As South Africa looks to renew its energy sector, comparisons are often made of how much one source of electricity costs versus another. Carrying out this exercise is much more difficult than might at first appear, but this must not deter the attempt. What are the problems encountered when comparing renewable sources such as wind or solar with coal-fired or nuclear generation?
Comparisons of capital costs of various methods of generation
There are usually few problems comparing capital costs. Coal and wind cost between $2 million and $2.5 million per MW installed in most global markets. Nuclear comes in more expensive between $3.3 million and $3.5 million, and solar photovoltaics (“PV”) come in now at around $3.2 per MW installed.
At a global average, a 1 000 megawatt wind farm or coal plant would cost up to $2.5 billion. This equates to a cost of up to R18 billion.
Comparing fuel costs
But capital costs merely describe one element of the total cost.
Consider the fuel costs in the case of coal: a 1 000MW coal plant burns about 3.27 million tonnes of coal each year. The local cost of coal is $19/tonne. The total fuel cost is therefore $62 million each year. A South African coal plant owner spends the same again as the capital cost every 32 years at this local coal price. However, if the fuel cost were to flex to represent the traded international cost of coal, the annual cost would be much higher. At a traded cost of $80/tonne this represents $244.5 million annual expenditure, (the global average cost over the past year). In that situation, a coal plant owner spends the same again as the capital cost every eight years. In addition to the cost of coal, the costs of disposing of the ash, and there is a 33% ash content in South African coal, also has to be taken into account.
Wind is a free fuel. Solar is a free fuel. No fuel costs and no ash. We begin to see how difficult it is to compare costs.
Carbon fines
Consider carbon fines. A 1 000MW coal-fired power station releases 7.1 million tonnes of CO2 each year. This would cost in fines (at the current rate of €13/tonne) R858 million annually. If the fine, as predicted, rises to €40/tonne the cost would be R2.64 billion annually. So in a situation where CO2 were fined at €40 a tonne, the owner would have to spend the equivalent of the capital cost of a new coal-fired power station every six years.
Wind and solar emit no CO2, so there are no fines.
Here is a very interesting fact. Private investors are very unlikely to invest in a coal plant in South Africa. They look at the same facts as we are looking at here and the see huge carbon fines being applied to their plant when it begins producing. How can they tell what the cost of production will be (fines and traded coal costs included) in 2020, 2030 or 2040? There is no clear line of sight to continuing profits so no one will invest.
Wind or solar on the other hand are good investments.
Life duration
Consider an engineering angle. Coal and nuclear plants are thermal power stations. They make electricity by heating steam. This places great stresses on the generating assets. Another life-shortening factor is corrosion in the combustion zones of the boiler. These conditions eat into the life of thermal plant so its maximum life is 30 to 40 years. The plant has to be taken out of service as progressively more maintenance has to be carried out. The running costs escalate and the availability and reliability of the boilers and turbines reduce.
A wind farm on the other hand operates at room temperature and pressure. With the replacement of some components, like blades, a wind farm will operate for 100 years. With normal maintenance, the roads, towers, transformers, substations, nacelle bodies, electrical connections and foundations will all be around in a century.
Water needs
Thermal plants need water. A 1 000MW coal-fired power station uses 8 900 000 m3, which is the same as 8 900 000 tonnes every year. In a water-stressed country like South Africa, this means there is less for households, farm irrigation and industrial processes. At the average rate of usage a 1 000MW coal plant consumes enough water to satisfy 520 000 households per annum.
Wind and solar PV consume no water.
Conclusion
My central contention is that, apart from capital costs it becomes very difficult to compare the life cycle costs of sustainable forms of electricity generation with coal-fired and nuclear-powered generation.
For South Africa the decision to go the coal route commits the state to many times the initial investment during the life of the coal plant. It’s not enough to compare the capital costs of coal with renewables, or even the fuel costs. Ongoing non-fuel costs have to be considered and those costs for a coal plant are a good deal higher than for renewables.
With wind and solar what you see is what you get, one upfront cost and some small annual costs related to maintenance, rates, and rental payments
In my next blog I would like to examine the fixed price feed in tariff for renewables. The headline price is one element, but the average cost of electricity is in effect lowered when wind and solar are introduced into the system.
Good to have a factual non PC article on energy, leaving out the red herring of Climate Change your facts and figures compels us to search for the solar/wind options for energy in the future.
Does your wind costs add in the ± equal extra costs of power storage SA would need as our wind varies and is not constant so needs storage for the electricity? Also the enormous land needed for wind must be factored in.
Look forward to your future articles
Brent
It is incorrect to compare a 1000MW nuclear plant with a 1000MW wind plant. A wind plant only works on average 20% of the time while a nuclear plant works on average 80% of the time. Therefore you should compare 4000MW ($10bill) of wind versus 1000MW ($3.5bill) nuclear with your figures. Nuclear plants operate for 60 years not 40 years so for 100year of 1000MW nuclear would have 2 plants at $7bill and wind 1 at $10bill. Have you included the cost of the transmission lines for wind? Nuclear fuel is 200 million times more energy intense than even chemical fuel which is why the fuel costs with nuclear are low. The fundamental as to this price difference is because renewables use roughly 10 times more material than nuclear for construction. As nuclear technology becomes cheaper and more efficient it will be by far the cheapest option.
For social and environmental justice we require as much energy as possible so every dollar spent on wind power will be well spent. However if South Africa is to compete with the nuclear powers we need to invest in nuclear.
Guy, as long as we continue to leave the legacy of nuclear waste to future generations to sort out, our support for nuclear energy is irresponsible. Period. It’s time to grow up and wipe our own rear-ends!
Great article!
For those interested in a fuller impartial analysis, I highly recommend Professor David MacKay’s free online book ‘Sustainable Energy Without the Hot Air’, available at http://www.withouthotair.com.
MacKay is the chief scientific advisor to the UK department of energy and climate change and his book is without a doubt the most excruciatingly detailed, insightful account of the promises and pitfalls of renewable energy solutions.
Nuclear is the most dangerous solution from cradle to grave. The mining of uranium is highly noxious and dangerous to human health; nuclear emissions are toxic to human health and to the environment. No nuclear plant has been safely decommissioned to date and nuclear waste lasts for millions of years and is highly toxic.
To date, 985 000 people have died as a result of Chernobyl. Studies are being intensively conducted on the health of people living cllose to nuclear power plants as there is evidence of high levels of cancers in these areas.
Sustainable energy is the new revolution and is being widely adopted even in China, where whole towns are poered by sun or wind.
SA doesn’t have sufficient water for coal or nuclear.
Nice article, as always. Brent misses the point, as do most people taking on this perspective. In SA you don’t need storage – the wind blows when you need it if you go & examine the wind profile of SA, and you have coal to back up anyway. So no need to build back up. Its a fallacy.
Guy misses the point also – I am sure he hs a well research, scientific paper of the wind regime? If he did he would see the capacity is quite a lot more than 20%. He also throws in misleading and irrelevant comments re the lines needed – Guy, how much do u think the new 400kV lines for the Thuyspunt nuclear plant are costing?? Perhaps you need to stand next to Koeberg and then next to a wind tower – there is nowhere near the same comparative use of materials, but I’d love to see the research and studies so let us know where this is published. Oh, and don’t forget to let us know where the nuclear waste will be stored, and what the costs will be to transport it. And also let me know how you costed and factored in the volatility and risk associated with uranium fuel prices.
The debate continues….and its always good to hear points of view especially when they are well research and based on fact, not hear say.
I agree with Guy. Anyway if one has ever lived withing five km of a wind farm the wap wap and the whine is ear pearcing and head pounding.
That said I am against this carbon storage idea as I see it as an excuse to maintain the Co2 status quo. On the other hand even with gigaton storage, like neuclear storage the world will run out of space eventually.
If released what is the CO2 impact against that of neuclear? One destroys a patch of land the other if released will destroy the earth.
I believe we are being sold a lemon in the name of saving the planet to enable the maintenance of profit and new taxes by government. Best to look at way of reducing consumerism.
A good blog and worthy of good debate and not critisism as there are so many factors to take into accunt that your article would then expand into a book.
It is well documented that the optimum functionality of both solar and wind energy are subject to natural climatic conditions and therefore the storage of their energy is a critical factor which inhibits government’s from choosing these options above that of coal and nuclear. I in the face of diminishing coal reserves and the post WW11 distaste for nuclear, it might be prudent to invest in more research in this area.
Maybe the optimum use of solar and wind energy should not be looked at in the national context but interationally. The establishment of a network of plants throughout sub-saharan Africa could be a way of optimizing the harnessing of these natural energy sources and thereby making them a more viable option.
Geo-thermal and wave energy are also unlimited sources that will be far more reliable than solar and wind, but harvesting the energy has more challenges.
Eddie
We seem to have missed the boat somewhere (are all your reader as dumb as me…)
I am reminded the words of Abe Lincoln “You can fool all of the people, some of the time and some of the people all of the time but you cannot fool all of the people all of the time. Attempting to do this is just plain stupid…” Renewable energy has been attempting to do this for some time and when we discover this deception, we become totally disillusioned with the movement, believing that they are lying all of the time instead of just occasionally.
Just two quick observations
Coal produces energy when you need it. Wind usually produces in when you don’t. Pumping water to store energy is very costly. The new molten metal salts batteries (announced 2 months ago) may, in the very distant future (30 years) provide storage but no other battery technology comes within 1 millionth of the requirement. Where are these VERY substantial costs in your rather broad brush approach?
…more in next post
….Follows from previous post
No less a world expert than Dr J. P. Bond, Head of Political Risk at the World Bank points out that the total cost of power generation still favours hydrocarbons on a factor of 3 to 2 against the best other alternative. JP is a strong supporter of the Greens movement and was, for many years the leading international economist in energy. He is also an expert on mining and he factors into his calculations, many of the substantial hidden costs of coal mining like the end-of-life costs of a mine (which are usually borne by the state).
JP is a major driver of the carbon tax. Because of damage this will, in his opinion cause in the future. He cannot put a price on this.
Perhaps you would share with us, your rather stupid readers why the World Bank support other forms of renewable energy so strongly if Wind is the best solution…
Davin, just a few lines from an energy storage consultant:
most successful wind farms have been built in Europe in the ‘roaring forties” around 40N latitude because of their constant and steady wind. SA in the low 30 degrees has more fickle winds. The E. Cape might have plenty wind but it is rarely constant, either blowing a gale of being still for long periods. Even when it does blow it comes in gusts, creating high demands on drive systems and gearboxs. The gusting wind also changes blade speed with each rotation causing variations in electrical supply within milliseconds.
ie wind to be really effective needs storgae.
Brent
I think Eddie O’Connor either included capacity factors in his estimates, or used old numbers. Guy is plane wrong. All things considered wind is at least half the cost of nuclear. And that still excludes the fuel, decommissioning and waste disposal costs.
Ariva (the French Nuclear company) says that they would charge about 8 billion dollars for an EPR.
http://www.nytimes.com/2009/05/29/business/energy-environment/29nuke.html?_r=3&pagewanted=2
The Ariva EPR is their newest model and the option currently most favoured by Eskom. It produces 1600 MW. So this is about 5 million dollars per MW.
Koeberg run at a load factor of 68%. So this is equivalent to about 7.4 million dollars per MW for 100% continuous operation.
Wind power typically costs about one million dollars per MW.
http://guidedtour.windpower.org/en/tour/econ/index.htm
So that means that a wind farm is cheaper that nuclear as long as the wind farm is located somewhere where the wind blows for more than 13% of the time. And that is just about anywhere! And this still excludes the cost of fuel, waste etc,
I can not help but feel utterly suspicious when someone with a large stake in wind and solar power extolls its virtues without comparison to other renewable energy sources or their virtues. Why does it sound so much like the latest trend in advertising where one read an interesting article only to realise when reaching the bottom, eh… advertising.
“Eddie is founder and chief executive of Mainstream Renewable Power, a company actively developing more than 10 000MW of wind and solar projects across Europe, North America, South Africa and Chile.”
Can we expect unbiased information from Eddie, the wind and solar energy projects man? Surely not.
@x cepting and victor: friends, where do you plan on getting your unbiased information? The existing energy companies spend a HUGE amount on PR; you probably don’t even realise you’re being PR’d half the time. I doubt Eddie is making nearly as much money as one of their branches in Outer Mongolia!
@ Brent: We have a grid, Brent; it carries power around the country, and sometimes a distant station will fill in when the closer one is down for some mreason. Why, Eskom at one stage was considering getting power from the Congo river and diverting it all over the southern half of Africa! All you need is a few stations in various parts of the country where wind can be relied on to blow for a percentage of the time; power can be sent from the active station to wherever it is needed.
To me, one of the persuasive things about wind is that China – the most eco-unPC country on earth, surely – is investing so heavily in it. Annual growth rate: 114%
Brent, thanks for the comment. Lets deal with the real data and issues. Go and take a look at the study done by Kilian Hagemann from UCT…check out the data and the wind map (www.yestorenewables.co.za) and then lets discuss again. The wind blows when u need it…between 07h00 in the morning and 20h30 at night. The hard facts and data are there to show this, as is the study on the variability of the resource. So, this is hard scientific fact you can go and read and perhaps run your own numbers as the scientists have done. The resource is not fickle at all. The resource and weather systems are very diffrent to Europe and elsehwre and this is why we have a stable, relible source of energy that is available when we need it. So lets base assessment on real hard data from the many met towers that are measuring as we speak. The wind resource is proven resource-hard scientific fact is there for all to examine. I am happy for you to supply us with scientific evidence that shows the contrary. If wind blows when we need it there is no real need for storage. If wind is blowing when we don’t need it, then that another matter. Luckily we don’t really have that problem…
Why does everyone leave out biomass. The only renewable other than geothermal that produces 24/7 365 and is so easly grown in most regions of the world. We use contaminated water so we do not even disturb out clean drinking water supply. We grow on hill sides or land not suitable for crops. Please include this into your equations.
Ray CEO
@ngwenya – First of all, I find being called a “friend” by someone I do not know at all a little presumptuous. Otherwise, when a stranger calls me a friend I know he is about to sell be something. Secondly, the unbiased technical information is available if you know how to do research check credentials and check research papers. I really do not understand why you are defending O’Connor except if you happen to earn shares in his company. Thirdly, an article on renewable energy that only deals with two types, the types his company happen to sell, amounts suspiciously to calls for investment in his company and is definitely not unbiased discussion of options or worthy of “Thought Leader”. I can get the same by visiting all the companies on the net that has a vested interest in the power industry.
@Davin – I am inclined to go with Brent on this one. While research is important, the only numbers that would actually have any credibility in my book is x amount of power generated (proven, and showing seasonal change)for y amount of capital layout with z hours required maintenance and a, b, c effects to the environment. To say that we always have wind when we need it is silly. Today, for instance, is a dead quiet overcast day in Cape Town, if you did not store power yesterday from solar or wind (in a battery of some sort) you will have a cold bath and food tonight unless you want to buy Koeberg (nuclear) power.
@ X Cepting
So, using your super-research skills, which part of the article do you have a problem with? What is being said about wind and solar that you disagree with? Can you suggest a better source of energy than the two we use for free (sometimes) and with zero environmental impact(like when hang your washing out to dry). Bearing in mind that what you interpret as vested interest can also be seen as laudable integrity since he only the writes about his area of ‘expertise’. Not everything in life is a hard sell. It is nothing more than a silly rhetorical gambit to attack credibilty rather than questioning the argument put forward. And there is a lot in the article, or rather, missing from the article that can be questioned.
@mallencolly – As seems usual you are over-reacting and placing words in my mouth which amounts to: you are looking for a fight. Afraid I’m not interested. I will not rob you of the pleasure of research, it does not take any super-research skills and an average mind will do, you’ll manage, I’m sure. Start with geo-thermal and then look up methane production and perhaps wave power. Ah, what the heck, just google sustainable or alternative power generation. Their are mountains of good research on the subject and just as many “articles” that are actually trying to get you to buy their product, that is normally very one-sided in approach, my very contention with this “article”. Above all, chill mallencolly, remember global warming?
@ X Cepting
Cynical, presumptious and sarcastic as always, heh?
So you didn’t say:
“the unbiased technical information is available if you know how to do research check credentials and check research papers. I really do not understand why you are defending O’Connor except if you happen to earn shares in his company”
and
“an article on renewable energy that only deals with two types, the types his company happen to sell, amounts suspiciously to calls for investment in his company and is definitely not unbiased discussion of options or worthy of “Thought Leader”. ”
I think my comment is far from an over-reaction. If you are going to accuse someone of bias perhaps you could provide some data to back it up. Your abc formulas (including the externalised costs) for geothermal, methane and wave compared to wind and solar would be a good start. Obviously only for areas where it is relevant.
And I’ll suggest you do a little research into using energy without any ‘generation’. Try Solar cooking and wind driven cold rooms. Theres a huge chunk of domestic energy generation requirements out of the window right there. See, most of us can easily access wind and solar on a domestic scale. Methane almost as much. The same cannot be said for geothermal and wave. Fair reason to concentrate on those two I would say.
And no not looking for a fight, just getting really bored with your stock response of attempting to discredit rather than engage.
Please see a study published by the Irish academy of engineers. Link Below Page 21. This includes all costs and was based on real data across the EU. Although it is aimed at Ireland it is a great summary based on FACT. Eddie O’connor was made a very rich man from wind energy in Ireland and as of yet I have yet to see a number from him on what the actual environmental benefit of this is. What we do kow is the consumer is paying.
http://www.iae.ie/site_media/pressroom/documents/2009/Jun/24/Review_of_Irelands_Energy_Policy_-_June_2009.pdf
There is also some big questions being asked about the true cost benefit of this technology in Germany and recently De Speigel has published some great fact based information and not spin. I also attach a link below to an interesting article and commentry in the telegraph.
http://www.telegraph.co.uk/comment/columnists/christopherbooker/8025148/The-Thanet-wind-farm-will-milk-us-of-billions.html
So how muc is this going to cost the average SOuth African Eddie. Me thinks they aint going to be the real beneficiaries here