Lazard's figures are junk. They say that the capital cost of offshore wind is $3.6m/MW. Recent UK units are costing £4m/MW, so say 25% more than Lazard claim. (And there is only one offshore windfarm in the US, which was more expensive still). They say maintenance is $79k/MW, so perhaps £70k. Recent UK units are spending double that.
The much bigger problem with all LCOE numbers is that the basis for renewables is completely skewed. The published LCOEs ignore the costs of keeping the rest of the power system going 60/24/365 while accommodating intermittent wind & solar PV.
The peer-reviewed study linked below sheds light on the issue.
From the summary: QUOTE
LCOE is inadequate to compare intermittent forms of energy generation with dispatchable
ones and when making decisions at a country or society level. We introduce and describe
the methodology for determining the full cost of electricity (FCOE) or the full cost to
society. FCOE explains why wind and solar are not cheaper than conventional fuels and
in fact become more expensive the higher their penetration in the energy system. The IEA
confirms “…the system value of variable renewables such as wind and solar decreases as their
share in the power supply increases”. This is illustrated by the high cost of the “green” energy
Over the weekend I've skimmed my way through "Carbon capture and storage (CCS): the way forward"; Crossref DOI link: https://doi.org/10.1039/C7EE02342A; Published Online: 2018
Below within square brackets I have added a few [Chris Bond comments... & ref nos. for clarity]
p5, below Fig 3:
"CCS is one of the very attractive options in the IAMs mitigation portfolios, as it has a number of advantages. First, CCS can be integrated into existing energy systems without requiring large amendments to the system itself. Clearly, renewable technologies become more expensive at high penetration rates as a result of the need for the infrastructure to accommodate intermittency. [29]"
[Yes, LCORE not LCOE; where the R is for 'reliable'.]
12.2 Direct air capture of CO2
[I think this section is muddied by inclusion of CO2 capture from flue-gas, which is *not* direct air capture. Also...]
"many technical and economic caveats, primarily associated with the highly dilute nature of atmospheric CO2, 400 ppm, a factor of 100–300 times more dilute than the CO2 concentration in gas- and coal-fired power plants."
[Yes, that's a given: CO2 in air is a slowly-moving target so would be clearer either to present analysis say for 420 ppm, or two analyses for 400 ppm and 450 ppm to bracket the issues.
It is muddied by inclusion of atmospheric CO2 concentrations (Fig 25) up to 1000 ppm.
In fact the answer = 450 ppm is provided in Section "9.3 Is there enough storage volume for CO2-EOR+?
CCS targets to meet the COP21 target of limiting mean global temperature rise to 1.5–2 °C through capping atmospheric CO2 levels at about 450 ppm require capacity to store 120–160 GtCO2 ..."]
"To illustrate the difficulty in estimating the cost of DAC systems, we calculate the amount of energy required to move air through the process. Assuming a concentration of CO2 in air [CB: it's measured, currently is 419 ppm, no 'assumption' needed - but ok, bracket it using 420 ppm and 450 ppm per above -] of 400 ppm and a 50% recovery rate, we need to process 2.11 million m3 of air to capture 830 kg of CO2, approximately the amount of CO2 produced for every MWh generated at a supercritical coal-fired power plant. Based on air being an ideal gas and assuming no losses in the process, if we had a pressure drop of 0.016 bar (0.23 psi), we would need 1 MWh to move the air. In other words, at this pressure drop, just moving the air would require all the energy released in generating the CO2 in the first place."
[This is perhaps where these folks were coming from:
"There is a wide range of cost estimates for DAC in the literature. Unfortunately, these estimates are not based on detailed process designs, but rather are based on processes with sparse details and many assumptions. A review of the literature by Goeppert et al. [993] reported a range of $20 to $1000 per ton of CO2. Perhaps the most quoted range
is $600–800 per tCO2 from the American Physical Society study. [1097] Many of the lower estimates are from people associated with companies trying to commercialise the technology. The $1000 per tCO2 estimate comes from House et al . [67]"
"There is strong evidence that the cost of CO2 capture rises with increasing initial dilution. [121] " [No sh*t, Sherlock!]
"Today, the cost of capture from a coal-fired power plant is on the order of $100 per tCO2 avoided. [1146] If we knew the scaling factor, we could approximate the cost of DAC. The Sherwood Plot suggests a scaling factor on the order of 100, i.e., the ratio of the concentration of CO2 in the flue gas to the concentration in air. This results in a cost for DAC of $10 000 per tCO2 avoided. Some proponents of DAC claim [they would, wouldn't they?] that the scaling factor should be based on minimum work, resulting in a cost of about $300 per tCO2 avoided." [See your "2.11 million m3 of air to capture 830 kg of CO2" text earlier and consider how credible the "minimum work" approach will be.]
12.2.3 System considerations. "DAC is essentially an extension of CCS."
It really is not, in the sense that CCS from flue gases is lowering the rate at which CO2 is entering the atmosphere, whereas
DAC (if it is ever economic) is intended to actually remove CO2 from the atmosphere.
[Except ]
13.2 The value of CCS
"The value of CCS derives from the fact that it is the only technology that can simultaneously address carbon reduction objectives across all main carbon emitting sectors of the
economy, without compromising their cost-effective provision of service [aren't they demonstrably not "cost-effective" in that CCS is not being adopted in the commercial world?]. These sectors include power generation, industry, transport and heating.§§§§§"
"CCS is also the only technology that can remove industrial quantities of CO2 from the atmosphere when combined with power generation from sustainable biomass combustion (so-called BECCS) creating room within carbon budgets for sectors more difficult to decarbonise, such as aviation."
[Wasn't lack of enough trees to burn in the UK a major driver for use of coal with all its dangers? Source your biomass internationally and you run all the risks of unintended consequences - deforestation particularly - as commercial entities chase the 'sustainable' certificates for the money regardless of the ethics.]
Thank you, and sorry, I've only just got around to reading your pieces. But absolutely we're saying very similar things.
Interesting that a decade ago you were saying 'big storage needed'... yet our policy-makers have pushed ahead with renewable generation without (meaningful scale) storage while rushing to shut fossil generation. Regulatory capture appears to be a thing.
At the bottom of the 2022 paper is your ORCID.org link and I see in 2018 you contributed to "Carbon capture and storage (CCS): the way forward". I've accessed the article and will read. But as you may have seen in my latest substack I don't have much faith in CCS, and absolutely none in direct air capture.
Hi Chris, I don't think there's any additional storage requirements for low penetration of variable renewables (such as the 25% or so we have now). It's not until we get to high levels (say above 75%) that storage requirements and other grid support measures become very significant, thereafter the costs shoot up in a very non-linear fashion as VRE penetration increases. So I don't think we've done anything irrevocable and expensive yet and renewables have saved a lot of imported gas and Russian coal.
However here in the UK (and many other systems) we've not thought through the pathway to zero emissions, or even agreed what the zero emissions system looks like. It may be that to maintain system security we keep a large proportion of existing fossil capacity available to deal with various crises that will come along like nuclear cracking, miners trikes, gas restrictions and renewable droughts. We've had all of these in the UK and survived through the ability to switch. So long as these issues are rare the emissions from the fossil plant will be very small.
Long term we've committed to get to zero emissions. This means we either have a negative emissions technology like BECCS or we phase out all fossil. We will then need some zero carbon firm capacity. There aren't many candidates and the list is really quite small for the UK, probably comes down to nuclear, biomass, CCS, VRE+Very large storage. All of these have issues (flexibility, waste, fuel sourcing, upstream emissions, undeveloped tech, cost etc) , so I agree with your doubts over CCS but alternatives are arguably as problematic.
Re: storage & 'low' vs 'high' penetration of renewables: we are already spending hundreds of millions a year on constraint payments, and currently on a windy but cloudless summer's day the renewable peaks are getting close to satisfying demand. I doubt we need to get to 75% VRE before the lack of power storage really starts to hurt. Or, the funding model for constraint payments needs to be radically revised.
Re: "I don't think we've done anything irrevocable and expensive yet " I disagree. Consider the decommissioning and rush to demolish coal power stations; the ban on domestic fracking; the sluggishness in approving other domestic gas (& oil) exploration and production.
Lazard's figures are junk. They say that the capital cost of offshore wind is $3.6m/MW. Recent UK units are costing £4m/MW, so say 25% more than Lazard claim. (And there is only one offshore windfarm in the US, which was more expensive still). They say maintenance is $79k/MW, so perhaps £70k. Recent UK units are spending double that.
It's a complete fiction.
Andrew, thank you for your comments.
The much bigger problem with all LCOE numbers is that the basis for renewables is completely skewed. The published LCOEs ignore the costs of keeping the rest of the power system going 60/24/365 while accommodating intermittent wind & solar PV.
The peer-reviewed study linked below sheds light on the issue.
From the summary: QUOTE
LCOE is inadequate to compare intermittent forms of energy generation with dispatchable
ones and when making decisions at a country or society level. We introduce and describe
the methodology for determining the full cost of electricity (FCOE) or the full cost to
society. FCOE explains why wind and solar are not cheaper than conventional fuels and
in fact become more expensive the higher their penetration in the energy system. The IEA
confirms “…the system value of variable renewables such as wind and solar decreases as their
share in the power supply increases”. This is illustrated by the high cost of the “green” energy
transition. UNQUOTE
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4000800
Another very interesting analysis, much of which corresponds to our findings. See https://www.our-energy-future.com.
Spot on Chris. When I headed up analysis at Energy Research Partnership I did some calculations on just 2012 data that showed UK would need >= 8TWh in a fully wind/PV system (https://erpuk.org/project/managing-flexibility-of-the-electricity-sytem/). Similarly I've looked at Australia and the NEM needs 10TWh for 100% VRE, reducing to 7 TWh if they interconnect the States perfectly. Reducing the requirement for reneawbles by just a few % dramatically reduces need for storage, but entails building a thermal backup system for wind droughts. (https://modelling.energy/publications/pdf/Boston_2022_Environ._Res._Commun._4_031001.pdf)
Hello again Andy,
Over the weekend I've skimmed my way through "Carbon capture and storage (CCS): the way forward"; Crossref DOI link: https://doi.org/10.1039/C7EE02342A; Published Online: 2018
Below within square brackets I have added a few [Chris Bond comments... & ref nos. for clarity]
p5, below Fig 3:
"CCS is one of the very attractive options in the IAMs mitigation portfolios, as it has a number of advantages. First, CCS can be integrated into existing energy systems without requiring large amendments to the system itself. Clearly, renewable technologies become more expensive at high penetration rates as a result of the need for the infrastructure to accommodate intermittency. [29]"
[Yes, LCORE not LCOE; where the R is for 'reliable'.]
12.2 Direct air capture of CO2
[I think this section is muddied by inclusion of CO2 capture from flue-gas, which is *not* direct air capture. Also...]
"many technical and economic caveats, primarily associated with the highly dilute nature of atmospheric CO2, 400 ppm, a factor of 100–300 times more dilute than the CO2 concentration in gas- and coal-fired power plants."
[Yes, that's a given: CO2 in air is a slowly-moving target so would be clearer either to present analysis say for 420 ppm, or two analyses for 400 ppm and 450 ppm to bracket the issues.
It is muddied by inclusion of atmospheric CO2 concentrations (Fig 25) up to 1000 ppm.
In fact the answer = 450 ppm is provided in Section "9.3 Is there enough storage volume for CO2-EOR+?
CCS targets to meet the COP21 target of limiting mean global temperature rise to 1.5–2 °C through capping atmospheric CO2 levels at about 450 ppm require capacity to store 120–160 GtCO2 ..."]
"To illustrate the difficulty in estimating the cost of DAC systems, we calculate the amount of energy required to move air through the process. Assuming a concentration of CO2 in air [CB: it's measured, currently is 419 ppm, no 'assumption' needed - but ok, bracket it using 420 ppm and 450 ppm per above -] of 400 ppm and a 50% recovery rate, we need to process 2.11 million m3 of air to capture 830 kg of CO2, approximately the amount of CO2 produced for every MWh generated at a supercritical coal-fired power plant. Based on air being an ideal gas and assuming no losses in the process, if we had a pressure drop of 0.016 bar (0.23 psi), we would need 1 MWh to move the air. In other words, at this pressure drop, just moving the air would require all the energy released in generating the CO2 in the first place."
[This is perhaps where these folks were coming from:
https://www.rechargenews.com/energy-transition/the-amount-of-energy-required-by-direct-air-carbon-capture-proves-it-is-an-exercise-in-futility/2-1-1067588 ]
12.2.2 Economic assessment.
"There is a wide range of cost estimates for DAC in the literature. Unfortunately, these estimates are not based on detailed process designs, but rather are based on processes with sparse details and many assumptions. A review of the literature by Goeppert et al. [993] reported a range of $20 to $1000 per ton of CO2. Perhaps the most quoted range
is $600–800 per tCO2 from the American Physical Society study. [1097] Many of the lower estimates are from people associated with companies trying to commercialise the technology. The $1000 per tCO2 estimate comes from House et al . [67]"
"There is strong evidence that the cost of CO2 capture rises with increasing initial dilution. [121] " [No sh*t, Sherlock!]
"Today, the cost of capture from a coal-fired power plant is on the order of $100 per tCO2 avoided. [1146] If we knew the scaling factor, we could approximate the cost of DAC. The Sherwood Plot suggests a scaling factor on the order of 100, i.e., the ratio of the concentration of CO2 in the flue gas to the concentration in air. This results in a cost for DAC of $10 000 per tCO2 avoided. Some proponents of DAC claim [they would, wouldn't they?] that the scaling factor should be based on minimum work, resulting in a cost of about $300 per tCO2 avoided." [See your "2.11 million m3 of air to capture 830 kg of CO2" text earlier and consider how credible the "minimum work" approach will be.]
12.2.3 System considerations. "DAC is essentially an extension of CCS."
It really is not, in the sense that CCS from flue gases is lowering the rate at which CO2 is entering the atmosphere, whereas
DAC (if it is ever economic) is intended to actually remove CO2 from the atmosphere.
[Except ]
13.2 The value of CCS
"The value of CCS derives from the fact that it is the only technology that can simultaneously address carbon reduction objectives across all main carbon emitting sectors of the
economy, without compromising their cost-effective provision of service [aren't they demonstrably not "cost-effective" in that CCS is not being adopted in the commercial world?]. These sectors include power generation, industry, transport and heating.§§§§§"
"CCS is also the only technology that can remove industrial quantities of CO2 from the atmosphere when combined with power generation from sustainable biomass combustion (so-called BECCS) creating room within carbon budgets for sectors more difficult to decarbonise, such as aviation."
[Wasn't lack of enough trees to burn in the UK a major driver for use of coal with all its dangers? Source your biomass internationally and you run all the risks of unintended consequences - deforestation particularly - as commercial entities chase the 'sustainable' certificates for the money regardless of the ethics.]
And that's plenty for the mo! BR, CB
Hello Andy,
Thank you, and sorry, I've only just got around to reading your pieces. But absolutely we're saying very similar things.
Interesting that a decade ago you were saying 'big storage needed'... yet our policy-makers have pushed ahead with renewable generation without (meaningful scale) storage while rushing to shut fossil generation. Regulatory capture appears to be a thing.
At the bottom of the 2022 paper is your ORCID.org link and I see in 2018 you contributed to "Carbon capture and storage (CCS): the way forward". I've accessed the article and will read. But as you may have seen in my latest substack I don't have much faith in CCS, and absolutely none in direct air capture.
https://chrisbond.substack.com/p/what-exactly-does-net-zero-mean
Hi Chris, I don't think there's any additional storage requirements for low penetration of variable renewables (such as the 25% or so we have now). It's not until we get to high levels (say above 75%) that storage requirements and other grid support measures become very significant, thereafter the costs shoot up in a very non-linear fashion as VRE penetration increases. So I don't think we've done anything irrevocable and expensive yet and renewables have saved a lot of imported gas and Russian coal.
However here in the UK (and many other systems) we've not thought through the pathway to zero emissions, or even agreed what the zero emissions system looks like. It may be that to maintain system security we keep a large proportion of existing fossil capacity available to deal with various crises that will come along like nuclear cracking, miners trikes, gas restrictions and renewable droughts. We've had all of these in the UK and survived through the ability to switch. So long as these issues are rare the emissions from the fossil plant will be very small.
Long term we've committed to get to zero emissions. This means we either have a negative emissions technology like BECCS or we phase out all fossil. We will then need some zero carbon firm capacity. There aren't many candidates and the list is really quite small for the UK, probably comes down to nuclear, biomass, CCS, VRE+Very large storage. All of these have issues (flexibility, waste, fuel sourcing, upstream emissions, undeveloped tech, cost etc) , so I agree with your doubts over CCS but alternatives are arguably as problematic.
thanks for the debate! Andy
Hello Andy, thank you for your comments.
Re: storage & 'low' vs 'high' penetration of renewables: we are already spending hundreds of millions a year on constraint payments, and currently on a windy but cloudless summer's day the renewable peaks are getting close to satisfying demand. I doubt we need to get to 75% VRE before the lack of power storage really starts to hurt. Or, the funding model for constraint payments needs to be radically revised.
Re: "I don't think we've done anything irrevocable and expensive yet " I disagree. Consider the decommissioning and rush to demolish coal power stations; the ban on domestic fracking; the sluggishness in approving other domestic gas (& oil) exploration and production.
Anyway, great to have your inputs.
Excellent analyses Chris. Well done.