{"id":18178,"date":"2017-02-27T20:20:38","date_gmt":"2017-02-28T01:20:38","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=18178"},"modified":"2017-03-02T09:44:05","modified_gmt":"2017-03-02T14:44:05","slug":"how-much-solar-power-could-sabal-trails-3-2-billion-buy","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2017\/02\/how-much-solar-power-could-sabal-trails-3-2-billion-buy.html","title":{"rendered":"How much solar power could Sabal Trail’s $3.2 billion buy?"},"content":{"rendered":"

\r\nThe same money would buy a lot more electricity<\/a> through solar power than that fracked methane pipeline could generate.\r\n

\r\nUpdate 2 March 2017:<\/strong> Added tables; fixed some typos.\r\n

\r\n\r\n<\/a>\r\n
\r\nRamez Naam, his blog, 21 September 2016,\r\n\r\nNew Record Low Solar Price in Abu Dhabi — Costs Plunging Faster Than Expected<\/a>\r\n<\/p>\r\n

Start with Sabal Trail’s numbers<\/H4>\r\n\r\n\r\n

\r\nLet’s use Sabal Trail’s own assumptions, from\r\n\r\nSabal Trail Project,\r\nDraft Resource Report 10: Alternatives<\/a>,\r\nJune 2014,\r\nSection 10.3.3 Non-Gas Energy Alternatives.\r\n

\r\nPage 10-6, in Wind Power:\r\n

\r\n

\r\nThe proposed Project, upon completion, would provide 1,100,000 de\r\nkatherms per day of additional energy, which, when converted to\r\nmegawatt hours (“MWh”) is approximately 322,580 MWh. To\r\ncompare the energy provided by the proposed Project to that of other\r\nrenewable energy sources, such as wind or solar, a unit of power\r\nmust be calculated. The equivalent of 322,580 MWh is 26,882 MW of\r\npower, assuming 12 hours of operation.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nPage 10-6, in Solar Power:\r\n

\r\n

\r\nSome of the largest completed solar photovoltaic power plants, also\r\ncalled solar parks or fields, have area efficiency of about 4.5 to\r\n13.5 acres per MW (Solar by the Watt, 2009). Therefore, it is\r\nestimated that the land requirements for a solar project that could\r\nproduce 26,882 MW of power would range between 1,991 and 5,974 acres\r\nof permanent disturbance.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nWe already examined acreage way back in 2014, and found\r\nby Sabal Trail’s own numbers that\r\n\r\nhalf the acreage of the pipeline’s right of way could produce\r\njust as much electricity through solar power<\/a>.\r\nThat’s even before solar power costs fell further in the intervening three years.\r\n

What does utility-scale solar electricity cost?<\/H4>\r\n

\r\nNow let’s look at cost.\r\n

\r\nChristian Roselund,\r\npv magazine, 19 July 2016,\r\n\r\nDeutsche Bank: U.S. utility-scale solar costs to fall below $1 per watt<\/a>,\r\n

\r\n

\r\nIn terms of overall project costs, Shah says that solar power\r\ncontracts in the United States are currently being offered at less\r\nthan $0.05 per kilowatt-hour, with prices under $0.04 in North\r\nCarolina for contracts to supply power in late 2017.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\n$0.05 per kilowatt-hour is $50 per megawatt-hour (MWh).\r\n

\r\nMark Bolinger, Samantha Weaver, Jarett Zuboy,\r\nLawrence Berkeley National Laboratory, May 2015,\r\n\r\nIs $50\/MWh Solar for Real? Falling Project Prices and Rising\r\nCapacity Factors Drive Utility-Scale PV Toward Economic\r\nCompetitiveness<\/a>,\r\n

\r\n

\r\nRecently announced low-priced power purchase agreements (PPAs) for U.S. utility-scale PV \r\nprojects suggest $50\/MWh solar might be viable under certain conditions….\r\n

\r\nBased on these trends, a pro-forma financial model suggests that \r\n$50\/MWh utility-scale PV is achievable using a combination of aggressive-bu-achievable \r\ntechnical and financial input parameters (including receipt of the 30% federal investment tax credit).\r\nAlthough the U.S. utility-scale PV market is still young, the rapid\r\n progress in the key metrics documented in this paper\r\n has made PV a viable competitor against other utility-scale \r\nrenewable generators, and even conventional peaking generators, in certain regions of the \r\ncountry. \r\n<\/blockquote>\r\n

\r\nMore about subsidies below<\/a>.\r\nFirst let’s finish our calculations.\r\n

\r\nThat LBNL paper apparently didn’t use any data newer than 2013.\r\nAnd Deutsche Bank says actual contracts are already being offered for $50\/MWh.\r\nIs that the lowest?\r\nNope.\r\n

The current record: $24\/MWh<\/H4>\r\n

\r\nAbu Dhabi\r\n\r\nin September 2016 got a low bid of $24.00\/MWh<\/a>.\r\n

\r\nRamez Naam, his blog, 21 September 2016,\r\n\r\nNew Record Low Solar Price in Abu Dhabi — Costs Plunging Faster Than Expected<\/a>\r\n

\r\n

\r\nThat is an unsubsidized price.\r\n

\r\nLet me put that in perspective. The cost of electricity from a new\r\nnatural gas powerplant in the US is now estimated at 5.6 cents \/\r\nkwh. (pdf link<\/a>) That is with historically low natural gas prices in\r\nthe US, which are far lower than the price of natural gas in the\r\nrest of the world.\r\n<\/p>\r\n

\r\nThis new bid in Abu Dhabi is less than half<\/em> the price of electricity\r\nfrom a new natural gas plant.\r\n<\/p>\r\n

\r\nWhat’s more, it’s less than the cost of the fuel<\/em> burned in a natural\r\ngas plant to make electricity — without even considering the\r\ncost of building the plant in the first place.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nHe doesn’t mention without even considering the cost of building\r\nthe pipeline to get the fracked methane to the natural gas plant.\r\n

\r\nRamez Naam continues:\r\n

\r\n

\r\nThe solar bid in Abu Dhabi is not just the cheapest solar power\r\ncontract ever signed — it’s the cheapest contract for\r\nelectricity ever signed, anywhere on planet earth, using any\r\ntechnology.<\/strong>\r\n<\/p>\r\n

\r\nNor is this bid a fluke. Three other bids in Abu Dhabi’s latest\r\npower auction came in at less than 3 cents \/ kwh:….\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nOK, Abu Dhabi is in the middle east where the sun shines all the time,\r\nso prices probably aren’t that low in the U.S.\r\n

Computations at $50\/MWh<\/a><\/H4>\r\n

\r\nSo let’s use $50\/MWh to start with, for utility-scale solar power.\r\n

Cost of 322,580 MWh of solar power<\/H5>\r\n

\r\nSabal Trail says their pipeline would produce 322,580 MWh of electricity.\r\nThey figure solar power would only operate 12 hours, half the day.\r\nSo we’d need twice that number of MWh, or 645,160 MWh from utility-scale solar.\r\nMultiply by $50\/MWh for the cost and that’s $32,258,000.\r\nThat’s a bit more than $32 million for the solar power.\r\nNot the $32 billion the pipeline costs FPL ratepayers.\r\nSuppose the solar power plants only generate four hours a day;\r\nmultiply by 6 instead of 2, or effectively $300\/MWh instead of $50\/Mwh.\r\nOr just multiply the total dollars we already got by 3,\r\nfor $96,774,000.\r\n$97 million is still way less than $3.2 billion.\r\nAbout 33 times less.\r\n\r\n\r\n
Cost of 322,580 MWh of solar power<\/caption>\r\n
Price\/MWh<\/th>\r\nHours
\/Day<\/th>\r\n		Tax
Credit<\/th>\r\n		Cost<\/th>\r\n$32 billion
\/Cost<\/th><\/tr>\r\n
\r\n$50\/MWh\r\n\r\n12 h\/day\r\n\r\n30%\r\n\r\n$32,258,000\r\n\r\n99\r\n
\r\n\r\n$50\/MWh\r\n\r\n\r\n4 h\/day\r\n\r\n\r\n30%\r\n\r\n\r\n$96,774,000\r\n\r\n\r\n33\r\n
\r\n$50\/MWh\r\n\r\n4 h\/day\r\n\r\n0%\r\n\r\n$138,248,571\r\n\r\n23\r\n
\r\n$225\/MWh
($4.50\/Watt)\r\n		\r\n12 h\/day\r\n\r\n30%\r\n\r\n$145,161,000\r\n\r\n22\r\n
\r\n$225\/MWh
($4.50\/Watt)\r\n		\r\n4 h\/day\r\n\r\n30%\r\n\r\n$435,483,000\r\n\r\n7.35\r\n
\r\n$225\/MWh
($4.50\/Watt)\r\n		\r\n4 h\/day\r\n\r\n0%\r\n\r\n$622,118,571\r\n\r\n5.14\r\n<\/table>\r\n

\r\nThe table contains some additional rows from numbers we’ll discuss below.\r\n

How much solar power can $3.2 billion buy?<\/H5>\r\n

\r\nTo put it another way, how much electricity could $3.2 billion of \r\nutility-scale solar produce?\r\nThat $3.2 billion is the price tag FPL’s ratepayers are stuck with for Sabal Trail\r\nand Florida Southeast Connection.\r\nSuppose Sabal Trail’s estimate of solar generation only half the day,\r\nso we have to buy twice as many panels, or call it $100\/MWh.\r\nDivide $3,200,000,000 by $100\/MWh to get 32,000,000 MWh.\r\nMaybe we only get solar power 4 hours a day, so that would be 6 * $50 = $300\/MWh\r\nOr just divide the above result by 3 to get 10,666,666 MWh.\r\nThat still seems quite a bit more than Sabal Trail’s 645,160 MWh<\/strike> 322,580 MWh.\r\nAbout 33 times more; same factor we got by the other computation.\r\n\r\n\r\n
How much solar power can $3.2 billion buy?<\/caption>\r\n
Price\/MWh<\/th>\r\nHours
\/Day<\/th>\r\n		Tax
Credit<\/th>\r\n		Solar MWh<\/th>\r\nSolar MWh
\/322,580 MWh<\/th><\/tr>\r\n
\r\n$50\/MWh\r\n\r\n12 h\/day\r\n\r\n30%\r\n\r\n32,000,000 MWh\r\n\r\n99\r\n
\r\n\r\n$50\/MWh\r\n\r\n\r\n4 h\/day\r\n\r\n\r\n30%\r\n\r\n\r\n10,666,666 MWh\r\n\r\n\r\n33\r\n
\r\n$50\/MWh\r\n\r\n4 h\/day\r\n\r\n0%\r\n\r\n7,466,666 MWh\r\n\r\n23\r\n
\r\n$225\/MWh
($4.50\/Watt)\r\n		\r\n12 h\/day\r\n\r\n30%\r\n\r\n7,111,111 MWh\r\n\r\n22\r\n
\r\n$225\/MWh
($4.50\/Watt)\r\n		\r\n4 h\/day\r\n\r\n30%\r\n\r\n2,370,370 MWh\r\n\r\n7.35\r\n
\r\n$225\/MWh
($4.50\/Watt)\r\n		\r\n4 h\/day\r\n\r\n0%\r\n\r\n1,659,259 MWh\r\n\r\n5.14\r\n<\/table>\r\n

\r\nThis table also contains some additional rows from numbers we’ll discuss below.\r\n

Really $50\/MWh?<\/H4>\r\n

\r\nMaybe that $50\/MWh is too low.\r\nIt came in a context of Deutsche Bank estimating $1\/Watt for solar panels.\r\nOther estimates are higher.\r\n

\r\nSara Matasci,\r\nenergysage,\r\nOctober 8, 2016,\r\n\r\nWhat is the Average Cost of Solar Panels in the U.S.?<\/a>\r\nShe estimates up to $4.50\/watt for the state of Washington.\r\nSo multiply the cost for 645,160 MWh<\/strike> 322,580 MWh by 4.5 or divide the total generated\r\nfor $3.2 million by 4.5 or just divide the factor by 4.5, so instead\r\nof 33 times more solar than pipeline power for the buck, only 7.33 times.\r\nEven if you divide again by 3 (4 hours a day instead of 12 hours)<\/strike> (three times even that price),\r\nthat’s still a factor of 2.44 cheaper for solar vs gas,\r\nunder the worst assumptions that make any sense (highest price per solar Watt,\r\nand fewest hours of solar production per day).\r\n

\r\nAnd guess which state Matasci estimates has the lowest price per solar panel Watt?\r\nFlorida, at about $2.50\/Watt.\r\nSo about 33\/2.50 = 13.20 times more solar than pipeline power per dollar.\r\nDivide again by 3 (4 hours a day instead of 12 hours)<\/strike> (three times even that price) and\r\nit’s still a factor of 4.4.\r\n

\r\n\r\n<\/a>\r\n<\/p>\r\n

What about Subsidies?<\/a><\/H4>\r\n

\r\nWhat about that 30% federal investment tax credit?\r\nFor the cost of 645,160 MWh<\/strike> 322,580 MWh of solar times 6 without that credit,\r\ndivide $96,774,000 by 0.70, for $138,248,571, which is still\r\nabout 23 times less than Sabal Trail’s $3.2 billion price tag.\r\n

\r\nOr for what could be built at the same price without that subsidy,\r\nmultiply 10,666,666 MWh by 0.70 to get 7,466,666 MWh,\r\nonce again about 23 times Sabal Trail’s 645,160 MWh<\/strike> 322,580 MWh.\r\n

\r\nSure, the 30% federal tax investment credit is a subsidy, but\r\n