The Economics of Solar Energy

Every so often we need news articles about the wonders of renewable energy and then people wonder why it isn't more widely adopted. Some think it is a conspiracy or greed, but in truth, it is economics.

 

A unique thermosolar power station in southern Spain can shrug off cloudy days: energy stored when the sun shines lets it produce electricity even during the night. The Gemasolar station, up and running since last May, stands out in the plains of Andalusia.  From the road between Seville and Cordoba, one can see its central tower lit up like a beacon by 2,600 solar mirrors, each 120 square metres (28,500 square feet), that surround it in an immense 195-hectare (480-acre) circle. "It is the first station in the world that works 24 hours a day, a solar power station that works day and night!" said Santago Arias, technical director of Torresol Energy, which runs the station.... As a result, the plant produces 60 percent more energy than a station without storage capacity because it can work 6,400 hours a year compared to 1,200-2,000 hours for other solar power stations, he said.... The investment cost exceeds 200 million euros ($260 million).

 

From Torresol's website, Gemasolar produces 19.9MW and can produce 110 GW per year, which is a 63.1% capacity factor.

 

 

$260M to get 20MW is ridculously expensive. ($13,000/kW). Over a 30 year life, this will cost $0.31 /kW-hr.

 

A new 500 MW gas plant will cost about $650 M. ($1,300/kW), about 90% less expensive for the capital cost.  Factor in the cost of fuel, the natural gas plant will cost about $0.07/kW-hr.  (The above analysis includes plant upkeep, plus an estimated cost of rising natural gas prices.)

 

Also factor in footprint. The 20MW solar plant takes up 480 acres, while a 500 MW gas plant will only take up about 40 acres. To get 500 MW from the solar facility, you would need 12,000 acres or 300 times the space of the gas plant.

 

Now factor in location. People don't live in the desert. You have to bring power from the desert to the city via transmission. The transmission lines will be 1.5 acres across by probably 500-1000 miles long at a cost of about $2M/per mile.

 I posted many comments on this article, and the arguments from the left were not very rationale. For all the talk about liberals loving science, they ignore even basic things like math. This FEELS good to them, so they will use anything to justify it and ignore rationale, logical arguments against it.  Liberal ideas are so good they have to be mandatory.

• "Greed is why we don't do solar companies" - power companies seeking the low cost solution is considered greed? Greed would be chosing the most expensive option and sticking customers with the bill.
• "What about the cost of wars to get oil" / "Where do you get your facts, the oil companies?"- power plants don't run on oil, they run on natural gas and/or coal, all of which are domestic resources.
• "We need to be visionary" / "Why can't you see beyond tomorrow" / "Conservatives aren't forward thinking" - this technology is from the 1980s and it hasn't gotten any cheaper.
• "Why don't Republicans consider the impact of fossil fuels on people and the earth itself?" "You haven't considered the cost of pollution or climate change?" - Modern natural gas plants are very clean burning. No sulfur, no CO, and NOx levels of 0.01 lbs/mmbtu, which is about 99% cleaner than plants 50 years ago. The solar plant will not be much cleaner, but will cost 4-5 times as much. Again, solar feels good, so it has to be good despite facts.