Human Events | Dr. Arthur Robinson | June 8, 2009
We are all familiar with various kinds of batteries — batteries that power all sorts of devices such as cell phones, toys, motor starters, and even some automobiles. Electrical energy is easy to make by several methods, but it is difficult to store. This is the reason that most devices that use electricity are stationary, so that they can be connected through the electrical power grid directly to electricity generating plants. Portable batteries and electrical generators are bulky and expensive.
Most of us are not aware, however, that our electrical power plants themselves are also batteries in a sense — huge installations that cost very large amounts of energy to construct. This construction energy comes in various forms, but all of it is fungible — that is to say is inter-convertible with electrical energy when estimating its value and availability.
Conversion of natural resources such as iron ore, silicon, and uranium into solar, hydrocarbon, or nuclear power plants requires energy — energy that is gradually recovered during operation of the completed plant. We don’t literally burn the iron ore to produce energy, but the energy we expend in producing iron from ore is part of the energy cost to produce the power plant.
The cost of these power plant “batteries” can be measured in terms of how soon they become net producers of energy: how long does it take to pay off the cost of building them?
The $100 million solar array at Nellis Air Force Base that was recently lauded by energy expert Obama required approximately $100 million worth of energy of various forms to build. A large portion of this was in the form of actual electrical energy. With the current maximum output of the Nellis solar array, this $100 million of capital will be returned at the rate of about 2% per year. This assumes a price of 12 cents per kilowatt hour for electricity and 8 cents accounted as return on capital. The remaining 4 cents is needed to pay for operational costs, base load power, grid changes to accommodate the intermittent supply, and other items.
This estimate may be overly optimistic, since Nellis Air Force Base advertises that this power plant “saves” the base $1 million per year. This is a return of 1% per year.
This capital is equivalent to energy — the energy required to build the plant. So, the Nellis 140-acre solar array is actually a very large battery. It “stores” the energy required to build it and returns that energy at a maximum rate of 1 to 2% per year over a period of 50 to 100 years. Only after it has returned the $100 million dollars worth of energy does the plant become an energy producer.
In contrast, the Palo Verde nuclear power station began operation in 1988. In 2009 dollars, the cost of Palo Verde was $13 billion. Assuming a price of 12 cents per kilowatt hour, Palo Verde produces $3.2 billion per year worth of electricity. Allotting 8 cents to capital return, Palo Verde returns $2.1 billion per year and pays back the entire capital investment in 6 years. So, Palo Verde functioned as a battery for 6 years — and then became a net producer of energy.
Moreover, the Nellis plant was built with 2007 technology and Palo Verde with 1970s and 1980s technology. It is estimated that Palo Verde, if built today with current technology and the economies of scale of several plants, would cost about half as much. Also, Palo Verde has a conservatively predicted lifetime of 50 years as compared with Nellis at 30 years. If we assume 50 years for both plants, Palo Verde will produce about $100 billion dollars worth of net energy during 50 years. The Nellis installation will never produce any energy at all because the entire 50 years will be spent in replacing the energy that construction of the plant required.
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