The real cost of wind and solar: Why rates don't match the claims

OVERKILL

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Saw this yesterday and thought it was an interesting read:

The crux of the issue is that claims that rely on LCOE don't integrate the costs of firming into their models; the claims are made in a vacuum, which allows the lack of fuel cost to be spun as "close to free".

This chart from the article does a good job illustrating what it looks like just adding storage (not firming capacity):
The study points out that the LCOE (Levelised Cost of Energy, which reflects the cost of generating electricity from different types of power plants, on a per-unit of electricity basis over an assumed lifetime and quantity of electricity generated by the plant) for renewables is higher than for fossil fuel generation once the costs of backing-up their intermittency is included, something many analyses including the ones used by BEIS, fail to include. Cost comparisons should reflect the costs of delivering reliable electricity to end users, ie the cost to meet demand, so ignoring intermittency invalidates these
1652024981626.jpg


Another recent chart making its rounds on twitter illustrates how this has borne out in California:
1652025270872.jpg


This is obviously the result of "picking winners" and incentivizing them with tax or ratepayer dollars, the same scheme we saw here in Ontario with FIT contracts and LRP's, which had the exact same impact.

Of course the quintessential example is Energiewende, an extensive article on which can be found here:

A very interesting quote from the above:

Energiewende depends heavily on neighbouring countries for back-up power and as dumping grounds for occasional surplus. With high input from solar or wind sources the supply may exceed demand, forcing the power surplus into the adjacent grids of neighbouring countries, and obliging those countries to compensate for German intermittencies by running their own conventional plants at less than economic levels.

*snip*

In October 2016 BNetzA announced that from July 2018 the Austrian power market would be split from Germany. This “has become necessary, because power grid transmission capacity in Germany, Austria, Poland and the Czech Republic no longer has the technical capacity to transport the power traded within the current common price zone even if a successful grid expansion is assumed in the long term,” it said, adding that at present TSOs had to carry out large-scale costly redispatching to ensure system security. “The need for redispatching measures has largely come from our inability to manage this transport capacity at the Austrian border. Congestion management is in place at other borders,” BNetzA said.


The Czech Republic is one of the adjacent countries affected by Germany’s grid problems. Since mid-2012 the 2 GWe Temelin plant has operated about 100 MWe below capacity as instructed by grid operator CEPS because of grid security issues caused by power surges due to renewable power production in Germany. The Czech Republic and Poland have installed phase-shifting transformers* on their German border to block German electricity dumping; France Netherlands and Belgium already had them. The Czech Republic is also boosting its lignite-fired generation capacity by 660 MWe at Ledvice, and CEZ has allocated €3.65 billon to refurbishing 11 coal and lignite power plants.


Interesting bit bolded and underlined there.

Also this statement:
An insight on the continued reliance on lignite can be gained from RWE, which in 2012 commissioned BoA units 2&3 at Neurath in North Rhine-Westphalia near Cologne (2200 MWe), billed as “the world’s most advanced lignite-fired power station” and costing €2.6 billion. Each unit can drop from full power by 500 MWe in 15 minutes and then recover as required, “demonstrating the power station’s ability to offset the intermittency of wind and solar power.” RWE said: “BoA 2&3 is an important element of our strategy, for modern coal and gas-fired power stations are indispensable. Unlike wind and solar sources, they are highly flexible and capable of producing electricity 24/7, which makes them the trump card of energy industry transformation.” The state premier said that the plant was “an important contribution to security of supply.”

Another good read on Energiewende from the IEEE, which contrasts its "success" to what the US has done with the shift from coal to gas:

However, the "transition" makes sense once you read this from one of its promoters:
1652028373307.jpg

Craig Morris (@PPchef) is co-author of Energy Democracy, the first history of Germany’s Energiewende.

The "cheap" angle is leveraged to get people (Americans, Canadians, Aussies, Brits...etc) to get onboard and assumes they won't do much in the way of research on the impacts that have happened so far, much of which has been the result of forced adoption (Germany, Ontario, California).

There is a Romanticism angle to Germany's pursuit of VRE that doesn't make sense to people who are comfortable with their current standard of living. Others who have emulated it without understanding that context (Ontario, I'm looking at you) have experienced massive push-back from ratepayers once the costs started to mount.

Shellenberger touches on this in his Forbes article from 2019:
The earliest and most sophisticated 20th Century case for renewables came from a German who is widely considered the most influential philosopher of the 20th Century, Martin Heidegger.

In his 1954 essay, “The Question Concerning of Technology,” Heidegger condemned the view of nature as a mere resource for human consumption.

The use of “modern technology,” he wrote, “puts to nature the unreasonable demand that it supply energy which can be extracted and stored as such… Air is now set upon to yield nitrogen, the earth to yield ore, ore to yield uranium…to yield atomic energy.”

The solution, Heidegger argued, was to yoke human society and its economy to unreliable energy flows. He even condemned hydro-electric dams, for dominating the natural environment, and praised windmills because they “do not unlock energy in order to store it.”

These weren’t just aesthetic preferences. Windmills have traditionally been useful to farmers whereas large dams have allowed poor agrarian societies to industrialize.

In the US, Heidegger’s views were picked up by renewable energy advocates. Barry Commoner in 1969 argued that a transition to renewables was needed to bring modern civilization "into harmony with the ecosphere."

The goal of renewables was to turn modern industrial societies back into agrarian ones, argued Murray Bookchin in his 1962 book, Our Synthetic Environment.



None of this is to say that VRE doesn't have its place. Solar in particular, tends to, at moderate levels of penetration, match daytime peaking requirements for running air conditioning loads. Coupled with some moderate storage (PHES makes the most sense), this can reduce peaking requirements and peaking capacity is expensive. Wind can compliment massive reservoir hydro (see: Quebec) when pursued in a rational and measured manner by a large public utility, not as a subsidy harvest for fossil fuel companies who also provide the gas backup.

The issue is that neither of these technologies were allowed to organically integrate into existing systems as they could fit, rather, they were forced, typically via ideologically driven politicians, or ones that had been hoodwinked by VRE advocates passing themselves off as environmentalists. That's exactly what happened in Ontario and now we have copious amounts of wind that produces massively out of phase with demand and solar contracts up to $0.80/kWh that ratepayers are on the hook for on a 20-year term. California's duck curve is another artifact of what this looks like.

Grids were historical a system designed, by engineers, to service a need, and the most efficient way in which to do so was typically employed. The goal was resiliency, reliability and reasonable cost. Grid design now is being manipulated by folks with no understanding of the engineering and instead are driven by ideology, dictating capacity quotas for specific technologies with no reason applied to why, or what will be required to make it work; to retain the reliability and resiliency that are being undermined by technologies that are neither. This has been a challenge for operators and has led to things like blackouts, brownouts, load shedding (cutting off large industrial consumers) and capacity alerts like have been seen in California during hot spells. Resiliency and reliability suffer as the operators try and maintain stability, because black starts are not fun.

Hopefully, the situation in Europe has adequately laid bare the vulnerability to foreign fuel supply (Russian gas) and now that the emperor has no clothes, sane policy dictated by what works where with an overarching goal of emissions reduction through reason, research and expertise can be brought to the fore.
 
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Large global scale reorganization of the grid and a realization that no one source of power is an absolute solution might help find the answer. No one will want to put aside agendas to get along is an issue. Every source of energy has its benefits and drawbacks. No one wants to foot the bill for overbuilding to handle transients. Some other issues with humanity sucking at being nice to each other.....

Just my thoughts.
 
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This is a very detailed article. Thanks for posting this.

I do agree in a way with Craig Morris. It’s a natural reaction to conserve when prices are high. So buying the latest energy efficient appliances for example goes in that direction. Inverters have made a big difference along with sensors and other electronics. The issue is that there is always a period of time before people realize that high prices are the new normal. Someone who just bought a huge SUV if scratching their head right now especially if that purchase was not practical for their situation.

There is a big push to remove dams out in the PNW. Most of those in favor of this don’t realize the impact that would have not only on power generation but on agriculture and flood control. I think we should explore hydro even more. How about using diversion feedstocks to feed turbines rather than putting up a dam?

Personally I want a solution that saves me money along with conserving energy.
 
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The question I have about CA is how much of the rate increases there are due to rate hikes for grid maintenance, to pay for wild fire damage caused by PG&E fires in years past.

Is this a correlation vs causation question and/or are their other factors involved?

This article suggests Solar is one factor and that Solar users don't pay "their fair share" for the grid maintenance charges, which are claimed to be 2/3rds to 3/4s of what CA residents are charged for their electricity.


Those costs don’t change based on how much electricity residents consume, yet between 66% and 77% of Californians’ electricity bills are used to offset the costs of those programs, the study found. PG&E filed for bankruptcy protection in January 2019, after being held financially responsible for a series of deadly and destructive wildfires in 2017 and 2018.

So I'm not sure CA rates can be so tightly tied to renewables as much as the state of the grid and how much is going to grid maintenance and the like.

Everyone pays for grid maintenance based on their usage, which to me seems to be the fairest of ways to fund it. (Contrary to this article/essay.) The grid provides service based on usage. Those who demand more from the grid should pay more for its maintenance, so I don't agree with the notion that consumer renewables mean users are not paying their fair share. Not sure how it's done in CA, but here in IL, we pay a fixed fee to be hooked up and then a per kWH fee for both generation and delivery (the grid.) Can't imagine CA is different.

Edited to add: I do suspect there are some additional costs not considered for renewables. However, I'm not sure I buy the idea that it's renewables driving the faster rate increases in CA vs the other factors regarding grid maintenance. That chart comes across as more sensationalism/click-bait type numbers than useful or relevant to the point being made.
 
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Good read.

Commonly used renewable are wholly unreliable and impractical on a large scale as the info illustrates. It can only augment a power grid reliably but will not sustain one long term. Simply put, the sun isn’t always shining and wind isn’t always blowing. And there isn’t enough capacitance available to store the energy needed during those times. Battery technology is not advanced enough to support the power demands. Not to mention the negative impacts batteries themselves have on the environment in both manufacturering and deposal.

It’s a tricky thing this energy issue. How do we continue to maintain modern life and keep up with technological progress without raping our environment. Unfortunately the easiest answer right now to the energy problem is to decrease demand which is pretty much a step backwards not forward.
 

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Good read.

...Unfortunately the easiest answer right now to the energy problem is to decrease demand which is pretty much a step backwards not forward.
Agreed. With population growth and housing demand increasing, I can't see any decrease in future energy demand.

The fuel with the highest energy density remains to be nuclear isotopes. Nuclear fission is here and now, with fusion still in the future, so the logical route is the improvement and efficiency of fission nuclear reactors; my vote is still on local/distributed nuclear reactors in terms of nuclear safety and grid security.
 
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Pump water uphill and run it through a turbine later.

Make freezers smarter and have them go extra cold when there's a surplus, and coast when there's high demand. Digital Equipment Computers did this in the 1970s-- running refrigeration overnight with a special deal from the PoCo.

Do the same with electric car charging. Heck, make smartphones and laptop computers charge in off-peak.

Won't solve everything, but will help a little.
 
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Agreed. With population growth and housing demand increasing, I can't see any decrease in future energy demand.

The fuel with the highest energy density remains to be nuclear isotopes. Nuclear fission is here and now, with fusion still in the future, so the logical route is the improvement and efficiency of fission nuclear reactors; my vote is still on local/distributed nuclear reactors in terms of nuclear safety and grid security.
Nuclear is the best in terms of input demand to output wattage hands down. The general public just are not ready to have nuclear plants spread across the landscape. It would take a substantial amount of money and time to put in place the infrastructure. And costs would be passed along to the consumer so it would take awhile to financially level out.
 

OVERKILL

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The question I have about CA is how much of the rate increases there are due to rate hikes for grid maintenance, to pay for wild fire damage caused by PG&E fires in years past.

Is this a correlation vs causation question and/or are their other factors involved?

This article suggests Solar is one factor and that Solar users don't pay "their fair share" for the grid maintenance charges, which are claimed to be 2/3rds to 3/4s of what CA residents are charged for their electricity.




So I'm not sure CA rates can be so tightly tied to renewables as much as the state of the grid and how much is going to grid maintenance and the like.

Everyone pays for grid maintenance based on their usage, which to me seems to be the fairest of ways to fund it. (Contrary to this article/essay.) The grid provides service based on usage. Those who demand more from the grid should pay more for its maintenance, so I don't agree with the notion that consumer renewables mean users are not paying their fair share. Not sure how it's done in CA, but here in IL, we pay a fixed fee to be hooked up and then a per kWH fee for both generation and delivery (the grid.) Can't imagine CA is different.

Edited to add: I do suspect there are some additional costs not considered for renewables. However, I'm not sure I buy the idea that it's renewables driving the faster rate increases in CA vs the other factors regarding grid maintenance. That chart comes across as more sensationalism/click-bait type numbers than useful or relevant to the point being made.
Subsidies in the form of FIT's certainly have their role, and are present in California:

Are they the primary driver for increased rates? I don't know enough about California's situation to comment, and yes, PG&E has been a disaster.

Here's a bill that @UncleDave posted recently:
1652060301917.jpg

And here's one of my Ontario bills:
1652060325532.jpg


You can see the cost for generation on Dave's bill is roughly the same as for Distribution, and Transmission is another fee on top of that. There's also a wildfire fund charge, wildfire hardening charge...etc So I'd need to see his per kWh rate on top of that to get an idea of how much of a driver on rates VRE has. The overall bill is ridiculous, but without the rate data, it's difficult to point fingers. When we talk about costs, are we talking about the whole bill, including all these fees, which are separate from rates, or just rates?

In Ontario, it's quite easy to point fingers, because we have generator costs, by source, broken out, and Delivery (transmission/distribution) is clearly separated.
 
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dnewton3

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Another cost not directly addressed is the massive waste of products after the tech is "used" and ready for disposal.

Solar panels are only about 5% recyclable and 95% solid waste which does not decompose, degrade or decay, and some of it is extremely toxic to boot; leaking toxic metals into the ground when burried! It is already a problem going largely unaddressed, (unless you consider landfills a long-term solution), and adding more will only compound an issue with no real solution. The big push for solar in the mid-2000s is quickly going to come to a head with nowhere to run and hide. It's a big issue now; it's going to be HUGE in the near future.
and so on ...

Wind has similar issues, but is somewhat more recycleable, but still much of it essentially a big problem with no tangible solution.

and so on ...

Back in the day (decades ago), the "solution to polution was dilution"... Essentially to disperse waste via landfills and waterways. Whereas "renewable" wind/solar energy sources may be quasi-clean up front, the tech used to collect, harness, and transfer that energy is anything but earth-friendly at the back end. Yet no one questions this "clean" energy as a whole topic. The front end looks really pretty and promising, but the reality is that wind and solar are just as problematic as anything else, and no practical solution exists. The only current answer is to bury the junk; that's going to come to an end really soon, and then true costs for "clean and green" will skyrocket.



CAUTION !!!
The following is 100% my singular opinion, and I could talk for hours about my basis for the opinion, but I'll spare you the keyboard boredom ...
We need a few things ... at least in North America

First:
completely skip over the "wind/solar/biofuel" efforts. They are a fool's errand IMO. They will never have the capacity to make a real dent in our energy problems, and have hidden costs in the background which only compound toxic and solid waste issues. These are effots which are wasting money and resources, not the least of which are intelligent minds which can be used elsewhere in energy development.

Short term energy plan:
- continue to use fossil fuels, and continue to make them more efficienct and cleaner
- move from coal as best we can as opportunities present themselves
- move further towards natural gas

Long term energy strategy:
- nuclear front to back; local/regional plants; grid reliability improvements
- energy dense requirements for large vehicles (planes, long-haul trucks, locomotive, oceanic shipping, etc) will still have to rely on fossil fuels until better battery-storage tech catches up
- come up with a solid plan for cleaner battery raw material harvesting/production/recyling, and only then push hard for commuter EVs, etc
- move away from single-use waste such as one-time packaging, etc.
- improve recycle tech such that it no longer is cheaper to make glass, plastics and aluminum than to reuse it


The sooner we work hard towards the long term strategy, the sooner we get out of the short term plan.
 
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Nick1994

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It's quite an odd comparison to compare costs of an existing nuclear power plant to a new solar install.

What about a new nuclear install vs. a new solar install?
 
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Remember folks the primary premise behind renewable energy is to reduce net emissions.

The secondary goal is to make it as affordable as possible. IOW..How do you induce adoption.

The third goal is to not make the environment any worse off in the process.
 
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Energy companies are not dummies, when the carbon taxes come to the US, the utility companies will be able to sell "renewable energy" Kwh at a premium.
You've got to be living in an alternate reality if you don't think carbon taxes are coming to America, the politicians have been warming you up to the idea for 20 years.
 
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It's quite an odd comparison to compare costs of an existing nuclear power plant to a new solar install.

What about a new nuclear install vs. a new solar install?
Vogtle in Georgia is going to cost about $30.34 billion for two 1,117MW AP1000 reactors or 2,234MW combined (it has 2 existing units at 2302MW). The largest operating solar array in the US is Copper Mountain with a nameplate capacity of 802MW. Copper Mountain was done in phases, with Phase 3 being 250MW at a cost of $625 million.

Solar panels degrade over time though, the generally accepted “lifespan” of them is 20-30 years before they’re producing 80% of what they’re rated for. The oldest nuclear plant in the US (Nine Mile Point Unit 1) will turn 53 this year, and is licensed to run until 2029. But even with that old plants 79% lifetime capacity factor, it blows away solar’s capacity factor which struggles to hit 30%.

Energy companies are not dummies, when the carbon taxes come to the US, the utility companies will be able to sell "renewable energy" Kwh at a premium.
You've got to be living in an alternate reality if you don't think carbon taxes are coming to America, the politicians have been warming you up to the idea for 20 years.
My utility already does this, and it costs extra per KWh. At least it’s voluntary… for now.
 
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Energy companies are not dummies, when the carbon taxes come to the US, the utility companies will be able to sell "renewable energy" Kwh at a premium.
You've got to be living in an alternate reality if you don't think carbon taxes are coming to America, the politicians have been warming you up to the idea for 20 years.
Carbon taxes are a way of trying to price pollution (ie. negative externality). For example some of the biggest emitters of methane are NatGas producers. Methane* leaks via wells and the distribution network. Methane (a GHG) is a negative externality. How do you levy a cost for that externality? Carbon tax.

One of the largest examples of negative externalities is ocean dumping. Do you think the owners of that trash pay for the true cost to the environment? Historically that inability to assign ownership of a waste stream has been one of the biggest reasons why energy and/or goods were cheap. If an emitter doesn't have to be responsible for their waste that's an additional expense they don't have to incur so they don't have to raise their prices.

From a BITOG perspective we have seen that with the introduction of emissions controls systems over the last 60 years. Fuel injection, PCV/EGR, catalytic converters, SCR, DPF/GPF, etc. All of this technology has made vehicle emissions cleaner but there's a cost.

The biggest fault with the carbon tax is arriving at an accurate dollar amount. It's not possible.


*Annual NatGas emissions from Permian basin equate to about 500k cars.
 
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Make freezers smarter and have them go extra cold when there's a surplus, and coast when there's high demand. Digital Equipment Computers did this in the 1970s-- running refrigeration overnight with a special deal from the PoCo.

Do the same with electric car charging. Heck, make smartphones and laptop computers charge in off-peak.

Uhhh...hehe, uhhhmmm heehehhee


If everyone is charging "off peak", then what does that time period become? Hey, while I wait on your answer, I'm gonna go cut off the first 6' of our 12' long rug, and sew it on the other end so we will have a longer rug.
 
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You've got to be living in an alternate reality if you don't think carbon taxes are coming to America, the politicians have been warming you up to the idea for 20 years.


They are already here in WA. They just called it something else and it passed.
 
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Large global scale reorganization of the grid and a realization that no one source of power is an absolute solution might help find the answer. No one will want to put aside agendas to get along is an issue. Every source of energy has its benefits and drawbacks. No one wants to foot the bill for overbuilding to handle transients. Some other issues with humanity sucking at being nice to each other.....

Just my thoughts.
Agree ... I actually think two solutions, if we could focus (which doesnt seem possible anymore)
Nuclear as the main source and solar as the back up/contributor. To me, solar to handle the peak demands in hot climates and warm northern summers would be ideal.

Throw in some wind if it makes sense for the area and climate even at the expense of slicing and dicing migrating flocks of birds.
It all seems sooooooo simple but there are "agendas"

(sleeper maybe hydrogen power, I think a real possibility I dont think oil producers are just going to throw in the towel giving up gas vehicles, if hydrogen can be done cost affective it can be. slam dunk, heck, you can have your own mini hydrogen power source to power your home)
 
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