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What is the point of citing theoretical values like LCOE when we have direct practical information on predicted profitability? Energy producers in Texas are ar
by Veserv 2y ago
What is the point of citing theoretical values like LCOE when we have direct practical information on predicted profitability?
Energy producers in Texas are are adding 8x as much solar capacity (24 GW) as natural gas capacity (3 GW) [1] over 2024-2025. Do you believe that the entire Texas power plant industry is deliberately choosing less profitable and capital inefficient generation?
That could be the case, they may optimistically forecasted or undercounted potential future problems, but at this point in time their calculations seem to show that solar is tremendously more cost efficient to deploy over its expected lifetime.
It could also be the case that there are just subsidies for renewable energy in Texas that tip the balance. But at the scales we are now discussing, 10-20% of total energy generating capacity, the total value of those subsidies would need to be quite tremendous (in the G$ to 10 G$ per year range).
[1] https://www.eia.gov/todayinenergy/detail.php?id=61783#:~:text=In%202023%2C%20installed%20solar%20capacity,capacity%20during%20the%20same%20period https://www.eia.gov/todayinenergy/detail.php?id=61783#:~:tex....
- verisimi 2y agoIs it a free market though? Or are solar, wind, etc being funded by the government? Or is gas being taxed in a way that solar is not (yet)?
- bee_rider 2y agoThere isn’t a free market for energy really, it is a global marketplace and the government of every major player puts their thumb on the scale. Governments are investing in solar because they want to be ahead in the renewable economy, where energy literally just falls from the sky. Is that a subsidy? I guess. It is also a good strategic move. Are petrochemicals taxed or subsidized? I have no idea, it is a big tangled web. What are the costs of staying plausibly friendly with Saudi Arabia and other OPEC members, who pays that bill? I’m not going to try and defend either way, but I don’t believe anybody who says they have an answer. If they did manage to analyze the entire global economy somehow (where to even start) I don’t think they’d post the answer here.
- verisimi 2y agoWouldn't the answer be to provide a simple number for the cost of a thing (oil, solar, wind, etc), that removes the government subsidies/taxes from the equation. Otherwise, you can tax what you don't like to oblivion or subsidise what you do like until it appears viable, but in neither case are you getting a true picture of the cost. The subsidies/tax moves a simple cost question, into the murky world of politics and society and opinion. We are only pretending to discuss costs if the social infrastructure is determining taxes/subsidies.
- bee_rider 2y agoWho’s going to provide that number and how do they calculate it?
- verisimi 2y agoRight. This is to say there nothing real or authentic about the numbers we are given. Solar numbers will shrink or inflate as a function of subsidies or taxes. The whole thing is operating within the confines of government largesse. It's nothing to do with the actual cost of energy, those numbers are a mystery.
- spywaregorilla 2y agoGas is being subsidized
- goodpoint 2y agorenewables have never been subsidized nearly as much as oil and nuclear.
- pfdietz 2y agoSince fossil fuels are not being charged the full cost of their negative externalities, no it's not a free market.