Introduction – a contradiction
Retail electricity prices keep going up despite the fact that the present Australian Government promised a $275 household reduction before it was elected. We are constantly told that renewable energy is "cheap", which is contradictory to our domestic cost experience . That renewables are "cheap" is the position of the International Energy Agency and the UN. Cheap energy is an oxymoron. The figures bandied around by the disciples of renewable energy and the nuclear and fossil industries cannot be taken seriously unless the methodology and the underlying assumptions in the calculations are made transparent. All of these groups have their own agendas.
The fallacy of free energy
Some claim that renewable energy is free, very cheap. Sunshine and wind are free and renewable. However, the facilities needed to capture the electromagnetic radiation (solar) and the kinetic energy (wind), convert this energy to electricity and transmit it to the points of consumption are not free, especially if they cannot operate 24/7 but only when the sun shines and the wind blows.
Limitations of LCOE
Levelized Cost of Electricity, (LCOE), has been useful for a long time but was never intended to deal with intermittent energy sources. Essentially, it calculates what it costs to build and operate a power plant and then figures out how much electricity it will be called upon to produce during its lifetime. It divides the former by the latter to come up with a single number to compare generating types.
The problem is the underlying assumption of the LCOE calculus – so obvious that it was never stated – was that any given power plant would run when needed and not run when not needed and so each kWh from each generating method has the same value. Under these conditions the LCOE calculation provides a simple comparison. In the days before solar and wind the assumption was valid. LCOE comparisons for renewables versus fossil and nuclear are not valid because the renewables only operate on the vagaries of the weather and cannot produce electricity on demand, that is when wanted, whereas fossil and nuclear can produce on demand, which is what is required.
As Robert Idel, an energy economist at Rice University, USA, has pointed out:the purpose of an electricity generator is no so much to produce electricity, per se, but to provide a specified amount of electricity to a particular place or places, at a specific time. Intermittent generation has no obligation to meet demand. The value of a kWh from an intermittent source, calculated by LCOE, has much diminished value compared to a similar unit produced from a generating source that can produce on demand such as fossil and nuclear. Consequently, the LCOE comparison between sources that can produce on demand on the one hand and intermittent renewables on the other that cannot, is invalid as a means of comparing real costs of electricity on demand. Any pronouncement about renewables being a cheap source of energy is invalid if based on LCOE, no matter what prestigious body pronounces it.
Intermittency, redundancy and capacity utilization factor
The major technological limitation of renewables (sun and wind) is due to their intermittency.
All those intermittent electricity generation facilities dependent on the weather must have similar or other types of generator in parallel, or storage, to produce electricity on demand. As they are not able to produce electricity on demand due to the vagaries of the weather they only produce for part of the time. This requirement for having generators in parallel (for example, solar and wind) increases cost of the stand-alone system by a number of integers. All renewable generators only operate part time (when the sun shines and the wind blows) so even if they are situated in widely different locations they are still only part time generators and their cost must be included in the cost of electricity along with the significant cost of long distance transmission lines. This low capacity utilization factor of intermittent renewables results in a tremendous increase in construction cost which must be factored into the cost of electricity. This means that the real cost of electricity from renewables will be a number of times more than that indicated by LCOE, making stand-alone renewable systems economically non-viable.
It should be noted that even if storage were not a significant economic obstacle, the intermittency will still make renewables either very expensive or even unaffordable in order to produce electricity on demand 24/7. Storage costs push the costs towards unaffordable.
Those who do not think that large-scale economic storage of electricity is a huge technological challenge should look at the electrochemistry behind the well-established (for small appliances) lithium-ion (Li-ion) battery which is currently favoured for upscale development. Li-ion batteries depend on the migration of lithium cations backwards and forwards (charge and discharge) through a permeable membrane. The economics of this depend on the concentration and migration speed of the cations across the membrane as well as the area of the membrane. There are also significant safety issues with Li-ion batteries, they need careful management circuits to prevent their destruction from overcharging, overdischarging and overheating. They are also subject to thermal runaway, they can self-ignite when abused or defectively made. Imagine this on large-scale storage. Some shipping companies have refused to accept consignments of electric vehicles, powered by Li-ion batteries.
No one is claiming success at the production of safe and economic large-scale batteries for the purpose of stand-alone electricity generating systems.
Environment degradation due to mining is generally acknowledged. It should be recognised that mining is essential for gaining the specialised, critical and scarce minerals necessary for the manufacture of solar panels and their add-ons as well as wind turbines. There is also the landscape deterioration with solar and wind turbines and long-distance transmission lines.
Stand-alone intermittent renewable energy on demand electricity generating systems are not cheap but rather economically non-viable. Society wants reliable, available 24/7 and affordable electricity and now carbon free. Stand-alone renewable systems are not fit for purpose but can be part of the future energy mix. Besides being economically non-viable, the environmental effects are not so green either.
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