How Much Do The Climate Crusaders Plan To Increase Your Costs Of Electricity? -- Part III

Now that Democrats are going to control the House starting in the new year, what’s the agenda? How about a “Green New Deal”! Naturally, new “it” Congresswoman Alexandria Ocasio-Cortez (my daughter lives in her district!) will be leading the charge. From Ms. Ocasio-Cortez’s website:

The Plan for a Green New Deal (and the draft legislation) shall be developed in order to achieve the following goals, in each case in no longer than 10 years from the start of execution of the Plan: 1. 100% of national power generation from renewable sources. . . .

And that’s just the start of a long list of proposals. Of course, no costs are attached to any of this. Over in the progressive universe, they are already feeling the excitement. As one example among many, this is from Think Progress yesterday:

More and more Democrats are committing to supporting a sweeping, historic green effort that would transform the U.S. economy in an effort to fight climate change, in the latest indicator that environmental issues will be a dominant force in 2019. As of Wednesday morning, the Sunrise Movement, a climate group led by young people, said at least 15 Democrats are willing to sign onto supporting the formation of a select committee to create a “Green New Deal” endorsed by Rep.-elect Alexandria Ocasio-Cortez (D-NY). 

OK then. And how much will this increase your costs of electricity? Remarkably, in all the articles reporting on the Green New Deal proposal and the excitement surrounding it, I can’t find a single one even raising that question. Is this just beyond the bounds of polite conversation? If your costs of electricity were going to go up by even 10 or 20 percent, wouldn’t that be a critical piece of information that you would want to know? And how about if the prospective cost increase were much, much more?

I previously did my own back-of-the-envelope work on this issue, on which I reported in two posts in August 2016, “How Much Do The Climate Crusaders Plan To Increase Your Costs of Electricity” Part I and Part II. My very rough estimate was that the prospective increase to get to a 100% renewable grid would be at least in the range of multiplying the cost of electricity by a factor of 5 or 10. I also reported in August this year on some work from MIT researchers on the seasonality of wind and solar generation, which has a very large effect on the costs of getting to 100% renewable electricity. That work implied cost increases even greater than my own previous estimates, like a factor of 15 or more.

And now comes along a guy named Roger Andrews, writing at the website Energy Matters on November 22, who takes this question to a new level of thoughtfulness and detail. His post is titled “The cost of wind & solar power: batteries included.” The conclusion: using a pair of case studies and assumptions that appear reasonable to me, the effect on cost of electricity would a cost increase in the range of a factor of 14 to 22.

How could that possibly be? I mean, we have our own government’s highly-perfumed Energy Information Agency putting out figures for what they call “Levelized Cost of Energy” that seem to indicate that wind and solar are competitive if not cheaper than coal or natural gas for generating electricity. Could they really be that far off?

The answer is that the government’s LCOE figures are just a simple misdirection designed to deceive you. LCOE tells you what it will cost you to get your next kWh of electricity from a windmill, assuming that you will accept it whenever it chooses to show up and that you have no obligation to supply a grid that must match consumer demand near-perfectly 24/7 and year-round.

If you want a 100% renewable grid that will match demand 24/7/365, here are the big issues that are not included in the EIA’s LCOE: (1) Capacity factor. On an annualized basis, wind and solar generators can produce only about 20-30% of their rated capacity (depending on where they are — some places are sunnier and/or windier than others). That means that to get to a 100% renewable grid for starters you will need 3 to 5 times as much generation capacity from solar panels and/or wind turbines than would have sufficed from coal or gas plants. But it turns out that that vast extra capacity is not the biggest contributor to the cost increase. (2) Storage. This is by far the bigger contributor to the cost increase. Since the hypothesis is that dispatchable fossil fuel back-up is no longer allowed, you will now need storage, presumably batteries, to save up power from times of excess production to be used at times of under-production. (3) Seasonality. Finally, and critically, you will need far more storage than you ever imagined. It’s not like you have a simple situation where one calm day regularly gets followed by one windy day, and a day’s worth of storage will take care of it. Rather, solar and wind tend to generate far more power in some seasons than others, and once you get to the amount of capacity that will generate the aggregate amount of power that you need for the year, you might find that it will take a whole month’s worth of battery storage to save up the energy from the sunny/windy season to be used in the dark/calm season.

Andrews takes on two cases, Germany and California. He has actually collected day-by-day demand data for both locations, as well as day-by-day production data from existing wind and solar generation facilties (in both cases, 2016 data for Germany and 2017 for California). He assumes that solar and wind capacity is added until aggregate annual generation equals aggregate annual demand. And then he looks to see how much of a surplus from the high sun/wind times of year you will need to build up in each case to get you through the low sun/wind times of year.

For example, in California, Andrews finds that “There are large surpluses in the spring and early summer months and large deficits in the winter months.” Here is his chart comparing wind/solar generation (extrapolated to meet 100% of annual demand) to demand.

Germany electricity supply:demand.png

You can see the clear pattern of large surpluses in the spring and early summer and deficits in the winter. Note that California’s peak demand (shown on the chart) is around 40000 MW. It’s a simple arithmetical calculation from these data to figure out how much battery storage you will need to build up at the peak to carry you through the trough. The answer is, about 25,000 GWh. Yes that’s gigawatt hours. That is more than a month’s average usage. Here is Andrews’s chart for the amount you will have in storage at any given time if you use your solar and wind facilities to generate all of your power and let it out in times of underproduction:

Germany required storage.png

You need to build up surplus from March through August to use through the rest of the year. Andrews then uses an assumed cost of storage of $200 per kWh — which is about half of current cost, but hey, everybody is predicting the cost to go down. Unfortunately, there are a lot of kWh’s in a GWh (a million, in fact). The batteries alone for this project are going to run you around $5 trillion — around double the entire GDP of California. Cost of the actual wind turbines and solar panels — for capacity five or so times peak usage — are extra of course.

The story for Germany is roughly the same. Actually, Germany’s wind/solar production proves to be somewhat less seasonal, meaning that the annual storage peak comes out to around the same 25,000 GWh, even though the population of Germany is about double that of California. So Germany can get by with the same $5 trillion worth of batteries, which is only about 1.5 times its GDP, as opposed to double GDP for California.

So let’s cut to the punch line: How much will the cost of electricity increase for a 100% wind/solar generation system backed up by this type of battery? Andrews:

The combined wind + solar LCOE without storage was $50/MWh . . .

I then estimated wind + solar LCOEs with battery storage capital costs included. This was a straightforward exercise because reducing baseload + load-following generation in direct proportion to the increase in wind + solar generation results in LCOEs that are the same regardless of the percentage of wind + solar in the generation mix. The NREL calculator showed:

  • LCOE Case A [Germany]: $699/MWh

  • LCOE Case B [California]: $1,096/MWh

These ruinously expensive LCOEs are entirely a result of the added costs of storage batteries, which in the 100% wind + solar scenarios approach $5 trillion in both Case A [Germany] and Case B [California], compared to wind + solar capital costs of ~$300 billion in Case A and ~$160 billion in Case B.
So, increasing the cost of electricity by a factor of about 14 for Germany, and 22 for California.

Some might say that it is critical that we head off this kind of idiocy before it gets too far. For me, I would actually like to see somebody try it. It will be a disaster of unimagined proportions, perhaps bringing the world to its senses.