Showing posts from January, 2016

Cost per KWh

Let's be careful when we see published charts with the generation cost of renewable energy (we'll be reviewing here solar and wind, not hydro which can stand by itself and provide reliable output).  We need to understand the following before accepting numbers at face value: 1. The value of energy depends on the time of the day / year that is is produced. Reliable and dispatchable energy tend to command a higher price in the market. Energy that is "dumped" into the grid can have little value or even a negative one (the grid needs to be paid to accept that surplus energy). 2. Bar some small off-grid operations, renewables need a pairing power plant in perpetuity. Thus in the cost of the system we have to add both the cost of the renewable installation PLUS the cost of the reliable power plant. In other words, renewables are almost always a duplicated investment and thus by definition have to be more expensive than a coal or natural gas power plant by it