Andy Frank of U.C.-Davis, godfather of the plug-in movement, made a similar comment: Plug-ins could drive renewable energy. Renewable energy would pay back investments four times faster competing with gasoline than competing with other grid power.

I remain mystified by this comment. Suppose a bunch of people trade in their gasoline cars for plugins. That doesn't change the fact that renewable electricity generation is competing with coal/natural gas generation.

Does anyone have an interpretation of that comment that makes sense?

We're both confused, because I'm confused about why you're confused.

Here's what Frank's getting at, as I interpret it:

Solar volataic power beats any fuel-based energy (coal, gas, oil, whatever) given a sufficiently long time horizon. The cost of solar energy is capital + maintenance, and that's it. The cost for fuel-based energy is capital + maintenance + fuel. That third cost may go up, it may go down, but it never goes away, and sunlight is always free.

So. Solar wins in the end. The question is how long. As of now, that time horizon is too distant to tip the balance for electricity investors, for the most part.

Coal and natural gas are fairly cheap, so it takes solar a long time to push its cumulative average electricity costs below theirs (particularly since coal and gas don't have to pay for the extra transmission central plants need).

However, petroleum is more expensive than coal or gas (and rising). If solar generation were competing with oil refineries (i.e., powering transportation) rather than coal plants, it would pay itself back (i.e., provide lower per-mile transportation fuel costs than petrol) faster than it would against coal or gas plants.

Make more sense? Or, um, less.

grist.org

If the car engine converts crude at 15% (probably far too generous) then a barrel of oil will yield 240 kWh(p).  At $82/bbl. that is $0.34/kWh.  Easy competition.  

Solar HIPV at $1/W and 25% capacity with a 25 year 15% recovery factor is about $0.07/kWh(e) fixed (no price escalation).  Wind could even be cheaper.  

Now, if you consider the future prices of oil for the next 25 years then I suspect renewable electric transportation will be much more than four times cheaper than oil.

Andy Frank was simply saying that gasoline sells for around four times more than electricity for the equivalent energy unit, so if you use a solar panel to fuel a plug-in the payback will be four times faster.  

Gellings and Yeager are not doing Galvin under the EPRI banner but independently.  And I agree that getting smart grid technologies in under the regulated ratebase is effective.

I hesitate to mix up the biofuels stuff I do with this post - all I can say is I'm paying close attention to nitrous oxide - It's no laughing matter!  And emissions very much depend on agronomy and even specific fields.  

Patrick Mazza

The disagreement here is in the definition of "payback time."

I would define it as "time it takes till a method becomes cheaper than the cheapest available alternative."

Your definition (I think) would be "time it takes till a method becomes cheaper than what I am doing now."

We agree about all the facts, so there's nothing more than a definitional thing going on.

For example, if I am propelling my car with really expensive rocket fuel, and then I switch to solar-powered plug-in EV, I could claim that my "payback time" is really low. But I'd say the baseline was a bad baseline. Similarly in this case: The baseline of "gasoline" is bad because it's not the cheapest alternative. The cheapest, given our assumptions, is EV powered by coal. (Cheapest in terms of dollars, today, not cheapest in terms of "plus a certain estimate of internalized externalities." I know how you feel about how this changes the coal picture.)

I think of payback time basically like opportunity cost, whereas you're treating it as a way of comparing exactly two things. No problem. But, if you stick with your definition, then I stop caring about payback time. For me the only relevant measure is opportunity cost.

Oil has a high fuel cost.  Coal has a high burner cost.  Different animals.  Solar thermal collectors are cheaper than new coal burners and solar power is cheaper than oil car power, and getting cheaper.

It is not difficult to visualize net present worth.  Put the principal in the bank and draw down, year by year, while collecting interest, to pay more each year for energy and inflation, until the principal is gone in 25 years.

Most people like simple payback time frames sans variables.   Oil or solar is like renting or buying.   The rent for oil pays for the ownership of solar in less than four years.  Then it is a twenty year free ride.