Tuesday, November 11, 2008

California Renewables Goals

No state has more ambitious renewables goals than California. Currently Clifornia law hasset the whole unobtainable goal of obtaining 20% of California's electricity from Renewable sources by 2010. Obtaining that goal would require a doubling of California's renewables portfolio. In addition a further goal of 33% renewables penetration by 2020 has been set. The California Public Utilities Commission issues Quarterly Reports detailing staff reviews of the challenges posed by these goals. I recently looked at the October 2008 Quarterly Report. The Report tells us that they are going to look at reasonable plans to reach the 33% goal, estimate their costs, and report on what they found.

The report states that in order to meet the 20% renewables goal by 2020 California would need to double its renewables portfolio, by adding 29 Million Kilowatts of new generating capacity to the existing 31 Million Kilowatts. In order, to reach the 33% goal California would need to add 70 Million Kilowatts of new electrical capacity. In addition the achieving the 20% goal will require the building of two major new transmission lines at a cost of $3.5 Billion. the 33% goal will require seven new transmission lines at a cost of 6.4 Billion. The report notes.
any current discussion of cost is very speculative given uncertainty regarding
generation, transmission, and integration costs.
There is hidden in the fine print some very bad news:
According to the CAISO’s analysis of a 20% RPS, “As wind generation further increases, the amount of variability
will increase non‐linearly… An increase of the RPS to 33% could more than
double the integration problems and costs.”
It is going to get harder and more expensive to keep the grid stable and reliable as renewables penetration rises. The Report acknowledges inflationary increases in renewables costs since 2002 and estimates a cost to the People of California for obtaining the 33% goal of $60 Billion.

A better idea about cost to California electrical consumers can be obtained by looking at the July Report.

That report shows reliance on a mix of renewable sources. Cost estimates are stated in price per MWh rather than installation costs, and estimates are presented on a somewhat difficult to read chart, rather than laid out in a table. Of the renewable options, only biogas would cost California consumers under $100 Per MWh, and the staff did not foresee a big contribution to the renewables total from biogas.

The next lowest cost would be wind and the staff estimated that somewhere around 20 GWs of wind nameplate capacity in the 20%/33% mix. The estimated cost to consumers of the wind generated electricity was around $110 per MWh. The July 2008 Report would appear to estimate that a little more than 20 GWs of generating capacity would come from Geothermal facilities. The cost of geothermal electricity was estimated to hover in the neighborhood of $120 per MWh. Next the reported noted a tiny amount of micro-hydro generated electricity, to cost a little more. The Next big contribution was seen as coming from Solar Thermal, The Report estimates that 20 GWs of ST generating capacity could be had for a little more than $130 pre MWh, and perhaps another 5 GWs for $140. The rest of the 70 GWs required in the 33% goal was to come from burning biomass.

So how much would this cost. if we take Ben Sovacool's low ball figure for wind of $1700 per KW for wind, and estimate that the same inflation rate that held for the last 5 years would continue to hold, this would give us a price for windmills of $3400 per KW in 2014, about half way through the project. Now that gives us $3.4 billion per GW. For 20 GWs we will need at least $68 billion. Now I believe that Sovacool's figure is should be ajusted for inflation. How much? i am not sure but i have some reason to think that the current installation price for on shore windmills is around $2500 per kW. If we use the standard adjustment for inflation, that would give us $5 billion per GW in 2014, and bring our estimated total to $100 Billion.

It only gets worse. So how much is a 33% renewables penetration going to cost? With no inflation, assuming Ben Sovacool's low ball wind estimate, and 100% wind in the renewables mix, the cost would be $238 billion. Lets take that as the unrealistic estimate. Given my end of 2008 guess for the installation cost for wind, a second slightly less unrealistic estimate for an all wind system would run to $350 Billion.

There are, of course reasons why wind was not chosen for the entire 70 GWs. California is running out of good wind sites. And the electrical generating capacity for the sites it would have to use to reach the 70 GW figure is truly pathetic. 70 GWs of new California wind probably would not get you to 33% penetration.

A few posts back on Nuclear Green, I estimated how many reactors would be needed to produce 50% of the 500 GWh of electricity California uses every day. 500 GWh is about the production of 21 one GW reactors. So one third of that would be 7 reactors. Lets raise that number to 10 incase one reactor is being serviced, and two unexpectedly shut down. 10 reactors @ $8 Billion, our current estimated 2014 price, would be $80 billion which is probably close to the low estimate for the wind share of Renewables mix. Even if you go with a $12 Billion Dollar estimate for nuclear costs, the price is not going to be that much more than the total cost of the wind portion of the renewables mix, and no more than one forth the total cost of the renewables mix.

Clearly then California is considering a far more expensive approach to post carbon electrical energy.


donb said...

The original posting states:

The report states that in order to meet the 20% renewables goal by 2020 California would need to double its renewables portfolio, by adding 29 Million Watts of new generating capacity to the existing 31 Million Watts. In order, to reach the 33% goal California would need to add 70 Million Watts of new electrical capacity.

I am sure that the 29, 31 and 70 million watt figures are really 29, 31 and 70 million kilowatts, i.e., 29, 31 and 70 gigawatts.

70 million watts is quite a small power plant. To get an idea of power demand for California, look toward the bottom the CAISO web page. Peak demand expected today (11 Nov. 2008) is 30 to 31 GW.

Anonymous said...

Well, good luck with the geothermal. I think the numbers for *existing* geothermal are wrong...it's practically free right now. The problem is that there is only a little more of it, and it's not at The Geysers with 1.3 GWs of power is produced now, it is down by the Salton Sea and THAT is expensive.


Randal Leavitt said...

Ontario blows it

Dealing with erratic wind power brings huge costs

Tom Adams And FranCois Cadieux, Financial Post Published: Tuesday, November 20, 2007

The McGuinty government is currently buying wind power for 11¢ per kilowatt hour -- about double the current price homeowners pay for reliable, available-on-demand power



We can fix this problem by forcing electricity supply organizations to refund consumers when the power is not stable.


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