Environmental Engineering Reference
In-Depth Information
he wide variation in cost estimates for each of the technologies in Figure
1.8 is worth highlighting, because it touches on a key aspect of the eco-
nomic debate over whether or not renewable energy is truly cost competi-
tive with fossil fuel sources. he cost of power generation using any of the
major generation technologies depends on, among other things, the tech-
nology used, the quality and prevailing costs of fuel feedstock, geographic
inluences, component costs, construction costs, operating costs, mainte-
nance costs, decommissioning costs, connectivity costs, project-speciic
costs, and equipment performance. Predictably, each of these factors is
inluenced by prevailing conditions in the locale where the technology
is being installed. In short, aggregate estimates of the type presented in
Figure 1.8 do not shed much light on whether the cost of generating elec-
tricity through a particular technology in a given country will be at the
upper end or lower end of the cost spectrum.
In fact, in some nations, certain technologies have an absolute advantage
over others. For example, the cost of generating power through geother-
mal resources may be comparatively higher in Australia than in a nation like
Japan, because Australia`s geothermal reserves are located far away from
electricity grids. herefore, grid connection costs in Australia substantially
increase the cost of geothermal energy. Meanwhile, in other nations—such
as hailand, for example—geothermal reserves would require deep drilling
technologies that could send the cost of geothermal energy well beyond the
range outlined in Figure 1.8. For some countries, certain renewable tech-
nologies simply are not feasible for large-scale application.
Some technologies also exhibit more variable economic proiles in cer-
tain nations. For example, proponents of coal-ired power could make the
argument that minimizing the cost of coal combustion is largely dependent
on the choice of technology; as such, producing electricity at the lower-cost
range for coal-ired power (i.e., US7.9¢/kWh) is simply a matter of technol-
ogy selection. Conversely, producing electricity at the lower cost range for
geothermal, biomass, and wind power is largely dependent on geographic
attributes, which are not controllable. In other words, some countries can
produce wind power for US6¢/kWh, but other countries can only produce
wind power at the higher range (i.e., US11¢/kWh). his perspective sug-
gests that although wind power may be more economical than coal-ired
power in some nations, it is not more economical in all nations.
Unfortunately for coal-ired power advocates, this perspective is invali-
dated when the full costs associated with electricity generation are incorpo-
rated into levelized cost estimates. Energy expert Benjamin Sovacool refers
to this process as “adjusted levelized costs.” In addition to amortizing the
aggregate construction, fuel, operation, and maintenance costs over the
