IRENA plans: cost optimal…not!

I have written before how IEA sometimes hides politically inconvenient results in their reports. Now IRENA has published a new report “REmap: Roadmap for A Renewable Energy Future: 2016 Edition”. It naturally has a myopic focus on renewables which is the purpose of the organization. Nevertheless I was somewhat interested in their cost and capacity figures. In the next 15 years their REmap plan calls for a total investment of about 6000$ billion into wind and solar.

What does this spending buy? According to IRENA it buys about 1600 GW of wind power capacity, 1585 GW of PV capacity, and an explosion of installations into concentrated solar power so that its capacity would increase from about 4GW today to 110 GW at 2030.

If we assume an average global capacity factor for wind power to be about 25%, for PV about 15%, and CSP about 40%, we find that added wind and solar production corresponds to about 690 GWe of continuous production over the year. With 25 year lifetime, this means an electricity production of about 151 PWh. So without discounting etc. we would pay about 8.7$ billion/GWe for delivered (average) power. Capital costs would imply (without discounting and other expenses) about 4 cents/kWh cost of electricity.

IPCC 5th assessment report median nuclear overnight costs 4300$/kW. Let me again ask the naughty question since IRENA refused to compare options (1,5). What could we get, if we were to plough the money IRENA desires to spend for wind and solar into nuclear? I will round the cost to 5000$/kW for nicer figures. It really doesn’t matter. We could buy 1200GW of capacity which implies about 1100GW production at 90% capacity factor. Much more than than the 690GW IRENA bought. With 60 year lifetime, the actual production and reduced emissions are larger by a factor of about 4 and correspondingly the cost per kWh from non-discounted capital costs is around 1 cent. Estimates are so far apart that fiddling with details is not going to change anything.

Savings from external costs according to IRENA

IRENA also finds that their plan costs more than reference scenario (which is also not a cost minimizing option), but makes it alright by assigning externalities to the reference case (10,11, and 12). Outdoor and indoor pollution would be reduced by poor people burning less dung and biomass and some (smaller) savings also appear from reduced CO₂ emissions. These are all savings that can just as well be assigned to the nuclear build-up sketched here except that savings would be considerably higher by hundreds of billions every year. Just sayin… (Of course I understand that at this point rules must somehow be changed.)

IRENA also states:

“Avoided investments in non-renewable power capacity alone are estimated at USD 1.5 trillion to 2030, or about USD 100 billion per year on average in the 15-year time period. Almost half of these savings would come from not building coal-fired power plants; another 30% from nuclear investments seen as no longer necessary. “

Mind boggles. No longer seen as necessary since authors proved themselves willing to impose additional costs on others? You do see that in the plan I outlined we would get much more savings in avoided investments than in the IRENA plan? Why settle for lower emission reductions? Have we been reducing emissions too rapidly? If you want to promote wind and solar, that is fine with me. But could you please make a case that somehow makes sense? Claiming that plans are economical even when it is manifestly clear they are anything but, undermines your message outside your echo chamber. Hopefully the plan is not dependent on everybody living in the same chamber. Not really my cup of tea. I rather stand in the rain outside.

P.S. Justifying climate action with external costs from indoor biomass burning and outdoor pollution is a dubious idea. Most of those costs can also be avoided by switching from dung and biomass to fossil fuels especially if appropriate pollution controls are used. Implicitly IRENA et al. base their logic on things NOT improving outside their chosen set of tools. This makes no sense.