Guest essay by Eric Worrall
According to Forbes the Eland solar project is the end of the line for fossil fuel. Except at night, or when clouds cover the sky, or when the batteries run flat.
New Solar + Battery Price Crushes Fossil Fuels, Buries Nuclear
Jeff McMahon Senior Contributor
Jul 1, 2019, 12:03amLos Angeles Power and Water officials have struck a deal on the largest and cheapest solar + battery-storage project in the world, at prices that leave fossil fuels in the dust and may relegate nuclear power to the dustbin.
Later this month the LA Board of Water and Power Commissioners is expected to approve a 25-year contract that will serve 7 percent of the city’s electricity demand at 1.997¢/kwh for solar energy and 1.3¢ for power from batteries.
“This is the lowest solar-photovoltaic price in the United States,” said James Barner, the agency’s manager for strategic initiatives, “and it is the largest and lowest-cost solar and high-capacity battery-storage project in the U.S. and we believe in the world today. So this is, I believe, truly revolutionary in the industry.”
…
The Eland Project will not rid Los Angeles of natural gas, however. The city will still depend on gas and hydro to supply its overnight power. But the batteries in this 400-megawatt project will take a bite out of the fossil share of LA’s power pie.
“It reduces the evening ramp (of natural gas) as the sun sets,” Barner told commissioners at their June 18 meeting. “As the sun goes down for our other 1,000 MW of solar that doesn’t have batteries, the gas-fired generation and hydro have to compensate for that. So that net peak load in the evening will be offset with this facility. We’ll be able to contribute to that and keep gas powered generation not running at the full amount.”
Crudely, Los Angeles can count on solar power generation from 7 a.m. to 7 p.m., said Louis Ting, director of power planning development at the agency. The batteries in this project effectively extend that horizon four hours, to 11 p.m.
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Read more: https://www.forbes.com/sites/jeffmcmahon/2019/07/01/new-solar–battery-price-crushes-fossil-fuels-buries-nuclear/
What terrific news. The low cost of this new plant creates an irresistible economic case for moving to solar energy, completely eliminating the need for the Paris Agreement, government renewable incentives and coercive carbon taxes.
I’m sure you’ll all join me in congratulating climate leader Los Angeles for transforming the future of global energy.
Update (EW): Some cynical comments appearing. Surely you guys don’t think Los Angeles is somehow LYING about their solar breakthrough? 😉
Salute!
YGBSM!
Can you spell Solyndra?
But we are doing our fair share to save the planet, huh?
Gums sends…
Ha Ha. youse climate deniers.
First you claim that renewables can not exist without subsidies plus penalties on coal
Second you ask us energy woke to provide a backwater to ‘prove our theory’
Now we have a backwater all lined up…you still complain
No, we read. Federal 30% capital cost SUBSIDY here. Not the only one, either (undoubtedly, the California – and probably LA – taxpayers are kicking in a chunk, too, in either direct subsidies or tax breaks that the fossil fuel generators do NOT get).
Forbes needs better fact checkers. Preferably ones who can do fourth grade arithmetic .
Here is how they are going to do it:
http://treasureislands.org/wp-content/uploads/2012/12/then-a-miracle-happens.gif
OK, so the County and City of Los Angeles are going to use all these illegal aliens and homeless to generate electricity. About Godd**mn time Democrat Party C*nts advocated slavery again, America Hating c*n ts.
It must suck to be you – perpetually angry and raging at the world.
Project much?
“a 25-year contract that will serve 7 percent of the city’s electricity demand at 1.997¢/kwh for solar energy and 1.3¢ for power from batteries.”
Sorry, impossible. This is either a typo, huge misunderstanding or outright fraud by omission.
Los Angeles must be one of the very few places on Earth that does not have cloud cover. The location has good solar resources but this is the first time I have seen it suggested there is never any cloud cover. Also unusual for any location on Earth at latitude 34N to have sunlight for 12 hours a day from November through March.
Irrespective of the optimistic claims for sunlight, at the stated prices the solar is a cost effective substitute for gas fuel; even in the gas rich USA. The economics of the gas generation are still impaired because there is reduced output over any period to recover the capital so that potentially lowers return on investment for the owners of the gas plant. In Australia, experience is that owners of the fossil plant make larger returns because higher cost, low utilisation dispatchable plant becomes uneconomic and retires thereby placing greater reliance on the remaining dispatchable plant and they simply charge much more when the sun is not shining and the battery is flat.
If the solar proves to be a cost effective substitute for gas fuel, without subsidy, it will be a first. In outback Australia, solar has proven to be an economic substitute for diesel fuel but the fuel has a huge transport component in its cost.
“Oh it never rains in Southern.. California…”
Wasn’t money to loose it’s significance under communism as all commodities would be too abundant to even waste time on billing ?
Well, it didn’t despite that many years and efforts trying.
Maybe lose its instead?
From the linked full article:
More realistically,
So, we have more than an order of magnitude discrepancy.
And Semi Valley is quietly adding MWHs of backup diesel generators sets to power thru the coming brownouts?
I used to live in Simi … a great little community back in 1968.
I remember reading an article in Mother Earth News Magazine back in the early 80’s, that claimed solar photovoltaic had become cheaper than coal. Articles every year since then have claimed the same. But it never seemed to be true. Is it finally true now? Maybe, but of course I’m skeptical. Mainly, they always seem to leave out the cost of building and paying for a natural gas peaker plant to sit idle waiting for a cloudy day. Back in, I think, the 90’s, there was an already built solar power plant in California Valley that they tore down and sold off the panels from, because apparently even just the operating costs were too high to pay for the electricity. So apparently even when solar panels and construction are COMPLETELY FREE, solar still can’t compete.
LA will continue to profit from carbon use. The coastals, despite going renewable, control the Carbon Trade Routes (goods produced in fossil-fuel-powered plants overseas and shipped to ports like Long Beach then distributed throughout the US).
So, by 7 am to 7 pm I take it that LADPW figures to get sunlight delivered from over the horizon six months of the year. Also does the entire solar farm track the sun? What is the nameplate capacity of this battery that will supply power for four hours? In fact, are the figures quoted in nameplate or actual capacity of the plant?
These articles aren’t worth much are they?
For the battery, the decision isn’t made yet. Options are 0 MW, 100 MW, and 150 MW.
If that means 600 MWh to provide 7pm to 11pm, it will be one of the biggest battery installations in the world.
If they build it, I really, really hope they put in some very, very good fail-safe systems into those battery installations. When a large bank of batteries fails, it’s usually quite spectacular.
But these solar arrays are certified non-GMO and gluten-free.
The rain may never fall till after sundown By eight, the morning fog must disappear In short, there’s simply not a more congenial spot For happily ever after in than here in Camelot
OK, I “took the bait” and read on…
I began to wonder, how on earth does a utility intend to install a 400 MW (peak / faceplate) power plant, prep the land, lay foundations, string up the devices, hook ’em all together, gather the DC juice (or perhaps distribute conversion to AC? Would make no small amount of sense.), and so forth and stil be amortizing the full expense to the tune of 1.99¢/kWh?
How?
I’m not a brilliant financial analyst; I’m unable to make a coherent argument for the time-value-of-money and all that stuff. HOWEVER, I also abide by the concept that the amortized-payment of an investment at least in present value represents a fair pay out for a big capital expense. We do it all the time for houses and properties. Also with depreciation included, we make similar calculations for heavy (and expensive) long-lived industrial equipment and plants.
Most all of it can be summed up with Excel’s convenient PMT( rate, intervals, principal ) function, and a crystal-ball guess of the general future rate of inflation, which works out to about 2% or thereabouts. The driving parameters are:
Responsible rate of inflation (2.0%)
Reasonable pay-down term (I say “20 years” for PV)
Reasonable pay-out rate (AA+ municipal bonds at about 3%)
Very reasonable down payment (5%)
And a reasonable number of power-producing hours a year (20% of 365 × 24)
Those are the drivers.
So, how to do this? If we don’t include the inflation rate, it is trivial:
Per kWh = -pmt( 3.0% ÷ 1752, 20 × 1752, $1000 );
Per kWh = 3.8¢ ($0.038/kWh)
With a 2% gebneral compounding of inflation which results in net-present value deflation of all payments combined (i.e. sort-of-magic-thinking), we get (100% – 2%) raised to 20 years power … = 100% in the beginning, 98%, 96%, 94.1%, 92.2%, 90.4%, and so on down to 68.1%. Taking the geometric mean over 20 years gives 82.5% effective present value, so
NPV (per kWh) = 0.825 × $0.038 = $0.0313 per kWh.
Which is decidedly different from the 1.99¢/kWh being quoted. NOTE that my driver of $1,000/kW (installed, working) is pretty darn cheap. Has to be less than $1/watt for frames, inverters, installation labor, land use, transmission line fittings, and all the rest. Buck-a-watt is darn cheap. And buck-a-watt gets us to 3.13¢/kWh net present value by these simple calculations.
THE IMPLICATION of a 1.99¢/kWh is that the system buy-in cost is either being subsidized or otherwise fiduciary institution “flippped” to be more attractive than a buck-a-watt. AND THIS is what gives me pause.
Is Los Angeles still depending on subsidies for their Solar Power investment?
If so, then the whole thing is pond water and toad scum.
Because I don’t care how efficient a utility is, the implied $636 per kilowatt, frames, inverters, transmision lines, and all the rest, is unheard of.
Just saying,
GoatGuy ✓
mosher, take note of the above financials too.
GoatGuy: Did you include the 30% federal tax credit for renewable energy.
The project is owned by a private company 8minuteenergy, which claims to be the largest provider of electricity from solar power in the world. I suspect the cost of capital will be higher than a AA+ muni bond rate, unless LA is borrowing the money for them and lending it at zero cost as part of the deal.
Isn’t replacing fossil fuel generated electricity with solar power like replacing a Boeing 777 with a crop duster? Sure, the crop duster uses less energy, but it flies slow, can’t carry much, and will not go very far.
Who gets the contract(s) for cleaning the dust and bird crap off the panels
to keep them within operating specs?
Inquiring minds want to know.
How do you provide just 7% of the city’s power yet claim to operate between 7am to 7pm plus 4 battery hours? That’s nearly 50% of the hours in the day, and mostly waking hours at that. Did I misunderstand?
Yes, they are 7% of the daytime power. It 7% of the day.
I’m sure there are ‘renewables’ supporters that will accept this announcement as fact…. but the cost and efficiency claims made defy logic, common sense, and reality.
No details. Future molten salt nuclear power will cost under 4 cents per kWhr, with zero subsidies.
and no need for cooling water, or peak load accessory generators.
I think I can beat that, but, I need to see your other numbers, like Capital cost, Maintenance Cost, Generation cost. Compare your costs for a molten salt nuclear power to a SunCell reactor.
— SunCell Economics —
Current Annual Gross Earning Capacity of any Electrical Generator: $1/W
SunCell Capital Cost: $60/kW
Compare this with Solar Capital Cost (2013): $3,463/kW
SunCell Life Span: 20 years
Maintenance Cost: $1.20/kW
Generation Cost: $0.001/kWh
Finally found something on the “battery” (but nothing in the cost).
AES has spent nine years working with manufacturers of electric-car batteries. It has learned how to assemble and control ever-bigger constellations of these lithium-ion batteries. The Long Beach facility, when it is completed, will have 18,000 battery modules, each the size of the power plant of the Nissan Leaf
It seems to me that if solar and battery is a panacea then people should be off the grid. Why have a grid at all?
An appropriate cost estimate would probably add half or more of the capex of the required gas powered plant, which would be used only approx. 1/4 of the days and at nights. Plus some of its opex when idling.
For the battery, the decision isn’t made yet. Options are 0 MW, 100 MW, and 150 MW.
If that means 600 MWh to provide 7pm to 11pm, it will be one of the biggest battery installations in the world.
Looks like a good time to start a diesel generator business in LA. Any backers?
Not Diesel, NatGas.
Here in Indiana we are seeing more and more of them. Hooked right up to you Gas Utility line, just like your furnace and appliances. And wired into your fuse box, so if the power goes out for more then a few seconds it switches over to the Genset and kicks on the generator. All completely automatic. It even automatically test runs the generator once a week, so you know it will be working when the time comes.
And since the gas mains are all underground, there’s almost no chance of it going out in a storm or the like.
~¿~
This makes me so happy that I don’t live in a nuthouse like Cal.! Great to see the epic and ongoing failures on others dime!
Just look at the UK power grid. Play with the downloaded data.
It is garbage.
https://gridwatch.templar.co.uk/