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Solar and Wind Power So Cheap They’re Outgrowing Subsidies

623 points by ph0rque 7y ago

vivianpan 7y ago
paywalled
spodek 7y ago
Can we stop subsidizing oil and corn too?
- nicoburns 7y ago
  It sounds facetious, but this comment is completely on point. It's pretty egregious that governments (e.g. the UK where I live) have stopped subsidising renewables, but continue to subsidise fossil fuels. People saying fossil fuels are cheaper often seem to forget this.
  - whatshisface 7y ago
    How exactly do these governments subsidize fossil fuels?
    - jdub 7y ago
      Tax claims, usually. Spent X dollars on fuel for farming or mining? Here's Y dollars off your tax bill.
      - whatshisface 7y ago
        Isn't every business allowed to depreciate their purchases?
        jdub 7y ago
        Spending money on a commodity isn't like buying a mainframe. And these are specific deductions and claims for fossil fuel products.
        guan 7y ago
        For land producing minerals, there is a special tax rule called “percentage depletion” available to some taxpayers. With percentage depletion, the owner can deduct a fixed percentage (15%) of gross income every year. This can add up to more than the original amount invested in an oil field. Normally, the depreciation allowance for capital investment over a period of years can only add up to the amount originally invested.
      - tim333 7y ago
        If the business has to pay tax to the government it isn't really a subsidy, which I think it usually the case with oil and gas. The UK govt seems to have received £1.2 bn from the oil and gas businesses in 2018/19. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818296/Statistics_of_government_revenues_from_UK_oil_and_gas_production_July_2019.pdf https://assets.publishing.service.gov.uk/government/uploads/...)
        jdub 7y ago
        While there are some direct incentives for fossil fuel producers, most of the subsidies go to commercial use of fossil fuel products.
        KirinDave 7y ago
        Why? The net effect is exactly the same.
        tim333 7y ago
        Government takes money from business = tax Government gives money to business = subsidy The oil industry is the first one even if depreciation allowances are involved in the tax calculation.
        greglindahl 7y ago
        You might want to check out the concept of a Tax Expenditure https://en.wikipedia.org/wiki/Tax_expenditure https://en.wikipedia.org/wiki/Tax_expenditure, which is when a government lowers tax on something.
        tim333 7y ago
        It's still an odd use of the word subsidy. I wish I could subsidise the oil industry by having them send me large amounts of money. Maybe we can kill the oil industry by tripling the subsidies so they have to send the government three times as much? It makes it hard to have sensible discussion. Is there a word for whether the government pays to the industry or visa versa if tax and subsidy have been redefined to no longer mean that?
    - addicted 7y ago
      Many governments set the price at the gas pump and subsidize the difference.
    - opencl 7y ago
      The UK in particular charges 5% VAT instead of the normal 20% for natural gas, heating oil, solid fuel and electricity for residential use. They claim that this isn't a subsidy but tax breaks for specific product categories sure sounds like a subsidy to me.
      - pfortuny 7y ago
        Well, most food has 0% VAT, as well as other necessities... I gather at least home energy should have a similar treatment. At least up to some level.
        bryanlarsen 7y ago
        How do you split food into "luxury" and "basic" foods? A 1 pound loaf of bread is "basic", a 5 pound loaf is "luxury"? What an impossible task. Far easier to put the VAT on all food and then send a rebate check to everybody on the assumption that the average food spend is "basic" and anything above average food spend is "luxury". Same thing for home energy. Heating a 1000 square foot flat is "necessity", heating a 5000 square foot flat is "luxury"....
        StreamBright 7y ago
        It is not that hard. See what is sold in a luxury store deduct what is sold in average Joe grocery stores and what you got is luxury food items.
        greglindahl 7y ago
        Is it that easy? I suspect you'll get an objection or two about junk food from doing that. Imagine how much fun marketers will have with that kind of measure, if it's a 20% difference.
        frobozz 7y ago
        It isn't about size, it's about the nature of the foodstuff. A biscuit is basic. A chocolate biscuit is luxury. Cake is basic Meals you cook at home are basic Meals someone cooks for you (e.g. restaurant or takeaway) is luxury. (among other examples)
  - jdub 7y ago
    Australia subsidises vehicle fuel for use in coal mining[1]. It is totally bananas. [1] among other things but this is the most ridiculous
    - gonzo41 7y ago
      Regulatory capture. We exempt mining companies from fuel tax because they don't drive on public roads. sigh.
      - ancarda 7y ago
        Isn't the point of a fuel tax to pay for road repairs? Why should they pay a fuel tax if they aren't using public roads? I don't drive, so I may be completely off here - I'm genuinely asking because I don't know
        jdub 7y ago
        They may not drive their enormous mining trucks on public roads, but they benefit from the society (including other public roads) that our taxes support. Plus it's absurd that we're incentivising the use of fossil fuels at all, let alone to dig up fossil fuels.
        pdpi 7y ago
        If the stated goal of a rule is X, it's entirely reasonable to request an exemption based on how you act relative to X. As a matter of principle, I object to denying said exemption because the request comes from the requester's position on Y. In this particular case, if the tax is indeed levied on the basis of how it impacts road use and repairs, it's perfectly fair to exempt fuel meant to be used only in private property, irrespectively of how I feel about its polluting nature. I do agree it's absurd that we don't disincentivize the use of fossil fuels, and the mining of said fuels in general, but two wrongs don't make a right.
        kortilla 7y ago
        By that measure everyone benefits from public roads and should pay fuel tax even if they aren’t driving on them. That makes no sense. You know farmers are exempt from diesel tax for farm equipment too, right?
  - tialaramex 7y ago
    UK Renewable energy production is still subsidised by Contracts For Difference. What happens is the government says OK, for this power we're willing to pay extra. Bid for how much you want. Some offshore wind farm builder might say OK, pay us £65 per MWh in 2020. No better offers in that category (low risk zero carbon power)? OK. Every MWh you generate in 2020 the electricity grid pays whatever they'd pay for gas or coal or anything else, then, the difference between that and £65 per MWh is from the government. Maybe the grid pays £20 right now, subsidy is £45. But, maybe the wants every amp they're paying £95 right now, the government gets £30 back from the wind farm. CFDs make investors comfortable. Wind farms are expensive, what if we take out a loan to build this expensive wind farm and only get £15 per MWh we'd go bankrupt. If the government promises £65 we're profitable so long as we build that wind farm. CFD bidding also drives down costs, if your rival will take £35 the government may not accept your bid.
    - edh649 7y ago
      It’s worth noting that ‘established technologies’ have not been eligible since CfD round 2 in 2017. This includes onshore wind, solar PV, energy from waste with CHP, hydro (>5MW and <50MW), landfill gas and sewage gas technologies. [1] From phase 1, roughly 670MW of onshore wind and about 75MW of solar were supported. [2] [1] - https://www.ashurst.com/en/news-and-insights/legal-updates/uk-power-the-second-contracts-for-difference-allocation-round/ https://www.ashurst.com/en/news-and-insights/legal-updates/u... [2] - https://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-one-outcome https://www.gov.uk/government/publications/contracts-for-dif...
      - tialaramex 7y ago
        Fair. On the other hand, what is there to subsidise? For onshore wind in particular, the remaining role of a CfD at competitive prices would be solely consistency/ predictability. I think the Private Sector would like to believe they can compete effectively in offering that. If I were a UK government that wasn't trying to eat its own tail over Brexit (so this is pretty hypothetical) I'd be focused on storage. People are going to build on-shore wind farms because they make sense. I need to subsidise figuring out how to smooth out the system load, or else all the wind farms in the world won't help me.
- e2le 7y ago
  Why is subsidizing corn a bad thing? Honest question.
  - jdub 7y ago
    It distorts the market by incentivising corn farming. Want to know why so many US farmers grow corn, lobby for bio ethanol fuel laws, and why an ungodly amount of US food is based on corn and corn byproducts (e.g. high fructose corn syrup)? Corn subsidies.
    - Vadoff 7y ago
      It sucks because high fructose corn syrup tastes worse than sugar for a lot of people too.
  - organsnyder 7y ago
    The corn monoculture in the United States is so pervasive, we hardly notice it—especially for someone like me that's lived under the regime my entire life (I'm in my mid-30s). It's caused us to use corn in places where other materials may be more optimal—for the environment, our health, and even economically—if it weren't for subsidies. I know someone who has a severe corn allergy (or reaction of some sort). He has to be careful even purchasing "fresh" non-corn vegetables at the supermarket, as they are often coated with a corn-based preservative.
    - deleted 7y ago
      [deleted]
    - Forbo 7y ago
      Reminds me of this thread: Corn is not a food, it's a platform. https://twitter.com/SwiftOnSecurity/status/1074810043495796736 https://twitter.com/SwiftOnSecurity/status/10748100434957967...
    - drak0n1c 7y ago
      If most of the world's practical alternative to US corn is palm oil and other cheap slash and burn crops - abandoning corn won't be good for the environment.
- MuffinFlavored 7y ago
  Why do governments subsidize oil + corn?
  - seph-reed 7y ago
    Because some very rich people control a whole bunch of it, and they're very, very good at getting their way.
  - kleer001 7y ago
    Because foreign corn is too competitive, too cheap, and pull the rug out from local farmers. It's a short term solution to a long term problem.
    - ssijak 7y ago
      Well, if you want a free market then let them pull the rug if they cant compete and spend the money more wisely.
- drdrey 7y ago
  In what concrete ways do we subsidize oil?
  - smileysteve 7y ago
    Intangible Drilling Costs to start. https://www.investopedia.com/articles/07/oil-tax-break.asp https://www.investopedia.com/articles/07/oil-tax-break.asp https://www.americanprogress.org/issues/green/reports/2016/05/26/138049/it-is-time-to-phase-out-9-unnecessary-oil-and-gas-tax-breaks/ https://www.americanprogress.org/issues/green/reports/2016/0...
tito 7y ago
USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017 https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Global-Fossil-Fuel-Subsidies-Remain-Large-An-Update-Based-on-Country-Level-Estimates-46509 https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Glo... "hey fossil fuels, let's 1v1" sincerely, solar (From Forbes: United States Spend Ten Times More On Fossil Fuel Subsidies Than Education)
- makomk 7y ago
  That big headline $5.2 trillion figure isn't money that was spent on anything. They're counting the difference between the actual market price of fossil fuels and what they think should be charged for them due to air pollution etc as a subsidy.
  - bildung 7y ago
    If the society knowingly pays the difference between market price and actual price, that effectively is a subsidy. Edit: That money is actually spent, though indirectly through health care etc.
  - SamBam 7y ago
    At least some of that was, in fact, hard cash subsidies. The US spends around $35 billion/year in actual subsidies on fossil fuels.[1] (About $20 billion to producers, and about $15 billion to consumers. Further more, the cost of not charging the fossil fuel industry for carbon emissions should absolutely be counted as a real subsidy, although its value is harder to calculate. But we force industries to clean up other pollutants, or we otherwise regulate their environmental impact, which costs them. If we gave one industry a pass on those regulations, that would be uncontroversially a subsidy. 1. https://www.theguardian.com/environment/climate-consensus-97-per-cent/2018/jul/30/america-spends-over-20bn-per-year-on-fossil-fuel-subsidies-abolish-them https://www.theguardian.com/environment/climate-consensus-97...
    - roenxi 7y ago
      But since any activity changes the environment for the worse, by that logic everything is subsidised. We can't use language that way - words become meaningless. Logically it goes straight to a silly place where everyone is getting 'welfare' because the government isn't taxing them for breathing out CO2. A subsidy is the government forcing more resources to be allocated to something than people with money think is good. An externality is when we believe that outcomes are affecting people who weren't the buyer/seller. The environmental lobby wants to claim that fossil fuels are subsidised therefore we must stamp them out because it is Free Market. Charitably speaking, that really just shows the environmentalists are making an effort to use other people's language but don't understand the free market philosophy at a fundamental level. If the use of something has to stop for environmental reasons then it is taxed. Claiming that it is really reversing a subsidy comes out more as trying to shout the opposition down by changing what words mean on them. It is bad form.
russdill 7y ago
Beautiful, chromium 77 has, as advertised, broken incognito mode detection. Bloomberg now claims I'm browsing incognito regardless of whether I really am (and thus cannot read the article).
- CraneWorm 7y ago
  outline failed so I used my freebie on ya I'm not reading it so you can have mine, everyone aside from Mr. russdill please kindly avert your eyes. Solar and Wind Power So Cheap They’re Outgrowing Subsidies @markchediak More stories by Mark Chediak 5-7 minutes For years, wind and solar power were derided as boondoggles. They were too expensive, the argument went, to build without government handouts. Today, renewable energy is so cheap that the handouts they once needed are disappearing. On sun-drenched fields across Spain and Italy, developers are building solar farms without subsidies or tax-breaks, betting they can profit without them. In China, the government plans to stop financially supporting new wind farms. And in the U.S., developers are signing shorter sales contracts, opting to depend on competitive markets for revenue once the agreements expire. relates to Solar and Wind Power So Cheap They’re Outgrowing Subsidies The developments have profound implications for the push to phase out fossil fuels and slow the onset of climate change. Electricity generation and heating account for 25% of global greenhouse gases. As wind and solar demonstrate they can compete on their own against coal- and natural gas-fired plants, the economic and political arguments in favor of carbon-free power become harder and harder to refute. “The training wheels are off,” said Joe Osha, an equity analyst at JMP Securities. “Prices have declined enough for both solar and wind that there’s a path toward continued deployment in a post-subsidy world.” Subsidy-Free Europe The reason, in short, is the subsidies worked. After decades of quotas, tax breaks and feed-in-tariffs, wind and solar have been deployed widely enough for manufacturers and developers to become increasingly efficient and drive down costs. The cost of wind power has fallen about 50% since 2010. Solar has dropped 85%. That makes them cheaper than new coal and gas plants in two-thirds of the world, according to BloombergNEF. “Solar got cheap,” said Jenny Chase, an analyst at BNEF. “It’s really that simple.” China Huaneng Group Windfarm in Eastern China Wind turbines spin in Qidong, China. Photographer: Qilai Shen/Bloomberg Yet for all it’s promise, clean energy still has a long way to go before fully usurping coal and gas. Wind and solar still only accounted for about 7% of electricity generation worldwide last year, according to BNEF. And most wind and solar projects still depend on subsides. In the U.S., in fact, the solar industry is pushing to extend federal tax credits that are scheduled to decline over the next few years. And then there’s the issue of round-the-clock power. Solar doesn’t work at night. Wind farms go idle when breezes slack. So until battery systems are cheap enough for generators to stockpile electricity for hours at a time, renewables can’t constantly provide power like coal and gas. Solar module prices have plunged this decade Perhaps nowhere is the push toward subsidy-free clean energy clearer than on arid expanses of Southern Europe. About 750 megawatts of subsidy-free clean-energy projects are expected to connect to the grid in 2019 alone, across Spain, Italy, Portugal and elsewhere -- enough to power about 333,000 households, according to Pietro Radoia, an analyst at BNEF. “The cheapest way of producing electricity in Spain is the sun,” Jose Dominguez Abascal, the nation’s secretary of state for energy, said last year. The road to subsidy-free renewables wasn’t easy for Spain. A decade ago, it offered developers a lavish feed-in tariff, prompting an uncontrolled boom that strained the national treasury. Spain slashed incentives and now has a hands-off energy policy. China, the world’s largest renewable energy market, also propped up wind and solar for years. Now it’s shifting toward a more market-driven approach. Earlier this year, officials announced a plan to develop 20.8 gigawatts of renewable projects that can only profit from selling electricity into grids at prices equal to or less than coal. Plus, most wind farms built on land -- as opposed to in the ocean -- won’t be eligible for subsidies after 2021. Cheaper Wind The picture is less clear in the U.S. Nearly every American wind and solar project remains eligible for subsidies through federal tax breaks, which are scheduled to decrease or phase out altogether over the next few years. Plus, dozens of states have renewable-energy quotas, forcing utilities to buy a certain amount of wind and solar. Still, they’re starting to compete on their own. The proof is in the sales agreements. For years, clean-energy developers needed 20- or 25-year power-purchase contracts to ensure a return on investment. Now they’re building wind and solar farms with agreements for 15 years or less -- with the expectation that projects will compete against gas- and coal-fired plants in wholesale markets after the deals conclude. “Renewable energy’s next major evolutionary step is to sell power directly into wholesale markets,” said Richard Matsui, chief executive officer at San Francisco-based solar risk-management firm KWh Analytics. “Investors worldwide are only beginning to dip their toes in those waters.” (Michael R. Bloomberg, the founder and majority stakeholder of Bloomberg LP, the parent company of Bloomberg News, has committed $500 million to launch Beyond Carbon, a campaign aimed at closing the remaining coal-powered plants in the U.S. by 2030 and slowing the construction of new gas plants.) This story is part of Covering Climate Now, a global collaboration of more than 250 news outlets to highlight climate change. — With assistance by James Thornhill, Reed Landberg, Jasmine Ng, Jeremy Hodges, and Chris Martin
gridlockd 7y ago
"Solar doesn’t work at night. Wind farms go idle when breezes slack. So until battery systems are cheap enough for generators to stockpile electricity for hours at a time, renewables can’t constantly provide power like coal and gas." This is the crux of the problem. We don't just need cheaper batteries, we need entirely new battery/storage technology. Current battery production is an ecological disaster in and of itself. "Still, they’re starting to compete on their own. The proof is in the sales agreements. For years, clean-energy developers needed 20- or 25-year power-purchase contracts to ensure a return on investment. Now they’re building wind and solar farms with agreements for 15 years or less -- with the expectation that projects will compete against gas- and coal-fired plants in wholesale markets after the deals conclude." This may just be speculating that governments will be issuing all kinds of premiums on fossil technologies instead of directly subsidizing renewables, which is far more likely than actually switching to renewables.
- beat 7y ago
  Storing energy isn't exactly magical. Humans built the first dam nearly 3000 years ago. It's simply a matter of cost, and that's a combination of situation and experience. Batteries, hydro, compressed air, thermal, gravity... all of these things work, and are known quantities. It doesn't take a breakthrough in technology to say "If we build a tank for compressed air that is volume X, to pressure Y, it can store energy Z; and thermal losses for conversion in and out are A, and it costs B to build". This is completely ordinary engineering.
  - gridlockd 7y ago
    > It's simply a matter of cost, and that's a combination of situation and experience. Batteries, hydro, compressed air, thermal, gravity... all of these things work, and are known quantities. Everything is a matter of cost. If cost didn't matter, we could just suck up all the CO2 from the air. That technology already exists too, and it's a "known quantity". The problem is, cost does matter and there is such a thing as "prohibitively expensive", especially if we're looking at countries that aren't as wealthy. Furthermore, relative costs matter. What are we not building if we are building all this buffering infrastructure? > It doesn't take a breakthrough in technology to say "If we build a tank for compressed air that is volume X, to pressure Y, it can store energy Z; and thermal losses for conversion in and out are A, and it costs B to build". This is completely ordinary engineering. Sure, but if B is too large, it just won't happen. That's why you need a technological breakthrough to get B within the realms of feasibility.
crazygringo 7y ago
> So until battery systems are cheap enough for generators to stockpile electricity for hours at a time, renewables can’t constantly provide power like coal and gas. I thought the solution wasn't expensive batteries locally, but rather storing pumped water in reservoirs, or other solutions like melting and re-solidifying salt, etc. -- huge-scale energy storage connected to the grid. Your energy is produced once from the sun/wind, and then second (at night) from hydroelectric turbines or steam. Anyone know how that's going? Does it have to be done at the city/region grid level, or are there micro-versions that make sense to be integrated with a single wind turbine or field of them?
- ivl 7y ago
  I believe China is commiting a huge amount of effort to building more pumped stored power, which should be coming online in the next few years [0]. If they keep up with building out a large amount of solar, this could work very well. 0. https://en.wikipedia.org/wiki/List_of_pumped-storage_hydroelectric_power_stations#Under_construction https://en.wikipedia.org/wiki/List_of_pumped-storage_hydroel...
- timerol 7y ago
  "Battery systems" encompass all of the above methods of "energy storage connected to the grid". My personal favorite "so crazy it might work" idea is stacking concrete blocks on top of each other. Li-ion batteries keep coming down in price, and they can be scaled to basically any size. Pumped hydro is generally considered the best if you have access to it. Compressed air storage works well if you've got a huge, airtight cavern (generally an old salt mine). But any cheap energy storage we can get is gonna be useful.
  - russdill 7y ago
    There's a lot of engineering challenges to still work out, but my favorite is currently flow batteries.
  - giarc 7y ago
    Another crazy one is simply pushing a big heavy train up a hill. Then when you need power just letting it go back down the hill. https://www.wired.com/2016/05/forget-elons-batteries-fix-grid-rock-filled-train-hill/ https://www.wired.com/2016/05/forget-elons-batteries-fix-gri...
spenczar5 7y ago
What are the developments that have made solar and wind so much cheaper over the last 15 years? I am hoping HN has an expert lurking about who can unpack this.
- ClutchBand 7y ago
  No expert, but I would imagine that decreased cost to manufacture (as factories are getting built and established), improvements in its total output (and generally the technology behind them), and longevity/durability.
- noneeeed 7y ago
  Mass production of both along with greater effieciencies in manufacturing and installation. There are huge factories that churn out solar panels, and the installation systems have become simpler and faster. On the domestic side it can now take just a couple of hours to fit the panels once the brackets are in place, it used to take a day or more. Basically both technologies have been matruring for a number of years, getting cheaper and better at the same time, so the cost per kwh drops. On the wind side of things, the turbines have also got larger, which increases output significantly (power is proportional to the square of blade length, roughly). We also seem to have hit a price point where there is ample capital to invest in projects of all scales. Add in the flexibility of gas to deal with varying demand and the you have a better market to invest.
  - wallflower 7y ago
    In the “Move fast, break things” realm, there was a 2013 tragedy in which two mechanics lost their lives atop one of those massive wind turbines when it caught fire. Their legacy is that it led to better safety standards. http://www.windaction.org/posts/38949-dual-deaths-in-wind-turbine-fire-highlight-hazards http://www.windaction.org/posts/38949-dual-deaths-in-wind-tu...
- artimaeis 7y ago
  There was a great episode of the Planet Money podcast they recently re-ran that got into at least one of the factors of the drastically cheaper solar availability: https://www.npr.org/2019/08/14/751234092/episode-616-how-solar-got-cheap https://www.npr.org/2019/08/14/751234092/episode-616-how-sol... As I recall -- there was a boom of manufacturing plants for the solar cells in China as they were forecasting a drastically growing demand. The plants came online and boosted the supply greatly before the demand was high enough, so the prices sank. There's also apparently been a number of improvements to tooling in regards to the labor required to install solar panels that has generally lowered labor costs.
noneeeed 7y ago
For anyone interested in power useage and supply patterns you should check out https://gridwatch.co.uk/ https://gridwatch.co.uk/ It shows UK power use and generation in realtime, and over various time periods. There is still plenty of room for more renewables, and it shows how solar is actually pretty good in the uk, it generates during the main peak period in the day.
- toomuchtodo 7y ago
  Worldwide mostly realtime data: https://www.electricitymap.org/?wind=false&solar=false&page=map https://www.electricitymap.org/?wind=false&solar=false&page=...
  - m0skit0 7y ago
    I think France vs Germany in this map is a nice argument in the nuclear vs "renewables" discussion
    - noneeeed 7y ago
      Germany's sudden shift from nuclear without a plan for what to replace it with was just so frustrating to watch. So much coal :/
ThomPete 7y ago
This is only because for some reason when we talk about wind and solar we don't factor in the cost of coal, nuclear, gas and oil which are being used as backup. Furthermore, with wind and solar, we don't factor in things like decommission like you would on nuclear.
- pjc50 7y ago
  Nuclear decomissioning is the only one that's especially expensive; I suspect if you look at most of the actual wind farm contracts you'll see a decomissioning cost in there somewhere. Factoring in the "backup" generators makes no sense in a free market electricity economy. That's like saying you need to factor in the cost of a taxi to train tickets, in case the train is broken down.
  - ThomPete 7y ago
    You don't see that in there, unfortunately. And of course, it makes sense to factor in backup energy as you can't actually deliver consistent energy with wind and solar alone. So the true cost of wind and solar should obviously include the cost of running these backups AND it would then of course also mean some of those externalities. Anything else is dishonest comparison IMO which the above article is guilty of.
    - pjc50 7y ago
      But that's not how an electricity spot market works. The market price is instantaneous as the energy is delivered.
      - ThomPete 7y ago
        That's how you need to discuss this in order to get to the true cost otherwise you are making decisions based on incorrect data. Wind can't deliver enough energy it's relying on other types. So any discussion that includes wind or solar as a solution needs to include what backup are needed and what that cost. The reverse mind you is not true.
jamil7 7y ago
Theres a Dutch study indicating that we're rapidly approaching supply chain limits for the rare metals required for renewable energy, both solar and wind. I wonder how long renewables can continue dropping in price.
- beat 7y ago
  Solar, maybe, for now. But I can't imagine that there is a need for large amounts of exotic metals in a wind turbine, which is a simple generator. Exotic materials might give a percent or three more operational efficiency, but they're not actually necessary.
  - jamil7 7y ago
    As far as I know neodymium is currently used for magnets in a lot of wind turbines and electric motors among other things. It's not rare but the vast majority of it comes from China right now. I can't speak to how much efficiency it adds.
    - beat 7y ago
      Actually, that makes a lot of sense. Neodymium magnets are much lighter and more compact for the same strength. (I know this from being a guitar player - exact composition of magnets in guitar pickups and speakers is a subject of substantial controversy, both technical and magical.) But it also seems to me this might be a cost issue... it's possible that neodymium magnets are used because they're cheaper in context than ceramic, alnico, or other materials. That could change if neodymium prices increase substantially due to scarcity.
    - BurningFrog 7y ago
      I wouldn't worry much about China refusing to export things for money.
    - vlehto 7y ago
      Wind turbines are currently over 100 meters high and installed into places that see lot of wind. It's a rule of thumb that you should keep the natural frequency of any large steel building above 20 hz. Swiching to heavier magnets will increase the mass of the generator which is mounted on top. That in turn will make the whole thing more wobbly (ie lower the frequency). To combat this you need thicker frame. Which in turn will cost more and weight more. It's completely possible that current windmill designs are only possible with neodymium magnets. We would need to ask turbine designer.
enqk 7y ago
Why no mention of nuclear electricity generation, which requires less CO2 than Solar and even Wind? (For the same amount of available power)
- orliesaurus 7y ago
  Simply because people are afraid of nuclear. Sure it's not a simple industry either, but when done right (look at France) it powers entire cities and allows for exportable energy!
  - pfdietz 7y ago
    No, it's because of cost, not fear. In France, we don't know how much their first wave of reactor construction cost, because the accounting mixed military and civilian development, and the paperwork has been lost. What we DO know is their recent attempts have gone disastrously wrong, with cost ballooning far outside the initial estimates. New nuclear is no longer a practical option there, if it ever was.
- beat 7y ago
  Because nuclear can't keep up on cost. Right now, new wind, PV solar, and gas all cost about half as much per kwh as nuclear. We actually have numerous nuclear plants being decommissioned early in the US, because they've lost industrial-scale customers to cheaper new sources, and since their operational cost doesn't reduce with output, it can cost more to keep the plant running than to just shut it down. A lot of pro-nuclear activists respond with "Yeah, but" and bring up theoretical thorium designs and such that are not actually in production operation anywhere. But until they are in production, they are not actual competition for the gas/wind/solar systems that are commercially available, at scale, right now. But traditional light water reactors? They're a technological dead end. The cost doesn't work.
  - enqk 7y ago
    When you're saying nuclear can't keep up with the cost, are you comparing the same kwh? For wind and solar if you install X kwh for amount A, and for nuclear Y khw for amount B, X represents a peak available capacity.. At best, what is the guaranteed available khw you get for this installed base? 0.10 * X? For nuclear the available capacity is much closer to Y. So if the available capacity from wind/solar was something like 0.10 X, then it means you'll have to install 10x more wind and solar than you would need nuclear. Which needs more material and more energy expenditure (more CO2?) to install. If you compare cost, similarly, A would have to be 10x smaller than B to make wind/solar be cheaper. Some other issues is how Solar competes in terms of surface with areas that you'd grow food in (unless you build in the desert, but then you have issues such as dust on the panels, and the need to carry the energy across large land)
deleted 7y ago
[deleted]
kumarski 7y ago
It takes an immense amount of coal to make steel turbines. It takes an immense amount of natural gas peaking facilities to counterbalance Solar and Wind's draw downs. Manufacturing photovoltaic panels with low-carbon electricity (for example, in a solar-powered factory), and installing them in a high-carbon-intensity country would tip the balance. Right now we do the opposite. Solar actually INCREASES gas consumption. You have to provide for a fixed power demand with 2 systems. -Combined cycle methane gas plant (cc) -Methane Peaker backed Solar PV(pvp) "Epvp=Epeak/(1-Cpv) Your effective time average methane energy consumption efficiency (electrical energy out / chemical heat in) for pvp is going to be the peaker efficiency divided by 1 - the capacity factor of the PV: Epvp = Epeak / (1 - Cpv) The methane energy efficiency of cc, Ecc, is fixed One can find the methane breakeven capacity factor, Cpvbe by setting Epvp=Ecc and solving for Cpv: Cpvbe = 1 - Epeak/Ecc Epeak ~ a generous 42% Ecc ~ 62% Plugging these numbers in yields: Cpvbe = 1-42/62 = 32% which means unless your capacity factor meets or exceeds 32% that solar imposes a net methane opportunity cost backing it up with a gas peaker plant in comparison to gas combined cycle. You can find the capacity factors for solar here: https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_6_07_b&fbclid=IwAR3Oj5a7FUildPrxVyVfErx-kb997hbl5KGWTjf0IDIVB2KtLar2sEFFIfA" https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...
- ahupp 7y ago
  I think you need to give citations on those net carbon claims, because that's hard to believe.
- timerol 7y ago
  This is a very poorly worded comment. I had to read it multiple times to get your point: Gas plants that run continuously (combined-cycle) have much higher efficiencies than peaker plants, so solar+peaker can have a lower efficiency than combined-cycle gas plants on their own. I have a few questions about this. How do combined-cycle plants adjust to changes in demand? Do we need to compare solar+peaker to combined-cycle+peaker to have a fair comparison? Or do combined-cycle plants allow for lower changes in output than peakers, such that (e.g.) a 10% solar 90% combined-cycle system could adjust as well? The grid is a whole system, not just two power plants. Finally, nobody is advocating for just solar+peaker. Solar+wind+peaker will easily get you over the 32% threshold, as solar and wind tend to provide power at different times (not perfectly, sadly). If you have some storage available (preferably hydro, but possibly other), then you get an even higher effective capacity factor.
kumarski 7y ago
"This performs a wealth transfer from the poor to the middle class, when the middle class can buy partially subsidized panels but the poor can't, and then the panels "drop" the cost of power by raising it for everyone else, offering cheaper power to those who can afford it on the backs of those who cannot."
- Robotbeat 7y ago
  This is partly a result of the monopolistic status of utilities. Usually, in a competitive market, if you add extra supply or reduce demand, the price drops. In a monopoly where the company is allowed to maintain profits, the reduced demand means less revenue and profits so they increase price. In a free market with lots of players, the profits would drop, the prices would drop, and marginal players would simply go bankrupt. It's clever marketing by utilities, however, to blame their abuse of monopoly power on solar power subsidies.
sremani 7y ago
As usual this where Bloomberg acts as Solar is similar to NG. Solar and Wind are widely dependent on location. Your results of NG in Phoenix or Chicago are going to be more or less same - you cannot say that for Solar. At the right places Solar is profitable - but at the grid interface level its not same as having NG. For all the solar panels that are visible and there are countless "invisible" massive diesel generator back-ups and an inefficiently used NG base-load generator somewhere. Its very rare Solar-Wind get their baseload from hydro (its possible). But again, HN being HN .. Ye Ye Ye! These headlines make people think some how ONG is replacable and all it takes moar and moar Solar and Wind, and there is nothing farther from truth. The enemy of knowledge is not ignorance, its illusion of knowledge.
- batmansmk 7y ago
  Solar and wind as you said are widely dependent on location; they have the courtesy of also being widely dependent on the time of the day, and the forecast that day. The price angle is not the correct one to estimate quality of an energy source. When the wind blows and the sun shines, NG is cheap because we overproduce and we have to get rid of MWh. Germany even reaches negative prices quite regularly.
Genome1776 7y ago
great story
lucaspottersky 7y ago
cant read. paywall. nice internets.
piokoch 7y ago
When it comes to renewable energy it is worth to look at one (sad) statistics: if Germany and California, one of the largest CO2 emitters (Germany is on the 6th place, despite a lot of (failed [2]) efforts and even more PR) would spend those money on nuclear energy, they would be 100% clean - CO2 emission zero, null. Why people keep investing in something so unreliable like wind/solar power plants which are useless without auxiliary source of energy (batteries technology is not ready for mass energy storage) while we have technology that provides clean, CO2 free energy? I understand sun power plants in California, that make some sense (not much, as those stats show), but, hey, Germany? With more or less 60-70 sunny days a year? [1] https://www.forbes.com/sites/michaelshellenberger/2018/09/11/had-they-bet-on-nuclear-not-renewables-germany-california-would-already-have-100-clean-power https://www.forbes.com/sites/michaelshellenberger/2018/09/11... [2] https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent-renewables-decreasing-germanys-carbon-emissions/ https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent...
- dnadler 7y ago
  That's not really the whole picture. Nuclear power doesn't produce CO2, but does produce radioactive waste which must be stored somewhere.
  - YJR 7y ago
    Said waste does not contribute to global warming/climate change in bad ways.
  - Robotbeat 7y ago
    The volume of nuclear waste that must be stored is vastly smaller (by orders of magnitude) than the amount of emissions (and often ashes) from fossil fuels. About the same size as the radioactive tailings from mining rare earths for wind turbines (depending on the design). And a big difference is that nuclear waste IS stored. In engineered containers. With the price paid by the nuclear power provider. Unlike CO2 emissions from fossil fuel power plants. So I'd say, given the orders of magnitude difference, it is pretty much the full story. Except to note the waste issue for nuclear is vastly exaggerated.
ufukcan74 7y ago
Cool Earth Solar company unlike normal solar panels, it produces spherical panels, thus producing 400 times more energy than normal panels. https://pdfs.semanticscholar.org/4bf1/d93a9467608c9c1d1536f3a9179d97f5ce2c.pdf https://pdfs.semanticscholar.org/4bf1/d93a9467608c9c1d1536f3...
- EA 7y ago
  "With no occlusion, the flat-panel collector is more efficient than the spherical-surface collector by a factor of more than 2." "Considering the occlusion factor, the spherical-surface collector can be the better choice in certain situations"
noetic_techy 7y ago
Has this translated to me as a consumer being able to buy rooftop solar for cheaper? I live in FL and am considering it.
- toomuchtodo 7y ago
  You’ll pay about $2.70/watt in Florida. Payback period will be based on whether you’re paying cash or financing, system size, and your current utility rates. Much cheaper than in the past, but whether it makes financial sense is a calculation each household has to perform. I’d suggest getting three quotes from local installers to kick off the process.
Jedd 7y ago
Why do we still have such poor quality reporting on renewables: > And then there’s the issue of round-the-clock power. Solar doesn’t work at night. PVC doesn't work at night, but CSP most definitely does. (By working, I mean a solar thermal plant is providing power well after sunset.)
rossdavidh 7y ago
I am really glad this is happening. I think that the Moore's Law-like decline in costs of wind and solar are going to far more to combat climate change than every international treaty ever attempted, and that's great because climate change is a serious problem and it must be addressed. However... I think we have been trying to figure out how to get the world's economy to shift off of fossil fuels for so long, we haven't given a lot of thought to what happens as we do, which appears to be in the process of happening. Right now it's coal that's circling the drain. The other fossil fuels will come a few years after. Imagine every nation in the world that depends on oil revenue right now, going the way of Venezuela. We are not ready.
woodandsteel 7y ago
Remember, one of the main arguments of the climate change is a hoax, fossil fuels forever gang is that switching to renewable energy would make electricity so expensive it would mean the end of modern society and we would all go back to living in crude huts.
Huycfhct 7y ago
I don't get these titles. Solar is overcoming the subsidies fossil fuels get for freely dumping carbon or they no longer need the government price alignment?
aussieguy1234 7y ago
The sun always shines - somewhere in the world. Is the problem of solar power at night more of an issue with transmission?

623 points by ph0rque 7y ago

vivianpan 7y ago

paywalled

spodek 7y ago

Can we stop subsidizing oil and corn too?

nicoburns 7y ago
It sounds facetious, but this comment is completely on point. It's pretty egregious that governments (e.g. the UK where I live) have stopped subsidising renewables, but continue to subsidise fossil fuels. People saying fossil fuels are cheaper often seem to forget this.
- whatshisface 7y ago
  How exactly do these governments subsidize fossil fuels?
  - jdub 7y ago
    Tax claims, usually. Spent X dollars on fuel for farming or mining? Here's Y dollars off your tax bill.
    - whatshisface 7y ago
      Isn't every business allowed to depreciate their purchases?
      - jdub 7y ago
        Spending money on a commodity isn't like buying a mainframe. And these are specific deductions and claims for fossil fuel products.
      - guan 7y ago
        For land producing minerals, there is a special tax rule called “percentage depletion” available to some taxpayers. With percentage depletion, the owner can deduct a fixed percentage (15%) of gross income every year. This can add up to more than the original amount invested in an oil field. Normally, the depreciation allowance for capital investment over a period of years can only add up to the amount originally invested.
    - tim333 7y ago
      If the business has to pay tax to the government it isn't really a subsidy, which I think it usually the case with oil and gas. The UK govt seems to have received £1.2 bn from the oil and gas businesses in 2018/19. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818296/Statistics_of_government_revenues_from_UK_oil_and_gas_production_July_2019.pdf https://assets.publishing.service.gov.uk/government/uploads/...)
      - jdub 7y ago
        While there are some direct incentives for fossil fuel producers, most of the subsidies go to commercial use of fossil fuel products.
      - KirinDave 7y ago
        Why? The net effect is exactly the same.
        tim333 7y ago
        Government takes money from business = tax Government gives money to business = subsidy The oil industry is the first one even if depreciation allowances are involved in the tax calculation.
        greglindahl 7y ago
        You might want to check out the concept of a Tax Expenditure https://en.wikipedia.org/wiki/Tax_expenditure https://en.wikipedia.org/wiki/Tax_expenditure, which is when a government lowers tax on something.
        tim333 7y ago
        It's still an odd use of the word subsidy. I wish I could subsidise the oil industry by having them send me large amounts of money. Maybe we can kill the oil industry by tripling the subsidies so they have to send the government three times as much? It makes it hard to have sensible discussion. Is there a word for whether the government pays to the industry or visa versa if tax and subsidy have been redefined to no longer mean that?
  - addicted 7y ago
    Many governments set the price at the gas pump and subsidize the difference.
  - opencl 7y ago
    The UK in particular charges 5% VAT instead of the normal 20% for natural gas, heating oil, solid fuel and electricity for residential use. They claim that this isn't a subsidy but tax breaks for specific product categories sure sounds like a subsidy to me.
    - pfortuny 7y ago
      Well, most food has 0% VAT, as well as other necessities... I gather at least home energy should have a similar treatment. At least up to some level.
      - bryanlarsen 7y ago
        How do you split food into "luxury" and "basic" foods? A 1 pound loaf of bread is "basic", a 5 pound loaf is "luxury"? What an impossible task. Far easier to put the VAT on all food and then send a rebate check to everybody on the assumption that the average food spend is "basic" and anything above average food spend is "luxury". Same thing for home energy. Heating a 1000 square foot flat is "necessity", heating a 5000 square foot flat is "luxury"....
        StreamBright 7y ago
        It is not that hard. See what is sold in a luxury store deduct what is sold in average Joe grocery stores and what you got is luxury food items.
        greglindahl 7y ago
        Is it that easy? I suspect you'll get an objection or two about junk food from doing that. Imagine how much fun marketers will have with that kind of measure, if it's a 20% difference.
        frobozz 7y ago
        It isn't about size, it's about the nature of the foodstuff. A biscuit is basic. A chocolate biscuit is luxury. Cake is basic Meals you cook at home are basic Meals someone cooks for you (e.g. restaurant or takeaway) is luxury. (among other examples)
- jdub 7y ago
  Australia subsidises vehicle fuel for use in coal mining[1]. It is totally bananas. [1] among other things but this is the most ridiculous
  - gonzo41 7y ago
    Regulatory capture. We exempt mining companies from fuel tax because they don't drive on public roads. sigh.
    - ancarda 7y ago
      Isn't the point of a fuel tax to pay for road repairs? Why should they pay a fuel tax if they aren't using public roads? I don't drive, so I may be completely off here - I'm genuinely asking because I don't know
      - jdub 7y ago
        They may not drive their enormous mining trucks on public roads, but they benefit from the society (including other public roads) that our taxes support. Plus it's absurd that we're incentivising the use of fossil fuels at all, let alone to dig up fossil fuels.
        pdpi 7y ago
        If the stated goal of a rule is X, it's entirely reasonable to request an exemption based on how you act relative to X. As a matter of principle, I object to denying said exemption because the request comes from the requester's position on Y. In this particular case, if the tax is indeed levied on the basis of how it impacts road use and repairs, it's perfectly fair to exempt fuel meant to be used only in private property, irrespectively of how I feel about its polluting nature. I do agree it's absurd that we don't disincentivize the use of fossil fuels, and the mining of said fuels in general, but two wrongs don't make a right.
        kortilla 7y ago
        By that measure everyone benefits from public roads and should pay fuel tax even if they aren’t driving on them. That makes no sense. You know farmers are exempt from diesel tax for farm equipment too, right?
- tialaramex 7y ago
  UK Renewable energy production is still subsidised by Contracts For Difference. What happens is the government says OK, for this power we're willing to pay extra. Bid for how much you want. Some offshore wind farm builder might say OK, pay us £65 per MWh in 2020. No better offers in that category (low risk zero carbon power)? OK. Every MWh you generate in 2020 the electricity grid pays whatever they'd pay for gas or coal or anything else, then, the difference between that and £65 per MWh is from the government. Maybe the grid pays £20 right now, subsidy is £45. But, maybe the wants every amp they're paying £95 right now, the government gets £30 back from the wind farm. CFDs make investors comfortable. Wind farms are expensive, what if we take out a loan to build this expensive wind farm and only get £15 per MWh we'd go bankrupt. If the government promises £65 we're profitable so long as we build that wind farm. CFD bidding also drives down costs, if your rival will take £35 the government may not accept your bid.
  - edh649 7y ago
    It’s worth noting that ‘established technologies’ have not been eligible since CfD round 2 in 2017. This includes onshore wind, solar PV, energy from waste with CHP, hydro (>5MW and <50MW), landfill gas and sewage gas technologies. [1] From phase 1, roughly 670MW of onshore wind and about 75MW of solar were supported. [2] [1] - https://www.ashurst.com/en/news-and-insights/legal-updates/uk-power-the-second-contracts-for-difference-allocation-round/ https://www.ashurst.com/en/news-and-insights/legal-updates/u... [2] - https://www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-one-outcome https://www.gov.uk/government/publications/contracts-for-dif...
    - tialaramex 7y ago
      Fair. On the other hand, what is there to subsidise? For onshore wind in particular, the remaining role of a CfD at competitive prices would be solely consistency/ predictability. I think the Private Sector would like to believe they can compete effectively in offering that. If I were a UK government that wasn't trying to eat its own tail over Brexit (so this is pretty hypothetical) I'd be focused on storage. People are going to build on-shore wind farms because they make sense. I need to subsidise figuring out how to smooth out the system load, or else all the wind farms in the world won't help me.
e2le 7y ago
Why is subsidizing corn a bad thing? Honest question.
- jdub 7y ago
  It distorts the market by incentivising corn farming. Want to know why so many US farmers grow corn, lobby for bio ethanol fuel laws, and why an ungodly amount of US food is based on corn and corn byproducts (e.g. high fructose corn syrup)? Corn subsidies.
  - Vadoff 7y ago
    It sucks because high fructose corn syrup tastes worse than sugar for a lot of people too.
- organsnyder 7y ago
  The corn monoculture in the United States is so pervasive, we hardly notice it—especially for someone like me that's lived under the regime my entire life (I'm in my mid-30s). It's caused us to use corn in places where other materials may be more optimal—for the environment, our health, and even economically—if it weren't for subsidies. I know someone who has a severe corn allergy (or reaction of some sort). He has to be careful even purchasing "fresh" non-corn vegetables at the supermarket, as they are often coated with a corn-based preservative.
  - deleted 7y ago
    [deleted]
  - Forbo 7y ago
    Reminds me of this thread: Corn is not a food, it's a platform. https://twitter.com/SwiftOnSecurity/status/1074810043495796736 https://twitter.com/SwiftOnSecurity/status/10748100434957967...
  - drak0n1c 7y ago
    If most of the world's practical alternative to US corn is palm oil and other cheap slash and burn crops - abandoning corn won't be good for the environment.
MuffinFlavored 7y ago
Why do governments subsidize oil + corn?
- seph-reed 7y ago
  Because some very rich people control a whole bunch of it, and they're very, very good at getting their way.
- kleer001 7y ago
  Because foreign corn is too competitive, too cheap, and pull the rug out from local farmers. It's a short term solution to a long term problem.
  - ssijak 7y ago
    Well, if you want a free market then let them pull the rug if they cant compete and spend the money more wisely.
drdrey 7y ago
In what concrete ways do we subsidize oil?
- smileysteve 7y ago
  Intangible Drilling Costs to start. https://www.investopedia.com/articles/07/oil-tax-break.asp https://www.investopedia.com/articles/07/oil-tax-break.asp https://www.americanprogress.org/issues/green/reports/2016/05/26/138049/it-is-time-to-phase-out-9-unnecessary-oil-and-gas-tax-breaks/ https://www.americanprogress.org/issues/green/reports/2016/0...

tito 7y ago

USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017 https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Global-Fossil-Fuel-Subsidies-Remain-Large-An-Update-Based-on-Country-Level-Estimates-46509 https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Glo... "hey fossil fuels, let's 1v1" sincerely, solar (From Forbes: United States Spend Ten Times More On Fossil Fuel Subsidies Than Education)

makomk 7y ago
That big headline $5.2 trillion figure isn't money that was spent on anything. They're counting the difference between the actual market price of fossil fuels and what they think should be charged for them due to air pollution etc as a subsidy.
- bildung 7y ago
  If the society knowingly pays the difference between market price and actual price, that effectively is a subsidy. Edit: That money is actually spent, though indirectly through health care etc.
- SamBam 7y ago
  At least some of that was, in fact, hard cash subsidies. The US spends around $35 billion/year in actual subsidies on fossil fuels.[1] (About $20 billion to producers, and about $15 billion to consumers. Further more, the cost of not charging the fossil fuel industry for carbon emissions should absolutely be counted as a real subsidy, although its value is harder to calculate. But we force industries to clean up other pollutants, or we otherwise regulate their environmental impact, which costs them. If we gave one industry a pass on those regulations, that would be uncontroversially a subsidy. 1. https://www.theguardian.com/environment/climate-consensus-97-per-cent/2018/jul/30/america-spends-over-20bn-per-year-on-fossil-fuel-subsidies-abolish-them https://www.theguardian.com/environment/climate-consensus-97...
  - roenxi 7y ago
    But since any activity changes the environment for the worse, by that logic everything is subsidised. We can't use language that way - words become meaningless. Logically it goes straight to a silly place where everyone is getting 'welfare' because the government isn't taxing them for breathing out CO2. A subsidy is the government forcing more resources to be allocated to something than people with money think is good. An externality is when we believe that outcomes are affecting people who weren't the buyer/seller. The environmental lobby wants to claim that fossil fuels are subsidised therefore we must stamp them out because it is Free Market. Charitably speaking, that really just shows the environmentalists are making an effort to use other people's language but don't understand the free market philosophy at a fundamental level. If the use of something has to stop for environmental reasons then it is taxed. Claiming that it is really reversing a subsidy comes out more as trying to shout the opposition down by changing what words mean on them. It is bad form.

russdill 7y ago

Beautiful, chromium 77 has, as advertised, broken incognito mode detection. Bloomberg now claims I'm browsing incognito regardless of whether I really am (and thus cannot read the article).

CraneWorm 7y ago
outline failed so I used my freebie on ya I'm not reading it so you can have mine, everyone aside from Mr. russdill please kindly avert your eyes. Solar and Wind Power So Cheap They’re Outgrowing Subsidies @markchediak More stories by Mark Chediak 5-7 minutes For years, wind and solar power were derided as boondoggles. They were too expensive, the argument went, to build without government handouts. Today, renewable energy is so cheap that the handouts they once needed are disappearing. On sun-drenched fields across Spain and Italy, developers are building solar farms without subsidies or tax-breaks, betting they can profit without them. In China, the government plans to stop financially supporting new wind farms. And in the U.S., developers are signing shorter sales contracts, opting to depend on competitive markets for revenue once the agreements expire. relates to Solar and Wind Power So Cheap They’re Outgrowing Subsidies The developments have profound implications for the push to phase out fossil fuels and slow the onset of climate change. Electricity generation and heating account for 25% of global greenhouse gases. As wind and solar demonstrate they can compete on their own against coal- and natural gas-fired plants, the economic and political arguments in favor of carbon-free power become harder and harder to refute. “The training wheels are off,” said Joe Osha, an equity analyst at JMP Securities. “Prices have declined enough for both solar and wind that there’s a path toward continued deployment in a post-subsidy world.” Subsidy-Free Europe The reason, in short, is the subsidies worked. After decades of quotas, tax breaks and feed-in-tariffs, wind and solar have been deployed widely enough for manufacturers and developers to become increasingly efficient and drive down costs. The cost of wind power has fallen about 50% since 2010. Solar has dropped 85%. That makes them cheaper than new coal and gas plants in two-thirds of the world, according to BloombergNEF. “Solar got cheap,” said Jenny Chase, an analyst at BNEF. “It’s really that simple.” China Huaneng Group Windfarm in Eastern China Wind turbines spin in Qidong, China. Photographer: Qilai Shen/Bloomberg Yet for all it’s promise, clean energy still has a long way to go before fully usurping coal and gas. Wind and solar still only accounted for about 7% of electricity generation worldwide last year, according to BNEF. And most wind and solar projects still depend on subsides. In the U.S., in fact, the solar industry is pushing to extend federal tax credits that are scheduled to decline over the next few years. And then there’s the issue of round-the-clock power. Solar doesn’t work at night. Wind farms go idle when breezes slack. So until battery systems are cheap enough for generators to stockpile electricity for hours at a time, renewables can’t constantly provide power like coal and gas. Solar module prices have plunged this decade Perhaps nowhere is the push toward subsidy-free clean energy clearer than on arid expanses of Southern Europe. About 750 megawatts of subsidy-free clean-energy projects are expected to connect to the grid in 2019 alone, across Spain, Italy, Portugal and elsewhere -- enough to power about 333,000 households, according to Pietro Radoia, an analyst at BNEF. “The cheapest way of producing electricity in Spain is the sun,” Jose Dominguez Abascal, the nation’s secretary of state for energy, said last year. The road to subsidy-free renewables wasn’t easy for Spain. A decade ago, it offered developers a lavish feed-in tariff, prompting an uncontrolled boom that strained the national treasury. Spain slashed incentives and now has a hands-off energy policy. China, the world’s largest renewable energy market, also propped up wind and solar for years. Now it’s shifting toward a more market-driven approach. Earlier this year, officials announced a plan to develop 20.8 gigawatts of renewable projects that can only profit from selling electricity into grids at prices equal to or less than coal. Plus, most wind farms built on land -- as opposed to in the ocean -- won’t be eligible for subsidies after 2021. Cheaper Wind The picture is less clear in the U.S. Nearly every American wind and solar project remains eligible for subsidies through federal tax breaks, which are scheduled to decrease or phase out altogether over the next few years. Plus, dozens of states have renewable-energy quotas, forcing utilities to buy a certain amount of wind and solar. Still, they’re starting to compete on their own. The proof is in the sales agreements. For years, clean-energy developers needed 20- or 25-year power-purchase contracts to ensure a return on investment. Now they’re building wind and solar farms with agreements for 15 years or less -- with the expectation that projects will compete against gas- and coal-fired plants in wholesale markets after the deals conclude. “Renewable energy’s next major evolutionary step is to sell power directly into wholesale markets,” said Richard Matsui, chief executive officer at San Francisco-based solar risk-management firm KWh Analytics. “Investors worldwide are only beginning to dip their toes in those waters.” (Michael R. Bloomberg, the founder and majority stakeholder of Bloomberg LP, the parent company of Bloomberg News, has committed $500 million to launch Beyond Carbon, a campaign aimed at closing the remaining coal-powered plants in the U.S. by 2030 and slowing the construction of new gas plants.) This story is part of Covering Climate Now, a global collaboration of more than 250 news outlets to highlight climate change. — With assistance by James Thornhill, Reed Landberg, Jasmine Ng, Jeremy Hodges, and Chris Martin

gridlockd 7y ago

"Solar doesn’t work at night. Wind farms go idle when breezes slack. So until battery systems are cheap enough for generators to stockpile electricity for hours at a time, renewables can’t constantly provide power like coal and gas." This is the crux of the problem. We don't just need cheaper batteries, we need entirely new battery/storage technology. Current battery production is an ecological disaster in and of itself. "Still, they’re starting to compete on their own. The proof is in the sales agreements. For years, clean-energy developers needed 20- or 25-year power-purchase contracts to ensure a return on investment. Now they’re building wind and solar farms with agreements for 15 years or less -- with the expectation that projects will compete against gas- and coal-fired plants in wholesale markets after the deals conclude." This may just be speculating that governments will be issuing all kinds of premiums on fossil technologies instead of directly subsidizing renewables, which is far more likely than actually switching to renewables.

beat 7y ago
Storing energy isn't exactly magical. Humans built the first dam nearly 3000 years ago. It's simply a matter of cost, and that's a combination of situation and experience. Batteries, hydro, compressed air, thermal, gravity... all of these things work, and are known quantities. It doesn't take a breakthrough in technology to say "If we build a tank for compressed air that is volume X, to pressure Y, it can store energy Z; and thermal losses for conversion in and out are A, and it costs B to build". This is completely ordinary engineering.
- gridlockd 7y ago
  > It's simply a matter of cost, and that's a combination of situation and experience. Batteries, hydro, compressed air, thermal, gravity... all of these things work, and are known quantities. Everything is a matter of cost. If cost didn't matter, we could just suck up all the CO2 from the air. That technology already exists too, and it's a "known quantity". The problem is, cost does matter and there is such a thing as "prohibitively expensive", especially if we're looking at countries that aren't as wealthy. Furthermore, relative costs matter. What are we not building if we are building all this buffering infrastructure? > It doesn't take a breakthrough in technology to say "If we build a tank for compressed air that is volume X, to pressure Y, it can store energy Z; and thermal losses for conversion in and out are A, and it costs B to build". This is completely ordinary engineering. Sure, but if B is too large, it just won't happen. That's why you need a technological breakthrough to get B within the realms of feasibility.

crazygringo 7y ago

> So until battery systems are cheap enough for generators to stockpile electricity for hours at a time, renewables can’t constantly provide power like coal and gas. I thought the solution wasn't expensive batteries locally, but rather storing pumped water in reservoirs, or other solutions like melting and re-solidifying salt, etc. -- huge-scale energy storage connected to the grid. Your energy is produced once from the sun/wind, and then second (at night) from hydroelectric turbines or steam. Anyone know how that's going? Does it have to be done at the city/region grid level, or are there micro-versions that make sense to be integrated with a single wind turbine or field of them?

ivl 7y ago
I believe China is commiting a huge amount of effort to building more pumped stored power, which should be coming online in the next few years [0]. If they keep up with building out a large amount of solar, this could work very well. 0. https://en.wikipedia.org/wiki/List_of_pumped-storage_hydroelectric_power_stations#Under_construction https://en.wikipedia.org/wiki/List_of_pumped-storage_hydroel...
timerol 7y ago
"Battery systems" encompass all of the above methods of "energy storage connected to the grid". My personal favorite "so crazy it might work" idea is stacking concrete blocks on top of each other. Li-ion batteries keep coming down in price, and they can be scaled to basically any size. Pumped hydro is generally considered the best if you have access to it. Compressed air storage works well if you've got a huge, airtight cavern (generally an old salt mine). But any cheap energy storage we can get is gonna be useful.
- russdill 7y ago
  There's a lot of engineering challenges to still work out, but my favorite is currently flow batteries.
- giarc 7y ago
  Another crazy one is simply pushing a big heavy train up a hill. Then when you need power just letting it go back down the hill. https://www.wired.com/2016/05/forget-elons-batteries-fix-grid-rock-filled-train-hill/ https://www.wired.com/2016/05/forget-elons-batteries-fix-gri...

spenczar5 7y ago

What are the developments that have made solar and wind so much cheaper over the last 15 years? I am hoping HN has an expert lurking about who can unpack this.

ClutchBand 7y ago
No expert, but I would imagine that decreased cost to manufacture (as factories are getting built and established), improvements in its total output (and generally the technology behind them), and longevity/durability.
noneeeed 7y ago
Mass production of both along with greater effieciencies in manufacturing and installation. There are huge factories that churn out solar panels, and the installation systems have become simpler and faster. On the domestic side it can now take just a couple of hours to fit the panels once the brackets are in place, it used to take a day or more. Basically both technologies have been matruring for a number of years, getting cheaper and better at the same time, so the cost per kwh drops. On the wind side of things, the turbines have also got larger, which increases output significantly (power is proportional to the square of blade length, roughly). We also seem to have hit a price point where there is ample capital to invest in projects of all scales. Add in the flexibility of gas to deal with varying demand and the you have a better market to invest.
- wallflower 7y ago
  In the “Move fast, break things” realm, there was a 2013 tragedy in which two mechanics lost their lives atop one of those massive wind turbines when it caught fire. Their legacy is that it led to better safety standards. http://www.windaction.org/posts/38949-dual-deaths-in-wind-turbine-fire-highlight-hazards http://www.windaction.org/posts/38949-dual-deaths-in-wind-tu...
artimaeis 7y ago
There was a great episode of the Planet Money podcast they recently re-ran that got into at least one of the factors of the drastically cheaper solar availability: https://www.npr.org/2019/08/14/751234092/episode-616-how-solar-got-cheap https://www.npr.org/2019/08/14/751234092/episode-616-how-sol... As I recall -- there was a boom of manufacturing plants for the solar cells in China as they were forecasting a drastically growing demand. The plants came online and boosted the supply greatly before the demand was high enough, so the prices sank. There's also apparently been a number of improvements to tooling in regards to the labor required to install solar panels that has generally lowered labor costs.

noneeeed 7y ago

For anyone interested in power useage and supply patterns you should check out https://gridwatch.co.uk/ https://gridwatch.co.uk/ It shows UK power use and generation in realtime, and over various time periods. There is still plenty of room for more renewables, and it shows how solar is actually pretty good in the uk, it generates during the main peak period in the day.

toomuchtodo 7y ago
Worldwide mostly realtime data: https://www.electricitymap.org/?wind=false&solar=false&page=map https://www.electricitymap.org/?wind=false&solar=false&page=...
- m0skit0 7y ago
  I think France vs Germany in this map is a nice argument in the nuclear vs "renewables" discussion
  - noneeeed 7y ago
    Germany's sudden shift from nuclear without a plan for what to replace it with was just so frustrating to watch. So much coal :/

ThomPete 7y ago

This is only because for some reason when we talk about wind and solar we don't factor in the cost of coal, nuclear, gas and oil which are being used as backup. Furthermore, with wind and solar, we don't factor in things like decommission like you would on nuclear.

pjc50 7y ago
Nuclear decomissioning is the only one that's especially expensive; I suspect if you look at most of the actual wind farm contracts you'll see a decomissioning cost in there somewhere. Factoring in the "backup" generators makes no sense in a free market electricity economy. That's like saying you need to factor in the cost of a taxi to train tickets, in case the train is broken down.
- ThomPete 7y ago
  You don't see that in there, unfortunately. And of course, it makes sense to factor in backup energy as you can't actually deliver consistent energy with wind and solar alone. So the true cost of wind and solar should obviously include the cost of running these backups AND it would then of course also mean some of those externalities. Anything else is dishonest comparison IMO which the above article is guilty of.
  - pjc50 7y ago
    But that's not how an electricity spot market works. The market price is instantaneous as the energy is delivered.
    - ThomPete 7y ago
      That's how you need to discuss this in order to get to the true cost otherwise you are making decisions based on incorrect data. Wind can't deliver enough energy it's relying on other types. So any discussion that includes wind or solar as a solution needs to include what backup are needed and what that cost. The reverse mind you is not true.

jamil7 7y ago

Theres a Dutch study indicating that we're rapidly approaching supply chain limits for the rare metals required for renewable energy, both solar and wind. I wonder how long renewables can continue dropping in price.

beat 7y ago
Solar, maybe, for now. But I can't imagine that there is a need for large amounts of exotic metals in a wind turbine, which is a simple generator. Exotic materials might give a percent or three more operational efficiency, but they're not actually necessary.
- jamil7 7y ago
  As far as I know neodymium is currently used for magnets in a lot of wind turbines and electric motors among other things. It's not rare but the vast majority of it comes from China right now. I can't speak to how much efficiency it adds.
  - beat 7y ago
    Actually, that makes a lot of sense. Neodymium magnets are much lighter and more compact for the same strength. (I know this from being a guitar player - exact composition of magnets in guitar pickups and speakers is a subject of substantial controversy, both technical and magical.) But it also seems to me this might be a cost issue... it's possible that neodymium magnets are used because they're cheaper in context than ceramic, alnico, or other materials. That could change if neodymium prices increase substantially due to scarcity.
  - BurningFrog 7y ago
    I wouldn't worry much about China refusing to export things for money.
  - vlehto 7y ago
    Wind turbines are currently over 100 meters high and installed into places that see lot of wind. It's a rule of thumb that you should keep the natural frequency of any large steel building above 20 hz. Swiching to heavier magnets will increase the mass of the generator which is mounted on top. That in turn will make the whole thing more wobbly (ie lower the frequency). To combat this you need thicker frame. Which in turn will cost more and weight more. It's completely possible that current windmill designs are only possible with neodymium magnets. We would need to ask turbine designer.

enqk 7y ago

Why no mention of nuclear electricity generation, which requires less CO2 than Solar and even Wind? (For the same amount of available power)

orliesaurus 7y ago
Simply because people are afraid of nuclear. Sure it's not a simple industry either, but when done right (look at France) it powers entire cities and allows for exportable energy!
- pfdietz 7y ago
  No, it's because of cost, not fear. In France, we don't know how much their first wave of reactor construction cost, because the accounting mixed military and civilian development, and the paperwork has been lost. What we DO know is their recent attempts have gone disastrously wrong, with cost ballooning far outside the initial estimates. New nuclear is no longer a practical option there, if it ever was.
beat 7y ago
Because nuclear can't keep up on cost. Right now, new wind, PV solar, and gas all cost about half as much per kwh as nuclear. We actually have numerous nuclear plants being decommissioned early in the US, because they've lost industrial-scale customers to cheaper new sources, and since their operational cost doesn't reduce with output, it can cost more to keep the plant running than to just shut it down. A lot of pro-nuclear activists respond with "Yeah, but" and bring up theoretical thorium designs and such that are not actually in production operation anywhere. But until they are in production, they are not actual competition for the gas/wind/solar systems that are commercially available, at scale, right now. But traditional light water reactors? They're a technological dead end. The cost doesn't work.
- enqk 7y ago
  When you're saying nuclear can't keep up with the cost, are you comparing the same kwh? For wind and solar if you install X kwh for amount A, and for nuclear Y khw for amount B, X represents a peak available capacity.. At best, what is the guaranteed available khw you get for this installed base? 0.10 * X? For nuclear the available capacity is much closer to Y. So if the available capacity from wind/solar was something like 0.10 X, then it means you'll have to install 10x more wind and solar than you would need nuclear. Which needs more material and more energy expenditure (more CO2?) to install. If you compare cost, similarly, A would have to be 10x smaller than B to make wind/solar be cheaper. Some other issues is how Solar competes in terms of surface with areas that you'd grow food in (unless you build in the desert, but then you have issues such as dust on the panels, and the need to carry the energy across large land)

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kumarski 7y ago

It takes an immense amount of coal to make steel turbines. It takes an immense amount of natural gas peaking facilities to counterbalance Solar and Wind's draw downs. Manufacturing photovoltaic panels with low-carbon electricity (for example, in a solar-powered factory), and installing them in a high-carbon-intensity country would tip the balance. Right now we do the opposite. Solar actually INCREASES gas consumption. You have to provide for a fixed power demand with 2 systems. -Combined cycle methane gas plant (cc) -Methane Peaker backed Solar PV(pvp) "Epvp=Epeak/(1-Cpv) Your effective time average methane energy consumption efficiency (electrical energy out / chemical heat in) for pvp is going to be the peaker efficiency divided by 1 - the capacity factor of the PV: Epvp = Epeak / (1 - Cpv) The methane energy efficiency of cc, Ecc, is fixed One can find the methane breakeven capacity factor, Cpvbe by setting Epvp=Ecc and solving for Cpv: Cpvbe = 1 - Epeak/Ecc Epeak ~ a generous 42% Ecc ~ 62% Plugging these numbers in yields: Cpvbe = 1-42/62 = 32% which means unless your capacity factor meets or exceeds 32% that solar imposes a net methane opportunity cost backing it up with a gas peaker plant in comparison to gas combined cycle. You can find the capacity factors for solar here: https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_6_07_b&fbclid=IwAR3Oj5a7FUildPrxVyVfErx-kb997hbl5KGWTjf0IDIVB2KtLar2sEFFIfA" https://www.eia.gov/electricity/monthly/epm_table_grapher.ph...

ahupp 7y ago
I think you need to give citations on those net carbon claims, because that's hard to believe.
timerol 7y ago
This is a very poorly worded comment. I had to read it multiple times to get your point: Gas plants that run continuously (combined-cycle) have much higher efficiencies than peaker plants, so solar+peaker can have a lower efficiency than combined-cycle gas plants on their own. I have a few questions about this. How do combined-cycle plants adjust to changes in demand? Do we need to compare solar+peaker to combined-cycle+peaker to have a fair comparison? Or do combined-cycle plants allow for lower changes in output than peakers, such that (e.g.) a 10% solar 90% combined-cycle system could adjust as well? The grid is a whole system, not just two power plants. Finally, nobody is advocating for just solar+peaker. Solar+wind+peaker will easily get you over the 32% threshold, as solar and wind tend to provide power at different times (not perfectly, sadly). If you have some storage available (preferably hydro, but possibly other), then you get an even higher effective capacity factor.

kumarski 7y ago

"This performs a wealth transfer from the poor to the middle class, when the middle class can buy partially subsidized panels but the poor can't, and then the panels "drop" the cost of power by raising it for everyone else, offering cheaper power to those who can afford it on the backs of those who cannot."

Robotbeat 7y ago
This is partly a result of the monopolistic status of utilities. Usually, in a competitive market, if you add extra supply or reduce demand, the price drops. In a monopoly where the company is allowed to maintain profits, the reduced demand means less revenue and profits so they increase price. In a free market with lots of players, the profits would drop, the prices would drop, and marginal players would simply go bankrupt. It's clever marketing by utilities, however, to blame their abuse of monopoly power on solar power subsidies.

sremani 7y ago

As usual this where Bloomberg acts as Solar is similar to NG. Solar and Wind are widely dependent on location. Your results of NG in Phoenix or Chicago are going to be more or less same - you cannot say that for Solar. At the right places Solar is profitable - but at the grid interface level its not same as having NG. For all the solar panels that are visible and there are countless "invisible" massive diesel generator back-ups and an inefficiently used NG base-load generator somewhere. Its very rare Solar-Wind get their baseload from hydro (its possible). But again, HN being HN .. Ye Ye Ye! These headlines make people think some how ONG is replacable and all it takes moar and moar Solar and Wind, and there is nothing farther from truth. The enemy of knowledge is not ignorance, its illusion of knowledge.

batmansmk 7y ago
Solar and wind as you said are widely dependent on location; they have the courtesy of also being widely dependent on the time of the day, and the forecast that day. The price angle is not the correct one to estimate quality of an energy source. When the wind blows and the sun shines, NG is cheap because we overproduce and we have to get rid of MWh. Germany even reaches negative prices quite regularly.

Genome1776 7y ago

great story

lucaspottersky 7y ago

cant read. paywall. nice internets.

piokoch 7y ago

When it comes to renewable energy it is worth to look at one (sad) statistics: if Germany and California, one of the largest CO2 emitters (Germany is on the 6th place, despite a lot of (failed [2]) efforts and even more PR) would spend those money on nuclear energy, they would be 100% clean - CO2 emission zero, null. Why people keep investing in something so unreliable like wind/solar power plants which are useless without auxiliary source of energy (batteries technology is not ready for mass energy storage) while we have technology that provides clean, CO2 free energy? I understand sun power plants in California, that make some sense (not much, as those stats show), but, hey, Germany? With more or less 60-70 sunny days a year? [1] https://www.forbes.com/sites/michaelshellenberger/2018/09/11/had-they-bet-on-nuclear-not-renewables-germany-california-would-already-have-100-clean-power https://www.forbes.com/sites/michaelshellenberger/2018/09/11... [2] https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent-renewables-decreasing-germanys-carbon-emissions/ https://www.forbes.com/sites/jamesconca/2017/10/10/why-arent...

dnadler 7y ago
That's not really the whole picture. Nuclear power doesn't produce CO2, but does produce radioactive waste which must be stored somewhere.
- YJR 7y ago
  Said waste does not contribute to global warming/climate change in bad ways.
- Robotbeat 7y ago
  The volume of nuclear waste that must be stored is vastly smaller (by orders of magnitude) than the amount of emissions (and often ashes) from fossil fuels. About the same size as the radioactive tailings from mining rare earths for wind turbines (depending on the design). And a big difference is that nuclear waste IS stored. In engineered containers. With the price paid by the nuclear power provider. Unlike CO2 emissions from fossil fuel power plants. So I'd say, given the orders of magnitude difference, it is pretty much the full story. Except to note the waste issue for nuclear is vastly exaggerated.

ufukcan74 7y ago

Cool Earth Solar company unlike normal solar panels, it produces spherical panels, thus producing 400 times more energy than normal panels. https://pdfs.semanticscholar.org/4bf1/d93a9467608c9c1d1536f3a9179d97f5ce2c.pdf https://pdfs.semanticscholar.org/4bf1/d93a9467608c9c1d1536f3...

EA 7y ago
"With no occlusion, the flat-panel collector is more efficient than the spherical-surface collector by a factor of more than 2." "Considering the occlusion factor, the spherical-surface collector can be the better choice in certain situations"

noetic_techy 7y ago

Has this translated to me as a consumer being able to buy rooftop solar for cheaper? I live in FL and am considering it.

toomuchtodo 7y ago
You’ll pay about $2.70/watt in Florida. Payback period will be based on whether you’re paying cash or financing, system size, and your current utility rates. Much cheaper than in the past, but whether it makes financial sense is a calculation each household has to perform. I’d suggest getting three quotes from local installers to kick off the process.

Jedd 7y ago

Why do we still have such poor quality reporting on renewables: > And then there’s the issue of round-the-clock power. Solar doesn’t work at night. PVC doesn't work at night, but CSP most definitely does. (By working, I mean a solar thermal plant is providing power well after sunset.)

rossdavidh 7y ago

I am really glad this is happening. I think that the Moore's Law-like decline in costs of wind and solar are going to far more to combat climate change than every international treaty ever attempted, and that's great because climate change is a serious problem and it must be addressed. However... I think we have been trying to figure out how to get the world's economy to shift off of fossil fuels for so long, we haven't given a lot of thought to what happens as we do, which appears to be in the process of happening. Right now it's coal that's circling the drain. The other fossil fuels will come a few years after. Imagine every nation in the world that depends on oil revenue right now, going the way of Venezuela. We are not ready.

woodandsteel 7y ago

Remember, one of the main arguments of the climate change is a hoax, fossil fuels forever gang is that switching to renewable energy would make electricity so expensive it would mean the end of modern society and we would all go back to living in crude huts.

Huycfhct 7y ago

I don't get these titles. Solar is overcoming the subsidies fossil fuels get for freely dumping carbon or they no longer need the government price alignment?

aussieguy1234 7y ago

The sun always shines - somewhere in the world. Is the problem of solar power at night more of an issue with transmission?