Letter: Lazard is a good first step, but be careful

A rationale examination of the options available is called for

To the Expositor:

I respond to David Samuels letter of July 24 (‘Facts and numbers in the climate change debate,’ Page 4).

The Lazard’s Levelized Cost of Energy Analysis (LCOE) does indeed indicate that under certain conditions, wind can compete with conventional sources of energy. Rather than break into a chorus of ‘The Hills are Alive With the Sound of Windmills,’ perhaps we should take some time to understand what it is that the LCOE is telling us. First a few words about the process of developing a LCOE. 

A number of assumptions are required before the calculations can proceed. For example, project interest rates, capacity factors, proposed project life, risks, to name a few. In other words, a LCOE is a result of qualified assumptions influenced by the values and judgments of the creator. As Lazard is a respected source of energy information, they also are careful to qualify reports. If the reports are read carefully, important qualifiers are inserted where appropriate. Here are two such qualifiers: “Other factors would also have a potentially significant effect on the results, these include transmission or other integration-related costs” and “the analysis does not take into account reliability or intermittency-related considerations (e.g., transmission and back-up generation costs associated with wind/solar.” The LCOE then should be seen as a starting point and one of many factors in an analysis.

For anyone interested in another important step in the review of wind and solar, perhaps a look at how other countries are doing with the technology would be useful. Here is a brief summary of a paper by Michael MacDonald entitled, ‘A Look at Impacts of Wind and Solar Electric Generation on Electricity Price’ that was published by the Energy Performance Measurement Institute. Part of the report looks at Europe and includes all countries with reliable data. Note that in most of Europe, subsidies are accounted for in such a way that they do not distort costs of power to any degree. The report shows that in a country with no solar + wind energy, costs are 12.7 Euro cents/kWh and this cost increases 0.48 Euro cents/kWh for each one percent increase in wind + solar share of electricity generation. The report also provides the results of a regression analysis indicating that the study results are robust and can be trusted to be a fair representation of what is happening. Here is an example of two countries included in the report at each end of the graph presented. Denmark gets 33.4 percent of its energy from wind + solar and pays 31 cents/kWh. The numbers for France are 4.9 percent and 17cents/kWh.

Interest in battery technology has also spiked with the development of lithium-ion technology. To the point where suggestions are made that this is the answer to the wind + solar problem of intermittency. To anyone thinking that this might be a good idea, I would suggest reading a paper published by MIT Technology Review by James Temple on August 27  entitled, ‘The $2.5 Trillion Reason We Can’t Rely On Batteries to Clean Up the Grid.’ Mr. Temple in this quote is referring to California in its bid to get to 100 percent renewables, “Building the level of renewable generation and storage necessary to reach the state’s goals would drive up costs exponentially from $49 per megawatt-hour of generation at 50 percent to $1,612 at 100 percent.” That is assuming that l-I batteries will cost roughly a third what they do today!

I now return to the work of David MacKay. His calculations indicate that if windfarms are installed on all available land in the UK, the country would get 20 kWh/d per person. If the same exercise is done for all of Europe, the result would be 9 kWh/d. Energy consumption for the UK as well as the rest of Europe is about 125kWh/d per person. Just to get a feel for the hardware involved, generating the 20 kWh/d output would require double the entire existing fleet of wind turbines in the world!

Energy policy is critically important for everyone. A rational examination of the options available to us is called for.

Shane Desjardins