Home > Economics - General, Environment > Energy storage getting real

Energy storage getting real

August 19th, 2014

Now that renewable energy sources like solar and PV are cheaper than new coal-fired power stations in most jurisdictions (anywhere with either favorable conditions or a reasonable carbon price), the big remaining question is that of supply variability/intermittency. As I’ve argued before, this problem is greatly overstated by critics of renewables who assume that the constant 24/7 supply characteristic of coal is the ideal. In fact, this constant supply produces a mismatch with variable demand and current pricing structures are set up to deal with this. A system dominated by renewables would have different kinds of mismatch and require different pricing structures.

That said, for a system dominated by solar PV, meeting demand in the late afternoon and evening will clearly depend on a capacity to store energy in some form or another. There are lots of options, but it makes sense to look first at relatively mature technologies like lithium and lead-acid batteries. Renewable News is reporting a project in Vermont, which integrates solar PV and storage.

The 2.5-MW Stafford Hill solar project is being developed in conjunction with Dynapower and GroSolar and includes 4 MW of battery storage, both lithium ion and lead acid, to integrate the solar generation into the local grid, and to provide resilient power in case of a grid outage.

The project cost is stated at $10 million, or $4m/Mw of generation capacity.

Assuming this number is correct, let’s make some simplifying assumptions to get a rough idea of the cost of electricity and the workability of storage. If we cost capital and depreciation at 10 per cent, assume 1600 hours of full output per year and, ignoring operating costs, the cost of electricity is 25c/KwH. There would presumably be some distribution costs, given the need to connect to the grid. Still, given that Vermont consumers are currently paying 18c/Kwh, this doesn’t look too bad. A carbon tax at $75/tonne would make up the difference.

How would the storage work? I’m starting from scratch here, so I’ll be interested in suggestions and corrections. I assume that the storage is ample to deal with short-term (minute to minute or hour to hour) fluctuations, which are more of a problem for wind.

How about on a daily basis? It seems to me that the critical thing to look at is the point in the afternoon/evening at which consumption exceeds generation (As I mentioned, prices matter a lot here). This is the point at which we would like the batteries to be fully charged. The output assumption suggests an average of about 12 MWh generated per day. If we simplify by assuming that the cutoff time is 6pm and that output drops to zero after that, the system requires that 8MWh be used during the day and 4MWh at night. That wouldn’t match current demand patterns, but if you added in some grid connected power (say, from wind, which tends to blow more at night) and shifted the pricing peak to match the demand peak, it would probably be feasible.

As regards seasonal variability, this would be a problem in Vermont, where (I assume) the seasonal demand peak is in winter. But in places like Queensland, with a strong summer peak, a system with lots of solar power should do a good job in this respect.

What remains is the possibility of a long run of cloudy days, during which solar panels produce 50 per cent or less of their rated output. Dealing with such periods will require a combination of pricing (such periods can be predicted in advance, so it’s just a matter of passing the price signals on to consumers), load-shedding for industrial customers and dispatchable reserve sources (hydro being the most appealing candidate, given that potential energy can be stored for long periods, and turned on and off as needed).

To sum up, we aren’t quite at the point where PV+storage is a complete solution, but we’re not far off.

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  1. Neil Harris
    August 19th, 2014 at 15:13 | #1

    Writing in The Conversation Associate Professor Mark Diesendorf says that he and his colleagues at UNSW “have performed thousands of computer simulations of the hour-by-hour operation of the NEM with different mixes of 100% commercially available renewable energy technologies scaled up to meet demand reliably.

    We use actual hourly electricity demand and actual hourly solar and wind power data for 2010 and balance supply and demand for almost every hour, while maintaining the required reliability of supply. The relevant papers, published in peer-reviewed international journals, can be downloaded from my UNSW website.

    “Using conservative projections to 2030 for the costs of renewable energy by the federal government’s Bureau of Resources and Energy Economics (BREE), we found an optimal mix of renewable electricity sources. The mix looks like this:
    • Wind 46%;
    • Concentrated solar thermal (electricity generated by the heat of the sun) with thermal storage 22%;
    • Photovoltaic solar 20% (electricity generated directly from sunlight)”
    • Biofuelled gas turbines 6%; and
    • Existing hydro 6%.”

    (My formatting) From http://theconversation.com/renewable-energy-is-ready-to-supply-all-of-australias-electricity-29200

  2. Ikonoclast
    August 19th, 2014 at 15:28 | #2

    I think we need to look at all renewable energy generation options and all energy storage options. I think the solution, if it comes, will come from a distributed network with some macro generation nodes and many micro-generation nodes. Storage will show the same characteristic; some major energy storages, like hydro dams and many minor energy stores like rooftop solar hot water tanks with hot water stored from the day.

    We should start with energy as it must be generated or acquired before it can be stored as potential. In the list below the terms “micro” and “macro” refer to the size of each individual generating node, not its number or total contribution. Leaving out non-renewables we feasibly will have;

    Solar PV panels (micro and macro);
    Solar concentrating thermal (micro and macro);
    Solar updraft towers (probably only macro);
    Wind power (micro and macro);
    Tidal power (probably only macro);
    Stream power (micro and micro);
    Hydro (macro);
    Biomass where it is carbon neutral, renewable and does not supplant food production (micro and micro); and
    Geothermal (macro).

    Storage is dependent on energy type of course but will likely include;

    Dams (gravity potential) – macro
    Molten Salt Tanks (heat) – macro
    Batteries (chemical) – micro and macro
    Home heated water (heat) – micro;
    Dynamos and fly-wheels – (used in specialised grid load equalising);
    Compressed gas – micro mostly
    Biomass stores – micro and macro

    This does not exhaust the list.

    An important thing not to forget is that solar updraft towers could provide power at night and thus obviate considerable storage requirements. Solar updraft towers are not as cost efficient as solar PV or solar thermal concentrating for generating power but on the plus side there are savings on energy storage. This might yet make solar updraft towers cost feasible.

    And dont forget wind power. It is very cheap and can be over-built economically to give good power in light winds. A wide (sub-continental) grid with distributed micro and macro generation will go a long way to making power available at all times as well.

    All this is do-able but Fossil Capital has to be over-thrown. Can Renewable Capital do it? Maybe, but I doubt it will do it fast enough without a major global dirigist government effort. One thing is sure, you can’t trust your future to unfettered capitalism.

  3. Newtownian
    August 19th, 2014 at 15:57 | #3

    Regarding you scratching your head John why don’t you just get Mark Diesendorfs very recent book “‘Sustainable Energy Solutions for Climate Change’.”

    It includes loads of modelling of a variety of alternative scenarios done by Mark and his students. An important feature is the discarding of the concept of Baseload power.

    You can read more here http://www.ies.unsw.edu.au/about-us/news-activities/2014/01/new-book-sustainable-energy-solutions-climate-change

  4. Tim Macknay
    August 19th, 2014 at 15:58 | #4

    Quibble time! (a minor one) ;)
    Geothermal should be macro and micro. Micro-geothermal is already popping up around the place – i.e. ground-sourced heat pumps for household heating, and geothermal heating of municipal swimming pools.

  5. August 19th, 2014 at 16:23 | #5

    Thanks to Neil Harris for mentioning the hour-by-hour computer simulations of 100% renewable electricity in the National Electricity Market by Ben Elliston, Iain MacGill and myself at UNSW. In relation to storage, I would like to emphasise that our mixes of commercially available renewable energy technologies have no electrical storage, which is still expensive. The storage in the system comprises the dams associated with existing hydro-electricity, thermal storage associated with concentrated solar thermal power, and the liquid or gaseous biofuels of the gas turbines.

    The latter play a vital role on several occasions on winter evenings following those overcast days that also have low wind energy. Gas turbines have low capital cost and, because they are operated infrequently and only for short periods of time (e.g., 1-2 hours), low running costs. They can be considered to be a low-cost storage that provides reliability insurance with a low premium.

  6. Ikonoclast
    August 19th, 2014 at 16:24 | #6

    @Tim Macknay

    You are almost certainly right. I wasn’t all that aware of it. But I do recall reading somewhere that there are towns in cold places that use geothermal heating on a house-by-house basis. Then again some use a system of storing summer heat in large undergound stores (water? water circulating through rock aggregate?) and then using that heat all winter. Or something like that. However, the moral of the story is that there is and will be a 101 ways of getting, storing and using micro and macro renewable energy. We just have to get smart about and put a stake through the heart of Vampire Fossil Capital.

  7. Hermit
    August 19th, 2014 at 17:14 | #7

    There’s always a party pooper and here he comes. When natural gas runs out there won’t be enough biogas to run gas turbines as Sweden is currently finding out. Biomethane contains up to 40% CO2 a fire retardant not good for fuel. Once that is removed, the gas is used to heat the digesters in cold weather and to power tractors and muck spreaders my guess is the EROEI is very low. No I don’t have a number for a closed loop system someone else come up with one. Start here

    Pumped hydro storage is another that probably won’t scale up. Find ROAM Reporting’s report for DCEE which includes also seawater storage in clifftop tanks.

    The next hot shot battery is said to the 60 kwh Li-ion costing $10k from Tesla’s yet to be built factory. We can get non straight line depreciation via cycle life. If we can get 2,000 cycles of 80% depth of discharge that’s 2,000 X 48 kwh = 96,00 kwh throughput. Dividing into $10k gives 10.4c per kwh not too shabby. If the average home uses 22 kwh per day one battery will last up to 2 and a bit rainy days, remembering we’re keeping depth of discharge to 80%. Presumably the biogas turbines will power the grid on a rainy week. Except we don’t have millions of homes with these batteries and nor enough biogas turbines to replace coal, natgas etc. In Australia that averages about 24 GW consumption out of 54 GW generating installed.

    I respectfully submit that the numbers don’t add up.

  8. John Quiggin
    August 19th, 2014 at 17:20 | #8


    You can respectfully submit all you want, but showing would be more convincing. The numbers look pretty good. As an argument against millions of homes having batteries “they don’t have them yet” is not exactly convincing.

  9. ZM
    August 19th, 2014 at 17:36 | #9

    Mark Diesendorf’s book is very good. I’d be interested in discussions between the groups who have modeled for Australia – there are I think 3 so far? And there are some differences between the UNSW and the Beyond Zero Emissions scenarios – it would be interesting to hear more discussion on these differences and why.

    Do current batteries allow for high usage? I lived in a house with solar and batteries some time ago and the diesel generator had to be run at times – but this May gave been due to the age of the technology?

    Also I wonder about other countries? I know Marc Jacobsen has stated 100% renewable energy is possible globally – but I spoke with someone recently returned from Vietnam and they said there was a lack of research but it looked more difficult there than in Australia. I’ve looked at Kenya and the prospects are good there. But what about other countries? More funds and people are definitely needed to do research at the moment, as well as starting what we can now.

  10. Ivor
    August 19th, 2014 at 17:41 | #10

    Typical capitalists;

    If we cost capital and depreciation at 10 per cent,

    There’s your problem – this weird, crisis generating, political demand by Capital for a rate of return greater than economic growth rate.

  11. August 19th, 2014 at 18:00 | #11

    Apparently (and I have saurdigger to thank for digging this up) the Stafford Hill energy storage will have 2 megawatts of inverter capacity, and 1 megawatt-hour of lithium ion battery storage with a maximum output of 2 megawatts, and 2.4 megawatt-hours of advanced lead acid battery storage with a maximum output of 2 megawatts.

    So if the batteries weren’t limited by the inverter capacity and discharged at their maximum power output, they would provide 4 megawatts for 51 minutes. So even if the batteries were fully cycled twice a day, once from solar power in the daytime and once from cheap off peak electricity in the early morning, they would only deliver 4 megawatts for 1 hour and 42 minutes a day or 310 hours a year.

    This does not look good for the economics of battery storage. However, rather than looking at a first of a kind installation that may be designed for specific requirements at its site, I think it might be more useful to look at the price of a battery pack that has been in production for at least a short while now and is much smaller. Smaller being important, since with current retail electricity prices and solar feed in tariffs, energy storage in Australia appears much more likely to end up in homes and businesses than on the grid.

    Nissan will now replace the 24 kilowatt-hour (about 19 kilowatt-hours usable capacity) battery pack for its Leaf electric car for $5,500 US. Even assuming that the battery pack only provides enough electricity to meet its eight year/160,000 km warranty and then dies, that comes to roughly 17 US cents a kilowatt-hour. In reality, since battery packs used for stationary storage don’t have to drive anywhere and can continue to usefully function even if the battery becomes considerably degraded, the actual cost per kilowatt-hour is likely to be much less than this.

    Now just to be clear, these battery packs aren’t currently available for purchase for home energy storage. I’m sure Nissan isn’t currently making any money on them. The $5,500 dollar price may well be below the current marginal cost of producing the battery pack, but Nissan thinks it’s worth the loss to promote sales of its electric car. And they may be reconditioning old packs to save on costs. (The deal requires the old battery pack be traded in.) However, this is still a good sign. Nissan would not offer this replacement price unless it was confident the marginal cost of battery packs would fall below this price before they have to replace too many.

    The battery pack of the Tesla electric is more or less without a doubt cheaper than the Nissan battery pack. However, the Nissan battery pack is higher performance and its 0.5 kilowatt-hour modules could better stand the demands of being used in a small home energy storage system. (The Tesla battery pack relies on its larger size to deliver high performance and long life.) So the cost of the Nissan battery pack may be more relevant than that of the Tesla.

  12. Crocodile
    August 19th, 2014 at 18:16 | #12

    Is there enough Lithium in the world to make all these batteries.

  13. August 19th, 2014 at 18:41 | #13

    Is there a reason that batteries for off-peak daytime power are preferable to just adding more solar panels? Obviously when there is no sun it’s a problem but is there a particular reason for choosing a battery storage system for the 5pm time slot instead of just increasing the number of solar panels?

    And is wind 46% feasible?

  14. August 19th, 2014 at 18:49 | #14

    Crocodile, don’t worry, there is enough lithium in the world to make the batteries. Current reserves are very roughly enough for about one billion Nissan Leaf electric cars and there is no need for stationary energy storage to use lithium batteries. It’s just that stationary energy storage is piggy-backing on research put into electric car battery packs and associated cost reductions. And if there ever is some sort of lithium shortage it can be extracted from seawater. And I don’t mean in the sense that we can extract gold from seawater if we really wanted to, I mean it has been done commercially in the past. So there is no shortage of lithium now and I imagine that in the future other battery chemistries will prove to be superior to lithium. Then we might worry about shortages of materials for them, but carbon is looking good for future batteries or ultracapacitors and we’ve got plenty of that. (Too much of it in some places.)

  15. Ikonoclast
    August 19th, 2014 at 19:06 | #15

    Lithium is an interesting story. Lithium is about as common as chlorine in the Earth’s upper continental crust, on a per-atom basis. However, recoverable (commercially mineable) lithium is relatively rare on land. According to the Handbook of Lithium and Natural Calcium, “Lithium is a comparatively rare element, although it is found in many rocks and some brines, but always in very low concentrations. There are a fairly large number of both lithium mineral and brine deposits but only comparatively few of them are of actual or potential commercial value. Many are very small, others are too low in grade.”

    Extraction from seawater looks unlikely with Li+ (lithium ions) being about 50,000 times less common than Na+ (sodium ions) if my maths is correct. This means we will probably have to rely on land deposits. Known commercially viable land reserves are estimated at 13,000,000 tonnes by US Geo but other estimates put reserves as high as 39,000,000 tonnes. Which is right? I don’t know. A study reports we might need up to 20,000,000 tonnes from now to 2100 if use really takes off with electric cars. So, we might be OK for lithium.


    Footnote: This has little to do with the topic but the world economy is facing a huge sulphur over-supply. Due to the amount of sour (containing lots of sulphur compounds) oil crude now being processed, a great quantity of surplus sulphur is being stockpiled in places like Saudi Arabia and Canada. Google, Sulphur Piles Larger than Buildings or Alberta Oil Sands Produces 1.2 Million Tonnes Of Sulphur Annually.

  16. August 19th, 2014 at 19:12 | #16

    Crocodile, when I said lithium in the world, I should have written lithium reserves, which is an estimate of economically extractable lithium. This is not a set figure and changes with the price of lithium. The total amount of lithium in the world is vastly more than what is required for a billion electric car battery packs.

  17. ZM
    August 19th, 2014 at 19:38 | #17

    I am somewhat dubious of mineral estimations. Mining companies and governments do not currently employ great numbers of exploration geologists to go and do all the researching unless they’re thinking of mining somewhere in the nearish future – so for most of the areas where these estimates are said to be I doubt there has been extensive geological research into the amount of the deposit and how it could best be extracted then the land rehabilitated.

    So if all this exploration geology has not been done – how accurate do you think the estimations can be? If they are not especially accurate I’m not sure we should expect to be able to rely on them…

  18. yuri
    August 19th, 2014 at 19:59 | #18

    @John Quiggin

    I see Hermit has mentioned “hydro storage” en passant but you, having already got into relevant calculations are the obvious person to pose my question to.

    I have tried it on a sceptical friend who doesn’t like wind farms (admittedly capable of blighting great landscapes with consequent capital loss by damage to money values) but he has failed me. So, over to you….

    Why would it not pay to use wind power to raise water to storage which could be used for peak hour hydro electricity production?

    Another question on which you would qualify as expert witness:

    It is often said that it pays for Australia to move early on the various ways of replacing coal fired electticity generation. Likewise that it will cost more if we delay. Can you please spell out the conditions under which this is not nonsense?

    A further thought for your consideration. When coal, especially brown coal can be bought for no more than what its cost of transport and a few dollars a ton for extraction or loading added to that what will be done with the coal and how much CO2 is likely to be released as a result, especially if it is shipped out of Australia?

    A friend who owns a disused quarry in or near future suburban development speculated recently that he could burn coal to provide hot water to a new housing development…. Then there are the chemists…

  19. August 19th, 2014 at 20:10 | #19

    4 MW of battery storage

    Confusing power units with energy units? I’m not sure I’d trust these numbers.

    If we cost capital and depreciation at 10 per cent, assume 1600 hours of full output per year and, ignoring operating costs, the cost of electricity is 25c/KwH.

    Do we know the expected lifetime of the batteries if they operate on a full daily cycle? I’d be suprised is they lasted longer than a year. If you have to spend hundreds of thousands of dollars every year or so to replace the batteries, your numbers will change quite significantly.

  20. Ben
    August 19th, 2014 at 20:32 | #20

    I’ve seen cycle life figures of 3,000 cycles for lithium iron phosphate batteries (so, ~8 years if cycled daily).

  21. Ikonoclast
    August 19th, 2014 at 21:28 | #21


    I am also dubious about most (but not all) mineral resource estimates. As a rule of thumb, I think of them in 3 simple categories. (“Peak” means peak production not practical exhaustion.)

    (A) Known to have peaked (Eg. Conventional Oil, Uranium)
    (B) Due to peak within 25 years (Eg. Coal*)
    (C) Cannot yet estimate a peak (Eg. Lithium).

    Where a peak cannot be estimated it might be due to uncertainty about reserves, uncertainty about future requirements due to technological progress or uncertainty about future historical events. Where a possible resource peak is likely to be more than 25 years ahead it is difficult to extrapolate anything. Too many things can change. So I am not going to worry my ugly big head about lithium. There are far too many clear and present worries to be concerned about. For now, I am going to keep hoping the electrical economy will save us or at least some of us.

    Note* : “…the date of peak annual energetic extraction from coal will likely come earlier than the date of peak in quantity of coal (tons per year) extracted as the most energy-dense types of coal have been mined most extensively.” – Wikpedia paraphrasing Richard Heinberg.

  22. rog
    August 19th, 2014 at 21:33 | #22

    @Ben There are a few quoting 2,000 cycles then reducing to 80% capacity with a full warranty of 3 years. This can give an effective 3-5,000 cycles over 10 years.

    For marine applications LiFePo4 batteries coupled with a combination of wind/solar/fuel cell generators are revolutionary.

  23. Peter T
    August 19th, 2014 at 21:43 | #23

    John’s 10% depreciation is a tad optimistic – Li batteries have an average life around 8 years and lead-acid 10 with careful maintenance. But I agree that we can go carbon-neutral with mostly minor inconvenience if we put our minds to it. the problem is, as always, more political than technological.

  24. August 19th, 2014 at 23:01 | #24

    John, I don’t think Vermont has a winter peak. They have a demand management program to reduce summer peak demand. Almost all of the United States has a summer peak. Some states are close, but I think Alaska may be the only state that has a winter peak. And much of the population of Canada also lives in places with summer peaks. However, in the US and Canada, unlike here, they don’t use much electricity for heating, so it’s not as strange as it may sound.

  25. August 19th, 2014 at 23:04 | #25

    Ronald, don’t they use oil for heating? If so, there will be a winter peak once the oil is phased out, surely?

  26. rog
    August 19th, 2014 at 23:18 | #26

    About half of the US use natural gas for heating


  27. August 19th, 2014 at 23:43 | #27

    Faust, oil for heating has mostly been phased out in the US because of its expense. Looking at the link Rog kindly provided I am surprised to how much of that oil has been replaced by electricity, but the largest single source of heating is natural gas. I presume that by electricity they generally mean heat pumps, and they are pretty efficient, so as America moves away from natural gas and the remaining oil use, and building energy efficiency improves, we may not see a change to a winter peak, although perhaps some of the states that are close may flip over. However, average temperatures are unfortunately a moving target, and as in Australia, the United States is warming up, reducing the need for winter heating:


  28. O6
    August 20th, 2014 at 00:29 | #28

    Gel-filled lead acid batteries have been around for 15 years. Zero maintenance. (I think it’s CSIRO technology but of course the batteries are not made in Australia.) We have them in our PV set-up and they’re in their 12th year, still delivering as specified every time we get a power outage, which is several times a year in the Adelaide suburbs. That’s not a full daily discharge cycle, of course, but it illustrates how battery worries need nore real evidence to back them up.

  29. James Wimberley
    August 20th, 2014 at 01:10 | #29

    “Pumped hydro storage is another that probably won’t scale up.” How come the Japanese have 25GW of it? Built, incidentally, as a reserve for their nuclear plants. Even think-small Britain has the 1.7GW Dinorwig plant in Wales, which is designed to be able to reboot the entire national grid after a catastrophic failure.

  30. James Wimberley
    August 20th, 2014 at 01:14 | #30

    “A further thought for your consideration. When coal, especially brown coal can be bought for no more than what its cost of transport and a few dollars a ton for extraction or loading added to that what will be done with the coal and how much CO2 is likely to be released as a result, especially if it is shipped out of Australia?”

    Can’t find the thought.

  31. jrkrideau
    August 20th, 2014 at 05:46 | #31

    Something not all that widely considered for energy storage although I do see some google hits is the flywheel. I can remember waay back in the 1970s some discussion about using flywheels to power buses in Switzerland but the composites technology (IIRC) was not good enough to prevent the occasional flywheel splintering and taking out the bus and a lot of bystanders so it was never used.

    CBC recently had a small piece about flywheel storage http://www.cbc.ca/news/business/nrstor-to-store-ontario-electricity-using-new-technology-1.2720669 but no costing. However it looked like most of the gizmo was metal which might be a plus compared to battery power since recycling sounds easier but since I know -0 about the topic …. I have no idea about costs but if someone is putting what appears to be quite a bit of money into a prototype the costs may not look that bad

    An interesting approach but for something more than individual homes.
    As Ronald Brak points out many parts of inhabited Canada are likely to have peak electricity use in the summer as many/most urban detached and semi-detactched homes will heat with natural gas, oil is competitive in rural areas and some large organizations will have steam heat (usually

  32. Ikonoclast
    August 20th, 2014 at 06:12 | #32

    Flywheel energy storage has a number of specialised applications for short-term bursts of high energy and for load levelling in electric grids. Flywheels are not good long term stores of large amounts of energy.


  33. August 20th, 2014 at 08:13 | #33

    James, japan has a lot of mountains and rivers very close to urban centers, and basically none of those rivers are natural anymore. It’s a geographical and environmental solution that can’t be easily repeated in oz, I suspect.

  34. James Wimberley
    August 20th, 2014 at 08:23 | #34

    Hermit’s question was whether pumped storage would scale up. It does. It may be unusually expensive in Australia, the driest continent.

  35. August 20th, 2014 at 09:42 | #35

    Yuri, you asked John some questions and I’ll chime in on them.

    It is much easier and cheaper to use use wind turbines to generate electricity and then use that electricity to pump water than to use wind to directly pump water mechanically. This is because wind turbines are very efficient at turning wind energy into electricity and electric pumps are very efficient at using that electricity to move water. The pipes and parts needed for direct pumping are not cheap and the windmills would need to be located exactly where the water is being pumped instead of where it is convenient.

    Coal power is more expensive than renewable power in Australia, so on the face of it any new coal capacity is a money losing proposition compared to the alternatives. Also, coal has extremely high externalities that are not factored into its cost. These externalities which include both damage to health and the environment make coal our most expensive form of electricity generation.

    No one wants our brown coal, Yuri. It is worthless. It doesn’t even make economic sense to transport brown coal from deposits in Victoria to the brown coal Northern Power Station in South Australia. (And it doesn’t make economic sense to transport black coal there either.) Brown coal is much more bulky than black coal and has to be handled carefully as it can on occasion auto ignite. Its bulk makes it uneconomical to transport any significant distance. With the world moving away from black coal there will never be any demand for Australian brown coal to be exported. As for building new coal plants next to brown coal deposits so it doesn’t need to be transported, renewables are cheaper than new coal capacity. So we will never build another coal power plant in Australia whether it burns black or brown coal, not now and certainly not when we start pricing carbon again or otherwise restrict emissions.

    As for using coal for heating in Australia, the reasons why we stopped doing that are still in place and its prospects have only grown worse.

  36. August 20th, 2014 at 09:43 | #36

    @James Wimberley

    Here’s an intriguing idea for hydraulic storage, which seems eminently scalable to me.

  37. August 20th, 2014 at 10:07 | #37

    Australia has over two gigawatts of pumped storage capacity. It consists of the Tumat Hydroelectric Power Station 3 which is part of the Snowy Mountains Hydroelectric scheme and was upgraded in 2011, so its capacity is now about 1.7 gigawatts. And there is the Wivenhoe Power Station in Queensland. Its capacity is half a gigawatt and can provide power for 10 hours and it takes about 14 hours to fill the damn again. While Australia is not a great location for hydropower, and all the good sites have been taken, its low population density means it gets a significant amount of electricity from it. Recently it supplied about 8% of grid electricity, but only because Tony Abbott caused water supplies to be run down by promising to remove our carbon price. But apart from the rundown in water supplies, hydropower has been increasing as a percentage of generation as demand for grid electricity has dropped over 8% from its peak. With solar power reducing the need for hydroelectricity during the day, hydropower has seen more use in the evening which has helped to keep electricity prices down after the sun sets.

  38. Will Boisvert
    August 20th, 2014 at 10:38 | #38


    As has been mentioned above, the specs on the project call for 2.5 MW DC power but only 2MW AC power supplied to the grid. The $10 million capital cost of the project should therefore probably be pegged at $5 million per MW grid output. At your 10 percent discounting and 18 percent capacity factor (optimistic for Vermont, especially considering round-trip losses for battery storage) and a 35-year project lifetime, the NREL calculator gives an LCOE of 33 cents per KWh, not counting O and M costs. That’s really expensive—twice the current Hinkley C strike price for a drastically less reliable power plant.

    As has also been mentioned above, the storage capacity of the project, 3.4 MWh, is pretty trivial. The batteries can smooth output on a day with passing clouds and that helps with grid stability, which is the project’s main selling point according to your source. But they will run dry after 51 minutes at full power (4 MW); the plant will be dead as a doorknob by 7 pm, 7:42 pm if we assume they output the plant’s 2 MW nameplate output. But that’s assuming the batteries were fully charged at 6 pm, which they will likely not be if they have been drained for smoothing output during the day, and definitely will not be on an overcast day. Since most days in Vermont are partly cloudy to overcast, the plant will make little contribution to meeting nighttime demand.

    The project would make somewhat more sense in the Australian desert, but not as much as one could wish, especially if we envision scaling it. That’s again because of the limited storage capacity, which will make it hard for the system to absorb all the surplus electricity during times of overproduction. On a cloudless summer day the batteries can be fully charged during the one and a half hour period centered on solar noon, assuming full 2.5 MW DC output; i.e., they could fill up pretty fast. That’s not a problem at low penetrations, but at high penetrations with redundant solar capacity on the grid, much of the solar overproduction will be spilled after the batteries fill up. A solar-dominated grid that could, at high penetrations, store all the solar overproduction for later use during deficits would likely need more MWh storage per MW generation than the Stafford Hill project has, and be even more expensive. Battery storage is very costly and you need a lot of it to cope with the extremes of solar overproduction and deficit.

    So Stafford Hill doesn’t strike me as a great advance. Adding the battery storage probably doubled the cost of the project in exchange for negligible enhancements in performance and reliability. I think battery storage has a long way to go before it’s cost-effective.

  39. Tim Macknay
    August 20th, 2014 at 11:36 | #39

    Some recent work at the ANU suggests there is considerable potential for smaller scale pumped hydro storage in Australia using artifical reservoirs.

  40. August 20th, 2014 at 13:34 | #40

    Tim, more pimped storage could be built in Australia but it doesn’t look like anyone is going to be able to make money doing that at the moment. Wholesale electricity prices are very low and there is an awful lot of generating capacity either sitting in mothballs or operating at well below capacity, with the amount increasing all the time as demand for grid electricity drops. And the situation still wouldn’t be favorable even if we hadn’t tragically lost our carbon price and effectively signed the death warrants of an unknown number of people throughout the world. And what will really blow the case for pumped hydro right out of the water, or maybe right into the water since pumped hydro is always built right next to a dam, is the spread of on grid home and business energy storage. Now with Australia’s retail electricity prices and low to non-existent solar feed-in tariffs, batteries are already cost effective, but they need to be put in a box with the proper electronics required to control the system and that box needs to be installed at a low price. Currently it’s looking like the cheapest place to shove the batteries and electronics for household energy storage is in a solar inverter. Now of course it doesn’t have to go in a solar inverter, but this does look like where it might take off. Currently the market for on grid energy storage is very small in Australia, as most people with solar are still on the old higher feed-in tariffs. But the market will rapidly expand in 2016 both due to an increasing number of people with new low to no feed-in tariff and as a large number of people in New South Wales come off their old feed-in tariff. In Germany and Japan there has been work on home energy storage for a while now with a variety of products being produced, and with Germany being of more direct help since they have similar current. Unfortunately there may be hesitation about breaking into the Australian market thanks to our government’s obvious determination to damage solar energy as much as possible as soon as possible. Deciding to wait until there is intelligence repair in Australia could be business choice that results. But anyway, it only takes a small amount of home energy storage to start reducing peak wholesale electricity prices, further damaging the profitability of pumped storage.

    What we may see is an improvement in the power output of existing pumped storage. Thanks to solar and also wind, periods of peak demand are now much shorter than they used to be and increasing the power output of exisiting pumped storage may make economic sense. For example if the turbines were doubled at Wivenhoe it could produce a gigawatt of electricity over 5 hours instead of half a gigawatt over 10. This means it could be charged with cheap solar electricity during the day and used to help meet demand during the late afternoon and evening peak, and then it could be charged with cheap windpower in the early hours of the morning and used to meet demand during the morning peak.

  41. Ratee
    August 20th, 2014 at 13:34 | #41

    Qld seems determined to stop future solar if this is true

  42. Ratee
  43. Tim Macknay
    August 20th, 2014 at 13:55 | #43

    @Ronald Brak
    Ronald, my point in linking to that article was that it appears that there is scope for substantially expanding pumped storage in Australia, were it required. Obviously in current conditions, where even the continuation of the RET is in question, nobody is going to be building any.

    Personally I’m dubious about the claim that PV with battery storage is cost effective in Australia right now (except in remote locaitons), although I admit I’m unfamiliar with the new developments in Japan and Germany you speak of. Here’s hoping, though.

    Yes, the Queensland government does appear determined to kill grid-connected solar. Based on the information in the article (which is probably incomplete and simplied, admittedly) it seems unlikely that the utility’s claim that the new fee is a “service charge” could survive a legal challenge. More likely it would be ruled an illegal penalty, unless the utility could make a realistic case that the $500 per day was an accurate estimate of the costs of providing the service to grid-connected business customers. It will be interesting to see how that situation develops.

  44. Jim
    August 20th, 2014 at 14:37 | #44

    @desipis I did my 4th year dissertation on solar /diesel hybrid systems in remote communities almost 20 years ago. For remote systems, solar hybrid systems already looked good back then. I think it will be the remote locations and supply augmentations that will be the best bets for alternative energy for the foreseeable future.

    Battery life (effectively large truck batteries) was a big problem 20 years ago, but they were still lasting 18 moths to 2 years if I remember correctly. And that was in extremely demanding (hot) circumstances where batteries decline faster.

  45. August 20th, 2014 at 15:46 | #45


    The huge daily tariff seems to be the height of vindictiveness.

  46. August 20th, 2014 at 17:23 | #46

    Tim, if one is paying about 30 cents a kilowatt-hour for grid electricity and getting zero cents for surplus solar electricity supplied to the grid, which is the situation some people now find themselves in, then it’s pretty clear that will cover the cost of batteries. It is the control module which seems to be excessively overpriced and without adequate warranty at the moment, but that looks like it’s coming good.

  47. Fran Barlow
    August 20th, 2014 at 18:42 | #47


    A solar-dominated grid that could, at high penetrations, store all the solar overproduction for later use during deficits would likely need more MWh storage per MW generation than the Stafford Hill project has, and be even more expensive. Battery storage is very costly and you need a lot of it to cope with the extremes of solar overproduction and deficit.

    I’m not sure that’s as big a problem as you suggest here. If the growth of both wind and solar continues, the risks will be on the spill side. It’s hard to imagine that solar PV won’t keep growing here, and wind too should continue to grow as well. That’s a lot of excess power to store and if the operator of the storage has most of the time between 16.00 and 22.00 and between 5.00 and 10.00 (in addition to other times when some supply anomaly occurs) to sell it above the purchase price the business should be viable.

    Moreover, it’s conceivable that in the transition period to decarbonisation, fossil HC generators may want the flexibility to sell their surpluses to the storage operator while they are ramping down. Given that we have excess capacity, that seems likely. Equally, the arrival of grid scale storage would probably put the final nail in the coffin of FHC since the arguments against intermittent generation would collapse into much narrower questions of cost.

  48. August 20th, 2014 at 18:49 | #48

    Ben :
    I’ve seen cycle life figures of 3,000 cycles for lithium iron phosphate batteries (so, ~8 years if cycled daily).

    Except for the price quoted I would expect the majority of the “lithium ion and lead acid” batteries to be on the lead acid side. I would estimate that having 4MWh of lithium ion batteries would drive the cost up by $3-4 million, which again is enough to skew the economics unfavourably against a pure solar+storage option when compared to other options.

    Jim :
    @desipis I did my 4th year dissertation on solar /diesel hybrid systems in remote communities almost 20 years ago. For remote systems, solar hybrid systems already looked good back then. I think it will be the remote locations and supply augmentations that will be the best bets for alternative energy for the foreseeable future.

    I agree it’s a viable option for remote locations where you don’t have the same scales of economy that are available to large coal or gas power plants connected to the grid.

  49. Salient Green
    August 20th, 2014 at 19:32 | #49

    If I were in need of home storage I would go for Nickel-Iron batteries. There have been major advances in recent years and while initially expensive, they have a very long life with minimal maintenance. I think for grid scale storage Flow batteries are looking promising.
    One must not overlook the capacity to reduce energy usage at peak times. My own home has a 1.5kw pv system with no double glazing, the minimum insulation standards set 25yrs ago, no attention to stopping draughts, a freezer which uses 4kw/hrs per day and an air conditioner which is only COP 2.
    It would be silly of me to raise the system capacity further before attending to the passive inefficiencies and waste.
    It really is a shame that double glazing is so expensive ATM. It’s a pity that energy efficiency measures aren’t as sexy as some of the high-tech battery research.
    One could add ‘changing consumer behaviour’ to energy efficiency measures.

  50. Watkin Tench
    August 20th, 2014 at 19:55 | #50

    You raise an important point, Salient Green.

    I’ve had a look at energy saving options for my own oversized poorly built house but most of them are very expensive (at least 25-30 grand) but I have no way of accurately calculating whether they are worth it.

    If you don’t have sliding windows (unfortunately I do), there are cheap double glaze retrofit options availavble.

    Ultimately building standards need to be raised so that homes are properly insulated.

  51. August 21st, 2014 at 00:09 | #51

    Looking at the SA government site I see that in Adelaide people apparently spend about 38% of their household electricity on heating and cooling. I cool my place in Adelaide in the summer, but I never heat it. This is Australia. It’s hot. What do you need to heat things for? The only time I heat my place is when my blind friend comes over and she needs warm fingers to feel things. Anyway, heating and cooling come to about 1,500 kilowatt-hours a year for the average Adelaide household. So let’s say double glazing works wonderfully and cuts the need for heating and cooling in half. That would save 750 kilowatt-hours a year. That’s about as much electricity as is produced by half a kilowatt of rooftop solar. And rooftop solar is now being installed in Australia for about $2 a watt before subsidy so half a kilowatt would cost about $1,000. As double glazing in a brand new home is supposed to increase costs by around $4,000 over single glazing, installing solar, or rather a larger rooftop solar system than one would otherwise, would clearly reduce far more emissions per dollar than double glazing and would give a higher return on the investment.

  52. Fran Barlow
    August 21st, 2014 at 00:20 | #52

    I should add that beyond what has been said above, personally, I don’t care if power costs a little more or even a lot more, provided the power is clean. If that’s what it costs and I need it, then as far as I’m concerned, we should just pay the price, and if needs be, curtail our expenditure somewhere else.

    There’s no doubt that I could save a lot of money if I sourced 80% of my protein and carbohydrates from bins behind restaurants and supermarkets. I choose not to because I put a value on hygiene and quality nutrient. I expect that food that meets food safety standards will cost more. I also pay extra to eat free range eggs and organic and grow veges in the back yard even though these also cost more.

    Energy supply is only one line item in the budget and all of us who want to reduce our footprint should be prepared to pay what it takes to have low footprint energy. Yes we should seek good value for money but you don’t have to be a chemical engineer to figure out why harvesting energy on the fly is going to be more expensive than raiding the capital stores of the carboniferous era. Expecting the wind and insolation collected today to compete with the results of millions of years of insolation and transformation under pressure and heat is naive — especially when no cost is put on the resultant pollution. As always, you get the service you pay for. If you’re relaxed about eating the future and polluting the world, then FHC cost competitiveness is a good marker. If you want not to debauch the ecosystem, that filth costs less is not relevant.

    I say we pay what it costs, go without what we must and look after those not as well off as we are with compensatory social support. Why wait? Just get on with it.

  53. jrkrideau
    August 21st, 2014 at 03:08 | #53

    Re flywheels
    Thanks for the link. Actually, my impression was that short-term storage (albeit 2-3 days) was the idea there, with the purpose of the flywheel being to even out load demands but I may be reading more into the article than is actually there.

  54. jrkrideau
    August 21st, 2014 at 03:15 | #54

    @Fran Barlow

    There’s no doubt that I could save a lot of money if I sourced 80% of my protein and carbohydrates from bins behind restaurants and supermarkets. I choose not to because I put a value on hygiene and quality nutrient.

    Tsk, tsk, See ww.amazon.com/dp/B005DI9PH8 for a veritable paen for dumpster-diving (not sure of the Australian term).

  55. Ikonoclast
    August 21st, 2014 at 07:49 | #55


    My impression from another article I read is that sophisticated flywheels (housed in a near vacuum and mounted on near frictionless permenant magnetic bearings) can be used for load-levelling on a grid. This load levelling occurs over time spans of minutes, seconds and even fractions of a second. These flywheels are connected to electric motor/generators amd can absorb or deliver power at need, reacting in fractions of a second. Another use is for UPS supplies, where the flywheel might deliver power for up to several minutes until a diesel generator is started and kicks in. Another use, which you no doubt read about, is to provide a huge short term energy supply for laser experiments in labs.

    I am not aware of flywheel systems that can store power for days or even hours of grid use when baseload is down. I don’t think flywheel systems are suitable for that. However, it always possible that windfarms could be combined with flywheel systems (one per wind generator) and this along with geographical distribution could greatly smooth windfarm contribution to the grid.

  56. Ikonoclast
    August 21st, 2014 at 07:52 | #56

    Footnote: Flywheels to power vehicles (like the Swiss bus experiment) suffer from the effects gyroscopic forces when the vehicle turns. The flywheel might have to be on gimbals. I can’t see that ever being a go-er now anyway. Batteries and power lines for electrified transport work much better.

  57. Collin Street
    August 21st, 2014 at 08:23 | #57
  58. Salient Green
    August 21st, 2014 at 08:49 | #58

    @Ronald Brak
    As usual Ronald you make excellent points. Double glazing with glass is out of the question for us anyway but for using those extra solar panels while they are generating power and retaining the heat or cooling longer into the evening, I plan to install acrylic sheets to the inside of the living areas using magnetic strips. This I can do for around $1,500 as opposed to over $20,000 for a double glass retrofit.

  59. Troy Prideaux
    August 21st, 2014 at 08:58 | #59

    Watkin Tench :
    You raise an important point, Salient Green.
    I’ve had a look at energy saving options for my own oversized poorly built house but most of them are very expensive (at least 25-30 grand) but I have no way of accurately calculating whether they are worth it.
    If you don’t have sliding windows (unfortunately I do), there are cheap double glaze retrofit options availavble.
    Ultimately building standards need to be raised so that homes are properly insulated.

    Indeed and they have been to some degree. My house was built with loads of halogen downlights – all the high use areas have them. I’ve held off replacing them because (1) they look good and (2) the energy efficient replacements were never bright enough to substitute as a direct replacement… Well until now :) Just tried some I sourced on EBay and yippy!

  60. derrida derider
    August 21st, 2014 at 11:26 | #60

    @Ronald Brak

    This is Australia. It’s hot. What do you need to heat things for?

    Obviously you have never lived in Canberra. Or Hobart. Or indeed anywhere a long way from the coast but not in the tropics.

    But of course heating is nowhere the big electricity user. Peaks for cooling are almost everywhere – even in most of Canada – more important.

  61. August 21st, 2014 at 11:47 | #61

    Oh, I did the Canberra thing. One morning I woke up and discovered someone had spread salt or something all over the ground.

  62. Ratee
    August 21st, 2014 at 17:48 | #62

    @Watkin Tench
    All good points on the economics of reducing the need for energy use through retro fitting. But discuss the building standards with any “solar architect” for want of a better description – and they will tell you the standards encourage the building of a house sized esky. Perfect for keeping the energy costs of heating and cooling to a minimum. Not targeted at removing, as much as possible, the need for heating and cooling through design. You can get them VERY agitated about the type of design that the “rules” promote!!

  63. John Quiggin
    August 21st, 2014 at 18:39 | #63

    @Will Boisvert

    Even if you and Hermit are right on the relative costs of nuclear and renewables, Will, what’s the point of banging this drum any longer? There are only a handful of new nuclear plants on the way anywhere in the developed world, and no prospect of any new large scale program starting for a decade or more. Even if that happened, we’d be looking well after 2030 before there was any significant contribution to electricity supply.

    If you want to go to China and push nuclear there, feel free. But in the developed world context, bashing renewables as both of you do continuously is as bad as outright denialism. There is, literally, no alternative.

  64. iain
    August 21st, 2014 at 18:55 | #64

    1 million rooftops with PVs, and counting…and what’s the EROEI? No one is counting closely (certainly not on this forum anyway) — but “very pitiful” is the only clear, likely, answer.

  65. Tim Macknay
    August 21st, 2014 at 19:02 | #65

    I take it from your precise estimate that you’re not exactly counting the EROEI closely yourself.

    Given that the vast majority of PV in Australia has been installed in the last 3 years, based on the range of figures in most studies done on PV solar in the last few years, the EROEI figues for rooftop PV in Australia would likely range from (using your rating system) “good enough” in the southern mainland capitals to “pretty good” in northern Australia.

  66. August 21st, 2014 at 21:11 | #66

    Iain, a watt of solar PV now costs 50 cents. In a mediocre installation in Australia it will produce over 40 kilowatt-hours of electricity in its lifetime. The Czochralski process for silicon ingots uses electricity due to the need to precisely control the temperature gradient. So even if the only cost of making solar PV in China was electricity and nothing else, that would give a return of eight times as much electricity as was put in. Now if you want to seriously make the argument that China is spending more than 50 cents worth of electricity on making something that they sell to us for 50 cents, go ahead and make that arguement. Let’s see what you’ve got.

  67. Will Boisvert
    August 22nd, 2014 at 02:09 | #67

    @ John Quiggin 13,

    Even leaving aside the comparison with nuclear, battery storage is still pretty dubious from a standpoint of comparative renewables policy. As the Stafford Hill example shows, batteries provide very little storage and reliability at very high costs. (Pumped hydro is much more economical, but geographically limited.) Utility-scale electricity storage in any form is so difficult and expensive that some academic “all-renewables” modeling studies are concluding it’s better to ignore it and just pile up the wind and solar and then rely on hydro, geo, biomass and natural gas for backup and stability. (Unfortunately, those solutions also have major drawbacks.) If a renewables future does come to pass, utility-scale battery storage like Stafford Hill’s will probably play no significant role—and certainly not by 2030.

    As for nuclear—yes, it faces strong headwinds in the West, but you might be too pessimistic about its prospects. 7 reactors building, 6 more planned in Finland and Britain, many more if you count South Korea and United Arab Emirates as “developed.” Britain’s program is quite significant: the new nuclear they are planning, due online before 2030, should provide at least 20 percent of their electricity and perhaps much more. The US EPA’s new carbon emissions rules have provoked new interest in nuclear with possible announcements this year. The politics of nuclear are fairly positive in Britain, America, Canada and Eastern Europe, but costs must come down before a major buildout will happen; there’s hope for that as the global industry and supply chain gains economies of series. (If China can start exporting nuclear parts to the West the way it exports solar panels, that alone could substantially reduce costs.) There’s also the crucial issue of preserving the West’s current reactor fleet. The US NRC is gearing up to start relicensing Gen II reactors out to 80-year life spans; if that can be done throughout the West it will make an enormous contribution to low-carbon generation in the coming decades. So I feel that discussions of nuclear energy are still relevant to decarbonization policy in the developed world.

    I think renewables enthusiasts often let wishful thinking get in the way of sober analysis of costs, logistics and feasibility. That can’t be a good basis for policy or for advancing the debate about it, which is why I go on banging the drum.

  68. John Quiggin
    August 22nd, 2014 at 04:05 | #68

    @Will Boisvert

    I’ve got no problem with keeping the existing nuclear fleet, or completing the 13 projects you mention. But even allowing for a 4:1 availability factor, the new projects would add about the same as one year’s developed country renewables (around 25 GW each of wind and solar PV). And of course, we need several times that rate if we are going to decarbonize electricity and power electric vehicles. So, to repeat, nuclear in developed countries is not going to be a significant part of the solution.

    Renewables (and efficiency) are the only solutions on offer. If you think current cost estimates are too low, you should be trying to do something positive about it, for example looking at better pricing structures, or ways to promote energy efficiency, not banging on about nuclear.

  69. John Quiggin
    August 22nd, 2014 at 11:10 | #69

    @Ronald Brak

    We can get a bit more precision than this. The polysilicon content of a cell is about 10g/w, so at $20/kg, that’s about 20c/w. As you say, that’s an upper bound if you suppose electricity is the only cost.

    Going a step further, if the price paid by poly producers is 10c/kwh (a pretty good price even for industrial users), the energy in is no more than 2Kwh, so the payback time is about a year, and the EROEI is the life of the panel in years, say 15-20.

  70. August 22nd, 2014 at 12:02 | #70

    @Will Boisvert

    Re your last paragraph. If it’s “sober analysis of costs, logistics and feasibility” that you’re after, then lots of posters and commenters on Clean Technica can do that for you.

    For example, Vogtle nuclear plant should come in with an LCOE of US11c/kwh. New PPAs for wind farms are being signed at US2.5c/kwh. That’s sober.

  71. August 22nd, 2014 at 12:12 | #71

    Thanks for that, John. And looking it up I see that by the end of this year it the average silicon per watt is expected to have fallen to five grams. And it’s predicted that 49 gigawatts of solar PV will be produced this year. That’s enough to produce about three times the electricity the three Chinese reactors brought online this year will. And of course PV production capacity is still expanding.

  72. Will Boisvert
    August 22nd, 2014 at 12:22 | #72

    @John Quiggin 18,

    “If you think current cost estimates are too low, [high?] you should be trying to do something positive about it, for example looking at better pricing structures.”

    I don’t think “pricing structures” can really solve the problem of solar economics, even with storage.

    The basic problem is low capacity factors and chaotic surge-and-slump production, which make it impossible to size intermittent supply to fit demand in an economical way. You have to vastly overbuild solar megawatts to get high grid penetration. But that means that in the brief periods when solar produces, it vastly overproduces and drives down the price of solar electricity, making recovery of costs impossible—solar puts itself out of business before it bankrupts fossil generators. And since solar can’t produce under night or cloud, you have to have other fleets of generators to pick up the slack; not only wind turbines but dispatchable plants for when wind and solar both fail. All of that just adds to the glut while raising real costs. So the hallmark of an intermittents grid is huge overcapacity and ballooning real costs, coupled with low nominal prices that make cost recovery from the market impossible. That’s precisely the dynamic in Germany, for example.

    Can storage rescue the situation? I don’t think so. Solar produces in the daytime when electricity demand is high, so regularly generating a surplus to store, over immediate demand, would require even more overbuild and glut—even higher costs with even lower prices. Will storage facilities that buy the electricity restore the finances of solar? No. Remember, they are storing that electricity to sell at night, when demand falls along with prices. They will be competing in that market with overbuilt wind and dispatchible generators which will sell at very low prices; coal, which will bound the price, can sell at 4-5 cents per kwh. So even if batteries store surplus solar electricity for free in the daytime, the highest buy-sell spread they can expect to see is maybe 5 cents per kwh. Obviously that’s nowhere near enough of a spread to sustain the solar-plus-storage electricity supply chain, which, to judge by Stafford Hills, costs 25-33 cents per kwh LCOE, as we’ve seen above. Pumped hydro would be cheaper but not all that cheaper, and it’s in limited supply.

    The only “pricing structure” I can think of that will allow solar to weather these grotesque market distortions is plain old state subsidy and preferment. That’s okay by me; I’m a social democrat and I’m comfortable with state subsidies. But if we go that route, I think it’s proper to ask which low-carbon technologies need the least subsidy when we scale them to run the whole grid.

    As it happens, nuclear comports very well with storage, especially pumped hydro. It can reliably store a surplus at night when demand and price are low, then sell the stored power into daytime peak demand when prices are high. The stored electricity is still expensive, but cheaper than power from gas peakers. So the reactor can run flat out in baseload, the PH makes a profit buying low at night and selling high in the daytime, and the grid meets peak demand at a lower cost and without building expensive new generating capacity. That’s the way a rational electricity storage system should work. As was mentioned above, many pumped hydro stations are built to complement nuclear plants—and that makes sense.

  73. Will Boisvert
    August 22nd, 2014 at 13:17 | #73

    @ David Jago,

    Do you happen to have a ref on wind PPA at 2.5 cents per kwh? Is that subsidized or unsubsidized? Are there state as well as federal subsidies? Does that price include any RECs? Is it typical of prices in places with bad wind resources, like Georgia, where the Vogtle reactors are going up? Does the PPA include the costs of integrating the wind into the grid, extra transmission costs and costs of backing up the wind farm when the wind stops? Will that backup power need to burn fossil fuels, and if so, how does that affect the climate? How might the capacity factor of wind turbines change at high penetrations when much wind generation has to be spilled, and how would that effect the LCOE? Does your Vogtle price factor in the big drop in cost of Vogtle power during the 30 to 50 years of service after the capital costs, which are most of the LCOE, are paid off? Vogtle’s reactors will have a capacity factor of 90 percent and can run a year and a half nonstop at nameplate power; the average US wind farm has a capacity factor of 31 percent, will almost always be running at less than nameplate, and will likely not be running at all for days on end many times each year. Do you think a nuclear plant like Vogtle has advantages in reliability that might justify a price premium over a wind farm? Can we generate all the low-carbon electricity we need just with wind? How about with nuclear? If we can’t do it all with wind, what will the total system costs be for all the other components we have to add in to assist wind? Are those costs fully represented in wind’s LCOE figures?

    John’s post and my comment was about the Stafford Hill solar-with-storage project, costing 25 cents per kwh. Do you feel that Vogtle electricity at 11 cents per kwh is more economical than Stafford Hill, and if so, do you think it should be built in preference to Stafford Hill?

    @ Ronald Brak,

    Four Chinese reactors so far this year–Fuqing 1 went on line on Wednesday.

  74. August 22nd, 2014 at 17:00 | #74

    @Will Boisvert

    I can’t find the actual article which I was remembering re the wind PPA, which is annoying.

    However, a quick search finds a couple of hits. This first one references in turn the US Department of Energy:


  75. August 22nd, 2014 at 17:18 | #75

    @Will Boisvert

    Ha! So my first reference is in moderation. The second wind PPA reference is from a Mike Barnard article on CleanTechnica back in May. You’ll need to look it up.

    The Vogtle LCOE is from Citigroup.

    In any event, nuclear here in Australia is currently a complete non-starter for public opinion and political reasons. Therefore the economics are irrelevant. All the calculations will just return a divide by zero error.

  76. August 23rd, 2014 at 00:23 | #76

    Will, thanks for catching me on the number of Chinese reactors. Boy, is my face red. Now let me help you out in return:

    I just recently paid for rooftop solar in Queensland. It cost under $2 US a watt before subsidy. With a 5% discount rate it will generate electricity for under 10 cents a kilowatt-hour. The cost of grid electricity in that area is 33 cents a kilowatt-hour which is not a great deal higher than the Queensland average. There was nothing particularly special about the deal. Other people are getting solar installed for less.

    The cost of rooftop solar is continuing to decline.

    In Australia neither grid generators nor distributors currently have a property right to the contents of my trouser pockets.

    I’ll let you arrive at what this obviously means for grid generation yourself.

  77. Will Boisvert
    August 23rd, 2014 at 03:35 | #77

    @ Dave Rajo,

    Thanks for the reference. The ultimate source is the DOE’s Wind Technologies Market Report for 2013, which does indeed report an average Power Purchase Agreement of 2.5 cents per kwh for all US wind farms coming on line in 2013. But once you read the fine print you find that price is not representative of the actual costs of wind power.

    For one thing, the PPAs are reduced because of government subsidies. All these projects would have gotten either the Federal Production Tax Credit of 2.3 cents per kwh, or the Federal Investment Tax Credit of 30 percent of capital costs, which is generally reckoned to be even more lucrative on a per kwh basis. The report also mentions additional Federal subsidies like accelerated depreciation, and state subsidies, none of which are accounted for in the PPAs. So to get closer to the true cost of the wind projects you would have to add all these subsidies back into the PPAs. DOE also notes that the PPAs don’t reflect the costs of extra transmission capacity for wind, of integrating wind into the grid, backup, etc.

    Also, the sample of projects DOE looked at was extremely skewed, by its own admission, almost all of them being in Great Plains locations where construction costs are lowest and capacity factors highest. It’s not DOE’s fault: it just so happens that that’s where virtually all the wind farms were built in 2013. The reason is that wind installations collapsed almost completely in 2013, down from 13 gigawatts in 2012 to just 1 GW in 2013. Why the collapse? It’s because the Federal tax credits expired at the end of 2012; developers didn’t want to build wind farms in 2013 because they would be unprofitable without the subsidies. As a result, only the handful of projects with the very best locations, performance, financials, RPS preferments and state subsidies went ahead in 2013. So the 2013 crop of PPAs is a very unrepresentative sample of wind farm costs. As it happens, the Federal tax credits were reinstated for one year in January 2013, so all the 2013 projects got them anyway, enabling them to sign dirt-cheap PPAs. (This episode casts doubt on starry-eyed claims that wind power can compete in the market-place on its own; it shows that without government subsidies the industry would almost completely dry up.)

    You’re right that Vogtle nuclear electricity will probably cost 10-11 cents per kwh during the 30 years or so that it’s paying off its mortgage. After that, for the remaining 30-50 years of its service life the cost will drop to maybe 3 cents per kwh in O and M. Averaged over the whole service life the cost will be about 6-8 cents per kwh. Vogtle is towards the high end; the VC Summer reactors under construction next door in South Carolina will cost about 25 percent less.

    So yeah, some wind power on the great plains could well be cheaper than some nuclear on a narrow LCOE basis. And if utilities think it serves their needs, no reason they shouldn’t buy it in preference to nuclear. But that comparison isn’t as stark as it looks at first blush, and it isn’t going to hold up in every location, over every time period, and for every purpose that we need power. If we need steady, reliable electricity, which we sure do, then wind alone just isn’t going to do it. (In Texas, for example, wind power in the summer almost perfectly anti-correlates demand, reliably flatlining during afternoon peaks when electricity is most needed.) That means we have to construct a system with extra components that compensate for the unreliability of wind, and then reckon the extra costs of that system.

    One of the components that is talked up by renewables advocates is electricity storage, which is the subject of John’s post. He’s looking at a system designed to make solar more reliable by adding a storage component. But as we’ve seen, the storage component actually provides very little extra reliability while adding outlandishly high costs. Will wind-plus-storage be better and cheaper? Maybe, but it has to be drastically better and cheaper if it’s to be a feasible solution to the problem of unreliability. More likely, any system that manages to make wind power as reliable as, say, nuclear power will also make it dramatically more expensive than nuclear power.

    Which is why it may make a lot of sense for a utility to buy a nuclear plant in preference to a wind farm, even if the wind farm has a lower LCOE. Nuclear provides a much better and more useful quality of power that accommodates a grid with much lower system costs. It could therefore earn its price premium (and generally does).

  78. Will Boisvert
    August 23rd, 2014 at 03:41 | #78

    @ David Jago, 25

    “In any event, nuclear here in Australia is currently a complete non-starter for public opinion and political reasons. Therefore the economics are irrelevant.”

    Well, that doesn’t sound good. I think economic considerations should be central to clean-energy policy. Maybe a vigorous public debate could get people to open their minds.

  79. Will Boisvert
    August 23rd, 2014 at 04:06 | #79

    @ Ronald Brak 26,

    It’s wonderful that you bought solar panels.

    It would be interesting if you could keep us apprised of the details of their performance, maybe over the next year or so. Here are some of the things I would like to know:

    1. How much exactly did you pay for the whole system–panels, inverter, everything, with and without subsidy? Do you have an itemized budget?

    2. Do you have any battery storage? If so, how much, what kind and how much did it cost? Charging and discharging times? Expected battery lifetime and number of cycles?

    3. What are the maintenance costs over a year (actual recorded figures rather than estimates)?

    4. How many kilowatt-hours of electricity does the system produce during the course of a year (actual production figures, not estimates)?

    5. Did your household use all the electricity you generated during the year? Did you export some of it to the grid? How much? Did you get a feed-in tariff and if so, how much in total and at what rate? If you have batteries, how much did you store? Were any of the kwhs spilled? (Again, actual records are more useful than estimates).

    6. Have you gone completely off the grid, literally severed the grid connection so that you are generating all your own electricity?

    7. If you did go completely off grid, do you have a backup generator? What does the generator cost, how many kwhs did you draw from it during the year, and what was the cost of maintenance and fuel for it?

    8. If you have not gone completely off grid, how many kwh of grid power did you use during the year, and what fraction of your total electricity usage is that? How much do you reckon it costs the grid to maintain service to your house? How much does the grid save if you go off-grid? What fraction of those costs do you think you should be charged for grid services?

    (As always, actual data are better than estimates.)

  80. Will Boisvert
    August 23rd, 2014 at 04:08 | #80

    27, David Jago, not David Rajo–deepest apologies!

  81. Hermit
    August 23rd, 2014 at 08:10 | #81

    Some thoughts. If people with PV + batteries in the suburbs disconnected from the grid I would be appalled if they bought a backup petrol generator to cover rainy weeks. It’s a) cheating if the aim is low carbon and b) bloody annoying to those within earshot. I know this from living next to a rural shed sometimes used for parties. IMO batteries have a fair way to go before making sense for suburban PV owners.

    A public opinion poll in SA found 58% support for nuclear. Evidently the opponents have more political leverage since nuclear power remains prohibited via sections of the federal biodiversity and radiation protection acts.

    No disputing electricity from sunny daytime PV will be as cheap as from a new coal fired powers station. Therefore there must be some reason why PV generates ~2% of our electricity while coal generates 64%. Can those percentages be reversed without subsidies? Some say coal is due for a comeback with higher gas prices, a possible El Nino and no carbon penalties.

  82. August 23rd, 2014 at 08:18 | #82

    Will, you asked: What fraction of costs do I think I should be charged for grid services? The answer is less than the 30 cents or so a kilowatt-hour brokerage fee many Queenslanders are currently charged to sell electricity to their neighbour. What should the fee be? It’s not possible to give a precise answer, but it should approximate what it would be if all generators competed on an equal basis with no artifical distinction between rooftop solar and Tarong Power Station.

  83. Ikonoclast
    August 23rd, 2014 at 08:27 | #83

    @Will Boisvert

    Google, “The nuclear renaissance is stone cold dead.” Even oligarchic capitalism is not interested in nuclear power if they can’t get massive subsidies to run it. These are the facts on the ground. Each year, those who keep on derping about nuclear power will look more and more foolish and irrelevant. By all means keep it up, I enjoy the amusement. :)

  84. August 23rd, 2014 at 14:19 | #84

    And the wholesale electricity price at around noon here in South Australia, the state with the most rooftop solar capacity per capita, was half a cent a kilowatt-hour. Now it doesn’t usually go that low. This may even be the first time it’s been that low at noon. But it does show how things have changed and are changing. And it does show that any new generating capacity is going to have to be able to compete in an environment with low daytime electricity prices. Today’s peak grid demand, well tomorrow’s peak actually, is predicted to come just after midnight when our off peak hot water systems all switch on at once.

  85. Hermit
    August 23rd, 2014 at 14:52 | #85

    @RB by your reasoning gas and coal must be even better
    I reckon later this year Adelaide and Melbourne will have a still humid evening when it is 35C at local 9 pm. I wonder what spot prices will be then? Example $1+ per kwh.

  86. August 23rd, 2014 at 15:02 | #86

    Hermit, go to the AEMO site and you will see that demand dropped in South Australia. At around noon grid demand was as low as it was at four o’clock in the morning.

  87. August 23rd, 2014 at 15:13 | #87

    Right now, 14:36 Adelaide time, we are at a little under one cent a kilowatt-hour.

  88. Hermit
    August 23rd, 2014 at 17:54 | #88

    There are growing signs that PV on the users premises will be use-it-or-lose-it. We have feed-in tariffs of 44c per kwh in some places but in other places new PV connections get 5.5c. Large commercial premises in Qld will pay a fixed daily $537 connection fee regardless so there is little point in reducing consumption with rooftop solar. Poland and the Czech Republic have installed phase shifting transformers to block solar power surges from Germany on sunny days. In some suburbs of some Australian cities you can’t install more than 5kw per roof in case of local power overload.

    If sufficiently smart smart meters become standard there may also be the possibility of export curtailment. The grid operator will decline to accept more PV input and send a signal to your meter to stop exporting power. On the other hand we don’t want pensioners in fibro homes dropping like flies in hot weather. This will all take the wisdom of Solomon to sort out.

  89. August 23rd, 2014 at 18:09 | #89

    Careful, Hermit. If anyone tells you rooftop solar can cause a local power overload they are lying to you. And I’m sure you wouldn’t want to be deceived into spreading lies.

  90. Hermit
    August 24th, 2014 at 08:16 | #90

    @ RB it’s not just in SA but several states
    I’m not saying it’s a serious problem just one of a number of difficulties that may prevent PV achieving the level some want.

  91. Will Boisvert
    August 24th, 2014 at 09:16 | #91

    @ Ronald Brak

    “the wholesale electricity price at around noon here in South Australia…was half a cent a kilowatt-hour….Any new generating capacity is going to have to be able to compete in an environment with low daytime electricity prices.”

    OK, but does that stricture apply to new solar generating capacity as well? When new rooftop solar rigs export electricity into the grid at noon, should they be paid a half-cent per kwh feed-in tariff, in line with the wholesale spot price? If they are paid any more than that, doesn’t that constitute a subsidy to rooftop PV? And if they are paid only that very low wholesale spot price, what does that do to the financials of owning rooftop PV?

  92. August 24th, 2014 at 10:07 | #92

    @Will Boisvert

    Right on cue, another CleanTechnica article yesterday discussing your exact questions. All sober, realistic, analytical stuff – trolls don’t count.

  93. August 24th, 2014 at 10:24 | #93

    @Will Boisvert

    Will, judging by your comments, you seem to be a passionate advocate who is into lots of detail. This is generally a good thing in terms of evidence based policy dialogue.

    Unfortunately, here in Australia, the policy dialogue has largely been captured by the fossil fuel lobby. They are no more interested in nuclear than renewables: it’s all competition to be stamped out at every opportunity.

  94. August 24th, 2014 at 10:37 | #94

    And the same article from three years ago crops up again. The Australian really should print a few new ones of these. Funny how South Australia has vastly more solar per capita than the states mentioned in the article that were supposedly having problems back in 2011 and South Australia has no problem. Anyway, unless you made your solar inverter at home out of an old microwave, when the voltage on the grid rises too high the inverter cuts off the power. That might be personally annoying, but it doesn’t damage the grid.

  95. August 24th, 2014 at 10:49 | #95

    @Will Boisvert
    Will, as I mentioned, using a 5% discount rate, my parents’ rooftop solar produces electricity for under 10 cents a kilowatt-hour and their cost of grid electricity is 33 cents a kilowatt-hour. So clearly the feed-in tariff would have to be negative to prevent people from installing rooftop solar. And a negative tariff could be easily circumvented by not exporting electricity to the grid.

  96. Hermit
    August 24th, 2014 at 14:23 | #96

    @Ronald Brak
    Well I know from personal communication it has been a problem around Victor Harbor. I looked at the council’s solar webpage and their optimism over future developments surpasses yours. On the bigger scale whole countries are taking action; Poland saying to Germany for example we don’t want your solar power surge.

    It may make sense to a bean counter to purchase new PV with no expectation of a generous feed in tariff. Most people with meagre cash reserves however want quick and obvious returns. That is probably why 2011/2012 will remain the peak for PV installation rates in Australia.

  97. August 24th, 2014 at 14:50 | #97

    What has been a problem in Victor Harbor, Hermit? People’s inverters tripping? Or are you saying that voltage levels in the grid there have risen above Australian standards? Really, there’s have to be quite a few faulty inverters there to happen, even on a sunny day in the off season. Maybe Pigdog and Spider have been installing ex-microwave oven inverters? But don’t you think it’s more likely to be another expression of wind turbine syndrome? Just because the refrigerator burned out doesn’t mean solar power is to blame.

  98. August 24th, 2014 at 15:04 | #98

    Hermit, my bank will give me a home loan at 4.49% and the standard variable rate for a home equity loan is 5.64%. They also say I can get a credit card at 11.8%. Even at 11.8% people can still save money installing solar. Solar leasing is also an option that people without money on hand can use.

  99. Nick
    August 25th, 2014 at 00:36 | #99

    First go at a Solar Baseload equation:

    4 hrs a day solar = 1460 hrs per year

    20 hrs a day batteries = 7300 hrs per year

    Stafford purchased 3.4MWh of battery capacity for $4 million.

    We assume they’re lithium iron phosphate, set battery cycle around 60% to 10%, and should see well over 10,000 cycles within that range.

    Gives us 50% effective battery capacity = 1.7MWh

    1.7MWh / 20 hrs a day = 85kW

    That figure becomes our system size.

    To match it, we need enough panels to generate 85kW, plus charge 1.7MWh of battery capacity, for 4 hours a day.

    85kW + (1.7MWh / 4) = 510kW

    Stafford purchased 2.5MW of solar panels for $5 million

    We only need 510kW = $1 million

    $4 million storage + $1 million of solar panels = $5 million capital cost

    35 years = 306,600 hrs

    306,600 hrs * 85kW = 26,061,000 kWh

    $5 million / 26,061,000 kWH

    = 19 c/kWh

  100. Nick
    August 25th, 2014 at 00:36 | #100

    Or – to go over the top, and completely account for any number of cloudy days:

    To match it, we need enough panels to generate 85kW, plus charge 1.7MWh of battery capacity, for 1.5 hours a day.

    85kW + (1.7MWh / 1.5) = 1.25MW

    Stafford purchased 2.5MW of solar panels for $5 millon

    We only need 1.25Mw = $2.5 million

    $4 million storage + $2.5 million panels = $6.5 million capital cost

    35 years = 306,600 hrs

    306,600 hrs * 85kW = 26,061,000 kWh

    $6.5 million / 26,061,000 kWH

    = 25 c/kWh

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