The hidden cost of unreliables

Under-estimating the cost of wind and solar? Who would have thought?

A big part of our problem is that we are dealing with variables that are “not independent.” If we add subsidized wind and solar, that act, by itself, changes the needed pricing for all of the other types of electricity. The price per kWh of supporting types of electricity needs to rise, because their EROIs fall as they are used in a less efficient manner. This same problem affects all of the other pricing approaches as well, including LCOE. Thus, our current pricing approaches make intermittent wind and solar look much more beneficial than they really are.

Abandoned renewable energy plants. h/t Max in comments.

Our contribution at Wollongong.

This entry was posted in Global warming and climate change policy, Rafe. Bookmark the permalink.

49 Responses to The hidden cost of unreliables

  1. Bruce of Newcastle

    The biggest problem is that energy companies must take wind and solar electricity when it is available. That means the dispatchable generators, such as coal and gas, are legally prevented from selling their electricity when the wind is blowing.

    So the wind and solar operators are parasitizing the coal and gas operators, using them to cover the times when they can’t generate, but denying them a market at the other times. And because they are forced to be available at any time of the day or week they have to pay their staff and other fixed costs even when not allowed to sell electricity.

    If wind and solar generators were forced to compete on a level playing field they’d have to buy batteries and pumped storage systems to spread their product over 24 hours (or longer). That would triple their capital cost, and therefore roughly triple their breakeven electricity price.

  2. incoherent rambler

    From reading a graph at the link, I note, that Denmark has a retail price for electricity at about 32c, France at around 16c per kwh.

    I would like to pay 16c per kwh.

    Windmills versus nukes.

  3. v_maet

    Spot on Bruce of Newcastle.

    The Powering Queensland Plan and the Finkel Review promote renewables and says that prices will fall going forward due to increased supply.

    They ignore that promoting renewables will result in the closure of fossil fuel plants which will drive up prices.

  4. RobK

    The linked article is a good one and most of the comments are good too. It has a US setting but I thought this comment stood out:
    GeoJuly 25, 2017 17:50
    You miss the point entirely.

    Much like BoN says.
    Exel wants the government to tax other sources of energy. They want to do this because solar and wind are not completive without a subsidy – in this case raising the price of other energy sources to make solar and wind more competitive. the article explains that this does not work – it simply raises costs for everyone without substantially increasing solar and wind penetration. This is because of intermittency. Germany and Denmark are excellent examples of this, and world wide, the cost of energy is directly correlated to renewable penetration. The more renewable power you have, the more expensive the compensating factors to account for intermittency must be.

    Iowa will never be 100% renewable if they have a need to buy electricity from somewhere else to compensate for the intermittency – they are simply reducing the amount of renewable energy that will be utilized elsewhere in the system.

  5. Mark

    This is why we have engineers and economic analysts and so forth, so that after 25 or 30 years of intense research they can reach this astounding conclusion.

  6. RobK

    Additionally to Bruce’s point, the grid that services high penetration intermittents will need to be more robust to carry sporadic surges, even sith buffering of batteries and hydro (yet to be costed) because the power sources will play a merry tune of chaos as sunlight and wind vary by the minute. The new grid will need better instrumentation and controls(yet go be costed), more power conditioning equipment (yet to be costed), more regulatory impost and supervision (yet to be costed), and an intrusion into private consumers for voluntary computer controlled load shedding (smart grid). This is covered in the Finkel report but he doesn’t say it in so few words. As the grid becomes more complex reliability suffers. This promotes the installation of redundancy at a higher cost. This is a large scale experiment with little chance of economic success in my view.

  7. Dr Fred Lenin

    When it gets the fan. As it will the maggots responsible for this scam must be severely punished . The major profiteers shoukd get capital punishment ,the essercriminals long long jail time .even the minor media promoters shoukd lose jobs assets homes and only get the dirtiest jobs for life .simple justice demands they derive no profit ,assets homes ,make the bastards suffer for murdering poor people with the cold they inflicted ,see how they like it .

  8. Tim Neilson

    even the minor media promoters shoukd lose jobs assets homes and only get the dirtiest jobs for life .

    I’m envisaging loin cloths, leg irons, large fields of hard to harvest agricultural products, and survival rations issued as payment on a piecework basis.

  9. John constantine

    The transnational looting cartels are going blind from counting the war reparations the racist settler coal cultures are bleeding out to the corrupt, the crony and the criminal.

    Remember, as triggs told us, Australia is despised by those that draft climate justice legislation.

  10. RobK

    Regarding regulation, security and supervision, Finkel has quite a number of suggestions regarding setting up boards, panels etc and how often they should meet to discus the changing dynamics of the grid. What isn’t immediately apparent is that these boards will be dealing with an almost never ending stream of “teething”problems as they try to bed down one of the largest pieces of machinery on the planet. Finkel could not supply a blueprint of the grid but more a suggestion of how one might develop given CO2 needed mitigation and nukes were taboo. We can look forward to a generation of tweaking in response to unmodelled “issues”. It wouldn’t surprise me if sporadic surges over geographic locations found low frequency harmonics that resonate with the grids natural frequency to create unforseen disaster.

  11. Bruce

    And, conveniently, the “pushers” of this madness systematically disavow any knowledge of the “energy equations” associated with the extraction, processing, manufacture and transport of their technical abominations. Our rice-propelled cousins in China have been stitching up a LOT of the sources of the rare-earths and such that go into “good” PV panels. This has NOT apparently slowed their consumption of prime Australian coal. As Bob Dylan sang: “Something is happening here, but you don’t know what it is, do you, Mister Jones”.

    “Renewables” work “best” when used to provide local power to far-flung, “off-grid” locations, when the cost of a lot of Km of HV transmission cables on ludicrously expensive steel pylons vastly exceeds the cost of a “local” panel farm or bird-mincer forest. These “eco-“friendly” systems, however, still require regular maintenance and close monitoring for optimum performance. For several reasons, they are an engineering abomination when connected to the putative grid.

  12. Rabz

    Are we ever going to be free of this evil irrational idiocy?

  13. Art Vandelay

    Our contribution at Wollongong.

    Not to be outdone, the White Elephant State™ has its own:

    Oceanlinx damaged wave generator off Carrickalinga

  14. cohenite

    As well as fossils not being able to sell when wind is rarely producing fossils must buy the RECs issued by the renewables based on their production; so renewables get paid twice and the fossils rarely.

  15. Sparkx

    The only way I can see around the current debacle is that every electricity generator be required to provide a 24 hour supply. I don’t care if they have to build coal, gas, nuclear or cow dung fired plants or buy shit loads of batteries for when the sun ain’t shinin and the wind ain’t blowing. Every generator must be able to supply round the clock power or leave the market. Oh, and all subsidies for any type of power generation will cease. That would sort the sheep from the goats (or something).

  16. RobK

    Sparkx,
    That scheme would solve many problems. I believe some parts of Canada have regs along that line (but they do have more hydro). It’s still expensive….or just settle for what we had, but upgraded.

  17. amortiser

    In July, a DPTI spokeswoman said the department is aware of a similar situation with another Oceanlinx wave generator abandoned at Port Kembla, New South Wales, for more than four years.

    Despite this, she said the department is treating the Carrickalinga Beach situation as a unique event.

    Are these people a completely incapable of accepting reality? Even though this event occurred in the recent past to the same operator, they are treating this occurrence as if it had never happened before.

    Why should anyone be surprised? This is what the climate alarmists do in respect of every unusual weather event.

  18. jupes

    Are we ever going to be free of this evil irrational idiocy?

    Not in the short to medium term.

    ABC radio interviewed the fuckwit running the ACCC, who has just been given the brief by Turnbull to look at electricity prices.

    Main point: De-regulation is the main cause of price rises.

  19. RobK

    Envisage the following when the grid is fully decked out with all the bells and whistles of a modern iPhone and suddenly the grids conductors themselves become the source of energy and fry the whole shooting match because…..
    From Wikipedia:
    “The Solar storm of 1859—known as the Carrington Event[1]—was a powerful geomagnetic solar storm during solar cycle 10 (1855–1867). A solar coronal mass ejection hit Earth’s magnetosphere and induced one of the largest geomagnetic storms on record, September 1–2, 1859. The associated “white light flare” in the solar photosphere was observed and recorded by British astronomers Richard C. Carrington (1826–1875) and Richard Hodgson (1804–1872).

    Studies have shown that a solar storm of this magnitude occurring today would likely cause more widespread problems for a modern and technology-dependent society.[2][3] The solar storm of 2012 was of similar magnitude, but it passed Earth’s orbit without striking the planet.[4]”

    The grid needs to be as simple and bulletproof as possible. A risk assessment I read a decade or two ago by the US government concluded they would have lengthy delays of weeks to months because they don’t have sufficient spare transformers on hand. Keep it simple.

  20. Dr Fred Lenin

    Why dont the fossil fuel generators make daily announcements of the amount of power they supply . Like “today fossil fuel supplied 96 percent of power used ” . Surely the lack of input from renewables can be exposed to the public ,its only the truth isn’t it ? Expose the carpetbagger s as the sleazy bastards they are ,then prosecute and jail them after their family assets have been confiscated. Let the corrupt greedy law trade get the lions share. then audit them severely and take them to the cleaners for a Cleaner Australia .

  21. RobK

    Dr Fred,
    Tony from Oz, on JoNovas site is doing a blog every weekend on the open thread doing just that. Like so many of us, preaching to the converted, unfortunately.

  22. anker

    Why dont the fossil fuel generators make daily announcements of the amount of power they supply .

    The fossil fuel generators (*cough* AGL *cough*) don’t want to miss out on their share of the renewable energy slush fund.

  23. BoyfromTottenham

    Yes, Dr Fred -I wonder myself that the FF generators are so silent in the face of the LRET while they slowly go bankrupt. As I understand it, this legislation forces them to stop generating (or stop selling their power) whenever any wind or solar power is available. This is insane, and has the clear effect of making the FF generators progressively uneconomic (as the amount of MWh under the LRET ramps up each year, and their sellable output drops), except for those (generally gas-fired stations) smart enough to game the system by waiting for those times when the wind isn’t blowing / sun isn’t shining and the coal-fired stations cannot meet demand and the spot price shoots up. The high spot price allows the smart generators to cherry-pick the ‘market’, which they then pass on as higher retail power prices to us mug punters. The wind and solar generators don’t have to cherry-pick, the LRET does this for them by both guaranteeing the sale of almost all their electricity, and allowing them to create and sell between 1 and 2 ‘cash-like’ LRECs worth $85 or so for each MWh they send to the grid. Note: The LREC legislation says they should be eligible for only 1 certificate for each MWh sent to the grid, but have a look at the worked example on the CER website here, where the ficticious generator gets 1.8 certificates: http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Power-stations/Large-scale-generation-certificates/Large-scale-generation-certificate-eligibility-formula. What a bl00dy scam!

  24. Nerblnob

    Don’t forget all the diesel gennies everyone has to buy and run for backup.

  25. Mundi

    The good news is that once process start passing 66c/kwhr, it will be cheaper to just have a diesel generator charging batteries and run an inverter than bother with the grid.

  26. egg_

    The only way I can see around the current debacle is that every electricity generator be required to provide a 24 hour supply.

    +1

    Or face disconnection from the Grid and nil revenue in the interim – minimum nameplate capacity online for 24/7 or p1ss off – if you’re reliant on wind, etc., you’d better have a good convention fallback or POQ.

  27. john clark

    The link to the wave generator claims the future of the equipment is in doubt. The website of the NSW Roads and Maritime Services states that 5 million dollars has been allocated for a contract to remove it.
    The only doubt is how this is to be done.
    This is the first of the brave new renewable energy projects. The third sank off the coast south of Port Adelaide a few years ago, having only made a few miles down the coast on its way to Victor Harbour.
    The fate of the second unit is a mystery. This was to be built near the Naval facility in WA. Julia Gillard claimed the Navy would buy the electricity and make it a viable , long term renewable alternative. I know the Navy were unhappy about having it foisted on them .
    Maybe they scuppered it.

  28. Wil

    And, as a farmer friend said recently, this wind turbine in my back paddock may be bringing in a good few dollars now, but did you know that the deactivation and ground restitution costs at the end of its life will be my responsibility? The estimate is about a $1M in today’s money, it’s written into the contract.

  29. John constantine

    The reason that wind turbines are built on leased ground, not purchased ground is so that the hideous end of life decommissioning costs can be dumped on the landowner after the front end loaded profits are stripped out.

    The ones built down to a price are not going to last twenty years. A looming financial debacle beckons rural Australia.

  30. Mr Black

    When this renewable energy scam falls over a lot of people, including politicians should be imprisoned for the rest of their lives. This must surely be the most colossal fraud in history and is costing trillions of dollars worldwide. If those involved at the top of it are not utterly ruined then we may as well pack up the rule of law and return to street killings.

  31. jupes

    Remember Corporal Klinger on Mash?

    He was trying to get out the army by claiming he was mentally incompetent. He did this by dressing as a woman.

  32. And, as a farmer friend said recently, this wind turbine in my back paddock may be bringing in a good few dollars now, but did you know that the deactivation and ground restitution costs at the end of its life will be my responsibility? The estimate is about a $1M in today’s money, it’s written into the contract.

    Wow, so the scamming unreliables company – subsidised to the eyeballs – doesn’t even have to fork out for the decommissioning and restitution of the land when its funky machinery dies? No wonder there’s such a determined effort to foist this shit on us. As always it’s all about the money – the money for the unreliables carpetbaggers, that is. Disgusting.

  33. This country is stuffed. This “global warning” scam and the resultant “renewables” lies have put the last nail in the coffin lid of our economy and any kind of affordable lifestyle. We might as well just sit on the verandah and get pissed while we watch it burn now. Why waste the effort trying to fight the planned destruction?

  34. Nerblnob

    What’s happening with that one at Port Fairy?

    Nothing in the Google search except what a great success it’s going to be anytime soon and could we have some more money please?

  35. overburdened

    My observation is that The Governing clique has not matured yet to have original ideas. Without original ideas the Australian Way has been to suck in anything different from O/S, badge it as ‘new’ to show how up to date the local thinkers are, then implement the idea with the aspect of adjusting the idea to local conditions as part of tactical planning. The outcomes are evident in the failures we see. South Australia being the crazed Dominion of Weather-ill (hyphen inserted for emphasis to show I have the Oz dag disease and claim no superiority) has the internationally recognised fiasco of their dodgy energy supply at cost regime in an ostensibly leading economy. More broadly, the embrace of the ‘Business Model of Government’ which is basically to go from providing service to the great unwashed as the first priority to amortising the cost of such activities. The great adopted concept of Privatisation which preceded the ‘BMoG’ was both a cash cow and a stimulator of the ‘BMog’. This of course requires buying off the entitled and indolent which has turned Australia into the churn monster it is.
    It’s little wonder with a track record of parroting and worse trying to emulate any big new idea from overseas (so it must be good), the Country is st#ffed. Australia is unique in the world. The largest island, the least number of people per sq Km outside of parts of eastern Eurasia and Antarctica, abundant and diverse materials and opportunities for primary production. The distances between major populations. The diversity and challenge of the geography. The generally engaged and empathetic population. I could go on. The only thing that could inspire our change makers to have a master plan to reshape our country into a shit hole akin to the Globalist manifesto is a deep seated inferiority complex and a lack of self belief in the Country. The everyday, non-anything Ozzie who has nothing to bring to the table other than their strong back and tax-paying capacity knows that despite the noise, they are in fact required or the wheels would have fallen off completely by now. I sense that they also know the Global Warming/Change canard is about destroying their world as they see it. We will continue to complain about it as our best years sink from trace. Far out I carry on.

  36. Rayvic

    Bill Shorten said that he will fight inequalities.

    That implies that Bill will acknowledge the hidden costs of unreliables. Don’t bet on that.

  37. OneWorldGovernment

    overburdened
    #2452729, posted on July 27, 2017 at 11:08 pm

    +++++

  38. OneWorldGovernment

    Apart from Jo Nova or WUWT go and have a look at The Pointman article

    https://thepointman.wordpress.com/2017/07/21/solaris-two/

  39. cynical1

    Renewable energy is free.

    IF you can harness it.

    You ever see a sailor who doesn’t need a yacht?

    And as well as a boat, smart yachties have an auxiliary engine.

    More efficient at certain times and for certain jobs.

    TANSTAAFL.

    Well, unless you can rort a subsidy from someone.

  40. John constantine

    Ruinables windmills are actually reliable for their intended purpose.

    The great transnational looting cartels fully intend windmills to transfer the wealth of the West to the dictator ruled hellhole nations of the world.

    The resolutions Australia’s quisling class have signed us up to use climate justice as their looting weapon.

  41. BoyfromTottenham

    Dr Fred and others. I have built a simple spreadsheet using the Clean Energy Regulator’s eligibility formula for LRECs, and using the example on the CER website a renewables generator that produces 100 MWh but only delivers 50 MWh to the grid is eligible for 90 certificates (= 1.8 certificates per MWh, not 1 certificate per MWh as the CER website claims and the legislation intends. Using the CER’s formula, if the same generator is highly efficient, and sends 90 MWh to the grid, it is eligible for 86 certificates (= 0.96 certificates per MWh), and if it is very inefficient and only sends 30 MWH to the grid it is eligible for 92 certificates (=3.07 certificates per MWh). So ‘renewables’ generators are rewarded more for being inefficient than for being efficient! Can someone check my maths and tell me if I am right or wrong here?

  42. RobK

    BfT,
    I went over this in a previous post on the subject. That formula allows for some energy to be used onsite for purposes that would otherwise have imported power (e.g. running the factory during the day), then it disallows energy used to facilitate the renewballs (eg.say cooling of the inverters). Then it allows export to the grid but deducts a transmission loss factor. So it pays for saved CO2. Of the 100MWh produced in the example 40MWh are credited as used in the factory (never got to the grid), 5 MWh were consumed to produce the energy(thus not credited, 50MWh were exported to the grid but only 45MWh are paid for because 5MWh are deduced as transmission losses. The certificates are for CO2 mitigation not grid energy production per se. They just happen to be in MWh units and mainly apply to electricity, that will change in time on the current policy trajectory. Something to look forward to. 🙁

  43. RobK

    Oops, should be “45MWh are credited as used in the factory (never got to the grid). Not 40. So 45+5+45+5=100 but only 90 are paid out.

  44. BoyfromTottenham

    Yes, RobK but the legislation says that generators will be eligible for a certificate ‘for each MWh delivered to the grid’, or words to that effect, but in the worked example (that you quoted), the generator gets 1.8 certificates (90) for sending 50 MWh to the grid. Therefore the formula does not give the intended result, in fact it rewards inefficient generators with more certificates per MWh than efficient ones. The difference could amount to around $1 billion a year in windfall profits for the renewable generators, paid for by every ordinary electricity user, at roughly $170 on every householders electricity bill. Please let me know where I am in error. BTW, The last sentence in your last post actually agrees with me (the generator gets 90 certificates for sending 50 MWh to the grid), except you say 45. Definitely not ‘1 certificate for every 1MWH sent to the grid’.

  45. RobK

    BfT,
    The certificates are issued for usable energy regardless of whether it goes to the grid or not, so long as it replaces what would otherwise have been supplied by fossil fuels. (it can even be off grid).

  46. truth

    This whole frantic escalation of the juggernaut to RE is just the agenda of the Big Money financial sector IMO…to get in on the gravy train and make the huge fortunes before it all hits the fan and the general public realizes they’ve been dudded….that wind and solar can’t sustainably power an industrialized nation.

    And anyone so Philistine as to suggest that on one of their sites is likely to be banned from commenting….as I was.

    Their daily puffing about the almost fait accompli RE revolution …the wonders of storage…the sneers about the backwardness of the Luddites who suggest that to have a 100% weather-dependent energy system might be a risk…all that hype is meant to be absorbed as gospel…never never to be questioned by those in lower and middle-income brackets whose money is being shifted straight from their pockets into the coffers of the already uber-rich …so they can quickly get richer before it becomes obvious that Australia is being made poorer.

    When you point out the untruthfulness of many of the claims about their poster countries for RE takeover…the stories about those countries’ great success that are designed to make Joe Blow believe resistance is futile…that the conversion of the world to RE is ‘fast…unstoppable and virtually complete’…..then you will be for the flick.

    Here in Australia the Big Money sector wants to fire up Australian RE converts to think we have to burn all our fossil fuel bridges ….eradicate coal…game the bidding system even more than it already is…to hasten the fervently-desired ‘end of thermal power’.

    Terms implying vermin are used for the fuel that still powers almost everything that maintains growth and jobs ….not just here but everywhere….and we must not just subsidize but canonize …worship almost…weather-dependent unreliable wind and solar …or we’re left behind.

    The RE carpetbaggers and cultists alike apparently see high prices and unreliable power…blackouts and deindustrialization as acceptable collateral damage that Australians must endure to ensure the eradication of coal….as if it were a cockroach plague.

    They put up examples for Australia to emulate…California…Germany..Spain..Denmark…many US states….but none of them…not one…stacks up as a RE success story when the facts are examined…and even if they were..ALL have alternatives should their windmills and solar fail.

    The demagogues don’t want their cultists to know California’s iconic …hugely subsidized solar plants have huge problems…one of them offline now for almost as long as it’s been in operation….the others faltering. ..that California has to import electricity from other states…that in spite of a Musk battery [supposed] rescue, California faces rolling blackouts this year.

    But at least California has alternatives .. it still gets 50% of electricity from gas….9.6% from nuclear ..wind and solar only providing 17%….and of course there’s the lead to Arizona.

    Australia on the other hand is completely ALONE in our vulnerability…with no alternatives once they use the bogus claims of cheap reliable RE to kill off coal.

    We have nowhere we can run a lead to.. as California does to Arizona…as Vermont and Maine do to Canada…as Germany does to France and Denmark does to Sweden …and those countries also have base load fuels…Germany building NEW BROWN COAL plants as well as having …like the others ….access to …nuclear and hydro.

    We have NONE of THAT…they want us out on a dangerous limb.

    The thing for Australians to ponder instead of listening to all the puffery…is that after trillions have been spent…only 1.3 % of the EARTH’s ENERGY MIX is wind and solar and of that a statistical 0% is wind…IEA figures… that fact depicting a world that’s RELYING on coal….gas…hydro…nuclear…-none of which Australia will have to fall back on if the cultists and Big Money have their way.

    Australians should ask themselves before it’s too late if they’re willing for Australia to be the ONLY country in the world to commit economic and social suicide…to destroy our children’s futures…and to do it for a Socialist hoax…. as anyone with a modicum of commonsense will conclude if they read everything they can find on CAGW.

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