Guest Post by Willis Eschenbach
For this post I’ve taken as my departure point a couple of very interesting graphs from over at Not A Lot Of People Know That. I’ll repeat them here:
(NOTE: I’ve been informed in the most genteel and lovely way that I’ve not given full credit for the source of these graphs. As the lower graph notes, they are from the Strom Report, Source: Strom-Report. My thanks to them for the heads-up.)
Interesting, no? But I’m a numbers guy, I wanted to actually analyze the results. Using the data from those posts and adding the US information, I graphed the relationship … Figure 1 shows the result:
Figure 1. Electricity costs as a function of per capita installed renewable capacity. Wind and solar only, excludes hydropower. [Updated to add Australia and correct the units]
That is a most interesting result. Per capita installed renewable capacity by itself explains 84% of the variation in electricity costs. Not a big surprise given the crazy-high costs of renewables, but it is very useful for another calculation.
Today, President Obama said that he wanted 28% of America’s electricity to come from renewable energy by 2030. He has not detailed his plan, so I will assume that like California and other states with renewable targets, and like the EU graph above, hydropower is not included in counting the renewables, and thus the energy will have to come from wind and solar. (Why? In California, they admitted that hydropower was excluded because it would make it too easy to meet the renewable goals … seriously, that was their explanation.)
Currently, we get about 4% of our electricity from wind and solar. He wants to jack it to 28%, meaning we need seven times the installed capacity. Currently we have about 231 kW/capita of installed wind and solar (see Figure 1). So Obama’s plan will require that we have a little less than seven times that, 1537 kW/capita. And assuming that we can extend the relationship we see in Figure 1, this means that the average price of electricity in the US will perforce go up to no less than 43 cents per kilowatt-hour. (This includes the hidden 1.4 cents/kW cost due to the five cents per kilowatt-hour subsidy paid to the solar/wind producers).
Since the current average US price of electricity is about 12 cents per kilowatt-hour … that means the true price of electricity is likely to almost quadruple in the next 15 years.
And given that President Obama famously predicted that under his energy plan electricity prices would necessarily “skyrocket” … it looks like he finally might actually succeed at something.
Since this is being done illegally or at least highly improperly by means of Obama’s Imperial Presidential Fiat, there seems to be little we can do about it except to let your friends and neighbors know that thanks to Obama and the Democratic Party, their electric bill is indeed about to skyrocket … otherwise, Obama is likely to blame it all on President Bush.
Best to everyone,
w.
My Usual Plea: If you disagree with someone, please quote the exact words that you object to. That way we can all understand exactly who and what you are objecting to.
Prediction Notes: It is always dangerous to try to predict the future. In this case, we have a couple of issues. First, we don’t know if this relationship will continue to work in the future. And we don’t know if America’s path will be like that of the other countries. The good news is, the fact that there are 19 countries which differ greatly in both installed capacity and level of economic development gives some comfort.
Next, outliers. I tested to see whether it would change the trend if I removed Denmark and Germany … it barely changed. That was very encouraging, because it means that the same relationship held when we extended the data from 600 kW/capita (Spain etc.) out to about 1000 kW/capita, a projection of about 60%. Since the extension to the projected US installed capacity/capita (1000 out to 1500 kW/capita) is of about the same size, this increases confidence in the estimate.
Finally, we have to make some assumptions about US electricity use in 2030. It will increase … but by how much? Fortunately, the independent variable is installed renewable capacity per capita. This means that extending the line contains a tacit assumption that the electricity consumption will increase at about the same rate as the population. While we have no way to know if this is true, US per capita electricity consumption has been about flat for the last two decades, so it is the most reasonable assumption.
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Canadian rivers: Solution to Northeast’s high energy prices?
http://www.centralmaine.com/2015/08/02/canadian-rivers-solution-to-northeasts-high-energy-prices/
What about Greenland? How much hydro energy you could generate there? How to transmit that energy elsewhere where it is needed?
How much will they produce when they freeze over? An how long will that last?
Just a small unit remark:
1 MW/ million head of population = 1 W /capita
I agree, renewable installed power per capita is very very low, unpredictable and definitively too expansive to fund
RAY, a french citizen
The chart is great but the conclusion may be flawed. Correlation does not prove causation. The data also shows that increased energy costs “cause” (provide an incentive for) more renewable capacity. This view of causation is more consistent with the basic economic principal of supply and demand and may provide a more generally useful interpretation of the data.
This was my concern as well – just reviewing in case someone else mentioned it. The business case for renewables gets better if your cost of electricity is already high, and thus the argument may work both directions (ie: high costs are correlated with presence of renewables). This is similar to how Ethanol in the US is tied to Oil Prices….it’s the opportunity cost that is impacting the decision. That being said, I think most everyone would agree that Renewables, once subsidies are accounted for, generally drive a higher cost. I just don’t think this chart should be used as an argument without recognizing Steve’s point above.
Let me see if I understand your argument correctly:
If you first force or subsidize investment in renewable energy
then – force citizens to, directly and indirectly, accept increased energy prizes
then – renewable energy will asymptotically reach a cost level where force and subsidies are not longer required.
Which came first: high energy prices or renewable energy solutions? You know the answer to that, and it implies that Willis’ interpretation is the correct one.
“…a more generally useful interpretation of the data.” ???
Maybe a more generally useful interpretation of the data based on ideology, but not a reasonable interpretation of the data.
It is true correlation does not prove causation, which is why it is hilarious that CO2 (specifically man-made CO2) is said to cause warming, when historically not even correlation is consistently demonstrated.
In this case each country is a discrete entity with it’s own unique set of taxation, economies, other energy sources, demand, consumption, advantages and dis-advantages. Regardless of these differences what they do have in common is higher renewables per capita and higher energy costs.
The case could be made better by showing energy costs per capita before the forcing of renewables, however until then the most reasonable interpretation is obvious and pointed out in the article.
Thanks for the info. “43 cents per kilowatt-hour.” that is around 20 to 40 times what we were told it would cost. It is without doubt the single most stupid policy that mankind has ever conceived (at least since the dawn of printing).
1000 kW/capita ?
Rather 1 kW/person. 1000 kW would be fairly much.
Yes, Norway has 4.8 kW/person hydropower. 95% of all electricity.
Figure I ce sont des Watts/capita.
Merci, Raymond, je l’ai changé …
w.
Based on 2010 figures US has a total electricity capacity of about 1, 063 000 MW about the same as Europe combined. About 317, 640 MW comes from coal plants . New EPA rules will mean that 32 coal fired power plants will be forced to be shut down and an additional 36 plants might have to close due to new federal air pollution regulations . These shutdowns will further reduce the US capacity by 14,700 MW. There will be very little margin between capacity and demand during peak periods .
If Obama wants to have 28% of the electrical energy to come from renewables , it would mean that 75 % of the time there would not be power for of renewable power users (28 % of US ) unless there is full nuclear or fossil fuel back up or ability to purchase from Canada. But Canada has a total capacity of only 135 000,MW, One cannot continue shutting down your dispatchable power generators and increase your intermittent generators without having major sustained black outs . Just look at what Germany is doing and they have been having problems,but they have learned from their mistakes and are trying to fix things .
Germany is planning to back up every wind and solar capacity with coal or gas back up . They have a surplus of capacity and regularly export around 20 % of its power . They are converting all their nuclear power plants to coal and will keep their coal plants . They also have access to a large European grid for power purchases. This is not the case for North America
If Obama wants to have 28% of power from renewables , he better have 100 % backup for the 28% renewable component in the form of coal, gas or geothermal energy . Replacing firm power with a major component of renewables for the main national grid without 100% back up is committing energy suicide in my opinion and US is heading for a serious electrical energy crisis and the electrical costs will go up 3-4 fold
US should exploit GEOTHERMAL as and alternative to wind and solar in my opinion
US should go back to being as much nuclear as possible and ditch all renewables in my opinion
interesting and from wsj:
http://www.wsj.com/articles/states-should-shun-the-epas-new-power-mandate-1438550971
Wow… am I glad I live in Hungary! The ‘government’ here – and I use the term very loosely – conforms to the normal Hungarian behaviour of “If they’re doing that, I’ll do this, because I know best and everyone else is wrong”. Sounds awful, but once you understand that, life in Hungary makes a lot more sense. Just hope they crack on with building a few more brown coal burning plants and a few more reactors, then they can export cheap electricity to the rest of Europe!
Or maybe it’s an old James Thurber aphorism:
“He who hesitates is sometimes saved”
New Socialism/Linberalism consists essentially in being seen to have your heart in the right place whilst your head is in the clouds and your hand is in someone else’s pocket.
Please check the units at the graph.
Hundreds of “kilowatts” of renewables per capita seems a bit high…
Maybe “watts” only?
Quadruple? Mine’s nearly doubled already. Quadruple that and you’ve cut the legs off of every small business and removed air conditioning from the reach of the poor and the marginally retired while making everyone but the power companies and renewable profiteers noticeably poorer. I believe the plan is to makeup for it by making transportation so expensive only the rich travel? Ahh, progress! Who knew it could be so miserable and wretched for the masses. Maybe they can dress it up a bit with mass entertainment and government regulated internet where we are reminded that “poor lives matter.”
Power is essential. People will simply have to move money spent on other things, to the fuel budget. Here in the UK we already have a phrase “Heat or Eat” for poorer families struggling in winter time.
Willis, great analysis.
Can you help me out on what the $/kwh actually represent?
I just went through a review of my electric bill for my home in Northern New Mexico and compared my actual bill with data published by EIA. As far as I can tell the EIA data for New Mexico reports the $/kwh for the first usage tranche, i.e. the first 450 kwh. Additional usage is charged at at progressively higher rate. In addition the EIA data does not include a bunch of other charges such as: fuel cost adjustments, renewable energy rider, cost effective energy “saving”, state and county taxes. The net result of all this is to take my cost from the EIA number of 9 cents per kwh to 18 cents per kwh. Is the US data and European data developed consistently and are we looking at apples to apples comparisons?
Boy do I feel fortunate. I am at 0.08 / KwH (yes 8 cents) and it is all natural gas. Used to be a lot of coal but all the new stuff brought online for the last 10 years is gas and the coal were converted because it was cheaper. I consider anything above 0.15 / KwH to be price gouging.
I also consider not counting hydro as cheating. The only place that has ever gone 100% renewable for any length of time was Costa Rica and that was because they counted hydro as renewable (as it should be IMHO). They are unique in that respect.
I have a friend living in Costa Rica. His mother now has dementia and tends to leave appliances and lights on 24/7. This is costing him serious problems due the cost of electricity there.
Excellent. If a country removes all renewable capacity from its portfolio, then figures out a way to uninstall some 500 kW/capita more, electricity should be free.
It may sound a bit tedious to uninstall capacity you do not even have, but I am sure there is a solution to that problem. It should be possible, at least in the EU.
Guys in Spain for example managed to generate solar power at night using diesel generators, so there are no limits, really.
My electric bill is already skyrocketing. I have written to my State public utility commission to complain. Everybody needs to do this if they feel their artificially skyrocketing fuel bills are causing them financial distress.
For those who think they are only paying US$.08 per kilowatt, check your bill closely. In Illinois, we have to pay two separate amounts, one for the infrastructure, the other for electricity. It is all for the electricity in the end. The infrastructure amount often doubles the bill, or more. So .08 is actually .16 per kilowatt. It is smoke and mirrors with this government.
Willis
Your article states
“Today, President Obama said that he wanted 28% of America’s electricity to come from renewable energy by 2030″
But the Obama’s plan says( see next post on WUWT)
–” Drive more aggressive investment in clean energy technologies than the proposed rule, resulting in 30 percent more renewable energy generation in 2030 and continuing to lower the costs of renewable energy.””
According to EIA, US produced 13 % of the 2013 power via renewables . a 30% increase would raise it only to about 16.9 % not 28 % as you suggest.
can you clarify?
Thanks, herkimer.
I had to work off of the “preview” information on the plan. It looks like it’s not as bad as I thought. Instead of requiring 30% of power generated, he’s only demanding 30% of capacity.
However, this is not as easy an out as it seems. This is because the US average capacity factor is 0.29 while the average wind capacity factor is about 0.24, so calculating it as a percentage of capacity doesn’t help much.
w.
WILLIS
Thanks for the clarification. I have modified my past comments as a result..
Renewables account for 13% or 171 000 MW of the US total electrical capacity of 1,151,812 MW in 2013 . So if the renewables are to go to 28 % of the total capacity by 2030 there will have to be a doubling of the renewable capacity or additional renewable power of at least 171,000 MW by 2030 . During the 5 years 2008-2013, the last period for which data exists, about 51,424 MW of renewables capacity was added. So in the next 15 years , they should be able to add another 171,000 mw based on the most recent experience . I understand that about 25,246 MW of coal generated power will be phased out due to new regulations and obsolete plants . GERMANY ‘S renewables capacity is about 29.4 % of their total capacity , but their overall capacity is only about 177,000 MW in 2012 , much smaller than that for US . Europe is 30 % in 2012 for renewables with an overall capacity of about 1,075 000 MW. Germany is already having problems with their smaller grid with almost 3000 grid adjustments / year. They have 35,000 MW of wind power and 37,000 MW of solar capacity . US has already 61,107 MW of wind capacity and 12,000 MW of solar capacity in 2013 and this will probably double again . There is very little good historical experience in operating such a huge power grid with so much renewables as US is now contemplating
My concern is not only about the quadrupling of the cost of electricity , but the reliability of the future 2030 grid with almost 340,000 MW plus some of intermittent power spread all over the nation. Obama has washed his hands of any future responsibility by saying that the power producers and grid operators have to solve the problems. However, he is making the final decision and has overall accountability for the problems that may arise,. In my opinion,in the end, the consumers will have a much less reliable electrical system with more frequent power outages , 4 times higher electrical costs at least and with no detectable impact on climate which really cycles every 60 years and is now heading for cooler weather rather than warming . We may be leaving a mess for our future generations , not helping them
Strangely enough, it is not about energy, nor any science except political. Goal one: get power. Goal two: keep same. Create shortages, then subsidies. The subsidized will support you else the subsidies be reduced. Works until the productive economy becomes too small to support the parasites. High energy prices do not hurt the poor. They require the “poor’ to get energy subsidies. Like food shortages in the worlds most productive agricultural economy. Or farm subsidies in the same economy Or housing shortages in the country with the most housing per capita in the world. Or trouble finding a doctor in the country with the worlds biggest medical establishment. Or transportation shortages and subsidized mass transit in the country with the most cars per capita. Producing too much of something cheaply require the government to screw up the production so as to create a rationable resource. So if Uber creates too much inexpensive and efficient transportation…..
The higher the energy costs, the less competitive your economy will become.
It is economic suicide to drive your electricity/energy costs ever higher. In the long-run, the country’s standard of living will be reduced in proportion to the cost of energy.
We should be using every possible source of Hydro available. Not only does it produce clean, reliable, low-cost power, but the dams create beautiful lakes that are a huge benefit to nature and humans. The only issue with Hydro is the energy loss on long transmission lines.
The new efficient combined cycle natural gas power plants are the second choice. Not only are they highly efficient and low CO2 producers, we now know there are huge resources of natural gas available from the new fracking technology that can be accessed virtually everywhere in the entire world. Gas is everywhere. It will remain cheap for a long, long time.
Fracking is really not the answer. I have Native American friends in North Dakota who are detailing all the problems with the resulting noxious waste water, on top of the endless oil spills in their territories.
Waste water and its disposal is also causing huge problems in Oklahoma – google ‘Oklahoma man-made earthquakes’ and many sites will come up – this is one, and shows incidentally that Govt interference in scientific research is not limited to climate disciplines!
http://www.newyorker.com/magazine/2015/04/13/weather-underground
Thanks, Willis.
Presidential candidates should run with this; voters need to know about the planned skyrocketing electricity prices.
The sad thing about Presidential candidates is that they don’t get into anything useful in debate or message consideration. That includes lack of concern for the dysfunction of federal agencies mixed with directed misuse by the political appointees. The campaigns look more like beauty contests with no depth of discussion or focus, beyond current events.
a little here –
http://time.com/3981623/ted-cruz-climate-change/
I can not see how we can avoid a N.A. grid collapse. Without sufficient backup generation and grid fortification, we are in big do-do. Individual states will have to disconnect from the grid AND/OR fight another civil war. Government has become the greatest threat to continued prosperity and nationhood.
Perhaps our civilization has reached our peak on the evolutionary ladder and self loathing and the utilization of useful idiots has finally tipped civilization into it’s final decline. RIP… sniff. GK
It is all part of the grand socialist/communist plan. The more poor people you have the easier it is to get socialists/communists elected.
I submit that the graph is largely a result of early adopter costs and misapplication of energy policy. Germany installed solar when it was a lot more costly and a significant amount is in even more costly rooftop applications. The installation of wind offshore has got to cost more over time with maintenance costs considered, unless they believe they have perpetual motion machines.
Good post. Thanks again.
Renewable energy: – Clean.
The world is so dirty and mean.
Never mind the expense
and it doesn’t make sense.
CO2 is what makes the world green.
With original quote from Obama: http://lenbilen.com/2015/08/03/co2-reductions-to-solve-climate-change-wrong-solution-for-the-world-a-limerick/
Dark clouds may have silver linings. Understanding that our high technology infrastructure grows ever more fragile to destruction and vulnerable to: nuclear weapons proliferation, large asteroid/comet impact, massive explosive volcanic eruption, new virulent and fatal plagues, bio-engineered toxic organisms used for terrorism, multiple EMP attacks or huge CME…etc. — reserving easily accessible coal for a civilization that gets knocked back to the steam age is not a bad thing.
http://static.uglyhedgehog.com/upload/2013/10/21/1382390515670-j_c_obama1.jpg
By the same logic we should mandate that 28% of all farming should be organic. Skills will be in place to feed a small portion of the population should civilization ever get knocked back to the steam age.
And 28% of all containers should be woven baskets. (Need I mention the immediate positive impact this will have on the native American population? Just joking, just joking. Basket weaving today is a middle aged white woman thing though it can still be found practiced in mental institutions.)
And 28% of all cars need to be replaced by buggies. (At one time one of the largest corporations in America only made buggy whips. We should start such businesses off with buggy subsidies. Up to now all Obama’s subsidies have been “buggy” so it is nothing new.}
Thank god we still train our children to ride bicycles!
We need universal gun training and every family should have several weapons and large stocks of ammunition. Families should be required to obtain 28% of their meat from hunting.
And so on.
Eugene WR Gallun