The Cost of Going Green. Does the push for renewable energy sources make sense?

Early in American history scientists and naturalists grew concerned that America, and the world, were using natural resources faster than they could be replenished.  Largely because building the colonies and the new country produced a visible effect on the land that was tangible to the people who settled here.  With the onset of the Industrial Revolution (1760-1840) America and the world became largely dependent on fossil fuels.  In 1896, a Swedish scientist made the first link to fossil fuels and global warming, predicting the effects of “greenhouse gases” on the environment.

Over the past few decades, there has been an exponential increase in interest in “renewable” energy sources and “low CO2” emissions.  Largely driven by concerns over climate change and the production of these “greenhouse gases”.  While most people focus on Carbone Dioxide (CO2) as the main culprit, there are multiple gases affecting the power industry that have seen strict regulation over the past 30 or so years:

  • Methane
  • Oxides (CO, CO2, SOx, NOx)
  • Particulate
  • Mercury
  • Fluorinated Gases
  • Fluorocarbons

The regulation of these products resulted in a slew of increased technology.  Advances not only in power generation, but plant control and emissions reduction technology.  New chemicals, cleaner-burning fuels, and the capture of byproducts have all increased the environmental friendliness of traditional fossil fuel burning plants.  However even with these advances, the push for 100% renewable energy continues…but is it worth it?

What is “Green”?

The EPA defines green power as “electricity produced from solar, wind, geothermal, biogas, eligible biomass, and low-impact small hydroelectric sources.”  Solar plants, wind turbines, geothermal plants, and hydroelectric stations are the most common commercial “green” energy plants. 

Is green energy better than conventional energy?  Well, that all depends on what qualities you are trying to compare.  When comparing energy sources, there are many factors that must be considered.  Cost per Megawatthour (MWh), land usage requirements, resource requirements (like cooling water sources), total emissions, reliability, energy output, and the ability to handle load swings are all factors that must be weighed together.

The Bottom Line.

Cost per MWh is arguably the most important factor for a consumer or investor.  The cost of electricity is a significant portion of most household budgets.  For a company investing in building or operating a power plant, the balance between efficiency and profit margin is a major concern.   According to NS Energy Business, 50 companies have declared bankruptcy and over 100 GIGAWATTS of coal supplied power has been retired in the past decade, or will be retired by 2024.  A 2018 Reuters article reported that over 40% of coal plants worldwide operated at a loss, and estimated by the end of this year that number could reach 75%. 

When talking cost of energy production, there is a lot to consider. Land costs, permits, fuel, maintenance, employee pay, etc., are all tied into the discussion. It is very difficult to compare conventional and renewable energy costs directly, it’s like comparing apples to oranges. The Energy Information Agency publishes reports that compare the cost of energy production in Levelized Cost, that is, the costs of a new power plant over its expected lifetime versus the energy it is expected to produce, in short, it’s how much money the plant has to make to cover its cost.

The reason Levelized Cost is most often referenced when comparing renewable energy to conventional energy is renewable energy sources don’t share the same recurring costs as conventional plants, specifically in fuel. The bulk of renewable energy cost is in construction, with no fuel costs, whereas a conventional plant will spend more in operational costs, such as fuel, maintenance, and employees.

A search of the DOE and EIA research from 2019 provides the following nationwide average levelized cost per MWh for different energy sources.

Power Plant TypeCost $/MWh
Natural Gas$66
Wind onshore$40
Wind offshore$122
Solar PV$33
Table 1 – Levelized Cost per Megawatthour for Different Energy Sources

Based on the cost per MWh, renewables seem to be the clear winner.  Easily beating or at least being very competitive with their “conventional” counterparts.  So why hasn’t the entire world already shifted to these clean energy sources?  Well, it’s not as black and white as cost per MWh. 

If you build it…

One of the largest factors when building a power generation station is land usage.  While the average coal or nuclear plant occupies somewhere around 1 – 2 square miles of land, the equivalent solar or wind farm requires upwards of 75 square miles (solar) or 360 square miles (wind) to produce the same amount of electricity.  This is one of the largest obstacles facing the two main sources of green energy, both in cost and community approval. 

That said, coal, natural gas, and nuclear all require extensive resources to operate, specifically personnel and cooling water.  Most steam generating plants are located adjacent to a large natural water supply or have had a water supply diverted or created for them.  In some areas, this just isn’t feasible as water may already be a scarce resource.  Based on the geography, wind and/or solar are perfect for remote or harsher climates.

Another benefit of the use of solar and wind power is they can be installed in conjunction with existing infrastructure.  Especially in the case of solar; warehouses, homes, city buildings, etc., all become part of the grid. 

Meeting the demand.

The common goal in energy production is meeting demand.  Obviously, companies must do this efficiently, because the goal of any company is to make money or it will not survive.  Steam Boilers, regardless of their source, don’t operate efficiently when they are at idle, and large power generating plants waste money by starting up and shutting down frequently.  These plants are designed to start up and generate large amounts of power 24/7.  When it comes to sheer energy production per unit fuel, Nuclear is the obvious winner, with the typical nuclear reactor generating 1000 MW per unit.  1 gram of Uranium produces 78,400,000 BTUs of energy, which is equivalent to about 4 tons of coal or 75,000 cubic feet of natural gas.

These facilities can operate 24 hours a day, 7 days a week, 365 days a year, no matter sun or rain, calm days or windy days. The reliability and consistency are unparalleled.  Additionally, these plants can absorb large swings in demand easily.

The average wind turbine on the other hand produces around 3-7 MW, and only when the wind blows.  A commercial solar array falls somewhere in the range of 5kW for a 400 square foot array, and only when supplied with direct sunlight.  The nature of these sources of energy produce consistent output without capacity for load swings.

So, is it worth it?

Investing research and development into Green Energy technology is definitely worth our effort as human beings as we all benefit from conserving the resources available on this planet.  It is important to recognize however, that these technologies are not a one size-fits all solution to providing energy.  As seen most prevalently in California this summer, the loss of heavy lifters like Coal and Nuclear can have a huge impact on the end user when demand is high. 

With the high cost of building and maintaining a Nuclear power plant, Coal, Natural Gas, and combined cycle plants still play a large role in energy production in the United States and shouldn’t be cast into the shadows.  In communities where power and jobs are both in high demand, these plants fill both needs.

Continuing technological advances in both power generation and end use will continue to improve the efficiency and cost of all methods of power generation.  In the end, what is really important is balancing our approach and utilizing our resources effectively.  While it may make sense to build a large geothermal plant outside San Francisco, a large solar farm in Nevada, and a hydro-electric plant along the Colorado River, none of those are likely to be successful in the mountains of West Virginia. If we capitalize on all the technology available to us, we can find a balance between safeguarding our environment, providing energy to our customers, and keeping our people employed.