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
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.
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:
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.
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
…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.
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.
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.
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.
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.
Please see our detailed analysis on PV for baseload power at: http://fusion4freedom.us/going-solar/
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.
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”.
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.
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.
The higher cost of renewable energy is part of the plan.
https://rclutz.wordpress.com/2016/04/02/environmentalist-manifesto/
“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).
@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…
“I don’t think anyone believes that running out of fossil fuel is a problem any more. ”
Not an immediate problem, but fossil fuels are not unlimited. For instance, see:
http://wattsupwiththat.com/2016/03/27/double-the-atmospheric-co2-fuggeddaboutit/
We have enough to last for 500 to 1000 years.
It’s a problem that we can leave to our 10 times great grandchildren to worry about.
It’s like the cavemen worrying that in 1000 years, their descendants will start to run out of rocks.
‘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.
You have to add in the NPV of the running costs to compare apples with apples.
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).
lol, He is making a comparison, not building a real world working plant.
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.????????????
How about we use the solar electricity to produce hydrocarbon and then use it to produce electricity when the sun does not shine.
http://newscenter.lbl.gov/2015/04/16/major-advance-in-artificial-photosynthesis/
Why would you? We’ve already got hydrocarbons.
We also got lots of hydro-carbons in a place where the sun don’t shine.
Bill Gates has been wasting peoples electricity by the GWH with his high maintenance operating systems. For decades.
What a clown.
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.
So your saying Warren Buffett and a growing number of electric utilities are getting their math wrong.
http://www.eia.gov/todayinenergy/detail.cfm?id=25172
http://www.pv-magazine.com/news/details/beitrag/buffett-strikes-cheapest-electricity-price-in-us-with-nevada-solar-farm_100020120/
You’re saying…
“a growing number of electric utilities” don’t have much choice. They must accept the “renewable” power even if unwanted.
Not in this very large case….
http://www.nola.com/business/index.ssf/2014/12/entergy_to_buy_arkansas_power.html
Not in the case of the northeast where they have limited pipeline capacity to partake in this theoretical exercise and not in the southeast where they are also limited by pipeline infrastructure and resource base.
PV is still an exercise in subsidy mining. The original post was figuring back of the envelope economics without subsidies.
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.
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.
Barrie Lawson and my analysis of the solar array and support requirements is by far the most complete and accurate you will find anywhere including time of day issues and 24 hour 7 day cycle with weather factored in. See at: http://fusion4freedom.us/going-solar/
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?
Speaking of water… http://www.eenews.net/stories/1060034623