By Peter Burrows
My subconscious has been grinding away for couple of days about something I wrote in my article on the PRC elections. I rechecked, and sure enough, I had made a big mistake when I wrote that Xcel Energy had received bids for wind-plus-storage electricity and solar-plus-storage electricity at 21 cents and 36 cents per kWh respectively.
The proper numbers should have been 2.1 cents and 3.6 cents per kWh, which explains the enthusiasm those numbers generated in the press, as they are far lower than what would be expected of bids that included storage, even after the 30% investment tax credit.
Regardless, since the amount of storage included in those bids was not disclosed, and since the bids were only 15-20% higher than stand-alone solar and wind, one commentator wisely noted that there was probably only "a limited amount" of storage involved.
I should have caught my decimal point error – too many zeros! --and used 2.1 cent and 3.6 cent per kWh to illustrate a larger point: Even if solar and wind electricity was free, the current cost of storage makes 100% reliance on wind and solar prohibitively expensive.
Tesla has just completed a $50 million battery project in Australia that can provide electricity to 30,000 homes for one hour. Since there are 7,500 homes in Grant County, one of these Tesla "batteries" would give us four hours, and we would need three to get through the night, nothing to spare. That's $150 million capital cost, and at 5% interest and 5% depreciation/debt reduction, we would have a bill of $15 million per year.
That would add about $167 per month to the electricity bill for each of the 7,500 homes. That's just for storage, zero cost for the electricity.
Someday storage costs may be low enough to lower our electricity bills, not increase them, but that is not the case today.