Posted on 01/27/2023 8:20:27 PM PST by SeekAndFind
Mississippi residents are consistently told that renewable energy sources, like solar panels, are now the lowest-cost ways to generate electricity, but these claims are based on creative accounting gimmicks that only examine a small portion of the expenses incurred to integrate solar onto the grid while excluding many others.
When these hidden expenses are accounted for, it becomes obvious that solar is much more expensive than Mississippi’s existing coal, natural gas, and nuclear power plants and that adding more solar will increase electricity prices for the families and businesses that rely upon it. One of the most common ways of estimating the cost of generating electricity from different types of power plants is a metric called the Levelized Cost of Energy, or LCOE.
The LCOE is an estimate of the long-term average cost of producing electricity from a power plant. These values are estimated by taking the costs of the plant, such as the money needed to build and operate it, fuel costs, and the cost to borrow money, and dividing them by the amount of electricity generated by the plant (generally megawatt hours) over its useful lifetime.
In other words, LCOE estimates are essentially like calculating the cost of your car on a per-mile-driven basis after accounting for expenses like initial capital investment, loan and insurance payments, fuel costs, and maintenance.
We can estimate the LCOE of new solar facilities in Mississippi by using overnight capital cost estimates from the U.S. Energy Information Administration (EIA) Electricity Market Module and other state-specific factors. We can then compare the cost of solar to the real-world cost data for the coal and natural gas generators at the Victor J. Daniel Jr. Generating Plant, and the Grand Gulf nuclear power plant using the Federal Energy Regulatory Commission (FERC) Form 1 database.
The graph below shows that electricity generated by new solar panels would cost $50.67 per megawatt hour when accounting for the fact that monopoly utilities are allowed to increase electricity prices to cover the cost of building any new solar facilities that receive approval from the Mississippi Public Service Commission, plus a ten percent rate of return, shown as “utility profits,” below.
Center of the American Experiment
These cost estimates are, I should point out, for the unsubsidized cost of solar – what you might call the real, or underlying cost of producing it. This matters because the Biden administration’s enormous $370 billion so-called “Inflation Reduction Act” offers massive subsidies for solar, which on the surface seem to reduce the cost of solar. In reality, what the IRA subsidies do is reduce the cost paid by some by passing on the costs to the taxpayer. Subsidy, in other words, does not change the underlying costs of solar, which remain unattractive no matter how many inducements the federal government offers us to go solar.
The most affordable electricity in the state was generated by the combined cycle (CC) natural gas units at the Victor J. Daniel Generating Plant at a cost $30.31 per MWh, based on the 2021 delivered cost of natural gas, which was $3.90 per million British thermal units (MMBtu), and electricity generation. Natural gas prices might have risen recently, but even at these increased prices, natural gas gives Mississippians better value than solar. So, too, does nuclear.
The next most affordable power plant was the Grand Gulf nuclear facility, which generated electricity for $32.10 per MWh, based on 2021 output. Lastly, the coal units at the Victor J. Daniel Generating Plant produced electricity for $43.83 per MWh, based on 2021 delivered coal prices of $2.55 per MMBtu and electricity generation.
But wait, there’s more.
Not only are solar panels more expensive than the existing natural gas, coal, and nuclear plants on Mississippi’s electric grid, but they also provide less value because they don’t provide electricity if the sun isn’t shining, which is most of the time.
Statistics from EIA show solar facilities in Mississippi only generated about 22 percent of their potential output in 2021, which means utility companies would need to install 450 megawatts (MW) of solar to generate 100 MW of electricity, on average, over the course of a year, requiring a huge overbuild of capacity to get the same annual energy output.
Creating an electric grid capable of incorporating all of these extra solar panels will require taking thousands more of acres of land, building more transmission lines to connect these panels to the grid, and moving the power to where it is needed. These costs, including the property taxes associated with the land, the lines, and the other equipment, will be passed along to customers through their electricity rates.
According to the Midcontinent Independent Systems Operator (MISO), these transmission lines routinely cost between $2.5 million and $3.1 million per mile. Despite their enormous price tag, solar advocates don’t usually include these transmission costs in their LCOE calculations because they are inconvenient.
Lastly, it is important to remember that no matter how many solar panels are installed in Mississippi, the electricity needs of the state will still require the use of natural gas power plants or expensive new battery storge facilities to provide electricity when the sun isn’t shining, which happens every night. As a result, Mississippi families and businesses are forced to pay for two electric systems: one that works when the sun is out, and one that works when it isn’t.
The data are clear: when all these costs are added up, we see that solar is much more expensive than using Mississippi’s existing natural gas, coal, or nuclear power plants. Therefore, the Mississippi Public Service Commissioners should protect ratepayers from the unnecessary cost increases that will inevitably result from building more solar facilities in the Magnolia state.
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Isaac Orr is a policy fellow specializing in energy and environmental policy at Center of the American Experiment.
I believe that solar power is the future - though it’s LONG in the future. We have a lot of work to do on it; but our great-grandchildren may be very happy for it.
I work in the electrical utility industry, although its way up here in Alaska, I’d like to think I know a little bit about so-called renewables.
I have never spoke to a single person, even a few old-school curmudgeons, that are for “clean, renewable” energy. The problem is the cost and reliability. Green power is neither cheap, nor reliable at this time. It all requires the backup of coal and various forms of gas to back it up and smooth it out.
Some day we may be able to figure out a way to make green power cost effective and reliable. We are no where close to that point.
"solar facilities in Mississippi only generated about 22 percent of their potential output in 2021, which means utility companies would need to install 450 megawatts (MW) of solar to generate 100 MW of electricity, on average, over the course of a year, requiring a huge overbuild of capacity to get the same annual energy output."This is naive. You cannot just quadruple your solar plant size because you still generate ZERO power at night. You need either a 1) electricity storage system or 2) a backup fossil or nuclear plant the same size as your solar plant.
Either way, you have to buy TWO power plants whereas before you only had to purchase ONE power plant. So you have doubled your capital costs AND doubled your fixed maintenance cost (costs that you incur if you run the plan or not). Large-scale storage does not exist yet except as pumped hydro. Batteries will never be a storage system for solar plants because of their staggeringly high price.
So the situation is far worse than author Orr says.
The other fallacy in green energy is that end-of-life costs are conveniently ignored and not accounted for. The cost of demolishing a fossil-fuel fired power plant is low. The cost of demolishing a nuclear plant is high and spent-fuel storage is a difficult problem. But the green zealots just totally ignore the demolition costs of solar and wind plants.
The Pacific Northwest has the potential for massive hydro power projects which would provide gargantuan amounts of clean carbon-free energy. Such projects also provide water for cities and farms. But ya know … but … but … the widdle fishies 'n' stuff.
The main problem with solar seems to be storage/batteries.
And yes, we are nowhere close to that point.
That's ok, lot of people believe nonsensical things.
The Sun is the most powerful source of energy anywhere near Earth. You aren’t being imaginative enough.
It won’t be any time soon; but the Founding Fathers couldn’t have imagined a lot of things that we have today.
(They might understand them, if explained properly, though. I’ve often imagined what it would be like to tell Ben Franklin how a computer works...)
Just before sunset, shut off the power.
Turn it on after sunrise on sunny days.
Everybody does without electricity when it's night or cloudy. /S
And in our area...they’re killing off farmlands
In my energy law class, several students were doing research on various forms of clean energy and many of us were unable to find sources on the exact actual cost of solar and wind without subsidies. The closest I found was about $86 per MWH, much more expensive than other sources. I don’t this comparison really includes the extra taxes and environmental permits and other such costs that are tacked on to coal and natural gas.
By that metric so is fusion power.🤨
Who knows? A lot of people believe in the future of that, too.
As I wrote previously, I don’t think any of this is anywhere close in the future; and I don’t believe anyone should be forced into it, especially at current costs for the very undeveloped technologies. (I personally want nothing to do with current electric cars, or a solar-powered house.)
But I’m all for investigating and experimenting with things - that’s how science and technology have always progressed.
I don’t believe in rejecting an idea itself merely for temporal political reasons, or because of the political purposes for which some people may be currently using it.
Yes, and their efficiency isn’t all its cracked up to be either.
Georgiana...not just taxes and permits! If you want to open a new coal mine, you must purchase a reclamation bond in advance. That means that money has been paid up front to reclaim the land after mining operations are completed and the mine shuts down.
“Green” energy gets away without having to pay for any sort of reclamation or remediation bonds. What do you think will happen when millions of windmills and millions of square feet of solar cells reach the end of their economic lives in 15 to 25 years? The junk will just be abandoned there because the developers and owners have all gone bankrupt. We will need another SuperFund to clean up the vast messes left behind. Taxpayers will be on the hook for billions in clean up costs.
Every windmill has hundreds of tons of concrete underground to hold up the tower. That concrete will just sit there forever.
The costs of the loss of enormous amounts of valuable farmland are ignored, too. There are huge opportunity costs to taking that land out of production.
These are just a few examples of how costs are ignored to make “green” energy appear competitive with fossil and nuclear power. There is no way on God’s Green Earth that highly diffuse, low energy intensity solar and wind power can compete with concentrated energy in fossil and nuclear fuels.
What about solar panels on individual homes? Any better?
All true. Great article. We have huge coal reserves and should be burning it super cleanly to make electricity. We used to burn more but natural gas has been replacing it. We need natural gas to make fertilizers and for our chemicals industries.
Unfortunately the anti-CO2 cult has too much wacked out power.
While I tend to agree that solar has a future I don’t believe that it will ever be anything more than a niche energy source. Solar is great for powering road signs, heating water, etc. where the real power comes from a storage device (battery) that the solar panels can recharge when they are producing. Depending on solar to power a small city or any mission-critical endeavor is foolhardy and expensive. Expensive because it takes two power sources to make the power reliable - the solar farm and the backup power generation plant.
The inefficiency and cost effectiveness of solar was well discussed by previous posts. What I’d like to add is the average person of today, in particular the younger generations, have absolutely zero thinking ability. They do not know how to balance a checkbook or run a simple budget to keep from going into debt. They know nothing about how machinery or electricity actually works.
My point is they can be easily duped into thinking solar is free because the sun is free. And when this same bunch is scared to death that global warming will kill them, then to them it’s a no-brainer, that we must have more solar power and no other sources of electricity production.
What they do not realize is they are the ones with no brains.
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