oldephartte (oldephartte) wrote,

Costs of 'free energy'

Taken from the comment threat at JoNova  ( Australia )


“The Levelized Cost of Electricity from existing generation resources”.


Intermittent generation imposes a parasitic cost of USD 29.94 / MWh upon conventional thermal generation by reducing thermal plant run time without decreasing fixed operating costs. This cost ought to be included in the cost of the unreliable rate charges.

One rarely finds the additional cost of transmission lines needed to connect the wind/solar to the grid.
Those costs are very significant and ought be borne by the wind/solar plants connected to them as they would otherwise be totally unnecessary.

Typical costs in USD / km

69 KV $932K /kM overhead $1,240 K /kM, underground

Transmission Line Losses are 6.8% / 1000 kM. Roughly 3.5% resistive losses and 3.3% corona discharge losses.

The transmission losses ought as well be borne by the unreliables producers from their point of origin to existing transmission infrastructure.

Transmission line costs




Transmission line losses


Energy Subsidies


Generation Cost by Fuel Type




So it’s taken the bureaucrats at AER (does anyone know what they “regulate”?) a year to see what blind Freddy could see three months after Hazelwood was shutdown in March 2017.
Per AEMO, average wholesale prices:
FY 2016: NSW $52/MWhr; Qld $60; SA $62; Vic $46/MWhr (Note it was May 2016 when the last SA coal station at Port Augusta was shutdown)
FY 2018: NSW $82/MWhr; Qld $74; SA $98; Vic $96/MWhr

Even the Finkel Report published in June last year provided indications of the problem despite attempting to show a glowing future for “renewables”.
Dr Finkel reported levelised costs as follows:
Wind $92/MWhr (without backup)
Solar $91/MWhr (without backup – with 12 hours storage $172/MWhr)
Gas $83/MWhr (and this was before gas prices doubled as SA and Vic suddenly increased demand to replace Hazelwood)
Open cycle gas $123/MWhr
Supercritical coal $76/MWhr (and that’s for new plant, not for existing plant with far lower capital costs)

Conclusion: As we continue to increase intermittent “renewables” into the mix to meet the government’s 23.5% RET by 2020 (currently about 15%, of which hydro is 6%, so wind/solar must increase from 9% to almost 18%), and then use scarce gas as backup, wholesale prices will continue to escalate.

Note: Dr Sims is due to report on retail electricity prices in June (having been studying the problems since June last year) and he has recently made some comments about affordable electricity being a priority. We can only hope.


Existing coal/nuke/gas plants in US produce power at about $38 to $45 per MWH.

Solar / Wind are closer to $112 / MWH.

The alternatives impose a $30/MWH parasitic cost to the thermal plants by decreasing run time and production without changing the fixed overhead costs.

It would appear that the $30/MWH cost is showing up in your 2018 numbers for thermal plant generation costs. That $30 should have been added to the cost of renewables. See link at comment #13 above for in depth analysis of this.

And a rather nasty summary


David, I have yet to trawl through the changes to the original Act. There is the idea that the compulsory purchase of LGCs has some limit but I have not see it. As far as I can read, the LGCs are mandatory without exceptions. The factor of 2 is also normal for retailers. The government is even cheeky enough to say the reason we are being ripped off is that we are not shopping hard enough.

The core reason Hazelwood, the biggest, cheapest supplier of electricity closed was that it could not make money. Why is no one asking the question why? In a fair society the biggest and cheapest supplier was forced to close, assisted happily by Daniel Andrews. The world’s highest Carbon Tax, $200 a tonne for coal and $400 a tonne for gas is the reason. Except it isn’t a tax but a cash grab by the windmill people, legislated by Federal parliament.

Our laws quite simply aim to force the closure of every fossil fuel power station. How can anyone doubt this? It is working as intended and our politicians act amazed. That is the really awful part. As Malcolm Tunrbull said, the closure of Hazelwood and the closure of Liddell are private matters. No, only wrong laws make it unprofitable to sell coal based electricity and our politicians claim ignorance, blame the market, demand more power?

No fracking, no exploration, no coal but diesel is OK? What sort of science madness is this? Why does destroying our country make politicians so smug? We are being betrayed. Turnbull’s eternal smirk tells it all.

Tags: #13, electrical generation costs, renewables
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