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.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Jake J says:
February 16, 2014 at 11:03 pm
I hope it was a very informal consultancy, because you seem to be conflating the capacity factor and the efficiency, which are very, very different things …
w.
RE: Tom J says:
February 16, 2014 at 4:44 pm
Hi, does anyone have a nice used 1961 Lotus Elite?
Fast forward 50 years, and things are not that much better. I just replaced a pair of world class carbon fiber racing bicycles from Trek and Cervelo of 2006 and 2010 vintage due to cracked bottom brackets. Turns out, I had the audacity to want to train outside during the winter season in barely sub freezing temperatures, and the engineers had not worked out that the thermal expansion properties of the high-tech military-grade export-controlled carbon fibre frames did not match that of the imbedded aluminum tube that receives the threaded crankset bearings. Given enough thermal cycles, the bond between the frame and the bearing receiver fails. (Of course, I tell everybody that my 1.3 kilowatt sprint power was just too much for the bottom bracket to absorb … but those I race against know better.) Maybe titanium would have been a better choice?
Too bad, as a little bit of global warming would have saved those two fine companies the warranty costs of a pair of shiny new frames. At least those engineers learned from their mistakes by eliminating the receiver tube. Both replacement frames now have bearings that seat directly into the carbon fibre bottom bracket shell. I will have to let you all know how it all works out next year, as this winter has been a total bust for outdoor riding. As I write this, I have 28 inches of snow pack in the back yard, and I am watching the great lakes next door freeze completely from shore to shore.
All the same, even with the new bottom bracket design, I will still run for cover when the hail stones start to fall.
-Complex life developed when oxygen became available to supply chemical energy through respiration.
-Agriculture and cities developed when crops were utilised on a large scale to source mineral chemical energy from the ground when it also interacted with solar energy in photosynthesis in plants; animal husbandry also utilised chemical energy from plants on a large and controlled scale.
-Civilisation and technology developed when metallurgy was developed to utilise various metals already concentrated by nature in the ground.
-Industrialisation on a large scale developed when fossil fuels were utilised which were already concentrated by nature in the ground.
All these are renewable and/or inexhaustible, except the last-fossil fuels. Something must be found that is largely inexhaustible and/or renewable to be as successful and dominant in the long run. Perhaps nuclear, but it is surprising just how much life in general and human society depends on energy utilisation and breakthroughs to flourish.
The second one above-agriculture and animal domestication, are interesting in that they utilise both chemical energy from the ground and solar energy from photosynthesis in a complex interactive fashion, which perhaps suggests that some form of complex combination of energy sources will be developed which could make a huge difference in the future.
Some turbines use no rare earths, no gear boxes, and can provide reactive power to a grid, and cause no frequency problems – dc generation with electronic controlled upconvertor to mains.
http://tinyurl.com/q7q42ay
wind turbines and birds:
http://tinyurl.com/ohrj6a5
How the UK grid handles a 1GW diconnection of a Nuclear generator (only 5 minute data available)
http://tinyurl.com/nb86eht
GE designed CCGT designed for load following:
http://www.ge-energy.com/products_and_services/products/gas_turbines_heavy_duty/flexefficiency_50_combined_cycle_power_plant.jsp
and finally a look at the rate of change of generation on the uk national grid during “typical” period (i.e. no outages of major generators)
http://tinyurl.com/n9u35u8
and if you want a peaak at uk electricity there is this excellent site:
http://www.gridwatch.templar.co.uk/
thingadonta says … “but it is surprising just how much life in general and human society depends on energy utilisation and breakthroughs to flourish.”
Not Really, streaming a little patch of ‘order’ out of the decay of the universe (entropy) takes a stellar effort 🙂
“Not Really, streaming a little patch of ‘order’ out of the decay of the universe (entropy) takes a stellar effort :)”….
My compliments…One of the best.
len says:
February 16, 2014 at 6:44 am
For all the CCS doubters, the penalty is not as high as you’d think relative to ‘Clean Coal’ and you can go to the SaskPower symposium in Regina in October after they’ve run it a couple months.
Willis Eschenbach says:
February 16, 2014 at 9:42 am SaskPower have no results yet, I’m unclear on the source of your confidence that the penalty is not high.”
I am confident they will complete their project and run it and do a fair economic evaluation because like I say, they’ve been tinkering with it for years. There is a very old documentary with a Saskatchewan scientist working on stripping CO2 from flue gas but like the David Suzuki doc on the benefit of commercial vitamin supplements it is hard to find 🙂 The main reason is they are a crown corporation with a mandate to use coal or any abundant under-utilized resource in their jurisdiction. Natural Gas is too valuable and portable relative to ‘generation quality’ coal.
The penalty they were siting in the interview on BNN was about 10% and you have to add on the energy penalty of clean coal which is required for the chemical CO2 stripping which is another 5% and another 5% to run an old coal plant (close to some tech stuff I’ve heard from people involved in another related project that never got built). Add that to the potential future premium of natural gas at 6$/GJ and above and there is a possible economic case for coal with CCS. The one advantage of coal is it is not prone to price spikes just when you need it … and if you hedge out these gas price spikes, you lock in a relatively high premium so most businesses won’t do that … which brings me to those simple reciprocating engine installations. They might end up like the couple of nat gas peaking stations which were never run and are now being demo’d because of a decade of abundant hydro power in the region which ‘just in time’ is now over … I digress.
What about renewables? They will always be a marginal consideration. Nuclear could do more but there is only so much uranium. When we perfect fusion power, which now seems possible, then there will be an alternative. By then (given we are smarter in a number of aspects) we may want to more actively take part in the carbon cycle and maintain 500-600 ppm of CO2 in the atmosphere which may be difficult given the natural sequestering processes.
25-30% parasitic loss on capture is not small bananas in a 600 mw unit.
But as I posted before, UNLESS the CCSis literally sitting on top of an EOR field, CCS is meaningless. The regulatory gauntlet to accomplish long distance CO2 transport and sequester in suitable geology is improbable at best and is literally decades away.
CCS without EOR is a regulatory box canyon and The enviros are licking their chops at the prospect of that battle.
Willis,
You said that each non-dispatchable power source you need to add at least 7 cents to the levelized cost. That is not exactly accurate. The levelized cost includes the cost of construction, maintenance, and fuel. In gas and coal plants the fuel is the lion’s share of the operational cost. If the reserves are spinning at low output much of the time then the $0.07 would come down significantly to probably $0.03-$0.05. In other words, if you build 100MW of wind and 100MW of back-up NatGas and sell 2GWh over the life time with 1GWh from wind and 1GWh from NatGas then the backup cost to wind is the total cost of the NatGas system minus the revenue generated by selling electricity from the NatGas plant. The simple bold statement you make assumes that the 1GWh from NatGas is given away for free.
Also, you group hydro with other non-dispatchable sources. That isn’t exactly fair since (according to your own article) hydro is dispatchable part of the year. So, in that case the hydro probably needs a lower estimate, or can be taken as dispatchable but seasonal.
Also, desert solar systems while not dispatchable are (if sited correctely) daytime base-load appropriate since their output characteristics are well known. This is similar to many coal stations that are not actually dispatchable since they cannot be quickly ramped up or down to meet demand.
Taken together, I could easily imagine cutting the add-on price for renewables to $0.03/kWh or less if the grid included hydro and solar along with cycling power plants designed to ramp up and down each day (the type already on the grid) that run during dry seasons in a manner to offset solar. These plants (again) are already on the grid, we would only shift when their output is ramped on or off. While the cost is still higher than traditional sources some risk components (nat-gas price spikes) are reduced since fuel is no longer as much of a limiting factor (Nat-gas still affects the peaking plants, but much of the baseload is insulated from fuel costs). Diversification is typically desirable whenever possible, and adding this sort of resiliency may be beneficial overall.
Not saying that a 100% green system is ideal, or even desirable, just saying that a $0.07 add on to all non-dispatchable sources is an overestimate. Or possibly disingenuous, although given your track record of being truthful and charitable I am guessing overestimate is the right descriptor.
However, as already pointed out repeatedly in the comments the transmission costs from appropriately sited renewables to demand centers raises the total cost by likely as much as I accused you of overestimating (5 cents or so per kWh) thereby making my entire objection moot.
Looking at the chart though I am surprised not to see greens pushing for more offshore solar-thermal. “It’s free, and it keeps the birds safe, what’s not to like man?”
Willis, thanks again for a wonderful article. You may not have written the “Emperor Has No Clothes Story” ( I think Al Gore did before he invented the internet and when we had a Republican president and Republican majority in Congress), but you sure prove its truth over and over here on WUWT. Please keep up the excellent and informative work. Work such as yours is critical to fighting fuel poverty and to help developing countries get the cheap, reliable energy the need to lift themselves out of poverty. A worthy goal for everyone with both a heart and a brain. Lead on!
thingadonta says:
February 17, 2014 at 3:33 am
All these are renewable and/or inexhaustible, except the last-fossil fuels.
============================================================
I assure you that they are inexhaustible. I will be long dead when fossil fuels are unavailable to Man. The condition of Man 1000 years from now is of no interest to me. Double-ought zero.
Solar energy will be unavailable to Man in 4 billion years. 1000 years, or 4 billion years, there is no distinction to me.
Where is this stupid comment “there is only so much Uranium” coming from? That has got to be one of the stupidest comments I see on these sites. If the USA reprocessed its slightly used uranium and used that reprocessed fuel with what we already have in the USA we would have enough for another thousand years. Presently we only burn about 5% of the fissionable uranium in the fuel rods. More than 90% of the fuel can be recovered and that can be done again, again, again, and again (About 10 more times). Actually costs less than digging it up. Then we have all of the “Bombs to Power” B/S of mixing in all of the decommissioned bombs into nuclear fuel. That alone is driving down the price of uranium to the point it is not worth looking for any. And just last week, Iraq claimed they discovered another LARGE deposit.
They are finding new deposits of uranium every year, and they only thing preventing mining is that the price is presently not high enough to waste the money on digging it up. If and when that runs out, the ocean has uranium that is recoverable.
And then in 500 or 1,000 years perhaps they will finally say that Fusion is making economical power, rather than saying it will be in ten more years like they have for the last 50 years.
Why must you add 7c to the wind power or solar power cost?
You should only have to add the infrastructure cost portion.
I’ve looked at EIA numbers before, and it seems that the EIA also includes subsidy benefits into the levelized cost. Thus the numbers above are significantly skewed by the massive construction and operation subsidies that have been extended to solar PV/geothermal and wind.
Granted, the natural gas and what not also have subsidies, but from what I saw – the relative impact on cost per output kW is small because construction costs play such a huge role in solar PV/geothermal and wind whereas the primary cost factor in coal and natural gas is fuel cost.
Yet another accounting scam.
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 …
The $0.07/kW-hr number is the steady state performance of the combined-cycle natural gas plants. During start-up, stand-by, and shut-down you don’t have enough heat in the stack for the steam side of the process to work, so the actual performance is closer to $0.14/kW-hr. That is what you need to add to the prices shown.
What was the one-time cost of the Tsunami?
Had Fukushima ‘blown up’ by itself (though direct human action, for instance), I might agree with you … ‘acts of God’ (re-read your insurance policy) are another thing.
.
Any indication of the instantaneous drop in grid frequency at that time? How long it took to recover?
.
One of the biggest fears here is damage to the ‘rotational’ (rotary or spinning) gear (equipment) … heaven forbid if an out-of-phase condition should occur and massive currents flow for a moment and ‘wire’ (in stators and rotors) are momentarily stressed, sometimes inducing physical damage (jerking, stretching, shearing etc.). This can be seen most dramatically in those cases where operators failed to ‘observe their (phase indicating) lamps’ (synchroscope) and ruined a generator they were trying to bring synchronously on line …
Power Plant “Horror Stories”
http://www.beckwithelectric.com/docs/tech-papers/pphoror.pdf
.
Electric ‘retailers’ (the middle men between the consumer and the distribution operator and the independent generators) have begun charging a ‘distribution’ charge … this amount used to be ‘eaten’ by someone in past years, but, our PUC (Texas) now allows this separate 30 some dollar (and scaled based on usage) charge to be tacked onto the bill too. ‘Quoted’ rates per kWh from retailers does not, of course, include this scaled charge.
.
Hoser wrote at 8:16 on Feb 16:
“That means the turbines need to be built off shore. 1250 sq miles translates to 500 miles of coastline with 7 or so rows of turbines from the shore out to sea covering a band 2.5 miles wide.”
Talk about climate change! Who really believes that such a wind sink will have little effect on the onshore winds that make the Southern California coastal climate so livable? Diminish that wind and you will have higher temperatures, which will result in higher air conditioning cost and less livability for those very elites that support this folly. Plus, what will it do to their beautiful coastal views?
And that is only the easily foreseeable effect. The law of unintended (or unforeseen) consequences applies. Free lunch is always prepared with a major portion of unobtanium.
Interesting the differences between actual historical costs and projected costs of generation. Here’s some historical data:
“August 2003 figures put nuclear costs at EUR 2.37 c/kWh, coal 2.81 c/kWh and natural gas at 3.23 c/kWh (on the basis of 91% capacity factor, 5% interest rate, 40 year plant life). With emission trading @ur momisugly EUR 20/t CO2, the electricity prices for coal and gas increase to 4.43 and 3.92 c/kWh respectively” Generation figures for nukes include decommissioning costs, unlike other generation sources.
Source: http://www.world-nuclear.org/info/Economic-Aspects/Economics-of-Nuclear-Power/
Unlike government projections, industry data needs to be accurate. Nukes and coal are the lowest cost, which is why real-world power generating companies have been buying them.
But then along comes requirements for ‘renewables’ and a US President who campaigned on a platform of “Under my plan, electricity rates will necessarily skyrocket” Reference: http://www.youtube.com/watch?v=HlTxGHn4sH4
So now we live in a world where China is building dozens of 3rd generation nukes that were designed in the USA with 100,000 years of fuel available, especially if you include the Japanese demonstration of collecting Uranium from seawater. But very little new construction in the US or much of the Western world.
I guess zero radiation-related injuries or fatalities at Fukushima after the tsunami claimed tens of thousands of lives just isn’t good enough.
len says:
February 17, 2014 at 6:02 am
Thanks for your reply, len, but it doesn’t even begin to answer my question. Try again. I asked why you are confident that the economic penalty for CCS is not high.
You answered, because you think they will do a “fair economic evaluation”, and because “they’ve been tinkering with it for years”.
So freakin’ what? What does that have to do with my question?
Neither of those should give you confidence that the CCS will be cheap enough to work. To the contrary, the fact that they’ve been “tinkering with it for years” should make you immediately nervous …
Len, I have to say, I find your kind of blind cheerleading for a technology that even you admit has not been tested to be bizarre. Let me suggest that you actually wait for sunrise before you start crowing about SaskPower. To date they have zero results, and that should engender zero confidence.
w.
David Simpson says:
February 17, 2014 at 8:16 am
David, you’re likely correct. However, in what I write, I have to be mindful that I need to be able to defend it. As a result, I tend to underplay my claims, and make my numbers err on the conservative side.
That way, when someone claims that the $0.07 is too much to add to the non-dispatchables, I can come back and patiently explain (as you did above) that the actual costs will likely be larger, not smaller …
w.
Do you recall in the early days the ‘test bed’ GE used to have to demonstrate the intersection of theory and practice which concerned itself with grid stability? In the ‘days’ prior to computer simulation any way, back in Charles Steinmetz (the REAL father of AC) days …
Jim I do indeed recall the good old analogue days when a model of an electric system provided a much better intuitive feel for power flows and dynamic stability issues ( just as a slide rule assisted in a better grasp of math than a calculator). Unfortunately very few people outside of electric power industry planners still understand how precarious that stability is, or the cost of building in the balances necessary for sources that can change as rapidly as wind. Those inside the industry have been silenced by political fear of the carbonphobia lobby.
len wrote, “renewables… will always be a marginal consideration. Nuclear could do more but there is only so much uranium.”
There’s an effectively infinite supply of thorium, which also works well, and which, coincidentally, is in the news just now. Also, Forbes had an interesting article two years ago:
len: “When we perfect fusion power, which now seems possible, then there will be an alternative…”
I doubt that fusion will ever be a practical alternative to uranium or thorium fission. I’d love to be wrong. But thorium sounds pretty good.
Len: “By then… we may want to more actively take part in the carbon cycle and maintain 500-600 ppm of CO2 in the atmosphere which may be difficult given the natural sequestering processes.”
Agreed. As I just wrote on the only climate alarmist blog I’ve found that doesn’t censor polite dissent, “it’s doubtful that we can maintain current rates of CO2 production for even the next one hundred years. / Before this century is done, if mankind is still around, we’d better hope that reliance on fossil fuels will be declining, and reliance on longer-term energy sources, such as thorium, will be increasing. There’s simply not enough fossil fuel in existence to run civilization forever. / The long term “CO2 problem” isn’t going to be global warming due to too much CO2 in the atmosphere. It’s going to be diminishing agricultural productivity due to declining CO2 levels, as the Earth’s flora consume and sequester it, after mankind ceases burning [fossil fuels], and relies, instead, on other forms of energy.”