Sorry to be pedantic but this is a follow-on to my earlier post: “LCOE is misleading and dangerous”.
In that post, I expanded the concept of the LCOE to more faithfully do an apples-to-apples comparison of the cost of renewable generation vs the cost of natural gas. The result was that renewable generation, when all factors are taken into account to make it an equivalent dispatchable resource, is substantially more expensive than natural gas (even with carbon capture).
This quick and dirty analysis, only considered dispatchable generation, it did not consider additional infrastructure requirements for delivering the energy to the consumer. There is a considerable difference between the infrastructure requirements for renewables versus natural gas which makes renewables even more expensive. Renewables have very low energy density and therefore for the same amount of dispatchable generation, a renewable project will require at least an order of magnitude or more space (acreage). This coupled with the necessary location of renewables is driven by weather and topography considerations (windy or sunny) resulting in the renewables being a far distance from the loads they will serve. This requires a major investment in transmission lines, that are not required by natural gas, which can be located very close to the load.
I apologize, I forgot to add these infrastructure costs into my original analysis and was prompted to make this correction post due to a recent report from the IEA this week that indicated we need to add 50 million miles of new transmission lines. At Black and Veatch’s estimate of $ 2.29 million per mile for new transmission lines, this equates to $ 114 trillion. Wow.
We really need to put together a comprehensive “budget” for the energy transition and stop looking only at individual and misleading pieces such as LCOE.