The True Cost of Renewables are Hidden Due to a Lack of Market Transparency

Testifying before Indiana’s 21st Century Energy Task Force, electricity markets expert and regulatory attorney, Mike Nasi, warns Indiana policymakers of the significant indirect costs and risks renewables have placed on the Texas grid.

Mike Nasi: “I have solar on my house. I’ve supported wind generation. But, we cannot underestimate the escalating costs as we more deeply penetrate the market with [renewables]. So, where Indiana is now is where Texas was a decade and a half ago, making decisions about really big, weighty, costly things; and, I’d simply ask, look to Texas and learn the lessons from it. […] Very high performance from the thermal fleet is keeping this story from being a horror story. […]

Even though natural gas prices were down this year by 15%, power prices in the Texas market went up 40%. How does that happen? When you underestimate what the cost of renewable penetration is going to be in your grid. […]

The biggest miss, other than transmission, the impact of subsidization. I think you all know this but when you get $23 a megawatt hour for putting wind on the grid, in the form of a subsidy, and the price of electricity drops low, and you only get that subsidy if you generate, you bid the price of electricity negative.

You literally, in the Texas market, see one out of every three bids negative. In other words, paying to stay on the grid. So, that has two effects. One, it destroys and distorts the market place and, two, it erodes the capital of existing thermal: nuclear, coal, and I will tell you new gas. We could spend another hour talking about the myth that new gas is getting built. Take a look at the Texas market. See how much new gas is getting built. Close to nothing, because people and banks are not going to invest in a marketplace where a subsidy is driving the price of electricity to below zero.”

21st Century Energy Policy Development Task Force Hearing
Indiana House Chamber
October 31, 2019

HT/Dan

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89 thoughts on “The True Cost of Renewables are Hidden Due to a Lack of Market Transparency

  1. Good catch, CTM. Reads like a great Reality Check on green nonsense. Not to mention commercial-scale wind turbines and solar generators chop up and cook our flying friends, and no other industry is allowed to do that.

  2. I live in Texas. I was not amused to see power prices jump from 9 cents a KWH to 13.5 rather quickly while, at the same time natural gas prices were actually negative some days in the Permian Basin. Free natural gas would generate some seriously cheap power if it hadn’t been displaced by subsidized and priority dispatched wind. Its all very shameful.

    • Texas won’t be Texas in a decade. Not it’s politics, not it’s culture, not it’s regulatory state, not a lot of things. This is drifting towards uncompetitiveness, which is really ironic for a state that staunchly touted itself as being so competitive for the last 15 years. Who does this hurt the most? Once again, the working class. Factories and manufacturing will become uncompetitive in this environment. Guess who’s jobs that will destroy? When electric rates go up, guess who that will harm the most? Working class people. Texodus will be the next big thing a decade out. If you have to work for a living, you have got to be absolutely nuts if you vote for a Democrat for President. Just nuts. Next year, vote like your job won’t exist because of entirely pointless and bogus reasons in five years and make sure that everyone you know do so as well.

  3. Excerpt:
    “Even though natural gas prices were down this year by 15%, power prices in the Texas market went up 40%. How does that happen? When you underestimate what the cost of renewable penetration is going to be in your grid. […]
    The biggest miss, other than transmission, the impact of subsidization. I think you all know this but when you get $23 a megawatt hour for putting wind on the grid, in the form of a subsidy, and the price of electricity drops low, and you only get that subsidy if you generate, you bid the price of electricity negative.”

    This is an informative video – worth watching. There is more information at http://www.lifepowered.org

    The situation as described in Texas is an energy fiasco. The Texas energy grid is being destabilized financially AND physically under the current regulatory regime. Costs are increasing sharply as grid reliability declines. I suspect that CO2 emissions are not even declining significantly due to the introduction of more wind power – the big emission reductions were achieved by replacing coal-fired power with natural gas.

    The fiasco becomes complete once people understand that increasing atmospheric CO2 is not causing dangerous global warming, and the only measureable impact is hugely positive – the major increase in crop yields and reduced desertification due to CO2 fertilization.

    So here is my recommended energy policy for the great State of Indiana:

    https://wattsupwiththat.com/2018/12/24/a-2019-resolution-honesty-in-energy-policy/#comment-2566340

    Green energy (wind and solar) requires almost 100% spinning conventional reserve, due to intermittency. That is why it is uneconomic energy nonsense.

    https://wattsupwiththat.com/2018/11/16/stacking-concrete-blocks-is-a-surprisingly-efficient-way-to-store-energy/#comment-2520849

    Here’s an even better solution:
    1. Build your wind power system.
    2. Build your back-up system consisting of 100% equivalent capacity in gas turbine generators.
    3. Using high explosives, blow your wind power system all to hell.
    4. Run your back-up gas turbine generators 24/7.
    5. To save even more money, skip steps 1 and 3.

    Regards, Allan 🙂

    • Good advice, Allan. However it isn’t being heeded just yet in Texas. Seems that the most common truck cargo moving through my part of Texas is wind generator parts. Every time I drive into town I’ll see at least 6 tower components moving west, and yesterday saw 3 of the longest blades I’ve seen yet–at least 80 ft I would guess, headed south. I think official Texas is rather proud of it’s wind and solar grid components, and obviously someone is making a lot of money from it,. Regular folks are tired of it’s spread though and a anti-wind campaign is pretty strong in my county (Brown) which is surrounded by wind farms but none in the county –YET.
      JVC

    • Told you so – 17 YEARS AGO! 🙂

      The four most beautiful words in our common language: “I told you so.”
      – Gore Vidal, October 3, 1925 – July 31, 2012

      We published in 2002:

      “THE ULTIMATE AGENDA OF PRO-KYOTO ADVOCATES IS TO ELIMINATE FOSSIL FUELS, BUT THIS WOULD RESULT IN A CATASTROPHIC SHORTFALL IN GLOBAL ENERGY SUPPLY – THE WASTEFUL, INEFFICIENT ENERGY SOLUTIONS PROPOSED BY KYOTO ADVOCATES SIMPLY CANNOT REPLACE FOSSIL FUELS.”

      Source:
      DEBATE ON THE KYOTO ACCORD
      The PEGG, November 2002, Association of Professional Engineers and Geoscientists of Alberta,
      by Sallie Baliunas, Tim Patterson and Allan MacRae
      reprinted in edited form at their request by several professional journals, the Globe and Mail and La Presse.
      http://www.friendsofscience.org/assets/documents/KyotoAPEGA2002REV1.pdf

      Wind and solar power do NOT contribute significant useful (dispatchable) electric power to the grid. This is a simple, proved hypothesis, yet many trillions of dollars have been wasted globally on this intermittent green energy nonsense.

      So next time, good people, please listen to your Uncle Allan, who cares for your well-being, and does not want you to waste trillions on foolish green energy schemes/scams – just to drive up energy costs, reduce grid reliability, and needlessly increase Winter Deaths.

      To try to convey this message to the lower-end of the intellectual spectrum, especially our green politicians, I simplified the message about a decade ago, as follows:

      “WIND POWER – IT DOESN’T JUST BLOW – IT SUCKS!”

      “SOLAR POWER – STICK IT WHERE THE SUN DON’T SHINE!”

      Bundle up, good people – it’s getting colder out there.

  4. We must do our best to contact the Audubon Society and other “nature” groups and thank them for their stance on wind energy! While the extra cost of wind and other “renewables” is regrettable, it is well worth it if we can continue pulverize, chop and destroy our birds and bats; especially endangered raptors! Perhaps they could start selling naming rights to the wind generators to defray some of the costs. I would be SO happy to see some recognition of the true value of these whirling dervishes; the Al Gory Bird-o-matic, the Mickey Mann Batslayer, the St. Greta Seabird Sanguinator, the list of possible names is endless; just like the pain, death and suffering our bird and bat friends are experiencing. Stop the Ice Age; CO2 to 1,000ppm!!

        • With the Possible exception of target practice for delusional people that tilt at windmills. Griff is a 21st century Don Quixote dreaming the Impossible Dream of running the world on renewable energy. He views himself as fighting the unbeatable foe of fossil fuels to right the unrightable wrongs foisted upon a sentient earth or some such nonsense.

      • Not to worry, we’ll all be living in caves and mud huts soon, so you’ll be able to tear those horrible buildings where we all live and work down……

      • “Except properly placed wind turbines don’t damage birds.”

        Perhaps in Antarctica. Penguins don’t fly.

        • “The only placement that keeps birds safe is where there are no birds.”

          Which often occurs a couple of years after placement.

        • Indeed. Here’s a little experiment that can easily settle the question for anyone who doubts which kills more birds. every day, count up the dead bird bodies around the wind turbines at the nearest wind farm to NYC* for a week. Go to NYC and do the same (be sure to use the same number of buildings as there were wind turbines). I think it’ll become quickly obvious which is the more deadly to bird life.

          *NYC is just an example, you can substitute any big city and it’s nearest wind farm and the results will be similar.

      • Except properly placed wind turbines don’t damage birds.

        The only “proper placement” that doesn’t damage bird is any location in which birds don’t ever visit. Which, except for Antarctica and, maybe, the Arctic, doesn’t leave very many place for “proper placement”.

        However US high rise building certainly do. 600 million a year

        Even taking the number at face value (and considering it came from the king of fake news, CNN, I’d take anything they write with a considerable amount of salt):
        1) Buildings serve a valuable purpose that humans can’t easily replace (there’s not many caves with equivalent usable space, for instance), wind turbines are unnecessary – man can easily replace what they provide with other forms of energy that are also much easier, cheaper and more reliable. Wind turbines are literally a technological step backwards for man’s energy needs (there’s a reason we stopped used them as a primary source of energy centuries ago).
        2) wind turbines, according to the current literature, kill somewhere between 140,000 and 328,000 birds each year. while 600 million sounds a lot worse than a few hundred thousand, when you consider the shear number of “bird killing buildings” compared to “bird killing turbines”, the per build number will work out to be smaller than the per turbine number.

      • With limited space, how does one properly space wind turbines? If you only have a certain amount of land in a certain location, then how can you just properly place?

        So, now we have the problem of proper placement added to the problems of intermittency, new mining demands, broken junk equipment that needs to be replaced relatively frequently, cluttering the visual landscape, cluttering the sonic landscape, and other more complex problems that I don’t fully understand.

        Let’s see, erect structures that pose a practical trade off between efficiency/functionality and environmental destruction or erect structures that pose an impractical trade off? Which makes more sense?

        Let’s weigh the practicality of efficient/functional built structures against the impracticality of inefficient/functionally-deficient built structures.

        Renewable fans seem perfectly willing to clutter and kill with inefficient structures. They want to replace high-energy-density with ridiculously low-energy-density structures that still clutter and kill, AND which still require high-energy-density structures as backup. What sense does this make? — Oh, I forgot, it makes NO sense — it just makes them feel good to engineer stuff to entertain intellectually-immature, practically-uninformed fantasies.

      • Just walk down the street of any metro area and you will see the ground littered with little dead birds. Do I need to add the sarc tag.

      • I have lived in this 39-story highrise for 7 years now. Every morning I walk outside, and you know what I don’t see? 600 million bird carcasses, or even ONE. EVER! Think before you speak, young man…

        • Indeed. Birds flying in tall buildings happen, but not very frequently. Birds flying into the blades of a wind turbine happen much more frequently. If just so happens that there are way more tall buildings than there are wind turbines (though the bird-hating “environmentalists” are trying to change that, it seems).

  5. Cheap energy is hugely beneficial for the economy. That fact is ignored but the evidence is there.

    Every job in the renewable sector costs around three jobs in the private sector. link

    • Good link. Commenter mary quotes Ross Mckitrick:
      In countries like Spain and the U.K., which launched their own versions of the GEA a decade ago, the job losses are now being confirmed by independent analyses. In the U.K., a report by Verso Economics used the Scottish government’s own macroeconomic model to show that, despite receiving net transfers of about £330-million ($521-million) from the rest of the U.K. for its renewables sector, Scotland still experienced a net job loss from wind power, and for the U.K. as a whole, 3.7 jobs were lost for every job created in renewable energy.

      In Spain, researchers at King Carlos University found that, on average, each job in the wind sector cost the country more than £1-million, implying a loss of 2.2 private sector jobs for every new job created in the renewables sector.

    • The value of cheap, abundant, on-demand electricity is much higher than intermittent, non-dispatchable renewable electricity. This is seldom taken into account in quoting the economics of kWhs from renewables. Huge mistake being made by communities switching to renewables, and we are seeing that now in the US, Germany, Australia, etc.

    • Thanks for the link.

      The left (and the climate nuts seem to belong to the same breed) has never understood that a bad ressource allocation is always a net jobs (and economy) killer.

      Wind farms are one of the worse ressource allocation with respect to electricity production and this, not even taking into account their negative externalities (decrease of the other – fossil fuel, etc. – power plant efficiency and decrease of the grid stability, eco-system and near inhabitants damages).

      The fact is that wind farms will barely generate the energy that was used to construct, install and maintain them. They are a Ponzi scheme and should be forbiden in any true competitive market :
      – I never saw investors nut to the point to invest in such failure, except crony capitalists who are assured by corrupted politicians to take people’s money by fraudulent taxation.

      Solar panels ? They are even worse !

  6. Even with the increased development activity in the coastal area of the South zone, 73% of the wind resources in the ERCOT region are located in West Texas. The wind profiles in this area are such that most of the wind production occurs during off-peak hours or other times of low system demand. This profile results in only modest reductions of the net load relative to the actual load during the highest demand hours, but much larger reductions in the net load in the low load hours of the year. Hence, wind generation erodes the total load available to be served by base load coal units, while doing very little to reduce the amount of capacity necessary to
    reliably serve peak load.

    ERCOT State of the Market Report

    To keep the lights on Texas will need to maintain 100% backup capacity from dispatchable generation, and it will need to pay to curtail or export surplus wind during periods of low demand (including for the necessary transmission lines), and find solutions to ensure there is adequate inertia and frequency response at times of high levels of wind output, which will entail further curtailment to make room for reliable load balancing generation.

    The prices at which wind is sold and the subsidies it enjoys merely serve to define what other subsidies are required to pay the costs of a go green and invest twice grid, unless you assume that regular blackouts become a feature. Of course, if that happens those who can afford it will install their own backup generation: batteries are likely to prove insufficient and far too costly as the problems worsen.

  7. This is exactly the situation Switzerland is in compared to Germany which is flooding the market with surplus electricity during the summer driving energy prices sometimes below zero. Even hydropower (60% of Switzerland’s electricity production) has to be subsidized due to Germany’s negative impacts on the energy market. Switzerland will shut down one of its five nuclear power plants on dec. 20 and no gas thermal plant is planned to compensate for it, although the country already had to import about 30% of its current last winter. On top of this Germany is planning to phase out its nukes and coal plants. Where will then the power come from in winter? An energy import strategy is not a strategy when no one has surplus energy to sell!

    • They will probably convert the coal plants to burn wood pellets. Same power, about 15-20% more CO2 emitted, but zero CO2 emitted on the books because wood pellets are considered sustainable per EU loophole.

      • Germany is building more than 20 lignite-fired power stations. I don’t think they are planning on using wood pellets.

      • What’s with that? Calling it biofuel makes it clean? I don’t get how they don’t get called out on it. The whole ‘climate change’ thing is about reducing co2 levels to save us all isn’t it?

        They can call it what they like but it goes against their own ‘rules’. They’re finding many ways to increase co2.

  8. The way you get an electricity price spike is not through subsidies. The way you get a price spike is by not having sufficient backup generation. That can be thermal, storage, hydro, or some other dispatchable power source. Texas is the only electricity market that is substantially growing, and at the same time the coal is being removed from the grid. Yes, this causes problems (especially during a heatwave). Yes, those problems are likely to get worse over the next two years as ~15GW of wind and ~10GW of solar are added. The wind is likely to push down the price of electricity in cooler months (Oct-Apr), and the solar is likely to push down the price of power during the high sun hours (8-5 in the summer). Some existing plants will no longer be profitable and will shut down. There will very possibly be problems with ramping of thermal generation from 5-7 pm in summer (although some thermal storage by commercial operations can ease that ramp).
    However, regardless of wind and solar the Texas market was overbuilt. When you have 90GW of generation chasing 75GW of demand you have to expect the prices to dip below break even until supply and demand match.

  9. Someone ‘splain to me why wind turbines, which are inefficient at best, and useless at their worst, have to be subsidized to justify their existence and use.

    Just how stupid are the people who want this twaddle foisted on the rest of us? This is NOT the wave of the future – PERIOD. It is baloney. I’ve read science fiction stories that seemed like nonsense when I read them and yet, the development of some of those sci-fi thingies – toys like house robots named Alexa – are reality.

    Wind and solar are NOT reliable sources of energy, especially for a population that depends on electric power to sustain itself. There is NO reason to subsidize this nonsense.

    • Answer — crony capitalism, AKA fascism. Installing these monstrosities is a present example of Mussolini’s “keeping the trains on time”.

    • “Someone ‘splain to me why wind turbines, which are inefficient at best, and useless at their worst, have to be subsidized to justify their existence and use.”

      So billionaires can make tons more money. Who was it… Buffet? … who said they weren’t profitable without subsidies?

  10. What an eye-opening presentation! Who would have thought that deregulation could wreak such havoc? The wind industry must be eliminated. We can’t afford it.

    • The alarmists kept telling us Texas was a great example of the success of renewables.

      Well, it appears Texas is actually a good example, another example, of how electricity prices go higher in relationship to the number of windmills and solar added to the power grid.

      In their rush to corral CO2, the alarmists have distorted the Texas energy market which puts everything in jeopardy by raising prices on everyone and everything.

      The solution to fixing the Texas energy market is to re-introduce the free market and make wind and solar compete with other forms of energy on a fair basis. No subsidies! If they can’t make it on their own, then they can’t make it. This solution doesn’t solve the alarmists CO2 fixation but there is no evidence CO2 is a problem, so that will work itself out. Meanwhile, Texans and eveyone else will be better off eliminating subsidies for industries that can’t make a profit on their own.

      • Agree, subsidies were originally conceived to help upstart endeavors. Wind energy & solar PV have been around now for decades. Neither are upstarts anymore. Of course, goobermint subsidies are as hard to remove as centuries-old laws (which are never taken off the books).

      • Agree. And it is important to ensure that a free market exists for ALL the factors important to grid performance. The load side needs to be charged for factors in addition to energy only. The grid needs voltage control and reactive power (VARS) supplies as well as a reserve (spinning and quick start together) to ensure the grid is robust and responsive to upset conditions. Thermal and hydro resources can and must fulfill these requirements and should be compensated for doing so. Wind and solar provide essentially none of these required resources. In MISO I believe these are called ‘ancillary services’, but the compensation for providing them is paltry. Its like a cocktail party, but besides the booze, someone has to bring the ice and glasses and mixers and tables and chairs and the bartender, etc. etc.

    • I’ve yet to meet an elderly person who prefers being frozen and hoping that someone can dig through a 10 foot snow drift to being too warm. Every one I’ve met has the heating set to ‘ludicrous’.

  11. By remarkable coincidence, Climate Numpties also happen to be Financial Numpties. This is what allows them to crow about “green jobs” and also about the price of wind and solar being so “cheap”, that it actually goes negative. They confuse price with cost the same way they confuse weather with climate.

    • Anyone who uses “numpties” in describing fools is alright by me. But calling the economically, maths-challenged Co2 Mongers … numpties … is sweet perfection!

  12. And here I actually got the impression that at least Texas’ wind-energy inclusion into their grid was working well. Apparently, significant inclusion of wind doesn’t work well even in a seemingly favorable area/situation. Haven’t analyzed it — maybe subsidies alone are the monkey-wrench in the works, but ending subsidies would certainly raise costs.

    • “…ending subsidies would certainly raise costs.”

      Actually, ending subsidies would lower costs and also lower taxes. After all, those subsidies have to come out of the taxpayers’ pockets.

      The problem is that the subsidies encouraged the overbuilding of energy sources while at the same time rendering the existing coal, nuclear, and gas plants less economical. The result is what you see in Texas, rising electric rates even though gas prices are falling.

      If a gas-fired generator, for example, is now only being used at 50% capacity, then regulators have to allow a rate increase on the gas-fired plant so that the owners can earn a return that attracts and holds investors. That’s just how regulated utilities are structured.

      There’s a reason that the graphs of every state and country that has gone whole-hog on wind and solar generation show the same result: More wind and solar drives higher priced electricity to the consumer.

    • And here I actually got the impression that at least Texas’ wind-energy inclusion into their grid was working well. Apparently, significant inclusion of wind doesn’t work well even in a seemingly favorable area/situation.

      It isn’t really a favorable area/situation for wind. A favorable area/situation for wind is an area where the summertime peaks are not as high as in Texas. See the graph at 7:00 minutes. Note that the graph shows very little contribution from solar, even though the solar peaks are roughly coincident with demand peaks. If he wanted to be completely honest in his portrayal, he would have included a line for “installed solar capacity”…it would show the actual solar output going right up near the installed solar capacity during those hot summer days.

      Important note: Nothing I wrote above disputes Mike Nasi’s point that the Texas subsidies for wind generation and distribution end up hurting consumers. That’s primarily because they don’t allow the building of natural gas power plants that otherwise would be viable, and threaten the viability of the nuclear power plants in Texas:

      https://www.houstonchronicle.com/business/article/Nuclear-power-woes-extend-to-Texas-13709604.php

  13. I have solar at my house. Insulation has both positive and negative effects on its performance. He should disconnect his house from the grid to enjoy a green lifestyle. That said, we should be careful to not conflate attached PV panels and the Green blight, garden windmils and the Green blight.

  14. A lack of market transparency, yes. As well as political, popular, and academic myths.

    That said, the drivers are green and renewable. The converters are Green and disposable.

  15. Cost Shifting From Millionaire Owners to Struggling Ratepayers and Taxpayers
    http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar

    Clever multi-millionaires have known about wind and solar being much more expensive compared with existing generation (coal, oil, gas, nuclear, hydro, etc.) for at least 25 years.
    https://www.instituteforenergyresearch.org/wp-content/uploads/2019/06/IER_LCOE2019Final-.pdf

    By beating the drums of climate change and global warming, and using clever lobbyists in the halls of Congress and State legislatures, they were able to get all sorts of goodies, such as upfront cash grants, upfront tax credits, low-cost loans, generous, above-market, feed-in tariffs, production tax credits, and loan interest and asset depreciation write-offs to avoid paying income taxes.

    All that enables them, and others to claim wind and solar is equivalent and competitive with other workers. What more could these millionaires ask for?

    Cost Shifting: Here is a partial list of the costs that were shifted, i.e., not charged to wind and solar plant owners, to make wind and solar appear less costly than in reality to the lay public and legislators.

    1) The various forms of grid-stabilizing inertia (presently provided by synchronous gas, coal, oil, nuclear, bio and hydro plants).

    2) The filling-in, peaking and balancing by traditional generators (mostly gas turbines in New England), due to wind and solar variability and intermittency, 24/7/365. Their random outputs require the other generators to inefficiently ramp up and down their outputs at part load, and to inefficiently make more frequent starts and stops, which also causes more wear and tear, all at no cost to wind and solar owners.

    The more wind and solar on the grid, the larger the required up and down ramping of the gas turbines, which imparts added costs to owners for which they likely would not be paid: And the wind and solar erratic output is coddled by government programs and subsidies!!

    Owners of traditional generators:

    – Have less annual production to cover power plant costs, which jeopardizes the economic viability of their plants.

    – Are left with inefficient remaining production (more fuel/kWh, more CO2/kWh), due to up and down ramping at part load, and due to more frequent starts and stops, which leads to less fuel and CO2 reduction than claimed, and increased costs for owners. See URL
    http://www.windtaskforce.org/profiles/blogs/fuel-and-co2-reductions-due-to-wind-energy-less-than-claimed

    – Have more wear and tear of their gas turbine plants, which further adds to owner costs

    NOTE: All of this is quite similar to a car efficiently operating at a steady 55 mph, versus a car inefficiently operating at continuously varying speeds between 45 mph to 65 mph, and accelerating for frequent starts and decelerating for frequent stops.

    3) Any battery systems to stabilize distribution grid with many solar systems. They would quickly offset downward spikes due to variable cloud cover. See URL.
    http://www.windtaskforce.org/profiles/blogs/large-scale-solar-plants-require-large-scale-battery-system

    4) Any measures to deal with DUCK curves, such as a) daily gas turbine plant down and up ramping, b) utility-scale storage and c) demand management.

    NOTE: GMP in Vermont, has determined 70 of its 150 substations will eventually need upgrades to avoid “transmission ground fault overvoltage,” (TGFOV), if more solar is added per requirements of the VT Comprehensive Energy Plan. This is nothing new, as utilities in southern Germany have been dealing with these issues for over ten years, which has contributed to German households having the highest electric rates (about 30 eurocent/kWh) in Europe.

    5) Grid-related costs, such as grid extensions and augmentations to connect the remotely distributed wind and solar, and to deal with variable and intermittent wind and solar on the grid. Those grid items usually are utilized at the low capacity factors of wind and solar, i.e., a lot of hardware doing little work.

    6) Utility-scale electricity storage (presently provided by the world’s traditional fuel supply system).
    https://www.neon-energie.de/Hirth-2013-Market-Value-Renewables-Solar-Wind-Power-Variability-Price.pdf

    The above 6 items are entirely separate from the high levels of direct and indirect subsidies. They serve to make wind and solar appear to be much less costly than in reality. See sections 1 and 2 and Appendix.

    All that enables wind and solar proponents to endlessly proclaim: “Wind and solar are competitive with fossil and nuclear”.

    Example of Cost Shifting: For example, to bring wind electricity from the Panhandle in west Texas to population centers in east Texas, about 1000 miles of transmission was built at a capital cost of $7 billion. The entire cost was “socialized”, i.e., it appeared as a surcharge on residential electric bills. Wind in Texas would have been much more expensive, if the owning and operating cost, c/kWh, of those transmission lines were added to the cost of wind.

    Example of Cost Shifting: Often the expensive grid connection of offshore wind plants, say from 20 miles south of Martha’s Vineyard, across the island, then about 7 additional miles under water, and then to the reinforced mainland grid, is not separately stated in the capital cost estimates, i.e., all or part of it is provided by the utilities that buy the electricity under PPAs to make PPA-pricing appear smaller than in reality. That cost would be “socialized”, i.e., it appears as a surcharge on residential electric bills, or is added to the rate base.

    Wind and Solar Wholesale Prices in NE: Here are some wholesale prices of wind electricity RE folks in New England, especially in Maine, do not want to talk about. They would rather dream RE fantasies, obfuscate/fudge the numbers, and aim to convert others to their dream scenarios, somewhat like religious missionaries. See table 2.

  16. The concept that solar and wind is cheaper than fossil fuel generation is actually impossible if 24/7 back up is required. If A is the cost of renewables and B is the cost of 24/7 backup A+B can never be less than B alone. Every country that has introduced a high level of renewables into the grid at the expense of base load has higher electricity costs than their less green neighbours. France with 70% nuclear compared to Germany ( which has been shutting down nuclear and building more renewables is a good example with energy costs about half the level of Germany.
    What’s frightening about this is that it’s not just about cost it’s also the intermittency. Countries or states that rely too much on renewables have to import electricity from neighbors . This works until your neighbours also close down base load generation and introduce renewables. In Australia green influenced governments have taken hold in many of the states and introduced renewables at a rapid rate.Those states increasingly rely on importing power from those where they haven’t blown up the coal fired power stations. Planned closures of coal fired plants over the next few years if not reversed will totally destroy our reliability. This issue if not reigned in by changes of governments will be disastrous in both costs and reliability. Even with the damage so far we have seen a huge exit of manufacturing capability in Australia which is never coming back.

    • Not quite true. You have to split between fixed and variable cost, and look at the patterns of demand. A cheapest overall solution can use a low fixed cost (mainly capital cost per MW of capacity), high fuel cost (because it may not be particularly efficient) source to meet rare demand peaks, such as an open cycle gas turbine, or a diesel generator. Nuclear is the opposite extreme: high fixed cost, and tiny fuel cost, which means it is most economic when run steadily in between fuel changeouts: you would not choose nuclear to meet demand peaks and require it to shut down. Filling in for wind intermittency is a game of chance, since there can be significant variations in average wind output even at an annual level. If the cost of wind is low enough it might make some sense to include some wind on your grid. However, as the proportion of wind rises, it starts imposing other costs. The cost of wind itself starts to rise when you have to curtail output (storage is simply uneconomic on anything other than a very short term basis). That happens quicker if you have baseload nuclear running, because wind must curtail during periods of low demand since nuclear is not so easily flexed. As wind capacity increases, more and more hours of demand get exceeded when the wind blows. By the time wind capacity is theoretically enough to meet peak demand, marginal curtailment of the marginal wind farm is likely to be running around 50% of its output, effectively doubling its cost. At two thirds of generation on average from wind, you are looking at marginal curtailment rising towards 75%, making the usable output four times as expensive. Meanwhile you are adding costs for the intermittent operation of backup.

  17. Design an electricity network to provide 50% of power requirements on average from wind mills and 50% from gas generators.
    At 30% average capacity factor, that means you must have 170% generator capacity on top of all those tall towers and a widely distributed grid able to cope with variable outputs.
    On occasions, with strong winds, those generators will supply 100% of demand – but in fact they can’t because of inadequate system synchronization, so they will be curtailed to about 75% of demand.
    But what happens when the wind doesn’t blow? 100% of power demand must be met by reliable gas generators. But on average those generators will be curtailed to run at 50% capacity factor.
    So to meet average demand, investors have installed a total of 270% generator capacity that on average will only operate at 40% utilization. Those investors will get their return on capital through higher electricity prices.
    Now tell me again about lower cost “renewables”?

  18. The true cost is starting to hurt. Politicians will have to make a decision to either slap some more billions on RE or to maintain a minimum social safety net. People around the world feel that ends don’t meet at the end of the month. Every month. And as I know politicians, they will overshoot as sure as I am sitting and typing now and things will get out of control. I am not surprised RE advocates panic.

  19. Looking at the EIA data on electricity generation in Texas it seems that they are still some way off the kind of renewables penetration that produces larger scale problems. Demand is significantly seasonal, and you can add on top diurnal variations that mean that the average load is substantially below the peak, which means that even absent wind there is significant ramping and periods of lower utilisation of the generating fleet. However, the proportion of wind in the supply on a monthly average level remains subdued, varying between 10% and 23.5% over the past year, with peak values in late winter and spring. Wind output falls over the hot summer months when demand is highest, so this exacerbates the variations that have to be met by dispatchable generation. Wind capacity is only just about reaching minimum overnight levels of demand above which curtailment starts to kick in.

    If you think you’ve got problems now, you ain’t seen nothing yet. Look at South Australia.

  20. I don’t understand that the toxic nature of renewable energy is rarely discussed, though the other negative aspects are well covered here. In Australia the greenies and the left followers are keen to close down all coal mines. We don’t have any nuclear power and little in the way of Hydro electricity, right now we have little enough water for essential needs of humans and animals, at least inland.
    My point is that people pushing for green energy don’t realise that there is nothing ‘clean’ about it and there are not less but more mines involved, in our case most of them happen to be in China. The open mines there are vast and the toxic waste is horrendous. Sulfuric acid is used to extract the necessary rare earth materials, cadmium and lead to name only a few. The lake next to one of the processing plants there contains 10 square kilometres of black toxic sludge that is quite close to villages.
    The solar panels become toxic waste when damaged and are ending up in landfill. We do not have recycling plants here in Australia, at this point only one has started up in South Australia and is merely a collection (at cost) centre with a view to going into production some time in the future. That is if they can ever find a way to recycle these panels in a safe and profitable way, there are some pretty nasty chemicals used in this process too.
    This story just keeps on giving. SF6 is a manmade product used as a fire retardant for electrical components. It has been around for decades and was used in many industries because it was cheap and readily available. At some point they discovered that much of it was leaking into the atmosphere and that it was accumulating at an alarming rate. It was decided that it’s use be banned in all but the electricity industry as a replacement product that worked as well wasn’t available. A decision was made on a global level that any leakage must be reported, but of course that rarely happens. SF6 levels are however measured in the atmosphere on a regular basis and are found to be increasing at a rapid rate. The use of SF6 has increased dramatically with the extra electrical connections required for renewable energy. SF6, unlike Co2, is not absorbed. It simply accumulates. SF6 is tens of thousands more toxic as a greenhouse gas than Co2 and is on the increase.
    What part of this is clean, green and free? Please someone tell me what part of this is good for anyone?

    • SF6 is non-toxic, but can be an asphyxiation risk if large amounts are inhaled, because it is heavier than air and will settle in the lungs. It is a potent greenhouse gas, but because of very low concentrations in the atmosphere (<10 ptt), its contribution to putative greeenhouse warming is estimated to be only 0.2% of the total effect of all greenhouse gases. It does have a long estimated residence time in the atmosphere, but in the grand scheme of things, it's nothing to worry about. (Of course, in the grand scheme of nothings, there is no cause to worry about CO2 either.

      • Thanks for the information Greg. My point though is why add ever increasing amounts of a substance (with renewable energy) that is not absorbed? I was never worried about co2 but SF6 is ‘manmade’.
        I guess I was trying to point out the huge environmental costs of renewable energy, at every stage. And for what? The greenies claim it will save the planet as it’s so very clean, what rubbish!
        Australia’s manufacturing industry has already reduced significantly, without coal our country will be in serious trouble. You cannot operate large scale manufacturing on renewable energy. An aluminum smelting plant has had to close it’s doors in South Australia, they had been expected to shut down operations in times of ‘electricity’ glitches, brought about by unreliable renewable energy!

        • re: “I was never worried about co2 but SF6 is ‘manmade’.”

          Questions: Megs, do you know the what and why SF6 is used?

          Do you know that you use it everyday, renewables or no?

          • I mentioned in my original post that it has been around for decades. Since WW2 I believe. I mentioned that it was widely used but that it was banned for use, except in the electricity industry many years ago. It’s used as a fire retardant for electrical connections. I also mentioned that leaks of SF6 are required to be reported, on a global level and that it’s levels in the atmosphere are being monitored, and have been found to have increased significantly in recent decades.
            The point here is that without renewable energy SF6 would not be increasing at such a rapid rate.

          • re: ” It’s used as a fire retardant for electrical connections. ”

            Well, not exactly. Or, maybe as an ancillary, but primarily it is used a high voltage dielectric and insulating gas in HV electrical switching equipment. Most every live-circuit interrupting breaker ‘in the yard’ over in the substation serving your area is filled with SF6. Do a search on SF6 and breakers for more info.

            The alternatives are oil-filled breakers or breakers with fan-powered arc-quenching ‘stacks’, these types are larger and were originally installed when they first emerged on the scene +100 years ago.

            My concern is that un-knowing civilian, non-professional ‘laymen’ advocating against such compounds as SF6 will end up getting those compounds banned THEN we are back where we are when the space shuttle lost critical insulating tiles on account inferior materials being used as substitutes.

          • Jim at no point did I suggest that SF6 had ‘no place’ in this world, I was merely trying to point out that due to renewables it is ending up in the atmosphere unnecessarily! Without renewable energy it would not be increasing in the atmosphere at an exponential rate. It’s the renewables that haven’t been thought through. Renewable energy is not beneficial to anyone but the developers, they build it, sell it, then move on to the next sucker, taking tax payer subsidies with them! The jobs are few and short lived. There is the mess left behind when sourcing and processing the materials (which few people know or care about), damaged panels ending up in landfill and the lack of recycling taking place. Recycling in itself is a toxic process and there are going to be billions of them discarded very soon. Recycling plants are almost non existent.
            You see as I mentioned, I was aware that SF6 has been around for a very long time. I mentioned that it’s now used almost exclusively in the electricity industry. I mentioned that it was banned for use in other areas to make a point that adding to it unnecessarily cannot be good. And as pointed out by Greg, and which I also happened to know, at this point the amounts that are in the atmosphere are quite low.
            So don’t be so cranky with me, you should be more worried about the monitored amounts that are growing in the atmosphere due to ‘renewables’, causing concern to the scientists who keep track of such things.

          • I thought I was rather even tempered, and I spoke my mind, addressed my concerns. No man should do less. You haven’t seen me anywhere near “cranked up.”

  21. The biggest problem with so called renewables is their performance! Or lack thereof!
    I expect my car to perform at all times, to it’s designed parameters.
    I expect my internet connection to perform.
    I expect my electricity connection to perform.
    Wind and solar do not perform! They cough, spit and fart to the whims of the weather Gods!
    And this is our future? God have mercy!

  22. Solar generation is an interesting study in energy economics.

    Everyone is aware of the inherent shortcomings of solar; it’s lack of despatchable output.

    But, the promotion, and proliferation if domestic solar generation makes this even more fascinating (i.e. problematic).

    Think of the one thing you could do to make a non-desptachable electricity generation technology even more destabilising for the grid. Answer: you would legislate and regulate to create the demand for electricity more negatively correlated with supply.

    When commercial solar plants are able to provide lots of electricity, households won’t want it (in fact they will be feeding in from their own systems).

    When commercial solar plants are unable to provide any electricity, households will be dramatically increasing demand, because their own systems will also be producing nothing.

    I see little discussion of this problem, or even alack of realisation that polticians and regulators are forcing this on the market.

    • “you would legislate and regulate to create the demand for electricity more negatively correlated with supply.”

      And bias the production market for variable highly cost production units (gas) and against those with less variable cost (coal) and more so against those with huge fixed cost minuscule variable cost (fission).

      Now that’s what a fossil fuel (singular) subsidy (a subsidy for A fossil fuel) looks like.

    • re: “Casually examining recent historical rates in Texas, I don’t see any significant price spike in residential prices from 2015,”

      WHAT are you examining?

      Your bills?

      I’ve been paying on the order of 14 c per kWh, plus the 3 to 4 c per kWh transport charge.

      Plus taxes and incidentals.

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