Bring in the Solar Batteries

By Russell Lowes, Rincon Group Energy Subcommittee Chair, April 2, 2017

Have you ever wanted to get off the electricity grid? You might have a number of reasons to do so. What about saving money? The economic breakeven may be here sooner than you think. There’s an interesting and eye-opening thing you can do with energy usage and cost numbers (step 4, below) to make your own cost estimates.

Let’s say that you have decided there are four things you want to do at your house. One, you want to reduce your energy use. Two, you want to buy solar. Three, you want to buy a battery system to back up your solar when the sun is not shining. Four, you want to go off the electricity grid.

This is how the process of battery-backed solar might work in the near future. However, you can get started with step 1 & 2 right now, and later with steps 3 & 4.

1) Reducing Energy Consumption

  • Let’s say you use 575 kilowatt hours (kWhe) of energy per month, a typical usage rate in southern Arizona;
  • 200 kWhe is a typical reduction per month by using energy efficiency techniques like insulating shades for your windows, weatherization, insulation for your attic, or getting a an evaporative cooler “piggyback system” added to your air conditioning system.

This translates into:

  • Your usage has been 575 kWhe X 11¢/kWhe, a typical energy cost in So. AZ, which equals $63.25 plus basic service charge, and other charges per month, going down to:
  • Your new usage, with a 200 kWhe reduction, would be 375 X 11¢/kWhe, or $41.25/month + other base utility charges.
  • If you were to leave it at that and not do the next steps, you savings would be $22.00/month, $264/year, $5280/20 years.

2) Adding Solar to Your House

Now that you have reduced your energy consumption, when you add solar, you won’t have to buy as many panels. Instead of paying for maybe 5.6 kilowatts of capacity (the average used by the National Renewable Energy Lab, at https://www.nrel.gov/news/press/2016/37745.html), you now would buy around 3.9 kWe.

Your new solar panel array would deliver energy at about 7.0¢ per kilowatt-hour to your home, plus financing, so maybe 8.5¢.

Solar Prices Continuing to Fall

Solar Prices Continuing to Fall “NREL Report Shows U.S. Solar Photovoltaic Costs Continuing to Fall in 2016” September 28, 2016 *
Solar Prices Continuing to Fall “NREL Report Shows U.S. Solar Photovoltaic Costs Continuing to Fall in 2016” September 28, 2016 *

3) Adding Battery Backup to Your Rooftop Solar

Batteries are the big unknown in this process. Costs are falling quickly, and there is a goal by the industry to bring them down to 14¢/kWhe, when combined with solar. This is a bit more costly, when compared to the roughly 11¢ average cost of electricity by the utilities of southern Arizona. However, you only have to get a portion of your energy from batteries, and with lower solar costs here in the Southwest, the deal gets sweeter. For example, you can get 35% of your energy needs met with energy efficiency, from step 1 above, and 45% from solar, from step 2, and 20% from battery energy, from step 3, well that leads us to that point I opened with. . .

4) Going Off-Grid . . . “There’s an interesting and eye-opening thing you can do with energy usage and cost numbers.”

First, you have to boost the number of solar panels a bit to power the batteries, so your cost of solar would go up from 8.5¢ to roughly 10¢/solar kWhe, fully financed. Let’s project that future battery costs are 20¢/kWhe, fully financed.

Take a look at the following table and if you copy these values and formulas onto a spreadsheet (or ask me for a copy at russlowes@gmail.com), you can change the percentages in column D, and as long as the total equals 100% at the bottom of that column, all the figures will automatically and accurately update! Likewise, if you change any of the projected costs/kWhe in column E, the spreadsheet will auto-self-adjust. But, you math wizards out there already knew that!

This has been about the process of going off the grid, but there are reasons to stay on the grid. The main one is so you can share your electrons with others so they don’t have to use coal, gas or nuclear energy from the grid. However, if the utilities resist the solar revolution, we may not have much choice. If the utilities keep fighting solar rooftop and keep putting onerous charges on our bills, the best choice for you and your family, and for you and your business, might be to go off-grid.

————-

*A side note about the above NREL chart: One interesting thing about the residential-size solar (rooftop solar) versus centralized utility scale is that with rooftop there is much less non-power-generation cost. With centralized solar there are new transmission requirements, more distribution costs, land acquisition costs, switch yard and substation and a myriad of other costs that are not required, as much, as with rooftop solar. Right now, rooftop solar is cheaper when you consider these non-generation costs. I believe that rooftop solar will widen the gap of cost benefit over large utility-scale centralized solar in coming years.

An Update on the War on Solar at the Arizona Corporation Commission

by Russell Lowes and Keith Bagwell

            Two utilities, Tucson Electric Power and its sister subsidiary UNS Electric, are applying for rate hikes with the Arizona Corporation Commission. Included in these rate cases is a troubling and unprecedented restructuring of how rates are applied. These proposed rate reshufflings are bad for the families and businesses in these monopoly areas. Additionally, these proposals are assaults on family and business-owned rooftop solar energy installations.

            TEP and UNS have engaged in a public relations campaign to promote the inaccurate idea that rooftop solar energy is costing non-solar customers more than if there was no additional rooftop solar installed.

            Tucson Electric Power has recently made a number of erroneous statements about rooftop solar costs. However, we will focus here on the most glaring blunder, in what has NOT been said. The utility company does not consider the “opportunity lost cost” for not going with rooftop solar. TEP again made this error of omission in a recent exchange with our County Board of Supervisors, who are opposing the proposed rate shuffle. That is, what happens if families and business owners, schools and local governments in the TEP service area do not install solar panels? TEP is installing centralized utility-owned solar energy plants, and this solar is costing non-solar customers much more than the customer-owned rooftop solar. See the table below, which further explains this.

Examples of Typical Un-Subsidized Energy Costs for New Power Capacity in Southern Arizona, in Cost Per Kilowatt-Hour

Energy Production & Efficiency Options

Initial Un-Subsidized Cost

Trans-mission & Distribution Component

Total Cost

Cost Covered by  Rooftop Solar Families & Business-Owners

Maximum Cost Borne by Ratepayers

           

Homeowner Rooftop Solar Financed with Homeowners Equity Line of Credit, 5%

$0.115(a)

$0.005

$0.120

$0.115

$0.005

Homeowner Rooftop Solar Financed with Lease

$0.120(b)

$0.005

$0.125

$0.120

$0.005

Medium-Size Business Rooftop Solar Financed with Commercial Loan, 6%

$0.095(c)

$0.005

$0.100

$0.095

$0.005

Utility-Owned Rooftop Solar, Financed with Blend of 50/50 Rate of Return and Corporate Bonds, 9% (per IRP)*

$0.110(d)

$0.005

$0.115

$0.110

$0.115

Utility-Owned Centralized Solar, Financed with Blend of 50/50 Rate of Return and Corporate Bonds, 9%

$0.090(e)

$0.060

$0.150

$0.000

$0.150

Utility Solar via Power Purchase Agreement (Subsidized Fixed Contract)

$0.062(f)

$0.060

$0.122

$0.000

$0.122

Utility-Owned Centralized Gas Plant Financed with Same Finance Mix

$0.084(g)

$0.060

$0.144

$0.000

$0.144

Energy Efficiency**

$0.050(h)

$0.000

$0.050

$0.000

            **

           

 * The vast majority of this cost will be borne by the ratepayer directly benefitting from this installation.

**Energy efficiency comes in many forms and at many different costs and benefits. The ratepayer-

   borne portion of this, on average is likely under 1¢ per kilowatt-hour saved.

 

            Recently TEP just secured more fossil fuel power capacity. This will cost much more for non-solar customers in total dollars, and in cents per kilowatt-hour.

            TEP claims that family-owned solar energy increases costs for its non-solar ratepayers. In this claim TEP is probably really talking about what the utility company losses will be. The company financial losses to customer energy efficiency and solar investments are real, if you do not count the gains to the company in terms of grid diversification, performance fees TEP earns on customer energy efficiency investments, etc. However, these gross costs (before these other offsetting benefits) are very minor, at this point of grid penetration, well under 5 percent.   

            What TEP and UNS Electric ignore, in this “solar costs non-solar customers argument,” is that all the other options of electricity generation expansion are more expensive than customer-installed rooftop solar. Centralized solar built by the utilities costs non-solar customers far more than rooftop solar. Fossil-fuel generation is even more expensive, as well as polluting and climate-changing. In addition, the 0.5¢/kilowatt-hour cost that is purported to be shifted to non-solar customers, is actually returned to customers numerous times, by diversification of the grid, reduction in peak gas-generated electricity, and by many other benefits that solar provides to all families and businesses.

            Consequently, it is in the best interest of our families and business-owners that customer-owned rooftop solar continues to be installed, under the current net-metering system. This is not best for the utilities only under the current business models that are now outdated. These models need to change. The Commission needs to require that TEP and UNS update their business models to mesh with the new technologies, the new ways in which people are living, and the improving costs of options customers did not have until recently. Additionally, the business models need to be changed to reflect the far lower impact the newer technologies have on the environment and on human health.

            When a rooftop-solar customer invests in solar, that family or business pays all of the construction cost, all of the interest and all of the maintenance costs. These costs add up to about 11¢ per kilowatt-hour if financed through a home equity loan, or a business loan. When a utility builds solar, it pays for these three categories and more (land acquisition, transmission lines, etc.), but then passes it on to the ratepayers. Similarly, when TEP acquires more natural & fracked gas capacity, it pays for these components of overall cost and passes them on to the ratepayers.

            TEP and UNS should not be allowed to ignore the fact that if solar rooftop is not invested in by families and businesses, the utilities will have to invest in other more expensive power-generation options and pass those costs on to their customers. To ignore this is deceitful and only works to further undermine the trust of ratepayers in the TEP and UNS Electric monopolies.

>>>      Action to take! For anyone wanting to comment before these cases close, you could address your comment as follows. Nobody knows when these two rate cases will close, but it will probably be open through July or August of 2016.

Re: Rate Cases E-04204A-15, E01933A-15-0322 and E-00000J-14-0023

Dear Commissioners Little, Burns, Stump, Forese and Tobin,

——————-

Methodology and References  

  1. a) This is calculated based on typical sale price of $3000/kilowatt of D/C electrical capacity, .8431 conversion rate to A/C electricity, a lifetime average degradation rate of 13.2% over the 30 year minimum life span, with a capacity factor (average output, compared to A/C rating) of 20.85% with 5% APR financing for a home equity line of credit (HELOC).
  2. b) Based on reviews of leases for solar homes in Tucson, Arizona, by one of the authors, Russell Lowes.
  3. c) Based on lower cost per kilowatt installed but higher loan rate, 6% APR.
  4. d) Based on $2800/kW D/C, 0.8431 conversion rate to A/C, a 13.2% average degradation rate for a 30 years, with a capacity factor of 20.85%, with 9% average financing, per Tucson Electric Power Integrated Resource Plan, which lists 8% as the average corporate bond rate, 10% as the average rate of return on equity and a typical 50/50% blend of the two financing options.
  5. e) Based on $2200/kW D/C, 0.86 conversion rate to A/C, a lower 9.5% average degradation rate for a 30 years, with a lower capacity factor of 18.3%, with X% average financing, based on the Tucson Electric Power Integrated Resource Plan, which lists X% as the average corporate bond rate, X% as the average rate of return on equity and a typical 50/50% blend of the two financing options.
  6. f) Based on what TEP is typically getting for Power Purchase Agreements and what it uses as the basis for its proposal to reimburse solar rooftop owners.
  7. g) Gas-produced power from Lazard’s Levelized Cost of Energy Analysis—Version 9.0, at: https://www.lazard.com/perspective/levelized-cost-of-energy-analysis-90/, p. 2 (click on “View the Study”). This is at the lower end of the two combined Gas Peaking and IGCC (more toward baseload) options. The average of these two is 16.6¢/kWhe. Additionally, see table below for similar approach to gas-generated electricity costs. This has to take into consideration more peaking energy costs for electricity that rooftop solar would displace. These costs can be as high as 21.8¢/kWh, according to Lazard, p. 2.
  8. h) , p. 2, energy efficiency is taken from the top of the range from Lazard’s (see g).

Cost for Conventional Combustion Turbine Gas Electrical Generating Plant

Using O&M & Fuel Costs from Table 8.4*, 2012 Dollars

   

1

kWe capacity scenario

$973

cost per kWe**

12%

Capitalization Rate (including principal, interest, taxes and fees)

$117

Cost Per kWe Per Year

   

50%

Cost Per kWhe for Capital

8760

Hours Per Year

4380

kWhe/Yr Generated

   

$0.02666

Cost Per kWhe for Capital

$0.00263

  Operation

$0.00290

  Maintenance

$0.03706

  Fuel

$0.04259

Subtotal O&M & Fuel

$0.06925

Total Cost Per kWhe

$0.06000

Non-Generation Utility Costs (incl. transmission, distribution, etc.)

$0.12925

Total Cost Per kWhe Delivered

   

*

www.eia.gov/electricity/annual/html/epa_08_04.html

**

http://www.eia.gov/forecasts/capitalcost/pdf/updated_capcost.pdf

Solar Under Siege | Alert: Three Arizona Electric Utilities Trying to Stop Solar Energy Rooftop Installations

UNS Electric, Inc., is the first of three utilities in Arizona to file a rate case to kill off the booming residential and business solar industry.  The utilities, UNS, Tucson Electric Power and Arizona Public Service, are undertaking a coordinated effort to increase rates, increase basic fees and wipe out family-owned solar energy rooftop installations. They hope to achieve this by implementing a new rate structure for consumers that includes three nasty components. These tactics are particularly detrimental to families and businesses in Arizona.  UNS is the first to propose it, but if the Arizona Corporation Commission (ACC) approves UNS’s proposal, the other two utilities are sure to follow.  The ACC is the regulatory commission for Arizona energy utilities.

First, UNS Electric wants to virtually eliminate a long-standing Arizona policy to put solar on parity with other energy options. This policy, called “net metering,” has been adopted by almost all states in the U.S.  Now UNS wants to reverse it in Arizona. Currently under this policy, your electric utility pays you the same rate for the excess solar electricity that you produce as you pay to buy energy from the grid when you need it. In other words, under the current system, if you have solar panels, the utility buys and sells energy from and to you at the same retail rate. UNS Electric wants to cut what they pay you in half. And then they would turnaround and sell the power that they buy from you to your neighbors for twice the price.
    Second, UNS  wants to increase the basic fee from $10 to $15 per month. This is bad in so many ways. It means a much bigger (50% bigger) portion of your bill would be beyond your control. When you reduce energy consumption, a move better for your pocketbook and for the planet, the fee would not go down. When you put solar on your house, which is better for your pocketbook and better for the planet, your fee would not go down. It is a disincentive to using your energy more wisely. And, because UNS gets the vast majority of their energy from coal and gas, it is a penalty to families that do the right thing by reducing their coal and gas-produced energy.
    
Finally, UNS wants to implement a demand charge for residential customers—something that no other major Arizona utility has imposed on residential users and is typically only used for commercial customers who are better able to control and track their usage. The “demand charge” would be a rate (cost per kilowatt-hour) calculation that would be assessed by UNS, and without notice to the customer, based on each customer’s highest energy peak usage over the worst 15 minute period in each month. So if your overall usage for a given month is lower than usual, if during that same month someone ran a number of appliances while the A/C was on over a 15 minute period, the cost per kilowatt-hour for the entire month would go up based on those brief 15 minutes. This would happen even if your peak was of no consequence to UNS.
    Not only have TEP and APS intervened in the UNS rate case on the side of UNS, all three companies have recently put forth the supposition that rooftop solar energy installed by one family is the cause of increased costs to other families. UNS and the other two utilities have been throwing out this concept, without referring to the other alternatives. Statements of costs of solar rooftop without comparing it to the other options are meaningless in the bigger picture. Energy costs for most other UNS options are much more expensive to these families without the participation of rooftop solar.
    If for example, UNS purchases solar energy at a large centralized solar facility, the cost per kilowatt-hour is currently about 6¢ for production, and going down each year, plus 6¢ for transmission and distribution, totaling 12¢/kilowatt-hour. This is after taking out about 2¢ from subsidies. New gas plants are about 13¢/ kilowatt-hour, with a likelihood of increasing fuel costs. This gas plant price is also is after subsidies are subtracted. New coal plants are about the same cost per kilowatt-hour.
    When UNS buys solar, or for that matter, gas or coal, the cost of construction is entirely passed on to the ratepayers, which includes families with and without solar. With utility solar, all ratepayers pay all the utility-solar-plant land acquisition costs, the environmental permit costs, the siting costs, equipment maintenance costs, increased transmission and distribution (T&D) costs, grounds cost, insurance, switch yard costs and more.  
    
    When a family or business decides to go rooftop solar, there are also system costs. However, instead of passing on these costs to other families, that solar family pays all the construction cost, all the interest costs, all of the other costs except a small portion of the normal transmission and distribution cost. The non-solar family would only pay a small added transmission and distribution cost. But this cost is very small compared to centralized plant T&D costs. The rooftop solar energy does not have to be transported on long-distance high voltage transmission lines. Rooftop solar largely uses existing lines. Under the UNS proposal, rooftop solar gets sold locally by UNS at a virtually 100% profit over a time span that is in an instant, not even the normal measurement of a year for return – that is price-gouging.
    In sum, the non-solar family pays much less for system expansion when the neighbor next door expands the system by 5 kilowatts, for example, compared to when the utility expands the system by that same 5 kilowatt of capacity.  Thus, the message that the Arizona utilities are crafting, that rooftop solar is costly, is false.  The much higher costs are with the other options of utility power plant construction and acquisition.  Moreover, solar energy offers substantial environmental benefits.  However, even without addressing these important advantages, solar rooftop costs less to all families, families with and without rooftop solar energy, than the alternative utility power plant expansion.
    I am hoping that many many ratepayers will submit comments to the ACC on this rate case. Please look over the action section below and at the URL in this section.

———–

TAKE ACTION to keep the solar rooftop option thriving in Arizona! Send your comments to the ACC to the Sierra Club Chapter Director, Sandy Bahr (sandy.bahr@sierraclub.org), as she has offered to get the 13 copies of our testimonies to the Arizona Corporation Commission, so that they will be a permanent part of the “docket,” or rate hearing case. Put at the top of your comments:
Regarding: UNS Electric Rate Case Docket # E-04204A-15-0142
You might address it with something like: “Dear Chairman Little and Members of the Arizona Corporation Commission:”
You can also find out more and comment at the Sierra Club’s http://tinyurl.com/UNSratecase

Install Solar at Your Home?

By Russell Lowes, Sierra Club Rincon Group Energy Chair, August 4, 2014

    A year and a half ago my wife, Lhasha, and I took the leap! After 17 years since buying our house, we finally installed solar panels.

Some of the crew members that installed our solar panels, picture by R. Lowes

    This article shows how solar is affordable now. Prices have come down even more, since we installed our solar panels. The costs of owning a solar array to power your home are now far cheaper than buying power from your utilities.
We had done a number of things to get ready for solar. We thought it would be best to first reduce our energy needs, so we engaged in a number of energy and water-saving techniques:

  • Added an evaporative cooler onto our air conditioner, so that we could switch back and forth with this piggyback system – we also put in a barometric damper between the AC and cooler so we would not have to do anything but turn one off and the other on (no getting up on the roof or putting metal sheets in place);


“Piggyback, or dual, evaporative cooler/HVAC system” picture by R. Lowes

  • Had insulation blown in to our attic;
  • Installed insulating blinds;
  • Installed double-pane windows (the noise reduction alone was worth it);
  • Replaced our lawn with desert landscaping and put in a grey-water system on our clothes-washer (with a Watershed Management workshop more water than energy-saving);
  • Replaced our A/C system with a much more efficient HVAC system; and
  • Insulated behind the cabinets on our kitchen cabinets.

    We did all these efficiency things first, to save energy and to reduce the panels we would need to buy. After saving up for solar by late last year, we decided to get three or four quotes. We received quotes from Sungevity, Technicians for Sustainability and Net Zero Solar, and a ballpark quote from Geo Innovation. These quotes were for similar products, and had similar contracts.

    I was hoping to go with Sungevity, because they linked with the Sierra Club in donating $750 to the Club per installation. However, Net Zero Solar in this instance provided the best bid. Their cost, pre-tax reduction and rebate, was $8925 (without the utility rebate, which we signed over to them). Technicians for Sustainability gave a $11,029 quote, and Sungevity gave a $16,910 quote (gross cost, pre-tax benefit reductions).
    So, you might ask, how quickly does solar pay for itself? How good of an investment is it?
    Here is a breakdown of how I would answer this question.
    First, it largely depends upon how you pay for the system. If you are buying the system and are comparing the cost of the system to what you would pay in electric bills, that would require a projected interest rate for a loan, and an electric price prediction.  
    If you are borrowing to buy the system, and are borrowing money at say 6%, it will be different than buying with cash. For my personal approach (after all, it is a personal approach), I do not think that investments will yield very much in the future, as the stock market is very high, so here I focused instead on the electric grid comparison. I also believe our U.S. economic foundation is weak and that we are likely to go into hyper-inflation in several years, similar to the early 1980s. I believe this will increase electricity bills substantially.
    It is important for me to emphasize to you: once you invest in solar, there is a good chance that your investment will be good for well over 25 years. Some solar panels are now still in use after 40 years. Your solar investment is not likely decrease in value like stocks or bonds during an economic downturn. It will keep its value and maybe increase in value if the cost of electricity does what I think it will do.
    This is how I personally approach it. If you are borrowing or leasing, you could come up with a different approach, or you could modify the table below. If you have positive equity in our house, home equity loans are a good way to go. The positive impacts on the environment are matched by the positive impacts on your wallet. Solar energy is economical now.

 


 

Re-Think Nuclear

Presented as a one-page primer for the Sustainable Tucson Newsletter

By Russell Lowes, February 27, 2010

The real choice is not nuclear versus coal, but nukes & coal versus the reasonable alternatives. 

There is massive opposition to coal now, which comprises about 45% of U.S. electricity. You can see smoke from the stacks or read about its CO2 emissions.

Opposition to nuclear energy is also amassing. Nuclear also produces CO2 emissions, which are growing ever-greater. It emits invisible radioactivity, uses even more water, and is much pricier. Here are some of the problems with nuclear energy.

Safety Issues Persist: The world has 436 reactors. In order to have a significant contribution to world energy, 1000 reactors are projected. Even if future reactor accidents improve by a factor of 10, the chance of a reactor meltdown would be roughly one more Chernobyl-like “sacrifice zone” by 2050.

Terrorist Issues: Shortly after the 9/11 New York jetliner crashes, the NRC corrected itself saying that airliners could destroy U.S. reactors. There is an even greater threat at the adjacent spent fuel cooling pools, housed in non-hardened buildings which, if breached, could create a meltdown.

Poor Economics/Subsidies Required: Nuclear electricity would run about 25 cents per kilowatt-hour to your meter. Current Tucson electricity is about 11 cents. New coal would be about 16 cents, wind at 12, solar photovoltaic at 24, gas at 13. The best option, however, is reducing energy with better lighting, architecture, insulation, A/C efficiency, etc.  Energy efficiency averages about 3 cents. Numerous nuclear industry officials have said they will build no new reactors without taxpayer loan guarantees.

Two Ways to Worsen Global Warming: Investing 1 dollar in nuclear rather than energy efficiency, you forgo saving 8 times the electricity. In other words, you can invest 1 dollar in nuclear and get 4 kilowatt-hours – or you can invest in energy savings and get 33 KWH. Investing in nuclear energy will dominate energy dollars, setting back the real options.

Second, nukes produce about 110 grams of CO2 per kilowatt-hour. This is 11 times the CO2 of wind, double that of solar, and many times that of energy savings/efficiency. It gets worse if you include 1 million years of waste storage.

Water Consumption Is Highest: Water lost to the environment at Palo Verde is about 0.8 gallons per kilowatt-hour. Coal consumes 0.5 gallons. With solar PV, wind and energy savings, water use is negligible.

National Security Is Diminished: We import 80-92% of our U.S. nuclear fuel. Energy independence is set back with nuclear.

Waste Legacy: The U.S. courts have ruled that nuclear waste much be safeguarded for 1 million years, 25,000 times the 40-year operating life of a reactor.

Russell Lowes is Research Director for http://www.SafeEnergyAnalyst.org. He was the primary author of a book on the Palo Verde Nuclear Power Plant, the largest U.S. nuclear plant upwind of Tucson about 125 miles. This book was used in a campaign to successfully stop two reactors at this now three-reactor complex. You can contact Russell Lowes for presentations or for questions at russlowes@gmail.com  Documentation to this article can be found at http://www.SafeEnergyAnalyst.org

With the New Energy Bills in Congress, the U.S. Government May be the Biggest Thing Between Us and a Renewable Future

By Russell Lowes, February 11, 2010

It shouldn’t be this way. The Government should be part of the solution – not a handicap. However, this is how the landscape has been settling and it is becoming apparent that with the influence of special interests, nuclear energy is going to get a huge amount of our tax dollars, while other, much cheaper energy strategies, are shorted. With so much potential for energy efficiency, this would give us time to make the transition to renewables.

With the new bills in Congress EE by state Graphic2 DOWNSIZED

Some people say that nuclear energy has become outdated. I would go so far as to say it was never in vogue, in a valid way. It has always cost too much. It has always taken too much water. It has always had too many environmental impacts. And, it has always had too many security risks. I could go on.

Nuclear energy is so expensive compared to the realistic options, like a blend of renewables and  energy-saving efficiencies, that we do not need any more nukes anywhere in the world. I cannot emphasize this enough.Yet, the current energy bills in Congress promote nuclear energy to the tune of a 150% expansion.(1)

To fully appreciate the wrongheadedness of this policy, it is important to understand the actual cost of nuclear power per kilowatt generated. Here are the details:

Construction costs: Nuclear plants cost a lot to build. A nuclear plant in the last round of nuclear reactor construction cost $3100 per kilowatt to install in 1988, running out the inflation with an online inflation calculator (like the Bureau of Labor Standards’ http://data.bls.gov/cgi-bin/cpicalc.pl) yields $5642 in 2008 real (adjusted for inflation) dollars.

Any nuclear plant that is being planned today will not be finished until 2022 or so, which if a 4% inflation is run out from the $5642, it comes to $9003 per kilowatt installed. This figure is probably low, as many plants that were canceled in the late 1980s were going to be much higher than the average $3100, but let us use this figure.

The next step in projecting nuclear costs includes projecting capital payback, meaning what the annual capital payback is over 30 years, the interest associated, plus fees and taxes. To make this simple for analysis, this is put in terms of a capitalized payback or levelized fixed charge rate of 14% per year for 30 years. So $9000/kilowatt of capacity times 14% equals $1260 to be paid per year for 30 years, for a total capital payback of $37,800 for each kilowatt of capacity, plus some fees for the last 10 years which I will ignore here.

The next step is to project the lifespan and the average percentage that the plant will deliver energy at (or capacity factor). I have looked the literature over extensively and believe the best estimates are 40 years and an 85% capacity factor. So take that 1 KW capacity times the 40 years times 8766 hours per year times 85% and you get the number of kilowatt-hours (KWH) that you are likely to get from that 1 KW of capacity, or 298,044 KWH. Divide this KWH figure into the capital cost of $37,800 and you get 12.7 cents per KWH for construction and related payback costs alone.

Operation and maintenance: Nuclear power plants are expensive to operate. After the initial outlay to build the plant, there is the additional cost of fuel,operation and maintenance, which an inter- disciplinary industry report called the Keystone study(2) found to be at 4.3 cents per KWH for the future. To take the capital cost of 12.7 cents per KWH and add the operating cost of 4.3, you get 17 cents per KWH.

Transmission and Distribution: Finally, you have to add in a transmission and distribution cost, which should be about 7-9 cents per KWH in the future, which bring us to about 25 cents per KWH. When you compare that that 25 cents per KWH cost of generating nuclear energy to the cost of saving energy, there is an over 8:1 ratio.(3) Surveys of our nation’s states that have energy efficiency programs show it costs $0.03 to save energy per kilowatt-hour saved. This is one eighth the cost of nuclear energy’s $0.25/KWH, not counting the long-term or other hidden costs of nuclear energy.

Energy efficiency includes all sorts of things, for example:

• Compact florescent lights (CFLs) replacing incandescent light bulbs;

• Improved refrigerator efficiency for households;

• Improved air conditioning efficiency for businesses and households;

• Reduction of raw materials to be manufactured to make the same products; and

• Improved architectural design.

A number of U.S. states have statewide programs that promote the use of energy efficiency. The success hasbeen most pronounced in California. See the accompanying U.S. map that tells you how much energy could be saved if each state simply went to California’s current level of energy efficiency.(4) Note that California is still dramatically improving. So for Arizona as an example, we will be able to save more than the 52% listed.

With such a stark reduction in energy consumption, many of our current electrical plants could have their useful lives stretched out, until renewables and other technologies come into play. That is why it is so outrageous that Congress is supporting an expansion of nuclear energy as a “solution” to our energy problem. First, after so many of your tax dollars have been spent by our government on nukes, it is outrageous that nuclear energy is still so expensive. Second, it is outrageous in a good way that energy efficiency is so cheap. Third, it is outrageous that since this price differential is so high that we would even be considering new nuclear – or coal – plants as an option any more.

(1) EPA Analysis of the American Clean Energy and Security Act of 2009, 6/23/09

http://www.epa.gov/climatechange/economics/pdfs/HR2454_Analysis.pdf

(2) Nuclear Power Joint Fact-Finding, The Keystone Center, June 2007,

http://www.ne.doe.gov/pdfFiles/rpt_KeystoneReportNuclearPowerJointFactFinding_2007.pdf

(3)American Council for an Energy Efficient Economy,

http://www.aceee.org/press/u092pr.htm,

also Saving Energy Cost-Effectively: A National Review of the Cost of Energy SavedThrough Utility-Sector Energy Efficient Programs, Katherine Fiedrich, et al., Sept. 2009,

at http://aceee.org/pubs/u092.pdf?CFID=4417970&CFTOKEN=99602900

(4)New Rules Project, Energy Self-Reliant States, October 2009, p. 25.

http://www.newrules.org/sites/newrules.org/files/ESRS.pdf