Tag: solar power

In a just-released report, the International Renewable Energy Agency (IRENA) claims that renewable energy is the most cost-competitive source of new electricity generation worldwide. The report further claims that “91% of new renewable power projects commissioned last year were more cost-effective than any new fossil fuel alternative” based on levelized costs, which can be thought of as the energy equivalent of a fixed mortgage.

If those claims sound too good to be true, it’s because they are. IRENA’s boasts ignore a fundamental reality: the intermittent electricity generated from wind and solar is fundamentally different than electricity generated by traditional generating resources that are not subject to the whims of the weather.

In the U.S., the Energy Information Administration (EIA) makes the same mistake. The EIA claims that wind and solar will account for the lion’s share of new generating capacity for the next decade and will provide electricity at a lower levelized cost than any traditional resource, including new natural gas generators.

But the episodic nature of wind and solar power has critical impacts on both supply adequacy and cost, which, while recognized by some, are nonetheless not incorporated into bottom-line data. Traditional coal, natural gas, nuclear, and hydroelectric generating plants can be scheduled to run when needed. Some of them, especially nuclear and most coal plants, are designed to operate continuously and are referred to as “baseload” facilities. Others, especially natural gas plants, can quickly be turned on or off (“dispatched”) to match changes in demand. Collectively, traditional generation can be both scheduled and dynamically managed, enabling the operators of electric grids to reliably meet demand at the lowest cost.

The inherent intermittency of wind and solar reduces the physical and economic value of their capacity relative to traditional generating resources, as sufficient reserves or storage must be maintained to meet demand when they are unavailable. Merely reporting total wind and solar capacity misleads because it does not account for the adequacy of the electrical energy generated to meet demand and the actual costs to do so.

Here’s an analogy. Imagine that a city and its citizens are offered two types of buses for commuting. One is with new buses and free fares. However, these run only one-third of the time, are often unpredictable, and are less likely to show up on bad-weather days. If you wait for one of these new free buses but it fails to show up, you must suffer the inconvenience of having to take a relatively expensive Uber ride, which can cost even more on busy or bad-weather days. Meanwhile, the other option is to pay a modest fare (say, one-tenth of an Uber ride) on a conventional bus—but one that’s reliable, regardless of weather. Over a year of commuting, the total costs for the “free” bus service are likely to be much higher and the value much lower than commuting on the conventional bus service.

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You wake up to an alarm, flick on the light, brew coffee, and drive to work. Every step requires energy – the stuff that shares the coin of physical reality with matter, the E in E = MC2.  It keeps homes warm, food fresh and economies running. 

Supplying 80% of the world’s primary energy, coal, oil and natural gas make up the lifeblood of modern civilization. Yet, there continue to be calls for the abandonment of these fuels without any feasible, scalable replacement in sight. 

It is dishonest for “green” lobbyists to claim that electricity from wind and solar can replace fossil fuels, when currently most of the energy used in the world is not even in the form of electricity.

Electricity represents only about 20% of global final energy consumption. That means four-fifths of the world’s energy use comes from fuels that power ships, planes, trucks and industrial furnaces. Oil fuels vehicles, natural gas provides heat for homes and industry, and coal is critically important for the manufacture of steel from iron.

Demand for hydrocarbons is expected to exceed that of electricity for many decades.

You’ve probably heard it before: “Solar and wind are now cheaper than fossil fuels.” This is a falsehood supported by a misleading metric – the levelized cost of electricity (LCOE). When Mark Twain spoke of “lies, damn lies and statistics,” he had LCOE in mind.

LCOE purports to present an apples-to-apples comparison between various energy sources. However, the measure is meaningless because it ignores key costs such as those of providing backup power to compensate for the intermittency of solar and wind. Something must be available to step up when the wind and sun are not available for power generation.

While it may be true that sunshine and wind are “free,” converting them to a form of energy that works with modern power grids and integrating them into the 24-hour operation of electrical systems supplying millions of customers is difficult and expensive. 

A 2022 study by Robert Idel exposes LCOE’s flaws.

First, LCOE assumes constant output, but solar and wind produce only 20%-30% of their designed capacity, compared to 80%-90% for plants running on coal, natural gas or nuclear fuel.

Second, integrating solar and wind requires expensive infrastructure, including new transmission lines between population centers and remote industrial installations of wind turbines or solar panels or to natural gas plants standing by as backups. 

Third, LCOE ignores more subtle but, nonetheless, important operational considerations. For instance, as the output of solar and wind rises and falls with changes in the weather or daily westward progression of the sun, fossil fuel plants must ramp up or down, reducing efficiency and raising costs.

The rosy numbers of LCOE don’t reflect the reality of electricity bills. In California, where so-called renewables make up more than 50% of electricity generation, residential rates hit 30 cents per kilowatt-hour in 2023 – more than double the U.S. average.

Higher energy prices infiltrate every corner of life – manufacturing, logistics, heating, cooling, farming, data storage and more.

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Ask families in Germany and the UK what happens when more and more supposedly “cheap” solar and wind power is added to the national power mix, and they can tell you by looking at their utility bills: It gets far more expensive.

The idea that power should get cheaper as we get more green energy is only true if we exclusively used electricity when the sun is shining and the wind is blowing.

But modern societies need power around the clock. When there is no sun and wind, green energy needs plenty of backup, often powered by fossil fuels. What this means is that we pay for not one but two power systems.

And as the backup fossil fuel power sources are used less, they need to earn their capital costs back in fewer hours, leading to even more expensive power.

This means real energy costs of solar and wind are far higher. One study looking at China showed that the real cost of solar power on average turns out to be twice as high as coal, while a peer-reviewed study of Germany and Texas shows solar and wind are many times more expensive than fossil fuels.

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