Just another hidden cost — intermittent generators are vandals on our baseload suppliers. Wind power needs gas, but gas doesn’t need the wind. When the two are paired together it makes the wind energy “reliable” but adds nearly $30/MWh to the cost of the energy from gas. Right now that cost will be added to the gas plant, but in a free market, it should be paid by the wind farm investors.
Stacy and Taylor compared the cost of running a Closed Cycle Gas plant (CC Gas) on its own or combined with a wind farm. The combination produces reliable electricity “on demand” and uses less gas to do it. The sole benefits to this odd industrial couple are a smaller gas bill and lower emissions of a fertilizing gas (CO2). All the capital and labor costs of running a gas plant are the same, but now it sits idle more often, pointlessly waiting like a spare wheel til the wind slows and gas power is needed again. About the only thing we can predict about the wind farm is that it can be relied on for almost nothing, so the gas plant must be almost as large whether or not it is chained to a wind generator.
Here’s a detailed estimate of some of the hidden costs of adding an intermittent power source to a reliable one. The figures are based on US data and came out a couple of years ago.
The idealized extra cost of adding wind to gas is $15/MWh, but the cost using real world capacity factors is $30/MWh.
Notice the “Nameplate capacity” on the right. Look at all the extra capital infrastructure required to generate the same amount of electricity. All that extra blood, sweat, tears and investment sitting around doing nothing most of the time.
Renewable energy saves fossil fuel, but wastes infrastructure, land, labor and resources.
Click to enlarge.
Here’s how you can use 1.8 times as much infrastructure to achieve no extra electricity
In the lowest cost scenario a 1MW gas plant works at 87% capacity. If it is paired with an equal nameplate capacity wind farm, the gas plant needs to be almost as large because wind power can only be relied on to produce 2.7% of its full capacity all the time. Hence rather than building a 1MW gas plant, we need to build a 0.97MW gas plant, only a tiny bit smaller, and 0.87MW of wind. The wind+gas combo will work together in synchrony to create the same amount of electricity as the 1MW wind. But it’s obviously a horrible deal — it requires a lot more capital outlay and infrastructure to build, then a lot of the time either the gas plant or the wind plant is sitting idle. The new gas capacity factor falls from 87% down to 58%.
The imposed cost of generating a MW from gas rises by at least $15/MWh when the gas plant is chained to a wind plant. This is the best case capacity factor, but real world capacity factors are lower. Using the real world data the capacity factor for gas on its own starts at 47% and falls to 32% when combined with a wind plant. The capacity factor of wind is 33%. In the real world scenario the cost imposed on the gas plant is $30/MWh.
The cost of running a gas plant on its own (LCOE) is $73 /MWh
The cost of running a new wind farm (plus the imposed cost on the gas plant) = $113 /MWh.
Renewables are not just a waste of space, they’re like anti-matter on the grid, damaging everything around them.
Thanks to commenter Lance.
REFERENCE
Stacy, T. Taylor, G. (2015) The Levelized Cost of Electricity from Existing Generation Sources, Institute for Energy Research (IER), based on EIA figures in the USA.
Average energy costs are almost always misleading. To reliabily meet loads are two things of value: capacity and energy and capacity is the primary concern. Once you have capacity, you can displace higher cost energy with lower cost energy when ever that becomes economic. But to go in after the fact and look at energy from a particular resource and see how much it cost on average will tell you on its own virtually nothing about the vaule of that resource in the power supply mix.
In the past expensive capacity came with cheaper energy, and cheaper capacity came with more expensive energy. If you planned to draw on the capacity round the clock it made sense to invest in resources with higher capacity costs that would give you lower costs for energy. But if you only needed the energy associated with the capaicty for shorter time periods, or if you though opportunities to buy cheap displacement energy might emerge, you would go with lower cost capcity resources.
If you bought fairly cheap capacity (to ensure you could serve peak loads) but were able to displace it with economic transactions (that you couldn’t have counted on in advance)- that was a very successful plan. However since most of the energy was displaced by economic purchases – the cost per kwh of actual energy under that purchase would look very high compared to other options (could hit infinity).
Now there are entities bidding into markets and that muddles the picture a bit. But resources that operate when others may not be there are inherently more valuable than intermittent resources.
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“Now there are entities bidding into markets and that muddles the picture a bit. But resources that operate when others may not be there are inherently more valuable than intermittent resources.”
The issue that I have with the current picture is this:
Baseload thermal plants operating at high capacity factors and high efficiencies are forced to throttle back to accept intermittent generation, forcing the thermal plant to incur higher operating costs / MWH actually delivered. This is an inherent benefit to the intermittent generator and a liability to the baseload plant. The costs incurred ought to be borne by the intermittent supplier who caused the inefficiency in the first place. This plays out differently where hydropower is involved, but those locations are few and unlikely to be increased in number or capacity due to siting availability and environmental impacts.
To actually manage the resources, the various generators ought be required to bid their firm generation at fixed price several hours in advance to allow the system operator ( ISO in the US, AEMO in AU) to economically dispatch the resources. If the intermittents can’t supply their bid, then they ought be required to turn to the spot market and make up their insufficiency. If they produce more, either it ought be rejected or allowed into the grid at a penalty commensurate with the losses they impose on other generators to respond.
The regulatory structure to deal with this reality was not anticipated or articulated after the Regulated Public Utility Model was scrapped in favor of Deregulation and subsequent breakup of the grid into Generation, Transmission, Distribution, and Maintenance, then forced to take intermittent generation as a legal priority. The intermittent subsidies and legally forced RET requirements distort the economics. This situation has to be revisited.
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From an engineering standpoint is the Gas Plant just ticking over or ramping up and down to achieve its low capacity factor, when it to comes on and off to make up for winds shortfall does this waste more fuel during these cycles?
Wind and solar echo the current times where participation trophies are handed out regardless of performance………bloody expensive trophies though.
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Yonniestone: Its a bit more complicated. The simple answer is you don’t want to ramp any kind of thermal power plant because they are designed for max efficiency at max design speed. Combined Cycle GT units (CCGT) use the waste heat from the turbine to generate steam for maximum energy extraction from the fuel. Open Cycle GT (OCGT) are simply a jet engine coupled to an alternator to be used as nearly instantaneous generation. One does NOT wish to ramp an CCGT plant because the overall efficiency suffers greatly. OCGT plants are intended to be throttled, but they are inefficient to begin with. GT plants are “topping Plants” to make up for short term surge load conditions or to temporarily replace a turbine-genset that is down for maintenance in a baseload thermal plant.
Using GT plants to compensate for wind intermittency is a very inefficient solution. One would not choose to do that without some forcing requirement, like RETs.
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I saw some info recently that discussed maintenance cost for thermal plants not run continuously but can’t find it now. The authors were pointing out the increased maintenance on any system that is loaded and unloaded often when it was designed to run continuously. They stated this is already a big problem for existing power plants and new design was needed for plants intended to be used to balance renewables.
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Yonnie, a while back I was reading up on the turbines [I’m a mechanic type who likes to know about engines] and GE’s largest, latest offering in a closed system maintained fuel efficiency running at below 40% capacity, as I recall.
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There is a way out of the dilemma but no government has the necessary balls to do it, their masters wouldn’t like it.
The way is to force all the unreliable energy producers to guarantee the output they produce over a set time at their own expense. To do that they would have to have some form of reliable power generating equipment available to make up the shortfall as necessary and they have to pay the tax on all the energy they produce that way.
As I say it would never happen just as the removal of subsidies for unreliables and the tax on reliables.
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So the gas cost is about $73MWh and you add the 55% “tax” of having wind power for a total of $113 MWh.
The 55% “tax” is an expensive way to do business.
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It seems to me that the vandalism lies in the ideology behind them. They however, are the parasites.
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If you look at https://www.svk.se/drift-av-stamnatet/kontrollrummet/
Then you will see that Nnorway only have a tiny amount of windpower even if they have a huge costline to the Atlantic ocean with a lot of wind.
Why not, because they have sufficient hydro power, so windpower will only replace some hydro that anyway can supply the needed power.
If they had not enough hydro, then combination with wind would be optimal.
In Denmark we use a lot of wind power, because our neighbours take up the differences.
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Wind/hydro is a better combination than wind/gas because hydro plants can’t work at nameplate capacity 24/7/52 because of water restraints, thus the slower periods are welcome.
Norway also has pumped hydro. They buy cheap power from Europe [incl. Denmark] when the wind is blowing to pump water uphill and sell it back when the wind drops. I have no idea of the capacity of the undersea cable across the Kattegat.
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Hanrahan:
I said similarly on euanmeans.com and was promptly told that Norway has NO pumped storage. When the cheap electricity resulting from wind surges arrives from Denmark and Germany they merely shut down some hydro turbines. The same applies for Sweden although they have one (non working) pumped storage plant.
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“In Denmark we use a lot of wind power, because our neighbours take up the differences.”
The hallmark of places with wind power that is made to work. The ability to lean on neighbours with stable power via interconnectors. A luxury that we dont have in Oz.
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Denmark has the most expensive power in Europe because they have buy power when the wind does not blow and have to give power away at little or no price when the wind is up and gives high capacity. Sweden has 30-40% of power from Nuclear stations and Finland is the same. Sweden has hydro and if necessary can buy some power from its neighbors Norway (Hydro and their own gas) and Finland (Nuclear and coal and gas from Russia). One of the articles here at Jonova showed that power costs went up with more wind (eg South Australia which is now above Denmark) By the way Finland is the only European country, at present, that is installing new Nuclear capacity except Russia.
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Sweden also benefits from the German obsession with wind turbines.
So too do the canny Swiss who buy cheap night time power from France (when it cannot export elsewhere when the wind is blowing) and use it for pumped hydro.
The new nuclear station in Finland is way over due and over budget.
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Was in Norway last year at the end of their summer, and was amazed at the huge volumes of water still tumbling down from the mountains. Hydro definitely works for them.
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Excellent post Jo. This is all so self evident to those with even a modest understanding and the ability to think clearly (Greens don’t qualify), but it’s the quantification, the actual figures that makes this post so valuable.
It would be interesting to see how wind paired with coal affects the coal driven power price. Coal would have to have a longer response time.
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To have a short response time coal must have the boilers at pressure and be venting the unused steam, clearly a bad solution. It takes a long time [24 hrs??] to bring a cold boiler up to full pressure and they have a limited number of cold starts before the kilns need relining anyway.
On a more cheerful note you may have read in Weekend Unthreaded how coal saved the day, or the winter, in eastern USA. The excess power demand over the unusually cold winter was met almost exclusively by coal because the nuclear generators were operating near nameplate anyway and gas generators were restricted by supply because so much gas was being taken off for domestic heating. As the author noted: Coal is unique in that they can store their fuel on site.
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In a 100% coal fired grid this is what is called “spinning reserve”.
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Not quite correct. boilers can be fairly quickly ramped up. Not all units at a power station are run at full capacity. Liddell for example has 4 units of 500MW. It would be normal to have two units operating at around 60%. Now if one unit goes down through a break down or for planned maintenance the units can be ramped up. It takes only about 10-15 minutes to take a unit from say 30% capacity to 100%. To go from 90% to 100% can be done in minutes. Before the Snowy scheme was commissioned NSW was on nearly 100% coal plants with a mix of different size units (50MW to 500MW)running at various capacity to meet fluctuating demand. A huge number of NSW power stations have been closed (eg in Sydney -Pyrmont, White Bay, Balmain, Liverpool, in Port Kembla- Tallewarra, around Lithgow -Wallerawang, on the central coast Wangi, Vales Point and Munmorah plus a whole lot of small ones in the country- Broken Hill was supplied by the privately owned Central Power station using Diesel engines. In Queensland Mt Isa was supplied by the 100 % coal fired Mica Creek power station which now runs on natural gas (since 2000).
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The issue is not only cost. It is an engineering fact that there is an absolute limit on how much CO2 can be reduced by wind and solar energy only.
Combined cycle natural gas power plants – combined cycle gas power plants produce steam from the waste heat from the first pass gas turbines – and are hence 20% more efficient than single pass natural gas power plant.
Combined cycle power plants take roughly 10 hours to start and hence must be left on most of the time.
When the amount of wind and solar energy reaches 100% of grid demand, at peak, it is no longer possible to use combined cycle power plants.
For Germany, the utilization rate (average availability) is only 17.4% for wind and 8.3% for solar.
The elimination of combined cycle power plants has a cost (someone must pay to mothball the plants) and increases the amount of CO2 that is produced by the entire grid due to the loss of the more efficient combined cycle power plants.
The saving of CO2 emissions does not take into account the loss of grid efficiency which increases CO2 emissions and does not include the CO2 emissions required to construct the wind farms and solar farms.
http://notrickszone.com/2015/02/04/germanys-energiewende-leading-to-suicide-by-cannibalism-huge-oversupply-risks-destabilization/#sthash.8tE9YRDj.PSllYaQF.dpbs
The coming age of power cannibalism…Germany on the verge of committing energy suicide
“Capacity without control
The problem with the “renewable” power sources of wind and solar is their intrinsic volatility coupled with their poor capacity utilization rates of only 17.4% for wind and 8.3% for solar (average values for Germany).”
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There is another factor to add to the complexity – the daily variation in demand, with a peak in the evening. In the AEMO area, baseload overnight demand is about 18,000 MW (18 GW) as Tony has clearly illustrated, rising to a peak of 26-30 GW depending on the season.
But there is also another factor as more roof top solar is introduced network demand drops in the middle of the day. So some part of the generation mix has to cope with peak demand. Australia has been blessed with sufficient hydro thanks to those strategic planners several generations ago (imagine trying to get approval for a new dam today) that provides efficient peaking capacity. AEMO reports available hydro capacity as 8 GW but it seems to rarely supply more than about 3 GW. With no new dams, open cycle gas has become the new peaking supply (and even emergency diesel in Vic and SA). So there will always be some unutilised capacity without storage.
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So, are you saying that VIC Energy Minister D’Ambrosio is telling fibs?
She constantly tells us how renewables put downwards pressure on prices. Surely its not a lie?
Those living out of electorate expenses are justified!
Really? I cant use taxpayer money to fund my electorate campaign?
Why cant I send my dogs home in a government car?
Hazelwood closing with only increase prices by 4%
I did not have sex with that woman
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Understanding this is easy.
I think the real problem is that all the movers and shakers involved in this went to college. If you study the business management curriculum you’ll soon be taught to itemize the bill, show every line item you can and exactly how much it’s costing your poor disbelieving customer. And that leads directly to needing more things to add onto the bill.
Coal not producing enough revenue? Must not be enough items on the bill so bring in the windmills and add them to the bottom line. It works every time.
It’s really very simple. 😉
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And politicians are even more eager to add line items to your bill. After all, they don’t have to pay it. They hand it off to you. 🙁
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Roy, most of the movers and shakers controlling the Oz power industry apparently learnt their only science and engineering in law school. They would have trouble counting the 3 fingers they have on each hand.
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If they have only 3 fingers on each hand are you sure they’re not aliens from some other planet? The nearest star is only about 4.3 light-years away and with the brilliance displayed by your 3-fingered movers and shakers they probably can move faster than C.
That would explain what’s going on. They’ve come steal our energy to power their space drive.
It makes as much sense as the explanations they give us, doesn’t it? 🙁
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The actual costs of Wind energy are approximately USD 157 / MWH for onshore and USD 238/MWH for offshore, neglecting negative effects of USD 30/MWH in inefficiencies imposed on thermal synchronous generation.
Existing coal plants clock in at about USD 30-50 / MWH because they are already paid for.
See Homewood at: https://notalotofpeopleknowthat.wordpress.com/2015/10/18/the-real-cost-of-wind-power/
If Wind energy is so awfully inexpensive, then of course, they no longer need any form of subsidy. Overlay that thought with the reality of your own experience at the end of the month. Reality is a grand teacher. eh?
Paying more for less might be fashionable, but it isn’t very smart.
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re reply #2.1.1 by DMA –
is this what you referred to?
8 Apr: ExponentTelegramWestVirginia: NETL exploring new clean coal tech
by Conor Griffith
“The issue is we’re seeing a growth in renewable energy to the grid,” Richards explained.
“Coal plants sometimes need to reduce their output, and that can make it hard to operate existing plants,” he said.
He gave the example of a coal plant designed years ago to operate at 500 megawatts, but then that requirement dropped to 300 megawatts because of a wind farm. If the wind isn’t blowing, however, the demand could return to 500 megawatts.
Richards said such fluctuations create wear and tear on the power plant in a manner similar to the pressure exerted on car brakes during stop-and-go traffic; the more it’s done, the faster parts begin to break down.
“It’s not true that every plant faces that challenge, but we know many of them do, and it’s really affecting the durability and efficiency of those plants,” Richards said.
To address these problems, he said the National Energy Technology Laboratory, or NETL, is developing new fiber-optic sensors made from flexible glass fiber. Although the fiber is not much larger than sewing thread, a laser can be run through it to monitor what comes back, which allows for the creation of a temperature profile, Richards said…READ ALL
https://www.wvnews.com/theet/news/netl-exploring-new-clean-coal-tech/article_c77079b3-ac59-5073-b2b4-121a0321fd74.html
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Thanks Jo / Lance. Regarding the comment:’All the capital and labor costs of running a gas plant are the same, but now it sits idle more often, pointlessly waiting like a til (sic) the wind slows to come back on’, I would also note that of course that the gas plant generates less revenue when it sits idle or reduces output, so its profitability takes a dive. This is what is killing all fossil-fuelled generators, a predictable result that apparently those who devised the devious LRET scheme either failed to understand out of ignorance, or failed to identify on purpose. Which was it, I wonder?
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What does “because wind power can only be relied on to produce 2.7% of its full capacity all the time.” mean?
A wind farm cannot be relied to produce anything all the time!
Can anyone explain?
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Also, “Using the real world data the capacity factor for gas on its own starts at 47% and falls to 32% when combined with a wind plant.”
Which combined cycle gas plant operating at full capacity has a capacity factor of only 47%?
A gas plant only shuts down for maintenance or the occasional trip. Capacity factors should be over 80%.
Where did 47% come from?
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Peter, the figure here come from the US study. Australian capacity factors are different. Most of our gas plants are a lot lower in capacity, because we don’t have cheap shale. But our coal plants run higher.
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I suppose it depends on how you interpret “but real world capacity factors are lower. Using the real world data the capacity factor for gas on its own starts at 47% and falls to 32% when combined with a wind plant. ”
A gas plant if allowed to run “on its own” can have capacity factors up to 90%. However if it has to compete with coal and renewables then it has to reduce generation and this lowers capacity factor. However it is not a physical constraint like 30% CP is for wind, it is a metric driven by market accessibility which is corrupted by politics.
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There are three factors which determine output at the end of a period say one year 1/ Is the actual capacity of the plant -this can be above original capacity (if some design restraint is removed eg a Nuclear power station in Finland has almost doubled its capacity by operating at higher pressure than design and replacing or adding turbine generators)or below capacity as at Liddell because of undersized coal mills limit the maximum achievable. 2/ Operating availability which as you say can be above 90%, that also goes for coal plants as has been recorded by some Queensland power stations- many power stations where union control is strong as in previous state owned PS in Victoria and those in NSW have poor maintenance and breakdown record. and 3/ the actual demand from the grid -those power stations with a good record of reliablity where always given preference over others. The record of Nuclear power stations is very good so they rank high in the demand list in a truly free market. The Finish Nuclear power stations produce some of the cheapest power in the world. Although two units have been operaing for 40 years they have been licensed for another 20 years (and may go beyond that) The capital cost spread over 60 years is very small.
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O/T —from the Department of Unicorn Flatulence and Pixie Dust:
Someone is onto a good money spinning scheme in LA: they’re painting the streets white, to reduce the UHI effect and Global Warming.
Moonbeams. The Lunatics are really in charge of the Asylum.
It can’t rain at all in the CrAzy State. Even mixing grit in the paint doesn’t add enough grip, as my decades of experience as a motorcyclist has reinforced. 🙁 Paint of any sort on a road is to be avoided at all times and especially in the wet. It’s one reason ABS brakes so quickly became standard equipment.
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‘The sole benefits to this odd industrial couple are a smaller gas bill and lower emissions of a fertilizing gas (CO2).’
That may be the case for wind farms with a capacity factor of at least 33%. Less efficient wind farms increase emissions of CO2 compared to gas alone.
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It is possible to operate some plants at high capacity factors but not all because demand varies. In fact in Australia before there was any significant wind or solar on the grid we had 53 GW of coal, gas and hydro and 2 GW of bagasse, landfill diesel etc to supply an average 24 GW demand. There was approximately 32 GW of coal, 10 GW of gas and a bit under 9 GW of hydro. Overall Capacity factor was therefore 45%.
In the US nuclear power provides a little over 19% of annual generation and the Short Run marginal cost is not only low but negative, the cost of cycling is more than the short run fuel saving so nuclear plants always run very close to capacity. Even so because of maintenance and refuelling they still only run at around 91% CF. In fact because most of them have been uprated so they can produce more than nominal capacity the true capacity factor is between 80 and 85%. This means that all other generators have to ope with demand variations. As system peak to trough is about 40% all 40% has to be absorbed by 80% of capacity. i.e. their output varies by 50%. Then because much of the hydro is nearly run of the river it takes precednce to in balmy late spring weather when the snow is melting hydro might be supplying almost 20% of demand so gas, coal etc even wind have to share 60% between them. That means that overall US gas runs at about 55% capacity factor and even though they have closed 260 coal generators since 2010 coal still only runs at 53% capacity factor.
Pairing one wind farm and one gas generator is not realistic because it does not represent the diversity of the grid or the variability of demand or in fact allow for faults or maintenance of the gas turbine.
Combined cycle gas turbines themselves do not follow load very effectively and often at low load they run as open cycle plants as all the CC plants in Australia were prior to the closure of Hazelwood so the analogy is not realistic. CC plants must be running at at least 35% to be stable and close to 55% to run in CC mode
A better model would be say two CC plants to supply 50% of peak power and three OC plants to supply peak and shoulder. That way you have enough diversity to minimise the effect of maintenance and outages. CC plants cost almost twice as much per MW as OC plants and they have to be fairly large probably a minimum of 400 MW to be economic these days. In summer in Australia they are probably 53% efficient. The best new designs can get up to full power in an hour. OC plants can be 35% efficient at high temperatures but they can be that efficient at 35 MW and those small plants can get to speed in 5 minutes. So the ideal situation is to have batches of smaller plants that can be turned on or off individually so that the units that are running are near rated load and stable and efficient
So then if we wanted a plant that could supply 6,000 GWh per year with a peak of 1,200 MW and minimum of 700 MW we could have two 450 MW CC plants and six 50 MW OC generators.
At current costs that would be about $2,2 bn. and annual gas usage would be about A$360 m per year.
A wind gas hybrid with 1,200 MW of wind over three of four widely spaced wind farms and eleven 100 MW gas generators would cost about $1.8 bn. but the gas cost would be $115 m per year. i.e. capital cost is the same but there is an opex saving of $240 m per year. If the gas turbines were replaced with reciprocating plants capital cost might go up $100 m but gas costs fall by $20-30m per year
[It would be better if this was shorter and then refer the reader to supporting articles with external links. Readers tend to not read everything if a comment is too long. I’ll make the assumption that you are expert enough to be an authority about the subject and approve this. But please remember what I say for next time. Thanks.] AZ
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Edit the wind gas system would cost $2.8 bn not $1.8 bn but the difference would be repaid in 3 ears in gas savings
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