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Putting an End to the Myth that Renewable Energy is too Expensive

Posted on 3 January 2013 by dana1981

The Washington Post recently published an excellent piece of investigative journalism in which they found that the Heartland Institute has teamed up with the American Legislative Exchange Council (ALEC) in an effort to reverse state renewable energy mandates across the USA.  ALEC is a highly controversial organization, essentially comprised of corporations which draft up legislation favorable to their interests, and then pass it along to legislators who will introduce and attempt to implement their bills in state legislatures and US Congress.

The Washington Post reports that ALEC has drafted the Electricity Freedom Act, which would repeal state renewable electricity standards (RESs), which require that a given state meet a certain percentage of its electricity demand with renewable sources by a certain date.  For example, California has an RES to supply 33% of its electricity demand with renewables by 2020, and overall 29 states (plus the District of Columbia) have RESs in the USA. A further 7 states have non-mandatory renewable electricity goals (Figure 1).

RESs

Figure 1: States with Renewable Electricity Standards and Goals.  Source: US Energy Information Administration (EIA).

The Heartland Institute defended the group's efforts to repeal state RESs, calling them "essentially a tax on consumers of electricity" and claiming:

"alternative energy, renewable energy, is more expensive than conventional energy."

In short, the Heartland/ALEC argument is that mandating that electricity comes from renewable sources will raise prices for consumers, and that we should therefore not implement these standards.

There are of course many benefits to implementing renewable energy which this argument neglects, primarily involving reduced pollution — both of traditional pollutants and their human health effects, and greenhouse gases and their climate impacts.  But before we address these important neglected points, is it true that deploying renewable energy technologies raises electricity prices?  Let's see what the data say.

Renewable Energy Implementation vs. Electricity Prices

To test the Heartland/ALEC claim, we've obtained state renewable electricity generation and electricity price data and from the US Energy Information Administration (EIA).  First let's just ask the simplest question — what is the correlation between the percentage of a state's renewable electricity generation and its electricity prices?  As Figure 2 shows, the two variables are essentially uncorrelated (correlation of 0.007, to be precise), meaning that a higher percentage of renewable energy generation has not translated to higher electricity prices.

renewables vs price

Figure 2: State renewable (excluding hydroelectricity) electricity percentage of total electricity generation vs. electricity price (blue diamonds) with a linear trend (black line).  Data from EIA (here and here).

In fact when we include hydroelectricity production in the renewable category, electricity prices actually decline slightly with higher renewable production (Figure 3).

renewables vs price with hydro

Figure 3: State renewable (including  hydroelectricity) electricity percentage of total electricity generation vs. electricity price (blue diamonds) with a linear trend (black line).  Data from EIA (here and here).

However, perhaps the states which have implemented more renewable energy started off with lower electricity prices, and perhaps deploying these supposedly more costly energy sources has indeed caused those prices to rise faster than states which continue to rely on fossil fuels.

Alas no, Heartland and ALEC are not saved by this potential nuance.  Figure 4 illustrates that there is virtually no correlation (correlation of -0.01) between a state's renewable electricity contribution and its electricity price increase between 1990 and 2011.

renewables vs electricity price increase 1990-2011

Figure 4: State renewable (excluding  hydroelectricity) electricity percentage of total electricity generation vs. the percent annual increase in electricity price 1990—2011 (blue diamonds) with a linear trend (black line).  Data from EIA (here and here).

Therefore, deploying renewable energy sources has not caused electricity prices to increase in the United States.

What About Subsidies?

Heartland and ALEC would undoubtedly argue that electricity prices have not risen alongside renewable energy deployment due to government subsidies.  There may be a sliver of truth to this argument. 

  • On the one hand, according to an Environmental Law Institute report, in the USA between 2002 and 2008, fossil fuels received approximately 2.5 times more subsidies than renewable energy ($72 billion vs. $29 billion).  This also includes transportation fuels, and over half of the renewable subsidies went to corn ethanol, which is not used for electricity production.
  • On the other hand, this represents a much larger renewable energy subsidization per unit of electricity produced, since fossil fuels account for a much larger fraction of the overall USA electricity mix (70% vs. 4.1%, respectively, or 70% vs. 10.4% if hydroelectricity is included in the renewable category).
  • However, fossil fuels have been receiving government subsidies for over a century, and therefore have received much larger overall government subsidies than renewable sources.

So while renewable energy sources appear to be receiving more government subisides per unit of energy produced than fossil fuels, fossil fuels are receiving larger total subsidies, and have historically received far more subsidies than renewables.  And then there are the hidden subsidies.

Carbon — The Huge, Overlooked Fossil Fuel Subsidy

Carbon emissions may reasonably be considered a subsidy because they impose various costs on society via climate change (on agricultural productivity, property damage, human health, etc.), but since most countries don't yet put a price on carbon emissions, these costs are not reflected in the fossil fuel market price.  Rather than fossil fuel producers and consumers paying these costs, society as a whole picks up the tab.  Therefore, fossil fuel prices are kept artificially low (Figure 5), which is generally the purpose of subsidies.

coal costs

Figure 5: Average US coal electricity price vs. Muller, Mendelsohn, and Nordhaus (2011) and Epstein et al. (2011) best estimate coal external costs.

The "social cost of carbon" (an estimate of the direct effects of carbon emissions on the economy) remains a highly uncertain cost, but according to a recent study by Johnson and Hope (2012), is somewhere in the ballpark of $100 per ton of CO2 emitted, which is similar to the highest value used in Epstein et al. (2011).  Accounting for this cost would add approximately 9 cents per kilowatt-hour (kWh) to the price of coal-generated electricity (which would more than double its market price), or approximately 4 cents per kWh to natural gas.  On top of that, there are the other external adverse health effects from coal illustrated in Figure 5, which are not reflected in the market price. 

In reality, coal in particular is a very expensive energy source.  Unfortunately its true cost is not accurately reflected in its market price, which allows groups like Hearland and ALEC to pretend that it's cheap and that transitioning to renewable energy will be too expensive.  In reality, the opposite is true.  Continuing to rely on coal is an extremely expensive proposition.

Renewable Energy is Not Expensive

To summarize,

  • States with a larger proportion of renewable electricity generation do not have detectably higher electric rates.
  • Deploying renewable energy sources has not caused electricity prices to increase in those states any faster than in states which continue to rely on fossil fuels.
  • Although renewable sources receive larger direct government subsidies per unit of electricity generation, fossil fuels receive larger net subsidies, and have received far higher total historical subsidies.
  • When including indirect subsidies such as the social cost of carbon via climate change, fossil fuels are far more heavily subsidized than renewable energy.
  • Therefore, transitioning to renewable energy sources, including with renewable electricity standards, has not caused significant electricity rate increases, and overall will likely save money as compared to continuing to rely on fossil fuels, particularly expensive coal.

Note: this post has been incorporated into the rebuttal to the the myth that renewable energy is too expensive

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Comments 1 to 50 out of 65:

  1. I have been following an at times vitriolic comment thread at The Conversation, on the topic Wind is no answer if it leads to higher emissions. The premise of the article is that wind generation is intermittent and requires fossil-fuelled backup generation capacity. To my surprise, almost none of the comments attacks the fundamental idea that CO2 emissions are a bad thing. The interesting argument on the comment thread is between pro- and anti-nuclear proponents, with the pro-nuke crowd claiming that renewables are too expensive and their intermittencies create costly engineering problems for the distribution network, so the logical thing is to start a crash programme of building nuclear generators, instead of spending resources on wind, solar, tide etc. capacity. Sadly, by strenuously opposing renewables, the pro-nuke crowd are playing into the hands of the do-nothing, BAU, burn-baby-burn crowd. I'm not sure where I stand regarding nuclear generators. On the one hand, I see the dangers of catastrophic failures, such as happened at Chernobyl and Fukashima. On the other hand, I know that great strides have been made in engineering and safety aspects, as well as the ability of newer designs being able to use spent fuel from earlier designs currently in operation, thus eliminating the dangerous waste products of existing nuclear plants. On balance, I am sceptical of the ability of humanity to rush the building of new nuclear plants, while maintaining the highest standards of safety, so I am uncomfortable with the prospect of rapid deployment. This caution, however, does nothing to solve the problem of renewables having intermittent generation capability.
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  2. Thanks for this excellent summary of key facts. As ALEC is very active at the state level as well as the national level, I suggest a minor edit to the sentence "..and then pass it along to legislators who will introduce and attempt to implement their bills in US Congress" to include State Legislatures as well as US Congress. Cheers...
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  3. GillianB @2 - I added the suggested text. Doug H @1 - at the risk of turning the comment thread into a nuclear power discussion (which I hope doesn't happen, but tends to occur), it's a bit ironic for nuclear power backers to criticize the cost of renewable power, because new nuclear projects always run way over budget and schedule, and often default on their loans at taxpayer expense. I'd support nuclear power if it could be cost-effective, but right now that's not the case. And an individual nuclear plant is so expensive that you have to put a lot of eggs in that high-risk basket. Renewables are a much safer bet.
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  4. dana1981 @ 3, to my mind, we should use whatever safe technology we have available, as the cost of not replacing fossil fuels is far more important to our collective futures than the cost efficiency of any one technology. If someone could come up with a demonstrably safe design for nuclear generation, I would be happy to include it in our future energy mix. That is my 'all the above, excluding fossil carbon' approach to future electricity generation. Delay is our worst enemy.
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  5. Your cost analysis, Dana, is simplified by the fact that you provide the average costs only. As a side note, I don't knoiw if your actual $ are wholesale or consumer prices. If consumer, then they seem quite cheap, at least comparing to the prices in most AUS states, where I live. The actual cost of electricity producton may vary wildly. The baseload is reliable and cheap. Peak time may be several times more expensive. We know that the technical problem with renewables is ake the as reliable to compete with baseload coal, which is reliable because the techology is well established (100y old) and very cheap because the various externalities including climate change are excluded. I'd like to see some more detailed analysis how renewables compete with baseload coal in both price and reliability. Perhaps solar (either theral or PV) could ultimately become our baseload power if we argree the grids become international (the "daylight" states selling power to "nighttime" states) but I guess that last condition is just in my dreams: I don't even know the feasibility of the power transport over such big distances in the first place.
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  6. Doug H, like you, I am fairly ambivalent on nuclear power, neither strongly in favour nor against. What annoys me, however, is the way the nuclear energy proponents misrepresent both nuclear and renewables. For an example of the former, note that they base costs on projected costs [*] of new conventional plants, but base benefits on hypothetical future fast breeders and thorium reactors, which are still a long way off commercial use and have highly uncertain costs. ([*] Never actual costs, of course, because every instance of massive over-runs so far is either a one-off that will never happen again, or the fault of overly burdensome regulations caused by irrational hysteria...) For an example of the latter, there is the land area required (as if that in and of itself is an issue — ignoring the fact that wind turbines can co-exist with other land uses, rooftop solar doesn't require any extra land, and large scale solar thermal is best placed in very low-value land areas), the material required (one popular Australian pro-nuclear site worked out how much steel and concrete was required and then essentially said "Look how much that is, QED" without mentioning that both represented just a few percent of global production capacity), and the intermittency. There is no doubt that large-scale penetration of unreliable power sources creates new challenges to be overcome; however the perfect is often the enemy of the good, and we can scale up penetration quite a long way before it becomes a big issue, all the while gaining the benefits of averted CO2 emissions. If we are expected to believe that all the historical problems with nuclear will be solved if only we start working on them now, then surely the same applies to engineering our grids to work effectively with high penetrations of renewables? The other thing they often overlook is the discrepancy between nuclear supply curves (or, more accurately, flat lines) and demand curves that dramatically reduces the attractiveness at high penetrations; that discrepancy needs to be resolved somehow — historically, using pumped hydro, or through large scale grid interconnects in the case of France — and many of the energy storage solutions that solve the problem for nuclear would also work for intermittent renewables. In the meantime, we have studies from Germany that showed how wind power actually lowered electricity costs (and, interestingly, that anti-wind article at The Conversation even said "Large volumes of wind generation entry have also contributed to a substantial lowering of the South Australian wholesale spot price" but thought it was a bad thing) and a study from California I posted about here before that showed how rooftop solar combined with solar thermal can dramatically increase wind penetration due to the complementary supply curves combined with the flexible output characteristics of solar thermal plants vs coal and nuclear. My view is that we should build wind and solar as fast as we can and let nuclear see if half a century of massive subsidies has managed to make it economically viable on its own yet. By all means subsidise wind and solar to the same degree that nuclear power has enjoyed over the years if you wish to level the playing field. :-)
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  7. Something that has occurred to me in the past is that there are countries like Australia, China, and the US, where the population centres are concentrated largely in the east and the ideal locations for solar thermal (i.e. deserts) lie to the west. The key feature of this, of course, is that peak power demand is often in the late afternoon/early evening, when the solar thermal plants a few timezones to the west will still be generating substantial output (especially with a few hours of storage). The trick is to get that power to the customer. According to Wikipedia there are > 2,000 km HVDC power lines already (two 3 GW lines 2,500 km long are under construction in Brazil); that's more than enough to connect Sydney and Melbourne to some very sunny areas in Australia. :-)
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  8. JasonB @ 6, the underlying problem exercising many minds, as I see it, is how to maintain our present life-styles in a low-carbon economy. To my mind, maintaining our life-styles is incompatible with zero emissions, given the state of current technologies. In many cases, adaptation to a low-carbon economy will require us to forgo some of the things we take for granted today. For example, broadacre farming currently relies upon powerful tractors and no replacement for internal combustion engines in such tractors has, as yet, made its presence felt. Thus, broadacre farming will continue to rely on the combustion of liquid fuels: if appropriate liquid fuels cannot be sourced, broadacre farmers will adapt by going out of business. In the same vein, if low-carbon electricity generation becomes intermittent, we will be forced to adapt by not expecting 24/7 delivery of electricity to our homes and workplaces. People who depend upon 24/7 electricity to power their life support systems will adapt by dying. It may sound harsh, but it is the reality of the future we are facing. The question is: can we maintain our current life-styles in a low-carbon economy? The answer is: almost certainly, we can't. Once we accept the reality of a future less convenient than today, we can move past the stumbling block of how to feed, clothe and house 10 billion people by 2050, by realising that a low-carbon future will not be able to sustain a population that large, using presently available technology. Instead of worrying about how to take today's good life into tomorrow, we should be looking at how best to use the more limited energy sources of the future. Deploying nuclear power plants may solve the 24/7 electricity conundrum, but it will not solve the problem of the farm tractor and its ilk.
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  9. Im interested in those two outliers on fig 2 - the high cost one and the high renewables one do you know which states they are? Could be useful as worst and best case examples.
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  10. Doug H, I'm not so pessimistic about our chances of being able to maintain close to our current standards while also raising the rest of the world to something similar for a few reasons, which I'll have to expound on somewhat briefly due to time constraints: 1. We are currently very wasteful with energy, precisely because it is so cheap. There is plenty of scope for improvement that actually has negative cost. 2. People make a big deal about the cost of renewable electricity and the cost of deploying infrastructure but fail to keep things in perspective. The current generating cost of electricity from coal in my state is only about 1/4 of the retail price; the rest is transmission costs, retailing costs, profit margins, etc. Even if renewables were four times as expensive as coal (which they aren't) it would still only double the retail price, and the cost of electricity makes up a pretty small percentage of my overall expenditures as it is. I've been buying free-range eggs for years despite being much more expensive than cage eggs in the beginning; I'm willing to make the same sacrifice with my power.
    For example, broadacre farming currently relies upon powerful tractors and no replacement for internal combustion engines in such tractors has, as yet, made its presence felt.
    Note that many of the largest trucks used in mining and diesel-powered trains have been "hybrids" for decades before the Prius came along — the diesel motor drives a generator that, in turn, drives electric motors that drive the wheels. Electric motors rule! There's no problem making an electric tractor (and, in fact, if it were large enough I wouldn't be surprised if it was electric, just like the trucks and the trains); the problem is energy storage. Hydrocarbons are a great way of storing energy — so great, in fact, that even when electric motors are being used, people are willing to put up with the low efficiency of the internal combustion engine driving a generator just so they can use them with an electric motor. BTW, the problem with hydrocarbons is not the fact that burning them releases CO2; the problem is that the CO2 that is released was sequestered for millions of years, so it is being added to the system. Synthetic hydrocarbons, made from CO2 freshly drawn from the atmosphere, are carbon-neutral. Synthetic hydrocarbons and alcohols are an interesting possibility that would allow us to keep much of our existing infrastructure. Batteries aren't great but they're workable; for years I've been using LiPo-powered helicopters rather than alcohol or petrol powered ones due to the benefits of electric motors in operation. I think there are plenty of reasons to be optimistic about our ability to change without great reductions in living standards if we make the change early enough for the world we are faced with to not be too different to what it is now. What I'm pessimistic about is whether we will choose to do so.
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  11. littlerobbergirl @9 I would suspect that the high cost outlier is Hawaii, reflecting the high transportation costs of fossil fuels.
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  12. littlerobbergirl @9: I believe that the high renewables state is Maine, which generates some of its electricity from woodwaste. It is probably not realistic for other states to adopt this kind of renewable energy at that level. My main problem with this analysis is that electricity price variations are dominated by the fluctuating costs of the large share of non-renewable sources and the changing mix, in different states, between coal, gas and nuclear energy. There are also many regulatory price controls. I don't think that we can assume that because we have not been able to measure an increase in costs when the proportion of renewables is generally less than 15% that this means that there won't be an increase when the proportion rises to greater than 50%--and we need to get to 100% within decades. Certainly, pricing externalities properly for coal and gas is going to raise consumer prices. Higher electricity costs seem inevitable to me, we have been free-riding and passing on costs to future generations for too long.
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  13. In the UK there is an ex-nuclear energy scientist that actively helps anti-wind farm groups. I think he also joined or has been associated with a climate skeptic group. I think climate change skeptics/deniers will align themselves with anything that has a potential to undermine any policy to deploy technology that is strongly linked to climate change policies. Nuclear energy is associated with existing energy provision and historical economic activity, so in many respects it is aligned with established norms. Renewable energy is associated with variability and a potential change in the way we use energy, that equates to uncertainty and change. A point I would make is that these struggles are similar to those throughout history. There were tremendous battles to adopt different standards and technology in electricity distribution. What we have today is established, only because of tremendous and very public fights over the use of DC or AC electrical systems and other issues. So the idea that established systems are going to continue into the future is basically a political lie and ignores the massive creative and extensive work that was required to establish what we have. This implies change will continue and the establishment of energy storage and renewables will continue into the future. Those changes will become established and will become the norm.
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  14. Doug H, you cite a few examples where carbon fuels might always be required (e.g. broadacre farming & load balancing) and then say that in a "low-carbon economy" these things would have to cease to exist. That isn't accurate. What you are describing is a no carbon economy. Logically, there is some point between our current level of fossil fuel use and zero fossil fuel use at which our emissions would not cause atmospheric CO2 levels to increase. Given that roughly half the carbon we emit currently accumulates in the atmosphere each year that level would seem to be at about 50% of current emissions. Even if we continued burning carbon for broadacre farming, commercial air travel, some military applications, grid load balancing, et cetera... the level of CO2 emissions from such would be far below 50% of current. The majority of our CO2 emissions (~75%) come from baseload power generation and general transportation. Convert those two things over to non-carbon electrical sources and we'd be fine. At that, there are existing or potential solutions to all of the 'no carbon exceptions'. Load balancing with fossil fuels would not be needed if we built a global electrical grid (there is always Sun and Wind somewhere on the planet), included sufficient electrical storage to smooth over fluctuations, or some combination of the two. A heavy tractor could potentially be beamed power from a nearby transmitter... allowing it to drop the weight of the huge engine and fuel tank (helping to offset power lost in transmission). There was a recent successful test of similar power beaming to a UAV in flight. Whether that could be scaled up to a full sized passenger jet is uncertain, but ultra-thin solar may also eventually be sufficient to keep planes in the air if they don't need to haul tons of fuel along. Et cetera. The point is that there already are or some day will be solutions to many of the 'continuing carbon' issues... but even if there weren't, we only need to tackle baseload power and transportation to end AGW. We could continue using carbon fuels for everything else and the planet would still be on the road to recovery. No new technologies are needed to solve the problem. We could do so today... and doing so would be less expensive than continuing with fossil fuels in the long run.
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  15. Concerning baseload power: currently power companies subsidize use of power at night with low rates because coal and nuclear power are inflexible and cannot be ramped down. Solar produces power at peak usage times so these subsidies are not needed. Perhaps industry will adapt to renewables by using energy storage as they do today with inefficient coal generators. Nuclear seems uneconomic to me. Here in Florida customers have paid $1.5 billion for planning on a plant that will never be built. Currently there are at least two nuclear power plants permanently off line (Crystal River in Florida and San Onofre in California) due to long term maintenance issues. Any solution must be good for the entire world. Do we really want North Korea to get its power from Nuclear plants? Would you feel safe about the maintenance of nuclear power plants in Nigeria? I feel good about solar in Nigeria and wind in Korea.
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  16. It's refreshing to see such a thoughtful set of informative comments (and, of course, a thoughtful and informative article). There seems to be a consensus building on Skeptical Science, at least towards nuclear, to the effect that we don't really know where we stand because we can't find enough information we trust on it. Is there a case therefore for expanding this and related articles into a cohesive analysis of renewable and other alternative energy? Perhaps a sister site, Sceptical Energy? I'd like to see someone, or a group of someones, with a proven level of expertise but no vested interests other than wanting a sustainable environment to live in looking in to these issues on my behalf....
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  17. CBDunkerson:
    Logically, there is some point between our current level of fossil fuel use and zero fossil fuel use at which our emissions would not cause atmospheric CO2 levels to increase. Given that roughly half the carbon we emit currently accumulates in the atmosphere each year that level would seem to be at about 50% of current emissions.
    Unless I am mistaken, it is my understanding that, all other things being equal, warming oceans tend to outgas CO2 (oceans being, as far as I am aware, the source of the CO2 feedback to warming orbital forcings). This is currently not the case due to anthropogenic emissions which are causing oceanic absorption of CO2 due to the pressure differentials (again, as far as I understand it). As such, as human emissions draw down I would expect we would see increased CO2 outgassing from the oceans, which would keep heightened atmospheric CO2 stable (or at least slow down its decrease). So I am not certain it is correct to say we can just cut our emissions by half and atmospheric CO2 will simply stop rising.
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  18. OPatrick, I can't speak for the other commenters but in my case at least my ambivalence probably derives from knowing too much about nuclear. :-) It is something I have spent a lot of time researching and looking at from lots of different angles, from mining and resource availability through to costs, safety, risks, and flexibility. The reason I'm not strongly against it in spite of all that is because I think we need to actively pursue all options if we're going to achieve major reductions and it can play a role. I just don't think it's ever going to be the magic bullet or even a major player for many reasons, so I don't like it sucking oxygen away from investment in renewables.
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  19. Composer99, there are actually a lot of factors involved... but my simple estimate should be in the ballpark. I think you are saying that less CO2 emissions would lower the amount of carbon in the atmosphere and thus result in more net outgassing from the oceans to maintain equilibrium... That would be true if the oceans were uniformly saturated with carbon, but they aren't. If the oceans were well mixed then the amount of carbon we have released to date would have had no discernible impact on global climate. Indeed, the vast amount of carbon the oceans can absorb was one of the initial and strongest arguments against AGW. It turned out to be incorrect only because of the rate at which we are putting carbon into the atmosphere... we are churning it out so quickly that the surface of the oceans is becoming saturated and allowing a backlog to accumulate in the atmosphere. If we were emitting at a lower rate (say 50% of current) the ocean surface would not be as saturated with carbon and thus actually able to absorb more for a given atmospheric ppm level. That said... I'm not arguing that our goal should be to hold steady at ~400 ppm by reducing CO2 emissions 50%. We should be looking to reduce the atmospheric CO2 level back to 350 ppm or less. However, that should be possible while continuing to use fossil fuels for a few niche applications... provided we deal with the two biggest culprits; baseload electrical generation and transportation.
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  20. I think chriskoz @5 and Andy @12 are making a somewhat similar argument - that just because average electricity prices haven't increased at current relatively low levels of renewable penetration, that doesn't mean they won't rise when renewables reach a higher share and have to replace some baseload power, for example. That's a valid point. This post is specifically in response to Heartland/ALEC arguing that renewables are already too expensive, which is clearly false. Most states are still just aiming for ~25% renewables in the next decade or two, and I think the evidence shows that won't have much if any impact on electricity prices. That being said, the hidden costs of fossil fuels are so large that replacing them with renewables will still almost certainly save money in the grand scheme of things, even if prices rise as renewables meet a higher percentage of demand. It's also worth noting that there are several ways renewables can produce baseload electricity. LRG @9 - Phil and Andy are correct that Hawaii is the expensive outlier, and Maine is the high renewable production outlier due mainly to burning wood waste.
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  21. In addition to dana1981's points, it has been shown that distributed renewable systems provide a steady baseline power supply - Archer and Jacobson 2007 show that just 19 wind sites in the southwest US (no solar in that investigation, which would increase availability due to different time patterns) gives at least 1/3 of the average power at current baseline dependability/consistency rates, while minimizing distribution costs. This percentage would only go up with larger distribution areas - individual sites have high variability, but weather is local, and when one site is calm others are windy. Back on topic - wind power is growing at 20% a year globally, solar power (photovoltaic) installations are doubling every two years. That wouldn't be happening if these weren't economically attractive, no matter what subsidies were given. ALEC and similar groups are arguing against reality.
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  22. KR @21 - my link to the renewable baseload rebuttal @20 addresses the distributed renewable baseload point :-) That's one of the ways renewables can meet baseload demand, in addition to geothermal, and sources with storage like solar thermal.
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  23. dana1981 - Ah, yes, the Advanced version of the blog post addresses intermittent supply via geographic distribution and linked systems. I had been looking at the Intermediate version, which does not - just energy storage techniques.
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  24. Whoops yeah, I should have linked to the advanced version.
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  25. The problems associated with the on-off nature of renewables are highly overhyped. http://mtkass.blogspot.co.nz/2011/02/wind-energys-no-good.html
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  26. I propose an "all of the above" approach , and allow the market to decide .
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  27. CBDunkerson: Thanks for clearing up your point; I think you have addressed my concern save one minor misunderstanding:
    I think you are saying that less CO2 emissions would lower the amount of carbon in the atmosphere and thus result in more net outgassing from the oceans to maintain equilibrium...
    I do not think I was making an argument from equilibrium. My understanding may be (and probably is) off, but the impression I have is that normally, ocean warming leads to CO2 outgassing by the oceans into the atmosphere, and vice-versa. However, because of the source of the current build-up of atmospheric CO2 (human emisssions), due to the difference in partial pressures of CO2, the oceans are taking it up instead, despite their warming. Hence my inference that reducing human emissions would allow ocean outgassing of excess CO2 when the partial pressure difference is altered. I gather that I have made a mistake in there somewhere, but I do not think it has anything to do with equilibrium CO2 concentrations.
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    Moderator Response: [DB] Dr. H. Franzen discusses that very thing in the comments thread of his Seawater Equilibria guest post, starting about here.
  28. Thanks, Dana, for this update on the ever-increasing market competitiveness of renewable energy, when all costs and subsidies are considered. Thanks also for pointing out that ALEC - the unholy alliance between corporations and elected leaders - has added the decimation of state renewable energy standards to its agenda. It is extremely irritating when a cabal of plutocrats uses money and influence to overrule the people of my state (Colorado) who voted to have a renewable energy standard. We're second only to CA, with a requirement for 30% of electricity from renewables by 2020. Thankfully the Wind Production Tax Credit (PTC) of 2.2 cents/kWh was renewed along with the "fiscal cliff" bill, although the extension is only for one year. Too late for many Colorado jobs already lost to Congress' dysfunctionality, but something is better than nothing I suppose. Why are direct fossil fuel subsidies permanent and automatic, rather than subject to renewal every year or two like renewables? One difficulty to overcome in reaching a clean energy future is the seeming enormity of the task of getting from here to there without great disruption and cost. There are some very well thought out and modeled solutions out there, and I'll mention two. One is a recent study by NREL, and the other is a project called Reinventing Fire by energy and energy economics expert Amory Lovins and his crew at the Rocky Mountain Institute (buy the book here...it's a good read, and hopeful). One thing I like about Lovins' approach is that consideration of climate change is unnecessary, as the transition is led by the private sector because it's the more profitable approach (opposite of the Heartland mythology).
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  29. Phil, Andy, dana, thanks. Hawaii seems to be going balls out for renewables - geothermal, wind, wave, and the sea pipe things for air conditioning. Makes sense if they have to import oil, but a special case as any alt. tech. is going to be cheaper! Worth watching how they get on. As for Maine burning their wood waste, good! But i cant help thinking we'll have rather more dead stuff to pyrolise (sp?) in next few years than we would like - pine bark beetles, sudden oak death, chestnut canker and ash dieback are just the start :(
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  30. RE: KR @20,Dana @21,KR @22 "it has been shown that distributed renewable systems provide a steady baseline power supply - Archer and Jacobson 2007" I still see renewables appearing to be costly (short-term) on account of our desparate need for more electricity infrastructure - particularly east/west connectivity. North America is pretty North/South and we require a grid that is actually more "grid like" in that hydro in the rockies, can be connected to wind in the mid-plains and then connect to the needs in the east. Wind should be paired with hydro (wherever possible) since turbines spun by falling water are relatively easy to turn off/on. Nuclear has a place (I suspect deep in the base of the baseload) since it is difficult to turn off and on. Renewables would be so much more effective in a better grid. And once they are up and running they are the energy gift that keeps on giving. Besides maintainence, their benefit continues on into the future.
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  31. Manwichstick, I think you hit the mark with the requirement for a well connected grid being the missing piece in the renewables puzzle. In a geographically diverse renewable generation scenario, fluctuations in sun/wind tend to even out. Pumped hydro storage also helps but, unless this can be done easily using seawater, this is unlikely to be useful in Australia. (On this note, Carnegie Wave Energy are using seawater to generate electricity/produce de-salinated water so this may not be too far-fetched.) As far as liquid fuels are concerned, I am keeping a finger on the pulse of algal fuels. I believe these present great possibilities for future fuel uses and, indeed for carbon sequestration. (Could we produce excess fuel and pump it back down into old oil wells?) Sequestering a liquid is a whole lot easier than a gas.
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  32. Pumped Storage & Hydro will be needed as intermittent renewable energy generation increases it's penetration of the grid. However, there is a subtle difference between Hydro & Pumped Storage. Regular Hydroelectric needs a sufficiently large catchment area to replace any water used to generate electricity, to put it another way, generation is limited to the amount of precipitation in the catchment. With Pumped Storage however, the same water used over and over again. The catchment only needs to supply enough water to replace water through evaporation. This reduced need for a large catchment means many sites that are not viable for hydroelectric generation may be viable for Pumped Storage. In Australia the Great Dividing Range which runs the entire length of the east coast of the county would likely have a number of locations suitable for Pumped Storage. The northern most end of the Great Dividing Range is the wettest area of Australia so would be viable hydroelectric generation.
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  33. This is an interesting analysis and useful in the argument against those who are less keen on renewables. A couple of comments/questions (I'm sorry if they've been raised/discussed elsewhere): 1) At present the conclusion from this analysis must be that mixed energy generation does not affect the average price of electricity (not that renewables specifically are no more expensive than fossils). I realise this post is a rebuttal to comments on cost of renewables made by ALEC/Heartland but I think the differences between a mixed and wholly renewable system is (or will be)important. As mentioned by others, there is the problem that when renewables reach a certain level it becomes impossible to run fossil fuel plants all the time, which may raise cost. As you state in another post, renewables can overcome problems with intermittency but with the Grid structure in the US (and elsewhere) at present, is this feasible without very disruptive and costly infrastructural changes? I guess we may only know this as various States increase their renewables to above 25%. 2) How do installation costs get factored into the analysis? Presumably a new power "plant", fossil or renewable, can be funded through either commercial investment, subsidies or a bit of both. If an installation is more commercially funded, I'd assume this would be seen in a change in metered electricity prices whereas it may not be when subsidised (unless one includes the taxation needed into the price). I'm unfamiliar with how these things are funded in the US, but are there big differences between fossil and renewables? 3) It would seem that in many cases existing renewables can be cheaper than fossils, or at least price match, once installed. However, it is the cost barrier in moving from a fossil fuel-based economy to a renewable one that gets in the way. This takes many forms- changes to the Grid, R&D and roll-out of new renewables and energy storage methods, installing smart meter/energy efficiency technologies in homes. Also, there is the "social" cost in having to educate and change people's behaviour. Thank you for a helpful analytical insight on this topic.
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  34. ridethetalk, Manwichstick. I thinkyou are close to the mark with a lot of this. With the dropping costs of wind & solar I am becoming virtually unconcerned about any cost question, even factoring in the cost of adapting to their intermittent nature. There are still serious concerns around how fast we can rampup production capacity forthese technologies. The two key missing technologies are storage & the grid. It is certainly true that studies indicate that nearly 100% renewable energy supply is pretty technically viable. There still might be the occassional issue with protracted weather periods over large areas - lots of still cloudy weather for days perhaps. But they will be uncommon. Energy storage is important for smoothing out the remaining irregularities. It also will play a very big part in a transition to 100% renewables. At current levels of penetration the intermittancy issue is small. At near 100% penetration it is small. However,in a world of say 50% renewables intermittancy may be a bigissue. The system isn't yet big enough to be self levelling. But it is big enough that significant lulls have a big impact. Storage may be critical in facilitating the transition from one viable state - now - to another viable state - 100% - through a difficult intermediate state - 50%. The other missing piece in all this is the grid. I would be willing to bet that if we tried to reverse the direction of flow in or grids today - all the electrons flowed fromour houses back to the powerstations - the grid would fail in 101 different little ways. All the transformers, switching yards and substations will have lots of small engineering decisions embodied in them that assume the electrons mainly flow one way. reverse themand equipment will fail,safety's will trip out etc. All absolutely solveable little engineering problems to make them truely bi-directional,but the investment needs tobe madetobring that about. The current grids have been designed to facilitate transferring energy from big generators, largely in one direction to small consumers. The grid we need to enable 100% renewables requires that we be able to move energy in hugely varying package sizes, in every possible direction. No preconcieved ideas of what the preferred pathways willbe. A bit like the Internet but for electricity. And there is no way out of the fact that that requires a much larger investment in the grid than we have made in the past. The future grid need a larger percentage of our total energy infrastructure spend. The old gridwassimple, very simple, because thats all it needed to be. Andsimple was cheaper. In the future,we will reap ever greater rewards the more powerful, flexible and adaptable the grid is. Thegrid needs to start to look like an organism, self adapting, self correcting, and when needed,self healing - lets never forget that part of the design brief for what we now call the Internet was that it be able to survive a Nuclear War. We need similar thinking about the grid. And we need to ramp up investment in it now, before the need seems to be there because the grid is the enabler of that demand. Another key feature that will give us flexibility so we can get the maximum benefit even if supply is somewhat variable is really intelligent demand management. Not just users turning oflights or whatever. Every energy using device connected to the grid being able toadapt it's energy consumptionbased on current supply & demand. Imagine the grid, in addition to delivering electrons, is also transmitting a singlenumber every few minutes. 0 to 100. The percentage of the current demand that the gridcan supply! If it transmits 100, it can meet all current demand. However, if it is transmitting 97 it issaying that iy can only meet 97% of demand. 'Eevrybody start reducing demand a bit!'. So a light bulb dims slightly. An Air Conditioner adjusts it's set point by 1/2 adegree. A freezer lets the temperature rise by 1 degree for a bit. Maybe the pump on a fountain slows down by 20%. Every device on the grid adjusts it'susage if it can to compensate where possible. So instead of a power blackout, everything justs dialsit back a bit. And the more a device or consumer is able to wind back their demand, the less they are charged for the power they do use during this period. Smart grids shuffling power around including in andoutof storage and smart demand management adapting to circumstances would achieve a huge amount. Then Renewables are absolutely viable under all circumstances.
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  35. Composer99 wrote: "Hence my inference that reducing human emissions would allow ocean outgassing of excess CO2 when the partial pressure difference is altered. I gather that I have made a mistake in there somewhere, but I do not think it has anything to do with equilibrium CO2 concentrations." Part of this may be a terminology issue. The equilibrium I was referring to was the balance between the partial pressure of CO2 in the atmosphere and the concentration dissolved in the oceans. To quote Henry's law; "At a constant temperature, the amount of a given gas that dissolves in a given type and volume of liquid is directly proportional to the partial pressure of that gas in equilibrium with that liquid." That said, there are three factors in play here; 1: Temperature 2: Partial pressure of atmospheric CO2 3: Carbon content of the ocean surface in contact with the atmosphere Essentially, my argument is that, given the fact that roughly 50% of human fossil fuel emissions currently remain in the atmosphere each year, cutting emissions by 50% should cause the atmospheric concentration of CO2 to stop increasing. Note that the partial pressure is determined by total atmospheric ppm of CO2 rather than annual emissions... thus, if we were at 400 ppm and emitting enough to increase by 4 ppm each year with 2 ppm of that instead being sequestered in natural sinks and we changed to emitting 2 ppm (50% reduction) we should remain at 400 ppm (no change in partial pressure) as natural sinks continue to absorb the 2 ppm we emit each year. Given that the oceans are the largest of those natural sinks it might be argued that the 2 ppm less emissions would result in a lower partial pressure throughout the year and thus slightly lower absorption... but we're talking about 2 / 400 = 0.5% of the total atmospheric concentration... so maybe the oceans would absorb 1.99 ppm of CO2 instead of 2 ppm and we'd see a 0.01 ppm per year increase continuing. Likewise, given that temperature increases are lagging the CO2 level we'd see temps continue to rise slowly and thus tip the balance towards slightly more outgassing. However, there would be an opposing push from the third factor in the list above... the carbon concentration of the ocean surface. If the oceans were absorbing carbon at a lower rate they'd have more time to mix and the concentration at the surface would drop... allowing more to be absorbed from the atmosphere. So, everything you describe is accurate, but there are other factors in play which would offset them and at a 50% reduction in emissions the delta values we are talking about become very small. Maybe at exactly a 50% emissions reduction atmospheric levels would continue to creep up very slowly... or maybe ocean mixing would allow them to start dropping very slowly... but somewhere right around 50% (52%?, 47%?) would 'stabilize' the atmospheric CO2 level. Basically, if we can get below 50% of current emissions (before passing some 'tipping point' that causes natural sinks to start releasing excess carbon) we'll be ok 'eventually'... though the outgassing issues you describe could make that a very long time in the future, depending on exactly how high the atmospheric concentration gets before we stop increasing it.
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  36. It is really good to know that renewable power costs no more than conventional power. It means that the expense of subsidies is unnecessary and they should be eliminated immediately to shut up all the whining from skeptics.
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  37. wstarck - You are of course including the fossil fuel subsidies as well? Both direct financial subsidies and the rather huge subsidies of not accounting for the external costs (health, pollution, climate change) of fossil fuel use?
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  38. Wstarck - As KR points out, once you account for the fossil fuel subsidies (over half a trillion dollars a year globally), and include the external costs (which are not currently accounted for), then fossil fuels are distant runners-up to renewable energy. How much do you think it would cost for fossil fuel companies to pay for the (roughly) 25 metres of future sea level rise they have already committed us to? I reckon it would bankrupt even them.
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  39. wstarck, I'm glad you agree that the whining from the fake sceptics is irrationally driven by their objections to proposed solutions rather than any real problem with the science itself. But I can't help wondering why they aren't similarly whining about the subsidies received by fossil fuel interests? I read once that the entire profit margin of Exxon Mobil, one of the most profitable companies in the world, was approximately equal to the subsidies it received. Why does it still need subsidies after all this time? And that's not even accounting for the external costs as KR mentioned; I presume those fake sceptics will be right behind some form of carbon pricing mechanism to allow the market price of fossil fuels to accurately reflect the true cost of using them if they are so concerned about subsidies, correct?
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  40. CBDunkerson @ 14, you said "What you are describing is a no carbon economy". Not quite right: what I was describing was an economy in which our non-fossil-fuel carbon emissions continue, thus using up the small wriggle room we have available in our emissions budget. As I understand it (and I may be wildly wrong), human agricultural practices cause the emission of significant volumes of CO2e that would not have been emitted in a human-free world. In addition, our existing CO2 emissions are sufficient to raise the average surface temperature by circa 2°C and this is already enough to cause significant releases of CO2e from NH tundra. Thus, my reading of the tea-leaves says a low-carbon economy probably needs to be a zero fossil fuel economy and this was what I meant in my comment. It is why I agree with the premise of the original post, that not only is renewable energy not as expensive as some claim, but it is the only way we can transition to a relatively safe future. I predict that a future world with renewable electricity and synthetic hydrocarbons (algal fuels etc.) for liquid fuels will be a very different one from what we enjoy today.
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  41. I've just been reading about liquid air energy storage, these people; http://www.highview-power.com/wordpress/?page_id=1405 All made from off the shelf kit, factory size
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  42. Doug H, the degree of impact from 'land use' issues is contested, but the IPCC ranks it fairly low. Claims that it is a major factor in current CO2 levels come only from the Pielke's (it was Roger Pielke senior's main area of research), Ross McKitrick, and other climate contrarians. That said, the primary 'land use' arguments are that deforestation has decreased CO2 sequestration in natural sinks and shifted planetary albedo. Neither of these actually 'emits' any carbon. Effectively, their impacts (however large or small they may actually be) are already 'factored in' to the calculations / logic I was using. That is, if natural sinks (already diminished due to land use) are currently absorbing ~2 ppm worth of emissions per year... then decreasing our total emissions to the 2 ppm level would stop the atmospheric accumulation. That would require a 50% reduction in emissions... and thus we could keep ~25% of our current emissions for large tractors, aircraft, and other energy intensive applications and still see the atmospheric greenhouse effect decreasing back towards natural levels over time. We do not need a zero fossil fuels solution to fix the problem. We just need to deal with electricity generation and general transportation (i.e. cars). We probably can adapt most other fossil fuel applications to renewable power, but we shouldn't allow any exceptions to be used as arguments that 'we cannot fix AGW without giving things up'.
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  43. littlerobbergirl @ 41 Another promising energy storage technology that has potential is Liquid Metal Batteries. An excellent description of the technology can be seen in the following TED Talk by Donald Sadoway http://www.youtube.com/watch?feature=player_detailpage&v=Sddb0Khx0yA This technology appears to be scalable. It may even be possible to convert Aluminium Smelters, as the basic hardware is the same.
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  44. CBDunkerson @ 42, I'm glad my concerns are unjustified. I must have misunderstood the information I read about land use being a significant contributor to AGW. What I (mis)thought was that methane emissions from paddy fields and livestock made up a large CO2e contribution to our greenhouse gas emissions. It is refreshing to find something about AGW that is not as bad as I feared! John Cook might have some ideas about how I absorbed this incorrect meme, considering I don't read the Pielkes, or WTFUWT. If natural sinks are consuming ~2ppm/year and one of those sinks (the biggest?) is the oceans, will our continued emission of 2ppm/year not continue to acidify the oceans?
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  45. Doug H, methane causes more warming than CO2 on a 'per molecule' basis, but is not a major factor in the current AGW for the simple reason that methane in the atmosphere quickly breaks down into CO2 and water. Further, since the carbon being emitted here comes from plants... which took the carbon out of the air in order to grow... there is no ongoing accumulation of atmospheric carbon as a result. Effectively, it is a transitory boost in warming potential due to atmospheric CO2 being temporarily converted into atmospheric methane. There is no ongoing accumulation. The only way for the greenhouse effect from this issue to increase would be to significantly increase the amount of land devoted to paddy fields and/or livestock. As to ocean acidification... I'm not sure whether the continued absorption of 2 ppm emissions would cause sufficient upper ocean acidification to offset the effects of greater dilution. However, that's also at 50% of current emissions, which we can get well below. If we reduce the atmospheric CO2 level then we will also reduce ocean acidification. Replacing electricity generation and automotive transportation with renewable energy would accomplish both.
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  46. An interesting report (based on data through last April) on the ongoing shift away from coal in the US can be found at the US Department of Energy's Energy Information Administration (EIA): Monthly coal- and natural gas-fired generation equal for first time in April 2012 Of course, the shift--quite visible in the accompanying graph--is predominately from one carbon-based fossil fuel to another, but at least it is from coal to natural gas. The EIA has another interesting graph which illustrates, even as the report focuses on our ongoing reliance on fossil fuels, just how sharply the US managed to break away from its upwardly trending dependence on oil in the mid-1970s following the OPEC oil crisis: Energy Perspectives: Fossil fuels dominate U.S. energy consumption I think the sharp break in the upward curve, while it reflects a serious economic disaster, nevertheless illustrates that things can change dramatically in a short period of time. With these two reports in mind, I suspect a well-implemented carbon tax could give green energy a dramatic and rapidly realized boost. It is probably necessary too, in order to counter the new attractions posed by natural gas. Unfortunately, one big obstacle to progress is that the same blank states we see in the map Dana has included are in a general sense dominated by Tea Party politicians who have shown what I'll charitably call a deep-seated reluctance to acknowledge the reality of global climate change.
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  47. CBDunkerson @ 45
    Further, since the carbon being emitted here comes from plants... which took the carbon out of the air in order to grow... there is no ongoing accumulation of atmospheric carbon as a result.
    Doh! Thanks for pulling me up on this. Stupid mistake for me to make, considering I have pointed this out to others in the past. The only methane I need to worry about is that currently sequestered in frozen form, as tundra or clathrates, because it is not currently taking part in the carbon cycle. You also said
    methane in the atmosphere quickly breaks down into CO2 and water
    I knew it broke down eventually, but did not characterise that conversion as happening quickly. I have read that CO2 stays in the atmosphere for many years (a century?), but thought methane stayed in the atmosphere as methane for a smaller, but still significant, number of years. So, I did a bit of googling and found the IPCC list of greenhouse gasses, which includes both an indication of their persistence and their global warming potential. The link is here, for any who are interested. Thanks for making me do my own homework - it is the best way for me to learn.
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  48. The central claim that the Heartland Institute is making is that "renewable" energy is more expensive than "conventional" energy. There are inevitable ambiguities in such a statement, but the normal method to compare generic costs of different types of generation plant is levelised cost of electricity (LCOE), which converts capital and running costs into a single metric. See EIA data for US here. This suggests that gas combined cycle is typically the cheapest plant, with wind , hydro and geothermal comparable to coal, but solar power somewhat dearer. The data is 2017 forecast; historically coal would have been cheaper than wind. I haven't checked the methodology in detail, but subsidies and externalities such as CO2 emissions are usually excluded unless specifically stated. Actual costs will vary from this due to site-specific factors as well as fuel contracts and the cost of capital. Hydro and geothermal are only available in very specific locations, and new large-scale hydro is often strongly resisted due to its local environmental impact. So under renewable mandates, wind is often predominant. But wind, along with solar has the drawback that it is not dispatchable, i.e. you can't bring it on when you want to. High penetration of such technologies will inevitably require large-scale (or widespread smaller-scale) storage, and maybe investment in grid management to deal with more intermittent supply. Another factor is whether the renewable mandate in practice is meeting some or all of a demand increase or whether it is cannibalising existing production (if demand is flat/falling due to energy efficiency and/or economic downturn). If the latter, which is certainly the case in some electricity systems outside the US, then the mandate forces new investment that would otherwise not be required at all. On balance, on currently available costings, mandated renewable energy will be incrementally more costly than no mandate under most circumstances. Frankly, as has already been pointed out, if it wasn't, then there would be no need for the mandate; utilities would choose renewable power as a matter of course. How this additional resource cost manifests itself in retail prices - which is the focus of the analysis in the original post - depends on a number of other factors. Generation costs are only a part of the total cost of supplying electricity to end users. Renewable energy policies may include subsidies that do not get funded through retail prices. Electricity markets are highly regulated, in some cases with a price cap that may have limited sensitivity to changes in underlying costs. Even where market pricing prevails, the supply and demand dynamics may mean that a small increase in the underlying cost mix of generation does not immediately result in higher prices. If the market is working efficiently, though, you will see the price effect over the longer term. There is obviously one large gap in the above analysis. It does not include the cost of the externalities. you can make a case for various externalities for all sorts of generation, but greenhouse gas emissions are the most significant. any valuation of these is inevitably highly contestable and so for purposes of analysis it is better to consider it separately. It does mean however that you cannot say with certainty that renewable energy mandates are economically inefficient. Conventional economic wisdom would however suggest that pricing the externality is the most economically efficient way to deal with it.
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  49. The interesting thing about the EIA levelised costs of power generation is the speed that solar PV seems to be dropping at. In the 2012 estimates for 2017 installations solar has a cost of $152.7/megawatthour, but the previous year's 2011 estimate for 2016 quotes $210.7!
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  50. Another point worth making about those EIA levelised costs is the regional variation. Solar PV is $152.7/MWh on average, but as little as $119.0/MWh in what are presumably the sunniest places in the US, and wind drops to $77.0/MWh in the windiest places. Wind and solar tend to have larger cost ranges due to location so including nonsensical locations when determining the average is probably a little unfair. Yet another point is the cost of CCS, especially for coal. Given the intrinsic problems with storage (in particular the sheer scale required and the long-term risks of containment failure) I don't think this is going to be a viable option and research into it seems to be more of a PR exercise to justify further expansion of fossil fuel usage. KJD: It appears subsidies are not included in those costs because it specifically mentions "Note: These results do not include targeted tax credits such as the production or investment tax credit available for some technologies, which could significantly affect the levelized cost estimate."
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