Wednesday, April 5, 2017

Electrical Energy Costs

I have no investment in whether you believe these numbers or not.  These are the means of the range given in the report that is referenced.
According to the Lazard's Levelized Cost of Energy Analysis 10.0, the mean cost of power produced in Gas Peaking stations is approximately $200/MWh or twenty cents a KW-hr. Gas Peaking stations are typically Natural Gas fueled turbines.  I suspect that one reason the power is so expensive is because the stations are idle much of the time, yet the utility must continue to make payments on the borrowed money.

The same study suggests that the cost of solar energy is extremely scale dependent ranging from roughly $180/MWh for residential scale installations to about $55/MWh for "Utility" scale installations.

The fine print in the study says, "...does not take into account... reliability or intermittency related considerations (e.g.,transmission and back-up generation costs associated with certain Alternative Energy technologies)"
Source of graphic.  Writer is in New York City.
The fact that Gas Peaking power costs twenty cents a kW-hr to produce indicates why utilities are very motivated to align power consumption with solar and wind AND to shave the peak consumption at high demand times.  It is hard to make money when you are selling a product that costs you $0.20 to make and you can only charge $0.12

Consider the incandescent lighting in the cooler of a convenience store during the month of August.  Most of the power going to the bulb generates heat, not light.  That wasted energy must then be extracted from the cooler and pumped "up hill" to an air-to-air heat exchanger that is well above 90 degrees F.  In a similar way, think about cooking inside of an air conditioned space in the middle of summer.  That microwave and outside barbecue look mighty good to the utility.

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