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June 30, 2015

What is the True Cost of Electricity?

June 30, 2015
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Electricity from New Wind Three Times More Costly than Existing Coal

WASHINGTON – Today, the Institute for Energy Research released a first-of-its-kind study calculating the levelized cost of electricity from existing generation sources. Our study shows that on average, electricity from new wind resources is nearly four times more expensive than from existing nuclear and nearly three times more expensive than from existing coal. These are dramatic increases in the cost of generating electricity. This means that the premature closures of existing plants will unavoidably increase electricity rates for American families.

Almost all measures of the cost of electricity only assess building new plants–until now. Using data from the Energy Information Administration and the Federal Energy Regulatory Commission, we offer useful comparison between existing plants and new plants.

America’s electricity generation landscape is rapidly changing. Federal and state policies threaten to shutter more than 111 GW of existing coal and nuclear generation, while large amounts of renewables, such as wind, are forced on the grid. To understand the impacts of these policies, it is critical to understand the cost difference between existing and new sources of generation.

The following chart shows the sharp contrast in the cost of electricity from existing sources vs. new sources:

LCOE press png

 

Click here to view the full study.

This study was conducted by Tom Stacy, a former member of the ASME Energy Policy Committee, and George Taylor, PhD, the director of Palmetto Energy Research. The source of the calculations used in this study is a compilation of data reported by the generators themselves to FERC and EIA.

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  • vacmancan

    Read the first paragraph. Now you know why we do our show!!! https://www.youtube.com/watch?v=EiaQemrDM9w&feature=share

  • J.P. Katigbak

    IER has yet to find out what the real ideological motivations behind environmentalism are. Perhaps it is never too late to challenge such a brand of socialism. – J.P.K.

    • Mike_Hohmann

      Try this offical IPCC statement by Ottmar Edenhofer in an interview:
      http://tinyurl.com/q4rtmvf

      then start digging for more coal pretty smartly:
      http://tinyurl.com/q7e8qgx

      • J.P. Katigbak

        Thank goodness – looks like I find the environmentalistic agendas ideologically motivated. Any more of the information regarding this, Mike Hohmann? Please let me know. It would be a pleasure. – J.P.K.

  • Sonny Paker

    i HAVE FRIENDS IN THE WIND BUSINESS… They take care of and install these wind farms through out the US… They told me from start to finish on installing one of these turbines and buying it costs a total of 40 million per one turbine… Thats from start to finish… Now, you have a wind farm that can have 50 to 100 of these… That a cool 4 billion bucks… So, they have to add this money on some how… Now coal is far less to work with… so, It will cost less for coal…

    • Jason Hall

      How much power does this generate per Kilowatt hour and how long would it take to recover your investment?

  • Brian Donovan

    Nuclear is short of fuel in 10 years, and cost 4 times solar or wind.

    Pub1104_scr.pdf IAEA

    “As we look to the future, presently known resources
    fall short of demand.”
    Fig 16 show the shortfall in 2025 and it going 1/4 of that 2050
    fig 20 also show shortfall.

    search lazard energy version 8

    The very first chart shows utility solar pv available at 60$ per MWH, coal at 66, and combined cycle at 61. That even using the 20 year solar panels life instead of the more realistic 30-40 year life.

    The IEA was founded to stockpile and control oil supplies.

    The study is not free, so we have no idea where they get these fantasy costs.

  • John Lock

    E=greens will not tell you this – why?

    ExxonMobil and Sierra Club Agreed on Climate Policy—and Kept It Secret

    Embarrassing for Exxon. In 2009, the company was prepared to sell America down the river.

    Bloomberg reports:

    Read the agreement.

  • Thatguy

    I just find it funny that the guy who runs the IER spent 20 years working for Enron…

    • Tom Stacy

      What is funny about it, “thatguy”? Don’t assume Rob “was” Enron or had anything to do with their lack of principles. On the contrary, Rob had always been a free market economist and despised much of what went on – and still goes on – in the electricity sector. You can read all about this in his bio and books on the subject at http://www.masterresource.org Very cool and fascinating story.

  • maryo

    One of these days, we will be like England, putting a dime in a meter in our homes to “x” number of hours heat and electricity.

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