[frafra]

> Renewables are now cheaper than fossils

price of energy production != cost of energy

Lazard 2023 estimates that solar and wind in the California grid costs 2/3 times more than when just considering the LCOE. Solar and wind production can be cheaper, but the final price is way higher.

[oezi]

I must be reading Lazard 2023 wrong because the LCOE for wind and utility scale solar seems almost half of the other sources. What am I missing?

[frafra]

When taking into account the "Cost of Firming Intermittency" the total cost can go up by 2/3 times in the "CAISO" case at page 8 of Lazard 2023, which is higher than LCOE for existing nuclear and to some LCOE estimates for new nuclear.

In addition to that, there are additional costs (integration costs) that are not considered in LCOE; for example, you can build PV power plants in sunny places, but that might not be where the electricity need is, so the network should be upgraded as well. All these costs are highly dependent on the penetration of intermittent sources and on the grid, and this is why the price of the electricity can be very different from the cost of electricity. I can produce electricity very cheaply, but maybe no one needs that. This is why Germany sometimes have negative prices, so it actually pays with subsidies the consumption of energy in neighbourhood countries, and then the price can skyrocket, which is why Sweden recently blocked a new connection towards Germany, "where the electricity market today does not function efficiently" (Energy Minister Ebba Busch).

[oezi]

I am sorry to say that I don't understand why solar without battery and solar+battery leads to different cost for firming in the Lazard. Shouldn't solar with battery already be pretty firm?

Remember we primarily want to reduce carbon emissions and we do have a lot of fossil plants already around.

[frafra]

Short answer: no, they are not (read footnotes 1 and 2)

CAISO, 1st column, 1st bar: - blue is the cost of solar - beige is the cost of firming intermittency using gas

CAISO, 2nd column, 1st bar: - blue is the cost of solar+battery (max 4 hours) - beige is the cost of firming intermittency using gas

Using batteries improves the ELCC (contribution to meet peak demand), but it is not enough, so it has to be compensated somehow. Want to get a higher ELCC? Get a larger battery (and install more solar panels). Be aware, this is not a linear relationship: getting from 10 % to 20 % of renewables is cheaper than getting from 70 % to 80 % (this is why the costs are lower when the penetration rate shown in the slide is low). You reach a point where you just waste energy or need to pay to use it, like in Germany, Netherlands or Denmark.

There is no best energy source. There are different networks, energy mixes, needs, etc. Under CAISO, it is just more convenient to go with nuclear. Under SPP, solar has a very high ELCC and a very low penetration, which makes it convenient just to install solar, but up to which percentage?

Overall, some mix of renewables and nuclear, depending on the network, seems a reasonable solution. Otherwise we would need to go with fossil power plants to meet the remaining demand (carbon capture seems wishful thinking) or to over provision renewables while building incredibly large storage systems (be aware that there are places where fluctuation are not on a daily or weekly basis, but on a seasonal basis - good luck storing the energy for ~3 months using lithium ion batteries because you live in a polar region).

The book "How to avoid a climate disaster" (Bill Gates) has a chapter just for that. I would recommend it.