by Peter Davies
While onshore wind generation has been relatively inexpensive for some time, solar PV and lithium ion battery storage costs have recently shown dramatic reductions. So can Texas, with excellent onshore wind and solar resources, be powered economically entirely by renewables in the 2030-40 time frame? This article brings together the available public material to estimate the cost.
Part 1 of this article looked at the current Texas ERCOT (Electricity Reliability Council of Texas) grid and used an hourly simulation spreadsheet containing actual 2010-12 load, wind and solar irradiance data to investigate the potential increasing use of wind, solar PV and two tiers of storage in the ERCOT grid. Based on a high-level design, the grid hourly simulation results indicate that a full renewable solution for the ERCOT grid should be technically feasible. But cost must always be one key criterion and part 1 did not address cost.
It is recommended that you read part 1 first.
The article below recaps the proposed 100% renewable solution from part 1, summarises the low and high range of total future 100% renewable electricity costs and includes a comparison with current Texas wholesale electricity prices. For casual readers this may be enough information. A link is provided to general pricing method information and the detailed current and future costing of individual components. Finally there are a few paragraphs on regulation and a summary.
Some caveats. This article is specifically about Texas. Texas has excellent wind and solar resources and the 2030-40 renewable generation costs are specific to Texas because they are based on current Texas costs. For instance solar PV costs elsewhere will differ from those in Texas. In New York, UK or Germany costs would be higher because there is less sunlight. In Chile or parts of the Middle East and Africa they would be lower because the sunlight there is even better. Some capital costs are global, such as those for battery storage, but since the cost of capital differs between countries, may still lead to different contributions to electricity costs.
To avoid any more confusion the term “grid model” spreadsheet used in part 1 will be replaced by the term “grid hourly simulation” spreadsheet in this article.
Finally, despite my best efforts, please do not treat the future 2030-40 costs as definitive – although hopefully they give a good indication of what is to come.
Summary from Part I
The grid hourly simulation download shows that in scenario 3 of part one 100% renewable generation could meet 2010-12 ERCOT demand scaled to a peak of 71 GW using the following system components and attributes.
While in 2030-40 the total load might vary from this, it is assumed that it will follow the same overall profile as in 2010-12. Since unit electricity costs are dependent on this profile, any increase or decrease in load should not change the unit costs significantly. In practise future additional ERCOT loads, such as electric vehicle charging, are likely to be more flexible than historic loads.
100% renewables system cost contributions
The table below gives the contribution of each component to the average cost of electricity supplied.
LCOE is “levelized cost of electricity” and is a method of assigning a single cost in $ / MWh to the cost contribution of each component of the solution. The aim of using LCOE for the cost model spreadsheet is to simplify it and thus make it easier to understand. There is also a table below of the approximate new capital sums required.
The 100% renewable solution wholesale cost of electricity would thus be between $61 and $92 / MWh, or 6.1 to 9.2 cents / kWh.
LCOE costs in the table above are derived either from current LCOE costs or from current capital costs. Where the cost has been derived from capital costs a 6% cost of capital has been used. Subsidies are excluded (i.e. all costs are before subtraction of any subsidies which might be available at that time). The overall sensitivity to the cost of capital is in a further table. Tax implications are not taken into account.
The detail component links explain the derivation of each LCOE from current or near-future costs and learning rates.
Additional Capital Expenditure
These figures are approximate. A lot of them will hopefully improve if the approach to estimating future LCOEs is as conservative as intended. For instance increasing the capacity of existing CREZ transmission line routes by a factor of seven could result in considerably lower unit costs due to increasing scale. New transmission line unit costs may also get cheaper over time with increasing automation.
If the tier 2 mixed renewable gas storage process referred to in part 1 becomes mature and economic it would mean a smaller electrolyser capacity requirement and cost.
These possible developments are likely within the 13-23 year timescale but reductions are difficult to quantify right now, so no attempt has been made.
This article is based on a peak load of 71 GW and average load of 39.5 GW. However, the load and thus capital requirements might also go down or up as future energy efficiency improvements offset new possible loads. Air conditioning is already a significant electrical load, but a switch to electric vehicles and electric heating of buildings with heat pumps could add multiples of 10% to the existing load. Although the capital costs would vary with higher loads, the LCOE figure should be similar as the whole system would expand pro rata.
The total capital cost figures are significant. One comparison is that the 19 GW of wind currently installed on the ERCOT grid by the end of 2017 probably averaged something like $2bn / GW, for a $38bn total over 15 years, topped up with additional gas generation installed which is relatively cheap and with $7bn for the existing CREZ network enhancements – perhaps a little higher than $50bn of total capital investment over 15 years.
Another investment comparison is from a report on possible USA oil and gas investments between 2017 and 2035 which suggests a total between $1.06tr and $1.34tr. Texas electricity load is 10% of that of the USA electricity grid so could perhaps be compared with $106bn to $134bn of oil investment from this report. Texas renewables electricity grid capital investment levels are somewhat higher than that.
Sensitivity to cost of capital
The sensitivities below have been calculated by varying the single cost of capital (discount rate) figure in the cost spreadsheet.
The overall LCOE does not appear to be highly dependent on the assumed cost of capital.
Bear in mind that $40.0 of the low LCOE and $57.1 of the high LCOE costs have been derived directly from LCOEs (wind, solar PV, gas turbine generation) and are thus not affected by changes to the spreadsheet cost of capital percentage. Effectively the assumption is that the implicit cost of capital will not change at all for costs derived from current LCOEs.
Comparison with current ERCOT electricity wholesale prices
Average prices for recent years are given in the chart below. The recent price reductions are mainly due to the decreasing price of Texas natural gas.
These prices are not comparable to the range of costs for the 100% renewable Texas proposal. They may not include the ERCOT overheads such as the transmission network costs, of which the CREZ network enhancements would be a significant fraction.
Due to reductions in the Texas natural gas prices, recent annual electricity prices are lower than the range of costs for the 100% renewable solution proposed. But 2016 ERCOT prices are probably unsustainably low.
The presence of large quantities of PTC-subsidised wind power appears to lower average power prices, sometimes becoming negative as the charts below indicate. Negative power prices will become almost impossible once all wind farms reach the end of their ten year subsidy periods soon after 2030.
At 2016 average ERCOT prices of $25 / MWh, coal and nuclear plants are unprofitable and would eventually close. The resulting downturn in coal and nuclear generating capacity would increase average electricity prices. New natural gas generation would not be profitable either, though old plants fully depreciated might remain profitable. New wind with a PTC subsidy can compete and new solar may be able to if the costs go down rapidly enough.
At the 2016 average Henry Hub (Texas) natural gas prices of around $2.5 / M Cu Ft (thousand cubic feet) the cost model shows an LCOE for CCGT (combined cycle gas turbine) generation with high capacity factors of $31.6 / MWh (low) and $33.1 / MWh (high) compared with an actual average price of around $25 / MWh. One possibility is that the installed CCGT generation was not profitable in 2016, in which case prices must rise at some point. Alternatively the installed CCGT generation is profitable but more fully depreciated than allowed for in the cost model. In that event, since the existing CCGT plant would be retained in scenario 3 (although fuelled by synthetic renewable methane), the cost model back-up generation costs should be reduced by something like $6.6 / MWH (low) or $8.1 / MWh (high) to correct for the real costs.
Although Texas has plenty of natural gas, the provision of more pipeline capacity to other US regions or an expansion of LNG (liquid natural gas) export terminal capacity would result in higher Texas natural gas prices more representative of the global LNG market. This would increase the electricity prices. If a future congress and administration ever passed legislation taxing carbon dioxide emissions this would also increase electricity prices.
The EIA projects Texas natural gas prices rising to $3.75 / M Cu Ft in 2019. At that fuel price the cost model gives a CCGT LCOE of $38.9 – 40.4 / MWh for high capacity factors. Companies can hedge against future higher natural gas prices by signing a power purchase agreement directly with wind or solar PV electricity providers. The price is fixed apart from cost of living increases. Companies are generally prepared to pay a premium on current prices to achieve such certainty.
Texas legislature enacted SB 943 which categorises storage as a “generation asset” and thus requires ERCOT to allow grid connection on request. The Texas PUC (Public Utility Commission) enacted rules 25.192 and 25.501 which ensures storage is treated as (deregulated) wholesale generation and does not incur fees for transmission (since it charges at the same point in the network as it discharges) or retail distribution. As well as other applications of storage, these rules encourage use of storage to time shift electricity supply where the provider of the storage is assumed to take advantage of arbitrage (charging when electricity prices are low and selling when they are high).
Rules such as these enable storage to compete with some of the current, more expensive “peaker” plants which are inefficient, have high fuel costs and generate only when electricity rates are high. They may also be sufficient to get to a high level of renewables and storage, but not to a 100% renewables solution. One problem is that high levels of storage in themselves reduce the price discrepancy between peak times and off-peak times – a phenomenon known as self-cannibalisation.
There are other regulatory issues in an economic 100% renewables grid. The requirement for (renewable) gas turbine generation is clearly sporadic, and the plant owners may be reluctant to take high per unit payments for only those occasions when back up renewable gas generation is actually required as the load factor of 6% is low will vary year by year. A similar problem occurs with the requirement to produce hydrogen or methane via electrolysis – the availability of spare electricity is intermittent, requiring provision of capacity with a small load factor of 18%. Again payments would vary year by year.
One solution commonly adopted elsewhere is for the majority of revenue for such plant to come from capacity payments with only a small proportion of revenue from generation or actual use. So far the ERCOT tendency to avoid making capacity payments has resulted in lower electricity prices, but this policy may not work well in securing the necessary investment at much higher levels of renewable and storage penetration.
One further issue is that Texas utilities cannot own generation or storage. There are ways around this, but it certainly needs thinking about. Currently the Texas wind power boom has been financed almost exclusively by private capital.
The current regulations controlling the ERCOT grid will not be sufficient to allow a 100% renewables solution to be implemented in a cost-effective manner, even if the raw costs are economic as presented above. The required, supporting, regulatory changes will certainly exercise the minds of the experts in the Texas PUC and ERCOT for some years to come. Fortunately the situation will develop only slowly, giving time to develop and test policies before the effect of them becomes crucial a decade or more from now.
In terms of demand and supply, a reliable, 100% renewable grid solution for Texas is possible using large-scale technology available today. No major technical innovation is required, and no miracles! Based on current Texas and global prices and trends the average cost of wholesale electricity before local distribution costs is likely to be between $61 and $92 / MWh. Although affordable, these costs are higher than Texas wholesale 2016 prices averaging $25 / MWh, which look unsustainably low.
Some caveats. This article is specifically about Texas. Texas has excellent wind and solar resources and the 2030-40 renewable generation costs are specific to Texas because they are based on current Texas costs. For instance solar PV costs elsewhere will differ from those in Texas. In New York, UK or Germany costs would be higher because there is less sunlight. In Chile or parts of the Middle East and Africa they would be lower because the sunlight there is even better. Some capital costs are global, such as those for battery storage, but since the cost of capital differs between countries, may still lead to different contributions to electricity costs.
Potentially cheaper, currently less mature, technology may be robust and economic by 2030-40 which could reduce the costs of such a 100% renewable solution.
Don’t treat the numbers in these articles as definitive. See them instead as a guide as to what to expect in the 2030-40 time frame. Let us all see what actually happens. Interesting times.
Moderation notes: As with all guest posts, please keep your comments civil and relevant.
APPENDIX – Technical details
Before delving into the detailed component costs, some general information may be helpful.
Cost model spreadsheet
The spreadsheet cost model calculates the average future cost of electricity supplied in 2030-40, irrespective of whether it was supplied direct through renewable generation, through the tier 1 battery storage, or through the tier 2 renewable gas storage using gas turbine back-up. It uses grid hourly simulation inputs and outputs together with ranges of costs and lifetimes for various system resources and the cost of capital, assumed to be 6%.
The cost model is available here to download and modify at will, either to cost different scenarios or to adjust the ranges of future costs to reflect different information or to determine how sensitive the result is to the individual cost ranges. The same link also includes the grid hourly simulation and its user manual.
In the cost model spreadsheet the CFs (capacity factors) for wind and solar PV generation are used solely in an average of LCOEs weighted by type of generation (wind vs solar PV). Since, from the grid hourly simulation, the default CFs are very similar (32.5% and 32.4%) the exact proportion of wind and solar has little effect on overall generation costs. The CFs are not used in the calculation of the future LCOE of the wind or solar PV generation.
Actual and discounted lifetimes
The assumed actual lifetimes are given in the table below. The discounted lifetimes are calculated from the actual lifetimes but also take into account an assumed 6% average cost of capital. The discounted lifetimes must always be lower than the actual lifetimes. Dividing capital cost by discounted lifetime gives the annual capital charge for a component which can then be spread over annual electricity supply to give the LCOE capital cost contribution for that component.
For a 6% cost of capital the maximum discounted lifetime would be 16.7 years, representing interest payments for a component with an infinite lifetime.
The costs of wind and particularly of solar PV generation and battery storage have reduced dramatically over the last few years. This has been due to product improvements and to the manufacturing learning process which, since the days of the model T Ford, has resulted in a similar percentage price drop for manufactured products for each doubling of the global installed capacity. The drop depends on the product and technology.
The range high cost estimates of system components have been made taking into account current Texas costs where available (e.g. wind, solar PV), or global costs if not (e.g. battery storage), with a very conservative learning-rate discount applied. The range low cost estimates typically assume the full historical learning rate reductions apply to each future doubling.
US federal tax credits
The US Federal PTC subsidies applied to the 2015 or 2016 Texas prices for wind and solar PV which are used to represent current costs. Anonymous PPA (power purchase agreement) strike price information is available. It excludes the PTC refund, which is a direct reduction of the tax liability on profits generated by the equity partners in the renewable generation project. This subsidy is thus paid directly to the project by the IRS and is not part of the PPA contract price paid by the purchaser of the electricity.
There is no doubt that the IRS contributed around $23-24 / MWh for the full PTC tax subsidy in 2015 and 2016, but this is not the same as the value to the project. The problem is not difficult to see. Texas wind PPA contracts signed in 2015 are for less than $20 / MWh (2 cents / kWh). On its own, this revenue is far too low to allow a claim for $23-24 / MWh tax reduction. Solar PV PPA prices now start at $31 / MWh, also low enough to cause the same problem. Clearly there was much less of a problem when wind and solar PPA contracts were well above $100 / MWh.
One project option is to bring in an equity partner whose profits mainly come from areas other than low-cost renewable energy projects. Such partners need an additional cut of profits to make participation worthwhile. Thus the PTC tax subsidy is worth less to the other project partners than the IRS is paying out. A report and presentation on tax incentives by the Lawrence Berkeley National Laboratory contains estimates that the true value to projects of the full PTC of $23-24 was around $15 / MWh (two thirds of the subsidy) which is the 2015 and 2016 PTC value assumed in this article for wind and solar PV projects. The URL above has recently changed twice, but in case of further problems copies of the report and presentation files are also available in the Dropbox folder linked here.
One way of looking at it is that if the PTC had not been available then less costly long-term bank loans rather than more costly equity would be used for more of the capital funding.
Thus the PTC is no longer an efficient tax subsidy. It served its purpose in bringing USA wind and solar power to mass market volume. But it has already been discontinued for solar PV, though the ITC remains, and it is reducing 20% each year for wind power construction starting before 2017 before complete phasing out for construction starting in 2020. The basis for it is thus unlikely to be changed now.
The ITC (investment tax credit) is an alternative for both wind and solar but is less generous at today’s renewables’ prices. Recently it was 30% for projects starting construction before 2017 but then scales down each year until 2022 at which point it will remain at 10% for solar power until the law changes.
None of the range high or low costs for 2030-40 assume a subsidy. In the cost derivations in the links below the PTC rate has been used only in the calculation of current unsubsidised costs.
Detailed 2030-2040 cost derivations
The following links go into some detail on how 2030-40 Texas costs for the individual components are derived from the available reference sources. Be selective if you wish!
Pingback: Electricity in Texas. Part II: the cost of a 100% renewable grid – Enjeux énergies et environnement
Wind and solar are not sustainable. They are hugely expensive now when all properly attributable costs are correctly attributed, and need massively more expensive back up or storage to make them dispatchable. They will never be able to supply sufficient energy to meet the ever growing demand for electricity, let alone energy. They are entirely dependent on fossil fuels.
Pedro A. Prieto (2017), SPAINS SOLAR REVOLUTION REVISITED (SIX YEARS LATER)
It’s mostly about PV, EOEI, sustainability and cost. I receive this comment on the CST part.
“…the actual efficiency of a plant in winter is in general significantly lower than in summer and varies according to the priorities underlying its design. (Jones et al. (2001), Wood et al, (2013, 4-14), Siangsukone and Lovegrove (2003), Odeh, Bahmia and Morrison, (2003), and Kaneff (1991).
That the effect is not trivial is evident in data via a personal communication from the Torresol generating company which operates Gemasolar in Spain (Marin, 2015), and from Solarstor, (2017.) The Solarstor device has an average ”Field efficiency” in summer that is twice its winter value i.e., the ratio of heat collected to solar radiation intersected by heliostats. This falls sharply as DNI falls, that is, faster than the fall in DNI. For instance at 400 W/m2 “field efficiency” is 61% below its level when DNI is 1000 W/m2, and heat is being collected at only 15% of the 1000 W/m2 rate.
The data on Gemasolar confirms the indication from Solarstor that the effect is marked. When DNI is 463 W/m2 the efficiency of heat delivery is only c. 20%. If a turbine efficiency of 33% is added the efficiency of solar to electricity generation would appear to be under 7% (…and this does not take into account loss of parasitic energy.) If this reasoning is more or less valid the CSP contribution represented in Fig. 6 in Lenzen et al. would have required more than four times the 61 GW capacity found to be needed (or would have required resort to be made to some other storage strategy.) Note that average Australian demand is 23 GW.”
Correction: The paragraphs I quoted from the emails are from a different study.
Peter Lang: Pedro A. Prieto (2017), SPAINS SOLAR REVOLUTION REVISITED (SIX YEARS LATER)
You ought to address the details of Davies’ essay about Texas.
The lessons are globally applicable to weather dependent renewables. They are not close to viable and never can be. They are not sustainable.
Peter Lang: The lessons are globally applicable to weather dependent renewables.
Clearly Texas is different from Spain. The question is when/whether the differences are big enough to matter. For Texas, much depends on the future evolution of prices of turbines, PV panels, batteries/fuel_generation, and natural gas. Near term, increasing exports of LNG are likely to drive up gas prices.
We’v discussed this many times before. No point going over it again. The key points are:
– Texas is not the world. Nor is Spain. Even if either of these states were close to being viable, they do not say anything about solar or winds viability for supplying a substantial proportion of the world’s energy needs, securely, reliably and financially viably. he argument used to justify renewables is that they are needed to ‘save the planet’. The justification is BS for reasons summarised below.
– huge subsidies needed for wind and solar or they don’t get built or go broke if already built. That is the first reality check that they are not even close to being financially viable.
– they transfer huge additional costs onto other generators and the grid; threse costs are not assigned to the renewables, as they should be.
– The transfer costs increase as penetration increases
– CO2 emissions abatement effectiveness reduces rapidly as penetration increases – at 20% abatement effective is down to about 20% (but varies by grid.
– Their very low EROI means they are not sustainable. They are entirely dependent on fossil fuels. This is what the Spain analysis (and Europe and elsewhere) really points out.
– They can never supply a large proportion of world energy supply, let alone world electricity supply, so they cannot replace fossil fuels when prices increase in the future and cannot make a significant contribution to reducing pollution or GHG emissions (not the same thing, BTW). the never ending per capita increase
Identifying the challenges of renewables, as you do above, is only the first step. The next steps are to determine how to beat those challenges, put together a suitable solution and evaluate how effective that solution is. This is what the ERCOT grid simulation and cost model are all about.
The grid simulation and cost model results indicate that Texas wind and solar PV with appropriately quantities of over-generation and short and long-term storage could have satisfied 100% of ERCOT demand between 2010 and 2012.
All the major solution components have 2030-40 cost ranges, hopefully estimated on a conservative basis, and not including any reduction for subsidies. The actual Texas wholesale electricity prices in 2005 and 2008 fall in the middle of the range of estimated future 2030-40 costs for the renewable solution. So the future renewable solution is not hugely more expensive than wholesale electricity has been in the past. And there are identified potential cost reductions in the pipeline from new technologies not yet mature enough to use in a cost model which might reduce costs still further.
It’s a specific solution for Texas, but without doing similar detailed work for other places you can’t justifiably claim that renewable solutions elsewhere wouldn’t work or would be unaffordable.
Peter, the links to the detailed derivations of cost are now working. Sorry about the delay.
Peter Lang – please read the study and comment on that.
As I was reading through this post, in the back of my mind I had thoughts of Robert I. Ellison discussing UV influences on polar pressures and changes in the location of the Southern and Northern Hemispheres so called Polar Vortex, that is, descending into the lower latitudes. As cloudiness and rainfall, and possibly wind directions and speeds may be influenced by the Polar Vortex as it descends and rises in the Northern Hemisphere speaking of Texas in particular, to me at least, these Polar Vortex influences may be relevant in any calculation regarding long term dependency on 100% renewable energy.
As I understand one of the consequences of a warmer world as projected by GCMs, there will be more cloudiness and rainfall. In some of the scary scenarios of Business-As-Ususal regarding climate change, the weather will become extreme, i.e. storms becoming more ferocious: high winds where the windmills will shut down, deluge rainfall, and, under the BAU scenario, there will be black skies from dense clouds, dust, and black carbon aerosols along with drought and still air.
It seems that the author is depending upon the weather to a large degree in making calculations regarding renewable energy. From my experience, such a dependence is fraught with major uncertainties. Friends of mine, farmers in particular are dependent upon the weather for their livelihood, and, given what they know and have experienced, that is why they take out crop insurance.
The atmospheric carbon dioxide growth rate has been tracking with sea surface temperatures of the southern ocean since the inception of the Mauna Loa Observatory data set in 1958. If the future is anything like the past half+ century, then business as usual scenerios will produce no greater carbon growth than other, lesser scenerios. In the same way that we shouldn’t depend upon the weather in making calculations regarding renewable energy, we shouldn’t depend on the climate models either…
RiH008, Yes the grid simulation is effectively making the assumption that the weather in 2030-40 will be similar to that in 2010-12 (the years the base load, wind and solar data came from).
However, the ability of the system to meet demand at all time is not weather dependent. Although sufficient renewable (synthetic) methane for back up is expected to be produced from surplus renewable generation, if something goes wrong the methane supply can just be topped up from the many Texas gas fields!
Researchers have been underestimating the cost of wind and solar
Electricity prices in Denmark and Germany are twice the price in France:
Peter Lang: Electricity prices in Denmark and Germany are twice the price in France:
Texas! Davies already allowed that costs of renewables would be greater in Germany.
In Georgia ratepayers are paying 18% of their electric bill for a unfinished nuclear plant that is bankrupt. I predict the plant will be finished with federal money so we can all share the cost of having reliable, clean, nuclear base load power. If you take out the clean part, the US would never build another nuclear power plant because they are a waste of money. Let’s just wait till China figures it out and maybe we can afford to license the technology. China will complete five new nuclear power plants in this year alone.
Read more at: http://www.nationalreview.com/article/450114/nuclear-power-plants-united-states-strategic-dimensions-russia-china
It’s hard to understand why they are building giant reactors instead of going to the small modular that can be built in factories shipped on trains.
Maybe it’s because we didn’t invest in that vision of nuclear energy over the last couple of decades. The vast majority of money the Dept. Of Energy spends is on nuclear weapons.
Right now China is investing 20X what we are in genetic engineering and A.I. so they own the future, not America. Do you think Lamar Smith, (the head of the House Committee on Science, Space and Technology) will step up and match the Chinese and invest in A.I. or genetic engineering? No he won’t because he doesn’t understand science or the technology that is changing our reality.
Actually, it’s hard to understand why they just did not build natural gas plants. They would be running right now at a faction of what the consumers will be paying for not getting any power from the abandoned nuclear plants.
On further reflection, I do know the answers. The utilities involved simply did not logically and even-handily consider the the best course of action in the 1st place. They were too heavily attached to nuclear power.
The reason for a large nuclear facility is simply that current USA rules do not allow new designs such as those small package reactor units. US nuclear rules are petrified at a 20 year technical delay level. Even making small safety or performance improvements to US existing nuclear plants takes year of negotiation and planning.
“Actually, it’s hard to understand why they just did not build natural gas plants.”
Probably because natural gas wasn’t cheap at the time.
Actually, only briefly spiked, then plummeted, which reinforces my point. Too infatuated with nuclear power to periodically step back and observe the big picture. Variation on when you are in an ever deeper hole, stop digging.
There are quite a few problems with Gail Tverberg’s report. One big thing is that she claims individual wind and solar need to be paired individually with all resources required to produce “controlled power”.
Using the results of the ERCOT grid hourly simulation, part 1 of this article shows this is not right. For instance the required storage to achieve a 94% renewables solution for Texas is a characteristic of the system as a whole, not of individual wind or solar farms. Wind and solar together are synergistic – you get a better renewable solution by splitting the total renewable generation capacity between them than you would do with the same total capacity installed as just one of them. That means you need less storage (of both tiers) and less back up with wind and solar. See scenario 3 in https://judithcurry.com/2017/05/14/electricity-in-texas-is-100-renewables-feasible-part-i/
Cost of wind and solar supply.
It should be cautioned that the 6,768 electrical generating plants in the US (2016) are housed in bunker like building. Nuclear, coal, gas and hydro. While solar and wind farm (solar roof tops) are in naked fields. Costs must consider that snow storms, tornados and hurricanes etc. will destroy electricity farms, not seen with bunkered systems. The grid is exposed today. We see that effect after every storm. Now add the regular occurrence of wiped-out solar farms. Outages will be measured in months with clean-up and replacement. Simple snow cover over a wide area will cause significant loss regardless of reserved systems (solar). Also, by the year 2030/35. All currently installed solar panels will need replacement (beginning that work). What is that cost at the time the system is planned to be at 100%.
Albert, yes individual wind turbines do sometimes fail in bad weather, especially those deliberately installed in particularly exposed places, such as ridges, to get the best wind. During bad storms which pose a threat to the wind turbines, the operators will put on the rotor brakes and turn the rotor plane sideways to the wind direction (ie. at 90 degree to the normal operational angle with the wind) to present the lowest profile and protect the turbine.
The key thing though, is that when you lose one wind turbine you typically lose only 2-3 MW of generation (offshore wind turbines can be more – up to 13 MW turbines planned for 2023). Even if you lost ten (unlikely), you still lose only 20-30 MW, and, they are not all going to fail at the same time. The grid can cope with this pretty easily. The actual connection to the transmission grid is as robust as it would be in a coal-fired plant as the delicate stuff will be indoors.
However, you should also think about mechanical failure of individual large turbine/generators in a coal or gas station which also happens quite frequently and this time takes out a 500 MW or 700 MW component in one go. This causes hundreds of times the disruption to the grid that loss of a single wind turbine will cause, and is a major reason why you have to have a significant percentage of “spinning reserve” such as 15% of demand in the ERCOT grid. The net of all this is that it is easier to cope with mechanical failure from wind farms than it is from coal or gas plants because the impact of individual failures will always be much lower with the much smaller generators.
For solar PV panels covered in snow you aren’t losing very much generation because you wouldn’t have been getting much out of them in the preceding snow storm anyway. Sure someone ought to go and wipe the snow off, if it isn’t going to melt soon anyway. The best places for solar in the USA tend not to have too many snow storms. Think arid desert in West Texas, California, Arizona, Nevada. Solar PV panels will eventually get installed in large quantities elsewhere, but remember the article is about Texas where the western desert bits with the best sunlight get very little snow.
You are correct, solar panels will have to be replaced. Depending on which web site you Google you will find quotes for lifetimes varying from 20 to 30 years. So panels installed this year might last until 2037 to 2047. Quotes on degradation (reduction of output) vary from 0.5%, 0.7% or 1.0% (Solar City) per year, and this will be factored into the LCOE cost calculations. As time goes on most types of solar panels are getting more durable as you would expect.
Over 20 or 30 years solar panels will get significantly cheaper, so “re-powering” the solar farm is likely to be considerably cheaper than the capital cost first time around. And the LCOE of the solar power produced will be correspondingly lower too. For re-powering in 2037 the LCOE range in the article says $20-30 / MWh (2 to 3 cents / kWh) for solar power for 2030-40 so I would stick with that. For 2047 replacement it is more likely to be towards the lower end of that range or below it. It’s not a large problem right now as Texas has less than 1 GW of solar installed and the part 1 grid hour simulation shows that 80 GW of solar is needed to meet loads similar to those in 2016.
Solar farms have an “inverter loading ratio” or ILR of more than one. This means you will have, say, 33% more maximum power from the solar panels than the solar farm DC to AC inverters and high voltage AC grid connection can pass on to the transmission grid. Because of this, failure of even quite a few panels will not reduce the peak output from the solar farm, though it will be reduced every time solar panel output goes below 75% of the original peak output.
Every one of your power generating assets (except hydro) are exposed to critical thermal differential limits that can significantly reduce efficiency and at the extreme can cause the plant to shut down. It happens every year on every continent now and will only get worse as the temperatures of lakes and rivers keeps rising. Every type of power generating system has it’s strengths and weakness but since wind and solar use little to no water they make an ideal component in a resilient and flexible grid.
Peter and Jack.
I believe it is just a dodge to compare bunker safe generating plants to generating plants out in the middle of all forms of destructive storms and normal unwanted and power reducing weather such as snow. Snow melts yes, but is also covers for days at a time and even weeks unless removed. Ignoring this difference or saying that bunker generation is no more safe than generating plants out being out in the elements is poor planning for a Texas or national grid. How many solar and wind mill farms are required to preplace the 6,000 fossil plants? It is a multitude more leaving even more exposure to damage.
The #1 cause of loss of power to all electricity customers turns out to be lightning, trees and wildlife. Of course we could pay to have all the power lines buried to avoid the tiny amount of time we loose while repair crews fix a small localized outage but that seems pretty expensive. I often wonder why so many anti-renewable people complain about how wind turbines and solar farms look ugly on the landscape and never mention the urban blight of having dangerous, ugly power lines and utility poles in their own back yards.
I noticed you were concerned about the life span of solar panels. From first hand experience I can tell you the annual loss of power is less than 1% (click my name to explore my system). So in a worse case scenario a 300w panel will loose about 1/3 of it power in twenty five years but even then it’s still producing power and will continue to do so for maybe another 10 years after that. When I bought my system the average 60 cell panel was between 200w and 250w. Today I can buy panels that are 17% more efficient and up to 300w for the same price. In fact if I built the exact same size system today (6.7KW) I could do it for $5k less than I spent in 2012.
Reblogged this on Climate Collections.
Peter Davies, thank you for the essay.
You are welcome. Sorry about the fact the links were late!
Looks like somebody is using tax dollars to pick winners and losers.
I think ERCOT is worried about demand not meeting forecasts and justifying their capital investment projections. The reason TXU went bankrupt ($42+ billion) was because they bought billions in $7+ nat gas futures based partly on ERCOT forecasts.
The TX credit is limited to 2,000 EV vehicle purchases. Only $5 million dollars in it. A drop in the bucket. It’s nothing more than lip service and barely that.
This is so out of character for Abbott. Maybe it is political cover for the 95 million dollar cut in the 2017 Texas Commission on Environmental Quality budget? Pretty good trade off, $95m for $5m plus there is no penalty if they never actually spend the money.
I wonder is California is similar to Texas? I believe Gov Brown has put forth the intention or plan to be entirely renewable by such and such a date. I doubt Texas would have such a plan. Trouble is Brown has dedicated so much political capital and real capital on an outdated high speed train, I kind of doubt they’ll have any left for renewable subsidies. We do have that brand new giant solar plant out near Vegas maybe they’ll make more of those.
Texas generates over twice as much renewable electricity as California.
On a per capita basis Texas renewables are close to four times as much as California.
Texas has its own independent electric grid. California does not it shares the western US grid with 10 other states.
So no, California isn’t similar to Texas. Not even close.
What I meant by the same is are they geographically similar i.e. lots of wind and sun. Although finding out that Texas is way ahead of California in renewables is interesting being that liberal California is always bragging about how progressive they are.
David, maybe I need glasses but it says California has 40% with hydro and 25% without whereas Texas is 13 and 13. Also they produce a lot compared to other states from renewable 52,000 from California 60,000 from Texas. I didn’t see the per capita you mentioned. California is ranked 6th w/I hydro and Texas is 16th.
Sorry, I was looking at wrong column (total electric consumption). California uses far less electricity than Texas. Without counting hydro Texas generates 60 gWh renewable and California 50. California has about 50% more residents so Texas generates nearly twice as much renewable per capita.
Geographically not the same if that’s what you were looking for. California has more and higher snow capped mountains which is the primary source of hydroelectric power when it melts. California also has far more moderate climate where little heating & air conditioning is needed which explains a lot of the difference in electricity consumed. Texas has more heavy industry which also consumes more electricity than California which is more agriculture and high tech centric.
Not sure who has better wind & sun. Texas almost certainly wins on sun due to overall lower latitude. California probably wins on wind because it has so much more coastline and desert/non-desert boundaries. Wind is generated across sharp temperature differentials. Differential heating of ocean/land means dependable winds at the shore. Same thing on desert boundaries.
ordvic, Southern California has better solar resources than Texas but not such good wind, but they are within 700 miles or so of Great Plains wind resource which extends down to the south of the Texas panhandle.
Without having modelled California you would expect it could build a similar 100% renewable solution with home grown solar PV and Great Plains wind, but the costs would be a little higher than Texas because the transmission lines for the wind power would have to be twice as long.
Peter, Montana would probably be a good place for renewables as they have lots of wind and sun too even though they are further north. They also have a low population 1.043 million. Also 2/3rds is on the high plains. Great Falls is the Windiest city in the contiguous US 48 states
Peter you have that backwards. Texas is located much farther south on average which means more solar energy. Texas couldn’t possibly have better wind given California’s much greater coastline. The problem is California won’t harvest wind power on the coast because the land is too valuable for real estate development to uglify it with wind turbines.
For solar power there are more factors than just the latitude. Otherwise you would expect the equator to be the best place, and it isn’t. The tropics have too much cloud and rain. The best place is the sub-tropics which has the highest fraction of clear-sky time in a year, and where all the arid deserts are located. The Atacama desert has among the best ground solar irradiance in the world and is located at 23 degree N.
This solar irradiance map shows that for the same latitude in Texas the further west you go the better, and that doesn’t change when you get to the borders of Texas. The deep south of Texas is worse than the westernmost tip, and southern California is better than most of Texas, despite being much further north. Further, the Texas population centres (Austin, Texas, Houston) are all in the East, whereas there are large population centres in California right where the solar irradiance is best.
On the wind front here’s a useful NREL map.
You can see from this that the onshore wind in the Texas Panhandle is as good as the offshore wind in southern California (see purple bits), but the offshore wind in parts of northern California (red and bright blue) beats both. The Great Plains / Texas Panhandle wind comes from three directions: over the Rockies, from the Gulf Coast and down from the Arctic and the intermixing of all three provides the high wind speeds.
Currently offshore is more expensive than onshore wind and takes longer to plan and install. Offshore wind in Europe has come down from €120 / MWh in 2012-14 to around €50-70 / MWh for the latest German offshore wind bids to be installed by 2023, including bids for zero subsidy (i.e. market electricity price only) from DONG and EnBW. Maybe that’s why the USA is suddenly sitting up and paying attention. But there are almost no offshore wind installations in the USA right now whereas Europe has 88% of global capacity with just UK at 36%.
You may well be right that, longer-term, southern California will get its wind power from northern California offshore wind, but this will likely take time. As California seems to be in a hurry there are plans for a 3 GW transmission line from California to Wyoming to tap into the world-class wind resources there. See http://time.com/4793897/wind-power-catches-a-mountain-breeze/ . Either way the longer distances for wind power transmission for California means the overall costs of a renewable solution will likely be a little higher than for Texas.
and the Southwestern United States (Arizona, California, Nevada). The city claiming the official title of the sunniest in the world is Yuma, Arizona, with over 4,000 hours (about 91% of daylight time) of bright sunshine annually.
I believe there is downloadable solar radiation data available that could resolve the competing claims of the Atacama desert and Yuma, but can’t remember where it comes from. The SolarAnwhere data at https://data.solaranywhere.com/Public/SelectData.aspx may not contain easily accessible total annual figures. If you want to have a go then NREL’s web site would be the place to start looking!
No, Texas beats California in solar potential. Houston #1 city in US with Los Angeles a distant second place. San Antonio beats San Diego by wide margin and California doesn’t even have another top 10 city while Texas has Dallas in the top 10.
California KILLS Texas in wind potential. Texas has essentially ZERO area in Superb, Outstanding, and Excellent categories while California’s coastline has little other than those categories. Like I said California isn’t going to uglify its high $$$ coastline with wind turbines.
Wrong yet again, Davies, fercrisakes. Don’t you ever check your facts before you blurt? EVER?
Equatorial regions kick ass in solar potential but a bit farther north in the topics is the best. The Tropic of Cancer running through Africa, Middle East, and Central America rules. There are a shiit-ton of deserts in the tropics. Duh.
Your Tier 2 costs look hugely unrealistic. No one has come close to 34% efficiency for methane synthesis, storage, and regeneration. You dropped a decimal point. Try 3.4%.
Power to gas doesn’t scale and you neglected parasitic distribution losses over transmission lines and NG pipelines.
Efficient gas generation requires concentrated CO2 as the feedstock. There’s a limited amount largely from industrial smokestacks. Surplus electricity from solar/wind must be transmitted to decentralized production plants co-located with concentrated CO2 sources. Then the gas has to be stored and eventually redistributed to decentralized combined-cycle generators. Transmission grids and pipelines mostly don’t exist where needed so all that has to be built, maintained, amortized into final cost.
The parasitic losses always kill these pie-in-the-sky schemes. The technologies needed for 100% renewable have been around for 100 years. There’s a reason why none exist except as small scale novelties.
David, losses from high voltage transmission lines are only a few percent, and natural gas networks have less losses than transmission lines e.g. 2%. This is really below the threshold for inclusion into the grid hourly simulation. If you wanted to take account of it then just bump up the total costs by 3% or 4%.
There’s no reason why the electrolysis needs to be co-located with a CO2 source as the hydrogen can be piped to the CO2 source if necessary. Cement production is a good source.
The reason no-one implemented a 100% renewable scheme in the past is that the electricity produced would have been too expensive to consider. But wind is now dirt cheap and solar PV has come down 78% in the last five years with more to come – see the links at the end now that they are working.
Hydrogen is exceedingly difficult to pump. The molecule is so small that leaks become overwhelming.
And there’s not enough concentrated CO2 sources to begin with which means it doesn’t scale.
Your lack of depth and glossing over important details is overwhelming as well.
David, the detailed links are available now.
(be careful with the currency symbols in the paragraph below!)
The biggest tier 2 cost is electrolysers. Since sending the article to Judith I found a presentation from ITM power which says it has hit the EU objective of €1m/MW. See slide 3 of http://www.itm-power.com/wp-content/uploads/2017/01/Company-Update-February-2017.pdf. The figure used in the cost model spreadsheet is $1.2m/MW electrolyser capital cost for 2030-40 which is around €1m/MW at the current exchange rate of 0.85 Euros per USD. There is no statement I can find on the lifetime of ITM Power electrolysers so on a conservative basis it is probably right to use this current price as the 2030 “high” price. In reality the cost is going to be much lower in 2030-40 but this might be compensated to some extent by a lower lifetime right now.
PEM (proton exchange membrane) electrolysers can exceed 70% efficiency (some are claiming 80%) for hydrogen (and oxygen) production, and CCGT (combined cycle gas turbines) can be more than 60% efficient, so the base figure for hydrogen is around 42% efficiency (43% used to be the old figure in Wikipedia). The reduction to 34% for converting to methane is because the conversion generates heat so reduces the energy in the fuel. But the order of magnitude of the 34% is definitely correct and 3.4% is way too low. There are links to the subject in part 1.
Peter Davies, thank you for hanging around and continuing the discussion.
There is an article at Tallblokes shop showing how they’re exploiting children in Africa to mine cobalt for Elon Musks batteries. It seems once again were exploiting Africa to build our shinny new toys. Supposedly Africa has nearly all the cobalt reserves in the world. I guess that’s why baby killer Musk hides from the press.
Average wholesale electricity cost of $61 and $92 / MWh compared to $25 currently, perhaps going to 31.6 / MWh to $33.1 / MWh… sounds like we’re simply being told what the price needs to be to compete with natural gas…
But they are not competing with natural gas, they have the inside running: “the plant owners may be reluctant to take high per unit payments for only those occasions when back up renewable gas generation is actually required”. If renewables had to compete with natural gas, their numbers would be far worse.
So, export more jobs then. That probably works for Brazil, Russia, India, China…
Strikes me your analysis fundamentally relies on the poor and middle class being forced to subsidize renewable energy for the inane reason of making liberals feel better about what is fundamentally a religious belief.
Dump the dopey idea of 100% renewable energy. Instead, use the right-energy-in-the-right place. If wind makes economic sense, great use it. Ditto for any other resource. The financial forces of the market fundamentally drive towards greater efficiency. That inherently reduces emissions, including the dastardly CO2.
“But the U.S. electricity system is not a free market — it has never been a free market, and frankly it has no reasonably foreseeable prospects of becoming a free market.”
See link above to conservative news site National Review.
That does not mean the market should be deliberately rigged to favor renewable energy. Generally, in state regulated markets there is an obligation to gravitate towards the best price for the consumer. That is completely bastardized when a particular technology is forced on the consumer with little regard for the cost. Renewable energy is a good example of such corruption.
I agree that markets should not be rigged to favor renewable energy. They passed a law in Texas that prohibits cities from blocking drilling inside city limits. I have a 8 well drill site 700 yds from my house in a dense suburb. If you don’t lease your mineral rights to the drillers they just take it anyway. The Texas Railroad Comm. even has rules on how to do it.
I add that forcing to pay “as-you-go” (Construction-Work-progress) for excessively expensive power plants is also unfair. Renewable energy is not the only guilty party, so is nuclear power.
Convenient that the religion also results in wealth transfer to those that will be feeling better, thus making the religion not quite so inane.
‘No major technical innovation is required, and no miracles!’
Really – does it never get dark in Texas?
oldbrew, read part 1 then download the Texas grid hourly simulation spreadsheet. Using real data from the years 2010 to 2012 it contains actual hourly demand (later scaled up to a 71 GW peak), actual hourly wind generation for the whole of Texas, and actual solar irradiation (which does go to zero when night falls) for four representative 10km x 10km squares from which solar PV output is calculated.
West Texas and Panhandle wind has a greater tendency to blow once it gets dark. See part 1 for a couple of charts on this.
Great Falls Mt is an interesting place in that it gets most of its power from 5 dams on the Missouri breaks. They use gas for furnasses (also electric furnasses) and electric for stoves. They are ranked 21 for renewables that is surprising but have a low population. Only 7% w/o hydro. More antelope than people.
The apparent trick of Davies model and undisclosed assumptions is that he does not include “cost shifting” (i.e., the higher cost of fossil fueled power relegated to only the “duck chart” hours of the day with fewer hours and sales over which to spread fixed costs). Davies model is a pea shell game (look at the pea of no fuel costs not the pea of much higher costs of backup fossil-fueled power). Forget Davies’ numbers and look at his undisclosed assumptions.
Have done some financial work on your observation. Requiring a 25% renewable energy mandate causes the price of a natural gas plant to balloon upwards about 15%, coal about 25% and nuclear over 30%. Is the impact of lower capacity factors forcing costs to be distributed over fewer generating hours.
In effect is a hidden fee on consumers to subsidize renewable energy even more than the “official” government subsidies.
Am referring to power prices in above example.
Wayne, the truth is pretty much the opposite. With a significant level of subsidised wind the consumer pays less for electricity (as the IRS pays for the federal PTC subsidy), but the coal and gas generation plant profit is squeezed, making it difficult to install new non-renewable generation. In this situation wind generators can make money even by bidding negative prices to the grid, because they get a second tax credit revenue stream direct from the IRS when generating. But by 2030 the current wind PTC subsidies will have expired for virtually all of the installed wind generation and such negative price distortions should be a thing of the past.
The way the cost model handles gas turbine back up is to spread the capital costs for it not only over the MWh supplied by back up, but also over the MWh supplied by the renewables as well. It is the equivalent of a full “capacity payment” which covers the capital cost of the back up.
The 2030-40 cost model provides ranges of costs for all the components of the simplified “green fields” renewable grid solution. It’s a thought exercise to answer the questions “Could a Texas 100% renewables grid meet demand at all times (answer – the simulation indicates is that it could), and how much would its wholesale electricity cost (answer – 6 to 9 cents / kWh).”
Where exactly does the subsidy come from? The either?
IRS = those of us who pay taxes. Nice fake, though.
Effectively the subsidy comes mainly from the taxpayers in the rest of the USA and only a little from Texas. Texas has installed way more than its fair share of wind power.
p.s. Texas electricity consumers get cheaper electricity as a result of the PTC (production tax credit) subsidy for the extensive wind installations in Texas. So probably Texas consumer are net beneficiaries after paying a little extra tax for PTC subsidies and the rest of the USA foots the tax bill! Texans are smart.
The PTC subsidy is now reducing by 20% each year for wind and is phased out completely for solar, though that can still take advantage of the ITC (investment tax credit) subsidy, currently at 30% of capital spending and reducing to its long-term value of 10% over the next few years. By 2030 there should be very little Texas wind generation receiving any subsidy at all on the current laws. But watch solar PV grow in Texas.
There seems to a be trend. There is also a new pro-wind article by Roger Sowell at WUWT of all places.
Do you have a link? It’s hard to find on my i phone
This is the one
Another one today. Charles the Moderator there has clearly gone rogue.
The WUWT denizens are not taking this well.
“The WUWT denizens are not taking this well” LOL that’s an understatement Jim! He (Sowell) thinks it was libelous last go around. I just can’t get that worked up over a windmill even if I was again it. Maybe they’re part of Don Quixote’s army.
The links should now be working. Apologies guys.
Peter, a simple question: Let’s say a week comes with no wind (or winds too strong) and no sunshine. How would the grid cope? Statistically, how many such weeks happen in 100 years?
Good question. The simple answer is that it will use CCGT (combined cycle gas turbine) generation from synthetic methane stores sufficient to generate 14,000 GWh (around 14 days of average demand). If you lump together all the deficits into weeks with no supply at all, then we are talking around 3 weeks per year. If the weather and the gaps were particularly uncooperative one year and the renewable (synthetic) methane stores were exhausted by much longer than expected gas turbine back-up generation, then there would be nothing for it but to top up the methane from the many Texas natural gas fields……!
The more complicated answer is below.
In a nutshell we have 27% more total renewable generation each year than total grid demand. Because of the variability of renewables it only satisfies 82% of the demand leaving an 18% gap. 300 GWh of battery storage uses some of the 45% surplus (27% + 18%) to fills anther 12% of the gap to leave 6% (which is around 3 weeks per year) of demand unfilled. 94% is thus satisfied by renewables + 300GWh of batteries.
The 3 weeks deficit are the sum of more weeks then 3 during which the deficit is only partial (some generation from renewables is occurring but not enough to satisfy all demand in that time). So if renewables could supply only half the demand for one week this counts as half a week of deficit.
6% is the correct deficit based on the 2010-12 data.
The 6% gaps extend from under a day up to a couple of weeks. The renewable methane storage uses another 18% of the surplus but at 34% (in)efficiency you only get 6% back up out of this, and you need to store enough methane to generate 14,000 GWh to ensure you can fill all of the gaps.
The simulation ran only with 2010-12 hourly data, but should ideally be run with as many years as possible. 100 years of actual data is not available.
Peter, thanks. If I understand your two answers correctly, renewables need a 100% non-renewable backup for that worst case. We can hope for a technological innovation that would allow us to store an excess renewable energy, but we don’t have it yet – unless the synthetic methane generation and storage already works somewhere. Of the 27% excess renewable energy there will be some losses during synthesis, and there is a guaranteed 46% loss in the CCGT generation. That would make a very poor rechargeable battery.
Curious George, you should read http://beyondthesuperficial.com/texas-tier-2-renewable-methane-production-and-storage/ and the section “TIER 2 RENEWABLE GAS STORAGE” of part 1 ( https://judithcurry.com/2017/05/14/electricity-in-texas-is-100-renewables-feasible-part-i/ ).
“Electrolysis + conversion to methane + later use of the renewable methane as fuel for CCGT” is a renewable process provided it uses renewable energy, not fossil fuel. So it should not be described as non-renewable, even if CCGT fed by renewable methane is used (because it happens to be cheaper than fuel cells).
Chemically, renewable synthetic methane and natural gas are both the same – they are both methane (CH4). For that reason CCGT runs fine with renewable synthetic methane, and the normal natural gas grid transmission and storage facilities can be used unchanged for renewable methane. Depleted gas fields make good storage for renewable (or natural) methane. The UK used to have a depleted gas field offshore called “Rough” storage which contained more than enough capacity to support 14 TWh of generation. Texas has plenty of depleted gas fields.
The 6 MW ETOGAS project (see https://www.ngva.eu/etogas-delivers-worlds-largest-methane-production-plant-to-audi) produces renewable methane and can be scaled horizontally as the input is electricity and the output is (renewable) methane, both of which can readily be split or combined. If you ordered 1 GW or 40 GW of capacity, NGVA would be able to deliver. It is just more of the same. So the entire tier 2 storage solution could be delivered now if someone wanted it, though there is no requirement right now as no-one yet has the high levels of renewable penetration to justify it.
Yes, the efficiency is poor at 34% round trip (electricity in to electricity out at a later date). Since the gap is 6% then you lose 12% (of 100% of demand) on the round trip. But the costs (higher capacity of electrolysers and additional renewable generation) are tolerable and included in the totals in the article above.
It seems that there is a requirement for other sources of power to go idle when anybody wants to push wind or solar onto the grid. If so, what happens if this requirement is removed?
Texas operates a deregulated grid using the “merit order” method of despatch. This means that the cheapest bids are always taken to fulfil expected demand over a specific period (e.g. an hour). Then everyone gets paid the amount of the highest bid required to satisfy expected demand for that hour.
Wind not only has a marginal cost of zero to generate (as there is no fuel) but also gets the PTC subsidy direct from the IRS. So wind farms can bid negative prices down to about negative $15 / MWh to ensure despatch before coal or gas and would still make a marginal profit. You can see this from the pricing chart above for the current system which has spikes below zero, typically at weekends when load is low and wind supplies a higher fraction of demand.
So wind and solar don’t need priority despatch. Even once the PTC subsidy is no longer available they would still be able to bid down to zero and beat coal or gas which can’t bid that low because of fuel costs.
In fact coal takes a long time to start up, and sometimes may bid lower than fuel costs, e.g. if the coal plant would only make a loss for an hour on fuel costs but then expected there to be a few hours of significant profit then they might choose not to shut down for that single hour.
Thanks Peter. If you were designing a system to enable one group of players to bankrupt another group of players that system would be hard to beat.
And it seems that under that system the baseload suppliers must either go out of business or dramatically inflate the amount they charge when they have a monopoly on supply.
Sounds like a recipe for disaster to me.
As an afterthought, it also appears that the fine grained nature of bidding is the basis of the advantage of wind and solar. Make the bidding for supply over a full 24 hours for example and solar could never even bid.
Peaker plants do very nicely out of charging very high prices at peak times by investing in cheap but inefficient generation. And so does ERCOT because it does not have to make capacity payments and the balance favours doing it this way rather than making capacity payments. But it doesn’t work for ever when the fraction of renewables gets too high.
And yes, the market despatch system is indeed survival of the fittest, and it does have weaknesses. For instance the UK grid regulator would like more gas generation installed, but average market prices are too low for suppliers to believe there will be a good return on capital investment for a new gas plant.
Bids over 24 hours would not work because the demand varies so tremendously over those 24 hours – what do you ask for? And the daily peak demand occurs at times when solar can usually generate plus an extension of a few hours into the evening on hot days suitable for supply from batteries storing surplus solar PV. Further, peak days are driven by clear summer skies, which also guarantee solar PV in large quantities will be available.
The net of it all is that it is likely to be cheaper to use a combination of solar PV with storage to cover days and evenings + gas generation for the rest of the time than to use gas generation alone. And there would be nothing to stop solar PV suppliers pairing with gas suppliers to bid this combination.
Wind energy isn’t free. Sources still have to pay the land leases, pay for transmission if they don’t own the lines, maintain equipment, service loans, pay taxes, meet payroll, etc. Davies is an advocate and ignores inconvenient details that clutter up his renewable narrative.
How does wind achieve a zero cost while employing a record number of people? It looks like the bids do consider only fuel cost, but not the real cost. From another angle, what is the cost of coal, oil, or natural gas while they are still under the ground?
David Springer and Curious George,
http://www.webberenergygroup.com/test/html/chapter-21.html describes the difference between the marginal cost of wind (close to zero) and the full cost (which includes an allowance for the capital). It also explains why wind generation usually gets paid more for generating than it bids.
Assume a grid with just wind and gas plants and that you are a wind farm owner with zero fuel costs and close to zero maintenance costs incurred because you are generating (say 0.2 cents / kWh). You are expecting the wind to blow at midnight for an hour and believe you can generate 100 MW from it. You hope that midnight demand will be high enough that gas generation will be needed too, as well as all the wind, but you are not sure. You know the gas plants will be bidding much higher than you (maybe 3 cents / kWh). What do you bid?
Most likely you will bid something a little over zero and much lower than gas will bid. Say you bid 0.4 cents / kWh for 100 MW at midnight. If gas is needed at midnight then you (and everyone else) will get 3 cents / kWh which is what gas plants bid, and have net revenue minus direct costs of 2.8 cents / kWh. If only wind plants bid because the load is low and you are included then your revenue minus direct costs is 0.2 cents / kWh which is a little better than nothing at all. If you try to be greedy and bid 1 cent / kWh and no gas and not all wind is needed you will get nothing because yours is likely to be the most expensive wind bid.
Because most of the time gas plants will be needed you will get 2.8 cents / kWh to put towards your capital repayments, or 0.2 cents / kWh if not. The size of your bid only matters when only wind is needed.
In other words you do expect to be able to pay back the capital cost of the wind farm, including all the people who installed it, but not from your bid amount, rather from the amount that the gas plants bid when they are needed.
Hopefully it may now be a little clearer how wind farms in Texas might think and why wind indeed costs money but still bids very low in the power auctions based on the marginal (not full) cost of generating.
What I have found is that a news story will refer to wind bid prices as cheap. Then others will argue wind power is cheap counting all costs over its lifetime.
A beautiful example of creative accounting – and discrimination.
This is one of the best analyses of the capability of renewables I have seen. It doesn’t seem to acknowledge that virtually all battery storage is not capable of deep discharge though. The PJM RegD signal is energy neutral within an hour. That means renewables cannot be backed up over a period of many hours. For example, nighttime backup of solar. The energy neutral requirement is not a matter of convenience it is a technical requirement for Li batteries. And the battery owners were not happy when the target was changed from 5 minutes to about an hour either.
dougbadgero, You are quite right and the range high price for batteries was calculated based on a maximum 80% depth of discharge. See the detailed link http://beyondthesuperficial.com/texas-tier-1-battery-storage/. This was done in the cost model, not in the grid hourly simulation spreadsheet.
In other words, each used 1 kWh of batteries costing $86 / kWh was assumed to only be only 80% usable, making the cost $108 / kWh.
This was done because of the characteristics of the lithium ion family of batteries (the front runner). Wear and efficiency for lithium ion is better with a reduced depth of discharge. For other battery types it does not necessarily matter to the same extent.
Thanks for the reply. 80% depth of discharge is not technically achievable in the long term for Li. A typical installation has a power to capacity ratio of 1 to 4, for example 1kw/4kwh. That means even at a 1 hour energy neutral target, that storage owners don’t like now, 80% depth of discharge is not remotely achievable.
We need different batteries. I work for AEP, but speak only for myself. We use NaS batteries in some locations that I believe are capable of deep discharge. I am not an expert on the subject but I believe they are more expensive than Li.
Yeah ya can’t swing a dead cat without running into another problem that contributes to making this impractical.
Another problem is why do this in the first place? Electricity isn’t the big problem. Transportation fuel is the big problem. And there’s whole slate of problems with no solution there too. Electric vehicles are still a novelty item just like wind and solar power.
David Springer; Electricity isn’t the big problem.
electricity is its own problem, which is why generating capacity was built in the first place.
The current penetration of EVs (electric vehicles) may be low, but the car industry is swinging towards them. Volvo has announced that all new models from 2019 will include electric motors (hybrids or pure battery electric vehicles). Tesla is expecting to ship 10,000 model 3s per week by the end of 2018, with an option for a range of over 300 miles with the extended battery. All the major manufacturers are expecting EV’s to be mainstream some time in the next decade and a lot of them are now cutting down on R&D effort into internal combustion engine technology.
EVs are taking a 42% share of new vehicles in Norway (which is a big oil exporter) and the CEO of Shell has announced his next car will be all electric. There are now more than 2 million EVs worldwide, though this is peanuts compared to the 200 million electric bikes in China. UK and France have announced that sales of new petrol/gas and diesel cars will be banned from 2040 (which includes hybrids).
The EV revolution is clearly coming, and the only question is precisely when it gets into full swing. Estimates of when EVs will outsell internal combustion engine vehicles vary, but with the current rate of reduction in battery pack prices (see http://beyondthesuperficial.com/texas-tier-1-battery-storage/) it could be as early as 2025, at least in Europe.
All these EVs will need charging, most of them perhaps charging overnight from existing electricity grids.
It’s a solved problem in the United States. Electricity is cheap, reliable, and available in every corner of the realm.
If it ain’t broke, don’t fix it.
The transmission grid can’t handle much penetration of electric vehicles. It’s operating near capacity already.
Once again reality contradicts the EV narrative. I looked into an EV this year. It’s almost an annual exercise. I get 500 mile range and 43mpg from my hybrid electric. I get 200 mile range and 60 mpg from an electric under ideal driving conditions. With the electric I can’t take a day trip to a nearby city more than an hour away at a sustained 80 mph on the highway. Can’t go from Austin to any of San Antonio, Dallas, or Houston. And forget about taking it cross country. It really doesn’t even make sense as a daily commuter for 250 miles per week.
Annual sales of EVs decreasing in the US.
Again the rosy EV narrative is contradicted by reality.
Why did Texas Gov. Greg Abbot sign into law a $2,500 Electric Vehicle tax credit last month? I know you can come up with a hard right conservative reason. Don’t let us down.
If all-electric vehicles become popular in other parts of the world more power to ’em. I don’t live in Norway I live in the US. I wonder how people expect to heat the interiors of those electrics in Norway but that’s not my problem. All-electrics are a non-starter in the US with sales already declining. They were a fad for a short period of time.
At $4 per 100 miles using typical residential electricity rates, EVs cost about a third of what a lot of people spend on gas-powered cars. So, if economics is more of an issue than range, it is a selling point, apart from reducing downtown pollution levels.
You are not trying to fool us are you David?
“U.S. Plug-In Sales Up 19% In July, While Gas Vehicles Drop 7%…
In July some 15,607 plug-ins were delivered, good for a sturdy 19.4% increase in the sector – the 22nd consecutive month of gains.
Through 7 months, the full year counter for electric vehicles has moved into 6 digits, with ~104,863 sold thus far – up 35% year-over-year.”
Jack do you actually live in Texas? There are no tax credits in Texas because Texas has no state income tax.
It’s a rebate. There are lots of rebates to spur energy conservation from central air conditioning to solar panels to electric vehicles.
It’s mostly for political purposes. The same legislators who advocate for energy conservation are advocates for sanctuary cites for instance. Abbot just signed the toughest law in the nation against sanctuary cities. Starting in September gov’t officials can be arrested and jailed for failing to enforce immigration laws. Horse trading happens. Same goes for Texas US house and senate members – they can trade concessions made in state laws for concessions in federal laws.
Thanks for asking!
JimD – regular gas in Texas is just under $2/gallon. That means I get 86 miles out of my Camry hybrid for $4 in fuel. At $0.12/kWh I would get 108 miles from $4 in electricity from a top shelf EV of similar passenger/cargo capacity.
A gallon of gasoline has 33 kWh of energy. That’s $4 worth of electricity where I live. If not for electric drive motors being north of 80% efficient and gasoline drive motors being south of 30% efficient electric vehicles would have a higher fuel cost, not less. Diesel motors get close to 40% so it’s tougher for electrics to compete with diesels. I have a full size 4WD diesel pickup that can’t be replaced by any EV. I also have a 25mpg 1998 Honda Accord with 200,000 miles that cost $5000 and has a good 100,000 miles of service life left in it. No EV can beat that because the capital cost is so low. Over 150,000 miles you can expect a bit more than $10,000 in fuel cost savings. There’s no such thing as a $5000 20-year old EV with 100,000 miles of life left in it. Hands down for *economical* transportation get an older Honda Accord. I swear by them.
Yes I do live in Texas. I made a mistake and called a rebate a credit. We all know that rebate money is a different color than tax credit money, I should have caught that. The reason Greg Abbott signed that EV rebate was because of the filthy air from all the FF burning.
Now admit you are trying to deceive people with your bogus out-of-date charts. Come clean.
I am interested in buying an electric vehicle but they need to make a fundamental transition from having a possible use as a second car in the household for daily commuting! to becoming the prime family car .
In that they are still miles away from being fit for purpose. On our steep Devon hills, with windscreen washers working, head lights and heating on, radio working and with four people and modest amounts of luggage how long would they last?
A second problem is that very many people will not be able to charge them at home as they may not have a driveway or garage.
In that respect some sort of quick battery change or wireless charging would be becessary to overcome range anxiety or the practical
Difficulties of home charging.
How soon do you think those problems will be overcome?
My worst economy vehicle is a 1989 4WD Chevy Blazer, 4.3 liter V6, automatic transmission. I spent about $15,000 for the vehicle and restoration. Everything about it is fuel inefficient from large ground clearance to boxy shape to off-road tires to high-torgue low horsepower motor to high friction losses in the automatic transmission and 8-speed 4 wheel drive. It gets 15 miles to the gallon in normal driving or 10 extremely fun miles per gallon off road.
jackoff4tx I’m pretty sure generating electricity to recharge EV batteries pollutes the air too
In any case even if the electrical generation created zero pollution there aren’t enough EVs on the road in Texas to made a measurable reduction in air pollution.
It’s purely political.
re; EV rebates in Texas.
The devil appears in the details. Only 2,000 rebates are available. Five million dollars total then hasta la vista rebates baby. LOL
An the same time as the EV rebates Abbot signed bills that:
1) cut tax incentives for wind energy
2) suing a polluter now requires permission from the state
3) authorized jail time for citizens & journalists using drones to document pollution violations
Yeah, that Abbott is all about stomping out FF pollution, huh?
Winner! jacksmith4tx + 3
Loser, David Springer – 4 (1 penalty point for childish name calling.)
climatereason, since your petrol is several times more expensive than our gas, the sums could work out even more in your favor depending on your kWh costs at home. Here we get about 8 kWh per dollar, and an EV car uses about 30 kWh to go 100 miles, hence $4 (maybe 3 GBP) per 100 miles. You could afford a long extension cable with the money saved. Most parts of the US gas is between $2 and $3 per gallon.
But that did ent answer my query about the range anxiety in running an electric family car in a real world situation up hills, with heating and lights on and carrying four people and lggage. Any moderate trip would require a charge en route.
As for a long electric extension lead, I think most councils would object to it running across a pavement to someone’s car that might be parked 100 yards from the owners house.
How do you overcome both those problem? It is preventing me from getting an electric car because as I see it the vehicle can only be used as a second and not a first, car.
climatereason: “But that didn’t answer my query”
The answer to your query is that electric vehicles are doubleplusgood.
climatereason, if you can’t park your car on your own property perhaps an EV is not for you. They would need charging stations with faster charging times or swappable batteries.
Most pure EV owners rent a ICE if they need to go on long trips. I won’t quote actual percentages because there are so many exceptions people use to cherry pick but the overwhelming majority of car trips are less than 30 miles, a fact supported by automobile accident statistics. There was a reason why the 1st. generation Chevy Volt only had a 40mi electric range so it made sense as a primary car for most urban dwellers. I love my 2013 Volt and have used it to take a trip to Mexico yet I have only used 32 gal. total since I bought it in 2015 (lease return).
One thing David Springer has right, regardless of what kind of car you own you should drive it till the wheels fall off. I hate the throw away mentality. The last car I owned was a 97 Ford Explorer with +200k on it. Only got rid of it because the maintenance+taxes was costing more than the gas. When the A/C went out I had to give it up.
Fortunately I can park my car on my own property but I understand around 40% of uk property can not do do.
However my query is rather about the transition that Ev’s need to make from a second car, used as a runabout, to being the main vehicle in a household. Until they can do that it will remain a niche product.
Swappable batteries or ultra fast charging times would be a solution but would still need the vehicle to have an acceptable range in the first place of around 400 miles
Yes, I had come to the conclusion that rental would likely be a component of the ev ownership experience. If its just once or twice a year that would be fine. If it became more regular it probably is not suitable due to cost and inconvenience
As Springer suggested, if a new ICE car gets 250,000 miles before it dies, figure how many EV battery replacements that is.
EV not practical for me as only vehicle. In-laws 261 miles away. Make that trip every few weeks. $24 round trip fuel cost in hybrid. Rental would be stupidly inconvenient transferring cargo from EV to rental and back plus about $200 for 72-hour rental, fuel, and parking for the EV. Add an hour of time each way.
jacking4tx glad we agree on something (drive until wheels fall off)
The cost model spreadsheet is now available by following this link.
This is a very simple question to answer.
Let them try.
With their own money at risk.
Pingback: Response to Andrew Rogers’ Texas post on euanmairns.com – Beyond The Superficial
Texas leads the US in killing bats and birds with Wind Turbines. Since the year 2000, wind Turbines are the number one cause of Mass Mortality events for bats.(O’Shea, Cryan et al 2016)
Bats are the best way for nature to control mosquito populations spreading Zika, West Nile virus etc.
Texas communities have begun extensive mosquito spraying projects .
At what point do we say – stop the madness of wind farms?
Tom, bat deaths from wind turbines is indeed an issue. Fortunately there are measures that can be taken to minimise bat deaths. The most important thing is to get the environmental assessment right up front to avoid siting the tubines where they might cause problems for bats. Another way is to stop turbines below wind speeds of 6 m/s instead of below 4 m/s in the seasons when particular bat species are known to be migrating or mating. Other measures are listed in this link – http://news.nationalgeographic.com/energy/2015/09/150902-wind-industry-feathering-to-help-protect-bats/ . And more research into bat behaviour is needed to get good long-term solutions to the problem.
Or just stop installing wind turbines. They’re stupid and unproductive.
That’s a difficult conclusion to square with the ability to get a signed PPA for 10 or 15 years in Texas for under 2 cents / kWh from a wind farm right now, or even under 3.6 cents / kWh if you add back the values of subsidies to the project.
What’s difficult to square is your rosy numbers for cost of wind energy and wind energy penetration decelerating.
If it was like the picture you paint then penetration rate would be sustained or increasing. In the real world that rate is decreasing. From 2005 – 2010 wind energy market penetration grew by nearly 7%. From 2010 – 2015 it grew by less than 4%.
If subsidies are cut what’s that going to do to an already decelerating penetration rate:
1) accelerate market penetration
2) decelerate market penetration
3) no effect
My criticism of your analysis explains what is happening the in real world.
Your analysis contradicts what is happening in the real world.
You produced a narrative. Reality contradicts it.
How many bats and birds does O’Shea, Cryan et al 2016 claim were killed by turbine blades in Texas? I encountered an ornithologist at a wind farm in the Dakotas who was there to count dead birds. She found a tiny number. So there are sites that have minimal problems with birds.
Birds are quickly eaten by scavengers.
Since you feel pretty strong about the health of birds please keep an eye on the Santa Ana Wildlife Refuge, the “crown jewel of the national wildlife refuge system”. Looks like U.S. Customs and Border Protection plans to construct an 18-foot levee wall that would stretch for almost three miles through the wildlife refuge. Home to at least 400 bird species and 450 species of plants, it also hosts both the rare Sabal palm and the endangered ocelot. The refuge is located on the Texas-Mexico border about 10 miles southeast of McAllen in the Rio Grande Valley.
If the levee wall is constructed, it will essentially destroy the refuge, the official said. The proposed plans call for building a road south of the wall and clearing refuge land on either side of the wall for surveillance, cameras and light towers.
I have always wondered why they didn’t just beef up the e-verify system and make hiring a undocumented worker a federal offense with a $250,000 fine(per violation) and a mandatory 5 years in prison. Trump’s wall will cost billions and need thousands of extra federal employees. Federal employees who will be sucking tax dollars for the rest of their lives. Just think of all the long term costs, pensions, health care, disability payments… forever.
EV rebates in Texas.
The devil would appear to be in the details. Only 2,000 rebates are available. Five million dollars available for the program. LOL
In the same times as the EV rebates Abbot signed bills that:
1) cut tax incentives for wind energy
2) suing a polluter now requires permission from the state to sue
3) authorized jail time for citizens & journalists using drones to document pollution violations
Yeah, that Abbott is all about stomping out FF pollution, huh?
There are also federal tax credits of between $2,500 and $7,500 available depending on the range. Details by model are on http://www.fueleconomy.gov/feg/taxevb.shtml .
The full credit is available for the first 200,000 EVs (or hybrids) for each manufacturer. Then there are two quarters of 50% credit and two quarters of 25% credit before there are no more credits for that manufacturer.
Since there are around 26 manufacturers and Texas is around 3/40ths of the USA population its fair share is around 400,000 full credits and some number of 50% and 25% credits depending on how fast EV’s are selling. But whether Texas gets them depends on how quick Texans are on the uptake in buying EVs compared to the rest of the country.
From the information David Springer posted above it looks like the Texas EV credit scheme is dwarfed by the federal scheme.
The part 1 article chart shows the wind penetration in 2016 was 15.1%.
The figures came from http://www.ercot.com/content/wcm/lists/114739/ERCOT_Quick_Facts_71117.pdf . The corresponding figure for 2015 was 11.7% from http://www.ercot.com/content/wcm/lists/89475/ERCOT_Quick_Facts_8816.pdf
That is an increase of 29%.
It was windy in 2016 compared to 2015. Nameplate capacity increased from 18% to 20% of total generation.
That is an increase of 10%. A better than average year but still nowhere near the annual increases from 2005-2010 (1000% total) when all the low hanging fruit was plucked.
It’s moribund outside Texas which doesn’t bode well.
David, you should go back and re-read the part 1 wind section because it explains clearly what is happening to the relationship between wind capacity and wind generation over time.
The actual ERCOT download data from 2010-2012 used in the grid hourly simulation works out at a wind capacity factor of 32.5%. The data is only provided as an average over all the wind farms in Texas. 2010-12 was before completion of the CREZ (competitive renewable energy zones) region transmission network to the population centres, so in 2010-12 most wind farms were not in optimum places. The locations of the CREZ zones were chosen to be good places to site both wind and solar PV farms and phase 2 of the CREZ network has since been completed and provides 18GW of transmission, of which around 3GW is still unused.
I have personally seen wind capacity factor results from just CREZ regions in 2010-12 of 49% (calculated on a similar basis to those which gave 32.5% for the whole of Texas wind in 2010-12). 49% was also the rule of thumb capacity factor figure that BNEF gave me last year for new Texas wind farms. In fact in the new BNEF/BCSE factbook BNEF is now talking about greater than 50% capacity factor for good Texas locations. See http://www.bcse.org/sustainableenergyfactbook/# which also confirms some of the other wind figures in this pair of articles.
As a result, recent capacity additions are worth more in terms of additional generation than the raw capacity addition might lead you to suppose. How windy a year was compared to the average also affects how much wind generation you get in that year, but this effect tends to average out over multiple years.
Wind power is in indeed concentrated in certain states – the windy ones!!! And Texas has by far the biggest grid of these windy states, so what you should look for is a chart of wind penetration as a fraction of overall supply by state and by year. To get you on the right track here’s a chart of all USA wind capacity by year, of which Texas was around 25% in 2010 but is now a little less. In other words the windy states are growing their wind capacity just fine.
You have my sympathies being denied the freedom of choice in your electricity providers. What percent of your bill is actually for electricity and how much are the fees (from their website: Membership fee, Service Availability Charge, Delivery Charge, Establishment Fee, Deposit, Taxes, Municipal Franchise Fee, ERCOT transmission fee)? I must say PEC has one of the worst customer satisfaction ratings I have seen in Texas and are absolutely ruthless to customers who violate any of the terms of their service agreement. But what can you do? You’re trapped in a monopoly and there’s no way for you fight back. If there ever comes a time when storage becomes an affordable option you should have a economic case for going off-grid.
I don’t have a particular problem with PEC. It’s a co-op and I have a vote in who manages its operation and how. Probably like most people when the ballots arrive in my mailbox they go straight into the trash without opening. The electricity is reliable and priced substantially below US and Texas average residential rates.
The total I pay including all fees, taxes, etc is a bit less than $0.10/kWh this month and very close to that for the year. Fixed fees ($27/mo) are a shade over 10% this month but will rise to 20% in December and March when I use less than half as much electricity as in August (highest use month of the year).
Note the average temperature this billing period is a degree lower than last year. Evidently the globe is rapidly cooling. Should I be alarmed?
Note my heating is entirely electric and so is most of the cooking with the caveat that we do a lot of outdoor grilling with propane. I have a small guest house where the hot water heater is propane and not especially efficient too. I spend about $25/mo on propane not counting time and driving expense getting bottles refilled.
The real utility expense hog is data not electricity. Cable bill (internet + cable TV) is about $175/mo and cell phones $100/mo which handily exceeds what I pay for all other utilities combined. I have my own well & septic systems so that’s difficult to expense but amortized cost of capital and maintenance might be $25/mo and I pay another $25/mo for trash pickup so even with those added on AT&T & Spectrum still get more of my money than all other utilities combined.
Unfortunately the retail cost of electricity in Texas hasn’t declined with all this wonderful wind energy.
That begs the question of its advantage unless one values dead birds, bats, noise, and uglification of land.
Check out a company called Gogriddy. https://www.gogriddy.com/
No hidden fees. You pay them $9.99 per month plus the cost of electricity, fees, taxes and transfer fee of 2.9% plus .30 per $100.00.
Here is the pitch: “We’re the only electric provider that gives you the real-time price of electricity for a low membership cost. That way, you pay the same price as power companies.”
Now you can buy electricity wholesale. Sounds too good to be true and I had to think you would love it.
Note wind power cheerleader Peter Davies has no snappy answer for why retail electric cost isn’t falling in Texas.
Natural gas price has fallen in half since wind power build-out began in 2005.
The truth of the matter is that renewable electrical generation, everything considered, costs far more than fossil fuel generation. The cost of electricity at the meter doesn’t lie. The lie comes from renewable cheerleaders like Peter Davies and I’m growing weary of it.
David, from the chart you put up, average retail electricity prices roughly mirror smoothed wholesale prices.
Texas is a deregulated electricity market using “merit order” despatch. So generators bid for specified demand for a period of time (e.g. hour) and ERCOT puts the bids in ascending sequence. It then takes all the cheapest bids required to completely satisfy the specified demand. All generators then get the highest of those cheapest bids, even if they originally bid lower.
Because of the current PTC subsidy, normally wind will be cheaper than natural gas or coal generation, so the wholesale cost will be dictated by the fossil fuel generators, not by wind. Coal pricing tends to be more stable than natural gas pricing. So, at present, Texas wholesale and retail electricity prices are dictated more by Texas Henry Hub natural gas prices than by anything else, despite the presence of cheap subsidised wind on the grid.
Occasionally demand is low and wind prices do affect the wholesale price, very occasionally causing it to become negative, but this is the exception rather than the rule so makes only a small difference to average wholesale and retail prices.
If you live in Texas and want to take full advantage of the effect wind has on the electricity market, then you should enrol for one of the plans which gives you free overnight electricity and schedule your appliance usage to take advantage of the free times. This indeed is one of the effects of cheap wind power in Texas.
Overnight charging of your EV would be a great place to start to use it!
More unresearched bs from Davies .
PEC electric co-op (my only source) doesn’t have any special renewable offers nor does the cost change with time of day.
Even if it did my electricity use is dominated by daytime air conditioning in the summer.
PEC (Pedernales Electric Cooperative) does a time of day and season pricing option, but no free night time electricity. It gets 80% of its electricity from the Lower Colorado River Authority which is only 6% renewables (mainly hydro). The other 20% is directly contracted with generators and looks like it has a large element of wind power. PEC quite rightly seems to be encouraging community solar projects which would boost generation during the summer 12 noon to 6pm peak times, particularly on days where there is no cloud and air conditioning load is highest.
If a substantial amount of solar PV gets installed in Texas over the next few years, this will tend to reduce the price of the summer peak hour electricity. There are approximately 10GW on the ERCOT interconnect request queues right now.
Which part of “my electric use is dominated by daytime air-conditioning in the summer” did you not understand?
Sorry, comment linked to previous thread.
I have worked through the NREL Energy Futures Report – but this comes under the heading of tell us something new. The bottom line is that a deep and early conversion to renewables using existing technology comes at an unacceptable cost.
The problem of spurring developing of cost effective technology is the real policy issue. I doubt that government has much of a role here. What the world needs is cheaper more abundant energy – not more expensive and less abundant.
I’ll discuss technology until the cows come home – but this is mere politics.
“What the world needs is cheaper more abundant energy – not more expensive and less abundant.”
Couldn’t possibly agree more with that. Still convinced that synthetic biology is the answer and it isn’t very far away. Plenty of solar energy available at the surface just need self-replicating biofuel factories to harvest it which is quite attainable. Just need to understand & modify photosynthetic bacteria that nature has already designed & tested over billions of years.
What I meant to say was that it tells us nothing new. Transitioning the energy system using existing renewables is nuts.
I am technology agnostic – but whatever it is must be actually cheap and get there without operational subsidies, targets and taxes. There are lots of promising technologies – some seem quite likely to pan out.
Peter, I’m sure Texas will continue to incrementally advance alternatives where it makes economic sense, but never to the degree or timeline you envision.
“Based on current Texas and global prices and trends the average cost of wholesale electricity before local distribution costs is likely to be between $61 and $92 / MWh. Although affordable, these costs are higher than Texas wholesale 2016 prices averaging $25 / Mwh”. These projections of yours are “affordable”? Doesn’t that depend on how much disposable income one has? Yours is a callous intellectual summation to so easily project this burdensome cost on Texans. What’s the percentage of households living near, or at paycheck-to-paycheck who would be harmed by a tripling of their utility bill? I can’t say, but certainly a massive number. Major subsidies would be required. While you allow that the costs of renewables are greater in places like Germany than they would be in Texas, your prorated costs already equals the multiples Germans are paying for utilities over what Texans are currently paying, and subsidies are still missing in your equation. And why would Texas base its economic future on the EU’s “prices and trends”? What’s the relevance in a trend? An old adage comes to mind; “If all your friends jumped off a bridge then would you too?” Texas voters will never willingly opt to pay 3x the cost for their utilities just because the EU’s brainwashed masses voted to collectively bend over to initiate a trend.
“…please do not treat the future 2030-40 costs as definitive.” I’ll be surprised if in 20 years current alternative tech is all that relevant, which is why I’d prefer to wait 20 years for revolutionary alternative advances, and declining implementation costs, to trump todays costly evolutionary advances and implementations.
“…2016 ERCOT prices are probably unsustainably low.” I’m not sure why there’s such confidence in this belief while also believing alternatives should become a larger percentage of the grid. Massive uptake for alternatives would lower demand for NG. LNG exports more than making up the difference? Maybe. Are China and India going to abandon coal for NG? Maybe they continue to develop clean, cheap coal tech. Who really knows.
I can’t think of anyone who doesn’t believe that the future will see massive advances in alternative energy solutions. Ultimately technology will be developed that will be better economically than fossil fuels, and offer scaleability. My guess is these advances will probably happen within 50 years. It’s interesting that warmists have subtly shifted their argument to align to many “deniers” views who base much of their pro science beliefs on the certainty of major technological advancement. Maybe the difference in beliefs is that warmists aren’t resolute enough in the tech promise (anti science) to eliminate CAGW scaremongering; yet warmists use techs promise to have their cake, and eat it too. Anything to kill a huge capitalistic base today.
I don’t know how to quantify the value of just being more energy efficient but from personal experience I reduced my electricity consumption by over 70% since 2011. I see some of my neighbors electric bills are over $400/mo and I just have to wonder if they are just uninformed or maybe just don’t want to change the way they use electricity (life style, not standard of living). I’m not going to feel sorry for people who pay high utility bills until they at least make an effort to be more conservative.
You mean you don’t feel sorry for people living near, or at paycheck-to-paycheck to cough-up money they don’t have for solar panels for their roof? What about renters who represent vast numbers, most of the low and middle class? Also consider that home ownership has been on a decline, it’s at record lows for Millennials, but also down across all demographics. These are things you can quantify.
No I don’t feel sorry for people living paycheck-to-paycheck because I was one of them a long time ago. We live in a class system so there will always be a lot of poor people. Don’t let empathy or compassion cloud the issue until you have a better economic model than predatory capitalism. Supply side economics is working great and the stock market is at record highs so the Phillips Curve should be kicking in any day now.
Jacksmith – “We live in a class system so there will always be a lot of poor people.” I bet you also believe that there is no upward mobility among classes, a notion that I’ve seen belied many times even recently.
Class warfare is for idealogues. So is the idea of “predatory capitalism”.
“Is all capitalism “predatory”? What does that mean – that there are winners and losers?
In recent decades class mobility been going down but it’s been worse. Looking at the relative size of student loan debt these days compared to the 60s & 70s it’s not getting better for the next generation. I took a cheap shot with the predatory label but capitalism is still one of the better economic models of the last 200 years. Capitalism wasn’t supposed to be a governing philosophy but that doesn’t mean it can’t be. In 2016 the CEO-to-worker pay ratio is 347 to 1, small business formation is going down and we have a multi-billionaire president and executive cabinet. Currently only 268 of the 534 members of Congress are millionaires.
The cost model projections are affordable in the sense that the actual 2005 and 2008 wholesale ERCOT electricity prices fall neatly in the middle of the cost model range. It is only falling Texas (Henry Hub) natural gas prices that have reduced prices to their current, probably unsustainably low, levels. And the EIA are predicting a significant rise in natural gas prices at Henry Hub (Texas) by 2020. Not that I believe all the EIA future predictions.
The Texas costs are based on current Texas or global prices and don’t use anything happening in Germany or Europe.
China is already taking steps to reduce coal consumption which has now fallen every year since 2013. They have already closed thousands of coal mines and halted work on more than a hundred new coal plants. There has been an increase in natural gas generation (e.g. in Beijing to get rid of 4 coal plants). China has also committed $360bn to installing renewables between 2017 and 2020 ($90bn per year). So the Chinese are doing a lot to change things, but China is a huge nation and these things take time. See my article Electricity in China.
I recognize that you didn’t detail German utility costs, but I described it as 3x current prices seen by Texans. While you didn’t describe the German utility market I’m sure you’re well aware of German utility costs as comps, they’re among the highest in the EU. I’m simply pointing out that your extrapolation of future costs to Texans roughly equals what Germans are currently paying. Further, you don’t appear to be thorough relative to subsidies that would be levied upon Texans. You determine 3x current Texas utility costs as being affordable, this is an arbitrary judgement.
China is indeed curbing coal fired energy production, which is good, but they’re still projected to have a net increase in coal fired capacity for at least for the next few years. They’re increasing NG and alternative from a much smaller base of production which distorts comparable percentages of growth. But I would agree that trends are going in the right direction http://instituteforenergyresearch.org/analysis/china-india-will-continue-increase-oil-coal-consumption-paris-agreement-notwithstanding/
Thank you Peter Davies. As a skeptic’s skeptic I am always looking for new evidence that might prove me wrong. I said that wind and solar were failed technologies. Your detailed analysis certainly seems to contradict that. I’ve had an epiphany. Thank you again.
It’s stories like this that must give grid operators and power producers nightmares.
Americans Are Using Less Electricity Today Than A Decade Ago
A new report reveals that demand for electricity in US homes all across America is down from what it was 10 years ago… a shift to smaller and smaller devices for much of our entertainment — TVs to laptops to tablets and smartphones — mean less total electricity is being used even though the number of items powered by electricity has increased substantially. Overall, residential electricity sales declined 3% from 2010 to 2016, and 7% on a per capita basis according to data from the U.S. Energy Information Administration.
The response to Roger Andrew’s article on Texas can be found on this link
I think this article is a good “at some point things are going to change” piece. Given that subsidies in one form or another will still be required it highly doubtful it will come to pass. It is a good attempt though to fulfill Pres. Obama’s promise that “electricity prices with skyrocket”.
I didn’t see, though, any reference to the recent history of renewable/generation/grid stability in South Australia over the last 6 months. Its extraordinary effort to use wind power is leading the state and its people into near bankruptcy. An electric grid that is planning on using rolling blackouts to level demand is likely to have continuing problems.
My understanding of the South Australia saga is that a variety of things went wrong, one of which was that wind turbines were not set correctly to cope with what happened and tripped out.
There’s a big difference between ERCOT and Electranet (if it is them who manage the S Australia transmission network). ERCOT manages a grid that is 20 times the size of the S Australia grid. Tripping out of wind farms of the size of those in S Australia would be unlikely to cause more that minor temporary local disruption on the web-like ERCOT grid, if any at all. The wind farms would have represented only a few percent of ERCOT generation with diverse routes around the troubled locations. Whereas, by necessity, Australia’s grids not only have much longer transmission lines and lower demand, but also tend to be routed only near the coast for cost reasons as that is where all the people and demand are.
ERCOT and the Texas Public Utility Commission are determined to plan and manage the Texas grid as independently as possible and don’t wish their freedom of action to be constrained by anyone else. Too much dependency (or vice versa) on the eastern or western USA grids constraining other states not only brings technical dependencies, but also would bring increasing and unwanted regulation from FERC, the federal regulatory body.
To maintain such fierce independence means ERCOT has to be demonstrably on top of the job of running what is essentially a completely separate grid comparable to that of the UK in TWh/year term, though in geographical terms the network has to span three times the area! And the fact Texas demand is 10% of that of the whole USA also means they have much bigger budgets than Electranet.
If ERCOT was a separate country it would have the fourth or fifth most installed wind power in the world. Spending $7bn on the CREZ transmission upgrades to get into that position was a pro-active step that Texas, its PUC and ERCOT could take without anyone else’s approval.
While Electranet should be expected to understand and specify the right settings for the wind turbine types on their network, ERCOT are in the much stronger position of being able to insist that wind turbine manufacturers provide the new facilities and behaviour from wind turbines which ERCOT deems necessary to guarantee the stability of its network. And they do from time to time.
In summary, Electranet and ERCOT are poles apart in politics of grid independence and size of network and budgets. ERCOT’s edge in expertise should come as no surprise. Integration of large penetrations of renewable power demands competency and you would ERCOT to be better at it than most.
I will agree that Texas is “best in class” for how to generate electricity and manage a large grid. That said 100% renewable is a pipe dream at the moment and the only viable means on the horizon of making it a reality is through biology not wind farms or solar panels. Mark my words.
So, non-sunshine states be damned?
So, non-sunshine states will be left in the cold?
Albert, the study was on Texas. I could make a guess about the non-sunshine states. One observation is that the north of the USA has pretty good offshore wind. In Europe this is getting cheaper rapidly and that latest bids to the German grid did not ask for subsidy but were prepared to take the market price of electricity from 2023 onwards.
The cost of an all-renewable system is likely to be lower and the design less demanding if there is a second, independent source of renewable power, same as there is with Texas. This could be variable onshore wind from the Great Plains (again), which may well be uncorrelated with the offshore wind. Some places might be close enough to Canada to tap into the huge despatchable hydro potential there. Difficult to say much more without doing the work, I’m afraid, and I have a PhD to finish by end of April!!
Peter Davies, thank you for your essay.
It will be a good story to follow in the upcoming 5 and 10 years.
The next sage of the Texas wind story will unfold in the next four years. The PTC (production tax credit) rules say you qualified for the full credit if work started before end 2016 and is finished before 2020, with few questions asked. Similarly for partial PTCs reduced by 20% per start year until 2020 when it goes completely.
Many of those thinking of installing wind power in Texas already have their foot in the PTC door. The ERCOT interconnection queues have 10 GW of wind with a signed interconnection agreement and another 15 GW with the interconnection study completed but no agreement signed (May 2017). Many of these projects may have “started work” in 2016 to qualify for the full or partial PTC. And they are all going to be in windy areas. Generation from wind in Texas could easily double over the next 4 years with the new projects likely having a capacity factor more like 49% than the 32.5% of the data in the grid simulation.
So, while it will be interesting to see what happens when the PTC is no longer available at all, the next four years may be totally frenzied as far as wind farm installations in Texas are concerned, and maybe solar too (10 GW, mainly unsigned as yet). Let’s see what happens.
I have two questions regarding the electrolyser process: Does it require 100% pure CO2 as a feedstock, or can it run with nitrogen present? Can it run with OXYGEN present?
The reason I ask is because the most obvious source of CO2 will be the exhaust stream of gas turbines. However, that stream will still contain about 70% nitrogen and about 15% oxygen. [Gas turbines run lean; about half of stoichiometric.] CCS efforts to remove pure CO2 from this stream have proven very costly and very energy-intensive.
If you don’t have to extract pure CO2, using electrolysis as an energy storage mechanism is clearly a winner. If you DO have to extract, though, then the analysis is missing a major source of cost and a major source of energy efficiency loss.
I don’t know the answers to your specific questions, but would agree that using CCS (carbon capture and sequestration) on the gas turbine generation would increase costs somewhat.
The assumed source of CO2 for the articles was from cement production or other processes where almost pure CO2 is driven off up to 96% pure limestone, CaCO3, to produce calcium oxide CaO.
For the articles the aim was to specify mature components which can be costed and have been used at some scale, leading to conservative pricing, rather than necessarily the cheapest solution.
Most likely by 2030 the cheapest renewable gas storage options would be either pure hydrogen using PEM (proton exchange membrane) electrolysers and fuel cells, or mixed gas using solid oxide electrolysers and fuel cells. For the mixed gas methane is stored when charged and CO2 is stored when discharged, so CO2 is recycled and you don’t need a continuous source.
Researching your question there are recent hydrogen fuel cell cost estimates I have not seen before. A renewable hydrogen solution could be considerably cheaper than renewable methane + CCGT (combined cycle gas turbine).
Fuel cells used to be quoted as $1,000 / kW or over, but in the Fuel Cell Guide they give the cost as $100 / kW in the USA and €100 / kW in Europe. Some other recent sources give lower capital costs.
Take a conservative figure of $150 / kW and a lifetime of 10 years, or 7.4 years discounted lifetime at a 6% cost of capital. The LCOE contribution from the capital cost of 40 GW of hydrogen fuel cells would then be $1.6 / MWh. Adding in the same ancillary component costs (inverters, environment, maintenance) as for tier 1 batteries (a slight overestimate) gives an LCOE contribution estimate of $3.8 to $5.7 for hydrogen fuel cell back-up generation to replace CCGT back-up generation at $13.4 to $15.8 / MWh.
Subtracting around 20% of the electrolysers for the more efficient process (43% compared with 34%) would result in 40 GW of hydrogen fuel cells for back up being about $10 / MWh cheaper than 40 GW of CCGT generation.
That’s a considerable saving.
In terms of scale, Nedstack has sold a 2MW fuel cell generation stack. Whether that is a sufficient demonstration of a capability to scale to 40 GW or more would make an interesting discussion, although there is a decade or more available to iron out the wrinkles.
One objection raised against hydrogen is that it is dangerous and tends to leak slowly from containers and pipes. However, Texas already has at least one large hydrogen store and at least two hydrogen pipelines already in operation.
If the mixed gas process results in prices close to renewable hydrogen + fuel cell costs, then mixed gas would win because it has the potential to be 70% round trip efficient (power to gas and back to power), which saves on renewable generation too. Which of the two eventually wins is difficult to judge right now.
I don’t have time correct much. Picking just one item where you blithely say Texas already has two hydrogen pipelines without any idea where, or how long, or what function they perform. Here’s the wrap-up for the entire US from the National Institutes of Standards and Technology (NIST):
“700 miles of hydrogen pipelines are currently in operation in the
U.S. (compared to > 1M miles of natural gas pipelines). These are
concentrated near refineries and chemical plants, operate at low
pressures, and require nearly constant safety inspection.”
Your entire narrative is riddled with fundamental mistakes in engineering & technology like this monumental boner.
David, think about the requirements for using different types of renewable gas grid storage.
Using renewable methane it is helpful to locate the electrolysers close to the CREZ region renewable generation to reduce the size of the transmission network. The storage solution needs to use existing CCGT plants which will be close to the population centres and not the CREZ regions. So the existing natural gas network would be useful and its presence saves the cost of building electricity transmission network capacity, and the natural gas storage can be located anywhere on it.
Now think about using renewable hydrogen.
The storage solution consists of electrolysers to produce the hydrogen and fuel cells for back-up generation. Since they are both new plants, both can be on the same site as the hydrogen storage cavern, and that is probably close to the CREZ region generation because a lot of the gas and oil fields are also in the west of Texas. You need a beefy grid connection to that site and a small supply of water to split into hydrogen and oxygen.
Do you need hydrogen pipelines? They are not needed if everything is on the same site. Might they be useful? Well possibly, but they are not essential.
In other words for renewable hydrogen it is considerably more important that there is experience of large hydrogen storage sites than that there are existing long hydrogen pipelines. However, with renewable methane long natural gas (methane) pipelines would be much more important.
Go ahead and keep cheerleading Davies. No one is buying it because it just doesn’t work in the real world. Cherry picking the best wind turbine locations for a penetration rate that might eventually reach 20% results in zero cost savings and only modest reduction in CO2 emission that won’t move the needle on how much greenhouse warming is going to occur from aCO2.
Grown men holding pompoms is not becoming, by the way.
From the state of the ERCOT interconnection request queues and the ending in 2020 of the PTC there is a distinct possibility that Texas will double the penetration of wind within 5 years from 15% now to 30%. Further, because of the PTC subsidy this additional wind would assist in keeping ERCOT wholesale power prices low.
The reasons that the article solution is considerably higher than current ERCOT prices are that a) Texas natural gas prices are currently unnaturally low (and expected to rise) and b) in the 100% renewable solution it is the cost of getting rid of the last 6% (and to a lesser extent the previous 12%) of CO2 which bumps the price up.
I don’t think that combining CO2 coming from cement production with H2 coming from solar/wind-powered electrolysis (to create methane) counts as “renewable methane”. After all, the carbon comes from mined calcium carbonate, which means that carbon extracted from the ground ultimately ends up in the sky as CO2.
At best, you could claim a 50% improvement, since the carbon was effectively used twice before reaching the sky, rather than only once.
And normally, the improvement would be less. If cement production is very limited, then you have little opportunity to use excess energy to form new methane. Most of your backup power would have to come from conventional natural gas. And if the need for storage is very low and methane reservoirs are already full, then the CO2 coming from cement production would have to be released unused. Only if cement production were perfectly balanced with gas turbine operational needs would even a 50% improvement be possible.
Realistically, this means using straight hydrogen. Which is difficult. Hydrogen can make many metals brittle and can leak out of damned near anything. There are reasons people don’t like working with it.
It doesn’t matter if it’s carbon neutral or not. It doesn’t scale. There isn’t enough CO2 from cement production. What has to be done in this scheme is use renewable electricity to electrolyse water AND concentrate atmospheric CO2. When you do that the power-gas-power efficiency drops down to the low single digits and the whole proposition falls apart.
It’s simply too effing expensive turning wind into electricity. Bottom line.
Harvesting solar power will eventually work but it won’t be through using the sun to heat air and make it blow across a fan. The key is synthetic biology. Create a robust free-living photosynthetic bacteria that thrives in brackish water and has its metabolism built around turning sunlight and CO2 into hydrocarbon fuels. Such organisms exist in nature today. They are called blue-green algae. Their metabolism isn’t optimized around fuel production however. We can through genetic engineering optimize it for fuel production but then it becomes weak and can’t compete with natural organisms in open ponds. Without open ponds it needs to be kept in a sterile environment which is expensive and to limit the sterile volume to keep costs down these organisms need concentrated CO2 bubbled through the fluid which then brings us right back around to the scaling problem – there aren’t sufficient sources of concentrated CO2.
The genetic engineering problem of an organism that’s both robust and has its metabolism optimized for fuel production will be solved. It’s a couple decades away at most which is faster than you can plan, build, and commission a nuclear power plant. It’s just a matter of time and not so much time that we need to worry about fossil fuel use or really any other energy source. That big glowing orb in the sky rains down plenty of energy, nature gives us the blueprint for how to harvest it with self-reproducing fuel production factories. Just needs some tweaking to make it serve human purposes.
Algal biofuel dream turns out to be a damp squib
It was with a lot of hope, and hype, that production of the third generation of biofuels was started. Unlike their predecessors, these biofuels are derived from algae, and so in theory the food vs fuel dilemma of crop-based biofuels would be solved.
Fossil fuel oil and gas originated from ancient algae in large measure, so the concept here is to replicate the essence of the creation of fossil fuels, albeit accelerated and optimised with modern chemical engineering. It was claimed that using algae would be much more efficient than creating biofuels from terrestrial plants and that the technology would make use of poor quality land not able to grow other crops.
Millions of dollars, euros and other currencies have been spent trying to get the algal marvel to work. Much of the money has been directed at refining the engineering process, electrically lighting the crop – which grows in a liquid suspension – harvesting and draining it. The solution to optimisation was seen as primarily technological non-biological, though species selection and growth conditions were also acknowledged as important factors.
However, it turns out that the hype has been misplaced. Our research has found that the production of algal biofuels is neither commercially nor environmentally sustainable.
The attainable production levels are a fraction of those that were claimed. The amount of biofuel produced from prolonged culture of algae in pilot-scale systems is actually not too dissimilar from those of terrestrial plants: around 5,000 to 10,000 litres per hectare per year.
Reports of the death of biofuel from algae have been highly exaggerated.
Tallbloke is a dumbass. Find better sources.
One genetic engineering breakthrough doubles biofuel production.
***Peer reviewed in Nature*** not some dumbass brit’s personal blog. Let that sink in.
David, I just happened to see that a few days before you posted. I don’t know the viability of anything. Just thought you might be interested, apparently not. Thanks for links, I read a lot about it before Exxon etc. But I’ll check those out. Recent too!
I don’t pay much attention to personal blogs of non-scientists like Tallbloke’s Talk Shop. I’m familiar with his in particular for many years. Even on a scientist’s blog I check things presented as fact because scientists are, sadly, too often advocates for an ideology rather than the dispassionate objective researchers they’re supposed to be.
Biofuel from genetically modified organisms is alive and well. Synthetic biology is an emerging technology which will most assuredly bring about transformative change to human civilization on the order of others such as written language, agriculture, metallurgy, chemistry, mass production, electricity, electronics, and information processing. I believe it will be the largest of these and have been closely tracking its progress since 1987. Information processing technology and the world wide web was a prerequisite and I’m proud to say I was a pioneer in that prerequisite technology.
PNAS says cost of extracting CO2 from air is around $1000/t
A friend (adjunct professor, chemical engineering) said to me in an email.
Thanks for bringing this to my attention [proposal for CO2 sequestration in Antarctica}. This is a really interesting idea, not one I’ve heard of before. Whether or not it turns out to be plausible I give it full marks for originality.
My first, random thoughts on this are:
* Obviously you don’t do this with a wind farm.
* The efficiency of the process may be less than indicated by calculation based on the Clausius-Clapeyron equation. This only considers the energetics of the bulk phase change. In practice, there is an additional energy barrier of nucleation to overcome, in forming the initial CO2 particles from bulk vapour. That is, maybe supersaturation of CO2 means you have to work at a lower temperature, or at the same temperature but reduced recovery, especially given the low concentrations involved.
* My first instinct is to redesign the infrastructure. I don’t think you do this with 100m cube settling chambers in the antarctic. There must be better ways to design it.
* Long term storage as CO2 seems iffy, I’d rather see it fixed. eg. nuclear hydrogen + nitrogen -> NH3 (Haber Bosch), then react with CO2 to form urea. Its more stable and doesn’t require ongoing refrigeration or insulted storage. And its an alternative feedstock for chemical industry.
* Maybe there are other chemical processes where the cold environment helps. eg. ammonia is a liquid at the prevailing temperature, maybe pumping air through a liquid (nuclear Haber-Bosch) ammonia scrubber becomes plausible?
* The energetics become less favourable the lower the atmospheric CO2 concentration. So as your draw down more, each additional ppm reduction is more expensive. Here I’m being highly optimistic and imagining us in net drawdown mode rather than just offsetting some of our emissions.
* A paper came out in December last year on thermodynamic limits to the energetics and the cost of direct air capture of CO2, and operational experience with industrial separation processes. While the thermodynamic limit is about 20 kJ/mol CO2 for air extraction, actual processes use around 400 kJ/mol. A cost of ~$1000 per tonne was estimated. But that was without the assistance of low Antarctic temperatures. Maybe doing this at the poles greatly improves the economics of the process. Anyway, its an interesting data point to compare to your $339/tCO2. The paper is here (free): http://www.pnas.org/content/108/51/20428.full . A summary is here: http://arstechnica.com/science/2011/12/carbon-capture-and-storage-too-expensive-for-all-but-powerplants/ ”
I later updated my estimate from $399/tonn to 2400 per tonne. See my estimates in my comments on this thread: https://judithcurry.com/2012/08/24/a-modest-proposal-for-sequestration-of-co2-in-the-antarctic
The key sentence on CO2 extraction costs from air is:
Extracting CO2 from air is cheap when you can custom design self-reproducing bacteria for your workforce. Nature has handed us the blueprints on a silver platter but it’s incredibly complex. Progress is occurring rapidly. It took 50 years to go from the first computers to a global network.
The first fully synthetic bacterial genome was created in 2010 by the same company which just announced the discovery of how to increase algal biofuel production twofold. Ten years before that it was the first company to fully sequence a human genome at the same time the US gov’t did it for the first time. The private company spent 10 times less money to do it.
Ten more years will see a couple more 2X breakthroughs and then algal biofuel will be so inexpensive conventional fossil fuels will be obsolete along with every other renewable source. It will of course take another few decades to fully replace conventional energy generation but the writing will be on the wall. It’s on the wall now as far as I’m concerned and has been since 1987.
A baseless assertion. Just as silly as the standard dogma from the climate alarmists and renewable energy advocates.
What is the actual demonstrated cost per Gt CO2 extracted from air?
It’s an interesting discussion. Here’s some additional information.
Portland cement production in Texas is 8m tons/year, and molecular weights and ratios between 2CaO.SiO2 to 3Ca.SiO2 and the 2/3 ratio of this to other aggregates gives CO2 emissions between 0.33 and 0.37 of the weight of the Portland cement. This results in 2.5 to 3m tons / year of CO2. Total USA Portland cement production is 80m tons/year and production of other types of cement and quicklime (CaO) is much smaller so Texas has its fair share of cement production relative to the size of the electricity grid (10% of USA).
6% back-up of 40GW average power is 21 TWh / year which produces about 10m tons of CO2 per year from CCGT (combined cycle gas turbine) at just under 0.5kg per kWh. So this is also the CO2 requirement for the Sabatier reaction to create methane. Clearly CO2 from cement production won’t be enough to satisfy this, though it is enough to top it up.
So either the back-up CCGT needs to have CCS (carbon capture) or hydrogen needs to be used.
If CCGT then from the DoE costing document the additional to the capital cost would add a contribution of 29.5 – 15.8 = $13.7 / MWh based on 2022 prices (and CCS is not popular at present), so in the 2030s might come down to, say, $10 / MWh addition to the article costing if this long-term storage solution became common. Operational costs will be insignificant at 6% load factor, but there must be a small uplift in renewable generation because CCS reduces the efficiency of CCGT generation which I haven’t estimated. Capture of carbon from the air is considerably more expensive than this solution.
However, if the solution cost is going to take the hit of fitting CCGT with CCS then you may as well just feed back-up generation with Texas natural gas, permanently store (sequester) the output CO2 in a depleted oil or gas field and forget about electrolysis and renewable methane storage. This would save a few $s compared with the article solution costs as less renewable generation is required.
As discussed above, the renewable hydrogen solution is probably $10 / MWh cheaper than the costing in the article above. The electrolysers, hydrogen fuel cells and storage cavern should be co-located. This reduces the safety risks considerably compared with having to run hydrogen pipelines because there are no safety dependencies external to the one site.
There is already one current Texas large-scale hydrogen storage site, so the principle is already established that it can be done with acceptable safety.
Thanks for the deep dive into the Texas grid. I like your science Peter. Millions of Texans are benefiting from the addition of industrial scale renewable energy as the ONCOR grid evolves. Our technology wants/needs zero emission energy and we will find a way to do it.
Probability zero. Elections have consequences.
It takes enormous amounts of taxpayer cash to make wind energy seem affordable. Last month, during its annual conference, the American Wind Energy Association issued a press release trumpeting the growth of wind-energy capacity. It quoted the association’s CEO, Tom Kiernan, who declared that the wind business is “an American success story.” There’s no doubt that wind-energy capacity has grown substantially in recent years. But that growth has been fueled not by consumer demand, but by billions of dollars’ worth of taxpayer money. According to data from Subsidy Tracker — a database maintained by Good Jobs First, a Washington, D.C.–based organization that promotes “corporate and government accountability in economic development and smart growth for working families” — the total value of the subsidies given to the biggest players in the U.S. wind industry is now $176 billion. That sum includes all local, state, and federal subsidies as well as federal loans and loan guarantees received by companies on the American Wind Energy Association’s board of directors since 2000. (Most of the federal grants have been awarded since 2007.) Of the $176 billion provided to the wind-energy sector, $2.9 billion came from local and state governments; $9.4 billion came from federal grants and tax credits; and $163.9 billion was provided in the form of federal loans or loan guarantees. General Electric — the biggest wind-turbine maker in North America — has a seat on AWEA’s board. It has received $1.6 billion in local, state, and federal subsidies and $159 billion in federal loans and loan guarantees. (It’s worth noting that General Electric got into the wind business in 2002 after it bought Enron Wind, a company that helped pioneer the art of renewable-energy rent-seeking.)
Read more at: http://www.nationalreview.com/article/436228/wind-energy-subsidies-billions-and-billions-your-tax-dollars
It’s not about me or you. It’s what technology wants. We have chosen as a species to become wholly dependent on technology and it’s been great for us as the apex predator on the planet. I happen to think Kevin Kelly is right about technology and it has a ordained destiny and we are as much the enablers as beneficiaries and couldn’t stop it if we tried.
I just don’t understand your obsession with spending money. Debt creates money and there doesn’t appear to be a limit to how much debt(fiat money) we can create. There *may* be a problem if too much wealth accumulates to the ruling class but I see no effective opposition to it so far, actually it’s still accelerating.
Jack speaks exclusively in urban hipster doofus memes. The next one should be that infinite growth in a finite world is not possible. I have an idea – let’s try.
Let us know when it’s time to short debt. It’s never worked as a long term investment strategy but if you know what to short and time it right you can get rich quick as demonstrated by Steve Eisman and Morgan Stanley in 2008.
The derivatives market is estimated at more that $1.2 quadrillion dollars. Some market analysts estimate the derivatives market at more than 10 times the size of the total world gross domestic product, or GDP. Some people might think that’s not much different than infinite debt.
Jack has a bizarre grasp of economic fundamentals – and he is hardly alone in this.
Private debt merely shuffles around the money supply in return a promise that it will be repaid with interest. Derivatives allow trade in just about anything at the margin. Pork belly producers use them to hedge against market movements. Day traders use them in a high risk zero sum game.
Overuse of government printing presses – on the other hand – has serious implications for economies.
Wales Wind Cheerleader Davies just blows off the NIST blurb on US hydrogen pipelines. Again. Highlighted this time.
“700 miles of hydrogen pipelines are currently in operation in the
U.S. (compared to > 1M miles of natural gas pipelines). These are
concentrated near refineries and chemical plants, operate at low
pressures, and require nearly constant safety inspection.”
Ignoring engineering realities is what Davies is all about.
Time for some fair disclosure: Davies has a vested interest in wind power.
As we’ve covered above, all the hydrogen components for a renewable hydrogen storage facility can be located on the same site site. A hydrogen pipeline network external to the site is not required.
Try https://www.linkedin.com/in/peter-davies-7a40179/ instead of your link! There are a number of people on LinkedIn called Peter Davies. You picked one of the many others.
For the record I have no vested interest in wind or solar power – just a keen interest in what is going on in energy and electricity grids. Same as most people commenting here, I expect.
So all we need for hydrogen storage are underground caverns with a high capacity grid connection located near prime areas for wind turbines then we build power plant on top of it. Yeah, there’s lots of places like that. /sarc
Here is a map of Texas showing the CREZ areas in the west and population centres in the east. Hydrogen storage locations could be in either, though the west would be preferable.
Here is a map of the current Texas oil and gas fields. By 2030 a number of these will be depleted. Either type of field, or salt caverns, could be considered for hydrogen storage.
31 TWh of hydrogen storage would be required which would be around 50m cubic metres at 200 bar pressure. That’s about half the current capacity of the Texas natural gas storage, though hydrogen would be a new set of self-contained facilities needing no external hydrogen pipelines.
New transmission lines would be provided to hydrogen storage facilities, and they would be cheap provided they are short.
Davies is glossing over reality once again. Only three underground hydrogen storage facilities exist in the entire world. Two are in Texas. All three are quite small compared to natural gas storage sites and all three are salt domes. Aquifers, depleted oil/gas fields, and caverns are hypothetical possibilities only while only three tiny salt domes worldwide have been tried.
“It is important to note, however, that existing natural gas options may not translate to a hydrogen system where substantial engineering obstacles may be encountered. There are only three locations worldwide that currently store hydrogen underground and they are all in salt caverns. Two locations are in the U.S. (Texas), and are managed by Conoco Phillips and Praxair (Leighty, 2007). The third is in Teeside, U.K., managed by Sabic Petrochemicals (Crotogino et al., 2008; Panfilov et al., 2006). These existing H2 facilities are quite small by natural gas storage standards”.
David Springer: All three are quite small compared to natural gas storage sites and all three are salt domes
Are they “small” compared to hydrogen storage needs?
Is it impossible to expand hydrogen storage capacity?
“Are they “small” compared to hydrogen storage needs”
Yes. They are a tiny fraction of even current hydrogen storage facilities. Oddities.
“Is it impossible to expand hydrogen storage capacity?”
It’s untried at the scope being discussed. It may turn out to be impractical as was pointed out in the Sandia National Labs report.
The Sandia report does not say that hydrogen storage on the scale Texas needs would be impractical. It merely points out that existing USA natural gas storage facilities may not meet the engineering standards required for hydrogen. Also that the existing hydrogen storage caverns are quite small, including the two in the USA, both of which are in Texas. Then it goes on to investigate the cost of various hydrogen storage options, but to store and distribute hydrogen as a fuel for cars rather than for grid back-up.
The good news is that Air Liquide is building a much larger hydrogen storage cavern in Texas.
This particularly one is 5.5m cubic metres in size (1,500 metres deep x 70 metres diameter). At 200 atmospheres Texas would need another 8 of these to provide the 50m cubic metres of hydrogen storage volume needed. So it’s the right scale to prove the concept and clearly Air Liquide cannot see any engineering or technical obstacles to building it.
Having worked as an engineer in industrial (outdoor) plant environments for many years throughout Texas it is amazing that folks do not realize the service factor degrade during winter conditions. Wind, storm, tornado, hurricane, freezing conditions can knock a generating facility off-line for a long time, esp. when rotors & PV panels/facilities are destroyed. Wind turbines are not maintenance friendly either. As far as capacity reduction during winter/storm conditions go… we don’t have sufficient real-world experience to quantify it…yet… but the reduced capacity may be quite substantial…. hence the need for running backup. Just a voice of experience… but what would I know.
The last time ONCOR had a serious grid wide problem was losing critical generating assets due to the cold snap in 2011 and it was the thermal plants that got knocked off line not solar or wind. Wind was a real hero in February 2011. Later that same year when we had a record long string of 100+ degree days it was the fossil fueled plants struggling to maintain thermal efficiency when lake levels dropped and water temperatures spiked.
PS: Solar is extremely low maintenance. No moving parts and only requires dust removal as condition warrant. I went though a multi billion dollar wind and hail storm in Mar. 2016 and my PV array was not affected but my roof was destroyed. Just a voice of experience like you.
Here’s another example showing wind power is not viable without government mandates and huge subsisdies:
Now seems like an appropriate time to bump this thread:
Any thoughts Peter?
It will be interesting to see how the ERCOT grid copes. Obviously you can avoid outages from high winds by putting transmission and distribution lines underground, but what then happens when you get up to 50 inches of rain and severe flooding? Underground distribution lines are expensive for rural areas, though less so in cities.
Most likely not too many wind turbines are installed in the areas the storm hit, but the damage done to any which were will make interesting reading later on when ERCOT gets a chance to report on it.
Peter – Thus far this appears to be all ERCOT have had to say on that topic:
I don’t know if it’s merely sinking beneath the unanticipated load, but ercot.com seems to be down at the moment?
Jim, ercot.com is often slow.
The local electricity wholesale price map on this page is interesting – http://ercot.com/content/cdr/contours/rtmLmp.html .
There are high prices around the storm (due to network problems?), but elsewhere prices are consistent and on the low side.
Perhaps ERCOT don’t care for Transatlantic traffic? All I see at your link however many times I try, and even in the middle of the Texas night, are words to the effect that:
The server at ercot.com is taking too long to respond.
I can finally view the ERCOT web site in all its glory, albeit via a US based proxy. What have ERCOT got against us Brits?
Here’s an article on the wind farms in the Harvey area.
One wind farm operated throughout with no problems.
The operators of another left it and it was operated remotely until wind speeds exceeded 55 mph, when it was shut down. It started back up later, but not all turbines restarted remotely. The operators have to be able to get on site safely before assessing how to restart the other turbines.
Apparently there are technical considerations to restoring power to areas when the source is variable wind power, though the report doesn’t go into detail.
One significant problem has been in transmission lines. The original failures were fixed but then there were more in other places, as might be expected.
And here is the ERCOT bulletin on Harvey :
I’ve also been following the FCC updates on Harvey.
Lack of electricity => lack of comms!
Not simple, I can see, But still, viewed from 30,000 feet :
– What is the real cost of propping up renewables (ie all privileges, subsidies plus costs shifted and imposed elsewhere by forced mandates) ?
– What therefore is an honest cost comparison – fossil X$/unit vs renewables Y$/unit (both can also be further broken down of course) ?
– What would happen if all political privileges were scrapped ?
The grid hourly simulation from part 1 indicates the solution works, at least from a 30,000 foot level. It would be better to base it on 10-20 years of data rather than 3, but you can’t have everything in a 20MB spreadsheet which you yourself can download and check.
ERCOT pretty much runs an independent grid, so no costs are shifted to other state grids or the western or eastern connection network of grids. Where there is surplus renewables generation that can’t be used it is discarded rather than assumed to be forced on a nearby state grid. All generation (whether used direct, used via storage, going into storage losses, or discarded) is costed in the cost model spreadsheet.
All costs are before subsidy. No subsidies are assumed. The PTC subsidy will have expired by 2030, and the residual ITC subsidy for solar (10%) is assumed to have been removed by then though that requires a change in federal legislation. No local Texas subsidies are assumed.
I hope the high-range costs are conservative. All major components are covered as if from new (with the exception of the existing high-voltage network connecting the eastern transmission centres which normally has a lifetime of many decades). So the resulting cost range is a fair approximation to what you would expect wholesale electricity to cost with nothing major obviously missing.
The section “Comparison with current ERCOT electricity wholesale prices” in the article above attempts to compare the wholesale cost in the all-renewable grid proposed with the existing ERCOT wholesale costs. It’s not very easy to compare as it looks like coal and probably nuclear is running at a loss, so current prices are likely to rise eventually. Further, natural gas fuel prices are a major cost and vary considerably year on year. If the USA ever implements carbon pricing this also changes the equation significantly. A rough conclusion is that the upper bound of wholesale electricity cost for the all-renewable solution cost (of wholesale electricity) is not much higher than the highest ERCOT wholesale costs over the last 10 years (9.2 cents vs 7.8 cents), but the lower bound is not necessarily cheaper than the lowest ERCOT wholesale costs that have been experienced recently. And current costs DO include PTC subsidies for wind power, though this does not necessarily affect wholesale prices that much.
Politics and regulation are not covered by the article. There would need to be changes to the ERCOT regulations to ensure the assumed system, but this gets into detailed areas which don’t obviously affect the costs. I wouldn’t claim to have done enough backgound research to comment sensibly on this and ERCOT is doubtless thinking about this.
If there is a 100% renewable ERCOT grid, this system will probably not be it. For instance it doesn’t include any solar tower thermal generation which can include its own hot salt storage, which might replace some of the battery storage assumed. Such a CSP (concentrated solar power) solution with around 8 hours of storage is being sold by Solar Reserve to Southern Australia for 6.1 cents / kWh (including storage), and this price is very early on in the maturation of hot salt CSP systems, so you would expect significant reductions in the future as volumes increase (and they are likely to take off very fast).
But the scenario in the articles is an approximate baseline to set people’s expectations. Improved 100% renewable designs for ERCOT could well be cheaper than this.
“German Wind Energy Market “Threatening To Implode …..
German flagship business daily “Handelsblatt” reported here yesterday how Germany’s wind energy market is now “threatening to implode” and as a result “thousands of jobs are at risk“. José Luis Blanco, CEO of German wind energy giant Nordex, blames the market chaos on “policymakers changing the rules“. Subsidies have been getting cut back substantially. The problem, Blanco says, is that worldwide green energy subsidies are being capped and wind parks as a result are no longer looking profitable to investors. The Handelsblatt writes that “things have never been this bad“. The online Hasepost here reports that while in 2016 some 4600 megawatts of new German wind power capacity were installed onshore, the figure will fall almost 50% to 2450 megawatts of new power by 2019. The fall could even be greater. Blanco told Handelsblatt: “In the next two years we will see a substantial collapse in the installation of new wind parks in Germany – we will have to react to this.” ”
“Is Germany Killing the Environment to Save It?
The German government is carrying out a rapid expansion of renewable energies like wind, solar and biogas, yet the process is taking a toll on nature conservation. The issue is causing a rift in the environmental movement, pitting “green energy” supporters against ecologists. Merkel’s energy policies have driven a deep wedge into the environmental movement. While it celebrates the success of renewable energies as one of its greatest victories, it is profoundly unsettled by the effects of the energy transition, which can be seen everywhere across the country. Indeed, this is not just about cleared forests. Grasslands and fields are being transformed into oceans of energy-producing corn that stretch beyond the horizon. And entire tracts of land are being put to industrial use — converted into enormous solar power plants, wind farms or highways of power lines, which will soon stretch from northern to southern Germany.”
All this, with subsidies,to boil a kettle.
(When the wind blows just right.)
The cost of going green: Australian taxpayers hit with a $60bn power bill
Taxpayers will have paid more than $60 billion through federal renewable energy subsidies by 2030, about twice what the crumbling car industry received over 15 years and enough to build about 10 large nuclear reactors. The government’s large and small-scale renewable energy ¬targets, which will compel energy retailers to buy 33 terawatt hours of wind, solar and hydro energy by 2030, will deliver about $45bn of subsidies to renewable energy producers over 20 years, according to analysis by The Australian. The grab bag of direct subsidies from the Australian Renewable Energy Agency and the Clean Energy Finance Corporation — which have spent or lent concessionally, respectively, $870 million in grants since 2010, and $4.3bn since 2013 — are on top of that. Meanwhile, the proposed clean energy target arising from the government’s Finkel review, would mandate a further 33TWh of ¬energy from renewable sources, costing an extra $11.3bn over the 10 years to 2030.”
Expect the usual denial and dogma laden responses from PD (an IT worker, not an engineer)
Peter – I’m an engineer and a programmer. What sort of responses do you expect from me?
I can tell you that I’m not a big fan of slightly green business as usual! What’s your take on things here in the once Great Britain? We have better wind resources than Germany, and the Isles of Scilly are south of Bavaria!
Jim Hunt, Read the Denizens II for my background and policy position on ‘human caused climate change’. You can read my previous posts on energy and on why global warming is likely to be beneficial, not a threat and not a negative for humanity or the environment.
Regarding my take on weather dependent renewables in UK (or in fact anywhere) I’ve had several previous posts, but this one should be of particular interest, given you asked about UK:
Is nuclear the cheapest way to decarbonize electricity?
Peter L – I fear we’ll have to agree to disagree about the “benefits” of “global warming”.
However, what do you make of the concept of “submarine atomic power stations”?
Jim Hunt, Did you read the link I gave you and the report it is based on. Did you understand them? It will take you quite a while to consider them and get to appreciate what is involved. Get back when you have digested them and are ready to discuss them.
Peter L – Did you bother to read the link I gave you?
Peter, @ Jo Nova . Open Thread, now.
Thanks for posting that link, Beth. That post certainly got a lot of attention and discussion – 506 comments. The costs of the whole system, and of the solar component and storage component (batteries or pumped hydro), versus the cost of doing the job with nuclear power istead, are interesting. What’s really interesting is the land area that would have to be inundated for pumped hydro to provide sufficient storage to allow solar PV to power the Australian National Electricity Market. For the usual nitpickers and deniers, I’d point out this is intentionally a simple analysis intended to explain the concepts to those who are unaware of what’s involved.
A more advanced conceptual, pre-feasibility type analysis of pumped hydro is here:
Pumped-Hydro Energy Storage – Tantangara-Blowering Cost Estimate
Note that a modified version of this concept, posted in 2009, has now been picked up by Snowy Hydro, and the Australian Prime Minister sees it as the solution to all Australia’s electricity system woes (and his political woes). However, pumped hydro is rarely feasible since the 1980’s and this certainly isn’t.
Renewables or nuclear electricity for Australia – the costs
Southern Australia has ordered storage from Tesla :
It is also installing a 150 MW solar tower thermal generating plant with 8 hours of hot salt storage from Solar Reserve. The cost of power from the Aurora project is 6.1 USA cents / kWh, including the storage component :
Combined with the existing wind power and rooftop solar this looks like a good direction in a country where the sun shines most of the time.
Pingback: Τα κεντρικά ΜΜΕ πιέζουν για το αιολικό «πάρκο» στον Καφηρέα (2): Θέσεις εργασίας; – ONLINE-PRESS
Solar farm burns money
“Imagine putting $100 in the bank and getting back a guaranteed $83 a year for four years, and then $59 a year for the next decade — all taxed at a maximum rate of 30 per cent. Your 2.9 per cent high interest saver account, taxed at 39 per cent, isn’t looking so good.
Courtesy of Australian electricity users, and the stupidity of the commonwealth government, Saudi Arabia’s Abdul Latif Jameel Energy, which bought Spanish solar farm builder Fotowatio in early 2015, has indeed struck such stellar returns.
In 2014 the Australian Renewable Energy Agency proudly made a $101.7m grant to the Spanish company for a $164m solar farm about 10km out of Moree, comprising 250,000 solar panels. An enthusiastic Clean Energy Finance Corporation chipped in a $47m loan to help, leaving Fotowatio with only $15.3m to put towards the project itself.
RICHARDSON: Blackout Bill may give PM boost
With a capacity of just under 150,000 megawatt hours a year, the solar farm, up and running, will generate about $12.8m in revenue a year for the next few years, based on the current Large-scale Generation Certificates (LGC) price of $85.
Assuming that price falls to $60 on average between 2020 and 2030, the farm will provide a tidy $9m a year to the Saudi owners.
All up, over the 14 years, the $15.3m investment would have reaped about $140m for the owners, a return of more than 900 per cent, which, by the way, is quite a bit better than the typical super fund.
“The project would not be possible without the unwavering support of the local community, Moree Plains Shire Council, the federal Members for Parkes, NSW state government, all the people who have dedicated many hours to development of the project, and last but not least, ARENA and the CEFC who have provided funding for the project,” said the Fotowatio regional manager for Australia. Full marks for honesty, at least.
Before you get jealous though, rest assured the project will, AREA said, create about 100 jobs, and provide electricity for 15,000 homes.
This has been a fantastic outcome for our Spanish and Saudi foreign investors, but it’s far from clear it’s a good deal for anyone else. The 100 jobs that have supposedly arisen have come at a cost of almost $1.5m each, including the grant and the government loan.
And the 15,000 homes could have sourced their electricity from other, far cheaper sources. Too bad those cheaper sources are gradually shutting down.
What about carbon abatement you say? According to Fotowatio, the farm will avoid 102,000 tonnes of CO2 a year. So that works out at between $88 and $125 a tonne, based on the LGC prices assumed above, which is up to five times more expensive than Julia Gillard’s carbon price of $23 a tonne.
Surely though, despite all this excess, households will be enjoying lower power prices?
After all, that’s what the modelling provided by the renewable energy sector and the army of consultants who work for them keeps telling us: more renewable energy will ultimately lead to lower wholesale electricity prices, which will be passed on to consumers.
Unfortunately, this sort of modelling has a major flaw. It assumes the owners of coal power stations keep them running, incurring huge losses every day they can’t sell their electricity into the power grid because it’s windy or sunny.
In reality, these stations inevitably choose to close, as Alinta’s Northern coal-fired power station in South Australia and Hazelwood in Victoria have already done. Liddell in NSW is next. That will leave a greater share of the grid’s capacity supplied by intermittent solar and wind.
My Energy Australia power bill arrived yesterday, for the three months to August, showing a 15 to 23 per cent price increase per kWh of electricity between June and July. The bill came to $527 for three people in a small house who are barely home.
A cynic might hope for blackouts across the eastern states this summer, to show voters the consequences of years of kneejerk, feel-good energy policy: extremely expensive, even absent power.
And it’s hard to see the cost of power falling or the level of reliability improving. Because of the RET, electricity retailers like Energy Australia are forced to buy power from renewable energy providers such as Abdul Latif Jameel when it is available. This year they are buying around 28 terawatts, rising to 33 terawatt hours a year by 2020.
For the massive sums Australians are forking out via their power bills and taxes to build solar and wind farms and provide juicy returns to foreign investors, we could have built multiple small nuclear reactors, which would, by the way, generate a lot more than 100 jobs each.
If we’re going to splurge on unreliable, emissions-free power, why not do it on reliable emissions-free power instead. A kilogram of coal can light 100 light bulbs for less than four days; a kilo of uranium would do the same for more than 1140 years.
Australia is the only country in the G20 to have banned nuclear energy, which is completely bizarre, rivalling the RET itself for stupidity.”
Source: The Australian 8/09/2017 http://www.theaustralian.com.au/business/opinion/adam-creighton/solar-farm-burns-money/news-story/a68e6a83b2fc63583b0d14430f60cf6d?utm_source=The%20Australian&utm_medium=email&utm_campaign=editorial&utm_content=BusinessReviewPM
Sounds like Australia is really socialistic. Good luck with that. It may serve as a future model for what not to do but may just be on the same list with most European countries. That is if suffering makes good models.
The results of the UK 2017 summer renewable energy CfD (Contract for Differences) auction are now known. Three large offshore wind projects succeeded with a total of 3.2 GW capacity, probably at 45-50% capacity factor. The strike price is guaranteed for 15 years and consists of revenue from the wholesale market price for power topped up with a subsidy to meet the agreed target strike price. In other words the strike price is the total wholesale cost albeit provided in a split way. The offshore wind farms are expected to last for 25 years.
The 860 MW Triton Knoll offshore wind project won a CfD with a strike price of £74.75 / MWh (GB) = $98.4 (US) for installation starting 2021/2022.
The 1.4 GW Hornsea Project 2 (which will become the world’s largest offshore wind project) and the 950 MW Moray East projects won with a strike price of just £57.50 / MWh (GB) = $75.87 (US) for installation starting 2023/2024. These will probably use 13-14 MW turbines which is one reason why the strike price is lower than for 2021/22 delivery.
The previous 2015 round of CfD auctions came in at a strike price of £119.89 / MWh for offshore wind capacity to be delivered in 2017/18, and £114.39 / MWh for 2018/19. In other words the lowest strike price for the 2017 round of £57.50 / MWh is half the lowest price for the previous 2015 round.
The new UK Hinkley Point C nuclear power plant was contracted at £92.5 / MWh = $122 (US) with a reduction to £89.5 = $118 (US) if a second plant is built later.
Also compare this with the estimated current unsubsidized cost of recent Texas onshore wind PPA’s at around $36 / MWh (US) [see links in article above], which is £27.28 on a comparable exchange rate. While Texas onshore wind is currently just under half the UK offshore wind price, offshore wind is a less mature technology and turbines can be constructed on much larger scales as it has fewer environmental or aesthetic considerations.
The new lower price of offshore wind has come as a shock to many.