The first chart tells it all, although the final one showing wind/solar's rise vs. flat electricity production in combination with the rising costs of electricity in Minnesota is also quite informative. great article, thanks
Energy Bad Boys hit a home run with this essay. Yet, being an engineer I must point out a couple of issues. First, I was unsure what the term "Green Plating" referred to. Yes, it is an amusing play on the older term "gold plating" which referred to running up the cost of a project. However, this is a confusing point for ratepayers. Many people are very skeptical of the utility argument that wind and solar have no fuel cost thus must be the lowest cost alternative because their power bills are rising fast, yet can't quite refute the utility's logic about fuel cost. We need to rectify this very clearly.
One approach to crystallizing the argument is to point to empirical data that show rising costs as a function of renewables penetration. The Concerned Household Electricity Consumers Council (CHECC) in their lawsuit against the EPA is taking this route. However, there is quite a bit of noise in the empirical data which gives opponents a means to cloud the issue. Recognizing this flaw, I wrote a contribution for What's Up With That (WUWT) last autumn that deconstructed the utility rate setting process to show, specifically, why rates will rise with wind/solar (https://wattsupwiththat.com/2023/11/05/setting-utility-rates/).
What you fellows call Green Plating is what specifically amounts to return on capital -- it is "paying for access to capital markets". Wind/solar add to the utility's rate base, and then will cost the rate payers in aggregate the rate base addition times the allowed return on rate base. So far, this appears no different than it would with thermal assets. However, because thermal assets that once were adequate to run the grid on their own are now being used to balance wind/solar intermittently, the addition of wind/solar lowers the capacity factor of other assets on the grid what results is higher rate of return cost per unit of delivered energy which cannot do anything but raise rates.
Poor utilization of capital dominates, and I mean dominates, the entire energy evolution. You guys mention needed additions to long-haul transmission lines. These are needed for relatively low probability failures of local sources of total energy (an issue of renewables) -- i.e. they represent a poor capacity factor and poor utilization of capital. The worst problem with all of this is cost of storage. Using just 2023 data, I estimated that rate base in our balancing authority area will rise from its current $17,000 per ratepayer to well over $100,000 and perhaps to twice that per ratepayer in order to maintain constant reliability.
Think of the opportunity costs that this poor utilization of capital represents.
BTW, thanks for the reference to Mark Christie's commentary at the FERC. I come here to learn and I am never disappointed.
Excellent analysis. You are exactly right about the cost of maintaining a reliable grid. When you flick the switch the lights MUST come on. I will be using the term Levelized Cost of Intermittency.
It seems states do have a policy of increasing transmission to neighboring states to make up for the shortfall caused by Clean Energy Policies. For Virginia Dominion Energy thinks it will be importing 10,800 MW from neighboring states, whilst PJM are shutting down 40,000 MW of depreciated dispatchable power.
If you don't have a plan to meet demand in your own state eventually you run out of other people’s electricity.
Another great article! Every one of them is like a present to me. Keep 'em coming!
For anyone who might be interested, look into Molten Salt Reactors. Designed and developed in the 50's with one running for several years at Oak Ridge in the 60's. Small fuel consumption (thorium, which is plentiful and not radioactive) and little waste. Why aren't these running everywhere? Our government wanted fuel that could be converted to nuclear bombs - so out with the MSR idea! Simple as that!
One point that you make, but is under appreciated is that the System LCOE for renewbales increases as pentration increases. The System LCOE for the first renewables on the grid are equal to the Unit LCOE because you don't need the additional System costs. The System LCOE begins to diverge from Unit LCOE as more higher cost solutions are required to support intermittancy.
The chart on page 4 of MISO's Renewable Integration Study demonstrates the complexity that arises from more renewables. Has anyone seen an "LCOE System Cost Curve" that would parallel this chart?
thank you, LCOE cannot and should not be used to compare intermitten solar and wind with despatchable coal, gas, or nuclear. It is important to get this information to the decision makers about energy policy and investments
my recent articel at Eurasia Review on the same subject
Really Great article and analysis, guys. Lazard should be summoned to the Ministry of Truth and forced to apologize. LCOE has enabled the feeble minded to yell WIND IS CHEAPER for years. They are substantially responsible for the trillions wasted on wind and solar.
Good work on breaking down the myth of cheap renewables. Unfortunately, most politicians seem to think electricity comes from the outlet and don’t consider the system wide costs.
Thanks for creating a new standard of evaluation that is so much more realistic! BTW, overbuilding to compensate for intermittancy is a terrible policy. It gobbles up much, much more acreage, and still is WORTHLESS when there is almost NO wind or sun; it only helps when wind and sun are LOW but over about 8 mph. When the wind speed is less than 7 or 8 mph, for example, the wind turbine output is ZERO, no matter how many turbines there are. What a waste!
Thank you for this article, Isaac and Mitch. We have cited your work in presentations with audiences totaling many thousands of people. The presentations include large public gatherings, Town Hall meetings, and radio and print interviews. Your explanations are elegant to the extent that complex subjects are understandable for most people. One Alliant engineer said he was going to have to check out your work based on us citing it. If you are attracting more trolls, we may be partly to blame ;)
The first chart tells it all, although the final one showing wind/solar's rise vs. flat electricity production in combination with the rising costs of electricity in Minnesota is also quite informative. great article, thanks
Energy Bad Boys hit a home run with this essay. Yet, being an engineer I must point out a couple of issues. First, I was unsure what the term "Green Plating" referred to. Yes, it is an amusing play on the older term "gold plating" which referred to running up the cost of a project. However, this is a confusing point for ratepayers. Many people are very skeptical of the utility argument that wind and solar have no fuel cost thus must be the lowest cost alternative because their power bills are rising fast, yet can't quite refute the utility's logic about fuel cost. We need to rectify this very clearly.
One approach to crystallizing the argument is to point to empirical data that show rising costs as a function of renewables penetration. The Concerned Household Electricity Consumers Council (CHECC) in their lawsuit against the EPA is taking this route. However, there is quite a bit of noise in the empirical data which gives opponents a means to cloud the issue. Recognizing this flaw, I wrote a contribution for What's Up With That (WUWT) last autumn that deconstructed the utility rate setting process to show, specifically, why rates will rise with wind/solar (https://wattsupwiththat.com/2023/11/05/setting-utility-rates/).
What you fellows call Green Plating is what specifically amounts to return on capital -- it is "paying for access to capital markets". Wind/solar add to the utility's rate base, and then will cost the rate payers in aggregate the rate base addition times the allowed return on rate base. So far, this appears no different than it would with thermal assets. However, because thermal assets that once were adequate to run the grid on their own are now being used to balance wind/solar intermittently, the addition of wind/solar lowers the capacity factor of other assets on the grid what results is higher rate of return cost per unit of delivered energy which cannot do anything but raise rates.
Poor utilization of capital dominates, and I mean dominates, the entire energy evolution. You guys mention needed additions to long-haul transmission lines. These are needed for relatively low probability failures of local sources of total energy (an issue of renewables) -- i.e. they represent a poor capacity factor and poor utilization of capital. The worst problem with all of this is cost of storage. Using just 2023 data, I estimated that rate base in our balancing authority area will rise from its current $17,000 per ratepayer to well over $100,000 and perhaps to twice that per ratepayer in order to maintain constant reliability.
Think of the opportunity costs that this poor utilization of capital represents.
BTW, thanks for the reference to Mark Christie's commentary at the FERC. I come here to learn and I am never disappointed.
Excellent analysis. You are exactly right about the cost of maintaining a reliable grid. When you flick the switch the lights MUST come on. I will be using the term Levelized Cost of Intermittency.
It seems states do have a policy of increasing transmission to neighboring states to make up for the shortfall caused by Clean Energy Policies. For Virginia Dominion Energy thinks it will be importing 10,800 MW from neighboring states, whilst PJM are shutting down 40,000 MW of depreciated dispatchable power.
If you don't have a plan to meet demand in your own state eventually you run out of other people’s electricity.
Another great article! Every one of them is like a present to me. Keep 'em coming!
For anyone who might be interested, look into Molten Salt Reactors. Designed and developed in the 50's with one running for several years at Oak Ridge in the 60's. Small fuel consumption (thorium, which is plentiful and not radioactive) and little waste. Why aren't these running everywhere? Our government wanted fuel that could be converted to nuclear bombs - so out with the MSR idea! Simple as that!
GREAT ARTICLE BOYS!!
One point that you make, but is under appreciated is that the System LCOE for renewbales increases as pentration increases. The System LCOE for the first renewables on the grid are equal to the Unit LCOE because you don't need the additional System costs. The System LCOE begins to diverge from Unit LCOE as more higher cost solutions are required to support intermittancy.
The chart on page 4 of MISO's Renewable Integration Study demonstrates the complexity that arises from more renewables. Has anyone seen an "LCOE System Cost Curve" that would parallel this chart?
https://cdn.misoenergy.org/RIIA%20Summary%20Report520051.pdf
This 'article' - and I use the term loosely here - is garbage put out by a useful idiot for BigFossilFuels.
Get the real FACTS:
https://cleantechnica.com/2022/09/06/switching-the-world-to-renewable-energy-will-cost-62-trillion-but-the-payback-would-take-just-6-years/
But wait, there's more:
https://reneweconomy.com.au/stanford-study-demonstrates-100-renewable-us-grid-with-no-blackouts/
So who're going to go with? This Quisling and his bullshit, or the Science?
👏 Verry well researched and written again boys!
The capacity is low so they try to compare megawatt to megawatt.
But to get one MW of solar over a year I must build 5 as the availability is only 20% here in Alberta.
It is my proposal that if a generator is capable of less than 80% then it should have to install backup, batteries or other, for 2 hours.
So if you build a 500mw solar far you must install 1000mwhr of batteries that can be discharged at 500perhour.
Also, you have to list it based on yearly average, so that 500mw is only 100 but the storage remains the same.
And that finishes the farce.
thank you, LCOE cannot and should not be used to compare intermitten solar and wind with despatchable coal, gas, or nuclear. It is important to get this information to the decision makers about energy policy and investments
my recent articel at Eurasia Review on the same subject
https://unpopular-truth.com/2024/03/08/energy-trilemma/
our peer-reviewed paper on the subject, Schernikau et al 2022
https://dx.doi.org/10.2139/ssrn.4000800
Really Great article and analysis, guys. Lazard should be summoned to the Ministry of Truth and forced to apologize. LCOE has enabled the feeble minded to yell WIND IS CHEAPER for years. They are substantially responsible for the trillions wasted on wind and solar.
As to the Nuclear argument - France.
Good work on breaking down the myth of cheap renewables. Unfortunately, most politicians seem to think electricity comes from the outlet and don’t consider the system wide costs.
Keep up the good work!
Yee Haw, Baddest Boys.
Excellent article and summary of the “cheap green energy” fallacy.
When the green energy fantasies meet the harsh realities of economics and physics, economics and physics prevail every time.
Thanks for creating a new standard of evaluation that is so much more realistic! BTW, overbuilding to compensate for intermittancy is a terrible policy. It gobbles up much, much more acreage, and still is WORTHLESS when there is almost NO wind or sun; it only helps when wind and sun are LOW but over about 8 mph. When the wind speed is less than 7 or 8 mph, for example, the wind turbine output is ZERO, no matter how many turbines there are. What a waste!
PJM has been involved in court battles over this very subject
States shouldn’t have to pay for transmission driven by other states’ policies: FERC’s Christie from Utility Dive:
Thank you for this article, Isaac and Mitch. We have cited your work in presentations with audiences totaling many thousands of people. The presentations include large public gatherings, Town Hall meetings, and radio and print interviews. Your explanations are elegant to the extent that complex subjects are understandable for most people. One Alliant engineer said he was going to have to check out your work based on us citing it. If you are attracting more trolls, we may be partly to blame ;)