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Renewable Energy's Hidden Costs?

Barry Brook's picture
University of Tasmania
  • Member since 2018
  • 143 items added with 105,922 views
  • Mar 23, 2013

A recent Bloomberg press release got wide coverage with its claim that wind power is now cheaper than coal. But a new report from the OECD shows that when you cover the full cost to the grid, variable renewables like wind don’t add up as favourably.

It is often claimed that introducing variable renewable energy resources such as solar and wind into the electricity network comes with some extra cost penalties, due to “system effects”. These system effects include intermittent electricity access, network congestion, instability, environmental impacts, and security of supply.

Now a new report from the OECD titled System Effects of Low-Carbon Electricity Systems gives some hard dollar values for these additional imposts. The OECD work focuses on nuclear power, coal, gas, and renewables such as wind and solar. Their conclusion is that grid-level system costs can have significant impacts on the total cost of delivered electricity for some power-generation technologies.

All generation technologies cause system effects to some degree. They are all connected to the same transmission and distribution grid structure and deliver electricity into the same market. They also exert impacts on each other, on the total load available to satisfy demand, and the stability of the grid’s frequency control. These dependencies are heightened by the fact that only small amounts of cost-efficient electricity storage are available.

Any electricity generation technology can cause grid instability and price fluctuations if it goes offline unexpectedly. But a key finding of the OECD report is that renewables that are particularly variable, such as wind and solar, generate system effects that are at least an order of magnitude greater than for “dispatchable” technologies such as coal, gas, and nuclear.

These renewable sources require no fuel, and so have very low operating costs. This allows them to enter the market at low prices (or even negative prices if production subsidies or generation mandates are in place).

As a consequence, with the current power-generation mix in the OECD (including Australia), dispatchable technologies will suffer due to lower average electricity prices and reduced capacity factors when a significant quantity of low-cost renewable energy is available. (That is, dispatchable units will more often be forced to ramp down their output when there are high flows of low-cost renewable energy, yet will still need to be ready to ramp up again when the output from variable renewable generators is not sufficient to meet the total demand across the grid.)

The report defines grid-level system costs as the total costs (on top of plant-level costs) to supply electricity at a given load and given level of security of supply. These additional costs include the extra investment to extend and reinforce the grid, plus the costs for increased short-term balancing and for maintaining the long-term adequacy of electricity supply in the face of intermittent variable renewables.

The system costs are limited to costs that accrue within the electricity system, so environmental and long-term security of supply impacts are excluded from this study.

The study assessed the grid-level system costs for six OECD countries with contrasting mixes of electricity technologies: Finland, France, Germany, South Korea, the United Kingdom and the United States. System costs, which include short-term balancing, long-term adequacy, and the costs of various grid infrastructures, were calculated at both 10% and 30% penetration levels of the main generating sources.

A summary of the results, expressed in dollars per megawatt hour ($/MWh) of electricity delivered, is shown in Table 1 below. The table shows the lowest and highest system costs for each technology considered at each penetration level.

Table 1: Grid-level system costs at differing penetration levels for a range of electricity generation technologies

Table 1: Grid-level system costs at differing penetration levels for a range of electricity generation technologies

The consequences of these results are clear. Grid-level system costs can be significant, particularly for wind and solar, and must be included in any realistic analysis of the total system costs of all technologies deployed at scale in regional or national electricity markets.

For Australia, the Bureau of Resources and Energy Economics (BREE) in its AETA reportsets out the Levelised Cost of Electricity (LCOE) for each technology, with and without a carbon price. However the bureau does not consider grid-level system costs. The levelised cost reflects the minimum cost of energy at which a generator must sell the produced electricity in order to break even.

If we take the mid-point of the OECD grid-level costs for 30% technology penetration shown in Table 1 and add them to the plant costs and carbon costs from the bureau, we can make a more accurate comparison of the total system costs for each technology as might apply in the Australian context – see Figure 1.

Figure 1: Total system cost for generation technology (2012) including carbon and grid-level costs

Figure 1: Total system cost for generation technology (2012) including carbon and grid-level costs

Ignoring such costs distorts the picture. For example, Bloomberg New Energy Finance (BNEF) recently put out a press release headed “Renewable Energy Now Cheaper Than New Fossil Fuels in Australia”, which attracted a great deal of attention.

Bloomberg’s very high coal levelised cost ($143) and lower on-shore wind levelised cost ($80) were the primary reasons for the headline, as pointed out by Tristan Edis at Climate Spectator.

However, if we include the grid-level system cost for wind and solar as estimated in the OECD study and apply the arguably more authoritative levelised costs presented by the bureau (shown in Figure 1), then the Bloomberg headline seems unlikely to be correct.

Like the carbon price, grid-level system costs need to be internalised. In other words, the plant owner should have to pay for grid-level costs in the same way they pay for carbon emissions. That way, solar and wind bid prices into the national electricity market would need to include the grid-level costs and could no longer be bid at rock bottom levels. This would help to level the playing field with coal and gas (important for the future viability ofcarbon-capture-and-storage technologies), and allow for a realistic assessment of the financial viability of nuclear energy for Australia.

In particular, if the Australian Energy Market Operator is to make a fully costed assessment, it must include grid-level costs in its forthcoming 100 per cent Renewable Study.


By Martin Nicholson and Barry Brook. This article was first published on The Conversation. A response was then published on Business Spectator. It is worth reading both pieces, and the comments that followed them (for instance, Martin’s reply).


Nathan Wilson's picture
Nathan Wilson on Mar 23, 2013

The system costs at 10 and 30% penetration are applicable for our short term goals, but longer term, we need our energy to come from 70-100% non-fossil sources.  We know this works with nuclear plus hydro (see France, Sweeden, and Switzerland).  What about renewables?

Bobbi O's picture
Bobbi O on Mar 24, 2013

  Barry,  To do 'REALISTIC ANALYSIS' one must include not only carbon cost but local and regional environmental and health costs. Just look at coal's part in the nightmare  pollution problems in China.  It seems to me  pairing gas turbines with wind or solar ,which can go on line as quickly as 15 minutes, is the way to deal with grid instability until cheaper grid storage is worked out. Coal plants have to go .

Steven Scannell's picture
Steven Scannell on Mar 24, 2013

We're trying to add up some unlike objects. Complaining will not help.  Wind would be better if we used CAES and Hydrogen energy vehicles, as these two would be comodity items, and hence a standard and conventional relationship to the dollar. Utilities aren't planning for any such thing, or pulling in a direction that is good for "us and them".   It's important to develop storage and shipment systems for sustainable energy inputs, as these are, and can't help but be profitable for our future.  Costs of what to whom, if they're not explicit make my head spin.  This situation isn't fair market based, as it is now.   We can kick into high gear with energy systems of the future when we get off the damned old grid page.   As if this is the only reference we have and the only reference we will have.  OH,  yes it's an established fact.  We are qualified to self destruct now.  The main energy bank now is fossil fuels, and a future bank for different holdings will require different thinking and systems.   The Tripe System is such a system that does store and ship energy but the energy isn't as easy as we would like.  There's no easy button.  

Steven Scannell's picture
Steven Scannell on Mar 24, 2013

That seems to be a real problem for us.  We want cheap storage now, as we go off the cliff in flames.  We're not doing enough R&D into viable storage, that which is scalable.  IF a storage is scalable, THEN we really should be paying attention.  But we're not.   I can't believe how we ignore CAES and Hydrogen.  We really are stuck in a rut.   We want cheap handed to us, all electrical at that. We're writing the book on barking up the wrong tree.   We're not doing enough prototype work, or even thinking and planning and designing in energy storage systems that are scalable.  We don't want to go there.  It seems emotional attachments are very tight with the electric grids.  It's our downfall.  It's all about scalability to me.  Otherwise we're chasing butterflies and happy cakes.  Coal plants need to be supercharged with CAES from wind.  I like coal, and do think it can be clean, with help from the wind. 

Davis Swan's picture
Davis Swan on Mar 26, 2013

This post and the report it refers to correctly identify the major problems and looming crisis that is being created by the introduction of variable and unreliable renewable energy sources.  By relegating thermal assets (coal and natural gas fired plants and even nuclear plants)  to "backup" status we destroy the economics that supported their construction - 7x24x365 output at a reasonable and regulated price.  I have covered these topics extensively in several of my blog postings.

When I refer to "crisis" I am expressing my concern that base-load thermal plants will be shut down due to economic reasons which will leave us seriously exposed to the unreliability of renewables.  I believe the crunch will come in Texas or Germany this summer and could lead to a major grid failure/blackout.  The real risk here is that such an event would cause a backlash amongst ratepayers and taxpayers tired of paying to subsidize renewables.  The result would be lost momentum which would be a shame.

As mentioned in at least one comment we need to get REALLY SERIOUS about energy storage research - tens of $billions, not a few $millions.  We need to look seriously at Demand Response and geoexchange to clip demand "peaks".  In other words we need to think different and do different.

I K's picture
I K on Mar 26, 2013

Hi Davis Swan

In the past I would have agreed with you but I don’t think it’s a very strong case anymore. Firstly power generation is shifting towards natural gas in Europe and America.

The advantage is that CCGTs have very low operating overheads compared to older coal and nuclear stations.

For instance a 2GW CCGT was opened recently in the UK which only has ~30 staff. That’s just 15 people per GW. Compare that to the nuclear power station that is to close in America which supposedly has 650 staff and outputs 0.6GW or over 1,000 people per GW.

In many ways new CCGT have very low overheads.

But you are correct, renewables forcing coal and CCGTs to operate at lower capacity factors is a problem. However there are ways around this and its only a problem if your chosen renewable produce at a price above the marginal cost of coal/gas.



An easy way to get around the problem in the USA is to install a super grid. That way you can shut down some of your older coal plants allowing the remaining plants to operate at a higher capacity factor.

A fantastic way, probably will not happen, would be to link America to Europe.

A 50GW DC connection. The 8-12 hour time difference means when our demand is high yours is low. When yours is low ours is high. It would enable at least 30GW of old stations on each side to be closed allowing the remaining stations to operate at a higher capacity factor

I K's picture
I K on Mar 26, 2013

You dont need storage if the source of your energy is very cheap, you can just choose not to use it.
Of course its a major problem if you are trying to generate solar PV power in northern germany at $400/MWh...

But for instance if offshore wind or nuclear was capable of producing eletricity at £10/MWh ($15/MWh) we would just install twice what we needed. That would mean when the wind blows hard or demand is low you have to not accept some of the power. But at other times when there is low or moderate wind you still produce most of what you need.

As a quick calculation in the UK we use 330TWh
If we decided to go all out and build 60GW of offshore wind it would produce 210TWh or about 64% of what we need. No need for any more storage. It would however mean we would have to turn some wind farm off some of the time as the demand would not be there if there was a very strong wind met with a low demand point (eg a summer night)

So at least with offshore wind upto about 60% is possible. Not cheap. but possible.

But you still have transport and heating where it can do nothing.
Nuclear could meet 100% of eletricity and perhaps as much as 80% of heating needs

Nathan Wilson's picture
Nathan Wilson on Mar 27, 2013

The problem with Demand Response is that it makes electricity most expensive when consumers want it the most: i.e. in the evening after work, in August when air conditioning is needed but there's no wind.  So we can expect it to be increasingly unpopular with consumers as renewables grow.

A big investment in storage research would boost the odds of a breakthrough, but there would still be no guarantee of low cost.  Perhaps batteries will drop in cost by a factor of three in a 10-20 years, which would make electric cars affordable, but even so, batteries would still not displace pumped hydro as the cheapest utility scale storage method.

So we can expect that for storage for 1-3 days, pumped hydro will continue to be the leader, with 75% round trip efficiency, and costs of $1-2/Watt.  Advanced batteries or CAES with TES may be competitive for < 1 day with more development. 

For seasonal energy storage, hydrogen-based fuel synthesis (compressed H2, ammonia, or methane) will continue to be the leaders with 30-45% round trip efficiency, and cost of $1.5-3/Watt.  Although if synthetic fuel has large use of dedicated plants, they could be used with Demand Response with no energy efficiency penalty, but there is still a cost penalty since the synthesis plant (which will have a cost similar to its electricity source) would be paid to operate at reduced load.

Note that energy storage facilities would suffer some of the same economic issues as baseload plants.  Much of the time in the Spring and Fall, they won't be able to sell any power at all (the grid load is low, and wind is plentiful).  The rest of the year, the 1-3 day storage competes with combined cycle gas plants, which are needed anyway for extended cloudy periods. 

So as important as storage is for high renewable penetration, there is not much reason to be optimistic about cost reductions.

Sage Radachowsky's picture
Sage Radachowsky on Mar 29, 2013

Two important points:

  • “Total System Cost” does not include ongoing (mainly fuel) costs which are high for fossil technology and very low for renewables.
  • Who calculates the carbon cost and on what basis?


Sage Radachowsky's picture
Sage Radachowsky on Mar 29, 2013

As for energy storage:

  • molten salt or simple heat storage with concentrated solar, and
  • pumped water, or better, hydro-hybrid in which a hydro source is the complement to wind/solar and gains head when not used.
I K's picture
I K on Mar 29, 2013

Nobody is suggesting 2.2MW solar at 14.3% capacity factor for $10.5 million is a good idea.

But imagine a 2.2MW solar farm, at a location yielding 22% capacity factor, and costing only $4.4 million? Well that is the price achieved for one off small roof top installations in Europe now ie $2/watt.

Needless to say large ground based farms would be considerably cheaper due to bulk buy discounts and lower installation costs per panel.

And let us project into the future, lets say some cleaver person figures out a way to quickly and cheaply install solar panels so the installed cost falls to $1/watt (the panels already cost below this) then what would your view on solar be?  It would require no subsidy and would produce electricity cheaper than the marginal fuel cost of coal or gas.

In short, don’t look at yesterdays prices and yesterdays solar or wind farms. Look at today, they are quite close to fossil fuels and look into the near future where they may be cheaper than fossil fuels.

Roger Faulkner's picture
Roger Faulkner on Mar 29, 2013

I have often wondered why solar farms in the desert are opposed by environmentalists. When hiking in the desert, one generally finds the most biologically rich microenvironments in shaded areas. It seems to me that with just a little attention to the environment, that solar farms could enhance the local biological diversity. The example of the VT solar farm is a travesty, for sure.

Roger Faulkner's picture
Roger Faulkner on Mar 29, 2013

Thanks for the supergrid plug. To be practical, the supergrid needs to be proved on a regional scale, though, which is the point of my recent post on HVDC loops.

There was a recent conference in Brussels (March 21) on the European supergrid, sponsored by Friends of the Supergrid (FOSG). I support their agenda, but I object to dishonesty by anyone, even my allies. 

How exactly is it going to be possible to install the supergrid with current technology? Although that is FOSG’s mantra, that no new technology is needed, it’s not true. Will there be 50 new overhead HVDC lines crisscrossing  Europe? (That is the order of magnitude of current technology 800kV HVDC lines that would be needed to accomplish the power transfer capacity needed for the European Supergrid.) I think not. Will there be hundreds of new cable connections? Too expensive, and ship-mounted cables cannot reach the interior of Europe. Truck transportable cables have ridiculously low capacity compared to what is needed. Subsea cables are important, and very expensive, and will never be up to the task of creating a supergrid. Meanwhile, some of the main backers of FOSG are making money “hand over fist” on subsea HVDC cables.

Underground electric pipelines are absolutely needed, and I have a viable solution. And yes, it all needs to be proven, but I cannot do that without backing. It harms my case that FOSG keeps insisting that there are no technical problems to solve, because there are.

David Gibson's picture
David Gibson on Mar 29, 2013

I think this report, and many others, miss the point. We need to move away from the centralized energy production and distribution system. In the US, 1/3 to half the energy distributed is wasted (not including production losses) – this includes air leakage, poor or no insulation, incandescent lighting, wasted hot water, inefficient refrigerators, TVs and appliances, etc. The most cost-effective ‘renewable energy’ source is efficiency and conservation. If we cut our energy usage nationwide by 1/3, it not only decreases demand, it also increases the grid’s capacity for moving electrons around.

Additionally, on-site renewable energy can be deployed to address heating, cooling and hot water loads. Ground-source heat pumps and solar hot water produce significant energy resources without needing to produce electricity or tie to the grid.

A year and a half ago, I bought a typical house built in 1950. With an Energy-Efficient Mortgage, I cut the energy consumption by more than half. I have now installed solar hot water, which produces 75% of my hot water in the winter and will produce 100% in the summer. None of this affects the grid negatively. All of this was extremely cost effective, and has a return on investment of greater than 15%. Every single home and business owner can make similar decisions.

Stephen Nielsen's picture
Stephen Nielsen on Mar 29, 2013

As a general rule, billionaires know where there is money to be made. Right now, billionaires are investing in companies that show promise in the quest to make the energy of the sun shine at night. Energy storage technologies, like solar tech itself, are continuing to advance exponentially and the richest guys in the room know it.  They know that the companies that create the most effective energy storage techs are going to make them even richer and with now almost daily major advances in nano materials, the vision of cheap, large scale energy storage has never looked clearer

Davis Swan's picture
Davis Swan on Mar 29, 2013

Interesting comments:  I’ll add a few thoughts.

We MUST move to renewables – that is obvious and not at all the issue.  The issue is how we get there.

David Gibson has raised some excellent points.  Conservation and reduced energy use are key.  As he stated residential geothermal (aka geoexchange) is ready right now and should be required as part of building codes just like water and sewer.  The city of Lancaster California has just added a requirement for residential PV as part of its building requirements (  That is another move in the right direction.

Demand Response programs need to be implemented and used.  Consumers in Oklahoma and Long Island, New York have proven that some minor discomfort (thermostats set a few degrees higher in the summer and cooler in the winter) is perfectly acceptable.

But there will always be a need for reliable base-load generation and that is where the challenge is.  I have started advocating for a combination of PV Solar during the day and CSP at night – that would work well for a reasonable cost in the Southern US.

Wind is the real problem.  There is absolutely no option other than utility-scale storage to deal with wind.  Pumped storage is not a reasonable option, nor is compressed air energy storage (CAES) – there are not enough suitable locations to scale these up.

Batteries (using anything close to commercial grade technology) are going nowhere.  In fact, I was disappointed to note that the brand new Duke Energy facility ( had a cost/MW and total storage virtually the same as the BESS facility in Alaska buit almost 10 years earlier ($file/Case_Note_BESS_GVEA_Fairbanks-web.pdf).

Storage research and development are very hard to justify by commercial firms because there is no business case at the moment.  Storage facilities get treated as end users by grid operators and have to pay grid access tolls – truly insane.  There are no Feed-In-Tariffs for stored electricity.  Without some price certainty this vital technology will not move forward in any significant way.

I.K. – I have to dispute several of your statements.  Firstly, Europe is not moving towards Natural Gas generation.  Just the opposite is happening in “green” Germany where a three year old ultra-efficient gas plant is being closed because it can’t compete with coal-fired plants on the basis of cost.  Over-building solar doesn’t help at night and over-building wind doesn’t help when there is no wind.  For example, Texas set a new record of 8.6 GW of wind generation for a few hours on Christmas day, 2012.  The very next day there were 6 hours with virtually no wind generation and very marginal generation in the days following.  Geographic “smoothing” (i.e. the concept that it is always windy somewhere) requires very large, fully integrated transmission systems. Texas has a larger geographic area than the UK and France combined. The cost of such a transmission “web” in the continental U.S. would be $trillions.

So we do have to pay more attention and provide more funding for storage research. 

Davis Swan's picture
Davis Swan on Mar 30, 2013

See previous posting.

Peter Shepherd's picture
Peter Shepherd on Mar 29, 2013

There are interesting methodological questions raised on this OECD study.

Nuclear Energy and Renewables: System Effects in Low Carbon Electricity Systems,

Method comments to a NEA report”  Professor Lennart Soder, 12/12/20,

David Gibson's picture
David Gibson on Mar 29, 2013


Low-cost, utility-scale storage exists. Look up Advanced Rail Energy Storage. It is designed to accompany large-scale wind and solar installations to stabilize the energy distribution. Also, thermal storage is extremely cost effective, right down to the home scale for domestic hot water and heating purposes.


I K's picture
I K on Mar 29, 2013

I said imagine, so for instance south of Spain can yield capacity factors in the order of 22%

Regarding the price, in the UK it now costs less than £5,500 to have a 4kWp system installed on your roof. £5,500 = $8,350 so it works out to less than $2.1 per watt.

Needless to say, a large installation with thousands on panels on the ground will be considerably cheaper than that. So prices are already quite a margin below $2/watt in Europe.

I K's picture
I K on Mar 29, 2013

This is incorrect but you seem to have made your mind up anyway. Do read on to find out why it is incorrect.

Lets say you own a 1GW CCGT in Spain and your natural gas costs you $9/mmbtu which is roughly what it costs in Europe.  Now lets say I am a business man and I come to your power station and say…  Mr Post can I install a 1GWp of solar plant on this land near your power station and use your power stations connection to the grid. I will sell you my power and you can sell it to the grid.
If you are sane, you will say, how much, before you kick me out the door.
If I say $100 per MWh you should kick me out the door,
$80/MWh you should kick me out the door
$60/MWh you should kick me out the door
$40……now you are interested because you know that it costs you $52 in natural gas to generate a MWh.

You are better off buying my solar electricity for $40 and selling it onto the grid than buying gas from Qatar costing you $52 to then sell to the grid.  So we strike a deal. You buy all my output at $40/MWh. That means when it is midday sun is out you pay me $40/MWh, when it is night you pay Qatar $52/MWh for the gas.

Win win

The only question is, at what price for solar can it generate power cheaper than this gas and make it a win win for everyone??  I will let you calculate that, its fairly easy, hint….we are not too far away from that price now

If you are finding it dificult to understand, think of it this way. Is solar good at $0 per watt? What about $0.01…or $0.02 or……There is a point when it stops becoming a good idea but that figure is not at 0

I K's picture
I K on Mar 29, 2013

Keep an open mind Willem
Wind at $4.5m per MW is not a good idea, fortunately it does not cost that much.

It costs about 1M euro per MW, that means a 4MW turbine costs about 4M Euro plus installation

Needless to say it does not cost $18M to buy an install a single 4MW turbine like you are suggesting.

Also data suggests that in the UK on average our current wind turbines produce more energy during the day than they do at night, and on average more in the winter than in the summer so the opposite of what you suggest. By good luck on average they produce more power during the times of higher demand (especially winter vs summer)

Regarding what to do when the wind does not blow, well we do what we do now, we use our existing CCGTs. There is no need to build more because they already exist.

Regarding the cost. You need to minus the cost of the fuel we would need to import from that figure.

A more fair comparison may be,

20,000 x 3MW offshore turbines at say £5M each = £100 Billion

$50B will buy you 50GW of HVDC plus converter on each side plus 100s km wire to connect it all. The UK offshore sites are not that far from shore, only 10-20km or thereabouts that means they dont need costly AC to DC to AC or lots of miles of cable. I think a more fair guess would be in the region of £10B

So the total cost in the region of ~£110B and they would generate 210TWh,
Importing the LNG to generate that through CCGTs at todays price of ~$9/mmbtu would cost nearly £11B annually
That does not seem too bad a deal

Especially if you also try to take other costs into account, eg installing turbines in this country generating jobs and taxes in this country rather than paying £11B to qatar to import their LNG

If you try to push it past ~60GW costs would go up exponentially since you would need lots of storage and interconnectors etc

I K's picture
I K on Mar 30, 2013

288MW and expected to cost £400M ($608M) or $2.11/watt…..and falling

Sage Radachowsky's picture
Sage Radachowsky on Mar 30, 2013

The cost of damage due to climate change is infinite. There is no amount of money that can undo what fossil fuel usage has done, even if we stop today. Source of information: my life experience, my own heart and mind, with no apologies.

Rhetoric aside, i advocate for a strong carbon tax to cause the change we need to see in order to keep this planet livable even with the damage already wrought. I don’t speak any more of the “true cost” of fossil fuels because it is unquantifiable. A carbon tax is a Pogouvian tax designed to begin to figure some of the real costs that are currently externalized, and to thereby cause behavioral changes. Market-based change like this runs deep and causes a nearly infinite number of changes in people’s decision making, with the right price signals. People can figure out the numerous compromises, and innovate in large and small ways.

As a side effect, it would also stimulate our economy hugely, and move it in a cleaner direction. If the revenue is returned as a flat dividend, or cancels employment taxes up to some income level, perhaps on the first $20,000 to $30,000 of income — which it well could — then it would be a huge economic stimulus with no cost to the government. Revenue-neutral bailout of the people and the planet.

Yet, it would not pass in the Senate today. Why? Fossil fuel money finds its way into the campaign accounts of most of our representatives, in large amounts.


Sage Radachowsky's picture
Sage Radachowsky on Mar 30, 2013

I read this story and i know there is truth in it. It’s not easy to tie intermittent energy sources to the grid. But on the other hand, it’s not impossible, and there are in fact very good and efficient means of energy storage, in some cases, that can buffer the intermittency of wind and solar.

In locations with some hydro capability, a hybrid solar/wind-hydro installation can let the water head rise while the intermittent source is generating power, and then use that head to make up the difference. This is very efficient. In locations without enough natural hydro, water can be pumped into a higher reservoir using the renewable energy. There is some loss in this method, of course, in the pumping.

In terms of solar, currently emerging use of thermal storage for concentrates solar projects is very promising. Either a molten salt or a simple gravel can store an immense amount of energy very inexpensively, so the daily sunlight can be buffered through the night, or even through several days at a time, and generate power continuously, as the load requires.

The graph titled “Total System Cost” contains categories for “carbon cost” and “grid-level cost”.

To follow the “grid-level cost”, i open the OECD link and first note that the graph’s source is from the Nuclear Energy Agency.  Carbon costs are included, and grid-level costs are included, but there is no category for fissile-material costs, either for extraction or disposal. And, there is no category for “risk of nuclear contamination of large parts of the planet”.

To follow the “carbon cost”, i open the report from the Australian Government’s Bureau of Resources and Energy Economics. That is based on levels set or projected to be set by the Australian government. That is not exactly in relation to the physical reality of the planet, nor any other country’s projected carbon tax projections.

I also do not see where the author specifies the length of time for which he’s calculating the levelized costs that he is portraying in Figure 1.

I think this story is heavily biased against renewable energy, and uses some heavy & biased documents and some doubtful interpretation to compare apples and oranges and make an argument. I suggest looking to other estimates of levelized cost, not the Aussie government’s mineral sector’s agency, and the nuclear industry’s agency. I would also love to hear more specifics about the parameter of Figure 1. How many years? Are fuel costs included? What projects? What carbon tax levels?

My house is powered by solar and i’m off the grid. No grid-level costs, no transmission costs, no carbon costs. And independence from grid collapse.


Steven Scannell's picture
Steven Scannell on Mar 30, 2013

Sage,  Good points.  Wind to pumped hydro is viable.  Also wind to compressed air, and hydrogen is a good possibility.  Pipes to me are the key.  

Mr. Edo's picture
Mr. Edo on Mar 31, 2013


The graph doesn’t take into account the cost of storing and securing nuclear waste like Plutonium for over 200,000 years.

The cost to store/secure nuclear waste will fall to 20,000 generations of all of our families.

The cost of that is INFINITE.

Nuclear waste is the biggest form of LONG-TERM DEBT that every country with nuclear energy must deal with.

Nathan Wilson's picture
Nathan Wilson on Apr 2, 2013

I can see why a cursory look might suggest this (allegedly high cost to secure nuclear waste for 200,000 years).  But a deeper look at established science does not support it.  For example, the DOE’s Waste Isolation Pilot Plant in New Mexico has been safely and permanently disposing of nuclear waste for many years, 2100 feet underground in a 250 million year old salt deposit.

In contrast, the waste (CO2, mercury, SO2, NOx, particulates, radon, uranium, etc) from fossil fuels burned to “back up” variable renewables goes directly into the environment, where it will be harmful, and extremely expensive to remove, if our decendents choose to do so.

The science says, our decendents will be able to safely ignore the WIPP facility. Alternatively, they might choose to expand the facility (the WIPP’s salt formation extends under several states in the heartland of the US), as part of a nuclear energy system that continues to produce inexhaustible clean energy for society. 

Nathan Wilson's picture
Nathan Wilson on Mar 31, 2013

Davis, I agree that short-term (0.5-2 day) energy storage may be a cost-effective replacement or complement to geographic smoothing of variable renewables.

But at the multi-day level and seasonal smoothing, the most important option may be dispatchable load of fuel synthesis plants.   The traditional party line of the renewable establishment is that in the post-fossil fuel era, our transportation energy will come from batteries and biofuel.  Assuming an even split between batteries and biofuel, it is easy to see that the biofuel component is marginal in the US, and impossible in places like Europe, India, and Japan with their much larger population densities.

Fuel synthesis using wind, solar, or nuclear power produces much more energy per unit land than biofuel (5x more for wind, 20-50x more for solar, even more for nuclear).

Dispatching curtailment at a fuel synthesis plant still has a cost, since the lost revenue from the curtailed fuel production must be paid-for by the electricity buyer.  But with a few days of hydrogen storage, only the $.5/W electrolyzer cost and tankage must be paid off.  There is very little reason to believe any other storage technology will every be cheaper than this (for occasional use).

Fuel made from solar, wind, or nuclear power will cost more than fossil fuel, so there is a big question of whether developed nations will make the transition any time soon. China is an interesting anomaly in this regard, since its low cost labor gives it very cheap nuclear power, which may someday allow it to produce and export clean synthetic fuel (like ammonia) cheaper than the world price of oil.


Paul O's picture
Paul O on Apr 1, 2013

I don’t support burying nuclear “WASTE” permanently. Doing so is simply a stupid waste. Plutonium and unused Uranium should be fed to a Fast reactor, or an appropriate MSR and burnt until what’s left behind is only harmful for 300 yrs.

The fear of waste nuclear power is not warranted if the appropriate nuclear reactors were built.

Mario Montero's picture
Mario Montero on Apr 1, 2013

Cost numbers seem a bit inflated (outdated=?) for wind and solar, hence the big difference.   We have recieved competitive bids for wind at the $80-90/MWH onshore (50 MW size plants) and lately Guatemala apropriated a (competitive bidded) 50 MW solar farm at $120/MWH.

Baseloads need not be produced with coal or nuclear.  Here in Costa Rica we use geothermal and big reservoirs for that.  Granted, these are not problem-less solutions as they can have important environmental and social problems.  But costs are on check.


Nathan Wilson's picture
Nathan Wilson on Apr 2, 2013

Spent fuel recycling is a great solution when Gen IV reactors such as the IFR or LFTR are used, and is a crucial part of their ability to make inexhaustible clean energy.  

However, recycling spent fuel from LWRs is much more expensive than doing so with IFR and LFTR (the fissile material in LWR fuel is several times more diluted with low value U238 than IFR fuel, and LFTR uses a fluid fuel that avoids the expensive oxide pellet fabrication), hence, it can become a distraction that does nothing to advance the more advanced reactors.

The other often neglected fact about the LWR fuel cycle is that 90% of the natural uranium that is unused by the LWR is in the enrichment tailings; the spent fuel waste is small by comparison.  IFR can use the enrichment tailings for low cost.

Geoff Thomas's picture
Geoff Thomas on Apr 3, 2013

We just had this debate on the Energy Collective,  why have it all again? – doesn’t Barry Brook read his own group articles? – perhaps not as the arguments he puts forward are exactly the same as the ones debunked soundly (to all but the faithful Willum who is paid by the Carbon Economy anyway so nothing can change his mind) in last weeks discussion.

 It is said that ‘those who are convinced against their will, are of the same opinion still’ – fair enough, but what can be achieved if folk will not listen because what they hear does not conform to their previous mind set? The major problem with this BarryBrook re-iteration is as it was before, the Grid already copes with huge variations in demand due to customer inclinations, – sometimes predictable, sometimes not, but of far greater percentage than say what a wind farm losing it’s breeze would inflict,(and the blades hold a fair bit of rotational energy anyway which should be made available both for the best interests of the owners of the wind farm and the grid it supplies, – some wind turbines can’t do that, – they should not be selected). So, the grid can already cope, the argument is flawed, perhaps time to look at the situation more deeply, – are there generators other than Wind (currently a small percentage) in the system that might impose real problems with grid flexibility? Fortunately we do not have to go too far to find the culprit, – Nuclear, – so hugely expensive it has to sell virtually all it’s output, so dangerous it would be risky to raise and lower the fuel rods many times a day, – built in rigidity, a pie in the sky that has never really delivered, forcing all other generators to shoulder the whole responsibility of variable consumer demand, secretive as to it’s whole of life expenses, much of it’s expenses hidden in dubious military development and failure to include insurance and waste disposal.

Future generators need to be flexible, eg Hot Rocks Geothermal (see todays announcement,–-Commencement-of-Commi.aspx) it is getting slowly and carefully more serious, is able to ramp up and down really quickly, works well with renewables, (paricularly Solar Thermal with which it can share the generators and heat exchangers, – already fully developed technologies) it can be used as a battery, so making wind and solar much more welcome, making Wave and Tidal also welcome, and the concept of a virtual power station so much more real, where the total load is supplied by many small contributors, where a small storage cushions quite cheaply the ups and downs, and total system collapse is almost impossible.

Most if not all of the BarryBrooks complaints are from Monopsonys trying to stop anyone else getting into their illegal monopoly, from Deniers trying to pretend the world is not changing, from the special interest group Nuclear, and from accountants trying to get one more year out of old outdated machinery that is probably not only in-efficient but dangerous.

Barry Brook's picture
Thank Barry for the Post!
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