<![CDATA[Grist - Comment Feed for RE less than G]]> Grist Comment Feed en Comment #1 by bolson http://www.grist.org/article/2009-06-24-re-less-than-g/ Wed, 24 Jun 2009 12:25:03 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/1 from the linked pdf: "The Project’s primary fuel is sunlight.  The Project does not require a supplemental gas powered electrical generation facility as backup." That's just a nice couple of sentences.

 

So, .23 GW of generation capacity down, 314 GW of coal and 394 GW of gas to go.

]]> from the linked pdf: "The Project’s primary fuel is sunlight.  The Project does not require a supplemental gas powered electrical generation facility as backup." That's just a nice couple of sentences.

 

So, .23 GW of generation capacity down, 314 GW of coal and 394 GW of gas to go.

]]> Comment #2 by Sean Casten http://www.grist.org/article/2009-06-24-re-less-than-g/ Wed, 24 Jun 2009 12:25:24 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/2 Apples and oranges, unfortuantely, Adam.  The price a solar developer sells power for factors in all the tax credits and RPS mandates on the utility.  Without opining as to whether those incentives are too high, too low, or just right, one can confidently assert that they do not apply to fossil-fired generators.

(Indeed, the 30% PTC that PV earns is alone worth something like $190/ton of CO2 reduction - well more than any other technology has access to.)

In other words, saying that PV is now cheaper than the fossil fuel alternative is like saying that... well, like saying that fossil fuels are cheaper than renewables.  Both benefit from significant subsidies, and comparison of the prices that are paid to either inclusive of those subsidies doesn't provide much of a point of comparison - other than to compare the all in, subsidy-inclusive economics of both.

]]> Apples and oranges, unfortuantely, Adam.  The price a solar developer sells power for factors in all the tax credits and RPS mandates on the utility.  Without opining as to whether those incentives are too high, too low, or just right, one can confidently assert that they do not apply to fossil-fired generators.

(Indeed, the 30% PTC that PV earns is alone worth something like $190/ton of CO2 reduction - well more than any other technology has access to.)

In other words, saying that PV is now cheaper than the fossil fuel alternative is like saying that... well, like saying that fossil fuels are cheaper than renewables.  Both benefit from significant subsidies, and comparison of the prices that are paid to either inclusive of those subsidies doesn't provide much of a point of comparison - other than to compare the all in, subsidy-inclusive economics of both.

]]> Comment #3 by Adam Browning http://www.grist.org/article/2009-06-24-re-less-than-g/ Wed, 24 Jun 2009 16:33:57 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/3 Sean, if your point is that there are so many imbeded subsidies and uncollected externalities in every energy source, fossil and renewable, to the point that it is impossible to say anything meaningful about 'true' prices and costs of anything, then I'm with you.  For whatever that's worth.  But if I had a nickel for every time I read a report putting the cost of solar at 50, 60 cents kWh, I'd be a rich man.  So this contract--with gametime technology, btwn reputable parties--is a useful corrective and a relevant point of reference.

]]> Sean, if your point is that there are so many imbeded subsidies and uncollected externalities in every energy source, fossil and renewable, to the point that it is impossible to say anything meaningful about 'true' prices and costs of anything, then I'm with you.  For whatever that's worth.  But if I had a nickel for every time I read a report putting the cost of solar at 50, 60 cents kWh, I'd be a rich man.  So this contract--with gametime technology, btwn reputable parties--is a useful corrective and a relevant point of reference.

]]> Comment #4 by Sean Casten http://www.grist.org/article/2009-06-24-re-less-than-g/ Wed, 24 Jun 2009 18:06:32 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/4 Well... it is possible to say something.  A 30% ITC to a $6000/kW PV array is worth $2000/kW.  Assume a 20% load factor and a 10 year system life and that's 8760 x 20% x 10 years = 17,520 kWh/installed kW, so the $2000/kW is worth 2000/17520, or 11.5 cents/kWh.  That's a massive subsidy, certainly higher than that obtained by any other clean technology.  And the biggest estimates I've seen of the total subsidies to coal (the highest subsidized of the fossil techs, by my count) is in the ~6 c/kWh range.

For comparison, US average retail rates are 9 cents/kWh.  So they're all big - but PV is the biggest recipient. 

Again, my purpose here isn't to knock PV, but simply to note that lots of technologies are competitive with fossil if you give them an 11.5 cent/kWh subsidy.  Which proves only that 11.5 cent/kWh subsidies are sufficient to make them competitive.  It doesn't provide any underlying insights with respect to PV cost trends.

]]> Well... it is possible to say something.  A 30% ITC to a $6000/kW PV array is worth $2000/kW.  Assume a 20% load factor and a 10 year system life and that's 8760 x 20% x 10 years = 17,520 kWh/installed kW, so the $2000/kW is worth 2000/17520, or 11.5 cents/kWh.  That's a massive subsidy, certainly higher than that obtained by any other clean technology.  And the biggest estimates I've seen of the total subsidies to coal (the highest subsidized of the fossil techs, by my count) is in the ~6 c/kWh range.

For comparison, US average retail rates are 9 cents/kWh.  So they're all big - but PV is the biggest recipient. 

Again, my purpose here isn't to knock PV, but simply to note that lots of technologies are competitive with fossil if you give them an 11.5 cent/kWh subsidy.  Which proves only that 11.5 cent/kWh subsidies are sufficient to make them competitive.  It doesn't provide any underlying insights with respect to PV cost trends.

]]> Comment #5 by Adam Browning http://www.grist.org/article/2009-06-24-re-less-than-g/ Thu, 25 Jun 2009 09:48:48 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/5 Well, you could say that...if you just make up wildly off-base numbers.  I'd say the installed cost is about half of what you estimate, and the contract term is nearly 3 times the length of your useful-life assumption (and while inverters do need replacing every 10-15 yrs, PV generally degrades to about 80% of initial efficiency, then seems to flatten out and continue to generate damn near forever.  i've seen some internal mnf docs estimating a useful life over 100 yrs.  note, of course, that the fuel is free).

so how about this for an apples to apples comparison: This contract for zero-emission PV is, with a little help from Uncle Sam, cheaper than a comparable gas contract, which is both subsidized and generates emissions that are killing the planet.

]]> Well, you could say that...if you just make up wildly off-base numbers.  I'd say the installed cost is about half of what you estimate, and the contract term is nearly 3 times the length of your useful-life assumption (and while inverters do need replacing every 10-15 yrs, PV generally degrades to about 80% of initial efficiency, then seems to flatten out and continue to generate damn near forever.  i've seen some internal mnf docs estimating a useful life over 100 yrs.  note, of course, that the fuel is free).

so how about this for an apples to apples comparison: This contract for zero-emission PV is, with a little help from Uncle Sam, cheaper than a comparable gas contract, which is both subsidized and generates emissions that are killing the planet.

]]> Comment #6 by Adam Browning http://www.grist.org/article/2009-06-24-re-less-than-g/ Thu, 25 Jun 2009 11:50:06 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/6 Contract for 92 MW of eSolar power towers, also cheaper than gas: http://www.pge.com/nots/rates/tariffs/tm2/pdf/ELEC_3481-E.pdf

]]> Contract for 92 MW of eSolar power towers, also cheaper than gas: http://www.pge.com/nots/rates/tariffs/tm2/pdf/ELEC_3481-E.pdf

]]> Comment #7 by Sean Casten http://www.grist.org/article/2009-06-24-re-less-than-g/ Fri, 26 Jun 2009 10:16:34 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/7 Adam,

To be clear, I'm not in any way trying to make up numbers.  I am not aware of any pre-subsidy installed costs for solar PV approaching $3000/kW.  Happy to be enlightened otherwise, but I'm skeptical of those numbers only because they're so much better than anything I've seen before. 

With respect to years of operation, it's a fair point.  But it's also fair to say that my math is wrong - future performance really ought to be discounted to reflect future uncertainty.  (e.g., a kWh today is worth more than a kWh 10 years from now.)  I was simplifying the math to reflect a 10 year present value of all future kWh flows (slightly confusing finance and engineering, I realize).  But in all cases, it's not appropriate to assume that a $ today applies just as equally to a kWh 20 years hence as one tomorrow.  This is, after all, what the owner who is trying to decide between solar and not-solar is doing mathematically. 

]]> Adam,

To be clear, I'm not in any way trying to make up numbers.  I am not aware of any pre-subsidy installed costs for solar PV approaching $3000/kW.  Happy to be enlightened otherwise, but I'm skeptical of those numbers only because they're so much better than anything I've seen before. 

With respect to years of operation, it's a fair point.  But it's also fair to say that my math is wrong - future performance really ought to be discounted to reflect future uncertainty.  (e.g., a kWh today is worth more than a kWh 10 years from now.)  I was simplifying the math to reflect a 10 year present value of all future kWh flows (slightly confusing finance and engineering, I realize).  But in all cases, it's not appropriate to assume that a $ today applies just as equally to a kWh 20 years hence as one tomorrow.  This is, after all, what the owner who is trying to decide between solar and not-solar is doing mathematically. 

]]> Comment #8 by Sean Casten http://www.grist.org/article/2009-06-24-re-less-than-g/ Fri, 26 Jun 2009 10:21:45 -0700 http://www.grist.org/article/2009-06-24-re-less-than-g/8 Again, to my earlier point, it's great that utilities are entering to long-term contracts with PV.  That is, in and of itself, a good thing.  But it does not follow that the price they pay reflects underlying comparative economics with gas to your "RE < G" header.  Either it's less than fossil with both on an equally non-subsidized basis or it's less than fossil on an equally-subsidized basis.  But nothing about these two contracts is an apples:apples comparison. 

There is a reasonable economic assessment that could be done to tally up subsidies on both sides and see if the underlying RE<G assertion holds.  But absent that analysis, one cannot conclude anything other than that RE+RE subsidies appear to be sufficient to drive a few utilities to enter into a few contracts.  (Let's not forget that as big a deal as 92+230 MW is in the PV world, it's a trifle on the grid; two contracts do not a axiom make.)

]]> Again, to my earlier point, it's great that utilities are entering to long-term contracts with PV.  That is, in and of itself, a good thing.  But it does not follow that the price they pay reflects underlying comparative economics with gas to your "RE < G" header.  Either it's less than fossil with both on an equally non-subsidized basis or it's less than fossil on an equally-subsidized basis.  But nothing about these two contracts is an apples:apples comparison. 

There is a reasonable economic assessment that could be done to tally up subsidies on both sides and see if the underlying RE<G assertion holds.  But absent that analysis, one cannot conclude anything other than that RE+RE subsidies appear to be sufficient to drive a few utilities to enter into a few contracts.  (Let's not forget that as big a deal as 92+230 MW is in the PV world, it's a trifle on the grid; two contracts do not a axiom make.)

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