NCPA - National Center for Policy Analysis

Renewables Offer No Bang for Your Megawatt

August 11, 2015

Advocates of renewable energy are touting a new statistic that 70 percent of new electricity generation capacity in the first half of 2015 was renewable. That 70 percent refers to how much energy power plants could produce if they were running at full power all the time, a metric called installed capacity. It does not mean that 70 percent of new energy generated in the first half of 2015 came from renewables, writes Preston Cooper of the Manhattan Institute.

While fossil fuels have maintained roughly the same capacity factor over the last few decades and nuclear power plants have gotten far more efficient, non-hydroelectric renewables have slipped since 1980. Large amounts of new renewable capacity do not always translate into large amounts of new power generation. Capacity factor measures the ratio of the energy a power plant actually produces to how much it could produce if it were running at maximum power all the time. A higher factor indicates that a source of electricity is more likely to reach its full potential.

  • Coal-fired power plants reach a capacity factor of 61 percent.
  • Natural gas combined-cycle plants hover around 48 percent.
  • Nuclear power plants reach a capacity factor of 92 percent.
  • Renewables most inefficient: hydroelectric (38 percent), wind (34 percent) and solar photovoltaic (28 percent). The one exception is geothermal, at 69 percent.

Federal policies have encouraged new renewable capacity, however renewables have a low capacity factor because their power sources are dependent on the elements -- the sun does not always shine, and the wind does not always blow. Solar panels will see their energy output spike in the middle of a clear day, but then drop down to zero at night. Renewable energy generation depends on more factors than other energy sources, making it more unreliable.

Source: Preston Cooper, "Renewables Offer No Bang for Your Megawatt," Economic Policies for the 21st Century at the Manhattan Institute, August 4, 2015.


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