Guest “why?” by David Middleton
Why? Because California…
OCTOBER 9, 2020
Solar photovoltaic generators receive higher electricity prices than other technologiesIn 2019, the average U.S. wholesale price for electricity generated by solar photovoltaic (PV) technology was significantly higher than average wholesale prices for electricity from other technologies. The weighted average wholesale price for solar PV-generated electricity was $83 per megawatthour (MWh) in 2019, more than double the price paid to producers for electricity generated by wind, fossil fuels, or nuclear. The higher average wholesale price for solar PV relative to other technologies is partly driven by geography and timing.
Wholesale electricity prices are the prices that electricity retailers, such as utilities, pay electricity producers, such as power plant owners and operators. In wholesale markets, the price of electricity changes based on changes in electricity demand, the price of fuels that power plants use to generate electricity, and the availability of the generation fuel sources. These prices are calculated as the revenue that generators receive in wholesale power markets divided by their technologies’ electricity generation and do not reflect the cost of building the power plants or the cost of generating electricity.
About one-third of all U.S. solar PV capacity is located in California, where the average wholesale electricity price across all technologies was $74/MWh in 2019, more than double the national average of $36/MWh. The weighted average wholesale solar PV price in California was $100/MWh, or more than 20% higher than the national average for solar PV. Because California had the most PV capacity in the country, the state’s higher wholesale electricity prices contributed to solar PV’s higher national average price.
Wind farms in Texas, Oklahoma, and Kansas collectively produced 45% of total U.S. wind generation in 2019. The average wholesale wind price in these states was $26/MWh compared with $47/MWh for wind generation in all other states. Wholesale wind prices in Texas, Oklahoma, and Kansas tend to be lower because their favorable wind resources lower wind generation costs.
Wholesale electricity prices are generally higher when electricity demand within an area is greater. Because consumer demand for electricity varies throughout the day, the time of day when generation occurs also influences wholesale prices. Solar PV only generates electricity in the daytime, when electricity demand and wholesale power prices tend to be higher, but wind turbines generate electricity whenever the wind blows and tend to reach their greatest output overnight. In 2019, more than half of wind generation occurred at night, resulting in lower average wholesale prices for wind-powered electricity than solar-powered electricity.
Principal contributor: Eric Harrison
Tags: prices, generation, electricity, solar, wholesale prices
US EIA
Funny thing… The wholesale price paid for solar PV generated electricity in Texas, Oklahoma and Kansas is lower than the average wholesale price from all sources in California…
But, it’s still higher than the other sources in those states… Why?
Because solar power doesn’t work late at night, when demand is lowest. It works best in mid-afternoon, when demand and prices are high… Then it crashes just before demand peaks, creating the “duck curve”.
Confronting the Duck Curve: How to Address Over-Generation of Solar Energy
OCTOBER 12, 2017In 2013, the California Independent System Operator published a chart that is now commonplace in conversations about large-scale deployment of solar photovoltaic (PV) power. The duck curve—named after its resemblance to a duck—shows the difference in electricity demand and the amount of available solar energy throughout the day. When the sun is shining, solar floods the market and then drops off as electricity demand peaks in the evening. The duck curve is a snapshot of a 24-hour period in California during springtime—when this effect is most extreme because it’s sunny but temperatures remain cool, so demand for electricity is low since people aren’t using electricity for air conditioning or heating.
The duck curve represents a transition point for solar energy. It was, perhaps, the first major acknowledgement by a system operator that solar energy is no longer a niche technology and that utilities need to plan for increasing amounts of solar energy. This is especially true for places that already have high solar adoption, such as California, where one day this past March, solar contributed nearly 40% of electricity generation in the state for the first time ever.
UTILITY CHALLENGES
High solar adoption creates a challenge for utilities to balance supply and demand on the grid. This is due to the increased need for electricity generators to quickly ramp up energy production when the sun sets and the contribution from PV falls. Another challenge with high solar adoption is the potential for PV to produce more energy than can be used at one time, called over-generation. This leads system operators to curtail PV generation, reducing its economic and environmental benefits. While curtailment does not have a major impact on the benefits of PV when it occurs occasionally throughout the year, it could have a potentially significant impact at greater PV penetration levels.
While the mainstream awareness of these challenges is relatively recent, the U.S. Department of Energy’s Solar Energy Technologies Office (SETO) has been at the forefront of examining strategies for years. Most of the projects funded under SETO’s systems integration subprogram are performing work to help grid operators manage the challenges of the duck curve.
[…]
US Office of Energy Efficiency & Renewable Energy
The more solar PV capacity added to the grid, the deeper the “duck curve”…
From about 9:00 AM to about 5:00 PM, solar power displaces other generation sources. As the Sun goes down, other sources have to ramp up in order to meet peak demand. The more solar in the grid, the steeper the ramp.
This actually creates a situation where solar PV could wreak even more havoc on our electrical grid, with or without government subsidies.
Based on the average wholesale prices received and the capacity-weighted levelized cost of electricity can expect to generate a profit of over $54/MWh, including nearly $9/MWh in tax credits.
While the averages aren’t truly representative because the actual costs and revenues vary widely geographically and by the manner in which the technologies are applied, the market is clearly encouraging the over-build out of solar PV power plants. Fortunately, most utility companies realize that, despite the falling construction costs, the Sun doesn’t always shine…
Natural gas
US EIA
Compared with other generation technologies, natural gas technologies received the highest U.S. investment in 2018, accounting for 46% of total capacity additions for all energy sources. Growth in natural gas electric-generating capacity was led by significant additions in new capacity from combined-cycle facilities, which almost doubled the previous year’s additions for that technology. Combined-cycle technology construction costs dropped by 4% in 2018 to $858 per kW.
Read today’s IEA report and stop these lies
What lies?
Yes I don’t get it the report does not contradict anything you posted it basically just tries to suggest we should be doing different paths with “ifs” and “we coulds”. The basic problem with the report is does little to explain why we should do what the things other than some implied Social Justice the only definitive statement they make was “The worst effects are felt among the most vulnerable”. If you don’t believe the whole social justice story then the IEA report just reads like a fairytale and you too can find the pot of gold at the end of the rainbow.
Got a link?
https://www.iea.org/reports/world-energy-outlook-2020
This IEA report reads like a horror story. Despite this years horrendous slowdown due to coronavirus it still isn’t enough to produce serious decline (in world heat wave?). That is the punchline in the joe houde “lies” comment. That’s right, they want the world economy damaged more than this pandemic episode, because, you know, tipping points, mass extinctions, and things that go bump in the night.
Bingo, Ron!
The IEA is a political organization posing as an energy information agency.
Joe , you might like to look at the latest piece from Paul Homewood https://notalotofpeopleknowthat.wordpress.com/2020/10/13/telegraphs-latest-renewable-puff-piece/
where he criticises misleading information from the Telegraph on the future of global solar power.
-“In reality solar power is still tiny in global terms, producing just 1% of the world’s energy, and there is little sign of this changing:”-
and:
-“As ever, the bellwether is China, where new build solar installations have been steadily declining since 2017, due partly to withdrawal of subsidies, but also because intermittent solar power is of little value.”-
(link: https://chinaenergyportal.org/en/2020-q2-pv-installations-utility-and-distributed-by-province/ )
and:
_” It is quite likely that China’s solar capacity could double by 2030, but this would still only enough to generate 6% of China’s power, even if demand remained the same as now.
It is a pity the Telegraph’s reporter did not have the gumption to point out any of these facts-“.
Does anyone believe China uses any solar?
If I was them I wouldn’t waste my time with solar and wind.
They make a lot of money building solar panels and selling them to suckers like us.
They built something like 53 GW of coal last year.
From the IEA report …
“Renewables grow rapidly in all our scenarios, with solar at the centre of this new constellation of electricity generation technologies. Supportive policies and maturing technologies are enabling very cheap access to capital in leading markets. With sharp cost reductions over the past decade, solar PV is consistently cheaper than new coal- or gasfired power plants in most countries, and solar projects now offer some of the lowest cost electricity ever seen. In the STEPS, renewables meet 80% of the growth in global electricity demand to 2030. Hydropower remains the largest renewable source of electricity, but solar is the main driver of growth as it sets new records for deployment each year after 2022, followed by onshore and offshore wind. The advance of renewable sources of generation, and of solar in particular, as well as the contribution of nuclear power, is much stronger in the SDS and NZE2050. The pace of change in the electricity sector puts an additional premium on robust grids and other sources of flexibility, as well as reliable supplies of the critical minerals and metals that are vital to its secure transformation. Storage plays an increasingly vital role in ensuring the flexible operation of power systems, with India becoming the largest market for utility-scale battery storage.”
https://www.iea.org/reports/world-energy-outlook-2020
It appears that the “cheap access to capital” is key to any cost estimate that includes capital intensive construction and a long horizon. This low cost capital is often enabled by government backing of bond sales. How many readers remember WPPSS?
Washington Public Power Supply System (WPPSS)
https://bit.ly/3jXLMO3
Prediction is hard — especially about the future.
“In the STEPS, renewables meet 80% of the growth in global electricity demand to 2030. ”
So we need an extra 20% of fossil fueled fired plant?
” The pace of change in the electricity sector puts an additional premium on robust grids and other sources of flexibility,”
Other sources of flexibility are what?
Jim
“Other sources of flexibility are what?”
Ummm –
‘Smart meters’ – ones that cut off your supply of electricity – partly or totally.
Next question.
Auto
A bum boatie
If you include the costs of babysitting nuclear waste for 250,000 years, nuclear power comes out as economically not feasible.
That top graphic image is sobering, it’s the precise opposite of what renewables apologists constantly assert. Solar shmolar.
The cost of building solar power and wind power plants is declining. The LCOE is now comparable to natural gas. The problem is that solar only works during the day and wind only works when the wind is just right. The wind in Texas, Oklahoma and Kansas is “just right” a lot more often than it is in California.
Solar receives a higher wholesale price because it only works when demand and prices are high… But it fades right at the time of peak demand. This is usually filled in by combustion gas (peaker) power plants, which have a high LCOE, but take advantage of higher peak prices.
It creates a bizarre incentive to over-build solar power plants.
Thanks for this post – as usual, quite informative. One question, is the cost of back-up power required for when the sun does not shine and the wind does not blow (or blows too much) factored into this analysis, or is that an additional cost that needs to be considered?
My favorite figure is Energy Return On Energy Invested (EROEI). Even if you don’t care when you get electricity, the EROEI for solar is so bad that it’s not a viable way to power society. EROEI cliff
The complaint about solar used to be that photovoltaic cells would never generate enough energy to build their replacements. Apparently that’s no longer true. Even so, after a photovoltaic panel has supplied the energy to build its replacement, there isn’t enough left for all of society’s other needs.
I can’t help but think that the any reason it is in the ballpark of natural gas right now is regulatory red tape from the time before you put a drill bit in the ground to building a pipeline to deliver that gas. If renewables were held to the same environmental standards as fossil fuels then they probably wouldn’t come close to breaking even.
Calculating LCOE for wind and solar is a charade since the hidden cost of hot standby power is not included. From a systems standpoint, intermittent power backs out conventional sources without reducing their capital, operations, or maintenance costs. Regardless of the costs for wind and solar power, their VALUE is at most the avoided fuel costs for the standby generators.
David: I think it’s instructive to look at use cases where solar actually makes sense. For example, solar hot water is much more efficient than solar PV because it makes use not only of visible light but of the considerable solar energy in the near infrared. And it provides its own energy storage in the form of a hot water tank that is usually sized to last through a few cloudy days. Works pretty well if frequent hard freezes aren’t an issue. It can be cost effective.
Solar also makes sense if you need a small amount of power in a location where grid attachment is impractical and lugging generator fuel periodically would be a problem because of the labor cost. For example some of the electric warning signs “ROAD WORK 8:00PM TO 5:00AM FOR ALL ETERNITY. FINES DOUBLED.” here in Vermont look to be solar powered.
I think solar PV might also be cost effective in some remote locations. e.g Pitcairn Island — a zillion miles from anywhere. Small population — about 60. Limited technical skills — the only guy who can repair the diesel generators is said to be getting on in years. No fossil fuels. No airport. No harbor. Very limited capacity to earn money to buy fuel — they export some honey . No, I’m not making this up.
How about Hawaii? Nearest fossil fuels are 2700 miles away and are none too plentiful there. Electric rates are high in Hawaii.– 0.25$/kwh on Oahu. Up to 0.40$/kwh on the other islands. A lava flow ate the injection wells for the geothermal plant on the big island a couple of years ago. Hawaii is tropical, so Winter sunshine and snow/ice cover shouldn’t be a problem — at least at low elevations. Surely solar PV can be cost effective there long before it is cost effective on the mainland?
“I think it’s instructive to look at use cases where solar actually makes sense.”
Definitely as solar power works with storage and HWS and reverse cycle aircon are no brainers in that regard as batteries can’t cut it-
https://www.solarquotes.com.au/blog/divert-solar-air-conditioning/
Otherwise solar is dumping on the communal grid with beggar they neighbour costs
One of the largest rooftop solar installation companies in Hawaii filed for bankruptcy earlier this year. Sunetric shutdown in February — see here.
Rooftop solar PV would seem to make sense in Hawaii, at least on the Western sides of the islands which get a lot of sun. Rooftop solar hot water is fairly common and seems to work well. Given the higher cost of conventional generation (all fuels have to be shipped 2,500 miles from the mainland), wind and solar generation enjoy more of a cost advantage than on the mainland. Even so, the trade winds go still for extended periods and solar PV produces nothing or essentially nothing for 14 hours out of 24. Hawaii has the highest electricity prices of any US state.
Inter-island power cables have been discussed as far back as Thomas Edison’s day, but so far it has never made economic sense, so essentially each island needs to generate all the power it uses. For small islands with lots of resorts (such as Maui), there simply isn’t enough land area for wind/solar facilities to meet the power demand.
On the big island there are large areas of lava fields which could host PV solar, probably relatively cheaply. But a lot of solar would amplify the duck curve with a vengeance.
Hawaii is probably the most favorable environment for wind and solar anywhere in the US, and they still can’t get away from fossil fuels.
Fun fact – wind comes sweeping down the plains because Oklahoma sucks. I guess that works well for energy production that sucks as well.
You’re doin’ fine, Oklahoma!
Oklahoma, O.K
I would be much more interested in the cost of genetating a specified amount of solar and wind energy, including subsidies paid for by taxpayers and/or electricity customers, back up fossil fuel plants, and amortized capital costs. How does the wholesale price tell us the whole story?
And of course, the cost of “wind and solar” doesn’t include the cost of integration into the grid.
This tends to be VERY expensive and are certainly never considered by the renewable shills and propagandists.
The report is total price paid by utilities for renewables such as solar in 2019. The reason why solar is so high is that California was in such a hurry to add solar to their grid back in 2010-2015 that they were allowing utilities such as PG&E & Southern California Edison to pay way above market prices. As someone that worked on projects then prices were around $200/MWH in 2010ish and in 2015 were still around $150/MWH.
Over the past few years $30 per MWH or less is typical for wholesale Power Purchase Agreements (PPA’s) and in $50 MHW for projects w/ storage. All these contracts typically run for 25 years and some 30 years or more. These awful legacy solar PPA’s drive up the average wholesale price in CA summary reports.
Most of these contracts were very political and went to favored parties in bilateral negotiations that circumvented the normal open bidding process of using RFP’s. Some of the worst projects were the massive solar thermal projects in Southern California’s desserts. Some of those are in $220-$280 per MWH range. And in typical CA fashion these inflated contracts are considered proprietary information and hidden from public disclosure of the actual contract price.
California could have kept prices “reasonable” if they had open bidding and the enviro’s had not demanded that all fossil fuel and nuclear plants be prematurely shuttered. Shutting these plants that support and add value to renewables is galactically stupid public policy! Instead they declared war on carbon no matter the cost and now the bill is coming due.
Eisenhower, you sound like a wind and solar snakeoil person. Am I right? What would the power purchase agreements be without the subsidies, tax credits, grid priority, low interest rates, accelerated depreciation, no property taxes and more? 2 to 3 times more than natural gas. RE is worth less than nothing junk, give it up
Dennis G Sandberg if you deem anyone employed in renewable energy a snake oil person by default I apologize for the offense. We started our business during a recession when our choice was pivot or closing our doors and laying off the dozens of people that built our business over 30 years.
I don’t know where you live, but I live in the real world not Fantasyland. I didn’t vote for the morons in Sacramento but am still forced to live under the system the setup. I tried to be factual in my observations of the CA market and not inject any opinion or politics. I cannot help that legislators foolishly see themselves as Avenger Superheroes fighting their own Thanos they call CO2.
Businesses I work with do receive an investment tax credit at federal level and property tax exemption in state. Virtually any business investment receives 100% first year expensing (solar gets 85%). CA has hundreds of tax credits of sales tax and investment expensing. Solar does not get either, FYI.
I can disagree with policies and still make the most of our states idiocy. 99% of my customers are Trump supporters as am I, but they are happy to avoid the states unreasonably high electricity costs by self generating and reducing energy costs by 70% or so. They do this because while Fantasyland sounds awesome it doesn’t exist outside of 30 acres in Anaheim.
P.S. With $50M in new contracts the past 4 months from business seeking a break from outrageous electricity prices and ludicrous policies I’m not giving up anything soon.
Tough deal when you know what you are doing is bad for the economy and the environment but you need to make a living. No different than a conservative farmer growing corn for even worse than solar ethanol. If we as a Country were not wasting limited capital on RE I suppose we would just built more aircraft carriers which is even more insane. This can only end badly.
David,
Curious…why is Nuclear Power rates “N/A” in California?
At least until 2024 we still have Diablo Canyon
I don’t know. Texas only has 2, Kansas 1 and Oklahoma 0.
Several times I’ve asked “If renewables are so cheap, why aren’t electric rates declining, even for non-profit municipal utilities that use them?” If I get any answer, it usually claims that the savings are going in to upgrading the grid. But aren’t many of the grid updates specifically for adapting to the intermittency of renewables?
When I asked a similar question about Germany’s high electric rates, I was told that it was because of the taxes on electricity. But why sell renewables as being cheap when the supposed cost savings are taxed away?
The taxes are to fund the build out of offshore wind farms and solar power plants… Once all that’s paid for, the electricity will be free (/sarc).
The only thing outside subsidies that keeps renewable prices from going any higher is cheap natural gas.
Yep.
Germany,s high cost for electricity is because of all of the unreliable generation .
Since they changed the law in 2000 to give Wind/ Solar priority the cost for the consumer has more than doubled .
https://notrickszone.com/2014/12/07/germanys-electricity-price-more-than-doubles-electrocuting-consumers-and-markets/
And the lies about it being because of taxes is just to cover up for the fact that it has to have massive subsidies .The taxes do not even cover all of the subsidies , a lot of which come out of normal taxation .But Germany does censor a LOT of the real truth about the costs for their disastrous ENEGIEWENDE program
Video interview in German of politician / scientist Dr. Fritz Vahrenholt, who is one of the energy sceptics there against the subsidized consensus: https://www.youtube.com/watch?v=hG6fq3M_IzY
In contrast to California Germany not only wrecks its own energy market, but also its big industrial base.
Merkel and her voters have a lot on their conscience, while the Chinese laugh their heads off over this Western lefty stupidity.
The levelized cost of electricity storage using batteries is still significantly higher than generating electricity even with expensive renewables. Isn’t this like putting a Casio watch in a Rolex box?
Battery storage roughly doubles the LCOE for solar.
That’s the conclusion I reached after looking into it. Speaking of batteries, my son was in an accident with his 2016 Prius. The airbag never deployed and it looked like the front bumper and maybe some of the other panels would have to be replaced. When I asked the body shop when it would be finished, I was told that the car was a total loss because the battery suffered some damage and would have to be replaced. I was stunned. This was a hybrid. What about a fully electric car like a Tesla? And what about insurance rates?
I looked into this once. Replacement batteries for older Priuses (Prii?, Prium?) don’t seem to be terribly expensive — a few thousand dollars installed. A lot, but no worse than a new engine or transmission for an ICE car. But those are the Nimh batteries that can get you only a few kilometers (downhill with the wind at your back) on battery alone. The newer Plug-in Prius hybrids use bigger Lion technology batteries to get a range of maybe 40km on electric. Those will indeed cost you quite a bit I think.
Do I own a Prius? No. But that’s because Pruisen have minimal road clearance which is fine for many folks, but not good on rural Vermont roads
that dissolve for a week or so every Spring. Topped off by occasional short trips on off-road tracks into old quarries. Also, I typically buy reconditioned “Salvage-Title” vehicles at half the price of new and drive them until the road salt makes repairs impractical. There’s never been a Prius on the lot on my rare car shopping trips.
This was a plug in hybrid.
I suspect it’s a lot more than that if you have no fossil fuel backup. How many extra panels do you need to recharge the batteries in a Minnesota winter? Must be a trade off between battery capacity and solar generation capacity.
Found it, Diablo Canyon, per PG&E generates electricity at a rate of 1.6¢ – 2.78¢ per kilowatt-hour or $16 – $27 per MW
$16 – $27 per megawatt HOUR, please.
I assume those costs for solar and wind power ignore the fact that the general population is responsible for paying for disposal at end of life whereas cost of removal/disposal is included in cost for nuclear and fossil fuels?
All of the costs ignore that… Renewables, fossil fuels and nuclear.
Hi David
I think you will find that nuke does include eol..or decommissioning cost, as it is mandatory. The kwhr rate qouted,however,may be operational out the door price as opposed to the fully integrated price..containing decommisioning ,capital,etc. At the two nukes I worked at,the full going forward price (included all costs) was about 3 c/kwhr…they were both shut down early… I simply have no way to reconcile such actions… insanity is the only explanation, but this is the reality none the less. Occams Razor.
Regards
Ethan Brand
I also worked at two nukes that were shut down – San Onofre and the VC Summer AP1000s.
Hi Kevin
I did a bit of post shut down contract work at both plants….fire related..sad…was all to happy to retire…way too much lunacy. I think it’s like discussing justice at a Salem Witch trial… where does one even start.
Regards
Ethan Brand
Yep… Once up and running, nuclear power generates very inexpensive electricity.
And (generally) reliable base load supply….which, apparently to the warped of mind, is bad.
I now spend some of my time cutting logs with a 100 year old saw mill…a business model which should be very familiar to wind and solar adherents…:)
Regards
Ethan
How much does it sell for at night?
Well, if you specifically want to buy solar, an infinite cost, cause there aint none available at any price.
I would definitely want to sell it for infinity.
It’ll beat any competitive price divided by zero.
What about fusion. 2025 they say
https://www.google.com/amp/s/www.fool.com/amp/investing/2020/10/11/americas-first-nuclear-fusion-reactor-online-2025/
Ha ha!
If we ever managed to get fusion to work, it would take 10 years minimum to build a new plant.
Even if fusion was a viable form of cheap power the greens I bet would be against it. In the end I believe they actually are against cheap energy because energy powers industry. They think humans use too much energy, no matter what the source.
2125 at best for commercial fusion, 2050 for molten salt, 2030 for NuScale small scale modular reactors. If anyone disagrees please post a timeline.
Since I was a kid in the 1950’s fusion has always been 10 years away. I guess 5 years is an improvement.
David, thanks once again for an informative and easy-to-read post.
Regards,
Bob
PS: Stay safe and healthy, all.
The cost of Wind is greatly underestimated in Texas. We have to keep building new power grid feeds to get to these wind farms, and whenever I check the costs of doing this are not factored in – I guess someone else (that taxes or charges consumers) is paying for them. With Wind, at least you have the chance that it will produce electricity at peak usage times, but still no guarantee so reliable power stations still have to be idle but available.
What a complete and utter waste of resources, money, and landscape. AND, we get to clean all this up in 20 years. Wheee…
I have been led to understand that the turbine blades have limited life and need periodic replacement. How does this factor in to the cost?
Waste of landscape is the big one for solar. Land use change does more environmental harm than most other human activities, and there is no bigger land use change than blanketing the area with solar panels.
Is this statement correct? My understanding has always been that renewables have grid priority and therefore when capacity exceeds demand conventional power is curtailed, not renewables.
copy
Another challenge with high solar adoption is the potential for PV to produce more energy than can be used at one time, called over-generation. This leads system operators to curtail PV generation, reducing its economic and environmental benefits
Renewables often get grid priority, it varies from state to state; but partially explains why they often garner a higher wholesale price.
And explains why coal fired generators are losing profitability due to being forced to sell less power at lower prices?
David Middleton, Really? I can’t imagine a wind or solar investment being successful without grid priority. Any specific place where it is?
This is what I wrote…
How is the wind suddenly equal to fossils?
I want to see proper economics, not this Mickey mouse unit comparisons. Show me a specific project economics instead of this. OPEX and Decommissioning costs, what are these?. Costs of batteries, not just capital costs. Most of the new oil projects are break even at US$ 40 per barrel or higher, hence no new ones coming on line with only infill or satellite developments coming on stream. But this approach is not creating new significant production. Established production facilities can produce profitably at 10US$ per barrel, particularly in the Middle East. This will never be equal by renewables on the open market. Hence these are doomed in the medium to long term.
Fireman, like the headline of this posting states RE is 2 to 3 times more expensive. If battery storage is added to provide a few minutes for an idling gas turbine to come up to speed it doubles again. If sufficient battery is added to get through the four hour, high demand, low solar output, early evening time frame it more than doubles again. Now you’re looking at 10X per mW.hr cost of simply using a gas turbine. You can see that proving sufficient storage for a cloudy week isn’t “viable”.
I have to say I am more than surprised by these figures. I took a look at what CASIO reported here:
http://www.caiso.com/Documents/Market-Performance-Report-Jun10-23-2020.html
where we see that afternoon prices at the weekend even go below zero, and the duck curve forces prices down in the middle of the day during peak solar production. Prices soar as the sun sets and demand hits peak levels. Doesn’t seem to be any better in winter:
http://www.caiso.com/Documents/WeeklyMarketPerformanceReport_2020-01-22.html
or fall:
http://www.caiso.com/Documents/MarketPerformanceReport_09_16_29_2020.html
These price profiles would suggest that solar has a much lower value than other generation, and the highest prices will accrue to peaker plants. Perhaps the reported figures relate to feed in tariff payments. The difference between what they are paid and what the output is worth then represents part of the subsidy paid to solar installations.
You’re probably right to some extent.
I’ve done detailed sums in the UK grid by half hour settlement period, where the solar impact is much less. It still comes out as the lowest value output consistently, below nuclear although that runs all night during low demand, and below wind, despite wind surpluses occurring mainly at night (but the data do not allow for curtailment costs, which should be viewed as negative revenue from a market value point of view).
Really not sure how the EIA made up these numbers.
I wonder why the duck curve doesn’t cause more of a flap.
Its potential to increase one’s bill could certainly foul up one’s financial situation.
I think it does. I can’t work out what the figures are supposed to show – no trace back to data I can find. Checking out CASIO pricing the duck curve is capable of turning prices negative during high solar output.
I’ve a post in moderation with links to CASIO price data.
David Middleton, I’ve read your many postings over the past couple years and I’m surprised you rely on and defend the EIA as a reputable source. What about the “Utah Study”:
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A 2016 Utah State University study shows the following extra costs omitted or miscalculated by the EIA for wind power: 15-years not 30-year life expectancies (US 7¢ per kWh), backup power (at least 2.3¢ cents if the back-up is natural gas), transmission costs (2.7¢), government subsidies (23¢). All that means the real cost of wind power is a staggering 43¢ per kilowatt hour! That’s seven times the cost of natural gas-generated electricity! What family, factory, hospital, office, church or school can afford this?
http://www.usu.edu/ipe/wp-content/uploads/2016/04/UnseenWindFull.pdf
EIA is just numbers.
The problem is, with LCOE, is that capacity, and availability, are not measured. As long as dispatchable fossil fuels – coal and gas – provide not just half or more of generation but almost all back-up, the true cost of renewables is hidden, as they are parasitic to the system. When operating, they destroy the price mechanism necessary to pay for backup. As thermal units retire in the face of negative prices (Caused by ‘overgeneration” ie electricity no one wants) and insufficient revenue, the cost of back up becomes apparent. California just found this out, but still tries to deflect blame. Batteries must be deployed in multiples of the RE capacity installed to make up for wind droughts and overcast days. The “dark secret” is that is cheaper to blanket the countryside with wind turbines than it is to use storage.
Yep. LCOE expressly doesn’t include storage or backup.
Oklahoma stopped subsidizing new windmill farms last year.
The Oklahoma legislators said to continue to subsidize new windmill farms would bankrupt the State. So they quit doing it.
Remember that during the Horse Manure Crisis of 1894 that very shortly afterwards the whole problem vanished with the invention of the automobile as per the recent article here; it’s entirely conceivable that someday we will invent a ‘lossless’ form of energy transmission that allows the building of a global grid. Then potentially somewhere the sun will always be shining and the supply won’t tank when demand maxes out. I agree that it’s not on the horizon yet, but cars were not visible over the horse manure horizon of 1984 either.
OTOH, mining and fossil fuel recovery today include costs of remediation that must be done after the resource is extracted; so far I see no equivalent levy on installers of wind farms and solar power installations. If the costs were added of recycling end-of-life photovoltaic panels that contain lead, antimony and cadmium, and breaking up the foundations of concrete that hold windmill towers–not to mention doing the as-yet-uninvented recycling of blades–the cost per kwh graphs would change their end-points considerably.
There’s a fat lady not done here yet. Once, for example, the wind farm companies get introduced to the costs and efficiencies of comminution applied to those concrete blocks they’ve built–especially the ones offshore–the economics of scale in building them ever bigger and bigger is not going to look so good. Those costs are major for those of us who have operated mines.
We should not forget that Oil Sands companies got fined millions of dollars for 300 ducks, while not a penny is paid by wind-generation companies for chopping up eagles–or for that matter CSP installations for raining barbecued birds. These costs don’t reflect a level playing field.
But of course as they aren’t applied they can’t affect the graphs yet.
It’s only conceivable in a universe which does not obey the laws of physics – like politics.
I appreciate your point John–but we have to remember that superconductivity does seem to obey the laws of physics. (I did put ‘lossless’ in quotes for a reason, not implying absolutes).
Politics, you are correct, obeys no laws. Hence whacking raptors out of the skies draws no penalties to the politically-favored wind-power generators, and can’t be an included factor in cost-per-kwhr in Dave’s–or EIA’s– graphs. But the Syncrude fine of $3 million for 300 ducks has to be included in their cost of production.
(Note that’s a $10,000-a-duck Thanksgiving dinner. Why, that’s almost what hunters spend.)
Syncrude made the mistake of not buying a duck hunting licence. Those 300 ducks could have been blasted out of the air with a 12 Gauge shotgun for the cost of a hunting licence when the season is open by a pay of hunters. Same for other resource development…If I wind up canceling a few dozen fish, I can be fined up to $250K, but I can get a fishing licence for $25 and catch and eat 6 fish a day. I realize it is two different issues, but considering they let wind turbines off the hook for cancelling much rarer raptors and birds of prey, bats and insects, it seems rather hypocritical that Big Wind gets off the hook with an exemption permit, all the while pretending to be ‘Green’. No wonder a lot of people are getting burnt up over all this nonsense.
Electricty from solar is the highest quality with the richest harmonics and deserves a premium. In the winter a heater running on solar electricity feels like heat from fireplace. Americans really can not appreciate this because thier senses are dulled by consumerism.
There’s no difference between solar, wind, nuclear, gas or coal as it pertains to voltage, amperage or frequency of the electricity being delivered to the appliances in your home.
It is the harmonics that converge in a holistic manner. Voltage, amperage or frequency are terms of white suppression.
Yes, and electricity generated by nuclear reactors is radioactive.
Have not thought about that but you may have a point.
Split dog, you should have added /sarc to your joke. Some people would actually believe that. Iincredible but true.
Sorry, I hate to admit it because it is the lowest form of humor. Can I blame it on the covid monster?
It is really annoying that few people with primary access to the real, up-to-date economics are willing and able to compile and publish comprehensive, meaningful reports that reflect the true, final picture.
Too many authors seem to feel that they have to “adjust” the numbers to favour their preferences, beliefs, ideals.
With renewables, the common deception is to ignore the cost of backup to these intermittent. If it was tiny nitpicking, less of a problem, but this is a major cost.
Surely the USA has accountancy standards, even regulations, that should require the full disclosure of costs. Geoff S
Peter W comments….I have been led to understand that the turbine blades have limited life and need periodic replacement.
…as a Marine helo pilot, I understood the metal fatigue we had with 1960’s technology rotor blades, but we evolved to the fiberglass fiber blades in the 1970’s which had no life expiration, only a wear factor, which was tremendously longer than the metal. Those blades faced vastly varying windspeeds as they rotated with the helo flying at over 100 kts. and involved landings in sandy areas and salt air of ocean ops. they were a fabulous improvement…even a bullet would not break them into (or a few tree tops…ops…did i say that)
A blade rotating with a near constant wind speed at any time on a 300 ft high pedestal – now what exactly is the wear factor that causes these blades to wear out?
i would expect the blades are the longest lasting part of the entire composition of the turbine/pedestal/blades.
Does anyone know why I keep reading that disposal of these blades is a big deal…why are they wearing out?
Just curious….
How many hours flying at “zero” feet did you do per year (or even total flight hours)? Divide into 8760 for a first estimate of the ratio of comparative lifetimes.
Bird strikes.
The torque forces at the end of a 75′-150′ wind turbine blade are far, far higher then the torque forces on a helicopter blade. The mass of a wind turbine blade roughly increases as the cube of its length. The power generated by a blade is related to the torque forces on the blade and the angular velocity of the blade. If your helicopter blade was as large as a wind turbine blade you would probably be replacing it weekly!
Solar panels work best in the tropical latitudes….when you reach the area of northern California and northward, the efficiency versus the cost of the panels is not so attractive….area of maybe 40 degrees northward …Canada….Russia…northern Europe don’t talk too much about solar power.
Fossil fuel costs shown are a little deceiving because fossil fuel production has high taxes and royalties (25-35%). This provides significant funds to federal, state, and local governments, and even makes some multimillionaires for individuals with mineral rights royalties. No government or individual will receive comparable revenue for solar or wind energy production, maybe even negative revenue if subsidies are included.
RelPerm, thanks this is never reported but it needs serious consideration.
‘Wholesale electricity prices are generally higher when electricity demand within an area is greater. Because consumer demand for electricity varies throughout the day, the time of day when generation occurs also influences wholesale prices. Solar PV only generates electricity in the daytime, when electricity demand and wholesale power prices tend to be higher’
so in other words if you have a resource operating at the time of day when prices are higher because of demand, it costs more. The solar part of this is irrelevant.
“The solar part of this is irrelevant.”
Thanks for finally agreeing that solar is IRRELEVANT.
In fact it causes the increase in prices because the other RELIABLE electricity producers have to stay ready to take up the missing electricity as wind goes AWOL.
In many countries peak demand is just as solar disappears in the evening.
Or were you DENYING this fact as well !
In the words I actually wrote in the post…
Only solar power creates a duck curve… Because solar power is the only generating source that only works when demand and prices are higher… And the only generating source that fails everyday, just as demand is beginning to peak.
There is no logical way to assert that “the solar part of this is irrelevant.” The problem is intrinsic to solar power.
About one-third of all U.S. solar PV capacity is located in California, where the average wholesale electricity price across all technologies was $74/MWh in 2019
David – are you sure this is correct?
The average FMM system energy price (MCE) for 2019, obtained from CAISO at oasis.caiso.com , appears to be about $36.
It’s true that there is great variability in solar prices and a long history of bad, ill-informed public policy votes related to it. But in the background of all that noise are some best-of-breed solar firms that are setting the pace and could do so without subsidy at this point.
https://pv-magazine-usa.com/2020/10/12/solar-plus-storage-replaces-coal-plant-in-new-mexico-makes-carbon-capture-retrofit-moot/
But here’s the unanswered question-
“The four projects slated to replace the generating station will all be located in Northwest New Mexico, with a couple close by to the generator. The quadruplets are comprised of 650 MW of solar generation and 300 MW/1,200 MWh of accompanying energy storage. Two of the projects have already been approved by state regulators: Arroyo Solar, which clocks in at 300 MW and 150 MW/600 MWh of storage and Jicarilla Solar I, with 50MW and 20MW/80 MWh to its name.
PNM is pushing hard for regulatory approval of the other two projects, San Juan Solar 1 (200 MW of generation and 100 MW/400 MWh of storage) and 201LC 8m (100 MW and 30 MW/120 MWh) prior to Dec. 4, so that construction can begin in January, in order to achieve a June 2022 commissioning.”
Will their storage be enough to match the dispatchable coal they’re displacing? Do you trust watermelons to do the sums and oversight with that or power consumers simply have to suck it and see? After all the track record of the watermelons rushing headlong into unreliables dumping on the grid to date isn’t a good one. Can’t blame Big Solar for privatising the gains and socialising the brownouts if emotional numpties are running the show and they’re simply excited at the thought of more solar going up.
No this would not match 1:1 the dispatchable coal of that one plant, but PNM is not a small utility. You might want to lighten up on the dogma in order make more lucid points.
Do solar and wind costs include the cost of the required 100% backup which is not required by conventional power? If not, reported solar and wind costs are much higher than reported.
Nothing to worry about as we have it all under control chilly folks-
https://www.msn.com/en-au/news/uknews/national-grid-warns-of-short-supply-of-electricity-over-next-few-days/ar-BB1a21T7
The more of these unreliables they come to rely on the closer the day for a please explain and when they’re found wanting with the big prescriptions the hard questions are naturally going to be asked about the climastrology underlying them. They can only get away with a grid running on emotion for so long before they crash headlong into physics engineering and economics. The Popcorn Era cometh.