Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Why Buffett bet a billion on solar miles per acre per year

By Henry Hewitt - posted Monday, 29 June 2015


During the late innings of the ICE-age (as in the Internal Combustion Engine age) it has become clear that feeding gasoline and diesel to the next billion new cars is not going to be easy, or cheap. In China alone, 500 million new vehicles can be expected to jam the roads between now and 2030.

That may sound far-fetched but considering annual sales have already made it to 25 million units per year (vs. around 17 million in the U.S. – China became the top market in 2009), it only requires a 4 percent growth rate to reach that target in fifteen years.

The cost to operate an EV, per mile, is already well below the cost to drive a standard ICE-age model, and the advantage is likely to widen. The average U.S. residential customer pays 12 cents per kilowatt-hour (kWh), which means the cost to drive one mile in an EV is somewhat less than 4 cents. By contrast, at 25 miles per $3 gallon of gasoline, those miles cost 12 cents each.

Advertisement

Coal still supplies more power in the U.S. than anything else, with natural gas next. However, building more coal and gas power plants to make miles for transport is counter-productive if the game plan is to reduce carbon output.

Fortunately, abundant renewable power, is getting cheaper, while gasoline from finite fossil fuels may get more expensive. (Even after the fall in U.S. crude, gasoline in California costs $4 on average. At that price, California miles are 16 cents each. If you drive an SUV in Southern California those miles cost over 30 cents each.)

Even though not all renewables are created equal, power purchase agreements (PPAs) for PV projects with utilities in the U.S. Southwest are now coming in under seven cents per kWh for a twenty year period. At that rate, the cost to operate an electric vehicle is 2 cents per mile. Hydropower in Seattle will push you around for the same price. The first ‘eye-opener’ for large scale solar was the Austin Energy PPA last year that was priced at 5 cents. What this country needed was a good 5-cent kWh, and now we have it.

It is generous to say that an acre of Iowa can provide 12,500 miles per year at a cost of 10 cents each. (Average fuel efficiency in the U.S. is 22 miles per gallon (mpg). New cars in 2015 get 25 mpg.) An acre of corn that provides 500 gallons of ethanol, at 22 mpg, gives you 11,000 miles, or would, if such gallons had the same energy content as a gallon of gasoline.

Unfortunately, they don’t. Ethanol packs about 70 percent of the punch of gasoline, so you actually need 1.4 gallons of ethanol to get you as far as a gallon of gas. (Instead of 11,000 miles per acre for the average 22 mpg model, the figure drops to 7,850 miles per acre per year.)

But suppose your new car is up to current Chinese standards (~35 mpg). In that case, Iowa’s acres provide 12,500 miles in a year (17,500/1.4). This is still roughly two orders of magnitude less output per acre than Warren Buffett’s Agua Caliente array in Arizona. No wonder Berkshire Hathaway has already bet a billion on PV arrays. One could say that Mr. Buffett has not only seen the light but invested heavily therein.

Advertisement


Agua Caliente PV Plant: Yuma Arizona

Sunrise in the Desert

An acre of desert in Arizona, Nevada and many other places on earth ‘sees’ on the order of 3,000 hours of direct sun per year. (This amounts to 34 percent of the total 8,765 hours available, half being dark.) PV arrays on a house are spaced closely together and it is reasonable to figure 250 kilowatts (kW) per acre of aggregated rooftops. However, it costs more to build an acre of rooftop PV. On the ground the figure is closer to 150 kW per acre.

  1. Pages:
  2. Page 1
  3. 2
  4. All

This article was first published on OilPrice.com.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

14 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Henry Hewitt writes for OilPrice.com.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 14 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy