Renewables Beat Coal In US, Surpass Gas For First Time In Europe
The renewable energy juggernaut is gathering strength in virtually every nation on Earth. There are two reports out this week that highlight the extent to which renewables are outperforming coal in the US and methane gas in Europe by almost every metric, especially cost. Not everyone is happy to see the changes being made, however. Here’s a roundup of the latest renewables news this week.
US Renewables Beat Coal in 99% Of The Time
A report by Energy Innovation dated January 29, 2023 claims “99 percent of the existing U.S. coal fleet is more expensive to run compared to replacement by new solar or wind. Replacing coal plants with local wind and solar would also save enough to finance nearly 150 gigawatts of four-hour battery storage — 60 percent of the coal fleet’s capacity.
“This research shows all but one of America’s 210 coal plants are more expensive to operate than either new wind or new solar. If the IRA’s new energy community tax credit is included in the equation, 199 of the 210 plants are more expensive to operate comparedvto local solar resources sited within 45 kilometers of the plant. Local wind resources are also cost effective and readily available, with 104 plants having cheaper wind resources within 45 kilometers.
“Altogether, 205 plants have local renewable options that would be cheaper than coal-fired electricity. This potential to replace existing coal plants with cheap, local clean energy generation creates significant economic benefits for community transition. Our analysis finds replacing these plants with local solar or wind would drive $589 billion in local capital investment that could support economic diversification, job creation, and tax revenue.sited within 45 kilometers of the plant. Local wind resources are also costeffective and readily available, with 104 plants having cheaper wind resources within 45 kilometers.
“These local wind and solar resources could also help solve the problem of long interconnection queues — a significant barrier to renewables deployment. Renewable projects built near a retiring coal plant could use the existing plant’s interconnection, helping to further lower costs. If more policymakers consider this dynamic, they can streamline economic replacement and anticipate coal retirements, which are accelerating due to the cost dynamics analyzed in this report.”
Michelle Solomon, a policy analyst at Energy Innovation, tells The Guardian, “Coal is unequivocally more expensive than wind and solar resources. It’s just no longer cost competitive with renewables. This report certainly challenges the narrative that coal is here to stay.”
Not everyone agrees. Coal lobbyists in particular would like to see their fat salaries continue for a while longer. Last November, Rich Nolan, president of the National Mining Association, told The Guardian, “Forcing essential coal capacity off the grid — without reliable alternatives and the infrastructure to support them — will only deepen reliability and economic challenges. Look to our friends in Europe, who blindly rushed to close coal plants at a rapid pace and are now working from Germany to Denmark to bring those same plants back online. The global energy crisis is real and imposing costly burdens on people around the world and here at home, taking deliberate steps to intensify that crisis is reckless and unthinkable.”
James Stock, an economist at Harvard University who was not involved in the Energy Innovation report, said the analysis “rings true” and that coal is no longer economically competitive. “We can’t shutter all these plants tomorrow. We need to do it in an orderly fashion to support grid reliability but we should be able to do it in fairly fast order. Coal has been on a natural decline due to economics and those economics are going to continue. This is a transition that’s just going to happen.
“We built a lot of coal plants in the US around 50 years ago because we were worried about energy security in the world. That made sense at the time and they made an important contribution. But we know a lot more now about climate change, so now we need to make different decisions.”
Renewables Surpass Methane Gas In Europe
Also this week, energy think tank Ember published a study that indicates wind and solar produced 22% of the EU’s electricity in 2022, while methane gas generated only 20%. It says the rise in renewables helped to avoid €10 billion ($10.89 billion) in costs for methane gas. The use of coal, the most carbon-intense fossil fuel, rose by 1.5% over the year to generate 16% of European electricity — but this rise was short-lived, with thermal coal generation dropping markedly in the latter part of the year.
The largest increase in terms of renewables was seen in solar, which surged by 24% to add 39 terawatt hours of renewable electricity compared to 2021. No less than 20 EU nations achieved a record share of solar generation. Overall, 2022 saw electricity demand decline by 7.9% in the last quarter of 2022, attributable to warmer weather, affordability concerns, and energy saving behavior among Europeans because of Russia’s war crimes in Ukraine. Ember forecast the carbon intensity of EU electricity to fall a further 20% in 2023 as nuclear power stations come back online and wind and solar deployments continue.
“Europe’s clean power transition emerges from this crisis stronger than ever,” Dave Jones, Ember’s head of data insights, tells Forbes. “Not only are European countries still committed to phasing out coal, they are now striving to phase out gas as well. The energy crisis has undoubtedly sped up Europe’s electricity transition. Europe is hurtling towards a clean, electrified economy and this will be on full display in 2023,” Jones added. “Change is coming fast, and everyone needs to be ready for it.”
Ember noted that the first two weeks of 2023 alone had seen a 29% fall in the use of fossil fuel generation. Coal and gas use are expected to fall further over the year. The analysts found the EU used only a third of the 22 million tons of extra coal it imported to hedge against factors such as nuclear reactor closures and the cut off of methane gas supplies from Russia.
“The increased focus on energy security as a result of the Russia-Ukraine war has the potential to accelerate the energy transition as countries seek to increase access to domestically produced energy, much of which is likely to come from renewables and other non-fossil fuels,” said BP’s chief economist, Spencer Dale. BP says Russia’s criminal invasion of Ukraine had “permanently dented fossil fuel demand.” Frans Timmermans, executive vice president for the European Commission’s European Green Deal, said recently, “We are seeing a remarkable acceleration in the pace with which renewable energy is being built. It’s clear that European citizens want to benefit from cheap, clean energy.”
Obstacles To The Rise Of Renewables
Long transmission lines are one issue for renewable projects but there is always the shadow of NIMBY lurking close by. Rural residents don’t like to see their farmland desecrated so those pinheads in the city can run their air conditioners or charge their electric cars. In Iowa, a bill has been introduced in the state senate that would prohibit any utility scale solar installations that are less than 1250 feet from an adjoining residence or livestock farm. According to the Iowa Gazette, some landowners don’t like to see solar panels and worry that tornadoes could blow debris onto their property.
Opponents of the bill say the setback requirement of almost a quarter mile from a neighboring residence or livestock facility would be a “project killer” and put a huge limit on the amount of space energy companies and landowners have to work with. “The larger you make that distance, that means the more farmland we actually have to go out and try to work on, because you’re taking that farmland by the homeowner, by the livestock facility out of use. We’ve got to go acquire that someplace else, that means ultimately you’re raising the cost,” said Christopher Rants, a lobbyist for the Iowa Solar Energy Trade Association and NextEra Energy.
Something else that is raising the cost of renewables in America is that hundreds of shipments of solar panels manufactured in the Xinjiang region of China have been seized by US Customs officials pursuant to the Uyghur Forced Labor Protection Act that went into effect last June. That law presumes all goods from Xinjiang are made with forced labor and permits imports only if producers prove otherwise by showing sourcing documentation of equipment back to the raw material stage.
Shortages always lead to higher prices. Reuters reports that US solar energy contract prices have increased by a third over 2021 as project developers struggle to get imported panels, according to a report by LevelTen Energy. The supply chain constraints have put a damper on the benefits for solar developers provided by the Inflation Reduction Act that went into effect last August. “Those delays and access to that equipment is introducing significant amounts of uncertainty on timelines, and therefore PPA prices are going up to cover that risk,” LevelTen Senior Director of Developer Services Gia Clark told Reuters in an interview. Clark added that demand was still strong for solar projects and that prices might stabilize in the second half of 2023.
The Takeaway
The news for renewables is not uniformly positive, but it is pretty darn good. Europe in particular has taken the lemons given to it by Russia’s lunatic leader and made clean energy lemonade. Things are never going back to the way they were, with Russia shipping billions of low cost methane gas to Europe to subsidize its war machine. In the US, demand for renewables remains strong and the IRA is encouraging massive new investments in solar panel production in America.
Is progress as fast as we might like? No, it never is, but the trend is clear. Our grandchildren will live in a world where electricity comes from renewables, not from burning fossil fuels. Now the only question is whether the transition will happen fast enough to slow the rise of average global temperatures so humans can continue to enjoy our very unique planet. That is far from certain.
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