ISO-NE, HELL-BENT TO TURN OFF THE LIGHTS:

ISO-NE PRESS RELEASE March 31,2022

                                         "A CLEAR PATH FOR CLEAN ENERGY"

      "The renewable resource exemption provides a clear path for projects that are ready to enter the FCM over the next two years. The exemption is for 300 megawatts (MW) of qualified capacity in FCA 17 and 400 MW of qualified capacity in FCA 18. Over the two auction periods, this is the equivalent of up to 2,000 MW in nameplate capacity, which is how most of these resources are considered outside of power system operations."
     "This exemption is in addition to other avenues for renewable resources to enter the market, either through the substitution auction process or through clearing in the initial auction. In fact, 100% of the new generation that cleared the more recent capacity auction were solar and battery resources."

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Comment by Willem Post on April 11, 2022 at 6:33pm

PART 4

 

Oversized Battery and Cost of Absorbing Midday Solar Bulges

 

This part shows, in very simple terms, the REAL cost of battery systems per kWh of throughput.

 

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

 

- Bank loan costs

- Owner's return on investment

- Cost of subsidies

- Battery system electricity loss. See Part 5

 

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

 

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

 

The battery primary purpose is to absorb a part of the midday solar bulge each day to avoid grid disturbances.

Some solar bulges are greater than others, which leads to an annual capacity factor of about 0.5

 

The annual throughput is about 1000 kWh x 0.5, capacity factor x 365 cycle/y = 182,500 kWh/y

Battery system turnkey capital cost 1000 kWh x 1.25, oversize factor x $500/kWh, in 2025 = $625,000. See Note

 

NOTE: The EIA projected cost of $500/kWh for 2025 is assumed for this analysis.

The 2025 cost likely will be much higher, due to increased inflation, increased interest rates, and increases in materials prices, such as of Tungsten, Cobalt, and Lithium.

 

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

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

 

Projects have many other costs during each year of their life
For analysis purposes, we will assume all other costs (O&M, monitoring, site security, insurance, etc.) at 15.00 c/kWh. See Notes


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

 

NOTE: The 15.00 c/kWh does not include the 18.40 c/kWh of battery electricity loss, due to absorbing midday solar output bulges, and delivering about 80% of it during the peak demands of late-afternoon/early-evening. See Part 5


Payment to Owner on $312,500 at 9%/y for 15 years is $38,035/y, or 38035/182500 = 20.84 c/kWh

Payment to Bank on $312,500 at 6%/y for 15 years is $31,645/y, or 31645/182500 = 17.34 c/kWh 

 

Project costs are 20.84, Owner + 17.34, Bank + 15.00, All other costs = 53.18 c/kWh of annual throughput

 

Project revenues are (Subsidies 45% of 53.18 = 23.93 c/kWh) + 29.25, battery services = 53.18 c/kWh of annual throughput

 

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

 

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

 

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

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

 

Alternative

Cost per kWh of throughput

c/kWh of throughput

Capital cost, $

625000

 

Subsidies

yes

 

Owner financing at 9%/y for 15 y; %

50

 

Bank financing at 6%/y for 15 y; %

50

 

Payment to Owner, $/y

38035

20.84

Payment to Bank, $/y

31645

17.34

Total payments, $/y

69680

 

All other costs 

27375

15.00

Owner total costs

97055

53.18

 

 

Revenue of battery services

53380

29.25

Subsidies; 45% of 97055

43675

23.93

Total

97055

53.18

Comment by Willem Post on April 7, 2022 at 7:11am

The stupidity of the leading people in those days broke historic levels.

Investors want to make a minimum return on their investment of at least 9%/y

A nuclear plant costing $10 billion at 9%/y for 40 years would require certain annual payments to owner, if the owner financed the entire plant.

The plant would produce a certain quantity of kWh over these. 40 years

That yields a c/kWh This is the minimum cost

Then add all other annual costs and you get a higher c/kWh, including:

1) 24/7/365 staffing of about 600 people at $100,000/y each, or $60,000000/y

2) refueling every 500 days at about $100 million

Comment by Lynn Oleum on April 4, 2022 at 2:55pm

Lewis Strauss, when he was head of AEC, famously said nuclear power would be "too cheap to meter." That was based on the fact that the contribution of the cost of raw unprocessed uranium, as it comes out of the ground, to the price of electricity is less than 0.001 cents per kilowatt hour. He didn't include capital, amortization, fuel processing, or operations.

Wind and solar advocates do the same thing. "Too cheap to meter" because fuel cost is zero. As John Cleese said in an old commercial BRILLIANT!

Comment by Willem Post on April 4, 2022 at 9:33am

FCM is forward capacity market.

FCA is forward capacity auction

ISO-NE is making sure there will be enough capacity at least 3 years from now, to serve the demand three years from now.

Entities that plan to own wind and solar systems, and have been selected as qualified to bid in the FCA, promised to provide a certain capacity, MW, of power, FOR A CERTAIN SEGMENT OF TIME, but that promise has some flexibility, because it is based on the sun and wind. 

It would be revealing to know the performance of these promises and cost per kWh along a timeline.

Remember, the wind/solar owners have no fuel costs, so they can bid low for a short segment of time, and all other owners, that do have fuel costs, would get that “clearing” price, which, for them, would be a money loser.

Welcome to the BS world that has been a humongous, expensive failure in the UK.

That failure is about to get a lot worse with increasing prices of everything all over Europe.

Comment by Robert Feller on April 3, 2022 at 3:32pm

I try not to use the F bomb in polite company but based upon this nightmare scenario, we're fucked.  I for one have a whole house generator running on propane and my lights, refrigerator, washer, dryer and anything else that runs on electricity will remain in use regardless of what these idiots at ISO-NE think that they can accomplish.  This is just another reflection of the Biden nightmare that we can't seem to wake up from. 

One last thing, I have heard from Angus [our senator in residence until voted out this coming November] and he too has consumed the Democratic Kool-Aid that Pingree has been serving.

God PLEASE help us in this time of inordinate volumes of stupidity.  

Comment by Lynn Oleum on April 3, 2022 at 1:45pm

Batteries aren't generation.

Comment by arthur qwenk on April 3, 2022 at 11:48am

None of this "Unreliable Crap' can compete in a fair  free market place.

Until the consumer rebels because of increased recognition of what is happening to them by the elitist scoundrels who manipulate their  Green ideolgy for profit, this will continue. 

The price is still too low for power in Maine. Look at 28 cents delivered witihn a few years if this trend is not interrupted by the realities of cost to the consumer.

In Germany, the price delivered for electrons is at 35 cents  KWH and a gallon of gasoline    is $8.60 US.

Comment by Dan McKay on April 3, 2022 at 7:31am

The Ratepayers' Last Bastion for A Free Market Has Surrendered to Corrupt Politicians. We Are F^#*ed.

 

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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