Continuing with the serialization of Mark Mills report titled New Energy Economy: An Exercise in Magic Thinking.
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The Physics-Driven Cost Realities of Wind and Solar Part 3
The technologies that frame the new energy economy vision distill to just three things: windmills, solar panels, and batteries.10 While batteries don’t produce energy, they are crucial for ensuring that episodic wind and solar power is available for use in homes, businesses, and transportation.
Yet windmills and solar power are themselves not “new” sources of energy. The modern wind turbine appeared 50 years ago and was made possible by new materials, especially hydrocarbon-based fiberglass. The first commercially viable solar tech also dates back a half-century, as did the invention of the lithium battery (by an Exxon researcher).11
Over the decades, all three technologies have greatly improved and become roughly 10-fold cheaper.12 Subsidies aside, that fact explains why, in recent decades, the use of wind/solar has expanded so much from a base of essentially zero.
Nonetheless, wind, solar, and battery tech will continue to become better, within limits. Those limits matter a great deal—about which, more later—because of the overwhelming demand for power in the modern world and the realities of energy sources on offer from Mother Nature.
With today’s technology, $1 million worth of utility-scale solar panels will produce about 40 million kilowatt-hours (kWh) over a 30-year operating period (Figure 2). A similar metric is true for wind: $1 million worth of a modern wind turbine produces 55 million kWh over the same 30 years.13 Meanwhile, $1 million worth of hardware for a shale rig will produce enough natural gas over 30 years to generate over 300 million kWh.14 That constitutes about 600% more electricity for the same capital spent on primary energy-producing hardware.15
The fundamental differences between these energy resources can also be illustrated in terms of individual equipment. For the cost to drill a single shale well, one can build two 500-foot-high, 2-megawatt (MW) wind turbines. Those two wind turbines produce a combined output averaging over the years to the energy equivalent of 0.7 barrels of oil per hour. The same money spent on a single shale rig produces 10 barrels of oil, per hour, or its energy equivalent in natural gas, averaged over the decades.16
The huge disparity in output arises from the inherent differences in energy densities that are features of nature immune to public aspiration or government subsidy. The high energy density of the physical chemistry of hydrocarbons is unique and well understood, as is the science underlying the low energy density inherent in surface sunlight, wind volumes, and velocity.17 Regardless of what governments dictate that utilities pay for that output, the quantity of energy produced is determined by how much sunlight or wind is available over any period of time and the physics of the conversion efficiencies of photovoltaic cells or wind turbines.
These kinds of comparisons between wind, solar, and natural gas illustrate the starting point in making a raw energy resource useful. But for any form of energy to become a primary source of power, additional technology is required. For gas, one necessarily spends money on a turbo-generator to convert the fuel into grid electricity. For wind/solar, spending is required for some form of storage to convert episodic electricity into utility-grade, 24/7 power.
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Coming up next is Part 4 The High Cost of Ensuring Energy Availability
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Climate Change Sanity 