| Can this back-of-the-envelope calculation be right? Are renewables in reality 13 times more expensive than nuclear? A total of USD 2,343bn has been invested in renewable energy capacity between 2004 and 2014. If we leave out hydro, the total investment amounts to an estimated USD 1,800bn... |  |
| With these investments, the capacity of renewable energy sources increased an estimated 902 GW. If we leave out hydro, total capacity has increased an estimated 550 GW. |
 Source: Bloomberg New Energy Finance |
| In 2014, the consumption of renewable energy sources amounted to 1,196 mtoe, an increase of 485 mtoe compared to 2004. If we leave out hydro, the consumption of renewable energy sources amounted to 317 mtoe in 2014, an increase of 241 mtoe compared to 2004. The share of renewable energy sources of total world primary energy consumption amounted to 9.3 percent in 2014, and 2.5 percent if we leave out hydro. In total, renewable energy sources have accounted for 7.8 percent of total world primary energy consumption between 2004-2014. If we leave out hydro, the share is 1.4 percent. |
 Source: BP Statistical Review of World Energy |
| In conclusion, an investment of approximately USD 1,800 bn between 2004 and 2014 (this leaves out hydro) has provided 1.4 percent of world's energy consumption during the same period of time. Calculated from these figures, if the world's entire energy consumption would be supplied by these renewable energy sources (wind, solar and other renewables excluding hydro) the price tag would be around USD 129 trillion. | The price tag would be around USD 129 trillion. |
PerspectiveTo put this number in perspective let’s compare it to the massive nuclear power program started in mid 70’s in France, where the country installed 56 reactors over 15 years at an estimated cost of some FF 400bn in 1993 currency, i.e. some EUR 84bn or USD 76 bn today taking inflation into account. As a result of this decision, France now claims a substantial level of energy independence and almost the lowest cost electricity in Europe. It also has an extremely low level of CO2 emissions per capita from electricity generation, since over 90% of its electricity is nuclear or hydro, nuclear’s share being some 75 percent today. If from these figures we calculate an estimate for how much it would cost to build a nuclear infrastructure that supplies 100% of world energy consumption, we end up at a figure of USD 10 trillion. This is based on the cost of France’s nuclear infrastructure (USD 76bn), France’s share of world nuclear consumption (17.2%) and nuclear’s share of world energy consumption (4.4%). |
 Source: IEA with our estimates |
These are, of course, just ‘back-of-the-envelope-calculations’. But we want to show the ballpark we are at: 129 trillion vs. 10 trillion. This is a huge difference, even if both figures in reality are +/- some trillions. The same comparison can be done to other countries which scaled nuclear, for example Sweden, Switzerland and South Korea.
This points to renewables being 13 times more expensive than nuclear.
What is the hidden cost?Why is the huge investment in renewable capacity not reflected more dramatically in renewables share of world energy consumption? One reason is the capacity factor, i.e. the ratio of actual output over a period of time to its potential capacity if it were possible to operate at full capacity over the same period of time. The capacity factor for solar and wind varies depending on location, time of the day and year and if storage is available. Their capacity factors are estimated to 10-25 percent and 20 percent, respectively. As comparison, the capacity factor for hydro power is 40%, for a coal fired power plant ~ 70% and for nuclear ~ 90%. Indeed, renewable energy sources are intermittent, dilute and location dependent (more on this later). |
In conclusion, we have to admit that a carbon free energy infrastructure based 100 percent on renewables is becoming more and more unrealistic. |
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