HIGH COSTS OF WIND, SOLAR, AND BATTERY SYSTEMS IN US NORTHEAST

Any transition from fossil fuels to low-CO2 sources, such as wind, solar, nuclear, hydro and biomass, could occur only when the low-CO2 sources are: 1) abundantly available everywhere, and 2) at low-cost, say 5 to 6 c/kWh, wholesale, and 3) as reliable as fossil fuels, 24/7/365, year after year. 

 

This article presents the all-in cost of wind, solar and battery systems in the US Northeast.

Table 1 shows the all-in cost of wind and solar are much greater than reported by the Media, etc.

 

Much of the cost is shifted from Owners of these systems to taxpayers and ratepayers, and added to government debts.

MINIMUM ANNUAL CARRYING COST OF ANY ENERGY SYSTEM

 

Simplified Mortgage Method

 

This method can be applied to Electric Vehicles, Heat Pumps, Electric Buses, Wind Systems, Solar Systems, Battery Systems, etc.

 

The minimum annual carrying cost of a house, or an energy system, is “paying the mortgage”.

With regard to a house, all other costs, such as real estate taxes, heating, cooling, maintenance, etc., are in addition.

 

An energy system must have annual revenues = “Paying the mortgage” + “All other costs”

Any shortage of revenues must be made up by subsidies.

 

The less an energy system is able to “pay for itself”, the more the subsidies.

Subsidies can be reductions in the upfront turnkey capital costs

Subsidies can be reductions of some items of “All other costs”

Subsidies can be paying for the electricity production in excess of market prices

 

A house, after paying the mortgage, likely is worth more than in Year 1.

However, wind, solar, and battery systems have useful service lives of about 20, 25, and 15 years, respectively.

Thereafter, they still perform at lesser outputs for some time, but their financial value is near zero.

 

Complicated Spreadsheet Method

 

A more exact analysis of the economics of an energy system would involve a spreadsheet with many rows and at least 25 columns (for solar), one for each year. It would involve Present Values, Internal Rates of Return, Levelized Costs of Energy, etc.

 

GMP, VT-DPS, VT-PUC, etc., have such spreadsheets, as do I. They would be much too complicated to present here.

PART 1

Cost Shifting from Owners to Ratepayers and Taxpayers

 

The owning and operating cost of wind, solar and battery systems, c/kWh, is reduced by about 45%, due to subsidies. However, because no cost ever disappears, per Economics 101, the subsidy costs are “socialized”, i.e., added, in one way or another, onto:

 

1) Rate bases of utilities, i.e., paid by ratepayers

2) Taxpayers, by means of extra taxes, fees and surcharges on electric bills and fuel bills

3) Government budgets

4) Government debt

5) Prices of goods and services, other than electricity

 

If the subsidies had to be paid by Owners of wind and solar systems, the contract prices paid to Owners would need to be:


- At least 19.3 c/kWh, instead of 11 c/kWh, for large-scale solar

- At least 15.5 c/kWh, instead of 9 c/kWh, for ridge line wind. See table 1 and URL

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar 

 

Shifting Grid Costs

 

Many small-scale solar systems and/or a few large-scale solar systems on a distribution grid would excessively disturb the grid, especially at midday. Battery systems could counteract those output variations.

 

Wind and solar systems could not be connected to any grid without the peaking, filling-in and counteracting services of the CCGT plants, i.e., shutting down CCGT plants, and artificially diminishing/obstructing their gas supply, advocated by pro RE folks, would not be an option for decades, if ever, because of the high costs of site-specific, custom-designed, utility-grade battery systems.

 

Costs not paid by wind/solar Owners:

 

- The cost of extension/augmentation of electric grids to connect widely distributed wind and solar systems

 - The cost of services rendered by other generators, mostly CCGT plants, which counteract the variable, intermittent outputs of wind and solar, 24/7/365

 - The cost of battery systems to stabilize distribution grids, due to variations of the solar and wind system outputs

 

Shifting Owning and Operating Costs

 

The combined effect of cost shifting, determined behind closed doors, increases a project’s annual cash flow, i.e., “left-over-money”, to provide an ample profit for the RE system Owner.

 

RE system Owners are happy, having the “ears” of friendly politicians, saving the world from climate change, and claiming: “See, my project is profitable and competitive”, while everyone else gets hosed.

 

1) Grants from various sources, such as the VT Clean Energy Development Fund

2) 26% federal investment tax credits, plus state FITs. Tax credits reduce, dollar-for-dollar, the taxes GMP pays on profits

3) 100% depreciation over 5 years; the normal for utilities is 20 to 25 years. Write-offs reduce GMP taxable income

4) Deductions of interest on borrowed money. Interest deductions reduce GMP taxable income.

5) Various O&M payments are often waved, such as sales tax, fees, property tax, school tax, municipal tax, etc.

6) RE system Owners sell their output at two to four times NE wholesale rates

EXORBITANT “ALL-IN” ELECTRICITY COST OF WIND AND SOLAR IN NEW ENGLAND

Pro RE folks always 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 SO solar systems had greater subsidies, up to 30 c/kWh paid to owner, than newer systems, about 11 c/kWh

 

- 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 the 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 price paid for electricity by a utility, about 6 c/kWh, plus NE grid operator charges, about 1.6 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.

NOTES:

1) NE wholesale grid price averaged about 5 c/kWh or less, 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.

 

- Wind, solar, landfill gas, and methane power plants provided about 4.8%

- Pre-existing refuse and wood power plants provided about 4.6%

- Pre-existing hydro power plants provided about 7.4%

- The rest was mostly hydro imports from the very-low-CO2 Canada grid, and from the much-higher-CO2 New York State grid

 

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

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


2) There are Owning and Operating costs of the NE grid, in addition to utility wholesale prices.

ISO-NE pro-rates these O&O costs to utilities, at about 1.6 c/kWh.

 

3) NE charges are for: 

 
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

9.0

4.1

2.4

9.0

1.6

17.1

7.6

2.25

Wind, offshore, new

12.1

5.4

2.8

12.1

1.6

21.9

7.6

2.88

 

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

Sample calculation; added to utility base = 17.4 + 3.5 = 20.9 c/kWh

Sample calculation; 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

Solar and Wind Impacts on Electric Grids

 

High voltage and distribution grids, in Vermont and elsewhere, have been, and still are, entirely adequate to provide Vermonters with electricity, 24/7/365.

 

However, connecting wind and solar systems to the grids requires: 1) extensions to connect them to the grids and 2) upgrades to reinforce the grids, to deal with their weather/season-dependent variability and intermittency, 3) battery systems to deal with midday solar output surges.


Wind and solar have a perverse tendency to produce when all of their outputs are not needed!!

https://www.windtaskforce.org/profiles/blogs/the-vagaries-of-solar-in-new-england

 

Almost none of the extension/upgrade costs are charged to the Owners of wind and solar systems, as otherwise NE wind and solar would become even more expensive to own and operate, which would “rain on the wind and solar parade”.

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar

 

Basic Rule Applicable to All Grids

Normal wind and solar output could be 10,000 MW. During a wind/solar lull, it could be 1,000 MW, such as at night. Such lulls may last 5 to 7 days, and may occur any time of the year. Sometimes a second multi-day lull occurs a few days after the first one.

At least 9,000 MW of other reliable generators, not wind/solar dependent, would need to be staffed, fueled and ready to operate at a moment’s notice, to counteract any wind/solar shortfalls. These generators would have to supply enough electricity, not supplied by wind and solar, to meet demand, 24/7/365

Counteracting Wind and Solar Output Up/down Spikes with CCGT Plants, Canadian Hydro Plants, and Battery Systems

1) CCGT Plants

CCGT are up to 60%-efficient, quick-reacting power plants, ideal for counteracting the variations of wind and solar.

They perform counteracting services on grids in Ireland, California, Germany, Spain, the Nether lands, etc.

The stable operating range of CCGT plants is from about 50% to 100% of rated output.

As counteracting plants, they typically would operate at 75% to be able to ramp up and down about 25%

 

CCGT plants, with a capacity of 6,400 MW, would be required to ramp down from 75% to 50%, to counteract a 1,600 MW up-spike, and then ramp up from 50% to 75%, to counteract a 1,600 MW down-spike. See table 2

 

Existing CCGT plants could perform the counteracting tasks 24/7/365, for 35 to 40 years. All they need is natural gas or fuel oil.

2) Canadian Hydro Plants

 

Existing Canadian hydro plants could also perform that service, but that would require greatly enhanced grid extensions in Canada and NE, similar to the inter-connections of the grids of Denmark, Germany, the Netherlands, and Norway.

 

That approach would be the least costly, plus large quantities of hydro could be purchased at about 6 c/kWh, far less costly than from capricious onshore/offshore wind. See table 2

 

Scotland Experience: Scotland’s east and west coastal areas often have high wind speeds. Owners are required to curtail their outputs to a capacity factor of, say 60%, even if wind speeds were high enough to have a CF of 100%, i.e., maxed-out production, to reduce the range of up/down spikes.

 

The purpose of curtailments is to ease the counteracting burden on the CCGT plants. 
A lesser capacity, MW, of CCGT plants would be required.

The Owners of the wind systems get paid for not producing what they could have produced.

In Scotland, such offset payments are several hundred million dollars per year; they are much greater in the UK

 

3) Battery Systems 

 

If 1600 MW down-spike over a 3-h period

Battery systems, capacity of about 2500 MW/7500 MWh DC, if 50% charged, i.e., in battery 3750 MWh DC

Down-spike energy =1600/2 MW x 3 h = 2400 MWh AC

Discharged from battery = 2400/0.9, charge loss = 2667 MWh DC, based on a 10% discharge loss

Remaining charge in battery = 3750 - 2667 = 1083 MWh, DC, or 14.4% charged.

 

If 1600 MW up-spike over a 3-h period

Up-spike energy =1600/2 MW x 3 h/ = 2400 MWh AC

Charged into battery = 1600/2 MW x 3 h x 0.9, charge loss = 2160 MWh DC, based on a 10% charge loss

Charge in battery = 1083, initial + 2160, added = 3243 MWh DC, or 43.2% charged. 

The battery would need about 563 MWh AC from the grid to add 507 MWh DC, to restore the battery charge to 3750 MWh DC. 

See table 2 and Note

See Appendix for battery system losses.

NOTE: If another 1600 MW up/down spike would occur shortly thereafter, the batteries would be unable to entirely counteract them, etc. Recharging the batteries immediately after each up/down spike is very important, to ensure full counteracting capability.

If that is not achieved, additional battery capacity would be required.

NOTE: ISO-NE, likely would implement wind output curtailments, during high wind speed periods, to minimize stress on the CCGT plants. Curtailments would be more frequent, and of longer duration, if additional wind systems would be implemented near the MVI area.

Battery System Turnkey Capital Cost

 

The battery would be operated from 20% charge to 80% charge, to achieve a 15-y life.

The battery power capacity would need to be 1600 MW/0.6 = 2667 MW.

The battery energy delivery capacity would need to be 6750 MWh to counteract one 1600 MW downward spike over 3 hours. See table 2.

 

The turnkey capital cost of a site-specific, custom-designed, utility-grade battery system would be 6750 MWh x 1000 kWh/MWh x $600/kWh = $4.05 billion. They would last about 15 years, which is much shorter than the 35 to 40 years of CCGT plants. See Appendix

Transmission Systems

 

Major high voltage transmission system upgrades in southeastern New England would be needed to distribute the output of the MVI and other offshore wind turbines systems.

https://www.iso-ne.com/static-assets/documents/2020/07/a2_b_brattle...

 

Table 2/Counteracting spikes

CCGT capacity, MW

6400

6400

6400

Operating fraction

1.0

0.75

0.5

CCGT average output, MW

6400

4800

3200

Up/down range, MW

1600

Down-spike

Up-spike

Battery capacity, MWh, AC

6750

Remaining charge, MWh, DC

1083

14.0

Efficiency

0.9

Up-spike, MW

1600

Battery capacity, MWh, DC

7500

100.0

Duration, h

3

Charge fraction

0.5

Surplus, MWh, AC

2400

Available charge, MWh, DC

3750

50.0

Efficiency

0.9

Down-spike, MW

1600

Added charge, MWh, DC

2160

28.8

Duration, h

3

Total charge, MWh, DC

3243

43.2

Shortage, MWh, AC

2400

From grid, MWh, AC

563

Efficiency

0.9

Efficiency

0.9

From battery, MWh, DC

2667

35.6

Added charge, MWh, DC

507

6.8

Remaining charge, MWh, DC

1083

14.4

Total charge, MWh, DC

3750

50.0

The below image shows an output simulation, MW vs calendar time, based on actual, high-wind-speed, weather data, if 1,600 MW of offshore wind turbines would be located south of Martha’s Vineyard Island, MVI.

 

BTW, the wind turbines would be about 850 ft tall, with highly visible flashing strobe lights, even at 30 miles south of MVI.

 

The almost 1,600 MW downward spikes of output, in a few hours, are far from trivial. They would create major havoc, if fed into the existing Cape Cod grid. ISO-NE has made studies of the impacts on existing grids, and costs of grid upgrades/extensions to deal with these large up/down fluctuations of output.

 

The flat lines at the top of the image are due to the automatic limiting of the wind turbine output by feathering the rotor blades, to avoid high-speed winds destroying the wind turbines.

 

As shown, all of a sudden, the wind dies, and wind output spikes down from almost 1,600 MW to near zero, then, the wind suddenly reappears, and wind output spikes up from near zero to almost 1,600 MW.

 

During weather with high wind speeds, wind output is extremely variable, as proven by the image! 
ISO-NE has to make sure such extremes would be manageable under various scenarios, i.e., no surprises!

 

Existing CCGT plants, several thousand MW, would have to be in good operating condition, staffed and fueled, i.e., ready and able, to rapidly adjust outputs to counteract such extreme spikes.

 

This article will calculate the capacity of CCGT plants required to counteract these fluctuations.

As a last resort, ISO-NE could order output curtailment to reduce grid impacts.

European Companies Building Offshore Wind Systems

Almost the entire physical supply of US East Coast offshore wind systems would be by European companies, because they have the required expertise and the domestic onshore and seagoing facilities, due to building at least 25,014 MW (end 2020) of offshore turbine systems, during the past 35 years.

 

Those companies would hire qualified US labor, as needed. 
Those companies would build US facilities, as needed. 
Those companies would not be interested in training a potential competitor.

 

The EU vs the US

 

 The US, with a low-cost, self-sufficient, energy sector would attract European, Korean, Japanese, etc., energy-intensive, heavy-industry and industrial product production to the US.

 

Europe is interested to make sure the US has a high-cost electrical sector, with lots of high-priced wind and solar and batteries, to handicap the US, and to enhance its competitiveness vs the US. The UN is helping out by urging the US to expensively reduce its CO2 by 50% by 2030, which is not possible. See URL.

https://wattsupwiththat.com/2021/04/21/the-latest-co2-fantasy/

 

- Europe desperately needs more low-cost gas from Russia to remain competitive on world markets

- Europe has to build out wind and solar to limit energy imports from unstable countries; the US does not need to.

PART 2

Solar Systems

Solar systems require large areas of land. It takes about 8 acres for each MW of panels, which produces about 1.25 million kWh/y. Electricity loaded onto Vermont grids is about 6,000 million kWh/y, of which about 5,600 million kWh/y arrives at user meters; Vermont in-state solar was about 8% of the mix at end 2020.

 

Solar production starts to become significant around mid-morning, peaks around midday, and goes to near-zero by late-afternoon, just about the time of the late-afternoon/early-evening peak electricity demand period. Solar stays asleep until about mid-morning the next day.

 

Solar is like a poorly performing, part-time “worker “, who needs to be highly subsidized, and supported, to be present and function on the grid.

 

The Owners of other generators are forced to expensively reduce and increase their outputs to accommodate the daily solar bulges, which are smaller during winter and overcast days, and larger during summer, during sunny days.

 

The Owners are not compensated for their increased wear and tear, lesser operating efficiencies, and revenue losses.

Those costs are shifted, in one way or another, to the rate bases of utilities, i.e., paid by ratepayers

Those costs would not be charged to Owners of solar systems, because that would “rain on the solar parade”.

 

Comments on Image

 

The image is of solar electricity production, during variable cloudiness, at various US Postal System area codes, in California.

Southern California has much greater DUCK-curves than northern California.

 

The graph is deceptive; 0 should be 6 AM, 20 should be 8 PM.

Solar output is near-zero from 7 PM to 7 AM the next day, because solar is peacefully sleeping.

The graph peaks at 12 AM.

 

The down spikes are due to clouds passing over the solar systems, which become increasingly harder to deal with, the more rooftop and other solar systems are installed on distribution grids. Fast-reacting batteries, such as Tesla Powerwalls, etc., serve to supply electricity to offset the down spikes. Southern Germany and Southern California, with large capacities of solar systems, have had to deal with those down spikes for at least 20 years.

Rutland “The Solar City of New England”

 

A few years ago, Rutland was declared to become “The Solar City of New England”. Substations between distribution and high voltage grids would have to be two-way, i.e., draw from and feed into the high voltage grid, instead of the normal one-way substations.

 

This fantasy came to a screeching halt, when RE folks were informed the daily solar surges would excessively disturb the distribution grids, and that these disturbances would spill over onto high voltage grids, which would have made ISO-NE very unhappy. Some RE folks said we should use battery systems, but that turned out to be off-the-charts expensive.

 

Solar Systems Combine with Battery Systems 

 

RE folks propose expensive battery systems that would absorb a part of the midday solar electricity surge, and would discharge that electricity, minus losses, during late-afternoon/early-evening hours, when peak electricity demands occur.

 

Charging and Discharging Losses: DC electricity from the solar system, passing through the battery system, then via a step-up transformer, to the distribution grid, has an A-to-Z loss of about 17%

 

The battery system could also be charged from the grid, in case of cloudy/foggy weather. AC electricity from the grid, via a step-down transformer, then passing through the battery system, then via a step-up transformer, to the distribution grid, has a loss of at least 20%

 

Cost Adder of Using a Battery: The cost of passing expensively subsidized solar electricity through the battery is about 63 c/kWh, in addition to the solar costs in table 2. The costsinclude:

 

1) Amortizing the financed part of the project turnkey capital cost, i.e., “paying the mortgage”

2) Owner’s return-on-investment regarding the not-financed part of project turnkey capital cost,

3) Federal, and state subsidies; any annual or one-time local incentives; and any one-time cash grants,

4) Annual costs of operating and maintenance of the battery system

 

Hidden Subsidies: Hidden subsidies are paid by remote entities, such as 1) federal and state governments, and 2) requiring utilities to pay Owners at rates in excess of wholesale rates. Those higher costs are added to the utility rate base, which is used to set electric rates.

All of them are a cost of having solar. Regarding item 3, those subsidies would include:

 

- Depreciating almost all of the turnkey capital cost in the first 5 years of the 15-y project, which provides huge tax benefits to Owner, i.e., a “tax shelter”

- Subtracting any interest on loans from Owner’s taxable income

 

Green Mountain Power, GMP, Owning/Operating Micro-grids all over Vermont

 

It looks like spreading micro-grids with batteries all over Vermont would be very lucrative for GMP, but very expensive for Vermont taxpayers and ratepayers.

 

Battery Cost Impact on Heat Pumps and EVs

 

It would be counterproductive to add battery costs/kWh to the rate base, because it would increase electric rates and discourage people from owning heat pumps and electric vehicles, i.e., the Comprehensive Energy Plan, CEP, goals would become unaffordable/unattainable. See Appendix

 

Reducing Midday Solar Electricity Surges

 

One of the main functions of battery systems tied to distribution grids is to reduce midday solar electricity surges. The cost of that service is not charged to Owners of solar systems, because that would “rain on the solar parade”.

 

NOTE: It looks like the decades-old-rule "the disturber pays" went out of the window, when wind and solar showed up to save the world.

GMP-OWNED SOLAR/BATTERY COMBO IN PANTON, VERMONT

GMP has built a solar/battery combo, on 35 acres of fertile farmland, in Panton, Vermont, a rural area. The $17.7 million solar/battery combo, would provide power, for a few hours, during rare power outages; at first to about 50 users, such as Town Hall, police, fire, EMS, etc., later to additional users. See URL

https://www.epa.gov/sites/production/files/2016-07/documents/re_on_...

 

Turnkey Capital Cost

Solar system about 4.9 MW x $3.0 million/MW = $14.7 million

Battery system about 4000 kWh x $750kWh = $3.0 million.

 

Power Outage

A power outage can be due to a production failure (extremely rare), or an electric grid failure (more common, due to lines on poles etc., instead of buried)

 

The battery annual average working capacity would be from 20% full to 85% full, or 65% of rated capacity, to ensure 15-y life.

The working capacity, only during power outages, would be increased to 75% of rated capacity, to ensure 15-y life.

The battery system, 1 MW/4 MWh, could deliver a maximum of 2,800 kWh for 1 hour, or 700 kWh for 4 hours, from 85% full to 10% full.

https://microgridknowledge.com/gmp-panton-microgrid-inverter/

 

It would be connected to many users with a distribution system modified to receive either grid power or battery power, a “microgrid”.

During a power outage, the battery system would take over, if the microgrid is undamaged.

 

Table 3/Battery Capital cost

Battery

$/kWh

$million

Battery modules, Tesla price, FOB

300

1.2

Bi-directional inverters

Thermal management system

AC main breaker and controls

Battery complete, Tesla price, FOB

500

2.0

Land

Site preparation

Foundations

Electrical and substation

Test operation

Turnkey capital cost, per GMP

750

3.0

 

Production of Panton Solar System

Production data and capacity factors are shown in this URL

Production was 1.272 MWh at a capacity factor of 34.891% on May 1, 2020

The annual average CF is about 0.20, which is greater than normal 0.145, because, instead of panels at a fixed angle, the panel angle is automatically varied during the day, to better face the sun.

http://www.wvwelectric.com/plant/60562/M/SUN

 

Midday Solar Electricity Surges

The midday surge would be a maximum of about 4.9 x 0.8 = 3.92 MW, during a rare, very sunny, summer day

The working capacity only on very sunny days, would be increased to 75%

The battery would absorb a top slice of the surge, about 1 MW for 3 hours

 

During the late-afternoon/early-evening (peak demand hours), the battery would discharge “the surge”, at 1 MW for 3 hours, to reduce the peak demand by 1 MW.

The solar system would be of little use to reduce late-afternoon/early-evening peak demands, because solar would be almost asleep.

1) Simplified Analysis of Economics of Solar System of the GMP Combo Project

If a bank makes a $14.7 million loan at 9%/y for 25 years, it would require annual mortgage payments of $1,480,342 to recover the loan, plus interest.

https://www.myamortizationchart.com

 

If GMP makes a $14.7 million investment in a solar system at 9%/y for 25 years, it would require annual revenues of $1,480,342 to “pay the mortgage”. GMP finances the solar system from its own resources.

Financial value of the battery system is assumed at zero at end of Year 25

Typically, utilities are allowed to earn 9%/y on investments.

The annual solar production is 4,900 kWh x 8766 h/y x 0.20, CF x 1000 kWh/MWh = 8,590,680 kWh

GMP sells at 11 c/kWh, as part of the VT “Standard Offer” program

90% of production is delivered to the grid as AC, or 7,731,612 kWh/y, and sold for $850,477/y, at 11 c/kWh

10% of production is drawn, as DC, by the battery system from the PV system to perform services.

8% of production is fed by the battery to the grid, and sold for $75,598/y, at 11 c/kWh

Battery loss is 0.2 x 859,068 = 171,814 kWh/y, or $18,899/y, at 11 c/kWh

Revenue total is $850,477 + $75,598 = $926,075/y

Cost of financing solar system is $1,480,342/y

Revenue shortfall is $1,480,342 - $926,075 = $554,267/y, which has to be provided, directly and indirectly, by 1) various subsidies from governments, and 2) from ratepayers and taxpayers, and 3) from additions to debt.

 

Cost of Solar/kWh

GMP receives from subsidies about $554,267 / (8,590,680 - 171,814) kWh/y = 6.27 c/kWh

Paid to GMP = 11, electricity sales + 6.27, subsidies = 17.27 c/kWh. See table 1

Owners of SO-qualified projects are able to accept 11 c/kWh, because they get subsidies worth 7 - 8 c/kWh.

 

Solar Variability a Cost Burden on Owners of Other Generators

Solar’s variability imposes extra burdens on the stability of the grid, such as midday electricity surges, the cost of which should be added to the cost of solar. See table 1

 

At present, those disturbance costs are minor. They are absorbed by Owners of other generators connected to the NE grid.

The more solar is installed, the greater the disturbance costs.

In the future, Owners would demand compensation, as they did elsewhere.

 

Other Annual Project Costs

A solar project has other costs, such as insurance, taxes, operating and maintenance costs, etc., which also are transferred to ratepayers and taxpayers, and to government debt (not to the Owner), which would increase electricity cost to at least 19.84 c/kWh. See table 1

2) Simplified Analysis of Economics of Battery System of the GMP Combo Project

 

If a bank makes a $3.0 million loan at 9%/y for 15 years, it would require annual mortgage payments of $365,136, to recover the loan, plus interest.

 

If GMP makes a $3.0 million investment in a battery system at 9%/y for 15 years, it would require annual payments of $365,136/y, to recover the investment, plus a 9%/y return on invested capital. GMP finances the solar system from its own resources.

https://www.myamortizationchart.com

 

NOTE: A battery system does not produce any electricity.

It needs electricity throughput, and consumes some of that electricity, to perform various services

Some services, such as control of midday solar output surges, are performed at a financial loss, not paid by solar system owners

It is paid by: 1) various subsidies from governments, 2) ratepayers and taxpayers, and 3) added to government debt.

 

NOTE: This analysis assumes battery throughput at 10% of solar production

Throughput is limited to about 65% of battery rated capacity, to achieve 15-y battery life.

Revenues and costs are determined as c/kWh of throughput.

 

Minimum Battery System Operating Cost

 

If 100% financing by GMP

The battery system, operated from 15% full to 80% full, would have an annual throughput of 0.65 x 4000 kWh x 365 d/y = 949,000 kWh, or $365,136/949,000 kWh = 38.5 c/kWh, just to “pay the mortgage”, i.e., pay GMP.

 

If 50% financing by GMP, 50% by bank loan at 3.5%/y

The “mortgage payment” would be $365,136/2 + $128,679 = $311,248, or 32.8 c/kWh  

The above c/kWh are for maximum utilization of the battery.

The c/kWh values would increase, if the battery is used at less than maximum throughput, as happens in the real world.

 

It is off-the-charts absurd, for RE folks to claim, ”batteries are the way to go, to store excess production of wind and solar”, when the sun happens to shine, and the wind happens to blow, at the same time, in New England.  

The cost/kWh would increase, because:

 

1) “All other Costs” would be in addition

2) In the real world, the battery would not have that level of throughput on many days

3) The “working” throughput would decrease at 1.0 to 1.5 percent per year, due to aging, but the “mortgage payment” would not.   

 

NOTE: Financial value of the battery system is assumed at zero at end of Year 15

Typically, utilities are allowed to earn 9%/y on investments.

See Table 4

Annual Revenues and Subsidies

 

A battery needs electricity throughput to perform services.

Every time a battery is charging and discharging, whether a large charge/discharge, or very small, up to 20% of the charge is lost, as measured from solar system as DC to distribution grid as AC

The below calculations show, batteries perform services at very high costs/kWh of throughput, if all costs are included.

This analysis does not include all costs. See Ignored Costs of Solar and Battery Systems

 

Annual Revenues and Subsidies

The project must have annual revenues of at least $365,136 to “pay the mortgage”

Total revenue is $179,880/y, RNS and FCM reduction + $7,653/y, arbitrage gain = $187,533/y.

Revenue shortfall is $365,136 - $187,533 = $177,604/y

 

Required subsidies have to be $177,604, revenue shortfall + $102,468, surge control loss (see table 4) + $18,899, battery loss (see table 4) = $298,971/y, which would be charged to ratepayers and taxpayers, and added to government debt. See Notes

 

Battery Capacity Factor

Battery average draw from grid is 859,068 kWh/y, assumed at 10% of solar production / 365 d/y = 2,354 kWh/d

Battery rated capacity is 4000 kWh/d as AC

Battery annual average CF = 2354/4000 = 59%, in year 1, which is within the 65% working range

If the electricity throughput remains constant, the CF would increase, as the system rated capacity decreases, due to aging at about 1.0 to 1.5%/y.

Cost of Battery Services

Cost of battery draw from grid = $365,136 / (859,068 kWh, annual throughput) = 42.50 c/kWh.

Cost of required subsidies is $298,971 / 859,068 kWh = 34.80 c/kWh

Cost of battery operations 70.31 c/kWh. See Notes

NOTE: For many decades, traditional systems have been performing the same services as are envisioned for battery systems, at a cost of about 25 c/kWh or less. 

Because the turnkey capital cost of site-specific, custom-designed, utility-grade battery systems in New England is about $700/kWh delivered as AC, the cost of their services are about 2 to 3 times greater than traditional.

That cost level likely will slowly decrease over the next 5 years, as more utility-scale battery systems are built. See URL and Appendix 

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

 

NOTE: This report shows values of battery owning and operating costs of 46 to 65 c/kWh, which are similar to the 70.31 c/kWh of this simplified analysis. See page 19 of URL

https://www.diva-portal.org/smash/get/diva2:1254196/FULLTEXT01.pdf

Ignored Costs of Solar and Battery Systems

 

1) O&M, which includes on-site use of electricity, labor and materials

2) Miscellaneous costs, such as insurance, taxes, etc.

3) Decommissioning and disposal of battery plant

4) Build new battery plant, or refurbish existing plant, to serve for 10 years, i.e., 25y, life of solar plant - 15y, life of battery plant

 

NOTE: Minor revenue could be obtained by using the battery for frequency regulation, i.e., rapidly absorbing and discharging very small quantities of electricity to maintain the grid frequency and voltage within the prescribed ranges.

 

NOTE:

- The GMP battery project is similar to a person buying a big house, without having enough income to make the monthly mortgage payments. Luckily, that person has parents, who voluntarily make up the shortage each month!!

 

- The GMP battery project does not have enough revenues. Luckily for GMP, 1) additions are made to government debt, and 2) ratepayers and taxpayers, who are coerced to make up the shortfall!!

 

- GMP wants to spread many heavily subsidized solar/battery combos all over Vermont, as part of its expensive “microgrid, climate fighting” strategy, which will be good for GMP financial results, but not good for ratepayers and taxpayers and the Vermont economy.

 

Comments on table 4

 

1) Gain from FCM and RNS Reduction

 

Significant revenue can be obtained by having the batteries reduce GMP peak demands, and thereby reduce RNS and FCM charges. These charges, imposed by ISO-NE, are a major expense of any utility.

 

The “Game of Picking Peaks” amounts to cost shifting from clever, early-adopter utilities, onto other utilities.

The ISO-NE costs of running the grid do not decrease. They continue to be spread among utilities.

The Game will end after more utilities learn to play the game.

 

The RNS value is $116.11/kW-year, or $9.68/kW-month, for 2020/2021

The FCM value is $5.30/kW-month, for 2020/2021

 

RNS reduction would be 1,000 kW x $9.69/kW-month = $9,690 for a month, or $116,280 for 12 months

FCM reduction would be 1,000 kW x $5.30/kW-month = $5,300 for a month, or $63,600 for 12 months.

Total reduction = $179,880/y

 

https://www.sandia.gov/ess-ssl/publications/SAND2017-6164.pdf

https://www.iso-ne.com/static-assets/documents/2017/02/20170228_pr_...

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

GMP finances the solar system from its own resources.

2) Gain from Arbitrage

 

A very minor revenue can be obtained by “buying low, at night-time, and selling high, during peak hours”.

 

The battery could be partially charged from the grid from 10 pm to 6 am, at about 4 c/kWh, and be charged some more by absorbing a part of the solar output surge from 8 am to 4 pm, after which it would be discharged to the distribution grid from 4 pm to 10 pm, when, on average, grid prices are 7 c/kWh.

The arbitrage gain would be $7,653/y.

3) Loss due to Midday Solar Output Bulge

 

The battery could absorb 0.45 MW of solar output from 8 am to 4 pm = 0.45 x 8 h = 3.6 MWh as DC; which after a 7% loss, would add 3.35 MWh DC to the battery charge, which after a 10% loss, would deliver 3.01 MWh AC to the distribution grid, from 4 pm to 10 pm, when, on average, grid prices are 7 c/kWh.

The surge control cost would be $102,468/y. 

 

Expensive solar electricity at 17.27 c/kWh, of which 20% is lost, due to charging/discharging, with the left-over sold at 7 c/kWh!!

Would that loss be charged to Owners of solar systems, who are the grid disturbers?

Oh no, because that would "rain on the solar parade"

 

The surge electricity costs 17.27 c/kWh. The quantity should be determined by measurement.

This calculation uses 4 c/kWh for all charging, i.e., the arbitrage gain is overstated!!

 

4) Battery loss is $18,899/y, as shown above

Table 4

ISO-NE Reduction

Surge control

Arbitrage

Battery loss

FCM

MW

0.45

From grid, MW

0.45

kWh/y

8590680

5.3

h

8

h

8

10%

859068

1000

To battery, MWh

3.60

To battery, MWh

3.60

8%

687254

12

Loss fraction

0.07

Loss fraction

0.10

5%

171814

63600

Loss, MWh

0.25

Loss, MWh

0.36

c/kWh

0.11

In battery, MWh, DC

3.35

In battery, MWh, DC

3.24

Loss, $/y

18899

RNS

Loss fraction

0.10

Loss, fraction

0.10

Net rev., $/y

926075

9.69

Loss, MWh

0.33

Loss, MWh

0.324

Mortgage, $/y

1480342

1000

To grid, MWh, AC

3.01

To grid, MWh, AC

2.92

Subsidies, $/y

554267

12

Charge cost, c/kWh

0.1768

Charge cost, c/kWh

0.04

c/kWh

17.27

116280

Charge cost, $/d

533

Charge cost, $/d

117

179880

Peak cost, c/kWh

0.07

Peak cost, c/kWh

0.07

Revenue, $/d

252

Revenue, $/d

204

Loss, $/d

281

Gain, $/d

87

Loss, $/y

102468

Gain, $/y

7653

APPENDIX 1

Vermont Has Much Better Options Than Expensive Wind/Solar/Battery Systems

 

Buildings:

 

A state-wide building code, which would require new buildings to be highly sealed, highly insulated so they could easily be energy-surplus buildings, or be entirely off-the -grid. Denmark, Norway, Sweden, Finland, etc., have had such codes for at least a decade.

 

Vermont should be replacing run-of-the-mill, old houses, with up-to-date, energy-surplus, off-the-grid, new houses, at a rate of at least 5,000 houses per year. There would be 150,000 such houses by 2050.

 

Dabbling at weatherizing, at $10,000 per house, is politically attractive, but a gross waste of money. The goal should be energy conservation and high efficiency. Their combined effect would reduce CO2 at the least cost.

 

Energy efficiency measures to reduce energy consumption, CO2, and energy costs, such as by:

 

1) Exchanging traditional light bulbs for LEDs

2) Insulating and sealing energy-hog housing and other buildings

3) Increasing the mileage of existing gasoline vehicles

 

Such measures would cost $50 to $200 per metric ton, much less than the $2,100/Mt of electric school buses.

https://www.windtaskforce.org/profiles/blogs/electric-bus-systems-likely-not-cost-effective-in-vermont-at

 

Vehicles:

 

Gas Guzzler Fee

 

Instead of RE folks fantasizing about banning gasoline vehicles, it would be far less expensive for Vermont to immediately enforce a gas-guzzler code to impose a fee on low-mileage vehicles. The fee would be collected at time of registration.

 

The more below 40-mpg, the greater would be the fee.

Vehicles with greater than 40-mpg, such as the 54-mpg Toyota Prius, would be exempt.

 

EVs

 

RE folks would have everyone drive UNAFFORDABLE, MATCHBOX-SIZE, IMPRACTICLE EVs, that would not reduce much CO2 compared with EFFICIENT gasoline vehicles.

 

On a lifetime, A-to-Z basis, with travel at 105,600 miles over 10 years (10,560 miles/y), the CO2 emissions, based on the present New England grid CO2/kWh, would be:

 

NISSAN Leaf S Plus, EV, compact SUV, no AWD, would emit 25.967 Mt, 246 g/mile

TOYOTA Prius L Eco, 62 mpg, compact car, no AWD, would emit 26.490 Mt, 251 g/mile

SUBARU Outback, 30 mpg, medium SUV, with AWD, would emit 43.015 Mt, 407 g/mile

VT LDV mix, 22.7 mpg, many with AWD or 4WD, would emit 56.315 Mt, 533 g/mile

 

The above shows,

 

A NISSAN Leaf, a compact SUV, would have CO2 reduction of 30.3 Mt over 10 years (3 Mt/y), if compared with the VT LDV mix, which contains small and big vehicles.

 

A NISSAN Leaf would have CO2 reduction of 16.3 Mt over 10 years (1.63 Mt/y), if compared with my 30-mpg Subaru Outback, a vastly more useful vehicle

APPENDIX 2

HEAT PUMPS ARE MONEY LOSERS IN MY VERMONT HOUSE, AS THEY ARE IN ALMOST ALL HOUSES

https://www.windtaskforce.org/profiles/blogs/heat-pumps-are-money-l...

APPENDIX 3

 

New England has Poor Conditions for Wind and Solar

 

Some areas of the US are favorable for wind and solar systems, because of good winds, such as from North Dakota to the Mexican Border, and the sunny US southwest.

 

NE has poor conditions for wind systems, except on pristine ridge lines, and offshore areas

NE has the most unfavorable conditions for solar, except the rainy US northwest. See images

 

https://www.nrel.gov/gis/images/100m_wind/awstwspd100onoff3-1.jpg

https://www.nrel.gov/gis/images/solar/national_photovoltaic_2009-01...

http://www.windtaskforce.org/profiles/blogs/wind-and-solar-conditio...

 

As a result, the costs of wind and solar electricity, c/kWh, would always be significantly greater in NE, than in the more favorable areas.

 

In the windy areas of the US, Owners of large-scale wind systems are paid about 5 c/kWh; they are said to be “competitive” with traditional fossil power plants.

 

However, these Owners would need to be paid about 9 - 10 c/kWh, if there were no subsidies, including the Production Tax Credit, PTC, of 1.8 c/kWh; tax credits are like gifts, they are much better than deductions from taxable income. The PTC, started in 1992, has been in effect for 28 years!!

https://www.eia.gov/todayinenergy/detail.php?id=46576

 

Vagaries of Wind and Solar in New England

https://www.windtaskforce.org/profiles/blogs/the-vagaries-of-solar-... 

  

Here is an example of a 6-day summer lull.

http://www.windtaskforce.org/profiles/blogs/analysis-of-a-6-day-lul...

 

Here is an example of a multi-day winter lull.

https://www.windtaskforce.org/profiles/blogs/wind-plus-solar-plus-s...

 

Area Requirements of Energy Sources in New England

 

An August 2009 study for the National Renewable Energy Laboratory examined land-use data for 172 projects, representing about 80% of the installed and targeted wind capacity, in the U.S., and found an average area of 85 acres/MW. 

http://www.aweo.org/windarea.html

 

This study includes all area aspects of an energy source.

According to Tom Gray of the American Wind Energy Association, the average is 60 acres/MW. Table 1 assumes an average of (85 + 60)/2 = 72.5 acre/MW 

https://www.strata.org/pdf/2017/footprints-full.pdf

 

A 1000 MW combined-cycle, gas-turbine plant, CCGT, on 343 acres produces 5.5 times the electricity of a 1000 MW solar plant on 8100 acres, i.e., solar needs 5.5 x 8100/343 = 130 times the land area of a CCGT plant to produce a MWh

 

A 1000 MW nuclear plant on 832 acres produces 6.2 times the electricity of a 1000 MW solar plant on 8100 acres, i.e., solar needs 6.2 x 8100/832 = 60.4 times the land area of a nuclear plant to produce a MWh

 

Low-cost CCGT and nuclear electricity: 

 

- Is not season/weather-dependent

- Is not variable 

- Is not intermittent

- Has minimal CO2 

- Has near-zero particulates.

Table 5/Source

 Capacity

CF

Area

Ridge line

Production

Times

 Production

New England

MW

acre/1000 MW

miles/1000 MW

MWh/y

solar

MWh/acre

Nuclear

1000

0.90

832

7,889,400

6.2

9,482

CCGT

1000

0.80

343

7,012,800

5.5

20,445

Wind

1000

0.30

72,500

62

2,629,800

2.1

36

Solar

1000

0.145

8,100

1,271,070

1.0

157

APPENDIX 4

 

Ridge Line Wind Turbine Systems

 

Any NE wind systems would need to be located where the winds are, i.e., on pristine, 2000 ft-high ridge lines, which would require:

 

1) Significant blasting to provide spacious erection areas for the 450 to 500 ft-high wind turbines

2) Several miles of heavy-duty, 50-ft wide access roads to reach and connect the erection areas

3) Extensive facilities for managing any rain and snow-melt water flows, including infrequent heavy rain-falls

 

The wind systems would devastate the already-fragile, mountain-top ecologies, which would have significant impacts further down the mountains. No self-respecting environmentalist, or sensitive human being, could ever approve of such wanton, highly visible, noisy, environmental destruction.

 

The Owners of other generators, mostly CCGT plants, are forced to expensively vary their outputs to counteract the variability of wind, 24/7/365.

 

The CCGT plant Owners are not compensated for their increased wear and tear, lesser operating inefficiencies (greater Btu/kWh, greater CO2/kWh), and revenue losses. Those costs are shifted, in one way or another, to the rate bases of utilities, i.e., paid by ratepayers.

No cost ever disappears, per Economics 101.

 

Those costs are not charged to Owners of wind systems, because that would “rain on the wind parade”

 

Lowell Mountain: The 63-MW wind turbine system, aka Kingdom “Community” Wind, on Lowell Mountain, owned by GMP, involved so much destruction that it “merited” a Manchester Guardian report, with aerial photos, a few years ago.

 

On top of that, it took about $20 million to connect that wind system to the NEK high voltage grid. It required:

 

1) A new synchronous condenser system, $10.5 million, to protect the high voltage grid

2) A new substation

3) Extensions/upgrades of high-voltage power lines, to ensure the rural grid would not be excessively disturbed, as the variable output might otherwise take down the entire northern Vermont grid.

 

- ISO-NE, the NE grid operator, on occasion, requires output curtailments, despite all these measures.

- GMP charges costs of the Lowell wind system to the rate base, subject to review by the VT Public Service Commission, PUC

- GMP uses various subsidies to reduce taxes it would have to pay on net profits, similar to Warren Buffett.

 

Future Build-outs of Offshore Wind Turbine Systems in New England

 

- MA, RI, and CT are planning to have 8460, 880, and 4160 MW, respectively, a total of 13,500 MW of offshore wind by 2035, much greater than the above 1600 MW.

- If the same simulation were made for 13,500 MW of wind turbines, the up/down spikes would be about

10,000 MW

- The existing CCGT plants would be inadequate to counteract them, i.e., output curtailments would be required.

- The 2035 date has a ring of urgency to it, but likely would be unattainable in the real world. See page 13 of NE-pool URL

 

It would take at least 20 years to build out 13,500 MW wind turbines off the coast of New England, plus large-scale solar systems to reduce the NE grid CO2/kWh by about 30%

 

With that much wind and solar, the NE grid would become very unstable. The NE grid would need:

 

1) Curtailments of wind output, kWh, on windy days

2) Curtailments of solar output surges on sunny days

2) Major connections to the Canadian grid

3) Grid-scale batteries, with a capacity of 3 to 4 TWh; turnkey capital cost about $1.5 to $2 TRILLION, at $500/kWh, delivered as AC

 

https://www.iso-ne.com/static-assets/documents/2020/02/2020_reo.pdf

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

https://www.windtaskforce.org/profiles/blogs/reality-check-regardin...

 

NOTE: Nearby countries import German overflow electricity, when it is windy and sunny, at low grid prices (because of a German surplus), and export to Germany, when it is not windy and not sunny, at high grid prices (because of a German shortage). 

The Netherlands is one of the major beneficiaries.

German households get to “enjoy” the highest electric rates in Europe, about 2.5 times as high as the US

Denmark, another wind country, is second!

https://wattsupwiththat.com/2021/04/08/germanys-windexitold-wind-tu...

Maine Floating Offshore Wind Turbine Systems are Dead in the Water

 

The ocean waters near Maine are deep. Almost all offshore wind turbines would need to be floating units, anchored at the seafloor with at least 3 long cables.

The 700-ft tall wind turbines would need to be located at least 25 miles from any inhabited islands, to reduce the visuals, especially with strobe lights, 24/7/365

The wind turbines would be far from major electricity demand centers, such as Montreal and Boston.

Transmission systems would be required to connect the wind turbines to demand centers

All that would make the cost of electricity produced by these wind turbines more expensive than those south of MVI.

http://www.windtaskforce.org/profiles/blogs/deep-water-floating-off...

 

HYWIND Floating Wind turbines: This article estimates the levelized cost of electricity of the HYWIND floating wind turbines, at Peterhead, Scotland, at UK pounds 224/MWh, or $311/kWh, or 31.1 c/kWh.

The turnkey capital cost was UK pounds 8.9 million/MW or $12.37 million/MW

https://wattsupwiththat.com/2021/07/31/the-levelised-cost-of-floati...

 

Maine is Desperate to Stay in the Wind Turbine Business

 

Maine wind/solar bureaucrats likely are in active discussions with stakeholders to add 751 MW of onshore wind turbines.

Maine wind/solar bureaucrats are not in active discussions with stakeholders to add offshore wind turbines, as shown by the interconnection proposals on page 13 of URL

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

APPENDIX 5

 

Turnkey Capital Costs of Grid-scale Battery Systems

 

Starting in 2015, EIA has prepared annual reports regarding grid-scale battery systems.

The average duration of delivering electricity increased from 0.5 h in 2015 to 3.2 h in 2019.

Excluded are: 

 

1) Financing costs

2) Benefits of subsidies, such as grants, tax credits, accelerated depreciation, loan interest deductions, waiving of state and local taxes, fees and surcharges, etc.

3) System degradation costs, because the systems had been in operation only a few years.

EIA 2020 Report

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

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

The values would be near the high end of the range in New England. See URL

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

 

EIA 2021 Report

Table 6 combines the data of prior reports and the 2021 report.

See table 6 and page 18 of URL

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

 

The US average turnkey capital cost of battery systems was about $590/kWh, delivered as AC, in 2019.

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

 

Such costs are likely to prevail for at least 5 more years, unless major technical breakthroughs are discovered, and subsequently implemented on a large scale

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

 

NOTE: Grid-scale battery systems, used 8,766 h/y, have a much higher turnkey cost per kWh (at least $600 per kWh, at present), than mass-produced battery packs for EVs, used about 750 h/y (about $125 - $175 per kWh, at present). They are not comparable.

 

NOTE: Various financial services entities, such as Bloomberg and Lazard, issue reports that project lower battery system costs/kWh, delivered as AC, than the EIA, likely to hype their financial services business interests. It would be prudent to ignore those reports.

 

Table 6/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

APPENDIX 6

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

 

The electricity loss of battery systems, i.e., efficiency, is much greater than generally understood.

Some energy systems analysts assume a loss for only the battery, such as 10%, but omit 1) Power Electronics, 2) Thermal Management and 3) Control and Monitoring.

.

1) This article identifies 18 losses of a site-specific, custom-designed, grid-scale battery system, totaling about 20% for a round-trip, excluding step-down and step-up transformer losses. See Note.

 

The system model has four coupled component models: BatteryPower ElectronicsThermal Management and Control and Monitoring.

Open URL and click on “View Open Manuscript”

See figures 3, 4 and 17 of article.

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

 

2) Per EIA survey of existing, site-specific, custom-designed, grid-scale battery systems, the efficiency is about 80%, AC to AC basis, excluding step-down and step-up transformer losses.

 

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

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

 

NOTE: Usually, AC electricity from a distribution, or high-voltage grid, has to pass through a step-down transformer, about a 1% loss, to reduce the voltage to that of the battery, then the AC is converted to DC, then inside the battery. The DC energy from the battery has to be digitized, then made into a sine wave with the same phase and 60-cycle frequency as the grid, then via a step-up transformer, about a 1% loss, to the distribution, or high-voltage grid, for an overall efficiency of about 78%, much less with aging. See URL

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

APPENDIX 7

The turnkey capital cost to implement the Vermont Comprehensive Energy Plan, CEP, would be in excess of $1.0 billion/y for at least 33 years (2017 - 2050), according to a 2015 Energy Action Network, EAN, annual report. If updated to 2021, the numbers would be about $1.25 billion/y for 29 years (2021 - 2050). See URLs.

 

http://eanvt.org/wp-content/uploads/2016/04/EAN-2015-Annual-Report-... 

https://outside.vermont.gov/sov/webservices/Shared%20Documents/2016...

 

Spending on government energy programs, including Efficiency Vermont, has averaged about $210 million/y from 2000 to 2015, a total of at least $2.5 billion, but Vermont CO2 emissions increased from 9.64 million metric ton in 2000, to 9.54 MMt in 2015, a decrease of 1.0%.

https://dec.vermont.gov/sites/dec/files/aqc/climate-change/document... 

 

That means, on average, these RE programs:

 

- Have been expensive underperformers for 15 years

- Led to higher energy prices, and higher other prices, than they would have been without those wasteful programs.

http://www.windtaskforce.org/profiles/blogs/vermont-is-going-to-hel...

Giving the same RE folks six times as much money per year, to implement the CEP, per mandate of the unconstitutional Global Warming “Solutions” Act, GWSA, would be very far beyond rational.

 

On this image, the CO2 of Vermont is about the size of a dot at the end of this sentence. See URL

https://wattsupwiththat.com/2021/04/16/eia-u-s-co2-emissions-declin...

Wind Solar and Battery Projects are Tax Shelters for the Wealthy, whether Domestic or Foreign

 

Per standard Wall Street practice for tax-shelters of wind and solar projects:

 

- The cash value of the subsidies to Owners has to be about 45 to 50% of the turnkey cost of RE projects

- The subsidies are “front-loaded”, i.e., in the first 5 years, to enable Owners to shelter as much income as possible in the early years; aka harvesting subsidies.

- The entire project cost has to be written off in about 5 years, no matter the length of the project, per MACRS IRS rules. See URL.

- Owners or VT utilities receive 9%/y on their invested capital, per Vermont Standard Offer RE-Promotion Program.

- Owners or VT utilities may finance up to 50% of the project cost, currently at about 3.5%/y, per SO program

- Owners or VT utilities are paid about 11 c/kWh, solar, 9 c/kWh, wind, delivered as AC to the grid, per SO program; the NE grid electricity wholesale price has been about 5 c/kWh or less, starting in 2009.

 

This explains why Wall Street investment bankers, such as Bloomberg, Lazard, Morgan, etc., are in favor of more RE projects for their wealthy clients

 

https://solarplusllc.com/macrs-and-bonus-depreciation/

https://norwichsolar.com/vermont-commercial-and-industrial-solar-incentives/

https://vermontbiz.com/news/2019/october/22/owner-gmp-and-vermont-gas-will-get-new-ceo

 

Warren Buffett Riding the Subsidy/Rapid-depreciation Gravy Train

 

Quote: "I will do anything that is basically covered by the law to reduce Berkshire's tax rate, for example, on wind energy, we get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit." 

https://www.usnews.com/opinion/blogs/nancy-pfotenhauer/2014/05/12/even-warren-buffet-admits-wind-energy-is-a-bad-investment

 

Green Mountain Power, GMP, Riding the Subsidy/Rapid-depreciation Gravy Train

 

Vermont utilities buy about 1.4 million MWh/y of hydro power, at 5.7 c/kWh, under a 20-y contract, from Hydro Quebec.

 

GMP, a Canadian company, refuses to buy more hydro electricity from HQ, because that electricity would just be a “pass-through”, on which GMP would make minimal profit. HQ is eager to sell electricity. This approach requires no subsidies!!

 

GMP rakes in $millions of our hard-earned money, by investing in: 1) utility-scale solar/battery combos, 2) leasing heat pumps and 3) wall-hung Tesla batteries for playing “catch the peak games”.

 

GMP rides the subsidy gravy train, and plays the “green, forward-looking utility” role.

 

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Comment by Willem Post on August 13, 2021 at 6:05am

BOB,

A river of money to achieve next to NOTHING regarding GLOBAL WARMING?

The only thing it will achieve is more feel-good ECO-egoism of Dem/Prog RE folks, yearning for lucrative RE careers, and more and more CENTRALIZED command/control of the Vermont economy.

They will want more and more money, because their goals are EPHEMERAL, ELUSIVE FATA MORGANAs, akin to tilting at windmills, while wishing water would flow uphill.

http://www.truenorthreports.com/roper-vermont-climate-council-wants...

The turnkey capital cost to implement the Vermont Comprehensive Energy Plan, CEP, would be in excess of $1.0 billion/y for at least 33 years (2017 - 2050), according to a 2015 Energy Action Network, EAN, annual report. If updated to 2021, the numbers would be about $1.25 billion/y for 29 years (2021 - 2050). See URLs.



http://eanvt.org/wp-content/uploads/2016/04/EAN-2015-Annual-Report-...
https://outside.vermont.gov/sov/webservices/Shared%20Documents/2016...
https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-sol...

Spending on government energy programs, including Efficiency Vermont, has averaged about $210 million/y from 2000 to 2015, a total of at least $2.5 billion, but Vermont CO2 emissions increased from 9.64 million metric ton in 2000, to 9.54 MMt in 2015, a decrease of 1.0%.
See page 36 of URL
https://dec.vermont.gov/sites/dec/files/aqc/climate-change/document...

EVs

EAN, with help of VT-DPS, claimed, without providing any calculations, a CO2 reduction more than two times as great, i.e., 4.5 versus 2.180 Mt/y per EV; the reduction would be even less, if the A-to-Z CO2 and lifetime conditions had not been ignored



This excessive 4.5 Mt/y claim was made to deceive people, including legislators, and to hype the adoption of overly expensive, not-very-useful EVs.
See table 1 and 2 in URL
https://www.windtaskforce.org/profiles/blogs/some-ne-state-governme...

HEAT PUMPS

EAN, with help of VT-DPS, claimed, without providing any calculations, 90,000 HPs would reduce CO2 by 0.370 million Mt/y, or 4.111 Mt/y per HP
See page 4 of URL
https://www.eanvt.org/wp-content/uploads/2020/03/EAN-report-2020-fi...

Heat pumps displaced only 35% of my space heating propane in my well-insulated/well-sealed house.
This is better than the AVERAGE displacement of 27.6% by HPs in AVERAGE Vermont houses, per VT-DPS study. See URL
https://publicservice.vermont.gov/sites/dps/files/documents/2017%20...

The CO2 reduction of my displaced propane was 300 gal x 12.7 lb CO2/gal = 1.728 Mt/y, and the CO2 of the additional electricity was 2332 x 317 g/kWh = 0.739 Mt/y, for a reduction of 0.989 Mt/y, based on the ISO-NE value of 317 g/kWh, using fuel consumption of all power plants connected to the NE grid.

Heat Pumps are Money Losers in my Vermont House (as they are in almost all people's houses)

I installed three Mitsubishi, 24,000 Btu/h HPs, Model MXZ-2C24NAHZ2, each with 2 heads; 2 in the living room, 1 in the kitchen, and 1 in each of 3 bedrooms. The HPs have DC variable-speed, motor-driven compressors and fans, which improves the efficiency of low-temperature operation. The HPs last about 15 years. Turnkey capital cost was $24,000

I do not operate my HPs at 10F or below, because HPs would become increasingly less efficient with decreasing temperatures.
The HP operating cost per hour would become greater than of my highly efficient propane furnace. See URL
http://www.windtaskforce.org/profiles/blogs/vermont-co2-reduction-o...

The cost of displaced propane was 300 x $2.399/gal = $720/y
The cost of additional electricity for HPs was 2332 x 0.20 = $466/y
My energy cost savings due to the HPs were $253/y, on an investment of $24,000!!
If all my investments had been this great, I would be in a poorhouse, and on welfare.

Cost of CO2 Reduction was (2,059, amortizing - 253, energy cost saving + 200, parts and maintenance)/0.998 Mt/y, CO2 reduction, table 6 = $2028/Mt, which is similar to money-losing, very expensive, electric transit and school buses. See URL
https://www.windtaskforce.org/profiles/blogs/electric-bus-systems-l...

Weatherizing Vermont's energy-hog houses at $10,000 each would NOT render these house suitable for HPs, BY A LONG SHOT, as was proven in MY housed and by the VT-DPS study

Only high-efficiency houses that are HIGHLY SEALED AND HIGHLY INSULATED are suitable for HPs.

All of the above has been well known to VT-DPS and EAN, because I have kept them, and thousands of others, informed over the years.

Comment by Willem Post on April 1, 2021 at 9:33pm

Right, you are.

They fought like hell to throw out Trump and put in Biden to get rescue bills passed

Trump was screwing up their livelihood prospects

That rescue money, hundreds of $billions, would go mostly to Democrat-run states, that just happen to be swing states.

A million more voters for Democrats just walked across the open borders,

Then, as instructed, they just sit down, get arrested, and start collecting on government programs.

Democrats do not know how to run profitable companies, so, instead, they hijack the government purse.

Obama is pulling the strings behind the scene; he is the most clever puppet master!

Comment by arthur qwenk on April 1, 2021 at 8:48pm

Willem, 

A truism I have found. It is not about science , it is  all about the ideology of today's left and their understanding of "The Economy".

 Much more so than Republicans, the Democratic Party is a highly interconnected ecosystem of incumbency and patronage dependent on a predictable flow of public money and liberal philanthropy that lubricates every cog of the party’s sprawling machinery. When they think of the U.S. economy, this is what  they are thinking of.

Comment by Willem Post on March 30, 2021 at 10:27pm

Art,

The excessive subsidies are driving RE profiteers crazy.

Biden's handlers are fueling the flames

30,000 MW of offshore wind turbines would be a BONANZA for EUROPEAN companies.

They are ready, willing and able to start right now.

The US will have an EXPENSIVE power production set-up, just as the Europeans.

Any competitive advantage the US now has regarding low-cost energy will be blown to bits.

We will be paying the Europeans to dig our grave.

They must be saying: "We got the US where we want them"

Comment by arthur qwenk on March 30, 2021 at 8:11pm

Well done William.Let's hope there are a few residents of these New England states that have the ability to connect the dots, and the will to do something about it to change the disastrous  energy path New England is on.

Thank you.  

Comment by Willem Post on March 28, 2021 at 2:20pm

Thank you Penny.

I am 84, retired many years ago, and am financially independent.

Exposing RE for what it really is, is a labor of love for me. 

RE for others is a means to grab as many subsidies as possible, as quickly as possible, and they will tell ANY lies to get them.  

I am fortunate to have about 35 years of energy systems analysis experience, which helps me to expose those lies.

Comment by Penny Gray on March 27, 2021 at 6:34pm

Willem Post, thank you for continually educating us on this important subject and for providing these amazing stats.  Heat pumps don't work up here in Fort Kent, yet they're still being pushed and there aren't many electric vehicles at all. There's no doubt that I dwell in one of the least energy efficient old farmhouses ever built, located in the windiest coldest dang location in Maine, but if it stands as long as I live, I'll be happy to suffer the cold winters.  Whoever lives on this mountain when I'm gone will hopefully build an energy efficient home.

Comment by Penny Gray on March 27, 2021 at 6:25pm

I just watched this presentation on Youtube that's quite amazing, coming out of California.  Given that politicians, Hollywood and bureaucrats are currently charting the course of our power grid, and science plays little to no part, this is an interesting interview. Bottom line, there's no dirtier energy than clean energy, namely wind and solar.  The biggest battery bank in the US is now located in Florida and would, if Florida suffered a blackout, power the entire state for two whole minutes.  It would take five hundred years to build enough big lithium ion batteries to power the US for one day.  This interview is worth watching and should be mandatory viewing for all government agencies, school age children and anyone who wants and expects the power to come on when they flip a switch...and they are relying on the unreliables. https://www.youtube.com/watch?v=rq-Z9sYGxeE

Comment by Willem Post on March 26, 2021 at 2:11am

Arthur,

The SSR of Vermont, which has the strongest SOCIALIST orientation in the US (Bernie Sanders even celebrated his honeymoon in the USSR), has had a near-zero, real-growth economy, with a near-stagnant population, for at least 20 years.

No amount of federal and state subsidies, COVID or other, and government programs could change that.

They are, in fact, the CAUSE of the disease.

It is a disease of the "Collective" brain of a small, but powerful group of entities, such as did exist in the Soviet Union.

Vermont needs glasnost and perestroika, right now!!!

I made some additions after you made your comment, and will be making more additions.

Stay tuned.

Comment by arthur qwenk on March 25, 2021 at 8:46pm

Solution for residents and business?

Leave the region , as this region is doomed by its own hand. 

Look at the data, that indeed is happening. 

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/

 

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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