Unsubsidized Renewables Now Cheaper Than Subsidized Fossil F

[pErvinalia]

In Australia.

A study by Bloomberg New Energy Finance (BNEF) in Australia has discovered that renewable energy is cheaper to produce than the old conventional fossil fuel sources, and that is without the subsidies.

The study shows that electricity can be supplied from a new wind farm at a cost of AUD 80/MWh (USD 83), compared to AUD 143/MWh from a new coal plant or AUD 116/MWh from a new baseload gas plant, including the cost of emissions under the Gillard government’s carbon pricing scheme. However even without a carbon price (the most efficient way to reduce economy-wide emissions) wind energy is 14% cheaper than new coal and 18% cheaper than new gas.

“The perception that fossil fuels are cheap and renewables are expensive is now out of date”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.

Bloomberg New Energy Finance’s research on Australia shows that since 2011, the cost of wind generation has fallen by 10% and the cost of solar photovoltaics by 29%. In contrast, the cost of energy from new fossil-fueled plants is high and rising. New coal is made expensive by high financing costs. The study surveyed Australia’s four largest banks and found that lenders are unlikely to finance new coal without a substantial risk premium due to the reputational damage of emissions-intensive investments – if they are to finance coal at all. New gas-fired generation is expensive as the massive expansion of Australia’s liquefied natural gas (LNG) export market forces local prices upwards. The carbon price adds further costs to new coal- and gas-fired plant and is forecast to increase substantially over the lifetime of a new facility.

BNEF’s analysts conclude that by 2020, large-scale solar PV will also be cheaper than coal and gas, when carbon prices are factored in. By 2030, dispatchable renewable generating technologies such as biomass and solar thermal could also be cost-competitive.

http://blog.cleantechies.com/2014/01/07 ... australia/

And this doesn't even account for the huge externality costs of fossil fuels.

[Jason]

“... clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.

That's what it's always been about - an economic shift in the power structure (taking power away from big oil and putting into big green). The fact that coal is now more expensive not because of scarcity of resources, but rather difficulty of financing is the green icing on the cake.

So, the question I have is can they produce enough power to replace gas, oil, and coal plants entirely with wind and solar? Diseconomy of scale tells me no.

[rainbow]

It would be nice if they were to show how they come to these figures.

Without knowing their assumptions, it is difficult to tell whether they are correct, or not.

[pErvinalia]

“... clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.

That's what it's always been about - an economic shift in the power structure (taking power away from big oil and putting into big green). The fact that coal is now more expensive not because of scarcity of resources, but rather difficulty of financing is the green icing on the cake.

So, the question I have is can they produce enough power to replace gas, oil, and coal plants entirely with wind and solar? Diseconomy of scale tells me no.

Places like Germany and Sweden are on the road to doing that. Australia could have been if we had of transitioned from a coal economy to a renewable economy last century. It would help if we had nuclear as well, at least to plug the gap until renewables could take over the whole lot.

[JimC]

One important advance will be more efficient energy storage solutions that help to smooth out the inevitable peaks and troughs of sources like wind and solar...

[rainbow]

...and transmission costs.

[Tyrannical]

It would be nice if they were to show how they come to these figures.

Without knowing their assumptions, it is difficult to tell whether they are correct, or not.

I was thinking the same, often these wind and solar power estimates are a bit too overly optimistic.

[Pappa]

One important advance will be more efficient energy storage solutions that help to smooth out the inevitable peaks and troughs of sources like wind and solar...

I remember reading about a trial on a small island off the coast of Australia. They kitted the village out with a wind farm and some new battery design. They were self-sufficient 100% of the time.

[cronus]

Wind and solar are both derivatives of the fossil fuels. As oil and coal and gas become more expensive the expense of scaling up these sophisticated alternative renewable's, along with expensive maintenance requirements per energy unit yield, means they will become prohibitive to finance. The answer to the coming energy crunch isn't to be found in renewable's rather it will be found in a combination of dirty carbons and nuclear. I know it means the climate thing is gonna be dodgy but I've studied human nature and noticed risk is never a issue when it comes to keeping the lights on. Time to build a ark? There is a good chance the runaway greenhouse effect unleashed will mean the Earth becomes inhospitable to most, and maybe even all, life in three or four centuries. Welcome to the real world. You can still take the green pill if you want, it will do you no harm, and no good.

[pErvinalia]

I'm not sure you are correct that they are going to become more expensive. If they are cheaper already (including manufacturing costs), then how do they become more expensive? Additionally, they will become even more cheaper with bigger scales of production. Not to mention that eventually coal/oil/gas will have a carbon price attached to it.

[Hermit]

Wind and solar are both derivatives of the fossil fuels.

Correction: Wind and solar are both derivatives of the sun. Fossil fuels are derivatives of vast amounts of ferns that were buried many millions of years ago in conditions that have no longer pertained for aeons.

[laklak]

Wind and solar are both derivatives of the fossil fuels.

Correction: Wind and solar are both derivatives of the sun. Fossil fuels are derivatives of vast amounts of ferns that were buried many millions of years ago in conditions that have no longer pertained for aeons.

That's why we have global warming, the Earth need to replenish the oil supply for the next dominant species in, say, 500,000,000 years.

[cronus]

The production costs, every single aspect, is dependant upon having access to cheap carbons. Once excessive price increases kick in the capacity to upscale will no longer be there. This isn't a chicken-egg issue since there is only ever gonna be a egg.

[Jason]

I'm not sure you are correct that they are going to become more expensive. If they are cheaper already (including manufacturing costs), then how do they become more expensive? Additionally, they will become even more cheaper with bigger scales of production. Not to mention that eventually coal/oil/gas will have a carbon price attached to it.

Diseconomy of scale, of a sort. A windfarm / solarfarm large enough to power, say, Melbourne, would be enormous and consist of numerous physically independent generators which would occupy an enormous area. The cost of maintenance alone will be huge as there is no possible physical centralization (fossil fuel plants take advantage of economy of scale - the larger they are, the cheaper they are to run). Manufacturing costs will surely fall due to economy of scale in production, but maintenance is where it will all fall down IMO.

[PsychoSerenity]

I'm not sure you are correct that they are going to become more expensive. If they are cheaper already (including manufacturing costs), then how do they become more expensive? Additionally, they will become even more cheaper with bigger scales of production. Not to mention that eventually coal/oil/gas will have a carbon price attached to it.

Diseconomy of scale, of a sort. A windfarm / solarfarm large enough to power, say, Melbourne, would be enormous and consist of numerous physically independent generators which would occupy an enormous area. The cost of maintenance alone will be huge as there is no possible physical centralization (fossil fuel plants take advantage of economy of scale - the larger they are, the cheaper they are to run). Manufacturing costs will surely fall due to economy of scale in production, but maintenance is where it will all fall down IMO.

I wouldn't have thought so. You have to have a distributed network, transformers/substations right across the grid anyway.