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Which Renewable Energy Form has the Best Economic Potential?

written by: •edited by: Lamar Stonecypher•updated: 1/27/2014

The high cost of fossil fuels coupled with CO2 emissions threatening climate change has led to an influx of proposals for renewable energy projects. However, the choice as always will come down to costs and which renewable energy type has the best short-term and long-term economic potential.

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    There are numerous forms of renewable energy sources that can be exploited to produce and supply electricity to the grids across the different regions of America, both on land and sea. Some will be far from the nearest cities so will require lengthy cabling and pylons to transmit the power. Others may be offshore and need sub-sea cabling to the nearest landfall.

    The following sections will examine some of these projects, comparing the costs involved in their installation and connection to the grid. The first section gives an overview of the operation of some of the larger renewable energy plants across America.

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    Roscoe Wind Farm in Texas

    Wind turbines are a very established means of supplying power to the grid. Numerous wind turbines, normally of 1, 2, and 2.5 KW capacities, are linked together in a wind farm, with a potential for many hundreds of MW output of power. Roscoe Wind Farm in Texas, at 781.5 MW installed capacity, is the largest wind farm in the world.


    The power is generated through the rotation of the blades in the nosecone, driving a shaft into the nacelle. Here the shaft speed is controlled by a gearbox, whose output shaft drives the actual generator. The unit is kept facing into the wind by a tail fin. An anemometer located close to the fin sends signals to the control module that can alter the blade's pitch and the nacelle yaw. The controller can also shut the turbine down in adverse weather conditions by feathering the blades and applying a hydraulic brake.

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    The Geysers Geothermal Power Plants

    Geothermal energy for the various energy plants at the Geysers is supplied from molten magma deep inside the earth. It comes in the form of hydrothermal fluids containing steam and hot water that is used to power steam turbines that run electrical generators.


    Three types of geothermal power plants have been developed to suit the different conditions of the medium produced in the underground geothermal reservoirs.

    • Dry Steam Power Plant – the steam is used directly to drive the steam turbines.
    • Flash Steam Power Plant – water and condensate is injected to the reservoir and the resultant steam is flashed off in a steam drum before being supplied to the steam turbines.
    • Binary Cycle Power Plant – hot water is used to heat a fluid of lower boiling point such as isobutene in a heat exchanger that flashes it off to steam. This steam is used to run the turbines, become condensed, and return to the heat exchanger.

    California, with an installed capacity of just over 2500 MW, is the largest user of geothermal energy in the US. This accounts for nearly 5% of the state's power requirements.

    The Geysers is currently the largest collection of geothermal plants in the world. Wth a combined output of 1,517 MW, they are located in the Mayacamus Mountains near San Francisco.

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    Solar Power Plants

    There are two categories of solar power used in modern power plants.

    Photovoltaic Cells Power Plants

    These are the industrial version of the PV panels we use in our homes.


    Photovoltaic cells are composed of layers of doped silicon joined together by wires. When solar rays fall on a photovoltaic cell, electrons start moving through the wires from one layer of silicon to the other because of the difference in the dope used in two layers. The individual cells only produce a small current, but hundreds of panels can be joined together to produce installed outputs of up to almost 100 MW (such as at the Sarnia PV Plant in Canada). The largest PV power plant in America is the Copper Mountain Solar Facility near Boulder, Colorado, which produces 48 MW of power.

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    Power Plant Solar Heating Systems

    These are very different from the solar heating panels we see on buildings and rooftops. There are two major types of industrial solar heaters used in power plants.

    Parabolic Trough Collectors

    These parabolic troughs are lined with mirrors that due to the parabolic effect concentrate the reflected solar energy on a central point.


    In this case the solar energy is reflected onto a 4" pipe running the length of the trough containing a medium such as synthetic oil. The oil is heated to around 700 F. Pipelines from numerous troughs are gathered into manifolds and fed into a heat exchanger. The exchangers transfer the heat from the oil to water, raising steam that is used to drive steam turbines running power generators.

    At present the largest capacity solar trough power plant is at Kramer Junction, CA where five fields combine to give an output of 165 MW. Gas fired boilers can be used at night or on days of low solar energy.

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    Solar Central Receivers or Power Towers

    The central receivers or power towers are high towers with an absorber unit on top. Mirrors are arranged on the ground at angles to reflect into the absorber tower. The solar energy is stored in the absorber unit medium, with popular mediums being molten salt or just plain old air.


    Molten salt is the most popular medium as the heat absorbed during the day can be used at night as well. The medium is fed into a heat exchanger where it heats water, converting it into steam to run the power turbines.

    The largest power tower system in America is at Antelope Valley California, and has an output of 5 MW, enough to supply 4000 homes with electricity. However the Ivanpah Solar Electric Generating System in California is under construction and due to be commissioned in 2013 with a projected output of 392 MW.

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    Comparing Costs of Different Renewable Energy Sources

    As the major renewable energy power plants are located in California, Texas, and Colorado, we shall compare the plants in these states for short and long-term economic potential using the following criteria:

    • The overall cost of the project
    • The power output
    • The cost of electricity produced in c/kWh (cents per kilowatt-hour)
    • Short-term employment used in construction
    • Projected long-term employment in plant operation and maintenance
    • Environmental concerns
    • Land used by the plant
    • Land owner earnings from land rental
    • Payback period

    The results of this survey will be displayed below and condensed in a table at the end of the section.

    Roscoe Wind Farm Texas

    The windfarm consists of 627 wind turbines of 1 MW, 1.5 MW, and 2.3 MW capacities taking up an area of 100,000 acres. Although land usage is one of the criteria, nearby farmers plant cotton, wheat, and pecan trees right up to the turbines, so no land for growing crops or grazing is lost to the industry apart from the base of the tower.

    • Total cost of power plant - 1 billion US Dollars
    • Rated Output - 781.5 MW
    • Cost/unit of electricity - as low as 2 cents per kWh
    • Short-term employment - large employment of local labor
    • Long-term employment - small team of specialist engineers required for O & M activities
    • Environmental Concerns - no emissions of gases to atmosphere although production of the concrete for the tower bases produce CO2 when being made from cement. Also some land is lost to access roads used to transport the turbines to the towers. Aesthetically, some people find the wind farms unsightly- a blot on the landscape- but this is very much a matter of personal opinion.
    • Area of land taken up by the plant - 100,000 acres, however as stated earlier the farmers plant right up to the tower and under the blades.
    • Land owners earnings from land rental to utility company - $3,000 to $5,000 per turbine per year. This is to compensate for the area taken up by one large capacity wind turbine base at 0.25 acre.
    • Payback Period - Several estimates of between 9 months and 1 year.

    Copper Mountain PV Solar Facility, Boulder Colorado

    With 775,000 photovoltaic panels, this is the largest solar PV power plant in the U.S. The panels are connected to devices that allow them to track the sun's progress east to west.

    • The overall cost of the project - 141 million US Dollars
    • The output - 48 MW
    • The cost of electricity produced - 10 to 15 c/kWh
    • Short-term employment used in construction - 350
    • Long-term employment used in plant operation and maintenance – there will be a number of qualified electrical engineers in long-term employment plus a number of laborers employed to keep the panels free of sand and dust, which is not an enviable task in the heat.
    • Environmental concerns - none known
    • Land used by plant - 380 acres
    • Land owners earnings from land rental - none payable, however the city of Boulder benefits by $700,000/ year from PV projects
    • Payback Period - average of 6 years

    Kramer Junction Solar Parabolic Troughs

    • The overall cost of the project - $450 Million
    • The output - 350MW
    • The cost of electricity produced - 13 to 14 c/kWh
    • Short-term employment used in construction – very labor intensive due to number of troughs and piping to install; local labor was used as much as possible.
    • Long-term employment used in plant operation and maintenance – the trough mirrors need to be kept clean for optimum operation, also steam and electrical fitters and engineers are needed for O & M; the plant is currently operating with 95 employees.
    • Environmental concerns - there is a possibility of oil leaking from the piping into the surrounding soil. (The plant has on-site biocides to deal with any spills.) As with all steam plants, water usage is an issue, especially in arid conditions.
    • Land used by plant - 1600 acres
    • Land owners earnings from land rental – Boulder City local goverment benefits by $700,000/year from solar energy power plants.
    • Payback period – no details available

    The Geysers Geothermal Power Plant California

    • The overall cost of the overall project (currently 22 separate plants) is estimated at $2.6 billion
    • The output - 1517 MW
    • The cost of electricity produced - 3 to 4 c/kWh
    • Short-term employment used in construction – specialist drilling and engineering personnel required for initial phase, although general labor is required for construction work.
    • Long-term employment used in plant operation and maintenance - this equate to 1.8 jobs per MW, or about 2700 long term jobs. However in an effort to reduce the cost of produced electricity, the plants are modernizing with automation that will reduce manpower.
    • Environmental concerns - some gases can escape to the atmosphere but modern plants can capture these and re-inject them. Water usage is a major concern for the steam plants. However at the Geysers, they are using sewage effluent (from San Francisco) for reinjection.
    • Land used by plant – the land was not used for any purpose before construction of the plants.
    • Land owners earnings from land rental: no data available
    • Payback period - 5 to10 years

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    Renewable Energy Cost Analysis

    So which forms of solar energy have the best short-term and long-term economic potential?

    • Roscoe Windfarm Texas

    The State of Texas having some of the constantly highest wind conditions in America, is ideally suited for the installation of windfarms. Farmers used to curse the winds for drying out the land, but they are much better off now with the land-lease payments that supplement their crop growing. Wind turbines do not affect the growing or harvesting of these crops, nor the grazing of their beef stock. There is little effect on the environment other than the CO2 emissions when using cement in the concrete foundations, with the aesthetic component being a matter for the individual.

    The payback period for windfarms makes them a viable investment. This is evident by the loans and government backing for the $1 billion Roscoe Windfarm development, the largest windfarm in the world. This data coupled with the low electricity production rate of 2 cents/kW, with a payback period of one year, make it the best short-term investment of the renewable energy power plants examined.

    • The Geysers Geothermal Power Plant California

    The State of California is ideally located for the exploitation of geothermal energy due to its position on the "Pacific Ring of Fire" and unusual amount of plate tectonic activity.

    The dry stream produced is the most economic and efficient type of geothermal energy hydrofluids. The location of the power plants in relation to consumers is also a contributing factor to the suitability of California’s use of geothermal energy, promoting the average electricity production cost of 3.6 cents/kW.

    These facts along with the enormous employment prospects, and notwithstanding a relatively long payback period of up to 10 years, still make geothermal energy the best long term investment prospect.

    • Solar Energy Power Plants

    The two types of solar power plants, PV and solar heating are popular for desert locations. However the production of power costs is very high when compared to other renewable energy and fossil fueled plants.

    The costs are likely to be elevated due to the cabling/transmission of the power from outlying dry, sunny areas, coupled with the manufacturing and maintenance costs of the many thousand PV silicon cells, parabolic mirrors, or heliostats.

    Solar power plants can only produce power during daylight, with the night-time generation coming from fossil fuels (unless a storage system such as molten salt is being used). So, even with the six year payback period (where data is available), the average cost of up to 15 cents/kW, along with the above data, renders solar powered power plants the least attractive long and short term investment potential of those plants examined.

    A table collating the above data is shown below.

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