Bishop Hill The BBC and the great levelised costs lie
Apr 8, 2013 BBC Energy: wind When watching Matt Briggs' lecture on the use and misuse of statistics by climatologists and social scientists, I was struck by his summary of the problems with the use of p-values, namely the view within the field that since everybody uses them, it doesn't matter that doing so is silly.
The reason I noticed Briggs' point was that it reminded me of an exchange I'd had with a BBC journalist about the use of levelised costs by advocates for windfarms. I had explained how misleading levelised costs are, a point that elicited the following response:
...this is the current standard measure - used by governments, industry, academics and international bodies. Any such measure, by its nature, will have limitations.
It doesn't matter that it's misleading. Everybody is being misleading.
Reader Comments (54)
My apologies - I posted this on the old "great levelized costs lie" thread; sorry for the duplication.
Bish - I am curious about your antipathy to levelized costs as a method of comparing the costs of alternative energy investments. To my mind the approach is entirely sound, and I would appreciate it if you could provide your analysis that leads you to think otherwise.
All the best,
Dean
dcardno
http://economics.mit.edu/files/6317
The social scientists recognize that false beliefs still guide behavior and indeed prompt action for change. That's what matters. We would do well to remember what has been described as the only immutable law in all of social science: "If men define situations as real, they are real in their consequences."
We are dealing here with rent-seekers and political radicals seeking transformative political, economic, and social change. As UK communitarian John Boswell recognized more than 20 years ago, that kind of all-encompassing change needs an emergency. Climate change is intended to be that emergency because it supposedly justifies state control over much of the economy and personal behavior. That ought to be off limits in a free society.
Instead of being surprised by the lying do what I do when I encounter the omnipresent lies going on in education globally, ask what the function of the lie is and who benefits. Analyze those very real consequences.
Okay.
I work in the industry - primarily storage hydro, with some thermal. Utilities are well aware of the problems in using levelized costs to evaluate "junk energy" (that's a technical utility term), although policy-makers and the general public are less-so. I had thought that you had a concern with levelized costs in principle (ie, for comparing storage hydro to coal to nuclear). I agree that intermittent resources are significantly over-valued by a levelized cost approach.
Thanks for the link to the Jaskow paper, by the way. I recommend it if anyone else is interested in the issue.
I'd be interested if anybody has a critique of the Jaskow paper other than the author's employment history.
Such statements are "true" in that they are useful when one is comparing outlandish statements to outlandish statements. This is how the stock market works: one company has outrageous claims to future economic growth, and another has its outrageous claims. The first says it could take your stock from 0.25/sh to 10.00/sh, while the second, says 0.25/sh to 20.00/sh. So the analysts tell you and me to buy the second and dump the first. If either goes from 0.25/sh to 0.50/sh, the analysts are excited and tell you to take your profit and run. Or at least they do with their own stock holdings ....
Oil and gas: a few years ago they created the Resource category. I like to call it "Molecules In the Ground". So all those shale gas companies of which I have been raging give you 200 BCF of gas in the Northumberland Shales or some such. How much is going to come out, i.e. "molecules in the pipeline"?
Well, they won't give you that number ..... that would put an actual dollar figure to the value.
Outlandish statements: how about the poltical leaders who tell you about GDP growth, green jobs and lower taxes ....
Eveywhere, they are everywhere, pod statements from pod people. Beware!
Bishop Hill
"I was struck by his summary of the problems with the use of p-values, namely the view within the field that since everybody uses them, it doesn't matter that doing so is silly."
Perhaps you could make that point to some of the comment writers here .
Those are the pseudostatisticians who refuse to accept the validity of any hypothesis which does not come stamped with "p>0.95".
Here's somethingelse from the BBC which no doubt uses the ame statistics; 'Transatlantic flights 'to get more turbulent'
http://www.bbc.co.uk/news/science-environment-22063340
The BBC turbulance story was inspired by a blast of hot air from East Anglia...
Bishop Hill
"I was struck by his summary of the problems with the use of p-values, namely the view within the field that since everybody uses them, it doesn't matter that doing so is silly."
Perhaps you should make that point to some of those commenting here.
I refer particularly to those pseudostatisticians who refuse to accept the validity of any hypothesis unless it comes stamped with "p>0.95".
Apr 9, 2013 at 12:26 AM | Unregistered CommenterEntropic man
--------------------------------
EM,
In many areas of science the p>0.95 is an accepted level at which something is deemed to be worth publishing. It is widely misinterpreted as a "gold-standard", but it is no such thing. In practice it is a minimum standard that is applied because experience informs many scientists that results that don't match this criteria to often end up leading nowhere useful. In other words, it may or may not be correct, but "go away and come back when you've got some better data".
Scientists who are more used to repeating failed experiments than climate-modellers, don't have a problem with this. It teaches.
After watching Matt's video and having read John Brignall's 'NumberWatch' for many years I'm still puzzled as to what percentage of the '97%' of Climate Scientists understood the question that was asked of them but am totally bamboozled as to why the vestigial 3% couldn't even get the answer right!
Is it 'cos the sample size, after cherry-pruning, was too small to mean squiddly-squat?
Hi Bish, You link to the earlier "levelised costs" thread but the video link goes to http://www.bbc.co.uk/programmes/b006mk25 and there's no "there" there.
Am I right to assume that the cost of wind farms as presented to plebs like myself includes the hundreds of billions in development and construction costs of connecting wind to the national grid AS WELL AS the cost of keeping conventional power stations running to cover when there is no wind blowing (when its cold and dark) or it's blowing at the wrong time (2 in the afternoon when it's sunny) or when it's blowing too much (the rest of the day) etc???
Regards
Mailman
I disagree with Jaskow's claim that because intermittent sources of generation are overvalued in levelised cost analysis then the method is itself is a failure. On the contrary, it is those carrying out the levelised cost analysis of intermiitent sources that have failed to bring to their analysis a valuation of the costs of provision of resources such as response, reserve and capacity security. (Another typical failure of these analyses is the omission of transmission costs). If you want to see how to do a levelised cost analysis for all types of generation done properly, see here:
http://www.iesisenergy.org/lcost/
Incidentally, Colin Gibson who carried out this analysis is a retired NG director, and a previous manager of First Hydro (Dinorwig and Ffestiniog)
@ Jimmy Haigh 1249 a.m. Transatlantic flights 'to get more turbulent'
I also heard that on BBC 5 Live in the early hours today.
Another "soundbite" I thought to myself.
John Brignel's take on P-values is worth looking at: http://www.numberwatch.co.uk/significance.htm
[self-snipped!]
Capell
Thanks - that looks very interesting.
'Transatlantic flights 'to get more
turbulent'
http://www.bbc.co.uk/news/science-
environment-22063340
We have many decades of excellent data flying in the transatlantic corridor that cover the significant 20th century CO2 rise. The article summary of increased turbulence must mainly come from that data rather than model extrapolation mustn't it?? It should be pretty trivial to show notable turbulence increase now compared to the fifties and sixties.
Sir John Beddington Grounded all aircraft when the volcano in Iceland Erupted on saftey grounds .First time he did anyway.
So is Dr Paul Williams of Reading University prepared to come out and say that all Transalatic flights should be baaned on saftey grounds.
So the Air France jet out of Rio that went down about 2 years ago .Did Climate Change caused it.
So Dr Williams when was the last time he popped over to the states.
@ Apr 9, 2013 at 8:32 AM | Capell
That is an honest attempt … who would expect less from probably a civil engineer ? … :-)
However, since it is an extremely complex calculation, it is only as good as the assumptions that are made … e.g.
3.1.6 The extra system cost of accommodating the intermittency of wind in an
operational timescale was taken from the Parsons Brinkerhoff paper Powering the
Nation as £16/MWh of wind generation.
while
7.1.7 The basic study gave a levelised cost of £75/MWh (for CCGT)
When the reserve team has to play 75% of the time at a cost of 75£/Mwh, I don’t see how only 16£ has to be added to the first team. Idem ditto for the transportation cost.
The author already puts some remarks in red.
Wind and solar are, and will remain, great for hobbyists … period …
That 'more turbulance over the North Atlantic' used a climate model that assumed that by 2050, CO2 concentration in the atmosphere would have doubled....
Well a) why make that assumption and b) how does that result in an increase in turbulance..?
In my experience, Tranatlantic pilots do not, as a rule, avoid turbulance - they simply wait until the coffee is served to fly straight through it..!
"Levelised costs"?
Ho Ho - is an academic exercise in so far as bird mincers are concerned - the whole idea of attempting to justify and lets be honest that is what it amounts to - the costs of these preposterous white elephants is idiocy way beyond all human logic and sense.
Moonbats all - only the BBC and the political claque could attempt it - green rationalisation does not compute - all of it is insanity - building palliatives to combat a non existent fiction and enforcing payment from the population to fill the bankers and green hedgers pockets.
I ask you - how mad can it get? Levelised costs - of bird chompers - give me strength!
How does the Joskow paper linked by AM show that levelised costs are a 'lie'. It shows that such a measure is not foolproof; that if you select certain parameters you can make renewables look either highly profitable (without subsidy) or highly un-profitable. But perhaps his selected parameters or costs or electricity price ratios (peak/off-peak) are not not applicable to the UK. Whatever, I fail to see where there is a lie. It's like saying that car manufacturers' MPG values are lies because you don't happen to get the exactly same performance. I know you need to claim people are lying to wind up your base, but you shouldn't.
Bitbucket,
Has anyone accused Jaskow of lying? His assertion that the levelised cost comparison method fails when assessing intermittent generation is wrong in my view and I've said why. Like any such comparison, you must include all the costs incurred delivering secure, reliable energy to the grid.
I'd also add that he introduces the concept of generation value and sales price at different times and dates. These are irrelevant: we’re asking what is the cost of making reliable generation response, reserve and capacity available to the UK transmission system; not what potential it has for making a profit.
When done correctly for the various forms of electricity generation, the levelised cost method demonstrates wind and solar are always uncompetitive.
If you disagree with these points, say why. But don't accuse us of calling him a liar.
BB
"car manufacturers' MPG values are lies"
Apparently, they are, because they are done with all ancillaries (alternator, steering pump, air con) disconnected, thinned oils, special or overinflated tyres, even brake pads removed, to get the minimum mechanical drag. Hard to believe this is allowable, but I'm reliably informed 'tis so.
Capel, I said, "How does the Joskow paper linked by AM show that levelised costs are a 'lie'." Read it again. There is nothing about Joskow lying. Read it again if you are still uncertain. Then get down from your high-horse and ask your girlfriend, boyfriend, mother, father, aunt or uncle: as long as they have no contact with the Hill they will confirm that it says nothing about Joskow lying. Only on the Hill using Hill rules of grammar and logic could such an interpretation be made.
On making a profit, you may not be interested in that but companies that are interested in building power plants certainly are.
Apparently, they are, because they are done with all ancillaries (alternator, steering pump, air con) disconnected, thinned oils, special or overinflated tyres, even brake pads removed, to get the minimum mechanical drag. Hard to believe this is allowable, but I'm reliably informed 'tis so.
Jamesp - do you have a reference?I find what you have said very hard to believe.
BitBucket (Apr 9, 2013 at 6:03 PM):
Read it again. There is nothing about Joskow lying
I think it is implied, BB, when you say: I know you need to claim people are lying to wind up your base, but you shouldn't. (Apr 9, 2013 at 4:33 PM).
ducdorleans - as I read it, the IESIS study claims that the 16GBP/MWh charge from the Parsons Brinkerhoff paper (presumably along with the low capacity factor) already compensates for the intermittency / backup cost problem. I am not sure that it does, but he takes it from someone else's work, so you would have to go there to see how convincing the Parsons analysis is.
Cappell - thanks for that link, I have looked at the on-shore wind one, and I will work through it and the others in more detail later.
Martin A
Here's what you are looking for on the manipulation of fuel economy data.
http://www.nextgreencar.com/content/T&E-Mind-the-Gap-2013.pdf
BitBuckled
My Aunt Fanny is pleased to see you're moving away from the 'lying' claim, but is disappointed that you haven't commented on any of the points I made. She looks forward to reading your thoughts on the costs of provision of response, reserve and security of supply, and also the high transmission costs associated with connecting renewable generators in remote sites. Perhaps your carer can help order your ideas?
But now you seem to think I have some objection to power companies making profits; I have said no such thing. I have no such objection.
Capell with your shaky understanding of English, it is remarkable that you consider yourself capable of being sceptical of anything. Whatever you read you misunderstand (I don't think you are unique in that here, so you are in good/bad company).
On your security of supply issues, I don't imagine that when calculating the levelised cost of a 500MW or 1GW coal, gas or nuclear plant you consider the cost of backup for the occasions where the whole thing flips out suddenly. This can occur and such occasions are likely to be much more serious for the grid (and need expensive backup measures) than a wind farm slowly loosing its puff or a cloud going over a solar array.
On the cost of connecting remote supplies, I guess it depends partly whether there is also remote demand, which must reduce the costs. I also don't know whether the related costs are included in the figures used in levelised-cost sums. The costs used in such sums must be average/typical values per MW and quite likely have transmission costs included.
the same old bitbucket...he gets boring accusing everyone of being less intelligent than him...when he continually asserts he is the dullest knife in the the cutlery drawer....memo to myself...ask him again about moving average graphs, an area where his understanding is more than usuallly impaired
Scientists who are more used to repeating failed experiments than climate-modellers, don't have a problem with this. It teaches.
Apr 9, 2013 at 1:38 AM | michael hart
"Repeating failed experiments" is, unfortunately a luxury an observational science like climatology does not have.
The experiment under way is the release of large quantities of CO2 into the atmosphere. The scientists have no way to control the rate of release. Nor can they control for other climate modifiers such as orbital cycles, solar insolation, ENSO, aerosols, etc.
Finally, there are no duplicate planets available on which to run a control experiment without the extra CO2, or any replicates
The only way to analyse possible alternative climate options is by using physical models, which have to run as computer software. These have the inherent limitation of being simplified versions of reality.
For some sciences the uncertainties make it very difficult to operate to p>0.95. In my days doing biology there was an old saying that no matter how carefully you controlled the experiment, the animals did what they liked!
For a lab based scientist doing experimental work under conditions which allow replication, repeatability and reliability p>0.95 is a reasonable requirement. For a science dependant on observation and simulations, it remains an aspiration in most areas.
I notice that many of the strongest proponents of the p>0.95 argument have an engineering background. Remember your Kipling? From Hymn to Breaking Strain:-
The prudent text-books give it
In tables at the end
'The stress that shears a rivet
Or makes a tie-bar bend-
'What traffic wrecks macadam-
What concrete should endure....
Having the "tables at the end" insulates the engineer from the uncertainties of the science from which the tables emerged. He can use PV=nRT without having to go through 400 years of gas physics from Boyle onwards. He can calculate the relativity correction for accurate GPS operation without needing to develop and test the theory for himself. He can calculate the deformation of a girder under load without having to invent Young's Modulus.
Unfortunately climatology is still a work in progress. It will not be possible to write the "tables at the end" until all the results are in, a couple of centuries from now.
So Entropic if Climate Science is still a work a progress whats your justifacation for burdening us with a load of expensive useless wind farms and unessassary crippling Carbon Taxes.
BitFuddled
Just so your understanding of levelised costs might actually progress, when properly applied to coal gas and nuclear plants there will indeed by due consideration given to whether or not those generators can provide, or require, response and reserve. Read the analysis I referenced.
As for security of supply and the issue of failing/tripping fossil fuel plants, you suffer from the common confusion that these are like events to those where an entire fleet of renewable technology can cease generating when experiencing a pan European high pressure or night falls. Provision for random failure of fossil fuel plants, and for planned outages has been standard practice in all grid management systems, and adds little to the costs of these technologies; that is not the case for renewables.
While on this subject again, there is one aspect that has yet to be considered for the levelised cost analysis of renewables and that is the reliability of such plant. Most studies of wind generation assume a generation life of 20-25 years (but still arrive at astronomical generation costs for each MWh). But the study by Gordon Hughes
(http://www.ref.org.uk/attachments/article/280/ref.hughes.19.12.12.pdf)
of historical data (not modelling) shows the capacity factor of wind declining from 24 % at installation, to 15 % at 10 years life, and 11 % and 15 years. In rough terms, capacity declines 1 % per annum. And roughly, again, this can be said to halve the effective generation life of wind, thus doubling the generation costs!
@ Apr 9, 2013 at 11:20 PM | Unregistered Commenter BitBucket
"On your security of supply issues, .... more serious for the grid (and need expensive backup measures) than a wind farm slowly loosing its puff or a cloud going over a solar array."
At the end of this February the 7GW total of windfarms in the UK continuously produced less than 100 MW for 7 days. Is that what you call a windfarm "loosing" (sic) its puff? It was the same situation in Ireland, the Netherlands and Germany.
So what's the difference in backup terms between a wind farm going off line for a week and a nuclear or gas plant doing the same?
NotjustaBitFuddled
Nothing at all in terms of security of supply. And by extension, there'd be no difference between all of the windfarms going off-line when there's a pan European high pressure in play, and all of the nuclear power stations, or gas stations or coal stations going off line at the same time.
But now, here's the rub. The entire windfarm fleet goes off-line several times a year, unplanned, when there's a pan European high pressure. Albert Stienastra brings such an occurrence to your attention; did you miss it? (And please don't plead that 100 MW out of 7000 MW means the entire fleet didn't go off-line - it might be worth remembering that the metering accuracy is only 0.5 %). When, if ever, has the entire nuclear, or gas, or coal fired generation fleet gone off-line, unplanned, at the same time? When, for that matter, has any one of these fleets gone off-line, or even close to going off-line even on a planned basis?
NEVER.
Bit Bucket
So what's the difference in backup terms between a wind farm going off line for a week and a nuclear or gas plant doing the same?
Grid operators plan for unexpected generation failures in conventional base-load plants. The biggest difference, though, is that conventional plant forced outages are fairly rare, and planned outages are scheduled well in advance to avoid periods when the energy would be particularly valuable (that is, needed) or when other conventional plants are off-line. Neither is true of fluctuations in intermittent resource output. With wind output in particular it is becoming unavoidably apparent* that in many (and perhaps most) markets output and demand are poorly correlated: the wind tends to not blow when heating and A/C loads are high (and the energy produced would have the most value), and vice-versa.
* that is, the problem was anticipated but it was either ignored or pooh-poohed by environmentalists, wind energy developers, and politicians seeking to establish their green credibility. As wind resources proliferate, it is increasingly difficult to pretend that this is not the case.
"When, for that matter, has any one of these fleets gone off-line, or even close to going off-line even on a planned basis?
NEVER."
Never? Even on a planned basis? Here's a report of Hinkley going down and I don't believe it is that uncommon for there to be outages, planned or unplanned. Power stations spend about 10% of their time off line on average. Here's a list I came across of some 90 outages in mid-2006, planned or not I don't know.
Never, my foot!
BitBucket - Capell's question wasn't "when has a given generating station gone down?" - of course that happens, both forced and unforced outages. His (I presume) question was "when has the entire fleet</I> (ie every generating station of that type) gone down?" to which he provided the answer of "never."
By contrast, the wind fleet seems susceptible to a systemic problem (as I suspect the solar fleet will be) where the entire fleet (or very close to it) is out of service. As noted above, this is exacerbated by the unpredictability and frequency of the failures, relative to conventional generating stations.
Grid planners require (at the very least) what is called an "N-1 Contingency" reliability - the grid must continue to operate in the face of losing its largest single resource (sometimes broken down into generation and transmission resources, and called "N-G-1" and so on) - when a large portion of the grid-connected resources may show a type failure, that is a real problem for the grid and for reliability in general
@ Apr 10, 2013 at 2:47 PM | Unregistered CommenterBitBucket
"So what's the difference in backup terms between a wind farm going off line for a week and a nuclear or gas plant doing the same?"
Sigh.
It is almost as if you do not think yourself, everything has to be spelled out for you. The occurrence I brought to your attention was that ALL windfarms were off. They were also off in the Netherlands, in Ireland, in Germany and perhaps also in other countries. In Germany the solar plants were also off because of cloud - in the UK you would not notice, since you hardly have any solar contribution.
It means that if you only had renewables for electricity and had done away with your coal, gas and nuclear plants you would have had no electricity for a week. This has NEVER happened with the conventional fleet, even if one or two plants were out, planned or not.
You can never plan for this contingency in renewable, because it is not your plant that is broken, it is the wind and sun that have disappeared. You can install as many windmills as you like, not one of them will have output.
There is a very silly idea coming from the EU that they suggest to use batteries from electric vehicles to cope with this problem of no wind/sun. A week of electricity in the UK is about 7 billion kWh, that is about 130 million EV batteries. It will be a long time before these are on the UK roads. If you would want to buy these batteries for the contingency, you would have to spend 270 trillion pounds. And, of course, the batteries would wear out, they all do.
Albert:
I think the "car batteries for storage" to smooth out intermitent suply is a great idea!
Except...
The population of the UK is about 65M. I'm taking a guess, but I wouldn't expect more than one car for every two people, so current automobile count is ~32.5M. By happy coincidence, that is one-quarter of the required rolling battery supply to meet a one week outage!
We can all gues how likely it is for that rolling stock to arrive in our (or our children's) lifetimes!
You are right, they don't all go off at the same time. But since there is supposed to be 70GW of generation capacity available, even if the whole nuclear or coal fleet went off line, there would still be enough to cover 40-50GW of actual demand, though with less spare for emergencies. Most of that 70GW is not going anywhere - I know some will be shut down or converted (and I agree that wood pellets are a crazy way to go), but there will remain a surplus. So when talking about levelised costs the fact that wind generation can go to zero is not relevant. It would be in a 100% renewable scenario, and for that, extra storage will be needed. So build it. UK gov can borrow at nearly zero interest and UK construction needs the work...
Totallyfuddled
You might just get away with losing the entire nuclear fleet (but why should they all fail at the same time?) but not coal and gas.
Storage doesn't stand a chance. Suppose we want to cover the loss of 10 GW wind for a typical winter high pressure period of, say, a week. We'd need 1680 GWh of storage. Dinoriwg stores 10 GWh, so we'd need 168 Dinorwigs. Optimistically, we'd get them (if we can anywhere to put them) for £168b. Attribute that cost to wind generation and we're building wind capacity at £16.8 m per MW installed capacity - about 6 times higher than nuclear.
£168bn? So you mean Dinorwig cost £1bn and you want 168 of then, which makes £168bn... Well clearly the maths is right, but I'm not sure it scales that way. The amount of energy stored in Dinorwig depends on the size of the pond; bigger pond = more energy at no extra cost. So if you were intent on building 168x Dinorwig, you'd find sites with potentially much bigger ponds. If the ponds are 10x as big, the overall cost is 10x less, ie £16.8bn - which is not nearly so alarmist. The problem is finding the sites, not the cost.
Totallyfuddled
The area of Dinorwig's top lake is ~1 sq km, it's at 600 maod, and has a depth of 60 m. The bottom lake needs a similar volume. You'll need ten of them. And you won't build one of those Leviathans for a £1b a pop, they'll be a lot more.
Over to you.