Solar and Wind More Expensive Than Recognized
Charles Frank of the Brookings Institution has done a study in which he tried to compare the total costs of five potential substitutes for coal in generating electricity according to their total costs on the electric grid. The concept of “levelized costs” is usually used for comparison since it purports to take into account all present and future costs for construction and operation, which includes fuel prices. On this scale, solar energy is rapidly approaching a level where it can be competitive with coal. But at Frank point out, levelized costs do not take account of solar and wind’s intermittency. That is, both are unpredictable and can disappear at any point if the wind goes into a lull or clouds cover the sun. This unpredictability means that other forms of generation must be kept operating as back-up, since any slight fluctuation on the grid can lead to disastrous consequences – brownouts, blackouts or power surges that destroy electrical equipment.
Frank discovered that when intermittency is taken into account, wind and solar end up requiring subsidies or hidden support somewhere on the grid, while hydro, wind and natural gas all pay for themselves and create economic benefits. Nuclear is the big surprise, since it has the highest construction costs, which usually make it seem the most expensive. But because of its extraordinary capacity factor – reactors run more than 90 percent of the time – its extreme reliability requires no backup and reduces costs to the grid. Natural gas is even better, mainly because of its ability to ramp up and down to meet fluctuations in demand (and fill in quickly for solar or wind).
With solar enthusiasts crowing about how solar and wind will soon be the cheapest form of electricity because of their lack of fuel costs, it is important to take capacity factor and intermittency into account. The best solar and wind facilities run at only about 35 percent capacity and there is no possibility of improving this. Utility-scale storage may one day make it cheaper but even then a solar or wind facility would have to be twice as big to approach a capacity factor of 70 percent, which is still below all other forms of generation except hydro, which is around 60 percent.