Analysis Shows Wind And Solar Power In Europe Is On Average 16 Times More Expensive Than Gas-Fired Power!

Charting the costs and effectiveness of renewable energy in Europe

A comparison of both the capital cost and energy production effectiveness of renewable energy in Europe.
By Ed Hoskins
(Some editing by P Gosselin)

The diagrams below show the cost and capacity factors of the major European renewable energy power sources: onshore and offshore wind farms and large scale photovoltaic solar generation. They are compared to the cost and output capacity of conventional gas fired electricity generation.

First two term definitions:
– Capacity factor:  installed nameplate capacity compared to the actual electrical energy output achieved.
– Capital cost:  comparison with the cost of equivalent electrical output produced by gas fired electrical generation.

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Overall European renewable energy has almost 6 times lower capacity than conventional gas-fired power generation and it costs about 16 times more in capital expenditure alone.

In all the capital costs expended by 2013 in Europe amounted to some €1/2 trillion for approximately 170 gigawatts of “nominal” installed renewable energy generation. But because of the reduced capacity factor, those installations provide only approximately 30 gigawatts of real output electrical power.  That output amounts to only about 2.9% of the total European generating capacity of 1024 gigawatts [1].

The following is a table summing up performance of the various wind and solar sources. The

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In addition, electrical output of renewable energies wind and solar power is intermittent and non-dispatchable. Their output cannot respond to electricity demand as and when needed. Energy is fed into the the grid in a haphazard, almost entirely random manner – depending on the weather, time of day and season.

In short, it is inefficient, exorbitantly expensive and often unavailable when it is needed, or severely excessive when it isn’t needed. It offers everything that makes a modern economy uncompetitive.

Renewable energy technologies

When it comes to wind and solar power, onshore wind power is the most effective form of renewable energy in terms of capital cost. It only costs approximately 9 times as much as conventional power generation. On average across Europe, the capacity utilization is about 23%.

Offshore wind too expensive

Offshore wind power is about 17 times more expensive to install, but its increased capacity factors mean that it should be significantly more productive than onshore installations. Nonetheless, in addition to the significant additional capital costs, offshore wind power appears to have major problems with costlier long term maintenance and questionable reliability [4].

The sun sends huge bills

Large scale photovoltaic solar power is proven to be the least economic renewable energy source, costing about 34 times more than gas fired power in terms of capital costs. However, solar power usually has reasonable maintenance costs. On average in Europe, solar PV yields roughly 11% of its nameplate capacity.

In addition to the impacts of cloudy weather, photovoltaic units are susceptible to performance degradation from ice or snow, or obscuration with accumulating dust in drier climates. Solar power might operate reasonably well at mid latitudes, but it is inevitably a poor investment in Northern Europe where yields are low because of latitude, adverse weather, the seasons and the daily rotation of the Earth.

Though the cost of the technical photovoltaic elements of the systems are reducing, these high-tech elements are becoming an ever smaller part of the final installation. The costs of the support infrastructure and linkages to the grid are irreducible. It is also clear that the service life of solar cells is limited, and degrades over time. System degradation of the DC to AC inverters is particularly significant:  they are an expensive element in any solar system with a limited operational lifetime.

Wind and solar make little sense

In summary the following analogy describes the nationally mandated use of renewable energy:

By law a family has to purchase two cars: one works well all the time, is cheap to buy, cheap to maintain and does not cost too much to run. But the other is very expensive to buy and only works about 1/6th of the time. However the fuel costs are very low. But by law the family is forced to use the expensive car if it is working even though it may well let them down at any time. At the same time the cheap car must be kept idling, using fuel but doesn’t go anywhere.

Readers can see Ed’s full analysis here.

 

19 responses to “Analysis Shows Wind And Solar Power In Europe Is On Average 16 Times More Expensive Than Gas-Fired Power!”

  1. John F. Hultquist

    Thanks Ed & Pierre.

    Though the cost of the technical photovoltaic elements of the systems are reducing, these high-tech elements are becoming an ever smaller part of the final installation.

    This issue is worthy of highlighting. Gear costs go down – every other cost goes up. However, it isn’t just the cost of the “final installation” but of the on-going operation, maintenance, and implementation. One thing green-activists like to bring up are the externalities of fuel production, as though there are no such things with PV systems.
    Ed’s report seems to be about “utility size” installations. However, in the US, companies are contracting with home owners for placement on roofs. But neither companies nor home owners are guaranteed to last. Legal questions are in our future. In this same context, as local PV grows the utility has less income to support and maintain the grid. Grid connection fees will become more common and grow.

  2. KitemanSA

    Somehow your data on wind capacity factors must be wrong. I have seen the data for ALL Germany wind installations and combined the on and off shore wind capacity factor is <15%. How can they be 30% and 21% individually?

    1. edmh

      You are right but I like to take “their” data and use it against them as I do here’

  3. Colin Megson

    Unambiguous figures for the performance of the almost 12 GW of UK wind turbines are now available on Wikipedia.

    A 2 MW wind turbine, weighing 1,008,000 kgs, when averaged over the whole of 2014, just managed to power 190 x 3kW kettles, weighing 190 kgs.

    Can any member of Greenpeace or Friends of The Earth, or any purported, concerned environmentalist make any kind of sensible case for perpetuating the installation of these useless monstrosities:

    http://lftrsuk.blogspot.co.uk/

  4. Ric Werme

    I received the URL http://www.fool.com/investing/general/2015/02/07/germanys-renewable-energy-strategy-could-send-a-lu.aspx

    It says:

    Which is [why] Merkel recently told the German Renewable Energy Federation: “It is right that we now need a respite from photovoltaics.” Her suggestion was a switch to offshore wind, “I think we will now have a lot to learn from offshore wind. Everyone should get their chance.”

    So that sent me here to see how things are doing with Bard Offshore or other sites. http://notrickszone.com/2015/02/05/the-chart-wind-energy-proponents-fear-youll-see-offshore-wind-turbines-stay-in-bed-4-of-every-5-workdays/ refers to a capacity factor of some 20%, this article says the European capacity factor is 30%. What is Germany doing worse than the rest of Europe? Can that be blamed on Bard Offshore? Apparently three new projects were added to the German supply around October but are in test mode. I assume they’re doing better than Bard, as the generated power also jumps at that point.

    Seems to me that Germany has learned a lot from offshore wind already!

    1. DirkH

      Has the Motley Fool ever been right about anything?

  5. sod

    Sorry, but this is a completely useless comparison.

    Taking capital costs ignores the fuel cost for gas power plants. That is a really cheap trick!

    capacity factor is a completely irrelevant information. What would a “capacity factor for cars” (maximum speed comapred to averade speed) tell you about the car?
    Capacity factor only matters if you include costs and stability of the remaining grid.

    The simple truth is, wind power is cheaper than gas. That is the reason why people are building wind power. Misinformation wont stop it.

    1. DirkH

      Well, all of what you just said is easily shown to be false, but let’s just stick with the lowest hanging fruit (because I’m lazy):

      “The simple truth is, wind power is cheaper than gas.”

      If that were so, why would any politician legislate subsidies for wind power?

      1. sod

        You wil not show anythingh to be false. But i am looking forward to your attempts to do so!

        The main reason fpr subsidies is, that wind power is not competimngh with new gas (or coal) plants in an empty field of power sources.

        New wind power is competimng with existing fossil fuel plants which are based on existing fossil fuel infrastructure.

        1. Graeme No.3

          Wind electricity is dumped onto the market at or below the price at that time. This is what it sells for but it isn’t what it costs. The difference is made up to the wind farm operator through subsidies.

          The gas plants shut down because their output costs more than coal fired, and because their plant is easier to shut down, That means less income, over a year so the owners look for a better home. You also ignore the cost of maintenance at 10-20% of the revenue for wind. If wind was truly cheaper it wouldn’t need subsidies. And Germany is building new coal fired stations.

          Germany has the greatest % of wind capacity in Europe and the highest retail cost. Denmark has the next highest level and the next highest cost. South Australia has the highest % wind capacity in Australia AND the highest retail price for electricity. Don’t you think there might be a connection?

          1. sod

            Of course here is a connection! A new technology will always enter the market in regions that have a high price. And the first ghenerations of wind and solar power were more expensive than other energy sources.

            So the prices paied in Denmark or Germany for existing wind power plants mighgt really be higher than for gas.

            But we are talking about plants being build today. And in maqny countries, wind power build today is significantly cheaper than gas power build today.

          2. DirkH

            Tall claims, not backed up by numbers.

            Nowhere on the planet can wind power compete without being subsidied.

        2. DirkH

          Ah, sod, so wind power can compete against NEW gas power plants but not against deprecated gas power plants?

          Oh boy, you don’t even know the amount of maintenance going into the fossil fuel infrastructure – flue gas scrubbers, new turbines all the time… It’s an entire industry that you have never heard of, my oh my. You think they’re just SITTING there just producing, right?

          1. sod

            in most situations, the existing plant will have a significant advantage. (as a major part of the costs has already been paid and there are additional advanatges for existing infrastructures)

            This might of course change, if upgrades produce high costs. We see this today, mainly with old nuclear plants.

            In these cases, some of them simply can no longer compete with cheap new wind power and ghets shut down while wind power gets build.

          2. David Norman

            sod (Mike… “sod”, a reference to the old “green side up” joke?… very appropriate!). ” In these cases [old nuclear plants], some of them simply can no longer compete with cheap new wind power”. Please provide a reference, one example of this assertion will do! I realize you can no longer reference your now non existent blog, and the references you now use in your wind energy language diplomatics still tend to give your precarious position away, but this narrative heuristic simply does not pass muster without real world data. Apparently, you have not yet mastered operating in the shadows of “deep thunder”.

          3. sod

            again: this article is comparing the cost of a power source WITH fuel costs to a power source WITHOUT fuel cost, while ignoring the costs of fuel.

            That does not make any sense and is an explanation for the false conclusion about the price.

            PS: you are mixing me up with someon

      2. sod

        Do you have any explanation for the choice of capital cost for this comparison? It does not make any sense!

        The same is true for capacity factor. Imagine a special expensive pure gas would allow gas plants to run at 200% capacity. All plants could change their nameplate capacity to twice the old value, but would keep running on the cheaper fuel, halving capacity factor (while nothing really changes). Capacity factor is a completely irrelevant stat of a power plant, oif not used in connection with other information.

        There is a relevant difference. Gas plants can provide power on demand. But this only starts to matter at a really high penetration of wind power (20% to 30%).

  6. John Reagan

    The article may or may not be true, if you ignore the costs of pollution even from ‘clean’ natural gas, the fact that solar costs are dropping as oil production costs rise, the dependency that the Eurozone has on Russia (and we all know what’s happening in the Ukraine, and how Russia has ‘cut off the gas’ in the past and is doing so again:

    This from 2009: Europe plunged into energy crisis as Russia cuts off gas supply via Ukraine | Daily Mail Online http://www.dailymail.co.uk/news/article-1106382/Europe-plunged-energy-crisis-Russia-cuts-gas-supply-Ukraine.html

    And this from last month: » Putin Strikes Back: Russia Cuts Off European Gas Supplies, Starts Selling Dollars: “The Decision Has Been Made” Alex Jones’ Infowars: There’s a war on for your mind! http://www.infowars.com/putin-strikes-back-russia-cuts-off-european-gas-supplies-starts-selling-dollars-the-decision-has-been-made/

    Just look at coal. What happened there is what will happen to oil and gas 20 years from now. Why fight that which is good for us? Do we really want to dump this on our kids’ shoulders to fix later?