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Sunday, January 1, 2017

CleanTechnica—Does Solar and Wind Really Crush Coal and Nuclear, Promote National Energy Freedom (aka Energy Independence), Improve the Economy?

Although solar and wind will be a major part of future low carbon energy grids, they have their limits. If that were not true, why would we bother with both when we could just pick one or the other? Future low carbon energy grids will be a mix of nuclear, wind, solar, hydro, biomass, etc, with just enough natural gas to stitch the various sources together.

Zachary Shahan begins his article with screenshots of the Lazards 10.0 LCOE study with two vertical lines drawn on it in an attempt to demonstrate that wind and solar are typically cheaper than new coal, natural gas, or nuclear power plants.”

If by typical, he means cheaper regardless of where in the country they might be installed, he’s wrong.

If he meant cheaper only in the sunniest and windiest of places, then obviously, they will not always be cheaper than other energy sources. And even if they were the cheapest regardless of where they are installed, a grid using them would still require several other types of energy sources, more expensive or not, to provide the lowest overall cost to consumers. Be it the mother board in your computer or an electrical grid, some components will cost more than others to provide the lowest overall cost of the final product.

I created Figure 1 below to explain why he is wrong. Hydro, wind, and solar are natural resources and they are not equally plentiful everywhere. Lazards states that the solar prices are only for areas of high solar insolence (the Southwest) and in the case of wind, only where it blows hard enough to use 35% to 50% of rated capactiy (windy places) and that the prices don’t include things like extra transmission lines. Read the disclaimer at the top of Figure 1.

Figure 1: Explanation of the limits of the Lazards LCOE chart.

The author presents (largely incorrect) messages for anyone wanting a better US economy …anyone wanting national energy freedom (aka energy independence), anyone wanting to advance the most cost-effective choices for electricity generation, and anyone wanting to make logical energy decisions ...[to] share with others.”

I would advise anyone reading that article to think twice before sharing it with others for the following reasons.

National Energy Freedom

The author’s “national energy freedom (aka energy independence)” argument was used to support corn ethanol, which ostensibly reduced the amount of oil imported, which made some sense at the time.

But only a percent or so of our electricity is made with oil, not to mention, we are on the verge of being oil independent.  Except for the 4% from wind and 1% from solar and oil, our electricity comes from biomass, hydro, nuclear, coal and gas, none of which are particularly dependent on imports. In short, this argument is utterly nonsensical.

A Better US Economy

The author argues that “anyone wanting a better US economy” should support wind and solar. One claim made to support this is that the combination of solar and wind is replacing coal, which the author says is costing a half-trillion dollars a year in health costs. Three problems:

1.     Solar and wind are not displacing coal (they are displacing natural gas)
2.     Nuclear displaces coal
3.     Wind and solar are not always the cheapest source

Since nuclear has been displacing coal for the last several decades it gets to claim trillions of dollars in averted health care costs.

If a massive transition to a grid dominated by wind and solar will help the economy, what is Germany doing wrong?

From the German Minister for Economic Affairs and Energy, second in command to Merkel, who was also the Federal Minister for the Environment, Nature Conservation and Nuclear Safety from 2005 to 2009:

I don’t know any other economy that can bear this burden [$30billion a year]...We have to make sure that we connect the energy switch to economic success, or at least not endanger it. Germany must focus on the cheapest clean-energy sources as well as efficient fossil-fuel-fired plants to stop spiraling power prices."

While renewable aid costs are at the “limit” of what the economy can bear, Germany will keep pushing wind and solar power, the most cost-effective renewable sources, Gabriel said.

The most cost-effective choices

Shahan presents two maps generated by “a tool from the Energy Institute of the University of Texas [which he thinks] shows the cheapest kind of new power plant by county, accounting for land available to deploy a particular technology.”

However, he’s wrong about what the maps show. According to the study authors, those maps are only showing “availability zones” which “are locations where we predict where you could build a given technology.”

The maps rely on hundreds of variables. Shahan makes no mention of the values used to generate his maps but I was able to roughly sleuth out which variables were used for his first map and used them for Figure 3 below.

In Figure 2, I show the real map of the cheapest kind of new power plants by county based on the default values put in place by the researchers but I adjusted the cost of gas to $2.65/MM Btu to reflect the average in 2016. Figure 3 has the price of gas double that of 2016.

Note in both cases that the only low carbon sources visible to the naked eye are wind in the Great Plains states and nuclear.

Figure 2: Cheapest Technology In the United States by County Gas at $2.65/MMBtu

Figure 3: Cheapest Technology In the United States by County Gas at $5.3/MMBtu

I have just scratched the surface of this article but I think you get the picture by now. Debunking the rest of it would not be particularly productive.   

Thursday, December 29, 2016

David Roberts Thinks "Solar is Winning"--Still Antinuclear

In his article "2 remarkable facts that illustrate solar power’s declining cost" Roberts starts off well:

First, there’s no such thing as an electricity source that is cheapest in all circumstances, nor is there likely to be such a source any time soon. All sources have advantages and disadvantages; they all have circumstances in which they excel.

But goes downhill from there, concluding with the following nonsensical remark:

 “Solar is winning.”

What does that even mean?

Industrial solar is going to play an important role in future grids but unless it’s located in one of the sunniest of places, it won’t be the least expensive source. And even when it is the least expensive source, it will never be the only component of a grid. More expensive components, be they nuclear, wind, gas, and possibly some amount of much more expensive storage, will have to be part of that grid ...especially at night. So, what matters is the total cost of operating all of the components of a grid. The fact that you may have lowered the cost in very sunny places of just one component (solar) will not necessarily lower your electric bill. Evidence to date strongly suggests the opposite.See Figure 1.

Why? One reason would be integration costs, which are not included in LCOE calculaltions. The price charged by the solar farm owner does not reflect all costs to the grid operator (which all get passed on to the consumer) of the additional transmission needs of industrial intermittent sources. For example, in Texas, the integration costs for wind can double the final price charged to customers. If the wind farm is charging $25/MWh and the cost of installing new transmission lines to export excess power produced when it's not needed locally is $25MWh (see Figure 2), the real cost is twice that being charged by the wind farm. Integration costs of intermittent sources tend to be much higher than for dispatchable sources because of the need for more transmission infrastructure to export excess power produced at times when it is not needed in the local grid.
Figure 2 Summary of transmission line integration cost studies with ERCOT average =$25/MWh

If “solar is winning” why has Germany just put the kibosh on it?

I recall that Germany used to build 7 GW of solar a year under a market-based feed-in tariff. Now we get close to nothing. This doesn’t make any sense. Cost of new solar has gone down. Why stop now?

Two rounds of auctions have already been held, but with disappointing results. According to Renewables International: “The government originally hoped that auctions would bring down the cost of solar, but that goal has now been abandoned.” The hope that the auctions would bring down solar costs was frustrated by high bid prices, with solar bids coming in at up to €89.30/MWh, not that much less than the Hinkley Point strike price of £92.50. And Hinkley generation is of course dispatchable while solar isn’t.

 David continues:

So the hyped headlines are a little out ahead of the facts. But the hype itself is warranted [emphasis mine].

I’ve been watching David hype wind and solar in this manner for well over a decade now.  It’s no wonder a recent poll found that Americans have somehow been given the mistaken impression that wind and solar combined are producing 20% of our electrical energy. They’re off by a factor of four.

And as is typical for Roberts, thoughts of the impact on natural ecosystems of an energy source that usurps seven times more land per unit energy than nuclear never enter his mind. If you can find enough places to put it all without obliterating natural ecosystems like the Ivanpah solar thermal plant just did and does, great. But the cheapest land tends to be that occupied by what is left of nature, and human nature being what it is... The four-volume mega-study by the NREL put solar at 6% by 2050.

Figure 3

In China and other emerging nations, population, GDP, and electricity demand are all rising quickly.

That’s why emerging nations are installing more renewable capacity than their Western counterparts.

Together, wind and utility-scale solar are now the cheapest available energy sources in the places that are building the most of them.
Figure 4

So, any guesses as to why he left nuclear out of that discussion? See Figure 4.

Liebreich says bluntly, “renewable energy will beat any other technology in most of the world without subsidies.”

I’d call that a bluntly disingenuous statement (although I suspect it’s been taken out of context). Hydro isn’t cheap in Tucson (where I’m presently writing this piece), solar isn’t cheap in Seattle (where Dave and I reside), and wind is only the cheapest in very windy places. Places without much hydro capacity, wind velocity, and solar insolence, won’t find that hydro, wind, and solar are cheaper than other sources. Look to Germany’s cost of implementing wind and solar for real world evidence of that.

From the German Minister for Economic Affairs and Energy, second in command to Merkel, who was also the Federal Minister for the Environment, Nature Conservation and Nuclear Safety from 2005 to 2009:

I don’t know any other economy that can bear this burden [$30billion a year]...We have to make sure that we connect the energy switch to economic success, or at least not endanger it. Germany must focus on the cheapest clean-energy sources as well as efficient fossil-fuel-fired plants to stop spiraling power prices."

While renewable aid costs are at the “limit” of what the economy can bear, Germany will keep pushing wind and solar power, the most cost-effective renewable sources, Gabriel said.

David continues:

Utility-scale solar now has a lower total cost of power than natural gas [in very sunny places when the sun is shining—my edit]

And that is a good thing in those sunny places because utilities will actually seek out solar based on cost rather than be enticed to use it with subsidies or mandated to use it by government fiat. But, it will only be used when the sun shines in the sunniest places, and, like wind, will only be used as a fuel reduction device for natural gas power stations. See Figure 5.
Figure 5
Lazard’s annual report is very widely read.

Lazards report, like any report, needs to be taken with a grain of salt. Unlike the many government reports on LCOE, Lazards, a for-profit entity, has many dogs in this fight (a strong incentive for bias). Read this blog post about their methodology.

David continues:

Our second remarkable fact is tucked away there on row five: Cutting edge solar has nosed ahead of natural gas.

On an LCOE basis, onshore wind is the cheapest form of electricity; utility-scale thin-film solar PV is the second cheapest.

Think about that for a minute. The cleanest [A low carbon source of] energy is the cheapest [has, according to Lazards, a lower LCOE in very sunny places than natural gas]. That’s a pretty big deal [an incremental improvement].

I took the liberty of editing the above sentence to make it more accurate. David’s remarkable fact, the basis for his article, actually first showed up in last year’s Lazards report (9.0). And to make matters worse, it had thin film solar $3 cheaper last year than this year (same for natural gas). Lazards 8.0 didn’t even mention thin film. David assumed that Lazards had been showing thin film getting cheaper every year and so has extrapolated that trend into the future. If he realized that it was shown as cheaper last year, he would have had to assume the opposite, that it’s getting more expensive (which it isn’t). Oh well. See Figure 6 .

Figure 6

This competition between renewables and existing power plants helps explain why US utilities (and fossil fuel companies, and conservatives) tend to dislike state-level renewable energy mandates.

I have to say, as I often do, the above sentence also doesn’t make a whole lot of sense to me.

Who, other than a masochist, likes it when the government decides to mandate the consumption of a competitor’s product?

Conservatives dislike renewable energy mandates? Google the term “conservatives favor renewable.”

Utilities dislike renewable energy mandates? I think what David really meant to say was that utilities don’t care for mandated consumption of wind and solar when that mandate makes it more difficult for them to remain fiscally solvent (wind and solar are worthless without, utterly dependent upon, fiscally solvent grid operators and dispatchable energy sources). Utilities would love (and sometimes do love) those mandates if they improve their bottom line.

All energy sources compete with each other. Historically, coal’s biggest competitor has been nuclear, now it’s largely gas. Hydro competes with everyone but has limited potential for expansion. Oil won the competition for transport hands down over natural gas. Solar and wind, not only compete with each other, but when cheap enough, also compete with natural gas and on and on.

“When forced to build new renewable-energy capacity, utilities are effectively creating their own competition, often rendering their existing fossil fuel and nuclear power assets uneconomic. (Thus the many cries for bailouts of existing coal and nuclear plants.)”

And above we have yet another largely nonsensical sentence. Natural gas, a fossil fuel, is nuclear power’s competition, not solar at 1% and wind at less than 5% concentrated principally in especially sunny or windy areas respectively.

David rarely misses an opportunity to associate coal with nuclear (even though one is the major cause of climate change while the other is the major weapon combating it). As for calling tax credits for nuclear "bailouts" but calling them a subsidy for wind and solar, see this Tweet:

But remember: It’s [Commercial and industrial (C&I) rooftop solar] is not competing with alternative forms of new generation [wind and utility scale solar], it’s mostly competing with existing [fossil fuel and nuclear] generation, relative to which it is wildly expensive.

Wind and solar are not competitors? Given the choice of buying solar panels or wind turbines, an entity is likely to opt for turbines in a windy, cloudy, location or solar in a windless, sunny location, much to the protestations of the respective turbine and panel salespersons.

And doesn’t every new power station have to compete with existing ones?

The costs of climate change are left out of these LCOE calculations. If they were included — if a reasonable carbon tax were applied across the electricity sector — it would obviously advantage renewables relative to fossil fuels. (It would also improve the position of existing nuclear plants.)

The above statement is quite accurate but I want to point out that the bone he threw to nuclear looks like a last minute edit job (it’s at the end of the sentence, in parenthesis, and the punctuation is wrong). And as I mentioned above, in an earlier article and in this one as well, he refers to subsidies for nuclear (a de facto price on carbon) as bailouts.

Wind and solar are intermittent resources (the wind isn’t always blowing, etc.), which means the more of them you add to the grid, the more “firming” of the grid you need to compensate. That can be done through flexible backup generation (usually natural gas), energy storage, “load shifting” (moving demand to times of high wind/sun), or a variety of other techniques.

If energy storage were really economically feasible, nuclear would profit from its existence just as much as wind and solar. Load shifting is also a technique that would benefit nuclear as much as wind and solar. Missing from David’s list is the construction of billions of dollars worth of additional transmission infrastructure to export wind and solar energy spikes to far away areas not being impacted by similar wind and solar spikes (because they have not installed too much wind and solar). This cost is unique to wind and solar and it’s huge. See Figure 2.

Making the grid more flexible will come at some cost.

In light of the $30 billion annual cost of the expense of the German experiment, which is far higher than the cost of new nuclear, I’m not sure that “some” is the proper adjective here. Also see Figure 1.

It has to be done eventually, and the end product will be much more effective, but getting there will cost money. Wind and solar necessitate spending that money.

Actually, it doesn’t “eventually” have to be done at all and if by “effective” he means effective at reducing emissions, judging from the German and California experiments to date, removal of nuclear from a grid always results in more emissions and higher costs.

If you use wind or solar as fuel reduction devices for natural gas power stations there will be no need for extra transmission lines to export power gluts caused by too much solar or wind capacity to grids that do not already have too much wind or solar (yes, you can have too much of a good thing).

Replacing existing coal plants in situ with nuclear as China is doing with some of its coal plants would actually be much more effective as France and Sweden proved long ago.

Utility-scale solar has gotten so much cheaper, so fast, that it is now directly competing with new wind and natural gas plants. That is something no one would have dared predict even a few years ago.

Headline from a few years ago at CleanTechnica: Solar Grid Parity In All 50 US States By 2016, Predicts Deutsche Bank

If solar costs keep dropping, then in a few more years there will be no remaining ambiguity: Utility-scale solar will be the cheapest form of new electricity almost everywhere. Where it isn’t, wind will be. And rooftop solar will be edging out natural gas.

By everywhere he means only in really sunny places (very roughly speaking, half as much sun = twice the cost). And when he says it won’t be, wind will be, he means in not-so-sunny but really windy places (very roughly speaking, half as much wind = twice the cost). Everywhere else …not so much, and it’s in those places you will find more nuclear.

As far as rooftop solar edging out natural gas, a study by NOAA and UC Boulder using NREL software found that for intermittent sources to crack 50% of electricity generation would require natural gas prices to triple (a 300% increase). See Figure 7

Figure 7: Effect of Gas Price on HVDC Grid Penetration of Renewables
That still leaves developed countries with the dilemma of how to deal with no-longer-competitive fossil fuel and nuclear generators, in which utilities have millions of “sunk costs.” But solar will be like an acid bath for them, eating away from the margins inward.

Wait a minute; this article is about utility-scale solar. These solar farms are owned by, wait for it …utilities. If wind and solar are truly more profitable in a given area, then closing non-competitive generators isn’t a dilemma, it’s an opportunity for a utility to reduce costs. If dumping a sunk cost is more profitable, they will dump it. If not, they won’t. The acid bath analogy is utterly nonsensical. If solar is profitable, it won’t be, like an acid bath, eating away at the utility that built the solar farm; it would be an asset to the utility.

Now throw climate change into the mix. You don’t want natural gas taking out a zero carbon energy source like nuclear. Solar, barely at 1%, primarily in sunny places, is not a threat to nuclear, and that’s a good thing because we sure can’t let low carbon energy sources take out other low carbon energy sources while coal sits there watching.

From an earlier article titled As they grow, wind and solar hit economic headwinds, Roberts concedes that the intermittent power glut effect (wind and solar producing power when little is needed create a glut on the market that drive the amount paid for power production into the insolvency range) is real:

And keep in mind that if wind topped out at around 35 percent and solar topped out at, oh, 25 percent, together they would cover 60 percent of total electricity demand. That would be an absolutely remarkable feat. In truth, say Jenkins and Trembath, there's reason to think the rule of thumb is too generous and VRE [Variable Renewable Energy] will top out at maybe 50 percent of global electricity. Even if they're right, though, that would represent an energy revolution, not some grim disappointment.