Solar energy cannot economically compete in electricity generationby Jonathan DuHamel on Dec. 05, 2011, under Energy
The Arizona Corporation Commission has imposed a renewable energy mandate that requires electric utilities to produce 15% of electricity from renewable resources by 2025. In Arizona the utilities are turning mainly to solar power to meet the requirement. That policy means that the cost of generating electricity and our electric bills will soar. Who benefits?
The graph below shows the relative costs of producing electricity by various means. The data are from the U.S. Energy Information Administration’s Annual Energy Outlook for 2011. (Link). The data were graphed by Willis Eschenbach. The costs are in cents per kilowatt hour. The blue part represents capital and transmission costs; the red part represents fuel, operation, and maintenance costs.
As you can plainly see, solar energy is much more expensive and would not be considered for utility-scale electricity generation were it not for government mandates and subsidies. Another problem with solar generation is that it requires backup power because even in Arizona, the sun doesn’t shine all the time. Solar plants typically produce just a fraction of their rated capacity. For instance, TEP operates one of the largest solar PV arrays in the United States, a 5-MW system. But over two years of operation, the capacity factor for that generator has averaged 19%, meaning it produced only 19% of its rated capacity most of the time.
One of the rationales for using solar (and wind) energy is that it is supposed to reduce our carbon dioxide emissions, but that isn’t necessarily so if the backup generation comes from fossil-fuel powered plants. A study in the Netherlands shows that the intermittent generation by wind actually increases carbon dioxide emissions because the fossil fuel-run backup generators have to cycle up and down constantly rather than being run efficiently at a constant output. That cycling uses more fuel. (Note, the study was specific to wind power, but it could be applied to intermittent solar power also due to variable generation on cloudy days.)
Some may argue that the cost of solar cells is rapidly falling. But, the cost of the cells themselves is a small part of what goes into a utility scale power plant.
Our modern society depends upon having a reliable source of electricity. Wind and solar generation are not reliable. As we increase our dependence of these unreliable sources we increase the risk of electrical brownouts or blackouts which disrupt vital services and commerce.
Perhaps our corporation commissioners think they are doing the right thing for the planet, but their benighted mandate may actually be doing the opposite because it ties up money and resources that could perhaps be put to better use to help solve real problems. Again, who benefits?
Our state legislators should repeal the renewable energy standards mandate and let the utility companies produce electricity by less expensive and more reliable means.
Then we will see whether or not the utilities employ solar energy voluntarily.