Response To Levelized Cost of Electric Generation

Response to WUWT post of 2/16/2014 by W. Eschenbach (see link)

I browsed through, looking for something else, and saw the linked article on levelized costs for new power plants from EIA in 2013.  I am too late to add a comment, so offer this as a response.  There are many points made by the author of that article that are simply wrong, or misleading. 

Pumped Storage Hydroelectric Plant - Lake Michigan
approximately 1,900 MW of energy production

Eschenbach writes: “The power grid is a jealous bitch, there’s not an iota of storage.”   That statement is simply not true.  US data shows pumped storage hydroelectric plants presently provide 20 GW (20,000 MW) of energy. [Update 4/26/14: EIA shows 22,368 MW installed as of 2012 see link - end update] That is grid-scale storage.   For some perspective, 1,000 MW is the output from a typical nuclear-powered single-reactor plant.  The photo nearby of the Ludington, Michigan plant shows Lake Michigan in the foreground, and the elevated storage lake in the background.  Off-peak power at night is used to pump water up into the upper reservoir, then the water generates power the next day during peak demand.  It is one of the largest such grid-scale power storage systems in the US.   There is also a battery-based storage system in use on Santa Catalina Island, offshore Los Angeles, California.  

Eschenbach writes: “when demand goes up, as it always does…”   Again, simply not true.  Electric demand historically has followed the population trend, roughly.  When Cleveland, Ohio, for example, experienced its 50-plus percent population decline in the 20th century, the demand for electricity also declined.  More recently, many utility planners remark that decreased demand is confounding their estimates for future needs. Eschenbach ignores the concept of cogeneration, also known as CHP for combined heat and power.  (see link to Truth About Nuclear Power – 7 for chart on CHP growth).    CHP capacity is currently around 100 GW   82 GW [Update 4/26/2014]  That also represents 20 percent of US electric power, not an amount to ignore.  EIA shows 160 billion kWh produced via CHP in 2013.  Total US power generated was 4,058 billion kWh.  That is 160 / 4058 = 3.9 percent or almost 4 percent of all power sold.   The trend is to more CHP, or distributed generation as it is also called.  This also reduces grid demand. 

Eschenbach writes:  “if you add a hundred megawatts of wind at $0.09 per kWh to the system, you also need to add a hundred megawatts of natural gas or geothermal or nuclear to the system.”   This is simply not true.  In fact, the opposite is occurring in today’s market.  In Texas, for example, 12,000 MW of wind-based energy has been installed to date.   The market added additional, non-wind-based capacity (primarily natural gas power plants) but it would have added that capacity in any event.   In Texas, the regulating body is ERCOT.  Their considered assessment of wind energy plants in Texas is that almost 10 percent of installed wind capacity can be included as dispatchable, what they refer to as ELCC, effective load-carrying capability.  This (8.7 percent) is presently at 920 MW out of an installed base of 12,000 MW wind energy.  That 920 MW is non-trivial, almost equivalent to one nuclear power plant.  See link  

Eschenbach writes: “As a result, for all of the non-dispatchable power sources, those gray bars in Figure 1,you need to add at least seven cents per kilowatt-hour to the prices shown there, so you’ll have dispatchable power when you need it.” [emphasis in original]   The opposite is shown for actual prices in states with substantial wind:  Iowa, 5.45, South Dakota, 7.03, Texas 6.4, and US avg 7.12 cents per kWh for industrial price in Feb 2014, latest figures from EIA.   Industrial prices best represent the cost of power production, since there is very little added for transmission and distribution costs.  Iowa and South Dakota each have more than 25 percent wind power on their grids at the present.  Texas has only about 9 percent grid power, but has the most wind energy of any state at this time, at 12,000 MW.   see link 

Eschenbach writes: “Finally, I’m not sure I believe the maintenance figures in their report about wind.”  The value he refers to, of 1.3 cents per kWh, is the same as California’s Energy Commission reported in 2009.   This is based on actual operating experience and millions of hours of operation.  The statement from AWEA is:  “A typical wind turbine requires routine service once or twice per year. Oil and filters need to be changed, operating components need to be inspected, and bolts need to be torqued.”  Also, some parts require replacement after 5 to 15 years, depending on the part.   Unusual environmental or electrical damage also requires replacement.  (AWEA is the American Wind Energy Association)

I write this with the knowledge that Mr. Eschenbach is quite sensitive to any criticism.   He frequently uses capitalized words to indicate shouting in internet useage.  He has, in the past, been quite rude in responses to my comments on his writings.  Quite recently, however, he has shown a more civil tone, and I hope he continues the civility if he chooses to respond to this article.

Roger E. Sowell, Esq.

Marina del Rey, California