A Solar Power Plant vs. A Natural Gas Power Plant: Capital Cost – Apples to Apples

gas-vs-solar-startup

Guest essay by Philip Dowd

Here is a simple example that illustrates why current solar technology will be hard-pressed to replace existing carbon-fired power plants.

Let’s suppose that a power company is planning to scrap a coal-fired power plant and wants to replace it with a new plant. Furthermore, let’s assume that the old plant to be scrapped is in Arizona. The options for the new plant are natural gas and solar. The company wants a simple, ball-park analysis of the front-end cost to build each of these options.

The requirements:

1. Electricity demand on this facility is 4,800 MWh/day, about the demand for a community of 160,000 average households[i]

2. The “up time” of both plants must be equal. That is, both must be equally reliable and produce the demand for the same fraction of time over the course of one year.

Assumptions:

1. The solar plant will consist of a Photovoltaic (PV) panel and a battery. The PV panel will generate enough electricity during the day to produce the necessary output and charge the battery. The battery will generate the necessary output at night.

2. Night time demand equals day time demand.

3. The new plant will be built in Arizona, a good spot for a solar plant

The Analysis

The analysis is in the form of an annotated spread sheet, showing the two options and the steps required to derive the solution.

I. Capital Cost to Generate Electricity

dowd-electricity-table-gas-solar II. Capital Cost of Storage for Night Time Demand

The solar option requires a battery that would supply night time demand. For this purpose we will use technology known as “Pumped Storage”. This method stores energy in the form of potential energy of water, pumped from a lower elevation reservoir to a higher elevation reservoir. In our example, about half of the electric power from our solar facility produced during the day would be used to run the pumps and fill the upper reservoir. Then, at night, the stored water would be released through turbines to produce the electricity that would run the night time economy.

clip_image002

For more on this see: https://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity

III. Total Capital Cost Including Storage ($millions)

For our exercise let’s consider the Bath County facility, located in the northern corner of Bath County, Virginia[vii]. It was constructed in 1977-85 and is currently the largest pumped storage facility in the world.

Here are its relevant specifications:

dowd-bath-county-va-costs2

So, at this point in the exercise we have the relative costs of the two options to generate electricity over a twenty-four hour period, assuming normal operations for both. The capital cost of the solar option is about 14 times the cost of the gas option.

dowd-electricity-table-gas-solar2

Conclusion

This back-of-the-envelope analysis suggests that a solar (PV) power plant that could deliver that same results as a gas-fired power plant would cost about 14 times the gas-fired option to build. It is worth noting that the solar option cost excludes any subsidies, investment tax credits, etc, that could narrow the range, but it is obvious from this little exercise that until solar technology improves dramatically, there is little chance that it will replace natural gas as the “go-to” option for new power plants.

Bill Gates, the co-founder of Microsoft, has said that it was “fantastic” that the UN, national governments, and environmental campaigners had raised awareness of climate change and were taking steps to counter it. However, he argued that current technologies could only reduce global CO2 emissions at a “beyond astronomical” cost. “The only way you can get to the very positive scenario is by great innovation,” he said. “Innovation really does bend the curve.”[xiv]

I totally agree. Mr Gates intends to invest $2 billion in renewable energy over the next five years — innovation to bend the curve. Solar energy is going to need lots of it if it is ever to become a viable substitute for carbon-based energy.


References:

[i] Average household in US consumes about 900 kWh/month or about 30 kWh/day

http://insideenergy.org/2014/05/22/using-energy-how-much-electricity-do-you-use-each-month/

[ii] Net Capacity = electricity demand for one day ÷ 24 hrs or x/24

[iii] http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

Scroll down to the table. Capacity factor is found in col 2.

The number for gas is “Conventional Combined Cycle”

The number for solar is ”Solar PV”

[iv] Gross Capacity required = net capacity ÷ capacity factor

[v] http://www.eia.gov/forecasts/aeo/assumptions/pdf/electricity.pdf#page=4

The cost used comes from col 5 in this chart: “Base Overnight Cost in 2014”

The entry for gas is “Conventional Gas/Oil Combined Cycle”

The entry for solar is “Solar PV”. Note that this cost excludes any subsidies.

[vi] Gross Capacity Required x Capital Cost

[vii] http://en.wikipedia.org/wiki/Bath_County_Pumped_Storage_Station

[viii] The equation here is Capital Cost at time of construction x adjustment for inflation

For Bath = $1,600 mil x 2.6 = $4.1 billion (inflation adjustment is for the period 1981 – 2014)

For inflation adjustment use this site: http://www.usinflationcalculator.com/

[ix] The equation here is Capacity x Time to Empty Upper Reservoir

For Bath = 3,000 MW x 14.3 hours = 43.0 GWh

[x] Assume night time demand = day time demand so night time demand on the solar battery = ½ total daily demand

[xi] Cost of Storage = Capital Cost ÷ Stored Energy = $4.1 billion ÷ 43 GWh ≈ $100/kWh

[xii] Capex to store night time demand = $100/kWh x 0.5X kWh = $50X

[xiii] Total here is the “Total Capital Cost” in Sec I plus the “Cost of Storage” in Sec II

[xiv] http://www.ft.com/intl/cms/s/2/4f66ff5c-1a47-11e5-a130-2e7db721f996.html#axzz3kyDZjQxG


Errata and notes: The $4.1 trillion capex for the Bath County facility is a typo; yes, should be $4.1 billion, both in the body of the article and the footnotes.  This has been corrected. All of the other numbers in the body of the article are correct and the conclusion that the capex of the solar plant is 14 times the gas plant stands.

The assumption of night time demand = day time is just for convenience.  I know its not true, but this is just a ball park analysis and I’m trying to keep it simple.

The analysis deals only with capital cost, not levelized or life cycle, again just to keep it as simple as possible. – Philip Dowd

 

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238 thoughts on “A Solar Power Plant vs. A Natural Gas Power Plant: Capital Cost – Apples to Apples

  1. The $4.1 trillion for the Bath County storage facility seems high, even adjusted for inflation. According to your footnote viii, shouldn’t that be $4.1 billion?

    • I think you are right:
      Zeroth Law of Climate Science: 1 is approximately equal to 100.
      So, even from a climate science perspective, this is off by an order of magnitude.

    • Yes. It is clearly 4.1 billion, however carrying this forward suggests the storage cost is just $240 thousand, instead of 240 million, which seems very low for such a large plant.

      • No if the costs of the large 3,000W Bath County storage is 44,100 at today’s prices
        Then a 20W storage costs $273.33m

        But he’s daft to leave off the cost of the gas and only consider capital costs.
        Gas costs might not be large if it is easily obtainable and untaxed.

      • OK so now we’ve got rid of three order of magnitude type errors…

        2. Night time demand equals day time demand.

        And where on the planet is that the case? NYC , perhaps?

      • if you’ve ever spent a summer in Phoenix, then you know that AC is on 24/7 as it only drops to about 85F in the wee hours just before Sunrise. So, at least in the summer, demand doesn’t drop all that much at night.

        I placed a thermometer in my car for several days over the summer and the temperature rose to over 156F with the windows up once topping at almost 170F

      • If you are going to include gas costs, then you have to include maintenance costs for both types of facilities.

  2. You don’t mention fuel cost over the life of the gas-fired plant. Does this make a significant difference?

    • I didn’t see land costs for pumped storage; is that included? But running costs weren’t part of what we were offered. All plants need maintenance, insurance, staff, taxes, …

      • Don’t forget the land cost for solar too. That’s going to be a very large PV array.

        Then again. The pumped storage option assumes that you have a convenient mountain with some fairly flat land on top of it, and lots of water. Not always a simple requirement to fulfill.

      • There also has to be assured sufficient water in it so someone has to buy the water and build and maintain the hardware and pay for replacing evaporation losses, as well.

        And hope prosaic multi-year droughts don’t occur like they always do, which requires carrying an expensive overhead of excess water supply, at all times, and its added evaporation loss costs, and this will use (and remove) more of the available rainfall.

        And you also need an excess of pumping capacity to provide for redundancy in failures and maintenance periods.

        And you’ll need to pay for a feed from a gas or uranium plants for when the unforeseen occurs … like an extreme weather tornado takes out your solar farm … or a solar flare fries it … or a hail storm wipes out 75% of its capacity in minutes.

      • Not a dumb question, but in Arizona, the land for generation and storage will probably be federal land leased at low or zero cost. There LOTS of Federal land in the mountain West. A more interesting question is where all the water required for storage will come from.

      • SmartRock. Yes, you are correct suitable sites for pumped storage look to be a problem in the Eastern US. There are some, but not a lot. I wouldn’t be surprised to find that there are not enough to support a large market penetration by intermittent sources. Not so much of a problem in the West, I think. Lots of mountains. Big ones. There, the problem looks to be water. Although in concept one can cycle water between just an upper and lower reservoir and only import enough to make up for evaporation and leakage. The more thoughtful environmentalists may not be big fans of such a concept because the “lakes” would presumably have constantly changing water levels and might not be a friendly environment for many species.

      • Try to get a new hydro project of any kind through the draconian licensing process.. And you also have to have a public utility commission willing to spend 14X of their customers’ money for the plant. Grandmaw can’t afford it, she,ll have to eat Alpo.

      • Evaporation wouldn’t be that big of a problem if the entire facility were located underground and not exposed to surface winds and sun. The only additional cost then would be for removing sufficient amounts of subsurface material (there are always those nasty Coal Strip Mines that could use infill) and protecting from loss to ground seepage over a large enough area.

      • The water could also come from coastal Desalination and transport pipes. With underground reservoirs very little evaporation and easy access to piped water supplies. Since the water isn’t being used for consuming, you could also use reclaimed water and no species concern for Underground reservoirs as it wouldn’t become a habitat.

      • Some form of floating plastic cover might be less expensive than building a covering for the entire lake.
        On the down side, the risk of having someone fall through the plastic cover and drowning might make insurance prohibitive.

    • I have been trying to educate the local Green activists and politician supporters of renewable energy to understand this normal, very basic, but essential “like for life” total life cycle CAPEX/OPEX cost comparison investment analysis for many years. The same applies to a comparison of Wind Turbines with Gas Turbine Standby’s versus Gas Turbines alone as base load units. You also have to add in the necessary massive additional cost of enhanced and additional Power Transmission lines needed to connect the remote WT’s and SP’s to areas of actual Power Demand.
      The result of this proper professional engineering investment analysis is a no brainer: the WT/GT/Power Line system is, and always will be, massively more expensive regardless of how much money is spent on R&D in an attempt to improve on the inbuilt engineering inefficiencies within this Total System.
      In addition, in the UK, we now have the ridiculous and obscene situation where WT power is given priority use and subsidies and guaranteed minimum prices are paid to the WT supplier/operator to make their product commercially viable, and then subsidies are then needed by the GT standby supplier operator to cover the increased costs of supplying and operating GT’s to meet every varying shortfall power demands and operating way off optimum efficiency loading.
      You just couldn’t dream up a more idiotic and crazy situation. Yet the politicians here still wonder why our steel industry and many other industries are losing the battle with foreign competitors, exports are failing and why our power costs, affecting all our other costs, keep rising.
      I despair – we desperately need scientists and professional engineers in Government!

      • macawber,

        I despair – we desperately need scientists and professional engineers in Government!

        I agree with the professional engineers, but scientists (especially “climate scientists”) are what got us into this mess in the first place!

      • So what is the point of only studying “front end costs”?

        Like working out the payments to buy a car without working out if you can afford to use it !

    • “You don’t mention fuel cost over the life of the gas-fired plant.”

      Fuel cost depends on local economic conditions; gas isn’t as transportable as oil.

      The existence of the plant changes these conditions.

      So the answer is: we can’t say what fuel cost is. But such energy plants have significant market impact.

    • The photo for the gas plant shows two units. There is no reason that the capacity of the two units combined with programed maintenance can not be well over 90%. I had experience of an oil fired rotary furnace operating at just over 98% average over 13 years availability and a second unit averaging over 95% availability.(output of the first was about 200% of original design capacity due to modifications and the other about 150% of original capacity)
      For the solar plant 25% capacity is far too high. Maximum capacity only occurs about 2 hrs a day if the sky is clear. Insolation is a bell curve with zero generation at night time. Average capacity over a year is only around 16% after allowing for clouds and low sun angle in winter. Experience with solar plants in Australia show they need a lot of maintenance. It is a myth that they operate at no cost.

      • Accurate post, c-a-f. And I realize this was a simplified calculation just to give us an idea of the costs. However, the impact of a cloudy day or two (yes, even in Arizona) could easily be factored in, it would significantly increase the PV and the pumped storage costs. I wouldn’t be surprised if it jumped it up to 20 – 25% X.

        BTW, I’ve visited the Bath County Pumped Hydro Station, it is amazing to behold.

    • I suspect that the 25% utilization rate for the solar is too optimistic. What happens if it’s cloudy for an entire week?

    • …especially the fact that Bill Gates’ $2 billion investment wouldn’t even purchase the example solar plant–he’d have to come up with another $500 million to do that.

  3. Well, very nice, but what about the NG to fuel it, say at $3/E6 Btu and a plant efficiency of 60%. Interest? Amortized? And annual O&M expenses? Even still the CCPP should have the edge. If I take the time might back of envelope some more numbers.

      • And they can be covered by dust.

        Anyway, there are other types of solar. Somewhere in the article should be mentioned that the comparison is against PHOTOVOLTAIC solar, not simply solar. Appart trom that, I like the article.

    • If I take the time might back of envelope some more numbers.

      Oh well, Nicholas. Plain Do it.

      Hans

  4. Without disagreeing with the basic point that solar power economics are questionable, the true apples-to-apples comparison is done via a Levelized Cost of Electricity (LCOE) methodology, which incorporates all capital, operating and finance costs over the entire lifespan of the plants in question. Judith Curry’s website has a couple of detailed posts on the point dating back a couple of months.

    • Would you move to a tropical island with only solar and wind power – NO.ZERO, backup from NG, Battery, PS? Hint,I went on a vacation to northern WA state. Fishing cabin only had solar power. After the third rainy day the four storage batteries were dead and my Cellphone was DEAD and it was two more days before I could recharge it. Caught a lot of fish,but the wife was super PO’d!
      Don’t believe the LCOE includes backup power. LCOE is a tool used to determine the compare power plants and is normally used to compare similar types of plants, not the cost of providing reliable power. It is only interested in power delivered tot he grid, not RELIABLE power to the customer. At least none of the equations that I have seen address backup power needs.

  5. The future of power , I’m totally convinced, is molten salt nuclear technology. Nothing else comes close.
    Look for it from Transatomic Power (owned by MIT graduates) and Terrestrial Energy(Candadian) and the crash program being financed by the Chinese govt. Commercialization by roughly 2020

    • Perhaps the best option. Modular, build and ship. We have at least 75 years worth of used fuel. Needs to be refueled every 10 years or so. The half life of wastes is measured in hundreds of years, not thousands (and more), unlike thorium. Why reinvent the wheel. Thorium fuel is difficult and expensive to produce even if raw thorium is cheaper.

      • Ric, he doesn’t say anything about thorium; why do you bring it up? MSR is not thorium based (if that’s where you got the idea); it doesn’t need thorium to run, though it can – theoretically – use some.

        ‘even if raw thorium is cheaper.’

        Unknown. There is no thorium production industry. None. What little man has wanted has come as by product from other material processing. Should it be used in energy production, the industry will have to be created. Ipso facto, the cost of commercial volume thorium is pure speculation.

      • Gamecock, I only brought up thorium because some on this site have the thorium bug and I wanted to show some of the disadvantages of thorium. Many think of thorium when they dream about MSR’s. I do wish Retired Kip P would be a little more specific. There are more than 2 companies working on MSR’s worldwide. I believe that the majority of the materials exist and the TSR (Technology Readiness Scale) is making good progress. I think there will be a prototype in 5 or 6 years. NRC approval could take 4 or 5 years with a present rate of something like $439 per hour.

      • Ric, agreed. One of the key characteristics of the Thorium Nuts is their ignorance of nuclear physics.

      • https://whatisnuclear.com/reactors/msr.html
        “There are many different types of MSRs, but the most talked about one is definitely the Liquid Fluoride Thorium Reactor (LFTR). This MSR has Thorium and Uranium dissolved in a fluoride salt and can get planet-scale amounts of energy out of our natural resources of Thorium minerals, much like a fast breeder can get large amounts of energy out of our Uranium minerals. There are also fast breeder fluoride MSRs that don’t use Th at all.”

      • Kit, if I were in my 80’s and these people were using thorium, I would agree. The basic design is well over 40 years old and they are not using thorium. The materials exist and the TRS’s ( Technology Readiness Scale) is coming along quite well. I think we will see a prototype in 5 or 6 years. NRC approval is slow (4-5 years) and expensive (last I saw was $439/hr).

    • The Chinese have over 20 operating plants commissioned and I believe the US has over 5 either being built or Commissioned where is molten salt storage. But the costs are very high about 40% higher than conventional. The real Holy Grail of solar energy storage as for photovoltaic. They don’t have a financially practical solution yet I believe they’re close. I believe there are some promising Technologies being developed from nanotechnology that would be cost effective.

  6. But you forgot the handwavium mine to power the unobtanium converter! Or so the apparent response of the greens will be to any such calculation.

    • Right on, Tom. If the greens smokescreen and propagandize the science, they can achieve “great” carbon reduction “innovation” through involuntary reduction of the population.
      Like Gates said: “The only way you can get to the very positive scenario is by great innovation,” … “Innovation really does bend the curve.”

      • You’re forgetting the key word: ambition ! We have to have “ambitious targets”. We need more ambition.

  7. Demand for electricity is not constant. It’s silly to use that assumption. It’s higher during the day and early evening and lowest from about midnight to 6am.

    https://www.eia.gov/todayinenergy/detail.cfm?id=830

    Between that bad assumption and the poor math ($4.1 trillion? Seriously?) this article is flawed.

    {a request has been made to the author to fix that typo -mod}

    • Night time usage is bound to be high what with pumping all that water back uphill. Or are you going to use grid power? :-)

      SteveT

    • Power generated from the solar panels is not a “constant” from sunrise to sunset either. More like a bell curve. This curve is only slightly flattened with Azimuth/Elevation tracking panels. Usually, not worth the added cost of the tracking equipment over the life of the panel.

      Still ignored by this calculation is this only gives you power for one night. PERIOD. Search for Pumped Storage on Wikipedia. Look at the size in acres of needed land. The majority of these are only “buffers” and/or peaking units. What happens with three or four “cloudy” days? And these are the cheapest to construct (today). Now, do the calculation of cost for batteries, any type of battery.

    • For the sake of simplicity, you could assume both plants are ‘base load’ power plants which are kept running at or near capacity. It is other plants on the grid (say, additional gas turbines without a steam cycle) that have their loads varied to meet demand.

      • And, just where are all of these “other” plants going to get their sunshine from when 50% of the power is from Solar. Or even 33%. or even 20%.,Do the math and you will see that you still need about equal number of fossil plants as “renewable” plants.
        Only Nuclear power is the answer, the renewables are a SCAM.

  8. Better not include cloudy days in those availability calculations. Or dust on the PV cells, or reduced tau during Springtime dust storms. They do both happen in AZ.

    Solar PV is only a reasonable cost-saving alternative when connecting to the fossil fuel/nuclear-powered grid is not feasible, like powering a remote weather reporting station or a remote night time lighting system (run by a battery charged by daytime sunshine).

    I got my Tucson Electric Power bill yesterday for March. On it is a collection of Green Energy Charges, totaling $5.74 of a $75.69 bill. So I’m subsidizing Elon Musk’s multi-billion dollar market cap of Solar City to make him even richer. But at some point in the not too distant future, all those homeowners with his PV installations on their rooftops, the subsidy gravy train will end. Then Solar City will go into liquidation, and there’ll be no one to pay for maintaining those systems except the homeowner. Then they’ll end up in the scrap heap, and we’ll need those nat gas generating plants we didn’t build.

    • bingo, Musks entire empire is built on rent seeking subsidies or outright blackmail (California) … he’s a great salesman … and that’s all …

      • C’mon Kaiser. Musk (his companies) has only received about $5 billion in subsidies and loan guarantees. Meanwhile, over this time period his personal fortune has grown to about …… $5 billion. Gosh, what a co-inki-dink.

      • SunEdison to file for bankruptcy.

        From the Wall Street Journal this Friday afternoon:
        ” Solar-energy company SunEdison Inc. plans to file for bankruptcy protection in coming weeks, a dramatic about-face for a company whose market value stood at nearly $10 billion in July.”

        http://www.wsj.com/articles/sunedison-said-to-be-preparing-to-file-for-bankruptcy-1459548775

        Can Solar City be far behind? Maybe the subsidies and business models are different, but the laws of economics can’t be repealed and losses on anything solar in recent years says Solar City is headed eventually to bankruptcy.

      • I’m not a big fan of Musk, but let’s give the man some credit. Unlike a lot of companies designed to suck up government money, Musk’s operations — Tesla, SpaceX — seem to be well managed and the products work.

      • Don K,

        At > $100K each, the Tesla model S better work damn well. But buyers get a $30K govt rebate. And Who is buying those? The affluent who buy them, that’s who. They buy them as bling, because beyond around town they are not practical highway cars (outside a narrow I-5 corridor in Cal where fast charge/battery swap stations are available). So taxpayer provided welfare for the rich.

        Tesla depends on subsidies in its business model. As for Space X, it has yet to make a profit, it may someday, that is far from certain. There is real innovation there, granted.

        All 3 of Elon Musk’s businesses, Tesla, Solar City, and Space X are completely dependent on tax dollars and/or rate payer subsidies to “Green Energy” to succeed. And Elon Musk has quite a few Democrat pols (and some Republicans) in his pocket book in a mutualistic symbiosis that parasitize off helpless tax payers.

  9. I disagree with one aspect relating to the Gas-fired solution:

    You’ve stated Net Capacity required 200MW, Capacity Factor at 87%, Gross Capacity required 230MW

    You’ve forgotten to take into account the efficiency of the plant.

    • no … that does take that into account … the horsepower rating of a turbine is not the 100% perfect efficiency number its the actual output …

      • I’m referring to the gas combustion thermal efficiency.

        That has not been taken into account.

    • No, electric power output is used on both cases.

      The “efficiency” of the plant isn’t relevant here. (BTW, the “efficiency” of the gas engine is much higher than the one of the solar panel. Of course, you don’t have to buy sun.)

    • The NG plant is tested and verified that it deliveries 200 MW to a load before the vendor gets paid for it. I have personally run these tests to assure that they deliver the rated output.

  10. The numbers don’t appear to include land cost. Considering the sizable difference in footprint, the PV cost would be even higher.

  11. This is incomplete. Assume a plant life for each type. I dunno the figures, but my guess is t hat the gas plant will last twice as long as photovoltaics. Maintenance on the gas plant might be higher, though. Cost of operations certainly will be influenced by the need to purchase gas while sunshine is free.

    Interesting contrast in cap costs, though.

    • Another thing left out of LCOE. But implied in the L (Lifetime) of “LCOE” but green’s ignore this.

    • You need to hire a lot of people to keep the solar panels clean. On the other hand that would be low skill minimum wage type employment.

      • Pumped storage in AZ is inappropriate. If a hill is available, gravity storage using solids (aresnorthamerica.com) is more realistic. If no hill, then you are stuck with CAES (lightsail.com).

  12. EIA estimates for new generation (2020) LCOE $/MWhr shows Solar PV at 125.3 ex subsidy (-11) and Nat. Gas Advanced CC at 72.6. Geothermal is 47.8 ex subsidy of -3.4

  13. OK, here’s what I got with fuel, interest, amortization, fixed and variable O&M. The solar does not include storage or considerations for dispatching or backup. Plus an interesting 2013 EIA study & link that I used for the costs. If somebody can ‘splain how I can insert the Excel sheet you can see all the numbers.

    http://www.eia.gov/forecasts/capitalcost/pdf/updated_capcost.pdf

    ……………………………Coal…….….CCPP………..….Solar
    Capacity, MW……………500…………..500……………1,700
    Capacity Factor,%……..85%………………85%………………25%
    Energy, MWh/y……. 3,723,000……..3,723,000…….3,723,000

    Annual Costs, E6 $………………….$154.48………..$132.93………..$191.31
    Required Revenue, $/MWh………..$41.49………….$35.70………….$51.38
    Required Revenue, cents/kWh……….4.15……………..3.57…………5.14

    $2/E6 Btu for coal, $4.50/E6 Btu for NG.

    Capital $/kW: coal – $3,246, CCPP – $917, Solar PV – $4,183
    Life, yrs: Coal – 30, CCPP – 30, PV – 20

    • I have worked for utilities with Coal fired power plants that are over 60 years old and still operating today, and selling power to surrounding municipal power systems for less than $0.05 per kWh.

  14. The idea of this article is right. An apples-to-apples comparison would be good, but this article falls short of that in at least these three major ways:

    1-The cost of fuel to run the NGCC plant is not included in any calculations (solar energy is basically free).
    2-A standard LCOE (levelized cost of electricity – cost to provide electricity for 20 years) should be calculated. The author basically only compares up front costs, which is very unfair to solar.
    3-There are cheaper options to pumped storage for energy storage for solar, like molten salt.

    Solar is outrageously expensive compared to NGCC, for sure, but not as bad as this article says.

    • Where is anyone actually using molten salt (or hydrogen fuel cells, or batteries, or whatever) in utility-scale (200mw in this example)?

    • Melbourne Victoria, 5kW system, daily output between 55kW and 300 watts. Great for subsidies, unless in real life.

    • What is the Property tax on “industrial zoned” property in your state/county? What is the taxes on 1,000 industrial acres compared to less than 20?
      The cost of the fuel/energy source used in generating electricity is one of the smallest factors in the major costs affecting the price of delivered electricity. Approximately 50% of the “Pay this Amount” line of your electric bill is TAXES. They consist of Property takes on every square foot of owned land and buildings. Taxes on every power pole and every foot of wire on those power poles. Property taxes on every vehicle owned, and every gallon of gas used in those vehicles, the annual registration, etc. And that is just the State/local/city, you also have the Federal taxes. Then, look carefully at your bill. Just like your phone/cable bill, there are now state and federal fees. And My state then includes the state sales tax on top of that.
      Is your state going to tax that 1,000-acre solar farm at its actual value or its subsidized cost?

      • Yes, paying taxes are relevant for commercial investment decisions, but not for economic cost-benefit analysis.

        The methodology should relate to the aims of the analysis. Some readers are assuming the analysis is financial (point of view investors). Others think that it is economic (point of view of the nation), Still others think it is about subsidies (point of view of consumers and taxpayers).

        I understood the author had only the limited goal of comparing the level of commitment required on the part of investors by showing the differences In capital costs, a key factor for risk analysis in situations where political factors predominate. I accept that Investors may commit to 20 years for a solar or wind plant, but I wondered, can government commit to 20 years of subsidies and to tariff increases needed for capital recovery?

        The return from investment in conventional power has historically been predictable enough to make power utilities a suitable foundation for pension funds. However, national policy has not so far addressed the long-term risks of regulatory energy policies to pension funds, annuities, and endowment policies upon which so many Americans are relying for support after retirement. The US pension sector has long relied on the energy sector, utilities especially, for stability, but we ought now to be asking about future political risks.

        For many years, the energy sector has been shifting voluntarily from carbon (coal) to hydrogen (methane as natural gas). Forcing the pace of change by regulation and subsidies will result in scrapping of massive amounts of existing capital before the end of its useful economic life.

        Who owns the capital that will be scrapped? The last I reviewed the issue, I found that some institutions are dumping these investments, ostensibly for ideological reasons. But could the reason be that these investments have become too risky relative to return?

        The same policies and regulations that destroy capital will require mobilization of massive amounts of new investment capital and will require massive amounts of new capital investments. Where will the funds be found?

        These are the questions this article provoked in my mind. There are enormous risks in driving radical change in the energy sector by using regulatory power. Readers should be wondering what is happening and what will happen to money they have put aside and will be putting aside for the future security, whether in private or company pension funds, insurance policies or mutual funds, or other institutions.

    • On the hand, you are only including fuel costs, without considering maintenance and replacement costs, which is very unfair to NGCC.

  15. Philip Dowd,

    Night time demand equals day time demand

    That is never the case: daytime demand is about 20-25% higher than nighttime demand and winter time demand can be 25% higher than summer time demand in my country, but I suppose in the hot desert of Arizona it is probably reverse with all their AC units… That is an advantage for solar which gives its maximum in summer.
    That means that storage may be 25% smaller. Not that it makes much change in the difference in capital needed to build the plants…

    As said already by Ken Robinson, I do miss the operating costs. Gas still is (relative) cheap – in the US – but you need a lot of gas for such a plant, while sunshine is free. Of course the solar plant needs more cleaning, especially after a dust storm, but even that is not a real high cost and a modern pump/generator plant doesn’t need much personnel either…

    • actually the size of the energy storage for the PV alternative would need to be significantly higher, to account for couple of cloudy days.
      The achieve the same availability and reliability, the storage by my first guesstimate would have to be 5x bigger (60hrs of stored energy, not 12hrs) and perhaps even bigger.

      • The problem is, cost justification for multiple days is virtually impossible. You might justify the investment for a day’s backup, but as you go further out, the utility approaches zero. Are you really going to get 5 straight days of clouds in Arizona? No one is going to invest in something they may use once every few years.

        Unless they are using someone else’s money.

      • No one is going to tolerate a total blackout until the sun re-emerges when multiple cloudy days do occur.
        Are you really going to get 5 cloudy days in a row in Arizona?
        Absolutely…the only question is how often.

    • janus100,

      I completely agree that it doesn’t stop with the storage for the dark hours. Not for wind, not for sun or any other intermitting power source. If you take that into account, the only solution is a 100% backup of fossil or nuclear. As the night time pumped storage is already several times more expensive than a gas plant, the installation of a backup gas plant which only needs to turn full speed during 10% of the time, makes it extremely expensive. Something like the necessary (fast!) backup is never mentioned in the price of “green” electricity.
      Only if you have already a huge supply from hydro like in Sweden and Norway, that may have merit, as that can act as a buffer when there is no wind and sun (hardly any in winter there). They do that already for the Danish wind power: cheap power export to Sweden and Norway with too much wind and expensive import with no wind. The Swedish and Norwegians are very happy with that, the Danish consumers a lot less, as they pay the highest rates in Europe…

      • ‘the installation of a backup gas plant which only needs to turn full speed during 10% of the time, makes it extremely expensive.’

        Exactly. The fixed costs are incurred whether the plant runs or not.

      • Exactly.

        It just shows that if the solar and wind ,if they are supposed to be at least remotely economical, They cannot represent more than 20% of the installed capacity of the System.

        From that, the total energy produced from intermittent, non-dispatchable sources will always stay below 10%.

        Any higher penetration is obscenely expensive.

        Other posters also mentioned the operating costs and fuel cost of Natgas plant, but don’t forget the even solar needs maintenance and upkeep.

        I own and operate 400kW rooftop solar array and someone has to go there every 2weeks.

        Also, Ontario where I live, has at the best 1300 insolation hours (and that would be a good year), so if one would want to build a system to cover continuous demand, the size of the solar array would have to be 8600/1300 = 6.6x , but more like 7x, and the same with the storage.

        (I get nice FIT though. It pays much better the pension for a live long engineering work, that’s for sure…)

      • ‘Any higher penetration is obscenely expensive.’

        Or you do without backup. The decision to do without backup can be a political decision, so it is a real threat.

      • “…cheap power export to Sweden and Norway with too much wind and expensive import with no wind…”

        Ontario does the same.

        Exports extra renewable power at 10% of the purchase price from the wind/solar developers.
        It’s totally insane.

      • Gamecock, beyond that, maintenance costs go down when the plant is not being run, but they do not go to zero.

    • It gets very cold at night in the desert during the winter. That’s a lot of heating costs when the nights are at their longest.

  16. The idea of pumped water storage for night solar supply has something about it of the paradoxical ‘hare-braininess’ of this wind energy solution for low-wind days:

    (The New Yorker)

    • It’s a goofy idea so I didn’t look at it in detail but in fact, the solar installation has to produce 24hrs. worth of power in approx. 8-10 hours

    • That’s really just an extension of the ‘motor driving a generator’ idea except that you have a ‘flexible coupling’ in the form of air between them.

      A motor driving a generator -which powers the motor- definitely works; you can find hundreds of videos on YouTube demonstrating this point. Only problem is you don’t get a subsidy for it, so nobody bothers.

      • It will work for a little, slow down, then stop. The generator has an efficiency less than 100%, and so does the motor.

      • There is a use for such installations. I’ve seen them used as a form of power filtering. Short term power surges or drop outs, less than a second, are handled by the inertia of both the motor and generator.

  17. A good metric of un (un)workability of a scheme is how much costly hypotheses you need to assume in order to say in a “study” that the scheme is virtually doable.

    The French ecoloonacies agency (ADEME = “Agence De l’Environnement et de la Maitrise de l’Energie”) made a study showing that France could go 100% “renewable” (they mean: for electric power, apparently oil and gas imports and peak everything don’t matter); they just needed huge decrease of price of mature technologies, increase of efficiency, and the rest of Europe NOT going ecoloonatics.

    The amount of hope going into these “studies” is staggering.

  18. Meanwhile, in Oz inconvenient answers are found …

    “Origin is among the prospectors, applying to the Australian Renewable Energy Agency for funding to support a 106 MW solar farm of its own to be built on the Darling Downs next to its existing gas-fired plant.”

    http://www.smh.com.au/environment/climate-change/shift-to-zerocarbon-power-must-start-by-2018-to-avoid-extra-warming-study-20160331-gnuy7x.html

    I have been preparing for perfect weather, and feel I can’t be prepared anymore.
    How much more prepared must I be be fore I can relax and enjoy the stable climate promised land?
    Should Australia be completely covered in solar panels & wind farms before the GBR is saved?
    Where are the answers?
    How stupid are the questions?

  19. It gets worst. Some here have spoken of fuel costs but failed to factor in water costs for the “stored energy”. water does evaporate here in the southwest.
    Also factor in the tremendous pressure that will be placed on taping into the stored water in times of water shortages.
    You just know that with any excess capacity built into the system it will be “sold” as being duel purpose. (And guess who will loose the duel )

    michael

  20. We did (Planning Engineer and I; he is THE senior grid engineering exec at one of the US largest utilities) a somewhat more refined LCOE for wind v. CCGT v. USC coal, using only the EIA starting assumptions corrected for reality. Posted at CE last year.
    Result: wind about 2x CCGT ignoring intermittency. Near 3x with 10% penetration, based on the Texas Ercot grid actuals. So despite many possible quibbles, the result here is directionally correct.

  21. This essay is crap. Stupid blogger vs stupid blogger. Like Spy vs Spy in Mad magazine. If WUWT was about juvenile humor, it might be amusing.

    Tucson Electric Power does not evaluate projects this way. TEP would look at the fuel cost of producing power with their gas plant during hot days. If PV reduced the cost, then they would build more. TEP would also know that the price of natural gas is higher during peak demand.

    I have read some of TEP annual report and their Landfill gas project is much more economical than Springerville PV. That was a few years ago. I have noticed recently that details in annual reports make it hard to evaluate performance of different choices.

    • “TEP would look at the fuel cost of producing power (…)”

      Yes, fuel costs are ignored. It’s an issue.

      But the Grauniad recently reproduced a comparison Hinkley Point vs. gas plants, with only construction costs considered (for the price of two EPR you could build a lot more power capacity with gas plants). Antinuc love to talk about the huge construction costs of a NPP.

      Almost all enviros are antinuc and use this comparison of construction cost to make NPP look expensive, disregarding other costs. They should love this post’s approach.

      • S-T

        “Hinkley Point vs. gas plants”

        I agree with your position. Let me add a concept. What are the ramifications of importing fuel for 60 years. Your choices are gas from Putin or coal from Obama.

        The answer is nobody knows but it would be a good idea to mitigate a worse case scenario.

        Many of the yahoos who post here forget ten years ago the US was building LNG terminals to import gas which was being burned to make electricity at $16/MMBTU

        Hindsight is 20/20 except for those with an agenda who see what they want to see.

    • TEP would not build PV in order to reduce the midday cost of extra gas used. That is as stupid as building the entire plant in the first place. How long does it take and how much money is consumed in interest for a plant that costs 14x’s it’s comparable?

      TEP, if they need extra energy, would build a NatGas peaking plant….or two or three.

      • He seems to take the position that unless you account for everything, the study isn’t worth doing.

  22. In addition to exorbitant up-front costs, solar power facilities take up massive amounts of space and need to be open to the elements (with all the maintenance headaches that entails). Wind turbines have all the same issues, plus a fuel source that’s even less reliable, even with optimal terrain and weather.

    Where solar power truly shines (pun unintended) is in small-scale, off-grid applications. PV panels with battery storage could meet the power needs of small-to-medium rural dwellings for less cost and labor than building miles of new lines to connect to the grid. Many rural areas of the US (like where I live in southern Oklahoma) only have access to electricity through non-profit RECs (Rural Electric Co-ops), who purchase the power from grid suppliers then put up and maintain the lines themselves.

    Instead of trying to make solar power into a large-scale grid source, where it’s a priori unfit for purpose, it ought to be promoted as a grid alternative for rural communities, small-scale farming, or any other remote or low-accessibility area. This would indirectly improve the stability and efficiency of the grid through elimination of unnecessary transmission lines. The energy savings would add up pretty fast.

    • A long ago colleague of mine lived off grid in eastern Colorado for two years with a one lung diesel engine generator set. Ran 24/7 with monthly maintenance. A lot cheaper and more reliable than wind or solar.

      • A neighbor had a small water cooled, NG, Diesel. Had baseboard heating and heated his house and HW with the engine and powered a generator for electricity.

  23. The nut to crack is how to get the Sun to shine on the US 24/7. Bill can do it, I’m sure, if he puts his mind to it.

    The idea that the Sun is a free power source entices and enamors libtards like a bag of candy to a two year old. They cannot believe that they cannot have it all. The translation of solar input to a usable form is their big problem, and they have no idea how to do that since our planet unfortunately rotates, the Sun goes down, and the winds dies. The vagaries of wind make wind power only an ancillary power source and solar power is predictably variable. The idea that any economy could be based on such unreliable power sources means they those pushing this future have no intention of their being an industrial society in their future. They want to unwind the world to an agrarian, subsistence society.

    • Solar power satellites. Problem is, given the enormous cost of building stations in geosynchronous orbit, the capital expense would be far too high. Get the cost of access to space down, and that might change.

      /Mr Lynn

  24. How much water will evaporate? If it evaporates after being lifted the loss is serious over the Summer.
    In Rockford, Illinois we get cold weather. -30C a few times per decade. Frozen water won’t pump or flow.
    Even well-built dams leak and there is often loss through leakage on the bottom and sides. Critters will drink tiny amounts but urine will replace much of that. Seals will leak and pipes will fail so we need redundancy to cover repair and replacement. Only part of the capacity can be used or we will kill Delta Smelt and Snail Darters.
    Where do we get the water? Rivers? Run-off? How do we move the original load?
    The increased area necessary for water loss will be costly.
    Before we deal with property improvements land here is over $6,000/acre. Are those downstream of the catch basin moved to prevent flooding from heavy rains or dam failure? Do we construct numerous miles-long bridges or remove roads and railroads? If we build in the Rockies how much new grid do we need? What happens during Spring melt?

  25. Sun Edison, SUNE, closed 01/04/16 @ $0.43 (-20.54%) per share; previous close $0.54 per share. http://www.fool.com/quote/nyse/sunedison/sune

    “It’s now all but confirmed that SunEdison (NYSE:SUNE), which dubbed itself the biggest renewable energy developer in the world, is going to go bankrupt. This week, its subsidiary TerraForm Global even said there was ‘substantial risk that SunEdison will soon seek bankruptcy protection.’

    If that bankruptcy happens, there will be a cascade of repercussions for the industry.”

    http://www.fool.com/investing/general/2016/04/01/what-a-sunedison-bankruptcy-could-mean-for-renewab.aspx

  26. The Ivanpah solar cost 2200 M$ price and produces 120 MW, a 18 $/W investment. By way of comparison, another nonpolluting source of electricity, nuclear power plant, the Millstone reactor No. 2 in Connecticut, operating at 880 MW since 1975, cost 0.5 $/W then; Ivanpah is thus 36 times more expensive (inflation excluded).
    With about 1000 employees receiving salary and benefits, the annual outlay for that alone is roughly 100 M$. Selling the annual 3.8 EJ at the projected 0.028 $/MJ yields 106 M$. Ouch – only 6 M$ left for other expenses, notably for natural gas whose burning produces 8 % or more of the total output. For comparison again, the Millstone nuclear plant complex employs also about 1000, and its two reactors have been producing 1870 MW actual electrical output. Assuming the same salaries, benefits, and the electricity selling price, the operating expense is 15 times higher at Ivanpah.
    Note that the above two outlays are 35 and 15 times higher (not percent higher), and that this huge discrepancy exists in an industry where a difference of a few percent means the difference between success and bankruptcy. The magnitude of the discrepancy hints also at the reason why the “free” solar electricity is so expensive. Who is responsible for stealing from taxpayers to pay for these solar monstrosities?

  27. I’ve been treated to this “alternate energy” crap for 40 years. I’m sick of it. Let’s do my suggestion of dividing the USA at the Mississippi, into TWO countries. One of industry and initiative (I&I), and on of Solar and Socialism. S&S.

    We can move all the industrial plants to one side. (Say East of the Ole Miss)and that way the “pollution” will blow to sea. The other side, even as an advantage…clear skies over AZ, CA, NE, CO, etc. And a LOT of winds in the Rockies. Now, don’t forget, the S&S side doesn’t need an Army, Navy, Air Force. They can just NEGOTIATE with everyone, and things will be “honky dory”. There will be no terrorism, as they will find out how they have offended the terrorists, and make amends. The I&I side, however, will continue their (in this case, “our”) polluting industry, “military industrial complex” ways. I&I will eschew the concept of renewables, and instead “squander” their precious resources…and all starve to death! No, wait…what’s happening…Because of the 10 to 100X’s cost factor of the S&S side’s energy, they…are starving. They are at the Mississippi. They are crossing it in rafts, hoping to escape from the devastation on their side. And now will come the REAL test of the I&I side. Will I&I be like (already S&S) Germany, and invite the poor S&S “refugees” into the I&I side, providing them with food, women, shelter and energy? Or will the I&I side be like Russia? And just “bomb the heck” out the S&S side?

    Who knows? But it could be the ultimate destiny or down fall of these (formerly) United States.

    • I have another idea. Split the country along an east-west axis. Put the I&I’s in the South (ex:Texas) and the S&S’s in the North. Then once we cover enough of the earth with solar collectors, it will change the albido of the earth, causing more solar energy to be reflected back into space. Eventually, this will cause the earth to cool, resulting in another ice age. The glaciers will advance South until they cover the northern half of the US, thus wiping out the S&S’s. Voila! Problem solved!

  28. Pumped water storage returns about 60% of the energy that’s put into pumping the water to the higher level. That means you need 10 / 6 kWHrs to get back 1 kWHr. So 2400 MWHr at night requires 2400 * 10/6 = 4000 MWHr of input during the day. That means you need to allow for another 1600 MWHr of daytime production. That would increase the cost of solar plus pumped water storage by about one third.

    • The 5 GWh pumped storage in Coo (Belgium), good for ~5 hours/day of peak shaving. It has a real yield of about 75% over the past 40 years. Thus somewhat better, be it that still extra solar input is needed for that loss, over the high daytime demand.

      The only advantage of solar is that its output is highest during maximum demand, if there is sun…

      • Max. demand is later in the afternoon, when both the air temp. is highest and people coming from work turn their A/Cs on. The sun, on the other hand, is 1/3 to 1/2 less intensive for fixed panels/mirrors.

      • 75%? Don’t believe it. 80% efficiency for the pump, and 95% efficiency for the motor would be good. Add in friction losses for the pipe. Use 80% efficiency for the turbine and 95% for the generator, and again friction for the piping. I think the previously cited 60% is pushing it. You also have the electrical efficiency for the wiring, switchgear, and transformers involve. Don’t know the efficiency, but it’s not 100%.

  29. Doesn t matter which costs more, the so called green extremists
    Are pushing for wind and solar, they are claiming fracking is poisoning our water. Along with the agw bull. Proof? They don t need no stinking proof

  30. Surely, the pumped storage cannot work. You need the total daytime output to pump and fill the reservoir. Thus the net output at best, is zero.

    • It’s less than zero but you use pumped storage to handle peak loads. The problem in this scenario is that they are using power during the daytime when demand is much higher to fill the reservoir so they can generate power at night. That’s backwards…

  31. Nat gas is by far the most capital efficient and scalable solution. As for operating costs gas is cheap because it s ubiquitous and easily transported. But this is not relevant to the green lobby..

    What is relevant to this group is that the solar facility is constructed. The desired process is as follows:

    1: company builds solar plant benefitting from government subsidies and promising strong returns to investors
    2: plant fails to achieve operational benchmarks and company goes bankrupt. Taxpayers now finance a permanent debt load;
    3: second company acquires plant on deeply discounted cost basis making better returns on the new lower cost base:
    4: repeat

    If it so happens that a few billion dollars of the capital costs of the bankrupt facility fall on the shoulders of taxpayers in perpetuity via the government subsidy framework, and the company that builds the facility goes bankrupt because of poor economic returns, is an interesting feature of the program because it generates an increasing number of potential users of the welfare system as more and more private capital is destroys.

    Eventually, a large fleet of solar facilities is in operation, with attractive variable cost structures. These plants squeeze out the development of other facilities such as natural gas, (which would have rewarded society because they would have generated full cycle profitability to those investors that originally financed them)

    • To borrow from a late, great US Senator (was it Everett Dirkson?), a Solyndra here, a Solyndra there, and pretty soon you are talking about some real money! lol

  32. Not trying to nitpick (well maybe) and I’ve been of the opinion that nothing would get a chance against natural gas for several years now but …

    “Night time demand equals day time demand”???? Since when? Peak hours are always 3-8 PM or there abouts (some say 4-7PM). Yes the NG still kicks butt.

    Why just solar? Solar plus wind plus geothermal would pit all common renewables against NG (and still loses IMHO). They do overlap but are complimentary sometimes (i.e. windy at night).

    Why pumped storage? The redux flow batteries are terrain independent and more cost effective (yes NG still kicks butt over it).

    Lastly “Average household in US consumes about 900 kWh/month or about 30 kWh/day”. Holy waste a cow Batman. My house (nothing special ~3k Sq Ft, gas water & space heat) uses 10-11 KWh/day. Are people heating their water and air with electricity? That is yet another instance of NG kicking butt.

    • TRM : night time demand is almost the same as daytime demand in Victoria Australia – I have seen the plots of demand versus time.

    • Grid-scale geothermal is much less problematic than wind and solar. It isn’t intermittent, and the costs at the best sites are cheaper than coal. The US currently has something over 3GW (equivalent of 3 or 4 nuclear plants) of geothermal on line and could probably expand that by a factor of 10 or 20 although I suspect it’d be a bit costly as we were forced to exploit lower grade resources. Exactly why our “energy planners” are so enthused about wind and solar options that look to be unworkable on a grand scale and mostly ignore geothermal escapes me. It could cause a man to suspect that they are kind of clueless.

      Problems? The resources are concentrated in the Western US. Disposal of waste water contaminated with a lot of minerals — some of which you probably don’t want in your drinking water is probably an issue.

      A handful of countries — Iceland, El Salvador — actually get a substantial portion of their electricity from geothermal.

      • Exactly why our “energy planners” are so enthused about wind and solar options ?
        FOLLOW THE MONEY!!!!

    • TRM
      When you say NG kick butt do mean when your house explodes killing your family?

      I prefer an all electric house with a heat pump. Safer and cleaner.

      • And exactly how often does that happen?

        Why not worry about meteorites killing your family? About as likely.

      • PS: Long before enough gas had leaked to kill your family, you would be able to smell it and get the family out.

  33. Demand for power is generally much lower at night so you probably don’t need a plant that puts out 200 every hour…you might come out better building the gas plant for base load and building solar for daytime peaks…trying to use solar as a sole source is gonna fail most scenarios just on economics…solar has a place but not as base load supply

  34. Assume we’re all clear on the fact that pumped storage, not available every energy is needed, is a net consumer of energy, and is good for a limited number of hours of useful energy. The hope is – THE HOPE IS, that solar will be able to recharge the storage else it will fall on backup power to do that and keep the grid alive. To be honest I doubt the fossil fuel plant was designed to support both a live load and to recharge backup storage. I do know that I cannot think of a less efficient way to illuminate the world and to keep hospitals, factories, and Facebook on line through a prolonged cloudy spell. Humans are capable of great things but also incredible and perplexing folly. This is an example of the latter.

  35. Two things strike me about this whole debate. Firstly that new technology is the only solution to the sort of problem (be it real or illusionary) like CAGW. Secondly that while proponents of the scare always extrapolate on the basis of no new technology decades into the future they are invariably wrong. If for no other reason than the very presence of the problem (if it is a problem) stimulates people to look for radical new solutions.

    While I know it is currently fashionable to consider cold fusion as fraudulent schlock science I think it might well be worth reviewing recent events in the field before being too dismissive. How many credible researchers reporting positive outcomes does it take before people start to take notice (there are now quite few)? I note that Rossi has supposedly had a 1 MW plant running continuously in a monitored customer site for 1 year (ending in February 2016) and an independent analysis of the performance is due to be released this month (April). I also note he now claims to have prototype reactors that deliver electricity without resort to a thermal cycle. He has been incredibly persistent over a long period with no visible payoff for a supposed fraudster and there are new researchers claiming replication almost every day.

    Question; how will the entire issue of CAGW (whether right or wrong) be viewed in 10 years if the cold fusion researchers turn out to have been right all along and by then cold fusion is an established new energy source that in hindsight was staring us in the face for 30 years?

    • I compare cold fusion to early work done with transistors. I remember when Bell Labs announced
      the germanium transistor.It took a while for the research learned enough to produce the silicon
      transistor. I still have a 2N107, device, (no 2 alike!). There may be something to doping the
      palladium crystal matrix, or adding an independent neutron source, to the mix. I am all for a
      Manhattan project on cold fusion, Good outcome or bad, it is worth knowing.. I read about Rossi,
      and am skeptical; in his favor, he didn’t claim 25X excess heat, only 3X. . and he is using nickel and
      lithium hydride. ( One hydrogen bomb used lithium hydride as the deuterium source). Hell, it
      might work!!

  36. Has anyone looked at the cost of the water for the pumped storage system? Evaporation in Arizona will be significant. Is the cost and availability of the replacement water a significant cost, or can we ignore it?

  37. the plan is to dump what is unaffordable in the developed world on to the developing world. nice.

    ***when Hank Poulson talks of countries leapfrogging fossil fuels and “moral” imperatives, developing countries should beware:

    31 Mar: Reuters Blog: Time to harness power of green trade
    By Henry Paulson
    (The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
    A green financing agenda was initiated at the G20 talks in Shanghai last month. The G20 Trade and Investment Working Group meeting in early April in Nanjing would be a good occasion to push toward a breakthrough in buying and selling green products more easily around the world.
    Environmental goods are among the most obvious to open up to freer global commerce. They have tangible economic and social benefits for all countries, ***particularly those that may leapfrog traditional fossil fuels as part of their Paris climate commitments…
    It defies economic – and environmental – logic for governments to deprive their own citizens from accessing the best, most effective clean tech products and services at the lowest cost.
    Eliminating tariffs would remove one of the main stumbling blocks to adopting such technologies…
    The good news, though, is that there is already a vast array of environmental technologies that can perform many of the tasks required and which are suitable for emerging markets…
    Making green technologies affordable is a global responsibility, ***a moral imperative and makes solid economic sense…
    http://blogs.reuters.com/breakingviews/2016/03/31/time-to-harness-power-of-green-trade/

  38. While I am a mechanical.engineer, I am just a neophyte in this particular field. So forgive me if my comment does not make sense. It seems to me that solar power generation makes the most economic sense when used for daytime peak power generation. That is, to provide power for daytime loads such as air conditioning, office uses, industrial uses, etc. Conversely, solar is the least cost effective for meeting nighttime power requirements.

    So wouldn’t it make more sense for the power company considering the solar power plant to partner with another power company with a coal or natural gas fired plant. These plants are usually sized for peak daytime loads, and thus would have excess power available at night that could be sold to another power company.

    I guess what I am really asking is if the basic premise of the comparison in the article is correct. Wouldn’t it make more sense to compare the pure gas turbine option to an option that would utilize solar daytime and purchased power at night?

    Here is another way of looking at it. Right now, our country has gigawatts (terawatts?) of excess nightime power generation capacity. Couldn’t some of that be utilized in lieu of building energy storage systems for solar power plants, at least for a few decades? And wouldn’t it be cheaper to upgrade our power grids so that we can better move nighttime power around, than it would be to build gigawatt-hours of energy storage systems?

    Your thoughts would be appreciated.

    • Ronn. I think you’re basically right. Matching sources to loads would seem to make sense. And I suspect that if it were done, it would turn out that intermittent renewables could power a fair amount of stuff at reasonable cost. Trouble seems to be that it’s hard to do and people aren’t used to thinking that way. And energy policy decisions are made either on the basis of perceived economic realities or of wishful thinking with no middle ground.

      BTW, Niagara-Mohawk runs apparently runs its generators at Niagara Falls 24-7 and uses the nighttime power to operate a couple of pumped storage facilities used to cover peak daytime demand. That works economically, but I’m far from convinced that it makes all that much sense compared to part time generators working off the 100 meter drop from Lake Erie to Lake Ontario.

    • A couple of thoughts, Ronn.

      Power companies are very much interested in balancing demand. They have to provide capacity to meet peak demand, and capacity means fixed cost. They wish more people worked at night.

      Grid scale solar power is nonsense. It is political, not business. Power companies do what they are compelled to do by government. I.e., they aren’t going to partner with a solar company unless they are made to.

    • This is exactly what is done in countries like Germany and Denmark. Ballancing the grids is one of the major challenges with regards to wind and solar, as is getting rid of excess capacity; Denmark is paid pennies for their export of excess power to Norway and Sweden, Germany actually pays the Swiss to take excess power.

      Still Germany and Denmark have the most expensive power in Europe!

    • You can use the gas plant to provide uninterrupted power without having to “back it up” with a solar array. However you cannot rely on the solar array to provide uninterrupted power, so it MUST be backed up the gas plant. Therefore, the solar array is redundant.

  39. What about improving energy efficiency and reducing energy waste? Not all available improvements have been done yet. For example, LED indicator lights in most modems, cable boxes, and a lot of other electronic devices have chemistry technology from around 1980. More modern LEDs costing only a couple cents more can do the same job with about 10% as much power, including power dissipated in associated dropping resistors and driving/switching electronics.

    Many homes have room for thermal insulation improvements.

    I think that using available technology to reduce electric energy consumption will reduce costs for nearly everybody. The LED indicator light improvement alone can likely spare USA electricity customers the cost of a power plant, by eliminating a power plant from the nationwide power plant construction schedule.

    – Don

    • This is the same misleading defence provided by UK Ministers and Green activists to sell renewables. Energy efficiency measures save money for all power systems and not just renewables. It follows that the best route is to have energy efficiencies and the cheapest power available, allowing even for Stern’s and others’ present day estimates of the costs of future accommodation of any disruption, damage or other consequences attributable to CO2 emissions. Renewables will still never be competitive or affordable!

      • Improving efficiency for lights to save energy has been proven a myth. With more efficient light, people leave them on more of them and longer, as I found in my own household after reading about this observation and paying attention. Also, I recollect an experiment in a country were they made make everybody turn all lights in the home for five minutes at a coordinated time. I doubt that they got 100 % participation, but they claimed close to it. The power stations did not register any lessening or increase in the demand for that five-minute interval. In other words, the household light demand is negligible (non-measurable) on the scale of the total.

    • > Many homes have room for thermal insulation improvements.

      They do, but I think that the easy fruit has largely been plucked from that tree. e.g. I can put more insulation in my attic fairly easily, but there’s not much I can do about the walls. They have insulation — but they should have been built thicker with more insulation. And not everyone has an attic they can stuff with fiberglass.

      As a national policy, completely rebuilding the US building stock to maximize energy efficiency might well be a good idea. (Oil won’t stay cheap for long. And gas won’t stay as cheap as it is. And green electricity is probably not going to be cheap at all no matter what the President’s Energy “Plan” says).

      But rebuilding most everything is an incredibly costly concept. And that I doubt we know how to build energy efficient structures that are livable. What’ll work in North Dakota will likely be a mold infested disaster in Florida and the best house for Seattle might well be uninhabitable much of the year in Austin.

      • It costs the same amount to increase your attic insulation from 30 to 50, as it does to increase it from 50 to 70. Yet the amount of energy reduction is only about half as much.

        Remember when adding insulation in the attic to not push the insulation up against the roof, you need to leave space for ventilation.

    • LED indicator lights use less than 1% of the power consumed by your average electronic device.
      The electronic devices probably use less than 10% of the total power consumed in your average house.

      PS: Even LED’s from the 80’s, had efficiencies in the 80% range. Exactly how you get LED’s that are 10 times more efficient than that, I have no idea.
      You must be talking about old style incandescent indicators, which companies stopped using decades ago.
      Heck, even the neon indicators were more efficient than that.

      Comparing old LEDs with newer ones, the change in efficiency is more like 80% to 90% efficient.

      Replacing incandescent bulbs with LED bulbs might reduce total energy usage in the US by about 1%.

  40. I have been trying to educate the local Green activists and politician supporters of renewable energy to understand this normal, very basic, but essential “like for life” total life cycle CAPEX/OPEX cost comparison investment analysis for many years. The same applies to a comparison of Wind Turbines with Gas Turbine Standby’s versus Gas Turbines alone as base load units. You also have to add in the necessary massive additional cost of enhanced and additional Power Transmission lines needed to connect the remote WT’s and SP’s to areas of actual Power Demand.
    The result of this proper professional engineering investment analysis is a no brainer: the WT/GT/Power Line system is, and always will be, massively more expensive regardless of how much money is spent on R&D in an attempt to improve on the inbuilt engineering inefficiencies within this Total System.
    In addition, in the UK, we now have the ridiculous and obscene situation where WT power is given priority use and subsidies and guaranteed minimum prices are paid to the WT supplier/operator to make their product commercially viable, and then subsidies are then needed by the GT standby supplier operator to cover the increased costs of supplying and operating GT’s to meet every varying shortfall power demands and operating way off optimum efficiency loading.
    You just couldn’t dream up a more idiotic and crazy situation. Yet the politicians here still wonder why our steel industry and many other industries are losing the battle with foreign competitors, exports are failing and why our power costs, affecting all our other costs, keep rising.
    I despair – we desperately need scientists and professional engineers in Government!

  41. One big weakness with this post is that it assumes that the solar power station has to deliver electricity continuously.

    In reality no power station deliver electricity all the time, even gas, coal and nuclear are down for maintenance from time to time. The important thing is that the power grid as a whole deliver continuously, not that each plant does that.

    Solar power has a unique benefit in hot areas because it delivers most power when the demand is highest, namely in daytime on hot summer days when all AC goes for full.

    That reduces the need for other utilities to cover the peak demand

    /Jan

    • One big weakness with this post is that it assumes that the solar power station has to deliver electricity continuously.
      **********************************************************************************************************************
      Not necessarily, but delivering power RELIABLY is a requirement. With reliable power generation, maintenance can be planned across the grid with a small contingency. Most maintenance is planned well in advance. This is how the grid operated before the “renewables fad existed”.
      Why would anyone consider paying the exorbitant capital costs involved in wind and solar installations for use only at peak times when there is a random chance that it may be unavailable and would need backup.. It would be much cheaper and more dependable to build an extra gas powered generator to handle this requirement.

      “Solar power has a unique benefit in hot areas because it delivers most power when
      the demand is highest, namely in daytime on hot summer days when all AC goes for full.”

      This is the first time I have come across the argument of a “unique benefit” for solar that it delivers most power when it is working!! Surely all the power generation methods produce “most power” when they are working. That is, at peak times (when demand is high) – they can also carry on producing that power for as long as the grid operator wants – unlike solar and wind.

    • The claim is that we can go 100% solar and wind. So they had better be able to produce power 100% of the time.

  42. …I totally agree. Mr Gates intends to invest $2 billion in renewable energy over the next five years — innovation to bend the curve. Solar energy is going to need lots of it if it is ever to become a viable substitute for carbon-based energy….

    ‘Innovation’ is not a cheap activity.

    For every breakthrough, there are thousands of blind alleys to be explored, and they all cost money. And we have limited amount of human ingenuity capable of performing innovation. So money spent on power generation innovation is money not spent on other investigations.

    We could be spending money on better communications and transport. On better living conditions, education and infrastructure – particularly in the Third World. On better health and medical techniques, to address plagues and cancer. On investigative research into particle physics or space, to help us understand what kind of a world we live in. On art and entertainment, to make our present lives more enjoyable…..

    But instead, we are spending money on changing our current workable power generation facilities into other power generation facilities which are barely workable at best. When we have done this, we will receive no benefit from the change.

    It reminds me of the Nazca lines – those images which are theorised to have been created in an attempt to summon water to a drought-oppressed culture. Actually, what we are doing is worse – though the Nazca lines were useless, they did not require the whole resources of the nations, and so the risk-benefit calculation was probably positive. The Nazca lines and geoglyphs were actually a better response to the problems of the Nazca culture than our windmills are to ours….

    • Better communications technologies have actually reduced travel costs for many companies.
      Tele-conferencing has made much business travel unnecessary.

  43. Would not the solar panels need to be sized for 1600 MW rather than 800 MW? The system needs to be large enough to provide for the daylight requirements while simultaneously providing for the recharging of the pumped storage, all of which must be accomplished during hours of sunlight. In reality you would probably have to build the the gas plant just to provide backup, unless you sized the solar and pumped storage systems about 8 times the basic requirements.

    • Agree absolutely. Plus you need to factor in the efficiency of the pumped storage process.

    • More likely it would have to be 2400MW because maximum output would still be when the sun as at its apex in the sky. Even with steerable arrays there would still be a bell curve of electrical output, just not nearly as narrow as a static array. You also have to take into account seasonal variations of the length of daylight as during winter months daylight would last a lot less than 12 hours. You have to design for worst case, so you would need 2400MW of capacity to equal the availability of an 800MW NG or nuclear plant.

      Another issue (mentioned earlier) is the sheer size of equivalent plants. A 1000MW NG generation site (may have more than one generation plant) takes up a small fraction of the land area of a PV solar facility, assuming the solar facility would require to have between two and three times the plate capacity of the NG plant in order to provide an equivalent power output. (This assumes some kind of storage at the PV plant for ‘dark’ hour power overnight.) I have seen figures as high as 40 to 1 ratio between the land required for solar versus conventional power plants of equal overall capacity.

  44. I get the gist — solar is stupid for power. Best use of solar is big, sun-facing windows w/enough roof-overhang to block it in summer.

  45. Capital does not/cannot create innovation, it is however required to develop and engineer it. Innovation is incremental not frog leap.

    It is too bad Bill was not around 400 000 years ago to invest his $2 billion in renewables, then Mankind would not have had to bother with fire and the wheel both of which inexorably have led us to the doom of global warming.

    Or if Bill had been splashing the cash at the start of the Industrial Revolution someone could have ‘innovated’ the Internet before Victoria became Queen, instead of having to wait for Al Gore to do it..

    Money certainly is magic fairy dust.

    Bill should stick to what he does well, innovating a great operating system then developing it backwards into the dark age.

  46. Another big difference. Not a single PV solar cell will survive the damage that the induced voltage of an EMP will cause over its substantial surface. Some or all major components of a natgas power plant will survive without permanent damage. The natgas plant may be able to be returned to service in a few days or weeks of outage whereas a PV solar cell plant will have instantly been turned into scrap.

  47. Mods,

    I am trying to copy this article with its 2 main tables into a blog I participate in. Unfortunately it is impossible to copy Table I “Capital Cost to Generate Electricity” – because the second Table come up instead – “Capital Cost of Storage for Night Time Demand”. Please can you put this right? Thank you.

  48. My broad take on this idea of comparing ‘termittent’ to ‘intermittent’ sources (nowhere near as elegant and precise as Dowd’s analysis) is this recent comment at Slashdot… I start stacking ratios and lose track.

    It is like a twisted kind of Drake Equation for estimating intelligent civilizations, with just as much uncertainty in every coefficient. Once you calculate the astronomical wind turbine count to generate Summer Peak if they were all spinning all the time… and multiply it for each factor (wind intermittentcy, storage inefficiency, storage time, loss from additional transmission lines, etc.) the whole idea dissolves into a psychedelic nightmare. Like bringing a Tonka fire engine to a real fire.

    While the biggest ratio I see so far in this thread is 36:1 (jake’s comparison of Ivanpah solar to nuclear) I firmly believe that once all factors are considered, the ratio will be way beyond that… and anything beyond 10:1 becomes ludicrous. And the cost of choosing a path that leads to collapse of society during the first weeks-long Winter freeze… priceless.

    • …like bringing a pumper truck to a real fire and running the pump on a wind turbine fired generator…Intermittent electrical production is not “power”.

  49. What is truly pathetic is:
    1) A major political party supports this nonsense.
    2) Environmental groups only need to promote a utopian vision without providing any real solutions, and they gain support.
    3) There is no way in our lifetimes alternatives will ever amount to much, and they will likely never become commercially viable over carbon based sources.
    4) The people making these idiotic proposals are rewarded, and the tax payers that get looted and mislead support it with their votes.
    5) The very people that support the party that promotes this nonsense are the ones that get harmed most by them, ie the poor, low-skilled and union labor.
    6) By demonizing carbon the climate alarmists pretty much limit themselves to power sources that will never work. Alternative carbon based fuels, ie Fischer-Tropsche fuels, are most likely the real solution, yet because we have demonized carbon we ignore this approach.

    America will never retain its greatness misallocating resources like we are now. We are no longer flying a shuttle, we have NASA promoting green energy.

  50. I’m sure someone has said it by now, but “nighttime demand =daytime demand” is a major fail in requirements!

    • It is not a failure. Daytime = nighttime is as relevant as any other set of assumptions you want to make, has the advantage of being simple to understand and apply, and allows for ease in conjecturing how different consumption patterns might affect the plant requirements. Seems more like a strength.

  51. “2. Night time demand equals day time demand.”

    That assumption is completely daft and the resulting calculation is meaningless.

    If average demand is 200 MW, then the gas plant likely needs a capacity of about 400 MW to meet afternoon demand in a place like Arizona (try living in Arizona without air conditioning). So capital cost for the gas plant is off by a factor of two. Then there is the cost of fuel, so the cost of gas power is probably off by more like a factor of 3 or 4.

    And since nighttime demand is much less than day time demand, the estimated cost of storage is probably high by at least a factor of two. So the factor of 14 is cut down to maybe a factor of two.

    Even that is unrealistic. Actual systems are much more complex with different type of plants for different purposes. Peaking power is very expensive. In a place like Arizona, solar correlates well with demand, so some solar (10-15% of average demand) can be easily incorporated with no storage.

    Trying to get all power from renewables is loony, as is using solar in a place like northern Europe where capacity factors are low and demand peaks in winter. Wind also can be useful in the right places, but for only a portion of total power.

    Renewables can significantly reduce the use of fossil fuels at a reasonable cost. But they can not come close to completely replacing fossil fuel. If you are a believer in warmaggedon, that is a hard truth to accept. But if you recognize that the real problem is running out of fossil fuel, then renewables could help our supplies of fossil fuels last until we can really solve the problem.

    • Quote

      Renewables can significantly reduce the use of fossil fuels at a reasonable cost

      Unquote

      Have you seen Germany?. nearly 100% renewable available yet no reduction in fossil fuel use, increased co2 and free electricity at four times the price.

      lol

      • Grey Lensman,

        Have you seen Texas? Something like 15% of electricity from wind (total production, not capacity) and prices have dropped. The price drop is actually due to lower natural gas prices, but the use of wind has obviously not screwed things up.

        Germany proves that it is indeed possible to do things stupidly, as if that needs proof. I already said that using solar there is loony. And I said that wind can be useful in the right places; that does not seem to include most of Germany. And they are pushing renewable capacity past readily accommodated levels, which I also indicated is a bad idea. The failure to cut CO2 emissions is mainly due to shutting down nuclear plants. Real dumb.

        The expansion of wind, and now solar, in Texas is pretty much market driven, albeit with a market that is biased by federal subsidies. The expansion in Germany is due to an ideological motivated government mandate. One seems to be working, the other is a big mess. Big surprise.

      • I think Mike M is overly generous in calling Texas wind a sucess. I live in an Austin suburb, and the Austin utility is offering customers on “smart meters” considerable discounts for using electricity in the wee hours, which the utility is forced to buy from wind farms. I would call that rent-seeking by the wind farms (subsidy farms, actually).

  52. @Mike M.

    …But if you recognize that the real problem is running out of fossil fuel, then renewables could help our supplies of fossil fuels last until we can really solve the problem….

    I don’t think anyone believes that running out of fossil fuel is a problem any more. That was a mistaken assumption of the 1960s (remember Peak Oil?) until Julian Simon explained how wrong it was…

  53. ‘But if you recognize that the real problem is running out of fossil fuel, then renewables could help our supplies of fossil fuels last until we can really solve the problem.’

    Since we aren’t going to run out of fossil fuel, there is not a real problem.

  54. Dowd didn’t do his homework. Hydro is the most expensive storage there is, and water in AZ is a non-starter. If a hill is available, he should price it with gravity storage from aresnorthamerica.com. If no hill, then price it with CAES storage from lightsail.com. Count fuel cost, and count the environmental impact of methane leakage (which is a huge problem).

  55. The fuel cost is a fraction of the capital cost and cost of money for the solar plant. the maintenance, footprint and tax base is massively lower as well. methane problem, what methane problem.????????????

  56. Bill Gates has been wasting peoples electricity by the GWH with his high maintenance operating systems. For decades.
    What a clown.

  57. A better analysis technique is to use the Levelized cost of energy. A nice set of charts for all power types etc and the background technique can be found on there website. Natural gas is certainly a winner using this method, which I believe is more fair as it takes in the cost of fuel, maintenance, financing etc.

  58. Rooftop PV is very definitely a subsidy mining program. Utility scale solar is not in the best of breed class and you need to stay up to speed with the fast changing metrics to see that one. These best of breed players would have survived expiration of ITC tax credits.

  59. I was not able to determine whether the pumped storage costs covered the cost of buying the land needed for the pumped storage.

    I’m sure others have already mentioned it that there are no sites suitable for pumped storage with-in 500 miles of Arizona. So you would have to include the costs of power lines from your solar array to the pumped storage facility, not to mention the line losses for the electricity in both directions.

  60. What about the hidden costs of fracking for natural gas? Like the water it’s polluting or rendering unrecoverable? Where do we add the cost of cleaning that water to make it reusable? What value do we place on the loss of water from the cycle for good? As well, can we expect natural gas to remain as cheap and plentiful 20-50-100 years down the road as it is now?

    Then solar. Is rooftop solar a better bargain than building large solar plants? What if we add in the monetary benefits to local economies if instead of sending half or most energy dollars to a corporation which then sends much of it to stockholders all over the country or world, that money was left in the hands of people to circulate in the local economy?

  61. Create a truly open demand-based market for energy and you let me know who “wins” because that’s where we’re headed.

    Where’s the analysis of 100% solar with battery tech at fairly predictable 2018-20 prices?

  62. Yes the storage capacity for photovoltaic panels is not very efficient. The panels themselves are becoming cheaper and cheaper but the storage technology has not caught up. But it’s coming. We’re just not there yet. But thermal solar panels maybe more expensive but they have solved to a certain extent the storage issues with molten salt in collector Towers. This technology is being built in the US and China and parts of Europe the cost is coming closer to conventional plants and electricity cost is about 40% higher than conventional cost per megawatt. A 200-megawatt plant will cost somewhere in the range of 6 bln. To put it in perspective Calgary will use approximately 1 gigawatt. But they are coming close to solving the storage issues for photovoltaic panels on a large scale When this is solved in a cost-effective way then watch out. Especially for a Alberta that has 85% sunshine in most of the Southern areas the cost of electricity will go way down or at least be equal to conventional generation methods. Hope it’s soon

  63. Remove CO2 demonization b.s. from the equations and comparisons, and things become much clearer yet.

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