Comment by gmac
14 hours ago
> an ideologically driven push for renewables
Renewables (especially wind) are now just about the cheapest way to generate electricity, and new battery technologies do much to help with their intermittency, so where’s the problem?
(Plus, the ‘ideology’ in question would seem to be: it’s bad to fry the planet, and also bad to run even a small risk of radioactively contaminating one’s landmass, and IMHO neither of these positions deserves to be called an ideology).
>> an ideologically driven push for renewables
> Renewables (especially wind) are now just about the cheapest way to generate electricity, and new battery technologies do much to help with their intermittency, so where’s the problem?
The basics of economics are:
Yet you know all this as you are a professor of economics in the UK. So how comes that the UK has the highest industry KWh prices in Europe? There must be an absolutely fantastic opportunity to make money and investors should be like vultures grabbing new projects for renewables.
Just the other day I read news that in Germany perfectly well functioning wind turbines are being turned down because they have reached the end of the phase of guaranteed KWh prices. So are the owners crazy and throwing money away? No, they simply do the business calculations and if the math doesn't play out, they simply remove them and build new ones with new subsidies.
The latest auction from the German gov for a new field in the baltic sea didn't even find one bidder.
China is doing lots of renewables but they calculate it down to the penny.
So yes, as you say "Renewables (especially wind) are now just about the cheapest way to generate electricity". To generate yes. But you need lots of CAPEX to store it and to distribute it. And you can not work with a 95%ile. You need 100% in any developed economy.
Despite marginal cost pricing it not interesting for investors without subsidies.
Old wind turbines might be perfectly fine but they are also no longer competitive with modern replacements. Usually it does make sense to replace them with more modern alternatives. Subsidies have gotten very low because carbon credits are now a much more important way for renewables to boost their income (most negative prices reflect that).
Offshore wind is facing the challenge that it is more expensive than onshore wind and also that solar is having a day with ever decreasing prices. Governments are trying hard to minimize the cost of the energy transition, offshore is primarily hurting because of this.
> Old wind turbines might be perfectly fine but they are also no longer competitive with modern replacements. Usually it does make sense to replace them with more modern alternatives.
I would just for once love to see a calculation for this. There have been no advancements in generator technology nor in blade technology. Generators in power stations have a life time of many decades. A third of the 31000 German wind turbines will be put down because of the end of subsidies.
Also subsidising solar power in the north of Germany makes no sense - for months there is no solar in winter but in summer solar adds to the already massive surplus of energy from offshore wind. It is a waste of money. If you believe that global warming is a problem (which I agree with) then the money should be put to efficient use.
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>There must be an absolutely fantastic opportunity to make money and investors should be like vultures grabbing new projects for renewables.
They are. While the marginal price is being set (most of the time) by expensive gas renewables projects are making money hand over fist.
Also, to add to the “ideology”: it is bad to rely on other countries for fossil or uranium fuels.
Frying the planet is bad. That said i don't see the reliance argument for uranium. There's a variety of existing sources on the planet and some we stopped mining. It's proportionally a super small financial element of the energy production process unlike with fossil fuels. So in the case of let's say Putin's Russia you can avoid using their or let's say Kazakhstan's fuel and if you don't but don't take it's gas directly or via intermediaries like armenia then Russia still ends up in the financial shitter because their income from Rosatom/uranium one/... doesn't even compare.
It's almost inviting anti renewables arguments based on things like aluminium mostly being produced in china and russia or based on where the vast majority of panels are produced, etc.
>Renewables (especially wind) are now just about the cheapest way to generate electricity
Only if you don't include the huge cost of storage for when it isn't windy.
Include it and it's still cheaper than, say, nuclear.
Also ... even when storage is included, you still gain freedom from opex spending for fuel (that is, lining oily pockets). Once there, renewables are "pure payoff".
Chiming in as Australian with no context on European situation. AFAICT the key drivers of cost inflation are to do with reconfiguring the electric grid to transfer power efficiently and reliably from plants that produce renewable energy. However, the grid is set up to do so from non-renewable sources. And you want to do it while smoothly operating the network. This is extremely hard. Doing so quickly therefore elevates prices. That’s the rationale I could imagine being the case in EU markets.
It's not that simple. For example, in the The Netherlands, the use of electricity was stable for a long time. Mostly because all kinds of equipment (light bulbs, etc) got more efficient.
Grid operators predicted that with the energy transition, demand would rise, but politics wanted to keep prices low and limited investments.
So now, there is a big problem in the entire country connecting companies or new residential areas to the grid independent of how electricity is generated.
At the same time, the government is extremely forward looking and builds massive interconnection points on the North-Sea. Not a bad idea in the long run, but in the short run it does make electricity from wind on sea more expensive.
That said, the biggest hit to EU countries is that cheap natural gas disappeared. Coal is not cheap and extremely polluting. Natural gas was cheap for a while. Until it wasn't.
The European situation is a bit more complicated. It was very well known for a long time that Russia is a ticking time bomb in our backyard yet we made ourselves nearly dependent on their energy supplies and now combined with the push for renewables (which in my opinion is the right thing to do) we have a crisis. Now there are also lot of countries in the EU with different priorities, so while in theory we could build long-range HVDC connections across borders, it is very hard to do.
more like "it's bad to fry the planet so we will destroy our economy for 0.001% impact while the real impacters continue to advance and leave us in the dust"