Solar PV Is Unstoppable, And Subsidies Can Be Removed Sooner Than Thought
Originally published on RenewEconomy.
New report finds solar will be cheaper than wholesale electricity prices across Europe by 2030 – without the need for any technological breakthroughs. The implications for fossil fuels are obvious – and means high renewable targets might reduce the energy costs, rather than increasing them.
Solar generation costs are likely to fall below the average wholesale price of electricity across Europe by 2030, according to a new study, highlighting the potential of a solar revolution across the globe – not just in the household and commercial market, but also for utility-scale installations.
The study by the EU-sponsored European Photovoltaic Technology Platform, released this week, suggests that solar PV costs will fall by half over the next 15 years – after an 80 per cent fall over the last five years – even without any new technology breakthroughs.
This means that by 2030, the generation costs of solar PV – including grid integration costs of 2c/kWh– will be lower than the wholesale price of electricity in most of Europe. In southern European states, it already is cheaper, and by 2030 the cost of solar PV could be as low as €20-€25/MWh, depending on the cost of capital. Even in London, the cost of large-scale solar PV will be around €50/MWh – equal to the current wholesale price and way below the cost of nuclear, the current Tory government’s clean technology of choice.
“By 2030, large-scale PV would be competitive with the current wholesale electricity price almost all over Europe,” the EU report says. “It can be concluded that PV will probably be the cheapest form of electricity generation in most countries in the coming decades.”
The report says that the cost cuts could be so dramatic that the capacity of solar PV could grow from around 170GW now to more than 3,000GW in 2030, and to 5,700GW by 2050, displacing an enormous mount of fossil fuels – coal-fired power stations in particular.
The report tells us what we already know about rooftop solar – that it is already cheaper than retail electricity prices across most of Europe, even in those countries with little sun, such as the UK and Sweden.
What we now know is that large-scale solar is also cheaper than wholesale electricity prices in southern Europe, and will be in the rest of Europe by 2030.
In Spain, if the real cost of capital is around 5 per cent, a 50MWp solar PV system in Spain would produce electricity at around €45/MWh now. In Italy it is a little more, but in Italy the average spot market electricity price in 2014 was €52/MWh. By 2030, the cost of solar on 5 per cent cost of capital would be cheaper than that across Europe.
The predictions are significant on a number of levels. Firstly, it is already recognised that solar PV is cheaper than new-build fossil fuels in most countries, and solar is already competitive in those countries that need to build new capacity and have high wholesale electricity prices. In Chile and the Middle East, solar is being built without subsidies.
But solar was never expected to be able to compete with fully depreciated, already built coal-fired power stations in developed economies for a few decades hence.
The fall in the cost means that subsidies for solar will be able to be removed, sooner than many thought. US energy secretary Ernest Moniz said this week that this could happen within a few years. As we reported in June, UBS suggests that subsidies for solar will be completely removed over time, and it predicts that up to half of all capacity could be solar by 2050, in its “dream” scenario. (That article is worth re-reading but the EU forecasts are even higher in terms of capacity).
The second major element of the EU study is that these cost reductions will be achieved without any significant technological advances.
“Such results can be achieved without any technological breakthrough,” said Gaëtan Masson, a co-author of the report. “We simply assume that PV modules and other PV system components will become more efficient and less expensive and that operation and maintenance procedures will be optimised.”
This is a critical point, because many of the critics of renewable energy, particularly those in the nuclear-lobby, speak of the need for “next generation” solar technologies to make the big price breakthroughs.
But as the EUPVCC studies show, the current generation will do the job anyway, and it will become a pretty obvious choice for energy planners and investors which technology to choose, particularly as solar provides no fuel price cost, and therefore no fuel price risk for investors.
The lack of fuel price risk helps reduce the cost of capital, which means that the savings on solar can be even greater. And so, with battery storage costs also falling heavily, and already delivering savings at a network level by deferring or avoiding expensive grid upgrades, and with the ability of batteries to provide load shifting into the peaks, storage for night-time, and frequency and other ancillary services, then the prospect for even higher renewable penetration becomes quite compelling.
The findings are important for Australia too, for the obvious reason that Australia has much better solar resources than Europe, and needs to replace a higher proportion of coal-fired capacity.
Aspirational targets like the 50 per cent renewable targets set by the Labor state government in Queensland and by federal Labor for the whole of Australia are dismissed by the Coalition, who drum up numbers such as the $85 billion used to quantify the cost of Labor’s federal target.
But like the Coalition’s emission abatement cost estimates, this uses very high estimates of solar technology costs, and doesn’t allow for any reduction between now and 2030.
Large-scale solar costs in Australia are comparatively high, but that is only because little in the way of large-scale solar plants has been built. As more is built, through tenders such as those planned by the Australian Renewable Energy Agency, the ACT government and the Queensland government, then costs will fall rapidly.
Some expect a 50 per cent cost reduction by 2020, and more after that. Large-scale solar is looking particularly attractive in Queensland, and is expected to account for a large part of the 5,000MW to 6,000MW needed to meet the 2020 renewable energy target, say both Bloomberg New Energy Finance and Origin Energy.
Rooftop solar costs in Australia, which boasts the highest highest penetration of rooftop solar in the world, are among the cheapest – mostly through efficiencies in installation and maintenance costs driven by the thriving market.
The EU study says the outlook beyond 2030 is even more attractive. Again, eschewing any major technology breakthroughs, and just relying on a modest 0.4 percentage point increase in module efficiency per year, the cost of a 1MW ground mounted system – even on a 5 per cent WACC – would fall to just €20/MWh in Malaga by 2050. This assumes a module efficiency of 30 per cent and system prices around one-third of what they are now.
“Parity with wholesale market electricity will be reached by 2030 almost everywhere. There is every reason to believe that this development will continue after 2030 because there is still a huge improvement potential in various PV technologies,” the report says.
Even in London, the cost could be below €40/MWh. To put that into context, the Hinkley nuclear plant, due to start in 2026 if financing is ever obtained, will cost €92.50/MWh and will then rise with inflation. By 2050, it will be paid more than €200/MWh for its output. By 2058, probably more than €300/MWh.
Reprinted with permission.
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The good news: Solar is generally cheaper than grid power even where there’s not much sun.
The ugly truth: Utility scale solar will not reach cost parity with wholesale for 10 years.
🙁
Is instantaneous wholesale the right benchmark? Solar is driving it down, so much that the wholesale price in Germany is often below break-even for fossil plants. We would be better off using 20-year PPA prices: but the joke is that fossil cannot offer these at all, so comparison is impossible.
In southern california, power can be generated at ~5 cents/kwh using natural gas. 20yr PPAs in the 1-6mw were in the 8-9 cent/kwh range. I’m specifically working on a installation this size and this is one of the many barriers we ran into. Wholesale via natural gas is still cheaper. Granted, this is the awkward in between size but we’re competing against wholesale so it’s relevant.
(Repeating a post that disappeared.)
Last year the unsubsidized PPA price for solar was 6.5c/kWh. (5c/kWh subsidized.)
Between Q3 2012 and Q3 2014 utility scale solar prices fell 23%.
At the rate at which solar prices are falling it’s hard to see how it takes ten years for prices to drop another 20%.
I was just summarizing a quote from the article/report: ““By 2030, large-scale PV would be competitive with the current wholesale electricity price almost all over Europe,” the EU report says”
Wholesale price is a reasonable benchmark, but we might expand further. What I find interesting is that the whole paradigm is changing. FF base load with gas peakers created the whole CF idea. Its an anachronism in the modern renewables world.
CF does not take into account load matching. Excess capacity and too little capacity are both negative consequences.
Solar follows load naturally. So solar eludes that whole paradigm. Low CF, but great payback.
An ideal generation source follows load and would not have a 100% CF. The whole idea that CF is a figure of merit is erroneous.
What remains is that all energy systems are optimally multi sourced for reliability and cost.
Breaking out one source for LCOE is artificial. The power system reacts dynamically. Changes in the energy mix cause changes in demand and changes in best operational economics.
One real world example? German solar.
Just about ended day/night arbitrage and storage.
Thats an example of how solar caused an effect quite opposite to prognostications of increased need for storage. And its happening everywhere solar is introduced in high numbers.
IMO, those considerations must be kept in mind first and foremost.
In the sense that the paradigm is changing wholesale might not be the best benchmark, or at least not wholesale as it exists now.
IMO, its probably best for now.
What does the acronym CF mean? The way you use it implies that it’s an obvious abbreviation… not to me. Thx
CF = capacity factor. I guess I am a power nerd, sorry. It means the ratio of average power to peak available power. If the source runs flat out and never changes, its high.
Ah, capacity factor! So, “fossil fuel base load with gas peakers created the whole capacity factor idea” or less verbose: “FF-BL with GP created the whole CF-i”
Thx, for the well-meant explanation
To give you an example:
Start with a 3MW wind turbine. If it ran full speed 24/365 it would produce 3 x 24 x 365 or 26,280 MWh of electricity in a year.
Suppose the actual production over the year is 11,000 MWh. Then the capacity factor (CF) would be 11,000 / 26,280 or 41.8%.
Thank you for this the well-meant explanation
electricity of 10cent which is locally created can be better for a country than electricity of 6 cent which is imported!
solor is local oil, gas and coal are for many imported.
What’s the correct WACC to use? 2% in real terms is about the historic mean of achieved reyurns. The recent growth in solar and wind in the US has been driven to a considerable extent by a falling cost of capital, as investors like Buffett have realized that utility plants are very low-risk: they always work, they have a known and long life, and you can easily find risk-averse customers wiling to sign long-term takeoff contracts. For public policy,the standard view is that the intrinsic rate of time preference should be zero, to assure equity between generations. A positive rate of discount is justified by technical progress, so you also end up round 2%.
James – I found this reference which may interest you. See what you think.
There is a graph of WACC.
It may be dated, but its a starting point. Its very readable, but substantial.
http://www.greenrhinoenergy.com/renewable/context/economics.php
PV technology improvements are here after only thirty years of crappy innovation in an even crappier global free market. And we are supposed to be impressed?
Innovation doesn’t require market competition. It requires money and motivation. Both of which could have been provided by government stimulus. Right now is where we could have been twenty years ago if our government was doing what it is supposed to be doing.
Just WTF has the Department of Energy been doing the past three decades? Maybe Sarah Palin is right – perhaps we should get rid of the Dept. Of Energy?!?
Ask your Republican whore representatives why natural gas gets an “Intangible Tax Credit” to find out that YOU paid for the massive drilling of American Gas wells. In other words there is no free market when the carbon industry enjoys massive Yearly Bailouts at your expense. That’s why it took 30 years.
Are you the last Repub alive who didn’t learn that Repubs are nothing but the corrupt puppet of incompetent business?
Look up:
Intangible Drilling Costs
Intangible Completion Costs
Depreciation
Depreciation Allowance
You paid for this, in the Tax Code.
You’re literally being robbed blind. That’s why there is a Fox News, to make a fool out of you, while you get robbed.
Are you calling me a Republican?!?
Did you read me before your am coffee?
Ok, Sorry.
“Just WTF has the Department of Energy been doing the past three decades?”
For 14 of those 30 years a Republican was in the White House.
During the 16 years that a Democrat controlled the administration and the Department of Energy Republicans controlled one or both houses of Congress for 12 years.
There have been only 4 years out of the last 30 in which a Democratic president could have directed the Department of Energy to do more and gotten funding from Congress to make it happen.
As it turned out Germany and Spain had to do the heavy lifting to bring down the cost of solar. Friends of Fossil Fuels have been pretty successful at keeping coal alive in the US.
The DoE is an Executive branch entity. Any President can tell them to change their policies and priorities and mission. Matters not what Congress wants.
Can’t do the job without the resources.
The President is not a king. Even over the executive branch. He can certainly force a lot of change but he can’t run wild.
Also the DOE is responsible for the nuclear weapons and reactors. That’s almost half their budget.
Well not just in the US, but also in other places around the world the tax code is written by people you do NOT have your and my best interest in mind, but by their own hide and their friends! :((
You mean like this?
Gas prices soar.
Bush visits NREL in Golden, Colorado.
Bush notices Republicans have decimated funding and cut jobs..
Bush needs politicized bargaining chip and realizes his cameo appearance is an embarrassing bust because no one will believe there is any strength in an emaciated NREL.
Bush restores funding and jobs.
http://newwest.net/main/article/bush_visit_restores_jobs_at_nrel/
But you are wrong on may counts. Its in the Constitution. The Congress passes laws and provides funds. The president can stop the monies from being spent. But a president can provide any monies.
Unless its Iran Contra and behind closed doors..
but thats another matter.
I remember when Bush was in the WH. Gas prices were soaring. He went to find a card to play for bargaining and to politicize.
So he did a visit to NREL in Colorado. It was decimated by Republican cuts. Jobs were lost.
After that they restored jobs. So much for the Republican plan for dealing with resource depletion and energy security.
http://newwest.net/main/article/bush_visit_restores_jobs_at_nrel/
Roger meet NREL. NREL meet Roger. NREL is a national laboratory of the Department of Energy.
You are missing a lot if you think they are doing nothing.
You should read a few of their papers.
Like this one.. Renewable Futures Study
http://cleantechnica.com/2015/04/13/80-renewables-by-2050-in-us-says-nrel/
And this one.. Western Wind and Solar Integration
http://www.nrel.gov/electricity/transmission/western_wind.html
To name but a few. Be prepared to read hundreds of pages.
But not just studies.
Here is an example of making stronger blades for wind turbines.
http://energy.gov/eere/wind/advanced-blade-manufacturing
http://energy.gov/sites/prod/files/styles/large/public/weights_on_turbine_blade.jpg?itok=yTORUWZE
Some of NRELs work has resulted in higher towers and higher capacity factor which has lead to a vastly increased area of feasible wind development and much greater output.
So much so, that capacity factors reach 65% and beyond. Enough to replace coal.
That data came from NREL.
http://cleantechnica.com/2015/08/04/wind-could-replace-coal-as-us-primary-generation-source-new-nrel-data-suggests/
http://apps2.eere.energy.gov/wind/windexchange/pdfs/wind_maps/us_contiguous_wind_potential_chart.pdf
Forgot the NREL wind capacity factor graphic.
http://c1cleantechnicacom.wpengine.netdna-cdn.com/files/2015/08/wind-potential-chart-us-072015-570×423.jpg
I appreciate your your efforts to highlight what the have done – but it is way too little way too late.
By this time, they should have a detailed blueprint on how to build us a new 100% renewable utility system. We should know how much it might cost using different approaches. We should see where the new smart grid we all agree we need is going to be built, how it is going to work, and how much it will cost.
We should have had – 15 years ago – a precise inventory on how many PV panels we will need and how many new PV factories will need to be built to produce them, how many large-scale solar and wind installs we will need and where they should be located, and how much they will cost. We should have had 15 years ago, a plan to develop tidal power. Tidal is still in its infancy.
We should have had new procedures, laws, policies on procuring the land we will need for these facilities by eminent domain.
We need to have a huge program to retrofit homes to electric heating and an even bigger plan on how to make the electricity to heat those homes affordable: rates need to go down or huge numbers of people are going to freeze to death.
Hey – here is a plan:
According to Jacobson and Delucchi, California could be 100% carbon-free with a $1 trillion investment. California is 1/6th of the U.S. energy demand. For $10 trillion, we could have a new Federal 100% renewable energy-only utility system, plus pay for a smart grid, plus pay for all those home and business retrofits, and probably have enough left over to buy every family a Nissan Leaf. $10T = 7 years of fossil fuel purchases (2012 numbers).
$10T (capital costs) goes onto the National Debt payed off egalitarianly with taxes. The American people now own their own utility system, which offers the electricity for next to nothing. Fossil fuel use disappears because it is priced out of the market. Every person in the U.S. now has $3200 more in his pocket every single year because they are no longer buying fossil fuels. A small portion of that can be used to pay off the debt.
Global warming is eliminated. OR… we can continue the way we are – having arguments with morons about facts; thinking that it is a good thing for people to pay for their own rooftop system instead of not demanding a Federal solution that works for everybody …. and fail.
Right off, here is the Energy Futures Study you say doesnt exist. NREL did it in 2010.
http://www.nrel.gov/analysis/re_futures/
Four volumes, 100s of pages each. Have you read it? What am I saying?
I have.
Here is the upshot.
They do projections of how to get to percentage renewables from about 30% up in 10% increments out to 90%.
Read the article for more information.
http://cleantechnica.com/2015/04/13/80-renewables-by-2050-in-us-says-nrel/
You have some catching up to do before it can be discussed. There is too much information for you to start discussing it right now.
I think what both Bob and I have been trying to tell you is that if you think DOE or NREL has not done enough,
1. They have done plenty
2. You have overlooked their accomplishments
3. They could do a whole lot better without clowns like Bush cutting their budget.
4. We should support NREL with an even better budget..
5. You are ignorant of the fact that NREL has already done an energy futures study just as you have described.
Its an illogical argument to claim their budget should be cut because they aren’t doing anything when their budget was cut and that caused nothing to be done.
The real problem is the opposite. Lack of funding.
Once the budget is there, they do contribute plenty.
We need to study how to progress in energy, so we know how to achieve our goals.
Instead of coming up with your own personal scheme, we should fund the scientists to show us how to do it.
I am fine with a publicly owned grid and private generation in competition.
And lets have NREL show us how to meet our energy goals like they did
in the 2010 Futures Study.
If there were an agency that needed some revamping, its not NREL.
Its EIA. Their energy projections seriously harm our energy planning and political process.
There is reason to believe FF interests may be affecting their projections.
Here is crappy solar innovation. You decide. Thats a logarithmic graph. A straight line means compound growth or decline. Thats cost per kwhr.
Notice the deep ramp at the end. Thats the tipping point, right now, where solar reaches grid parity.
http://www.the9billion.com/wp-content/uploads/2014/06/cost-of-solar-power-graph.gif
And solar growth? Viral. Exponential and phenomenal. Doubling less than two years.
http://www.wired.com/wp-content/uploads/2015/03/solar-1-chart.jpg
Here is a list of solar myths and corrections.
http://mediamatters.org/research/2013/01/24/myths-and-facts-about-solar-energy/192364
And an article about exponential gains in solar power.
http://rameznaam.com/2011/03/17/the-exponential-gains-in-solar-power-per-dollar/
Solar makes up less than 3% of our electricity use. This is after 30 years of letting the free market solve the problem. Meanwhile, we are going to need 6x that electricity use to replace all fossil fuels.
We do not have the time frame to just let this get solved by a marketplace that doesn’t want it. That path leads to doom. It is way past time to demand the government do its job and fix AGW bu building a new renewable utility system.
You cannot comprehend. It makes no difference how long a technology exists. It only matters when it reaches a tipping point of replacing or supplanting an existing technology or opening a completely new market.
What the logarithmic curves show is compound gains in cost reduction one time. When cost reaches the tipping point growth is phenomenal.
Here are a few articles that explain the myth of base load power further.
http://theconversation.com/renewable-energy-can-provide-baseload-power-heres-how-2221
http://theconversation.com/baseload-power-is-a-myth-even-intermittent-renewables-will-work-13210
http://www.dailykos.com/story/2013/08/12/1230558/-Sunday-Train-The-Myth-of-Baseload-Power#
It also matters little what an initial value is. Exponential growth rates are more important.
Thats what viral means. One day its 3%, the next it overtakes everything. Thats growth.
At 2x every 2 years, in 10 years, solar grows 32x. So that becomes the entire market.
Although you show now calculations of time, there is nothing else growing as quickly. Thats what matters.
Based on that, solar is the most highly desirable option there is.
The marketplace seems to be quite in alignment with that.
It has not been “30 years of letting the free market”. We have had federal subsidies for wind and solar and they have been highly successful in bringing down the price of both. (Most credit for lower solar prices should go to Spain and Germany.)
Hindsight is a wonderful thing. It is easy to look back at what we should have done differently/better, but that’s now done. We have to start with where we are and go from there.
So, where are we? We now have very affordable wind (less than 4c/kWh unsubsidized) and affordable solar (6-8c/kWh and rapidly dropping).
We’ve converted a significant amount of our coal generation to natural gas. While NG is a carbon source it’s half that of coal. And there are problems with methane leaks and fracking but those can be minimized.
The important thing about NG is that it is dispatchable. Unlike coal or nuclear, when solar or wind are producing we can efficiently turn off the NG plant. The more wind and solar we add, the less NG we use. But we still have that NG capacity waiting in the wings so as we build a renewable grid we can maintain a reliable grid.
Now, how are we doing with wind and solar installations? I’ll give you some graphs. Installations are soaring.
Let’s get real here:
Fast growth = Slow growth
Base case = Even slower
Slow growth = Linear growth
Solar is great, and it’s wonderful to hear that it’s at grid parity in southern Europe and getting better. But for far north latitudes like London and Stockholm, you have not only time of day issues, but time of year. Household energy consumption in winter is fat higher, and solar generation far lower.
Unless and until solar or electric to liquid fuel energy conversion is economical, I don’t see how this is a long term energy solution for London or Stockholm.
Besides that air conditioners also need power: Nobody said to forgo wind power, which is more plentiful in the winter.
You’re not looking at the California truck market which is going hybrid. We won’t need gas to fuel a transportation industry in 10 years.
I’m not talking liquid fuels for transportation. I’m talking about it for energy storage. A battery big enough to store summer surplus for use in winter is ridiculous. Hence liquid fuel storage is needed.
Liquid fuel or flow battery chemicals or water in a PuHS facility.
It will take time to see which works best.
Sure, for storing a few hours’ worth of production or maybe a few days.
But several months’ worth? This is a lot of energy we’re talking about: even for a single 250 W module, making ~1 kWh/day, that’s a 100 kWh battery — bigger than the biggest Tesla battery — for each module! A preposterous ratio, even for flow batteries.
PuHS: there just isn’t enough capacity. You’d need to pump the volume of the Baltic Sea. Flow batteries are sort of like liquid fuels, but with 5-10x lower energy/kg, so you need much larger storage tanks.
Sorry, large-scale solar build-out (more than 10-15%) in high latitudes just isn’t practical. You have to get a lot lower than 4¢/kWh for massive summer curtailment to make sense, or efficient electricity-to-liquid-fuels for reasonable storage at this scale.
The market is dynamic. There are all kinds of responses from demand reduction by conservation and demand management, to time of use.. Then there is supply.
Wholesale rates vary seasonally, daily, weekly, and even when there is a soccer match, all kinds of things.
I have no doubt there will be some solar. The amount depends on how high wholesale prices go during the summer. Solar matches that demand pattern, so its worth more than the average rate at those times.
My guess is solar will be limited by the lack of summer air conditioning demand primarily. Since demand is highest in winter, I expect higher wholesale prices then, and consequently more wind power.
Thats how it should work, anyway.
Hazel – I should have simply said that hydro and wind would be used in winter. And a lot less solar than in southern countries. Like Bob said, when that last bit is expensive in summer, solar steps in. Its worth more because its available when demand is highest.
Exactly, but keep in mind that most of the increased winter demand is actually heating. Cogeneration can be very helpful to fill in the winter gap from electricity and heating.
Thats where wind, biomass, hydro et al step in. Never one source. Too impractical. And then there is transmission. Many of the Northern regions like Canada and Scandinavia have abundant hydro and even wind.
Sure, but it seems that even with modest solar build-out, you’ll get ridiculous swings in electricity prices in summer vs. winter. If solar produces 3-5x more in summer (Stockholm has about 3x more hours of sunlight in July than January, and at a much better angle), then summer electricity prices plunge, reducing the incentive to build out solar. It’s hard to see it being more than 10-15% of the grid in these places, unless solar producers get non-market pricing, which would be very inefficient.
(The context of the article was about solar in the UK and Sweden, not renewables in general.)
Industry speculation is running toward 2c/kWh solar in sunny places, 4c/kWh solar in less sunny places.
Prices that low leave room for a fair amount of overbuilding and curtailment.
And you also have to look at wind performance. If there’s a summer dropdown then solar is likely to play a much larger role in the middle of the year.
I don’t understand. If we let the market function properly, won’t overbuilding in Sweden lead to summer prices well below 4¢/kWh, discouraging further solar investment? Or alternatively, won’t giving solar energy producers a higher price encourage its build-out above wind, which is the more logical technology for such latitudes?
All grids are built to supply peak demand. The demand created on the hottest day of the summer. (Or, perhaps in a cold place, the coldest day of the winter.) That means that 99.9% of the time we’ve got some amount of capacity sitting idle. Natural gas plants in the US sit idle over 70% of the time.
The mix of wind/solar/everything else will vary from one grid to the next. The people making the decisions will have to look at available supply and what they think demand will be. Once there’s enough capacity to cover the lowest demand hour/minute of the year they will be adding capacity that will not be used 100% of the time.
4c/kWh solar won’t be the metric used. They will look at the specific need they are addressing and asking themselves if they can meet that demand for the lowest price with wind, solar or something else.
The “last 0.1%” might mean adding $1/watt solar that would be used only 8-10 hours a year or with $1.60/watt onshore wind or $1.10/watt natural gas turbines or more storage. If it’s a sunny afternoon need then the choice might be solar. If it’s a windy winter night need then the choice might be wind.
Whatever the choice, the cost of supplying that last 0.1% is going to be expensive. The total annual cost of the plant will need to be recovered in 8 – 10 hours.
—
What will become more and more important/valuable will be ways to shave the peaks. If we can find ways to reduce demand during the few days a year with highest demand then we won’t have to build capacity to cover that demand.
EVs will be a wonderful asset to the grid. Just make it financially worthwhile for drivers to not charge during the highest demand hours then charge during the lowest demand hours.
That way the utility can add a wind turbine or solar panel that will be used more, curtailed less and not have to build as much peak-coverage capacity that will sit idle 90+% of the time.
Other ways to smooth the demand curve will likely be appliances such as refers and freezers that cool down pre-peak and float through the peak. Same for water heaters. “Cool storage” systems for AC that chill a water/salts medium then use that stored cool to assist AC during the hottest part of the afternoon. Or “warm storage” for heat pump assistance in the winter, storing heat during the lowest demand part of the day.
Some industrial processes can run during the low demand periods and drop out or slow down during peak demand periods.
Commercial buildings can let temperatures rise a degree or two and air exchanges slow a bit during peak without people in the building even noticing.
I think we agree on the big vision. But this article is about solar reaching grid parity and growing without bound, and specifically mentioned UK and Sweden. So I brought up two points:
(1) No, it’s not great for those far north markets on any serious scale, and won’t get to more than 10% without causing problems.
(2) Let’s make sure that these solar generators actually see time-dependent wholesale pricing, so they don’t overbuild.
Regarding (2), you say “4c/kWh solar won’t be the metric used. They will look at the specific need they are addressing and asking themselves if they can meet that demand for the lowest price with wind, solar or something else.” But that’s not true in today’s markets. PPAs use a fixed price, and if it’s greater than cost (say 4¢), they build as much as possible. In northern latitudes this would lead to overbuilding way beyond mid-day summer demand. If instead you told utility-scale solar developers, “You’ll get the real-time wholesale price”, the result would be more reasonable solar build-out.
I’m looking forward to the day when some geographies get 50-80% of solar using (flow?) batteries and/or molten salt heat storage for time-shifting. Solar costs are falling that much faster than other renewables, and still have a long way to go. But for northern latitudes, other renewable technologies, and conservation and demand management, are far better.
One other thing since we’ve drifted off-topic: demand response sucks. It essentially double-pays people to reduce consumption below their “nominal value”: you save money by not consuming the energy, and get paid for “producing” the energy you’re not consuming. This encourages consumers to game the system by maximizing their “nominal value”, and thus increase this double-dipping. In some scenarios, it can *increase* energy consumption.
Much better to manage demand by real-time pricing, or if that causes grid instability, then day-ahead forecast pricing. And yes, EVs massively increase flexibility of demand — and they can charge really cheaply if they use something like real-time or day-ahead forecast pricing.
1) I’m sorry, I can think of no reason why more than 10% solar would disrupt a high latitude grid.
Consider the case where winds might drop off appreciably during the long summer hours. During ~four months of the year the primary input might be solar. High latitude areas have very long solar days for the better part of half the year.
50% half year and 0% half the year would be 25% annually.
Try visiting someplace like Iceland in June. Solar panels would produce almost 24 hours a day.
Sweden? Hold back hydro and go solar for months.
2) You’re confusing what the market will pay when there are multiple and adequate choices and when there are not.
When it comes time to cover the last 30%, 20%, 10%, 1% the utility has to pay more.
Be it a gas, wind, solar, or coal plant, the supplier cannot sell all they can produce with their plant/farm. They build a plant that can fill the utility need but the utility won’t purchase from them except for a few days a year.
They then demand a higher price for what the market wants to buy in order to recoup their costs and make a reasonable profit on smaller volume sales.
From here “One other thing since we’ve drifted off-topic: demand response sucks” on down.
Does it really matter how much renewable energy people use as long as they pay for it?
Yes, there is a problem during the transition off fossil fuels as over consumption would slow the transition, but once we’re off fossil fuels….
How we incentivize people to use less power when supply it tight is something we’ll evolve over time. I suspect most would would involve giving, for example, EV drivers a very sweet per kWh rate if they allow the utility to switch charging on and off.
8c/kWh if you charge between 12 AM and 5 AM.
2c/kWh if you allow the utility to pick the minutes between 12 AM and 5 AM.
But past that we may find it most economic to pay some large consumers (pulp mills, aluminum smelters) to shut down on a few very hot days of the year. Why build generation to keep them up that would be used only “6” afternoons a year? Better to give the employees a paid day off and pay the owners for their lost profit.
I get your drift. The ridiculous swings are more a fact of the massive changes in demand winter/summer than of generation source. Northern latitudes are an example of how energy mixes and solutions modify to accommodate different situations.
Sweden and Norway have excess hydro. I wonder how much other renewables they actually need to add since they are already exporting.
They get wind imports from Denmark which peak in the Winter. Denmark is starting to overflow wind. That will continue as Denmark reaches its 100% renewables goal. There are some wind turbines in Sweden.
I don’t really see any problem in having solar prices fall as they meet the energy need during summer. Its balanced against how low solar panel prices can fall, and they have really sunk hard and fast. IMO, between wind solar and hydro, Scandinavia is in no big difficulty.
You will be interested to find out that in the US, with its better solar insolation, and based on 2010 technology, NREL found that 35% wind and 15% solar would do the job of 80% renewables by 2050.
http://cleantechnica.com/2015/04/13/80-renewables-by-2050-in-us-says-nrel/
Scandinavia with its rich hydro resources can do much better than that.
I’m sorry but shouldn’t you be trying to stop direct and indirect fossil fuel subsidies first. And then add their external to the cost, so the market does go in the correct direction. Does anyone else get tired of, we done enough for RE and the environment time to go back to support of friend coal, NG, oil, and nuclear. They are cheaper because we don’t include their health cost, or environment impact, or that they are going to make the plant unlivable. The important thing is PTB are making a lot of money on them. In US health care cost alone would push cost of coal electric up 3x-5x, yet not one of the “let the market save us” are campaign to reduce fossil fuel government support.
Do you really care so little for future generation that you want to campaign to kill them? Fine you say freak the future, what about the millions that die early already, or all the lost work days?
Exactly. You can expect frackers and coal producers to fight, and deny, their massive pollution of America. Because their Profit comes before Your Health.
They are also cheaper because they are already here (no amortization).
They’re cheaper because the coal industry deposits their coal ash toxic dumps next to rivers, and wait for rain. The coal mercury polluting Americans who eat fish, that’s a “negative externality” they don’t pay.
But really, coal was put out of business by the US Tax Code that made the American Tax Payer pay for drilling, which drove the cost of natural gas down, but leads to the next “negative externality” they won’t pay for. Polluted fresh water. In a time of global drought, to pollute your own fresh water instead of switching to solar. That’s what happens when government is allowed to be bought by Corporate.
Just talked to a friend day before yesterday that told me that his company has a ton of work building landfills for the fly ash, and if it isn’t done by 2016 or 17 the EPA is going to require very expensive monitoring, so this is in transition, but that is exactly what they were doing , and it is outrageous that it was legal to do so.
Yes, but even if you’d left out the externalities, new coal power plants wouldn’t be built, because they are too expensive compared to the alternatives.
F That. Oil and Natural Gas Enjoy 1000 Times more in Tax Code Treatment then Wind and Solar. There’s no damn Level Playing Field where Solar and Wind tax advantages Leave the Market First.
This is OUTRAGEOUS.
If Solar/Wind was awarded the same level of tax breaks/subsidies etc that FF gets, the price of electricity would probably be negative for the whole day.
That is an idea whose time has come. FF really would be screwed then and their cronies wouldn’t be able to do a damn thing to stop it without looking like complete hypocrites.
It’s not about the look. It’s the money. First energy has a proposal in front of the PUCO called the retail rate Stability Rider. Goes like this: They produce as much juice from Sammis, a 50 year old. coal plant and Davis Besse, a 38 yea old nuke as they can, sell it into the PJM grid for whatever they can get for it for the next 15 years, then add up their costs plus a modest profit, take the difference, and add it to everybody’s bill who has electric service even if they chose a different supplier like me(100% wind power). If they get away with this sh!t then it won’t make any difference to them what renewables cost. They are guaranteed to make money while keeping renewables off the grid. Maddening, no? You can Google it if you like. It’s on like page 6 of the very first filing on the PUCO site.
Thats the PUC code. Not just PUCO. They have to give a guaranteed rate of return if they approve capital expenditure.
It screws conservation and demand management. No payback, because not enough capital spending for them. With solar and wind, the utilities can put capital spending and get a payback. Rooftop solar, not. But even still, they want to defend existing capital expenditures.
Read stranded assets. The utilities idea of monopoly is corporate profit, public loss.
The paradigm is failing.
We lost when we made a utility public monopoly system, and even worse when we deregulated it and made it semi private.
The worst of both worlds.
Yes. A picture worth, well at least 40 words…
http://c1cleantechnicacom.wpengine.netdna-cdn.com/files/2012/07/fossil-fuel-subsidies-490×407.jpg
Terrific report, thanks!
”
Solar PV Is Unstoppable, And Subsidies Can Be Removed Sooner Than Thought”
And why in the world would we want to remove subsidies for solar?
Why would anyone think that is a proper thing to do in our situation?
The time to remove subsidies for green energy is when all our energy generation is green, and [CO2] is at 200 ppm.
Subsidies for Small and Micro hydro ended years ago. Today’s 30 % federal tax break for residential renewable energy does not include Micro hydro although the market offers many types of equipment. The government loves to pick the winners and losers. Micro hydro loses because of lack of government support compounded with strangling regulations and high permitting costs. Regulation may be coming for solar too, not everyone likes where solar farms are being sited and as solar capacity increases FERC may need to start regulating sites as it does now for even the smallest Micro hydro.
All renewables should be supported equally but this has not been the government policy. In some states, like Massachusetts, solar is over subsidized to the point where developers are making huge profits at taxpayer /ratepayer expense. Weren’t the subsidies supposed to make renewables just more affordable ?
I believe that excessive subsidies should be dialed down for all energy sources letting the actual cost of these sources be exposed. Solar has been around for many decades and it is time for it to start “standing on its own feet” and get weaned off the government crutch. Hopefully government action for solar won’t follow what they did to hydro. Solar PV is an important resource and provides citizens without access to water ( or wind) with independence.
Taking away all subsidies and adding externalities to FF generation would be the most efficient way to go, because to the extent that removing subsidies raises prices, it encourages energy efficiency. And wind and solar are cheap, and getting cheaper, so it would be good for the overall economy. Obviously, coal companies would suffer, but they will just need to find other work.
I don’t know that wind and solar PV are cheap, since both of these are so heavily subsidized in ways that we don’t even know of. Solar, wind, and hydro do offer the advantage of zero fuel costs once constructed.
They offer the advantage that they won’t destroy civilization as we know it. It matters not how much we over-subsidize it, so long as we build it on a time-scale that prevents disaster.
Regardless of how much we spend, it will still be the best ROI in the history of mankind. So much so in fact, that it is a very stupid idea to leave the construction to the (so-called) free market.
how about this plan: the government buys millions of solar PV panels and inverters ( maybe even batteries) at a great quantity price. These panels are then GIVEN to citizens with priority given to rooftop, parking lot, etc sites. The only free market would be with the installers.
Wouldn’t this be the least cost, fastest way, to get this done ??
….and for my predictable comment: the same offer should be available for small wind and Micro hydro
What is the difference between the federal government directly buying millions of PV panels and supporting a subsidy of others to do so while directing various government agencies to buy them?
Little.
I was thinking that there would be a lower unit cost if one agency made one huge quantity buy. The more people / agencies involved would not help efficient procurement.
Logical. Just like single payer health care. The Republicans decimated it. Seems like their plan to cripple any useful change with idiotic alterations.
They start calling it socialism and trot out the every man for himself libertarian canard.
In the height of irony, Trump is supporting single payer healthcare over ACA.
That is what Obama pushed originally, but the Republicans torpedoed.
But the administration is doing what it can with agency buys from the Defense Department and others.
Works in China, maybe. Not so well here. You need to change government. There might not be that much time. But it may come to it if things get bad enough.
” since both of these are so heavily subsidized in ways that we don’t even know of.”
Bullshit.
You working on your trolling merit badge?
….What do you call no state sales tax, no state property tax, 30% federal tax credit, and solar REC’s at $400-$500 per 1000 kWh ??? Looks like alot of $ give-away here to me
I call it partially leveling the playing field.
We’ve pumped at least $156 billion into nuclear energy subsidies and we spend between $140 to $252 billion per year paying for the health impact of coal.
When we stop using taxpayer money to support nuclear and coal then let’s talk about the relatively small amount of assistance wind and solar get. You’re bitching about the crumbs the servant boy gets when the ‘little lord’ is being fed foie gras and caviar.
so the government’s answer is to not take back these subsidies from nukes and coal yet pump more public money into wind and solar……..sounds like business as usual using public money to promote chosen private businesses. So now we are getting fleeced by big money solar just like we are getting fleeced by big money FF.
Look at Roger Lambert’s plan ( above) . It has merit
I try to be realistic.
The fossil fuel industry has too much political power to permit removing its taxpayer support at this point in time.
Lambert’s plan is to keep renewable subsidies in place.
“The time to remove subsidies for green energy is when all our energy generation is green, and [CO2] is at 200 ppm.”
I think we should do that and/or put a price on carbon. I don’t think either likely at the federal level until we get Republicans out of power.
I think what will happen is that federal subsidies for onshore wind and solar will disappear before 2020. Sometime after 2020 the general public may become concerned enough about climate change to demand that support for fossil fuels be removed and/or renewables once more subsidized. Or that wind and solar will both drop below 2c/kWh and utilities will start dumping coal and NG use simply to save money.
Yes, I think you got it right….FF industry has too much political power and the general public isn’t concerned. Look what happened to Prius and high mileage car sales as well as pickup truck and SUV sales when the price of gas fell. I don’t think there are enough of us out there that give a dam
I share your sentiment. DId you notice that California started a cap and trade recently? As California goes….
The Federal Government is usually the last to respond. Put your effort into local first. It pays off better. Then you can get the feds to go along. Like everyone else, they hate to get caught being old fashioned. Its just that they don’t wake up to it until its apparent to everyone else that they are lagging.
Speaking loosely and figuratively.
Not even close. The governments answer is perversely wrong.
Oil and gas still get massive subsidies,
But subsidies for wind and solar are eliminated.
Thats cuckoo.
There is a bill in Congress that notices that subsidies are going away for wind and solar, but oil and gas still get Master Limited Partnerships.
A level playing field demands they both get that.
It would be a safe bet it never passes.
http://www.coons.senate.gov/issues/master-limited-partnerships-parity-act
Yes, Nicely poetic. Would be nice if justice was also.
Uh. You SPECIFICALLY said: “… in ways that we don’t even know of…”.
And then you list things that we know full well. Strawman much?
…..Uh exactly. I listed what is kinown, do you know all the monies pumped into FF for instance ?? Are the solar PV silica mines allowed depreciation allowances like the drilling industry ? Are the solar panel factories and wind generator factories given special tax advantages ? Is DOE or other government grant money or loan guarantees ( remember Solyndra ) paid to renewable energy businesses ?? Etc,etc,etc
“That we know of” makes it sound conspiratorial. Its not as if you can’t look up studies documenting these. Now if you have a bone to pick with a well done study, thats fine.
But casting aspersions in a semi conspiratorial way is no way to inform and educate.
If you want to find out, and most people don’t, because its fairly dry and a big task, you have some reading to do.
But I can save you some trouble,
“claims that American federal government support for the oil industry is five times the amount for renewables power annually; support for nuclear power was twice the commitment to renewables. ”
“Over the lifetime of oil, coal and nuclear, government subsidies have been exponentially higher cumulatively than they have been for the nascent renewables sector. As a percentage of the federal budget, subsidies for oil and gas have always been at least 25% more than the support for renewables, and at times as much as 10 times more.”
“Its almost surprising that renewables have done as well as they have done,” Pfund said.
“She urged government regulators to keep tax subsidies in place to help the market grow. A disruption will undoubtedly “disrupt the cycle of innovation,” she said. “The stop-start nature” of government incentives is also putting private sector investment at risk, she said.”
http://breakingenergy.com/2011/12/20/dbl-investors-oil-subsidies-far-higher-than-federal-renewables/
http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf
OK
First of all, this article should have been titled ” Renewable Energy ( not just solar PV) is unstoppable” and should have dealt with ALL renewables and their steady advance.
Second, I’m tired of hearing about the minor support given to ( some) renewables compared to FF. What the government did with FF support is obscenely wrong. How hydro is treated by the government is also obscenely wrong. Does the solar PV and wind renewable community feel entitled to the same obscenity given to FF or will it stand on it’s own merits and demonstrate it’s (obvious) advantages over FF. Tell your Legislators to start reducing that FF support. Level the field by FF divestment or a carbon fee or de-subsidizing FF. Going for equal money is the wrong approach.
Lastly, as renewables go, there is definitely disproportunate support for solar PV, at least where I live. I get 3 to 5 calls a day from solar businesses pushing their plans. No calls from the wind folks. No business can maintain this level of promotion unless they are making big money. And they are making big money from the pricey Massachusetts solar REC’s. Also agencies and environmental groups have done studies on the (yes, impressive) true value of solar PV. No one that I know of has done one for wind (or hydro for that matter). I wonder what the true value of a consistant, 24/7 renewable energy source that generates 5 times more energy than solar PV for the same rated capacity, costs less than solar PV and is designed to last 50 to 100 years would be.
You are not paying attention to the graph comparing FF to renewables or to the fact that the ITC an PTC are scheduled to disappear or to the fact there essentially was no PTC last year or to the fact that the PTC has been on and off for many years.
That means your statement,,
” Does the solar PV and wind renewable community feel entitled to the same obscenity given to FF”
make any sense given the fact that spotty renewable subsidies have only been a tiny fraction of what FF subsidies have been and continue to be.
Neither does “stand on their own” make any sense given FF continued subsidy.
You cannot expect them to stand on their own on an unlevel playing field.
If oil and gas subsidies go away, then you can ask for renewables to drop their subsidy. Not until then.
No one is asking for such mega dollars. A simple 5 year extension tapering off on the ITC and PTC would do just fine.
And it would also be nice if renewables got the same tax considerations oil and gas get with Master Limited Partnerships to level the playing field..
There is a bill in Congress to do that. I bet big oil kills it.
But you are way off base, because not only is the playing field not level, renewables have been utterly screwed on support.
The meme that renewables are sucking up tax dollars is a lie.
The very little money put into them is returning benefits and increasing renewables growth while lowering cost.
The same cannot be said of FF or nuclear.
That makes renewables a bargain.
I don’t think the the government is interested in a level playing field. I suspect that within the FF world the coal guys think that they are being “utterly screwed” and that coal producing regions are government “sacrifice zones” since natural gas has gained prominence. Within government renewables support, do you think it was merely an oversight that residential hydro was not included in the ITC ?…..talk about an unlevel playing field !
I would think the subsidies for FF would be different than to renewables because FF plants need an ongoing, continuous supply of variable cost fuel. Renewables though have the cost of material and installation but after those are paid off every kilowatt thereafter is free for the life of the equipment……an aspect that should have great appeal to private investors
There is absolutely no justification for oil and coal to think they deserve subsidies.
None.
oil and coal for electrical generation are seeing their last days.Oil though is still “the” fuel for transportation. Our military, construction, agriculture, ships, railroads, trucks, etc have no short term alternative to petroleum. Subsidies will be around for awhile to ensure an adequate, consistent supply. Oil drilling is still a risky business and unless the government chooses to nationalize oil exploration, drilling, refining, etc then subsidies should be used as necessary to mitigate the risk.
Do you want gas lines like we saw in the late 1970’s – early 1980’s ? Back then we were told that the world is running out of oil ………a claim that has yet to materialize. Either they were lying about the supply or maybe the subsidies provided for expanded exploration and technological advances like directional drilling , and yes, hydraulic fracturing.
You paint an unrealistic picture. There are no gas lines.
We are in a supply limited market. That does not mean demand exceeds supply. It means we can have more oil than we want at high prices.
And it means our demand has dwindled since we can’t pay for it.
FF are running out and getting ever more expensive, despite the recent volatility. They are not going back to pre 2004 levels, ever. That reality is sinking in, since it has lasted more than a decade.
We have already reached peak conventional oil physically and economically. There are less new wells discovered to replace old ones tapping out.
http://cdn2.hubspot.net/hub/88935/file-15964198-png/images/peak-oil-growing-gap-between-discoveries-and-production.png?t=1441747622784&width=455&height=280
In the real world market, the depletion of oil has already caused recession.
Expensive, unconventional oil, is the only thing we have to replace conventional. And its failing. Oilco capes is mounting. The economic pinch is besetting the oilcos gambling and losing on Arctic oil, shale, and tar sands.
Its more good money after bad. And there will be fallout.
The best way we can respond is to make our energy independent of FF price volatility as soon as possible.
Subsidies for FF only delay the pain and extend the problem, wasting dollars that could be spent on renewables and EVs.
It is hard to envision military, heavy duty trucking, agriculture, aviation all running on batteries………..but I guess it could happen
Long distance trucking could be done right now with battery swapping ~every 200 miles.
Lots of ag jobs could be done with battery swapping.
Flying is happening with batteries, but not large planes. It would be theoretically possible to power passenger planes with lithium batteries but there is no guarantee when or if we’ll reach high enough capacity numbers.
Its not going to happen all at once and batteries will not replace everything. Some things will run better on liquid synthetic fuels for one. And petroleum will not just disappear. Its use will reduce greatly compared to today rather than disappearing altogether. It will become too expensive to use the way we do today.
A long, great, and interesting discussion on the energy transition.
https://daryanenergyblog.wordpress.com/future_energy/
Interesting reading, thanks
Do your pseudonym some justice. Research a little, weave conspiracy less.
It is intellectually dishonest to summon up straw men to support your opinions. Keep to the facts.
neither you nor I know the facts on wind and solar funding support, or even FF for that matter……and we likely never will. Of course you are welcomed to add to the list of known items other that what I denoted.
We have pretty good data on the installed cost of various electricity producers. The subsidies you list have an impact on what they sell for, not on what it costs to install.
Well Bob can you tell me of the installed cost of Micro hydro. If you know please tell me. The two experienced Engineering firms I dealt with were just about equal money up to the point of costing the permitting…..then it was anyone’s guess on the permitting time and cost. OK, to be honest one did offer from $50,000 to $400,000 from historical data. This is for a 10 kW to 100 kW, run of river, former hydro site with existing dam.
The cost of micro-hydro? I have no idea what it is today. I haven’t priced out a micro-hydro system for over a decade. Everyone around here that has hydro potential has already developed it.
Do mean smaller run of the river hydro? If so, a couple of sites were just sold. Locks on the Ohio. You can look up the selling price and get some idea.
The thing with hydro prices is that it is so site specific one can just pull up a number like they can with, say, installed solar.
Basically I’d guess that the price of new hydro is not too good. Otherwise we’d be hearing about a bunch of new projects rather than the odd one here and there.
Ok. Lets compare.
During the first 15 years of subsidies life for solar, nuclear, and oil,
we spent 0.5% of federal budget on oil and gas
we spent 1% of federal budget on nuclear
we spent 0.1% on renewables.
http://nexus.som.yale.edu/qn/sites/default/files/Energy%20Graph%202g.jpg
http://c1cleantechnicacom.wpengine.netdna-cdn.com/files/2011/09/historical-energy-subsidies.png
http://c1cleantechnicacom.wpengine.netdna-cdn.com/files/2011/09/comparative-energy-subsidy-trends.gif
Hands down. Oil and gas the big glutton. Nuclear challenging. Renewables, sorry you’re out of luck.
Looks like a lot of giveaway to me, too. But not to renewables.
To oil and gas.
You seem to have it upside down.
We would have to drop all subsidies to oil, gas, and nuclear before we would even notice renewables.
It makes little sense to cut renewables spending. It hardly even compares.
Huh? The PTC and the ITC. Some European countries had a fit. The things we didn’t even know of are all the different costs caused by the mining, air pollution, and the disposal of the ash, though the EPA does have new rules that are being implemented now for the ash.
I could not disagree with you more. This is not a situation where renewables must “stand on their own”. This is not a standard textbook economic issue at all. This is an issue of survival. And, it is an issue of timing – we have a strict timetable to accomplish an enormous amount of infrastructure construction in time.
If you are concerned that too many developers are making too much profit, then I propose something that should make you and me both happy – the development of our renewable energy future should not continue to be a laissez-faire process, but instead should be a Federalized commons project organized through the Department of Energy (this sort of thing is. after all, their fracking mission) whose goal should be a completely new Federal 100% renewable energy system, complete with a shiny new smart grid. If a homeowner can expect to enjoy basically free electricity after his capital investment is payed off, so should a country.
You get no profiteering, the rest of us solve AGW in a time frame that saves civilization as we know it. Guess what it would cost? About 5 years worth of fossil fuel spending for the U.S. Peanuts.
I like your plan. Now how do you get government to actually help it’s CITIZENS and not just another “business as usual” ploy to promote selected business’ success by using public money…..like what the FF guys have been enjoying for years.
I think your plan can work if we as responsible citizens demand that our elected representatives follow this directive and watch that they are not swayed by outside special interests .
And we better do this soon, Sarah Palin wants to dump the DOE !
The government is picking…. good so far… winners and losers.
Not so good. It involves a lot of implications and clouds the issues.
Some government support is good, some is bad and in between.
What the government picks is who it hands out subsidies, etc. to.
What we have right now is a declaration to remove all subsidies for solar and wind, and keep them for 100 year old, oil, coal, and gas.
IMO, all subsidies for oil coal, and gas should be removed first.
I think we have had enough time to figure out if they could make it without government support.
there is no point to remove solar and wind subsidies before the electricity markets have been redisigned to support rational wind and solar pricing. Today the price of electricity is determined by the marginal cost of electricty. The problem is that the marginal cost of wind and solar (and batteries) is near zero, therefore marginal based electricity pricing does not make any sense.
However, smart grid allows to have individual prices for each power generation unit and for each customer. Also smart grid allows huge temporary over-production of electricity in the grid without negative electricity prices, because surplus electricity can be directed to batteries and other dispatchable energy intensive loads, such as Power-to-Gas and vertical farming.
Good idea is that the average price of electricity for the customer is determined by how deep demand management industrial or household customer can reach. E.g. if charging of electric car is timed for off-peak hours, then household can have considerable savings in electricity bills. Likewice, if company invests on battery storage it can sell demand management services for the grid operator, while having storage for solar and UPS-system as a by-product.
“Today the price of electricity is determined by the marginal cost of
electricty. The problem is that the marginal cost of wind and solar (and
batteries) is near zero, therefore marginal based electricity pricing
does not make any sense.”
Or it means that electricity should be priced at or near zero! If the citizens own the system, they should enjoy the same economics as a homeowner.
Meanwhile, essentially free electricity would mean fossil fuels become irrelevant. No need to regulate or tax carbon – it will disappear on its own as it is priced out of existence.
We need to stop thinking about our power grid through the glasses of a 20th century fossil fuel consumer. If we build the system we all know we need, electricity could be provided without fee. After all, sun, wind, and tide are not only free, but in endless supply. We really need not be concerned, within reasonable degree, of being overly profligate – energy use will not be something to feel guilty or parsimonious about. Our quality of life will be improved, not decline as the fossil fuel propagandists insist.
“electricity could be provided without fee”
That’s a bit over the top. New wind and solar may drop to 3 cents/kWh or a bit less. Maintenance/opex on a paid off wind or solar facility can run 1 cent. Storage/backup to make them 24/365 will cost something. Distribution now costs about 5 cents. Those are likely unavoidable costs which will need to be covered.
The cost of distribution of electricity actually can be significantly cut by battery storage and smart grid. Although it is probable that the cost of battery systems will keep the system level price of electricity moderately high at least for the next 20 years.
But there is a way go around this. That is, if the user of electricity can do significant amounts of demand management and utilize efficiently the surplus production of intermittent renewables, then the unit cost of electricity per kWh may drop dramatically. But the drawback is that there is no cheap electricity available 24/7.
Above I mentioned vertical farming as an example that can do almost 100 % demand management that the electricity demand is allocated when there is surplus production of solar and wind in the grid. Therefore it is likely that for these kinds of customers that can do full demand management, electricity can be essentially free.
I’m not buying your “essentially free” claim. Not at all. How about you flesh it out for us?
How do we generate electricity for almost nothing?
How do we make it available 24/365 for almost nothing?
How do we move it from source to consumer for almost nothing?
Bob, you failed to understand my point. The point is that there is about 8800 hours in a year, but with wind and solar there should be about 2000-3000 hours when electricity is essentially free, because wind and solar must be optimized for hours when conditions are less than optimal. Therefore, if company can take advantage of utilizing this surplus electricity, then the electricity bill per MWh considerably cheaper and even essentially free.
For those who cannot do full demand management, electricity is naturally more expensive.
That also means that factories need to be redesigned that they can take full advantage of intermittent cheap electricity.
Ah, the old “The utility will donate their surplus electricity to us for free” argument. Got it.
Here’s the thing. We probably will “overbuild wind and solar to some extent simply because it will be, at times, cheaper than using stored power.
But 2,000-3,000 hours? 2,000 hours is 5.5 hours per day. I suspect that is way, way over the top.
More likely we’ll have some overproduction in the spring and fall when demand for heat/AC is low.
Running a factory a few hours a day, some days of the week, a few months of the year? Do you think someone will build enough capacity to pump out a year’s worth of product in “spurts” and staff it with “on call” workers?
no, for example In finland we have average electricity consumption about 8 GW (today). And the plan to go 100 % renewable energy requires about 44 GW wind power and about 30 GW solar power. You can easily see that there is probably more than 2000 hours of surplusproduction of electricity!
Most of the surplus renewable power is directed to Power-to-Gas process that requires that the cost of electricity must be very low in order to compete with fossil oil and commercial P2G process requires about 2000 hours to be economically viable, in addition to very cheap electricity.
Wind power needs to be installed according its median power. That means that if the average electricity demand is about 8 GW, then it is required about 25 to 35 GW installed wind power to satisfy that demand for more than 4400 hours in a year.
Therefore huge surplus power of wind and solar is always there. And we need a lot of long term storage, such as power-to-Gas or power-to-liquid (Synthetic Jet Fuel).
” about 44 GW wind power and about 30 GW solar power. You can easily see that there is probably more than 2000 hours of surplus production of electricity”
I can’t “see” that because I don’t know the CF factors. Looking at the 8/44/30 it looks like a lot of overbuilding but those numbers are not enough all by themselves.
And they tell us nothing about the regularity of ‘surplus’. Does it come infrequently in very large amounts? If so, then there would need a very large investment in synfuel factories which would sit idle much of the time.
Do you have access to an actual study that says using overbuild for fuel production makes financial sense?
Yes I have reference, but it is written in Finnish. But here is English summary:
http://www.lut.fi/web/en/news/-/asset_publisher/lGh4SAywhcPu/content/fully-renewable-energy-system-is-economically-viable-in-finland-in-2050
In general, Power-to-Gas is economically viable if we have more than 2000 full capacity working hours, or about 25 % capacity factor.
But that cited study might already be outdated, as there is very interesting idea to use geothermal heat for district heating in Finland. This could drastically reduce the need of biomass for heating, what was assumed in that study.
For solar panels capacity factor is less than 10 in Finland and for wind power it is about 30 %. Also note that this assumes that 100 % transportation is electrified or runs on synthetic fuel. Therefore electricity demand will considerably be increased by 2050.
But in general, we just cannot go to 100 % wind and solar without drastically overbuilding capacity. Also on high winds, it will probably make more sense to curtail surpluss wind power than to try to store all power produced.
“If we build the system we all know we need, electricity could be provided without fee.”
This is seriously misguided economics.
All systems wear out. They all have an initial cost. Even if there were zero maintenance and fuel costs, it would not be free. The only forever part of it is the sun.
That initial cost must be paid. Its not free.
He’s thinking taxes I guess…
After all fuel taxes will dry out some day….we might replace that with some other tax.
Call me an engineer. Tiny maybe. But zero is like infinity. Doesn’t exist in the real world.
It is not perhaps free, but too cheap to meter, is traditionally the correct word. This has been tried before but technology was not ready yet, but perhaps this time it is different.
The cost will be much lower. Anything with zero cost will spur infinite demand – and waste.
thera are no infinities in the nature. In Germany the price of electricity is from time to time negative and even that does not motivate people to consume electricity.
the problem today is that although marginal cost is near zero. Capital costs are more than zero. But capital costs are getting down rapidly.
The cost of vertical farming is ~13€/kg.
Don’t think there will be much dispatchable vertical farming around even in 2030…
solar and wind and smart grid will cut the price of electricity to around 10 % from today’s standards. This also pushes the cost of Vertical farming down below 2 euros per kg. Even further cost efficiency gains are possible.
So, indeed if we put any price tag for the natural and carbon value of pristine forests, then there will be huge amounts of vertical farming in 2030’s!
Why should solar subsidies be stopped when oil, gas, coal and nuclear subsidies continue? We need to either stop all subsidies or keep subsidies for all forms of energy…or…I wouldn’t be opposed to renewable subsidies without dirty energy subsidies due to the hidden costs of dirty energy.