A reader of this blog, c1ue, has send in an comparison of wind energy costs versus hydro and fossil in the Pacific Northwest. He has asked for some feedback on his findings that wind is far more expensive than hydro and fossil. His commentary is below, please offer responses and critique in the comments.
Wind, Hydro, Coal, and Natural Gas electricity generation: real life data comparisons
Some of you may have seen this article: "Pacific Power seeks 20 percent rise in electricity Rates."
The new requests come on top of rate increases earlier this year that added about 5 percent to customers bills.” . . .
Company officials acknowledged that it's a terrible time for rate increases, but said the investments were in many cases being driven by state and local mandates for more renewable power and pollution controls.
This prompted me to wonder exactly what impact renewable energy has had on Pacific Power – legally known as PacifiCorp. (Pacific Power is how PacifiCorp is known in Oregon)
Fortunately there is a resource to investigate this: the PacifiCorp FERC reports. The FERC is a federal agency responsible for many things, but in particular administers accounting and financial reporting regulations and conduct of regulated companies. Thus pretty much all utilities must file a report with the FERC, including Pacific Power/PacifiCorp. PacifiCorp’s 2009 FERC report is embedded in the Washington Utilities and Transportation Commission web site
From this report, a snapshot of Wind vs. Hydro vs. Coal vs. Natural Gas can be taken. My spreadsheet can be found here [spreadsheet updated, see comment here].
Of course there are caveats and questions:
1) Are construction costs based on absolute value at time of construction, or are scaled to some common value of dollar in a given year? The latter seems likely as many of the hydroelectric projects were constructed 50 or even 100 years ago; The Pioneer Hydroelectric project has a completion date of 1897 and a cost of 10,738,733 dollars. 100 years ago this number was 2/3rds of the entire GDP of the United States.
2) Are construction costs including/excluding subsidies? Depreciation? Depreciation certainly is in the part of the report for coal facilities, but not specifically for hydroelectric and wind.
3) Are operating costs reflecting subsidies? Depreciation?
4) The Wind/Hydro data is from one section – the coal and natural gas are from another. There are therefore questions arising in how accurately some of the categories map such as: How exactly are Wind/Hydro operating costs per MWh calculated? And how does this method differ vs. the coal/natural gas operating costs including fuel?
No doubt there are more.
Regardless, the data paints an interesting picture on how wind electricity generation compares against hydroelectric, coal fired, and natural gas fired electricity generation.
1) Comparing the average of all wind electricity generation plants vs. all hydroelectric generation (minus inactive plants): Wind cost 1.5x as much per MW installed with 12.3x the operating cost per MWh generated. This reflects that total wind facilities were 12.5x peak load capacity vs. hydroelectric but cost 21.3x more.
In addition, the 12.5x multiple of wind generation peak capacity only generated 5.9x total electricity vs. hydroelectric -- or in other words, 2.1 MW installed wind generation capacity was necessary to replicate 1 MW of installed hydroelectric in terms of actual electricity generated. Said 2.1 MW cost 3.2x as much as hydroelectric to build and 24.6x as much to operate.
For a weighted average – as many hydroelectric installations were very small – the wind electricity generation improves in average operating cost (only 8.1x vs. 12.3x) but construction costs increase from 1.5x to 1.9x
2) Comparing wind electricity generation vs. coal fired electricity generation: Wind cost 2.9x more to construct and 102,672x to generate 1 MWh of electricity. Note that the construction cost difference is almost certainly too high since decommissioning costs are not included for coal fired electricity generation.
3) Comparing wind electricity generation vs. natural gas: Wind cost 4.1x more to construct and 18,305x more to generate 1MWh of electricity. Comparing the wind average against a single relatively modern natural gas plant, wind cost 3.1x more to construct and cost 47,092x more to generate 1MWh of electricity.
21 comments:
47,092 times more to generate, when no fuel needs to be purchased? I know that wind has integration costs. But clearly something is missing from your figures.
Dean,
Operating costs include more than just fuel. What they precisely are are defined in the FERC reports and include things like maintenance, repairs, personnel, land rent/lease, and what not.
Interestingly enough in other FERC reports I am now looking at, water isn't free (albeit a low cost).
You are welcome to examine the original report; the wind/hydro section doesn't show the complete breakdown but the coal/oil ones do.
Here are some figures from EIA. They are helpful because they represent actual cost without subsidies, and they split fixed and variable (fuel) operating costs.
http://www.eia.doe.gov/oiaf/aeo/electricity_generation.html
Apparently, non-fuel operating costs of wind and thermal solar power are quite high.
I understand that fuel is not the only cost, but for wind it isn't a cost at all. My point is that there must be something included for wind that isn't included for others if the comparison is 47000+ times.
I remember once requesting and receiving a report from Washington state for their plans to greatly increase wind power generation in the coming years. One of the key problems was that the way financing and accounting had been set up was tuned for existing fuel sources and did not handle the very different profile of wind. Somehow that seems to be affecting this comparison.
I just finished a book about the Enron fiasco; they fooled people for years with accounting gimmicks. The idea that I can dig into a FERC report and untangle their accounting methods strikes me as fanciful.
Dean,
Your comment about different accounting was indeed valid - but not completely in the way you think.
I went back and looked at the FERC report, and indeed I had made an error: the operating costs in the small hydro/wind section are set up different than in the 'main' power generation section.
In particular, the 'main' section talks per kwh generated whereas the small hydro/wind is just apparently a lump sum.
Thus indeed the differences are not 100,000x - the wind operating costs are lower than coal/natural gas/small hydro and are comparable to large hydro. One big reason for this, however, is because the wind plants all had maintenance costs under $0.40 per MWh generated.
All of the hydro/coal/natural gas facilities had appreciable ($5 or more per MWh generated) maintenance and non-fuel operating costs.
This extremely low maintenance number definitely looks odd. Of course the wind plants are almost all very new - it would be interesting to see how this holds up over time.
The only wind generation plant which is older has a blank where the maintenance costs should be and has the highest operating costs of all the wind generation plants - on par with coal.
Just for a bonus - a large hydro plant:
Name: Merwin
Build date: 1936
Capacity: 136 MW
Peak Demand capacity: 148 MW
Total Generation: 442,443 MWh
Total Cost: $65,850,831
Install Cost per MW: $484,197
Operating Costs: $3,292,961
Operating Costs per MWh generated: $7.44
More than 2/3rds of the Operating Costs for Merwin are associated with Operation Supervision and Engineering (category 23) and Miscellaneous Hydraulic Power generation expenses (category 27).
If these costs (supervision = human, miscellaneous = repairs?) are fairly fixed per facility it would explain why the wind power (and smaller hydro plant power) numbers are so high in relation.
The above hydro operating cost number is in fact better than any other plant I looked at for this FERC report, but equally it is one of only 3 hydro facilities rated to provide more than 40 MW of install capacity.
In any case, objection noted, verified, and the article/excel will be updated.
A few thoughts:
1) Financial profiles of different generating technologies.
I cannot speak for the accuracy of the costs presented, because I am not going to dig through this filing, but it was clear that the prior operating costs of wind were wildly incorrect. Like nuclear, wind is a high capital cost, low variable cost technology. If a spreadsheet lists operating costs that are higher than capital costs, there is clearly at least one mistake contained, presumably of a factor amount.
2) Capital and Variable Costs.
Traditionally, the capacity charge covered initial capital costs (overnight cost of construction plus cost of capital, e.g. debt service & equity return) and the energy charge covered the fuel costs and O&M. When a facility's debt is paid off and equity is satisfied, a plant can sell at its variable cost of production.
The initial costs of constructing many of these old facilities are likely paid off by now (not counting environmental upgrades, etc). Most likely, therefore, the cost of production from many of these old facilities is their variable costs. For simplicity, you could look at the O&M cost of a paid-for hydro facility as its cost of production. An existing, paid-for, hydro facility, is, I believe, probably the cheapest source of production.
For a new plant, you need apportion both its initial capital costs and its variable cost over the production. e.g. (using the spreadsheets numbers, and an *extremely* simplified analysis, for illustrative purposes) - over the course of 20 years, Glenrock will produce 5,077,500 MWh (253,875*20). It cost $199,803,681 to construct ($2,018,219/MW), and have a variable cost of $5/MWh. Therefore, it will produce energy at $44.35/MWh (($199,803,681/5,077,500) + 5).
$44.35/MWh isn’t expensive, but doesn't compare so well with the cost of existing, fully-paid plants; moreover, we are unable see how this compares with the cost of a new plant, because none are listed on the spreadsheet.
PacifiCorp is living off of paid-off hydro facilities: if it builds a new plant, of any technology, costs BETTER go up, otherwise, they are currently charging too much to their customers. If they built a new hydro facility (among the most capital-intensive technologies), and their rates went up by even more over the rates currently imposed by existing hydro facilities, would that mean that hydro became an expensive technology? The question doesn’t make sense, because it is poorly posed.
A few other ways to think of this: (a) in 20 years, if the cost is $5/MWh, Glenrock will be among the cheapest generating technologies; (b) if someone were to give you a wind farm for free, it would be among the cheapest today; (c) if someone gives you a free hydro plant, you get cheap energy; (d) if someone makes you pay for a hydro plant, you get more expensive energy.
(I had to split this into two comments due to the character limit; my apologies.)
3) Generation profiles.
The facilities listed are used for different purposes. e.g. I don't know why you'd have a $162/MWh natural gas plant (Gadsby), unless it's a peaking unit - it is somewhat apples and oranges to compare the levelized cost of a peaking unit with that of a unit that can run continuously.
So, apples-and-oranges with respect to: (a) the cost of energy from a fully-paid existing facility and from a newly-constructed facility, regardless of the technology; and (b) between generating profiles.
4) Scale of costs.
Too much of the debate about the costs of renewables (are they too costly?) does not take into account the amount by which they may be costly. This is not an either/or question. It's a matter of degree. (This is one reason why a technology-neutral charge may be more effective than government-directed R&D.)
Here, anyone with *any* knowledge of the costs of renewables would be able to instantly tell that, e.g. the variable cost structure of wind and coal makes it ludicrous to believe that wind is, on an O&M/fuel cost basis, 102,672x more costly than coal. Ludicrous. That this was posted on a major blog by a respected professor with a request for comments from his readers, demonstrates how far the discussion has yet to proceed.
-7-sojornment
"That this was posted on a major blog by a respected professor with a request for comments from his readers, demonstrates how far the discussion has yet to proceed."
I think you'll find that many professors encourage the asking of questions and exchanges of information. At least, that is how I operate in the classroom and on this blog.
The responses to the query, including your own, already justify the post.
Now, whether this is a major blog by a respected professor, that we can debate;-)
Thanks!
sojournment said... 6
"(a) in 20 years, if the cost is $5/MWh, Glenrock will be among the cheapest generating technologies;"
I assume Glenrock is a windmill. The useful life of windmills is currently estimated to be in the neighborhood of 20 years. The same goes for solar panels.
So the capital payback has to occur in less then 20 years. The same goes for solar panels.
Of course one of the problems with windmills is that they don't produce 'Time of Day' value.
What's the value of a KW of electricity on a 100 degree day when the wind isn't blowing?
Whats the value at 3 AM as opposed to 3 PM?
Professor: Thank you. You are very respected, and for good reason.
I can only hope that the energy discussion continues to proceed. Hopefully, a year from now, this discussion will have advanced to a stage where people will know whether or not the O&M/fuel costs of wind are 100,000x more expensive than coal.
"I assume Glenrock is a windmill. The useful life of windmills is currently estimated to be in the neighborhood of 20 years. The same goes for solar panels.
So the capital payback has to occur in less then 20 years. The same goes for solar panels."
Well, as a matter of course, banks demand that debt be completely serviced a few years before the end of the term of the PPA; e.g. 10-15 years. Shorter, in the current credit environment, depending on the project and the offtaker.
While a financing structure matters to the LCOE, it doesn't change the production over which the costs are calculated. If you have the following two plants:
Plant A: Produces 8760 MWh/year for 20 years, 0% interest.
Plant B: Produces 8760 MWh/year for 20 years, 4% interest, to be paid in 10 years.
The LCOE from Plant A will be cheaper due to the financing terms, but not because the costs must be spread among a different amount of production. The levelized cost of energy depends, in part, on level of debt and equity and the cost of capital, but the particular terms of these agreements do not change the useful service life for purposes of levelized cost of energy calculations.
"Of course one of the problems with windmills is that they don't produce 'Time of Day' value."
The question here is the price of dispatchability.
If you had an existing, cheap hydro plant, to what extent would it matter if the water level was low during hot afternoons in the summer? One wouldn't replace all cheap, existing hydro facilities with the $169/MWh natural gas facility, or exclusively build $169/MWh peaking natural gas facilities, simply to plan to this contingency. Why? Because this overpays for dispatchability.
Rather, the hydro facility would be dispatched when it is able to produce, and other plants would be economically dispatched when it is unable to produce. Pricing-wise, one would not say that hydro costs $169/MWh, because one MWh of peaking natural gas must be built to replace on MWh of hydro. Because, if everything goes according to our predictions, we do not need to plan 1:1. Nor do we need to plan 1:1 for wind.
Sojournment,
"Like nuclear, wind is a high capital cost, low variable cost technology. If a spreadsheet lists operating costs that are higher than capital costs, there is clearly at least one mistake contained, presumably of a factor amount."
Indeed, there was a mistake - noted already and corrected. However, the correction made no difference to relative hydro/wind profiles, only to scale vs. the natural gas/coal.
"For a new plant, you need apportion both its initial capital costs and its variable cost over the production.
...
$44.35/MWh isn’t expensive, but doesn't compare so well with the cost of existing, fully-paid plants; moreover, we are unable see how this compares with the cost of a new plant, because none are listed on the spreadsheet."
Actually the article notes that the construction costs are almost certainly scaled to a consistent dollar value - i.e. fixed 2000 dollars or something like that - because the listed costs of some of the smaller hydro plants are significant chunks of the entire US GDP at time of construction (1880s).
"PacifiCorp is living off of paid-off hydro facilities: if it builds a new plant, of any technology, costs BETTER go up, otherwise, they are currently charging too much to their customers. If they built a new hydro facility (among the most capital-intensive technologies), and their rates went up by even more over the rates currently imposed by existing hydro facilities, would that mean that hydro became an expensive technology? The question doesn’t make sense, because it is poorly posed."
This assertion is easily tested.
If I look at the 2 natural gas examples in the Excel spreadsheet: Hermiston and Gadsby
Hermiston's construction cost (roughly $170M), plus an assumed constant operating cost equal to what it was in 2009 extending back to 1996, yields a lifetime expenditure of approximately $60.5M * 13 = $786.5M. Lifetime generated electricity equivalent to 2009 is then 1.55M MWh * 13 = 20.5M MWh.
Cost per MWh lifetime generated is thus $46.7 per MWh 'lifetime cost to date' (vs. $39 per MWh for 2009)
For Gadsby, the same set of assumptions yields a 'lifetime' cost of $75.3M construction cost + $2.4B lifetime operating costs generating 14.9M MWh = $166 per MWh generated 'lifetime cost to date' (vs. $162 per MWh in 2009)
It is thus quite clear that for traditional power plants like gas - even the medium term cost of electricity generated quickly converges toward the per unit generation cost.
In this light, it is quite clear that hydro even for small facilities is by far the most economical solution.
To replicate the above with the oldest wind plant: Foote Creek
Construction cost = $37.2M - note this is the lowest by far of any of the wind facilities
Generation cost in 2009 = $1.64M
MWh generated in 2009 = 86324
Foote Creek thus demonstrates a $62 per MWh generated 'lifetime cost to date'.
Of course operating costs today are higher than in 1999, but even halving the average operating cost still yields $52.6 per MWh generated 'lifetime cost to date'.
The point of this exercise was simple: a 1996 combined cycle natural gas plant converged to near its present day operating cost per generated MWh, whereas a somewhat newer wind generation facility halfway through its lifetime was still more than 3x its halfway point operating costs.
This is quite a significant fundamental difference.
The Foote Creek wind electricity generating facility thus is 12.6% to 32.8% more expensive per MWh generated than Hermiston, a combined cycle natural gas plant.
-sojournment
"PacifiCorp is living off of paid-off hydro facilities: if it builds a new plant, of any technology, costs BETTER go up, otherwise, they are currently charging too much to their customers. If they built a new hydro facility (among the most capital-intensive technologies), and their rates went up by even more over the rates currently imposed by existing hydro facilities, would that mean that hydro became an expensive technology? The question doesn’t make sense, because it is poorly posed."
I think the previous example clearly shows that capital cost isn't necessarily a factor in per MWh lifetime cost - while hydro is extremely expensive, it is by and large actually cheaper than wind. Thus while a utility might see a short term hit to profitability due to its new hydro (or any other) generation capability, over time this equalizes out to the operating cost of generation. The utility really just has to pay for the cost of borrowing the money as over time its investment will be repaid.
Barring very high interest rates or an inability to borrow - only fundamental shifts in per MWh cost should require significant rate increases.
Secondly you continue to assume that the construction costs are not scaled to a common value dollar when in fact they almost certainly must be.
"Too much of the debate about the costs of renewables (are they too costly?) does not take into account the amount by which they may be costly. This is not an either/or question. It's a matter of degree. (This is one reason why a technology-neutral charge may be more effective than government-directed R&D.)"
I think the previously posted example shows a possible fundamental cost structure difference between wind and natural gas/coal/hydro - the capital costs of wind its generation capability (irregardless of time of day value) are such that even halfway into the lifetime, the Foote Creek wind facility still had lifetime cost per MWh more than 3x that of its 10th year per MWh operating cost.
In contrast a 13 year old combined cycle natural gas electricity generating plant had a lifetime cost only 1.2x that of its 2009 per MWh operating cost - and the lifetime of a combined cycle natural gas plant is almost certainly longer than 20 years.
Even disregarding this fundamental difference, the absolute values of these were such that the wind energy facility was significantly more expensive in 'lifetime cost per MWh' vs. a comparable technology combined cycle natural gas electricity generation plant.
Note this does not even take into account possible acceleration of maintenance costs as the wind plant approaches its end of life.
sojournment said...
"the hydro facility would be dispatched when it is able to produce, and other plants would be economically dispatched when it is unable to produced"
In the Pacific Northwest our Hydro-facilities have to maintain a minimum flow to avoid killing the fish. At 'off peak' there is a limit as to what can be 'turned off'.
I think most of us have noticed that the wind usually blows fairly well after a good rain.
The Bonneville Power Administration explains it better then me below (emphasis mine)-
http://www.bpa.gov/corporate/WindPower/docs/Comments-to-CPUC-on-TRECs-Sept-2010-124476.pdf
This was BPA’s first opportunity to experience a high runoff event on the Columbia River with
close to 3,000 megawatts of wind energy on the federal system. As the report details, BPA was
able to manage through the situation without widespread wind curtailments or negative impacts
to salmon and steelhead, but just barely. BPA experienced the potential conflict between
environmental goals for renewable energy development and endangered species protection.
Fundamentally, the problem we experienced was having more electricity production than was
needed to serve load and no place to put it, even after taking extreme actions to reduce electricity production wherever possible.
(1) Cost comparison.
“$44.35/MWh isn’t expensive, but doesn't compare so well with the cost of existing, fully-paid plants; moreover, we are unable see how this compares with the cost of a new plant, because none are listed on the spreadsheet."
Actually the article notes that the construction costs are almost certainly scaled to a consistent dollar value - i.e. fixed 2000 dollars or something like that - because the listed costs of some of the smaller hydro plants are significant chunks of the entire US GDP at time of construction (1880s).”
As I noted, I am not taking a position on whether the costs on the spreadsheet are accurate, including whether they are properly indexed for inflation. (Personally, I would find it difficult to believe that PacifiCorp’s predecessor built a 5 MW facility that cost 2/3 of U.S. GDP, but I have neither the time nor the inclination to investigate this characterization).
Rather, my point is about how to correctly calculate the cost of production, and compare the cost of production between facilities (e.g. new/old, intermediate/peaking). This analysis remains severely flawed. One apple is more expensive than another by some degree, but based upon the oranges presented, we cannot determine this degree.
“Foote Creek thus demonstrates a $62 per MWh generated 'lifetime cost to date'. “
What is a “lifetime cost to-date”? This is trivia. According to this reasoning, 1-day old plant should never be built, because it is much more expensive than any existing source of generation. You need to figure out the useful service life of these plants.
(Using the numbers in the spreadsheet – which I do not vouch for)
Ex/ Foote Creek Wind: $3.7m to construct (1.14m/MW), and it will generate 1,726480 MWh over the course of 20 years (86,324 MWh/year, which is approx. a 32% capacity factor - in the range of reasonableness). The (extremely simplified, e.g. no discounting, allocation of financing, etc.) LCOE is $40.54/MWh. ($37,196,619/1,726480 + 19) – see how dependent this price is on initial capital costs?
Ex/ Hermiston Natural Gas: $1.7m to construct (.608m/MW), and it will generate approx.
46518900 over the course of 30 years (1,550,630 MWh/year, which is approx a 63% capacity factor). The (again, extremely simplified, etc.) LCOE is $47.65/MWh ($1,700,490,85/ 46,518,900 MWh + 39 + 5) – see how dependent this price is on fuel costs?
(1 cont.)
“It is thus quite clear that for traditional power plants like gas - even the medium term cost of electricity generated quickly converges toward the per unit generation cost.”
What is clear (generally speaking – again, I do not vouch for your spreadsheet) is that for a low capital cost, high O&M/fuel cost technology like natural gas, the cost of production will vary primarily with the cost of the fuel supply. For a high capital cost, low O&M/fuel cost technology (e.g. wind or nuclear), the opposite is true: the cost of production will be based primarily open the initial capital outlay.
Again, I am not concerned with the assertion that old, paid-for hydro facilities produce energy cheaply. It is the reasoning, which is bereft of understanding how to compare the costs of different technologies, of different ages.
(2) BPA runoff.
The wind industry, in particular, advocates for large, connected, liquid, and transparent wholesale markets. In the attached link, BPA is advocating for an increased ability to send overproduction to California. This is part-and-parcel with the wind industry’s position; indeed, with the position of free-market advocates for the last couple of decades.
-sojournment
"(Personally, I would find it difficult to believe that PacifiCorp’s predecessor built a 5 MW facility that cost 2/3 of U.S. GDP, but I have neither the time nor the inclination to investigate this characterization). "
Indeed, that is why the cost numbers in the FERC report must be indexed, as in noted in the original article.
"Rather, my point is about how to correctly calculate the cost of production, and compare the cost of production between facilities (e.g. new/old, intermediate/peaking)."
The data is merely being presented. No matter how you look at it, it is impossible to show that wind is in any way more economical than hydro - either in construction or in operation. In turn the purpose of gathering data is to understand exactly how wind electricity generation compares to natural gas/coal electricity generation in a non-CO2 tax context.
In this light, it appears that wind is somewhat more expensive than a modern combined cycle natural gas electricity generating plant - albeit only with a single example. However, compared to coal, wind is very much more expensive.
What is also interesting is that the wind facilities have fundamentally different cost structures than any of the other types of electricity generation. Unlike hydro - which is extremely long lived, or coal/natural gas - which realize very high actual vs. possible generation, wind energy appears to combine both high construction costs and low relative generation capability such that even halfway through projected life cycle, the lifetime cost per MWh generated comparison both vs. its own operating costs and vs. combined natural gas/coal fuel costs is highly unfavorable.
Whatever your AGW views, the data thus informs what CO2 mitigation costs must be in order to increase relative coal and natural gas costs in order to equalize the absolute value costs of the 'polluting' types of electricity generation.
The data also shows why wind energy can increase electricity consumer's rates, and from this data it is then possible to estimate exactly what these increases would be under various CO2 mitigation scenarios and/or minimum percentage alternative energy source laws.
-sojournment
"“Foote Creek thus demonstrates a $62 per MWh generated 'lifetime cost to date'. “
What is a “lifetime cost to-date”? This is trivia. According to this reasoning, 1-day old plant should never be built, because it is much more expensive than any existing source of generation. You need to figure out the useful service life of these plants. "
Again, you appear to miss the point. Foote Creek is compared with Hermiston. Both plants were built in approximately the same time frame (1999 vs. 1996).
Thus it is fair to say that lifecycle cost of generation per MWh to date has both facilities under roughly the same depreciation conditions - in fact the combined cycle plant likely has a longer rated lifetime.
As for the numbers, you leave out the operating costs. This is convenient because the operating costs for Hermiston are small relative to fuel cost, but in fact Foote Creek in 2009 had operating costs on par with a coal electricity generation plant.
This is the difference between the numbers you put out and the numbers I put out.
It is disingenuous to say Foote Creek has negligible operating costs when in fact for 2009, Foote Creek had a $19 per MWh generated operating cost vs. Hermiston's $5 per MWh generated non-fuel operating cost and $39 per MWh generated with fuel operating cost. In turn the 2 coal electricity generating plants had $16 and $20 per MWh generated with fuel operating costs and $5/$5 non fuel operating costs.
Foote Creek, whether due to relatively smaller actual vs. potential generation, relative size (Foote Creek is much smaller vs. the coal/natural gas plants), higher fundamental maintenance issues (turbine replacements), relatively old technology, or whatever had higher per MWh generated operating costs.
"The wind industry, in particular, advocates for large, connected, liquid, and transparent wholesale markets. In the attached link, BPA is advocating for an increased ability to send overproduction to California. This is part-and-parcel with the wind industry’s position; indeed, with the position of free-market advocates for the last couple of decades."
This may be, but sending electricity elsewhere doesn't make it cheaper.
The rates I pay in California right now are $0.12 per KWh - unquestionably these would have to increase significantly in order for California utilities to be able to buy wind energy derived electricity.
c1ue:
You requested comments and critique, which I have attempted to provided accurately and succinctly.
The major problem with the analysis is that it doesn’t understand how to compare the pricing of energy from technologies of differing cost structures, ages, and generating characteristics, or how, why, and when a LCOE analysis is employed. These problems are compounded by an inadequate understanding of the technologies themselves.
Professor Pielke:
You are often subject to personal attacks upon your motivations and integrity. A good portion of these attacks are from intemperate ideologues – but, on a personal level, I can only imagine this provides a limited amount of solace. Another good portion of these attacks arise from well-intentioned, yet fundamentally mistaken understandings of your positions – misunderstandings which you then attempt to correct post hoc, after having endured personal attacks.
On a personal level, and for the purposes of explaining your positions, wouldn’t it be more productive to avoid such misunderstandings at the outset? From a reader’s perspective – that is, an intermittent and incomplete reader of your blog - it would be much easier to follow the debate and arrive at my own conclusions if those misunderstandings which predictably arise were avoided at the outset.
This post can be somewhat illustrative of this point. A fundamentally erroneous analysis from a reader has been posted with a request for comments and critique, but your own thoughts have not been shared. People will guess at your positions regarding which questions are most pertinent in cost comparisons, and what types of analyses are employed to answer various questions. Inevitably, some well-intentioned people will guess incorrectly. Guessing invites precisely the kind of misunderstanding that hounds the broader energy discussion, and forms the basis for unfounded personal attacks.
I believe that I have stated an industry-standard analysis (and by “industry,” I am referring to the power industry, not the renewable industry) of the pertinent questions and how they are typically addressed. (Again, leaving the accuracy of the numbers aside, and whether they incorporate incentives, etc.) But perhaps I am mistaken, as well. I would assume that you are familiar with these sorts of questions and analyses, and would be surprised if you disagreed with what I believe to be industry-standard. But, if you did disagree, I would like to learn from this. And, if you did not have a position on how to analyze such questions, or had serious issues with such analyses, that would be informative as well. But leaving this post as-is seems to invite confusion and hostility.
-19-sojournment
Thanks for your comments. I have come to learn that the personalization of policy debates goes with the territory -- if the attacks that I sometimes see are the best they've got, well, that says more about them than me ;-)
On your specific comments about this post -- This blog is like a cafe in the sense that there are many conversations going on at one time. I participate in many of them, being the host, but certainly not all of them.
When a reader writes in asking if he can tap into the vast expertise that follows this blog to up his understanding of an issue, I am happy to oblige. I clearly identified this posting as one from an anonymous reader with questions. I do not endorse the arguments made or share the views expressed. In fact, I have not even had time to follow the discussion closely. It is clear to me that the numbers initially presented are not particularly realistic, but I have no time nor interest to dig into FERC filings to sort it out. I do know that the person asking the questions wants to learn and that an education is being provided. So I fail to see what the problem is. The person asking the questions is free to accept the responses, or not. Debate and discussion is such that not everyone needs to agree.
As I have mentioned, I really appreciate your willingness to engage in a substantive manner with a reader who has taken the time to try to up his understanding of these issues.
People need not guess about my motivations, they can just ask me. And in this case it was simply to facilitate an exchange on a technical but important topic. Such facilitation is open to all on a wide range of topics, regardless of their views, and whether I agree with them or not.
I hope this clarifies, but if not ask again!
-sojournment
"I believe that I have stated an industry-standard analysis (and by “industry,” I am referring to the power industry, not the renewable industry) of the pertinent questions and how they are typically addressed. (Again, leaving the accuracy of the numbers aside, and whether they incorporate incentives, etc.)"
Interesting - I have carried through on every objection you have put up by calculating various forms of 'lifetime cost' to understand how your objections hold up (or not).
You have yet to either confirm or deny the numbers put up - indeed you chose a specific example which left out a significant cost factor.
And you've now twice attempted to deus ex moderator.
If in fact the analysis is wrong, the typical approach is to discuss and/or show the correct path.
Instead you attempt to attack my motivations, my expertise, and so forth rather than actually examining the information at hand.
This is not the mark of an inquiring mind, but rather an ad hominem tactic.
Be that as it may, the purpose of this exercise was simply to see how - in the context of an FERC report - various electricity generation technologies actually performed as documented by a federal reporting standard.
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