Estimating life-time costs for Renewable Energy in Europe

Written by Ed Hoskins on April 5, 2016. Posted in Current News

Summary

• Electricity generation by using gas-fired installations is significantly cheaper than Renewables in terms of both installation capital cost and Operation and Maintenance  costs, even when accounting for the cost of fuel.
• The € 1.1 trillion capital costs already spent on Renewables in Europe would have been sufficient to re-equip the whole 1,000 Gigawatt European electricity generating fleet with Gas-fired power stations producing electricity for the grid effectively at ~90{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} capacity.
• The European Renewable fleet with a nominal nameplate output of ~ 212 Gigawatts only contributes ~ 38 Gigawatts to the European Grid, a capacity percentage at about 18{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}.
• The installation of the Renewables fleet as of 2014 has already lead to a 60 year lifetime financial commitment amounting to about €3.1 trillion:  this is equivalent to the annual GDP of Germany.
• 60 year life-time costs of Onshore wind power range from 10 – 13 times more expensive than Gas-fired generation.
• 60 year life-time costs of Offshore wind power and Solar power range from 40 – 50 times more expensive than Gas-fired generation.
• during the 60 year life-time Gas-fired generators have a full-time productive capacity of about 90{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}  whereas the combined capacity figures for Renewable Energy of only about 18{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} is achieved across all European Renewable installations.
• These notes make estimates of:
  • the likely capital expenditure over 60 years
  • the running costs including fuel costs, if applicable, over that time period
  • the likely combined 60 year costs overall
  • the ratios of Renewable financial performances compared to Gas-fired electricity generation.

 Introduction

This article is concerned with the two main forms of weather-dependent Renewable Energy, Wind Power (Onshore and Offshore) and Photovoltaic solar power.

In the UK this amounts to ~75{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} of all installed Renewable Energy.  The other Renewable Energy  inputs are traditional Hydro power ~8{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} and the remainder are other sources such as biomass, waste and landfill gas amounting to ~17{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}:  they are not considered here.

It accepts that the effective capital cost of weather-dependent Renewable installations range from 16 – 63 bn€ / Gigawatt for the electrical energy produced when their capability for productive contribution to the grid is taken into account.  This compares with the installation cost of Gas-fired electricity generation of about 1bn€ / Gigawatt, produced for the grid.

This article is intended only to give indicative guesstimates of the differentials in financial performance of Renewables and shows however the data is assembled that they are generally bound to be very significantly more costly than fossil fuel based generation.  In addition these guesstimates point out that the cost of providing fossil fuel backup is small in comparison.

But of course if full fossil fuel back-up has to be provided, the entire need for the Renewables in the first place is obviated.

Estimating life-time costs for Renewable Energy in Europe

This further article assesses the costs of  weather-dependent Renewables over a 60 year life-time and compares them with Gas Fired Electricity generation.  It accounts for:

• for capital costs
• running costs
• an overall combination both.

A 60 year life-time  is chosen as being the approximate in service life for the alternate generation technologies  Nuclear and Coal-fired power generation.

It assesses the lifetime costs of weather-dependent Renewable Energy in addition to the capital cost and capacity characteristics shown in the earlier site.  These notes give indicative comparisons between the lifetime costs of Renewable Energy technologies by demonstrating  comparative costing ratios between the Renewable technologies and Gas-fired electricity generation.

This article follows on from and should be read in association with:

https://edmhdotme.wordpress.com/renewable-energy-the-question-of-capacity/

 Assumptions

• The capital and running costs estimated here are based on assumptions for the viable lifetimes of Renewable plant as compared to the 60 year operational life of a Nuclear and Coal fired generating plant.
• The likely cost of Operation and Maintenance are calculated as percentages of the original capital installation costs.
• The capacity factors for Onshore and Offshore wind generation are based on the 10 years of capacity information measured from UK data from the Renewable Energy Foundation.
• The overall Solar capacity factor in Europe was measured in 2014 from the EurObserER data, (12.1{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}).  This EurObserER capacity level is rather higher than the level for Solar PV capacity reported for the last 10 years for the UK, (8.6{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}).
• Gas-fired, Nuclear and Coal-fired capacity data is taken from  US  EIA data tables.
• The US$ is used by the US  EIA data on comparative costs.  It is assumed that the Euro and the US $ provide roughly equivalent value on their respective continents.

It should be noted that in the 2014 cumulative Operation and Maintenance costs for Gas-fired electricity generation fuel amounted to ~75{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} of the variable costs at 2014 prices as presented  by US  EIA.

However since that time Natural Gas prices have halved.  The is as a result of the USA fracking revolution.  As fracking is increasingly being employed worldwide, except in Europe, where a “Green Philosophy” survives to block this useful and large scale energy source, it seems that international gas prices, whether imported or not, are likely to remain reasonably low for the foreseeable future.  Large scale gas exports from the USA into Europe have now begun.

In summary this results in 60 year life-time cost when using 2014 fuel prices costs as are shown below.

60 year life-time expenditures on Renewables:  € billion

When these 60 year lifetime costs are combined with the current renewable commitments already made in Europe by 2014, (EurObserER data), the estimated scale of the 60 term investment made country by country can be seen.

The following graphic shows the estimated 60 year life-time future expenditures in Europe (28), as if installations were made simultaneously.

In total Europe (28) as of 2014 had already made a 60 year commitment to Renewable Energy technology amounting to some 3.1 trillion €uros.

As can be seen below ~37{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} of that European investment has been made by Germany.  However as Germany has opted for the extensive use Solar PV, the overall performance of Renewable investment in Germany  in 2014 is, at 13.2{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} capacity, the least performant of all European countries.

Comparisons with Gax-fired generation

The following graphics show the comparisons with Gas-fired power generation  for the alternate generating technologies.  It shows that for installed nameplate capacity the Onshore capital cost can be almost 4 fold Gas-firing and the Offshore capital cost are 18 times more costly.

Solar PV are only 2.6 time more expensive to install for the same nominal nameplate output.  However the low capacity factor for Solar PV means that they are less effective.

But when the capacity factors are taken into account in the comparative ratios the lack of effectiveness of Renewable technologies becomes much more clear.

This shows that for the 60 year costs involved supporting Renewable Energy, that Onshore wind power is about 10 times more costly overall for the power it produces, whereas both Offshore wind power and Solar PV are both almost 40 times less effective overall.

In 2014 the costs of natural gas fuel comprised about 75{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} of Gas-fired generation, the picture changes somewhat if current prices for Natural gas are taken into account, say by reducing the Operation and maintenance percentage from 4{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} as above to 2.5{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}.  This increases the ratios for Onshore wind power to 13 times from 10 times overall and for Offshore and Solar power from ~40 times to ~50 times.

Alternate assumptions can be made in this simple model. Nonetheless  whatever reasonable values are chosen, the indications always remain with much the same comparative outcomes.  Renewables always remain substantially more costly, as a means of electricity generation, rather than Gas-firing by orders of magnitude, .

All these comparative values between Renewables and Gas-fired generation still ignore entirely the problems with the vagaries of intermittency and non-dispatchablility inevitably associated with weather dependent Renewable technologies.

The Renewable Energy industry could not exist without the Government mandated subsidies and preferential tariffs.  Without Government subsidies and consumption mandates the Renewable Energy industry is not a viable business.  And without its Government mandate, Government subsidies and Government interference Renewable Energy would never be a chosen part of the generating mix, when viewed from the needs for the engineering viability of a nation’s electrical supply grid.

It is progressively being realised that the failure of Renewables in Germany, far from being a beacon of Renewables excellence, is now being seen as a massive and very costly policy failure, which is vastly damaging Germany’s industrial prowess and which is not now even managing to reduce Germany’s CO2 emissions output.

http://notrickszone.com/2016/03/17/grand-debacle-germanys-renewable-energy-effort-turning-into-a-colossal-costly-and-senseless-failure/#sthash.uhH6zpQM.dpbs

 Some conclusions

• Electricity generation by using gas-fired installations is significantly cheaper than weather-dependent Renewables in terms of both installation capital cost and Operation and Maintenance  costs, even when accounting for the cost of fuel.
• The € 1.1 trillion capital costs already spent on Renewables in Europe would have been sufficient to re-equip the entire ~1,000 Gigawatt European electricity generating fleet with Gas-fired power stations producing power effectively at ~90{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} capacity.
• The European Renewables fleet with a nominal nameplate output of ~ 216 Gigawatts only contributes ~ 38 Gigawatts to the European Grid, a capacity percentage at about 18{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}.
• 60 year life-time costs of Onshore wind power range from 10 – 13 times more expensive than Gas-fired generation.
• 60 year life-time costs of Offshore wind power and Solar power range from 40 – 50 times more expensive than Gas-fired generation.
• during the 60 year life-time Gas-fired generations a productive capacity of about 90{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} is achieved whereas the combined capacity figures for Renewable Energy of only about 17{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} is achieved across all European Renewable installations.
• Gas-fired electricity generation significantly reduces CO2 emissions, when compared other fossil fuels such as all forms of Coal and Lignite:  this is in spite of the fact it burns a “fossil fuel”.
• This effect is already seen in the USA where significant CO2 emissions reductions are being achieved by the transition from Coal to Natural gas for electricity generation.  This effect arises from the fact that coal contains a 6-10 times higher proportion of carbon atoms as natural gas and thus produces proportionally much more CO2 when oxidised for equivalent thermal outputs.
• By 2014 the countries of the European Union had made a current and future financial commitment of some 3.1trillion to Renewable Energy technologies, Wind Power and Solar Power.  That commitment continues to increase with further Renewable installations into the future.
• 3.1 trillion Euros is about the annual GDP of Germany and about 50{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} greater than the annual GDP of either France or the United Kingdom
• More than 1/3 of the financial commitment to Renewables in Europe so far has been made in Germany.
• CO2 emissions from Germany are now increasing, so the the vast investment in Renewable technologies to control man-made CO2 emissions is manifestly failing, most obviously  in Germany.
• Some part of the €3.1 trillion financial commitment made in support of Renewables could have been usefully invested for further research into low CO2 alternates such as:
  • small scale reproducible standardised Nuclear generation technologies
  • the establishment of Thorium based reactor technology
  • fusion power.
• The use of current Renewable technologies should be examined critically from “cradle to grave” to assess the effectiveness of the technology in actually reducing man-made CO2 emissions at all, when manufacturing, installation processes, grid connection and demolition are fully accounted for.
• If as many assert, that man-made CO2 is not pollutant, is not the cause of catastrophic and dangerous Global Warming / Climate Change is a positive benefit to plant life and thus the biosphere. Then the investment commitment of some €3 trillion in Europe has been entirely wasted.

• This waste has arisen from the adherence to an erroneous Green philosophy, as determined by the European Union and subsequently supported to various extents by the governments of other European countries, and most particularly in the UK with the 2008 Climate Change Act.
• At the same time all other non-European nations are continuing to emit very large amounts of CO2 such that now Europe as a whole only accounts for ~10{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} of worldwide CO2 emissions with:
  • Germany ~2.1{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}
  • UK ~1.3{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}
  • France ~0.9{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117}

https://edmhdotme.wordpress.com/man-made-co2-emissions-1965-2014-accounting-for-the-under-reporting-of-chinese-co2-emissions/

• This is emphasised by the fact that in 2014 Chinese CO2 emissions (at 8.24 tonnes/head) have now exceeded the overall European CO2 emissions average by ~12{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} and France in particular by employing Nuclear power for electricity generation, has CO2 emissions/head  40{154653b9ea5f83bbbf00f55de12e21cba2da5b4b158a426ee0e27ae0c1b44117} lower than China.
• The French CO2 emissions level (at 4.96 tonnes/head) is in fact now lower than the global average, (at 5.09 tonnes/head).  That global average includes India and the whole of the rest of the underdeveloped world.

Read more at edmhdotme.wordpress.com

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