BATTERY SYSTEM CAPITAL COSTS, OPERATING COSTS, ENERGY LOSSES, AND AGING

BATTERY SYSTEM CAPITAL COSTS, OPERATING COSTS, ENERGY LOSSES, AND AGING

This article has eight parts

 

Solar electricity increases with the rising sun, is maximal around midday, and decreases with the setting sun.

 

The Owners of traditional generating plants, to avoid grid disturbances, are required by ISO-NE, the NE grid operator, to reduce their outputs when solar is present, which decreases their annual production, kWh/y, and increases their costs, c/kWh, plus increases wear and tear of their plants, i.e., those services are not “for free”.

 

Electric grids with many solar systems have major midday solar output bulges, that are counteracted by the traditional power plants reducing their outputs. Combined-cycle, gas-turbine plants, CCGTs, perform almost all of counteracting (aka balancing) of the variable wind and solar outputs.

 

Those plants have to increase their outputs during the peak hours of late afternoon/early evening, when solar will have gone to sleep until about 8 or 9 AM the next morning.

 

Battery Systems Electricity Delivery Periods at Rated Capacity: At present, most recently installed battery systems have about 4 hours of electricity delivery at rated capacity, because the battery systems are primarily used to absorb midday solar output bulges.

 

Battery systems, in use during all of 2015, delivered electricity, on average, for 0.5 hours

Battery systems, in use during all of 2018, delivered electricity, on average, for 2.4 hours

Battery systems, in use during all of 2019, delivered electricity, on average, for 3.2 hours  

 

The increase in energy-delivery duration is required, because the main function of battery systems is to store excess wind and store midday solar output bulges. They discharge about 80% of the stored electricity during the peak hours of late afternoon/early evening; the other 20% are battery system losses. See Parts 2 and 4

https://www.eia.gov/todayinenergy/detail.php?id=43775

 

Battery systems usually perform multiple services at the same time. See image

 

A 2018 survey of 43 battery systems, performed by the Energy Information Administration, EIA, found 26 systems dealt with: 1) excess wind events, which occur at random, and 2) midday solar output bulges, which occur every day; 18 dealt with frequency regulation, 13 dealt with system peak shaving.

 

The annual battery throughput is greatest, by far, for dealing with excess wind and midday solar output bulges.

Battery System Usage is Extremely Low: Because of the efficiency loss between charging and discharging, batteries are a net consumer of electricity. Of the 150 battery plants (1,022 MW) that reported operating battery storage capacity on Form EIA-860 in 2019, 109 plants (850 MW) also reported electricity discharge and charge data on Form EIA-923 in 2019.

 

These 109 plants reported a total of 458,169 MWh of gross discharge from and 553,705 MWh of gross charge into the battery systems in 2019; an average round-trip efficiency of 85%, which excludes step-down and step-up transformer losses of 1% each.

 

1) About 230,000 MWh of the gross discharge in the PJM area was for serving its frequency regulation market (Figure 10 in URL). The PJM battery systems have a usage factor of almost 9%

 

2) About 110,000 MWh of the gross discharge in the CAISO area was for dealing with excess wind and solar storage. The CAISO battery systems have a usage factor of just over 9%

 

3) The ISO-NE battery systems have a usage factor of about 5%

See page 20 of URL

https://www.eia.gov/analysis/studies/electricity/batterystorage/pdf...

  

Multi-day Wind/Solar Lulls: If, at some future date, gas, oil, and nuclear power plants were no longer allowed, and were replaced by wind and solar systems, battery systems would need about a month of electricity delivery at rated capacity to cover:

 

1) Randomly occurring, 5 to 7-day wind/solar lulls with minimal output, that could be followed by another multi-day wind/solar lull a few days later

 

2) Seasonal variations of wind and solar outputs

 

Battery Owning and Operating Costs are Very High: This article will show the total cost of a 1 MW/4MWh battery system would be about $105,187/y, which includes: 1) the annual cost of financing, 2) the Owner’s annual return of investment, 3) the annual cost of operation and maintenance, 4) all other annual expenses. See Part 6

 

Most of cost should be allocated to the Owners of wind and solar systems, because: 1) they are the disturbers, and 2) most of the annual throughput of the battery system is due to dealing with wind output variations and absorbing midday solar output bulges.

 

Battery systems perform various other functions, but those services require much smaller throughputs than wind and solar systems.

 

This analysis assumes the net effect of financial benefits and subsidies is equivalent to reducing Owner’s annual costs by 45%

 

US Utilities Capital and Operating Cost Data: US Utilities, which own a large number of various type battery systems, provide a minimum amount of information regarding the:

 

1) All-in, turnkey capital cost of their battery systems

2) Hourly and daily operating data, including overall, round-trip, system losses, and usages for each service. See Parts 1, 2 and 7

3) Revenues earned from each service

4) Annual cost of: 1) owner’s income, 2) cost of financing, 3) O&M expenses, 4) all other expenses 

5) How much of Owner annual costs is offset by subsidies and other financial benefits

PART 1

 

Turnkey Capital Costs of Site-specific, Custom-designed, Utility-grade, Grid-scale Battery Systems

 

Tesla Megapacks

 

Tesla is at the forefront of providing the world with lithium-ion battery systems, that include front-end power electronics, the batteries, and back-end power electronics, and systems for battery heating and cooling, as needed, in standardized enclosures.

 

The Megapack ratings shown in the table, in bold, fit into a standard container W, 286” x D, 85” x H, 99”

If multiple Megapacks are purchased, the $/kWh becomes less. See URL

https://www.tesla.com/megapack/design

 

The 2022 Megapack pricing is shown in the table

The 2022 Megapack pricing is 24.5% greater than the 2021 pricing. See URL

 

The 2025 Megapack price likely will be much higher, due to: 1) increased inflation rates, 2) increased interest rates, 3) supply chain disruptions, 4) increased energy prices, such as oil, gas, coal, etc., and 5) increased materials prices, such as of Tungsten, Cobalt, Lithium, and Copper

 

https://cms.zerohedge.com/s3/files/inline-images/2022-03-21_15-28-4...

https://www.zerohedge.com/commodities/tesla-hikes-megapack-prices-c...

 

NOTE: After looking at several aerial photos of large-scale battery systems with many Megapacks, it is clear many other items of equipment are shown, other than the Tesla supply, such as step-down/step-up transformers, connections to the grid, land, access roads, fencing, security, site lighting, i.e., the cost of the Tesla supply is only one part of the total battery system cost on a site.

 

NOTE: PG&E, a California utility, put in operation a 182.5 MW/730 MWh battery system, 4-h energy delivery duration.

The primary purpose is to absorb midday solar output bulges.

The turnkey cost was about $330 million, based on 2020/2021 pricing.

The cost would be significantly greater, if based on 2022 pricing. See URL

None of the costs associated with such systems will be charged to Owners of solar systems

https://www.10news.com/news/national/pg-es-tesla-megapack-battery-i...

 

NOTE: World Cobalt production was 142,000 and 170,000 metric ton, in 2020 and 2021, respectively, of which the Democratic Republic of the Congo was 120,000 metric ton in 2021.

 

https://www.kitco.com/news/2022-02-02/Global-cobalt-production-hits...

https://www.wilsoncenter.org/blog-post/drc-mining-industry-child-la...

Purchase	Capacity	Energy	Duration	Location	Cap Cost	Price
Units	MW	MWh	h	State	$million	$/kWh
1	1.295	2.570	2	Vermont	1.842	717
2	2.590	5.140	2	Vermont	2.808	546
3	3.885	7.710	2	Vermont	4.189	543
1	0.770	3.070	4	Vermont	1.566	510
2	1.540	6.140	4	Vermont	2.957	482
3	2.310	9.210	4	Vermont	4.409	479

PART 2

Turnkey Capital Cost Surveys of Grid-Scale Battery System by EIA

The Energy Information Agency, EIA, has collected turnkey capital costs and operating data of the US energy sector for many decades.

 

The first EIA report regarding the turnkey capital costs of various types of grid-scale battery systems, not just Lithium-ion types, was issued in 2017, and covered battery system in use for all of 2015

 

The most recent EIA report was issued in 2021, and covered battery systems in use for all of 2019

 

The trend of the data revealed, the turnkey capital cost decreased after 2015, as shown by the table and image.

The EIA projects turnkey capital costs at about $500/kWh in 2025, based on historic cost trends.

Power Delivery Duration: The average duration of battery discharge increased from 0.5 h in 2015 to 3.2 h in 2019, because they are increasingly used to absorb midday solar output bulges. They deliver about 80% of that electricity during peak hours in the late-afternoon/early-evening.

EIA 2020 Report, which includes systems in operation during all of 2018

 

The EIA graph, based on surveys of battery system users, shows slowly decreasing costs after 2018

The average price was $625/kWh in 2018

It appears, the range of values likely would become $900/kWh to 450/kWh in 2025.

The values would be near the higher end of the range in New England. 

https://www.eia.gov/todayinenergy/detail.php?id=45596

EIA 2021 Report, which includes systems in operation during all of 2019

 

The US average turnkey capital cost of battery systems was about $589/kWh, delivered as AC, in 2019. 

The average price decreased from $625 in 2018, to $589 in 2019, or a $36/kWh decrease

The average price would decrease to $500 in 2025, if the annual decreases were about $15. See image

The NE average turnkey capital cost for such systems was about $700/kWh, delivered as AC, in 2019

 

Those average prices will not decrease, unless major technical breakthroughs are discovered, and subsequently implemented on a large scale.

See table 3 and page 18 of EIA URL

https://www.eia.gov/analysis/studies/electricity/batterystorage/pdf...

 

Such grid-scale battery systems operate 8,766 hours per year

Annual capacity factor is about 0.5, i.e., a working throughput of about 50% of rated throughput

https://www.windtaskforce.org/profiles/blogs/economics-of-utility-s... 

 

Table 1 combines the data of five EIA reports

NOTE: The EIA projected cost is $500/kWh for 2025, but that value likely will not be attainable, due to:

1) increased inflation rates, 2) increased interest rates, 3) supply chain disruptions, 4) increased energy prices, such as oil, gas, coal, etc., and 5) increased materials prices, such as of Tungsten, Cobalt, Lithium, and Copper

Future EIA Reports

EIA 2022 Report for 2020 likely would show the decreasing capital cost trend of the 2019 report.

EIA 2023 Report for 2021, and reports for subsequent years, likely would show an increasing capital cost trend, especially with lithium-ion battery systems becoming a significant part of a year's mix.

NOTE: Various financial services entities, such as Bloomberg and Lazard, issue self-serving reports that project much lower battery system costs/kWh, delivered as AC, than the EIA. Those entities tend to underestimate battery costs to avoid chasing away their wealthy clients who are seeking tax shelters, which would adversely affect their financial services business. It would be prudent to ignore those reports.

Table 1/Battery system turnkey cost	Range	Duration	Average
Year	$/kWh as AC	hour	$/kWh as AC
2015	2500 to 1750	0.5	2102
2016	2800 to 750	1.5	1417
2017	1500 to 700	1.8	755
2018	1250 to 500	2.4	625
2019	1050 to 475	3.2	589
2025	900 to 450		500

 

This image is from the 2020 EIA report. The 2019 data of table 1 are not yet shown.

The image shows turnkey capital costs of utility-grade, grid-scale battery systems is approaching about $500/kWh in 2025

 

 

General Comments Regarding EV Battery Systems

 

Grid-scale battery systems are entirely different from the mass-produced battery packs in electric cars, which operate about 700 hours per year, are warranted to have a loss of no more than 30% of capacity, at end of year 8, in case of Tesla.

The cost of a 60-kW replacement battery is about $10,000, or $165/kWh, plus about $2,000 for labor, etc.

The cost of EV battery systems may decrease, due to more mass production

However, the cost likely will increase, due to: 1) increased inflation rates, 2) increased interest rates, 3) supply chain disruptions, 4) increased energy prices, such as oil, gas, coal, etc., and 5) increased materials prices, such as of Tungsten, Cobalt, Lithium, and Copper

Who, of rational mind, would switch batteries, at a $12,000 total cost, in an 8-y-old car?

 

As the Mar 30, 2022 price of tungsten was $320,000/ metric ton, prices of EV battery packs are likely to increase, rather than decrease 

https://price.metal.com/Tungsten-Cobalt-Antimony

The purchase price of Tesla EVs (AWD, long range, no extras) are Model 3 ($55,990) and Model Y ($62,990)

Includes a price increase of $1,000, in March 2022.

Excludes state sales taxes, dealer preparation and documentation.

Amortizing $62,990 at 3.5%/y over 8 years costs $9,039/y, which far exceeds any annual fuel cost reduction

 

https://www.tesla.com/model3/design#overview

https://www.tesla.com/modely/design#overview

https://www.myamortizationchart.com

These EVs cost much more to own and operate, and are less capable, especially in colder climates, than equivalent gasoline vehicles.

Such price levels are out of reach of 90% of US households, i.e., the EV subsidies and EV charger subsidies, paid for by everyone, benefit mostly upscale households.

 

https://www.windtaskforce.org/profiles/blogs/poor-economics-of-elec...

https://www.windtaskforce.org/profiles/blogs/electric-bus-systems-l...

NOTE:

China is the world’s biggest market for EVs with total sales of 1.3 million vehicles in 2020, more than 40% of global sales that year.

China is the dominant battery pack producer, including anodes and cathodes, which require energy and raw materials , such as lithium, nickel and cobalt, and rare earth metals.

https://moneyweek.com/investments/commodities/industrial-metals/604...

NOTE: Lithium carbonate price was $41,060/metric ton, or $41/kg, on Jan. 3, 2022, about 5 times higher than in Jan. 2021

https://www.mining.com/ev-battery-costs-set-to-rise-in-2022/

PART 3

Financing and Operating and Maintenance Costs of Grid-Scale Battery Systems 

 

Any project has an upfront turnkey capital cost, and financing and annual operating and maintenance costs and periodic renovations, the same as a house, or a battery system. Some of the annual financing cost, O&M cost, etc., are listed below:

 

1) Financing costs, such as due to amortized loans or bonds, are assumed at about 6%/y for 15 years. This is a significant annual expense. This percentage likely would be greater in 2025 than at present, because increased inflation rates require increased interest rates. See Note.

 

NOTE: Examples of recent interest rate increases:

House mortgage rates increased from about 2.8%/y in 2021 to 5.1%/y in 2022, and likely will increase in future years.

Bank loan rates for battery systems increased from about 3.5%/y in 2021 to about 5.0%/y in 2022.

https://themortgagereports.com/61853/30-year-mortgage-rates-chart

2) Owner’s return on investment of about 9%/y, which is a standard annual return utilities make on their investments. This is a significant annual expense. This percentage may increase in future years, to offset inflationary effects.

 

3) Battery system throughput loss averaging about 20%, which increases with aging, as measured from distribution grid or high-voltage grid, AC-to-AC. This is a significant annual expense. 

 

4) All other battery system operating and maintenance cost, including security, insurance, etc. The total is a significant annual expense

 

5) Financial benefits and subsidies, such as cash grants, tax credits, accelerated depreciation, loan interest deductions, waiving of state and local taxes, fees and surcharges, waiving of local real estate taxes, etc.

 

The intent of subsidies is to shift costs from Owners to Others, by about 45%.

This enables Owner's to offer battery services at a much lesser cost/kWh of battery system throughput.

This makes the use of batteries look politically more palatable.

 

Any shifted costs are paid by Others, i.e., ratepayers, taxpayers and added to government debts

No cost ever disappears, per Economics 101

 

General comments regarding grid-scale battery systems:

 

1) All-in cost is about $700/kWh, delivered as AC, in NE, in 2019, with little prospect of a significant decrease 

2) Last at most 15 years, if operated between 15% full and 80% full, and in a temperature-controlled enclosure.

Some experts claim operation between 20% full to 80% full is more prudent to achieve 15-y life, with less aging

3) Age at about 1.5%/y (the capacity loss would be about 25% in year 15)

4) May catch fire, i.e., high insurance costs. This is a significant annual expense

https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-sol...

PART 4

Energy Losses of Site-specific, Custom-designed, Utility-grade, Grid-scale Battery Systems

  

Here are two sources that claim the loss of a battery system is about 20%, based on field measurements. 
Because losses increase with aging, continuous monitoring/recording for the life of the project is required.

 

SOURCE 1 

 

Based on operating data from a 192 kWh, li-ion/phosphate, battery system, on A-to-Z basis

 

This referenced article identifies 18 losses of a stationary battery system, totaling about 20% for a round-trip, excluding step-down and step-up transformer losses.

 

Four Major Loss Categories: The system model has four coupled, component models: 

 

1) Battery, 

2) Power Electronics, 

3) Thermal Management, such as heating/cooling of batteries and enclosures, and

4) Control and Monitoring.

 

In addition, grid-scale battery systems, with high turnkey capital costs, require electricity for: 1) building HVAC and lighting, 2) site lighting and security surveillance, etc.

 

Open URL and click on “View Open Manuscript”

See figures 3, 4 and 17 of article.

 

https://www.sciencedirect.com/science/article/pii/S0306261917315696

https://www.osti.gov/servlets/purl/1409737

 

Sequence of Losses regarding two of the four loss categories:

 

1) AC electricity from a distribution, or high-voltage grid, via a step-down transformer, about a 1% loss, to reduce the voltage to that of the battery

2) Through the front-end power electronics to DC

3) Charged into battery

4) Discharged from battery

5) Through the back-end power electronics; DC is digitized, made into a sine wave with same phase and 60-cycle frequency as the grid

6) Via a step-up transformer, about a 1% loss, to the distribution, or high-voltage grid

 

Overall efficiency of about 78%, less with aging at about 1.5%/y. See URL

https://www.explainthatstuff.com/how-inverters-work.html

 

SOURCE 2

 

Based on EIA survey data from various types of grid-scale battery systems

 

The EIA surveys found the losses of various types of operating, battery systems range from about 30% to about 14%, for an average about 20%. AC-to-AC basis, excluding step-down and step-up transformer losses.

 

That value was obtained from the real-world operating conditions of various type battery systems, in use for multiple years

 

Aging had only a minor effect, because the battery systems were only a few years old.

https://www.eia.gov/todayinenergy/detail.php?id=46756

 

NOTE:

 

Tesla Megapack

 

Tesla mentioned a round-trip efficiency of 89.5% of its Megapack battery system (4-h system) in its sales literature.

Net Energy delivered at 25°C (77°F) ambient temperature, including thermal control.

 

This excludes:

AC from the grid passing through a step-down transformer (1% los)

AC from the battery passing through a step-up transformer (1% loss)

Total AC-to AC loss is at least 13.5%, not including any aging

https://www.tesla.com/powerpack

PART 5

Battery System Aging and Capital Cost Impacts

 

The three main components of battery system aging, and their assumed values for this analysis, are:

 

1) Front-end power electronics, assumed at 0.3%/y

2) Battery, assumed at 1.3%/y, for 24/7/365 service

3) Back-end power electronics, assumed at 0.3%/y

4) System capacity loss factor is 0.997 x 0.987 x 0.997 = 0.981

 

A 1000 kWh battery system, with a 15-y life, is assumed. The table shows the system capacity loss due to aging, and the annual capital costs required for the additional battery capacity to offset the annual aging, to ensure the battery system will perform the same level of service in later years, as in year 1.

 

Most of the original battery system would need to be replaced in year 15

The additional batteries have their own aging issues, i.e., their capacities, kWh, would need to be oversized, and their capital costs would be greater than shown in the table

As an alternative, the original battery system could have been oversized by about 25 to 30% to cover aging as the years go by. This avoids the hassle of adding battery capacity each year.

The 20% losses discussed under section 2 would increase with aging

 

NOTE: The EIA projected cost of $600/kWh for 2020 is assumed for this analysis.

The 2025 cost likely will be much higher.

 

Year	Aged	Aging factor	Add.’l	Original	Add.’l	Total
	Battery		Capacity	Capital Cost	Capital Cost	Capital Cost
	Capacity			$600/kWh	$600/kWh	$600/kWh
	kWh		kWh	$	$	$
0	1000	0.981		600000		600000
1	981	0.981	19		11348	11348
2	963	0.981	37		11133	11133
3	944	0.981	56		10923	10923
4	926	0.981	74		8930	8930
5	909	0.981	91		10513	10513
6	892	0.981	108		10315	10315
7	875	0.981	125		10120	10120
8	858	0.981	142		8273	8273
9	842	0.981	158		9740	9740
10	826	0.981	174		9556	9556
11	811	0.981	189		9375	9375
12	795	0.981	205		9198	9198
13	780	0.981	220		9024	9024
14	765	0.981	235		8853	8853
15	751	0.981	249		8686	8686
						745988

 

PART 6

 

Oversized Battery and Cost of Absorbing Midday Solar Bulges

 

This part shows, in very simple terms, the REAL cost of battery systems

 

Very often there is much crowing about battery revenues, but not about the: 

 

- Bank loan costs

- Owner's return on investment

- Cost of subsidies

- Battery system electricity loss. See Part 5

 

Battery systems perform various functions during a day, including absorbing the highly subsidized, expensive, midday solar output bulge, and discharging about 80% of it during the peak hours of late-afternoon/early-evening; the other 20% are various system losses. 

See Part 4

 

In the morning, the battery charge is low, say 20% full, so they can absorb the bulge to about 80% full.

Almost all days, there is enough bulge to fill the batteries, even on cloudy days. 

In New England, panels are often covered with snow. 

On those days, there is no bulge, and the batteries are filled with low-cost, night-time electricity, of which 80% is discharged during peak hours

 

Assume for this analysis: Subsidies 45% of Owner costs; Bank Financing 50%; Owner Financing 50%

 

State governments require investors to have at least a 50% interest in such projects, i.e., “have skin in the game”

  

This analysis assumes, turnkey capital cost and interest data of 2020; prices and interest rates significantly increased in 2021 and 2022

 

The annual discharge is about 1000 kWh x 0.10, usage factor, assumed x 365 cycle/y = 36,500 kWh/y

Battery system turnkey capital cost 1000 kWh x 1.25, aging factor x $600/kWh, in 2020 = $750,000. See Note

 

NOTE: This analysis assumes the EIA projected cost of $600/kWh for 2020.

The 2025 cost likely will be much higher, due to increased inflation rates, increased interest rates, supply chain disruptions, and increases in energy and materials prices.

 

If the Owner hires someone to manage the project, that becomes a project operating cost

If the Owner decides to self-manage the project, that still becomes a project operating cost

 

Projects have many other costs during each year of their life. See Note

NOTE: Utilities that own grid-scale battery systems have the real numbers, which they do not make public, because they are “proprietary”

Payment to Owner on $375,000 at 9%/y for 15 years is $45,642/y; this cost remains the same each year

Payment to Bank on $375,000 at 3.5%/y for 15 years is $32,170/y: this cost remains the same each year

Other annual costs, assumed, $27,375/y; these costs increase each year

Total annual cost, $105,187/y

Effects of Various Subsidies: The table shows, the Owner total costs are $105,187/y. Almost all of these costs exist, even if the battery system is not used.

 

See Part 4 for cost of the electricity loss resulting from sending electricity through the battery system.

 

The battery system would need revenues from battery services of:

 

1) $105,197/y, if no subsidies, to offset Owner total costs.

2) $57,853/y, if Owner receives subsidies

 

If project revenues are insufficient, the Owner has to: 1) get more subsidies, 2) charge more for services, 3) reduce costs

 

All these revenue and subsidy issues are hatched out with detailed spreadsheets, behind closed doors, to end up with a deal between utility and Owner, that can be plausibly sold to the lay public, various regulatory agencies, and legislators 

 

As always, any costs not recovered by selling battery services are shifted from Owner onto ratepayers, taxpayers, and government debts.

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

 

Alternative/year	2020
Capital cost, includes aging, $	750000
Subsidies	yes
Owner financing at 9%/y for 15 y	50
Bank financing at 3.5%/y for 15 y	50
Payment to Owner, $/y	45642
Payment to Bank, $/y	32170
Total payments, $/y	77812
Other costs, $/y	27375
Owner total costs, $/y	105187
Revenue of battery services, $/y	57853
Subsidies, $/y	47334
Total, $/y	105187

PART 7

 

Battery Systems Losses due to Absorbing Midday Solar Bulges

 

Those losses are a major battery operating cost almost never mentioned by stakeholders.

Those losses certainly are not obvious to lay people, including most legislators

 

Assume a grid has many solar systems

Assume midday solar bulges need to be reduced to maintain grid stability during each day of the year. See Note.

Assume 45,625 kWh/y is drawn, as AC, from the grid to absorb midday solar bulges during each day of the year.

 

This solar electricity would experience about a 20% loss after passing through the battery system.

About 36,500 kWh/y would be left over after passing through the battery system, AC-to-AC basis

 

This solar electricity has a heavily subsidized, all-in cost of about 22 c/kWh, if part of a “net-metered program”. See URL

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

 

The 36,500 kWh/y would be fed to the grid during peak hours of late-afternoon/early-evening, when wholesale prices would be about 8 c/kWh

 

The electricity loss would be about 45,625 - 36,500 = 9,125 kWh/y

The dollar loss would be about 45625 x 22 c/kWh - 36500 x 8 c/kWh = $10038 - $2920 = $7,118/y, or 7118/36500 = 19.5 c/kWh of annual throughput

 

The $7,118/y, or 19.5 c/kWh, is just one of the annual costs of dealing with midday solar bulges.

A significant part of the annual costs for financing, owning and operating the battery system, i.e., $53.18/kWh, should also be allocated to dealing with midday solar bulges. (See PART 5)

 

Those costs are definitely not charged to solar system Owners (the grid disturbers) or battery system Owners

A utility likely “takes care of them” by burying them in the next rate increase request to the VT PUC, i.e., that loss is shifted onto ratepayers, taxpayers, and government debts

 

NOTE: Absorbing midday solar bulges likely will not occur in New England, and other snowy/overcast regions, because there will be days with snow and ice on the panels, and overcast days; grid disturbances would be minimal.

On such days, the batteries would be charged at night, when wholesale prices would be about 3 to 4 c/kWh.

PART 8

 

General Comments

 

All of the above is well known by the engineers of larger utilities, who proudly own multiple grid-scale battery systems.

Those utilities have the detailed operating and cost data to perform refined analyses. 
They share some of their data with the EIA, on an anonymous basis.

 

They do not publish their analyses on their websites, or in their reports, or in their press releases, because that would likely cause major blowback from a better-informed citizenry.

Utilities think it is best to keep things fuzzy, cozy, and happy, with lots of smiling employees, always there to serve you.

Big Bucks are at Stake in the Small State of Vermont

 

If the "big-bucks-stakes" are multi-$billion in a small, mostly rural state, just imagine what they would be in large, mostly industrial states.

 

VELCO, which owns the Vermont high voltage grid, wants $2.2 BILLION to upgrade its grid to be ready for EVs, HPs, and more wind and solar, as part of fighting 1) climate change and 2) global warming

 

GMP, a major Vermont utility, with about 78% of Vermont’s electricity market, owned by Canadian/French investors, likely wants a similar capital infusion for 1) extending/augmenting its distribution grids and 2) building out a state-wide system of EV chargers.

GMP gets its funding, via the VT-Public Utilities Commission, the VT-Department of Public Service, and the VT Legislature 

 

APPENDIX 1

The supply chains to “take wind and solar to the next level to meet 2050-zero-carbon climate goals” do not exist.

 

The supply chains would be MUCH MORE EXPENSIVE, due to economic policies which gave us: 1) increased inflation rates, 2) increased interest rates, 3) supply chain disruptions, 4) increased energy prices, such as oil, gas, coal, etc., and 5) increased materials prices, such as of Tungsten, Cobalt, Lithium, and Copper
https://www.windtaskforce.org/profiles/blogs/battery-system-capital...

 

All that will make it much more expensive to reduce CO2 to “save the world from climate change” (if that were actually possible).

 

For example, the cost of financing has increased, i.e., higher interest rates for bank loans, because the official consumer price index, CPI, is increasing at 8.5%/y (the unofficial CPI likely is about 12%/y), and the producer price index, PPI, is increasing at 11.5%/y

 

Owners typically put up 50% of the turnkey capital cost of a wind, solar, or battery project, the rest is financed.

Owners typically make 9%/y on their investment, when bank interest rates are low, say 3.5%/y.

Owners may want to make a higher %/y, when bank interest rates are high.

 

All this translates in Owners having to sell their wind solar electricity, and battery services at much higher prices, i.e., wind and solar suddenly are not competitive with existing domestic, low-cost, coal, natural gas, nuclear and hydro.

 

1) Solar electricity

 http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

 

2) Grid-scale battery system services

https://www.windtaskforce.org/profiles/blogs/battery-system-capital...

 

3) EVs, and EV chargers, and EV charging

 

https://www.windtaskforce.org/profiles/blogs/poor-economics-of-elec...

https://www.windtaskforce.org/profiles/blogs/electric-bus-systems-l...

 

All that will make it much more expensive to reduce CO2 to “save the world from climate change” (if that were actually possible).

 

Also, the growing of crops for food has already been reduced, due to poorly planned sanctions on Belarus and Russia, which led to worldwide shortages of potash and phosphates (which are mined) from Belarus, and nitrogen fertilizers (which are made from natural gas) from Russia; their prices have become stratospheric.

 

This will lead to 1) global food shortages and food price inflation, 2) additional impoverishment of the middle classes, 3) in large areas of the Global South (South Asia, Africa, South America), increased poverty and starvation, and 4) increased migration.

 

NOTE: Almost all of this is due to the US relentlessly pushing to expand NATO infrastructures and personnel beyond East Germany, which it had promised not to do in 1990. The USSR and the Warsaw Pact collapsed in 1991. NATO had become superfluous.

However, the US had an “expansion mission” for NATO, per the US Secretary of Defense Wolfowitz’s budgeting plan for 1994 - 1999. The Czech Republic, Hungary, and Poland were added to NATO in 1999.

At present there are 30 NATO members “barking at the gates of Russia”.

 

After the US-instigated color revolution in Ukraine, in 2014, the US:

 

1) Turned impoverished, corrupt, oligarchic, far from democratic Ukraine, into a NATO-armed/trained proxy to weaken/diminish Russia

 

2) Threatened its security, with Aegis rocket systems in Poland and Romania. See URL

https://www.windtaskforce.org/profiles/blogs/the-plot-is-thickening...

 

This image shows aid to March 27, 2022.

US aid has increased to $54 billion after Mar 27, 2022

Who pays the piper, calls the tunes!

APPENDIX 2

EXCERPT from:

COST SHIFTING IS THE NAME OF THE GAME REGARDING WIND AND SOLAR
http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

EXHORBITANT REAL COST OF WIND AND SOLAR ELECTRICITY

 

“All-in” Electricity Cost of Wind and Solar in New England

 

https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-sol...

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

 

Pro RE folks point to the “price paid to owner” as the cost of wind and solar, purposely ignoring the other cost categories. The all-in cost of wind and solar, c/kWh, includes:

 

1) Above-market-price paid to Owners 

2) Subsidies paid to Owners

3) Owner return on invested capital at about 9%/y

4) Grid extension/augmentation

5) Grid support services

6) Future battery systems

 

Comments on table 1

   

- Vermont legacy Standard Offer solar systems had greater subsidies paid to owner, than newer systems

 

- Wind prices paid to owner did not have the drastic reductions as solar prices.

 

- Vermont utilities are paid about 3.5 c/kWh for various costs they incur regarding net-metered solar systems

 

- "Added to rate base" is the cost wind and solar are added to the utility rate base, used to set electric rates.

 

- “Total cost”, including subsidies to owner and grid support, is the cost at which wind/solar are added to the utility rate base

 

- “NE utility cost” is the annual average cost of purchased electricity, about 6 c/kWh, plus NE grid operator charges, about 1.6 c/kWh

for a total of 7.6 c/kWh.

 

- “Grid support costs” would increase with increased use of battery systems to counteract the variability and intermittency of increased build-outs of wind and solar systems. See URL

https://www.windtaskforce.org/profiles/blogs/fuel-and-co2-reduction...

NOTE: NE wholesale grid price averaged about 5 c/kWh, starting in 2009, due to low-cost CCGT and nuclear plants providing at least 65% of all electricity loaded onto the NE grid, in 2019.

 

https://www.iso-ne.com/about/key-stats/resource-mix/

https://nepool.com/uploads/NPC_20200305_Composite4.pdf

NOTE: There are Owning costs, and Operating and Maintenance costs, of the NE grid.

ISO-NE charges these costs to utilities at about 1.6 c/kWh. The ISO-NE charges include: 

 
Regional network services, RNS, based on the utility peak demand occurring during a month

Forward capacity market, FCM, based on the utility peak demand occurring during a year.

 

Table 1/VT & NE sources	Paid to	Subsidy	Grid	GMP	Added	ISO-NE	Total	NE	Times
		paid to	support		to rate	RNS+		utility
	owner	towner	cost	adder	base	FCM	cost	cost
	c/kWh	c/kWh	c/kWh	c/kWh	c/kWh	c/kWh	c/kWh	c/kWh
Solar, rooftop, net-metered, new	17.4	5.2	2.1	3.5	20.9	1.6	29.8	7.6	3.92
Solar, rooftop, net-metered, legacy	18.2	5.4	2.1	3.5	21.7	1.6	30.8	7.6	4.05
Solar, standard offer, combo	11.0	6.74	2.1		11.0	1.6	21.44	7.6	2.82
Solar, standard offer, legacy	21.7	10.5	2.1		21.7	1.6	35.9	7.6	4.72
Wind, ridge line, new	8.5	3.9	2.4		8.5	1.6	16.4	7.6	2.15
Wind, offshore, new	9.0	4.1	2.4		9.0	1.6	17.1	7.6	2.25

Sample calculations:

 

NE utility cost = 6, Purchased + 1.6, (RNS + FCM) = 7.6 c/kWh

Added to utility rate base = 17.4, net-metered, new + 3.5 = 20.9 c/kWh

Total cost = 17.4 + 5.2 + 2.1 + 3.5 + 1.6 = 29.8 c/kWh

Excludes costs for very expensive battery systems

Excludes costs for very expensive floating, offshore wind systems

Excludes cost for dealing with shortfalls during multi-day wind/solar lulls. See URL

https://www.windtaskforce.org/profiles/blogs/wind-and-solar-provide...

 

“Added to rate base” is for recent 20-y electricity supply contracts awarded by competitive bidding in NE.

“Added to rate base” would be much higher without subsidies and cost shifting.

Areas with better wind and solar conditions, and lower construction costs/MW have lower c/MWh, than NE

New England has average winds, has highest on-shore turnkey costs ($2,400/kW in 2020), has highest PPA c/kWh

See page 39 of URL

https://www.energy.gov/sites/default/files/2021-08/Land-Based%20Win...

APPENDIX 3

 

The Full Cost of Offshore Wind

 

The Coastal Virginia Offshore Wind system, owned by Dominion Energy turnkey cost was about $57 million for 15 MW of wind turbines. The $57 million is for the wind turbines, and to bring the power ashore.

https://wattsupwiththat.com/2022/05/20/what-is-the-full-cost/

 

Here is a summary of some cost items:

 

1) The capital cost of transmission upgrades, which is socialized.

2) The increase in operating, maintenance, wear and tear, and fuel costs imposed on OTHER generating plants, usually CCGTS, to counteract the variable wind output, 24/7/365

3) The operation and maintenance costs of the offshore wind turbine system, which are at least 3 times the cost of a similar onshore wind system

4) The cost of standby/reserve generation, staffed, fueled, ready to operate, in case the wind is insufficient 

5) The annual cost of federal and state grants, subsidies, accelerated depreciation, deductions of loan interest costs, etc.

6) The annual cost of the owner’s return on his investment, at about 9%/y, 

7) The annual cost of amortizing any bank loans at about 6%/y

 

The above would be close to the full cost of energy, FCOE, of offshore wind.

 

In the real world, a lot of these costs are not separately identified and quantified, and much of the costs are SHIFTED to ratepayers, taxpayers and government debts, which makes offshore wind LOOK a lot less costly per kWh, than in reality

 

There is massive misinformation, aided and abetted by Wall Street and the Media, to make wind and solar appear less costly than in reality, to reinforce the widespread delusion we can have wind, solar and batteries at less cost than fossil fuels.

APPENDIX 4

Often, people are exposed to mantras, such as:

 

DO THIS AND THAT, BY SUCH AND SUCH DATE, OR THE WORLD WILL BE DOOMED

 

Let’s get real

The BEST thing for New Englanders is ENERGY EFFICIENCY and MUCH SMALLER STATE GOVERNMENTS

 

Here is an example of a very expensive experiment:

 

Germany, population about 84 million, reduced its fossil fuel from 84% to 76% of total primary energy, after spending at least $500 billion on its ENERGIEWENDE for over 20 years. That is the official number. The real number is at least $700 billion.

 

Much of the $700 billion likely was added to national debts, so the interest on it would be up to $25 billion per year, which is accounted for somewhere else, per government bookkeeping rules

 

$700 billion/84 million people = $8,333/per person per 20 years, or $400/person/y, or $1,600 per family of 4, per year, not counting interest on borrowed money.

 

Remember, a lot of this includes low-hanging fruits, such as changing light bulbs, insulating, sealing, more efficient vehicles and appliances.

It gets more difficult and more expensive to add each ADDITIONAL percent reduction!!!

 

By this time, the EARLY solar and wind systems are being REPLACED with new ones, etc. 

Where do you landfill all THAT junk?

 

This dismal example was accomplished by a rich, technologically advanced country, which most European countries, and New England, and the rest of the world, could not afford to imitate

 

Germany ruined its countryside with 500 to 600 ft tall wind turbines and solar systems all over Germany (to socially and "equitably" spread the blight), and deforested millions of acres for generating electricity from burning trees.

 

Germany increased its household electricity rates by more than 250% over these 20+ years

Germany and Denmark, another wind maven, have the highest household electricity rates in Europe, about 30 EUROCENT/kWh

 

In Germany, and the rest of Europe, a major increase in household and commercial/industrial electricity rates is in process, due to:

 

1) Increased inflation rates, increased interest rates, supply chain disruptions, and increased energy and materials prices.

 

For Germany, and the rest of Europe, fighting climate change will be at the bottom of the list, despite Brussels’ declarations to do this and that, by such and such date.

APPENDIX 5

 

Theoretical and Practical Capacity of a Battery Cell

 

Theoretical Capacity

 

The faraday, F, is a dimensionless unit of electric charge quantity carried by 1 mole (approximately 6.02 x 10^23 electric charge carriers, such as ions). The 6.02 x 10^23 is known as Avogadro's constant.

In the International System of Units (SI), the coulomb (C) is the preferred unit of electric charge quantity.

 

The theoretical capacity, Q, of a battery cell can be calculated by Faraday’s law:

 

Equation 1; Q_theoretical = (nF) / (3600 s/h x Mw), yields a value with these units Ah/g

 

n is the number of charge carriers/ion;

F is the Faraday constant;

Mw is the molecular weight of the active cathode material.

 

If LiFePO4 → FePO4 + 1Li⁺ + 1e^-

Mw of LiFePO4 is 157.76 g/mol. See table

n = 1 Li⁺ = 1

F = 96 485.3329 is the quantity of electric charge (aka 1 coulomb) carried by 1 mol of electrons

 

Ampere = Coulomb/s

Ah = C/s x 3600 s

mAh = (C/s x 1/1000) x 3600 s

 

Q = (1 x 96485.3329/mol of charge carriers) / (3600 s/h x 157.7 g/mol) = 0.1699 Ah/g, or 169.9 mAh/g of Lithium

Practical Capacity

 

In reality, the practical capacity of a battery cell is different from the theoretical one.

 

If LiNi_1/3Co_1/3Mn_1/3O₂ 

Theoretical Q = 277.8 mAh/g, if Mw = 96.462 g/mol and n = 1. See table

https://www.webqc.org/molecular-weight-of-Li+NiCoMnO6.html

 

The practical Q can be calculated by the voltage-time curve from galvanostatic cycling testing

Q/30 is the rate at which charge is added to the cell.

 

Q_practical = (I x A x t_{cut off}) / (3600 x Mw), yields a value with these units mAh/g

 

where:

I is the current density; A/m2

A is the area; m²

t_cutoff is the time to reach the cut off potential (V_cutoff); seconds

Mw is the molecular weight of the active material used in the electrode.

 

The practical Q depends on the charging rate, and the voltage range

For test run 1, a current A1 is applied, at voltage V1, for a period of h1 hours, until Q is achieved

During test runs the cell temperatures are monitored

After multiple test runs, at Q/30, in the specified 2.5 - 4.3 voltage range, the practical Q of a Li-NMC battery cell averages 165 mAh/g of Lithium metal, which is much less than the theoretical Q

 

The practical Q is less than the theoretical Q, because not all Li can be removed from the lattice of the host material below 4.3 V, the cutoff voltage. The rest of the Li could be removed above 4.3 V, but that likely would damage the cell.

 

Lithium has an atomic weight of 6.941 g/mol; one electron per lithium atom; 1 C per mole of electrons; one ampere is one coulomb per second.

 

The theoretical Q = 1 x 96485.3329 / (3600 s/h x 6.941) = 3.861 Ah/g of lithium, or

 

Ah x V/1000 = 3.861 Ah/g x 3.7 V /1000 = 0.014319 kWh/g, or 70 g Li/kWh for a 3.7 V nominal Li-NMC or Li-NCA battery

Ah x V/1000 = 3.861 Ah/g x 3.2 V /1000 = 0.012384 kWh/g, or 80.9 g Li/kWh for a 3.2 V nominal LiFePO4 battery. 

 

These are inaccurate values, because the utilization of lithium in real battery can never be 100%.

The lithium content in a lithium-ion battery of an electric vehicle would need to be about 0.85 kg of Lithium carbonate (Li2CO3 /kWh, which would contain about 0.16 kg of Lithium metal/kWh.

https://m.greenway-battery.com/news/How-Much-Lithium-is-in-an-Elect...

 

For example, if an EV, such as a Tesla Model 3, had a 75-kWh battery, it would require 0.16 x 75 = 12 kg of battery grade lithium.

Battery-grade is at least 99.5% pure metal. All mined lithium is not battery grade.

https://www.mckinsey.com/industries/metals-and-mining/our-insights/...

 

NOTE: IATA uses theoretical values of lithium in batteries for air shipment. The IATA basis is 0.3 g Li/Ah, or 3.333 Ah/g Li, which for a single cell at 3.7 V nominal, would be 81 g Li/kWh, slightly greater than the above 70 g Li/kWh. 

Clearly the IATA calculation is a gross underestimate, as it is barely enough Li to satisfy the theoretical minimum, never mind the practical minimum.

http://batteryuniversity.com/learn/article/bu_704a_shipping_lithium...

The above values are summarized in the table

 

Cathode type	LiFePO4	Li-Ni/3Mn/3Co/3O2	Li
Li	6.941	6.941	6.941
Fe	55.845
P	30.974
O x 4	64
Ni		19.564
Co		19.644
Mn		18.313
O x 2		32
Molecular wgt; g/mol	157.760	96.462	6.941
Theoretical capacity
n	1	1	1
Faraday constant	96485.3329	96485.3329	96485.3329
Mol. wgt.; g/mol	157.760	96.462	6.941
s/h	3600	3600	3600
Q; Ah/g of Li metal	0.1699	0.2778	3.8613
Q; mAh/g of Li metal	169.9	277.8	3861.3
Practical capacity
Q; mAh/g of Li metal		165