Picking and Choosing

Picking and Choosing

It’s been interesting to read all the glowing stories about how renewables are competitive with coal and natural gas power plants. 

Here is a headline from Forbes:

Production Cost Of Renewable Energy Now ‘Lower’ Than Fossil Fuels

The stories piqued my curiosity so I finally obtained a copy of the Lazard report that was being widely quoted.

It was immediately obvious that the glowing stories were based on picking and choosing the most favorable data from the report.

While the graphics (bar line) in the report showed the LCOE (levelized cost of electricity) for solar could be as low as 4.3, i.e., 4.3 to 5.3, cents per kWh, the footnote disclosed that it was for an installation in the Southwestern United States, in other words the best possible location for insolation in the Continental US.

Meanwhile, for PV community solar, the LCOE ranged from 7.6 to 15 cents per kWh, with the lowest LCOE from the Southwestern US.

Clearly, PV solar isn’t competitive with coal or natural gas except in the most favorable locations, so headlines saying,  Renewables are competitive with coal and natural gas”, are highly misleading.

And, of course, there was no consideration for the fact that solar only generated electricity during the day and was unreliable since clouds could cut output to zero.

The Lazard report was even more misleading when it came to concentrating thermal solar tower with salt storage, claiming the LCOE ranged from 9.8 to 18.1 cents per kWh, when in fact, the only such installations in the US haven’t performed as advertised. They noted that concentrating solar without storage was 23.7 cents per kWh.

For comparison, new natural gas power plants have LCOEs of 6 cents per kWh, while existing coal-fired power plants have LCOEs of less than 6 cents per kWh.

The story for wind LCOEs is even more intriguing as they include “the Americas”, i.e., countries throughout North and South America, specifically Argentina and Brazil, and also countries in Europe, specifically Denmark, the Netherlands, and the UK.

Wind turbines near Copenhagen, Denmark. Apparently, European wind is included in Lazard wind analysis. Photo by D. Dears

There is no explanation as to why conditions in Europe and South America are relevant to the United States.

In addition, the Lazard LCOEs use capacity factors that have not yet been routinely seen in the United States. 

For example, the LCOE for Texas, which somehow includes Argentina and Brazil, use capacity factors as high as 55%. The Energy Information Administration (EIA) show no capacity factor above 42% in the United States and most are closer to 30%.

As for the LCOE for coal-fired power plants, the Lazard report shows a range of 6 cents to 14 cents per kWh, but it’s necessary to dig deep into the report to see that they have included the cost of 90% carbon capture and storage (CCS) for the upper end.

CCS is a fool’s errand and has no relevance in any analysis of LCOEs.

It’s disturbing that supporters of renewable energy stoop to such absurd headlines when the facts show they are merely picking and choosing the most favorable data from the most favorable, and frequently isolated locations.

There are nearly always exceptions to the rule, and it’s highly probable that there will be isolated situations in the United States where solar and wind will have LCOEs as low as those for coal-fired and natural gas power plants, but even so, they will not account for the added costs associated with wind and solar being unreliable and requiring back up power or more costly storage.

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2 Replies to “Picking and Choosing”

  1. Thank you. I see so many claims that solar and wind are the lowest cost power that it’s good to be reminded of how unreliable such claims are.

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