4 ms·

Renewable energy accounting is shady (no pun intended). This is more accurate (original source EIA): http://www.safremaenergy.com/wp-content/uploads/2013/11/LC

Renewable energy accounting is shady (no pun intended). This is more accurate (original source EIA): http://www.safremaenergy.com/wp-content/uploads/2013/11/LCOE-2018.png http://www.safremaenergy.com/wp-content/uploads/2013/11/LCOE... ... and also why natural gas will always win, and why coal is getting shut down.

DesiLurker 10y ago
seriously! thats from EIA their entire focus is on traditional not renewable sources. plus its misleading to quote prices from 2013 knowing fully well renewables have made a lot of cost reduction owing to economies of scale in last few years. its only going to accelerate further.
greglindahl 10y ago
This prices carbon at $0/ton, right? Lots of big energy companies are not making that assumption.
maxerickson 10y ago
Can you explain more about what is shady in the auctions mentioned in the article? To me they seem to be market derived prices rather than accounting shenanigans.
- ucaetano 10y ago
  Converting from MW to MWh is complicated for intermittent renewables. For a gas-fired plant you usually get 95+% of the installed capacity as firm production. For hydro, 50%-60% on average, depending on the profile of the reservoir and rainfall. For solar it can be 10% to 20%, for wind 20% to 40%. The accounting gets complicated when you include the fact that you can't dispatch or even precisely predict those sources, so you're only able to offer it because there are other sources (hydro, gas, etc.) which you can turn down on demand to accommodate and compensate for the intermittent renewable. Also, $/MW isn't comparable across sources due to the facts above, the price that really matters is the long-term $/MWh average, which the parent post provided. [Edit] Some of the terms I used might not match the appropriate technical terms in English, when I worked in energy it wasn't in an English-speaking country, so my apologies.
  - Retric 10y ago
    PV Solar is vastly better than 10% you generally get 20-30% in good areas and nobody installs solar in Alaska. PS: Concentrating solar towers need cloudless days (and are outdated tech) and even they still beat 10%.
  - maxerickson 10y ago
    In Chile, the company bid to sell power at $30 per megawatt hour. "deal in August pegging $29.10 per megawatt hour in Chile." So where's the tricky accounting?
    - philipkglass 10y ago
      I am pretty bullish about solar technology, as you might be able to tell from my posting history, but I'm a bit suspicious of those sub-$30 record breaking bids reported on this year. It looks like the companies making the bids are either gambling on continued aggressive cost reductions before the plants are scheduled to enter service or they're basically not making money on the contracts. Some of them could end up like SunEdison if they've left no margin for error. That said, $150/MWh is certainly too high for a PV project entering service in 2018 in any reasonably sunny part of the world. American PPA prices this year, bid realistically by experienced companies, are such that they're still in the $70-$80 range after you back out the 30% Investment Tax Credit.
    - ucaetano 10y ago
      The tricky accounting is in comparing $/MW, a number which isn't comparable across different energy sources. You're picking a part of the article where there isn't tricky accounting and asking me where the tricky accounting is. Well, it is in the part of the article that you didn't pick.
      - maxerickson 10y ago
        The prices I am talking about from the article and the graph provided above are both in $/MW-h! So where's the tricky accounting?
ucaetano 10y ago
Especially when you look at the cost composition: almost 3/4 of the total cost of natural gas is variable, so if you're not producing, you're not paying. Compare it to wind and solar, where the vast majority is capital costs.
ricardobeat 10y ago
That graph puts solar at $150/MWh, while current contracts are reaching < $30
- ucaetano 10y ago
  The chart's from 2013, numbers are probably out of date.
- D_Alex 10y ago
  That graph is not from a credible source, it is from a company trying to push tidal power generation. Sure enough - according to the graph, tidal power is the cheapest. In reality, tidal power is WAY more expensive than wind turbines.
imglorp 10y ago
First of all, the link is 3 years old; so how old are the numbers? It looks like they're projecting to 2018. And second of all, there are hidden future costs in burning carbon which are not factored in.
mtgx 10y ago
Even going by that chart, it's from 2013, and it measures solar prices from 2013. By now solar is less than half than it was in 2013. Give it a few more years, and it should halven again, likely reaching what you call the "real price" of nat gas.
propter_hoc 10y ago
First, this data is well out of date. Here are the EIA's latest calculations: http://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf http://www.eia.gov/outlooks/aeo/pdf/electricity_generation.p... For plants entering production in 2018 (same cohort as in your old data above), Solar PV has fallen dramatically and is now right between combined-cycle and combustion natgas turbines. Second, your argument that because of the EIA calculations "natural gas will always win" is demonstrably false; Solar PV has been the fastest-growing source of new energy in the world in 2015: https://www.bloomberg.com/news/articles/2016-06-08/solar-is-the-fastest-growing-energy-says-top-fossil-fuel-major https://www.bloomberg.com/news/articles/2016-06-08/solar-is-... It is in fact rather silly to say that one source of energy will "win"; in general a mix of sources will always provide best grid flexibility. Finally, I would also like to suggest that you avoid charts from dubious sources such as this marine current turbine startup and instead to search for up-to-date primary source data yourself.
- chris_va 10y ago
  Hi, feedback noted. I had not thought my comment would generate so much discussion, so yes I should have linked to a more up-to-date source (actually I thought I was linking to the 2015 data, and this was the easiest to read chart, but oops). I also should have included more information. Anyway, Solar PV is not dispatchable. What does that mean? It means that Solar PV will never replace baseline power by itself (maybe with storage, that is a long and separate conversation). Because renewables are highly variable, they tend to actually increase the variability of demand for baseline power. That means that power plants with lower capital costs, and quicker ramp up/down times are more profitable. Coal does not have a quick ramp up/down time, and nuclear is not low capital cost. As a result, the net power from natural gas has gone up, and nuclear/coal has dropped. Without some kind of energy storage, you'll never be able to get more than about 50% of the power from wind/solar/hydro in the US. The LCOE on Solar PV, if you extrapolate out the existing cost curve, drops to about 1.8c/kWh. The best energy storage methods are not very efficient (e.g. compressed air or molten salt only get about 40% efficiency), which means they will always be more expensive than natural gas.
  - ahartman00 10y ago

DesiLurker 10y ago

seriously! thats from EIA their entire focus is on traditional not renewable sources. plus its misleading to quote prices from 2013 knowing fully well renewables have made a lot of cost reduction owing to economies of scale in last few years. its only going to accelerate further.

greglindahl 10y ago

This prices carbon at $0/ton, right? Lots of big energy companies are not making that assumption.

maxerickson 10y ago

Can you explain more about what is shady in the auctions mentioned in the article? To me they seem to be market derived prices rather than accounting shenanigans.

ucaetano 10y ago
Converting from MW to MWh is complicated for intermittent renewables. For a gas-fired plant you usually get 95+% of the installed capacity as firm production. For hydro, 50%-60% on average, depending on the profile of the reservoir and rainfall. For solar it can be 10% to 20%, for wind 20% to 40%. The accounting gets complicated when you include the fact that you can't dispatch or even precisely predict those sources, so you're only able to offer it because there are other sources (hydro, gas, etc.) which you can turn down on demand to accommodate and compensate for the intermittent renewable. Also, $/MW isn't comparable across sources due to the facts above, the price that really matters is the long-term $/MWh average, which the parent post provided. [Edit] Some of the terms I used might not match the appropriate technical terms in English, when I worked in energy it wasn't in an English-speaking country, so my apologies.
- Retric 10y ago
  PV Solar is vastly better than 10% you generally get 20-30% in good areas and nobody installs solar in Alaska. PS: Concentrating solar towers need cloudless days (and are outdated tech) and even they still beat 10%.
- maxerickson 10y ago
  In Chile, the company bid to sell power at $30 per megawatt hour. "deal in August pegging $29.10 per megawatt hour in Chile." So where's the tricky accounting?
  - philipkglass 10y ago
    I am pretty bullish about solar technology, as you might be able to tell from my posting history, but I'm a bit suspicious of those sub-$30 record breaking bids reported on this year. It looks like the companies making the bids are either gambling on continued aggressive cost reductions before the plants are scheduled to enter service or they're basically not making money on the contracts. Some of them could end up like SunEdison if they've left no margin for error. That said, $150/MWh is certainly too high for a PV project entering service in 2018 in any reasonably sunny part of the world. American PPA prices this year, bid realistically by experienced companies, are such that they're still in the $70-$80 range after you back out the 30% Investment Tax Credit.
  - ucaetano 10y ago
    The tricky accounting is in comparing $/MW, a number which isn't comparable across different energy sources. You're picking a part of the article where there isn't tricky accounting and asking me where the tricky accounting is. Well, it is in the part of the article that you didn't pick.
    - maxerickson 10y ago
      The prices I am talking about from the article and the graph provided above are both in $/MW-h! So where's the tricky accounting?

ucaetano 10y ago

Especially when you look at the cost composition: almost 3/4 of the total cost of natural gas is variable, so if you're not producing, you're not paying. Compare it to wind and solar, where the vast majority is capital costs.

ricardobeat 10y ago

That graph puts solar at $150/MWh, while current contracts are reaching < $30

ucaetano 10y ago
The chart's from 2013, numbers are probably out of date.
D_Alex 10y ago
That graph is not from a credible source, it is from a company trying to push tidal power generation. Sure enough - according to the graph, tidal power is the cheapest. In reality, tidal power is WAY more expensive than wind turbines.

imglorp 10y ago

First of all, the link is 3 years old; so how old are the numbers? It looks like they're projecting to 2018. And second of all, there are hidden future costs in burning carbon which are not factored in.

mtgx 10y ago

Even going by that chart, it's from 2013, and it measures solar prices from 2013. By now solar is less than half than it was in 2013. Give it a few more years, and it should halven again, likely reaching what you call the "real price" of nat gas.

propter_hoc 10y ago

First, this data is well out of date. Here are the EIA's latest calculations: http://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf http://www.eia.gov/outlooks/aeo/pdf/electricity_generation.p... For plants entering production in 2018 (same cohort as in your old data above), Solar PV has fallen dramatically and is now right between combined-cycle and combustion natgas turbines. Second, your argument that because of the EIA calculations "natural gas will always win" is demonstrably false; Solar PV has been the fastest-growing source of new energy in the world in 2015: https://www.bloomberg.com/news/articles/2016-06-08/solar-is-the-fastest-growing-energy-says-top-fossil-fuel-major https://www.bloomberg.com/news/articles/2016-06-08/solar-is-... It is in fact rather silly to say that one source of energy will "win"; in general a mix of sources will always provide best grid flexibility. Finally, I would also like to suggest that you avoid charts from dubious sources such as this marine current turbine startup and instead to search for up-to-date primary source data yourself.

chris_va 10y ago
Hi, feedback noted. I had not thought my comment would generate so much discussion, so yes I should have linked to a more up-to-date source (actually I thought I was linking to the 2015 data, and this was the easiest to read chart, but oops). I also should have included more information. Anyway, Solar PV is not dispatchable. What does that mean? It means that Solar PV will never replace baseline power by itself (maybe with storage, that is a long and separate conversation). Because renewables are highly variable, they tend to actually increase the variability of demand for baseline power. That means that power plants with lower capital costs, and quicker ramp up/down times are more profitable. Coal does not have a quick ramp up/down time, and nuclear is not low capital cost. As a result, the net power from natural gas has gone up, and nuclear/coal has dropped. Without some kind of energy storage, you'll never be able to get more than about 50% of the power from wind/solar/hydro in the US. The LCOE on Solar PV, if you extrapolate out the existing cost curve, drops to about 1.8c/kWh. The best energy storage methods are not very efficient (e.g. compressed air or molten salt only get about 40% efficiency), which means they will always be more expensive than natural gas.
- ahartman00 10y ago