“WIN, WIN, WIN, WIN” - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 151

modules and from the costs of installing and maintaining the equip-
ment. 34 Alas, those numbers don't necessarily follow the same ever-
declining pat erns that module prices do. h is doesn't mean solar won't
make big gains in the coming decade or two; it just means that making
coni dent predictions, one way or the other, may not be wise.
h e second challenge to the more aggressive numbers is what experts
call grid integration. h e sun doesn't always shine and the wind doesn't
always blow. And electricity, unlike oil, usually can't be stored: once
you've generated it, you need to use it right away. Operators dealing
with renewable energy typically need to carefully integrate intermit ent
sources into the electric grid. If those variable sources reach substantial
scale, an operator has two choices. It can make sure there are a lot
of other power plants on standby, ready to i ll in when the renewable
sources aren't able to deliver. But this costs money, and if wind farms
and solar plants are required to pay at least some of it, their own costs
will rise and they will become less competitive. h e other option is
to build up lots of traditional power plants alongside the renewable
ones. h at, in part, is what Texas has done, which explains why it
sometimes needs to pay users to take electricity of its hands. h is sort
of redundancy undermines whatever edge in costs alternative energy
might have. Down the road, the world might develop large-scale storage
systems that would buf er these problems. But those storage solutions
don't exist yet, and it would be unwise to assume they'll be in place
anytime soon.
Perhaps the trickiest part, though, comes from the use of a single
simple number to describe and compare the costs of dif erent sources
of power. When analysts say that wind will be as cheap as natural gas,
they're usually talking about something called the “levelized cost of
electricity” (LCOE). h e idea is simple: tally up the amount of power
produced over the lifetime of a facility and divide it by the cost of
producing that power. h at's your levelized cost.
But comparing levelized costs of electricity is enormously mislead-
ing, because electricity that is available on demand, like that produced
by coal or natural gas, is worth more than electricity that is available
whenever the sun happens to shine or the wind blows. In this sense,
it's like any other product. You'd pay more for a computer you can use