Energy Storage Replace Gas Plants

[KeyboardWarrior + 527]

@Wombat

Solar plant got $80 for the carbon credits they'll sell at $10 per megawatt hour equivalent of CO2. 

[Wombat + 1,028]

10 minutes ago, KeyboardWarrior said:

@Wombat

Let's do NPV

Both plants are rated at 1000 MW and will sell all of their power.

Solar plant gets $80 per MWh, gas plant gets $70 per MWh.

Gas plant costs $1B, solar costs $1.5B.

20 year period. Gas is $3 per million btu.

interest is 5%

GAS

[($200,000,000 * 20) / ((1 + 0.05)^20)] - $1,000,000,000 = approx $500,000,000

SOLAR

[($110,000,000 * 20) / ((1 + 0.05)^20)] - $1,500,000,000 = -$670,000,000

Is this correct?

Definitely not. "Garbage in = Garbage out". You whole hypotheses that gas more "profitable" than solar is wrong. Unless a gas plant get much higher wholesale electricity price than solar, your entire analysis a waste of time. What makes you think solar get just half as much revenue for same amount of electricity sold? You need to start all over again.

[KeyboardWarrior + 527]

2 minutes ago, Wombat said:

Definitely not. "Garbage in = Garbage out". You whole hypotheses that gas more "profitable" than solar is wrong. Unless a gas plant get much higher wholesale electricity price than solar, your entire analysis a waste of time. What makes you think solar get just half as much revenue for same amount of electricity sold? You need to start all over again.

No, the same amount of electricity isn't sold, because a 1000 MW rated solar farm doesn't put out the same amount of power that a 1000 MW gas plant does. 

Remember, a kilowatt of installed solar yields 1300 kWhrs in Alberta. 

Also the base rate is the same for both, but solar gets extra for carbon credits. 

Edited May 8, 2020 by KeyboardWarrior

[Wombat + 1,028]

16 minutes ago, KeyboardWarrior said:

No, the same amount of electricity isn't sold, because a 1000 MW rated solar farm doesn't put out the same amount of power that a 1000 MW gas plant does. 

Remember, a kilowatt of installed solar yields 1300 kWhrs in Alberta. 

Also the base rate is the same for both, but solar gets extra for carbon credits. 

But Alberta is in Canada! I am talkin sunny Texas or Florida?

[Jay McKinsey + 1,490]

1 hour ago, KeyboardWarrior said:

 

This is just the way it is. Companies are switching because of tax incentives and the ability to deduct panel depreciation (up to 85% I believe), but not at all because it's better than gas. 

 

 A natural gas power plant is 100% deductible. Solar is also 100% unless they take the ITC deduction and then depreciable capital is decreased by one half of the claimed ITC. So 85% based on the 30% ITC.  Solar does have a faster deduction rate but that has nothing per se to do with it being solar. All capital assets are rated at different depreciation rates.

The fossil fuel tax subsidies are mainly applied to the production side of the house to provide for less expensive fuel e.g. 

Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically. In its analysis of President Trump’s Fiscal Year 2017 Budget Proposal, the Joint Committee on Taxation (JCT) estimated that eliminating tax breaks for intangible drilling costs would generate $1.59 billion in revenue in 2017, or $13 billion in the next ten years.

Percentage Depletion (26 U.S. Code § 613. Active). Depletion is an accounting method that works much like depreciation, allowing businesses to deduct a certain amount from their taxable income as a reflection of declining production from a reserve over time. However, with standard cost depletion, if a firm were to extract 10 percent of recoverable oil from a property, the depletion expense would be ten percent of capital costs. In contrast, percentage depletion allows firms to deduct a set percentage from their taxable income. Because percentage depletion is not based on capital costs, total deductions can exceed capital costs. This provision is limited to independent producers and royalty owners. In its analysis of the President’s Fiscal Year 2017 Budget Proposal, the JCT estimated that eliminating percentage depletion for coal, oil and natural gas would generate $12.9 billion in the next ten years.

[KeyboardWarrior + 527]

4 minutes ago, Wombat said:

But Alberta is in Canada! I am talkin sunny Texas or Florida?

Oh I've been referring to the Vulcan project this entire time..  I'm rather in favor of desert solar but now I'm curious. That's fine, we can do it in the desert. I think it's a 50% boost in revenue actually. I'll start ground up assuming it's $1.50 per installed watt, but we'll use the federal 22% cut. Let me grab some solar figures for Texas. 

 

 

[KeyboardWarrior + 527]

@Wombat

Okay. Capital cost: $1.50 per installed Watt * .78 (feds) = $1.17 per Watt

Interest rate we'll still say is 5%. 

1000 MW rating

We'll say output is 2100 kWhr/y per installed kW

No carbon credits in America though, so we'll be using $70 per MWh (same as gas plant)

Annual earnings: 1,000,000 kW * 2100 kWh * $0.07 = $147,000,000

(assumed constant, all power produced is sold and the same amount of sun happens every single year)

So...

[($147,000,000 * 20) / (1.05^20)] - $1,170,000,000 = - $61,944,920

Ehh... 

Edited May 8, 2020 by KeyboardWarrior

[KeyboardWarrior + 527]

Anything need to be changed there? Higher desert output? If we increase the electric rate we'll do that for the gas plant too and get the same net result. @Wombat

[KeyboardWarrior + 527]

19 minutes ago, Jay McKinsey said:

The fossil fuel tax subsidies are mainly applied to the production side of the house to provide for less expensive fuel e.g. 

That's okay. I'm including subsidy with the solar calculations to help it out. 

[ronwagn + 6,290]

14 hours ago, Wombat said:

Wrong. Once a few more of your LNG plants completed over next 24 months, Henry Hub natural gas price will jump to at least $4/mmbtu, and will be EVEN LESS COMPETITIVE with solar/battery.

We will see what Californians will pay for their electricity versus the obscene prices they already pay due to similar mistakes in the past. The price to the residential and commercial customers is what matters, not the theoretical price the green industries tout. You have to include any subsidies, new power lines, maintenance, lifespan etc. 

[KeyboardWarrior + 527]

Just now, ronwagn said:

We will see what Californians will pay for their electricity versus the obscene prices they already pay due to similar mistakes in the past. The price to the residential and commercial customers is what matters, not the theoretical price the green industries tout. You have to include any subsidies, new power lines, maintenance, lifespan etc. 

Ayy Ron. Check out the NPV calculations for solar vs gas. It's frickin hilarious. 

[ronwagn + 6,290]

https://en.wikipedia.org/wiki/Net_present_value If you are referring to this NPV please explain. You are over my head. Thanks

[Jay McKinsey + 1,490]

39 minutes ago, KeyboardWarrior said:

 

Okay. Capital cost: $1.50 per installed Watt * .78 (feds) = $1.17 per Watt

 

What is the .78(feds)  ?

[KeyboardWarrior + 527]

2 minutes ago, Jay McKinsey said:

What is the .78(feds)  ?

22% of solar capital cost refunded in the form of tax credits. 

[ronwagn + 6,290]

7 hours ago, Jay McKinsey said:

That is an aspect I am always amazed at. With all the clamor about energy independence through oil and gas here in the US it is never mentioned that domestic solar and wind provides the same independence. 

We have never seen an example of that considering the lifespan of the investment including all the maintenance etc. We have seen a lot of multi billion dollar failures in the solar industries and a lot of states stuck with higher prices. 

I don't mind solar or wind hidden away somewhere but I don't want to look at those installations or pay higher prices. I don't want to fry or mulch birds either. Other than that I am OK with wind and solar. The proof is in the pudding. I need examples of long term profitability versus what natural gas can do. Natural gas is virtually free energy at current prices. You are mainly paying for the transport. 

[ronwagn + 6,290]

7 hours ago, Jay McKinsey said:

 

No need for regulation, the market is very efficiently taking care of that as it is far more lucrative to store power at the production site to sell at peak than sell for low price or be curtailed when the wind is blowing or sun is bright. Most of this new CA storage purchase is going to be located at the production sites.

That is great if the consumer does gets the price reductions they would with natural gas. 

[ronwagn + 6,290]

6 hours ago, KeyboardWarrior said:

Ever heard of supercritical coal? Coal plant efficiencies 50+%, and higher with "ultra supercritical" coal plants. 

Is anyone using them? Never mind. https://energypost.eu/how-much-do-ultra-supercritical-coal-plants-really-reduce-air-pollution/

Edited May 8, 2020 by ronwagn

[Jay McKinsey + 1,490]

2 hours ago, KeyboardWarrior said:

@Wombat

Okay. Capital cost: $1.50 per installed Watt * .78 (feds) = $1.17 per Watt

Interest rate we'll still say is 5%. 

1000 MW rating

We'll say output is 2100 kWhr/y per installed kW

No carbon credits in America though, so we'll be using $70 per MWh (same as gas plant)

Annual earnings: 1,000,000 kW * 2100 kWh * $0.07 = $147,000,000

(assumed constant, all power produced is sold and the same amount of sun happens every single year)

So...

[($147,000,000 * 20) / (1.05^20)] - $1,170,000,000 = - $61,944,920

Ehh... 

The cost per installed Watt number you are using is the most recent published but it is from 2017. According to NREL the cost is falling by 14% per year so the 2020 cost is around .95 per installed Watt.

 

the average reduction in reported price of 14% between 2010 and 2017 https://atb.nrel.gov/electricity/2019/index.html?t=su

Can you point me to where you got your yearly output number of 2100 kWhr/y per installed kW?

[KeyboardWarrior + 527]

Just now, Jay McKinsey said:

The cost per installed Watt number you are using is the most recent published but it is from 2017. According to NREL the cost is falling by 14% per year so the 2020 cost is around .95 per installed Watt

The Canadian project figures come from last year into this year, and it's about $1.50 per Watt. I'm not using 2017 figures.

I can link you to a project in my home state where the figure is about the same. $1.50. All you have to do is divide rated output by capital cost. 

As for the 2100 number, that's from a solar plant in California. In the desert. So basically one of the highest possible figures you can get in the U.S.

[KeyboardWarrior + 527]

@Jay McKinsey

You understand that I gave you several advantages right? All the power sold. 22% cost cut. In the case of Canada, $80 per megawatt hour. Yet, negative NPV. I don't believe we're ready for this yet. 

[Jay McKinsey + 1,490]

1 minute ago, KeyboardWarrior said:

The Canadian project figures come from last year into this year, and it's about $1.50 per Watt. I'm not using 2017 figures.

I can link you to a project in my home state where the figure is about the same. $1.50. All you have to do is divide rated output by capital cost. 

As for the 2100 number, that's from a solar plant in California. In the desert. So basically one of the highest possible figures you can get in the U.S.

Please do send the link for your state and Canada. 

[Jay McKinsey + 1,490]

Just now, KeyboardWarrior said:

@Jay McKinsey

You understand that I gave you several advantages right? All the power sold. 22% cost cut. In the case of Canada, $80 per megawatt hour. Yet, negative NPV. I don't believe we're ready for this yet. 

Do you understand that NREL says the CAPEX you are using is wrong?

[KeyboardWarrior + 527]

3 minutes ago, Jay McKinsey said:

Please do send the link for your state and Canada. 

https://calgaryherald.com/business/local-business/greengate-secures-partner-to-finance-countrys-largest-solar-project/

Go ahead and calculate that cost per installed Watt. 

[nsdp + 449]

14 hours ago, Wombat said:

Where do you plan to get the H2 from? I bet u love they grey and blue stuff, not the green stuff right?

Wind and solar and water.   Hydrogen is a storage mechanism for  load balancing using hydrogen and oxygen(electrolysis) when you have a surplus of renewables and then run them though a specially  designed combined cycle plant to replace the sun when it doesn't shine or the wind when it doesn't blow.  You also provide reactive power for the grid which synthetic AC  from solar and wind does not prove to energize your transformers and power lines; you have inertial mass to adsorb the effects of lights being turned on and off preventing over generation or voltage collapse; and you can increase/decrease the magnetic field to raise/lower the  grid voltage. voltage.  If you can do Maxwell's equations you know that no power flows if any of those four values are 0.   Batteries do not provide DYNAMIC reactive power, or inertial mass or voltage control for AC.

[KeyboardWarrior + 527]

@Jay McKinsey

https://www.duluthnewstribune.com/business/energy-and-mining/4530549-minnesotas-largest-solar-farm-project-moving-ahead-far

$22 Million for land.

I need to see what the panels cost quick.

Edited May 8, 2020 by KeyboardWarrior