Comments - Grid Balancing Costs Sky-Rocket in the UK, due to Increased Wind and Solar - Citizens' Task Force on Wind Power - Maine2024-03-28T09:22:41Zhttps://www.windtaskforce.org/profiles/comment/feed?attachedTo=4401701%3ABlogPost%3A233908&xn_auth=noRemember, these ANNUAL additi…tag:www.windtaskforce.org,2022-01-21:4401701:Comment:2338622022-01-21T17:11:19.055ZWillem Posthttps://www.windtaskforce.org/profile/WillemPost942
<p>Remember, these ANNUAL additional costs are due to the variations and intermittencies of wind and solar, because the OTHER power plants have to operate far from their more-efficient modes of operation.</p>
<p></p>
<p>When wind and solar were only a very small percent of the electricity loaded onto the U.K. grid, those balancing costs were minimal, sort of “lost in the fog”</p>
<p></p>
<p>When wind and solar became a large percent, those balancing costs became 1.3 BILLION U.K. pounds in 2020,…</p>
<p>Remember, these ANNUAL additional costs are due to the variations and intermittencies of wind and solar, because the OTHER power plants have to operate far from their more-efficient modes of operation.</p>
<p></p>
<p>When wind and solar were only a very small percent of the electricity loaded onto the U.K. grid, those balancing costs were minimal, sort of “lost in the fog”</p>
<p></p>
<p>When wind and solar became a large percent, those balancing costs became 1.3 BILLION U.K. pounds in 2020, likely even more in 2021, 2022, etc.</p>
<p></p>
<p>Those balancing costs should have been charged to the Owners of wind and solar systems, but, in reality, they are charged to taxpayers, ratepayers, and to government debts.</p>
<p></p>
<p>Those balancing costs are in addition to the various government subsidies, which are also charged to taxpayers, ratepayers, and to government debts.</p>
<p></p>
<p>Now you all are finally beginning to see just how wonderful wind and solar have been for your pocketbook.</p>
<p></p>
<p>I saw this mess coming about 20 years ago, because I have about 40 years experience as an energy systems analyst, but ignorant folks dismissed me.</p>
<p></p>
<p>The Biden fools adding 30,000 MW of very expensive offshore wind, would be a bonanza for Europe, because it will make oodles of money, plus it will saddle a competitor with much higher energy costs. <br/><br/></p>
<p>A master stroke, in deed, and the US is falling into the very expensive, debilitating trap.</p>
<p></p>
<p><strong>“All-in” Electricity Cost of Wind and Solar in New England</strong></p>
<p><strong> </strong></p>
<p><a href="https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-solar-and-battery-systems">https://www.windtaskforce.org/profiles/blogs/high-costs-of-wind-solar-and-battery-systems</a></p>
<p><a href="http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar">http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar</a></p>
<p> </p>
<p>Pro RE folks point to the “price paid to owner” as the cost of wind and solar, purposely ignoring the other cost categories. The all-in cost of wind and solar, c/kWh, includes:</p>
<p></p>
<p><span>1) Above-market-price paid to Owners </span></p>
<p><span>2) Subsidies paid to Owners</span></p>
<p><span>3) Owner return on invested capital at about 9%/y</span></p>
<p><span>4) Grid extension/augmentation</span></p>
<p><span>5) Grid support services, including fees for:</span></p>
<p><span> </span></p>
<p><span>- Capacity availability (i.e., plants are fueled, staffed, kept in good working order, ready to produce on short notice)</span></p>
<p><span>- More frequent plant start-up/shut-down</span></p>
<p><span> </span></p>
<p><span>6) Future battery systems</span></p>
<p><strong> </strong></p>
<p><strong>Comments on table 1</strong></p>
<p><strong> </strong> </p>
<p>- Vermont legacy Standard Offer solar systems had greater subsidies paid to owner, than newer systems</p>
<p>- Wind prices paid to owner did not have the drastic reductions as solar prices.</p>
<p>- Vermont utilities are paid about 3.5 c/kWh for various costs they incur regarding net-metered solar systems</p>
<p>- "Added to rate base" is the cost wind and solar are added to the utility rate base, used to set electric rates.</p>
<p>- “Total cost”, including subsidies to owner and grid support, is the cost at which wind/solar are added to the utility rate base</p>
<p>- “NE utility cost” is the annual average cost of purchased electricity, about 6 c/kWh, plus NE grid operator charges, about 1.6 c/kWh</p>
<p>for a total of 7.6 c/kWh.</p>
<p>- “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.</p>
<p><strong> </strong></p>
<p><strong>NOTES:</strong></p>
<p>1) NE wholesale grid price averaged about 5 c/kWh, starting in 2009, due to low-cost CCGT and nuclear plants providing at least 65% of all electricity loaded onto the NE grid, in 2019.</p>
<p> </p>
<p><a href="https://www.iso-ne.com/about/key-stats/resource-mix/">https://www.iso-ne.com/about/key-stats/resource-mix/</a></p>
<p><a href="https://nepool.com/uploads/NPC_20200305_Composite4.pdf">https://nepool.com/uploads/NPC_20200305_Composite4.pdf</a></p>
<p><br/>2) There are Owning costs, and Operating and Maintenance costs, of the NE grid</p>
<p>ISO-NE charges these costs to utilities at about 1.6 c/kWh. The ISO-NE charges include: </p>
<p> <br/>Regional network services, RNS, based on the utility peak demand occurring during a month</p>
<p>Forward capacity market, FCM, based on the utility peak demand occurring during a year.</p>
<p> </p>
<table>
<tbody><tr><td><p><span style="font-size: 8pt;"><strong>Table 1/VT & NE sources</strong></span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">Paid to</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">Subsidy</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">Grid</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">GMP</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"> Added</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">ISO-NE</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">Total</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">NE</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">Times</span></p>
</td>
</tr>
<tr><td><p><span style="font-size: 8pt;"><strong> </strong></span></p>
</td>
<td><p><span style="font-size: 8pt;"> </span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">paid to</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">support</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"> </span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">to rate</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">RNS+</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"> </span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">utility</span></p>
</td>
<td><p><span style="font-size: 8pt;"> </span></p>
</td>
</tr>
<tr><td></td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">owner</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">towner</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">cost</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">adder</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">base</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">FCM</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">cost</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">cost</span></p>
</td>
<td></td>
</tr>
<tr><td></td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">c/kWh</span></p>
</td>
<td></td>
</tr>
<tr><td><p><span style="font-size: 8pt;">Solar, rooftop, net-metered, new</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">17.4</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">5.2</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">2.1</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">3.5</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">20.9</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">1.6</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">29.8</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">7.6</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">3.92</span></p>
</td>
</tr>
<tr><td><p><span style="font-size: 8pt;">Solar, rooftop, net-metered, legacy</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">18.2</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">5.4</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">2.1</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">3.5</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">21.7</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">1.6</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">30.8</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">7.6</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">4.05</span></p>
</td>
</tr>
<tr><td><p><span style="font-size: 8pt;"><strong>Solar, standard offer, combo</strong></span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;"><strong>11.</strong><strong>0</strong></span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"><strong>6.74</strong></span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"><strong>2.1</strong></span></p>
</td>
<td style="text-align: right;"></td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"><strong>11.</strong><strong>0</strong></span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"><strong>1.6</strong></span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"><strong>21.44</strong></span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;"><strong>7.6</strong></span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;"><strong>2.82</strong></span></p>
</td>
</tr>
<tr><td><p><span style="font-size: 8pt;">Solar, standard offer, legacy</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">21.7</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">10.5</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">2.1</span></p>
</td>
<td style="text-align: right;"></td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">21.7</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">1.6</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">35.9</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">7.6</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">4.72</span></p>
</td>
</tr>
<tr><td><p><span style="font-size: 8pt;">Wind, ridge line, new</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">8.5</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">3.9</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">2.4</span></p>
</td>
<td style="text-align: right;"></td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">8.5</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">1.6</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">16.4</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">7.6</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">2.15</span></p>
</td>
</tr>
<tr><td><p><span style="font-size: 8pt;">Wind, offshore, new</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">9.0</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">4.1</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">2.4</span></p>
</td>
<td style="text-align: right;"></td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">9.0</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">1.6</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">17.1</span></p>
</td>
<td style="text-align: right;"><p><span style="font-size: 8pt;">7.6</span></p>
</td>
<td><p style="text-align: right;"><span style="font-size: 8pt;">2.25</span></p>
</td>
</tr>
</tbody>
</table>
<p> </p>
<p>Sample calculation; NE utility cost = 6, Purchased + 1.6, (RNS + FCM) = 7.6 c/kWh</p>
<p>Sample calculation; added to utility base = 17.4 + 3.5 = 20.9 c/kWh</p>
<p>Sample calculation; total cost = 17.4 + 5.2 + 2.1 + 3.5 + 1.6 = 29.8 c/kWh</p>
<p> </p>
<p>Excludes costs for very expensive battery systems</p>
<p>Excludes costs for very expensive floating, offshore wind systems</p>
<p>Excludes cost for dealing with shortfalls during multi-day wind/solar lulls. See URL</p>
<p><a href="https://www.windtaskforce.org/profiles/blogs/wind-and-solar-provide-50-percent-of-future-new-england">https://www.windtaskforce.org/profiles/blogs/wind-and-solar-provide-50-percent-of-future-new-england</a></p>
<p> </p>
<p>“Added to rate base” is for recent 20-y electricity supply contracts awarded by competitive bidding in NE.</p>
<p>“Added to rate base” would be much higher without subsidies and cost shifting.</p>
<p> </p>
<p>US regions with good wind and solar conditions, and low construction costs/kW, produce at low c/kWh.</p>
<p>NE has poor wind conditions, except on pristine ridge lines, and the poorest solar conditions in the US, except the rainy, Seattle area.</p>
<p>NE has highest on-shore construction costs/kW ($2,400/kW in 2020), produces at high c/kWh</p>
<p>See page 39 of URL</p>
<p><a href="https://www.energy.gov/sites/default/files/2021-08/Land-Based%20Wind%20Market%20Report%202021%20Edition_Full%20Report_FINAL.pdf">https://www.energy.gov/sites/default/files/2021-08/Land-Based%20Wind%20Market%20Report%202021%20Edition_Full%20Report_FINAL.pdf</a></p>
<p> </p>