Monday, December 14, 2009

How much does it cost to fight Global Warming

Graphic: The Cost of Cleaner Energy


DW said...

Charles, I find it hard to believe that CCGTs have a lower, by a HUGE factor, of Carbon out put than wind and solar. this is skewed somehow.

Charles Barton said...

David, I do not know enough about the data behind this to judge it. I have not quoted it, for that reason. I would like to contact Fahl and learn more on how he calculated this. I have, as of yet been unable to locate his email address.

Author said...

David -

I haven't looked at the methodology, but it is clear these figures are the marginal costs of incremental offsets. That is, if you replace 1 MW of generation with CCGT, in the current economy this would cause a reduction of CO2 emissions, only because the current generation mix is more carbonful than CCGT; it would offset coal generation. Likewise, the cost is the additional cost for this marginal 1 MW displacement, divided by its marginal CO2 reduction. As such, CCGT has a lower marginal mitigation cost, not because it is cleaner than wind, but cheaper. Of course marginal reasoning is only differential: obviously you can't use CCGT to drive CO2 emissions to zero by substituting the entire grid with gas "three times over". However it is exactly what you need to predict economic effects: e.g. the current EU carbon price (13.40 €/tCO2) means essentially nothing will happen. And a €50/tCO2 price would mean, in the ultra-long term CO2 intensity would be partially reduced by replacing coal with gas, but no further change.

This graph is of course extremely misleading, because it is suggests relative magnitudes, whereas the only meaningful quantities are differences. There is no meaning to the the wind/nuclear ratio of 91/7. In fact the uncertainty of the EPR figure should be ridiculously high: it could be an order of magnitude higher, or negative. Because the €7/tCO2 figure is an extremely small number, representing an extremely small relative price difference. A 50% coal grid for instance, is about 0.4 tCO2/MWh(e), so a marginal offset with clean energy which costs €7/tCO2 corresponds to an increase in generating cost of €2.8/MWh, or 0.28 c€/kWh, relative to maybe 5 c€/kWh absolute cost for nuclear - a 5% relative difference. This is absurdly precise.

In my cynical opinion, the graphed quantities were chosen, and numbers tweaked, precisely to give nuclear such a tiny marginal cost. They are as small as possible without being negative, which would would cause casual readers to realize the graph doesn't mean what they think it means.

This reminds me of the Chevy Volt's mileage figures, as exposited here:

GM chose a driving distance just slightly higher than the range of the electric battery, so that their mpg statistic would be a misleading average of mostly-electric driving with a tiny bit of gas (hence "230 mpg"). Just manipulative enough to confuse the vast majority of consumers.

Nathan2go said...

Uvdiv, great response. Note also that the graph is labelled max cost, not typical or average.

Charles, you may want to put a disclaimer on that graph. It's pretty misleading.


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