It is becoming an accepted part of the current energy/climate narrative that renewable energy electricity generation from solar and wind has become economically competitive with fossil fuel generation. So if this is true why are renewables not growing and supplanting fossil fuels? Because wind and solar are relatively new and only account for a small part of overall generation there is little data to inform the debate which largely relies on theoretical solutions with lots of assumptions. Rather than a bottom up theoretical model that tries to estimate and sum unknown costs there is a simpler macro level approach that uses real total system data, does not make lots of assumptions and inherently includes all costs. 

The price of electricity is determined by the overall cost of generation, transmission, distribution operation and maintenance. Most of the cost is capital cost. Utilities use the revenue from selling electricity to repay the loans used to build the capacity. Revenue to pay capital costs is heavily dependant on capacity factor, the ratio of average output to nameplate peak output. 

There are two large markets, Germany and California where there is significant renewable generation in the region of 20% to 30%. Both markets are representative of the overall market and have historical data on overall generation capacity, actual generation and average price of electricity to customers. Dividing overall generation by overall generation capacity gives overall capacity factor. The graphs below show the resulting capacity factor along with the average electricity price to customers for both markets. 

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The historical data is on the left and projected capacity factor and price are on the right. Both markets show the same behavior. Capacity factor has fallen as renewable generation was added and existing generation was still needed as backup. As capacity factor has fallen electricity price rose. A simple model that calculates the price as a constant for each market divided by the capacity factor closely matches the price rise curve.  

As California capacity factor has fallen from 41% in 2000 to 29% today, price has risen from $0.10/kWh to $0.16/kWh, a 60% increase. The US national average  electricity price has remained constant at around $0.10/kWh. California has expensive electricity by US standards. Projecting forward to full renewable energy, capacity factor falls from 29% to 13% as generation capacity,storage capacity and transmission capacity are added and legacy fossil fuel capacity cannot be retired because of long duration intermittency. This results in electricity price rising to over $0.32/kWh, over three times the price for US regions without renewable energy. 

Over a similar period, as German capacity factor fell from 57% to 33%, the electricity price rose from 16 cents to 29 cents. Projecting forward, capacity factor falls to 13% as price rises to over 70 cents, over four times its price in 2000. German capacity factor is better than California mainly because California has a lot more hydro-electricity which has a low capacity factor and very high multi year intermittency due to droughts. The German price is higher than California because of high taxes and the use of feed in tariffs paid by electricity customers to subsidize renewables.   

So despite lower generation costs for renewables, the price of electricity is rising because of the rising overall capital costs needed to accommodate them in the grid. The costs are high and already are getting pushback in Germany. Germany's renewable energy growth has slowed and along with resistance to higher prices, NIMBY forces that object to windmills and transmission lines have curtailed growth. High prices in California are not raising political headwinds yet but as prices continue their inexorable rise it  is likely that there will be political pushback. Nobody is telling customers that the price for electricity will at least double as we try to meet our 100% renewables goal.

High electricity prices have economic consequences if your competitors have prices one third your level. California is rich, but the bulk of the world building new electricity generation is poor and developing. They cannot burden their economy with such high priced electricity. Current intermittent wind and solar cannot escape this increasing price. 

An acceptable renewable energy solution needs a lower price than fossil fuels.  That is where Stratosolar comes in. Without long term intermittency Stratosolar can eliminate the legacy generation and its high capacity factor provides much cheaper generation. The following graph shows price trends for a stratosolar solution for California. Prices stabilize at around $0.15/kWh while capacity factor grows and the legacy generation is phased out. Then capacity factor stabilizes at around 50% and prices fall to around $0.08/kWh. Stratosolar cost of generation is low but this price includes generation, transmission, distribution, storage and operational costs for California.

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The contrast is stark. With current wind and solar, prices will rise continuously for the foreseeable future. With Stratosolar prices will cease growing and fall below current levels for fossil fuels. This economic story is not understood or accepted but the evidence from Germany and California is there for all to see. A solution that imposes economic hardship on those least likely to afford or accept it is doomed to failure no matter how noble the cause. 

By 
Edmund Kelly

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Two clean energy narratives have become common refrains. One, that 100% renewables is achievable today and two, that wind and solar generation are cheaper than coal generation. However, we see that world CO2 emissions continue to grow every year and clean energy investment has been stagnant at around $300B/year since 2011. Investment is actually falling substantially in 2019 as China, the largest investor by far is pulling back its subsidy regime. These two narratives do not add up. If solar and wind are cheaper, why are we not switching over? Is it a great conspiracy by the coal, oil and gas industries?

​The answer is that neither assertion is what it seems on the surface. It is true that wind and solar generation can have a lower levelized cost of generation (LCOE) than coal generation. However the two forms of generation are not equivalent. Coal generation can be turned on when there is demand. Wind and solar generation only happen when the sun is shining or the wind is blowing and only sometimes lines up with demand. The world operates on energy on demand. 

As I have written in previous posts, the two large economies with the most clean energy (Germany and California) are facing the problems of intermittent clean energy as it becomes a larger percentage of the total. Energy storage needs to be added to combat intermittency. This exposes the 100% renewables assertion. The 100% renewables goal is aspirational based on continued technological development, not proven available storage technologies. It also either ignores cost or assumes very optimistic cost estimates. 

Numbers do not clearly represent the nature of the problem with intermittent energy sources which is not visible from simple average energy numbers. A graphical illustration shows the problem better.

The graphs above show hourly direct solar insolation in W/m2 for two example US locations, (China Lake CA on top and  Oak Ridge TN below) for the months of January and June 2000. The data is from the National Solar Radiation Database 1991–2010. China Lake is in the Mojave desert in California and is among the best solar resources in the US. Oak Ridge is in Tennessee in the US south and is representative of more average US insolation. Any two locations in the US would show the same general intermittency.

The yellow lines are terrestrial insolation and the blue lines are StratoSolar. Stratosolar is constant during daylight and zero at night.  Terrestrial is far smaller than Stratosolar and far more variable during daylight. The database covers hundreds of locations throughout the US for over a decade. These graphs are only a snapshot of two locations to graphically illustrate the problems with terrestrial solar and the benefits of Stratosolar.  

Because there is so much data it is very uncommon to show this data graphically. It is usually reduced to daily, monthly or yearly averages. Unfortunately averages do not show the high variability of terrestrial solar and there is no convenient number that captures this variability.  January and June are chosen to show the worst and best months. Both locations show reduced insolation and higher variability in January.  As the graphs show, even the Mojave desert, one of the best locations in the world has significant variability that even with far beyond daily storage will have power outages. Oak Ridge is more representative of average locations in the US. Here the intermittency in both summer and winter is far beyond what daily storage can handle. Even three days storage would not guarantee the reliability of power. 

These graphs illustrate the advantages of Stratosolar. The amount of storage to guarantee stable electricity supply is totally predictable. Stratosolar with daily storage is as reliable a source of electricity as coal or natural gas. Stratosolar gravity energy storage is far cheaper than batteries. Also Stratosolar gathers far more energy than terrestrial solar, about 3X at Oak Ridge. These advantages add up to far cheaper electricity than terrestrial solar AND fossil fuels. 

Intermittency is the Achilles heel of renewable energy that is only slowly being acknowledged. Stratosolar solves that problem and is far cheaper to boot.

​By Edmund Kelly

This article discusses a plan for renewables to replace planned shutdowns of German nuclear generation by 2022 and coal by 2038. The shutdowns represent about half of Germany’s electricity generation capacity. The plan is interesting in that as well as solar and wind, it includes significant storage and synthetic gas synthesis. This is an improvement over the normal situation of assuming solar and wind can be added without any impact on the overall electricity generation system. 

As I have mentioned in previous blog posts, Germany and California represent the two leading edge large economies with the most alternative energy deployment and the most ambitious plans for future deployment. It’s good to see that the issues that I discuss about increasing cost of renewables with increased deployment are starting to be addressed as the problems are becoming real. This is the first plan I have seen that actually proposes synthetic fuel for long term storage. Germany has very little sunlight in winter so seasonal storage is far more significant for them than for California. 

The scale of new additions is large and still only reflects a fraction of German electricity generation and does not cover the other two thirds of energy beyond electricity. Overall it represents an expenditure of at least $500B over about twenty years or about $25B/year. Germans, while positive on clean energy in general have become NIMBYs in particular, especially for wind and electricity transmission. It's not clear there is the political will to maintain this level of clean energy expansion. Germany has the highest cost of electricity and there is growing opposition to this high cost. Implementing this plan will raise costs significantly. 

The scale of storage and gas synthesis proposed is way too low to balance the renewable energy proposed. This would probably mean burning lots of natural gas. However, the small scale proposed is probably realistic considering the immature state of storage and synthesis technologies that are still in their infancy and not yet deployable at scale. This is far from 100% renewable electricity generation and gives some indication of the impracticality of the various proposals (like California’s) to hit 100% renewable electricity. 

Stratosolar can solve the intermittency problems and provide a much lower cost of generation. This makes it politically viable as it reduces the cost of electricity and avoids the NIMBY problems. 

By Edmund Kelly

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The cost of renewable energy is a complex topic much clouded by  partisan posturing. Solar and wind based electricity generation have reduced dramatically in cost and will continue to do so. It’s become standard to see quotes in mainstream media reporting on the growing commitment to 100% renewable that assume that wind and solar are already cheaper electricity generation than fossil fuel based electricity generation. While this is true for small scale deployment it is not true for 100% deployment. As always, the devil is in the details. Because the fossil fuel and renewable sides are so polarized, they both pick facts to win their case rather than trying to be objective. 

The fossil fuel advocates simply want to kill renewables so their arguments are regarded as biased. There are others who advocate CO2 free alternatives like nuclear who don’t want to kill renewables but do want to point out their flaws. Stratosolar is in a similar position. Current renewables have serious flaws that only get exposed as renewables become a bigger percentage of generation. Advocates  for renewables see these arguments as a continuation of partisan posturing and ignore them. However there are real problems but so far there are few markets where renewables have a sufficient market share to prove the case and the problems won't be accepted until the case is proven and the problems cannot be denied. 

Much of the debate is theoretical and academic with lots of assumptions. California is the closest to demonstrating the real problems with real data. The two graphs shown in a previous post are California’s electricity generation from 2000 to 2017. California is a large market with significant renewable generation. Some simple observations can be made from these two charts. Yearly generation has remained nearly constant at around 200GWh. Capacity has increased from around 55GW to around 80GW as renewables were added. This little spreadsheet below shows how these numbers result in a capacity factor of 41% in 2000 reducing to 28% in 2017. This is the predicted consequence of renewables becoming a bigger percentage. Fossil fuel plants get used less as wind and solar are used more but the fossil fuel capacity has to remain to provide backup for when the wind does not blow and the sun does not shine. Capacity has capital costs that need to be repaid. Utilities have to raise prices to cover their costs, which is what has happened in California.

                         GW GWh        GW  GWh
gen capacity     55   482,130    80    701,280
gen                          200,000             200,000
Capacity factor         41.48%             28.52%

Renewable energy can claim a low cost of generation but the system overall costs more as a result of renewable intermittency. This results in higher electricity costs. Some renewable advocates think the existing generation redundancy covers renewable intermittency but this is not the case. California’s system was balanced at 41% capacity factor in 2000. To stay at 41% they would have had to reduce fossil fuel generation as they added renewable generation. This reduced fossil fuel capacity would not have been able to supply sufficient electricity when solar and wind were not generating. 

This focus on generation does not capture all the added costs as renewable penetration grows. At the relatively low penetration levels in California renewables sometimes produce too much electricity and generation has to be curtailed. This reduces renewable capacity factor and thus increases cost of generation. Also, additional transmission was added to the grid to connect wind and solar. This is a unique added expense as this transmission is only used for wind and solar. The reduced capacity factor and this added expense has significantly raised electricity prices in California. 

California is at stage one of renewables penetration.  As they continue to add capacity the capacity factor will reduce, producing rapidly rising electricity costs. Solar is about 18% penetration today. It will max out at about 25% when overall capacity factor might get to about 20%. So even at this low level while solar generation costs will continue to fall the falling capacity factor due to increased curtailment will offset this gain.The solution to enable continued expansion is storage. This is stage 2 of renewable expansion. So far there is little storage. There are two big issues. The first is simply getting storage that works, is low enough cost and can scale rapidly. The second is the added cost of electricity as storage additions are added in lockstep with generation additions. Even as generation costs continue to fall storage costs have to be added, keeping overall cost of electricity high. Storage is expensive and unlikely to cost reduce rapidly.

This brings us to stage three of renewables expansion. Costs remain high because even with storage, fossil fuel capacity still needs to be maintained to cover long duration intermittency which occurs about 20% of the time. Fossil fuel capacity cannot be removed until a long duration storage technology is viable. The most likely candidate is synthetic fuels. As well as just getting synthetic fuel plants developed, a big impediment is the cost of synthetic fuels will depend on the cost of electricity. If electricity costs remain high then synthetic fuels will be expensive which makes electricity from synthetic fuels even more expensive.

The current emphasis on 100% renewables is not based on a sober assessment of the technologies needed to achieve that goal. It is an aspirational goal presented as something that is already feasible. The status quo is fine for the incumbent renewables but is not reducing CO2 emissions and at current rates of penetration will not reduce CO2 emissions until long past the 2050 deadline. As with many subsidized industries the industry becomes dependant and has little incentive to change. New approaches that challenge the failing status quo are needed. Stratosolar is one such approach.

​By Edmund Kelly

This video from brilliant.org is a little confusing but does graphically highlight a growing awareness of the difficulties of achieving California’s aspirational goal of 100% renewable energy based electricity generation. Its basic point is that the scale of batteries required to replace natural gas is enormously expensive even at low battery prices projected for the future. It also makes the fairly obvious point that batteries are impractical to use for seasonal storage.(apparently this is not so obvious to some).

As a solution to these problems with batteries it focuses on using a more diverse pool of generation which includes large hydro and nuclear( both of which California is currently trying to eliminate). As I have discussed previously California’s closure of nuclear and unwillingness to upgrade its large hydro have totally cancelled the CO2 emissions gains from wind and solar and kept California’s CO2 emissions from electricity generation about where they were twenty years ago.

By Edmund Kelly

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In this recent blog article I discuss how California and Germany are two large economies that have for decades had the biggest commitment to promoting clean energy in order to reduce CO2 emissions. The article focused on California’s experience but pointed out that Germany had followed a similar trajectory. The bottom line for California was that it had not reduced overall CO2 emissions for almost two decades as different constituencies within the clean energy coalition fought for reducing nuclear and big hydro rather than reducing CO2. This offset the gains from deploying wind and solar. The large California investment has significantly raised electricity prices but this has paid to satisfy agendas other than reducing CO2  emissions.

Michael Shellenberger (whom I have cited before)  recently wrote this article on Germany’s clean energy efforts (called the energiewende) in Forbes magazine quoting extensively from this article in Der Spiegel. Der Spiegel is a center left publication generally favorable to clean energy and a believer in climate change and the threat it poses. The Der Spiegel article is highly critical of Germany’s results so far and even more critical of where they are going. CO2 emissions are stagnant and with nuclear being phased out they are more likely to rise than fall.

​German’s increasingly object to wind farms and electricity transmission lines. They don’t want nuclear and are having to replace it with coal. They do want clean energy but are increasingly reluctant to pay more as they already pay very highly for electricity. The rising political right are anti clean energy, much like Trump in America.


The details between California and Germany differ, but the broad picture of failing to reduce CO2 emissions  is the same. First, CO2 emissions reduction is not the only or even primary political agenda. Second, the reason for the stagnation in CO2 reduction going forward is simply that both economies have built as much renewables as can be sustained by current electricity networks. Germany has a higher percentage of renewables but its grid is highly integrated with its neighbours who are geographically close and can take surplus renewable energy.

Further expansion of wind and solar in both economies now relies on adding large amounts of affordable energy storage. Storage deployment is in its infancy. Given time and technological development it may reduce in cost and scale sufficiently to allow renewable energy expansion. It's not a slam dunk. Batteries seem to be the leading contender. They currently are expensive and have insufficient life for daily recycling over twenty or more years.

Even when they reduce in cost batteries are an ADDITIONAL cost on top of the cost of wind and solar. Given that wind and solar still need substantial government subsidy, adding storage will take more subsidy. Fundamentally, clean energy is a cost issue. At small scale the cost of renewables can be absorbed. As they become a significant percentage of energy the costs rise at an increasing rate as the grids have to add more and more costs to adapt. Renewable energy at the scale that California and Germany have achieved demonstrates the rising cost and the looming need for storage is demonstrating that costs will rise further. They are the canary in the mine.

Energy costs around 8% of GDP today. There is significant resistance to the energy share of GDP rising which is what significant deployment of renewables entails. There is a lot of wishful thinking about CO2 reduction, as can be seen by all the political commitments to 100% renewable energy. These goals are aspirational. None have a plan to accomplish 100% renewable energy other than hope in technological improvement. Unfortunately wishful thinking is postponing the realization that we are failing to reduce CO2 emissions and are not on a path to succeed. Solar at current costs is already stagnating and will fall behind as storage becomes necessary.

Stratosolar addresses all the cost problems of solar and can scale to be an affordable clean energy solution that reduces energy cost to less than 8% of GDP.

By Edmund Kelly

In previous blog posts I have commented on the stagnant world renewable energy investment level of around $250B since 2011 and the prospect that 2019 will be more of the same. However, while the investment level has stayed in this narrow range, the generation capacity it has purchased has continued to grow, mostly due to the falling price of PV panels from China. This pattern was a source of optimism as it was expected that prices would eventually decline to where subsidies were not needed.

Now, the latest International Energy Agency data for 2018 shows overall 2018 capacity additions flat with 2017 as China reduced its 2018 capacity additions over 2017 while trying to adjust its FIT subsidy policy. Flat investment and flat capacity combined imply flat prices.

What this implies is quite negative for the renewable energy outlook going forward. As I commented previously, the lack of PV investment growth despite significant PV cost reductions was a sign that unsubsidized prices were still too high for a natural market expansion and subsidies were still required to sustain the market. The effect of China’s 2018 pull back on subsidies clearly reinforces this interpretation of dependency on subsidy. More significantly, if investment and capacity were flat in 2018 this implies that prices were stable and the era of rapid price reductions has ended, at least for now.

To summarize, prices have not reduced sufficiently to sustain a normal unsubsidized market and prices have now stabilized, thus guaranteeing that subsidies are still needed and the market size will remain subsidy limited. The question is which way are subsidies heading? All the indications from China, the US and Europe are for reduced subsidies. This implies lower investment levels and declining renewable energy capacity additions going forward.

CO2 levels continue to rise with growing fossil fuel usage. Renewable energy is not having an appreciable effect and based on stagnant to declining investment it will not have an effect. Wishful thinking needs to end and new options need to be considered. Nuclear is on the table but there is no political will, the cost would be enormous and the time to develop and ramp safe clean reactors is many decades. Given the limited options and their problems Stratosolar does not look like an outrageous candidate.

By Edmund Kelly

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