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.
When enough young people realize their being scammed like this, they’ll change their tune (because it will be their money):
Basically million was spent constructing this nonsense in upstate NY (not very sunny), and it was dismantled years later without ever powering anything - EVER. The money is gone, the business (front) is closed, and everyone is a bit poorer for the experience (except the scammers themselves).
Even if the young people don’t pay for it, they should be upset because rabbits and racoons lost their homes for this farce...
“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.”
Conveniently, the cost of having this backup available is never factored into the cost of solar power. The backup has to be in the form of conventional fossil fuel power plants which have a life expectancy of 30 to 40 years. Each of these plants costs about $1 billion for 1 gigawatt. If the plants are used as backup for solar, they are only running 50 percent of the time or less. So the amount of power they produce over their lifetime is cut in half. So the capital cost per megawatt hour of power produced is doubled. This cost needs to be added to the cost of solar to accurately reflect the total cost of adding solar power to the grid (solar LCOE). Idiots in government just wave their hands, make false promises, and when electricity bills triple they blame it on Putin or greedy companies instead of blaming it on their own manifest stupidity.
Anything that needs a federal subsidy to exist...
I have a medium size solar power system. (4.6KW). A bank of batteries that will carry the house for 18-20 hours. I don't sell back to the grid. They don't need to know what I have out here.
Since my system is a few years old, I don't run it full time any more. Just as a backup.
I like being able to flip a couple of switches when power goes out. I don't try to heat water with it. And I have a propane dryer. Otherwise I can run my dishwasher, washer and dryer, toaster oven and microwave. Though not all at once:)
It's a good feeling that if the grid went down long-term, I can live probably at least 75% of normal.
All that said, I don't think the grid is ready for green energy. We are long past the reasons for subsidies. The industry can't work till battery tech is a lot better than now.
“solar power is the future”
Solar power has great potential to give individual homes self-sufficiency—if there is no requirement to connect them to the grid.
To keep our liberties everyone is going to have to get “off the grid”.
If the plutocrats control your electricity they can control you.
Results may vary.
I live in the north of England; this month has been overcast most days and of course it’s January so I can’t expect my domestic setup to be hugely reliable.
Having said that, 53.76kWh of my consumption for the month has been powered by solar. Right now it’s so dim I need the house lights on and it’s only generating 4% of what it could be generating.
But the plant is set up for 5kWp, with the house only using 2kWp at the most peak of times. So actually it’s covering almost 20% of my current consumption. That alone is ofsetting the bill to the point where my monthly spend is down to where it would’ve been in pre-Ukraine invasion prices if I didn’t have the setup.
Based on those numbers, and knowing I’ll be exporting as much as I use between end of March and beginning of November, my solar setup will have completely paid for itself by the end of next year. (Electricity costs have more than doubled since I had it installed 3 years ago).
While solar provides cheap clean power when the sun is shining the sun doesn’t always shine. I can see how it could be advantageous to use it as a supplement to another source of electricity but that is all it is really good for.
Within a couple decades fusion power will be a reality and then all this green nonsense we have paid through the nose for will simply be abandoned as too expensive.
I am not against solar as a supplement especially for residential use. I have two homes. Both of them are equipped with solar power, that is roof top solar panels. the house in Florida is very useful. As a vacation house I don’t have a lot of long term frozen food storage but I do have a pool and air conditioning, both require a lot of electricity. Most of the time I simply pay the basic $21.00 fee each month to be hooked to the grid. In Kentucky however I have substantial frozen food storage that I would like to have in the event of any long term emergency. I have 9 kids and with their wives and kids in an emergency I may be providing a lot of meals. I have battery backup in Kentucky. The backup will provide weeks of minimal use, I wouldn’t use the air conditioner or the electric dryer but about everything else would be just fine. I should never have to go weeks however without sunshine to recharge the batteries and I do have a couple generators that could supplement the sunshine if necessary and if natural gas or gasoline is available.
I have had the solar long enough that it has more than paid for itself, after all the Federal government paid for a third of it by giving me tax credits. So, while I took no money from the government I did have reduced taxes. I would rather pay for the solar than taxes so it was a good deal for me.
I think the only reason that utility companies are investing in solar is for the same reason as me, in part any way, they would rather take some free money than pay it in taxes, I don’t blame them. I blame our stupid leftist press and representatives. The press misinforms the masses and then the masses elect who the press wants them to elect. Ignorance of the truth is the number one factor destroying this country.
Nobody, as far as I know, has ever claimed that a single source of 'renewable' energy such as solar will be the future. I've never seen any reasoned objection to a diversified energy budget, in which a range of 'renewable' technologies complement, without wholly replacing 'non-renewable' sources. Diversification is prudent in all forms of investment, including this one.
When these hidden expenses are accounted for, it becomes obvious that solar is much more expensive.
I won’t matter the climate control cult that’s selling the idea will have made billions it’s all that matters.
In the 1920’s someone was selling something guarantied to kill fly’s (two bricks) made good money at it too.
I agree. I mean, there's this giant nuclear furnace in the sky putting out untold billions upon billions of watts of energy each second.
However, truly useable solar power will require massive advances in technology that just isn't there yet.
Instead, we're clearcutting acres of forests for solar farms that can barely charge a cell phone.
Let's get the tech first, and then transition.
You are so right! I do think it is very convoluted, and purposely so... So that regular people can’t understand it.
Locally, one of the farmer’s here directly asked one of these solar presidents about the farm land AFTER the solar panels were done and he said something to the tune that it will be fine. SO the farmer asked that president to present evidence of studies showing the land quality and the president said they didn’t have any and he could not present any hard factual evidence!
One of the ladies in my class discussed the water flow disruptions around windturbines and the fact for nearly 60 feet around them, nothing can grow. There is serious disruption to the land!!!
“Locally, one of the farmer’s here directly asked one of these solar presidents about the farm land AFTER the solar panels were done”
Your local farmer was on the right track, but they will never remove those panels. They will grow and grow and grow and grow some more. They are like weeds you cannot eradicate with every one destroying the ability to grow crops.
Maybe he was presuming they would fail and have to be replaced with nuclear or fossil power. But it is naive to think they would ever be removed. They will be a blight on the landscape for eons.
RE: The headline encapsulates an example of the relentless dualism in which FR discussions, such as those on energy policy, often get entrapped. “A is better than B, therefore A is good and B is bad
The headline only tells us how expensive and how inefficient solar energy is in providing electricity to the people. If anyone can provide a solar energy solution that is cheaper and more efficient than conventional energy sources, I don’t think anyone sane will be against it.
Correct. Some day we may get there. Where it is cheaper and more efficient than natural resources. Until then, all this garbage does is harm poor people the world over.
Exactly. It’s always “free wind power”. You never hear about the cost of increased operations and maintenance on units swinging around trying to regulate that “free” stuff.
I agree completely.
“When enough young people realize their being scammed like this, they’ll change their tune (because it will be their money)”
Therein lies a probability I’ve been pondering. The younger generations have the thinking ability in their craniums for logical thought, it’s just that they have been heavily brainwashed since birth.
I see the possibility that a good portion these little lefties will soon wake up and realize they have been scammed and cheated their whole lives. This will create a huge backlash against the elitists.
Speaking of solar...
See the NTSB and NYSP are now involved. The story should finish disappearing down a memory hole shortly.
I see the mass layoffs in the tech sector as one possible way to start that backlash; the entitled yuppies have been cast aside by their employers, and for the first time can see what many other older Americans have been experiencing for decades.
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