Renewable Energy is Too Expensive?
Not according to independent experts!
Not according to independent experts!
I often hear people say "renewable energy is just too expensive... we can't afford it".
To these people, I say, "I disagree, but ok, don't believe me, look at what Moody's came up with in their May 2008 report called "New Nuclear Generating Capacity: Potential Credit Implications for U.S. Investor Owned Utilities". They estimated the cost of nuclear and coal to be more than wind or even solar power! Read on...
Background to the chart below (Direct except):
To these people, I say, "I disagree, but ok, don't believe me, look at what Moody's came up with in their May 2008 report called "New Nuclear Generating Capacity: Potential Credit Implications for U.S. Investor Owned Utilities". They estimated the cost of nuclear and coal to be more than wind or even solar power! Read on...
Background to the chart below (Direct except):
Source: Page 15 of http://massimobray.italianieuropei.it/080527MoodysNewNukeGenCapacity.pdf
Everybody seems quick to point at renewable energy as the cost of rising electricity rates. Whatever sources of electricity (or other energy form for that matter), I have news for you: Electricity rates are going up anyway. Here is another except from that same Moody's report:
Nuclear power does not exist in a vacuum. It is one of several sources of electric power, and competes with other fossil-fueled generation (such as coal), other renewables (such as wind and solar) and other demand-side technologies (designed to reduce volume). In choosing to build a nuclear plant, a utility is making a long-term bet on a technology that has locked in a design (currently being reviewed by the Nuclear Regulatory Commission) and where construction costs are rising rapidly (primarily associated with labor and commodities). As a result, market and technology risks might emerge that position a new nuclear plant as uneconomic over the course of construction. These developments, in turn, could put a significant amount of pressure on legislators and regulators to protect rate-payers from incorporating the full cost of a new nuclear plant into rates at the expense of a less costly alternative, even if the alternative is developed (or materializes) in the future.
For illustrative purposes only, Moody’s made several simplifying assumptions regarding the all-in costs associated with several competing generation alternatives. In the table below, we assume each technology builds a 1,000 MW plant, and we incorporate the capital cost, capitalization, depreciation lives and fixed and variable expense assumptions and solve for the average revenue per MW-hour, targeting a 10% ROE (for each technology). (NOTE: Red highlight is my own)
For illustrative purposes only, Moody’s made several simplifying assumptions regarding the all-in costs associated with several competing generation alternatives. In the table below, we assume each technology builds a 1,000 MW plant, and we incorporate the capital cost, capitalization, depreciation lives and fixed and variable expense assumptions and solve for the average revenue per MW-hour, targeting a 10% ROE (for each technology). (NOTE: Red highlight is my own)