We are often told that wind and solar, if not cheaper, are at least cost competitive with fossil fuels. Dead wrong! Wind or solar costs around five times more per megawatt hour compared to, for example, natural gas.
We are told that wind and solar will save us from a climate catastrophe. If there is a looming climate catastrophe, the only thing that will save us is nuclear power. Wind and solar are incredibly expensive methods of reducing CO2 emissions. The more wind and solar you build, the cost of removing CO2 increases disproportionately.
The U.S. has wasted $1.5 trillion on wind and solar and for that money only a little more than 10% of our electricity comes from wind and solar.
Fossil fuels are not dirty. Modern natural gas or coal plants are environmentally pristine. CO2 is not a pollutant, but an aerial plant food that is greening the Earth. CO2 makes plants grow faster with less water.
Wind or solar electricity is not worth what it costs to create it. It is worth what someone is willing to pay for it. That is a generally accepted economic principle.
If the government requires a utility to purchase some amount of electricity at some price, that is not a free market. That is central planning. Central planning has a role, but it rarely works as well as the voluntary exchange of goods and services. Central planning creates unexpected twists and turns and often results in low productivity.
I will first discuss the value of wind and solar electricity in a free market and then discuss the effect of extensive government interventions via subsidies and mandates.
Everywhere when commentators compare the cost of wind or solar electricity with the cost of fossil fuel electricity, they use LCOE, the levelized cost of electricity. It is a logical error to compare LCOE of natural gas with LCOE of wind or solar. The correct comparison is to compare the marginal cost of natural gas with the LCOE of wind or solar. The marginal cost of natural gas electricity is about $20 per megawatt hour in the U.S. The LCOE of wind or solar hovers around $100 per megawatt hour, or about five times more.
LCOE includes amortization of the cost of building the generating plant. The marginal cost is essentially the cost of the fuel to generate the electricity.
Under what circumstances will a utility or grid operator be willing to purchase wind or solar electricity? For the sake of the discussion, we postulate that the utility is going to replace some of its natural gas electricity with wind or solar electricity. The argument would be the same if coal electricity is being replaced and different if hydroelectricity is being replaced. No one would replace nuclear electricity with wind or solar because nuclear fuel is too cheap.
The utility cannot make a complete replacement, scrapping a natural gas generating plant and replacing it with a wind or solar farm. That is impossible because wind and solar are erratic, providing power subject to the weather and the daily solar cycle. Their erratic nature cannot be fixed at a remotely reasonable cost with batteries or pumped storage.
The utility will be open to reducing output from a gas plant and replacing that electricity with wind or solar electricity, when the sun is shining or the wind is blowing, only If the wind or solar electricity is less expensive then the marginal cost of generating the electricity with the gas plant. Notice that I said marginal cost, not LCOE.
Marginal cost for a gas plant is almost entirely the cost of the fuel. If gas is $3 per MMBtu and the gas plant is a combined cycle plant, the marginal cost of generating electricity is about $20 per megawatt hour. In countries that do not enjoy cheap natural gas the marginal cost will be higher.
If the cost of the wind or solar electricity is greater than $20 it will be a money losing proposition to substitute wind or solar electricity for gas electricity. If it is less, then it will be a profitable endeavor. The value of wind or solar is $20 per megawatt hour under these conditions.
LCOE for a natural gas plant includes an allowance for the amortization of the initial investment. It also depends on the utilization or capacity factor of the plant. The capacity factor is not very relevant to the properties of natural gas generation because real utilities over-provision their generator capacity to account for peak demand and the possibility of plants being under repair.
LCOE for a wind or solar farm is almost entirely capital cost spread over the number of megawatt hours generated with due consideration for the time value of money. The marginal cost is near zero because it costs nothing extra to generate an additional megawatt hour and nothing is saved if fewer megawatt hours are generated. If plant output is curtailed because the grid cannot accept all the wind or solar power available, the cost per megawatt hour is proportionally increased. Overwhelming the grid with wind or solar is an increasingly serious problem.
The Departure From a Free Market
The most important government intervention is state renewable portfolio laws. These laws define renewable energy and set quotas for what proportion of the electricity in the state must be from renewable sources.
Without getting too complicated, renewable energy is usually defined as anything that is not fossil fuel, nuclear energy or hydroelectricity involving dams. Most of the energy that passes that test is too expensive or not scalable. Wind and solar are too expensive and handicapped by intermittency, but they are scalable. The result is that renewable energy is almost always wind or solar. A few states allow hydroelectricity with dams to be considered renewable. Hydro has limited scalability due to the best sites being already developed.
Renewable portfolio laws mandate the purchase of an increasing proportion of renewable electricity. For example, California requires that 60% of the electricity be from renewable sources by 2030.
The second most important government intervention are federal subsidies, tax credits and complicated tax provisions called tax equity financing, that subsidize about 50% of the cost of building a wind or solar farm.
Mandating the purchase of renewable electricity changes the nature of the market for renewable electricity. Without the mandates the owner of a wind or solar farm is doomed to beg utilities to purchase electricity for far less than it costs to generate. The farm would soon be bankrupt. But with mandates the utilities are knocking on his door begging for renewable power that they are mandated to purchase, without regard to the price. Renewable portfolio laws change the market from a buyers’ market to a sellers’ market.
There are a handful of companies with the expertise and financial resources to construct billion-dollar, utility-scale, wind or solar farms. Although they nominally compete by bidding for the sale of electricity, they constitute an oligopoly. That is to say that the competition will not be as vigorous as it would be if more players were in the market.
The most common deal structure is that the developer constructs a wind farm and sells the electricity to the utility. Because the market is tipped in favor of the big companies, they are able to require a long-term contract, called a power purchase agreement or PPA, usually 20 for years, guaranteeing a market at a set price for all the electricity that the project can produce. That long-term market and price guarantee has tremendous value.
The PPA is a subsidy because by removing market risk, the farm becomes less like a business and more like a treasury bond. The price per megawatt hour can be less because a lower rate of return is viable. Risk has been removed. With the guaranteed market, the farm becomes marketable to conservative investors like infrastructure funds or pension funds. I estimate that the PPA reduces the rate of return needed from 12% to 8% and thus subsidizes the cost of renewable electricity by a third.
That subsidy is not cost free. The utility is assuming massive debt and risk by signing the PPA. There are plenty of possible reasons why utilities might want to get out of PPA’s in five or ten years. For example, lower cost nuclear electricity.
Between renewable portfolio laws and federal subsidies, the wind or solar farm is about 66% subsidized. For example, if the LCOE of the wind or solar electricity is $100 per megawatt hour, after the subsidies are applied it is $33 per megawatt hour. This is still more than the $20 that the electricity is worth. To close the gap the utility must raise its rates to pay for the extra $13 per megawatt hour. The final subsidy comes from the electricity customers.
Justifications for Massive Subsidies
The first justification is that reducing CO2 emissions will prevent a climate catastrophe. This justification fails for several reasons. Reducing American CO2 emissions will have little effect because the emissions problem is in Asia where emissions not only dwarf ours but are skyrocketing due to development of coal powered generation.
The cost of reducing CO2 emissions by wind or solar is very high, more than $300 per metric ton of CO2 removed. The subsidy is the cost of removing CO2. It becomes increasingly difficult to augment the amount of wind or solar above 50% due to their intermittent nature. Carbon offsets can be purchased for as little as $10 per ton, although not enough would be available to neutralize CO2 emissions from the entire power system. Serious reduction of emissions at reasonable cost requires adopting nuclear power, generally prohibited by renewable portfolio laws.
The second justification is that fossil fuel or nuclear fuel will run out. Within the borders of the U.S. is enough fossil fuel for hundreds of years and nuclear fuel for thousands of years. It is not sensible to turn the economy upside down in anticipation of a theoretical event centuries in the future.
A third justification is that fossil fuel plants cause air pollution, and nuclear plants may release harmful radiation. Modern coal or natural gas plants are environmentally clean. Nuclear plants are proven by hundreds of plants running for decades. The worst accidents were easily contained.
Finally, the increase in CO2 in the atmosphere has greened the Earth and substantially increased agricultural production. CO2 is aerial plant food.
When will the nation wake up and stop the bleeding?
Norman Rogers writes about energy and is the author of the book Dumb Energy. More detailed discussion and computational details is at https://windsolarcon.org.
This article was originally published by RealClearEnergy and made available via RealClearWire.
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“ The correct comparison is to compare the marginal cost of natural gas with the LCOE of wind or solar. “
Why? (He never says). The marginal cost of wind or solar is effectively zero. Why should the cost of building plant for gas not be included in the comprison, but should be for W&S. Very lop-sided!
LCOE is basically a calculation that asks whether you should build generation, and on that score W&S do come out ahead. Marginal cost asks whether you should buy power if offered, and on that score W&S wins hands down.
The real costs impacts should only be considered and compared “where the rubber hits the road”.
That is – domestic consumers’ electricity bills.
What’s happening with these, Nick?
The associated cost of gas back-up should be borne in the inherent cost of wind and solar…at least that percentage of gas used as spinning reserves for backing up wind lulls at night
Bryan, absolutely correct. This is project comparison NPV economics 101. If W and S developers were obliged to install sufficient backup to ensure 24 / 7 electricity output for 50 years (fossil fuel plant comparison) or 70 years (nuclear plant comparison), they wouldn’t build a single plant. Put another way, this is why governments simply will not go out for bids for 24 / 7 electricity from whatever source the bidder wants to offer. They would never get a renewable offer.
The cost of backup is accounted in the capacity auctions. Perhaps that should be part paid by W&S, but it isn’t that much. Capacity is needed, not just for fluctuating supply, but for fluctuating demand, which we have always had.
The capacity market at PJM recently closed at almost 10 times the previous price. I don’t think you can say that “isn’t much”.
The cost of back-up (gas back-up) can’t be wholly accounted for given the inherent fluctuations of the commodity itself, there will always be a difference
Whatever considerations that are relevant to the long term fixed costs of any generation source needs to be applied the same regardless of the technology. Ditto with variable costs like fuel, labor, materials, etc. That is the point of the LCOE calculations.
One can argue that the calculations do not properly account for the costs, but one cannot just cherry pick one item – like fuel, as this author did – and say that is the only real cost that matters.
If fuel is all that matters, then nuclear wins hands down, with the cost of fuel per kw-hr of electricity generated being dirt cheap, ranging from 0.000015 dollars per kw-hr (breeder reactors) to 0.0015 dollars per kw-hr for typical pressurized water reactors. The cost of fuel for gas fired plants as of May 2024 is 0.0031 dollars per kw-hr. So NG fuel is at least twice as expensive as nuclear fuel in today’s prices (which change with time). But, nuclear power plants are also much more expensive to build, maintain, and replace than gas power plants.
That’s where LCOE comes in.
LCOE is fiction, because there is nothing “levelized” about power produced when and where you need it, on demand, 24/7 compared with power that is intermittent, inconsistent, unreliable, and can’t be matched to demand, requiring backup and less efficient rapid response to manage its frequency variations.
Plus the inflation of the cost caused by underutilzation caused by stupid government mandates for poor quality electricity sources to be used first.
Rates paid by customers actually do consider and are based upon the total cost of owning and operating the power generation infrastructure .. which must necessarily include eventual replacement costs, as well as fuel, labor, materials, supplies, taxes, etc. etc. When a regulated utility goes before its utility regulation entity, they must justify their rates based upon such calculations.
When you buy a kw-hr of electricity, you are buying the whole thing, not just the natural gas to run the plant.
Fossil fuels work. Renewables I mean unreliables do not. End of discussion.
The same old bullshit from Nitpick Nick Stokes: “the wind is free!!”
Mr Stokes does NickPick quite often
The wind is, indeed, free, but so are oil, gas, coal, and uranium. No one gets a bill from Mother Earth for any of them. The cost comes from getting the energy contained in them them to the consumer wherever he is, in the form he needs to use it.
The wind is free.
So is the coal, all you have to do is dig it up.
It is the cost of harnessing it to produce reliable electricity that is more important.
Coal and Gas, you can do that. Quite cheaply…
Wind and Solar, YOU CANNOT… evah !!
Everything in your pathetic, senile and demented existence is there because of fossil fuels.
You could not live without them.
“There is no such thing as a free lunch.” I get lots of ads promising free stuff, including for renewables. We knew four decades ago about their limited value including their use on sailboats. “Buyer beware!”
The wind is technically free but harvesting it is damn expensive and Land Intensive
The sunshine is also free but harvesting it is also damn expensive and Land Intensive AND nonfunctional from 4pm until 9am local time when people actually need electricity the most (4-11pm peak 7-9am peak)
1100MW Nuclear can function on just 12 acres but requires a buffer for safety
…Diablo Canyon NPP has a buffer of 750 acres but the facility covers 12
1100MW Gas can function on 20 acres but generally covers over 300
…Moss Landing covers 360 acres and generates 1060MW
Topaz Solar farm covers 4700 acres but with a nameplate of 550MW and a capacity factor of 26.6% only produces 146MW so would require 35,000+ acres to generate the same energy as Moss Landing or 70,000+ acres to equal Diablo Canyon
Both wind and solar are short lived compared to Gas or Nuclear and would require replacing 4-6 times at increasingly expensive costs over the lifespan of either conventional generation source
Except to large raptors, who ultimately pay the highest conceivable price.
Yes, the wind is free. But wind power certainly isn’t.
Chris
Wind turbines do not generate energy, they collect it from the wind and distribute it. That process is not free.
The cost of collecting energy from it and making up for its deficiencies, STAGGERING.
For heaven’s sake, Nick, the marginal cost of wind energy is a figment of peoples’ imagination. The ability to just order up wind energy or solar at zero cost occurs only in circumstances of vanishingly small likelihood. Marginal cost is never realized. Cost of amortizing, running and maintaining the entire energy network is what actually matters because that is what the ratepayers must cover. The ratepayers matter because the entire idea of a public service or utility is to deliver power at reasonable cost and with maximum reliability — that is what is baked into the mission of a Public Service Commission.
Utility rates across the country, across the world too, are rising rapidly because wind/solar are not cheap, and they complicate operation of the other assets, made subservient to wind and solar by the idea of cheap marginal cost, but without which wind and solar could not operate by themselves.
That’s about as concise an explanation as I’ve ever run across.
So, Kevin, can you explain why total cost of wind should be compared with the marginal cost of gas?
Cost of intermittency is covered in the system by capacity auctions. Maybe the cost of that should be attributed to W&S, but it isn’t that much.
The cost of implementing erratic , intermittent supplies onto a grid is very high. !
From a study of implementing VRE onto the Vietnam grid, from IEE Japan.
Interesting the massive costs to the economy and environment that were not considered.
Ah, Capacity Auctions. Nameplate of course. The subsidies to build them – are they also included in their “cheapness”? 😉
‘So, Kevin, can you explain why total cost of wind should be compared with the marginal cost of gas?’
So, Nick, can you point out where Kevin actually compared the total cost of wind to the marginal cost of gas?
The article said that was the correct thing to do and my comment, to which he replied, disputed that.
No Nick, you just did not comprehend.
I made no such suggestion about cost comparison, but your suggestion that capacity markets cover the cost of intermittency is a tough statement to analyze fully. Capacity markets are meant of cover the hazard of intermittency, but I don’t know of any substantial proof that they will or can. It’s like saying an insurance company cannot be ruined by any event.
Look. Thermal assets, other than nuclear, are used to balance wind and solar. The coal and some gas assets were specified, designed and built long before anyone imagined a grid including wind/solar. Those plants were meant for capacity factors of maybe 85-90% and being able to run at 100% for short periods of time (reserve) — that is varied operation only considering some seasonality, night/day demand variation, and some turnaround time. It also meant having 100% of all capital expense, return on rate base, and other expenses covered by delivery of service 85-90% of time.
Once people believe in the myth that only marginal cost matters the wind plant soon dictates the operating schedule of plants that can be scheduled. Now the capacity factor of the coal plants is below 50% as they work to balance wind. Suddenly one half of that big capital investment is no longer used and useful for delivery of service, but rates still have to cover the full 100%. The wind plant itself presents no fuel cost, but its O&M still runs between 1 and 2 cents per kWhr, and the coal plant does not save one-half the fuel by throttling up and down 50%, and its O&M outside of fuel is perhaps not reduced at all and possibly increased because ramping is detrimental to boilers and turbines. Mixing plants with intrinsic capacity factors of 15-60% seasonally, annual average of 30-40%, into a grid and having them dictate the schedule of everything else just leads to poor utilization of capital. The cost cannot be characterized as “isn’t that much.” We are seeing it in utility rates.
Excellent. Well-stated
The true marginal cost is the difference in what “wind + solar + FF + nuclear” costs are to the ratepayer and the costs to the ratepayer of “FF + nuclear”.
This whole argument skips the final purpose. In the past, at least in the U.S., electricity was recognized as a desired monopoly service that was regulated by the state governments. The purpose was to provide the best service (99+%) at the lowest cost to the user, i.e. the ratepayer.
This has been destroyed with the political pressure to be seen as “saving the planet”. Various schemes have been invented such as using subsidies and other mechanisms to pay providers for electricity.
Meanwhile, the service guarantee has been put in jeopardy as W&S has proliferated and the lowest cost has been absolutely thrown out the window.
The true marginal cost should be evaluated at the end user rates. In other words, what is the total cost of wind, solar, FF, and nuclear to the end user as compared to FF and nuclear alone.
I’ll guarantee that adding wind and solar to the mix will result in higher costs to each and ever ratepayer even if batteries were thrown in so that FF could disappear.
Nick will be long gone by now but in simple terms the reason is that ramping up a gas plant is a matter of burning more gas. Ramping up wind or solar is a matter of building entirely new infrastructure from scratch.
Such a pity Nick is such an expert in not understanding things. It is as though his pay packet depends on not understanding.
“ ramping up a gas plant is a matter of burning more gas”
As with W&S, you have to build the plant first, which costs.
Implementing VRE onto grid is massively expensive,
not to mention the clean-up costs at the short end-of life.
“As with W&S,”
What a stupid comment.!!
You cannot “ramp up” wind and solar, especially when there in no wind at night.
And then they degrade, and they have to be rebuilt…
But over 60 years 2025-2085 you only have to build the 1100MW Gas Plant once. Wind must be built and rebuilt every 20 years. You will need to build 1100MW of wind in 2025. Then you will need to build another 1100MW of wind in 2045 at 2045 inflated costs. Then again in 2065 at 2065 over inflated costs to get to 2085.
With solar to get 1100MW you need to build 4400MW (capacity factor) in 2025. Then again in 2040 at inflated costs (cheap Chinese solar doesn’t reliably last much more than 15 years). Then again in 2055 at even greater inflated costs. Then again at 2070 at extremely over inflated costs just to get to 2085. However, with Solar you will also have panels to replace from Hail Storm damage…perhaps annually by the thousands at each Subsidy Farm
That wind turbines are a capital asset with a 20 year life span is demonstrably false. Warranty repair charges are bankrupting several large wind turbine OEMs. I’ve seen 4-1/2 foot diameter wind turbine mainshaft bearings reduced to the point that no piece larger than one’s fist remained after 2-1/2 years of operation.
One will be fortunate to have a windmill last, even given proper maintenance and repair, which is a big IF, 5 years before it has to be replaced.
That is of course a hurricane or tsunami does not take it down sooner.
How many square miles of solar panels were recently destroyed in a hail storm?
“Replacing the energy output from a single 100MW natural gas turbine requires at least 20 wind turbines, each about 500 feet tall and collectively requiring some 30,000 tons of iron ore, 50,000 tons of concrete as well as 900 tons of plastic for the blades. The gas turbine, by contrast, requires 300 tons of iron ore and 2000 tons of concrete.
The wind turbines also require 1000 tons of specialty metals such as copper, chromium and zinc compared to 100 tons for the gas turbine.
The gas turbine is the size of a large residential house. The wind turbines require 10 square miles of land as well as utility scale storage”
‘The Hard Math of Minerals’ Mark P Mills
https://issues.org/environmental-economic-costs-minerals-solar-wind-batteries-mills/
A false statement. It DOES NOT ‘REPLACE’ the 100MW natural gas plant, it just reduces the utilization of the natural gas plant, which you have to KEEP to back up the worse-than-useless wind farm when the wind isn’t blowing.
I have the same question as Nick. Why do we compare the marginal cost of natural gas with the LCOE of wind or solar? There may be a very good reason, but he never explains it.
What Nick is missing, and he knows it very well, is that while wind and solar may be cheap, filling in the gaps when they are not operating is much more expensive than simply not using them to start with. In capacity auctions, such as PJM runs, renewables really can’t participate, because they can’t guarantee power on a date certain. The reliability that fossil fuels offer is worth so much more than what is measured by LCOE
Surely you are not that stupid Nick!
Because it is needed for firming the wind or solar. Building wind and solar does not eliminate the need for the gas plant. Alternative is that its capital has to be included in the LCOE for the solar wind. The only saving is the fuel cost.
You could use batteries for firming rather than gas but that would give an LCOE in the stratosphere.
People may still not understand exactly how LCOE is calculated. It goes like this.
You take the total cash out by year over the life of the installation, whether gas, coal, nuclear, wind, solar. All cash, whether capital, fuel, maintenance. Then apply to those costs the NPV formula, available in any spreadsheet, and the applicable interest rate, and you obtain the Net Present Value of the costs.
You then take the total amount of electricity generated across the life of the project, divide, and you get the NPV per MW.
This as usually done leaves out half the costs, those due to remedying intermittency. Huge, the Royal Society estimated the UK would need storage of one third of annual demand maintained over decades. Also those due to transmission (because the wind farms are remote from demand). It also assumes that electricity generated when there is no demand is as valuable as that generated when there is demand.
The costs of intermittency are that you have to make up power when there is a calm or an evening. So to do NPV correctly you have to include these costs, basically running total gas backup. This raises costs. Then you also have the opposite, some of your generated power is unusable because there is no demand just then. So you have to take this out before dividing, which raises NPV per MW. Then you have to provide transmission – you can see how big a deal this is from the currently emerging UK plans. Again, it raises costs.
Do LCOE right, include all the costs and get the amount of generated power right, and you will find wind and solar way exceeds conventional in costs. Rud Istvan did a very nice piece at Climate Etc some years ago, doing it right:
True costs of wind electricity | Climate Etc.
Nick Stokes here keeps blindly repeating that the fact that wind and sun are ‘free’, so they have no fuel cost, means that systems using them must be cheaper to build and run. But he has never produced any proper NPV analysis showing this, and I’m not aware of anyone ever having done so, and its completely implausible.
Nicks argument, if I understand it, has modified a bit over time, and is now that if you have a conventional system it will pay you to supplement it with wind and solar because of the fuel savings. I don’t believe it, but am ready to be convinced by a properly done business case. But I keep asking for one, and haven’t ever seen hide nor hair of one.
For instruction in how to do NPV analysis, Brealey and Myers, Principles of Corporate Finance. LCOE will never look the same again. Its a bit like the idiots claiming that depreciation allowances are subsidies. They should read a basic accounting textbook. But they won’t.
Thank you, Michel. I had often wondered about this. Good explanation.
Maryland has an ongoing demonstration. When the solar arrays are producing, the generators are turned down and the fuel savings are allegedly passed on to the consumers.
I do not know who paid to have the solar arrays built or how much they cost.
What a tiny little fantasy land you live in Nick
The cost of wind and solar is far higher because of the massive mining, pollution, short-life, economic and environmental degradation at all stages of production, installation, use and end of ligfe. etc etc
… involved in an erratic totally unsuitable farce of a electricity supply.
That is part of the missing total life cycle costs analysis.
Have you put in that application for wind turbines on the hills around Moyhu yet, Nick.
Neighbours will love it. !! 😉
Nick,
the marginal cost of wind and solar increases steadily as they age and cost of maintaing them increases. In some cases the cost of maintenace after fifteen years makes them uneconomic to run.
Dr Gordon Hughes has done a very detailed study on this sunject.
Why not compare the costs on a single basis.
Each supplier to provide their quotation for power, on Tuesday evening, on the 4th of next month.
Now that would be worth watching.
LCOE was originally a calculation to decide the least cost/best way – coal, gas, nuclear – to INCREASE output, not to replace output. It was comparing like with like, clearly definable capital costs, fuel consumption costs, operating costs, lifetime output for each.
Wind and solar are replacing coal, gas, nuclear but not actually increasing output, and have something which those three do not have – intermittency costs. In the cost of wind and solar must be included the capital, consumption costs, etc of fossil fuel generators required to be built, operated, to back-up and deal with that intermittency.
In fact wind and solar are not replacing fossil fuel generating, just taking over output from those generators when meteorological conditions are favourable. Those costs do not disappear just because the fossil fuel generators are not selling output.
Using LCOE to compare wind/solar with nuke, fossil fuels is not comparing like for like and is false accounting as it leaves out a significant cost element.
Which is exactly why the cheerleaders for worse-than-useless wind and solar will always point to the meaningless LCOE as if wind and solar can be directly comparable to dispatchable sources, which of course it cannot.
What would be the cost of guaranteed 24/7/365 electricity from a W&S supplier? Given that it would have to include either battery or CCGT backup costs it would be uncompetitive to say the least. Stop being ridiculous.
“LCOE and LCOS by themselves do not capture all of the factors that contribute to investment decisions, making direct comparisons of LCOE and LCOS across technologies problematic and misleading as a method to assess the competitiveness of various generation alternatives”
US Energy Information Administration, ‘Levelised Costs of New Generation Resources’ in the Annual Energy Outlook 2022.
LCOS is Levelised Cost of Storage.
I selected the same quote to protest, but if you’re seeing the same problem then you can’t fairly say “The marginal cost of wind or solar is effectively zero.” A fair comparison would have to include maintenance at least.
The Hoover dam was built in the 1930s and still generates power. If you build a solar farm in the 2030s it will be ? by 2124.
W&S have been around long enough for costs to settle out. They don’t look good to me and the ultimate proof is consumer cost of electricity.
I believe you are both wrong. A professional financial analyst would only ever compare the cost of the base scenario = “all FF”, with the cost of the proposed end game = “W&S with FF backup and storage”, the latter undoubtedly costing several times as much as “all FF” based on current technologies because (a) you would need to keep some FF power stations in play as backup or convert them to a grid balancing resource, add a huge amount of extremely expensive batteries, AND provide extremely complex and sophisticated transmission networks and additional balancing equipment to support the grid inertia required to deal with predominantly unsynchronised source generation.
Two quibbles. Only quibbles, as your general conclusion is obviously correct to any thinking skeptic.
Yes. This is a link to Rud’s post:
True costs of wind electricity | Climate Etc.
This should be reworded. Wind, solar and firming are more coal intensive than just burning the coal. Building solar and wind farms plus battery storage is around 5 times more coal intensive than just burning the coal to make electricity. The panels and batteries would need to last 200 years to save coal.
USA is looking to slap a 270% tariff on solar panel imports so USA manufacturers can be competitive. Solar panels are being made with low cost coal in SE Asia.
China maintains the western illusion that solar is cheap because they are burning close to 5,000,000,000tonees of coal a year to make all the stuff the west is demanding for its energy transition.
Any sources for…oh, who am I kidding, of course not. That myth was debunked 20 years ago.
Not by you it hasn’t. The environmental, energy and material cost of wind and solar is very high, not to mention the huge amounts of toxic chemicals needed and waste toxic sludge produced.
You do know it is impossible to build and implement wind and solar without using copious amounts of fossil fuels of each type, don’t you.
Hot air but no numbers.
Exactly what your are posting. Thanks for admitting this.
Please say how you are going to build wind and solar without using large amounts of fossil fuels . !!
And DENIAL of the massive lakes of toxic sludge in the Chinese turbine manufacturing region.
Or is it that you are totally unaware of reality.. as always.
Please point out all the wind turbine and solar PV manufacturers using only the output of wind and solar to produce more wind and solar systems. Certainly if wind and solar are so productive, there should be many. Prove it.
Oh no, we didn’t change the system overnight, that must mean it doesn’t work!!!111
So you now admit that coal and gar are used to produce solar and wind.
Well done.
Wind turbines have been around for centuries, solar panels for more than half a century and batteries for more than a century. They are all mature technologies. And no one has found a way to use their energy output to make them.
The reason is obvious. They consume more energy to make them than they can produce through their operating life. It would be a futile task. It is currently a western fantasy driven by China’s efficiency to mine and convert coal to the junk western nations are attaching to their grids.
Sorry, ignorant little child, but many of the items used in the production of wind turbines and solar panels can only be produced using fossil fuels.
Any sources for .. That myth was debunked 20 years ago. Your sources?
Do you really expect an answer?
Here’s a newer one, and you can always google eroi.
https://arstechnica.com/science/2024/05/we-get-more-useful-energy-out-of-renewables-than-fossil-fuels/
That is a link to an opinion piece from someone who read “a new study by researchers at the UK’s University of Leeds.”
True science, yup: “The key to understanding why is that it’s much easier to do useful things with electricity than it is with a hunk of coal or a glob of crude oil.”
Lots of debatable points. But the key point is this was not done 20 years ago per your claim. In was published in May of this year.
I wrote it’s a newer one, and yet for all the answers I got not a single one was able to offer the slightest hint for a negative eroi.
And of course the whole reasoning is totally BOGUS.
Wind and solar will always cause grid prices to increase.
It has happened in EVERY place where wind and solar is anything but a tiny % of the grid supply.
In fact, It is very hard to get “useful” electricity from wind and solar, because most people “use” electricity whenever they need it…
This is something wind and solar can NEVER do.
You cannot use just wind and solar in any major manufacturing enterprise.
You cannot use just wind and solar to drive a data centre, or to light a shopping mall.
EVERYTHING that is worthwhile in even your pathetic little ghetto life, is there because of access to the reliability of FOSSIL FUEL ELECTRICITY.
“useful things with electricity than it is with a hunk of coal or a glob of crude oil.”
Probably one of the most GORMLESS and STUPID statements ever made.
You can make electricity out of coal and crude oil…
.. and a huge variety of other things as well
You cannot make ANYTHING from erratic electricity supplies.
There is absolutely NOTHING USEFUL that you can get from wind and solar electricity.
They destroy the stability of the grid. They are a PARASITE.
They are very often missing when most needed, yet expect privilege treatment when there is too much.
Just ask Chat GPT:
For example, you want to supply 10MW continuously from wind turbines (including their foundations) and battery to cater for up to 14 days without wind. Tell me how much coal will be needed to make the stuff. The answer:
The answer is similar to what I get using a much simpler method based on the cost of all the junk and China’s efficiency to convert coal to junk.
The last paragraph in CHatGPT’s summary is clearly nonsense because no one else can compete with China’s ability to convert coal into junk. Trying to use energy from junk to make junk is simply impossible.
If gas is necessary to make wind & solar even marginally useable as electricity sources, the gas is an integral component of w&s generation.
Therefore the full costs of the necessary gas apparatus and operation must be included in the delivered costs of w&s electricity.
(Which also poses the obvious question – if you have to have the gas on tap at all times, and it’s affordable, why bother with the w&s in the first place?)
The world wonders, as Admiral Nimitz once asked.
I’ve said this before. Its impossible to run modern grids on wind and solar because intermittency. This means that you end up with a hybrid system, it has full capacity based on gas or other conventional (including sometimes diesel!). This capacity is flexed to accommodate the wind or solar generation as it becomes available.
The right way to look at this is not that you have wind and solar with gas backup. Its that you have a gas (or other conventional) system supplemented with wind and solar.
So the financial question is whether supplementing your basic system with wind and solar is cost effective. Do proper cash flow analysis and show that the addition of the wind and solar makes financial sense.
The progression of the argument on this has been first to claim that wind and solar are cheaper than conventional. This is only plausible if you leave out the costs of the conventional required, or the costs of the storage required. When this becomes untenable, the argument shifts to claiming that the savings in fuel costs from running wind and solar as supplements more than pays for the full costs of installing them.
This is no longer a net zero proposal. Its a very straightforward business case issue, add wind and solar and save money. So do a full cash flow analysis of both, including all the costs, and making the end product the same, ie dispatchable, and show its true.
I have never seen such a case done by wind and solar advocates, never heard of one being referred to, and its not for want of asking. As I said in an earlier post, its most implausible in financial terms. But worse, from the enthusiast point of view, its not going anywhere near net zero, which is the original motivation for wind and solar. All you would get, at best, is slightly lower CO2 emissions, and considering that the hybrid system employs gas generation in intermittent form, which is far less fuel efficient than continuous, even that is very doubtful, if its real it will be very small savings.
Spot on.
A side note:
“The world wonders, as Admiral Nimitz once asked.”
Actually, “The world wonders” was a bit of “fluff” added by whoever transmitted the message to Halsey from Nimitz asked where the 3rd fleet was during the Battle of Leyte Gulf”. Such “fluff” (random phrases) was added to real messages to make it harder to decipher if intercepted.
It was mistakenly added after after decoding to the real message delivered to Halsey.
He didn’t take it well.
Yes I had read that claim in either “Miracle At Midway” or “War and Remembrance” if I recall.
Fossil fuels are not dirty. Modern natural gas or coal plants are environmentally pristine. CO2 is not a pollutant, but an aerial plant food that is greening the Earth. CO2 makes plants grow faster with less water.
c02 is not plant food.
plants are autotrophs, they make their own food, yes they USE c02 to make this food but their cells are powered by glucose.
Modern natural gas or coal plants are environmentally pristine.?
https://earthjustice.org/press/2022/new-report-most-power-plants-violating-federal-rules-mandating-cleanup-of-toxic-coal-ash-dumps
https://www.utilitydive.com/news/coal-ash-power-plant-earthjustice-environmental-integrity-report/635751/
and i dont even have to look at natural gas
Pristine?
your burning gas to boil water and drive a turbine.
ever boil water at an industrial scale?
scale has a double meaning
Earthjustice 😉
One more garbled comment like this one by Mosher and I will never again read anything he/she/it posts. Wasting an intellect is a terrible thing.
How many errors in spelling, grammar, chemistry, biology, and basic logic can one idiot make in a few incomplete sentences?
Dunno, but Mosh is certainly trying.
You really are showing just what an ignorant twit you are, mosh.
the two absolutely essential ingredients for plant growth are H2O and CO2.
“cells are powered by glucose.”
And where do you think the glucose comes from , moron !!
The rest of your comment is, as usual.. incomprehensible garbage.
Looks like it is written by a 3-year-old. !
Humans are powered by heat released during metabolism. And the source? Food.
Coal ash is used all around you Nick.
That plaster on your walls.. uses coal ash
Road surfaces and fill.. coal ash,
Bricks and cement… coal ash
Ice control on roads.. coal ash.. doesn’t cause rusting like salt does.
https://youtu.be/HYKgLDCM88g
https://youtu.be/rKlJElb2Be0
Try not to remain ignorant. !!
CO2 as plant food is a commonly accepted expression just as heat radiation interchangeable with IR (IR is not heat) and heat “trapping” used to describe how a blanket works or that somehow the atmosphere can “trap” heat. FYI, the definition of heat is the transfer of thermal energy based on temperature differential and thermal resistance of the intervening media. If it is “trapped” it can’t move..
While I am an ardent advocate for precise and correct language in science, most do not adhere to that philosophy. For me, being able to effectively and efficiently communicate is an essential function in science.
This is a very important article, short, written in plain English and truthful. People can argue about how to figure the cost of electricity all they want. There is only one thing that matters, the more renewables we are forced to purchase the higher our rates climb. So we are paying more money for less reliable electricity and the global CO2 concentration continues to climb. We have pissed away all that money for worse service and gone backwards in regards to the CAGW goals. That is just stupid I don’t care how you figure it.
I suppose this will get me a lot of down votes here at WUWT, but the author is wrong about the only cost that matters is the fuel cost of a power plant, rather than the levelized cost of power.
All electrical generation systems require significant capital cost investments, plus maintenance costs, plus fuel and other operational costs (like labor), and replacement costs. That is why tax rates are adjusted for depreciation, because no asset retains 100% of its value forever. The typical engineering cost evaluation for any facility includes the capital cost of eventual replacement after whatever is perceived as the likely plant lifetime. If plants go much beyond their design lifetime, the maintenance and repair costs accelerate and at some point, it is unaffordable to continue operating the plant.
Even if one assumes for argument that we aren’t building any new gas power plants – which of course could not ever be true – every hour and year it operates it incurs a replacement cost for which an allowance must be made.
That has to be included in the actual cost of any power source. It’s not clear now how long the turbines and blades of a windmill will last before needing replacement, since most have been in operation only the last couple of decades. Gas fired plants, whether carnot cycle steam plants or gas turbines have pretty well defined design lives, as do hydropower plants, nuclear plants, coal fired steam plants, even geothermal turbogenerator plants.
I am not arguing that wind or solar power levelized cost of energy is less than fossil fuel sources. I don’t know the answer to that question. But as an engineer it is frankly malpractice to look only at the marginal temporary cost of anything, especially fuel which is highly susceptible to wild market price swings, and say that that alone defines its real cost to investors and customers.
Hasn’t Michel explained that NPV analysis is the best way to assess comparative all-in costs of suppled electricity to consumers?
We have plenty of data on the performance life of wind turbines. As you say, decades. It’s not good news, and the OEMs are certainly not going to share it willingly.
I said the same. The only basis should be life cycle costs, including fuel, and including what is done when the facility is no longer in use.
But, we also need to add to it the physical environmental degradation each incurs. What does 500 sq mi or solar arrays do? What does an offshore wind farm that is 25 mile long and 10 miles deep do and including the totality of infrastructures added to implement the system.
Part of the impacts must include what do we give up in exchange for what is being built? How does 500 sq mi affect food and water. Also, does a massive solar array create a new heat island? How does it affect wildlife. How much wildlife is slaughtered by spinning 800 foot fiberglass knives?
We do not own the earth. We do not own the land. We are tenants and caretakers. I am a conservationist. Environmental justice to me means we must be wise in our choices how best to use the resources available.
The least of all the least concerns is CO2.
Yes, the marginal cost of fuel IS the right comparison.
Because you have to have the same capital investment in the coal or gas or nuclear which is what supplies the baseload power and supplies the power when wind and solar don’t, which is more often than it does.
In other words, you are NOT *replacing* fossil fuel and nuclear with wind and solar, because intermittency REQUIRES 100% backup. So the only thing wind and solar can do is some reduction of fuel consumption at the NECESSARY EITHER WAY foss fuel and nuclear plants.
LCOE can be used to compare coal vs. gas vs. nuclear (and perhaps hydro where consistent water flow is available) since those sources are all 24/7 dispatchable sources.
Using LCOE to compare available-only-at-the-whim-of-the-weather-and/or-time-of-day wind and solar with dispatchable sources is COMPLETELY DISHONEST.
It is a logical error to compare LCOE of natural gas with LCOE of wind or solar.
nope.
freshman logic
Affirming the Consequent
If P then Q.
Q.
Therefore, P.
Example #1:
If taxes are lowered, I will have more money to spend.
I have more money to spend.
Therefore, taxes must have been lowered.
THAT is a logical error, comparing the LCOE mayybe a “flawed approach”, a mistake, misleading,
but it is NOT a LOGICAL error.
Absolutely true. There is no logic in LCOE of W&S, nameplate capacity for starters. 😉
Seems you never studied basic logic in your FAILED Eng-Lit attempt ??
You are yapping gibberish .. again. !!
The sequence goes:
Conditional – If p then q
Inverse – If not p the not q.
Converse – If q then p.
Contrapositive – If not q then not p.
The conditional and Contrapositive are always both T or both F.
The Inverse and Converse are always both T or both F.
Your sequence:
Cond: If taxes are lowered, then I will have more money to spend.
Converse: If I have more money to spend, then taxes are lower.
As above, the true/false status of the Conditional statement has no relationship to the truth/false status of the Converse.
The truth table goes something like.
Cond T F T F
Inve T F F T
Conv T F F T
Cont T F T F
As a result, your logical inference is meaningless.
We are often told that wind and solar, if not cheaper, are at least cost competitive with fossil fuels. Dead wrong!
Well it’s a very hard lesson to learn now with offshore wind turbines clearly pushing the engineering limits of blade size in order to make the costly platforms pay-
Second turbine blade failure hits world’s largest offshore wind farm, in fresh blow to GE Vernova | RenewEconomy
story tip
Wrong. No one would replace nuclear electricity with wind or solar because cost of dismantling a nuclear plant is astronomic.
Better: No one would replace a nuclear power plant with wind or solar because…
wind or solar (or both) CANNOT REPLACE A NUCLEAR POWER PLANT.