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.
I find the wind number to be useless, as so many factors are site specific. Might as well rely on climate model projections. ;?p
First problem : the cost of wind energy depends in large measure on the strength and availability
of the wind. The more windmills there are, the less likely one will find good locations and windmills need LOTs of space. There is also talk of high maintenance costs, probably non-reported. Also, as pointed out, unreliable power generation incurs side effect costs – the need for backup
generation. Only fuel is saved (usually, but not always) when dispatchable power is replaced
by non-dispatchable power. But fuel costs are often the smallest portion of plant operation costs, especially these days with cheap gas prices and cheap nuclear fuel prices.
California is trying to create power storage by building a half dozen or more pumped storage facilities up in the mountains to store their excessive wind and solar. There are problems : 1) the costs of these facilities is quite large – not much cheaper than a nuclear power plant 2) their output capacity is limited to a dozen hours at peak output (a gigwatt) – obviously these plants do not make solar or wind power dispatchable in the general sense- they mainly can displace power from one part of the day to another – if the wind dies for more than half a day, there will be no wind power available to the grid. Ditto for solar. 3) there is a significant penalty for storing the power in the pumped storage facilities – apparently about 30% of the power is lost in the process. That makes stored wind power about 30% more costly, apparently.
My estimate of current build nuclear generation costs (assuming,conservatively, a lifespan of 60 years) is less than 5 cents. Fuel costs these days are less than 3/4 cents per kWhr and maintenance and ops costs are running 1.5 cents per kWhr in my state. My estimate of build costs (assuming the guaranteed 60 year lifespan of Gen 3 plants) is roughly 1 cent per kWhr. The land requirements are trivial – about 50 acres these days. Costs for nuclear waste disposal are 1/10th cent per kWhr and have been shown to be excessive- especially when fast nuclear reactors come online, which can burn nuclear wastes. I would love to see what cost component estimates were used for this study. I find it impossible to arrive at 11 cents per kWhr for Gen 3 plants, which are being built at roughly $4 to $5 billion per gigawatt. Try half that figure. Or less.
Each reading this needs to look at the first link – http://www.eia.gov/forecasts/aeo/er/electricity_generation.cfm and read this and ther report and understand it and the facts that are missing.
“Levelized cost is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-kilowatthour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle”
It is a hokus-pokus financial number that is used to decide if you should build a plant. It leaves out many important factors. As someone above mentioned NPP’s will normally run for 80 years – not 40 as in the analysis. Then, they use the manufacture’s warranty life for wind/solar, 25 years, yet to this date NONE have actually ever lasted that long, most don’t even last half of that 20-25 years. Then if you bought one, you are stuck with a massive repair bill which means it is usually cheaper to just replace it. Nuclear includes the cost of decommissioning, in most cases to better than as found conditions. Whereas all others do not. and the community is left with a rusting wind turbine or an abandoned solar farm. (Google them) At least coal plants and gas turbines will be torn down to avoid the higher property taxes, but the land will be just bulldozed to a semi-usable state – extensive work needed to re-use. They are also talking retail customer selling (electric bill) price NOT wholesale factory, industry price, which is typically about 1/2 that number – Except for Wind/solar as who is going to run a factory on either?
But it does give the Greenies something to throw at you – when you don’t understand what the number is.
My calculations are that a solar farm requires about 80,000 acres to produce the same gross amount of power as single nuclear plant of roughly 1500 Mw, operting at their usual 96% capacity. Windmills also require lots of land.
So what are the cost estimates for those land compoments in this (apparently bogus) levelized power costs ?
A great article about the Bird Assassins can be found at:
http://www.masterresourse.org/2012/10/20-badthings-wind-e-reasons-why/
Not widely know our signer-in-chief extended a 30 year exemption to allow continued assassination of “protected” species by these bird mashers. Read the article at Heartland.org.
len says:
February 16, 2014 at 6:44 am
Since SaskPower have no results yet, I’m unclear on the source of your confidence that the penalty is not high … a link to actual facts would be good.
w.
IN my research on small modular reactors, it is often claimed that they can produce power at 10 cents per kWhr, and further, that this is considerably more expensive than power from a conventional nuclear plant, reducing the likely applications to remote areas or smaller populated areas that don’t require a full sized nuclear plant. All this totally contradicts these levelized cost figures for nuclear supplied by the govt.
Even the windmill meisters agree that unless you live in a very windy place, windmills aren’t cost competitive. (Probably not even then) So what happens when it becomes common knowledge that windmills are decimating our bat populations and possible exterminating our endangered Whooping Cranes and other birds ?
Willis: Did you read far enough to discover that these figures arise from a massive economic model? The costs for various fuels appear to be projections for the quarter century after a new plant opens in 2018. There is no free market in electricity, so we really don’t know how electricity production really costs. The best one could do is find out how much distributors are actually paying generators today for electricity from various sources, add in the cost of the subsidies the generators receive and adjust for known improvements and current price changes.
“This report presents the major assumptions of the National Energy Modeling System (NEMS) used to generate the projections in the Annual Energy Outlook 2013 [1] (AEO2013), including general features of the model structure, assumptions concerning energy markets, and the key input data and parameters that are the most significant in formulating the model results. Detailed documentation of the modeling system is available in a series of documentation reports.” http://www.eia.gov/forecasts/aeo/assumptions/
“There are two options”
The other option will soon be here: smart meters are being installed all across the USA (& soon in the UK). These will allow the grid controllers to switch homes partially or fully off when the renewables cannot cope and there is insufficient dispatchable generation.
The age of having a dependable supply is over – time to buy a small generator to power the freezer, fridge & (gas) boiler.
David Friedman says:
February 16, 2014 at 8:42 am
Thanks, David. You seem to think that if a generation mix contains say 30% wind, and the wind suddenly drops, someone runs out and turns on the dispatchable power, and the rest of the time the dispatchable power is not running.
This is not the case at all. Instead, the dispatchable power has to be on all the time, to make up the difference between the semi-steady load, and the wildly varying windpower input. If you need a hundred megawatts, and the wind side varies in a very short time between say zero and two hundred megawatts, you need what are called “spinning reserves”, generators that are running already. (You also need to shed the generated power, but that’s a separate question.)
And not only are the generators running, they are running under the worst conditions imaginable, which are that they are constantly varying their speed. That’s very bad for an engine of any kind. More to the point, it is very damaging to the efficiency of the system, it wastes energy to ramp it up and down and up and down.
So yes, you do need to add in the $0.07 per kWh to the figures for the intermittent power sources. You will need to have the equivalent dispatchable power, you’ll need to have it running all the time, and you’ll need to have it running in the most uneconomical manner.
w.
Sergey says:
February 16, 2014 at 8:56 am
Thanks, Sergy. You are correct, and there are always subdivisions within divisions. In this case, the dispatchable power can be subdivided into baseline power, which are the boiler fired type you mention above, and peaking power, these days mostly gas turbines.
w.
Frank says:
February 16, 2014 at 9:51 am
Thanks, Frank. I didn’t have to read at all to know that the estimated costs of a new power plant that is started today, finished five years from now, and run for a quarter century will be the results of a model.
Do you know any other way to estimate the costs and benefits of such a project? Of course both electric utilities and governments use economic models for this purpose—it’s not only our best option, it’s our only option, unless you include counting on our toes …
Indeed, I put this information out there in part so that people can examine and discuss the various assumptions that go into the models.
w.
Wind power is fabulously uneconomic. A recent report (http://www.americanthinker.com/2010/02/wind_energys_ghosts_1.html ) documents that some 14,000 power-generating windmills have been abandoned in California alone. After the developers made their money, and the government subsidies and forced-purchase agreements were all used up, the construction all done, all wired into the grid, and getting “free” wind energy, they still couldn’t cover their own maintenance costs and were shut down.
Some one should work up a post/thread:
“Civilizations Cost Related to an Earth First Cultized Electric Generation Failure”
Or
When what goes around comes around and the “Tea Party” gets control of the levers of power in D.C. and they use the NSA to get the membership records of Earth First and Greenpeace and the IRS gets to work on that list a bit.
Willis
Here is a report from the State of California Energy Commission.
CEC-200-2007-011-SF
COMPARATIVE COSTS OF CALIFORNIA
CENTRAL STATION ELECTRICITY
GENERATION TECHNOLOGIES
The results are considerably different from the ones in the report that you reference Willis.
Coal is the cheapest and nuclear second. Wind and Solar are the most expensive.
@wayne Job, First post.
“The cost of free energy seems to come in at around three times the price of unfree energy.”
Not trying to be a pain . But I wonder, what is the cost of “free” energy? Is it not free?
itsonlysteam says:
February 16, 2014 at 9:13 am
So let me tell you how it really works in a ‘deregulated’ generation market in North America.
======================================================
The U.S. market is highly regulated. So what are you talking about?
Willis Eschenbach said on February 16, 2014 at 10:01 am:
“You also need to shed the generated power, but that’s a separate question.”
Anecdotally, it is my understanding that there are special facilities that shed generated power directly to ground and are paid to do so. I suppose that it is not technically trivial to dump large amounts of electricity to ground safely.
How much generated electricity is shed to ground, at what total cost and whether this is subtracted from renewables’ generation figures are open questions to me.
Is this significant?
The wholesale price of electricity in the US is about $.04/kwh. About half the cost of the lowest cost power plant. If these cost are accurate, no one would build any new power plants.
fobdangerclose says:
February 16, 2014 at 10:42 am
Or
When what goes around comes around and the “Tea Party” gets control of the levers of power in D.C. and they use the NSA to get the membership records of Earth First and Greenpeace and the IRS gets to work on that list a bit.
…………………………………………………………………………………………………………………………………….
classic error made by progressives. they think everyone is vindictive and mean. when the truth is usually it is only progressives who display such traits. if the Tea Party displayed as you suggest then they wouldn’t be Tea Party ..they would be progressives like you.
I don’t think it is normally worth addressing a troll/progressive but you give an opportunity to show how deranged progs are. you are a teachable moment.
OT
You would think that the Pres. and his staff of “Climate Change” belivers would think a bit before Pres. Obama the next day after his big “tax and spend” on Climate Change speach,,,, he goes golfing at Palm Springs Calif..
Not sure there is a more wasteful use of water resources on the planet.
Gen.Malaise,
Did not think I need to put a “sarc” tag on that post.
Sorry to say but most who know me think I am a “knuckle dragging right wing Republican conservative” sorry to distract you.
asybot:
At February 16, 2014 at 10:50 am you ask
I answer.
All energy is free. It was all created at the Big Bang
Collecting energy and concentrating it in a form to do useful work has costs.
Nature has collected energy and concentrated it in fossil fuels and radioactive materials.
The high energy density in fossil fuels and radioactive materials means that it is easy to get a lot of useful energy by obtaining and using them because nature has done most of the energy collection for us. It is much more expensive to do the collection for ourselves.
For example,
fossil fuels are solar energy collected by plants using photosynthesis over geological ages then provided in dried, compressed volumes of material
but
biomass is solar energy collected by plants using photosynthesis over a few years then provided in wet, uncompressed volumes of material.
With the exception of the solar energy obtainable from hydropower, all the sources of ‘renewable’ energy are so diffuse that it costs much more to collect it than the cost of obtaining similar amounts of useful energy from using fossil fuels and e.g. uranium.
Richard