In my latest article for The Telegraph, I revisit the myth that renewable energy is cheap.
Predictably, some people have come back at me with “ah but Lazard says renewables ARE the cheapest form of energy – see their levelised cost analysis”. So let’s do that. Here, once again, is an explanation of why the Lazard levelised cost analysis does not show that renewables are the cheapest form of energy…
What does the Lazard analysis show?
To start with, we need to understand what the analysis does and does not include. Below is the first page of the introduction to the report, repeated verbatim:
Lazard’s Levelised Cost of Energy (“LCOE”) analysis addresses the following topics:
- Comparative LCOE analysis for various generation technologies on a $/MWh basis, including sensitivities for U.S. federal tax subsidies, fuel prices, carbon pricing and cost of capital
- Illustration of how the LCOE of onshore wind, utility-scale solar and hybrid projects compare to the marginal cost of selected conventional generation technologies
- Illustration of how the LCOE of onshore wind, utility-scale solar and hybrid projects, plus the cost of firming intermittency in various regions, compares to the LCOE of selected conventional generation technologies
- Historical LCOE comparison of various utility-scale generation technologies
- Illustration of the historical LCOE declines for onshore wind and utility-scale solar technologies
- Comparison of capital costs on a $/kW basis for various generation technologies
- Deconstruction of the LCOE for various generation technologies by capital cost, fixed operations and maintenance (“O&M”) expense, variable O&M expense and fuel cost
- Considerations regarding the operating characteristics and applications of various generation technologies
- Appendix materials, including:
- An overview of the methodology utilised to prepare Lazard’s LCOE analysis
- A summary of the assumptions utilised in Lazard’s LCOE analysis
Other factors would also have a potentially significant effect on the results contained herein, but have not been examined in the scope of this current analysis. These additional factors, among others, could include: implementation and interpretation of the full scope of the Inflation Reduction Act (“IRA”); network upgrades, transmission, congestion or other integration-related costs; permitting or other development costs, unless otherwise noted; and costs of complying with various environmental regulations (e.g., carbon emissions offsets or emissions control systems). This analysis also does not address potential social and environmental externalities, including, for example, the social costs and rate consequences for those who cannot afford distributed generation solutions, as well as the long-term residual and societal consequences of various conventional generation technologies that are difficult to measure (e.g., nuclear waste disposal, airborne pollutants, greenhouse gases, etc.)
The key part is highlighted (my emphasis).
People are getting very excited about the “cost of firming intermittency”, described by this chart:
It’s actually quite hard to work out what’s going on here. Renewables are being compared with the levelised costs of CCGTs ($39-101 /MWh) and gas peakers ($115-221 /MWh). Lazard has analysed the cost per technology per region, separating out the un-subsidised cost from the subsidised cost. Firming costs are added based on what each system operator says those costs are based on the main backup technology used, which in CAISO and PJM includes batteries.
We can see that only wind which is subsidised in the SPP region has a cost lower than the cheapest CCGT. In CAISO just about everything is more expensive than CCGTs – the cheapest technology comes in just below the most expensive CCGTs. Results elsewhere are more variable. Only gas generation has a cost range, and the ranges are wide, with the most expensive CCGTs being more than 2.5 times more expensive than the cheapest. This skews the analysis…why are the fossil fuel comparators given such a wide cost range but none of the other technologies are?
In any case, this chart does not “prove” renewables are cheaper than fossil fuel generation. On the contrary, when including the costs of backup generation, it shows that in many cases they are more expensive. And this does not include other important costs associated with the integration of renewables, in particular transmission upgrades. It’s unclear whether balancing costs are included in the cost of firming – I suspect not, but it is unclear (the word “balancing” does not feature in the report).
Data from the OECD give an idea of the magnitude of these missing costs for selected countries including the US:
This indicates that excluding back-up costs which are included in the Lazard data, it is necessary to add $10.70 – 13.70 /MWh for on-shore wind, $18.42 – 21.42 /MWh for off-shore wind and $14.82 – 17.82 /MWh for solar. These are old data (from 2012) so not directly comparable – I wasn’t able to find an update on the OECD website. If anything, these costs are likely to be higher now, particularly grid infrastructure costs, given the increase in raw materials prices in the last couple of years.
Battle of the investment banks: JP Morgan challenges the Lazard approach
In the 2022 JP Morgan Annual Energy Paper, entitled The Elephants in the Room, there is further criticism of LCOE and the approach to the energy transition taken by many Western countries:
““levelised costs” comparing wind and solar power to fossil fuels are misleading barometers of the pace of change. Levelised cost estimates rarely include actual costs that high renewable grid penetration requires: (a) investment in transmission to create larger renewable coverage areas, (b) backup thermal power required for times when renewable generation is low, and (c) capital costs and maintenance of utility-scale battery storage. I am amazed at how much time is spent on this frankly questionable levelised cost statistic,”
– Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan Asset & Wealth Management
One of the elephants referenced in the title is grid infrastructure. Cembalest says that the US electricity grid has been called the “largest machine in the world”, comprising 7,700 power plants, 3,300 utilities and 2.7 million miles of power lines. While trying to electrify large segments of the heating and transport sectors, policy-makers will need to ensure the stability of this machine, something which is already causing problems (that I plan to address in an up-coming blog) – some US utilities are already struggling with rising grid outages with the average duration of outages in minutes per customer per year increasing.
Unfortunately, the development of new grid infrastructure is moving far too slowly to allow for the effective integration of renewable generation. In addition, the US shares similar grid connection issues to the UK, further hampering system efficiency.
Cembalest points out that a lot of the emissions reductions that have been achieved in the developed world over the past 25 years, have been achieved by shifting carbon-intensive manufacturing of steel, cement, ammonia and plastics to the developing world. Although energy consumption in the developed world is expected to continue to fall, the opposite is true in the developing world where energy consumption is projected to keep rising and where coal is still widely used.
He also says that fossil fuel use will remain high in the developed world – JP Morgan estimates that the US might need almost as much gas in 2035 as it uses today, based on assumptions about wind and solar growth, EV and heat pump adoption and the decommissioning of coal and nuclear plants. These factors combine to create a range of economic and geopolitical risks.
“…countries that reduce production of fossil fuels under the assumption that renewables can quickly replace them face substantial economic and geopolitical risks,”
– Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan Asset & Wealth Management
As an amusing aside, he points out one of the highest ratios in the world of energy science: the number of academic papers written on carbon sequestration divided by the actual amount of carbon sequestration (~0.1% of global emissions at last count).
EROI is a better measure and shows the problems with intermittent renewables
This peer-reviewed analysis published in the Journal of Management and Sustainability also criticises the use of LCOE:
“LCOE is inadequate to compare intermittent forms of energy generation with dispatchable ones and when making decisions at a country or society level. We introduce and describe the methodology for determining the full cost of electricity (FCOE) or the full cost to society. FCOE explains why wind and solar are not cheaper than conventional fuels and in fact become more expensive the higher their penetration in the energy system. The IEA confirms “…the system value of variable renewables such as wind and solar decreases as their share in the power supply increases”. This is illustrated by the high cost of the “green” energy transition,”
– Dr. Lars Schernikau, Independent; William Smith, Washington University, Saint Louis; Rosemary Prof. Falcon, University of the Witwatersrand, Johannesburg, South Africa
The paper is interesting read because it discusses the differences between generation technologies when using EROI (energy return on energy invested) rather than LCOE as the measure of comparison, and how much worse renewables perform on this measure, something which is clear when considering the chart below. They also frame this in the context of the Laws of Thermodynamics.
The 1st Law states that energy can never be lost, only converted from one form to another. The 2nd Law introduces the concept of entropy, which describes the usefulness or value of energy (high entropy = high disorder, or low value of energy). This Law explains why, in a natural state, heat always moves from warm to cold and not the other way round. When energy is converted from one form to another, “useful” energy is lost ie entropy increases.
The logical conclusion is that the conversion and storage of energy should be avoided as much as possible, since these result in the loss of useful energy (renewables proponents say that “surplus” renewable energy can be converted and stored for future use, but this implies a significant over-build of renewables in excess of peak instantaneous demand). Any loss of useful energy directly translates into reduced system energy efficiency, and a lowering of the EROI. It also results in direct warming of the biosphere since the energy losses are typically in the form of heat lost to the environment.
“It can be concluded that wind and solar have a very low EROI and are therefore a step backward in history in terms of net system energy efficiency. Their grid-scale employment risks energy starvation and is therefore not desirable economically nor environmentally…The full cost of electricity FCOE and EROI illustrate that wind and solar are unfortunately not the solution to humanity’s energy problem. At grid scale, they will lead to undesired economic and environmental outcomes. The use of LCOE for the purpose of discussing the “green” energy transition must cease because it continues to mislead decision makers,”
– Schernikau, et al
The Lazard analysis clearly takes into account capital costs, however this paper quantifies the relative amounts of different materials needed to build different types of generation, which impacts costs but also the environmental footprint of these assets, something that is often ignored. Concrete and steel are particularly energy intensive to produce.
I have complained in the past about the lack of data on lifecycle emissions for different generation technologies, something echoed by the authors: “the only positive aspect, such expansion [of renewable generation] will limit the use of fossil raw materials mined. The question is, however, if it would truly reduce total raw material use when honestly and truly accounting for the entire life cycle from resource mining, via material transportation, processing, manufacturing and operation, to recycling. Further research is required here.”
The authors conclude that energy policy and investors should not favour wind, solar, biomass, geothermal, hydro, nuclear, gas, or coal but should support all energy systems in a manner which avoids energy shortages and energy poverty. They point out that all energy requires taking resources from the planet and processing them, negatively impacting the environment, and that the goal should be to minimise these negative impacts by increasing, energy and material efficiencies. They suggest policy-makers refocus on the entirety of the energy trilemma but with environmental protection rather than de-carbonisation as the third pillar, saying that this translates into two paths for the future of energy:
- investing in education and base research to pave the path towards a “New Energy Revolution” where energy systems can sustainably wean off fossil fuels; and
- at the same time supporting investment in conventional energy systems to improve their efficiency and reduce the environmental burden of generating the energy required for daily life.
This is an interesting if controversial suggestion. The authors are essentially saying that we’re some way away from being able to do away with fossil fuels (consistent with the JP Morgan analysis above as well as many other forecasts) and so some efforts should be made to make the best of this by making fossil fuel use as efficient as possible.
This is a sensible approach – so far the focus, where any thought has been given to making fossil fuels “better”, has been on carbon capture, but as noted by JP Morgan, and as I have often argued, this technology is so far failing to make much of an impression, and there are doubts as to whether it will ever be viable in the power sector (for CCGTs). There are likely to be ways of making gas and coal fired power stations more efficient, which would reduce emissions, but there is little research into this because it is no longer perceived as useful. However, if fossil fuel use even in the power sector is likely to realistically continue for decades, there would be benefits to exploring this further.
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It’s clear that the levelised cost approach does not accurately describe the relative costs to the consumer of renewable generation compared with conventional energy sources, and it is therefore deeply mis-leading. The fact so many people responded to my article with “but Lazard…” illustrates that the understanding of its limitations is poor. Also, people want to believe that renewables are cheap because that strengthens the arguments for deploying them at scale. Whether we should do that or not is not the point of this analysis – the point is that decisions need to be made based on accurate information. Consumers are not interested in the ins and outs, they just care what shows up on their bills, and that includes the full system costs of all sources of generation. That is the only metric that really counts.
How do you feel about the ad hominem attacks on linkedin…? It’s scary that so many ‘energy analysts’ and EV this that and the other renewables specialists feel so threatened….
It was picked up by people outside my network so got an unusually aggressive response. When it was re-posted by others the discussion was more constructive. It’s depressing how people think it’s OK to behave that way though, as an alternative to reasoned debate.
Thanks for this very useful critique of LCOE. It needs to be debunked. We can all see that our electricity bills have been steadily rising since ever greater numbers of weather dependent renewables have been forced onto the grid. The other factor in rising consumer bills is our dysfunctional UK regulation of the energy ‘market’, including marginal cost pricing. The intermittency and unreliability of renewables obviously drives up the ‘marginal’ cost of all the power provided to the grid.
Thank you, Kathryn, for another insightful blog. Good to see direct warning getting a mention. This issue demands much more attention. See Sabine Hossenfelder’s take here:
https://youtu.be/9vRtA7STvH4?feature=shared
A very well thought through and well articulated piece as always Kathryn.
Thank you Kathryn for another excellent and well researched piece of analysis, it was an excellent read for me. In God we trust, everybody else needs data, bring it on I say, so we are transparent and honest with the citizens we serve as to the trues cost of decarbonisation and ensure the costs are equitably recovered.
It’s clear that better data is needed but this analysis is skewed too far away from supporting wind. Where are the real scientists doing expert analysis of the UKs energy needs over the next 30 years and where are those able to calculate the best mix in terms price and security? I’m glad that thermal storage for wind gets a mention. In terms of thermodynamics (also mentioned) thermal and compressed gas is likely to minimise entropy increase over the cycle. Excuse me again for pointing out that thermal storage in the home is the most efficient way to store electrical energy and has the additional benefit that the customer pays for the hardware.
To minimise the need for storage, some detailed work on the most beneficial location of wind turbines to ensure the fewest drop outs is needed. Also, when you have enough wind, nuclear and storage to cover the coldest months, there is no point at all in solar.
Ed Hogbin, why bother with the network expense and headaches created by using wind turbines? why not just go for more and different types of nuclear power? New generations of nuclear power plants will be more flexible and responsive to demand; will provide high temperature heat for industry; can re-cycle nuclear ‘waste’ to get the 90%, or so, remaining energy out; will have no ability to ‘melt-down’ or explode in the way current stations potentially could; provide the safest power source we have; produce hydrogen if needed; and facilitate district heating systems; be placed where the power is most needed; reduce entropy; use much less (ever more) important land and sea space; could easily provide stable and affordable energy prices; be much easier to defend from Putin’s sub-sea mines! etc etc.
Renewables are a necessary long term part of the generation mix along with Nuclear. Both happen to be more expensive than fossil fuels. Unfortunately the way the world works and behaves happens to be to migrate towards the lowest cost solutions and given energy is a political hot potato, it plays into a narrative shaped to attract votes.
Renewables is a lovely pitch to voting consumers when it comes with a narrative of low cost. Low cost is believable instantly because well, its the wind after all and the wind is free surely and must surely as a result cost less than gas or coal. Whatever you do, don’t complicate the narrative with fact or reality, there is no kudos there and you are criticised as a dinosaur and enemy of nature if you dare to introduce inconvenient truths.
Getting a nation behind supporting the investment in much more expensive energy systems, something the public don’t value much and many think ‘should be free’, is a job. It may be necessary, but the truth about its cost will out in the end and trying to quieten those that challenge the narrative will ultimately be futile when the bills come home in the years to come.
Thank you for an interesting and timely article. I am surprised that people still think Wind & Solar are cheaper than fossil fuels. If they were then why would they need subsidies ? why would people built CCGTs in the first place ? Also, we have about 27 GW of installed wind capacity in the UK, so how much has this mitigated the recent rise in our electricity bills ? not a jot as far as I am aware. But there seems to be two problems in comparing Wind&Solar with Fossil fuels just on cost. (1) If we are facing a “climate emergency”, a “climate catastrophy” or an “age of boiling” as we are constantly told in the media and every natural disaster, loss of biodiversity, species extinction is said to be due to climate change, then it becomes imperative to move from fossil fuels to renewables (wind&solar) ASAP. It seems necessary to first argue that these statements are nonsense (or at least grossly exaggerated, as I think they are) or that whatever we do in the UK is going to have little effect on the level of CO2 in the atmosphere. (2) The article quotes from Lars Schernikau and William Smith. Their views are more fully set out in their book “The Unpopular Truth about Electricity and the Future of Energy”. I go along with all their arguements about trying to power the modern world by intermittant energy sources like wind&solar which require enormous amounts of material and energy investments. But I disagree with their conclusion about a “New Energy Revolution” which is basically saying abandon current wind&solar because they are useless and press-on using fossil fuels coal, oil and gas until something better turns-up. This does not seem to be a very sound energy policy. Science has taut us quite a lot over the last few hundred years about how the world works to it seems unlikely there is new energy source to be found. Fossil fuel plants are already optimised for efficiency and at best research can add only a few percent to the efficiency. Sooner or later fossil fuels are going to begin to run out whether it is 50 years or 200 years and if they do with significant preparation then it seems the end of our civilisation (which would be a pity). So perhaps any concern about current levels of CO2 in the atmosphere should be viewed as an impetus to get the process started of moving away from fossil fuels, which will take centuries (not 27 years till 2050)
Your post on LCOEs is interesting; but I’m not clear why you should take time to analyse the subject, except perhaps to warn against its careless use. The comment by Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan Asset & Wealth Management would support that.
As the Lazard analysis is based on US data which vary from State to State, without fully defining actually what LCOE includes or not in each analysis, and also includes the use of expensive batteries for storage, it would seem to have little value in the GB situation. I suspect that the Lazard analysts have Wall Street in their sights?
The fact that wind and sun have a nil marginal cost, perhaps explains the enthusiasm for their use. It’s only when the amortisation of capital, costs of maintenance, etc., etc., are factored in to the inevitably low utilisation of wind turbines, that their true costs and the high LCOE of renewables emerge.
Assuming that base load is covered, then, for ‘Net Zero’ is to be achievable, wind generating capacity must be sufficient to meet the 4 hour winter peak evening demand when the sun has set. Inevitably this leads to 20 hours per day of excess capacity, not including all the other periods of spare capacity, especially on sunny days in both winter and summer – all adding up to low utilisation.The only way in which the high LCOE can be improved is by making more use of the idle wind turbines – and this can only be achieved by having adequate energy storage. At present the only grid scale storage facility is Dinorwig. Although large with a capacity of 9.1 GWh, it is nowhere near big enough to meet the LCICG estimated total mid-range storage capacity of 128MWh required by 2030. Much more is needed; but from where?
Basically, the average household only needs enough electricity to meet sundries, TV, washing machine, etc., The greater need, ‘warmth’, can be supplied by hot water from a DHS; and a DHS can be both a source of heat energy and a store of energy supplied by wind generated energy. It is interesting to note the growth in number of DHSs in Germany coupled with the phasing out of their nuclear power. It is also interesting to note that Germany has given energy storage a separate legal and operational identity; to separate it from generation and demand.
May I suggest that some serious thought be given to this strategy in this country.
Yes, I agree with a lot of what you say, but why have district heating systems when you can have a national one. Energy storage in domestic dwellings using good old thermal bricks is intrinsically more efficient. My approach to the future of energy in the UK is to look at the post fossil fuel era when it is reasonably certain that we will have a mix of nuclear, wind and storage, (plus a tiny amount of natural gas held in reserve). The issue then, is how you get to that point without major disruption. It will need careful planning with flexibility built in so governments will always need to be able to change tack as technology changes.
This means higher costs will be with us for a long time.
I wasn’t going to analyse it except many responses to my DT article were to use Lazard’s LCOE analysis to justify the “renewables are cheap” standpoint.
People often point to Germany as a model but the German market and social structures are fundamentally different to ours. Local government is Germany is more powerful than here and many had their own energy companies (subsequent consolidation has had an impact). DHS schemes have had their ups and downs – some companies lost a lot of money when they lost money on electricty generation but were forced to run in order to supply low-value heat contracts. It’s also difficult to retrofit DHS into existing urban landscapes.
Batteries of any kind add cost to the system and therefore to the end user i.e,consumers. The more batteries the higher cost overall, so once again why bother with all the downsides of wind turbines when we have nuclear power?
The issues with a Nuclear only option are that we are having this discussion in 2023 and a Nuclear station would be 20 to 30 years down the line at the rate of recent developments. If the world woke up to the issue of climate change when the alarm bells went off in the 90s all would be good (at least in this country.. which is pretty meaningless on the global scale). Secondly, dependence on a single source is generally never a good idea, like dependence on a single country (Russia). Who knows how the technology, waste management and other aspects of Nuclear might roll out in the future. But in general, I do agree that Nuclear is the obvious long term solution for delivering base load for the whole of Europe. What a massive project however.
The problem with your argument here Kathryn is the lack of an alternative solution to replacing fossil fuels. And don’t say SMR’s, an unproven high cost technology with myraid issues.
The DoE bar chart shows the amount of base material per TW for wind power to be about 10 times that for nuclear. But my calculation, based upon the amount of concrete and steel used to build Hinkley Point C and the Rampion Offshore Windfarm, show that the windfarm uses 1000 times more concrete and steel per unit of power compared to the nuclear plant.
As an exercise in the energy, power and costs of renewables, I have analysed the energy and power resulting from the Labour Party’s proposal to decarbonise our electricity by 2030 by quadrupling offshore wind, doubling onshore wind and trebling solar, plus some of the costings necessary to increase the installed power further to enable dispatchable power using either hydrogen or batteries for storage. It is based upon the demand, wind and solar data for 2022 downloaded from the Gridwatch website into an Excel spread sheet.
For anyone interested to see the calculations, please email me at jbxcagwnz@gmail.com
John Brown I suggest you publish your figures with the full breakdown and your sources and send a copy to Net Zero Watch for their information and analysis and then everyone can comment freely.
Mairede Thomas : Thanks for your suggestion. The power and energy part has been covered by Not A Lot Of People Know That, who are allied to Net Zero Watch :
Labour’s Energy Plans Will Lead To Blackouts :
https://notalotofpeopleknowthat.wordpress.com/2023/08/08/labours-energy-plans-will-lead-to-blackouts/
But the section covering the additional installed power necessary to achieve dispatchable power together with some of the costings was not covered in this article.
Anyone interested in examining all the calculations, please email me at jbxcagwnz@gmail.com
Really, we need to look at whether energy sources have an acceptable EROEI, as you suggest, and then at whole system costs and how they change as different kinds of capacity are added or subtracted.
Here’s why LCOE will really prove to be completely useless as a metric in a simplified example. (worth opening the chart in a separate tab or app to help follow the narrative)
https://wattsupwiththat.com/wp-content/uploads/2023/08/WInd-Curtailment-vs-capacity-1693347403.5904.png
Start by looking at the position with zero wind: nuclear accounts for about 17% of generation and is of course zero carbon. In this simplified example it continues at that level as wind is added, but CCGT capacity is also maintained because it has to cover for Dunkelflaute that renders wind useless on a cold winter day when demand is at maximum. Gas accounts for the other 83% of generation. Its average capacity utilisation is 50%, because it provides all the flex needed to accommodate demand peaks. If there were no nuclear, it would be at 61% which is the underlying ratio between average and peak demand.
As we add wind initially it displaces gas generation, pushing up the system cost because of lower utilisation of CCGT and the need for extra grid capacity (including extra stabilisation measures) to deliver wind generation to consumers. If we add these costs they progressively increase the costs of adding more wind.
Then we reach an inflexion point: at 20- 25GW of wind capacity there are occasions when the whole wind fleet is producing more than low overnight demand having allowed for the nuclear generation (also kept to help with grid stabilisation). We start having to curtail wind, absent storage. As more capacity is added the size of these occasional surpluses during low demand grows. But also there are more hours where high winds start generating surpluses that must be curtailed, because generation exceeds an intermediate level of demand. Furthermore, hours of low demand move into curtailment surplus at lower wind speeds. So we see curtailment (red line) rising roughly quadratically in this phase.
Curtailed output does nothing to reduce CCGT generation, and the small increases of wind output from extra capacity on less windy days also do rather less to reduce CCGT generation, so the rate at which gas generation is supplanted reduces. CCGT is still needed to cover Dunkelflaute and other smaller wind shortfalls.
If we calculate the curtailment needed as we add a small extra tranche of wind capacity we find that a sharply rising proportion of the extra output has to be curtailed (cyan line) – the marginal rate of curtailment soars. Of course, it is ultimately limited by approaching quite close to 100% curtailment of incremental capacity – at which point it is surely quite pointless. In this example, based on real GB demand and real wind generation data scaled up for the stated capacity, by the time you have installed 50GW of wind marginal curtailment is about 63%, leaving the new capacity trying to earn its cost from just 37% of its output. That means it needs its output to sell for 100/37ths (a factor of 2.7) of the price needed to cover the cost of building wind farms before curtailment started to become a factor. Yet wind plus nuclear still only accounts for 70% of generation.
Press on to 90GW of wind, and the marginal curtailment is 85%, with the effective cost (before the other extras, which by now are less important because of the curtailment – you don’t need grid capacity to transmit curtailed power, and the useful output will be on days that are less windy and already accommodated by existing grid capacity) now 100/15 times the number first thought of – 6.666 times as costly. Overall curtailment of ~150TWh/a is now about half of demand. And still almost 20% of demand is being met by CCGT.
LCOE is what the Italians would call a scala mobile. Very mobile. Perhaps it’s because La donna e mobile that renewables proponents flirt with it so much.
Absolutely agree that we will never get enough renewable generation or storage in place to cover Dunkleflaute periods. With aging gas fleet, no where near enough nuclear and interconnector capacity hoping that our neighbours have energy diversity and always excess to provide to us, is not realistic either. Everyone in Europe relies heavily on French nuclear backup, and France’s nuclear fuel from Africa may now be in jeopardy and LNG from the USA possibly disappearing as their output is likely to fall with little new investment in fracking sites with US anti-fossil-fuels regulations and ESG rules meaning banks don’t provide funds to hydrocarbon projects regardless of potential returns, it is a recipe for energy shortages. The government has the solution at hand though through the Energy Bill. They can now mandate that homes have smart appliances to allow Load Disconnection dispatch directly from the ESO or DSO. So when the wind stops blowing they don’t need to issue emergency disconnections, they can just instruct smart devices to turn off.
There is no policy in the west, the only “policy” is “out of sight, out of mind” (chimneys bad), it already caused Europe great deal of grief and US hasn’t learned yet. Same policy goes for cars you’re not deleting exhaust pipes you are moving them and multiplying because production of batteries is not quick or easy it takes alot of energy and big bad chimneys.
At last an “All-In” LCOE that puts an end to the damned lies that Wind and Solar are cheap!
https://colinmegson.substack.com/p/at-last-an-all-in-lcoe-that-puts?utm_source=profile&utm_medium=reader2
They aren’t ‘damned lies’, they are calculations for a particular situation – and situations change.
High LCOE values result from low utilisation of wind turbines and better utilisation would result in better LCOE values. Better utilisation depends mainly on providing more energy storage.
(And there is need to be insulting. We are all trying to get to the truth by debate)
If “Consumers are not interested in the ins and outs, they just care what shows up on their bills, and that includes the full system costs of all sources of generation. That is the only metric that really counts.”
Actually gives a rather limited derogatory impression of consumers, some of us actually want a better system.
The only way to achieve a better system is through residential rooftop solar PV installations, where all LCOE/EORI calculations can be thrown out the window because they are irrelevant. Or even the FCOE calculations suggested by one group.
If a consumer gets measurably lower electricity bills, and can prove a return on their investment, are we going to need so much investment on a utility scale?
Isn’t the problem that currently, the financial rules work against homeowners, where investment in renewables cannot be offset against income tax unlike a corporation can offset their capital investment against corporation tax, so the system is rigged against the population doing the best for themselves, i.e. those with less money.
The capitalism in this society is skewed against the general population and towards those with more capital (companies/rich people). If individual homeowners had the ability to offset their capital investment against income tax, who wouldn’t install solar PV on their home?
Currently in addition to £1,000 VAT savings there could be another £1,000 (basic rate) or £2,000 (higher rate) saved from income tax reduction for say a 5kw installation costing about £5,000 ex VAT. A 5kw system would cost between say £3,000 to £4,000, say giving 4000kwh per annum, which would give a pay back period of between 4 years and 6 years. Who wouldn’t install solar PV?
It would require no subsidies at all!!!…….just a reallignment of tax policy to give individuals the same tax benefits (system) as companies. It isn’t a subsidy if it is making tax policy unbiased instead of biased towards companies……there would be less tax collected, but is that money being spent less efficiently in other ways anyway?
Yes the government has removed VAT, which companies can do anyway with being VAT registered.
And if those residential owners are feeding in electricity between 2p and 15p/kwh
If say there is 100GW of residential solar or even 50GW, feeding in at between 2p and 15p/kwh…….where does the cost increase come from if it is at the same price or less than the price of gas to consumers?
And so the mutually beneficial scenario of huge residential investment in solar PV is completely ignored, which can also cheapen electricity for business during the daytime.
CCGT providers can be redesigned to give inertia to the system, to stabilize the system. They don’t have to be added as a separate function, if the CCGT plants are reconfigured from how they were designed/concieved 30 years ago……..but that would probably happen when the current CCGT systems are retired and new ones come online.
We’d still need peaking capacity.
It might be more complex, but doesn’t have to be more expensive. If you are constantly analysing future system costs with current technological solutions and industry structure, with the same industry cost structure, you will always miss the synergies and benefits of new developing technologies that can actually bring costs down.
It’s like analysing electrolysis costs for water to produce hydrogen at say current 70% efficiency, but misses the change to 95% efficient systems.
Once we get to CCGT only operating at night through the summer when there is lower demand + more during winter, and they are configured to give inertia/grid stability at all other times, perhaps then we can revisit the true costs of renewable electricity in a more intellectual way, instead of this limited analysis.
Again, is any financial analysis worthwhile if it doesn’t take all the significant technological changes and industry structural changes into account including the increased longevity of CCGT?
If the government was serious about getting renewables installed and making electricity cheaper, there are many ways to achieve that goal, and there are still a few approaches that have not yet been taken.
If you and the government keep analysing things as “Utility Scale Investments”, with the old banal economics of power generation with the potential increased cost of renewables that would be caused by an old industry structure, there is obviously nothing that would change for the better. It is only with the restructuring of the entire industry including the cost structure and investment return for homeowners, that distributed generation enables, that will allow for improved efficiency and cheaper electricity.
Isn’t anyone else able to do these calculations, or am I the only one?
If homeowners only get pennies per kwh (i.e. less or about the same as the price of gas) for their exported electricity, how can that make electricity more expensive with renewables?
Please give me a detailed answer……..anyone
And when some CCGT have been getting £6,000 per MWh through the balancing mechnism, instead of selling through the wholesale market, yes we can all ignore the huge costs in the current system, that allow excess profiteering at the expense of the consumer.
There is no myth, it depends on how you structure the economics, and which beneficial economics you choose to ignore, or who you choose to tax harder…….individuals or companies.
The power system we have now is near perfect in that it provides all the power we need whenever we need it at a price that most of people can afford. To make it “better” as suggested seems to be just trying to make it cheaper.
The calculations are more complicated because they must apply to the whole national grid system. The grid has to accept the power generated by solar panels and it must also provide power when there is none from the solar panels.
If the solar panels generate, say 100 GW, when it is not needed, do we need to compensate their owners as we do with wind turbines ?
If the 100 GW is not available from the solar panels then CCGTs can fill the gap providing there are enough of them. But what then for the relatively brief times when solar panels are able to operate, do we keep the CCGTs spinning on standby or do we keep turning them on and off ? CCGTs are large complex industrial plant which needs continuous manning plus maintenance from time to time therefore there are both capital and running costs involved. It is not like turning a car ignition on and off.
Hence “utility scale” investment seems necessary to optimise the choice between local generation (such as roof top solar) and central generation (large power stations). The latter has been proven to work; the former might be high risk.
With huge output from solar PV on residential/commercial buildings, you can visualize the scenario of summer daytime electricity being 2-5p/kwh, under the price of gas, making it cheap to produce hydrogen at scale from the excess electricity available, or even potentially negative pricing from an excess, how long would it take water electrolysis companies to start to get running if they had really cheap power from an available excess of clean electricity?
What would happen if we get to 50GW peak solar PV output from residential/commercial buildings?……..it’s more than we need currently during the summer daytime….35GW
The problem is that perhaps the people who are most fearful of the changes are the ones that cannot actually imagine the massive structural changes in the industry and the beneficial changes in the cost structure as they only have an old model that they work with.
You only get new economics with new systems of working, a new structure. As with any change there are initial increases in expenditure, in chemistry it’s called an Activation Energy…….investment in financial terms, but then the systems resets to a lower level, which will be the future cost of electricity…….cheaper, cleaner. It will be worthwhile. The economy will not crash, the best aspects of the new system are not yet being realised to their full potential.
There’s just the recyclability aspects to sort out (design in) as the next stage to get better utilisation of raw materials, to increase sustainability, and more installation of solar PV on residential and commercial buildings. No, you don’t need vast tracts of land, we have sufficient buildings to utilise……..make the most of what we have……..synergies.
As I said before, if the government made solar PV tax deductable for individuals, who wouldn’t install it?…….problem solved.
You should acquaint yourself with Germany and the Shell REFHYNE project that looked at making just 1% of the refinery requirement at Wesseling for hydrogen by electrolysis. Germany already has 50 GW of solar. Yet the project found the economics very challenging, with steam methane reforming being consistently the cheaper route most of the time, and during the energy crisis the economics deteriorated. You can’t run a business or a refinery on the basis of occasional hydrogen even if at times a solar surplus leads to wholesale power at minus €500/MWh because it is nor possible to turn off the domestic oversupply, as happened earlier in the year.
The economics of solar only really work if the investor can use the output. Check out the (optimistic, unshaded South facing) sample payback calculations here
https://energysavingtrust.org.uk/advice/solar-panels/
Your cost of borrowing needs to be below the value of savings to be not lossmaking. At 13 years that’s about 7.5%, assuming that savings persist- i.e. energy costs remain high and ToU pricing doesn’t turn the value of export surpluses negative and reduce the value of your savings.
Large volumes of solar pose big problems for grids. The rate of change of power output at dawn and dusk has to be offset by other generation. On cloudy days or in winter generation can be dramatically lower, so there has to be backup. Big surpluses threaten grid stability, and require extra transmission capacity to move them away. These problems are why the government withdrew the heavy subsidies for solar a few years ago, limiting capacity to what is not too taxing for the grid. As it is, extra transmission is being built in the SW and East of England motivated by solar. Of course, high prices have made solar look worthwhile again for some.
You may find it interesting to look at this map that shows the volume of domestic solar installations by constituency (and thus roughly equal population areas). There is good deployment in the sunny SW, and in rich Green rural areas (even in e.g. Banff). There is not much in cities. Blocks of flats etc. only have one roof is one reason. Idealism needs to be tempered by reality.
https://datawrapper.dwcdn.net/ApSy6/1/
The output needs to be used by the homeowner/business:
People working from home, young families, retired people, set dishwasher and washing machine for daytime use, don’t put them on in evening, charge your electric car at the weekend during the day if you say commute and go to the local rail service for travel into a city, so you don’t need to charge everyday, timed immersion heater with sufficient storage (daytime) for hot water instead of using gas……charge your electric car at work during the day, or at the station carpark where you leave your car…….not at night!!!
All government buildings, local and national should have solar PV, all NHS facilities
Load shifting is a critical aspect of better renewable power utilisation, hence getting cheaper daytime electricity and more expensive night time electricity is going to be significant.
How many businesses will change even automated processes if daytime electricity is cheaper?
The rate of power change at dawn and dusk can be modified if battery storage for homeowners becomes cheap enough, then there should be some ability to use battery storage as a means to adapt the output from solar, where direct grid connection could be reduced. The systems that we have at present are very basic. The technology to improve the quality of output from solar PV from residential and commercial rooftop systems hasn’t been developed yet, but could be…….a different electrical standard with laws to control how solar PV connects to the grid.
The tax aspect is actually critical because at present a homeowner does not get any tax relief with their capital investment, whereas a utility company investing in solar PV does. This is why the returns have been so poor for a homeowner and instead of the government actually changing the tax regime (because we have huge borrowing requirement/national debt) we have had subsidies paid for by the consumer to install renewables in an inefficient manner, although with the amount of fuel not burnt, the subsidy costs have been offset as far as I can see, so whilst there has been no significant cost increases overall, we haven’t actually had the benefits yet, although it may have mitigated the effects of the last gas price spike. All those that previously installed solar PV would be glad that they made that decision, so there have been some that got a greater benefit than originally costed.
At dawn and dusk you would need other power coming offline and online respectively anyway and that would be the critical time (most challenging time) for grid stabilisation services as the amount of solar PV increases, but adapting the inverters on an array to have different cut-out voltages would stop a 5kw system going offline instantaneously, say if the different inverters on separate panels are set for different voltage increments (softstart), or having a battery as a buffer between panels and inverter would allow a programmable timed power cutout, so you don’t get all solar PV switching off at one time in one district, but if you get different systems in different orientations (not all are perfectly South facing and 50 degrees to the vertical), surely there is significant variability in the cutout times due to the differences in sun insolation levels for all the different installment orientations anyway…….this is why utility scale solar PV is a bad idea, where it’s all in the same orientation……..separate houses with random roof orientations is perfectly OK
There are a few technological changes to the current design of solar PV that can help with grid stabilisation, it doesn’t all have to be centralised grid stabilisation services that have to deal with the sudden power changes of solar PV output.
With renewable power, the interesting thing is that all rational people with sufficient capital/income are doing their own calculations of their own returns, either personally or as a business, and for heavy daytime power users there will always be a greater incentive to use solar PV…….it will be added by users to cut their bills, you don’t have to force the installation rate, it will develop naturally.
If the government and opposition would stop trying to outbid each other on how much wind/solar etc that they are going to install or giving subsidies and let the users steadily install the renewables that are economically beneficial, we would get to a naturally arrived at system that is beneficial for the users and isn’t bastardised by uneconomic policies, subsidies etc. politicians have too much power sometimes and they use it in the most inappropriate way.
People will add renewable technologies, companies will offer renewable power generation when they can make it economic for themselves. Perhaps the main problem is that the government (all governments ) are/have been forcing the pace unnecessarily, which is why so many people turn against it, and we get these periods of constraints on wind due to insufficient investment in the grid to actually distribute generated power, etc etc.
We don’t need expensive standalone utility scale solar PV, increasing costs in the system again, getting excess profits from payments relating to CCGT output…….who thought of such a stupid system anyway? we need end users doing the installations!!!
Unfortunately politicians like deadlines….2050, but aren’t actually directly involved in the delivery……top down pressure that doesn’t help, subsidies that don’t help
At least homeowners and companies will refuse to cooperate if the economics are unfavourable…….who would invest if either you can’t reduce your costs, or get a profit. The only question is: Are the politicians so arrogant that they subsidise uneconomic developments (e.g. over-capacity or uneconomic renewables), such that we do end up increasing national debt that cannot be repayed, or the cost of electricity from a badly organised electricity market…….the argument of onshore vs near shore offshore wind vs deep water offshore wind is critical. Adding more expensive renewable power generation is not the answer, and it is known that there are significant differences in the costs/pricing of the different renewables.
At the moment no economic damage has been done….yet, but the next few decades are critical, where significant economic damage could be done if the politicians force certain issues/development but one would hope that the quality of advice that they can get is high enough to dissuade them from poor decisions. Although with the rumours of politicians who have no concept of efficiency and cost effectiveness being swayed by lobbying by groups just in it for profit or environmental extremism, could ruin the system and is a big worry.
The right renewables aren’t a problem, renewables per se are not a problem, but there are specific renewables that should be avoided/minimised to prevent economic problems and and an unbiased tax policy would help…..hopefully if the debate can be improved, and discussions can actually be held on rational basis with properly costed technologically feasible solutions, we will get to a better system…….I live in hope.
If home owners want to remove themselves from the grid they can do whatever they like to obtain their own heat & power (within the law!). However all the public services like Schools the NHS, Local Government, Police, Prisons etc etc are reliant on the grid and everyone should contribute to the costs that make the grid an affordable and utterly reliable source of power 24/7 all year round. At the moment the weather dependent renewables are undermining this. Only nuclear power and/or fossil fuels can get us out of the current mess. I’m all for new tech and look forward to nuclear fusion, for example, So one day we might have other technologies that are cheap, reliable and dispatchable, but we have not got them yet that is the reality,
Solar is an utter waste of time in the UK.
If you consider a point in time when there is adequate wind, storage and nuclear to cover the coldest winter months then you will have plenty in the summer months, a considerable excess in fact. No one will want to pay for those meagre solar kW in summer.
I suggest you try doing some calculations rather than guessing. I have done lots of calculations with over 30 years of refactored weather data, and with actual historic output data covering not only the UK but a number of other places around the world. You have to calculate at least at hourly resolution across at least a year, and preferably several. In the case of the UK, if you try for a wind and nuclear and storage solution you can cut the need for costly storage by including some solar output. That reduces the wind investment needed as well, and reduces the wind surpluses from overcapacity even if it creates some from some solar overcapacity. The objective is to minimise system cost (at least subject to the constraint of no gas or coal etc.).
If you want to get to the lowest cost electricity, you have to redesign the system in certain ways, which includes ensuring that you are not adding to the companies profiting from selling electricity in an adverse way, and get as many synergies as possible. You have to have the lowest investment in infrastructure that solar PV allows, where residential and commercial rooftop installments uses the current grid network infrastructure, not needing substantial additional spurs to wind or other renewables. Some local networks may need to be upgraded where more power is created than previously used, but if you go from say 500kw user to 500kw exporter, there’s no problem at all.
You don’t need much steel in residential/commercial rooftop solar PV, because you have the roof structure already installed.
If you can’t work out the total residential and commercial roof area, plus car parks, plus certain vertical surfaces (walls), where it doesn’t cause a light reflection (blinding for traffic or localised heating problem i.e. a walkie talkie, 20 Fenchurch street type effect) for the whole country and work out the 10’s of GW capacity potential…actually well over 100GW in summer, then yes, you may struggle to see the benefits.
And you have to ensure that you don’t over invest in off-shore wind energy or any of the more expensive utility scale investments, otherwise you will be adding costs unnecessarily.
It is possible to use off-shore wind, but is it really the most cost effective way?
Yes National Grid has a period of learning and development to go through to keep the system stable, but again it should be a temporary period, but can’t say how long for because it depends on the rate of addition of the renewable energy supplies and the rate at which National Grid learns and installs the necessary equipment or subcontracts out the services it requires and gets things running by other companies.
It might be that we need to have an additional charge for “Grid Stabilisation Services” on our electricity bills as a separate item, but when the electricity is getting charged at the same price as gas, or negative pricing with a vast excess, which utility company would want to install more renewable capacity?
You can add more wind, offshore if you like, but you will start to make electricity more expensive…..again, as it is more expensive for the country than onshore wind and residential/commercial rooftop solar PV.
It is only getting a supplier that is willing to accept a lower price than the cost of producing the electricity for their exports, at or below the price of gas which is only the end user (consumer), because any other commercial supplier has to make a profit.
The efficiency of locally produced power at an affordable price for the consumer, which solar PV is, especially if the consumer was to be given the same tax regime as companies installing renewable energy supplies on a utility scale, will eventually give us a system that isn’t affected so much by fuel prices, oil/gas etc.
I could get 25kw installed on my house….a normal sized detached house, but yes the output would vary during the day, and it wouldn’t be the most efficient installment, just an example that actually, a 5kw system for a detached house is pretty limited, there is far more available area and potential power output than currently analysed.
Solar can work in the UK, with hydrogen generation, but again, it depends how you do the numbers and how you structure the whole thing……if you stick to the old system and ignore all the synergies you can end up with an expensive setup.
Hasn’t anyone else actually gone through the logical, technologically feasible system design, or is it all based on prejudice, misconception, old industry models and I think after 9/11 the CIA put it in the best way……a failure of imagination?
There’s no “Magic Thinking” in any of what I have stated. It’s a different solution to the same problem, but which grid structure and industry structure actually reduces the cost of electricity?
Solar PV….currently working technology
Synchronous Condensers
https://www.siemens-energy.com/global/en/offerings/power-transmission/portfolio/flexible-ac-transmission-systems.html?gclid=EAIaIQobChMI_fOJ84uOgQMVMYlQBh3PmAJtEAAYASAAEgKlH_D_BwE
If National Grid plc is imagining these technologies through “Magic Thinking”, it’s amazing that they have Siemens involved as well, and other companies that are selling these technological solutions for grid stability.
And the SEG prices for exporting residiential and commercial rooftop solar PV isn’t in my imagination, you can look them up on the internet.
If you want to know why California has a problem with how solar power is being produced with the duck shaped curve, and the rapid change in output in the evening, 63% is utility scale, 37% distributed, with no battery buffering …….I hope we do not make the same mistake as solar PV is added in this country!!!!
Solar PV Utility scale investment/development should be stopped, and fortunately there are people who protest and object to covering fields with solar panels……rightly so, there is absolutely no need whatsoever in this country
https://www.solarpowerportal.co.uk/news/ground_mount_solar_restrictions_could_cost_consumers_5_billion
Unfortunately there are some people who believe that doing utility scale solar PV projects gives cheap power, yet have missed the fact that the cheapest solar PV is residential and commercial rooftop, with lower export prices of the excess.
It may take more time to build doing residential and commercial rooftop, but it depends on what you want the eventual pricing structure for electricity to be.
You can get these perverse incentives for the more expensive renewable installations when CCGT output costs are higher than solar PV, but unless you do a proper analysis of all the financial aspects with a comparison of end user costs for each (including tax aspects) and the export pricing, you don’t actually optimise the system to obtain the lowest possible cost of electricity.
Utility scale solar PV projects have the advantage that they generate 3-phase electricity which is what is needed for distribution on the national grid. Residential solar PV can only generate single phase electricity which is perhaps less valuable and less easily tolerated as input to the grid.
Will we need 3-phase residential systems, where different circuits in the house are on different phases (I know houses have a ring main)? At the moment my connection has a 100Amp breaker, which allows 24kw take off from a single phase, but you never use that much. I think the higher output residential systems, and certainly the high power commercial roof top systems are 3-phase. If people get to using/generating more power, a shift to 3-phase isn’t out of the question, but would add to the costs. If you have different houses with solar PV spread across the three phases, then surely, just by making sure that there is a balance of input across each of the phases, within certain tolerances should suffice?
How well is the power balanced across the 3 phases in terms of usage, and how well are they balancing the solar pV input across the 3 phases now?
If this is one of the issues that they are struggling with, then converting to 3-phase supply should be part of the installation costs to reduce the problems being caused if that is happening. If we do need more solar panel output, with higher residential power output, with extra power demand from electric car charging and heat pumps then is there an argument that we should be converting residential power to 3-phase anyway?
Will the late adopters need to go 3-phase if the balance between the phases is deteriorating?
The typical residential system is 4kw or so single phase.
With heat pumps and car chargers, you will be possibly increasing electricity demand by 200%, especially in the winter
Prior permission is not needed for systems with an inverter up to or under 3.68kW for a single phase supply or 11.04kW for a three phase supply, as generation is at or below 16A per phase, but permission is required to connect higher power systems. Instead of 4kw single phase systems, will 11kw 3-phase systems become the standard?
Making the most of self-generated solar PV really depends on sequencing of loads, rather than having everything on at the same time.
There is one aspect of feedback in the system concerning cost of electricity. If the government were to make some really bad decisions concerning renewable power generation that increases the price of electricity, it would provide greater impetus to all consumers to install solar PV to reduce their costs…….the savings would be greater the more expensive the electric power gets. Even as far as adding battery storage as the economics changes, to minimise the electric power used from the National Grid. Perhaps there are innate feedback mechanisms that many, but not all people of the UK can use to mitigate any bad decisions at a governmental level.
If you want to see the effect of the addition of renewables by the consumer (solar PV), residential and commercial, and the effect of increased efficiency with LED bulbs and electrical equipment, just look at the following graph.
https://www.researchgate.net/figure/Graph-showing-UK-electricity-demand-in-TWh-over-time-Note-the-peak-demand-was-around_fig2_351872522
The current projection is that it will hit ZERO around 2070, but will it stabilize at some yet undetermined level…….I would think so, but where will it be? It should end up as the demand that cannot be self-generated, but with battery storage by the consumer, hydrogen/bio-methane/bio-propane gas supply and CHP combined with heatpumps may yet allow this demand to reach ZERO……..don’t get stuck in an obsession with just one gas, a mixture can be used, just because we’ve been using pure methane for decades, doesn’t mean we have to stick with technology of a single gas (town gas/coal gas was a mixture)…….shouldn’t we be getting use out of all the energy it embodies through CHP?……….35GW electric output gives 35GW waste heat from burning 70GW gas in CCGT
The trend reversal (peak National Grid) around 2005 is obvious. We’re 20% off the peak, and will decrease as efficiency in the system increases……..impossible without renewables and increasing efficiency of utilisation.
The politicians don’t need to push it now (waste money), it’s going in the right direction, and at an appropriate speed……..although you could argue it just demonstrates the loss of heavy industry and manufacturing in this country……….but that’s the effect of globalisation where there are much cheaper manufacturing capacities in other countries.
So what if it takes until 2070-2080? Yes there’s about another 50 years to go. Carbon use is decreasing (carbon efficiency is increasing) much faster than that……..even if the UK ends up with no heavy industry and becomes beholden to other countries for supplies……….silicon wafers for solar PV made almost exclusively by China……….
Are the potential tax refunds that could be applicable to solar PV installers now being used to subsidise heatpumps?………is that subsidy effectively a tax rebate?……….it depends how you want to look at it/define it.
Tom, sorry I work as an architect at the heart of the energy system and I don’t buy the fairy tales. I have to deal with ever more complexity of distributed systems and a larger number of smaller generation and storage sites trying to connect at weak parts of the network. Short of Skynet taking over this this does not bode well for either electricity being available where and when required. The cheapest and simplest and most reliable electricity system is the one we are dismantling by moving away from large centralised production using highly controllable generation with their own built-in storage than can be easily coordinated to load-follow. The new system will be a costly and sophisticated, inefficient and ineffective system. Of course the rich will continue to afford energy or have their own local backup solutions to cover for the erosion of the common good of the centralised grid. When it comes to the wider energy problem currently catered for excellently by using high energy density hydrocarbon fuels and trying to move to all electric or synthetic hydrogen or worse synthetic hydrocarbons you see a huge waste of resources and waste of the primary energy in conversions. There simply isn’t the minerals and manufacturing facilities from unfriendly countries (burning fossil fuels) to make all this stuff; nor is their the land area to site all these wind-farms and solar farms to generate enough power to charge all these batteries, make all this hydrogen etc. and we as a nation don’t have the stored wealth made during the hay-day of fossil-fuel powered industrial era to afford this deindustrialisation and dismantling of our civilisation. Now we also have to suffer the foolishness of parliament which has passed the draconian Energy Bill to give the Secretary of State the power to imprison you or fine you huge amounts of money for not obeying their latest Net Zero whim of the season. We are all going to freeze or starve in hell at this rate.
Good morning David,
Your emotional response to Tim is quite understandable – but it doesn’t help to solve the problem.
From being a leader in nuclear electricity generation in the 1960s, we are now struggling to catch up at huge expense. The government didn’t take its eye off the ball, it left the field.
The large generators you refer to were all fossil fuel powered and had/have to be replaced with the only feasible alternative – nuclear power stations. But they can only cope with base load. Demand is variable and flexibility is required. The development of SMRs, as built by RR for nuclear submarines has not been promoted by the Government until very recently – yet another failure in Government strategy.
The Government effectively not allowing land based wind turbines to be built until now hasn’t helped either. It’s all been a string of policy failures by the Government in one of the most important areas – power generation. No electricity means nothing works.
Intermittency is a very complex problem and needs very detailed and informed analysis to solve.
Totally omits the billions of dollars in external costs, deaths from pollution, environmental degradation etc
Key Takeaways
Worldwide, air pollution from burning fossil fuels is responsible for about 1 in 5 deaths—roughly the population of New York City.
In the United States 350,000 premature deaths are attributed to fossil fuel pollution. The states with the highest number of deaths per capita are PA, OH, MI, IN, KY, WV, IL, NJ, WI
Transitioning from fossil fuels to renewable energy has immediate health benefits, including preventing premature deaths attributed to fossil fuel pollution.
Exposure to particulate matter from fossil fuels accounted for 21.5% of total deaths in 2012, falling to 18% in 2018 due to tightening air quality measures in China
In India, fossil fuel pollution was responsible for nearly 2.5 million people (aged over 14) in 2018; representing over 30% of total deaths in India among people over age 14
Thousands of kids under age 5 die each year due to respiratory infections attributed to fossil fuel pollution
https://www.hsph.harvard.edu/c-change/news/fossil-fuel-air-pollution-responsible-for-1-in-5-deaths-worldwide/
David, I agree entirely with what you are saying in terms of how this is being managed it is awful, with zombie projects in the connection queue, no regard for how the future system should look, and some of the silly ways the electric market has been operated as a regulated cartel, rather than as separate shops selling the same product at different prices, where you can go into the cheapest shops to buy as much as you want, until they run out, and pay for their offering at the price they offered and simultaneously buy from other shops at whatever prices they are offering, and just have an aggregate price, not a regulated cartel where you have to pay everyone (all shops) the highest price that only one shop has suggested, it’s awful, awful, awful, the way the system has been working.
But overall, I would think of it like going from fuel injection for cars, a standard petrol engine, where the level of electronic control was complex (with electronics for ignition, that also started off simple points/condenser/coil, then went complex with separate coils computer controlled), and computer controlled fuel injection and yes the addition of catalytic converters added to the cost with the feedback to control fuelling………
To a Toyota Prius Hybrid, with even greater complexity, but you can run those at incredibly low costs, with far less fuel…….Toyota hybrids are a favourite for many taxi drivers/firms……….incredible reliability, far more reliable, cheap to run and more fuel efficient than anything else in terms of petrol cars………we’re just doing the same process to the electricity system now…….you are right, they could add extra wiring into the system that is superfluous a few decades from now………makes me think of the Beeching cuts to the railways……….infrastructure overbuild, but the canals, when they stopped being used for commerce could be used for leisure industry……..cycle paths that used to be railway lines. Toyota hybrids relative to a normal fuel injected car have loads of extra wiring, electric motor controls, larger separate battery from the starter battery, far more complexity and cost initially, but at least twice as efficient and more powerful. The wind and the sun are what we will be using to charge up the battery, where the Prius uses braking energy recovery, or engine power.
Tim, I don’t really see any future efficiencies coming down the road. The laws of physics and economics are shouting that the technology and system scale architecture won’t work. Measuring the total impact of the whole systems, whether energy efficiency, return on capital invested (including subsidies and unaccounted costs) or CO2 emissions and other environmental accounting – you find that all ‘solutions’ that move away from fossil fuels become more costly and wasteful of energy, materials, land etc and because of this they are not economically viable.
Take the idea of using wind power to generate enough hydrogen to replace liquid hydrocarbon use in transport.
You need to create enough wind generation to cater for the integral needs of electricity usage + the hydrogen creation including all down-stream losses of making hydrogen, cooling it, transporting, and then burning it etc. You have to have enough hydrolysis and network to cater for peak flows to consumers and filling storage facilities in parallel. If you care about environmental damage then you have to account for the mining, refining, manufacturing of all this infrastructure, generally using fossil fuels. The short life of many of these assets means that it would need to have a Return on Energy Invested of less than 10 years and not result in more emissions or more other types of environment damage to be of benefit. Where this is not the case and you are hiding costs behind subsidies your country is still facing this burden and drag on GDP through higher tax burden as well as higher energy costs. The energy system itself is more complex and prone to failure or issues. The car, the infrastruture feeding the car etc all become more expensive because of both the increasing amount of materials going into them, the more complex manufacturing, higher energy requirements in manufacturing in an environment where the beast is eating its tail. That is to say that as you replace fossil fuels with more costly, less reliable, more complex infrastructure the basic costs increase, so the next round of manufacturing becomes harder and more costly. Where the Chinese are not decarbonising and their base costs remain at cheap coal levels that means you deindustrialise and become dependant on them whilst emissions overall keep climbing. Further since the demand for minerals is skyrocketing there will be shortages. We are looking under NET ZERO to mine orders of magnitude more minerals than has been mined in the whole of human existence from mines that are running out of high-grade ore. That is stupid as we are going to see all metals, manufactured goods going up in price not only because of spiralling feedback costs on energy, but also spiralling feedback costs on minerals. If the green environmental cultists came up with this as a complicated Malthusian effort to push all of the West back into the bronze age then they are doing a great job.
I’ve had a look at the REFHYNE project or any form of storage for that matter, and the problem is that you need the commercial and residential rooftop solar PV output excess, at weekends from commercial rooftop solar PV and on weekdays for residential solar PV to put downwards price pressure on electricity prices during the summer, but that will only happen as enough solar PV is installed and it gets cheaper to install.
Solar PV is the only technology that has the potential to get cheaper over time in a way that most other renewable technologies cannot, because they are really nearer to standard engineering and cannot have a Moore’s Law component that Solar PV has, although with onshore wind, the repowering of turbines in 20-25 years time will be at substantially lower cost than their addition now……….that’s their Moore’s Law component.
There is the concern that there is a limit, like the Betz limit for wind turbines, but we don’t know where that limit is yet for solar PV.
There are some economics that you cannot rush, it will develop in time. You have to get a consistent excess capacity to have enough to store for later, and no one is actually at an excess of solar PV yet, especially of residential and commercial solar PV. Far more needs to be installed, and it will, but rushing now just adds costs.
Even Germany with 50GW solar isn’t at an excess, but you have to find the most economic way to install it.
Of course, the more constant renewable supplies (less weather dependent, such as tide/hydro/ocean current would help), so storage isn’t the only answer, just one solution.
I’ve mentioned before about the LCOE calculations for CCGT needing to be changed, because as you use that less instead of lasting 25 years, it should last much longer 50 years or 75 years, or may be even 100 years as the maintenance etc is time based, if you look at wind say in 20 years time when you start to get an excess of solar PV, which we need, then not only will CCGT be constrained, and used as little as possible, but we will need to start constraining wind more often. The LCOE calculations will need to change for wind, or whatever other calculations are being done.
The way the system should develop, is based on the inconsistency/reliability and costs associated with each of the power sources.
During summer, we should get to only using solar PV during the day, with all other combustion power and wind power turned off/constrained, except on occasional days to get the consistent excess that we need for long-term storage. Peaking/balancing capability is done by CCGT/IC engines, but I have read that even wind is now getting into the balancing mechnism.
https://www.ref.org.uk/energy-data/notes-on-wind-farm-constraint-payments
Overnight in summer, it’s OK to have the wind, but depending on how much we have, some may still need to be constrained on certain days when the wind is strong, but unconstrained when the wind is weak.
During the winter, wind will only need to be constrained on the windiest days, but with enough power as a controlled excess to give a boost to storage at a level that electrolysers or other long-term storage can cope with in terms of current supply. It’s the current supply maximum rate for storage that is the determining factor.
Balancing the costs of different forms of storage and the use of renewable fuels is going to be critical, where storage has to be sized appropriately, as it has costs and inefficiencies compound.
The important point is that wind constraint payments should stop for the following reason. A wind turbine will be used regularly throughout the year, and so they will have consistent income. The back-up as CCGT will need support as it will be used far less, hence it will get more expensive to use it when it is needed. Even if wind costs slightly more when being used, we have to get away from paying for no output, unless the whole industry is financially restructured and all power providers are paid at two rates, one for their capacity availability, a daily/monthly rate and a lower rate than now for the actual power output.
Supposedly wind developers have had vast excess profits due to the linking to CCGT output pricing and constraint payments when there has been congestion on the grid, especially from Scotland.
But what about the missed generation for wind, their loss of income I hear you say? Well, those wind turbines with being constrained will, like the CCGT being used less often, will also last much longer than the 20-25 years than they are projected to last now.
If wind turbines are being switched off/shut down for 12 hours a day in mid summer, effectively only operating during the dark, it is possible that they could last 30-35 years, not the 20-25 years. The LCOE calculations or whatever other calculations you want to do need to change to reflect their changing longevity.
The system will need to be managed to maximise the productivity/efficiency of use of raw materials. Sometimes thinking carefully about which resources you use and when can give benefits. As long as the towers for the turbines are designed and built for 200 years service, repowering the turbines every 30-35 years will be substantially cheaper than their cost of being installed now. A different LCOE calculation will be needed again.
All the different calculations of cost of the different renewables that I have seen so far have not actually taken into account the way the system should work in the future, and the effective static state reconditioning costs once the new system is fully developed.
Yes, some of the calculations may be applicable now (at least the ones where they have got the correct amount of materials for installation), but the calculations are going to be completely different in just a few decades time, definitely by 2050.
Even Schernikau et al does not represent any single generation means over the long term, and especially for solar PV for installation just at the initial installation, because with the base material costs for 1 TW output, for residential and commercial rooftop solar PV, there is no concrete, and it should be aluminium and not steel structure, i.e. very little steel, if any, and much less aluminium would be used, unlike nuclear say that uses incredible amounts of concrete.
There may be extra costs now, but in the future many of those costs will have been paid for and come out of the equation. When coal and gas are installed in a new location, the costs are much higher, (but they have taken the current installed base costs, and not any of the costs if and when they would have to be replaced) but many CCGT companies learnt to stop building a big expensive turbine hall. Financial research on costs and financial modelling is a good thing, and is necessary for government, and companies, both manufacturers, and developers/power companies, but only if they use actual models of how things could be structured and work in the future.
Some renewables need to be used consistently, for as much power as possible, every day of the year, but others are better managed being used inconsistently to help to manage their own inconsistency, which especially applies to wind.
Unfortunately the electricity market has not been efficient at all except for making money for the power companies with excess profits.
The last comment by Tim Stone is useful in that it brings out the need for deep and realistic analysis of the various costs of power generation in different, and particularly developing, situations. The failure of the Government to get any bids last week for new offshore turbines indicates that this is not understood. I fear we shall all be paying for this failure in our domestic bills.
Tim Stone beware assumptions about long term solar PV costs , it’s tricky working out useful life-spans of current PV cells as this research suggests https://www.pv-magazine.com/2023/09/09/weekend-read-a-10-gw-time-bomb/?mc_cid=8b52b90366&mc_eid=bff0b8c627
David Bunny I agree that our Government is certainly moving us “further and faster” towards Zero Power. Meanwhile not only is China burning more and more coal to manufacture solar panels and wind turbines for export to the West, it’s also stealing a march on our ability to generate reliable, safe and much cheaper nuclear power https://www.youtube.com/watch?v=W95DY3q61T4