Another Study Proves Wind and Solar Cost More

Another Study Proves Wind and Solar Cost More..

The evidence keeps mounting that renewables are more expensive than coal or natural gas for generating electricity. Which is in addition to wind and PV solar being unreliable and intermittent.

Here is the headline from a recent study done by Sintef, one of Europe’s leading research organizations:

“Developing World: Cashflow analysis shows gas, coal far more profitable than clean energy.”

The author of the study used construction costs in developing countries that were lower than in Europe or the United States, while maintaining the price of electricity constant at 6 cents per kWh to remove that variable from the calculation.

He also noted, “Despite the lower capital costs, electricity prices are similar, resulting in higher returns on investment.” And, that higher rates of return are needed to incentivize investment in developing countries.

Here are the capital costs used in the study for each source:

  • Onshore wind: $1200/kW
  • Solar PV: $900/kW
  • Nuclear: $2500/kW
  • Gas: $700/kW
  • Coal: $900/kW

Listed below are the resulting annualized rates of return for each of the sources.

  • Onshore Wind: 6.9%
  • PV Solar (Utility scale): 6.5%
  • Nuclear: 7.2%
  • Natural Gas: 13.5%
  • Coal: 15.4%

Note that coal and natural gas both have ROIs twice those of wind and solar.

The study also concluded that the cost of integrating wind and solar into the local grid would significantly reduce the ROIs for wind and PV solar, so that the ROI for wind would be nearly negative, at 0.7%, while the ROI for PV solar would be a negative, -3.1%.

(Integration costs included new transmission lines to bring wind and PV solar generated electricity to where it can be used.)

The study concluded:

Thermal power generation (especially coal) still easily outcompetes clean energy in the developing world on economics alone.”

Add to that the fact that wind and solar are unreliable.

Climate Action Tracker from Sintef website

The genesis for the study was to determine the effect of varying prices for CO2. 

Being part of the EU, Sintef is bound to promote renewables so as to reduce CO2 emissions, as shown by the accompanying chart.

This is why the results of this study are so remarkable and important.

The study arrives at the following damning conclusion:

“Growth [in wind and PV solar] will not even come close to achieving the CO2 trajectories recommended by climate science.”

This is only one of a number of studies that have proven that electricity produced by wind and PV solar are more expensive than electricity produced from coal or natural gas. See, Worldwide Costs for Power Generation, and also, Boring, But Important LCOEs

The fundamental fact is that fossil fuels generate electricity at lower costs than do wind and PV solar.

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7 Replies to “Another Study Proves Wind and Solar Cost More”

    • I read the abstract. Storage does have some positive uses, such as for frequency control, and possibly as a replacement for gas turbine peaking units. The abstract attempts to establish another.
      I can’t comment on the paper as I have only read the abstract. The Duck curve may support the abstract, if I understand the proposal, as storage can smopth the need for ramping up quckly in the evening.
      Thanks for brining it to our attention. It looks interesting.

      • The paper shows that the dream to solve the mismatch problem between renewables and load profile using batteries is impossible. For a perfect match what is important is the annual storage cycle, which is quite expensive and capacity demanding. Batteries are good for daily cycles, but even in this case there is a “saturation” limit as it happens with interconnection capacity (and in some cases, curtailment is less expensive than using storage).

        So, for reaching a neutral CO2 system it is necessary to look for other solutions. Nuclear power plants might be the natural candidate, but at least in EU there is an ideologic thinking against it and there are studies for going to hydrogen and synthetic gas options!

        In the next decade solar photovoltaic will increase a lot and EU will discover the duck curve (not discussed in the paper). This will decrease dramatically the spot prices and turn the solar market value below its LCOE and even wind power. Therefore, the integration costs have to increase. Are EU politics prepared to support both situations to encourage the private investment in the sector?

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