Baseline power sources and intermittent power sources simply are not compatible on the grid. To the extent intermittent sources are added, the more screwed up the grid gets.
"But, while utilities resisted renewable energy mandates at first, they soon realized they could earn on renewable investments, and then, treat them simply as a cost-lowering fuel source. Looking at it in this way allowed them to price out their options every hour of every day – burning fossils when there is no wind or sun and then switching to wind/solar when those sources are abundant and cheaper."
However, that is not what we see in practice. States with renewable energy mandates have electricity costs that are 29% higher than those that don't.... And that is with the huge subsidies and tax breaks!!! Mills (2022) showed a direct correlation between utilization of wind and solar in western European countries and cost per KwH. I agree that the utilities are not ripping us off so why are these prices so high?
There is a monster flaw in your logic. Just because you are getting energy from wind or solar does not mean you can shut down traditional thermal power plants. Solar and wind energy are not dispatchable. Every time a cloud passes over a solar farm or wind velocity declines over a wind farm, additional energy must be immediately dispatched to make up for that shortfall. That means "peaker plants" must run constantly. Usually these are traditional thermal gas plants as opposed to CCGT plants as they can make up for the shortfalls very quickly.
Now let's add in CAPEX for wind and solar farms, new infrastructure necessary to move electricity from remote areas to cites and associated transmission losses. You can maintain that wind and solar are cleaner sources of energy (as long as you ignore mining, manufacturing and transportation costs) but your argument that they are cheaper is not justified by any data whatsoever.
So, the utilities are not reducing expenses by running wind as solar. The cost of running two energy sources at once and increased CAPEX increases their costs. They are then passing those cost increases on to the consumer.
While the article mentions several energy sources and touched on energy infrastructure and reliability, I was surprised nuclear energy - reliable, long useful life, energy dense, small footprint - was not even mentioned.
There is something about retiring a paid-for coal plant utilizing low sulfur Powder River Basin Wyoming coal that smacks of politics instead of providing low cost electricity to its customers.
It _should_ smack only of including the cost of the CO2 accumulation effect of retiring/not retiring the plant. Politics except to say that the cost of the CO2 accumulation must be included should have no part.
“We’re simply accepting that the delivered cost of renewables is often much cheaper to the utility than traditional sources – and that has been a benefit to customers.”
I’m not buying this claim under number 5. The added cost of transmission, load balancing and the replacement cost of sun/wind harvesting machines every 15-20 years, plus the needed gas back-up that must be built and maintained are not factored into the “delivered cost”. Hiding the state and federal subsidies that the utilities receive does not lower the “actual cost”. We are all grid rate payers and tax payers, so we need honest transparency to show us the total cost of renewables vs reliable energy.
I thought this is a great article. I think it’s over playing the concern of electric utilities ability to build things like renewable energy and retreating to what social scientist would warn against using which is NIMBY explanations for this or I guess you’re calling them bananas now. (please see recent Berkeley lab reports on this or my 2017 paper in land use science for summaries of this literature),.
Your colleague Mathieu Burgess showed that electric utilities are on target to meet renewable portfolio standards - so to build more renewable/clean (or nuclear whatever) energy, you have to increase renewable/clean energy portfolio standards.
Put differently if it’s so hard to build clean energy infrastructure how come utilities are compliant with renewable/clean energy portfolio standards?
“We’re simply accepting that the delivered cost of renewables is often much cheaper to the utility than traditional sources – and that has been a benefit to customers.”
I would really like to see an even-handed analysis of this claim. On the one side are those citing LCOE to claim solar is now the cheapest source of electricity. But the system cost of intermittent sources is different than that of dispatchables. And the structure of energy markets doesn’t always reflect the cost of capacity.
For example, the IEA has developed a metric called Value Added Cost of Energy (VALCOE) that considers flexibility value and capacity value in addition to energy value (LCOE). To quote: “The result of IEA’s value adjusted LCOE (VALCOE) metric show however, that the system value of variable renewables such as wind and solar decreases as their share in the power supply increases.”
So, my question is, are there currently electrical grids where wind and solar are making the retail cost of electricity cheaper? Texas, maybe?
Also, as the share of wind and solar increase, the cost of the dispatchable gas or coal generation goes up because it's dominated by fixed costs (everything except the fuel cost) so with decreasing generation and the same fixed costs, guess what happens! With this fact and some sleight of hand, the climate activists then claim that fossil fuel generation is costing more and more and should be eliminated!
“while utilities resisted renewable energy mandates at first, they soon realized they could earn on renewable investments, and then, treat them simply as a cost-lowering fuel source.”
1. To be explicit, are you referring to Federal subsidies and incentives that allow utilities to “earn” on these investments?
2. One aspect you didn’t touch on is around transmission, and the idea I keep hearing that “if we just connect all the grids together, that would solve many problems” by load balancing. But there are significant hurdles to an idea like that. That said, there’s only so much you can pack into a short readable article :)
"The global demand for energy will continue to rise, and no single technology is the answer."
It seems to me that wind and solar are clearly not part of the answer. They require large amounts of land, high cost for connection to the grid, short lifetimes, require backup which operate intermittently thus expensively and on and on. They survive only because of subsidies and for absolutely no other reason.
Can you explain: How can we have a stable electricity grid powered by unstable renewable generators?
Baseline power sources and intermittent power sources simply are not compatible on the grid. To the extent intermittent sources are added, the more screwed up the grid gets.
You state:
"But, while utilities resisted renewable energy mandates at first, they soon realized they could earn on renewable investments, and then, treat them simply as a cost-lowering fuel source. Looking at it in this way allowed them to price out their options every hour of every day – burning fossils when there is no wind or sun and then switching to wind/solar when those sources are abundant and cheaper."
However, that is not what we see in practice. States with renewable energy mandates have electricity costs that are 29% higher than those that don't.... And that is with the huge subsidies and tax breaks!!! Mills (2022) showed a direct correlation between utilization of wind and solar in western European countries and cost per KwH. I agree that the utilities are not ripping us off so why are these prices so high?
There is a monster flaw in your logic. Just because you are getting energy from wind or solar does not mean you can shut down traditional thermal power plants. Solar and wind energy are not dispatchable. Every time a cloud passes over a solar farm or wind velocity declines over a wind farm, additional energy must be immediately dispatched to make up for that shortfall. That means "peaker plants" must run constantly. Usually these are traditional thermal gas plants as opposed to CCGT plants as they can make up for the shortfalls very quickly.
Now let's add in CAPEX for wind and solar farms, new infrastructure necessary to move electricity from remote areas to cites and associated transmission losses. You can maintain that wind and solar are cleaner sources of energy (as long as you ignore mining, manufacturing and transportation costs) but your argument that they are cheaper is not justified by any data whatsoever.
So, the utilities are not reducing expenses by running wind as solar. The cost of running two energy sources at once and increased CAPEX increases their costs. They are then passing those cost increases on to the consumer.
Bingo.
While the article mentions several energy sources and touched on energy infrastructure and reliability, I was surprised nuclear energy - reliable, long useful life, energy dense, small footprint - was not even mentioned.
I searched and searched but could find nothing about unicorns and fairy dust just hard realities about the grid. What kind of nonsense is this?
There is something about retiring a paid-for coal plant utilizing low sulfur Powder River Basin Wyoming coal that smacks of politics instead of providing low cost electricity to its customers.
It _should_ smack only of including the cost of the CO2 accumulation effect of retiring/not retiring the plant. Politics except to say that the cost of the CO2 accumulation must be included should have no part.
“We’re simply accepting that the delivered cost of renewables is often much cheaper to the utility than traditional sources – and that has been a benefit to customers.”
I’m not buying this claim under number 5. The added cost of transmission, load balancing and the replacement cost of sun/wind harvesting machines every 15-20 years, plus the needed gas back-up that must be built and maintained are not factored into the “delivered cost”. Hiding the state and federal subsidies that the utilities receive does not lower the “actual cost”. We are all grid rate payers and tax payers, so we need honest transparency to show us the total cost of renewables vs reliable energy.
The first priorities of our energy system is and always should be reliability (24/7/365) and cost. Concern for CO2 emissions is secondary.
I'm not fond of the term "renewables." The point is the net emission of CO2 of the technology.
I thought this is a great article. I think it’s over playing the concern of electric utilities ability to build things like renewable energy and retreating to what social scientist would warn against using which is NIMBY explanations for this or I guess you’re calling them bananas now. (please see recent Berkeley lab reports on this or my 2017 paper in land use science for summaries of this literature),.
Your colleague Mathieu Burgess showed that electric utilities are on target to meet renewable portfolio standards - so to build more renewable/clean (or nuclear whatever) energy, you have to increase renewable/clean energy portfolio standards.
Put differently if it’s so hard to build clean energy infrastructure how come utilities are compliant with renewable/clean energy portfolio standards?
Tax breaks, subsidies, grants and political pressure. Plus, they can pass off increases in cost to the consumer.
I like Elon Musk. But it is easy to become mega-wealthy when Obama gives you a $4.9 billion dollar starter kit. He probably regrets that now 😁😁😁😁
https://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html
“We’re simply accepting that the delivered cost of renewables is often much cheaper to the utility than traditional sources – and that has been a benefit to customers.”
I would really like to see an even-handed analysis of this claim. On the one side are those citing LCOE to claim solar is now the cheapest source of electricity. But the system cost of intermittent sources is different than that of dispatchables. And the structure of energy markets doesn’t always reflect the cost of capacity.
For example, the IEA has developed a metric called Value Added Cost of Energy (VALCOE) that considers flexibility value and capacity value in addition to energy value (LCOE). To quote: “The result of IEA’s value adjusted LCOE (VALCOE) metric show however, that the system value of variable renewables such as wind and solar decreases as their share in the power supply increases.”
So, my question is, are there currently electrical grids where wind and solar are making the retail cost of electricity cheaper? Texas, maybe?
Also, as the share of wind and solar increase, the cost of the dispatchable gas or coal generation goes up because it's dominated by fixed costs (everything except the fuel cost) so with decreasing generation and the same fixed costs, guess what happens! With this fact and some sleight of hand, the climate activists then claim that fossil fuel generation is costing more and more and should be eliminated!
Great article! A couple of questions:
“while utilities resisted renewable energy mandates at first, they soon realized they could earn on renewable investments, and then, treat them simply as a cost-lowering fuel source.”
1. To be explicit, are you referring to Federal subsidies and incentives that allow utilities to “earn” on these investments?
2. One aspect you didn’t touch on is around transmission, and the idea I keep hearing that “if we just connect all the grids together, that would solve many problems” by load balancing. But there are significant hurdles to an idea like that. That said, there’s only so much you can pack into a short readable article :)
Thank you.
"The global demand for energy will continue to rise, and no single technology is the answer."
It seems to me that wind and solar are clearly not part of the answer. They require large amounts of land, high cost for connection to the grid, short lifetimes, require backup which operate intermittently thus expensively and on and on. They survive only because of subsidies and for absolutely no other reason.