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Business/Finance
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Title: If Solar And Wind Are So Cheap, Why Are They Making Electricity So Expensive?
Source: [None]
URL Source: https://www.forbes.com/sites/michae ... y-more-expensive/#fd951d1dc66b
Published: Jun 18, 2018
Author: Michael Shellenberger
Post Date: 2018-06-18 08:31:41 by Tatarewicz
Keywords: None
Views: 958
Comments: 8

If Solar And Wind Are So Cheap, Why Are They Making Electricity So Expensive? Michael Shellenberger , Contributor I write about energy and the environment Opinions expressed by Forbes Contributors are their own.

Clipper yacht Liverpool 2018 passes the Burbo Bank Wind Farm on August 14, 2017, off Liverpool, England. (Photo by Christopher Furlong/Getty Images)

Over the last year, the media have published story after story after story about the declining price of solar panels and wind turbines.

People who read these stories are understandably left with the impression that the more solar and wind energy we produce, the lower electricity prices will become.

And yet that’s not what’s happening. In fact, it’s the opposite.

Between 2009 and 2017, the price of solar panels per watt declined by 75 percent while the price of wind turbines per watt declined by 50 percent.

And yet — during the same period — the price of electricity in places that deployed significant quantities of renewables increased dramatically.

Electricity prices increased by:

51 percent in Germany during its expansion of solar and wind energy from 2006 to 2016; 24 percent in California during its solar energy build-out from 2011 to 2017; over 100 percent in Denmark since 1995 when it began deploying renewables (mostly wind) in earnest.

What gives? If solar panels and wind turbines became so much cheaper, why did the price of electricity rise instead of decline? EP

Electricity prices increased by 51 percent in Germany during its expansion of solar and wind energy.

One hypothesis might be that while electricity from solar and wind became cheaper, other energy sources like coal, nuclear, and natural gas became more expensive, eliminating any savings, and raising the overall price of electricity.

But, again, that’s not what happened.

The price of natural gas declined by 72 percent in the U.S. between 2009 and 2016 due to the fracking revolution. In Europe, natural gas prices dropped by a little less than half over the same period.

The price of nuclear and coal in those place during the same period was mostly flat. EP

Electricity prices increased 24 percent in California during its solar energy build-out from 2011 to 2017.

Another hypothesis might be that the closure of nuclear plants resulted in higher energy prices.

Evidence for this hypothesis comes from the fact that nuclear energy leaders Illinois, France, Sweden and South Korea enjoy some of the cheapest electricity in the world.

Since 2010, California closed one nuclear plant (2,140 MW installed capacity) while Germany closed 5 nuclear plants and 4 other reactors at currently-operating plants (10,980 MW in total).

Electricity in Illinois is 42 percent cheaper than electricity in California while electricity in France is 45 percent cheaper than electricity in Germany.

But this hypothesis is undermined by the fact that the price of the main replacement fuels, natural gas and coal, remained low, despite increased demand for those two fuels in California and Germany.

That leaves us with solar and wind as the key suspects behind higher electricity prices. But why would cheaper solar panels and wind turbines make electricity more expensive?

The main reason appears to have been predicted by a young German economist in 2013.

In a paper for Energy Policy, Leon Hirth estimated that the economic value of wind and solar would decline significantly as they become a larger part of electricity supply.

The reason? Their fundamentally unreliable nature. Both solar and wind produce too much energy when societies don’t need it, and not enough when they do.

Solar and wind thus require that natural gas plants, hydro-electric dams, batteries or some other form of reliable power be ready at a moment’s notice to start churning out electricity when the wind stops blowing and the sun stops shining.

And unreliability requires solar- and/or wind-heavy places like Germany, California and Denmark to pay neighboring nations or states to take their solar and wind energy when they are producing too much of it.

Hirth predicted that the economic value of wind on the European grid would decline 40 percent once it becomes 30 percent of electricity while the value of solar would drop by 50 percent when it got to just 15 percent. EP

Hirth predicted that the economic value of wind would decline 40% once it reached 30% of electricity, and that the value of solar would drop by 50% when it reached 15% of electricity.

In 2017, the share of electricity coming from wind and solar was 53 percent in Denmark, 26 percent in Germany, and 23 percent in California. Denmark and Germany have the first and second most expensive electricity in Europe.

By reporting on the declining costs of solar panels and wind turbines but not on how they increase electricity prices, journalists are — intentionally or unintentionally — misleading policymakers and the public about those two technologies.

The Los Angeles Times last year reported that California’s electricity prices were rising, but failed to connect the price rise to renewables, provoking a sharp rebuttal from UC Berkeley economist James Bushnell.

“The story of how California’s electric system got to its current state is a long and gory one,” Bushnell wrote, but “the dominant policy driver in the electricity sector has unquestionably been a focus on developing renewable sources of electricity generation.”

Part of the problem is that many reporters don’t understand electricity. They think of electricity as a commodity when it is, in fact, a service — like eating at a restaurant.

The price we pay for the luxury of eating out isn’t just the cost of the ingredients most of which which, like solar panels and wind turbines, have declined for decades.

Rather, the price of services like eating out and electricity reflect the cost not only of a few ingredients but also their preparation and delivery.

This is a problem of bias, not just energy illiteracy. Normally skeptical journalists routinely give renewables a pass. The reason isn’t because they don’t know how to report critically on energy — they do regularly when it comes to non-renewable energy sources — but rather because they don’t want to.

That could — and should — change. Reporters have an obligation to report accurately and fairly on all issues they cover, especially ones as important as energy and the environment.

A good start would be for them to investigate why, if solar and wind are so cheap, they are making electricity so expensive.

Michael Shellenberger, President, Environmental Progress. Time Magazine "Hero of the Environment."


Poster Comment:

Adding renewable power sources means operating two separate generating systems, renewables built at higher capital costs at todays labor prices.Most of the capital costs of previous built carbon-based plants have been recovered

Real savings come in less pollution so lower health costs and availability of carbon sources for future product manufacturing.

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Begin Trace Mode for Comment # 4.

#1. To: Tatarewicz (#0)

HAH! Germany's the poster child in all this ;-}

Do renewables mean less pollution? The pinwheels are made with serious amounts of toxic materials inside, and both they and the solar farms are great at liquidating wildlife - - just two of their little-discussed drawbacks. Much as I'd like to believe in them, they're looking a bit gimmicky at this point.

NeoconsNailed  posted on  2018-06-18   8:45:34 ET  Reply   Untrace   Trace   Private Reply  


#4. To: NeoconsNailed (#1)

In 2017 Wind electricity was lowest cost: $45, solar: $50, N gas $60, coal: $102 and nuclear: $148

Tatarewicz  posted on  2018-06-19   9:40:19 ET  (1 image) Reply   Untrace   Trace   Private Reply  


Replies to Comment # 4.

#5. To: Tatarewicz (#4)

From my 2nd link above.....

Villagers Su Bairen, 69, and Yan Man Jia Hong, 74, stand on the edge of the six- mile-wide toxic lake in Baotou, China that has devastated their farmland and ruined the health of the people in their community

This toxic lake poisons Chinese farmers, their children and their land. It is what's left behind after making the magnets for Britain's latest wind turbines... and, as a special Live investigation reveals, is merely one of a multitude of environmental sins committed in the name of our new green Jerusalem.

On the outskirts of one of China’s most polluted cities, an old farmer stares despairingly out across an immense lake of bubbling toxic waste covered in black dust. He remembers it as fields of wheat and corn.

Yan Man Jia Hong is a dedicated Communist. At 74, he still believes in his revolutionary heroes, but he despises the young local officials and entrepreneurs who have let this happen.

‘Chairman Mao was a hero and saved us,’ he says. ‘But these people only care about money. They have destroyed our lives.’

Vast fortunes are being amassed here in Inner Mongolia; the region has more than 90 per cent of the world’s legal reserves of rare earth metals, and specifically neodymium, the element needed to make the magnets in the most striking of green energy producers, wind turbines.

Live has uncovered the distinctly dirty truth about the process used to extract neodymium: it has an appalling environmental impact that raises serious questions over the credibility of so-called green technology.

The reality is that, as Britain flaunts its environmental credentials by speckling its coastlines and unspoiled moors and mountains with thousands of wind turbines, it is contributing to a vast man-made lake of poison in northern China. This is the deadly and sinister side of the massively profitable rare-earths industry that the ‘green’ companies profiting from the demand for wind turbines would prefer you knew nothing about.

Hidden out of sight behind smoke-shrouded factory complexes in the city of Baotou, and patrolled by platoons of security guards, lies a five-mile wide ‘tailing’ lake. It has killed farmland for miles around, made thousands of people ill and put one of China’s key waterways in jeopardy.

This vast, hissing cauldron of chemicals is the dumping ground for seven million tons a year of mined rare earth after it has been doused in acid and chemicals and processed through red-hot furnaces to extract its components.

Wind power's uncertainties don't end with intermittency. There is huge controversy about how much energy a wind farm will produce

Rusting pipelines meander for miles from factories processing rare earths in Baotou out to the man-made lake where, mixed with water, the foul-smelling radioactive waste from this industrial process is pumped day after day. No signposts and no paved roads lead here, and as we approach security guards shoo us away and tail us. When we finally break through the cordon and climb sand dunes to reach its brim, an apocalyptic sight greets us: a giant, secret toxic dump, made bigger by every wind turbine we build......

NeoconsNailed  posted on  2018-06-19 10:53:39 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 4.

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