Guest Post by Willis Eschenbach
The BBC, that bastion of slanted reportage on all things green, has an article about a new solar power plant entitled “The Colossal African Solar Plant That Could Power Europe“. It’s full of all kinds of interesting information about the plant, located in Ouarzazate, Morocco. Man, how come Africa gets all the great place names, that one just reeks of mystery, “Ouar-za-za-te”, makes me want to go visit … but I digress. It’s called the “Noor” power plant, from the Arabic word for “light”.
The reporter talks about a variety of things, including the fact that on the day the reporter visited it was overcast … but somehow, despite hyperventilating about just how awesome and gosh-dang wonderful the plant is and the difference this will make to the planet, the reporter never got around to talking about the cost. Funny, that.
Being a congenial sort of fellow, at least on a good day with a following wind, I figured I’d give them a hand. The relevant numbers are available at the Wikipedia page—the plant cost $3.9 billion dollars US ($3.9E+9, much of it a gift from hard-pressed European taxpayers diverted by guilty CO2-obsessed European liberals), and it produces 370 gigawatt-hours per year (370E+9 watt-hrs).
Now, in the US a power plant typically sells its product for something like six cents US per kilowatt-hour. Multiplying that by 370 GWhr/year gives us an annual value of the energy produced of about $22,000,000 dollars per year.
And at twenty-two mega-bucks per year, how long will it take to pay back the $3.9 billion dollar cost of the plant?
Er … um … breakeven time is a hundred and seventy-seven years … but only if there are zero maintenance costs … and if there is no interest on any borrowed funds … and if you don’t count avoided income available from investing the four giga-bucks elsewhere for a century … ooogh.
However, I do note that on the Wikipedia page it says that they are selling the electricity wholesale at US$ 0.19 per kilowatt-hour. Not good news for poor people in Morocco. This brings the breakeven time down to a mere fifty-six years … again if there are no maintenance costs, no interest costs, and no avoided income.
You know, people keep selling these plants on the basis of saving the world, but at that horrendous cost and huge breakeven time, I’m not sure we can afford to keep saving the poor thing time after time …
Further research, however, elucidates the conundrum. It turns out that this is not just an energy generation plant. It’s a moral lesson for the world and a harbinger of the future and will save CO2 and serve as a template for really big money wasting projects and … hang on, that’s my interpretation. Let me get the actual claims, curiously from a Freedom of Information Act document. To start with, it says:
Both cost-effectiveness analysis and cost-benefit analysis indicate that the project is not economically justified under prevailing economic conditions.
However, the plant is supposed to provide the following intangible benefits:
- Climate change mitigation
- Increase in factors of production (physical capital, human capital, and natural capital)
- Accelerated innovation, through correction of market failures in knowledge
- Enhanced efficiency, through correction of non-environmental market failures
- Increased resilience to natural disasters, commodity price volatility, and economic crises
- Job creation and poverty reduction
My favorite? “Correction of non-environmental market failures”. That’s got to be worth big bucks.
So all you have to do is to put numbers on those intangibles, make the values large enough, and suddenly this money-losing proposition will be ready to “power Europe” … at three times the market cost of electricity … not counting significant transmission costs … as soon as the multibillion dollar high voltage high ampacity DC undersea power cable gets funded and designed and laid across the Mediterranean from Morocco to Europe …
Another beautiful green dream ship wrecked on a reef of hard economics. It least it seems no US taxpayer money is going into this debacle. That’s good news, because we need it to line Elon Musk’s pockets …
Por favor, if you disagree with someone please QUOTE THE EXACT WORDS YOU DISAGREE WITH. I can defend my own words, but only if I know which ones you are referring to.