We are all familiar with various kinds of batteries — batteries that power all sorts of devices such as cell phones, toys, motor starters, and even some automobiles. Electrical energy is easy to make by several methods, but it is difficult to store. This is the reason that most devices that use electricity are stationary, so that they can be connected through the electrical power grid directly to electricity generating plants. Portable batteries and electrical generators are bulky and expensive.
Most of us are not aware, however, that our electrical power plants themselves are also batteries in a sense — huge installations that cost very large amounts of energy to construct. This construction energy comes in various forms, but all of it is fungible — that is to say is inter-convertible with electrical energy when estimating its value and availability. Conversion of natural resources such as iron ore, silicon, and uranium into solar, hydrocarbon, or nuclear power plants requires energy — energy that is gradually recovered during operation of the completed plant. We don’t literally burn the iron ore to produce energy, but the energy we expend in producing iron from ore is part of the energy cost to produce the power plant.
The cost of these power plant “batteries” can be measured in terms of how soon they become net producers of energy: how long does it take to pay off the cost of building them?
The $100 million solar array at Nellis Air Force Base that was recently lauded by energy expert Obama required approximately $100 million worth of energy of various forms to build. A large portion of this was in the form of actual electrical energy. With the current maximum output of the Nellis solar array, this $100 million of capital will be returned at the rate of about 2% per year. This assumes a price of 12 cents per kilowatt hour for electricity and 8 cents accounted as return on capital. The remaining 4 cents is needed to pay for operational costs, base load power, grid changes to accommodate the intermittent supply, and other items.
This estimate may be overly optimistic, since Nellis Air Force Base advertises that this power plant “saves” the base $1 million per year. This is a return of 1% per year.
This capital is equivalent to energy — the energy required to build the plant. So, the Nellis 140-acre solar array is actually a very large battery. It “stores” the energy required to build it and returns that energy at a maximum rate of 1 to 2% per year over a period of 50 to 100 years. Only after it has returned the $100 million dollars worth of energy does the plant become an energy producer.
In contrast, the Palo Verde nuclear power station began operation in 1988. In 2009 dollars, the cost of Palo Verde was $13 billion. Assuming a price of 12 cents per kilowatt hour, Palo Verde produces $3.2 billion per year worth of electricity. Allotting 8 cents to capital return, Palo Verde returns $2.1 billion per year and pays back the entire capital investment in 6 years. So, Palo Verde functioned as a battery for 6 years — and then became a net producer of energy.
Moreover, the Nellis plant was built with 2007 technology and Palo Verde with 1970s and 1980s technology. It is estimated that Palo Verde, if built today with current technology and the economies of scale of several plants, would cost about half as much. Also, Palo Verde has a conservatively predicted lifetime of 50 years as compared with Nellis at 30 years. If we assume 50 years for both plants, Palo Verde will produce about $100 billion dollars worth of net energy during 50 years. The Nellis installation will never produce any energy at all because the entire 50 years will be spent in replacing the energy that construction of the plant required.
Wind power suffers from the same disadvantage as solar — very large capital costs for very small amounts of energy. These boutique methods sound fine during televised speeches, but the only methods that actually produce net energy at reasonable cost are hydrocarbon and nuclear. Hydroelectric power is also practical, but most available U.S. sites are already developed.
If, however, electricity is priced at $1.20 per kilowatt hour — ten times the current price — wind and solar also pay back their capital costs in a reasonable time and produce net energy, but only if all of the plants can be built by power produced by coal and nuclear plants at current prices. If prices rise during construction due to cap-and-trade or other government impediments, these installations will never produce net electricity.
Even then, if the U.S. government continues with its policy of suppressing nuclear and hydrocarbon power and using tax money to subsidize the building of solar arrays and windmills, net energy production will require electric bills that are an order of magnitude — ten times higher — than they are today. Long before that level is reached, the public will demand price controls and rationing — and lack of electricity will sharply reduce American productivity and prosperity.
The solar array at Nellis occupies 140 acres. A similar solar array large enough to duplicate the power output of Palo Verde would cover 125,000 acres, or 200 square miles. Palo Verde is sited on a 6 square mile site of which it uses about 2 square miles. If sited along the coast, a similar plant would require less than 1 square mile.
When people build things, the energy they use is a measure of the capital that is stored in the completed installation. If that installation is a power plant, the construction energy is gradually recovered through operation of the plant, so the plant itself functions as a large battery. The boutique power sources that the politicians, bureaucrats, and community organizers in Washington seem determined to force upon us are not energy sources at all. They are large sinks of energy capital. They will gradually repay a part of that capital with inefficiently produced electricity.
The free market, even hampered as it already is by government meddling, knows these things. This is the reason that less than 1% of American energy is generated by wind, solar, and other boutique methods. The windmills and solar arrays that are sprouting on the American landscape are outstanding monuments to governmental waste of taxpayer dollars, but they are not net producers of practical power for an increasingly energy-starved people.
A nation that has a shortage of domestically-produced energy needs to build new hydrocarbon and nuclear production capacity — not waste its scarce resources building wind and solar plants that will not even return the energy required to build them.
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