Thursday, February 21, 2019

High Cost of Intermittent Renewables:

A Comprehensive Analysis

A recent report by the OECD Nuclear Energy Agency provides an analytic assessment of something that has been discussed for a long time--that there is a significant system cost to relying too heavily on intermittent renewables.

The report models different levels of nuclear power and renewables with a tight carbon emission constraint.  Since the load factor of variable renewable energy (VRE) sources is much lower than that of conventional fossil or nuclear power plants, a significantly higher installed capacity is needed to produce a given amount of electricity.

The results of the study are consistent with observations in countries like Germany, where, despite declining generation costs and zero marginal costs for solar and wind power, the costs of electricity have risen as more renewable energy has been supplied to the grid.

The study also points to other issues.  For example, deploying a lot of wind and solar power with low marginal generating costs produces a significant increase in the volatility of electricity prices, which can have negative financial implications for both backup sources of electricity and for the renewable sources.

One might question the credibility of a study on renewables from an agency that focuses on nuclear power, but one should keep in mind that the mission of the OECD/NEA is NOT to promote nuclear power.  Its mission is to assist its member countries in developing the bases for the safe use of nuclear energy.  In fact, the membership of the OECD/NEA includes countries that are anti-nuclear, e.g. Ireland.  So, based on my experience there as Deputy Director-General in 2004-2007, I can assure readers that any comparison of energy sources that shows a benefit for nuclear power would get careful scrutiny from the anti-nuclear members.

Therefore, the results of this study should be taken seriously as countries try to move away from carbon-emitting energy sources, and should be viewed as another indication that a balanced portfolio of energy sources is essential in the future.