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Why did renewables become so cheap so fast?

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Re: Why did renewables become so cheap so fast?

#91

Post by renewiltord »

dmurray wrote: post #89
hangonhn wrote: post #64

Earlier quoted context omitted.

The Germans had this really clever scheme where they tied the price they pay for solar power to the price from fossil fueled power. That really incentivized people to create more efficient solar and thus increase their profit margins.

Isn't that very close to how a normal electricity marketplace would work? The consumer mostly doesn't care if they got their electricity from renewables or not, so they pay the same price.

No, a normal electricity marketplace would eat up the profits from getting more efficient renewables.

e.g. If fossil is $4/kW and wind is $2/kW then normal market buys all the wind at $2/kW. Here, government will pay $2/kW premium on the wind. That means every cost gain on wind goes to the provider.

Re: Why did renewables become so cheap so fast?

#92

Post by konjin »

By ignoring most costs.

Saying renewables are cheap when it's sunny or windy is like saying coal is cheap at the mine.

For some reason people realize that distance in space is a problem. But distance in time is something that we can't wrap our heads around.

It would cost trillions to build up enough storage capacity in the grid to time shift the power needed, or to build a grid capable of moving power between regions on the scale of continents.

Re: Why did renewables become so cheap so fast?

#93

Post by WalterBright »

throwaway201103 wrote: post #80
WalterBright wrote: post #72

Earlier quoted context omitted.

We already have cheap "batteries" in our homes. Run the electric water heater when the power is cheap. Water in the tank stays hot for a couple days. The only piece missing here is an internet-connected thermostat for the tank that inquires about the spot price for electricity and turns on when it's cheap. The same thing applies to your HVAC system.

You're exaggerating a bit. Water heater will stay hot for a day or so, but will rapidly cool when you start using it and cold water flows in. House will be uncomfortably cold after a few hours in the wintertime if the heat is not running, and it's not really practical to overheat it when electric rates are low/free because you can only go maybe 10 degrees before it's really too warm for comfort. You'd need a heat tan…

I've had power outages for a week more than once, and can vouch for it staying warm enough for a comfortable shower for a couple days.

For HVAC, you can heat/cool it at a minimum to the edge of the comfort range, which will make a big difference. You can take it much further by heating/cooling some thermal mass, and drawing on that mass when the electricity is cheaper.

That mass can simply be a pile of stones in a box with some ductwork added. It's hard to find a cheaper "battery" technology than a box of rocks.

Frankly, I think people are way too focused on batteries and are overlooking the rather obvious.

Re: Why did renewables become so cheap so fast?

#94

Post by magicalhippo »

marvin wrote: post #78
magicalhippo wrote: post #62

Earlier quoted context omitted.

Here in Norway it's because we sell our cheap hydro overseas, so that we can buy back more expensive energy when hydro is low. The owners make a ton of cash, and us consumers can only say "thank you". Sure something something more reliable, but don't come here and say the cash they skim isn't a strong motivation in this equation. At least a lot of the hydro is owned by local municipalities and counties, so most of it…

Norway's system of municipal hydropower ownership combined with export of surplus hydropower, effectively converts the (basically mandatory) electricity bill into a tax. Reducing the need for other forms of local government taxation, given that the municipality is well-run and not corrupt. Beneficial side effects are incentivizing power efficiency, since capital-intensive efforts like insulating your house and instal…

Yeah as long as ownership is retained by the public I don't mind so much, I'd just like it if they called a spade a spade.

But things are getting sold off, which is a worrying trend.

Re: Why did renewables become so cheap so fast?

#95

Post by konjin »

marshray wrote: post #52
shoguning wrote: post #38

Earlier quoted context omitted.

Yeah, that is mentioned as "one of the downsides of renewables". That is like saying, "one of the downsides of using a cooked noodle as a fork is that it doesn't hold its shape". It's disqualifying until that issue is sorted. The value of solar right now is that it provides energy at the hottest, most energy use part of the day. But there is a tipping point where marginal solar is not really valuable for a grid anymo…

> But there is a tipping point where marginal solar is not really valuable for a grid anymore. And that is a very good problem to have. There are any number of industrial processes that could easily put that excessively cheap energy to use. Aluminum smelting, for example.

It isn't. Your base load stations close and you are left only with the intermittent reweables and natural gas. South Australia is the only energy market in that place right now and the prices paid there would destroy any industrial economy.

Re: Why did renewables become so cheap so fast?

#96

Post by zdragnar »

99_00 wrote: post #68
gandalfian wrote: post #61

The Germans paid for it creating the market/industry. Vast amounts. Then the Chinese thought it looked like a good industry to be in and threw unbelievable money at developing manufacturing capacity. If the Germans keep voting green and being parsimonious savers then we may yet get cheap batteries and survive.

Is Germany's experience a success or failure? What is the counter to this article: https://www.forbes.com/sites/michaelshellenberger/2019/09/05...

A charitable reply would be advances (real and predicted) in energy storage- I dont think anyone is deluded into thinking that wind or solar alone form a good baseline.

That said, Germany's investments are clearly a failure, IF you go by the desired carbon reduction goals for 2020-2030.

I also don't know anyone who genuinely believes any of those carbon goals are feasible, or that we have high odds of hitting them... but that might just be that I tend to have cynical friends.

Re: Why did renewables become so cheap so fast?

#97

Post by afrojack123 »

Many things wrong with this. First, clickbait headline. Renewables aren't cheap but they are saying they will become cheaper over time.

This yet another use of the trick where you say something that is universally true but irrelevant to decision making. All objects go down in cost when production scales. The key factor is the UNIT cost of renewable energy with scaled production vs UNIT cost of fossil fuels now(already scaled).

Re: Why did renewables become so cheap so fast?

#98

Post by mrDmrTmrJ »

99_00 wrote: post #68
gandalfian wrote: post #61

The Germans paid for it creating the market/industry. Vast amounts. Then the Chinese thought it looked like a good industry to be in and threw unbelievable money at developing manufacturing capacity. If the Germans keep voting green and being parsimonious savers then we may yet get cheap batteries and survive.

Is Germany's experience a success or failure? What is the counter to this article: https://www.forbes.com/sites/michaelshellenberger/2019/09/05...

Great question!

Here's what Germany did: They invested a vast amount in local renewables, at above market prices, that had the effect of dramatically driving down the global price of wind and solar. Because they radically expanded production capacity. Effectively, Germany gave the world a 'gift'!

This had the long-term affect of dramatically increasing global solar + wind deployments (b/c prices fell) and transferring a huge economic boom to China, who actually made the solar panels and who's government subsidized production.

Unfortunately, for domestics political reasons, Germany also shut down their nuclear plants and kept burning coal. So their total CO2 emissions have been roughly constant and about 10x higher, per person, than France or Sweden.

The article is correct in that vastly more electrical transmission is needed to effectively integrate renewables. The article is misleading in describing price spikes. Yes, there are 2-45 days a year of price spikes for a few hours, but on average price is lower b/c of renewables outside of Germany. (Again, Germany did everyone the favor of buying renewables before they were economic.) Texas average prices are some of the lowest in the world. CA wholesale power prices are very low globally, while retail prices are sky high b/c PG&E is a monopoly combined with an inadvertent domestic terrorist organization.

Something the article only eludes to, the energy transition covers many more areas than just power production. Germany has done a bad job in both transportation and building emissions. They're overly reliant on Russian natural gas for heating and have been slow to embrace electric cars (VW is doing 'ok' but not great). Both issues are separate to renewables but major failings of German policy to either reduce emissions or increase energy security.

Overall, the German investment in renewables electricity production is a massive success and global gift. Completely underrecognized. Everything else sits in the category between "failure" and "didn't even try."

Re: Why did renewables become so cheap so fast?

#99

Post by 99_00 »

reitzensteinm wrote: post #66
99_00 wrote: post #24

This is the source they are using: https://www.lazard.com/perspective/levelized-cost-of-energy-... Does lazard include subsidies in their numbers or not? I can't figure it out. I'm having trouble making sense of the lazard report, but to me it seems that it does, and ourworldindata.org is using their numbers while claiming they are without subsidies.

I don't have time to check that report in particular, but past Lazard studies have included both subsidized and unsubsidized figures side by side. And as Bryan says in the sibling comment, there's not a large gap between the prices. Residential solar was heavily subsidized in many countries but wind and utility scale solar aren't as much, and they're also the cheap ones. If they're not clearly marked, you may need to…

What does this mean?

>Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 14.0) shows that as the cost of renewable energy continues to decline, certain technologies (e.g., onshore wind and utility-scale solar), which became cost-competitive with conventional generation several years ago on a new-build basis, continue to maintain competitiveness with the marginal cost of selected existing conventional generation technologies.

I assume new-build is building a wind for or nat gas plant.

What is marginal cost? Is that adding capacity to a wind farm or nat gas plant, or just having an existing nat gas plant generate more power per day.

Are they basically saying that renewables are competitive when capital costs are included and also when capital costs are excluded?

Re: Why did renewables become so cheap so fast?

#100

Post by outworlder »

albertop wrote: post #87
jes5199 wrote: post #49

Earlier quoted context omitted.

this is why rooftop solar, which has the highest LCOE of any power generation, still ends up making sense for consumers. Because it doesn't have to compete on the open market, it just has to be plausibly cheaper than your utility bill

Rooftop solar still have 5+ years ROI. Recently utilities changed billing plans to make it even less attractive.

> Rooftop solar still have 5+ years ROI

Why is that a problem? Most people take multiples of that time just to pay off their mortgage. Maybe if you are house flipping, but even then this tends to increase their value.

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