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Controversy over a proposal build a new electricity generation plant

July 1, 2008

The Rocky Mountain News reported on a supposed controversy over a proposal by Xcel Energy to build a new electricity generation plant powered by natural gas in Denver.  This plant would cost under $650 million dollars and have a generating capacity of 480 megawatts.  The RMN points out that critics…

“question the need for the plant, whose estimated cost today is more than $600 million, up from initial estimates of $436 million in November, due in part to escalating costs for labor, steel and equipment.

Opponents argue that renewable sources of energy, such as solar and wind, or energy conservation can substitute for an expensive new plant.”

Really? 

Solar

I wonder if the opponents have checked the cost of solar energy lately.  According to the June 2008 survey results for the Solar Electricity Global Benchmark Price Indices, the cost per watt for industrial sized solar electricity installations is $4.94 per watt.  At that rate it would cost about $2.4 billion to build a 480 megawatt solar plant, four times the cost of the natural gas plant.  But, of course, the gas powered facility can operate near maximum capacity for 24 hours a day, yielding over 11,000 megawatt-hours of energy per day.  The solar powered plant can realisticly operate at its maximum power for about four or five hours a day on the average (in Colorado), and if lucky would yield maybe 3,000 megawatt-hours of energy per day.  To equal the the daily maximum energy output of the gas powered plant, the solar powered plant would actually need to have about four times the installed wattage, and would cost closer to $10 billion!  With typical silicon solar technology of today, such a solar facility would have a footprint of about 15 square kilometers, or roughly 200 times the size of Coors Field, as illustrated in figure 1, below.

15 square kilometers over downtown Denver

Figure 1.  Click on image to enlarge.  About 15 square kilometers of solar arrays would be needed to yield the same energy as a 480 kilowatt natural gas power plant averaged over a typical day.  That is approximately 200 times the size of Coors Field.  This image shows 15 square kilometers compared to downtown Denver with Coors field near the top.  Image is from Google Earth with annotation added by Tom Moriarty.

Wind

 Wind is a better bet than solar at this time, and in the long run is cheaper than gas per kilowatt-hour generated.  It would still be very expensive to install enough wind turbines to be able to match the continuous output of a gas fired plant.  480 megawatts worth of wind turbines would put out 480 megawatts of power if the wind is blowing fast enough.  But when the wind is not blowing fast enough, the the output will be lower.  A multiplicative number, called the “capacity factor” is used to calculate the amount of energy that is produced over time, versus the amount that would have been produced if the turbine had been running at its maximum output 100% of the time.   Roughly speaking, the capacity factor for wind power in Eastern Colorado is about 35%.  The capacity factor for modern gas fired electricity generation would be better than 85%.  So, in order to get the same energy as a 480 megawatt gas fired plant, you would have to install twice as much wind capacity, or about 1000 megawatts.  The realistic installation cost of wind power (with the required transmission lines, etc.) is about $3 per watt, as seen here.  So it would cost about $3 billion dollars worth of wind generation facilities to replace the $600 million natural gas powered plant.

However, even with the high construction cost, wind energy would still be cheaper per kilowatt-hour than gas in the long run.  Gas is expensive and going up, while wind is still free.  But wind has another problem.  When the wind is slow or zero, the power is low or zero.  It doesn’t make any difference how many watts of wind power have been installed when the wind isn’t blowing.  There is no power.  There must always be enough non-wind (and non-solar) power generation capacity to cover the load when the wind isn’t blowing (and the sun isn’t shining).

The folks at Xcel Energy figured this out a long time ago.  That is why our lights are not going out.  They know that wind turbines are a great asset for reducing the load on the more traditional types of power generation, but only when the wind is blowing.  That is why they are already the leading wind power provider in the United States, with over 2500 megawatts of installed wind capacity and plans for more in the future.  But they still must maintain the non-fickle conventional power sources, like gas, or the lights will start going out when the wind stops blowing.

Conservation.

Who can argue with conservation, if it means not being wasteful.  But be careful when some environmental activists says “conservation.”  The Rocky Mountain News article quotes the environmental activist, Leslie Glustrom expressing her reservations about moving from coal to gas.  In another recent opinion piece in the Boulder Daily Camera Glustom wrote:

“The alternative to building gas turbines to meet the summer peak is to begin using modern internet-based tools to manage the demand by cycling non-essential motors, lights, air conditioning and HVAC systems. There are a growing number of firms that develop these high-tech “demand response” systems, but, despite repeated efforts from citizen interveners, Xcel repeatedly refused to explore this powerful form of demand management.”

In other words, “citizen interveners,” (like Glustrom herself, no doubt) would like to use tools to control your use of pesky wasteful things like motors and lights.  Don’t worry, I’m sure they have your best interest in mind.

Conclusion

I am all for solar and wind energy.  Really.  Just click on the “ClimateSanity by Tom Moriarty” tab at the top of this page if you doubt me.  But I believe the market, rather than demands by “activists”  will ultimately lead to a better mix of renewables and non-renewables, with renewables gaining share as they become more cost effective.  As for Ms. Glustrom’s idea to “manage the demand,” I suggest a better alternative would be to have plenty of generating capacity and a varying rate scale for consumers based on the cost of generation by Xcel or the time of day.  That way, as the cost of generation varies with demand consumers can adjust their own practices and manage their own demand, without any help by Ms. Glustrom.

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22 comments

  1. Well said Great information, keep up the great work!


  2. I wonder why Xcel won’t look into more modern conservation techniques. They should definitely look into implementing demand response , it’s a lot more modern and practical.


  3. Dan,

    Thanks for the comment. I will look into “demand response.”

    Tom


  4. Have you looked into CSP? Arizona Public Service just signed a contract for a 280 MW plant with 6 hours’ molten salt storage at a cost of 12-14 cents/kWh; and NREL-Sargent & Lundy say the cost will be less than 7 cents/kWh by 2015.

    In contrast, natural gas prices are up 100% in the past year; and have increased an average of 16%/year for the past decade.

    Well depletion rates for natural gas wells are 3-4 years.

    Perhaps we should…plan ahead? Forward thinking?

    Not when the utilities, coal and natural gas industries are in charge.

    After global warming gets bad enough, people will realize how it happened — and coal and utilities will get the same bad rap that oil is getting now.

    Only we’ll have changed the climate. Rats.


  5. Perhaps you should read the tragedy of the commons by Garret Hardin.

    Hmmm, what do you call all the abandoned SUVs we’re reading about? A market success?

    Global warming and environmental destruction are the best examples of market failure I can think of.

    Tom Friedman’s book The Earth is Flat failed to take into consideration the real costs of globalization, and the fact that globalization can’t exist without cheap fossil fuels.

    But you don’t have to believe me. Just wait a few years. Or perhaps another 500 year in the Midwest (the 2nd in 15 years); or the 1,400 fires burning in California; or the complete melting of the polar ice cap and associated rapid increase in summer high temperatures.


  6. Earth to Tom:

    It doesn’t matter how many cars there are on the road when there’s no gas.

    It doesn’t matter how many gas plants there are when no one can afford the little that’s left.

    And it won’t matter how much coal we burn when ocean acidification and feedback loops combine for a super-greenhouse effect, causing runaway climate change and ecosystem failure.


  7. Dear Nancy LaPlaca,

    Thank you for your courteous comments. Now please calm down and take a deep breath.

    I applaud efforts like the 280 MW CSP system in the Arizona desert. I would like to see this project be successful, and if so, multiplied many times over.

    This type of energy production will work great in the southwestern US because the insolation is so great. In Gila Bend, where this system is to be built, the insolation is about 6.5 kilowatt-hours per square meter per day and is quite consistent over the course of the year. This is also true of much of southern California and Western New Mexico.

    Of course, this type of system becomes impractical as you move further north and east, where insolation can be as low as 2.5 kilowatt-hours per square meter per day and there can be day after day without sunshine. The dream of using the southwestern deserts to generate electricity for the entire nation can only come about if great advances are made in reducing power transmission losses.

    Please note that the 280 MW molten salt system that you are talking about will be the largest such system of its kind to date. It is still dwarfed by the 2500 MW of Xcel’s installed wind power. Now think about it Nancy, if Xcel or other utilities find the concentrating solar power route to be cost effective, don’t you think they will eventually buy in?

    Utility companies that burn fossil fuels to generate electricity have to pay for the fossil fuels one way or another. And when the fossil fuels become scarcer and/or more expensive their cost of doing business goes up. They have great incentive to invest in practical, proven, cost effective methods of power generation.

    Best regards,
    Tom


  8. The comment above, responding to Nancy LaPlaca is from Tom Moriarty, the author of this blog. That may not have been apparent, since I was not logged in when I wrote the response, and it was subsequently labeled “anonymous”

    Sorry for any confusion this may have caused.

    Tom


  9. But … this battle has already been fought, several years ago. The Colorado Public Utilities Commission found that new wind, instead of new gas, would save consumers money. As the saying goes, you could look it up. Since I am a nice guy, I’ll save you the trouble and chase down the reference.

    Wind power is readily available, affordable and abundant. Along with energy efficiency, it should be one of the first steps we take to respond to the threat of global warming.

    For an authoritative look at what wind power can do, see the 20% by 2030 Technical Report from the U.S. Department of Energy at http://www.20percentwind.org.

    Regards,
    Thomas O. Gray
    American Wind Energy Association
    http://www.powerofwind.org
    http://www.awea.org


  10. Tom Gray,

    Thank you for your comments.

    If you re-read my post, above, you will see that I say that wind is “cheaper than gas per kilowatt-hour generated.” Additionally, I go on to say “with the high construction cost, wind energy would still be cheaper per kilowatt-hour than gas in the long run.” So, we are in agreement on these points. Yes?

    In my conclusion I mentioned “I am all for solar and wind energy. Really. Just click on the “ClimateSanity by Tom Moriarty” tab at the top of this page if you doubt me.” I suggest that you actually do that if you have not already.

    The point I am making, perhaps not clearly enough, is that wind and (photovoltaic) solar are non-continuous sources. They don’t work when the wind isn’t blowing and the sun isn’t shining, respectively. But we still need and want power during those times. We expect and rely on Xcel to come through with that power. And they have done so quite reliably.

    Also, photovoltaics are not cost effective. Maybe in the future – I sure hope so – but not now.

    Nancy LaPlaca above touts the benefits of concentrating solar power with molten salt storage (not to be confused with concentrating solar photovoltaics). This has the advantage over wind and solar photovoltaics of being able to deliver power to the grid when the sun goes down. But, of course, it is only practical where the insolation is adequate. My guess is that if it turns out to be cost effective, then it will be more widely adopted. And as time goes on the cost effectiveness of various renewables are likely to increase.

    Best regards,
    Tom Moriarty


  11. Tom,

    I agree with you that solar and wind have certain limitations right now. However, it seems that you are forgetting to factor in the price of natural gas, which has increased considerably in the last year. The natural gas plant will have to buy its gas every year, while the wind and solar generate power for free beyond the initial cost.

    That said, I suggest that you rewrite the article with a new cost matrix.

    Regards,
    Jamie


  12. Jamie

    You are correct about the price of natural gas. As I pointed out, above, wind is already cheaper per kilowatt-hour than natural gas when everything is factored in.

    This is not so, and won’t be for a very long time, for solar photovoltaics. The lowest installed price for solar photovoltaics is about $5.50 per watt with today’s technologies. An installed watt of PV will realistically yield about 5 watt-hours per day in the southwest US. That is about 2 kilowatt-hours per year. At $0.10 per kilowatt hour for more conventional power, the payback time for the solar PV is about 25 years. In the meantime, advances in solar PV or other technologies, will likely deliver more cost effective results – while we would still be waiting for the solar PV installed today to pay for itself. That is why solar PV today is not a good deal, except in certain very small markets.

    Today’s wind and solar PV technologies don’t work when the wind isn’t blowing or the sun isn’t shining. But we still need power when the wind isn’t blowing and the sun isn’t shining.

    The molten salt storage thermal solar power referred to (uncordially) by Nancy LaPlaca is a better alternative to wind or solar photovoltaics in the Southwestern US because it does deliver power when the sun isn’t shining. But it won’t work nearly as well where the insolation is lower.

    Thank you for your comment.

    Best Regards,
    Tom


  13. Which fossil fuel corporation is using this front as a drill drill drill gopher site?:)


  14. Tom Exxon,

    Thank you for your comment, paranoid as it is.

    You may have noticed, if you check the “about” section of this blog, that I am a scientist working on photovoltaics with the National Renewable Energy Laboratory.

    Best Regards,
    Tom Moriarty
    ClimateSanity


  15. The fundamental problem of not steady wind and solar power generation is addressed by a research project in Germany called “Kombikraftwerk”, in English: “combined power plant”. The project is described on: http://www.kombikraftwerk.de

    This research project proofs that the COMBINATION of wind, photovoltaic, biomass and energy storage is capable to supply enough electricity under real world conditions. The emphasis is on combination and a diversity of locations.

    Regards from the not so sunny Germany
    Werner Niggemann


  16. Werner Niggermann,

    The lack of steady wind and sunshine remains the “fundamental problem.” Storage is essential if you do not want to back up renewables with coal, oil or gas. But you can’t store what you don’t produce.

    One watt of installed PV in Germany would yield about 2.5 watt-hours of energy per day. Or, about 0.75 kW-hr per year. At a (true, unsubsidized) cost of about $5 per watt, it will take about 35 years to pay for that one installed watt, and that is assuming no degradation.

    Now, add storage, with its inherent conversion losses, and it takes even longer to pay for that one installed watt.

    Best Regards,
    Tom


  17. Well, if you are going to compare the cost of gas-fired vs solar, you have to include the cost of the gas in the calculation for say 20 years…then the cost outcome is radically different. And if you don’t think solar cells are becomming cost effective vs fossil fuels, you need to check out Nanosolar, where 3rd generation solar cells are being PRINTED at a cost that will allow retail of $1/watt.
    Jack Rauh


  18. Your analysis is HIGHLY FLAWED. While you mention that “wind is free” in your analysis of wind turbine power generation, you fail to mention that “sunshine is free” as well.

    Furthermore, while you mentioned under your breath (after having already dismissed the solar power genration scenario) that “gas is expensive and going up”, you do not include even one penny of estimated operating cost for the gas powered generation scenario.

    So, your analysis is equivalent to saying that it is cheaper to take a taxi to work than to ride a bicycle because you don’t have to buy the bike. That conclusion only holds if your job lasts only a week.

    You are obviously bright enough to include teh following in your analysis which would give at least a reasonably close apples-to-apples comparison:

    1) Fuel input costs (natural gas/coal = high; wind/sunshine = free);
    2) Plant labor and operating costs (gas/coal = high; wind = low; solar = very low);
    3) Ongoing plant maintenance costs (gas/coal = high; wind = medium; solar = very low);
    4) Operating life of the plant (?);
    5) Pollution cost (? – currently subsidized as an externality, but properly valued as a cost to the general health and welfare: coal = very high; gas = high; wind = very low; solar = practically none).

    Let me know if you complete your analysis – until then, your article is bald faced propaganda, and you know it. What is your connection to the gas power industry?

    If you are too busy, just ask a high school student to finish the analysis properly.


  19. Further, your red herring claim that your conclusion hinges on “continuous generation” is also a crock. The U.S. already has enough power generation capacity for night time hours. What is needed, and when power is most “valuable”, is daytime wattage. That is why we have “peaker plants”. So, to make your analysis even more “apples-to-apples” you should limit the “capacity factor” for your gas/coal scenario to match the solar/wind scenarios because those are the generating assets that the wind/solar plants would be replacing.


  20. Jack Rush,

    I am prevented by the confidentiality requirements of my position at the National Renewable Energy Laboratory, where I am a Senior Scientist in the National Center for Photovoltaics, from commenting on the efficiency of Nanosolar modules.

    However, as a consumer, I have my eyes open looking for the $1 per watt installed PV. You can get an idea of the world market price (dollars per watt) for PV modules at Solarbuzz, but of course, installed watts cost considerably more.

    Best regards,
    Tom


  21. Dear Thomas Krouse,

    I’ll respond first to your question, “What is your connection to the gas power industry?”

    As I mentioned in the post you are criticizing,”I am all for solar and wind energy. Really. Just click on the “ClimateSanity by Tom Moriarty” tab at the top of this page if you doubt me.” If you had done so, you would see that I am a Senior Scientist at the National Renewable Energy Laboratory, where I have been working on photovoltaics (i.e. solar energy) for more than a dozen years. On that same page you can click on the link that says “Google Moriarty and Photovoltaics,” which should give you some clue about the extent of my involvement. Does this answer your question about my “connection to the gas power industry” adequately?

    Next, I think you are implying that I have ignored the cost on natural gas when you say “you mentioned under your breath (after having already dismissed the solar power genration scenario) that ‘gas is expensive and going up’, you do not include even one penny of estimated operating cost for the gas powered generation scenario.”

    Go back and re-read the post, I said very clearly, and not “under my breath” that “Wind is a better bet than solar at this time, and in the long run is cheaper than gas per kilowatt-hour generated.”

    My conclusions are sound.

    Solar has two strikes against it.
    1. It is expensive.
    2. It is inconsistent

    Wind has one strike against it.
    1. It is inconsistent

    I pointed out that Xcel Energy, the very company that wants to install the gas powered generating plant, is already the leading wind power provider in the US. When renewables make sense, I say “go for it.” But when they don’t make sense, then they should not be used.

    My criticism is really against people who have some kind of simple, emotional, nearly religious belief, that renewables are always the best solution, non-renewables are always the worst.

    Best Regards,
    Tom


  22. really good



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