I recently had the good fortune to have lunch with Carl Weinberg. We are both retired now, but Carl at one time was the most respected utility official involved with solar electricity.
He started and ran the PG&E renewable program in those days when many utilities across the world were not all that interested in this new possible pathway for the generation of electricity. He has, of course, kept up with the field, and sent me some information that I will here share.
He started and ran the PG&E renewable program in those days when many utilities across the world were not all that interested in this new possible pathway for the generation of electricity. He has, of course, kept up with the field, and sent me some information that I will here share.
Electricity prices vary by location due to type of power plants, cost of fuels, fuel transportation costs and state pricing regulations. The states with the highest average residential price of electricity in April 2018 were:
Hawaii (31.21¢ per kWh)
Massachusetts (22.34¢ per kWh)
Alaska (21.61¢ per kWh)
Those with the lowest average prices in April 2018 were:
Washington (9.74¢ per kWh)
Louisiana (9.80¢ per kWh)
Arkansas (10.00¢ per kWh)
Is this because solar electricity has made a difference? Nope. Honolulu leads the nation in solar PV residences, but still mostly burns crude oil, while hydroelectricity is responsible for 27% of the power produced in Washington. #2 is California with 13%.
The Grand Coulee Dam in Washington is just about a mile long and 550 feet high. In 2016 the average U.S. home used 900 kWh/month and paid $112.59 before taxes and fees.
Do you pay the same rate as, say, industry? No:
2018 U.S. ELECTRICITY PRICES PER kWh
Residential 12.89¢
Commercial 10.44¢
Industrial 6.58¢
Tranportation 9.53¢
All Sectors 10.23¢
While generation is the major cost, distribution and transmission adds to the cost:
You ask what is the difference between distribution and transmission? Transmission costs are associated with the line that moves electricity from the power plant to substations, while distribution lines carry electricity from the substation to the consumer.
There are basically two types of solar power: thermal and photovoltaics. There was a surge of interest in solar thermal from 1984 to 1991 when nine large facilities were built in California's Mojave Desert, producing 354 megawatts when the sun was out, feeding half a million homes. However, when natural gas prices dropped in the 1990's, this optioned essentially died. To the left, the Ivanpah solar plant when I flew over the site a few years ago.
In the meantime, solar photovoltaics (PV) have shown considerable progress:
During the past 15 years PV prices have dropped by a factor of 25. Once installed PV modules have essentially no maintenance cost. While residences have jumped on board, their cost is almost three times that of utility scale solar PV powerplants: $2.80 per watt to $1.03 per watt.
Solar PV has just about reached parity with natural gas and wind energy. More so, as electricity consumption (due to air conditioning) increases when temperatures rise, PV farms become especially useful as a peaking option.
| Energy Plant Type | Lifetime Cost $ per MWh |
|---|---|
| Offshore Wind | 138.0 |
| Coal with 30% CCS | 130.1 |
| Coal with 90% CCS | 119.1 |
| Biomass | 95.3 |
| Advanced Nuclear | 92.6 |
| Nat Gas Combined Cycle with CCS | 74.9 |
| PV SOLAR | 63.2 |
| Hydro-electric | 61.7 |
| Land Based Wind | 59.1 |
| Natural Gas Combined Cycle | 50.1 |
| Geothermal |
While not exactly easy to understand:
The above table shows the Levelized Cost Of Energy (LCOE) for various sources of electricity. LCOE is a "fair" method of comparing the cost of different complex energy technologies. It is the total life cycle cost of electricity for a given technology divided by the total life cycle electricity produced, expressed as dollars per million watt hours ($ per MWh). The table below, derived from LCOE costs developed by the US Energy Information Administration (EIA) in March, 2018, "estimates" the average LCOE (with no subsidies) over a 30 year period for different energy sources that are brought online in the year 2022. The year 2022 is used for comparison as that is a realistic time frame for a new plant to come on-line. (LCOE calculations are explained in much more detail in the Utility Section below.)
Total life cycle cost includes the fact that the sun only shines about a third of the day. Note that solar is half the cost of coal with carbon control and storage (CCS). But this comparison is deceptive because there is no law today requiring this need. In time, when expected laws are incorporated to reduce global warming, solar and wind will become the obvious option of choice.
In the U.S. today there are tax incentives for renewables:
Bringing CCS costs in line with solar costs today would require a roughly $80 per MWh subsidy, assuming CCS projects stay on-budget. By comparison, the production tax credit for wind plants, which passed on a bipartisan basis in 2015, provides a subsidy of $23 per MWh and will sunset completely in 2020. The investment tax credit for solar plants pays for up to 30% of investment costs, or about $18 per MWh, and will decrease to 10% of investment costs by 2022.
If President Donald Trump is reelected and has his way, meaning no penalty for emitting carbon dioxide into the atmosphere and no continuation of assistance to renewables, clean energy use would face challenges. Worse, since 2000, the world has doubled its coal-fired power capacity to around 2,000,000 megawatts, while a further 572,000 MW are either being built or planned, mostly in China and India. What about the Paris Agreement? Well, read this article and weep.
That's not all. The sun only shines for a small part of the day and winds come and go. Energy storage is today all about batteries and old pump storage. But batteries continue to be very expensive and there are not that many new pumped storage sites of significant.
Nuclear power has been suggested, but countries like Germany are getting out of this option and these reactors are getting more and more expensive.
What happened to flywheels, compressed air and thermal storage? Not much.
So what about all those 100% renewable plans? First, all those goals are for electricity only, which is only a little more than a third of energy used. Nothing much is happening with air transport, while ground transport using biofuels is supposedly approaching 25% in the U.S., and plug-in electric vehicles are perhaps 1% of the car market in the world, and last year 2% of new car sales in the U.S. were these EVs. Norway? 49%. California? Almost 8%.
However, renewable energy is the fastest-growing energy source in the U.S., increasing 67% from 2000 to 2016. While solar might provide 5% of the electricity produced today, it is projected to supply 36% of electricity consumed by 2050.
Clearly, this percentage will be higher if fossil fuel prices surge and the carbon tax is invoked. Within 30 years, both should occur.
Clearly, this percentage will be higher if fossil fuel prices surge and the carbon tax is invoked. Within 30 years, both should occur.
Any major transition takes time. Much of relative recent sluggishness has to do with the price of oil, which has wandered around $50/barrel for several years now. Biofuel economics were more favorable when the cost ranged from $80 to $100/barrel four years ago.
But solar PV costs are dropping to the point where the competition is not oil, but coal and natural gas, where utilities are rightfully concerned that something close to a carbon tax has to be factored into future planning. The future looks good for solar electricity.
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