One of the strengths of solar power is it tends to track the demand for electricity in the summer when the air conditioning load is highest. The longest, sunniest, and therefore hottest days are the best days for solar panels. If they were able to produce electricity at a reasonable cost, they would be a welcome addition to the grid. This is why it makes sense to put research and development funds into solar technology. A breakthrough in price would be an important advance.
In addition to its much higher cost, solar electric power is also intermittent and unreliable. It does not work at night, during cloudy days or cloudy periods, or in the early morning or late afternoon when the sun is low in the sky. In other words, solar panels are automatically powerless for about 16 out of 24 hours on average during the year, or two-thirds of the time, even when there are no clouds. Depending on the cloudiness of the location where the solar panels are installed, they may actually provide useful power for only 15 percent of the time over the year.
The term capacity factor is used to describe the amount of electricity actually produced compared to the potential if the generator were operating at 100 percent of its capacity, 24 hours a day, 365 days a year. Large baseload power plants, such as coal, nuclear, and hydroelectric, typically have capacity factors of 90 percent or higher as they run continuously, except for repairs and refueling in the case of nuclear power plants.
An analysis of 12 large solar installations in the United Kingdom concludes they have an average capacity factor of 7 percent. That is the main reason why, at the standard cost of electricity in the U.K., it will take between 45 and 290 years to pay for these systems.[14] Not even solar panels last that long. It doesn’t take a genius to realize solar power is a waste of good money on the grid. In the words of a sustainability director in one of the five New York boroughs, solar panels are a “wealth-destroying technology.” If quiet, sustainable, and clean are the main criteria then there are other, more cost-effective technologies that can deliver much more energy at lower cost and with even fewer emissions. Let’s look at some real examples of the prices consumers are being charged for solar electricity.
In 2004 the government of Germany passed the Renewable Energy Sources Act, requiring electrical utilities to pay a fixed price for solar energy. It did so to encourage individuals and companies to buy solar panels, install them on rooftops, and connect them to the national grid.
The price utilities must pay for solar energy is called a “feed-in-tariff.” The average price for rooftop solar is 50 euro cents per kilowatt-hour (kWh), or about 70 US cents per kWh. (A kilowatt-hour is the amount of electricity required to power 10 100-watt lightbulbs, or 40 compact fluorescent bulbs of the same brightness for one hour.) This does not include the delivery cost over transmission lines to the eventual consumer. Consider that coal and nuclear energy are sold into the grid for less than 5 US cents per kWh on average across the United States; you can calculate that German solar energy costs 14 times as much as U.S. coal and nuclear power. Over the past decade billions of dollars have been invested in solar power and yet today it produces less than 1 percent of Germany’s electricity at a cost of over US$3 billion per year. A wise German would hope the percentage of solar stays below 1 percent.
Feed-in-tariff laws have now been enacted in France, Spain, Italy, and Greece as solar hysteria continues to grip the European community. But there is a growing realization that the pace of solar installations can’t be sustained at recent levels. In late 2008 Spain reduced the feed-in-tariff to 46 US cents per kWh and placed a cap on the amount of new installations for 2009. This is clearly due to the unsustainable cost increases solar energy imposes on electricity prices.
The only jurisdictions in North America to have introduced feed-in-tariffs are Ontario and California. In Ontario, the Green Energy Act of 2009 required initially that the electrical utilities pay 42 cents per kWh, about half the German rate. The average cost of electricity for residences in Ontario is 7 cents per kWh. So at 42 cents solar is seven times more expensive than the average cost of electricity.
Predictably, the Ontario Sustainable Energy Association rejected the original 42-cent rate as insufficient. They are correct that it is not possible to pay back the investment in a reasonable time at 42 cents. They lobbied actively for a rate as high as 86 cents per kWh, more than double the legislated price. In their aptly named document, “Renewables Without Limits,” they claim it is not possible to make a profit on solar energy unless it is priced 15 times higher than the average cost of power.[15] They succeeded in getting the government to raise the price for solar to up to 80.2 cents, nearly 14 times the cost of conventional power.[16] And they did so in all seriousness as if this was obviously the right thing to do. It was a case of unbridled moral certitude that negated any concern for cost to the economy or human welfare. It was a complete rejection of competition in the market and a blind (or not so blind) adherence to feel-good policies that will surely pave the road to hell with good intentions.
As of early 2009, California was the only state in the U.S. to adopt a feed-in-tariff for solar energy. The renewable energy community has declared it a failure from the start because it offers only up to 31 US cents per kWh.[17] Even in one of the sunniest states in the country, five times the rate for conventional baseload power won’t support intermittent and unreliable solar energy.
Most U.S. states have shied away from feed-in-tariffs, possibly because the obviously inflated cost would result in consumer outrage. Instead, several states have adopted Renewable Portfolio Standards (RPSs), a bureaucratic term that the average person has never heard of, never mind knows what it means. I would love to see Jay Leno out on the sidewalk asking people what they thought of the Renewable Portfolio Standard. The word energy is entirely absent, as if there is a standard for renewable portfolios. A more understandable term would be Renewable Energy Mandates, or Renewable Energy Dictates because what it means is that government has forced the utilities to acquire a certain percentage of their electricity from approved renewable technologies, almost regardless of price. But large-scale hydroelectric power, by far the most important renewable electricity source in the U.S., and the world, is not accepted as part of most states’ Renewable Portfolio Standards. That’s because many activists don’t like dams and they have lobbied successfully to exclude the most important renewable electricity technology from the renewable category. This in itself makes a mockery of the policy.
It would be funny if it weren’t so serious. To date, 28 states, including the most populous ones, have adopted RPSs and many others are considering doing so. While the objectives vary from state to state, most require between 20 to 30 percent of electricity from approved renewable sources by 2020 or thereabouts. The federal government is considering a national RPS of 20 percent by 2020 as well. This means an 8- to 12-fold increase in renewable energy from the present 2.5 percent of the national electricity supply.[18] Given the existing choices, this will invariably be mainly wind and solar energy. Such a program could conceivably increase the cost of electricity in the U.S. by 50 percent, thus making nearly everything Americans do and every item they purchase considerably more expensive. Politicians will no doubt blame the electrical utilities for the consequences of these energy dictates, despite the fact the utilities are being forced into them against their better judgment in many cases.
In mid-2010 the wheels began to come off the heavily subsidized solar industry in Europe. Spain has reduced the subsidy by 30 percent and may retroactively reduce the tariff it guaranteed for 20 years.[19] Spanish solar companies are being investigated for selling solar energy at night. It is presumed they were running diesel generators and sending the power through the meters that measure solar output. Such incredible distortions to market prices are bound to lead to this kind of fraudulent activity.[20] Germany and France have begun to cut their subsidies for solar energy. This has resulted in a collapse in new installations. The German government has had to face the fact that after committing over US$100 billion for solar
energy it is producing well under 1 percent of the country’s electricity.[21] Solar electric energy is clearly a bubble that’s beginning to burst.
Wind Energy
Wind energy is more cost-effective than solar panels, but it too is relatively expensive.
Looking again to the German feed-in-tariff that provides real numbers instead of optimistic projections, the price paid for wind energy is between 10 to 15 US cents per kWh. In Ontario, the tariff price is 13.5 Canadian cents, much higher than prices paid for hydroelectric, coal, and nuclear power.
And wind energy also suffers from some inherent weaknesses. Like solar energy, wind is intermittent and unreliable. It has a higher capacity factor than solar, between 15 to 30 percent, depending on the location of the wind farm. But unlike solar, wind does not track the demand for electricity. The peak periods for electricity demand are during the coldest and hottest days of the year. Very often these are calm, clear days in the winter and summer. This means if wind is used for either baseload or peaking power there must be a reliable backup that can be brought online when the wind is not blowing. So when you build a wind farm you must also build a gas plant or another generator of equal capacity to back it up. Then why bother with wind farms?
In some cases there is good reason to build wind farms because when the wind blows we can avoid burning natural gas. This contributes to the conservation of a nonrenewable resource and reduces greenhouse gas emissions. On the other hand, the more wind farms we build, the more gas we must burn to back them up during the periods when the wind is not blowing, or not blowing hard enough to run the windmills at sufficient capacity to meet demand. In the final analysis building wind farms guarantees more and more natural gas will be required. This will likely result in increased CO2 emissions, the opposite of what one would expect from wind energy.
The only exception to this is where there is abundant hydroelectric energy. When the wind is not blowing the hydro can be turned on. It is capable of “following the load” as it can be turned on and off quickly and can be ramped up and down with ease. This can allow better management of the hydro capacity because when the wind blows the water behind the dam can be conserved to be used another day.
Wind energy and other energy technologies can be converted into baseload, continuous power by using what is called pumped storage. When the wind blows and the power is not needed on the grid, the energy generated can be used to pump water up into a reservoir. Then when the energy is needed the water can be passed through turbines, exactly as with hydroelectric power, to a lower reservoir, 450 feet lower, where the water can be stored until it can be pumped up again. Or there must be a sufficiently large river where water is pumped up to the reservoir and released back to the river after flowing through the turbines. The problem with using wind for pumped storage is that it costs too much to begin with and after pumping water back into a reservoir it costs even more
The clever Swiss buy very inexpensive nuclear energy from France late at night, when there is a large surplus on the grid, and they use it to pump water into dams in the Alps. In the morning they run it through hydroelectric turbines and sell it to the Italians at a profit. But the economics work because the nuclear energy costs less than a penny a kilowatt-hour. With wind you are pumping with energy that costs 10 to 15 US cents per kilowatt-hour. And you have to build all the reservoirs and hydroelectric turbines, so the wind energy ends up costing much more than 15 cents. It is unlikely this approach will be used widely with wind energy in the near future.
Intermittent Versus Continuous Energy Sources
There is a popular perception, encouraged by activists and renewable energy advocates, that technologies such as wind and solar could replace conventional sources such as hydroelectric, nuclear, and fossil fuels. These activists fail to recognize the fundamental difference between technologies that are intermittent and those that produce power continuously. Continuous production is referred to as baseload as it is able to satisfy the main load all the time. Power plants are also used intermittently to satisfy peak loads when demand is especially high, such as in the afternoon on hot days when air conditioning operates at its peak. Natural gas plants are often used for “peaking” because they can be turned on and off quickly, whereas coal plants and nuclear plants can’t be turned on quickly and turning them off quickly is not convenient for the operators. Even peaking plants work best if you can rely on them at all times. But intermittent technologies, such as wind and solar energy, are not available whenever we want them.
We have discussed how much more expensive wind and solar energy are to produce than conventional systems. But the cost to produce the energy is only one aspect. The value of the energy produced, how much it is worth, is a different matter. Regardless of the cost of producing the power, reliable continuous power is worth more than unreliable intermittent power. It is not worth much to have a lot of wind and solar energy when there is no demand for it. And technologies like wind and solar energy inevitably produce a percentage of their energy when it is not needed. In a very readable essay on this subject Glen Schleede states, “In fact, few people in the general public, media or government know the facts about the high true cost and low true value of electricity from wind.”[22]
One can only conclude that wind energy and particularly solar energy are investment bubbles that will eventually burst. Only very rich countries that think they have money to burn can afford these technologies. To expect that countries in Africa will adopt them without huge subsidies from rich countries is far-fetched. It appears equally far-fetched that rich countries will provide such subsidies. In many ways these very expensive technologies are destroying wealth as they drain public and private investment away from more affordable and reliable energy-generating systems. It seems this lesson will be learned the hard way.
Hydroelectric Energy
Hydroelectric technology was the first large-scale producer of electricity. Thomas Edison did build a steam-powered generator in New York three weeks before he launched the first hydroelectric system in Appleton, Wisconsin, in September 1882. But for years after hydroelectric energy became the primary source of electricity. Eventually the hydroelectric system around Niagara Falls became the powerhouse that spurred industrial growth in New York and Ontario. The Tennessee Valley Authority’s 30 hydro dams and the Bonneville Power Authority’s 31 hydro dams contribute to a system of hydroelectric facilities that provide 7 percent of U.S. electricity, nearly three times as much as all other renewable electricity technologies put together.
Hydroelectric energy is, in many ways, the best source of electricity. It is renewable, clean, relatively emissions-free, available on demand for baseload power, and in suitable sites is the least expensive of all the major electricity technologies. That is why energy-intensive industries, such as aluminum smelting, tend to locate their factories where large hydro projects can supply the power even when this means shipping the bauxite ore thousands of miles. The airplane manufacturers—Boeing in the U.S., Bombardier in Canada, and Embraer in Brazil—have in common the fact that they are located where there is abundant, inexpensive hydroelectric power to manufacture aluminum. Boeing benefits from the Bonneville Power dams on the Columbia River. Bombardier is in Quebec, where more than 90 percent of the electricity comes from the huge James Bay hydro project. Embraer takes advantage of the fact that Brazil produces 85 percent of its electricity from hydro power. The main weakness of hydropower is that it is limited by geography and rainfall. Some regions have abundant hydro potential while others regions have little or none.
Most environmental groups oppose large hydro dams because they flood valleys. It is true that a hydro dam completely alters the ecosystem, transforming a valley into an artificial lake. But a lake is not an undesirable environment. It’s not as if the valley is being turned into a toxic waste dump. Fish can thrive in hydro reservoirs, boaters and cottage owners can enjoy holidays there and in many cases the dams provide flood control and improved irrigation. It�
�s not as if there are too many lakes or too few valleys in this world. While a hydro dam means the end of a valley, it also means the birth of a new lake environment.
It is therefore highly irrational for environmental activists to have a zero-tolerance policy toward all large hydroelectric developments. Hydroelectric energy is the most important renewable source of electricity and will probably remain so into the distant future. Yet many Renewable Portfolio Standards in the U.S. do not classify large hydro as renewable energy. Environmentalism is supposed to be about all things renewable. Are solar panels made from aluminum that is produced with hydroelectricity somehow morally superior to the hydro dam that produced the aluminum? Are wind turbines that require backup with large fossil-fuel plants better than renewable hydro plants that provide power around the clock? And perhaps most important, would anti-dam activists rather see countries build more coal-fired plants instead of hydro?
Based on their opposition to hydropower, Greenpeace and other activist groups managed to force the World Bank to withdraw financial support for the Three Gorges Dam in China, the largest hydro project in the world at 22,500 megawatts. Thankfully China had enough economic muscle to go ahead on its own. New cities were built to relocate over one million people who lived near the flood zone. The Three Gorges Dam is equivalent to 40 large coal-fired plants.
In recent years China has become the world’s largest producer of hydroelectric power, surpassing Canada, Brazil, and the U.S. I think this is a good thing as otherwise it would surely have built even more coal-fired plants, of which there are more than enough already. China gets more than 15 percent of its energy from hydro dams and is building more. But over 80 percent of China’s electricity comes from coal, only 2.5 percent is nuclear.[23] Clearly hydropower is the most important renewable energy technology in China, without which there would be considerable more use of coal.
Confessions of a Greenpeace Dropout: The Making of a Sensible Environmentalist Page 30