Editor’s Note: In this blog, Dr. Charles Kutscher, a member of PCAP’s National Advisory Committee, rebuts the argument that 100% renewable energy is not practical. Dr. Kutscher is a Fellow and Senior Research Associate of the Renewable and Sustainable Energy Institute, a joint institute between the University of Colorado-Boulder and the National Renewable Energy Laboratory (NREL). He served as the Director of the Buildings and Thermal Sciences Center at NREL from 2013 until his retirement in 2018.
By Charles F. Kutscher
Wind and solar energy are now very low in cost and have comprised more than half of new U.S. electric capacity additions for four of the last five years. Not surprisingly, they have become a target for those who want to continue our reliance on conventional energy sources. A case in point is a recent article, What It Costs To Go 100 Percent Renewable, by Philip Rossetti of the American Action Forum, which opposes the Green New Deal and argues that 100% renewable energy is impractical.
I see several issues with Mr. Rossetti’s analysis, and to address them we need to dive into some of the technical details. To begin with, he incorrectly defines a power plant’s capacity factor as the percent of the time that it operates. (It is actually the average power output over a year divided by its maximum, or rated, power output. For example, if a 1,000-MW plant produces an average of 500 MW throughout the year, its capacity factor is 50%.) It then appears that he adds together the independent capacity factors for solar and wind technologies to wrongly conclude that “approximately 40 percent of the time neither would be available,” therefore requiring a huge amount of back-up capacity. This indicates a fundamental misunderstanding of how renewable energy deployment works.
It is true that the lowest-cost renewables—wind power and solar photovoltaics—are variable sources of electricity. But when deployed together, wind and solar complement each other on both a diurnal and a seasonal basis (wind tends to be stronger at night and in the winter). Furthermore, numerous studies have shown that both solar and wind outputs become quite smooth when utility operators have access to a sufficient number of widely dispersed renewable energy generators. The figure that accompanies this blog shows the smoothing from 200 wind turbines in a wind farm compared to 15 turbines. Further smoothing occurs, both during the day and over long periods, when the outputs from multiple wind farms are combined. If, as some have proposed, we build high-voltage DC transmission lines to interconnect the entire U.S. or North American grid, that would give electricity suppliers tremendous additional flexibility.
Mr. Rossetti calculates that converting our electric grid to 100% renewable energy would cost the U.S. $423.9 billion per year, which he calls “a simplistic ballpark estimate.” I see some important things missing from his calculation as follows:
- It uses 2017 costs and does not account for the rapid cost reductions that are accruing and will continue to accrue from deployment learning curves.
- It does not account for the savings resulting from not operating conventional plants, that is, the present value of future fuel costs and operation and maintenance (O&M) costs. Mr. Rossetti cites a renewable energy investment figure of $320 billion per year from a Risky Business Study but does not mention the equivalent amount of savings that are shown in that same study.
- It neglects the large cost savings that result from deploying energy efficiency technologies along with renewable technologies, as well as the fact that energy efficiency can greatly reduce the amount of clean energy deployment needed.
- It assumes that during times when wind and solar are insufficient to meet the load, it will be supplied only by new hydropower and batteries. But there are many other options: pumped hydro storage, compressed air energy storage, concentrating solar power with low-cost thermal storage, biomass power, and geothermal power. Perhaps most important, a smart two-way grid in conjunction with low-cost demand response measures in commercial and residential buildings (which consume 75% of U.S. electricity), as well as in the industrial sector, can shape the load profile to accommodate the variable supply.
Regarding battery storage, Mr. Rossetti states that lithium-ion batteries will become more expensive because of significant increases in the price of cobalt, a common battery component. But battery manufacturers have been steadily decreasing the cobalt content, and total battery costs have dropped greatly. According to Bloomberg New Energy Finance, “BNEF’s latest Long-Term Energy Storage Outlook sees the capital cost of a utility-scale lithium-ion battery storage system sliding another 52% between 2018 and 2030, on top of the steep declines seen earlier this decade. This will transform the economic case for batteries in both the vehicle and the electricity sector.” In addition to lower-cost lithium-ion batteries, many other battery technologies are under development.
Mr. Rossetti argues that a business-as-usual approach of adding 36.7 GW of additional (mainly natural gas) capacity to the grid by 2030 requires a much lower investment than converting our entire electric grid to renewable energy. However, the whole purpose of the clean energy transformation is to break away from business-as-usual and drive climate-disruptive carbon dioxide emissions to zero. Numerous studies, beginning with the famous Stern Review, have concluded that the cost of damage caused by climate change is many times the cost of addressing it. NOAA Data shows that the cost of billion-dollar disaster events has dramatically increased from a 1980-2017 average of under $50 billion per year to a record $306 billion in 2017, with the six highest annual costs occurring just since 2004. Continuing business as usual is, in reality, the costliest thing we can do.
What about a broader low-carbon approach that includes nuclear power and carbon capture & storage (CCS) along with renewable energy? (The latest House resolution describing the Green New Deal calls for “net-zero greenhouse gas emissions,” not 100% renewable energy.) How we address climate change is the right debate to have. While many environmentalists oppose nuclear power, it does not present an existential threat like climate change. Our operating reactors save large amounts of carbon emissions, so it makes sense to continue to operate them (barring any safety issues) until closing them will not drive up emissions.
On the other hand, new nuclear reactors today are much more expensive than wind and solar both in terms of capital cost and O&M costs. The latest version of Lazard’s Levelized Cost of Energy Analysis shows the unsubsidized cost of nuclear electricity at 15.1¢/kWh compared to 4.3¢/kWh for wind and 4.2¢/kWh for solar PV, which have the lowest levelized costs of all the electric generating technologies. In December 2017 Xcel Energy received 430 proposals for new generation, of which more than 350 were for renewable energy. Wind and solar with battery storage had record low median prices of 2.1¢/kWh and 3.6¢/kWh, respectively.
Because of nuclear power’s poor economics, six U.S. reactors have been closed since 2013, and construction on two new units has been halted. New next-generation reactor designs, such as small modular reactors, are being developed for US deployment; however, at this time their costs and when they will become commercially available are unknown. When they are ready, they can compete against renewables in the energy market.
CCS is also expensive. The Carbon Capture & Storage Association estimates that initial projects will cost between €60 and €90 ($69-$103) per tonne of CO2. Until there is a favorable carbon price, there is no financial incentive to do large-scale CCS. At some point, bio-energy with carbon capture and storage (BECCS) could provide one needed option for actually drawing down atmospheric CO2.
That brings us back to the 100% renewable energy path. What this means is: 1) electrifying everything that makes sense and producing renewable fuels where necessary (solar heat may also be preferred for some applications), 2) providing that electricity mainly with wind and solar augmented with various storage options, 3) maximizing energy efficiency, especially in buildings, to minimize the electricity needed, and 4) modernizing our grid and controlling electricity demand to match the renewable energy supply. In addition to having significant environmental and societal benefits, as well as low electric generating costs, Department of Energy data shows this approach to be an outstanding job creator.
There is no question that achieving 100% renewable energy presents engineering challenges. It will require additional transmission, a smarter and more flexible grid, and advanced inverters. Energy modelers tell us that getting from 80% to 100% carbon-free energy will present the biggest challenge, mainly because solar and wind systems sized to meet springtime loads will not meet high summertime loads. As a result, they point out that seasonal storage may be needed. Interestingly, a recent Minnesota Study concluded that wind and solar could meet a target 70% of the load at costs comparable to natural gas generation and that it would be cheaper to oversize systems and curtail their output in the spring, thus avoiding the costs of seasonal storage.
Despite the real challenges, there are many studies covering countries around the world that conclude that a stable electric grid with 100% or near-100% renewable energy is practical and achievable at reasonable costs. While the most cost-effective combination of technologies to finally get us to zero emissions is worthy of debate, many capable analysts, power systems engineers, and other researchers are developing and field-testing advanced renewable energy solutions. The most important thing we should be doing right now is deploying the low-cost efficiency, wind, and solar technologies we already have today as rapidly as possible to drive down carbon emissions and fight the rising costs of climate change damage.