Due to fracking natural gas is very cheap and plentiful in the U.S. It is transportable by pipelines at low cost. After liquification, natural gas can be transported by ship. The U.S. has plentiful coal that can be mined cheaply. Coal is transported by ship, barge or railroad. Coal can be stored on-site protecting against pipeline failure for natural gas.

 

Nuclear fuel is very cheap for the amount of energy it contains. A reactor can operate for more than a year on the same fuel load. Reactor construction is expensive, partly due to political hostility to nuclear by environmental organizations. Like hydroelectric, nuclear does not emit carbon dioxide (CO2).

 

The Electric Grids

There are 3 electric grids in the United States. The Eastern Interconnection covering east of the Rocky Mountains except Texas, The Texas Interconnection covering Texas, and the Western Interconnection covering west of the Rocky Mountains. Each grid is served by hundreds of generating stations all connected together and synchronized via power lines. At any moment the amount of electricity consumed must be equal to the amount of electricity generated in each grid. The amount of power generated is constantly adjusted as the millions of electricity consumers modify the amount of electricity they are consuming. The delivery of electricity is highly reliable. Blackouts are rare and are extremely costly to the economy because all work stops during a blackout.

 

The electric grids are vulnerable to attack by hostile actors or by natural solar storms. Unfortunately, the government and the industry are negligent in this area. Money spent on solar would be better spent making the grid more resilient.

 

The electric grids are a miracle of technology and vital to the functioning of the nation.

 

Off-Grid Solar

In various situations electric power is supplied by small scale solar systems because it is difficult or uneconomical to connect to the electric grid. These systems usually include batteries to provide power when it is cloudy or nighttime.  Examples are highway emergency call boxes or illuminated temporary highway signs. Residential houses located where grid power is not economically available is a common use for off-grid solar.

 

This article has no argument with these useful applications of solar electricity.

 

Heating of swimming pools by solar collectors that heat water does not involve electricity and is an application of solar energy that works very well.

 

Intermittent Electricity versus Dispatchable Electricity

Dispatchable Electricity comes from conventional power plants. These plants can be ordered to generate electricity as the managers of the grid request.

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Intermittent electricity, like solar or wind electricity, is subject to the wind or clouds or the daily solar cycle. Wind or solar generating plants can be ordered to reduce generation but the amount of electricity they can generate depends on the weather and the daily solar cycle, factors out of the control of the grid managers.

 

It is very important not to curtail or reduce the generation of intermittent electricity because the electricity not generated is lost forever and that increases the average cost of intermittent electricity. The dispatchable generating stations must change their output to make room for the amount of intermittent electricity generated at any moment.

 

If there is more intermittent electricity than the grid can absorb then the grid is suffering from solar or wind congestion and the intermittent electricity must be curtailed.

 

Wind or Solar Electricity Requires Near 100 Percent Dispatchable Backup

It is not always understood that wind or solar electricity cannot replace a coal or natural gas generating plant. The reason is that wind or solar may fail for days or weeks due to the weather. It is not possible at remotely reasonable cost to store enough electricity to bridge the potentially long periods when wind or solar is suffering from reduced generation. These gaps must be filled by dispatchable generation. Solar output is seasonal with greatly reduced output in the winter. Wind is also often seasonal.

 

There are two main methods of storing electricity, batteries and pumped storage. Batteries are efficient in that nearly all the electricity stored can be recovered. But they are expensive and wear out within five or ten years. Pumped storage uses two water reservoirs at different altitudes and stores electricity by pumping water to the upper reservoir. Electricity is recovered by releasing water from the upper reservoir through turbines-generators.  About 20% of the electricity is lost. Pumped storage requires mountains, water and massively expensive pumping and generating equipment.

 

Storing electricity is practical for short periods of time. Solar generation is peaky so that in states with more than about 15 percent solar, the midday solar surge may overwhelm the capability of the grid to accept the solar power. A solution is to store excessive solar electricity generated at midday so that it can be released a few hours later when it is needed in the evening. Time shifting batteries are typically used for that purpose. In serious solar states all new solar farms must be equipped with time shifting batteries.

 

The Concept of Renewable Energy

Renewable energy means sources of energy that won’t run out, at least not for millions of years. That basically comes down to energy from the sun’s radiation (solar and wind energy), energy extracted from the kinetic energy of the earth’s rotation (tidal energy), or geothermal energy, energy extracted from hot rocks beneath the Earth’s surface. Tidal energy is only practical at a few ideal sites. Geothermal energy is likewise only practical at certain sites such as the geysers site in California.

 

Logically hydroelectric energy should be classified as renewable, but most states deny renewable status to hydroelectric energy if a dam is involved. Dams are usually necessary. This is primarily a political decision resulting from hostility to dams by influential environmental organizations.

 

In the 1970’s when the Arab oil producers exerted monopoly power and raised the price of oil it became popular to think that we were running out of oil, natural gas and coal. We weren’t. We were only running out of extremely cheap oil from foreign countries. In the 1970’s global warming from CO2 was not a factor. Climate scientists at that time were predicting global cooling.

 

The 1970’s were a time of doomsday predictions. Doom from overpopulation, resource depletion, famine and pollution were popular themes. All those predictions were wrong. But a large and influential environmental movement became important based on the faulty doomsday predictions.

 

The environmental movement requires a never-ending string of doomsday predictions to raise money to support the various organizations. The movement has to keep inventing new doomsday predictions to stay in business. Thus, we had scares based on DDT, nuclear radiation, acid rain and most recently global warming, among other scares. These scares were either fake or greatly exaggerated. Scientists are complicit in inventing scares. Scientists need publicity and money too.

 

This is not to say that it is not a good idea to limit pollution, but just because some ideas of the environmental movement are worthy does not imply that every crackpot idea they have is worthy.

 

The Energy Transition

It is a popular idea that we must change the energy supply to be wind and solar electricity and then change everything to be powered by electricity. For example, battery powered cars and space heating via electrically powered heat pumps. Extremists even propose battery powered airplanes and battery powered army tanks.

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There are proposals to replace fossil fuels with hydrogen or ammonia, fuels not containing carbon and thus not emitting CO2 when burned. Hydrogen is difficult to transport and store and is more susceptible to exploding than natural gas. Ammonia is quite toxic.

 

The original motivation for renewable energy was the false idea that we are running out of fossil fuels. The new motivation is that we must reduce CO2 emissions to prevent global warming.

 

A major contradiction is the idea that we must use wind and solar to effectuate the energy transition. It would make more sense to use nuclear energy, which does not emit CO2, as a source of electricity. Nuclear is cheaper than wind or solar and it is dispatchable, so backup fossil fuel plants are not required. Nuclear fuel is almost unlimited, especially as newer types of reactors are developed. But nuclear power was one of the big scare stories used by the environmental movement, so it is impossible for them to support nuclear power even though it is the obvious solution to the supposed global warming scare.

 

How Solar Can Be Competitive with Fossil Fuel Electricity

A utility will be interested in substituting solar electricity for natural gas (or coal) electricity if purchasing the solar reduces its costs. To replace some of its natural gas electricity with solar it is necessary to cut back on natural gas generation to make room for the solar. The utility will save money because it will burn less natural gas. The cost of the natural gas fuel is about $20 per megawatt-hour generated[2]. For solar to be competitive it must cost less than $20 per megawatt hour.

 

In a few places, such as isolated islands, very expensive fuel is used with inefficient generators. In those places the cost of the fuel can be much higher, even $150 per megawatt hour. In theory solar could be competitive in such circumstances.

 

Rate of Return on Investment in a Solar Farm

A company that makes an investment, such as an apartment complex or a solar farm, evaluates the potential investment by the expected rate of return.  For real estate, rates of return between 8 and 12 percent are common.

 

When an investment is risky a higher rate of return is expected for higher risk.

 

More than half of the states have renewable portfolio laws. These laws require that increasing percentages of electricity generated in or imported into the state must be from renewable sources – mostly wind or solar. For example, Nevada requires that 50 percent of the electricity be renewable by 2030. California requires 60 percent by 2030.

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The renewable portfolio laws can have strange results such as California paying Nevada to accept renewable power that it cannot use in California.

 

The effect of the renewable portfolio laws is that utilities must purchase wind or solar electricity, even if it is exorbitantly expensive. Only a limited number of large companies have the resources and expertise to build and manage billion-dollar solar farms. These large companies constitute an oligopoly. The renewable portfolio laws change the market to give greater power to the oligopoly.

 

The large companies demand guaranteed long-term power purchase agreements (PPA’s). Having a 20 or 25 year PPA to purchase all the output of a proposed solar farm has immense value. The risk is reduced and so the rate of return required for a profitable investment is reduced.

 

We estimate that without the PPA a rate of return of at least 12 percent is needed for a solar farm investment, something that might be practical on an isolated island with existing expensive generating infrastructure.

 

With a 20-year PPA, 8 percent rate of return is sufficient. The companies will bid a cost of the solar electricity commensurate with an 8 percent rate of return, knowing that a long term PPA awaits them.

 

 At a 12 percent rate of return the cost of solar pencils out at $144 per megawatt hour. With an 8 percent rate of return the cost of solar pencils out at $99 per megawatt hour.

 

The effect of the renewable portfolio law is to reduce the cost of solar electricity from $144 to $99 per megawatt hour. The renewable portfolio law is a subsidy of $144-$99 = $45 per megawatt hour.

 

This subsidy is paid for by the utility that signs an oppressive 20-year agreement to purchase the power. The utility is giving a credit guarantee that is worth $45 per megawatt hour. The utility must continue to buy the power for 20 years even if better options become available.

 

The rate of return for a solar farm is analogous to the interest rate on a home mortgage. Each year the solar farm receives revenue from the sale of electricity. That is analogous to the annual payment on a mortgage. After 20 years the initial investment is returned to the owner of the solar farm with interest.

 

Calculating the Cost of Solar Electricity

The cost of solar electricity depends mainly on three things:

 

1. The amount of electricity generated.

2. The construction cost of the solar farm.

3. The rate of return on investment expected

 

The sunniest parts of the country are the southwest deserts, so solar is cheaper in those areas. The construction cost of a solar farm is measured in dollars per nameplate kilowatt. Nameplate kilowatts are the number of kilowatts of electricity generated under perfect conditions, meaning the amount of power generated when skies are clear and the sun is squarely shining on the photovoltaic panels. The average power, including nighttime, is usually about 25 percent of the nameplate in sunny, southern deserts. That 25 percent is called the capacity factor. The capacity factor is higher in summer when days are long and lower in winter. The 25 percent value is the average for the entire year.

 

Based on estimates from the National Renewable Energy laboratory, increased by the cost of time shifting batteries[3] and recent inflation[4], the construction cost of a solar farm in, for example, southern Nevada is about $2200 per nameplate kilowatt. Based on this, the cost of a solar farm with 500 megawatts, or 500,000 kilowatts, nameplate, would be $1.1 billion. The average output would be 125 megawatts, and the annual electricity production would be 1,095,000 megawatt hours. An additional cost of $20 per megawatt of capacity is added for operation and maintenance.

 

The Effect of of Subsidies

If the rate of return is 12 percent, with a 20-Year plant life, the cost of electricity would be $144 per megawatt hour[5]. This $144 is the true cost of solar, or the free market cost absent subsidies. State renewable portfolio laws result in long term PPA’s and create a reduction of the rate of return to 8 percent, resulting in a cost of $99 per megawatt hour.

 

There are federal subsidies applied to the construction cost of solar farms. These subsidies, an approximate 33 percent[6] tax credit, and a complicated subsidy called tax equity financing[7], pay roughly 50 percent of the construction cost. This reduces the cost from $99 per megawatt-hour to $55 per megawatt hour. (The operation and maintenance cost is not subsidized.) This is still nearly three times the $20 marginal cost of natural gas electricity. The remaining subsidy is the difference between the $55 subsidized cost and the $20 value of the electricity or $35 per megawatt hour. That remaining subsidy must be paid by higher electric rates.

 

 

The subsidies break down as:

Initial cost                                                      $144 per megawatt hour ($134 construction, $10 O+M)

State subsidy                                                               $45 per megawatt hour (renewable portfolio law)

Federal subsidy                                                           $44 per megawatt hour

Electricity consumer subsidy                                      $35 per megawatt hour

Cost after subsidies                                        $20 per megawatt hour

 

The federal subsidy for solar electricity is subject to reduction or removal if there is a change of administration. But since the subsidy is paid at the time of construction existing solar farms should not be affected.

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An Excel spreadsheet with these calculations can be downloaded here.

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The Cost of Using Solar to Reduce CO2 Emissions

As shown above, a total subsidy of $124 per megawatt-hour is needed to make solar competitive with natural gas. If that subsidy is justified on the grounds of decreasing CO2 emissions it is possible to compute the cost of using solar for emissions reduction. In order to reduce CO2 emissions by a metric ton it is necessary to substitute 3.5 megawatt hours of solar electricity for an equal amount of natural gas electricity. The cost of a one-ton reduction is then 3.5 x $124 = $434 per ton.

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The best method of reducing CO2 emissions is to switch to nuclear power. This would result in a cost of of about $140 per ton of emission reduction, about 3 times less than using solar[8]. Nuclear is not cost competitive in the U.S. with natural gas, but it is not intermittent and could entirely replace natural gas plants. Some of the most important climate scientists, for example James Hansen, a true believer in global warming, believe that using solar and wind to reduce emissions is a joke. They are advocates for nuclear power.

 

Is It Worth Spending Trillions to Minimally Reduce CO2 Emissions?

The U.S. is only responsible for about 12 percent of world CO2 emissions and the U.S. electric power industry is only about 3 percent. U.S emissions are declining due to increased use of low carbon natural gas. China and India emit 3 times as much CO2 as does the U.S. and their emissions are skyrocketing.

 

Increasing the quantity of CO2 in the atmosphere has great benefits because CO2 is an aerial fertilizer that helps plants grow. Increasing levels of CO2 are greening the earth and enhancing agricultural productivity[9].

 

It is alleged that increasing CO2 will create a climate catastrophe. The problem with this theory is that the only evidence is the output of speculative computer models. There is no climate trend that can be definitively attributed to CO2 rather than to typical variations[10]. Even if the computer models are correct, we are wasting our time by using solar energy, rather than nuclear, to solve the problem. Further the problem, if we assume there is one, is centered in Asia.

 

Reducing emissions of CO2 in one locality won’t change CO2 concentrations in that locality. CO2 in the atmosphere is quickly mixed around the world. If Nevada reduces its CO2 emissions to zero there will be no measurable effect on Nevada’s climate. Nor will the world’s climate be measurably affected since Nevada is responsible for less than a thousandth of world emissions.

 

The advocates of climate catastrophe refuse to enter into debate and make every effort to shut up and discredit critics. That tells us a lot about their honesty and reliability.