A lot of time spent arguing about the comparative cost of RE vs conventional power would be saved if people just understood that wind and solar cannot work due to the three basic principles of intermittent energy, they ABC as we call it among the Energy Realists of Australia. It can't work, and it should never have been allowed to contaminate and destablise the grids of the western world.
All we have got from trillions of dollars of expenditure is power that is more expensive and less reliable, with massive damage to the planet.
Around the Western world, subsidised and mandated wind and solar power have been displacing conventional power in the electricity supply. Consequently, most of the grids in the west are moving towards a tipping point where the lights will flicker at nights when the wind is low. This is a “frog in the saucepan” effect and it only starts to worry people when it is too late. Too late for Britain and Germany certainly.
Consider the ABC of intermittent energy generation.
A. Input to the grid must continuously match the demand.
B. The continuity of RE is broken on nights with little or no wind.
C. There is no feasible or affordable large-scale storage to bridge the gaps.
Therefore, the green transition is impossible with current storage technology.
The rate of progress towards the tipping point will accelerate as demand is swelled by AI and electrification at large.
In Australia, the transition to unreliable wind and solar power has just hit the wall, while Britain and Germany have passed the tipping point and entered a “red zone,” keeping the lights on precariously with imports and deindustrialization to reduce demand.
The meteorologists never issued wind drought warnings and the irresponsible authorities never checked the wind supply! They even missed the Dunkelflautes that must have been known to mariners and millers for centuries!
There is an urgent need to find out why the meteorologists failed to warn us about wind droughts and why energy planners didn’t check. Imagine embarking on a major irrigation project without forensic investigation of the water supply including historical rainfall figures.
On the US EIA charts of LCOE, there has always been (or was, haven't checked in several years) a note that LCOE for wind and solar do not reflect true costs because expenses such as long distance transmission and firming are not included.
Lazard has always ignored this note in their reports. In my opinion, what Lazard has done for the last two decades has been blatant lying and misrepresentation to drive the narrative their customers wanted, rather than actually trying to report something resembling reality.
On a different but similar note, I did a little diving in my collection of bookmarks the other day. Explanations of how wind/solar actually do very little to reduce overall CO2 emissions on a reliable grid:
Several (oldish) references on this topic:
"CO2 Emissions Variations in CCGTs Used to Balance Wind in Ireland"
"what Lazard has done for the last two decades has been blatant lying and misrepresentation to drive the narrative their customers wanted, rather than actually trying to report something resembling reality."
Thank you! That needed to be said 'aloud.' It is a shame they suffer no consequences for such shenanigans!
Very accurate assessment. I like to think that LCOE is the cost at the plant gate. I use the 'Full Cost of Electricity' (FCOE) as the cost of all power generators delivering fit-for-purpose fully dispatchable power to the grid.
Totally get it. We call it the “all-in” LCOE to signal to people that there is more to the LCOE than they hear about but we’re all signing from the same hymnal.
Great reporting Boys, thanks for the tag! It is very difficult ti capture the cost of ancillary services like governor response, inertia, voltage support, etc. that wind and solar simply do not provide. Batteries yes, a pseudo type of ancillary support, not great, not nothing. The ability to follow load based on input from AGC cannot be overstated, wind and solar simply cannot provide it.
Yes it is, and the entire grid has been built around those features. Beyond cost and intermittency, the lack of ancillary abilities is one more reason why wind and solar can't replace the existing grid.
Policies that penalize ratepayers: RGGI (carbon tax ), net energy billing, renewable energy credits, stat sponsored long term contracts with wind and solar projects, build out of transmission and distribution infrastructure to deliver solar and wind from generation to load. All these programs are self accelerating costs in that they exponentially raise costs as more wind and solar come on line. Look up the carbon allowance costs on the RGGI site, and net energy costs passed onto the ratepayers ( usually in case proceedings in the states public utilities commissions), ISO-NE has calculated future transmission costs, renewable energy credits costs are skyrocketing as NE States accelerate renewable energy compliance rates and long term contracts are found in PUC proceedings.
In June, 2024, Lazard created LCOE+ which is a more accurate accounting for firming inherently-intermittent solar and wind generation. https://www.lazard.com/media/gjyffoqd/lazards-lcoeplus-june-2024.pdf Particularly significant is the observation on pages 9 and 14 of 48 showing nuclear power plant extended operations are a mere $32.00 / MWh. This is incredibly cost-effective.
Nice article and analysis guys. The scary thing about LCOE is that in addition to the activists and grifters the banks believe it too! I think convincing the financial community that this overbuild situation will end badly is the key to stopping the madness. If LCOE is correct, why the subsidies? On the bright side I had two meetings with solar/battery developers this week. Both were complaining hard about this new administration is going to put a giant hole in their business. 🤞
Capacity factor for coal seems too low. Current factors in the US are generally over 40%. I realize factors are being squeezed down by government mandates, but 7%? Of course, higher factors would reduce the energy cost, making your argument better.
Isaac - what was your assumption(s) for solar capacity factor in Maine. I’m thinking that with the latitude in Maine and the weather the capacity factor will never see double digit
The natural capacity factor for coal, NG, and nuclear is, from long experience, over 90%. Utilization factors are artificial limits imposed by treating coal, NG, and nuclear as "backup" for wind and PV. This is backwards, at best, since wind/PV cannot support the grid because neither is dispatchable. The utilization factors used here for coal, NG, and nuclear are 'misinformation' since they are artificial limits imposed on coal, NG, and nuclear to support wind/PV which are given grid priority - when working. If there were NO prioritized wind or PV, the capacity factors for coal, NG, and nuclear would immediately rise to their natural levels.
Wind and PV are extremely expensive toys which have put $trillions in the pockets of crony capitalists while impoverishing the rest of us. Intermittent Renewable energy is an abject failure as is again being witnessed during 'dunkelflaute' in Europe.
I am glad that you included CCGT in this analysis, as it is the bedrock of American electrical generation.
I have a question on your assumptions for the capacity factors for fossil fuels. Where did you get the estimate “capacity factors of 42 percent for natural gas CC plants, 7 percent for coal, and 15 percent for natural gas CT”?
I can understand that, but those capacity factors for CCGT and coal are obviously artificially low because of operator choice and possibly government mandates. Both types of generators can easily run at 90+% capacity, so using your assumptions greatly increases the apparent costs of those fuel sources.
Perhaps create another cost estimate using a realistic maximum capacity factor in addition to the estimate that you display? It will make your main conclusions even stronger.
Hi Michael, this piece is a partial summary of the report we did for a coalition of New England groups so maybe in the future we can look at the theoretical costs of the dispatchable resources at various utilization rates. We’ve discussed that in other articles already so we wanted to focus on the system specific LCOEs we found for the region
Please do not take my suggestions as criticism. I am a big fan and always look forward to reading your work. I just wanted to give some suggestions for how you can strengthen your analysis. I regularly update articles due to reader feedback.
You might also consider subscribing to my Substack. I write about Energy and its role in promoting human material progress quite often.
Well written, easy to read article. One perspective is that utilities are tasked to meet Customer load and not simply produce energy. That distinction is especially important here in the southwest where our significant solar resources increase the attractiveness of solar PV. Solar PV resources' output is well below maximum capacity in the early evening when peak Customer load occurs in the summer. In addition, the abundance of solar PV resources has driven negative pricing in the spring for the last several years. Lazard has responded to this by including firmed LCOE's in their reports.
An additional metric that Resource Planning organizations use is Effective Load Carrying Capacity (ELCC) which calculates the incremental capacity a new resource contributes based upon both the utilities load and existing generation portfolio. An important characteristic of ELCC is that it trends down with the increasing penetration of variable energy resources (non-dispatchable wind and solar) making it very difficult to achieve 100% clean generation portfolios.
A challenge for all utilities is how to develop their generation portfolio in a manner that balances the cost, clean, and reliability characteristics. I'm of the opinion that this task has been significantly skewed over the past 10-years significantly increasing Customer costs and reducing reliability.
I do believe that the Lazard LCOE+ has the new nuclear LCOE is the correct range ($142/MWH to $222/MWH) based upon work in this space for our utility over the past 2-years. New nuclear should play an important part of generation portfolios going forward but does face significant cost challenges.
You make a good point, but it does serve as a "point of departure." When you data referenced to Lazard, you know its going to be understated, or just plain wrong.
Simply looking at Lazard's nuclear LCOE's, they better align with our calculations versus the "aspirational" forecasts we get from the OEM's. In our 20+ months of work in this space, no OEM has bothered to clarify the calculation of their projects cost inputs or LCOE's.
Quick Q, sir: LCOE covers the cost of producing energy from a given plant, whether thermal, wind or solar. But LCOE does not cover externalities like curtailment and dispatchable power? Thank you.
A lot of time spent arguing about the comparative cost of RE vs conventional power would be saved if people just understood that wind and solar cannot work due to the three basic principles of intermittent energy, they ABC as we call it among the Energy Realists of Australia. It can't work, and it should never have been allowed to contaminate and destablise the grids of the western world.
All we have got from trillions of dollars of expenditure is power that is more expensive and less reliable, with massive damage to the planet.
Around the Western world, subsidised and mandated wind and solar power have been displacing conventional power in the electricity supply. Consequently, most of the grids in the west are moving towards a tipping point where the lights will flicker at nights when the wind is low. This is a “frog in the saucepan” effect and it only starts to worry people when it is too late. Too late for Britain and Germany certainly.
https://newcatallaxy.blog/2023/07/11/approaching-the-tipping-point/
Consider the ABC of intermittent energy generation.
A. Input to the grid must continuously match the demand.
B. The continuity of RE is broken on nights with little or no wind.
C. There is no feasible or affordable large-scale storage to bridge the gaps.
Therefore, the green transition is impossible with current storage technology.
The rate of progress towards the tipping point will accelerate as demand is swelled by AI and electrification at large.
In Australia, the transition to unreliable wind and solar power has just hit the wall, while Britain and Germany have passed the tipping point and entered a “red zone,” keeping the lights on precariously with imports and deindustrialization to reduce demand.
The meteorologists never issued wind drought warnings and the irresponsible authorities never checked the wind supply! They even missed the Dunkelflautes that must have been known to mariners and millers for centuries!
https://www.flickerpower.com/images/The_endless_wind_drought_crippling_renewables___The_Spectator_Australia.pdf
There is an urgent need to find out why the meteorologists failed to warn us about wind droughts and why energy planners didn’t check. Imagine embarking on a major irrigation project without forensic investigation of the water supply including historical rainfall figures.
https://quadrant.org.au/news-opinions/climate-change/no-gusts-no-glory/
Amen brother.
On the US EIA charts of LCOE, there has always been (or was, haven't checked in several years) a note that LCOE for wind and solar do not reflect true costs because expenses such as long distance transmission and firming are not included.
Lazard has always ignored this note in their reports. In my opinion, what Lazard has done for the last two decades has been blatant lying and misrepresentation to drive the narrative their customers wanted, rather than actually trying to report something resembling reality.
On a different but similar note, I did a little diving in my collection of bookmarks the other day. Explanations of how wind/solar actually do very little to reduce overall CO2 emissions on a reliable grid:
Several (oldish) references on this topic:
"CO2 Emissions Variations in CCGTs Used to Balance Wind in Ireland"
http://euanmearns.com/co2-emissions-variations-in-ccgts-used-to-balance-wind-in-ireland/
"Cost and Quantity of Greenhouse Gas Emissions Avoided by Wind Generation" By Peter Lang
https://bravenewclimate.com/files/2009/08/peter-lang-wind-power.pdf
"Does wind power reduce carbon emissions?" by Barry Brook, references Lang above.
https://bravenewclimate.com/2009/08/08/does-wind-power-reduce-carbon-emissions/
"Why solar and wind won’t make much difference to carbon dioxide emissions"
https://blog.oup.com/2017/10/solar-wind-energy-carbon-dioxide-emissions/
"Wind Integration: Incremental Emissions from Back-Up Generation Cycling (Part V: Calculator Update)" By Kent Hawkins
https://www.masterresource.org/wind-power/wind-integration-incremental-emissions-from-back-up-generation-cycling-part-v-calculator-update/#more-7271
"HOW LESS BECAME MORE… Wind, Power and Unintended Consequences
in the Colorado Energy Market"
https://docs.wind-watch.org/BENTEK-How-Less-Became-More.pdf
In fairness, Lazard has a disclaimer at the beginning of their reports but then they act like the disclaimer doesn’t exist
The studies have been very useful for activists and politicians coming to the wrong conclusions. I wonder who paid for the studies….
They should pay us instead!
"what Lazard has done for the last two decades has been blatant lying and misrepresentation to drive the narrative their customers wanted, rather than actually trying to report something resembling reality."
Thank you! That needed to be said 'aloud.' It is a shame they suffer no consequences for such shenanigans!
Very accurate assessment. I like to think that LCOE is the cost at the plant gate. I use the 'Full Cost of Electricity' (FCOE) as the cost of all power generators delivering fit-for-purpose fully dispatchable power to the grid.
Totally get it. We call it the “all-in” LCOE to signal to people that there is more to the LCOE than they hear about but we’re all signing from the same hymnal.
Great reporting Boys, thanks for the tag! It is very difficult ti capture the cost of ancillary services like governor response, inertia, voltage support, etc. that wind and solar simply do not provide. Batteries yes, a pseudo type of ancillary support, not great, not nothing. The ability to follow load based on input from AGC cannot be overstated, wind and solar simply cannot provide it.
Yes it is, and the entire grid has been built around those features. Beyond cost and intermittency, the lack of ancillary abilities is one more reason why wind and solar can't replace the existing grid.
Policies that penalize ratepayers: RGGI (carbon tax ), net energy billing, renewable energy credits, stat sponsored long term contracts with wind and solar projects, build out of transmission and distribution infrastructure to deliver solar and wind from generation to load. All these programs are self accelerating costs in that they exponentially raise costs as more wind and solar come on line. Look up the carbon allowance costs on the RGGI site, and net energy costs passed onto the ratepayers ( usually in case proceedings in the states public utilities commissions), ISO-NE has calculated future transmission costs, renewable energy credits costs are skyrocketing as NE States accelerate renewable energy compliance rates and long term contracts are found in PUC proceedings.
it seems to me that your work needs a wider audience, especially policymakers around the nation
We’ll take it!
In June, 2024, Lazard created LCOE+ which is a more accurate accounting for firming inherently-intermittent solar and wind generation. https://www.lazard.com/media/gjyffoqd/lazards-lcoeplus-june-2024.pdf Particularly significant is the observation on pages 9 and 14 of 48 showing nuclear power plant extended operations are a mere $32.00 / MWh. This is incredibly cost-effective.
keep telling the people. this stuff makes Soylent Green look like Sesame Street
I love Soylent Street
The facts, just the facts. The lunacy of wind and solar is incredible.
Nice article and analysis guys. The scary thing about LCOE is that in addition to the activists and grifters the banks believe it too! I think convincing the financial community that this overbuild situation will end badly is the key to stopping the madness. If LCOE is correct, why the subsidies? On the bright side I had two meetings with solar/battery developers this week. Both were complaining hard about this new administration is going to put a giant hole in their business. 🤞
As Jerry Seinfeld would say, that’s a shame
This mechanical engineer who works with solar/battery powered pumps in the oilfields completely agrees with your staff: bang. up. job. as always.
Your data aligns nicely with https://truthsocial.com/@davewalshenergy
The cost/benefit ratio with 'green' = infinity. Such a stain on our government who is grafting you by the trillions.
Capacity factor for coal seems too low. Current factors in the US are generally over 40%. I realize factors are being squeezed down by government mandates, but 7%? Of course, higher factors would reduce the energy cost, making your argument better.
yeah the local factors are key. The units in NH rarely run so they influence the cost pretty heavily
Isaac - what was your assumption(s) for solar capacity factor in Maine. I’m thinking that with the latitude in Maine and the weather the capacity factor will never see double digit
great question!
We used the hourly generation and installed capacity data from EIA so the data determined the CFs. @Mitch could probably tell you what that was
The natural capacity factor for coal, NG, and nuclear is, from long experience, over 90%. Utilization factors are artificial limits imposed by treating coal, NG, and nuclear as "backup" for wind and PV. This is backwards, at best, since wind/PV cannot support the grid because neither is dispatchable. The utilization factors used here for coal, NG, and nuclear are 'misinformation' since they are artificial limits imposed on coal, NG, and nuclear to support wind/PV which are given grid priority - when working. If there were NO prioritized wind or PV, the capacity factors for coal, NG, and nuclear would immediately rise to their natural levels.
Wind and PV are extremely expensive toys which have put $trillions in the pockets of crony capitalists while impoverishing the rest of us. Intermittent Renewable energy is an abject failure as is again being witnessed during 'dunkelflaute' in Europe.
I wouldn’t say they are misinformation. They are indicative of assets that aren’t being utilized to their full potential.
Great analysis.
I am glad that you included CCGT in this analysis, as it is the bedrock of American electrical generation.
I have a question on your assumptions for the capacity factors for fossil fuels. Where did you get the estimate “capacity factors of 42 percent for natural gas CC plants, 7 percent for coal, and 15 percent for natural gas CT”?
Those were based on recent performance of the New England fleet
I can understand that, but those capacity factors for CCGT and coal are obviously artificially low because of operator choice and possibly government mandates. Both types of generators can easily run at 90+% capacity, so using your assumptions greatly increases the apparent costs of those fuel sources.
Perhaps create another cost estimate using a realistic maximum capacity factor in addition to the estimate that you display? It will make your main conclusions even stronger.
Hi Michael, this piece is a partial summary of the report we did for a coalition of New England groups so maybe in the future we can look at the theoretical costs of the dispatchable resources at various utilization rates. We’ve discussed that in other articles already so we wanted to focus on the system specific LCOEs we found for the region
Great!
Please do not take my suggestions as criticism. I am a big fan and always look forward to reading your work. I just wanted to give some suggestions for how you can strengthen your analysis. I regularly update articles due to reader feedback.
You might also consider subscribing to my Substack. I write about Energy and its role in promoting human material progress quite often.
https://frompovertytoprogress.substack.com/t/energy
https://frompovertytoprogress.substack.com/t/green-energy-policies
Thanks for sharing! I tend to stay away from daily publications just because it gets to be overwhelming in my inbox!
I understand where you are coming from. That was outside the scope of our analysis
I think that it is well inside the scope of analyzing the cost impact of various energy sources in New England, which is the point of the article.
All you would need to do is change a few numbers in the spreadsheet and pop in an additional graphic. You can keep the rest of the article the same.
It will only strengthen your overall argument.
Well written, easy to read article. One perspective is that utilities are tasked to meet Customer load and not simply produce energy. That distinction is especially important here in the southwest where our significant solar resources increase the attractiveness of solar PV. Solar PV resources' output is well below maximum capacity in the early evening when peak Customer load occurs in the summer. In addition, the abundance of solar PV resources has driven negative pricing in the spring for the last several years. Lazard has responded to this by including firmed LCOE's in their reports.
An additional metric that Resource Planning organizations use is Effective Load Carrying Capacity (ELCC) which calculates the incremental capacity a new resource contributes based upon both the utilities load and existing generation portfolio. An important characteristic of ELCC is that it trends down with the increasing penetration of variable energy resources (non-dispatchable wind and solar) making it very difficult to achieve 100% clean generation portfolios.
A challenge for all utilities is how to develop their generation portfolio in a manner that balances the cost, clean, and reliability characteristics. I'm of the opinion that this task has been significantly skewed over the past 10-years significantly increasing Customer costs and reducing reliability.
I do believe that the Lazard LCOE+ has the new nuclear LCOE is the correct range ($142/MWH to $222/MWH) based upon work in this space for our utility over the past 2-years. New nuclear should play an important part of generation portfolios going forward but does face significant cost challenges.
Why anyone would ever trust anything from Lazard again after they've spent the last 20 years lying is beyond me.
You make a good point, but it does serve as a "point of departure." When you data referenced to Lazard, you know its going to be understated, or just plain wrong.
Simply looking at Lazard's nuclear LCOE's, they better align with our calculations versus the "aspirational" forecasts we get from the OEM's. In our 20+ months of work in this space, no OEM has bothered to clarify the calculation of their projects cost inputs or LCOE's.
My understanding is Lazard uses vogtle as the basis of their nuclear calculations
Absolutely. Need to build the plants on time and on budget
Quick Q, sir: LCOE covers the cost of producing energy from a given plant, whether thermal, wind or solar. But LCOE does not cover externalities like curtailment and dispatchable power? Thank you.
Yep and that’s why Mitch and I developed the “all-in” LCOE
Got it, thank you sir (and to Mitch)!
LCOE is better though of as what someone needs to be paid to build and operate that resource.