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Great if true, but color me skeptical. Almost anytime there is a story like this, the fine print is that renewables are only “cheaper” because of government su

Great if true, but color me skeptical. Almost anytime there is a story like this, the fine print is that renewables are only “cheaper” because of government subsidies. Is that the case here? Also, cheaper in some situations (e.g. hydro power for purchasers right next to a dam) does not mean cheaper when scaled to a whole country. Is that the case here?

ghouse 8y ago
Globally, conventional fossil fuels receive greater subsidies (nominally, not $/MWh) than renewable power. Estimated to be up to $6 trillion when considering indirect subsidies [1] and $260 billion when only considering direct cash subsidies [2]. [1] https://www.sciencedirect.com/science/article/pii/S0305750X16304867 https://www.sciencedirect.com/science/article/pii/S0305750X1... [2] https://www.iea.org/newsroom/news/2017/december/commentary-fossil-fuel-consumption-subsidies-are-down-but-not-out.html https://www.iea.org/newsroom/news/2017/december/commentary-f...
- mikeash 8y ago
  Coal alone kills a million people a year worldwide. If we take the EPA's value of a statistical life of about $10 million, that's effectively $10 trillion in subsidies just for coal deaths. We don't typically consider being allowed to pollute to be a subsidy, but we really should.
  - travisoneill1 8y ago
    $10 million per person fails the sniff test Global GDP per capita: $17,300 Global life expectancy: 72 72 * 17300 = $1,245,600 upper bound
    - mikeash 8y ago
      Sure, that’s the “if.” Although even the monetary value of a life is probably more than just the economic contribution.
  - briandear 8y ago
    What are migratory birds worth? Are endangered birds worth a bonus? Wind-turbine-related bird deaths approach 57 million per year. https://abcbirds.org/wind-energy-threatens-birds/ https://abcbirds.org/wind-energy-threatens-birds/
    - mikeash 8y ago
      It’s not like fossil fuel pollution is benign to wildlife. Does it really make sense to call bird deaths from power lines “wind turbine related” just because those power lines serve wind turbines? You’d still need them if you used another source of energy.
  - marcoperaza 8y ago
    How many people die because of insufficient access to medicine caused in part by lack of infrastructure like reliable power? How many dollars spent on the additional cost of clean power could instead go to things that would improve people’s health, be it health care or something more indirect (like healthier food, better sanitation, or even vacations)? Quantifying all externalities is a questionable endeavor.
- deleted 8y ago
  [deleted]
- travisoneill1 8y ago
  I can't take this too seriously because most of the subsidies they talk about are actually externalities for which cost estimates are extremely imprecise. This is a real thing, but lumping them together with actual subsidies feels misleading. Also not sure why a nominal comparison is meaningful. The actual impact in terms of resource allocation will be due to $/MWh.
hyperbovine 8y ago
You seem to be under the impression that fossil fuels are not subsidized by governments everywhere.
- deleted 8y ago
  [deleted]
rossdavidh 8y ago
Solar and wind power have the cost trend of a technology. Not quite Moore's law, in that the percentage drop per unit time is less, but the important point is that it is an exponential decline. Fossil fuels have the cost trend of a commodity; it goes up, it goes down, it goes up, depending on demand. Whereas technologies have a cost that drops as demand goes up, commodities have a cost that rises as demand goes up. This means that commodities can remain cheaper than the technology for a long time, and then suddenly lose that advantage, and when they do they will probably never get it back.
diafygi 8y ago
That is not the case here. The term everyone in the energy industry uses now is the "LCOE" (levelized cost of electricity) that does an apples-to-apples comparison (e.g. removes subsidies). For example, the investment firm Lazard puts out an annual comparison report on the LCOE and last year wind was cheaper than natural gas on an unsubsidized LCOE basis and solar is getting within a dollar per megawatt-hour of natural gas[1]. However, raw solar and wind only gets you to about 50% penetration before you start having to add storage in addition to renewables, and that is still about 5-10 years away from being cheap enough to take us from 50% to >90%[2]. [1]: https://www.lazard.com/media/450337/lazard-levelized-cost-of-energy-version-110.pdf https://www.lazard.com/media/450337/lazard-levelized-cost-of... [2]: https://www.lazard.com/media/450338/lazard-levelized-cost-of-storage-version-30.pdf https://www.lazard.com/media/450338/lazard-levelized-cost-of...
- barney54 8y ago
  It is not accurate that LCOE provides apples-to-apples comparisons. For examples, there is no value for dispatchability. As EIA explains, “The direct comparison of LCOE across technologies is, therefore, often problematic and can be misleading as a method to assess the economic competitiveness of various generation alternatives because projected utilization rates, the existing resource mix, and capacity values can all vary dramatically across regions where new generation capacity may be needed.” https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.... The point is that care should be taken to compare various types of generation and LCOE isn’t a good measure to do that.
  - specialist 8y ago
    For the scope of this discussion, is there a better measure?

ghouse 8y ago

Globally, conventional fossil fuels receive greater subsidies (nominally, not $/MWh) than renewable power. Estimated to be up to $6 trillion when considering indirect subsidies [1] and $260 billion when only considering direct cash subsidies [2]. [1] https://www.sciencedirect.com/science/article/pii/S0305750X16304867 https://www.sciencedirect.com/science/article/pii/S0305750X1... [2] https://www.iea.org/newsroom/news/2017/december/commentary-fossil-fuel-consumption-subsidies-are-down-but-not-out.html https://www.iea.org/newsroom/news/2017/december/commentary-f...

mikeash 8y ago
Coal alone kills a million people a year worldwide. If we take the EPA's value of a statistical life of about $10 million, that's effectively $10 trillion in subsidies just for coal deaths. We don't typically consider being allowed to pollute to be a subsidy, but we really should.
- travisoneill1 8y ago
  $10 million per person fails the sniff test Global GDP per capita: $17,300 Global life expectancy: 72 72 * 17300 = $1,245,600 upper bound
  - mikeash 8y ago
    Sure, that’s the “if.” Although even the monetary value of a life is probably more than just the economic contribution.
- briandear 8y ago
  What are migratory birds worth? Are endangered birds worth a bonus? Wind-turbine-related bird deaths approach 57 million per year. https://abcbirds.org/wind-energy-threatens-birds/ https://abcbirds.org/wind-energy-threatens-birds/
  - mikeash 8y ago
    It’s not like fossil fuel pollution is benign to wildlife. Does it really make sense to call bird deaths from power lines “wind turbine related” just because those power lines serve wind turbines? You’d still need them if you used another source of energy.
- marcoperaza 8y ago
  How many people die because of insufficient access to medicine caused in part by lack of infrastructure like reliable power? How many dollars spent on the additional cost of clean power could instead go to things that would improve people’s health, be it health care or something more indirect (like healthier food, better sanitation, or even vacations)? Quantifying all externalities is a questionable endeavor.
deleted 8y ago
[deleted]
travisoneill1 8y ago
I can't take this too seriously because most of the subsidies they talk about are actually externalities for which cost estimates are extremely imprecise. This is a real thing, but lumping them together with actual subsidies feels misleading. Also not sure why a nominal comparison is meaningful. The actual impact in terms of resource allocation will be due to $/MWh.

hyperbovine 8y ago

You seem to be under the impression that fossil fuels are not subsidized by governments everywhere.

deleted 8y ago
[deleted]

rossdavidh 8y ago

Solar and wind power have the cost trend of a technology. Not quite Moore's law, in that the percentage drop per unit time is less, but the important point is that it is an exponential decline. Fossil fuels have the cost trend of a commodity; it goes up, it goes down, it goes up, depending on demand. Whereas technologies have a cost that drops as demand goes up, commodities have a cost that rises as demand goes up. This means that commodities can remain cheaper than the technology for a long time, and then suddenly lose that advantage, and when they do they will probably never get it back.

diafygi 8y ago

That is not the case here. The term everyone in the energy industry uses now is the "LCOE" (levelized cost of electricity) that does an apples-to-apples comparison (e.g. removes subsidies). For example, the investment firm Lazard puts out an annual comparison report on the LCOE and last year wind was cheaper than natural gas on an unsubsidized LCOE basis and solar is getting within a dollar per megawatt-hour of natural gas[1]. However, raw solar and wind only gets you to about 50% penetration before you start having to add storage in addition to renewables, and that is still about 5-10 years away from being cheap enough to take us from 50% to >90%[2]. [1]: https://www.lazard.com/media/450337/lazard-levelized-cost-of-energy-version-110.pdf https://www.lazard.com/media/450337/lazard-levelized-cost-of... [2]: https://www.lazard.com/media/450338/lazard-levelized-cost-of-storage-version-30.pdf https://www.lazard.com/media/450338/lazard-levelized-cost-of...

barney54 8y ago
It is not accurate that LCOE provides apples-to-apples comparisons. For examples, there is no value for dispatchability. As EIA explains, “The direct comparison of LCOE across technologies is, therefore, often problematic and can be misleading as a method to assess the economic competitiveness of various generation alternatives because projected utilization rates, the existing resource mix, and capacity values can all vary dramatically across regions where new generation capacity may be needed.” https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.... The point is that care should be taken to compare various types of generation and LCOE isn’t a good measure to do that.
- specialist 8y ago
  For the scope of this discussion, is there a better measure?