Backup Power's Cost to Renewable Energy

One of the main problems with renewable energy in its current state is the need for backup power generation to level out production. Since the wind doesn't always blow and the sun doesn't always shine, backup power, usually natural-gas-driven generation, is needed to smooth out the lumps.

This is something most people know about renewable energy, but how much does it really cost?

NV Energy and Navigant Consulting did a study with the backing of the Department of Energy to find out how much this backup costs. In the case studied in Nevada, the analysis showed backup generation costs utilities $3 to $8 per MWhr, or $0.003 to $0.008 per kWhr. This is something that should be considered when looking at how much it costs to put renewable energy on the grid.

The number will become more significant as manufacturers and utility-scale installers add more projects to their pipelines, something manufacturers have focused more on recently.

  • First Solar (Nasdaq: FSLR  ) ended the third quarter of 2011 with 2.7 GW of projects in the pipeline and had added 654 MW in the first three quarters of 2011.
  • SunPower (Nasdaq: SPWR  ) recently began construction on the 250-MW California Valley Solar Ranch, which will be owned by NRG Energy (NYSE: NRG  ) and feed electricity to Pacific Gas & Electric.
  • LDK Solar (NYSE: LDK  ) is getting into the utility and power plant business with a recent loan from China Development Bank to build two power plants in California totaling 8 MW.

With solar module sales slumping, manufacturers are turning to power plants as a way to create demand for their product. But as these plants get larger, the impact on the grid grows, something utilities need to deal with.

Solutions to a solar storage problem
Other solutions are beginning to arise, but few are ready for prime time. Pumped hydro and compressed air storage have been used on large scales in locations where it's feasible. A123 Systems (Nasdaq: AONE  ) and Ener1 are working with utilities to test batteries for energy storage on a somewhat smaller scale right now.

But until a bigger solution is developed, utilities will have to use fossil fuel backup power with renewable energy, and that costs money for everyone involved.

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Read/Post Comments (3) | Recommend This Article (2)

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  • Report this Comment On January 09, 2012, at 10:16 PM, seattle1115 wrote:

    Vanadium flow redox looks like an extremely promising technology:

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  • Report this Comment On January 10, 2012, at 1:10 PM, sailrick wrote:

    I think there is a flaw in this thinking. The reason the backup is needed is because so far, there is really very little solar or wind energy installed.

    Eventually there will be enough solar and wind installed over wide areas, that much of the volatility will be taken care of by these sources themselves.

    To take the backup power needs idea to it's logical conclusion, I think one has to stretch credibility. The IEA projects a world in 2050 where solar energy produces 60% of the world's power. In such a scenario, the need for backup power would recede into the background.

    And then there is solar thermal power, with molten salt heat storage, which is a kind of base load solar with firm capacity, but also with the ability to follow the load. Replacing much of our base load with there CSP plants, would actually make it easier to integrate PV solar and wind into the grid.

    We have over 1,000 GW potential for solar thermal in the southwest U.S.

    That is using a tiny percentage, like 1%, of the available and sutable land, while providing a buffer around any sensitive areas, lakes road, human habitation, rivers, parks etc. Arizona alone has the potential for 285 GW of solar thermal.

    My back of the envelope estimate makes Arizona's CSP potential equivalent to about 125 nuclear power plants of 1 GW each. That is after adjusting for capacity factors.

  • Report this Comment On January 11, 2012, at 10:45 AM, relztes wrote:

    You are right that much of the volatility can be averaged out with the combination of solar and wind installed over a large area (with large improvements to the grid). But you'll still need the backup, you just won't have to use it very often. The problem is that you need >99.9% reliability not 98% reliability. Most of the time the sun will be shining somewhere or the wind will blowing somewhere, but there are still going to be the rare days where a huge area has cloud cover or the rare nights where there is very little wind over a large area, and without storage, you'll have to have a backup source.

    The backup source can be inefficient and have high fuel costs because it'll be rarely used, but it's still a necessity.

    The other problem is that if say 60% of the world's power comes from solar, there will be many times where the production exceeds demand (mild days with very little cloud cover) and the excess production will be wasted. This will also increase costs. This is why storage is such an attractive idea.

    Just to be clear, none of these things are reasons to give up on solar, just costs that have to be considered.

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