Energy Storage Replace Gas Plants

[KeyboardWarrior + 527]

Holy shit it gets even better!

https://www.eia.gov/todayinenergy/detail.php?id=31912

"Nearly 75% of the natural gas capacity installed in 2015 were combined-cycle units, which had an average installed cost of $614/kW"

I wonder what the cost is now!

Do you people have any idea how big of an issue this is for solar? These plants not only use half the fuel of traditional plants, but their capital cost is literally 3/4 of traditional models. 

Let's do another NPV for a 1000 MW gas plant, because apparently that's the way to go.

Combined cycle earns $400 per annum at $3 per mmBtu since its fuel cost goes from $400 to $200 million.

[($400,000,000 * 20)  ((1 + 0.05)^20)] - $650,000,000 = $2.3 B present value in twenty years. 

Give up. I've had it with this dishonesty. 

[KeyboardWarrior + 527]

6 hours ago, Wombat said:

I agree that H2 storage necessary as well, plus pumped hydro, but pls don't believe the BS that electrical engineers spew out about grid instability just coz they deny climate change.

Your H2 storage will capture about 64% of extra energy. ROI for storage is calculated by money that it captures from excess power, so this had better be cheap or there's no reason to do it. 

64% would be an 80% efficient cell that loses 20% when it makes hydrogen and loses another 20% when it converts it to electric power. 

Edited May 8, 2020 by KeyboardWarrior

[ronwagn + 6,290]

11 hours ago, nsdp said:

That merely shut of coal plants. NG plants have operating losses below 70cents per mmbtu. What ch them drop off on ERCOTs real time dispatch on the web.

Good luck. We will see.

[Coffeeguyzz + 454]

Mr. KeyboardWarrior

Please allow me to highlight what is unfolding here.

The posters on this thread who are staunch advocates of the implementation of Renewable Energy (sic) for electricity generation appear to be sincere, bright individuals who - amongst many other motivations - seem to embrace a powerfully motivating ideology commonly (now) referred to as Climate Change.

In October, 2015, a paradigm-shattering, 11 page paper (easily downloadable and readable) called "Heartbeat of the Sun" was put forth by Dr. Valentina Zharkova.

In addition to having a Phd in Astrophysics, Dr. Zharkova has a Masters in Applied Mathematics and Astronomy.

She posits a theory concerning the multiple, asynchronous dynamos within the sun that correlates with a 97% accuracy going back  to 400 years of sun spot observations.

I'll leave whatever further research you - and others - may choose to pursue in this matter ... but know this ...

The "Movers and Shakers" WAY up the foodchain well recognize the validity - and ramifications - of Dr. Zharkova's work. (Corroborating research continues apace from labs all across  the globe, with the Ames Research Center  being just one).

What you are witnessing on a global scale, Mr. KW, is a frenzied push to kneecap all things hydrocarbon related before the growing onslaught of indisputable evidence (shortened growing seasons being just one, albeit a pressing issue) continues to emerge that will unmask this Global Warming hysteria as one of the most bizarre, destructive episodes of mass psychosis in human history ... far, FAR surpassing events such as the Tulip Mania centuries ago.

[Monk + 14]

3 hours ago, KeyboardWarrior said:

Holy shit it gets even better!

https://www.eia.gov/todayinenergy/detail.php?id=31912

"Nearly 75% of the natural gas capacity installed in 2015 were combined-cycle units, which had an average installed cost of $614/kW"

I wonder what the cost is now!

Do you people have any idea how big of an issue this is for solar? These plants not only use half the fuel of traditional plants, but their capital cost is literally 3/4 of traditional models. 

Let's do another NPV for a 1000 MW gas plant, because apparently that's the way to go.

Combined cycle earns $400 per annum at $3 per mmBtu since its fuel cost goes from $400 to $200 million.

[($400,000,000 * 20)  ((1 + 0.05)^20)] - $650,000,000 = $2.3 B present value in twenty years. 

Give up. I've had it with this dishonesty. 

 

It is good to compare ones won math to industry standard.  There are quite a few different costs/revenues/nuances in power markets depending on the market design.  If not fully accounted  or mis applied will give miss leading results.

A few key things to start:

• Power markets are typically designed with a 15% margin over once in 10 year peak loads. It means some gas plants run only during peak loads times and are an integral part of the grid. The capacity factor, the % of the time per year a power plant is run
• The different types of gas plants are  1) Combustion turbine gas peakers (CT type) - typical capacity factor <30% 2) Combined cycle gas turbine  (CCGT type). - typical capacity factor > 85% ( The new ones with 1500MW and 30 full time people and ~60% efficient)
• Leveraged cost of energy - LCOE  in net cost of electricity in NPV terms used to compared across power generation types. The lower the number the more money you can make.  

As you can see from the table 1A in the link below compared across different categories to the extent you can make. The LCOE is in $/MWh 

https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf

 

For  summer peaking regions, the solar+4 hour storage is becoming cost competitive over combustion trurbine gas plants. (for plants starting construction now)

and the the headline should read  renewable+4 hour storage replaces gas peaker plants CT type not CCCG type,  for proper context and built-in assumptions.

 

 

Another perspective from the buyers side:

Also keep in mind LCOE, typically, Capital costs/debt is expected to be paid back in 20 years and hence all calculations or with 20 year lifetimes. But all plants typically continue to work for 30-40 years. The residual valuation will not included in these comparisons. Nonetheless the merchant generators and some patient capital investments do rely on these returns after 20 years and is beyond the scope of this discussion.  These get reflected in Power purchase agreements another metric similar to LCOE but from buyer perspective instead of  generator perspective.

You can take a look at them from a company that runs a market place for solar and wind PPAs.  They are priced in $/MWh and published quarterly based on the executed deals.

Latest: https://leveltenenergy.com/blog/ppa-price-index/q1-2020/ 

A recent one below: (Yes these are real and way less than from the report above)

 

 

And lastly, California calculates it cost of renewable requirements by LAW., https://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/About_Us/Organization/Divisions/Office_of_Governmental_Affairs/Legislation/2020/2020 Padilla Report.pdf

You can see both past and current in $/KWh, a recently published.

"The average price of RPS contracts that were executed in 2019 was 2.82 ¢/kWh compared to 3.81 ¢/kWh in 2018."

BTW, with all the noise around solar, it is only 2% of generation (in US) almost like a rounding error.  With existing plant lifes of 30-40 years things wont change overnight and will be take about 20 years for that to be any meaningful number.  Who knows what happens in 20 years let alone 5 years for if any one made any of the current solar proposal/arguments in 2015(Solar+storage replacing gas peakers) they would have been laughed out of the room.  

 

 

 

 

[Coffeeguyzz + 454]

Mr. Monk

That is an outstanding post and I thank you for your contribution.

Amongst all your enlightening data, I would call attention to the PPA price point for PJM being at 28 bucks per Mwh for wind.

This ties right into the highly charged matter of the recent FERC decision with the Minimum Offer Price Rule as needing for government subsidies/mandates  to be taken into account when regional bids are considered.

If it stands as is, there will be virtually no new buildout of these projects pretty much anywhere in this country.

Even the uncertainty (due to legal proceedings, amongst many others) - should it prolong indefinitely -  will greatly hinder Renewable Energy buildout sans rigid (and VERY expensive) locally mandated purchases by utilities.

[Tom Kirkman + 8,860]

1 hour ago, Monk said:

It is good to compare ones won math to industry standard.  There are quite a few different costs/revenues/nuances in power markets depending on the market design.  If not fully accounted  or mis applied will give miss leading results.

...

That's an outstanding first post, Monk.

[Jay McKinsey + 1,489]

5 hours ago, KeyboardWarrior said:

Holy shit it gets even better!

https://www.eia.gov/todayinenergy/detail.php?id=31912

"Nearly 75% of the natural gas capacity installed in 2015 were combined-cycle units, which had an average installed cost of $614/kW"

I wonder what the cost is now!

Do you people have any idea how big of an issue this is for solar? These plants not only use half the fuel of traditional plants, but their capital cost is literally 3/4 of traditional models. 

Let's do another NPV for a 1000 MW gas plant, because apparently that's the way to go.

Combined cycle earns $400 per annum at $3 per mmBtu since its fuel cost goes from $400 to $200 million.

[($400,000,000 * 20)  ((1 + 0.05)^20)] - $650,000,000 = $2.3 B present value in twenty years. 

Give up. I've had it with this dishonesty. 

The capacity factor for NGCC is 56.8% https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_6_07_a

 That decreases your profit to $250 million per year.

The ITC is not included in the reported capital costs for solar. You dishonestly made that up.

Edited May 8, 2020 by Jay McKinsey

[Jay McKinsey + 1,489]

deleted

 

Edited May 8, 2020 by Jay McKinsey

[footeab@yahoo.com + 2,135]

8 minutes ago, Jay McKinsey said:

Found this juicy morsel while verifying that ITC is not reported to EIA. You report your taxes to the IRS not the EIA. 😂

By golly natural Gas subsidies are only 6000% greater than solar. 

https://www.eia.gov/analysis/requests/subsidy/

Ah, resorted to blatant lies now?

That is so disgustingly DISHONEST to post TOTAL subsidies and then claim they are for NG.... when in fact there is not one cent of subsidies for NG.  WHo gets all those subsides?  Solar, Wind, Bio, Nuclear. 

EDIT: Ethanol subsidies are in there, but part of farm bill I believe and not in the total...

Edited May 8, 2020 by footeab@yahoo.com

[Jay McKinsey + 1,489]

14 minutes ago, footeab@yahoo.com said:

Ah, resorted to blatant lies now?

That is so disgustingly DISHONEST to post TOTAL subsidies and then claim they are for NG.... when in fact there is not one cent of subsidies for NG.  WHo gets all those subsides?  Solar, Wind, Bio, Nuclear. 

Yep I screwed up that is why I deleted it. But oil and gas does get many special tax deductions such as for drilling costs, reservoir depletion, etc. It is incorrect to say that NG gets no tax subsidies. The primary renewable subsidies are also tax subsidies.

your income is partially sheltered from taxes because of a depletion allowance. Here is why:

• Depletion allowance: Because oil and gas are finite resources that will eventually be exhausted, depletion allowances are granted for a portion of the producing well’s gross income. These allowances can shelter 15% of the annual production from income tax. Deductions can be taken as long as the wells are productive.
• Tangible Costs represent substantial expenses like storage tanks, pump jacks, and casing. Tangible costs are capitalized and depreciated over seven years.
• Intangible Drilling Costs (IDCs) are expenditures that have no salvage value – this would be fuel, wages, hauling, contracted drilling and repairs. They typically comprise 75% to 85% of the total well cost and are 100% deductible against taxable income in the first year.
• Intangible Completion Costs (ICCs) average around 15% of the total cost of the well. ICCs are goods and services like labor, completion materials, completion rig time and fluids that have no salvage value. ICCs are completely deductible in the year the expense was incurred.
• Depreciation: The tangible equipment and resources used to complete a well are generally considered salvageable, and thereby are depreciated over a 7-year period. These tangible completion expenses can account for between 25% and 40% of the total well costs.
• Lease operating expenses are the ongoing monthly costs to operate the well, and are deductible in the year the expenses are incurred.
• Amortization of Geology and Geophysical costs

IRS tax code Section 167(h) Amortization of Geological and Geophysical Expenditures

You can deduct these costs at 25% the first year, 50% the second year and 25% the third!

https://www.ranken-energy.com/index.php/oil-investing-tax-breaks/

Edited May 8, 2020 by Jay McKinsey

[Jay McKinsey + 1,489]

"Minnesota utility Great River Energy confirmed Thursday that it will pilot Form's technology, identified for the first time as an "aqueous air" battery system. While it's common for lithium-ion batteries on the market today to discharge their full power capacity for up to four hours, Form's 1-megawatt project will do so for up to 150 hours, an unprecedented achievement for the storage industry.

Great River Energy, the second-largest power supplier in Minnesota, announced plans Thursday to phase out coal power, add 1,100 megawatts of new wind capacity and expand market purchases, resulting in a cheaper electricity mix that is 95 percent carbon-free. The generation and transmission cooperative wants to see if long-duration storage works to ride out the lulls in wind generation."

https://www.greentechmedia.com/articles/read/form-energys-first-project-pushes-long-duration-storage-to-new-heights-150-hour-duration

[KeyboardWarrior + 527]

1 hour ago, Jay McKinsey said:

The capacity factor for NGCC is 56.8% https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_6_07_a

 That decreases your profit to $250 million per year.

The ITC is not included in the reported capital costs for solar. You dishonestly made that up.

And what, might I ask, is the capacity factor for solar?

As for ITC, I did a second calculation where we cut costs by 22%. Your system still lost by a hefty amount. 

You can also refer back to the other example if you want to bitch about capacity factor. The point holds true.  You recall that we gave both entities 100% capacity factor. Your solar figures gave you a negative NPV after 20 years. We've reached the end of the argument. 

You're the one being dishonest by ignoring the conclusions. Focusing on irrelevant details or adding figures that need to be included on your end as well.

Edited May 8, 2020 by KeyboardWarrior

[footeab@yahoo.com + 2,135]

58 minutes ago, Jay McKinsey said:

Yep I screwed up that is why I deleted it. But oil and gas does get many special tax deductions such as for drilling costs, reservoir depletion, etc. It is incorrect to say that NG gets no tax subsidies. The primary renewable subsidies are also tax subsidies.

your income is partially sheltered from taxes because of a depletion allowance. Here is why:

• D

So, according to you, business expenses are subsides...  I've heard it all now.  You have never operated a business before have you? 

And yes renewables do get tax subsidies(big ones), they MOSTLY get PRODUCTION credit subsidies. 

You create 1 KWh of Wind, sell it for ~3c/KWh and you get 1.5c/KWh additional from the government.... for 10 years...  a nice PRODUCTION subsidy of~~ 30%%%!!!

Then they ALSO get massive subsidies from local power grid providers who buy at ABOVE market rates by 50% to get "wind/solar" in their "portfolio" as it was demanded by stupid shit voters usually. 

Edited May 8, 2020 by footeab@yahoo.com

[KeyboardWarrior + 527]

2 minutes ago, footeab@yahoo.com said:

So, according to you, business expenses are subsides...  I've heard it all now.  You have never operated a business before have you? 

And yes renewables do not get tax subsidies, they MOSTLY get PRODUCTION credit subsidies. 

You create 1 KWh of Wind, sell it for ~3c/KWh and you get 1.5c/KWh additional from the government.... for 10 years...  a nice PRODUCTION subsidy of~~ 30%%%!!!

Not only this, but the government cuts the cost by 22% in the form of tax credits. 

[footeab@yahoo.com + 2,135]

1 minute ago, KeyboardWarrior said:

Not only this, but the government cuts the cost by 22% in the form of tax credits. 

yea I modified by post.  screwed up, and then added the bottom part... which is key.  Their power is bought at WAY above market cost as demanded by voters...

[KeyboardWarrior + 527]

2 minutes ago, footeab@yahoo.com said:

yea I modified by post.  screwed up, and then added the bottom part... which is key.  Their power is bought at WAY above market cost as demanded by voters...

The NPV calculations I did tell the truth. Solar is nowhere near competitive with gas if you give them the same electric rate.

How much do they mark their power up by exactly? I'd like to do another calculation where we give solar an electric rate advantage. It's still going to lose.. but by how much I wonder? 

[KeyboardWarrior + 527]

@Jay McKinsey

You mentioned that the CCGP has its profits cut to $250. That's fine, it still kicks ass because it's cheaper than I thought it was and earns even more revenue. You think solar can beat that? 

[footeab@yahoo.com + 2,135]

Just now, KeyboardWarrior said:

The NPV calculations I did tell the truth. Solar is nowhere near competitive with gas if you give them the same electric rate.

How much do they mark their power up by exactly? I'd like to do another calculation where we give solar an electric rate advantage. It's still going to lose.. but by how much I wonder? 

Depends on the local energy provider.  So it varies wildly.  Sorry, no easy answer.  Quite often you will read articles where at the VERY bottom they finally admit that they are buying 'x' amount of wind/solar for ~say fixed wholesale price of 7c/KWh, 1) get first dibs at the market so they do not have to provide any of the grid stability costs, 2) do not have to curtail their power output, thus 3) increasing their capacity factor while NG/Coal etc take it in the shorts.  

Meanwhile, Hydro, Coal, NG are selling their power wholesale at 3c/KWh or less...  Less than 50% that of wind/solar and with much higher costs as well as not allowed to put their energy on the grid while the sun is shining and the wind is blowing. 

[KeyboardWarrior + 527]

Just now, footeab@yahoo.com said:

Meanwhile, Hydro, Coal, NG are selling their power wholesale at 3c/KWh or less...  Less than 50% that of wind/solar and with much higher costs as well as not allowed to put their energy on the grid while the sun is shining and the wind is blowing.

Exactly, and this was something I was willing to ignore with NPV. Instead I get more berating for not using a gas plant's actual capacity, as if the numbers are somehow going to magically favor solar. 

[KeyboardWarrior + 527]

3 hours ago, Monk said:

For  summer peaking regions, the solar+4 hour storage is becoming cost competitive over combustion trurbine gas plants. (for plants starting construction now)

Of course, if capacity factor is less than 30%. Maybe you should put out the NPV calculations because I'm honestly pretty tired of searching for figures only to face more conclusion dodging. 

[Jay McKinsey + 1,489]

11 minutes ago, footeab@yahoo.com said:

So, according to you, business expenses are subsides...  I've heard it all now.  You have never operated a business before have you? 

And yes renewables do get tax subsidies(big ones), they MOSTLY get PRODUCTION credit subsidieYou create 1 KWh of Wind, sell it for ~3c/KWh and you get 1.5c/KWh additional from the government.... for 10 years...  a nice PRODUCTION subsidy of~~ 30%%%!!!

Then they ALSO get massive subsidies from local power grid providers who buy at ABOVE market rates by 50% to get "wind/solar" in their "portfolio" as it was demanded by stupid shit voters usually. 

Solar doesn't get a production credit, just the ITC. 

[Jay McKinsey + 1,489]

27 minutes ago, KeyboardWarrior said:

Not only this, but the government cuts the cost by 22% in the form of tax credits. 

 The ITC is 26% this year and steps down to 22% next year. The ITC and Production Credit for wind are mutually exclusive, you can only claim one or the other. Solar doesn't have the option of a production credit.

[Jay McKinsey + 1,489]

56 minutes ago, KeyboardWarrior said:

And what, might I ask, is the capacity factor for solar?

As for ITC, I did a second calculation where we cut costs by 22%. Your system still lost by a hefty amount. 

You can also refer back to the other example if you want to bitch about capacity factor. The point holds true.  You recall that we gave both entities 100% capacity factor. Your solar figures gave you a negative NPV after 20 years. We've reached the end of the argument. 

You're the one being dishonest by ignoring the conclusions. Focusing on irrelevant details or adding figures that need to be included on your end as well.

The capacity factor for solar was built into my number which I got via NREL's solar calculator: https://pvwatts.nrel.gov/

Are you saying you agreed to a 100% capacity factor for solar?!? I'd take that but it would be dishonest. I make no claims about solar effectiveness at night. 😀 

Edited May 8, 2020 by Jay McKinsey

[Jay McKinsey + 1,489]

1 hour ago, KeyboardWarrior said:

@Jay McKinsey

You mentioned that the CCGP has its profits cut to $250. That's fine, it still kicks ass because it's cheaper than I thought it was and earns even more revenue. You think solar can beat that? 

You found a lower capital cost but how does it earn more revenue? Further profit is what matters not revenue. $150 million in decreased profit each year is $3 billion over the life of the project. That seems rather significant.

Edited May 9, 2020 by Jay McKinsey