The Cost Of Generating Electricity

If you want to read a dry document look no further than the "The Cost of Generating Electricity" from the Royal Academy of Engineering. But to describe this document as dry is very far from an insult. It does exactly what it says on the tin (or header page). It makes no blatent partisan statements. It is a terse brutally scientific appraisal of the costs of generating electricity by different methods of generation.

It includes as optional extras the bits that some wish to miss out.

take this graph:

There are also two caveats attached to the graph. These are:


1 With the exception of nuclear, the analysis assumes that decommissioning is cost neutral. The capital cost estimate for nuclear plant includes an allowance for the costs of decommissioning.
2 For the purpose of this study, wave and marine technologies are deemed to be predictable and therefore have not been burdened with the additional cost of standby generation.

So Nuclear including decommisioning costs less per MW than any other generation method other than CCGT (Combined Cycle Gas Turbine) and is less than one third of the cost of offshore wind generation and well under half the cost of on shore wind generation. Even if you exclude the extra spinning reserve needed by wind, nuclear is still massively cheaper.

But pure cost is not the only issue. One item constantly raised by pro-windies is energy security, so lets have a look at a graph concerning a price variation of +/- 20% on each energy fuel.

So because nuclear uses so little fuel, the cost of the fuel is not far off immaterial. Also all nuclear fuel can either be created from existing stocks (85 years worth) and at worst purchased from the massive ore supplies in secure countries like Australia. With nuclear there is no risk to fuel supply.

The final argument bleated out by proponents of wind concerns CO2 emissions. Look at this:

Clearly the cheapest and least polluting technology is Nuclear. In fact just about everything , even with carbon mitigation is more cost effective than wind.

So why are we continuing to ruin our countryside with these monstrous, ineffective and massively expensive wind turbines?

All answers please to Billothewisp, written on a clean £50.00 note.Please mark all bank notes "ROC subsidy"


RayF said...

Why are you referencing a report that was published 8 years ago?

Onshore wind power is now cheaper than nuclear. Wind power is much lower CO2 than nuclear.

BilloTheWisp said...

Hi Ray,
I will reply asap, but I am up to my eyes at the moment (hopefully I'll reply later today/tomorrow)

BilloTheWisp said...


True. The RAE report is now 8 years old. I could if you like refer you more damning and more recent reports such as "Why is Wind Power so expensive" by Prof Gordon Hughs (March 2012)" or The report "Powerful Targets" by Mercados Engineering Consultancy.(Dec 2011). There is also the ground breaking report by the John Muir Trust(2010).

All of these show how things have actually got worse for wind since the RAE report.

See this post for references to all of these reports.

But even so, the RAE report is still highly relevent today. The report gives a clear and comprehensive analysis of the cost factors for each current generation technology.

Nothing much has changed since 2006 regarding their analysis with the exception of an increased level of implementation for wind.

Of course fuel prices have changed (as accomodated for in the report) but, with the exception of wind, all of the technologies were ature
in 2006, so it is reasonable to use this report today for them.

With regard to wind, the RAE had to use the best estimates available in 2005/2006 to formulate their report. Consequently they used a capacity factor of 35% for a projected mix of on-shore and off-shore wind.

Today, we now know this is wildly optimistic and unrealistically high.

The postulated 35% especially for the average of onshore and offshore combined has turned out to be a total myth. Even off-shore on its own has never achieved this figure.

The consequence of this is that the RAE report's main failure, due to its age, is related to an over optimistic appraisal for wind rather than the opposite.

However I still think the report is very important because not only does it show how utterly hopeless wind generation is (even with an inflated CF), it also provides a very important comparison between all major generation techniques.

Finally, you assert wind is cheaper than nuclear.

I have to ask: Where is your independent evidence? (Or even your partisan evidence for that matter.)

Why should I disbelieve all of these four independent, detailed and comprehensive reports?

Each has been prepared by highly competent engineers and conomists.

I'm sorry. But until you can actually provide meaningful data to back up your claim and prove these reports wrong then I will continue to assert (with independent back up from these reports) that nuclear is considerably cheaper than wind. In fact just about all generation methods are cheaper than wind.

De Facto.

RayF said...

If you look at a recent, credible source such as the DECC / Mott McDonald UK Electricity Generation Costs Update 2010, you will see wind is cheaper than coal or nuclear.

Or you can just look at the reality of what is happening all over the world. Wind is growing at an exponential rate while nuclear power is in long-term decline.

These facts should prompt you to question your beliefs and seek information to explain why those things are happening.

P.S. Your belief about capacity factor are similarly flawed. Onshore CF is about 27%, offshore is about 35% (ref. 'Wind Power and the UK Wind Resource', Sinden et al, 2005) - and both are growing as bigger machines come online.

Also, don't obsess over CF because it's nowhere near as important as the uninformed believe - largely because wind turbines harvest free energy.

BilloTheWisp said...

I take it the document you are referring to is the "The Renewable Energy Review May 2011" authored by the Comittee on Climate Change, who used figures from Mott McDonald.
It is difficult to see where you get your figures from. Look at fig 1.9 p 67. Using the Mott McDonald figures only coal with CCS is more expensive than onshore wind while
offshore is still by far the most expensive of any generation technique. Try reading the documents I suggested above. They will at least give you an idea of percieved
problems with wind, whether you agree with them or not.

You are right that wind is being rapidly adopted. But this is solely due to the massive subsidies it is being given. When the subsidies die (as they will) so will the turbines.

Again with nuclear you are partially correct, we (and the world) has lost twenty years of large scale decarbonisation that would have been possible without the
scaremongering and misinformation.

Then we come to capacity factor (that really does matter!) I am glad you at least quote 27% rather than the usual 30% propaganda. 27% is the rolling 10 year UK on-shore average.
In England it is about 25% in SW it is 23%. The figure you quote for offshore is more than the highest it has ever been. It is certainly NOT the average. The Sinden report (2005)
was essentially based on the speculated value for offshore wind and was not based on real values. Look in Dukes 2011 table 7.4. In the recorded period (2006-10) the offshore
CF has NEVER reached 35%. The offshore average 2006-2010 is about 31%.

But the most important thing to realise about wind is that the CF is an inflation of their true capability. Most generation technologies, while operational have an output higher than
their CF EXCEPT wind where the typical (i.e. the most common output) is significantly less than the CF. It is difficult to over emphasise how important this is.

I'll reply to your other comment on "European Electricity Prices Compared" tomorrow.

RayF said...

It was the 'UK Electricity Generation Costs Update June 2010' from Mott McDonald I was referring to, but it does not matter too much. There are many sources that demonstrate wind is cheaper than nuclear - and indisputable evidence that wind is getting cheaper as nuclear becomes more expensive. Only for people who deny the reality of climate change is coal or gas a viable solution.

Also, you need to consider the cost trend for these technologies and when they will come online. Solar is falling in cost rapidly. A new nuclear reactor started today would not come online until the mid-2020s at best. By this time solar + storage will be much cheaper. Also offshore wind is predicted to see big cost reductions in the coming years.

The "low" capacity factor is really just propaganda pushed by the fossil / nuclear lobby to confuse the unwary. Just build a range of renewable energy sources in a distributed grid and the capacity factor of each unit is compensated for. There are many credible sources that have produced blueprints for 100% renewable energy, including the IPCC, but 'Zero Carbon Britain 2030' provides an easy to understand explanation.

This all explains why RWE and E.ON and Siemens and other nuclear builders are pulling out of the industry. They see the writing on the wall and are investing in renewables.

BilloTheWisp said...

I admire your enthusiasm Ray, but really you must ensure you deal in facts not wishful thinking. The Mott Macdonald report used in the DECC report (as I said above, see fig 1.9 p 67 in the DECC document) clearly shows that nuclear is cheaper than onshore wind. In fact the most expensive (by a long way) is offshore wind.

Nothing is getting better about this.

Wind will be perpetually dependent on subsidy. When the subsidy is finally withdrawn all but a few turbines will close down.

So lots of reports show wind cheaper than nuclear?

What reports Ray? Independent, reliable reports? Or more Green Party dreaming? Even RenewablesUK can only manage a "On a good windy site, wind is becoming increasingly competitive" In otherwords not competive yet, and that is a good windy site AND it is RenewablesUK!

As for storage, the only viable large scale energy storage we have is Hydro. In the UK we don't have much Hydro. Nothing else is even in prototype stage let alone nearing deployment.

Nuclear does have a long build time ( 5-10 years) . That is why we need to start now.

Which brings me to capacity factor. Capacity factor is unimportant? No Ray - It is arguably the most important aspect of any energy system - especially an intermittent source like wind.

I obviously have not explained this well enough. Another post on CF using an analogy will come soon. I've also got a post showing the illusion about "distributed" wind.

Both will come backed up with reliable and verifiable data.

RayF said...

It's good you are trying learn about this subject, but you need to inform yourself with the full facts and not cherry picking and confirmation bias.

There is no "fig 1.9" on p.67 of the document I told you to reference. There is a Figure 7.2 which clearly shows onshore wind is cheaper than nuclear. Many credible sources will tell you offshore wind is falling rapidly in cost, most likely becoming cheaper than nuclear before a new reactor could come online - that is why multiple countries all over the planet are investing heavily in offshore wind.

I'm puzzled why you are demanding that other people provide evidence that is easily found by typing words in to Google. But, OK - I'll help you - - onshore wind cheaper than nuclear. Note: offshore wind in the USA has received no development or investment and is therefore much more expensive than in Europe. Note 2: 'advanced nuclear' is represented by the EPR projects in Finland, France and China that are years behind schedule and billions of dollars over budget.

Also, you need to understand that governments with nuclear power often have very close ties to the industry, partly as a result of the military connections. For instance it was revealed that the UK government worked with the nuclear industry to hide the true scale of the Fukushima catastrophe. Therefore, it's hardly surprising that government reports show nuclear being far cheaper than >>reality<<.

The most important thing you need to do is compare your beliefs against >>REALITY<<. In the real world, nuclear power has been in decline for 20 years and that decline appears to be accelerating as multiple countries abandon nuclear in preference for renewable energy. If your >>beliefs<< were correct this would not be happening. So, is reality wrong or is it your beliefs?

BilloTheWisp said...

The figure 1.9 on p67 is in the DECC report "The Renewable Energy Review May 2011" This uses the Mott MacDonald data from the pdf below.
But, it uses it properly. The figure you refer to (I assume) is fig 7.2 in the Mott MacDonald report.
This bar graph in the Mott MacDonald while showing a marginal advantage to on-shore wind clearly states that the nuclear cost comparison is FOAK (first of a kind) this refers to the initial cost penalty incurred on building the first of type plant.

If you read the Mott Macdonald report ( section 7.2 "Main Technologies" p82) they explain this as so...

Nuclear has a current levelised cost just under £100/MWh on our central case....
However, this is very much a FOAK cost, and our projection is that on a NOAK basis costs will fall to by
about one third to £68/MWh, possibly for projects initiated as early as 2017. By the early 2020s,
nuclear is projected to have a £35-40/MWh levelised cost advantage versus the lowest cost fossil fuel
options and it would be the least cost zero carbon generation option among the main technologies.

This section goes on to state on-shore wind, while is currently marginally cheaper than FOAK nuclear can only expect modest cost reductions. The section then expounds on the utterly insane price of off-shore wind.

While it is good to back up your statements with references it is important to actually read the report and check what the graphs are really referencing.

The second report you quote (EIA - USA) uses a wind capacity factor of 34%. Any turbine running at 34% would essentially generate 40% more electricity than the English average (CF-25%) and 200% the output of the Reading Turbine! The document though does do an good job of highlighting that wind is capital intensive. This means that while at 34% CF they may be viable, the low CF we have here mean that nearly all WTG's are dependent on subsidy.

See this post on this report:

Your statement that nuclear has been in decline for 20 years is simply untrue. It peaked in 2006 has had a shallow dip then recovered in 2010 but was set back by Fukishima. Many new plants are being built and is about to rapidly rise.
See this post:

Finally: I do understand massively subsidised wind has been growing very rapidly. ( But now it appears the Chinese are pulling the plug see this post:

Just because it is growing rapidly does not make it right. Look at the massive growth of coal power worldwide.

Should I support that?