Renewable power advocates often claim wind and solar are less expensive energy sources than coal, natural gas and nuclear power. Such a claim begs the question of why the heavily subsidized Ivanpah solar power facility is going out of business, following a long line of other renewable energy project bankruptcies. Also, why would most of the world continue to build coal power plants if it is more expensive than wind and solar? The answer is wind and solar are expensive, financial losers. A recent peer-reviewed analysis proves that point.
A recent study, published in the peer-reviewed journal Energy, reports on the full-system levelized cost of electricity generation. The term “full-system” is key. Many entities have assessed what it costs utilities to purchase or produce electricity from existing sources and deliver it to customers. These cost assessments, however, ignore the intermittency of wind and solar and how intermittency adds substantial costs to the entire electric grid. The cost assessments also fail to account for how wind and solar projects cannot be built just anywhere and often require new, long, expensive, and inefficient transformation lines to deliver power from the generation locations to consumers. This also adds substantial costs to the overall electric grid.
The peer-reviewed Energy study analyzes these factors and presents an apples-to-apples cost comparison on the full-system cost of wind, solar, coal, natural gas and nuclear power. The verdict is devastating to wind and solar power and explains why most of the world prefers to build coal and natural gas power plants.
Geographic location is a significant factor in the cost of producing wind and solar power. For example, producing solar power in Germany, with its northern latitude and frequent cloudiness, is three times more expensive than producing solar power in the southern latitude and general sunniness of western Texas.
Indeed, Texas is about as favorable an environment as there is for wind and solar power. In western Texas in particular, the southern latitude, predominant sunshine, and persistent windiness make for extremely favorable conditions for wind and solar power.
Even in Texas, however, the Energy study shows wind and solar power are prohibitively expensive. The peer-reviewed study shows solar power produced in Texas is more than triple the cost of nuclear power, more than quadruple the cost of coal power, and more than 10 times the cost of natural gas power.
By the full-system numbers, solar power in Texas costs $413 per megawatt hour (mwh) of generation. Wind power costs $291 per mwh. Nuclear power costs $122. Coal power costs $90. Natural gas power costs merely $40. That is a huge price differential between wind and solar versus all other energy sources.
In most places, it costs even more to produce wind and solar power than in the favorable climate conditions of Texas. So, the disparity is typically greater than the numbers reported above.
Another important factor to consider is a typical proposal for a new wind or solar power project does not entail building wind and solar to fill an imminent new power need. Typically, climate activists and monopoly utilities propose shutting down a perfectly operating – and already built and paid for – coal, nuclear, or natural gas power plant and replacing it with wind and solar. Building a new wind or solar power project to provide power is substantially more expensive than building a new coal, nuclear or natural gas power plant to provide power. Shutting down an already paid-for coal, nuclear or natural gas power plant to build an expensive new wind or solar project makes even less economic sense.
Utilities often support such wind and solar madness because they make a financial killing on wind and solar projects. Governments typically guarantee monopoly utilities an approximately 10% profit on their expenditures, including the cost of building new wind and solar projects. Construction for large solar projects can cost $2 billion, $3 billion, or more. That means a guaranteed utility profit of $200 million or more per project. A utility pushing for more wind and solar power has nothing to do with saving consumers money and everything to do with stuffing the utility’s own pockets.
The next time some climate activist or wind and solar shill claims wind and solar are less expensive than conventional energy sources, point them to the peer-reviewed Energy study and the actual truth.
James Taylor (jtaylor@heartland.org) is president of The Heartland Institute.
This article was originally published at www.thecentersquare.com
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