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Clean Power Falling Renewable Prices Should Kick Policy Makes in the ass

Published on January 15th, 2013 | by Joshua S Hill

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Falling Renewable Energy Costs Should Force Policy Rethink

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January 15th, 2013 by  

A new report from the International Renewable Energy Agency has found that renewable energy has entered what they are calling a “new virtuous cycle of falling costs, increasing deployment, and accelerated technological progress.” 

The report, ‘Renewable Power Generation Costs in 2012: An Overview’, was launched during the recent International Renewable Energy Agency (IRENA) annual assembly and at the World Future Energy Summit in Abu Dhabi. It detailed a comprehensive analysis of the costs and performance of renewable power generation currently capable today.

One of the problems renewable energy is facing, according to the report, is what they describe as “outdated perception” of its ability to compete. This perception forms a “significant and unnecessary barrier to its deployment.”

One example to the contrary of this perception is the cost of solar energy. The cost of solar energy has dropped below the cost of diesel generation worldwide for communities living beyond access to the electrical grid.

The report’s analysis of 8000 medium- to large-scale renewable power generation projects shows that not only are renewable energy projects becoming one of the most competitive options in the field of new electricity grid supply, but they are already the default economic solution for off-the-grid power generation.

“The past two years have seen a remarkable increase in the competitiveness of renewable energy,” says Adnan Amin, IRENA Director General. “2012 was the year when renewables came of age – able to compete with other power generation technologies, and increasingly without subsidies. It is time for the public debate to reflect this changing reality.” 

Back at the beginning of December I reported on IRENA’s policy brief that looked at the fact that renewable energy is the easiest way to generate electricity for those not on the electric grid. Every renewable option is a likely option for millions of people around the world: whether it be biomass or hydropower, concentrated or PV solar, or offshore and onshore wind farms. These renewable options are not only feasible for the millions not on major electrical grids, they are cost-effective and energy-efficient.

One need only troll through the masses of clean power stories we have here at CT to see that renewable energy is becoming, more and more, the only smart option left to us.

[showhide type=”pressrelease”]

ABU DHABI, United Arab Emirates–Renewable energy has entered into a new virtuous cycle of falling costs, increasing deployment, and accelerated technological progress, a ground-breaking report by the International Renewable Energy Agency has found.

“The past two years have seen a remarkable increase in the competitiveness of renewable energy”
The cost of solar energy, for example, has dropped below the cost of diesel generation worldwide for communities living away from the electricity grid.

The public debate around renewable energy, however, continues to suffer from an outdated perception that renewable energy is not competitive, forming a significant and unnecessary barrier to its deployment.

Renewable Power Generation Costs in 2012: An Overview, launched during the IRENA annual Assembly and at the World Future Energy Summit in Abu Dhabi, is the most current, comprehensive analysis of the costs and performance of renewable power generation today. It can be found on www.irena.org.

Its analysis of 8000 medium- to large-scale renewable power generation projects reveals that renewables are fast becoming the most competitive option for new electricity grid supply and swift grid extension, and are already the default economic solution for off-grid power supply.

“The past two years have seen a remarkable increase in the competitiveness of renewable energy,” says Adnan Amin, IRENA Director General. “2012 was the year when renewables came of age – able to compete with other power generation technologies, and increasingly without subsidies. It is time for the public debate to reflect this changing reality.”

IRENA is launching the Renewable Costing Alliance to raise awareness of falling costs, and to collect more data. It will bring together government agencies, financial institutions, equipment manufacturers, project developers, utilities and research institutions.

[/showhide]

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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Diane Charmley

    i have a crush on this Joshua guy…xxoo…we need more of him..

  • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

    Most off-grid locations want to be on-grid at some point, so for them this comparison isn’t relevant.

    • Bob_Wallace

      What comparison is not relevant?

      • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

        Purely from an economic perspective, why spend the money on a renewable system if a community is going to be put on the grid in say 5 or 6 years? Renewables aren’t competitive with grid energy.

        • Bob_Wallace

          In many parts of the world it is not reasonable to expect that many currently non-connected villages/homes will be connected to the grid that soon.

          Right now those places which are operating with diesel generators or kerosene for lighting can set up solar panels with batteries for storage and have clean electricity very quickly. They will, in a reasonably short amount of time, pay for their solar systems with savings from purchasing fossil fuels.

          There are programs in Bangladesh, India and other parts of the world that allow a non-connected household to buy a very basic solar system and make payments which are generally less than what the people were paying for kerosene. They get a panel, controller, battery and some LEDs lights. They can charge a cell phone off the system. After the initial system is paid off, in some plans, they can trade it in for a larger system that is capable of running a TV or computer.

          And there are health benefits. If you’ve ever lived with kerosene lighting (I have) you’ll know very well the desirability to get kero out of your life.

          In India they have already installed over 1 million of these micro-solar systems and are installing at the rate of 1,000 per day. They plan to expand the program into two other states in the near future which will triple the number of daily installs.

          Solar systems, like cell phones, allow less developed areas to leapfrog over old technology constraints and get what they need quickly.

          • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

            Again…I acknowledge all the wonderful advantages of solar. The article was about cost – and so i mentioned a mitigating factor.

        • Bob_Wallace

          ” Renewables aren’t competitive with grid energy.”

          Here, I’m afraid you are very misinformed.

          Onshore wind in the US is now the cheapest way to bring new generation to the grid. It’s cheaper than natural gas. That’s without subsidies.

          Solar is now being sold on long term for under $0.10/kWh. That makes it less expensive than power from peaking plants and results in power savings via merit order pricing.

          Were we installing at $2/watt, as is Germany, solar would be 8 to 9 cents per kWh in most of the US. Without subsidies.

          • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

            Why was it so critical that we passed the subsidies then?

            This on top of the renewable energy requirements that many states have in place?

          • Bob_Wallace

            Thirty years ago wind electricity cost $0.38/kWh and solar panels cost $100/watt. The market wouldn’t have installed wind and solar at those prices. Subsidies brought the prices down to where they are now (wind down ~7x and solar panels down ~200x).

            Building gas plants – gas is very cheap. Coal plants are being priced out of existence because it’s cheaper to replace them with NG that to bring them up to EPA standards.

            Coal is exported for money. Some people don’t give a damn about others, only their bank accounts.

            Renewable energy requirements alone are not enough to bring down the prices of wind and solar. They just force the utility companies to gain some experience with new technologies. Cost will what really gets stuff installed.

            Natural gas has been/is a mixed blessing. It does cut coal CO2 levels in half. And it’s very fast to install compared to coal and nuclear. It’s highly dispatchable which means that when wind or solar are available the fossil fuel component can be shut down.

            Of course there’s fracking and methane leaks….

            Worry not about the amount of your money that has gone to wind and solar.

            Worry about the billion dollars per day we have been sending overseas to purchase oil from people who don’t like us.

            Worry about the almost billion dollars per day we spend to treat the damage caused by coal pollution.

            Worry about the billions and billions and billions of dollars we’ve spent subsidizing coal, oil and nuclear whose prices continue to rise.

            Celebrate the relatively tiny amount that’s gone to wind and solar. Those dollars have returned you massive returns.

          • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

            Bob. You take my questions and comments too generally. I’ve never said wind power is bad. I’ve only said that it cannot be built, connected, and operated (for the bulk of our needs) as inexpensively as gas.

            I acknowledge coal and gas have environmental effects.

            Also – a lot of people work in those industries and they are being displaced using tax dollars.

          • Bob_Wallace

            Gas prices are almost certain to increase. Wind prices continue to decrease.

            The environmental costs of gas should not be ignored. Moving from coal to NG only slows climate change. If you add in the cost of all our coastal cities either being flooded or having to build sea walls, the cost of crop failures, the deaths from heat waves, well, you get the picture.

            We built the interstate highway system with tax dollars.

            That put a lot of motels, restaurants gas stations and other businesses out of business. Lots of jobs went away.

            It’s too bad that coal miners are losing their jobs. I grew up close to the coal mines and I know how few jobs there are there, but preserving those jobs is no reason to continue to kill thousands and to risk costing ourselves trillions.

          • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

            As long as we all acknowledge that subsidizing renewable energy can actually cost jobs I’m fine.

            What makes you think nat gas will increase?

          • Bob_Wallace

            Technological advances change the work people do.

            I don’t know if your are old enough to remember when desktop computers because affordable for businesses. When they did it eliminated a tremendous number of middle management jobs. A lot of middle aged guys who thought they were set for life suddenly found themselves working as security guards and retail clerks.

            Data I gave you elsewhere make it seem to me that our subsidies have created far more jobs than are going to be lost when coal mining stops.

            The price of natural gas is currently below what it costs to drill a new well. When the NG boom started tons of investment money poured in and well drilling charged ahead.

            Sometime later all the new gas on the market forced the price down and almost all the drill rigs left the gas field and moved back to drilling for oil

            We’ll burn through that bubble soon and prices will have to rise in order to bring new wells on line.

            Check the futures market. Those who buy and sell gas see prices rising.

          • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

            Prices wont go up much. The glut is due mostly to this terrible economy we’re stuck in and a lesser degree to the subsidized and mandated wind generation on the grid.

            I’ll stop arguing with you now.

          • Bob_Wallace

            The glut is due to too much well development.

            We have been increasing our burn rate even when the economy was in the dumps.

            That’s your third goodbye. Do you need an assist out the door?

          • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

            I’m not going to leave if you keep making snarky remarks in absent any cogent argument.

            The President promised us a growing economy, so wells were developed. Then the economy failed to improve at an historical rate. Companies don’t choose a fuel based on projected costs over the next six months.
            Generation is a decades long investment.

    • http://zacharyshahan.com/ Zachary Shahan

      Funny thing: a panel I recently attended at the World Future Energy Summit laughed, very sadly, at the fact that basically everyone who is off the grid thinks they will soon “get the grid,” when in reality, they never will, or at least not in the coming 20 years or so. But it’s quite an easy promise for politicians to make. In the meantime, it keeps people from getting reliable electricity from microgrids or other decent options. I don’t know who exactly you’re referring to, but most of the 1 billion+ who aren’t on the grid today certainly won’t get it in the coming 5-6 years.

  • David Fuchs

    It is funny how people like us are going to change the world so profoundly.

    • http://zacharyshahan.com/ Zachary Shahan

      Technology and economics will create the shift. Thanks to thousands and thousands of engineers and scientists. Of course, in many cases, thanks to the funding provided by non-engineer and non-scientist decision-makers in the first place. :D

    • http://www.facebook.com/jeffrey.todd1 Jeffrey Todd

      That is funny.

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