THE COST OF NEW ENERGY

Utilities weigh price of power with aging plants and renewable mandates
Mark Jaffe, August 21, 2011 (Denver Post)

"…Levelized cost analyses [of energy – all lifetime plant building and operating costs divided by dollars the plant produces for a dollars per megawatt-hour]…rely on assumptions that can make the estimates lower or higher…[F]our levelized cost studies — from government agencies, financial firms and engineering companies — …[make estimates that] vary as much as 100 percent…

"Standard coal-fired power plants are among the least expensive forms of electricity generation...The cost among the studies ranged from a low of 7.4 cents to 13.5 cents per kilowatt-hour…[but a] 2009 study by the National Research Council titled "The Hidden Costs of Energy" estimated that the pollution impacts of coal — the most polluting of the fossil fuels — added 3.2 cents a kilowatt-hour in 2005, declining to 1.7 cents a kilowatt-hour in 2030 as more electricity comes from cleaner coal plants…[T]hat doesn't count…a cost for carbon emissions…"

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"The least-expensive fossil fuel generation in the major cost studies is natural gas…The EIA put the average cost at 6.6 cents a kilowatt-hour in 2016 for a conventional combined-cycle gas plant…The biggest concern with natural gas has been the cost…In the past 10 years, the spot price has been as low as $1.80 per million British thermal units…and as high as $15.38…The average for the decade was $6.07…[A recent] closing price…was $3.89."

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"The cheapest renewable-energy source, and one of the least expensive overall, is wind power, with the average cost between 4.4 cents and 11.5 cents a kilowatt-hour…The problem with wind — as with solar — is what is called the "capacity factor." A coal or natural-gas plant will run 70 to 90 percent of the time, constantly generating electricity…A wind farm runs 32 to 42 percent of the time and a solar array generates electricity 22 to 27 percent of the time…

"Solar energy is the most expensive way to make power — more than twice as expensive as natural gas and wind…[according to] five levelized cost studies…The EIA estimates the cost of a utility-scale solar photovoltaic installation at 19 cents a kilowatt-hour…The cost of solar cells, however, has dropped by more than a quarter since 2001 and is projected to continue to decline. That could bring the levelized cost for photovoltaics to 8 or 9 cents a kilowatt-hour by 2020, according to a study by Greentech Media…"