Cost of Various Electricity Options

Click on chart to enlarge

This analysis has a few important caveats. First, a CO2 penalty was imposed on the cost of the coal and gas technologies. The penalty was applied as a 3-percentage point increase in the cost of capital. The report stated this was equivalent to a $15/ton cost for CO2. Why not just add the CO2 penalty directly to the fuel cost? That would be easy to grasp and analyze. Why increase the cost of capital?

Second, the fact that PV and wind energy is worth less due to its intermittency is NOT captured in the cost data.

In summary, solar PV is shown to cost about 3-4 times more than traditional generation methods, but without the CO2 penalty on coal and with a correction for the intermittency of PV energy, the real price of PV is about 10 times more than traditional alternatives and several times higher than other renewable alternatives.

A more intuitive and fair comparison, would include externalities clearly and separately. The structure of the analysis, makes it difficult to apply the lower value of intermittent power. Perhaps a simple $/kWhr would be a better approach, if clarity on the cost of renewables is an objective.

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