Analysis confirms nuclear’s value

Facts still matter. And the fact of the matter is residential utility rates in Washington state are the lowest in the nation. But some people want to change that and force Washington residents to pay more for their power.

“…the widely-publicized decline in solar and wind prices now makes it probable that (Columbia Generating Station) could be replaced entirely with renewable resources and still deliver a cost reduction to Pacific Northwest customers. Once thought to be too expensive, renewables are becoming a viable option for utilities…”

Portland economist Robert McCullough wrote those words as part of a February report pushed by Physicians for Social Responsibility, an anti-nuclear energy group dedicated to closing Columbia Generating Station nuclear energy facility and eliminating nuclear energy entirely from the U.S. electricity mix.

McCullough based his conclusions mostly on levelized cost of electricity reports by Lazard, a financial advisory and asset management firm. However, in doing so he misrepresents the Lazard LCOE 10.0 report, which clearly states that renewables alone can’t replace baseload generation. By ignoring the cost of firm capacity resources needed to back up intermittent generation from renewables, McCullough significantly under-represents the costs that would be incurred if Columbia were retired prematurely (it’s currently licensed through 2043).

McCullough’s conclusion: replacing Columbia with renewables yields a net present value savings of $261.2 million to $530.7 million through June 2026.

A recently released analysis (PPC Analysis – McCullough CGS Report) by the Public Power Council, an entity that has represented the Pacific Northwest’s consumer-owned utilities for 50 years, uses actual data for the Northwest to show McCullough is simply wrong in his conclusions.

The PPC report concludes McCullough’s recommendation would cost Pacific Northwest power customers $271 million a year, as well as impact the region’s power supply resource adequacy.

Playing with numbers

As the PPC report explains, McCullough uses the “median” Lazard LCOE to make his cost comparison, which gets him a cost per megawatt-hour for solar of $42.50 and $31 for wind. The PPC writes, “(a)lthough these values might be realistic in some circumstances, they are wildly inconsistent with the values produced specifically for this region by the [Northwest Power and Conservation Council].”

But the numbers in the Pacific Northwest aren’t as friendly to McCullough and PSR, so they avoid them altogether. The PPC looked at the NWPCC’s Seventh Northwest Power Plan to find levelized costs more in tune with the region where necessary replacement power for Columbia would be generated. “The least expensive new renewable resources in terms of levelized cost in the 7th Power Plan is $61.43 per MWh for utility scale solar and $102.45 per MWh for wind. Many options are significantly higher,” the PPC writes.

They go on to offer a slight rebuke of McCullough’s research tactics.

“Although the (McCullough) report cites the NWPCC and the 7th Power Plan in other instances, the choice to rely on a minimally documented, national level report for levelized resource costs rather than the extensively vetted regional analysis used by the NWPCC is not explained.”

Perhaps we can help. Anti-nuclear energy ideology drives many folks to discount scientific facts about nuclear (such as calling carbon-free nuclear “dirty”) and economic facts that don’t serve their point of view (such as existing resources being cheaper than new resources, even renewables). A lot of people across the country just participated in the March for Science which was, in part, a protest against this type of tactic. In fact, PSR members just marched against this type of tactic.

Doing the math

The PPC takes the NWPCC solar cost of $61.43/MWh and adds Bonneville Power Administration’s Resource Support Services number, basically capturing the cost of an intermittent resource versus a baseload, or full-time, resource. The PPC report uses BPA’s 2018 rate case number of $16.30/MWh for solar.

“Using regionally vetted analysis from the NWPCC and BPA’s latest proposed rates, the least expensive replacement for the power of (Columbia) with intermittent renewables would be utility scale solar facilities in Idaho at a total cost of $78.84 per MWh,” according to the PPC report.

The average cost of power for Columbia Generating Station is $48.50/MWh through 2026 (including transmission), according to the PPC.

McCullough Chart new

Given the difference between the two costs, based on Columbia’s 1,019 aMW annual output (1,019 MW of generation an hour multiplied by 365 days), the McCullough/PSR recommendation would cost power customers $271 million a year over what they currently pay.

“This result is consistent with a scenario analysis conducted in the 7th Power Plan that examined the change in regional portfolio cost for the planned retirement of a 1,000 MW carbon free resource. That analysis found an increase in regional power costs of
$3 to $6 billion on a net present value basis over 20 years,” the PPC concludes.

Other report issues

Cost is certainly an important factor when considering electricity resources. But so is capacity and reliability, or what McCullough strangely sees as “inflexibility.”

In his report, McCullough writes, “Indeed, as renewable energy standards in the Pacific Northwest, California, and other Western states require additional variable resources, inflexible baseload plants, including nuclear and coal plants, will become increasingly problematic.” This ignores two key points: that intermittent generation from renewables is not a reliable replacement for baseload generation; and, existing Northwest coal plants are and will be retiring, reducing the available amount of baseload generation in the region. By arguing that Columbia should be retired, McCullough is doubling down on these challenges.

The Public Power Council report catches this mistake.

“The NWPCC conducts a rigorous, annual Pacific Northwest Power Supply Adequacy Assessment which looks forward five years. The most recent assessment conducted in 2016 for adequacy in 2021 already shows significant potential for resource deficiencies based on the planned retirements of the Boardman, Centralia and Colstrip Units 1 & 2 coal facilities. Retirement of (Columbia) would significantly exacerbate these issues,” the PPC writes.

A final point from PPC: BPA uses the hydro system to help balance the wind generation in the region. The baseload electricity from Columbia Generating Station provides significant additional margin to accomplish that while still maintaining an environmentally-friendly carbon-free mix. Following the McCullough/PSR formula would put added pressure on BPA and the hydro system.

Here’s why:

“(T)he 7th Power Plan specifically does not rely on the large scale development of intermittent resources to meet capacity needs, instead calling for demand response measures as available or natural gas generation,” according to the PPC analysis.

Reports, reports

So to summarize, McCullough took 48 pages to reach a result that was off by literally more than half a billion dollars at best ($750 million at worst) versus a three-page analysis that provided facts relevant to the Northwest and its power customers, and showed the true value of Columbia Generating Station to the region.

As another regional energy expert said about this McCullough report:

Overall, it looks like Robert McCullough hasn’t changed his basic approach. Instead, he’s just adding more superstructure on top of a weak foundation. For example, he willfully continues to ignore and misrepresent the fact that the Mid-Columbia spot market only reflects the variable operating costs of resources, and at best only allows a small portion of the fixed costs of owning resources to be recovered.

As headline grabbers, McCullough’s reports do the job admirably (see here and here, for example), but as the basis for serious energy policy discussions, they seem to miss the mark, and in this case, wildly.

(Posted by John Dobken)

 

Of Marches and More

“(Climate change) is along with the prevention of nuclear war the greatest challenge facing humanity today.”

That statement does not contain a lot of wriggle room.

The line is from a letter to the editor written by Jim Sawyer, identified as a member of Washington Physicians for Social Responsibility by the organization. That is a group trying to shut down Columbia Generating Station nuclear power plant and is in favor of eliminating nuclear energy altogether.

Nuclear energy provides 60 percent of the carbon-free electricity produced in the United States. That dwarfs wind (17%), solar (2.7%) and hydroelectric power (19%) by comparison.


PowerPoint Presentation


The real reality
So how does one go about tackling “the greatest challenge facing humanity today”? Eliminating sources of clean energy would seem a dubious beginning. We have seen in states where nuclear plants shut down that carbon emissions rise. Look at Vermont (Vermont Yankee). Look at California (San Onofre, and perhaps Diablo Canyon). New York is gearing up to replace carbon-free Indian Point Nuclear Power Plant with a carbon-emitting natural gas plant. Even in Germany, often held up as an example of how to do renewable energy policy, emissions, coal use and electricity costs are all up.

This week, the Environmental Defense Fund acknowledged this reality in a post in favor of offering targeted financial incentives to existing nuclear energy plants to remain operating, if the alternative is to replace them with natural gas. That’s smart.

Nuclear Energy Saves Lives LGRenowned climate scientist Dr. James Hansen, in a study published by NASA’s Goddard Institute in 2013, found the clean air energy from nuclear power has saved 1.8 million lives and may save as many as 7 million more.

The United Nations’ Intergovernmental Panel on Climate Change has been saying for years that nuclear energy must be part of the climate change solution. In 2014 they wrote, “Achieving deep cuts will require more intensive use of low-GHG [greenhouse gas] technologies such as renewable energy, nuclear energy, and CCS [carbon capture and storage].”

Given these pro-nuclear voices and benefits, one would think the Physicians would be calling for MORE nuclear energy, not less.

To make a difference
Which brings us to Saturday, when people from all across the country will be marching for science. Some critics have said the march is more about politics than science, which in some cases and for some people may be accurate. Leave that aside.

Sci-con.Artboards.AtomIt is refreshing that the Seattle march organizers (and indeed the national organization) created a graphic that features the symbol of the atom and sought to make nuclear energy part of the conversation. Nuclear science is an often forgotten field, foolishly equated by some to simply making bombs. But it is so much more (as in saving lives through nuclear medicine – surely PSR supports that!). As Dr. James Conca has said, when a mainstream media outlet features a segment on nuclear energy, the “expert” is almost always an activist, not a scientist. That needs to change.

To embrace science (and facts) is to realize that spent nuclear fuel is not the problem so many anti-nuclear activists make it out to be. It is used as a rhetorical fallback position (“yeah, but what about the waste”) to argue against any new nuclear energy. This should stop. Used nuclear fuel occupies a tiny land footprint and poses no environmental concerns as it is currently stored. The science tells us that. If one believes otherwise, that’s a departure from science into ideology. Science is helping us develop a way to utilize this spent fuel and turn it into more clean energy. Thankfully, interest in developing advanced reactors is gaining momentum.

To embrace science is to realize radiation is not the stuff of 1950s b-movies. That while natural disaster-induced nuclear events such as Fukushima are absolutely devastating to displaced local populations, claiming that people or fish/wildlife will be greatly affected by any resulting radiation/contamination is irresponsible. Scientists, real scientists, have looked at the impact of the releases from Fukushima on health and future cancer rates and found them to be negligible. That’s science. Anything else drifts into the realm of “alternative facts.” And who wants to go there?

Ideology is what drives false narratives about “easily” replacing baseload, or full-time, energy resources with intermittent ones. See an example here of how difficult it can be, even on a small scale. (Paywall alert). Don’t be mistaken, we need wind and solar as part of our electricity mix, especially to displace carbon-emitting resources. But using wind and solar to replace either hydro or nuclear makes zero sense in the age of climate change.

While storage technologies are promising, they aren’t efficient enough or economic enough to replace large hydro or large nuclear or large fossil resources. In 20, 30 or 40 years, perhaps. But groups like Washington Physicians for Social Responsibility want to close down nuclear plants yesterday. That’s irresponsible. Tesla cars are fun to talk about, but the world still runs on pick-up trucks and Camrys.

Mr. Sawyer continues his letter, “What’s almost as horrifying as these impending and looming realities is our government’s incomprehensible indifference to the problem and the seeming commitment and desire to accelerate a problem that the human imagination cannot even begin to come to grips with.”

Doctor, heal thyself.

The PSR position on nuclear energy was born of, and lives in, a pre-climate change universe. Since the time most anti-nuclear energy positions were formed in the 1970s and 80s, nuclear energy has only gotten better as an energy resource. The U.S. fleet now has annual capacity factors over 92 percent.US-Nuclear-Industry-Capacity-Factors It’s safety record continues to be unmatched. Which may be one reason anti-nuclear energy arguments focus almost exclusively on cost of power. But if you believe, as Mr. Sawyer and his colleagues believe, that climate change is “the greatest challenge facing humanity today,” shouldn’t that change the prism through which costs are viewed? How does the public health factor into PSR’s cost analyses? (Hint: it doesn’t for nuclear. Washington’s PSR chapter actually posted that link on their Facebook page, missing the irony). Cost for anti-nuclear groups is a convenient cudgel that only swings at one target, an opportunity brought about by (current) low natural gas prices. But then they don’t want natural gas either. That’s what ideology does for you.

Science… just the facts
While we still await an energy storage system capable of city-scale baseload equivalence; or a large-scale electric grid that can turn part-time energy resources into full-time, dispatchable resources; science has already developed a resource that is carbon-free, cost-effective and runs more than 90 percent of the time with an abundant supply of fuel.

Yeah, science did that.

Support science with your feet, but more importantly, support it with your brain and your heart.

(Posted by John Dobken)

Resolute about Nuclear Energy

Four Energy Northwest member utilities issued resolutions during the past two months calling for the continued operation of Columbia Generating Station during its lifecycle. Columbia received a license extension from the Nuclear Regulatory Commission in 2012 to operate through 2043.

Pacific County Public Utility District 2 commissioners were first to place their signatures behind the economic and environmental value of Columbia, followed
March 28 by Benton and Franklin PUDs and Grant County PUD 2.

Resolutions adopted by Benton PUD and Franklin PUD also took to task a recent report commissioned by the anti-nuclear energy group Physicians for Social Responsibility. In the report, researcher Robert McCullough claims Columbia’s output can be replaced by renewable resources. (See our blog post for more on the report).

“We felt pretty strongly about this,” said Franklin PUD general manager Tim Nies during the utility’s public meeting March 28, referencing “a lot of flaws” in the PSR report. “CGS is baseload…and the cost of generation from CGS is still a really good deal.”

Resolutions

Such statements of confidence join state bi-partisan political support for nuclear energy generation that, according to Gov. Inslee last year, is “a vital part” of the state’s diverse mix of environmentally responsible generating resources.

Last summer Washington State Democrats passed a resolution titled, “Retain the Columbia Generating Station”. In early March the Benton County Republican Party passed a similar resolution which, like its democratic companion, is expected to advance this year to full state party support.

Brent Ridge edit

EN Vice President for Corporate Services/CFO Brent Ridge

“This all started with the state democratic party, which focused on the environmental benefits of nuclear power generation,” Brent Ridge, vice president for Corporate Services and chief financial officer, told Franklin PUD commissioners. “Now we have a resolution from Benton County republicans that’s similar, but leans toward the specific economic benefits of Columbia.”

Directly responsible for more than 1,000 high-paying jobs, Columbia is the third largest electricity generator in the state, behind Grand Coulee and Chief Joseph dams. Plant operations prevent an atmospheric carbon impact equivalent of keeping 600,000 cars off the road, or equal to eliminating every passenger vehicle in Oregon’s Multnomah County.

Last month Pacific PUD leaders also pushed back on a local activist’s call to close Columbia because of “risks to the Columbia River.” In a letter published in the Chinook Observer, Commissioners Diana Thompson, Michael Swanson and Dick Anderson spoke to Columbia Generating Station’s safe and efficient operation, declining costs, recent generation records and environmental benefit.

“PUD commissioners and employees have gained insights and knowledge about nuclear energy and nuclear energy operations; about their systems and back-up systems; the regulatory framework these plants operate in; and the professionals who keep the plant running safely and efficiently,” the commissioners wrote.

(Posted by Mike Paoli)

 

Making the Case for Nuclear Energy: 5 Questions

Everyone comes to nuclear energy along different paths. For some the journey starts in high school. For others, later in life, after knowledge has been gained and, perhaps, views have changed.

Such is the case for the participants in Tuesday’s event (April 4) at Seattle Town Hall, Making the Case for Nuclear Energy in the 21st Century (tickets and information available here). The event is an effort by the grassroots organization Seattle Friends of Fission, a group of Seattle-area residents, to ensure nuclear energy is part of the climate change discussion.

Panelists Dr. Jim Conca, Forbes.com contributor on energy and environmental issues; Dr. Nick Touran, advanced nuclear reactor physicist for TerraPower; Kristin Zaitz, senior consulting engineer, Diablo Canyon Nuclear Power Plant and co-founder of the group Mothers for Nuclear; and moderator Scott Montgomery, nationally acclaimed writer, and adjunct faculty, University of Washington Jackson School of Intl. Studies, offered their thoughts on how nuclear energy became a calling instead of just a career.

Speakers


Northwest Clean Energy: What first got you interested in nuclear energy?

Nick Touran: I first got interested in solving the energy challenge in high school. I went to the local engineering school not knowing how exactly to do this and ended up in a discussion with a peer advisor on what to major in during freshmen year. She asked what I my interests were and I said “energy.” Then she asked me if I had considered the nuclear engineering department. I had not.

Kristin Zaitz: I’m a civil engineer by training. I chose my profession when I was in my teens, flipping through college catalogs. The pictures of civil engineers were all outdoors, inspecting bridges, taking water samples. I didn’t want to be in an office. In my career I’ve rappelled down enormous concrete structures, swam amongst beautiful Pacific Ocean sea life, hiked along rivers, explored pristine coastland and tide pools,  and I’ve done that all while working at a nuclear power plant.

Scott Montgomery: I am a geoscientist and became an anti-nuclear activist in the 1970s. At that time, fear focused on radiation and on nuclear power as a dangerous technology forced upon the public by an anti-democratic concentration of power by a military-industrial-government system.

I began to question my views in the early 2000s, due to rising concern among scientists about climate change. One key influence was the endorsement of nuclear power by many of these scientists, who wrote of reevaluating their own former ideas.

Jim Conca: As a young planetary geologist in the 1970s, I first became interested in nuclear as

Jim Conca Salt I0001

Dr. Jim Conca with Delaware Basin salt from New Mexico’s Waste Isolation Pilot Project.

possible propulsion for spacecraft. Later, I worked on deep geologic disposal of nuclear waste and began to see the irrational fear that surrounds radiation and nuclear power, and how the misunderstanding between weapons and energy led to nuclear being used as a political tool during the Cold War.

Being an environmentalist and understanding both climate change and the massive direct pollution caused by fossil fuels, it became obvious that we need all non-fossil fuel sources for a sustainable future that provides everyone on Earth with reliable and sufficient power to have what we consider a good life.

SM: Educating myself on basic nuclear science and radiation led me to look into the Manhattan Project, the detailed development of weapons and the impacts of Hiroshima and Nagasaki, and from there, into the history of nuclear power, the medical literature on health effects of radiation, and a great deal more. Over the past decade, as part of my research for a book on the future of nuclear in this century, I have had conversations with hundreds of physicians, radiation workers, nuclear engineers, radiobiologists working at hospitals, health physicists at the Centers for Disease Control, anti-nuclear activists, and ordinary citizens.

 

Scott M Tour

Scott Montgomery, at far right, with students from his class on a tour of Columbia Generating Station.

The combination of all this study and work has made it clear beyond measure that nuclear power is among the least threatening of all major energy sources and among the most essential for battling climate change.

KZ: I’m interested in conserving our precious land, cleaning up our air, and protecting our climate. When I connected nuclear energy with the things that I value, my interest in nuclear was born.

Far more has been done out of uninformed fear than informed understanding.
– Scott Montgomery

Northwest Clean Energy: Why do you think there is not more widespread acceptance of nuclear energy?

Kristin Zaitz: Because of people like me. Like many people, I am afraid of things that I don’t know a lot about, I am biased in ways that I don’t immediately realize, and I am not naturally good at assessing risk. We all tend to seek out data that confirms our beliefs.

IMG_2040

Kristin Zaitz with children Oliver and Kate.

I have spent over fifteen years working at a nuclear power plant, learning, questioning, exploring, discovering. When I started my career, I thought that I was going to uncover a pile of dirty secrets that the mad scientists were hiding. My preconceptions were the product of the mainstream environmental anti-nuclear fear campaign that preys on the public’s lack of information about nuclear power coupled with fear of radiation and nuclear weapons. It took many years for me to shake that fear, but I ended up discovering nuclear energy to be one of the best kept secrets in land conservation and climate action.

Nick Touran: I once went out on the streets of Ann Arbor, Mich. asking people what they thought about nuclear energy for a documentary. People generally mentioned the typical four

lab_dinner

Dr. Nick Touran of TerraPower.

concerns: waste, bombs, accidents and cost. But one woman summed up the general feeling really well when she said “Honestly, my gut feeling is that I’m not in favor of it, but I don’t know hardly anything about it.” Her friend standing there chimed in “I second that!” So I’ve made an effort to try to help people understand nuclear energy better. Generally, the more someone understands it, the more accepting of it they are.

Scott Montgomery: This is both an easy question to answer and a challenging one to explain. There is little doubt in my mind:  the most fundamental factor is the fear of radiation. It is not a simple fear, combining as it does many anxieties about society and the self. But it saturates nearly everything to do with nuclear power, from the unending talk of “safety” to the idea of a “dirty bomb.”

Jim Conca: Agree. The intentional, but incorrect, fear of all radiation, even at low levels that cause no harm.

SM: Far more has been done out of uninformed fear than informed understanding. Educate and reduce that fear, and a great burden will be lifted.

Northwest Clean Energy: If there was one thing you could tell someone to help them understand why nuclear energy is good, what would it be?

Scott Montgomery: 50 years of civilian nuclear power, with an average of 300 reactors operating, has resulted in only 3 large accidents, two of them without a single injury to the public.

Jim Conca: Fewer people have died as a result of nuclear power than any other form of energy, including renewables. It is the most reliable, safest, longest-lasting form of energy we have.

Kristin Zaitz: I’d want them to understand how electricity is generated, how it is transmitted, and the magnitude of our consumption in the developed world. When you look at the abilities and limitations inherent in the technology of each available energy source, and pair that with the environmental pros and cons of each, you realize that there is a trade-off in every energy scenario. We need to understand those trade-offs and make wise choices. With nuclear as part of a clean energy mix, we can provide abundant energy to our growing world and minimize the impacts to people and nature.

Nick Touran: I like informing people that if they got 100 percent of their energy (electricity, transportation, heating, everything!) from nuclear fuel, they’d consume about 1.5 soda cans of it in their lifetime and produce no climate-altering byproducts. I’d then go through the key concerns and point out how there are reasonable solutions to all of them, but I guess that’s more than one thing.

Northwest Clean Energy: What is the greatest myth about nuclear energy?

Kristin Zaitz: The greatest myth about nuclear energy is that we don’t need it, and that we can decarbonize without it. Germany is a great practical example of this. Germany is succeeding at adding lots of wind and solar power to the electric grid, but still its carbon emissions are rising since this intermittent supply is backed up by fossil fuels. We simply cannot decarbonize our energy supply with renewables as long as they are backed up by fossil. Energy storage is something that we don’t do well at large scale, or for any appreciable length of time. In absence of an energy storage miracle, Germany and many others are doing the only technologically possible thing that they can do and locking in their dependence on fossil.

Nick Touran: That they’re unsafe. At a public meeting last year the people laughed out loud when a nuclear supporter said it was one of the safest energy sources known. Upon even brief research, anyone can see that the data support this conclusion. Nuclear has actually net saved 2 million lives worldwide by displacing air pollution deaths even considering the effects of nuclear accidents. I think it’s a shame that people reject the data on this one.

Northwest Clean Energy: Looking to the future, what is your hope for nuclear energy, in the U.S. and the world?

Jim Conca: My hope is that the United States will retake the global leadership in nuclear science and nuclear power. We should complete development of new reactor technologies that are ideal for eradicating global poverty and reverse global environmental degradation before we pass the point of no return, somewhere around 2050.

Nick Touran: Some Chinese urban populations are losing something like five years of life due to air pollution, so they have an urgent clean energy need. Accordingly, I see China, India, and Russia building large nuclear fleets in the somewhat near future.

Scott Montgomery: My hope is that the U.S. will see the need for expanding and advancing nuclear power in a major way, a technology it has given to the world. That the many new nuclear start-up companies in the U.S. and Canada focused on advanced reactors that address waste and non-proliferation concerns, find major success.

Kristin Zaitz: I want energy access for all of humanity, clean air, a livable climate, and room for nature. I see this happening through the protection of existing nuclear energy, and the expansion of new nuclear and other clean technologies across the world.

(Posted by John Dobken)

Reader Beware: apples and oranges alert

When rhetoric edges toward demagoguery, techniques to beware of include selective use of data and misleading statements that may sound appealing but actually perpetuate misconceptions. And when an author’s own numbers don’t support their broad conclusions, it’s time to be even more wary about going along for the ride.

Enter Robert McCullough’s latest faulty comparison of the cost and value of various forms of power generating resources (Renewables Cost Report, published by McCullough Research on Oct. 5).

The primary focus of McCullough’s report is on declining costs for new renewable resources such as wind power and solar photovoltaic generation, relative to other types of power supplies, including new hydroelectric power plants. The report begins by reiterating the conclusion reached in an earlier McCullough Research report:

“This assessment only reinforces the conclusion I reached in my report last year – renewables such as solar and wind are less than half the cost of hydro.”

Immediately following this statement, the McCullough report presents a table comparing the average levelized (life-cycle) cost in Canadian dollars per megawatt-hour (MWhr) for the following generating resources:

mr-lcoe

Careful readers will quickly note that the numbers simply do not support McCullough’s claim that hydro is double the cost of other forms of renewable generation. According to his own comparison, the levelized cost of power from the Site C hydro project is estimated to be 15.6 percent higher than the cost of onshore wind power, and 41.5 percent higher than the cost of utility-scale solar photovoltaic generation. So right out of the gate, McCullough’s rhetoric is unsupported, even by the cost comparison he prepared himself.

But wait, it gets worse. McCullough’s simplistic comparison of the cost of power from these types of power resources totally ignores the practical reality that they have very different characteristics and capabilities. As a result, the value of the power produced by different types of power generation varies dramatically.

This is not a small point.

U.S. News and World Report made sure its readers were aware of LCOE drawbacks, the exact drawbacks McCullough chooses to ignore.

Despite the strengths of LCOE as a metric – it is easy to understand and widely used – it has some shortcomings, too. Namely, it leaves out geographic variability, changes with seasons and usually ignores the cost of environmental impacts such as the cost of carbon emissions. This metric is a bit too simple when comparing variable wind and solar generators to power plants that you can turn on and off at will, such as those fueled by uranium, coal and natural gas.

And one could add water.

For example, consider solar photovoltaic generation. As the McCullough report (correctly) notes, solar PV in the Pacific Northwest only produces at a 19 percent to 26 percent capacity factor. But what the McCullough report does not mention is that solar PV generation occurs primarily during the spring and summer months between mid-morning and late afternoon. Meanwhile, consumption of electricity in most of the Pacific Northwest is typically highest during earlier and later parts of the day, and during the winter season. This means that other, less intermittent forms of generation are needed when consumers use the most electricity. It also means that a significant share of solar generation occurs when the market value of power is low – further reducing the value of solar PV compared to other types of generation. These realities are not acknowledged in the McCullough report. (He does reference the potential use of energy storage to partially mitigate the daily mismatches between solar PV generation and consumer use of electricity, but conveniently neglects to include the additional costs that would be incurred for storage.)

Anyone living in the Pacific Northwest has felt the bite of Old Man Winter of late, with temperatures falling into the single digits for extended periods. How are people staying warm? Mostly from baseload, or full-time, electricity resources like hydro, fossils and nuclear.

BPA Source Graph.png

Is that value worth something? We think so.

Diversity is key

One of the information sources quoted in the McCullough report is Lazard’s Levelized Cost of Energy Analysis 9.0, which was published in 2015. The Lazard LCOE analyses are actually a good source of information about costs for various types of power generation. But unlike McCullough, Lazard is realistic about how a diversified mix of resources is needed to keep the lights on. Toward this point, here is a key quote from Lazard’s press release for their latest LCOE Analysis 10.0, issued December 15, 2016:

“Even though alternative energy is increasingly cost-competitive and storage technology holds great promise, alternative energy systems alone will not be capable of meeting the baseload generation needs of a developed economy for the foreseeable future. Therefore, the optimal solution for many regions of the world is to use complementary traditional and alternative energy resources in a diversified generation fleet.”

We could go on with identifying flaws in the McCullough report, but will close by observing that it improperly compares the cost of generating resources with the market value of wholesale power, and does so only when it supports false conclusions. For instance, the McCullough report once again trots out a previously-debunked and overly-simplistic comparison of the operating cost of nuclear power with “the low market cost of electricity.” Meanwhile, the report refrains from comparing the cost of new renewable resources with “the low market cost of electricity.”

When it comes to biased, inconsistent and misleading “analyses” like those presented in the latest McCullough report, reader beware.

(Posted by John Dobken)