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.”
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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? 😉
Speaking of great solar news from SoCal reported by Forbes here is another gem from February 2009:
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25 viewsFeb 11, 2009, 06:40pm
A Super Solar Deal
By Andy Stone
How’s this for a great deal? Southern California Edison , under increasing state pressure to ensure as much as 33% of the electricity it provides comes from renewable sources by the year 2020, announced the largest solar energy pact ever Wednesday: an agreement to purchase electricity from 1.3 gigawatts of solar thermal plants in the Mojave Desert, starting in 2013.
Whether or not a single electron ever flows, the deal is already a winner….
There will be serious egg on face when the installations don’t make 25 years, when the contract expires. With efficiency crashing with time, the hapless taxpayer is likely to be forced to bail them out even before the installations simply stop working. Then they will be in a nice little mess.
If they were true ultra greens, they would go wind and solar only- no gas, no coal, no nuclear. It will be interesting to see what happens when their batteries run out. South Australia again. The greenies will never learn.
Solar from 7am to 7 pm?
Approximately so.
But, at 7am there is a tiny dribble of sunrise power.
Ditto 7pm sunset.
On average 7 to 7, about half peak, all else being assumed maximum, like no clouds
Were these rough numbers done by the authorities using PEAK or AVERAGE 7 to 7 output? Makes a difference if you have to divide your optimism by 2.
The economics are best understood when numbers are extracted from comparable, working projects elsewhere. I have yet to see a routinely profitable major renewable project when the cost assumptions include supply when the wind does not blow and the sun does not shine and subsidies are excluded. Geoff
That’s why TEXAS is the largest wind power producer in the US, it has so much wind power, it covers 100% of its daily power need only with wind power, day and night.
Have you ever heard of batteries?
As to economics, today, renwables are the lowest cost power to produce, by far.
Or are you suggesting that at BP are all stupid, by investing $Bs in the North Sea… taking down oil rigs and replacing them with .. you guessed it, gloating wind power mill farms.
Yeah, its Chief economist must be a liberal sissy
https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy/chief-economist-analysis.html
Look, renewables alone won’t cut it on the long run, but they are a very cheap entry point and are very effective at cutting the actual power need, for maintaining the electric power grid stable.
The real thing you forget to say is that we were to pay for the damages caused by using fossil fuels, the cos of oil&gas would be much much higher … let’s not even get started with the subsidies oil companies keep getting.
Fact aren’t up for debate, when oil companies tart investing in renwables, as Shell and BP are doing … you might want to consider reality as opposed to wishful thinking.
Be part of the solution, not the problem, cause regardless what you wish, the reality is, people are already dying, even in the USA, because of the heatwave and extreme colds, cause by a changing climate.
Then again, perhaps you are one of those, who think your children don’t need a better world.
Ever thought of asking them?
I don’t expect this post to survive the free speech moderator
You spew nonsense.
A quick check (https://www.eia.gov/state/?sid=TX#tabs-4) shows that TX does *not* cover “100% of its daily power need with only wind power, day and night”. It’s not even close.
So when you’re wrong with something so simple and mundane, why should anyone believe anything else you say? As for BP and Shell laying their money on renewables; they are like any other company in that they will go where there is profit to be made. Subsidies and favorable PR are absolutely worth it to them right now. In the future, when the cost of these follies is more widely known (environmental, monetary) and the subsidies go away, you’ll see a definite shift of their focus into something else.
Paul,
Your post may survive the free speech monitor but it will not survive the fact checker. You begin with “That’s why TEXAS is the largest wind power producer in the US, it has so much wind power, it covers 100% of its daily power need only with wind power, day and night.” Consult the Texas ERCOT site (http://www.ercot.com/gridinfo) and you will see that, at 5:00 PM today, July 4, 2019, the wind production was 11,209 MW, and the demand was 61,709 MW. Only very rarely (once that I know of) has the wind power production in Texas met or exceeded the demand.
“That’s why TEXAS is the largest wind power producer in the US, it has so much wind power, it covers 100% of its daily power need only with wind power, day and night.”
Except that isn’t true. Not even close. Hard to take someone seriously when they post this kind of nonsense. 17% for wind is a long way from 100%.
Looks like this PAUL is trying for a record of “most total rubbish in 1 posting “.
Greenpeace put up adverts in the UK saying that the cost of wind energy had come down .
The Advertising Standards Authority made them take the adverts down as it is a complete lie .
The latest wind farm to come on line, [ Hornsea 1 ], is being paid about £160 per MWh which is 4 times the wholesale grid price, & it will get that for 15 years , which is about its maximum life .
If you compare the cost of wind power with a gas powered station over its approx 60 year life , wind power is 15 to 20 times more expensive , & solar power is over 20 times more expensive .
https://edmhdotme.wordpress.com/renewable-energy-capacity-load-factors-in-the-uk-to-2016/
And then there is the factor that a grid needs 100 % conventional generation back up for any unreliables that are fed into it .
As for the rest of PAULs post , it is so ridiculous that it does not need any reply .
This has to be a Concentrated Solar Project…Think Ivanpah with a twist. Good luck with that LA.
Cooy/ paste Wikipedia
..an advantage of CSP over photovoltaic conversion is that as a thermal technology, a CSP plant can incorporate thermal energy storage, which stores energy either in the form of sensible heat, or as latent heat (for example, using molten salt), which enables these plants to continue to generate electricity whenever it is needed, whether day or night. This makes CSP a dispatchable form of solar. This is particularly valuable in places where there is already a high penetration of PV, such as California[15] because an evening peak is being exacerbated as PV ramps down at sunset (a phenomenon referred to as duck curve).[16]
Wrong! I thought surely no one would be stupid enough to install about 2000 lithium batteries at a cost of about $500 million. Oh well saving the planet was never going to be cheap.
I wonder how Facebook’s algorithm will deal with this compendium of false prediction, smoke and mirrors and absurdities.
Again we have the confusion between MWs and MWhrs. We have no idea whether the prices mentioned are with or without subsidies. No mention of the costs of backup provision and no mention of the capital costs involved. etc. etc. The comments say it all; but would an algorithm have the nous to understand it all?
Without expensive subsidies paid for by the consumer/taxpayer is is obvious that this project would go bust in a very short time.
Isn’t there a recent report on a Texas town mayor who signed a 25 year offtake agreement with renubles suppliers that turns out to be horribly expensive? I dont remember how he made this treasury-breaking decision, but he was a media star for his wily prescience at the time.
Georgetown Texas
https://www.forbes.com/sites/chuckdevore/2018/12/17/texas-taxpayers-pay-for-political-virtue-signaling-with-costly-renewable-energy/#92050ed46a69
Reserving comment until the truth of this con is made plain.
This may be of some use to the discussion:
https://www.eia.gov/special/disruptions/socal/summer/
Seems to me power demand falls off sharply around 10 pm…
Just until electric cars become the only personal transportation option and hundreds of millions are plugged in and recharging overnight. Peak demand will shift to overnight.
A Tesla with an 85kWh battery if 80% depleted would need to recharge 65 kWh overnight 8 hours and so would require a constant use of 8kWh per hour for 8 hours
Average monthly KWh usage is 867kwh. Say 900
365/12 is about 30 days per month average.
This gives an average of 30kWh per day average usage.
A typical family has 2 cars.
2 – 85kWh Teslas would require 16kWh of electricity usage per hour overnight to recharge their 85kWh batteries.
Peak demand will move to overnight hours when the sun is unavailable for potential solar recharging
I don’t understand why public officials can commit to a project without disclosing the full proposal to scrutiny in advance.
Subsidies are funds dragged from the taxpayer and given to a business.
We have it over here in the UK, councils etc committing to big spends of tax payers money, on stupid projects, when everyone understands they are being stitched up.
Full transparency please.
Whilst ‘rare earths’ used in solar panels/batteries aren’t rare, they are uncommon. They are also very often mined in extremely environmentally unfriendly conditions and have considerable problems with processing. Much of the world’s rare earths are under Chinese control.
Bearing in mind the mining, processing and transportation damage and costs these panels are not as friendly as is often claimed.
anyone know where the material for these panels is coming from? Is it from the US? If so how is it mined and processed?
tonyb
Most solar panels are made of silicon, which comes from silica, known to the State of California to cause cancer and birth defects 🙂
Complete Green fantasy mixed with Marxist idealism.
I wonder if the complete capital costs of the infrastructure is being depreciated over the correct working life of the facility, or if the cross subsidies are being properly accounted for?
Well then the power connectors to Nevada and Arizona, which currently provide power when there’s a shortage on the west coast, can be shut down as they are surplus to requirement. Let’s do that … and see what happens.
People had better watch they don’t tread in those human faeces when the black outs begin.
The Left lives in a world of lies and, sadly, is unable to distinguish reality.
Even when they have a plan that requires numbers, such as this one, it will be conclusions first, then data will be pushed to fit.
The problem is that the Left insists upon imposing its fantasies wherever it can.
To counter on their power issue, numbers are not needed.
Each new unit of intermittent power needs to be backed by full-time power.
A double in total capacity.
Batteries or pumping storage are not economic.
Seems to be the equivalent to the insanity of Mao’s Cultural Revolution when all Chinese households were to smelt iron in their backyards.
When it fails, they’ll blame it on climate change. You know they will.
Napkin math says you’d need 15,000 SQUARE MILES of solar to run LA. Part time.
Someone’s napkin has some blurry numbers. Per this website, it would take 21,400 square miles to provide electricity for the entire U.S.
https://www.freeingenergy.com/how-much-solar-would-it-take-to-power-the-u-s/
I’m not saying that the above site is correct. But it seems likely to be closer to correct than your napkin math.
Eric writes: “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?”
Such cynicism. Los Angeles isn’t responsible for this solar breakthrough. The solar farm is being built by a private company, 8minuteenergy, which provided the winning bid to provide electric power to LA. Other bids came with similar prices. This is what electricity from solar farms actually costs today in the sunny Southern California desert with existing incentives. 8minuteenergy is the largest provider of solar electricity in the country.
They are able to offer these extremely low prices because of a combination of factors: 1) The cost of solar panels and related equipment has fallen dramatically. 2) INTEREST RATES are extremely low, so capital intensive projects are cheaper. 3) There is a Federal Renewable Energy tax credit that reduces capital costs by 30% and California offers a 30% tax credit on the batteries. The unsubsidized price would be 42% higher, which still seems like a great price to me. It’s a better deal for the people of LA, who get 30% of their cost paid for by others. Perhaps there are other subsidies I don’t know about. 4) The cost of electricity from the battery has a 1.3 cents surcharge the cost of the electricity used to charge the battery. 5) The solar farm is in the desert over the mountains from LA where it is usually sunny. 6) The transmission line from the site to LA is near capacity from other nearby solar farms, so the project was designed to store some of the output during peak generation hours and deliver at times of peak demand.
The real problem is that dispatchable electricity generators are selling less and less power during peak solar generation hours and when the wind is blowing strongly. That means their fixed costs must be recouped over fewer generating hours. Most plants must operate every day to meet peak demand in the late afternoon. California banned generation from gas plants that weren’t higher efficiency combined-cycle and the capital charges for combined cycle plants are much higher and must be paid if when the plant is producing for a few hours a day. So, this new solar farm is going to increase the cost of electricity provided to customers during peak demand in the late afternoon, when the wind isn’t blowing and the rare days when the sun isn’t shining. However, the falling cost of battery and other storage is beginning to reduce this problem.
The thing about looking at renewables in isolation it is a nonesense. As long as base load power is required renewables can never lead to a cheaper energy system. If we assume that emissions is irrelevant and you wanted to build the cheapest system you would ( presumably build a coal fired facility or gas. You would not need renewables. If you add renewables to the system you have to maintain your base load as well because of the unreliability of renewables. If A = base load and B = renewables. The cost of A + B can never be cheaper than A alone.The important thing to remember A can do without B but not vice versa.
Zigmaster wrote: “The thing about looking at renewables in isolation it is a nonesense. As long as base load power is required renewables can never lead to a cheaper energy system.”
Your ideas may be obsolete. CA obviously needs to be able to meet demand when wind and solar aren’t producing much. Hydroelectric is a renewable that can be ramped up to replace a significant amount of wind and solar. CA obviously needs enough dispatchable fossil fuel generation capacity to replace the remaining wind and solar and California rate payers must pay the capital charges associated with building those fossil fuel plants every year. However, they save the cost of fuel and some operating expenses when the plant isn’t running.
https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf Table 1a
The DoE reviews the cost of newly commissioned electricity generating plants and estimates what the levelized cost of electricity would be for a new facility coming online in a few years. 2019 numbers of 2023 are:
Fixed cost for CC-gas: $10/MHh
Variable cost for CC-gas: $32/MWh
Fixed cost for solar PV: $46/MWh (lowest anywhere $40)
Variable cost for solar: $0/MWh
Levelized tax credit: -$11/MWh
The standard assumptions are an after-tax cost of capital of 4.2% and a 30-year cost recovery period. With interest rates falling and technology improving modestly, the $20/MWh reported in the post doesn’t seem grossly out of line with these older numbers from the DOE. (The capital cost of building a new gas plant has dropped too, but that is only 25% of the total cost.)
So, if you turn off a generating plant needed to meet baseload demand and replace it with solar, you save $32/MWh and are charged $35/MWh by the solar farm with tax subsidy ($46/MWh without subsidy) according to these numbers from the DOE. If you believe the numbers in this article, you are charged only $20/MWh. So the LA rate payers save $12/MWh and American taxpayers have subsidized essentially all of these “savings”. That looks like a great deal for LA and breaking even without subsidy.
Shocked? In 2014 (under the Obama administration) the cost of solar PV in the same report was $125/MWh. The cost of solar power has dropped dramatically. Interest rates are an important part of the reason. The cost of capital in 2014 was estimated to be 6.5%. Gas was $20/MWh more expensive then.
I made the point in a reply above that the solar power vs. gas numbers are for a single additional plant. The solar plant must rely on the existence of the fossil fuel infrastructure. Not only must the cost be subsidized to compete, but the natural gas or coal plants (or hydro or nuclear) must also be existing. Thus, you need to pay for two infrastructures instead of one.
If you go solar only you need storage and the infrastructure of the batteries or whatever else you use. That infrastructure would have to have a capacity of providing power for many times what the solar plant output is in case of an El Nino year where it may rain for a couple weeks straight.
In the case of places other than southern California and the desert Southwest, it could need battery storage for months of power.
Also, if the demand for materials for solar power plants goes up by a factor of 20 or more there will be shortages, so plants just can’t be built, and the ones that are able to be built will cost many times more than current estimates.
Improvements in current technologies could make solar power a useful niche provider that could give a positive return on investment starting up a new plant in 20 years or so. It can never be feasible for the whole grid with anything based on current technologies, however.
Norm: Please look more carefully at the numbers from the DoE shown above. Today, you can build BOTH a new solar farm AND a new gas generation plant to back it up FOR THE SAME PRICE as you can get all of your electricity from solar. (With the federal subsidy for renewable energy, LA comes out ahead and the rest of America subsidizes LA.)
This works because the main cost of electricity from gas is the cost of the gas. You can turn the cost of gas off when the sun is shining, still fairly compensate the owner of the gas plant for providing back up and pay for the electricity from solar. The variable cost for gas is as big as the cost of electricity from solar – in an usually sunny southern corner of the US.
You are supposing the Production Tax Credit for the solar comes from nowhere, that somehow it is not a tax paid by the same people who are buying power. Nice green accounting!
Tom wrote: “You are supposing the Production Tax Credit for the solar comes from nowhere, that somehow it is not a tax paid by the same people who are buying power. Nice green accounting!”
However Frank had written: “(With the federal subsidy for renewable energy, LA comes out ahead and the rest of America subsidizes LA.)” My accounting was honest and included both subsidized prices and unsubsidized prices.
The point is that WITHOUT THE SUBSIDY, the full cost of solar + the cost of gas backup is now similar to the cost of electricity from gas alone…. In the American Southwest with abundant sunshine.
IIRC, the subsidy is currently scheduled to expire next year. In a year or two, LA can pay for solar backed up by gas without paying higher bills. The numbers come from the DoE under the Trump administration.
From a quick Bing search:
California is insolvent, fiscally and otherwise. California, the most populous U.S. state, is a social trendsetter that is also at the leading edge of local governments failing to come to terms with an economic crisis.
TRANSLATION: “… failing to come to terms with reality.”
In other words, LA = LA LA land.
Robert: Speaking of failing to come to terms with reality, your information isout-of-date. California’s economy and fiscal situation has improved significantly in the past 5 years, with its credit rating rising from A- to AA-. This is on par with PA, WV, MI, CN, KS (Brownback tax cuts) and above KY (A+), NJ (A-) and IL (BBB). For what it is worth, BBB is the lowest category usually considered to be investment grade.
“LOL LOL…….there is ARE less numbers in 1.3 than 1.997”
LOL LOL LOL LOL…….there is ARE Fewer numbers in 1.3 than 1.997
Les if you can count, fewer if you can count them. Less water in the pool, fewer people in the pool.
Best to be accurate if being pedantic (which itself is not helpful in this forum)
If you believe on word of this you are a fool…
I am afraid that as we get more and more “renewable energy”, we will end up building three generators to maintain the steady flow of electricity to our homes. 1) The generator in the windmill or the solar panel cost. 2) Back up generators that the power companies will build to run when the wind or sun isn’t working, and 3) As the reliability of electricity drops, people will install backup generators for their homes, because in America we will not tolerate being out of electricity frequently. Wow this system is really going to be efficient!
hmmmmph! well up in San Fran, we are building a feedlot to fatten up the poor. the homeless, illegals and republicans. then we are converting the carcass to bio diesel. big savings on auto fuel. Top that Los Angeles.
The press releases don’t say who the contract will be with. Who is going on the hook for this low price?
Who will own and operate the facility?
The press releases say 8Minute is developing the project; they don’t say who will be involved with production.
Making me think that 8Minute convinced LA they could make their own electricity for that price, that the kwh price is not an actual contracted price.
The reason for the battery power being so cheap is the input from the solar panels is correctly priced at $0.00 . As stated when the Solar output exceeds demand it goes to the batteries. The value of power without demand is actually negative ( southern Cali already has to much solar power at “high noon”).