An analogy for Levelized Cost of Energy
OCT 28
The much-touted claim that “renewables are cheaper than fossil fuels” is based on the flawed concept of levelized cost (LCOE).
Here’s a little analogy that explains why it’s BS:
You’re heading out on Saturday night and you need a babysitter...
You shop around a bit - there are plenty of options - and eventually come across a nice young lady, let’s call her Wendy. At just $10/hour she looks to be way cheaper than the other options. Bargain. Wendy is hired.
Saturday arrives and you’re all dolled up, ready to hit the town Wendy turns up on time but, just as you’re leaving, she casually mentions she won’t be able to watch your kids the whole time you’re out. “What? Why not?” you ask… “I need to pop out a few times”
“When?”
“I don’t know”
“For how long?”
“Not sure”
“Errr OK, will you’ll find a friend to cover for when you have to leave?”
“Nope, sorry”
“Right, so I have to find another babysitter and have them on standby for when you leave?”
“I guess so”
“But I’ll have to pass that cost onto you”
“Nope, not my problem. You want a standby babysitter, you pay for it buddy”
So, you head to Google and find a back-up, Simon.
Simon is reliable. He’s there whenever you need him. But, at $20, he’s a tad more expensive.
You can’t leave the kids alone for even a minute. They're terrors. Imagine the chaos
You have no choice but to hire Simon too, & pay him even when he’s on standby, regardless of Wendy’s comings and goings
Total babysitting cost: $30/h
Not $10/h as Wendy had you believe.
This is the folly of renewable power cost claims.
They don’t consider the cost of their own unreliability. A cost that must be paid.
If you want to run a modern economy then reliable power is priority #1, not an afterthought.
Time to be honest, Wendy.
The 'Real Cost" of renewable energy
The 'Real Cost" of renewable energy
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: The 'Real Cost" of renewable energy
Actually, Wendy is even a worse deal. She lives 30 miles away and has no "transmission" in her car.
You say, "why not fix it."
She says she has no money to fix it. "Loan me some"
You say , "OK, How much"
Wendy, "$6 billion"
You say, "What"
Wendy, "Yes, $6 billion. That was in the fine print when you hired me. Either that, or I get your kid.
You, "Oh."
(Around 5 years ago, Texas rate payers, paid $6,000,000,000 for one transmission line to hook up intermittent windmills in west Texas to eastern Texas cities)
You say, "why not fix it."
She says she has no money to fix it. "Loan me some"
You say , "OK, How much"
Wendy, "$6 billion"
You say, "What"
Wendy, "Yes, $6 billion. That was in the fine print when you hired me. Either that, or I get your kid.
You, "Oh."
(Around 5 years ago, Texas rate payers, paid $6,000,000,000 for one transmission line to hook up intermittent windmills in west Texas to eastern Texas cities)
Re: The 'Real Cost" of renewable energy
Wind and Solar are too expensive and will not be reliable electricity. Manufacturing companies will need to install their own ngas or diesel fired generators to avoid regular power outages. MY POINT is that no modern economy can function on unreliable electricity. Europe is going to show the world how dumb the Paris Climate Accord is.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: The 'Real Cost" of renewable energy
Total Cost = Price tag + Cost to Use
Dan, you have provided a great example of the Cost to Use the low bid. Add to the Cost to Use for renewables, the cost of citizen's taxes to subsidize the renewable source. Getting rid of it is another issue, decommissioning a Windmill is up there with getting rid of a destroyer.
Cliff
Dan, you have provided a great example of the Cost to Use the low bid. Add to the Cost to Use for renewables, the cost of citizen's taxes to subsidize the renewable source. Getting rid of it is another issue, decommissioning a Windmill is up there with getting rid of a destroyer.
Cliff