16.05.2013
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Do the math!

The cost of German solar versus nuclear

Yesterday, an article compared the cost of German solar to the cost of Finland's new nuclear plant, and it led to a bit of commotion on Twitter. In our latest installment of "Do the math!", we show how the author makes a compelling case for the British to cut their current offer for a new nuclear plant by two thirds.

The Energy Collective is a website that calls itself "the world's best thinkers on energy & climate." Nonetheless, I recently found one of their articles to be poorly researched – based on an article a year older than the author thought and on a study funded by the Koch brothers, who support climate change denial publications in the US.

This time, someone from the Breakthrough Institute compares the cost of German solar and the cost of new nuclear based on estimates for a new plant in Finland. He claims that, "Proponents of Germany's Energiewende … argue that solar and wind can make up the difference in lost [nuclear] capacity."

 - Germany does not think it can switch to 80 percent renewable electricity by 2050 unless it reduces power consumption by 25 percent at the same time.
Germany does not think it can switch to 80 percent renewable electricity by 2050 unless it reduces power consumption by 25 percent at the same time.
energytransition.de

Unfortunately, that's not what proponents of Germany's Energiewende argue. I've said it before, and I'll say it again: Germans are switching to wind, solar, and biomass, and they do not believe a switch to renewables will work unless they drastically lower their consumption. So once again, a bogeyman is being dispelled.

There's some fancy math at work in proving that what Germany is not attempting will be expensive. The author impressively includes the degradation (lower output from aging) of solar panels in his calculation and estimates the cost of electricity from the new Olkiluoto nuclear plant going up in Finland at a price tag of 15 billion dollars (including, though he doesn't mention it, roughly 2.4 billion as a loan from BayernLB, a bank whose majority stakeholder is the state of Bavaria, at an interest rate of 2.6 percent).

His conclusion? German solar now costs 32 cents per kilowatt-hour, compared to only seven cents from the upcoming plant in Finland. So solar will cost more than four times as much, making the thing that Germany is not doing far more expensive.

While I poured over his math for nuclear, I could not help but wonder, however, why he bothered. We already know what a kilowatt-hour of new nuclear will have to cost for EDF to build a new plant in the UK: around 9.5 pence per kilowatt-hour. That's roughly 0.114 euros or closer to 0.15 dollars – so the French firm is asking the British government for more than twice as much as Mr. Trembath says nuclear power in Finland will cost.

 - Trembath says his "findings challenge the idea that solar photovoltaic is a disruptive… technology," but by the end of this decade solar and wind power will be pushing heavily into the baseload, thereby forcing these plans to ramp down – something nuclear does not do.
Trembath says his "findings challenge the idea that solar photovoltaic is a disruptive… technology," but by the end of this decade solar and wind power will be pushing heavily into the baseload, thereby forcing these plans to ramp down – something nuclear does not do.
www.energy transition.de

Then it occurred to me – Trembath is stealthily displaying his skills for the British government! You see, the two new reactors planned for Hinkley Point C will have a total capacity of 3,200 MW at a price tag of 14 billion pounds, or around 22 billion dollars. Olkiluoto will have only half of that capacity (1,600 MW) but apparently cost 15 billion dollars, putting the cost of a MW in Britain at only 73 percent of the cost in Finland. So according to his math, the British should only be paying 73 percent of half of what the Finns will pay – not the 15 cents being discussed, and not the seven cents in Finland, but 73% of seven, or around 5.13 cents.

Mr. Cameron, you need to get Trembath to London fast!

But back to solar in Germany – as my colleague Felix Matthes tweeted yesterday, the cost of solar is plummeting. Trembath takes figures from 2000-2011 for solar and compares them to future theoretical estimates for a new plant not yet in operation. At present, though, the feed-in tariffs for newly installed arrays in Germany are dropping by 1.8 percentage points per month. On June 1, the highest price will be 0.15 euros for the smallest rooftop arrays, with the lowest price dropping to 0.104 euros – equivalent to a range of 0.19-0.13 USD.

The first new solar arrays in Germany are thus already cheaper than what EDF is asking for to build new nuclear in the UK. That price for nuclear will be locked in for decades, whereas solar keeps getting less expensive.

 - Power production in France during the week of May 11, 2011, when the accident at Fukushima happened. Clearly, nuclear plants (the brownish area at the bottom) do not like to change their power output much at all.
Power production in France during the week of May 11, 2011, when the accident at Fukushima happened. Clearly, nuclear plants (the brownish area at the bottom) do not like to change their power output much at all.
Öko-Institut

Of course, at a monthly reduction of 1.8 percent, it will take the smallest solar arrays some time before they cost only 0.15 USD (EDF's offer for Hinckley). An entire year, in fact – in June 2014, the most expensive feed-in tariffs for new PV arrays in Germany will cost 14.75 US cents (11.71 euro cents) at current reduction rates. Who knows what solar will cost seven or eight years from now, when Hinckley Point C is finished?

Finally, the first feed-in tariffs for solar built years ago will expire after 20 years next decade, so we will have solar at less than 10 cents per kilowatt-hour replacing decades-old solar at 50 cents per kilowatt-hour. By 2030, lots of really cheap solar will have replaced the old expensive stuff in Germany, but if you build a nuclear plant now, you will be stuck with it (at 15 cents per kWh) until mid-century. Nuclear does not ramp down well, so it is not compatible with intermittent wind and solar. If you are waiting until solar gets cheap to build it, you need to get rid of nuclear now. (Craig Morris)

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15 Comments on "The cost of German solar versus nuclear "

  1. heinbloed - 14.06.2013, 14:10 Uhr (Report comment)

    Swiss wrote:
    " It is one thing to subsidise PV inland. But export the subsidised energy at a subsidised price is against the WTO rules. Still, it seems it is done."
    This is simply wrong. Energy politics are not included in the WTO regulations. Together with 6 other parts of the "free" market. Like war planes for example.

  2. heinbloed - 14.06.2013, 14:07 Uhr (Report comment)

    @ jmdsep, concerning losses with localised generation and storage:
    Here a sample from today's REI on how grid-losses can be minimised
    http://www.erneuerbareenergien.de/solarpark-im-virtuellen-kraftwerk/150/436/67131/

  3. heinbloed - 14.06.2013, 14:04 Uhr (Report comment)

    @ jmdsp, concerning losses:
    The shorter the transport the smaller the losses. Check the official Belgian reports:
    http://www.elia.be/en/grid-data/electrical-losses-fed-transm-system#anchor5
    Atomic power plants like in France produce 24h/day. Half or a quarter of the off-peak/night time electricity is dumped abroad in hydro storage and then bought back the next day, after the weekend. To be transported through the entire nation, from one end to the other.Twice. This makes the French electricity grid so uncompeteable: the source of the generation. Not the grid itself.

  4. jmdesp - 31.05.2013, 17:08 Uhr (Report comment)

    @heinbloed : Your last answer which contains some interesting data, however I didn't expect you'd focus on the losses which are only from 3 to 6% of consumption so will not make a major difference. Of course when talking about consumption, I was talking about per capita consumption, because it's just normal a country with a larger population has more consumption.
    Moreover, it's hard to attribute the difference in losses between France and Germany to nuclear and renewable when it was in 1978 already at 4% in Germany and 7% in France, with very little nuclear in France and no renewable in Germany. FYI the number of around 6% of loss for France is half in transport and half in local distribution. The very large proportion of nuclear between 2001 and 2008 left it at 5.5%. Except in 2009 and 2010, we don't see it going down in Germany, which suggests that only solar reduces it and not wind. Meanwhile it went up in the same period France, whilst nuclear was reduced and renewable power was getting more significant.
    My take is that opposite to accusations, centralized power generate some loss, but not that much, as is shown by Germany already at 4% when that was the only option it had. So-called "centralized" production is actually installed relatively near where it's needed with relatively small transportation, even though that's harder to do in France due to the geography. However when nuclear went down in 2009-2010, France had more loss because more frequently power had to be imported from a large distance.
    Roof-top solar does contribute to lowering the loss, but it's much less true for wind, both because it's installed far from cities that consumes most electricity, many turbines are at some distance from the high voltage transport network and the loss before reaching it is significant, and when wind is not blowing somewhere, the current must be brought from far away with high looses. In Germany's case, having installed most of the turbines in the north completely negates any possible loss reduction advantage.
    In the case of solar, in average it's much better, but not systematically. Like in the case of the 18 MW Neiße-Malxetal parc installed deep in former east Germany, where there's little local consumption, and the one there is was already multiple times covered by the three very large lignite plant in the vicinity. You expect a large part of the power from that plant gets transported far away with high losses.
    There's also the indirect effect that when solar peaks, frequently the large fossil plants choose to export power internationally with high loses, instead of ramping down.

  5. heinbloed - 26.05.2013, 22:47 Uhr (Report comment)

    Prices for PV panels have stabilized recently. But there are still huge chunks of 'emergency sales' hitting the market with rock-bottom prices:

    http://www.photon-international.com/news_archiv/details.aspx?cat=News_PI&sub=asia-pacific&pub=4&parent=5867

  6. heinbloed - 26.05.2013, 22:40 Uhr (Report comment)

    Jmdesp asks:
    " So what concretely are the German doing to reduce consumption ?"
    One important step is to reduce dependency on large central power plants, decentralisation reduces the transmission losses in the system. Germany loses about 3.85% and France about 6.28% (2010)
    https://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_elec_kh_pc&idim=country:FRA&dl=de&hl=de&q=stromverbrauch frankreich#!ctype=l&strail=false&bcs=d&nselm=h&met_y=eg_elc_loss_zs&scale_y=lin&ind_y=false&rdim=region&idim=country:FRA:DEU&ifdim=region&hl=de&dl=de&ind=false

  7. heinbloed - 26.05.2013, 22:32 Uhr (Report comment)

    @ jmdesp:
    About 18% more electricity usage in Germany compared to France (2010):

    https://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_elec_kh_pc&idim=country:FRA&dl=de&hl=de&q=stromverbrauch frankreich#!ctype=l&strail=false&bcs=d&nselm=h&met_y=eg_use_elec_kh&scale_y=lin&ind_y=false&rdim=region&idim=country:FRA:DEU&ifdim=region&hl=de&dl=de&ind=false

  8. heinbloed - 26.05.2013, 22:29 Uhr (Report comment)

    Jmdesp wrote:
    "Whilst Germany uses less electricity than France, it uses a lot more gas. And a lot more coal also, of course. "
    Germany uses more electricity than France. It is a larger country. The consumption per capita seems to be slighty lower in Germany, about 500 Watthours/a :

    https://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_elec_kh_pc&idim=country:FRA&dl=de&hl=de&q=stromverbrauch frankreich#!ctype=l&strail=false&bcs=d&nselm=h&met_y=eg_use_elec_kh_pc&scale_y=lin&ind_y=false&rdim=region&idim=country:FRA:DEU&ifdim=region&hl=de&dl=de&ind=false

    The French electricity trading at the public exchange covers only about a quarter in volume (MWh/a) compared to Germany. Due to protectionism there is no 'real' electricity trading in France:

    http://www.eex.com/en/



  9. jmdesp - 17.05.2013, 21:44 Uhr (Report comment)

    You claim higher efficiency is a full part of the Energiewende, but you might be the very first person I see making this claim. At least it's not put like that most of the time.
    So what concretely are the German doing to reduce consumption ? I've read your other post, you said nothing about what exactly this is supposed to cover.
    Whilst Germany uses less electricity than France, it uses a lot more gas. And a lot more coal also, of course.
    @heinbloed : Potentially this kind of module could make the EEG bankrupt. Also even with the battery, it will not cover consumption in winter, or when the weather is bad during a full day.

  10. Dimitar Mirchev - 17.05.2013, 07:22 Uhr (Report comment)

    Well, that is comparisson of the first 25 GWp in Germany with Finland's new nuclear plant. Accent on FIRST.
    The second 25 GWp will be far cheaper and the third 25 GWp will cost nothing to the tax payers because they will be build entirely for self consumption.
    The forth and fifth 25 GWp will cost virtually nothing.

  11. Todd Millions - 16.05.2013, 01:26 Uhr (Report comment)

    to be fair to the mighty Finns-Solar is decidley seasonal at high latitudes.Perusal of wind maps recording back almost 200 years now,reveal no shortage of wintre gales to not have wind make up for what amounts to 22hour nights for months.Over a somewhat larger area than Finland amounts too,however.This of course is a big deal on more than transmission line reliability-But as Buckminister Fuller pointed out decades ago-interconnections between neibouring countries and even continents,is secure supply.Because the time zone load shift profiles creat a useful dependency(non parasitic),as people tend not to blow up half 'their' power supply.Unless of course one is stupid(willfully)enough to privatize and so turn the switch over to banksters(parasitic),the grid and transmmision lines.

    Finns-

  12. swiss - 16.05.2013, 23:28 Uhr (Report comment)

    It is one thing to subsidise PV inland. But export the subsidised energy at a subsidised price is against the WTO rules. Still, it seems it is done. When airplane manufacturers get the slightest subsidy, competitors raise the hell and successfully.

  13. Talkredius - 16.05.2013, 20:26 Uhr (Report comment)

    expensive renewable vs. cheap nuclear :
    hmm, has anyone calculated how much it costs to store and guard nuclear waste for more than 24.000 years ?
    And how much does it cost to contract an insurance for a nuclear plant in Germany? Oh wait, insurance companies don't make contracts for nuclear plants because they think the risk is to high ? Interesting.
    Amazing how people can believe in cheap nuclear power.

  14. James Wimberley - 16.05.2013, 15:55 Uhr (Report comment)

    Basically you are right. But this is unclear: "That price for nuclear will be locked in for decades, whereas solar keeps getting less expensive." With FITS, the price for solar is also locked in. The difference is that you have to compare the price on completion of Hinkley C - 30 or 40 years from 2020 at the very best - with a renewable fleet (plus storage or other despatchable) built over a period, ranging from now to 2025-2030.
    The simplest method for comparison is to take a stab at marginal renewables costs in 2020. You have to be an extreme pessimist to think that these will be above 9.5p/kwh, since a href="http://www.ise.fraunhofer.de/en/publications/veroeffentlichungen-pdf-dateien-en/studien-und-konzeptpapiere/study-levelized-cost-of-electricity-renewable-energies.pdf"onshore wind is already much cheaper than this. And if you are doing a worst-case scenario, the worst case for Hinkley C is that it won't ever run, like a href="http://www.worldnuclearreport.org/IMG/pdf/2012MSC-WorldNuclearReport-EN-V2.pdf"Watts Bar 2 in the USA, incomplete after 43 years under construction.
    The difficulty as always in the wind-and-solar scenario isn't LCOE - that battle is won - but grid reliability and despatchable capacity. You are right to say that nuclear is useless on despatchability, as it only works on the obsolete baseload model. I add that it's not helpful on reliability, as you would be putting a huge proportion of your generating assets in only two reactors in one place, so the risks are not independent.

  15. heinbloed - 16.05.2013, 15:25 Uhr (Report comment)

    Hard-to-teach atomic and coal workers will be 'deported' towards the east :
    http://www.sueddeutsche.de/N5338E/1318213/Atomkraft-nein-danke.html
    The UK has to build cables - towards the east
    http://www.rechargenews.com/wind/europe_africa/article1326654.ece
    since electricity prices are going north
    http://www.uswitch.com/gas-electricity/news/2013/05/16/energy-bills-will-rise-by-10-before-christmas/
    A new PV manufacturer starts in East Germany this month, offering plug-and-play electricity for consumers. CHEAPER than electricity from the grid:
    http://www.photovoltaik.eu/nachrichten/details/beitrag/sun-invention-produziert-in-brandenburg_100010836/
    We will soon see these panels at Aldi, OBI and Tchibo. Buy 2 packs of coffee and get a PV System with it.
    ---------------
    Math seems to be a science for all :)

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