Guest Post by Willis Eschenbach
In early 2013, the US Energy Information Agency (EIA) released their new figures for the “levelized cost” of new power plants. I just came across them, so I thought I’d pass them on. These are two years more recent than the same EIA cost estimates I discussed in 2011 here. Levelized cost is the average cost of power from a new generating plant over its entire lifetime of service. The use of levelized cost allows us to compare various energy sources on an even basis. Here are the levelized costs of power by fuel source, for plants with construction started now that would enter service in 2018:
Figure 1. The levelized cost of new power plants that would come on line in 2018. They are divided into dispatchable (blue bars, marked “D:”) and non-dispatchable power sources (gray bars, marked “N:”).
Now, there are two kinds of electric power sources. Power sources that you can call on at any time, day or night, are called “dispatchable”. These are shown in blue above, and include nuclear, geothermal, fossil fuel, and the like. They form the backbone of the generation mix.
On the other hand, intermittent power sources are called “non-dispatchable”. They include wind and solar. Hydro is an odd case, because typically, for part of the year it’s dispatchable, but in the dry season it may not be. Since it’s only seasonally dispatchable, I’ve put it with the non-dispatchable sources.
OK, first rule of the grid. You need to have as much dispatchable generation as is required by your most extreme load, and right then. The power grid is a jealous bitch, there’s not an iota of storage. When the demand rises, you have to meet it immediately, not in a half hour, or the system goes down. You need power sources that you can call on at any time.
You can’t depend on solar or wind for that, because it might not be there when you need it, and you get grid brownout or blackout. Non-dispatchable power doesn’t cut it for that purpose.
This means that if your demand goes up, even if you’ve added non-dispatchable power sources like wind or solar to your generation mix, you still need to also add dispatchable power equal to the increased demand.
So there are two options. If the demand goes up, either you have to add more dispatchable power, or you can choose to add both more dispatchable power and more non-dispatchable power. Guess which one is more expensive …
And that, in turn means that the numbers above are deceptive—when demand goes up, as it always does, if you add a hundred megawatts of wind at $0.09 per kWh to the system, you also need to add a hundred megawatts of natural gas or geothermal or nuclear to the system.
As a result, for all of the non-dispatchable power sources, those gray bars in Figure 1, you need to add at least seven cents per kilowatt-hour to the prices shown there, so you’ll have dispatchable power when you need it. Otherwise, the electric power will go out, and you’ll have villagers with torches … and pitchforks …
Finally, I’m not sure I believe the maintenance figures in their report about wind. For solar, they put the price of overhead and maintenance at about one cent per kilowatt-hour. OK, that seems fair enough, there are no moving parts at all, just routine cleaning the dust off the panels.
But then, they say that the overhead and maintenance costs for wind are only one point three cents per kilowatt-hour, just 30% more than solar … sorry, that won’t wash. With wind, you have a multi-tonne complex piece of rapidly rotating machinery, sitting on a monstrous bearing way up on top of a huge pipe, with giant propellors attached to it, hanging out where the strongest winds blow. I’m not believing that the maintenance on that monstrosity will cost only 30% more than dusting photovoltaic panels …
Best to all,
w.
Usual Request: If you disagree with what I or someone else says, please QUOTE THE EXACT WORDS you disagree with. That allows everyone to understand exactly what you are objecting to.
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PS
Jake,
The bottom line is that there would be no significant grid-connected wind or solar sources absent the legislation, massive subsidies and tax incentives that mandate or financially encourage these dreamy but unrealistic renewable fantasies.
Mobile or geographically isolated applications where a renewable source ( especialy more dependable hydraulic generation) displaces high cost fuels such as air-lifted diesel, or avoids expensive transmission extensions can justify the cost of contorl and storage systems ( for example temporary highway signs, sailing boats, remote cottages or villages).
@richard, I’m more open-minded on your objections than I might sound. As I wrote above, when I studied the so-called “clean tech” stuff, I played economist and assumed that the grid could take the power. I am all ears when it comes to learning more about the capabilities and limitations of the grid.
You can imagine, I hope, and sympathize, I hope, with me when I say that mere assertions plus $2.79 will buy an iced grande Americano here in Seattle. But if you would like to point me to neutral engineering discussions about the grid’s ability to incorporate non-dispatchable power, I assure you that it will get my close attention and appreciation.
To me, there’s no denying that the extraction of coal, gas, oil, and uranium is environmentally destructive. (And I might add, I also regard wind turbines as a blight on the landscape, and increasingly worry about that underplayed issue.) There are reasons other than climate change to seek alternatives to extractive energy.
Unlike the “usual suspects,” though, I’m not a devotee of the hair-shirt school of life, nor do I have the oh-so-righteous complex about Exxon and all the rest. I view a “switch” to renewables as something to be accomplished on a 100- to 200-year time scale, and one that must be accompanied by the holy grail storage solution(s).
You’re right about subsidies, but I’d also note that land-based wind turbines now beat coal and nuclear on a kWh for kWh basis. But that “assumes the grid,” and as these things become non-trivial (especially wind, now at 4% of U.S. generation), one can no longer “assume the grid.” In the end, it’s all about the science and the engineering, and letting the chips fall where they may. Today is today, but tomorrow will be different.
One other thing. Yes, hydro is “more dependable,” but it’s still classified by the Dept. of Energy as “non dispatchable,” with the proviso that it can be dispatched “within a season.” I can’t help but think that solar would fall in a similar category, being predictable enough even without storage to be “dispatched at certain times of day.” Surely more predictable than wind, wouldn’t you agree?
I look at the American Southwest, and see lots and lots of roof space. As PV cost-per-watt continues to drop toward a point (I expect by 2025, if not sooner) at which subsidies will no longer be necessary, my going-in position is that there’s a strong argument for equipping the rooftops of Las Vegas, San Diego, Riverside, and Tucson with PV panels over time.
When I talk to the enviro types about these things, I continually find myself telling them that there isn’t a magic bullet, that our energy comes from a variety of sources now (about 85% fossil and uranium), and that it’s going to remain this way forever, and that any replacement of extraction-based methods will take MUCH longer than they think it will. Even if someday, after we’re all dead, a future society generates 100% of its electricity from renewable sources, there will be a variety of them.
Finally (for now), there are subsidies and then there are subsidies. Here in Washington State, they subsidize solar panels at 8:1 relative to RETAIL electricity rates. I think this is beyond absurd, well into lunatic territory. Same goes for Germany, which I assume has done this to placate their Greens.
But here in America, we have the Southwest, and it’s big and sunny and far enough south. The fact that Seattle and Germany are full of nutcase progressives doesn’t indict solar. It indicts the innumeracy of nutcase progressives, that’s all.
Jake, I think this thread has gone on long enough and was not intended as a seminar on electric utility planning. My final comments are:
1. Dispatchability is a major factor in electric grid systems that react at lightspeed to imbalances. If you ran any time-dependent business, such as a ferry or taxi service, intermittent non-dispatchable operators would be of very limited use, as you would constantly have to arrange for back-up and/or lose business. Wind is virtually useless in grid applications, the coincidence of solar output and air-conditioning load in some areas does confer slightly more value on this variable resource but it is still highly variable, uncertain and non-dispatchable and absurdly expensive. You cannot run 24 hour process plants on intermittent sources. Don’t believe me? Try running a wind or solar powered ferry business – I’m sure there will be an academic study that tells us it is feasible.
2. Run-of-river Hydro ( with no storage dam) was recently the darling of the green movement as it causes minimal disruption to streamflow and fish stocks. It is not dispatchable however – which is maybe why Hydro is classed as non-dispatchable in the referenced report. Large Hydro with multi-year storage dams ( think Hoover dam) are eminently dispatchable but expensive, and cause significant environmental disruption. There are few remaining sites in North America where large storage dams could still be built, and they would meet with XL pipeline-like opposition.
3. I am not aware of any detailed reports on the real costs of integrating intermittent renewable resources into grid systems. The reason is simple. The only people that fully understand these costs are the electrical engineers who plan and operate real-life utility grid systems. They would lose their jobs if they told the truth about these costs in an environment where utilities are dependent on political favours to remain viable, and it is politically incorrect to be seen as negative in any way about renewables. You are only going to hear about these problems when these engineers retire, and as the cost of electricity soars in places like Germany, Denmark and the UK where they have gone overboard with renewable nonsense. I know this because I am one of those (semi)retired engineers.
4. Sustainability and weaning ourselves off of a finite fuel supply is a no-brainer. So is the observation that we have 200 – 300 years to do this. What is the gadarene rush? I’m sure that 200 years from now ( if the human race has survived far more significant hazards than climate change) we will have sustainable energy in the form of 5th generation nuclear (fission or fusion), sustainable bio-mass and sustainable natural gas/hydrocarbon supplies ( from garbage etc) and who knows what else. There is no need for Quixotic wind-turbines or solar panels, and certainly no need this century to do anything more than research novel sources.
Richard
We’ve talked this much. I see no reason to stop, but I suppose if there are no replies I’ll stop.
I don’t see how solar is as “highly variable” as you portray it to be. Seems to me that it’s very much the other way, as long as we’re talking about habitually sunny places. I wouldn’t call it “dispatchable,” but surely a portion of it is. I would expect that a portion of hydro would also be dispatchable, but I wouldn’t stake my life on it.
Even if we have to wait 100 or 200 years to completely move away from extracted fuels, I expect that the process with happen by increments. I don’t see anything wrong with having subsidized wind and solar thus far. We subsidize lots of things; the question is what the return on the subsidy might or might not be. I’m pretty confident in the returns on wind and solar.
I’m not nearly as confident on the return on the $4 billion we’ve already sunk into fusion, much less what’s coming in future subsidies. And I don’t think garbage methane is ever going to be more than the sort of cute boutique project of the kind that the progressive worthies of Seattle go apeshit for. e seen
I think one point on which we do agree is storage. This is the holy grail, and the question will be how much it costs/kWh. I am not high at all on stored hydro, from what I’ve seen. My hopes are in new batteries, a technology that’s pretty much drifted in the engineering backwaters for a long time. Now that we have electric cars in need of lower costs and higher energy density, and a call for grid scale storage, maybe we’ll see some investment dollars flow that way.
Richard says:
February 20, 2014 at 11:28 am
True dat … and I do love the phrase “gadarene rush”. Eloquent.
w.
Jake J says:
February 19, 2014 at 6:51 pm
Don’t know if you remember, Jake, but back under Carter the government started subsidizing solar power. This was done with the idea that in a decade or so, solar would be cost-competitive with fossil fuels and wouldn’t need subsidies. And you know, for the first decade or so, I believed it myself.
However, I gotta say that after FORTY YEARS OF TAXPAYER SUPPORT driven by the green fantasies of well-meaning fools, I busted out laughing when you said solar would be able to compete … in about a decade … if the taxpayers just keep up the subsidy. My response?
Get your green greedy hands out of my wallet, and pay for it yourself.
Next, you note that hydro is dispatchable maybe half the year. Let me add that during that half year it is available 24/7, and is rapidly adjustable from zero to full power production.
Solar, on the other hand, is dispatchable about a third of the day, from about 8AM to 4PM. During that third of a day, the amount produced is not controllable or adjustable, rapidly or otherwise. Instead, it is subject to unpredictable major disruptions in production.
As a result, your idea that they are comparable is simply not true. Hydro can be used to balance intermittent sources. Solar IS an intermittent source.
Finally, roof-top and other solar is driving electricity costs … well … through the roof. When legislation forces the utilities to buy power from roof-top installations and large-scale installations at high costs, who do you think pays the bills? The poor bugger at the end of the power line, that’s you and me.
I say cut them all loose, stop subsidizing them all, every one. The market sorted out the shift from wood to coal and whale-oil, and the shift from coal and whale-oil to petroleum, and the shift from coal to natural gas … let solar and wind sink or swim with the rest. There are certainly places for both … usually, really isolated places.
w.
Excellent response, w…allow me to pile on. Solar in the desert southwest may be 8 to 4, but in the rest of the country its worse, someplaces much worse (think latitude). Here in Ohio I give you 11-2 on a clear day…with the further caveat that we are cloudier than the Pacific Northwest!
During that third of a day, the amount produced is not controllable or adjustable, rapidly or otherwise. Instead, it is subject to unpredictable major disruptions in production.
What, because the sun will go down?
I say cut them all loose, stop subsidizing them all, every one. The market sorted out the shift from wood to coal and whale-oil, and the shift from coal and whale-oil to petroleum, and the shift from coal to natural gas … let solar and wind sink or swim with the rest. There are certainly places for both … usually, really isolated places.
At the risk of sounding like one of righteous Seattle progressives who make me grind my teeth, there are in fact considerable subsidies for all of the extractive fuels. If, for example, we’d slapped a 70-cent a gallon tax at the pump on gas to pay for the Iraq and Afghanistan wars, I’d be more sympathetic to the jihad against “subsidies.”
That much said, I view subsidies, whether they’re for the semiconductor industry in the 1950s, (what became the) Internet in the ’60s and ’70s, or solar since the ’00s, I view them as investments by a different mechanism. Some investments are stupid (Solyndra being a prime example) while others (the Marshall Plan, hotly opposed by the wingnuts of the day) make more sense.
To me, fusion has been one of the bigger boondoggles out there, given that no one has ever even shown any sign of coming remotely close to solving the big issue, containment. Yet, for some reason, the gov’t keeps pouring money down that rat hole. But who knows, maybe it’ll pay off. Solar panels? Those are going to pay off in a big way. The Iraq war? Not so much.
of course it is great idea about Generator but generator speed is not more. you know about the Brush Rocker