
Solar fields = Monuments to the green energy era. Given time, these monuments will take on the patina you will find on monuments to humankind’s folly.
Bob Rogers says: “What’s the ROI on a hand grenade or a bullet? Nothing the Army does returns a profit, so why should this?”
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Yes money was wasted in the war against Japan and Germany on bombs and munitions. Losing Hawaii, the west coast, Philipines, Hong Kong, Burma, Australiia, France, Holland, Britain, etc. would have been no cost at all.
More Soylent Green! says:
January 24, 2013 at 8:52 am
I am sure Concurrent Technologies Corp. is well aware of the Time of Delivery Factors (TOD) built into the RE contracts that the three big service providers offer for RE projects. They will be leveraging the factors to supply electrical energy to the grid at peak times in the summer at $.24 kWh (PG&E) to $.30 kWh (SCE) and they will be able to charge the batteries at night during off peak rates (there are some special rates for EV folks so the price to charge can be as little as $.05). I don’t know if there are any funds still in the Advanced Energy Storage (ASE) pot, Tesla tapped this fund a year plus ago so they have already figured out how to take advantage of the TOD factors and have worked out how to send the electrons from the batteries to the grid, but I am sure Concurrent will leverage this funding source if it’s available.
The levelized costs of the solar farm noted above is the costs to the developer. The price that SCE, or whoever is getting the power, will be based on a 20 to 25 year PPA. In order to get the cash flow to work out for the investors the Time of Delivery (TOD) factors have to be taken into account so the AVG price will be around $.13 kWh for generation, before any other costs are allocated (i.e. transmission, line loss, distribution, back up power for when the sun doesn’t shine, etc. etc).
And yes, I think a few DOE projects could be reduced without effecting national security. I believe this effort would be classified as an investment in green energy by the administration.
Military Intelligence.
What would a President and General Eisenhower have said about this?
Why is it that nobody can call a dumb thing “dumb” anymore? Some things, like this, are.
Has anyone done a study on how scoring the panels by blowing sand affects efficiency? Or is that one on the questions that one doesn’t ask because one doesn’t want to hear the answer.
What shall we call the heat island that is surely present around this collosal waste of money?
How about the Collosal Waste of Money Heat Island Effect (CWMHIE). Oh well, I was never much good at inventing acronyms.
The political class is very good at finding new avenues for patronage. During Bush’s regime, it was military contractors and weapons suppliers. During the current regime it is Green companies, slayers of climate change (*eniers) and social media software companies etc.