Interesting article. I think it is important to point out that California is one of the best possible regions in the world for solar + batteries powering the electrical grid. In other regions the capacity factor of solar power drops significantly and changes the conclusions.
Geography is the most important constraint on renewable energy, but it is typically missed in this type of analysis.
I would caution the use of Lazards LCOE data. They are pretty notorious for making optimistic assumptions for renewable energy.
I would also like to see the solar + CCGT (without batteries) as an option in the graphics. CCGT could run at nights, in the winter, and during cloudy days. My guess is that this the most cost-effective option in the American Southwest for the foreseeable future.
I would also add that charging a significantly larger number of EVs at night complicates the transition.
Indeed, you definitely have to be careful when using Lazard LCOE data, here is the note at the bottom of page 8 of their 2024 LCOE+ report. "Other factors would also have a potentially significant effect on the results contained herein, but have not been examined in the scope of this current analysis. These additional factors, among others, may include: implementation and interpretation of the full scope of the IRA; economic policy, transmission queue reform, network upgrades and other transmission matters, congestion, curtailment or other integration-related costs; permitting or other development costs, unless otherwise noted; and costs of complying with various environmental regulations (e.g., carbon emissions offsets or emissions control systems). This analysis is intended to represent a snapshot in time and utilizes a wide, but not exhaustive, sample set of Industry data. As such, we recognize and acknowledge the likelihood of results outside of our ranges. Therefore, this analysis is not a forecasting tool and should not be used as such, given the complexities of our evolving Industry, grid and resource needs. Except as illustratively sensitized herein, this analysis does not consider the intermittent nature of selected renewables energy technologies or the related grid impacts of incremental renewable energy deployment. This analysis also does not address potential social and environmental externalities, including, for example, the social costs and rate consequences for those who cannot afford distributed generation solutions, as well as the long-term residual and societal consequences of various conventional generation technologies that are difficult to measure (e.g., airborne pollutants, greenhouse gases, etc." https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf
Electricity policymakers are optimistic about the flexibility of electric vehicle (EV) charging times, which could help manage grid demand more effectively. In Australia, a majority of EV charging currently occurs during the day to take advantage of lower electricity prices. However, I remain skeptical about the generalizability of this behavior.
The current cohort of EV drivers in Australia is still relatively small and may represent a self-selected sample of the population. These early adopters are likely to have flexible work arrangements and access to rooftop solar panels, which incentivizes daytime charging. As EV adoption becomes more widespread, the charging patterns may shift, potentially leading to different demand profiles on the electricity grid.
To gain a more comprehensive understanding of EV charging behavior, it would be instructive to examine electricity data from Norway, which has one of the highest EV penetration rates in the world. However, it is important to note that Norway's electricity generation is primarily powered by hydroelectricity, rather than solar or wind. This difference in the energy mix could influence charging patterns and grid management strategies.
In 2007 I ran a pilot project with solar + flow batteries that was intended as proof of concept to replace diesel gensets generating electricity in communities throughout Africa.
Two problems appeared: the flow battery technology was immature, and if solar & batteries must replace 100% of the electricity the size of solar array and batteries becomes gi-normous. So the project never progressed beyond the pilot stage.
In March of this year I met someone (Manoj Sinha at Husk Power systems) who made a business of that exact same concept, but with two notable changes:
-Lead acid batteries instead of flow batteries.
-Keep the diesel gensets, which means only 90% of the electricity is provided by the photovoltaic array.
Not to complain too much, but could the graph axes labels be adjusted? Perhaps the graph generator doesn’t allow for it, but rather than 50K to 150K on the X-Axis and 0 mwh to 800000 mwh on the secondary Y-Axis, why not 50GW to 150GW and 0 GWh to 80GWh, respectively? It was not immediately clear what meant what until I read the note above it.
(Also to be pedantic: the unit is MWh not mwh! Small m is milli, small indeed.)
A pretty rosy picture, but entirely ignores the system dynamics to run a power system. There is no mention of system inertia, one of the reason for the Iberian Peninsula collapse. A power system needs ancillary services like reactive support, reserves, dispatchable capacity responsive to AGC, system inertia, the list goes on. NERC has declared an emergency because of the poor ride through performance of Inverter Based Resources and their habit of shutting down when they are most needed. If you read the list of Disturbance Reports included in the just released NERC Level # NERC Alert, the vast majority have occured in connection to the CAISO system. Not ready for Prime Time i believe is the correct description. See; https://substack.com/@kilovar1959/note/c-118954262
I didn't reference it because the author was specifically talking about CAISO, but fair point. I have a post dropping at 5am tomorrow on my Substack about the Iberian Blackout if you want to check it out.
Hello Brian, I am a big fan of your work and particularly enjoyed your article on the potential and perils of solar power. I have long advocated for a "90 percent campaign" for renewables, and my current residence in South Australia provides a compelling case study for this discussion.
South Australia's state electricity grid boasts the highest penetration of renewables in the world, with approximately 75% of all electricity in 2024 being powered by renewable sources. This is the state where Elon Musk effectively launched the grid-scale battery industry. The state government has set an ambitious goal of achieving 100% renewables by 2030. However, given our connection to the east coast grid, we will likely achieve a "net zero" grid rather than a fully zero grid.
The Eastern states have been particularly stringent about approving new gas projects and pipelines, largely due to pressure from environmentalist groups. If these puritanical tendencies are not addressed, they risk undermining the economics of solar and wind power.
On a related note, it seems unrealistic to assume that the grid will be powered solely by solar and gas. Most grids incorporate a mix of solar and wind, as these sources are complementary. Wind power tends to peak during the evenings, nights, and winter months, providing a balance to solar power. While I believe it is uneconomical to go beyond 90% renewables, this balanced approach can help achieve a more stable and sustainable grid.
Recently, Michael Liebreich had a podcast where his guest made a similar argument, proposing the use of diesel engines (similar in size to those used in marine ships) as a better alternative to open-cycle gas turbines. What do you think of the proposal?
To the critics, adding other energy sources makes the case for solar substantially better. Uncorrelated energy sources like wind and hydro reduce the storage required. Sources like geothermal and nuclear compliment renewables further by providing both baseload power and heat.
It's abundantly clear at this point that solar can cheaply provide 40-50% of energy demand after addressing some straightforward technical challenges. Nuclear, wind, hydro, and gas can make up the slack. Eventually, the gas power can be made green with DAC or replaced with clean sources of baseload power.
In many cities, the peak electric load is on sunny days, due to air conditioning. Solar fits well to handle those peaks. 25% of the load can be AC in Phoenix AZ
California has exceptional solar potential and little winter heat load.
This whole schema breaks down in the Midwest and Northeast with lousy solar capacity and greater winter heating.
The imbalance between seasons requires more batteries and more gas.
As you admit, your calculations don’t account for all the system costs that are imposed by intermittency. The LCOE cost calculations have been increased almost yearly as we learn more about the cost and performance of grids with higher renewable participation.
The 2024 Lazard costs for California Solar with only four hours of battery backup was similar to the disastrous Votgle nuclear plant.
On a national or global scale, wind and solar can be a major contributor, but it’s wishful thinking to promote very large penetrations of wind and solar power as THE solution to climate change.
Eh. California has higher-than-average solar capacity factors, but not that much higher. California is at 27.7% capacity factor, but the US as a whole is at ~23%.
I agree that large-scale electric heating in cold climates would make these economics worse (though I'm not sure by how much).
The average capacity factor is not particularly relevant, its the worst day / week/ month capacity factor that drives how effective PV or PV + storage can be. California has a high floor.
Do you think heat batteries can help manage winter peaks? Also doesn't the Midwest have a lot of wind potential which tends to peak during the winter seasons?
Wind power I'm sure works as a substitute for solar. That's what is used in northern Europe for that reason, but even solar is now efficient enough to be of use.
Have you considered grid stability? Does the recent blackout in Spain, which appears possibly to have been caused by frequency instability due to solar's inability to quickly stabilize frequency variations, mean that further infrastructure would be required to maintain grid stability?
I know South Australia has achieved very high levels of renewables coverage, but it is a small state next to two much larger states (Victoria and New South Wales) that get most of their power from conventional sources, so I expect that SA "borrows" its stability from its neighbors.
Even if you don't trust grid-forming inverters, it doesn't mean you need spinning rotors powered by fossil fuels.
Synchronous condensers (essentially a real-world version of the old perpetual motion joke, a generator hooked up to an electric motor) can provide the necessary inertia.
A CSIRO study in 2022 suggested the costs of adding synchronous condensers to provide inertia to a high-renewables grid would be in the order pf 1-2AUD (so maybe 1 USD) per megawatt/hour of wholesale electricity.
Regarding using grid batteries, I have pitched this to our utility several times. It has even better return than you have modeled. Because you are effectively running the grid like a hybrid car. Peaking plants are notoriously inefficient, as is spinning reserve. Grid connected batteries at substations make sense for multiple reasons: dispatchable power for demand spikes, local redundant power during outages, efficient generation load management, load leveling for brownouts. The charging doesn’t really care where the power is coming from. The BMS can set weighting from various sources of power and direct usage accordingly (my daughter worked on a scheme for this in Ontario six or seven years ago).
Solar is great in sunny places for sure. At least the helioscope modeling is mature these days and you can reliably predict outputs. But it won’t ever be the full replacement they claim.
I would think that the amount of batteries needed is not independent of actual grid size (but moving electricity these distances requires actually costing the extra transmission). This is because at the extrema, the limiting factor is not the variance of a solar farm but the covariance of all solar farms. But solar farms in Mountain time see the sun 1 hour before the solar farms in Pacific time (on average), so if you have unified grid over two time zones, the night gap is 1 hour shorter (and your peak is lower). But that means that there is a time where you will be generating all of the power in the east for the west, and visa versa.
Similarly other renewables are more valuable the lower their correlation with the sum of the solar sources. If we could guarantee that wind was not very correlated with solar, then even at worse LCOE it might beat out some gas, especially because again, we are already buying the batteries.
If you could find enough uncorrelated wind basins, then wind supplementation would be very valuable.
Also note that this analysis does not include analysis of demand curtailment. If there are new uses for energy given lower prices (and there will be), those might be viable even if you can only get that sometimes. We can actually accept a system that 10% of the time does not do the 10% least important things we do with power, for a 1% total shortfall.
This also does not interface with the interaction of battery costs and round trip efficiency.
Brian, I'm curious if you've evaluated rooftop (home level) vs large scale PV. Rooftop is more expensive, but it has the benefit of being resilient. The transmission infrastructure is fragile, so co-locating generation and consumption (at the 70-80% level) is safer. But it depends on how much more expensive it actually is.
If solar share rises, power prices during solar peaks will plunge. Making vertical solar more profitable. Vertical solar decreases the need for batteries. Spread the message.
It might be interesting to see Brian do a calculation of how these might change costs - panels hanging vertically facing east and west will generate a good amount of electricity at dawn and dusk near the equinox, and very little at noon or near the solstice.
These are clearly going to be a lot more expensive per unit of energy generated, since their peak moments involve the sun shining through extra atmospheric thickness. But perhaps the decreased maintenance cost, and favorable timing of when they generate their maximum power, might make them a valuable part of the mix. Especially since they can ring farmland and go on walls, rather than covering parking lots and roofs, so they aren’t competing for the same sites.
Possibly interesting to consider the effect of increasing accuracy of weather forecasts on the cost of supplying energy. Suppose we could predict weather perfectly for arbitrary lengths of time (and consequently the capacity factor). Then the energy infrastructure would depend only on demand variation so could be cheaper.
Interesting article. I think it is important to point out that California is one of the best possible regions in the world for solar + batteries powering the electrical grid. In other regions the capacity factor of solar power drops significantly and changes the conclusions.
Geography is the most important constraint on renewable energy, but it is typically missed in this type of analysis.
I would caution the use of Lazards LCOE data. They are pretty notorious for making optimistic assumptions for renewable energy.
I would also like to see the solar + CCGT (without batteries) as an option in the graphics. CCGT could run at nights, in the winter, and during cloudy days. My guess is that this the most cost-effective option in the American Southwest for the foreseeable future.
I would also add that charging a significantly larger number of EVs at night complicates the transition.
I only used Lazard cost data for gas turbine and nuclear prices (and for gas turbines I also checked it against quite a few other sources).
Indeed, you definitely have to be careful when using Lazard LCOE data, here is the note at the bottom of page 8 of their 2024 LCOE+ report. "Other factors would also have a potentially significant effect on the results contained herein, but have not been examined in the scope of this current analysis. These additional factors, among others, may include: implementation and interpretation of the full scope of the IRA; economic policy, transmission queue reform, network upgrades and other transmission matters, congestion, curtailment or other integration-related costs; permitting or other development costs, unless otherwise noted; and costs of complying with various environmental regulations (e.g., carbon emissions offsets or emissions control systems). This analysis is intended to represent a snapshot in time and utilizes a wide, but not exhaustive, sample set of Industry data. As such, we recognize and acknowledge the likelihood of results outside of our ranges. Therefore, this analysis is not a forecasting tool and should not be used as such, given the complexities of our evolving Industry, grid and resource needs. Except as illustratively sensitized herein, this analysis does not consider the intermittent nature of selected renewables energy technologies or the related grid impacts of incremental renewable energy deployment. This analysis also does not address potential social and environmental externalities, including, for example, the social costs and rate consequences for those who cannot afford distributed generation solutions, as well as the long-term residual and societal consequences of various conventional generation technologies that are difficult to measure (e.g., airborne pollutants, greenhouse gases, etc." https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf
Electricity policymakers are optimistic about the flexibility of electric vehicle (EV) charging times, which could help manage grid demand more effectively. In Australia, a majority of EV charging currently occurs during the day to take advantage of lower electricity prices. However, I remain skeptical about the generalizability of this behavior.
The current cohort of EV drivers in Australia is still relatively small and may represent a self-selected sample of the population. These early adopters are likely to have flexible work arrangements and access to rooftop solar panels, which incentivizes daytime charging. As EV adoption becomes more widespread, the charging patterns may shift, potentially leading to different demand profiles on the electricity grid.
To gain a more comprehensive understanding of EV charging behavior, it would be instructive to examine electricity data from Norway, which has one of the highest EV penetration rates in the world. However, it is important to note that Norway's electricity generation is primarily powered by hydroelectricity, rather than solar or wind. This difference in the energy mix could influence charging patterns and grid management strategies.
In 2007 I ran a pilot project with solar + flow batteries that was intended as proof of concept to replace diesel gensets generating electricity in communities throughout Africa.
Two problems appeared: the flow battery technology was immature, and if solar & batteries must replace 100% of the electricity the size of solar array and batteries becomes gi-normous. So the project never progressed beyond the pilot stage.
In March of this year I met someone (Manoj Sinha at Husk Power systems) who made a business of that exact same concept, but with two notable changes:
-Lead acid batteries instead of flow batteries.
-Keep the diesel gensets, which means only 90% of the electricity is provided by the photovoltaic array.
Not to complain too much, but could the graph axes labels be adjusted? Perhaps the graph generator doesn’t allow for it, but rather than 50K to 150K on the X-Axis and 0 mwh to 800000 mwh on the secondary Y-Axis, why not 50GW to 150GW and 0 GWh to 80GWh, respectively? It was not immediately clear what meant what until I read the note above it.
(Also to be pedantic: the unit is MWh not mwh! Small m is milli, small indeed.)
Ok, I figured out a way to do this, will get these updated (and make sure to do it for future graphs).
Unfortunately datawrapper really makes it hard to add labels to axes on line graphs, I'll see if I can find a way to do this though.
Yes, that does make the graphics very hard to read. I got lost on a few of them.
A pretty rosy picture, but entirely ignores the system dynamics to run a power system. There is no mention of system inertia, one of the reason for the Iberian Peninsula collapse. A power system needs ancillary services like reactive support, reserves, dispatchable capacity responsive to AGC, system inertia, the list goes on. NERC has declared an emergency because of the poor ride through performance of Inverter Based Resources and their habit of shutting down when they are most needed. If you read the list of Disturbance Reports included in the just released NERC Level # NERC Alert, the vast majority have occured in connection to the CAISO system. Not ready for Prime Time i believe is the correct description. See; https://substack.com/@kilovar1959/note/c-118954262
What about the Iberian Peninsula collapse?
I didn't reference it because the author was specifically talking about CAISO, but fair point. I have a post dropping at 5am tomorrow on my Substack about the Iberian Blackout if you want to check it out.
Hello Brian, I am a big fan of your work and particularly enjoyed your article on the potential and perils of solar power. I have long advocated for a "90 percent campaign" for renewables, and my current residence in South Australia provides a compelling case study for this discussion.
South Australia's state electricity grid boasts the highest penetration of renewables in the world, with approximately 75% of all electricity in 2024 being powered by renewable sources. This is the state where Elon Musk effectively launched the grid-scale battery industry. The state government has set an ambitious goal of achieving 100% renewables by 2030. However, given our connection to the east coast grid, we will likely achieve a "net zero" grid rather than a fully zero grid.
The Eastern states have been particularly stringent about approving new gas projects and pipelines, largely due to pressure from environmentalist groups. If these puritanical tendencies are not addressed, they risk undermining the economics of solar and wind power.
On a related note, it seems unrealistic to assume that the grid will be powered solely by solar and gas. Most grids incorporate a mix of solar and wind, as these sources are complementary. Wind power tends to peak during the evenings, nights, and winter months, providing a balance to solar power. While I believe it is uneconomical to go beyond 90% renewables, this balanced approach can help achieve a more stable and sustainable grid.
Recently, Michael Liebreich had a podcast where his guest made a similar argument, proposing the use of diesel engines (similar in size to those used in marine ships) as a better alternative to open-cycle gas turbines. What do you think of the proposal?
I'm not an expert, but I'm not buying this.
Wonderful post.
To the critics, adding other energy sources makes the case for solar substantially better. Uncorrelated energy sources like wind and hydro reduce the storage required. Sources like geothermal and nuclear compliment renewables further by providing both baseload power and heat.
It's abundantly clear at this point that solar can cheaply provide 40-50% of energy demand after addressing some straightforward technical challenges. Nuclear, wind, hydro, and gas can make up the slack. Eventually, the gas power can be made green with DAC or replaced with clean sources of baseload power.
In many cities, the peak electric load is on sunny days, due to air conditioning. Solar fits well to handle those peaks. 25% of the load can be AC in Phoenix AZ
https://www.eia.gov/consumption/residential/reports/2009/state_briefs/pdf/az.pdf
California has exceptional solar potential and little winter heat load.
This whole schema breaks down in the Midwest and Northeast with lousy solar capacity and greater winter heating.
The imbalance between seasons requires more batteries and more gas.
As you admit, your calculations don’t account for all the system costs that are imposed by intermittency. The LCOE cost calculations have been increased almost yearly as we learn more about the cost and performance of grids with higher renewable participation.
The 2024 Lazard costs for California Solar with only four hours of battery backup was similar to the disastrous Votgle nuclear plant.
On a national or global scale, wind and solar can be a major contributor, but it’s wishful thinking to promote very large penetrations of wind and solar power as THE solution to climate change.
You might curb your utopian idealism.
Eh. California has higher-than-average solar capacity factors, but not that much higher. California is at 27.7% capacity factor, but the US as a whole is at ~23%.
I agree that large-scale electric heating in cold climates would make these economics worse (though I'm not sure by how much).
The average capacity factor is not particularly relevant, its the worst day / week/ month capacity factor that drives how effective PV or PV + storage can be. California has a high floor.
Try with like New York or Germany...
This is a good point.
Do you think heat batteries can help manage winter peaks? Also doesn't the Midwest have a lot of wind potential which tends to peak during the winter seasons?
Wind power I'm sure works as a substitute for solar. That's what is used in northern Europe for that reason, but even solar is now efficient enough to be of use.
Thanks -very thoughtful and insightful.
Have you considered grid stability? Does the recent blackout in Spain, which appears possibly to have been caused by frequency instability due to solar's inability to quickly stabilize frequency variations, mean that further infrastructure would be required to maintain grid stability?
I know South Australia has achieved very high levels of renewables coverage, but it is a small state next to two much larger states (Victoria and New South Wales) that get most of their power from conventional sources, so I expect that SA "borrows" its stability from its neighbors.
Even if you don't trust grid-forming inverters, it doesn't mean you need spinning rotors powered by fossil fuels.
Synchronous condensers (essentially a real-world version of the old perpetual motion joke, a generator hooked up to an electric motor) can provide the necessary inertia.
Thanks. I'm sure there are other solutions. My question is - how much does it add to the cost?
Not a lot.
A CSIRO study in 2022 suggested the costs of adding synchronous condensers to provide inertia to a high-renewables grid would be in the order pf 1-2AUD (so maybe 1 USD) per megawatt/hour of wholesale electricity.
https://www.energycouncil.com.au/analysis/csiro-does-the-maths-re-integration/
Great stuff as usual.
Regarding using grid batteries, I have pitched this to our utility several times. It has even better return than you have modeled. Because you are effectively running the grid like a hybrid car. Peaking plants are notoriously inefficient, as is spinning reserve. Grid connected batteries at substations make sense for multiple reasons: dispatchable power for demand spikes, local redundant power during outages, efficient generation load management, load leveling for brownouts. The charging doesn’t really care where the power is coming from. The BMS can set weighting from various sources of power and direct usage accordingly (my daughter worked on a scheme for this in Ontario six or seven years ago).
Solar is great in sunny places for sure. At least the helioscope modeling is mature these days and you can reliably predict outputs. But it won’t ever be the full replacement they claim.
Interesting.
The company which is now Fluence first installed batteries as spinning reserve for a power plant in Chile back in 2007.
Next was frequency regulation, PJM was receptive to the pilot project which worked better than they imagined possible.
Etc etc.
Odd, that 😉
Yes it makes perfect sense but many locales aren’t willing to do it
I would think that the amount of batteries needed is not independent of actual grid size (but moving electricity these distances requires actually costing the extra transmission). This is because at the extrema, the limiting factor is not the variance of a solar farm but the covariance of all solar farms. But solar farms in Mountain time see the sun 1 hour before the solar farms in Pacific time (on average), so if you have unified grid over two time zones, the night gap is 1 hour shorter (and your peak is lower). But that means that there is a time where you will be generating all of the power in the east for the west, and visa versa.
Similarly other renewables are more valuable the lower their correlation with the sum of the solar sources. If we could guarantee that wind was not very correlated with solar, then even at worse LCOE it might beat out some gas, especially because again, we are already buying the batteries.
If you could find enough uncorrelated wind basins, then wind supplementation would be very valuable.
Also note that this analysis does not include analysis of demand curtailment. If there are new uses for energy given lower prices (and there will be), those might be viable even if you can only get that sometimes. We can actually accept a system that 10% of the time does not do the 10% least important things we do with power, for a 1% total shortfall.
This also does not interface with the interaction of battery costs and round trip efficiency.
You need a huge amount of transmission to time shift by a time zone though.
And its not good enough for wind to be weakly uncorrelated with solar, as that still leaves periods where neither show up.
Brian, I'm curious if you've evaluated rooftop (home level) vs large scale PV. Rooftop is more expensive, but it has the benefit of being resilient. The transmission infrastructure is fragile, so co-locating generation and consumption (at the 70-80% level) is safer. But it depends on how much more expensive it actually is.
If solar share rises, power prices during solar peaks will plunge. Making vertical solar more profitable. Vertical solar decreases the need for batteries. Spread the message.
I hadn’t heard of vertical solar before, but found this Reddit post: https://www.reddit.com/r/solarpunk/comments/1cvwhs0/if_you_havent_heard_of_them_by_now_let_me/
It might be interesting to see Brian do a calculation of how these might change costs - panels hanging vertically facing east and west will generate a good amount of electricity at dawn and dusk near the equinox, and very little at noon or near the solstice.
These are clearly going to be a lot more expensive per unit of energy generated, since their peak moments involve the sun shining through extra atmospheric thickness. But perhaps the decreased maintenance cost, and favorable timing of when they generate their maximum power, might make them a valuable part of the mix. Especially since they can ring farmland and go on walls, rather than covering parking lots and roofs, so they aren’t competing for the same sites.
If you now add in wind to the mix which quite often kick in during the evening when solar generation is going down ...
Possibly interesting to consider the effect of increasing accuracy of weather forecasts on the cost of supplying energy. Suppose we could predict weather perfectly for arbitrary lengths of time (and consequently the capacity factor). Then the energy infrastructure would depend only on demand variation so could be cheaper.