Back to Reality as Wind, Solar and Batteries Make All the Noise and Expensive Electricity

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Monthly wholesale electricity prices and demand in New England, March 2024

Prices down in both day-ahead, real-time markets

Drivers of wholesale electricity prices

Power plant fuel

Fuel is typically one of the major input costs in producing electricity. Natural gas is the predominant fuel in New England, used to generate 55% of the power produced in 2023 by the region’s power plants, and natural gas-fired power plants usually set the price of wholesale electricity. As a result, average wholesale electricity prices are closely linked to natural gas prices.

The average natural gas price during March was $1.63 per million British thermal units (MMBtu).3 The price was down 45% from the March 2023 average Massachusetts natural gas index price of $2.94/MMBtu. The Mass. index price is a volume-weighted average of trades at four natural gas delivery points in Massachusetts, including two Algonquin points, the Tennessee Gas Pipeline, and the Dracut Interconnect.

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Comment by Willem Post on May 17, 2024 at 4:32pm

APPENDIX 1

World Offshore Wind Capacity Placed on Operation in 2021

During 2021, worldwide offshore wind capacity placed in operation was 17,398 MW, of which China 13,790 MW, and the rest of the world 3,608 MW, of which UK 1,855 MW; Vietnam 643 MW; Denmark 604 MW; Netherlands 402 MW; Taiwan 109 MW

Of the 17,398 MW, just 57.1 MW was floating, about 1/3%

At end of 2021, 50,623 MW was in operation, of which just 123.4 MW was floating, about 1/4%

https://www.energy.gov/eere/wind/articles/offshore-wind-market-repo...

 

Floating Offshore Wind Systems in the Impoverished State of Maine

https://www.windtaskforce.org/profiles/blogs/floating-offshore-wind...

Despite the meager floating offshore MW in the world, pro-wind politicians, bureaucrats, etc., aided and abetted by the lapdog Main Media and "academia/think tanks", in the impoverished State of Maine, continue to fantasize about building 3,000 MW of 850-ft-tall floating offshore wind turbines by 2040!!

 

Maine government bureaucrats, etc., in a world of their own climate-fighting fantasies, want to have about 3,000 MW of floating wind turbines by 2040; a most expensive, totally unrealistic goal, that would further impoverish the already-poor State of Maine for many decades.

 

Those bureaucrats, etc., would help fatten the lucrative, 20-y, tax-shelters of mostly out-of-state, multi-millionaire, wind-subsidy chasers, who likely have minimal regard for:

 

1) Impacts on the environment and the fishing and tourist industries of Maine, and

2) Already-overstressed, over-taxed, over-regulated Maine ratepayers and taxpayers, who are trying to make ends meet in a near-zero, real-growth economy.

 

Those fishery-destroying, 850-ft-tall floaters, with 24/7/365 strobe lights, visible 30 miles from any shore, would cost at least $7,500/ installed kW, or at least $22.5 billion, if built in 2023 (more after 2023)

 

Almost the entire supply of the Maine projects would be designed and made in Europe, then transported across the Atlantic Ocean, in European specialized ships, then unloaded at a new, $500-million Maine storage/pre-assembly/staging/barge-loading area, then barged to European specialized erection ships for erection of the floating turbines. The financing will be mostly by European pension funds paying pensions to retirees.

 

About 300 Maine people would have jobs during the erection phase

The other erection jobs would be by specialized European people, mostly on cranes and ships

About 100 Maine people would have long-term O&M jobs, using European spare parts, during the 20-y electricity production phase.

https://www.maine.gov/governor/mills/news/governor-mills-signs-bill...

 

The Maine woke bureaucrats are falling over each other to prove their “greenness”, offering $millions of this and that for free, but all their primping and preening efforts has resulted in no floating offshore bids from European companies

 

The Maine people have much greater burdens to look forward to for the next 20 years, courtesy of the Governor Mills incompetent, woke bureaucracy that has infested the state government 

 

The Maine people need to finally wake up, and put an end to the climate scare-mongering, which aims to subjugate and further impoverish them, by voting the entire Democrat woke cabal out and replace it with rational Republicans in 2024

The present course leads to financial disaster for the impoverished State of Maine and its people.

The purposely-kept-ignorant Maine people do not deserve such maltreatment

 

Electricity Cost: Assume a $750 million, 100 MW project consists of foundations, wind turbines, cabling to shore, and installation at $7,500/kW.

Production 100 MW x 8766 h/y x 0.40, CF = 350,640,000 kWh/y

Amortize bank loan for $525 million, 70% of project, at 6.5%/y for 20 years, 13.396 c/kWh.

Owner return on $225 million, 30% of project, at 10%/y for 20 years, 7.431 c/kWh

Offshore O&M, about 30 miles out to sea, 8 c/kWh.

Supply chain, special ships, and ocean transport, 3 c/kWh

All other items, 4 c/kWh 

Total cost 13.396 + 7.431 + 8 + 3 + 4 = 35.827 c/kWh

Less 50% subsidies (ITC, 5-y depreciation, interest deduction on borrowed funds) 17.913 c/kWh

Owner sells to utility at 17.913 c/kWh

 

NOTE: The above prices compare with the average New England wholesale price of about 5 c/kWh, during the 2009 - 2022 period, 13 years, courtesy of:

 

Gas-fueled CCGT plants, with low-cost, low-CO2, very-low particulate/kWh

Nuclear plants, with low-cost, near-zero CO2, zero particulate/kWh

Hydro plants, with low-cost, near-zero-CO2, zero particulate/kWh

Cabling to Shore Plus $Billions for Grid Expansion on Shore: A high voltage cable would be hanging from each unit, until it reaches bottom, say about 200 to 500 feet. 
The cables would need some type of flexible support system

There would be about 5 cables, each connected to sixty, 10 MW wind turbines, making landfall on the Maine shore, for connection to 5 substations (each having a 600 MW capacity, requiring several acres of equipment), then to connect to the New England HV grid, which will need $billions for expansion/reinforcement to transmit electricity to load centers, mostly in southern New England.

 

Floating Offshore a Major Financial Burden on Maine People: Rich Norwegian people can afford to dabble in such expensive demonstration follies (See Appendix 2), but the over-taxed, over-regulated, impoverished Maine people would buckle under such a heavy burden, while trying to make ends meet in the near-zero, real-growth Maine economy. Maine folks need lower energy bills, not higher energy bills.

 

APPENDIX 2

Floating Offshore Wind in Norway

Equinor, a Norwegian company, put in operation, 11 Hywind, floating offshore wind turbines, each 8 MW, for a total of 88 MW, in the North Sea. The wind turbines are supplied by Siemens, a German company

Production will be about 88 x 8766 x 0.5, claimed lifetime capacity factor = 385,704 MWh/y, which is about 35% of the electricity used by 2 nearby Norwegian oil rigs, which cost at least $1.0 billion each.

On an annual basis, the existing diesel and gas-turbine generators on the rigs, designed to provide 100% of the rigs electricity requirements, 24/7/365, will provide only 65%, i.e., the wind turbines have 100% back up.

The generators will counteract the up/down output of the wind turbines, on a less-than-minute-by-minute basis, 24/7/365

The generators will provide almost all the electricity during low-wind periods, and 100% during high-wind periods, when rotors are feathered and locked.

The capital cost of the entire project was about 8 billion Norwegian Kroner, or about $730 million, as of August 2023, when all 11 units were placed in operation, or $730 million/88 MW = $8,300/kW. See URL

That cost was much higher than the estimated 5 billion NOK in 2019, i.e., 60% higher

The project is located about 70 miles from Norway, which means minimal transport costs of the entire supply to the erection sites

The project produces electricity at about 42 c/kWh, no subsidies, at about 21 c/kWh, with 50% subsidies 

In Norway, all work associated with oil rigs is very expensive.

Three shifts of workers are on the rigs for 6 weeks, work 60 h/week, and get 6 weeks off with pay, and are paid well over $150,000/y, plus benefits.

If Norwegian units were used in Maine, the production costs would be even higher in Maine, because of the additional cost of transport of almost the entire supply, including specialized ships and cranes, across the Atlantic Ocean, plus

A high voltage cable would be hanging from each unit, until it reaches bottom, say about 200 to 500 feet. 

The cables would need some type of flexible support system
The cables would be combined into several cables to run horizontally to shore, for at least 25 to 30 miles, to several onshore substations, to the New England high voltage grid.

.

https://www.offshore-mag.com/regional-reports/north-sea-europe/arti...

https://en.wikipedia.org/wiki/Floating_wind_turbine

.

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APPENDIX 3

Offshore Wind in US and UK

Most folks, seeing only part of the picture, write about wind energy issues that only partially cover the offshore wind situation, which caused major declines of the stock prices of Siemens, Oersted, etc., starting at the end of 2020; the smart money got out
All this well before the Ukraine events, which started in February 2022. See costs/kWh in below article

US/UK Governments Offshore Wind Goals

1) 30,000 MW of offshore by 2030, by the cabal of climate extremists in the US government 
2) 36,000 MW of offshore by 2030, and 40,000 MW by 2040, by the disfunctional UK government

 

Those US/UK goals are physically unachievable, even with abundant, low-cost financing, and low inflation, and low-cost energy, materials, labor, and a robust, smooth-running supply chain, to place in service about 9500 MW of offshore during each of the next 7 years, from start 2024 to end 2030, which has never been done before in such a short time. See URL
 
US/UK 66,000 MW OF OFFSHORE WIND BY 2030; AN EXPENSIVE FANTASY  
https://www.windtaskforce.org/profiles/blogs/biden-30-000-mw-of-off...

US Offshore Wind Electricity Production and Cost

Electricity production about 30,000 MW x 8766 h/y x 0.40, lifetime capacity factor = 105,192,000 MWh, or 105.2 TWh. The production would be about 100 x 105.2/4000 = 2.63% of the annual electricity loaded onto US grids.

Electricity Cost, c/kWh: Assume a $550 million, 100 MW project consists of foundations, wind turbines, cabling to shore, and installation, at $5,500/kW.

Production 100 MW x 8766 h/y x 0.40, CF = 350,640,000 kWh/y

Amortize bank loan for $385 million, 70% of project, at 6.5%/y for 20 y, 9.824 c/kWh.

Owner return on $165 million, 30% of project, at 10%/y for 20 y, 5.449 c/kWh

Offshore O&M, about 30 miles out to sea, 8 c/kWh.

Supply chain, special ships, ocean transport, 3 c/kWh

All other items, 4 c/kWh 

Total cost 9.824 + 5.449 + 8 + 3 + 4 = 30.273 c/kWh

Less 50% subsidies (ITC, 5-y depreciation, interest deduction on borrowed funds) 15.137 c/kWh

Owner sells to utility at 15.137 c/kWh; developers in NY state, etc., want much more. See Above.

 

Not included: At a future 30% wind/solar penetration on the grid:   

Cost of onshore grid expansion/reinforcement, about 2 c/kWh

Cost of a fleet of plants for counteracting/balancing, 24/7/365, about 2.0 c/kWh

In the UK, in 2020, it was 1.9 c/kWh at 28% wind/solar loaded onto the grid

Cost of curtailments, about 2.0 c/kWh

Cost of decommissioning, i.e., disassembly at sea, reprocessing and storing at hazardous waste sites

.

APPENDIX 4

Levelized Cost of Energy Deceptions, by US-EIA, et al.

Most people have no idea wind and solar systems need grid expansion/reinforcement and expensive support systems to even exist on the grid.

With increased annual W/S electricity percent on the grid, increased grid investments are needed, plus greater counteracting plant capacity, MW, especially when it is windy and sunny around noon-time.

Increased counteracting of the variable W/S output, places an increased burden on the grid’s other generators, causing them to operate in an inefficient manner (more Btu/kWh, more CO2/kWh), which adds more cost/kWh to the offshore wind electricity cost of about 16 c/kWh, after 50% subsidies

The various cost/kWh adders start with annual W/S electricity at about 8% on the grid.

The adders become exponentially greater, with increased annual W/S electricity percent on the grid

 

The US-EIA, Lazard, Bloomberg, etc., and their phony LCOE "analyses", are deliberately understating the cost of wind, solar and battery systems

Their LCOE “analyses” of W/S/B systems purposely exclude major LCOE items.

Their deceptions reinforced the popular delusion, W/S are competitive with fossil fuels, which is far from reality.

The excluded LCOE items are shifted to taxpayers, ratepayers, and added to government debts.

W/S would not exist without at least 50% subsidies

W/S output could not be physically fed into the grid, without items 2, 3, 4, 5, and 6. See list.

 

1) Subsidies equivalent to about 50% of project lifetime owning and operations cost,

2) Grid extension/reinforcement to connect remote W/S systems to load centers

3) A fleet of quick-reacting power plants to counteract the variable W/S output, on a less-than-minute-by-minute basis, 24/7/365 

4) A fleet of power plants to provide electricity during low-W/S periods, and 100% during high-W/S periods, when rotors are feathered and locked,

5) Output curtailments to prevent overloading the grid, i.e., paying owners for not producing what they could have produced

6) Hazardous waste disposal of wind turbines, solar panels and batteries. See image.

.

APPENDIX  5

BATTERY SYSTEM CAPITAL COSTS, OPERATING COSTS, ENERGY LOSSES, AND AGING
https://www.windtaskforce.org/profiles/blogs/battery-system-capital...

EXCERPT:

Annual Cost of Megapack Battery Systems; 2023 pricing
Assume a system rated 45.3 MW/181.9 MWh, and an all-in turnkey cost of $104.5 million, per Example 2
Amortize bank loan for 50% of $104.5 million at 6.5%/y for 15 years, $5.484 million/y
Pay Owner return of 50% of $104.5 million at 10%/y for 15 years, $6.765 million/y (10% due to high inflation)
Lifetime (Bank + Owner) payments 15 x (5.484 + 6.765) = $183.7 million
Assume battery daily usage for 15 years at 10%, and loss factor = 1/(0.9 *0.9)
Battery lifetime output = 15 y x 365 d/y x 181.9 MWh x 0.1, usage x 1000 kWh/MWh = 99,590,250 kWh to HV grid; 122,950,926 kWh from HV grid; 233,606,676 kWh loss
(Bank + Owner) payments, $183.7 million / 99,590,250 kWh = 184.5 c/kWh
Less 50% subsidies (ITC, depreciation in 5 years, deduction of interest on borrowed funds) is 92.3c/kWh
At 10% throughput, (Bank + Owner) cost, 92.3 c/kWh
At 40% throughput, (Bank + Owner) cost, 23.1 c/kWh
 
Excluded costs/kWh: 1) O&M; 2) system aging, 1.5%/y, 3) 20% HV grid-to-HV grid loss, 4) grid extension/reinforcement to connect battery systems, 5) downtime of parts of the system, 6) decommissioning in year 15, i.e., disassembly, reprocessing and storing at hazardous waste sites. Excluded costs would add at least 15 c/kWh
 

COMMENTS ON CALCULATION

Almost all existing battery systems operate at less than 10%, per EIA annual reports i.e., new systems would operate at about 92.4 + 15 = 107.4 c/kWh. They are used to stabilize the grid, i.e., frequency control and counteracting up/down W/S outputs. If 40% throughput, 23.1 + 15 = 38.1 c/kWh.

A 4-h battery system costs 38.1 c/kWh of throughput, if operated at a duty factor of 40%. That is on top of the cost/kWh of the electricity taken from the HV grid to feed the batteries

Up to 40% could occur by absorbing midday solar peaks and discharging during late-afternoon/early-evening, which occur every day in California and other sunny states. The more solar systems, the greater the peaks.

We are not even talking about longer-term storage, as during a multi-day W/S lull.

40% throughput is close to Tesla’s recommendation of 60% maximum throughput, i.e., not charging above 80% full and not discharging below 20% full, to achieve a 15-y life, with normal aging.

Tesla’s recommendation was not heeded by the Owners of the Hornsdale Power Reserve in Australia. They excessively charged/discharged the system. After a few years, they added Megapacks to offset rapid aging of the original system, and added more Megapacks to increase the rating of the expanded system.

http://www.windtaskforce.org/profiles/blogs/the-hornsdale-power-reserve-largest-battery-system-in-australia

Regarding any project, the bank and Owner have to be paid, no matter what. I amortized the bank loan and Owner’s investment

Divide total payments over 15 years by the throughput during 15 years, you get c/kWh, as shown.

There is about a 20% round-trip loss, from HV grid to 1) step-down transformer, 2) front-end power electronics, 3) into battery, 4) out of battery, 5) back-end power electronics, 6) step-up transformer, to HV grid, i.e., you draw about 50 units from the HV grid to deliver about 40 units to the HV grid, because of A-to-Z system losses. That gets worse with aging.

A lot of people do not like these c/kWh numbers, because they have been repeatedly told by self-serving folks, battery Nirvana is just around the corner.

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

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