Rerun the analysis, add gas. Remember that batteries can store gas AND solar. You’ll get as many nines as you want, and a pretty cheap system.
What’s not commented on a lot is if you want an ultra clean grid, there is a point where solar wind gas storage becomes less optimal than raw clean firm.
Path dependency is a thing, and you can get stuck!
But overall at some point at that tail that you flagged, the optimal system has a phase shift and you end up removing a lot of solar, gas, storage in exchange for clean firm!
Nice thinking. The most important lesson is that none of us know what form of energy generation is best in every possible circumstance. The answer is not to allow some "expert" agency decide, but to let the market decide. Eliminate all subsidies for all energy sources.
My takeaway on these types of analysis is something like the 80/20 rule. Except it’s closer to 80/50. Assuming your solar is firmed with gas peaker plants instead of batteries, you can do roughly 80% decarbonization for half the cost as 100% decarbonization.
A similar rule applies to sizing electric heat pumps with backup from a natural gas furnace. In a climate zone 5 (Boston, Chicago, etc.) sizing your heat pump to meet load for all but the 10% coldest hours of the year provides 90% decarbonization at half the cost.
You can even apply the rule to plug-in-hybrid electric vehicles. If 80% of your driving is in trips less than 50 miles, you can decarbonize (assuming clean electricity) 80% of your driving with a much smaller battery (at lower cost).
This rule occurs because electrification technologies have expensive capacity and low operating costs. The capacity cost of fossil fuel burning equipment (engines, furnaces, turbines) is comparatively lower, but needing to burn fuel to operate makes operating costs higher.
One detail not in this analysis is the upfront carbon emissions from equipment manufacturing. Going from 90% to 99% solar may require twice as many panels and batteries. That’s twice as much equipment that required carbon intensive materials processing and manufacturing. At some point on a lifecycle carbon perspective that includes carbon from equipment sourcing, you’re probably better off burning gas for several hours a year.
Side note: it’s a shame that nuclear got expensive in the 70s. If the build streak had lasted a bit longer, the US may have had 2x or even 4x as much clean firm generation as it has now which would make the decarb problem that much easier!
Analyzing a solar+battery only grid doesn't make sense, even if it was just renewables you'd mix wind and solar which are also anti-correlated (we often have wind when we don't have solar) plus if its the grid then you've got balances between west and east, north and south which have different patterns of wind and solar. And then you add in a little bit of gas backup - expensive to operate, cheap to build. If we are talking decentralized then similar logic applies, for example household batteries supply a lot of those looking for high reliability, as do backup generators.
What you have described is a typical monoculture > all-electric. Once you step out from under this binary logic straight jacket and into that of a biotope of contextual interrelations the picture becomes far more interesting and way more feasible.
The weight of the building, the positions and sizes of the windows, the insulation and form factor in relation to the geo-position, the occupant's behavioural consumption and the possible load reductions and enthalpic shift from high to lower forms, from electric to thermal.
One can even go further to include thermal salt battery storage and go beyond PV to include bio (CHP), wind, hydro, solar and geothermal energy generation, depending on the location. And smart to do this as a group.
We are conditioned to suppose that the cheapest solution will be the one with the lowest cost to produce instantaneous power sufficient to meet peak demand. And that, at utility scale, battery storage is too expensive to sufficiently address intermittency to significantly change the optimum configuration.
However, if you start with an entirely different set of assumptions....
Some good data. The notion that comes across to me is “no matter how good renewable energy becomes (efficiency, cost, output), it will never be enough.” That has been the tagline of the petroleum industry for decades. As renewables improve in technology and cost efficiency the demand for energy also is increasing from growing population to data centers. So the goal posts keep moving. I concur that at the present certain applications and timing make best use. But petroleum based energy escalates the costs of climate change which could be catastrophic at some tipping point—and then how do the calculations compare? And what are we sacrificing for “cheaper” non-renewable energy? It could be our planet.
Propane and fuel oil are irrelevant at grid scale, and coal will be soon enough. Natural gas is of course very significant, and it has a different sort of risk profile than solar or wind, so we have to be careful about being too reliant on it for those reasons. Unfortunately, its risk profile just depends on how much of it there is, not on what percent of our electricity supply it produces.
I'm skeptical of the cost increase analysis of Cembalest. Doug Sheridan at Energy Point Research has done an analysis that shows that costs almost double when you get to deeply decarbonized grids.
It would be worth comparing base assumptions. These are unabated costs as well so maybe that's part of it.
As you've rightly pointed out, it is a very bad assumption to simply think that costs go down over time so solar will eventually catch up. It won't go down for any installations already in place.
I think the other thing that is often overlooked is the capital intensity of alternative fuels. Even if you got to a breakeven cost, solar requires almost all of the capital up-front. These are nowhere near the same financing profiles and risk profiles. That is something that is often lost. It's literally as if you offset the fossil alternative by a solution which requires you to building a plant and buy all the fossil fuel UP-FRONT. Another reason which LCOE is a rotten measure.
Interesting, thanks. Hmm, is Doug estimating 100% solar? Because if so then I think a 2x cost increase is an *underestimate.* I must be misunderstanding something.
Note that Cembalest's estimate of 15–35% cost increase is only for increasing 30 points from a 40% non-carbon grid to a 70% one! Nowhere near 100%.
You're right that all the solar costs are up front, but financing costs are accounted for in all these estimates, I think. The fact is that the capex for solar is now pretty cheap per watt of nameplate capacity—just over $1/W in the US. Even if you divide by the capacity factor, I think it's competitive with many other energy sources.
You'd have to dig into his linked and blog posts, but the short answer is no. He assumes penetration from 0% to 100% with same online operating factors and also has the capex and financing costs involved in both. Shows break even across all those penetrations. I've never seen any analysis of solar that doesn't have the total up front capex dwarf fossil-powered, but if you have an example of that built into the model, I'd like to tear it apart. Part of that comes from the fact that you have to build so much additional MW solar capacity just to get the reliability factor up, and of course no advocate of solar ever mentions that that you have to keep an equivalent amount of fossil "in reserves" to run when solar can't.
I happened to stumble across this guys analysis and if you lay it side by side with Doug's it's a pretty interesting comparison of what solar advocates get really wrong.
I happened to be doing some research on this same topic for a podcast I'm appearing on next month, and so this was timely.
So, I'm going to draw your attention back to the capital intensity. I totally get why levelized costs are favorites of solar advocates because it allows them to minimize this aspect and sort of dismiss it (that's what Daan does in the link above - he even did so in his reponse to me in the comments) I've run thousands of financial models over my career looking at every kind of large capital investment type in chemicals, and yes, solar is cheaper in operation but it's hugely more expensive in capital intensity.
That's not something that we say, "oh it works out in the cost figures," and as long as we have the WACC the same it's fine. These are RADICALLY different projects in their risk profiles. And the capital intense one is vastly worse.
These project essentially say, "It's costs us $X/W to run a fossil fuel power plant, let's take all the capex for a project like that, and let's buy all the fuel ahead of time for that project, and all the operating costs as well, and let's sink all that money in up front to get radically lower cost/unit run costs." You would never do a project where the leveled costs is parity, EVER. If the levelized cost is actually higher (which it always is to anyone who is intellectually honest with todays solar tech - see Doug's analysis), then it also says "...and let's take 2 or 3x the fuel costs *ALL UP FRONT* and build this solar project instead."
Like that's not a sort of equivalent project from a financing standpoint; it's a complete non-starter. Even if the $/W was the same, it would be a radically different project and likely not get financing without some really stupid money to invest in it. And anyone who claims it is, has never financed such projects. It's the same reason why you don't see solar panels dotting every house in America. (American consumers are pretty savvy when it's their own money - not so much with someone else's.) And the answer is you don't make your money back until 10 or 15 years (on some of these idealized solar pojects, its' not until 25 or 30 yrs) in the future, and a lot can change between now and then, and if it does, and it's negative, you NEVER make your money back. Until you run sensitivity, until you understand the risk you take by putting your whole pot in up front, you don't really see it (or like solar advocates, you wish it away) what that says is, no financier would ask the same return from these two projects, the WACC for the solar project HAS to be MUCH higher because the capital all goes in up front.
This is folly, it's not how startups work, they're the opposite (minimal capital until absolutely necessary). It's not how large financial projects work (Capital intensity and risk are material to WACC).
If you want to radically improve your knowledge in this area, at a faster clip than feeling around, I'd be happy to walk you though a lot of this. This is deeply in my intuition set, and I know right where to look to see the folly in this stuff. I looked at Daan's model inputs and found 3 immediate errors in about 30 seconds that radically change his conclusions. Doug Sheridan is from my sort of background, and I've looked deeply at what he's done and it's pretty sound, and pretty ugly. Solar advocates often call him a "shill" but he's just smart money, like I am. The hurdles that smart money would put up aren't bias, they are objectivity. Solar advocates don't want to get radically honest with themselves.
Solar/battery is not ready for prime time grid access, not in any meaningful way. Lots of great niche applications for it. Maybe next gen, or 2 or 3 gens away, but the hurdles it has to clear are pretty clear. We need to wait until the technology is ready for primetime.
Gas Combined Cycle has LCOE of $45/MWh, which is $18 of capital, $1 fixed O&M, $3 variable O&M, and $23 of fuel.
Solar PV—Utility has LCOE of $29/MWh, which is $25 capital and $4 fixed O&M, no variable O&M, no fuel.
Are you saying that the $25 of capital costs vs. $18 of capital costs makes the difference between a bad investment vs. a good one?
Or are you more reacting to their estimates of Solar PV + Storage—Utility, which have much higher capital costs? ($56/MWh)
I'm confused if so because coal plants have $48 of capital costs built in here, and gas peaking has $71, and I would be surprised to hear you say those are bad investments?
You're right that getting to 100% based on solar plus batteries only in one place would be incredibly expensive, but that's not really an important question, right?
Getting to 50% is trivial and even 80% should be quite doable (I'm bullish on grid scale battery chemistries, given most research into batteries has gone into optimising size and weight for gadgets, not raw cost per watt-hour).
There are a couple of things that really help here:
1) Having a very large and interconnected grid substantially mitigates the cloud variation.
2) In many places (like the UK) there's more wind at night and during the winter, which is very convenient for these purposes.
3) A tiny proportion of gas dealers can go a long way to filling in the rest to three nines (and you can just carbon capture those few at reasonable total cost).
I think that solar (and wind) make a decent off-grid power supply for applications that, as you note, are generally good with coping with intermittent availability. I suspect that a 2x max load solar panel plus sufficient battery to smooth (say 1-2 hours of maxload ) will work well for a lot of use cases. You'd get an average of perhaps 6-8 hours of availability per day which could be quite enough if planned well.
I note that plenty of developing nations where power is intermittent adapt to doing stuff that needs power when the power is available and doing other stuff when it isn't.
A lot of temporary lighting for road works etc. is totally solar + battery powered. LED lights don't consume much power so you can get away with enough panels to charge a small battery to run ~24 hours in one hour of full sun
A better solution is to use a combination of solar with fuel cell technology where the fuel cell powers during off solar hours. By using hydrogen to power the fuel cell you end up with a clean solution. Part of the system generates the hydrogen off of water during daylight hours via the solar energy being generated
(a) Falling costs of solar panels and batteries could make it economic, labor aside, to move many or most homes to electricity self-sufficiency.
(b) But that probably won't happen because "labor aside" isn't reality. Installing solar panels on your roof and maintaining them is too troublesome and inconvenient for mass adoption.
This is where I think manufactured housing could make a big difference.
Have you ever written a post about manufactured housing? If you do, I'd be excited to read it. But my impression is that past progress thinkers like Joseph Schumpeter expected manufactured housing to be huge, but it's remained stuck at ~15% of the housing stock, and an inferior good, mainly because you can't conveniently move a house that's wider than a road lane, or at most-- with agonizingly awkward special arrangements-- two road lanes. And people don't like to live in that kind of a space.
We're accustomed to all sorts of manufactured goods getting both better and cheaper over time, in cumulatively dramatic ways. It's not an absolute law, and it certainly varies from product to product. But your manufactured car and your manufactured smartphone are packed with features and capabilities, whereas manually site-built houses all seem kind of ramshackle and awkward to maintain.
My technological hobbyhorse is GIANT AIRSHIPS. And one of the things giant airships could do is install manufactured houses from the air. That gets you past the road lane limitation. Large homes could be mass manufactured, loaded onto airships, and then lowered into place on-site. On the other hand, maybe AI robots could build houses. The AI robots could be a mobile factory, with a good deal of adaptation and customization but also enough standardization that the concepts of "make" and "model" would be applicable. When something breaks, your house's manufacturer would run diagnostics remotely and then send a robot to fix it in a standard way.
And this relates to solar+batteries because I think we basically can't make houses much more complicated while we're still relying on old-fashioned site-built construction and an awkward aftermarket of mostly self-employed tradesmen for maintenance. When most housing is manufactured, houses can become more feature-packed, and things like solar+batteries power systems can be thrown in.
I hope at some point the global community can get trustworthy data from China on how green power supplies affect their grid. They are so far ahead of the rest of the world that it seems like the best place to see how it's likely to look everywhere else if we manage to catch up.
When you bring in aggressive measures for Building Automation (controlling lights, HVACs and other equipment very tightly) and add good design, good windows, good insulation, you can knock down the power consumption of a typical building by 25%. This isn't cheap or easy, but it's a whale of a lot cheaper and easier than building more solar plants.
We waste an enormous amount of energy. But, no politician gets to put their name on a conservation project and the opportunities for graft are far lower, so nobody talks about doing the easy thing.
The obvious way to get more uptime is to allow the cost to vary. The vast majority of the time, the price of electricity will be low, in line with current prices, with some predictable variation over the course of the day and some predictable variation over the course of the seasons. Then there will be a small amount of time (a few hours a year up to maybe a few days a year) where prices spike quite a bit. People (and industrial customers) will use less electricity during those times, and backup sources like gas peaker plants, long-distance transmission lines, etc., will be incentived to provide a lot of extra power. We just need to clean up the regulatory environment to let the power of the free market to set market-clearing prices.
Yes, good point, and we should definitely do that. But IMO it's still a failure if electricity often spikes to prohibitively expensive levels. We should have energy that is affordable all the time.
It's a nice idea in theory, but it would be extremely unpopular with the vast majority of retail electricity customers. Requiring all electricity customers to move to this model would be a great way for some politicians to get themselves voted out of office.
Interruptible power contracts exist in a lot of US electricity markets. I think they're mainly entered into by industrial/commercial electricity customers. The customer gets a lower rate (and perhaps cutoff payments) in exchange for the utility's ability to cut-off or reduce electricity as a demand response measure in times of high usage.
The wholesale generation side already has real-time market pricing in a lot of places, providing the incentive for building/operating peaker plants.
Rerun the analysis, add gas. Remember that batteries can store gas AND solar. You’ll get as many nines as you want, and a pretty cheap system.
What’s not commented on a lot is if you want an ultra clean grid, there is a point where solar wind gas storage becomes less optimal than raw clean firm.
Path dependency is a thing, and you can get stuck!
But overall at some point at that tail that you flagged, the optimal system has a phase shift and you end up removing a lot of solar, gas, storage in exchange for clean firm!
And wind.
Nice thinking. The most important lesson is that none of us know what form of energy generation is best in every possible circumstance. The answer is not to allow some "expert" agency decide, but to let the market decide. Eliminate all subsidies for all energy sources.
For sure
My takeaway on these types of analysis is something like the 80/20 rule. Except it’s closer to 80/50. Assuming your solar is firmed with gas peaker plants instead of batteries, you can do roughly 80% decarbonization for half the cost as 100% decarbonization.
A similar rule applies to sizing electric heat pumps with backup from a natural gas furnace. In a climate zone 5 (Boston, Chicago, etc.) sizing your heat pump to meet load for all but the 10% coldest hours of the year provides 90% decarbonization at half the cost.
You can even apply the rule to plug-in-hybrid electric vehicles. If 80% of your driving is in trips less than 50 miles, you can decarbonize (assuming clean electricity) 80% of your driving with a much smaller battery (at lower cost).
This rule occurs because electrification technologies have expensive capacity and low operating costs. The capacity cost of fossil fuel burning equipment (engines, furnaces, turbines) is comparatively lower, but needing to burn fuel to operate makes operating costs higher.
One detail not in this analysis is the upfront carbon emissions from equipment manufacturing. Going from 90% to 99% solar may require twice as many panels and batteries. That’s twice as much equipment that required carbon intensive materials processing and manufacturing. At some point on a lifecycle carbon perspective that includes carbon from equipment sourcing, you’re probably better off burning gas for several hours a year.
Side note: it’s a shame that nuclear got expensive in the 70s. If the build streak had lasted a bit longer, the US may have had 2x or even 4x as much clean firm generation as it has now which would make the decarb problem that much easier!
Analyzing a solar+battery only grid doesn't make sense, even if it was just renewables you'd mix wind and solar which are also anti-correlated (we often have wind when we don't have solar) plus if its the grid then you've got balances between west and east, north and south which have different patterns of wind and solar. And then you add in a little bit of gas backup - expensive to operate, cheap to build. If we are talking decentralized then similar logic applies, for example household batteries supply a lot of those looking for high reliability, as do backup generators.
Keep up the good work!
Simply put, rich deposits of coal and oil will eventually run out and using inferior types and sources of fossil fuel will become very expensive.
We must keep using them now and begin a worldwide process of developing nuclear fission reactor technology before that time comes.
"Net zero" and "carbon neutral" and civilisation are mutually exclusive.
There is no real man-made global climate crisis outside of partisan political and economic thinking.
What you have described is a typical monoculture > all-electric. Once you step out from under this binary logic straight jacket and into that of a biotope of contextual interrelations the picture becomes far more interesting and way more feasible.
The weight of the building, the positions and sizes of the windows, the insulation and form factor in relation to the geo-position, the occupant's behavioural consumption and the possible load reductions and enthalpic shift from high to lower forms, from electric to thermal.
One can even go further to include thermal salt battery storage and go beyond PV to include bio (CHP), wind, hydro, solar and geothermal energy generation, depending on the location. And smart to do this as a group.
We are conditioned to suppose that the cheapest solution will be the one with the lowest cost to produce instantaneous power sufficient to meet peak demand. And that, at utility scale, battery storage is too expensive to sufficiently address intermittency to significantly change the optimum configuration.
However, if you start with an entirely different set of assumptions....
https://www.youtube.com/watch?v=6zgwiQ6BoLA
https://23227526.fs1.hubspotusercontent-na1.net/hubfs/23227526/Energy%2BReports%2B-%2BMethodology-1.pdf
Some good data. The notion that comes across to me is “no matter how good renewable energy becomes (efficiency, cost, output), it will never be enough.” That has been the tagline of the petroleum industry for decades. As renewables improve in technology and cost efficiency the demand for energy also is increasing from growing population to data centers. So the goal posts keep moving. I concur that at the present certain applications and timing make best use. But petroleum based energy escalates the costs of climate change which could be catastrophic at some tipping point—and then how do the calculations compare? And what are we sacrificing for “cheaper” non-renewable energy? It could be our planet.
Petroleum is basically irrelevant for electricity!
Talking about propane, natural gas, fuel oil, coal— all carbon based. I should have been more specific.
Propane and fuel oil are irrelevant at grid scale, and coal will be soon enough. Natural gas is of course very significant, and it has a different sort of risk profile than solar or wind, so we have to be careful about being too reliant on it for those reasons. Unfortunately, its risk profile just depends on how much of it there is, not on what percent of our electricity supply it produces.
I'm skeptical of the cost increase analysis of Cembalest. Doug Sheridan at Energy Point Research has done an analysis that shows that costs almost double when you get to deeply decarbonized grids.
https://www.linkedin.com/posts/sheridandoug_renewables-solar-energytransition-activity-7295064061501681665-XBkm
That's for a high-solar load region. He extended it to most of the lower 48 below. Obviously it gets worse.
https://www.linkedin.com/posts/sheridandoug_energy-renewables-solar-activity-7307732540495212544-uk7g
It would be worth comparing base assumptions. These are unabated costs as well so maybe that's part of it.
As you've rightly pointed out, it is a very bad assumption to simply think that costs go down over time so solar will eventually catch up. It won't go down for any installations already in place.
I think the other thing that is often overlooked is the capital intensity of alternative fuels. Even if you got to a breakeven cost, solar requires almost all of the capital up-front. These are nowhere near the same financing profiles and risk profiles. That is something that is often lost. It's literally as if you offset the fossil alternative by a solution which requires you to building a plant and buy all the fossil fuel UP-FRONT. Another reason which LCOE is a rotten measure.
Interesting, thanks. Hmm, is Doug estimating 100% solar? Because if so then I think a 2x cost increase is an *underestimate.* I must be misunderstanding something.
Note that Cembalest's estimate of 15–35% cost increase is only for increasing 30 points from a 40% non-carbon grid to a 70% one! Nowhere near 100%.
You're right that all the solar costs are up front, but financing costs are accounted for in all these estimates, I think. The fact is that the capex for solar is now pretty cheap per watt of nameplate capacity—just over $1/W in the US. Even if you divide by the capacity factor, I think it's competitive with many other energy sources.
You'd have to dig into his linked and blog posts, but the short answer is no. He assumes penetration from 0% to 100% with same online operating factors and also has the capex and financing costs involved in both. Shows break even across all those penetrations. I've never seen any analysis of solar that doesn't have the total up front capex dwarf fossil-powered, but if you have an example of that built into the model, I'd like to tear it apart. Part of that comes from the fact that you have to build so much additional MW solar capacity just to get the reliability factor up, and of course no advocate of solar ever mentions that that you have to keep an equivalent amount of fossil "in reserves" to run when solar can't.
I happened to stumble across this guys analysis and if you lay it side by side with Doug's it's a pretty interesting comparison of what solar advocates get really wrong.
https://electrotechrevolution.substack.com/p/renewables-allow-us-to-pay-less-not
I happened to be doing some research on this same topic for a podcast I'm appearing on next month, and so this was timely.
So, I'm going to draw your attention back to the capital intensity. I totally get why levelized costs are favorites of solar advocates because it allows them to minimize this aspect and sort of dismiss it (that's what Daan does in the link above - he even did so in his reponse to me in the comments) I've run thousands of financial models over my career looking at every kind of large capital investment type in chemicals, and yes, solar is cheaper in operation but it's hugely more expensive in capital intensity.
That's not something that we say, "oh it works out in the cost figures," and as long as we have the WACC the same it's fine. These are RADICALLY different projects in their risk profiles. And the capital intense one is vastly worse.
These project essentially say, "It's costs us $X/W to run a fossil fuel power plant, let's take all the capex for a project like that, and let's buy all the fuel ahead of time for that project, and all the operating costs as well, and let's sink all that money in up front to get radically lower cost/unit run costs." You would never do a project where the leveled costs is parity, EVER. If the levelized cost is actually higher (which it always is to anyone who is intellectually honest with todays solar tech - see Doug's analysis), then it also says "...and let's take 2 or 3x the fuel costs *ALL UP FRONT* and build this solar project instead."
Like that's not a sort of equivalent project from a financing standpoint; it's a complete non-starter. Even if the $/W was the same, it would be a radically different project and likely not get financing without some really stupid money to invest in it. And anyone who claims it is, has never financed such projects. It's the same reason why you don't see solar panels dotting every house in America. (American consumers are pretty savvy when it's their own money - not so much with someone else's.) And the answer is you don't make your money back until 10 or 15 years (on some of these idealized solar pojects, its' not until 25 or 30 yrs) in the future, and a lot can change between now and then, and if it does, and it's negative, you NEVER make your money back. Until you run sensitivity, until you understand the risk you take by putting your whole pot in up front, you don't really see it (or like solar advocates, you wish it away) what that says is, no financier would ask the same return from these two projects, the WACC for the solar project HAS to be MUCH higher because the capital all goes in up front.
This is folly, it's not how startups work, they're the opposite (minimal capital until absolutely necessary). It's not how large financial projects work (Capital intensity and risk are material to WACC).
If you want to radically improve your knowledge in this area, at a faster clip than feeling around, I'd be happy to walk you though a lot of this. This is deeply in my intuition set, and I know right where to look to see the folly in this stuff. I looked at Daan's model inputs and found 3 immediate errors in about 30 seconds that radically change his conclusions. Doug Sheridan is from my sort of background, and I've looked deeply at what he's done and it's pretty sound, and pretty ugly. Solar advocates often call him a "shill" but he's just smart money, like I am. The hurdles that smart money would put up aren't bias, they are objectivity. Solar advocates don't want to get radically honest with themselves.
Solar/battery is not ready for prime time grid access, not in any meaningful way. Lots of great niche applications for it. Maybe next gen, or 2 or 3 gens away, but the hurdles it has to clear are pretty clear. We need to wait until the technology is ready for primetime.
That's an interesting point about more of the costs being up-front and therefore the risk being higher.
Can we make this a bit more concrete? So I'm looking at Lazard's LCOE analysis, p. 32 here: https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf
Gas Combined Cycle has LCOE of $45/MWh, which is $18 of capital, $1 fixed O&M, $3 variable O&M, and $23 of fuel.
Solar PV—Utility has LCOE of $29/MWh, which is $25 capital and $4 fixed O&M, no variable O&M, no fuel.
Are you saying that the $25 of capital costs vs. $18 of capital costs makes the difference between a bad investment vs. a good one?
Or are you more reacting to their estimates of Solar PV + Storage—Utility, which have much higher capital costs? ($56/MWh)
I'm confused if so because coal plants have $48 of capital costs built in here, and gas peaking has $71, and I would be surprised to hear you say those are bad investments?
You're right that getting to 100% based on solar plus batteries only in one place would be incredibly expensive, but that's not really an important question, right?
Getting to 50% is trivial and even 80% should be quite doable (I'm bullish on grid scale battery chemistries, given most research into batteries has gone into optimising size and weight for gadgets, not raw cost per watt-hour).
There are a couple of things that really help here:
1) Having a very large and interconnected grid substantially mitigates the cloud variation.
2) In many places (like the UK) there's more wind at night and during the winter, which is very convenient for these purposes.
3) A tiny proportion of gas dealers can go a long way to filling in the rest to three nines (and you can just carbon capture those few at reasonable total cost).
*gas peakers
I think that solar (and wind) make a decent off-grid power supply for applications that, as you note, are generally good with coping with intermittent availability. I suspect that a 2x max load solar panel plus sufficient battery to smooth (say 1-2 hours of maxload ) will work well for a lot of use cases. You'd get an average of perhaps 6-8 hours of availability per day which could be quite enough if planned well.
I note that plenty of developing nations where power is intermittent adapt to doing stuff that needs power when the power is available and doing other stuff when it isn't.
A lot of temporary lighting for road works etc. is totally solar + battery powered. LED lights don't consume much power so you can get away with enough panels to charge a small battery to run ~24 hours in one hour of full sun
A better solution is to use a combination of solar with fuel cell technology where the fuel cell powers during off solar hours. By using hydrogen to power the fuel cell you end up with a clean solution. Part of the system generates the hydrogen off of water during daylight hours via the solar energy being generated
So the big takeaway seems to be that:
(a) Falling costs of solar panels and batteries could make it economic, labor aside, to move many or most homes to electricity self-sufficiency.
(b) But that probably won't happen because "labor aside" isn't reality. Installing solar panels on your roof and maintaining them is too troublesome and inconvenient for mass adoption.
This is where I think manufactured housing could make a big difference.
Have you ever written a post about manufactured housing? If you do, I'd be excited to read it. But my impression is that past progress thinkers like Joseph Schumpeter expected manufactured housing to be huge, but it's remained stuck at ~15% of the housing stock, and an inferior good, mainly because you can't conveniently move a house that's wider than a road lane, or at most-- with agonizingly awkward special arrangements-- two road lanes. And people don't like to live in that kind of a space.
We're accustomed to all sorts of manufactured goods getting both better and cheaper over time, in cumulatively dramatic ways. It's not an absolute law, and it certainly varies from product to product. But your manufactured car and your manufactured smartphone are packed with features and capabilities, whereas manually site-built houses all seem kind of ramshackle and awkward to maintain.
My technological hobbyhorse is GIANT AIRSHIPS. And one of the things giant airships could do is install manufactured houses from the air. That gets you past the road lane limitation. Large homes could be mass manufactured, loaded onto airships, and then lowered into place on-site. On the other hand, maybe AI robots could build houses. The AI robots could be a mobile factory, with a good deal of adaptation and customization but also enough standardization that the concepts of "make" and "model" would be applicable. When something breaks, your house's manufacturer would run diagnostics remotely and then send a robot to fix it in a standard way.
And this relates to solar+batteries because I think we basically can't make houses much more complicated while we're still relying on old-fashioned site-built construction and an awkward aftermarket of mostly self-employed tradesmen for maintenance. When most housing is manufactured, houses can become more feature-packed, and things like solar+batteries power systems can be thrown in.
What do you think?
I hope at some point the global community can get trustworthy data from China on how green power supplies affect their grid. They are so far ahead of the rest of the world that it seems like the best place to see how it's likely to look everywhere else if we manage to catch up.
When you bring in aggressive measures for Building Automation (controlling lights, HVACs and other equipment very tightly) and add good design, good windows, good insulation, you can knock down the power consumption of a typical building by 25%. This isn't cheap or easy, but it's a whale of a lot cheaper and easier than building more solar plants.
We waste an enormous amount of energy. But, no politician gets to put their name on a conservation project and the opportunities for graft are far lower, so nobody talks about doing the easy thing.
The obvious way to get more uptime is to allow the cost to vary. The vast majority of the time, the price of electricity will be low, in line with current prices, with some predictable variation over the course of the day and some predictable variation over the course of the seasons. Then there will be a small amount of time (a few hours a year up to maybe a few days a year) where prices spike quite a bit. People (and industrial customers) will use less electricity during those times, and backup sources like gas peaker plants, long-distance transmission lines, etc., will be incentived to provide a lot of extra power. We just need to clean up the regulatory environment to let the power of the free market to set market-clearing prices.
Yes, good point, and we should definitely do that. But IMO it's still a failure if electricity often spikes to prohibitively expensive levels. We should have energy that is affordable all the time.
It's a nice idea in theory, but it would be extremely unpopular with the vast majority of retail electricity customers. Requiring all electricity customers to move to this model would be a great way for some politicians to get themselves voted out of office.
Interruptible power contracts exist in a lot of US electricity markets. I think they're mainly entered into by industrial/commercial electricity customers. The customer gets a lower rate (and perhaps cutoff payments) in exchange for the utility's ability to cut-off or reduce electricity as a demand response measure in times of high usage.
The wholesale generation side already has real-time market pricing in a lot of places, providing the incentive for building/operating peaker plants.