Tuesday, June 12, 2012

Electricity Production Costs in Perspective




Electricity Production
US Production of electricity in 2010 was 4,125,060 megawatt hours. The production portions by plant type was as follows:

(http://205.254.135.7/electricity/annual/html/tablees1.cfm)
          Coal Fired                     44.6%
          Natural Gas Fired         23.9
          Nuclear                         14.7
          Hydroelectric                  6.3
          Other Renewable            4.1

Present Production Costs
Since the above productions are from existing plants, let's consider only their operating costs (cents/kilowatt hour), which are fuel and maintenance:

  Nuclear (1)                       2.3
          Coal (1)                            3.0
          Hydroelectric (2)              2-5                                                         Natural Gas (1)                 8.2
          Other Renewables (2)       5-125

Notes:
          (1) http://www.world-nuclear.org/info/inf02.html
          (2) http://www.hydro21.org/div_media/pdf/pdf_economie_en.pdf

Observations
          The US economy is primarily based on manpower using cheap energy. Our cheapest available energy source is our nuclear plants, but we don't have enough to supply all our electricity needs.
          Our next cheapest source is coal. Providing we don't burden it with unnecessary regulations that will increase cost.  Coal-fired plants have been our traditional electricity source and we already have many of them. With proper maintenance, they don't wear out. We should be using our existing coal-fired plants to their maximum capability.
          Similar to nuclear, our hydroelectric plants are cheap to operate, but their total production capacity is limited. We should again be using them to their maximum capability and again fall back to coal, as will be necessary.
          Electricity production from natural gas has been traditionally high in cost, and the number of existing plants is limited. However, with fracking, natural gas prices will fall. and we may be able to use the existing natural gas-fired plants more efficiently.


Future Growth
          We will not have sufficient electricity as our population continues to grow, and we develop more efficient production of goods through use of electricity. Therefore, we will need to build new electricity generating facilities. This is especially true, if we convert much of our internal combustion vehicles to electricity.
          With production of new electricity generation facilities, amortization costs on capital for normal plant construction and special equipment required by government regulation are added to the operating costs of fuel and maintenance. Costs for various facility types have been estimated for construction in 2016. The electricity production costs for each type have been "levelized" to a consistent annual cost over plant life expectancy.
The estimated electricity costs in $/megawatt hour are as follows:

(http://en.wikipedia.org/wiki/Relative_cost_of_electricity_generated_by_different_sources)

  Natural Gas     66-124
          Hydro              86
          Coal                95-136
  Wind               97-243
  Biomass        113
  Nuclear         114
  Solar             211-311

Observations
New natural gas-fired plants are the apparent first choice for electricity expansion, providing the new construction is not loaded with mandated federal control, which would appear to increase the cost to the higher $124. The apparent  low cost for natural gas is likely based on the simplicity of the equipment.
New hydro production looks good, but the geographical limitations reduce the practicability.
The reference explains that coal is loaded with carbon capture and sequestration equipment, but even without that, the cost is higher than for natural gas. This may be because coal plants handle solid fuel, which is more difficult to handle than pipeline gas.
Even the low value for wind is above the other three. It also has the disadvantage of geographical limitation and the erratic behavior of wind.
Overall, our best course of action is to operate existing coal, nuclear and hydro facilities to maximum capacity, while minimizing unnecessary government mandates. Carbon control on coal plants through sequestration is a prime example.
New plants should favor natural gas. Again with the avoidance of government mandated controls.



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