Re: Meredith Fowlie, “Climate change and the post-election blues”, from The Energy Institute, BerkeleyHAAS
My only comments regard Dr Fowlie’s LCoE analysis. While correct from its perspective, LCoE depends upon the viewpoint of the cost efficiency. For example, because residential PV is generated close to the consumption point, it avoids Sankey inefficiencies from upstream, primarily due to conversion losses when stepping up and down. So, from the perspective of cost of energy, there is a benefit to local generation. Note most wind generation does not have this efficiency either. The other efficiency which an “at delivery point” LCoE fails to see is use of capital. In particular, private capital is being deployed to construct residential PV and, to some extent, wind. Now, one can argue that capital costs of wind are recovered from ratepayers, but in the case of solar PV, unless some of those incentives like the ITC are factored into the CoE locally, seen as rewards for putting up capital, the price to the consumer using the PV is exaggerated. If they are not included, it seems that the social benefits of not having to raise or bear the cost of capital for that portion of generation ought to be reflected as well.