The outrageous cost of solar power.

There is significant interest and excitement in Australia at present after plans were announced to build what will be the largest solar photovoltaic power station in the world, using advanced concentrating heliostatic photovoltaic solar collectors.

Here’s the report from The Age.

MOST of Mildura could be powered by solar energy following a $290 million agreement signed by TRUenergy and Melbourne-based Solar Systems for the world’s largest photovoltaic solar power station to be built in the north-west of Victoria.

Building of the $420 million, 154-megawatt power station starts next year, and is set to provide enough power for 45,000 homes by the time it is completed in 2013.

The signing of the agreement comes a week after Professor Ross Garnaut’s interim report suggested a widespread overhaul of Australia’s energy sector was needed. He said massive cuts in greenhouse emission levels by 2050 would be required to head off dangerous climate change.

TRUenergy’s managing director, Richard McIndoe, said investment in renewable sources would be a big part of its operations after pledging last year not to build any more coal-fired power stations.

TRUenergy, which operates the Yallourn coal-fired power station in the Latrobe Valley, is the only Australian energy company to commit to reducing emissions by 60% by 2050. Mr McIndoe said TRUenergy had no plans to increase its target, and doubted Professor Garnaut’s target was achievable.

“To have a 90% reduction by 2050 would mean completely new technologies in terms of renewables and would need existing fossil-fuel technologies, whether coal or gas, to be linked in with carbon capture and storage. Unless those new technologies are available and unless the CCS capabilities are available, and in the absence of anything like nuclear power, then that 90% reduction would be difficult to achieve,” he said.

It’s worth reading that last part again.

In the absence of anything like nuclear power, then that 90% reduction [in greenhouse gas emissions] would be difficult to achieve.

He basically just admitted that it is achievable, but that some sector of the government or the community – doesn’t want to achieve it. And that’s, frankly, deplorable.

This proposed solar energy plant will have a nameplate capacity of 154 MW, and will generate 270,000 MWh per annum.

[That's a capacity factor of 20%, in case anybody was wondering.]

The plant is quoted as having a cost of 420 million [Australian] dollars. I will assume that this is just the capital cost to construct the facility, and independent of operational costs.

[The Australian dollar is trading very close to parity with the US dollar at present, so if, for simplicity's sake, you prefer to simply think of these values as USD, then that's fairly accurate.]

It sounds like a positive move for everybody, right? Well, sure – it is a good thing. But I’m just a little bit skeptical of just how much difference it makes, on the large scale, in the grand scheme of things, and whether it represents a particularly sensible overall investment.

Now, for comparison, let’s consider the Hazelwood Power Station, a typical coal-fired power station, also in Victoria, Australia, with a nameplate capacity of 1600 MW. I don’t have the data to hand for the specific capacity factor of this station – but let’s assume something around 90%, for typical modern base load coal-fired  plant.

This proposed photovoltaic plant therefore generates about two percent of the energy output of one quite average – not especially large – coal fired power plant. Such a plant would have to be built 50 times over, just to replace this one single coal-fired plant. Remember, this plant will be the largest solar photovoltaic installation in the world.

Assuming no economy of scale comes into effect – which of course it does, to some extent, in practice – that’s twenty-one billion dollars worth of solar photovoltaic plant needed, to replace just one coal-fired plant.

However, just one typical two-unit nuclear generating plant can “drop in” as a clean replacement for all the electricity output of such a coal plant, and then some. Calvert Cliffs in the US, for example, has a nameplate capacity of about 1800 MW, total. Capacity factors are comparable – around 90%, at least, on average.

Let’s assume that a nuclear power plant, generating 1 GWe, from a single reactor unit, with a capacity factor of 90% – typical for the US nuclear power industry – operates for 50 years, and costs $2 billion dollars to construct – typical for a modern 1 GWe nuclear power plant.

$2 billion is a very high estimate for the capital cost of such a plant, but we’ll conservatively assume such a high figure, for what would, in our hypothetical example, be Australia’s first nuclear power plant.

The capital cost is therefore 5.07 dollars per MWh over 50 years.

(This is an “overnight cost”, ignoring interest, but the same is true for the costs we’re considering for the solar plant.)

Operational costs in the US commercial nuclear power industry – which includes the fund which is saved up to pay for the permanent disposal of waste – are around 17 dollars per MWh.

With a construction cost of 420 million dollars, and a lifetime which we will again assume to be 50 years, the construction cost is therefore 31 dollars per MWh over 50 years.

Just in terms of capital cost, it costs over 6 times more for the solar plant!

Let’s not forget that solar photovoltaics have the highest whole-of-life-cycle greenhouse gas emissions intensity of any of the “green” energy technologies, such as wind, hydro or nuclear – by a large margin, since they’re so energy intensive and technologically intensive to construct. (This greenhouse gas emissions intensity is of course far superior to any fossil fuels, though.)

I really do not believe that it is economically feasible to construct multiple plants of this type, unless very significant economies of scale are coming into effect. As such, I doubt strongly that such technology will lead to significant displacement of fossil fuel generating capacity – and hence, displacement of greenhouse gas emissions – in the grand scheme of things, in Australia.

As such, I’m almost inclined to believe that this is less about really making a difference to the greenhouse gas intensity of our energy systems, and more about making it look like our politicians are really making  accomplishments in implementing sustainable energy in order to displace fossil fuels.

It seems to me that such expenditure on efforts to realize “large scale” solar generation are a vastly inefficient use of money and resources, and that these same funds could be far better spent realizing a much larger amount of clean, sustainable nuclear electricity generation. Yes, I do appreciate the irony of that last paragraph – given that anti-nuclear activists say exactly the same thing about “renewable” energy as opposed to nuclear energy.