Love those 30 year old coal and nuclear plants — nothing gives cheaper electricity

The gold-plated stars of our national grid are the old coal plants we’ve built and paid off.

A US report (thanks Lance) shows how fantastically cheap and bountiful old coal and nuclear plants are. The LCOE or the Levelized Cost of Electricity includes the costs of the concrete, turbines, car parks and coal, plus the maintenance and salaries. It reveals that thirty year old, and even fifty year old coal plants, are the gift from past generations — enormous infrastructure, built and paid for, and ready to churn out bargain electrons. Or in crazy-land, ready to be blown up.

Look how long it takes to pay off the capital cost of building them (the red sector in the graph), and look how wonderfully cheap that electricity is from a 30 year old plant. Watch the pea. All those “investigative news stories” that compare the cost of building new coal to the cost of solar or wind are hiding the most brilliant and essential assets on our grid. Reopen Hazelwood now. (!)

Both sides of politics are choosing to destroy the family jewels in the hope of controlling global weather.

From the report by Stacy and Taylor, of the Institute for Energy Research (IER):

Most existing coal, natural gas, nuclear, and hydroelectric generation resources could continue producing electricity for decades at a far lower cost than could any potential new generation resources.

If anyone sees a 30 year old nuclear plant on ebay please call Josh Frydenberg:

These old plants just go and go

Below, see the real world data on capacity factors (this is a reflection of how well that plant keeps working as it ages). There is very little decline, and maintenance costs are small (especially compared to fixing gears and wings in giant towers in windy locations far out to sea and that break after just a few years.)

These old US plants keep kicking along for decades without a loss of capacity:

Old coal plants in Australia are working at even higher capacity factors

The cheap old brown coal plants in Victoria were running at 90% capacity year in, year out. Though here, the capacity factor partly reflects pagan energy policies. The carbon tax dinted the capacity factor of brown coal in 2012-2014. The RET takes a growing bite.

In the US coal competes with nuclear plants and cheap shale gas. In Australia, nothing bar anything, competes with Victorian brown coal (at least in a free market) which is why it is run virtually flat out all the time.

Hazelwood is a national treasure.

Thanks to commenter Lance.

The summary from the report:

Our findings show the sharp contrast between the high cost of electricity from new generation resources and the average low cost from the existing fleet. Existing coal-fired power plants, for example, generate reliable electricity at an LCOE-E of $38.4 per megawatt-hour on average. Compare that to the LCOE of a new coal plant, which ranges from $80.0 to $97.7 per megawatt-hour depending on how frequently the plant operates. The analysis shows the same for existing natural gas, nuclear, and hydroelectric resources—each produces electricity at a substantially lower levelized cost than its forward-looking LCOE (as estimated by EIA) would indicate.

We also find that intermittent resources increase the LCOE for conventional resources through a similar mechanism, that is, by reducing their run time without reducing their fixed costs. We refer to these as “imposed costs,” and we estimate them to be as high as $29.94 per megawatt-hour of intermittent generation when we model combined cycle natural gas energy displaced by wind.

The LCOE-E framework allows for cost comparisons that are relevant for today’s energy policymakers. For example, when all known costs are accurately included in the LCOE calculations, we find that existing coal ($38.4), nuclear ($29.6), and hydroelectric resources ($34.2) are about one-third of the cost of new wind resources ($112.8) on average

CONCLUSION

Most existing coal, natural gas, nuclear, and hydroelectric generation resources could continue producing electricity for decades at a far lower cost than could any potential new generation resources. At a coal-fired power plant, for example, when a component wears out, only the component must be replaced, not the entire plant. The same is true for nuclear plants, until they reach their regulatory end of life, which is currently defined to be 60 years but could be extended to 80.9 Under current laws, rules, and regulations, large amounts of generating capacity is slated to retire and will be replaced with new generating capacity which will produce electricity at a far higher average levelized cost. The Institute for Energy Research recently identified more than 110 GW of coal and nuclear generation capacity set to close as a direct result of federal regulations.

When electricity from an existing electric generating plant costs less to produce than the electricity from the new plant technology expected to be constructed to replace it—and yet we retire and replace the existing plant despite the higher costs—ratepayers must expect the cost of future electricity to rise faster than it would have if we had instead kept existing power plants in service. An unprecedented amount of generating capacity is set to close due to ongoing renewables policies, undervalued capacity markets, currently low natural gas prices, and additional environmental regulations. In the absence of even some of these factors, most existing power plants would remain operational, helping keep electricity costs low for many years or decades into the future.

Spot the lie by omission: studies that compare the cost of new coal plants to wind and solar.

REFERENCE

Stacy, T. Taylor, G. (2015) The Levelized Cost of Electricity from Existing Generation Sources, Institute for Energy Research (IER), based on EIA figures in the USA.

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