Renewables acolytes have been massaging the numbers for years, in an attempt to show that wind and solar power are the cheapest of all.
The standard bag of tricks includes ignoring the capital cost of having every single (unreliable) megawatt of wind or solar constantly backed up by another (reliable) megawatt of coal, gas, nuclear or hydro; refusing to acknowledge the cost to power consumers of mandated targets, tax breaks and/or massive direct subsidies that exclusively benefit wind and solar; ignoring the additional transmission costs of bringing intermittent and diffuse sources of energy from remote locations (where they’re produced) to the cities where the power is consumed; and dismissing the cost of wrecking, once viable, rural communities, including reducing the value of properties where the owners have been forced to abandon homes pummelled by pulsing, thumping, low-frequency wind turbine noise.
Late last year, Australia’s CSIRO – the Commonwealth Scientific and Industrial Research Organisation – entered the fray with its own ‘pigs might fly’ claim that wind and solar are truly competitive with reliable power generation sources.
The CSIRO’s GenCost study 2018/2020 has been touted the AEMO and the usual suspects as the gold standard to demonstrate that wind and solar is cheaper than conventional power. This dangerous illusion was punctured by a comprehensive study delivered to the NSW Parliament over a year ago.
Here’s another critique from two of the team in the “four icebergs” project, Craig Brooking and Mike Bowden, the summary of which follows.
A review of the Problems with Gencost 2018
Craig Brooking and Mike Bowden
In response to a letter from one of the authors of this paper to his State Member, the Minister for Energy and Environment stated that ‘the most economic form of reliable generation is firmed renewables, and this is driving the biggest change in our electricity system’s history’. The Minister’s letter also advised the author to seek further information, if required, from a nominated public servant.
The nominated public servant was subsequently contacted and her advice was sought on the reference for the Minister’s statement on the economics of renewables. The author was duly advised that the CSIRO publication ‘GenCost 2018’ was the source.
GenCost 2018 was examined and a number of potential shortfalls were identified. In particular, GenCost 2018 advised that, “On the other hand LCOE estimates, in their current form, can be misleading if they apply the same discount rate regardless of exposure to climate policy risk and inherently do not recognise the additional balancing technology that is required by variable renewable generation as its share of the generation mix increases. Given the variable renewable share is expected to increase in most Australian states, towards or beyond 50%, this is an issue that needs to be solved.”
Accordingly, a short paper was developed to highlight the shortfalls and clarification was sought from the NSW Government. The Government officials declined to provide further advice and the author was directed to the CSIRO. Correspondence was forwarded to the CSIRO with no response and it was determined that a more comprehensive analysis of the NSW Government’s electrical energy policies should be conducted with the view to seeking a meeting with the Minister. This paper is the result of that determination.
1.2 The Carbon Dioxide (CO2) Question
A brief examination of the geological history of the earth confirms that the CO2 concentration in the atmosphere has varied dramatically over millions of years and the earth has not been destroyed.
It may therefore be concluded that the unproven hypothesis that anthropogenic CO2 emissions will result in runaway global warming should not be a serious consideration in the development of NSW energy policies.
Accordingly, any discussion of Carbon Capture and Storage (CCS) and the price of carbon used in life cycle calculations have been eliminated from this paper as they add significant costs to the electricity system with no real benefit.
A scenario was developed which included a modern, High Efficiency Low Emissions (HELE) coal fired power station similar to one recently commissioned in Germany. It also featured wind farms based on the Sapphire Wind Farm in NSW. Noting the well-known reliability problems with intermittent wind farms, the wind turbines in the scenario were firmed with either Open Cycle Gas Turbines (OCGT) or Combined Cycle Gas Turbines (CCGT), with technical characteristics that reflect turbines common in the international markets.
The capital and operating costs for each technology were determined using data solicited by the Australian Energy Market Operator (AEMO). Calculations were undertaken to determine the cost per megawatt hour (MWh) of electrical energy and the results compared. The outcomes demonstrated that the cost per MWh generated by the HELE plant was significantly less than the OCGT or CCGT firmed wind farms, which indicates that firmed renewables are not the most economic form of reliable generation.
1.4 Replacing the NSW Coal Fired Power Stations
By 2035, there will be a single remaining coal fired power station in NSW. The NSW Government’s Electricity Strategy sets out a plan to deliver three Renewable Energy Zones (REZ) in the State’s Central-West Orana, New England and South-West regions. This builds on the NSW Transmission Infrastructure Strategy and supports the implementation of the Australian Energy Market Operator’s Integrated System Plan. It is assumed that these REZs are planned to replace the coal fired power stations.
This paper has examined the costs to replace the coal fired power stations with wind farms firmed by OCGTs or CCGTs. These costs are substantial and the questions of who will underwrite these costs and what impact they will have on the retail price of electrical energy remain open.
1.5 The German Experience
Germany has adopted the Energiewende (energy transition) policy of replacing its coal and nuclear power plants with wind, biomass and solar; however, the cost has been enormous and there is now a significant public backlash against the consequent destruction of the environment and the increased cost of electricity.
The combined nameplate rating of Germany’s wind and solar infrastructure is approximately double the average demand for electrical energy in that country. Nevertheless, the intermittent nature of the wind and solar farms coupled with their low capacity factors means that their output fails to meet demand with the difference being provided by Germany’s conventional generators and energy imported from neighbouring countries. Australia’s current planning puts it on a similar path to Germany; however, Australia does not have the luxury of electrical energy rich neighbours.
1.6 Solar Power
Noting that the Capacity Factor of large scale solar is less than wind and that it therefore requires even greater firming and hence increased costs, it is difficult to justify its inclusion in the electrical energy system. Accordingly, no detailed study of solar has been undertaken in this paper.
This paper demonstrates that the MWh cost of reliable and dispatchable electrical energy generated by HELE coal fired power stations is significantly less than that generated by firmed renewables and, as such, HELE technology should underpin the NSW Government’s energy strategy.
The NSW Government:
- Should review the Electricity Strategy and immediately implement a life-extension program for the five extant coal fired power stations.
- Should immediately implement construction of additional units at existing coal fired power stations where these were to be provided at a future date. For example, Mt Piper.
- Should plan to replace the five coal fired power stations with modern HELE coal fired plants at the completion of their extended lives.
- Should ensure all renewable energy (RE) generators must be dispatchable at nameplate rating and be economically viable without subsidies and/or preferential treatment before being connected to the transmission network.
- Should ensure transmission infrastructure required by such a connection must be funded by the RE Generator prior to connection.
Read the full paper Brooking & Bowden 2020 A review of the Problems with Gencost 2018
via STOP THESE THINGS
January 10, 2021 at 12:31AM