Fossil Fuels are Dead, Long Live Fossil Fuels
With new carbon capture and sequestration technologies, can fossil fuels be part of the zero-carbon solution?
The start of a new year – and decade – is a good time to revisit how new technologies are impacting the electricity sector. In the electricity generation space, the hottest technologies seem to be wind turbines and solar panels. Visions of producing 100% renewable electricity are dancing through lots of heads, including Bernie Sanders’ and the proponents of the Green New Deal.
I’ve also come across a couple of new technologies that seem poised to pump life into older fossil-fuel-based technologies. For example, colleagues of mine in the chemistry department at UC Berkeley have founded a company, Mosaic Materials, based on a chemical that works as a low-cost CO2 sponge and can be used to support carbon capture and sequestration from fossil-fuel-based power plant emissions.
What are the prospects for technologies that seek to decarbonize fossil-fuel electricity generation? Can they make economic sense, and, if so, are they getting any support in policy circles? In short, the answers seem to be that there are good prospects, but limited policy support.
Deep Decarbonization Appears Cheaper with at Least Some Fossil Fuel Use
Electricity generation is projected to play a central role in global decarbonization efforts. On the one hand, electricity generation is supposed to scale up rapidly, as we use electricity to replace fossil fuels in everything from powering vehicles to heating buildings and cooking food. At the same time, decarbonization necessitates a radical transformation in the way we produce electricity, since worldwide, over 60% of electricity is currently produced using fossil fuel technologies.
A number of researchers have sought to model decarbonized electricity systems. For example, several MIT researchers published a paper that modeled low- and zero-carbon systems for a northern electricity system, loosely based on New England’s electricity grid, and a southern electricity system, loosely based on Texas’ electricity grid.
In a nutshell, studies like this one make a range of different assumptions about the costs and efficiency of different low- or zero-carbon technologies and they simulate future electricity demand. They then try to find the least cost way of using the technologies to meet that demand under the different assumptions about, say, the cost and efficiency of solar electricity and the costs and efficiency of storage.
One general finding of these studies is that systems based entirely on renewables plus storage involve a whole lot of wasted solar and wind. In order to have enough electricity during periods when its cloudy or the wind isn’t blowing – or worse, when it’s cloudy AND the wind isn’t blowing, the models design electricity systems that vastly overproduce during periods when it’s sunny and windy. This paper cites studies that find we would need to build generating capacity equal to anywhere from 3 to 8 times peak demand to meet demand with renewables. These results hold even with relatively cheap battery storage, mainly due to the multi-day periods of low renewable generation which are particularly likely to occur in the winter when loads are projected to grow disproportionately due to the electrification of heating and other end uses.
By contrast, if you allow the models to use some fossil fuels to generate electricity, and make the fossil-fuel-based electricity low-carbon with carbon capture and sequestration, the costs of eking out the last little bit of carbon from the electricity system are a lot lower – less than half the cost in some of the MIT researchers’ simulations.
Economic Prospects for Carbon Capture and Sequestration
So, what are the economic prospects for carbon capture and sequestration? Mosaic Materials claims that a carbon capture system based on its materials can cost $40 per metric ton of removed CO2 in some applications. I don’t think this includes transportation and storage costs, though. More generally, a report from the Clean Air Task Force suggests that the current incentives of less than $50 per ton of removed CO2in the Federal tax code (under Section 45Q) could lead to a significant economic expansion of carbon capture and sequestration in some context, like enhanced oil recovery.
How should we think about these costs? One way is to compare $40-50 per ton of CO2 removed to the social cost of carbon, which is currently estimated to be around $50 per ton of CO2. In other words, if the government were to impose the economically correct tax on CO2 emissions, a lot of carbon capture and sequestration projects could be viable. Of course, it’s early days for carbon capture and sequestration, and the cost estimates seem pretty speculative, but costs for a lot of things go down with scale.
Policy Support
Unfortunately, the policy support for carbon capture and sequestration seems lukewarm. In California, state agencies are considering it (and other technologies such as hydrogen) as part of the periodic review of the feasibility of the 100% carbon-free electricity goal required by the law that established the goal, but there has been limited investment in carbon capture and sequestration relative to renewables and storage. Congress passed a law in early 2018 that provides a tax credit for industrial facilities or power plants that remove CO2 (Section 45Q), but it seems the IRS is dragging its feet developing regulations with some crucial implementation details.
At a high level, I see two fundamental arguments for fossil fuels with carbon capture and sequestration. First, we need all the help we can get. The best way to invest in the stock market is to hold a diversified portfolio. Similarly, I suspect that the best way to invest in decarbonizing the electricity system is to support a diverse portfolio of technologies. Second, there are huge amounts of existing infrastructure that rely on fossil fuels. I know fossil fuels are a dirty word in a lot of environmental circles, but they are ubiquitous worldwide for two fundamental reasons: they’re cheap and energy-dense. If we can work on ways to also make them environmentally benign, that could be huge.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.
Suggested citation: Wolfram, Catherine. “Fossil Fuels are Dead, Long Live Fossil Fuels” Energy Institute Blog, UC Berkeley, January 6, 2020, https://energyathaas.wordpress.com/2020/01/06/fossil-fuels-are-dead-long-live-fossil-fuels/
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Catherine Wolfram View All
Catherine Wolfram is Associate Dean for Academic Affairs and the Cora Jane Flood Professor of Business Administration at the Haas School of Business, University of California, Berkeley. She is the Program Director of the National Bureau of Economic Research's Environment and Energy Economics Program, Faculty Director of The E2e Project, a research organization focused on energy efficiency and a research affiliate at the Energy Institute at Haas. She is also an affiliated faculty member of in the Agriculture and Resource Economics department and the Energy and Resources Group at Berkeley.
Wolfram has published extensively on the economics of energy markets. Her work has analyzed rural electrification programs in the developing world, energy efficiency programs in the US, the effects of environmental regulation on energy markets and the impact of privatization and restructuring in the US and UK. She is currently implementing several randomized controlled trials to evaluate energy programs in the U.S., Ghana, and Kenya.
She received a PhD in Economics from MIT in 1996 and an AB from Harvard in 1989. Before joining the faculty at UC Berkeley, she was an Assistant Professor of Economics at Harvard.
Energy Institute Blog 
Catherine,
Very interesting post. The idea that whatever carbon trajectory you want should be done a least is somehow missing in a lot of popular and political discussions. But, it is crucial to a rational decision making, rather than romantic, quixotic gestures…Your post is an excellent contribution.
Ted Frech
Larry Goulder’s article “Timing Is Everything: How Economists Can Better Address the Urgency of Stronger Climate Policy” is an insightful discussion on this issue. https://academic.oup.com/reep/advance-article-abstract/doi/10.1093/reep/rez014/5695767?redirectedFrom=fulltext
Remember that we don’t have $40 carbon capture, only the projection of the would-be developers. If you had a dime for every rosy early-design cost estimate that didn’t turn out (for fossil combustion, fission, fusion, geothermal and exotic wind and storage technologies), you’d have a lot of dimes.
And then there’s the matter of sequestration. EOR is not sequestration, since the CO2 comes up with the oil.
Good luck with CCS, Th SMRs, blameless wind turbines, fusion reactors, and whatever. Perhaps my grandchildren will use them. In the meantime, solar and wind work, batteries work, pumped storage works. Now.
Catherine, despite a dismal record of progress over the last half century (after tens of $billions in investment, wind provides less than 7% of U.S. electricity; solar less than 2%) renewables advocates seem singularly determined to find an end-around plan that might justify their relentless, quixotic pursuit of powering the world with wind, water, and sunlight.
Though their fantasy can be ruled out for any number of fundamental thermodynamic reasons, Haas is a school of business – so let’s look at some of the economic reasons:
1) To power the State of California for a single day of cloudy weather with lithium-ion batteries, at today’s prices, would require nearly $1 trillion worth of grid-scale batteries. Amortized over 10 years, that’s $10.16 billion per month.
2) To date, the most productive Carbon Capture and Storage (CCS) facility in the world has succeeded in sequestering a 1 million metric tonnes of CO2 per annum. To even catch up with current emissions (37 billion tonnes/year) we’d need to build 37,000 of these $22 million facilities, at suitable sequestration sites, then the transmission infrastructure to get CO2 there from power plants. Moreover – practitioners will likely vent invisible, odorless CO2 back into the atmosphere from whence it came (CCS is unverifiable).
3) De-carbonizing the other half of our carbon-emissions – transportation – will require twice as much reliable energy to charge electric cars, buses, commuter rail, and trucks. Transportation is charged overnight when, unfortunately, power from the sun is consistently lacking.
To summarize, not only would powering the world with wind, water, and sunlight be impossible – it’s not even close. Does a solution to decarbonizing global energy even exist?
At a U.S. Senate briefing last February pre-eminent climatologist Kerry Emanuel of MIT offered some good news to his audience: yes, it is possible, but our options are running out. This ten-minute video should be required viewing for any policymaker who is interested in real, practical solutions to saving our environment from destruction.
By my calculations based on the latest estimate of battery technology costs, a system of standalone batteries delivering 24 hour power at 50% capacity factor would cost about $70/MWH, At an average load of about 25,000 MW per hour, that would be about $42M per day or $15B per year. That’s in line with current utility revenue requirements. This does exclude the cost of renewables, which would offset a portion of the battery power that I’ve included here.
I effectively calculated a 25% capacity factor for batteries. The cost would be $35/MWH for a total annual cost of $7.5B.
Then your calculations are wrong, per my last comment, as well as your understanding of capacity factor:
“The net capacity factor is the unitless ratio of an actual electrical energy output over a given period of time to the maximum possible electrical energy output over that period.”
We’re assuming a mythical 100% renewables + batteries scenario, where renewable sources are briefly unavailable, and batteries have been called upon to provide all in-state “generation”. For at least part of that period batteries will be operating at 100% capacity factor – pumping out electricity as fast as they possibly can, and they aren’t being recharged. It would cost a minimum of $1.17 trillion for batteries capable of accomplishing that feat for one day – yet somehow, since your previous comment, both your capacity factor and your total annual cost have now been cut in half (?).
Even with over $1 trillion in batteries, at dawn of Cloudy Day 2 either a) the CAISO grid goes down, or b) we’re forced to fire up all those gas plants renewables were supposed to replace.
I have no idea where you’re getting your “latest estimate of battery technology costs”, but as of May 2018 EIA lists an average installed cost of $1,500/kWh for Large-Scale Battery Storage Systems. Last year California averaged 782 GWh/d of in-state electricity generation. Thus, the capital cost for storage able to cover one day California renewables are down for the count would be $1.17 trillion. Assuming a generous 10-year lifetime, those batteries would cost a utility $124 B/yr in amortized payments.
Though $15 B/yr might be in line with “current utility revenue requirements”, any utility charging that paltry sum would be losing $109 B/yr. A poor return on investment, no?
Click to access battery_storage.pdf
My battery cost estimate of $156/kWh for a 4 hour battery comes from this article by Bloomberg, which I reference in my blog post: https://about.bnef.com/blog/battery-pack-prices-fall-as-market-ramps-up-with-market-average-at-156-kwh-in-2019/?sf113554299=1.
The EIA site you reference appears to have a serious error, and you used an erroneous value.(https://www.eia.gov/todayinenergy/detail.php?id=36432). You used the $1,500 per KILOWATT (not per kWh) value. In addition, the EIA site didn’t calculate the cost per kWh correctly. It should take the cost per kW and divide by the number of hours of capacity to get to the cost per kWh, so for a 4 hour capacity battery, that would be $375/kWh. Further, that’s a capacity value, not the cost per unit of energy output. That means the capacity cost must be annualized and then distributed over the year. I also have no idea of how you calculated capacity factor. Note that the typical battery is configured to have a 4 hour capacity for its output. I used a 10 year life and a 10% WACC. A 46% capacity factor allows for charging and discharging. Here’s an NREL study with a better presentation of the battery costs. https://www.nrel.gov/docs/fy19osti/73222.pdf
And that “kWh” is storage capacity, not the average cost over a year. (It’s confusing how the storage cost is reported–they need to use a different designation.) Even the MIT studies that you reference show $300/kWh. So the cost per standard kWh over the life of the battery is $6/MWH for a single battery.
Using the average load you calculated the cost rises to $11B per year.
Your battery cost estimate (Bloomberg) is referring to uninstalled car batteries (you might as well use a cost estimate for flashlight batteries – they’re an entirely different animal).
“The EIA site you reference appears to have a serious error, and you used an erroneous value.”
Wrong. Graph on p13, labeled “Energy Capacity Cost,” cites the average, installed cost of short-, medium-, and long-duration grid-scale batteries combined as $1,500/kWh.
“In addition, the EIA site didn’t calculate the cost per kWh correctly…”
That’s a laugh – we should believe you over the U.S. Department of Energy, should we?
I’m talking about capital cost – the cost to buy necessary battery capacity to cover one day of cloudy weather, when turbines are barely spinning, and the sun is behind clouds (it happens more often than you might think). Do the math: the cost of sufficient capacity to provide energy to the CAISO grid for one day is
$1,500 (cost/kWh) x
782,000,000 (782 million kilowatthours, a day’s average in-state generation in California) =
$1.173 trillion
I didn’t calculate capacity factor because it’s irrelevant, as is output capacity. If your batteries can only deliver electricity for four hours, you’ll have to buy six times as many to provide power for 24 hours, won’t you?
“It’s confusing how the storage cost is reported–they need to use a different designation.”
I realize it can be confusing, but you need to learn the difference between power and energy. Power is a rate of energy transfer, measured in watts or joules/second. Energy is the capacity to perform work, measured in joules or kilowatthours.
No matter how you slice it, renewables + batteries will never provide a realistic or practical alternative to dispatchable, non-intermittent generation. Why? Relying on batteries to power an electrical grid raises the possibility of running out of electricity – and allowing the grid to go down is not an option.
I’ll let other readers determine that the Bloomberg study is in fact referring to stationary storage batteries. And car batteries are MORE expensive than stationary because they have to withstand crashes and a wider range of conditions.
The EIA study you reference clearly shows $1500/KW (not KWH). Again other readers can verify this. Regardless, the NREL study I also referenced clearly shows $375/KWH, consistent with my corrected calculation–it’s not just me finding error in EIA’s presentation. I’m sorry that you still don’t understand the difference between the reported capacity cost of storage (in KWH) and the general energy unit cost (again in kWh). It’s very confusing for those who don’t follow the industry and needs to be addressed. There is absolutely no market viable technology that costs $1500/kWh under any condition. Under your misunderstanding, the recent PG&E 500MW storage PPA would cost $750M to operate for a SINGLE hour! I can guarantee to you that the Independent Reviewer and the Procurement Review Group would not approve these PPAs under any circumstance. I also suggest reading the CAISO’s study comparing the costs of the Puente Hills CT vs. storage to see how to correctly calculate the cost of storage: https://www.caiso.com/Documents/MoorparkSubareaLocalCapacityAlternativeStudyReleased.html
“And car batteries are MORE expensive than stationary because they have to withstand crashes and a wider range of conditions.”
I would ask you to provide support for this claim, but it’s obviously hypothetical and without basis (caps-lock, notwithstanding).
“Under your misunderstanding, the recent PG&E 500MW storage PPA would cost $750M to operate for a SINGLE hour!”
Of course not. But PG&E is buying electricity, not batteries – and someone has to pay the capital cost for the batteries that will deliver it, don’t they?
Now, a hard dose of reality: those 2,270 MWh of batteries would be capable of powering the State of California for 4 minutes and 10 seconds, at average consumption, and solar/wind evangelists want us to believe renewables + storage will be capable of replacing natural gas on the CAISO grid. Either PG&E, some company (Tesla, Vistra), or some combination of companies will need to have 344 times as much capacity charged and ready, should a cloud front roll in one day when wind turbines are idled.
In the report you apparently misplaced, EIA clearly cites the average cost of grid scale storage capacity (not flashlight / watch / hearing aid batteries) is $1,500/kWh. Thus, to keep the CAISO grid in operation for that one day would cost $1.173 trillion – not in energy, but for the batteries in which to keep it stored. On Cloudy Day #2, the grid goes down.
If you are unable or unwilling to understand how hopelessly impractical it would be to provide reliable power in California with solar, wind, and batteries, I’m done trying to inform you. I’ve explained it repeatedly in the simplest of terms – it’s not that complicated – and you continue to obfuscate and deflect.
It’s an axiom of technology that those that must be mobile are more expensive the equivalent stationary ones. This is true for engines, electronics. fuel storage, etc. Please provide a single example where a technology with equivalent performance and lifetime is less expensive in its mobile manifestation than in its stationary version. Further large scale technologies are almost always less expensive than smaller ones. But by your logic, why do we bother looking at large scale batteries if car batteries are actually cheaper? If that’s the case, then we deploy distributed energy resources widely without having to incur T&D costs, and then it will be much cheaper than what you’re calculating! You can’t have it both ways by claiming that large scale batteries are more expensive and then doing your calculations with the the more expensive option–that’s very disingenuous
Here’s two reports on car battery costs from 2012 and 2017 that show a range from $600/kW/h in 2012 down to $227/kW/h in 2017. What is McKinsey doing wrong in their report? Are they incompetent? Why are their results consistent with the other reports that I’ve referenced?
https://www.mckinsey.com/business-functions/sustainability/our-insights/battery-technology-charges-ahead
https://ww.electrek.co/2017/01/30/electric-vehicle-battery-cost-dropped-80-6-years-227kwh-tesla-190kwh
The South Bay battery project is not going to power all of California–why is your example at all relevant. And why would a developer build a project that will recover less than 1% of its costs according to your example?
And again, you are misreading the EIA figure. The left hand figure clearly shows $1500/KW (not KWH). Further the NREL report shows the cost of $375/KW/H, which is consistent with every other entity reporting these costs. It’s one federal agency vs the other. Please provide another source that confirms the EIA’s value. I have provided several that are consistent with NREL’s.
…. And those batteries would need to be replaced every 7 to 10 years, making Mr. McCann’s economic claims dubious.
For more realistic statistics, see “The $2.5 trillion reason we can’t rely on batteries to clean up the grid – Fluctuating solar and wind power require lots of energy storage, and lithium-ion batteries seem like the obvious choice—but they are far too expensive to play a major role.” (Please note the “trillion” in the article title.)
by James Temple, MIT Technology Review, July 27, 2018 https://tinyurl.com/Battery-Boondoggle
In light of the PG&E Public Safety Power Shutoff (PSPS)policy in 2019 the Wall Street Journal published the cost for a specific homeowner in the Sierra foothills to install a solar PV system and three Tesla PowerWalls (R) The total was $58,000.00 for this homeowner’s system with a short operational lifetime.
I assumed a 10 year life on the batteries and a 10% WACC. Both of those are approximate of course, but it gives an order of magnitude cost.
I’ve already pointed out the serious errors in the MIT analyses. (Another example of why we can’t entirely trust the peer review process.)
And why is $2.5 trillion so surprising to rebuild the U.S. generation fleet. That’s only $2300/kW for a system that has almost zero fuel and operational costs. In comparison, a nuclear plant currently costs about $8,000/kW. If we’re using his basis, the cost for an all nuclear system would be almost $9 trillion!
$2.5 trillion does not “rebuild the U.S. generation fleet.” $2.5 trillion is only the cost of storage – dead batteries. Two and one-half times the U.S. national budget, every ten years.
Now we need hundreds of $billions in solar/wind farms to charge them, don’t we? Beyond impractical, it’s not even close to possible.
First, I was pointing out that $2.5 trillion is not an extraordinary number for rebuilding the entire generation fleet. We will have to spend something on that order over the next three decades just as a usual course of action, so it’s not valid to harp on that as being an issue. It needs to be compared to the alternative, as I did pointing out that it would be $9 trillion to rebuild with nuclear plants–but I was being extreme as a real system will be mixed.
Second, the implied price Temple uses of over $2,000/kW is not valid. The current cost is about $600/kW and that doesn’t account for expectations of further reduced costs, and the integration of EV batteries into V2G systems as even lower costs. Based on using a correct value, Temple’s corrected calculation should be $650B, which is a fraction of value of the current grid.
Catherine, despite a dismal record of progress over the last half century (after tens of $billions in investment, wind provides less than 7% of U.S. electricity; solar less than 2%) renewables advocates seem singularly determined to find an end-around plan that might justify their relentless, quixotic pursuit of powering the world with wind, water, and sunlight.
Though their fantasy can be ruled out for any number of fundamental thermodynamic reasons, Haas is a school of business – so let’s look at some of the economic reasons:
1) To power the State of California for a single day of cloudy weather with lithium-ion batteries, at today’s prices, would require nearly $1 trillion worth of grid-scale batteries. Amortized over 10 years, that’s $10.16 billion per month.
2) To date, the most productive Carbon Capture and Storage (CCS) facility in the world has succeeded in sequestering a 1 million metric tonnes of CO2 per annum. To even catch up with current emissions (37 billion tonnes/year) we’d need to build 37,000 of these $22 million facilities, at suitable sequestration sites, then the transmission infrastructure to get CO2 there from power plants. It’s 100% unverifiable
3) De-carbonizing the other half of our carbon-emissions – transportation – will require twice as much reliable energy to charge electric cars, buses, commuter rail, and trucks. Transportation is charged overnight when, unfortunately, power from the sun is consistently lacking.
To summarize, not only would powering the world with wind, water, and sunlight be impossible – it’s not even close. Is there a possible solution to decarbonizing global energy?
We also have to be much smarter at managing loads. This is a two-sided problem.
Excellent blog post title, Catherine. The fossil fuel industry has deep pockets to maintain its dominance as the energy source for dispatchable electricity generation. It continues to develop “novel strategies” that seem plausible to reduce carbon emissions. However, climate researchers continue to criticize the increasing atmospheric concentrations of greenhouse gases.
As an example, the Kemper Coal plant consumed about $7.5 billion of mostly taxpayer funds to develop “clean coal” technologies. https://arstechnica.com/business/2017/06/7-5-billion-kemper-power-plant-suspends-coal-gasification/ In June, 2017, the plant’s owners decided to convert Kemper to a natural-gas-fired power plant. In Kern County, California, there were plans to inject carbon dioxide from the Hydrogen Energy California Power Plant Project as a carbon capture and storage demonstration project. This project consumed millions of taxpayer dollars. It was shelved on March 3, 2016. http://www.energy.ca.gov/sitingcases/hydrogen_energy/
The maxim “an ounce of prevention is worth a pound of cure” is applicable to this policy debate. The most cost-effective and reliable emission prevention approach is safe, reliable, abundant nuclear power. However, this does not enhance the profits of fossil fuel interests. Instead, fossil fuel interests have a long history of funding campaigns that capitalize on public fears that have no factual basis. There have been no deaths from radiation from U.S. nuclear power plants or from the U.S. nuclear navy. On the other hand, deaths associated with fossil fuels are routine and numerous. Think of the San Bruno Natural Gas Pipeline explosion on September 9, 2010 as an example.
Solar and wind are expensive means to “embed” large amounts of natural-gas-fired generation in power grids worldwide. Big fossil companies such as BP America and Total SA of France run ads touting the “complementarity” of natural gas to solar and wind generation. Here’s a two-page advocacy article from the Interstate Natural Gas Association of America, a Washington DC – based lobbying organization: https://www.ingaa.org/File.aspx?id=30374&v=b0798882 As California solar and wind penetration increases, “heat rates” of generators are increasing. (Increasing heat rates mean decreasing efficiency and increased emissions.) Independent CPUC Intervenor Californians for Green Nuclear Power included this information in its post-2016 CPUC testimony which was ignored by the CPUC, likely a consequence of the millions spent annually by fossil fuel interests lobbying the California government
In addition to the emissions problem, CGNP recognizes that California’s dependence on natural gas is dangerous public policy because 95% of California’s natural gas is imported via a system of aging natural gas pipelines that will fail catastrophically when the southern section of the San Andreas Fault ruptures. Thus California, nuclear power plants such as Diablo Canyon become important public safety assets to power post-earthquake recovery and desalinate seawater to provide life-sustaining water after the earthquake while the aqueducts are repaired
…just as the Fukushima plant survived the earthquake in Japan…
I’ve rebutted Dr. Nelson’s assertions about nuclear power numerous times here, including his misunderstanding of several key studies. I have several posts on the economics of nuclear power here that goes further into these issues: https://mcubedecon.com/tag/nuclear-power/
Since Mr. McCann’s income stream seems to be derived from the production of reports that indirectly defend the California fossil-fired status quo, with a side-order of fearmongering, I take his “reports” with a proverbial grain of salt. To keep it really simple, please review the following information……
Click to access FERCForm1.pdf
PG&E’s FERC Form 1 for 2018. Diablo Canyon Costs are shown on Page 329 of 494 at $29.10/MWh, considerably less than $38.40/MWh for Colusa, PG&E’s modern combined – cycle gas turbine (CCGT) generator.
Diablo Canyon and Colusa’s costs are both considerably less than the cost per /MWh for either solar or wind when the generous taxpayer-funded subsidies are removed.
Multi-billionaire Warren Buffett explained the “Reverse Robin Hood” rationale for solar and wind generation in 2014:
“For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
“Big Wind’s Bogus Subsidies – Giving tax credits to the wind energy industry is a waste of time and money.”
By Nancy Pfotenhauer, Contributor |May 12, 2014, at 2:30 p.m US News & World Report https://tinyurl.com/Buffett-Wind-Scam
Your derivation of the Diablo Canyon costs ignore the capital additions amounting to several hundred million dollars for each refueling cycle. Because refueling occurs on roughly 18 month cycles and due to accounting rules, those costs are rolled into the rate base and not shown in the operational costs. When those cap adds are included, PG&E’s costs increase to over $40/MWH (and even higher, but I can’t reveal the confidential value that I calculated using PG&E’s data in its ERRA proceeding.) I will repeat that PG&E did not challenge my calculation in the 2019 ERRA proceeding.
Citing a 2014 article about the financial viability of wind is terribly out of date. Wind generation is expected to be attractive even after the expiration of the PTC in 2020. And all of the other energy sources receive substantial subsidies of their own, as has been well documented for decades. For example, nuclear power receives a substantial insurance subsidy, as well a research subsidy from development of nuclear weapons and naval engines.
Apples/oranges. Fukushima was a Generation 1 nuclear plant, a design that predated Diablo Canyon by 20 years, built to entirely different specifications.
Ever wonder why U.S. nuclear reactors are surrounded by 6 feet of reinforced concrete, and not a Home Depot-style corrugated box? It’s why Three Mile Island survived a reactor meltdown and Fukushima didn’t. The same culture of safety is behind the construction of every U.S. nuclear plant.
But your fearmongering is duly noted.
If we could only believe that. (Diablo would have been Gen 1 as well if PG&E hadn’t screwed up the initial construction.) Fixing seismic risk was one of the reasons that PG&E decided to retire Diablo Canyon. Similarly, SONGS faced a very similar seismic exposure to Fukushima due to its placement, although lower overall risk to less likelihood of a tsunami (not to mention the risk of sea level rise.)
“Diablo would have been Gen 1 as well if PG&E hadn’t screwed up the initial construction.”
Wrong again…
“Gen II systems began operation in the late 1960s and comprise the bulk of the world’s 400+ commercial PWRs and BWRs.”
Click to access nuclearReactors.pdf
“Fixing seismic risk was one of the reasons that PG&E decided to retire Diablo Canyon.”
and again…
“…new and extensive scientific re-evaluations performed at the direction of the Nuclear Regulatory Commission (NRC) continue to show that Diablo Canyon can safely withstand earthquakes, tsunamis and flooding that could potentially occur in the region.”
Click to access ML11153A103.pdf
“Similarly, SONGS faced a very similar seismic exposure to Fukushima due to its placement, although lower overall risk to less likelihood of a tsunami (not to mention the risk of sea level rise.)”
and again (Fukushima-Daiichi was undamaged by the Tohoku earthquake).
“The tsunami caused nuclear accidents, primarily the level 7 meltdowns at three reactors in the Fukushima Daiichi Nuclear Power Plant complex…”
https://en.wikipedia.org/wiki/2011_T%C5%8Dhoku_earthquake_and_tsunami
Maybe that’s why the NRC concluded in 2010
“…the risk each year of an earthquake intense enough to cause core damage to the reactor at Diablo Canyon was 1 in 23,810.”
https://en.wikipedia.org/wiki/Diablo_Canyon_earthquake_vulnerability
Your fearmongering is duly noted. Again.
A tsunami is part of earthquake damage. SONGS is clearly exposed.
As for fear mongering, cooking up a scenario of a collapsed gas pipeline network when the likelihood is at least as remote as a nuclear plant accident also counts. If such a risk was significant, the insurance rates would also have to be heavily subsidized by the federal government, just nuclear plant rates are.
Why do you and Dr. Nelson continue to use obsolete references? That NRC study was called into question and a new one ordered by California. It came up with a finding of safety, but who is now willing to believe an industry lackey? https://www.pge.com/en_US/safety/how-the-system-works/diablo-canyon-power-plant/seismic-safety-at-diablo-canyon/seismic-safety-at-diablo-canyon.page
This lack of credibility where regulators cover up and dismiss important problems is at the core of why the public doesn’t trust nuclear power. You can’t just dismiss these issues as “fear mongering”–they have to be addressed head on with credible steps. That’s not happening now and the regulators are too captured to be reformed. You can wail on these blogs, but nothing will change until the industry makes truly fundamental changes. (And having proponents make such grievous analytic errors as we see here and in regulatory filings doesn’t help that credibility.)
“A tsunami is part of earthquake damage. SONGS is clearly exposed.”
Both SONGS and Diablo Canyon were/are adequately protected from both.
“It came up with a finding of safety, but who is now willing to believe an industry lackey?…This lack of credibility where regulators cover up and dismiss important problems is at the core of why the public doesn’t trust nuclear power.”
With no evidence of either a coverup or “important problems,” it seems your lack of trust in nuclear power is more of a personal issue.
“You can’t just dismiss these issues as ‘fear mongering’…”
Try me.
“..they [these issues] have to be addressed head on with credible steps.”
Agree. It seems therapy, and medication if necessary, are appropriate.
You mean drugs and therapy for the majority of the U.S.? That’s who you have to convince, not just me.
As for regulators, I have substantial professional experience in several regulatory forums and know how much to trust regulators. Do you have similar experience? Or are you just going off faith in people who tell you what you want to hear?
“You mean drugs and therapy for the majority of the U.S.? That’s who you have to convince, not just me.”
I don’t have to convince anyone, nor would I try. My aim is to strip half a century of misinformation and fearmongering about nuclear energy, going back to the anti-growth movement of the 1960s, and extensively funded by the Rockefellers, the Gettys, and other fossil fuel interests. Then let the facts speak for themselves.
Those fossil fuel interests include members of California’s power elite. Did you really believe the crusades of Jerry Brown, Gavin Newsom, and others in California politics to shut down nuclear in California had something to do with safety or the environment? Then you know even less about California electricity than I thought you did:
“The story begins in the 1960s with the construction of Diablo Canyon. The goal of the state’s electric utilities was, at the time, to reduce dependence on coal, oil and natural gas, which were and remain expensive and dirty. But the same year the Sierra Club endorsed the building of Diablo Canyon, Brown’s family came into extraordinary oil wealth — wealth that depended on maintaining the state’s dependence on imported foreign oil.
On taking power in 1975, Brown and his allies aggressively wielded power in ways that directly benefited Brown’s family, which included killing nuclear power plants…
“California’s former Governor, Edmund ‘Pat’ Brown, Gov. Jerry Brown’s father, started helping the Indonesian military dictatorship raise money to expand its state-owned oil industry. Pat Brown eventually raised an astonishing $13 billion ($100 billion in 2017 dollars) mostly from U.S. banks, the Sacramento Bee’s Dan Walters reported in 1990. In exchange for Brown’s services, the state Indonesian oil company Pertamina gave him exclusive and highly valuable rights to sell Indonesian oil in California. In 1974, Jerry Brown ran for governor. Executives from Pertamina, the Indonesian oil company, gave him $70,000 — $350,000 in 2017 dollars.”
All extensively referenced here: http://environmentalprogress.org/big-news/2018/1/11/jerry-browns-secret-war-on-clean-energy
Speaking of conflicts of interest: you’re very fond of touting your professtional qualifications, including analyses of the viability of SONGS and Diablo Canyon. Gene Nelson seems to believe they were made to order for California’s big three energy holding companies – Sempra International, Edison International, and Pacific Gas & Electric Corporation – whose shareholders would benefit financially if SONGS and Diablo Canyon were replaced by gas plants. Who was paying you for those analyses?
” My aim is to strip half a century of misinformation and fearmongering about nuclear energy,”
So you are trying to convince others, just as I said. You need to convince a much broader group than just me.
Environmental Progress has long been a pro-nuclear group with a strong bias. It’s unclear where it’s funding comes from, but it’s most visible proponents are often nuclear engineers who have a personal economic stake in continued construction of new nuclear plants. You are attributing WAY too much to the power of the state’s governor. And the move against nuclear has been national, not just in California.
If Dr. Nelson had actually bothered to look me up, he would have seen plainly that I have not worked directly for a California IOU in 25 years (and then it was to evaluate an R&D program. Sometimes the IOUs pay our bill when a regulatory agency tells them to do so.) We work for ratepayer and environmental intervenors, and the CCAs as our primary clients. You can see how I take on the IOUs on my blog: https://mcubedecon.com/
If America is going to continue to enjoy the lifestyle we are accustomed to ~ we are going to be depending on coal and oil and natural gas for a few more years yet.
America has over 600 years of good quality coal available and with the Clean Coal Technology, Carbon Capture Utilization this coal can be combusted with over 90% of the CO2 removed. https://youtu.be/RQRQ7S92_lo This technology turns the CO2 into good paying full time jobs and money.
America has a lot of natural gas and consumes a lot of natural gas. The problem is how much is wasted ~ vented into the atmosphere as hot combusted natural gas exhaust. http://www.SidelSystems.com Natural gas can be consumed to near 100% efficiency, so do it!
America’s Renewables (solar & wind) should be connected to it’s own grid network and be used primarily to charge America’s growing EV charging system. If the sun goes down and the wind stops blowing and the batteries die, it’s time to shut it down for the day. Tomorrow is another day!
There is a promising CCS technology, but with many caveats: https://www.sciencemag.org/news/2018/06/cost-plunges-capturing-carbon-dioxide-air. That something is technologically feasible does not mean that it is economically feasible. We can get to the moon, but we don’t yet have regularly scheduled service.
I critiqued a different MIT study from the same programs on my blog: https://mcubedecon.com/2019/12/26/nuclear-vs-storage-which-is-in-our-future/. (It doesn’t look like these two groups of authors communicated or coordinated very well). The second study cited here has 3 dubious assumptions: (1) that nuclear costs will decline from the current $8,000/kW cost that is the worldwide average; (2) that CCGTs, which are now a mature technology, will cost less with carbon capture in the future than they cost currently; (3) that battery storage costs will rise above today’s average cost–batteries are already near achieving the “very low” costs included in the study. The other important questions are: how to dispose of the carbon taken from the fuel stream? and just as importantly, how is methane fully recovered during oil and gas production? Carbon capture has been very slow to decline in costs and several large pilot coal plants have been delayed or cancelled over the last decade.
Mr. McCann provides inflated costs per MW for nuclear power. A well-designed and maintained nuclear power plant will run for a century. The life expectancy for solar and wind plants are between 1/5 to 1/4 of a nuclear plant’s lifetime. In 2015, the US EIA projected the average levelized cost of energy (LCOE) per MWh for 2020. Emission-free advanced nuclear matched dirty conventional coal at $95.00/MWh. Compare that cost with $125/MWh for solar and $197/MWh for offshore wind. The substantial cost to integrate intermittent solar and intermittent wind into the grid by burning large amounts of natural gas isn’t included.
At least you agree the LCOE of nuclear is at least $95/MWH. The most recent EIA cost for solar and wind is now $37/MWH for both technologies. (Conventional nuclear isn’t even listed now. Yet to be built “advanced” nuclear is $77/MWH.) https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf