Renewable Energy – Solar and Wind-Power: capital costs and effectiveness compared

A comparison of both the Capital Cost and Energy Producing Effectiveness of the Renewable Energy investments of the USA, Germany and the UK.

The summary diagram below collates the cost and capacity factors of Renewable Energy power sources compared to the cost and output capacity of conventional Gas Fired Electricity generation.

US D UK comp

The associated base data is shown below:

Screen Shot 2014-11-03 at 16.16.32

In summary, these figures show that these three Western nations have spent of the order of at least  ~$0.5trillion in capital costs alone, (conservatively estimated, only accounting for the primary capital costs ), to create Renewable Energy electrical generating capacity.

Nominally, this total nameplate generating capacity at ~153GW should amount to about ~26% of their total electricity generation, were it fully effective.  However, because of there is an inevitable ~20% capacity factor applicable across the board for all renewables, the actual cumulative energy output by from these Renewable sources only results in ~5% of the total electricity generation for these nations.

Across the board overall solar energy is about ~34 times the cost of comparable standard Gas Fired generation and 9 times less effective.

Wind-Power is only ~12 times the comparable cost and about 4 times less effective.

The same total electrical energy output could have been produced using conventional natural gas fired electrical generation for ~$31 billion or ~1/16 of the actual capital costs expended on renewable installations.  Had conventional Gas Fired technology had been used, the full ~31 GW generating capacity would have provided non-intermittent and wholly dispatchable electricity production generated as and when needed.

The following calculations only provide conservative estimates of Renewable Energy installation capital costs.  They discount entirely the major additional costs of:

  • supporting backup generation
  • connection to the grid from remote locations
  • the large differentials in ongoing maintenance costs.

As all Renewable Energy technologies are only viable with the support of costly government subsidies, market intervention and market manipulation, can this be a responsible use of public funds or a good reason for increasing energy costs for individuals or industry in the Western world ?

The following data sources for the USA, Germany and the UK were reviewed:

United States of America: data available 2000 – 2012

Germany: data available from 1990 to 2013

United Kingdom: data available 2008 – 2013

Note:  the Wikipedia sources are used because they normally have a green orientation and are unlikely to be questioned by the advocates of Man-made Global Warming.

These data listed above provide installed “nameplate” capacity measured in Megawatts (MW) and energy output measured across the year in total Gigawatt hours, (GWh). Thus they do not provide directly comparable values as Megawatt nameplate capacity and the actual energy outputs achieved. For this comparative exercise the annual Gigawatt hours values were revised back to equivalent Megawatts, accounting for the 8,760 hours in the year, as indicated by Prof David MacKay in “Sustainable Energy – without the hot air”, page 334.

Although this measure eliminates the unpredictable and variable effects of intermittency and non-dispatchability that characterise Renewable Energy sources, it gives a conservative comparative value of the actual energy output and thus potentially available.

It allows for the calculation of capacity factors in relation to Renewable Energy technologies in each nation. The following graph shows the history of Renewable Energy (Solar and Wind power combined) installations and shows the progress year by year of actual electrical energy generated. Screen Shot 2014-11-03 at 20.09.06 The Energy Information Association provides the capital cost information in US$ for the USA.  These capital costs are used for comparative purposes, but they take no account of currency variations and other local financial factors.

The USA Energy Information Association publishes comprehensive information on the capital costs of alternate electrical generation technologies, in Table 1 of their 2013 report. From that full list these notes consider three technologies:

  • Large Scale Photovoltaic: this is the most economic of the PV technologies at ~$3.8 billion / GW.
  • Combined Wind 80-20: merged onshore 80% and offshore 20% wind at ~$3.0 billion / GW.
  • Natural Gas Advanced Combined Cycle: the costliest technical option at ~$1.0 billion / GW.

Screen Shot 2014-10-30 at 10.19.25

“Overnight Capital Cost”, (just as if an power generating installation has been created overnight), is the standard comparative measure for capital costs used in energy industries. The specific Overnight Capital Costs used include:

  • Civil and structural costs
  • Mechanical equipment supply and installation
  • Electrical and instrumentation and control
  • Project indirect costs
  • Other owners costs: design studies, legal fees, insurance costs, property taxes and local electrical linkages to the Grid.

However for this comparison “Overnight Capital Costs” specifically do not include:

  • Provision of Back-up power supply, “spinning reserve” for times when renewable power is unavailable.
  • Fuel costs for actual generation and the spinning reserve
  • Remote access costs
  • Extended electrical linkages to the Grid
  • Maintenance
  • Financing   etc.

These further costs for Renewable Energy excluded from Overnight Capital Costs mean that its use probably significantly less economic than the comparisons provided in these tables. In addition for these comparisons the Energy Information Association data denominated in US$ is used. These brief results are primarily for comparative purposes and do not purport to give precise actual expenditures in the various nations and by governments. However, they do  clearly indicate the order of magnitude of the capital sums involved.

They also allow for the calculation of comparative figures to be established between renewable energy generation and standard Gas Fired electricity generation. The results for the individual Nations in tabular form using the EIA Overnight Capital Cost data are shown below: Screen Shot 2014-11-03 at 16.15.34 In graphic terms the results for renewable Energy generation in each country is shown below.Screen Shot 2014-11-14 at 17.10.58 Solar power is comparatively successful in the USA, because it is mainly installed in Southerly latitudes, but in Germany its very serious renewable investment in Solar amounting to more than 50% of all renewables is twice as expensive and half as effective as in the USA.  Solar energy in the UK is 55 times more expensive and half as effective again as in Germany.  Fortunately the UK only has about 25% solar generation in the Renewable mix. Wind power is about 26% effective in the USA  and about 11 times more costly than Gas Fired generation. In Germany Wind power at less than 50% of its renewable commitment is 50% more expensive and substantially less effective in the USA.  Wind power in the UK is also about 11 times more costly, similar to the USA, and rather more effective than in Germany, because of wind conditions.

In addition, there is also a very large discrepancy in maintenance costs shown in the Energy Information Association table 1. When compared to a standard Natural Gas plant, maintenance cost comparisons are as follows:

  • Photovoltaics                     times ~1.6
  • Onshore Wind-Power        times ~2.6
  • Offshore Wind Power        times ~4.9
  • Combined Wind  80 – 20    times ~4.0
  • Coal (without CCS)            times ~1.9   (included for reference)
  • Nuclear                              times ~6.1   (included for reference)

There are also significant questions to be answered about the longevity and engineering robustness of the Solar and Wind-Power technologies: this is particularly problematical for off-shore wind farms.

In addition a more detailed analysis might well indicate that, in spite of the cost of fuel being essentially free, the development, fabrication and installation of both Solar and Wind-power installations involves the release of substantial amounts of CO2.  The actual savings of CO2 emissions may be hardly exceeded over their installed working life of these Renewable technologies.

Intermittancy and Non-dipatchability

However there still remains a further major problem with all Renewable Energy sources. Their electrical output is intermittent and non dispatchable. Their electrical output cannot respond to electricity demand as and when needed. Energy is contributed to the grid in a haphazard manner dependent on the weather.  This effect can seen from German electrical supply in the diagram below, for a week in August 2014, an optimum period for any solar energy input. Power certainly not necessarily available whenever required.

Screen Shot 2014-09-07 at 15.09.47Solar power inevitably varies according to the time of day, the state of the weather and also of course radically with the seasons.  Solar power works most effectively in latitudes nearer the equator and it certainly cannot be seriously effective in Northern Europe. In the example above in August 2014 wind power input varied from 15.5 GW to 0.18 GW and the Solar contribution varied from nil to some 15 GW. Thus this Renewable Energy variability combined with the “Renewables Obligation”, which mandates that the electricity grid has to take energy from renewable sources preferentially, if available, resulted in demands on conventional generation in Germany varying from ~23GW to ~47GW over the period. In Germany, its massive commitment to solar energy can briefly provide up to ~20% of country wide demand for a few hours either side of noon on some fine summer days, but at the time of maximum power demand on winter evenings solar energy input is necessarily nil. But at the same time the output from wind power is equally variable as in the summer months.

Germany has similar insolation and cloudiness characterists as Alaska and the UK being even further North has an even worse solar performance. Electricity generation from wind turbines is equally fickle, as in the week in July 2014, clearly shown above, where Wind-Power input across Germany was close to zero for several days. Similarly an established high pressure system, with little wind over the whole of Northern Europe is a common occurrence in winter months, when electricity demand is at its highest. Conversely, on occasions Renewable Energy output may be in excess of demand and this has to dumped expensively and unproductively. This is especially so, as there is still no solution to electrical energy storage on a sufficiently large industrial scale. That is the reason that the word “nominally” is used throughout these notes in relation to the name plate capacity outputs from Renewable Energy sources.

Overall these three major nations that have committed massive investments to Renewable Energy.  Conservatively this amounts to at least ~$0.5 trillion or ~2.2% of combined annual GDP.  

This investment has resulted in a “nominal” ~31Gigawatts of generating capacity from an installed Nameplate Capacity of ~150Gigawatts.  This is “nominally” almost a quarter of the total installed nameplate generating capacity.

But this nominal 31GW of Renewable Energy output is ~5.4% of the total installed generating capacity of ~570Gigawatts.  Even that 31GW of Renewable Energy production is not really as useful as one would wish, because of its intermittency and non-dispatchability.


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